DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT

between

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

and

F. HOFFMANN-LA ROCHE LTD

dated

September 24, 2013

 

 

 

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REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION

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TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

Page

ARTICLE

 

1 

 

 

DEFINITIONS

 

1 

 

 

 

 

 

ARTICLE

 

2 

 

 

GRANT; LICENSE

 

10 

 

 

 

 

 

 

2.1

Grant to Roche.

 

10 

 

2.2

License to PacBio.

 

11 

 

2.3

Limitations.

 

12 

 

2.4

Distribution Outside the Field.

 

12 

 

2.5

No Territoriality.

 

13 

 

2.6

No Other Rights.

 

13 

 

 

 

 

 

ARTICLE

 

3 

 

 

GOVERNANCE

 

13 

 

 

 

 

 

 

3.1

Joint Steering Committee.

 

13 

 

3.2

Committee Membership.

 

14 

 

3.3

Committee Meetings.

 

15 

 

3.4

Decision-Making.

 

15 

 

3.5

Alliance Managers.

 

15 

 

3.6

Scope of Governance.

 

15 

 

3.7

Day‑to‑Day Responsibilities.

 

15 

 

 

 

 

 

ARTICLE

 

4 

 

 

DEVELOPMENT AND REGULATORY ACTIVITIES

 

16 

 

 

 

 

 

 

4.1

In General.

 

16 

 

4.2

Development Plan.

 

16 

 

4.3

Product Specifications.

 

17 

 

4.4

Regulatory Filings.

 

18 

 

4.5

Regulatory Matters.

 

18 

 

4.6

Infeasibility.

 

19 

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ARTICLE

 

5 

 

 

COMMERCIALIZATION AND DISTRIBUTION

 

19 

 

 

 

 

 

 

5.1

Commercialization of the Products and Services

 

19 

 

5.2

Commercialization Plan

 

19 

 

5.3

Conduct

 

19 

 

5.4

Sales Minimums

 

20 

 

5.5

Commercially Reasonable Efforts

 

20 

 

5.6

Marketing and Promotion

 

20 

 

5.7

Trademarks

 

21 

 

5.8

Label License; End User License Agreement

 

22 

 

5.9

Services

 

23 

 

5.1

Warranty; Instrumentation Installation, Support and Maintenance

 

23 

 

5.11

Remote Access Software

 

24 

 

5.12

Know-How and Software Transfer

 

24 

 

5.13

Competing Products

 

24 

 

 

 

 

 

ARTICLE

 

6 

 

 

SUPPLY

 

24 

 

 

 

 

 

 

6.1

Supply

 

24 

 

6.2

Transfer Price

 

26 

 

6.3

Shortage of Supply; Cooperation

 

26 

 

 

 

 

 

ARTICLE

 

7 

 

 

PAYMENTS

 

27 

 

 

 

 

 

 

7.1

Payments

 

27 

 

7.2

Reports

 

27 

 

 

 

 

 

ARTICLE

 

8 

 

 

PAYMENTS; BOOKS AND RECORDS

 

27 

 

 

 

 

 

 

8.1

Payment Method

 

27 

 

8.2

Withholding

 

27 

 

8.3

Records; Inspection

 

28 

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ARTICLE

 

9 

 

 

CONFIDENTIALITY

 

29 

 

 

 

 

 

 

9.1

Confidential Information

 

29 

 

9.2

Permitted Disclosures

 

29 

 

9.3

Confidential Terms

 

30 

 

9.4

Publication of Product Information

 

30 

 

9.5

Publicity Review

 

30 

 

9.6

Certain Principles

 

31 

 

9.7

Prior Non-Disclosure Agreements

 

31 

 

 

 

 

 

ARTICLE

 

10

 

 

INTELLECTUAL PROPERTY

 

31 

 

 

 

 

 

 

10.1

Ownership of Intellectual Property

 

31 

 

10.2

Patent Challenges

 

34 

 

10.3

Enforcement of Roche Patents

 

35 

 

10.4

Enforcement of PacBio Patents

 

35 

 

10.5

Third Party Technologies

 

36 

 

10.6

Non-Infringement of Third Party Intellectual Property Rights

 

38 

 

10.7

Patent Marking

 

40 

 

 

 

 

 

ARTICLE

 

11 

 

 

TERM AND TERMINATION

 

40 

 

 

 

 

 

 

11.1

Term

 

40 

 

11.2

Termination for Breach

 

40 

 

11.3

Termination by Roche

 

40 

 

11.4

Termination for Cessation

 

40 

 

 

 

 

 

ARTICLE

 

12 

 

 

EFFECT OF TERMINATION

 

41 

 

 

 

 

 

 

12.1

Accrued Obligations

 

41 

 

12.2

Effect of Termination

 

41 

 

12.3

No Renewal, Extension or Waiver

 

42 

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12.4

Survival

 

43 

 

12.5

Non-exclusive Remedy

 

43 

 

 

 

 

 

ARTICLE

 

13 

 

 

REPRESENTATIONS AND WARRANTIES

 

43 

 

 

 

 

 

 

13.1

General Representations

 

43 

 

13.2

Representations and Warranties of PacBio

 

43 

 

13.3

Representations and Warranties of Roche

 

44 

 

13.4

DISCLAIMER

 

44 

 

13.5

LIMITATION OF LIABILITY

 

44 

 

 

 

 

 

ARTICLE

 

14 

 

 

INDEMNIFICATION AND INSURANCE

 

45 

 

 

 

 

 

 

14.1

Indemnification of PacBio

 

45 

 

14.2

Indemnification of Roche

 

45 

 

14.3

IP Infringement

 

45 

 

14.4

Procedure

 

47 

 

14.5

Insurance

 

47 

 

 

 

 

 

ARTICLE

 

15 

 

 

BANKRUPTCY LAW; FIRST RIGHT OF NEGOTIATION; ESCROW

 

47 

 

 

 

 

 

 

15.1

Bankruptcy

 

47 

 

15.2

Escrow

 

48 

 

15.3

Roche Right of First Negotiation

 

50 

 

 

 

 

 

ARTICLE

 

 

 

 

DISPUTE RESOLUTION

 

50 

 

 

 

 

 

 

16.1

Dispute Resolution

 

50 

 

16.2

Pre‑Arbitration Dispute Resolution

 

51 

 

16.3

Disputes

 

51 

 

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ARTICLE

 

17 

 

 

GENERAL PROVISIONS

 

52 

 

 

 

 

 

 

17.1

Responsibilities

 

52 

 

17.2

Force Majeure

 

52 

 

17.3

Governing Law

 

52 

 

17.4

Waiver of Breach

 

53 

 

17.5

Modification

 

53 

 

17.6

Severability

 

53 

 

17.7

Entire Agreement

 

53 

 

17.8

Notices

 

53 

 

17.9

Assignment

 

54 

 

17.1

No Partnership or Joint Venture

 

55 

 

17.1

Third Party Subcontractors

 

55 

 

17.1

Export Laws

 

55 

 

17.1

Counterparts

 

55 

 

17.1

Affiliates

 

55 

 

 

 

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DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT

THIS DEVELOPMENT, COMMERCIALIZATION AND LICENSE AGREEMENT (“Agreement”) dated as
of September 24, 2013 (“Effective Date”), is entered into between Pacific
Biosciences of California, Inc., a Delaware corporation with its principal place
of business at 1380 Willow Road, Menlo Park, CA 94025 (“PacBio”) and F.
Hoffmann-La Roche Ltd, Grenzacherstrasse 124 CH-4070 Basel, Switzerland
(“Roche”).

BACKGROUND

A.PacBio has developed its PacBio Technology Platform (as defined below) and
owns or controls certain patents, know-how and other intellectual property
rights and technology relating to the PacBio Technology Platform; and

B.Roche, on behalf of itself and its Affiliates (as defined below), desires to
enter into with PacBio a development, commercialization and license agreement,
pursuant to which PacBio will grant to Roche and its Affiliates certain
exclusive rights for the development and distribution of products and
performance of services based on, using or incorporating the PacBio Technology
Platform (each defined below as the “Products” and “Services,” respectively) for
the Field (as defined below), including the development and distribution of
products intended and labeled for in vitro diagnostic use, and PacBio will
supply certain of such Products to Roche and its Affiliates, on the terms and
conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

ARTICLE 1

DEFINITIONS

1.1     “Affiliate” shall mean, with respect to a Person, any corporation or
other business entity controlled by, controlling or under common control with
such Person, for so long as such control exists, and for this purpose “control”
means direct or indirect beneficial ownership of more than fifty percent (50%)
of the voting interest in such corporation or other business entity or having
otherwise the power to govern the financial and the operating policies or to
appoint the management of an organization, provided, however, that with respect
to Roche, the term “Affiliate” shall not include Chugai Pharmaceutical Co., Ltd,
1-1 Nihonbashi-Muromachi 2-Chome, Chuo-ku, Tokyo 103-8324, Japan, unless Roche
opts for such inclusion of such entity by giving written notice to PacBio.

1.2     “Applicable Law(s)” shall mean, with respect to a Party’s activities
hereunder, individually and collectively, any and all applicable laws
(including, without limitation, securities laws), ordinances, orders, rules,
rulings, directives and regulations of any kind whatsoever of any governmental
authority or Regulatory Authority, final, binding and

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unappealable court orders and judgments, and rules of a stock exchange, in each
case, including the then-current amendments thereto or any replacement thereof,
and in each case, applicable to such Party’s activities hereunder.

1.3      “Business Day” shall mean 9.00 a.m. to 5.00 p.m. local time on a day
other than a Saturday, Sunday or other public or federal holiday in Switzerland
or the State of California, United States.

1.4      “Clinical End Users” means clinical testing laboratories (including
academic, not-for-profit, governmental and commercial clinical testing
laboratories) and in vitro diagnostic companies, which in each case will
predominantly use the Products, or the results of a Service, as applicable, for
the Field.

1.5      “Commercially Reasonable Efforts” shall mean with respect to an
objective, the diligent and good faith efforts of the type to accomplish such
objective that a similarly situated company in the exercise of reasonable
business discretion would normally use to accomplish a similar objective. 

1.6      “Control” (including any variations thereof, such as “Controlled” and
“Controlling”) shall mean, with respect to any Know-How, Software or other
Intellectual Property Rights, possession by the Party granting the applicable
right, license or sublicense hereunder (or its Affiliate, as applicable) of the
power and authority, whether arising by ownership, license, or other
authorization, to disclose and deliver the particular Know-How or Software to
the other Party as provided herein and to grant and authorize under such
Know-How, Software or Intellectual Property Right the right, license or
sublicense, as applicable, as provided herein without giving rise to a violation
of the terms of any written agreement with any Third Party.  Notwithstanding
anything to the contrary in this Agreement, any Know-How, Software or
Intellectual Property Right owned or licensed by any Acquiring Entity of a Party
shall not be deemed Controlled by such Party except to the extent such Know-How,
Software or other Intellectual Property Right (i) was licensed from such
Acquiring Entity directly or indirectly to such Party or its Affiliates prior to
the effective date of the relevant Acquisition, but only to the extent that such
Know-How, Software or Intellectual Property Right was Controlled hereunder by
such Party prior to such effective date or (ii) is used or generated in the
course of the performance of activities under this Agreement, on or after the
effective date of the relevant Acquisition, by the Acquired Party, by such
Acquiring Entity or by an Affiliate of the Acquired Party or such Acquiring
Entity.  For purposes of this Section 1.6, “Acquiring Entity” shall mean a Third
Party that merges or consolidates with or acquires a Party, or to which a Party
transfers all or substantially all of its assets to which this Agreement
pertains (such Party, the “Acquired Party” and such merger, consolidation,
acquisition or transfer, an “Acquisition”).

1.7      “Data” shall mean any and all research data, pharmacology data,
preclinical data, clinical data or all regulatory documentation, information and
submissions pertaining to, or made in association with an IDE, Marketing
Approval Application, Marketing Approval or the like for

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any Product, in each case that are Controlled by a Party or its Affiliates as of
the Effective Date or during the term of this Agreement.

1.8      “Distributor” shall mean any Third Party whom Roche has appointed as a
distributor or agent to market and promote a Product together with the right to
sell or have sold such Products on its own behalf or on behalf of Roche or an
Affiliate in accordance with Section 2.1(c).

1.9      “FDA” shall mean the United States Food and Drug Administration, or any
successor entity thereto performing similar functions.

1.10     “Field” shall mean nucleic acid sequencing (including, without
limitation, DNA, cDNA and RNA sequencing) for (a) medical management (including,
without limitation, diagnosis or treatment of a human disease or condition) of a
human being and (b) quality control or testing of human blood or tissue for
transfusion or blood banking, human bone marrow transplantation or banking, or
human tissue typing for transplantation, including the use of products intended
and labeled for in vitro diagnostic use or the provision of services using such
products, in each case, for the purposes described under subsection (a) or (b)
above.  The Field excludes, among other uses, sequencing for (i) basic and
applied research, other than clinical studies for obtaining and maintaining
Marketing Approvals for Products and Services intended for the purposes
described under subsections (a) or (b) above or other clinical research, in each
case linked to the medical management of a human being; (ii) biomarker research
or other content discovery research, other than for purposes of validating (but
not discovery of) Roche Content in connection with the development of Consumable
Products or Kit Products intended for the purposes described under subsections
(a) or (b) above that incorporate or will be used with such Roche Content; (iii)
quality assurance and quality control (including, without limitation, testing to
determine conformance with specifications, purity, and batch-to-batch
consistency); (iv) testing of environmental samples, including, without
limitation, the detection of organisms where the intent is to track or identify
the nature and source of the organism; (v) identity testing applications for
forensic purposes or determination of paternity, other than identity testing for
the purposes described under subsection (a) above; and (vi) testing of non-human
(e.g., plant or animal) samples, including, without limitation, in connection
with animal breeding, pedigree determination, or gender determination, or
testing for agricultural or food industries, including, without limitation, the
identification of genetically modified organisms (GMOs) for these industries.

1.11     “Field Generic Product” shall mean [***].

1.12     “Field Specific Product” shall mean [***].

1.13     “First Commercial Sale” shall mean, with respect to a Product or
Service, the first bona fide, arm’s length sale of such Product or Service. 

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1.14     “Foreground Technology” shall mean all Inventions made, developed,
conceived, authored, acquired or created (a) by or on behalf of a Party or its
Affiliates, or the Parties (themselves or through their respective Affiliates)
jointly, in the performance of activities under this Agreement or (b) by an
individual (i) having access to Know-How that is Confidential Information
Controlled by the other Party or its Affiliates and disclosed by such other
Party or its Affiliates under and in accordance with this Agreement, and
(ii)  acting on behalf of a Party or its Affiliates, which Invention is based
upon, using or incorporating such Know How..

1.15     “IDE” shall mean any Investigational Device Exemption (including any
amendments thereto) filed with the FDA (as described at 21 CFR Part 812) before
the commencement of clinical trials of a Product, or any comparable filings with
any Regulatory Authority in any other jurisdiction.

1.16     “Intellectual Property Rights” shall mean any Patents, copyrights,
design rights, rights in databases, moral rights, trademarks, service marks,
trade and business names, rights in inventions and other intellectual property
rights, in each case whether registered or unregistered, and including
applications for the grant of the foregoing and all rights or forms of
protection having equivalent or similar effect to any of the foregoing which may
subsist anywhere in the world.

1.17     “Invention” shall mean any invention (whether or not patentable), data,
results, ideas, discovery, development, method, process, know-how, works of
authorship or other information that is made, developed, conceived, authored,
acquired or created by or under the authority of a Party or the Parties (itself
or themselves, or through its or their respective Affiliates), and in each case,
including all Intellectual Property Rights therein and thereto.

1.18     “IP Infringement Claim” shall mean any Third Party Claim alleging that
the development, manufacture, use or sale of a Product, in each case for the
Field, infringes or misappropriates any Intellectual Property Rights of a Third
Party.

1.19     “Know-How” shall mean all scientific, medical, technical, regulatory
and other information and documentation relating to the Products and Services
(including Data), but excluding any and all Software and Product Documentation

1.20     “Major Market” shall mean [***].

1.21     “Marketing Approval” shall mean, with respect to a Product or Service,
those approvals, licenses, registrations, waivers or authorizations, in each
case, from a Regulatory Authority in a jurisdiction that are necessary for the
marketing and sale of such Product or Service in such jurisdiction.

1.22     “Marketing Approval Application” (or “MAA”) shall mean a Premarket
Approval Application (PMA) (as described at 21 CFR Part 814) or 510(k) Premarket
Notification Application (as described at 21 CFR Part 807), as applicable,
submitted to the FDA in the United

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States or a similar application that has been submitted to a Regulatory
Authority in any other jurisdiction.

1.23     “New Technology” shall mean, collectively, New [***] Technology and New
Field Specific Technology.

1.24     “PacBio Intellectual Property Rights” shall mean (a) the PacBio Patents
and (b) any other Intellectual Property Rights Controlled by PacBio or its
Affiliates. 

1.25     “PacBio Know-How” shall mean all Know-How Controlled by PacBio or its
Affiliates. 

1.26     “PacBio Patents” shall mean (a) the Patents listed, as of the Effective
Date, on Exhibit 1.26, and all patents and patent applications claiming priority
to such patent applications or to the patent applications from which any such
patents issued (any such Patents that are owned by a Third Party shall
constitute “PacBio Patents” solely to the extent PacBio Controls such Patents
pursuant to and in accordance with the terms of the applicable Existing
In-Licenses), (b) any patent application filed on an Invention assigned to
PacBio by Roche pursuant to Section 10.1(c)(i) (a “Roche-Assigned Improvement”),
(c) any Foreground Technology owned by PacBio or its Affiliates pursuant to
Section 10.1(b) (other than PacBio-Assigned Improvements), and (d) all other
Patents Controlled by PacBio or its Affiliates.

1.27     “PacBio Products” shall mean [***].

1.28     “PacBio Product Documentation” shall mean, with respect to a PacBio
Product, Product Documentation Controlled by PacBio or its Affiliates for such
PacBio Product.

1.29     “PacBio Software” shall mean, with respect to a PacBio Product to be
supplied to Roche hereunder that is an Instrumentation Product or Chip Product,
Software Controlled by PacBio or its Affiliates and that is incorporated in or
interoperates with such PacBio Product.

1.30     “PacBio Technology Platform” shall have the meaning set forth in
Exhibit 1.30.  

1.31     “Party” shall mean PacBio or Roche individually, and “Parties” shall
mean PacBio and Roche collectively.

1.32     “Patent(s)” shall mean any patents and patent applications (including
provisional applications), together with all patents and patent applications
claiming priority to such patent applications or patent applications from which
any such patents issued, including any continuations, continuations-in-part,
divisional and provisional applications, any patents issued with respect to any
such patent applications, any re-issues, re-examinations, renewals or extensions
(including supplemental patent certificates) of any such patents, and any
confirmation patents or registration patents or patents of addition based on any
such patents and all foreign counterparts of any of the foregoing. 

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1.33     “Person” shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency thereof.

1.34     “Product(s)” shall mean instrumentation, software, kits and
consumables, in each case, that is based on, uses or incorporates the relevant
element(s) of the PacBio Technology Platform or is intended (as demonstrated by
design or label) to be used or interoperate with the PacBio Technology
Platform.  Such Products include the following products as defined below:

(a)      “Chip Products” shall mean those disposable sequencing chips further
described in Exhibit 1.30. 

(b)      “Consumable Products” shall mean Chip Products and Other Consumable
Products. 

(c)      “Instrumentation Products” shall mean those sequencing instruments
further described in Exhibit 1.30.

(d)      “Kit Products” shall mean [***].

(e)      “Other Consumable Products” shall mean [***].

(f)      “Software” shall mean any and all software (whether bundled or
embedded, including, without limitation, any firmware) intended to be used or
interoperate with a Chip Product or Instrumentation Product.  “O/S and Primary
Analysis Software” shall mean Software that is (i) the Instrumentation Product
operating system software and firmware, including the Instrumentation Product
control, data collection and touch screen user interface and (ii) primary
analysis software, including signal processing, base calling and quality
assessment functions.  “Secondary Analysis Software” shall mean Software that is
secondary analysis software, including open source software tools for the
alignment of sequencing reads to a reference sequence or de novo assembly of
sequencing reads into a genome.

For purposes of example only, Exhibit 1.34 sets forth a list of certain Products
by category that are contemplated as of the Effective Date. 

1.35     “Product Documentation” shall mean, with respect to a Product,
functional specifications, user manuals, reference manuals, installation guides
and other documentation for such Product.

1.36     “Product Specifications” shall mean, with respect to a particular
Product, those designs and technical and functional specifications for such
Product as established in accordance with Section 4.3.

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1.37     “Regulatory Authority” shall mean the FDA, or a regulatory body with
similar regulatory authority in any other jurisdiction.

1.38     “Roche Content” shall mean any biomarker or similar assay-specific
content incorporated in or used with a Consumable Product or a Kit Product,
where the use or application of such biomarker or similar-assay specific content
(and associated Intellectual Property Rights) is owned by, or licensed to, Roche
or any of its Affiliates or Distributors.

1.39     “Roche Intellectual Property Rights” shall mean the Roche Patents and
any other Intellectual Property Rights Controlled by Roche or its Affiliates. 

1.40     “Roche Know-How” shall mean all Know-How Controlled by Roche or its
Affiliates.

1.41     “Roche Patents” shall mean (a) any patent application filed on an
Invention assigned to Roche by PacBio pursuant to Section 10.1(c)(i) (a
“PacBio-Assigned Improvement”), (b) any Foreground Technology owned by Roche or
its Affiliates pursuant to Section 10.1(b) (other than Roche-Assigned
Improvements), and (c) all Patents Controlled by Roche or its Affiliates.

1.42     “Service(s)” shall mean any service(s) provided to Third Parties
involving the use of any Product. 

1.43     “Supply Failure”  [***].

1.44     “Third Party” shall mean any Person other than PacBio, Roche and their
respective Affiliates.

1.45     “Trademarks” shall mean trademarks, marks and trade names.

1.46    Additional Definitions.  Each of the following terms shall have the
meaning described in the corresponding section of this Agreement indicated
below: 

 

 

Term

Section Defined

Acquired Party

1.6

Acquiring Entity

1.6

Acquisition

1.6

Agreement

Preamble

Alliance Manager

3.5

Assigned IP

10.1(c)(i)

Assignee

10.1(c)(i)

Assignor

10.1(c)(i)

Background Technology

10.1(a)

CDAs

9.7

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Term

Section Defined

Clinical Supplies

6.1(d)

CMO

6.3(c)(i)

CMO Supply Agreement

6.3(c)(i)

Commercialization Plan

5.2

Committee

3.2

Competing Product

5.13

Confidential Information

9.1

Cooperating Party

9.5

Development Plan

4.2(a)

Development Requirement

4.2(a)

Dispute

16.1

DMF

4.4(b)

Effective Date

Preamble

End User License Agreement

5.8(b)

Enforcement Action

10.4(b)

Escrow Agreement

15.2

Escrow Materials

15.2(a)

Escrow Triggering Event

15.2(e)

Existing In-Licenses

10.5(a)

External Factor

5.4

ICC

16.3(a)

Improvement

10.1(b)(ii)

Indemnitee

14.4

Indemnitor

14.4

Infringing Product

10.4(a)

Initial Term

11.1

[***]

15.3

IPR Agreements

10.6(a)

IRB

5.4

Joint Steering Committee

3.1

Joint Inventions

10.1(e)

JSC

3.1

Knowledge

10.6

Label License Agreement

5.8(a)

Listed Trademarks

5.7(b)

Losses

14.1

Made

10.1(b)(i)

Manufacturing Costs

Paragraph 3 of Exhibit 7.1

Milestone Payment

Paragraph 2 of Exhibit 7.1

New [***] Technology

10.5(b)

New Field Specific Technology

10.5(c)

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Term

Section Defined

O/S and Primary Analysis Software

1.34(f)

PacBio

Preamble

PacBio Indemnitees

14.1

PacBio Promotional Materials

5.6(b)

PacBio Technology Platform Capabilities

4.3(a)

PacBio Technology Platform

Exhibit 1.30

PacBio-Assigned Improvement

1.41

Patent Authority

10.2(a)

Patent Challenge

10.2(a), 10.2(b)

Permits

4.4(a)

Platform Patents

10.6(e)

Pre-existing Roche Product

5.13

Prosecuting Party

10.1(d)

Quality Systems Information

4.4(b)

Renewal Term

11.1

Requesting Party

9.5

Roche

Preamble

Roche Indemnitees

14.2

Roche-Assigned Improvement

1.26

ROFN Assignee

15.3

ROFN Notice

15.3

ROFN Response

15.3

ROFN Response Period

15.3

Sales Forecast

5.2

Sales Minimum Requirements

5.4

Secondary Analysis Software

1.34(f)

Secondary Analysis Software EULA

2.1(d)

Senior Executives

3.4

Sole Invention

10.1(c)(i)

Subcommittee

3.1

Supply Agreement

6.1(c)

Supports

10.2(a), 10.2(b)

Third Party Claim

14.1

Transfer Price

6.2

Wind-Down Period

12.2(a)(ii)

 

1.47    Interpretation.  The captions to the several Articles, Sections, and
Exhibits of this Agreement are not a part of this Agreement, but are included
for convenience of reference and shall not affect its meaning or
interpretation.  Unless specified to the contrary, references to Articles,
Sections or Exhibits shall mean the particular Articles, Sections or Exhibits to
this

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Agreement and references to this Agreement include all Exhibits hereto.  Unless
the context clearly requires otherwise, whenever used in this Agreement:  (a)
the word “or” shall have its inclusive meaning of “or” except when paired as
“either/or”; (b) the word “day” or “quarter” or “year” means a calendar day or
calendar quarter or calendar year unless otherwise specified; (c) the word
“notice” shall require notice in writing (whether or not specifically stated)
and shall include notices, consents, approvals and other communications
contemplated under this Agreement; (d) the words “hereof,” “herein,”
“hereunder,” “hereby” and derivative or similar words refer to this Agreement
(including the Exhibits hereto); (e) provisions that require that a Party, the
Parties or a committee hereunder “agree,” “consent” or “approve” or the like
shall require that such agreement, consent or approval be specific and in
writing, whether by written agreement, letter or otherwise, except to the extent
that such agreement, consent or approval is with respect to purely
administrative matters; (f) words of any gender include any other gender; (g)
words using the singular or plural number also include the plural or singular
number, respectively; (h) “$” or “dollars” shall mean US Dollars; and (i)
references to a Party’s “respective field” shall mean, with respect to Roche,
for the Field and with respect to PacBio, for outside the Field.

ARTICLE 2

GRANT; LICENSE

2.1     Grant to Roche. 

(a)      Grant; License.  Subject to the terms and conditions of this Agreement,
(i) PacBio hereby grants to Roche and its Affiliates the exclusive, worldwide
right to distribute the Products and provide the Services, in each case, solely
for the Field, and (ii) PacBio hereby grants to Roche and its Affiliates, under
the PacBio Intellectual Property Rights and the PacBio Know-How, the following
exclusive and worldwide licenses, in each case, solely for the Field:  (A)
[***]; (B) [***]; (C) to assemble and have assembled the elements of the Kit
Products; (D) to bundle and have bundled the Products with each other or in
combination with or packaged with products not licensed hereunder; (E) to file,
have filed, prosecute, and have prosecuted Marketing Approval Applications and
to obtain and maintain Marketing Approvals for the Products and Services; (F) to
offer and have offered for sale, sell, have sold, market, have marketed, import,
have imported, distribute, have distributed, promote and have promoted, use,
have used, maintain, have maintained, support and have supported the Products;
and (G) to provide and have provided the Services.  The grant of rights and
licenses to Roche under this Section 2.1(a) above and elsewhere hereunder shall
include a grant to the Affiliates of Roche; provided that Roche shall remain
responsible to PacBio hereunder for all activities of its Affiliates to the same
extent as if such activities had been undertaken by Roche itself.  For clarity,
the Parties understand that, [***], the Products or components thereof [***] may
be identical or functionally equivalent to [***] or interoperate with sequencing
system platforms other than the PacBio Technology Platform, and, accordingly,
the scope of rights and licenses granted under this Section 2.1(a) (and any
other rights and licenses granted under this Agreement) with respect to Products
does not extend beyond the extent to which such Products

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are developed and commercialized (including sold, marketed, and promoted) to be
used or interoperate with the PacBio Technology Platform [***], and all rights
with respect to products or components that are functionally equivalent to
Products and intended to be used or interoperate with sequencing system
platforms other than the PacBio Technology Platform are retained by PacBio.

(b)      Sublicenses.  The grant of rights and licenses under Section 2.1(a)
above shall not include the right to sublicense; except that Roche or its
Affiliate may grant sublicenses to Third Parties solely to perform activities on
Roche’s or its Affiliate’s behalf under and within the scope of the licenses
under Section 2.1(a) in accordance with this Agreement, and Roche shall remain
responsible to PacBio hereunder for all activities of such Third Parties to the
same extent as if such activities had been undertaken by Roche itself. 

(c)      Third Party Distributors.  Roche may appoint Third Parties as
distributors or agents for purposes of distributing, marketing, and promoting
the Products solely for the Field in a particular country(ies).  Roche shall
ensure that each of its arrangements with distributors or agents is in material
aspects not inconsistent with this Agreement, and Roche shall be responsible to
PacBio for all activities of its distributors and agents to the same extent as
if such activities had been undertaken by Roche itself. 

(d)      Secondary Analysis Software License.  In connection with the grant of
rights and licenses under Section 2.1(a) above, PacBio hereby grants to Roche
and its Affiliates, under the PacBio Intellectual Property Rights and PacBio
Know-How, a non-exclusive, non-transferable, worldwide license to use,
reproduce, modify and create derivative works of the PacBio Software that is
Secondary Analysis Software to develop, manufacture, offer for sale, sell,
market, import, distribute, promote, use, maintain and support such Software
solely for use in combination with Products for the Field in accordance with the
licenses granted under Section 2.1(a).  Such PacBio Software is made available
for download on the PacBio DevNet website (currently located at
http://pacbiodevnet.com/) and is subject to additional terms and conditions of
use as provided in connection with the download (as may be updated from time to
time in accordance with Sections 10.5(b) and 10.5(c)) (the “Secondary Analysis
Software EULA”). Roche or its Affiliates are also entitled to provide such
Software for download by its customers in accordance with, and subject to, the
Secondary Analysis Software EULA.

(e)      Additional grants of rights and licenses from PacBio to Roche are set
out in the following Sections 4.3(b), 5.6(b), 5.7, 6.3(c), 15.2(f).

2.2     License to PacBio. 

(a)      License.  Subject to the terms and conditions of this Agreement, Roche
hereby grants to PacBio and its Affiliates, under the Roche Intellectual
Property Rights and the Roche Know-How (except Roche Intellectual Property
Rights and Roche Know-How comprising Roche Content) (i) the following
non-exclusive and worldwide licenses, in each case,

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solely for the Field:  (A) to develop and have developed the PacBio Products for
Roche; and (B) to manufacture and have manufactured the PacBio Products for
supply to Roche for it and its Affiliates and Distributors; and (ii) the
following non-exclusive and worldwide licenses, in each case, solely for outside
the Field:  to develop, have developed, manufacture, have manufactured, offer or
have offered for sale, sell, have sold, market, have marketed, import, have
imported, distribute, have distributed, promote, have promoted, use, have used,
maintain, have maintained, support or have supported the PacBio Products, and to
use such PacBio Products to provide and have provided the Services.  The grant
of rights and licenses under this Section 2.2(a) above shall include a grant to
the Affiliates of PacBio; provided that PacBio shall remain responsible to Roche
hereunder for all activities of such Affiliates to the same extent as if such
activities had been undertaken by PacBio itself.

(b)      Sublicenses.  The grant of rights and licenses under Section 2.2(a)
above shall not include the right to sublicense; except that PacBio or its
Affiliate may grant sublicenses to Third Parties solely to perform activities on
PacBio’s or its Affiliate’s behalf under and within the scope of the licenses
under Section 2.2(a), and PacBio shall remain responsible to Roche hereunder for
all activities of such Third Parties to the same extent as if such activities
had been undertaken by PacBio itself. 

(c)      Third Party Distributors.  Subject to Section 2.4 below, PacBio may
appoint Third Parties as distributors or agents for purposes of distributing,
marketing, and promoting the Products solely for outside the Field in a
particular country(ies).  PacBio shall ensure that each of its arrangements with
distributors or agents is in material aspects not inconsistent with this
Agreement, and PacBio shall be responsible to Roche for all activities of its
distributors and agents to the same extent as if such activities had been
undertaken by PacBio itself. 

2.3     Limitations. 

(a)      Roche. Except as otherwise prohibited by Applicable Laws, Roche agrees,
on behalf of itself and its Affiliates, and shall cause each of its Distributors
to agree, as applicable, not to (and Roche and its Affiliates acknowledge that
they are not authorized under this Agreement to) develop, use, offer for sale,
sell, market, import, distribute or promote the Products or Services, or to use
the Products to provide the Services, in each case, for any purposes other than
for the Field, pursuant to and in accordance with this Agreement.  [***]

(b)      PacBio.  Except as expressly permitted under Section 2.2(a) or as
otherwise prohibited by Applicable Laws, PacBio agrees, on behalf of itself and
its Affiliates, and shall cause each of its distributors to agree, as
applicable, not to (and PacBio and its Affiliates acknowledge that they are not
authorized under this Agreement to) develop, use, offer for sale, sell, market,
import, distribute or promote the Products or Services, or to use the Products
to provide the Services, in each case, for any purposes other than for outside
the Field, in accordance with this Agreement.  [***] 

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2.4     Distribution [***].  If PacBio intends to seek or authorize a Third
Party (other than a Third Party with whom PacBio has a then-current distributor
relationship pursuant to a written agreement in the relevant country(ies) with
respect to products other than the Products) to sell, market, distribute and
promote [***], then PacBio shall promptly notify Roche [***], the Parties shall
enter into good faith negotiations [***] for Roche to become the exclusive
distributor [***]; provided that neither Party shall have any obligation to
accept or agree to any terms or conditions proposed by one Party to the other
Party or any liability whatsoever in connection with such negotiations or any
failure thereof.

2.5     No Territoriality. 

(a)      If a claim of a PacBio Patent would be exhausted with respect to a unit
of a Product for the Field by an authorized sale of such unit for the Field in
accordance with all terms and conditions of this Agreement (including Section
5.8) by Roche, its Affiliates or Distributors in the jurisdiction in which such
PacBio Patent was issued, then the Parties acknowledge and agree that such claim
shall also be deemed so exhausted with respect to such unit for the Field by the
authorized sale of such unit for the Field by Roche, its Affiliates or
Distributors in accordance with all terms and conditions of this Agreement
(including Section 5.8) anywhere else in the world. 

(b)      If a claim of a Roche Patent would be exhausted with respect to a unit
of a PacBio Product for outside the Field by an authorized sale of such unit for
outside the Field in accordance with all terms and conditions of this Agreement
(including appropriate label license terms (if any)) by PacBio, its Affiliates
or distributors in the jurisdiction in which such Roche Patent was issued, then
the Parties acknowledge and agree that such claim shall also be deemed so
exhausted with respect to such unit for outside the Field by the authorized sale
of such unit for outside the Field by PacBio, its Affiliates or distributors in
accordance with all terms and conditions of this Agreement (including
appropriate label license terms (if any)) anywhere else in the world. 

2.6     No Other Rights.  Each Party acknowledges that the rights and licenses
granted under this ARTICLE 2 and elsewhere in this Agreement are limited to the
scope expressly granted.  Accordingly, except for the rights expressly granted
under this Agreement, no right, title, or interest of any nature whatsoever is
granted whether by implication, estoppel, reliance, or otherwise, by either
Party to the other Party.  All rights with respect to Intellectual Property
Rights and other subject matter that are not specifically granted herein are
reserved to the Party or its Affiliates owning or otherwise controlling the
same.  For the avoidance of doubt, Roche and its Affiliates shall not be limited
in the exploitation and commercialization of their own Intellectual Property
Rights by the terms and conditions of this Agreement.

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ARTICLE 3

GOVERNANCE

3.1     Joint Steering Committee.  The Parties shall establish a joint steering
committee (“Joint Steering Committee” or “JSC”) to oversee, review and
coordinate the activities of the Parties under this Agreement, including
progress made in the development and commercialization of Products and Services,
subject to the provisions of this ARTICLE 3.  The JSC may from time to time
establish one or more subcommittees (each, a “Subcommittee”), to perform certain
duties of the JSC as expressly delegated by the JSC to such Subcommittee (which
may include Subcommittees for development or Intellectual Property Rights
matters).  The JSC shall act and have the following purpose: 

(a)      Review the Development Plan (including reviewing any revisions to the
Development Plan and Product Specifications on a quarterly basis) and the
Commercialization Plan (including establishing Sales Minimum Requirements) and
modifications thereto in accordance with Sections 4.2 and 5.2, respectively;

(b)      Review and oversee the progress and execution of the Development Plan
and Commercialization Plan, taking into full consideration the requirements of
the Field, including, without limitation, regulatory aspects thereof;

(c)      Review and oversee the setting of, and changes to, the Transfer Prices
relating to the supply of the PacBio Products in accordance with Exhibit 7.1,
and review and oversee the [***] Transfer Prices, and review the [***] Transfer
Prices;

(d)      Oversee the supply of PacBio Products to Roche; [***];

(e)      Provide a forum for the Parties to exchange information and coordinate
their respective activities with respect to matters pertaining to the
development and manufacture of the Products;

(f)      Establish additional timelines and criteria for decision points;

(g)      Provide a forum for resolving matters to be decided by the Parties
under this Agreement; and

(h)      Perform such other duties as are specifically assigned to the JSC in
this Agreement.

3.2     Committee Membership.  The JSC and any Subcommittee created by the JSC
pursuant to Section 3.1 (each a “Committee”) shall each be composed of an equal
number of employee representatives from each of Roche and PacBio, selected by
such Party.  Unless the Parties otherwise agree, the exact number of
representatives for each of Roche and PacBio shall be three (3) representatives,
at least one of whom shall have decision-making authority on behalf

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of and the ability to bind the appointing Party within the scope of such
Committee’s responsibilities.  Either Party may replace its respective employee
representatives serving on a Committee at any time by giving written notice to
the other Party; provided that the criteria for composition of each Committee
set forth in the preceding sentence continues to be satisfied following any such
replacement of a Party’s representative on any such Committee. 

3.3     Committee Meetings.  Each Committee shall meet at least once each
calendar quarter, or more or less often as otherwise agreed to by the
Parties.  All Committee meetings may be conducted by telephone, video-conference
or in person as determined by the applicable Committee.  Unless otherwise agreed
by the Parties, all in-person meetings for each Committee shall be held on an
alternating basis between PacBio’s facilities and Roche’s or its Affiliates’
facilities.  Each Party shall bear its own personnel and travel costs and
expenses relating to its representatives’ participation on any Committee. 

3.4     Decision-Making.  Decisions of each Committee shall be made by unanimous
vote, with at least one (1) representative from each Party participating in any
vote; provided always that any change to the terms and conditions of this
Agreement requires an agreement in writing by both Parties in accordance with
each Party’s own internal guidelines and delegations of authority.  In the event
a Subcommittee fails to reach unanimous agreement with respect to a particular
matter within its purpose, then upon request by either Party such matter shall
be referred to the JSC for resolution.  In the event that the JSC fails to reach
unanimous agreement with respect to a particular matter within its purpose, then
either Party may, by written notice to the other Party, have such matter
referred to the Chief Executive Officer of PacBio and the Head of Roche’s
Sequencing Unit (“Senior Executives”), or their respective designees, who shall
meet promptly and negotiate in good faith to resolve such matter.  If the Senior
Executives fail to meet or, despite such good faith negotiations, the Senior
Executives are unable to resolve such matter, the Parties shall resolve the
matter in accordance with the provisions of Section 16.3 (Dispute Resolution).

3.5     Alliance Managers.  Promptly following the Effective Date, each Party
shall appoint an employee representative (“Alliance Manager”) to facilitate
communications between the Parties (including, subject to the oversight of the
JSC, developing plans and mechanisms for each Party to provide the other Party
with that Know-How licensed to the other Party hereunder which is reasonably
necessary for the other Party to perform its obligations hereunder) and to act
as a liaison between the Parties.  Each Party may replace its Alliance Manager
with an alternate employee representative at any time by giving written notice
to the other Party.  For clarity, the Alliance Managers may seek the advice and
assistance of other personnel of either Party in fulfilling its purpose
hereunder.

3.6     Scope of Governance.  Notwithstanding the creation of the JSC and any
Subcommittee, each Party shall retain the rights, powers and discretion granted
to it hereunder, and no Committee shall be delegated or vested with rights,
powers or discretion.  No Committee shall have the power (a) to amend or modify
this Agreement, (b) to determine whether or not a

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Party has met its diligence or other obligations under the Agreement, or (c) to
determine whether or not a breach of this Agreement has occurred, and no
decision of any Committee shall be in contravention of any terms and conditions
of this Agreement. 

3.7     Day‑to‑Day Responsibilities.  Each Party shall: (a) be responsible for
day‑to‑day implementation and operations of the development, manufacture and
commercialization activities for which it has or is otherwise assigned
responsibility under the Development Plan or Commercialization Plan or this
Agreement, and (b) keep the other Party reasonably informed through the JSC as
to the progress of such activities, as designated by the applicable Committee or
reasonably requested by the other Party. 

ARTICLE 4

DEVELOPMENT AND REGULATORY ACTIVITIES

4.1     In General.  PacBio shall have the right and responsibility to conduct
all development activities for the development of the PacBio Technology Platform
and the PacBio Products; except that Roche shall have the right and
responsibility to conduct all clinical development activities as may be required
to obtain and maintain Marketing Approvals for the PacBio Products [***] for the
Field (including preparing, filing, and prosecuting any Marketing Approval
Applications, and obtaining and maintaining any Marketing Approvals for such
PacBio Products).  In addition, Roche shall have the right and responsibility to
conduct all development activities for the development of [***], including all
clinical development activities for the development of such [***], in each case,
for the Field.  Each Party shall perform such development activities in
accordance with the Development Plan (as defined under Section 4.2 below) and
the provisions of this ARTICLE 4, and each Party shall bear its own costs and
expenses incurred in connection therewith. 

4.2     Development Plan. 

(a)      General; Initial Development Plan.  The Parties through the JSC shall
prepare and update a development plan for the development of the PacBio
Technology Platform and the Products for the Field that sets out separately the
activities to be conducted by each Party for which it has responsibility in
accordance with Section 4.1 (collectively, the “Development Plan”), which shall
include specific requirements and timelines (each, a “Development Requirement”)
and for obtaining Marketing Approval for the Products for the Field (including,
when applicable, scope and timelines for the conduct of clinical studies
designed to support Marketing Approvals of the Products for the Field).  The
Parties through the JSC shall prepare an initial Development Plan consistent
with the outline of development activities [***]. 

(b)      Changes to the Development Plan.  Each Party shall update the
Development Plan on an ongoing basis (but not less often than once each calendar
quarter at the JSC meetings) as to the progress of its development activities
thereunder.  PacBio shall be solely responsible for updating the Development
Plan with respect to those development activities for

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which it has responsibility in accordance with Section 4.1 and Roche shall be
solely responsible for updating the Development Plan with respect to those
development activities for which it has responsibility in accordance with
Section 4.1.  Each update shall include all material decisions and actions
relating to the development of the PacBio Technology Platform and the Products
(including filing or prosecution of any Marketing Approval Applications for the
Field or obtaining or maintaining any Marketing Approvals for the Field).  In
addition, Roche shall provide, at JSC meetings, summaries of resulting data for
all preclinical studies and all clinical trials conducted to obtain Marketing
Approval [***] for the Field.    It is understood that each Party shall be
solely responsible for updating the Development Plan with respect to its
activities as provided in this Section 4.2(b), and the other Party may advise
but shall not have any right of approval with respect to changes to such Party’s
development activities set forth in the Development Plan in accordance with this
Agreement.  Notwithstanding the foregoing or anything else in this Agreement,
PacBio may not modify the requirements of any Development Requirements without
the prior written consent of Roche, not to be unreasonably withheld, conditioned
or delayed.  For clarity, however, PacBio may adjust the timelines for achieving
the Development Requirements consistent with the use of Commercially Reasonable
Efforts to accomplish the same.

(c)      Conduct.  Each Party shall use Commercially Reasonable Efforts to
conduct those development activities for which it is responsible, as set forth
in the then-current Development Plan, to achieve the goals of the then-current
Development Plan in accordance with the timelines specified therein.  Each Party
shall conduct such activities in compliance with all Applicable Laws and in
accordance with good scientific practice.

4.3     Product Specifications. 

(a)      Establishment.  In furtherance of the development activities set forth
in the Development Plan, PacBio shall establish and update the technical and
functional capabilities of the PacBio Technology Platform (“PacBio Technology
Platform Capabilities”).  [***]  Each Party shall provide to the other Party and
its Affiliates all PacBio Know-How and Roche Know-How (as applicable) reasonably
necessary for the other Party and its Affiliates to exercise its rights or
perform its obligations under this Section 4.3.

(b)      Changes.  Each Party shall have the sole right to make changes to the
Product Specifications for which it has responsibility in accordance with
Section 4.3(a); [***].  Accordingly, PacBio hereby grants to Roche and its
Affiliates under the PacBio Software and any PacBio Intellectual Property Rights
and PacBio Know-How with respect to such PacBio Software a non-exclusive,
non-transferable worldwide license to use, reproduce, modify and create
derivative works of such PacBio Software to implement such modification to such
PacBio Software for the Field in order to develop, manufacture, offer for sale,
sell, market, import, distribute, promote, use, maintain and support such PacBio
Software in accordance with the licenses granted under Section 2.1(a).  Roche,
on behalf of itself and its Affiliates, covenants not to exercise such license
unless and until the Parties agree that Roche or its Affiliate shall

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implement such modification.  Roche’s rights under the foregoing license shall
be further subject to a separate software license agreement to be entered into
by the Parties consistent with this Agreement, the terms and conditions of Third
Party licensors of the PacBio Software, and other standard and customary terms
and conditions for such license. 

4.4     Regulatory Filings.

(a)      Exclusive Right.  Subject to Section 4.4(b) below, Roche shall have the
exclusive right, at its expense, to file, obtain and maintain approvals for the
clinical development and commercialization of each Product and Service for the
Field, including any IDE, MAA or Marketing Approval, as well as permits,
registrations, licenses, exemptions, waivers, exceptions and other permissions
(“Permits”).  Roche shall keep the JSC reasonably informed of such activities,
including updating the Development Plan as to such activities in accordance with
Section 4.2(b) above.

(b)      DMF; QS Information.  With respect to a PacBio Product that [***]
PacBio is supplying (or having supplied) to Roche pursuant to Article 6 below
and for which Roche files, or intends to file, a Marketing Approval Application
for the Field in any country, at Roche’s request, PacBio shall either, as PacBio
determines (a) file a Device Master File (“DMF”) with the applicable Regulatory
Authority (and/or shall arrange for its contractor manufacturers to do so) and
permit Roche and its Affiliates, and hereby grants Roche and its Affiliates the
right to cross-reference any such DMF, or (b) provide to Roche and its
Affiliates the relevant Quality Systems Information, in each case of (a) or (b),
with respect to such PacBio Product for the purposes of, or use in, its
regulatory filings to obtain and maintain Marketing Approval for such PacBio
Product and use of such PacBio Product to provide Services.  “Quality Systems
Information” shall mean all data or information regarding a Party’s quality
systems filed or required to be filed to obtain Marketing Approval for a Product
or Service, in each case, for the Field.

4.5     Regulatory Matters.  Roche shall have the exclusive right to liaise with
and manage all interactions with Regulatory Authorities to obtain and maintain
Marketing Approvals for the Products and Services, as applicable, for the Field;
provided that PacBio shall be entitled to participate in such interactions as
provided in Section 4.5(a)(i).  In addition to PacBio’s obligations under
Section 4.4(b), PacBio shall, at Roche’s request, use Commercially Reasonable
Efforts to assist Roche in participating in such interactions to obtain such
Marketing Approvals for the Products and Services for the Field, including
through execution and delivery of such documents (including any documentation to
Regulatory Authorities to permit Roche and its Affiliates to cross-reference any
DMF described in Section 4.4(b)), and provision of such information requested by
Roche that Roche considers to be reasonably necessary in connection with
obtaining such Marketing Approvals. 

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(a)      Participation by PacBio.  Without limiting PacBio’s obligations under
Section 4.5 above, to the extent relating to the Products or Services for the
Field, Roche shall provide PacBio with: 

(i)      reasonable advanced notice (and in no event less than fourteen (14)
days’ advance notice whenever feasible) of substantive meetings with the FDA, or
any other Regulatory Authority in a Major Market that are either scheduled with,
or initiated by or under the authority of, Roche or its Affiliates, and an
opportunity to (and PacBio shall, at Roche’s request) have a reasonable number
(but at least one (1)) representative participate in all substantive meetings
with the FDA or any other Regulatory Authority in a Major Market, and in any
case Roche shall keep PacBio reasonably informed as to all material interactions
with any Regulatory Authorities; and

(ii)      a copy of any material documents, information and correspondence
submitted to, or received from, the FDA or any other Regulatory Authority in a
Major Market as soon as reasonably practicable, together with English
translations and summaries thereof, to the extent such translations and
summaries exist.

4.6     Infeasibility.  In the event that, with respect to a PacBio Product,
PacBio reasonably believes, and provides written notice to Roche, that the
applicable Product Specifications cannot be achieved despite using Commercially
Reasonable Efforts (which may include acquiring New Technology in accordance
with Sections 10.5(b) and 10.5(c) below) with respect to the development or
manufacture of such PacBio Product, then the JSC shall convene within fifteen
(15) Business Days upon notice thereof to establish appropriate measures and
timelines to address the problem, [***].  

ARTICLE 5

COMMERCIALIZATION AND DISTRIBUTION

5.1     Commercialization of the Products and Services.  Roche, its Affiliates
and Distributors shall have the exclusive right to commercialize and distribute
the Products and Roche and its Affiliates shall have the right to provide
Services, in each case, solely for the Field.  Roche shall use Commercially
Reasonable Efforts to carry out all such activities in accordance with the
then-current Commercialization Plan (as defined under Section 5.2 below) and the
provisions of this Agreement, and Roche or the relevant Affiliate shall bear its
costs and expenses incurred in connection therewith.

5.2     Commercialization Plan.  Reasonably in advance of the anticipated First
Commercial Sale of a Product or Service by Roche, its Affiliates or Distributors
for the Field, Roche shall prepare, in consultation with PacBio, a plan for the
marketing, promotion, distribution and commercialization of such Product or
Service by Roche, its Affiliates and Distributors, as applicable, in reasonable
scope and detail (the “Commercialization Plan”), which shall be presented and
updated on a calendar year basis by Roche to the JSC for its review.  The

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Commercialization Plan and each annual update shall include a [***] sales
forecast  [***] (the “Sales Forecast”), [***].  Such Sales Forecasts are
non-binding (except to the extent of the Sales Minimum Requirements as described
in Section 5.4 below). 

5.3     Conduct.  Roche shall use Commercially Reasonable Efforts to market,
promote, distribute and sell each Product and Service, in each case, for the
Field, and meet the Sales Minimum Requirements; provided, however that subject
to Section 11.4 (Termination for Cessation), Roche may decide to discontinue a
particular Product at any time if its sale or distribution is not profitable or
otherwise commercially competitive according to Roche’s reasonable
assessment.  Roche shall conduct all such activities in compliance in all
material respects with all Applicable Laws. 

5.4     Sales Minimums.  In connection with the review of the Commercialization
Plan for a particular year, the JSC shall establish aggregate minimum
requirements for revenue from the sales of all Products and Services, in each
case, for the Field, which shall be, at a minimum, [***], the “Sales Minimum
Requirements”), as illustrated by the examples in Exhibit 5.4, beginning with
calendar year in which the First Commercial Sale of a Product or Service by
Roche, its Affiliates or Distributors for the Field occurs.  In the event Roche
fails to meet the Sales Minimum Requirements [***], PacBio shall provide written
notice to Roche [***], to convert the rights and licenses granted to Roche under
Section 2.1(a) above (and any other rights and licenses granted hereunder) to
non-exclusive.  [***] 

5.5     Commercially Reasonable Efforts.  Each Party shall use Commercially
Reasonable Efforts to maintain and enhance the reputation and acceptance of the
Products and Services [***].

5.6     Marketing and Promotion.

(a)      General.  Roche and its Affiliates and Distributors shall use
Commercially Reasonable Efforts to market and promote the Products and Services
and to distribute Product and Service information and promotional materials, in
each case, solely to Clinical End Users for the Field.  Such marketing and
promotion may include, without limitation, trade show displays, training
workshops, educational seminars, advertising, sales sheets, Product information,
and other activities related to promoting Products and Services. 

(b)      Materials.  PacBio agrees to provide Roche with reasonable quantities
of relevant and current marketing and promotional information relating to the
PacBio Technology Platform and the Products in the form that such materials are
used by PacBio in the United States market or the particular other market
(collectively, “PacBio Promotional Materials”), at Roche’s request during the
term of this Agreement, and Roche will reimburse PacBio for its incremental
costs of providing such PacBio Promotional Materials to Roche.  PacBio hereby
grants Roche and its Affiliates a right and license to copy, translate, adapt,
create derivative works of, publicly display and distribute the PacBio
Promotional Materials and derivative works thereof for the

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purposes of marketing and promoting the Products and Services solely for the
Field in accordance with this Agreement (with the right to grant sublicenses to
Third Parties acting on Roche’s or its Affiliate’s behalf).  Roche may also
develop and use its own marketing and promotional information relating to the
Products and Services consistent with the PacBio Promotional Materials
(including any translations or derivative works thereof). 

(c)      Packaging and Labeling.  Roche shall have, in its sole discretion, the
right to determine the trademarks, trade dress, final packaging, and labeling of
the Products (including Kit Products) and Services, in each case, for the
Field.  For the avoidance of doubt, Roche may decide in its discretion to use or
not use its own, its Affiliate’s, a Third Party’s or, subject to Section 5.7
below, PacBio’s Listed Trademarks.  Notwithstanding the foregoing, with respect
to a PacBio Product, to the extent required under any Existing In-Licenses or as
expressly agreed by the Parties in writing in accordance with Sections 10.5(b)
and 10.5(c) before the first manufacture of such PacBio Product by or on behalf
of PacBio to supply to Roche pursuant to Article 6, Roche shall not repackage
any such PacBio Product, and Roche, its Affiliates and Distributors shall resell
such PacBio Product for the Field [***]; provided, that, if the JSC or a
Subcommittee for Intellectual Property Rights matters determines that such
action is appropriate after taking into account the facts and circumstances
related thereto, PacBio shall use Commercially Reasonable Efforts to seek an
amendment of any such Existing In-Licenses in effect as of the Effective Date to
allow the use of Roche Trademarks on such PacBio Products.

5.7     Trademarks. 

(a)      Grant.  In connection with the exercise of rights and performance of
obligations under Sections 2.1 and 5.6 above and in accordance with Section
5.7(b) below, PacBio hereby grants to Roche and its Affiliates an exclusive
license to use PacBio’s Listed Trademarks (except with respect to PacBio’s trade
name and trademarks used with respect to products or components that are
functionally equivalent to Products intended to be used or interoperate with
sequencing system platforms other than the PacBio Technology Platform (e.g.,
PacBio®, SMRT® and SMRTbell™) under which such license to use is non-exclusive)
for the packaging, labeling, marketing, promotion, distribution and sale of the
Products and Services, and to otherwise exercise its rights and licenses
hereunder with respect to the Products and Services, in each case, solely for
the Field in accordance with this Agreement (with the right to grant sublicenses
to Third Parties working on Roche’s or its Affiliate’s behalf). The extent of
exclusivity of the license to PacBio’s Listed Trademarks granted under this
Section 5.7 shall be subject to the same clarification in Section 2.1(a),
mutatis mutandis. PacBio shall own all right, title and interest in and to
PacBio’s Listed Trademarks and the registrations thereof and all goodwill from
the use of PacBio’s Listed Trademarks shall vest in and inure to the benefit of
PacBio.  Notwithstanding the foregoing, neither Roche nor its Affiliates shall
use any of PacBio’s Listed Trademarks except as mutually agreed by the Parties
or as required by Applicable Laws, in each case, in accordance with Section
5.7(b) below.

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(b)      Guidelines.  In the event Roche uses, as mutually agreed by the Parties
or as required by Applicable Law, any of PacBio’s Listed Trademarks for
marketing and promotional materials, packaging or display of the Products or
Services, or to otherwise exercise its rights and licenses hereunder with
respect to the Products and Services, in each case, for the Field, PacBio shall
provide to Roche a representative proof of each such Listed Trademark and
reasonable guidelines on the use of such Listed Trademark, and Roche shall
obtain PacBio’s review and approval prior to the first use of such  Listed
Trademarks in such marketing and promotional materials, packaging or display,
such approval not to be unreasonably withheld if such marketing and promotional
materials, packaging or display of such  Listed Trademarks are used in a manner
that is consistent with such guidelines or is required by Applicable Law. 
Neither Party shall engage in any activity that would adversely affect the name,
reputation, or goodwill of the other Party, the Trademarks of the other Party
that such Party may adopt with respect to the Products or Services for its
respective field as set forth in Exhibit 5.7(b) (the “Listed Trademarks”) or the
Products or Services.  Neither Party shall challenge or assist others to
challenge the Listed Trademarks of the other Party (except to the extent such
restriction is expressly prohibited by Applicable Law) or the registration
thereof or attempt to register any trademarks, marks or trade names confusingly
similar to such Listed Trademarks.    Exhibit 5.7(b) may be updated from time to
time upon request by a Party with the written consent of the other Party, not to
be unreasonably withheld.  Except as set forth in this Section 5.7, nothing
contained in this Agreement shall grant or shall be deemed to grant to either
Party any right, title or interest in or to the other Party’s Listed Trademarks.

5.8     Label License; End User License Agreement. 

(a)      Label License.  With respect to a Product supplied by PacBio pursuant
to ARTICLE 6 or otherwise licensed to Roche and its Affiliates hereunder, Roche
and its Affiliates and Distributors, shall market, promote, distribute and sell
such Product with, and subject to, label license agreements consistent with the
terms and conditions of the label license agreement that PacBio uses [***], and
other terms and conditions to the extent required by any Existing In-Licenses or
as expressly agreed by the Parties in writing in accordance with Sections
10.5(b) and 10.5(c), as set forth in Exhibit 5.8(a) (as may be updated from time
to time in accordance with Sections 10.5(b) and 10.5(c)) (each a “Label License
Agreement”); provided, that, if the JSC or a Subcommittee for Intellectual
Property Rights matters determines that such action is both reasonably necessary
and likely to be successful (after taking into account the facts and
circumstances related thereto), PacBio shall use Commercially Reasonable Efforts
to seek an amendment of any such Existing In-Licenses in effect as of the
Effective Date to waive the requirements to sell such Product with, and subject
to, such other terms and conditions of the Label License Agreements.  The Label
License Agreements are intended to provide, among other things, a limited
license that would prevent, to the extent provided under Applicable Law, the
exhaustion of any PacBio Patents [***].  Notwithstanding anything to the
contrary, no Label License Agreement or other labeling of the Products regarding
its terms and conditions for use shall be construed to expand or limit the
rights and licenses granted to Roche under Section 2.1 or elsewhere in this
Agreement.

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(b)      End User License Agreements.  With respect to an Instrumentation
Product supplied by PacBio pursuant to ARTICLE 6 or otherwise licensed to Roche
and its Affiliates hereunder, Roche and its Affiliates and Distributors, shall
market, promote, distribute and sell such Product (including the associated
Software) with, and subject to, the Product Documentation for such Product
(including the associated Software) and an end user license agreement consistent
with terms and conditions of the end user license agreement that PacBio uses for
its own comparable product, and other terms and conditions to the extent
required by any Existing In-Licenses or as expressly agreed by the Parties in
writing in accordance with Sections 10.5(b) and 10.5(c), as set forth in
Exhibit 5.8(b) (as may be updated from time to time in accordance with Sections
10.5(b) and 10.5(c)) (each an “End User License Agreement”); provided, that, if
the JSC or a Subcommittee for Intellectual Property Rights matters determines
that such action is both reasonably necessary and likely to be successful (after
taking into account the facts and circumstances related thereto), PacBio shall
use Commercially Reasonable Efforts to seek an amendment to any such Existing
In-Licenses in effect as of the Effective Date to waive the requirements to sell
such Product with, and subject to, such other terms and conditions of the End
User License Agreements.  Except as expressly provided in this Agreement under
Sections 2.1(d), 4.3(b), 6.3(c) and 15.2(f), nothing in this Agreement shall be
construed to convey any license to Roche with respect to the Software, and
PacBio retains all its rights under the Software and related Intellectual
Property Rights. 

5.9     Services.  Roche shall, in its sole discretion, have the exclusive right
to control and direct marketing, promotion, distribution, sale and performance
of the Services for the Field, in accordance with this Agreement.  Roche agrees,
on behalf of itself and its Affiliates, that they shall provide the Services for
the Field in compliance with all Applicable Laws, [***].

5.10    Warranty; Instrumentation Installation, Support and Maintenance. 

(a)      General.  PacBio shall provide to Roche the limited warranty for each
of the PacBio Products supplied by PacBio pursuant to Article 6 as set forth in
the applicable Supply Agreement for such PacBio Product; provided that the JSC
shall determine the appropriate terms and conditions of warranty for such PacBio
Product consistent with industry standards applicable to the Field, and provided
further that the warranty for any Instrumentation Product shall be for at least
one year after the placement with the relevant Instrumentation Product user,
[***].  Without limiting Roche’s obligation of inspection as required in the
particular Supply Agreement, the Parties acknowledge that a warranty issue may
be identified following a resale of the relevant PacBio Product by Roche, its
Affiliates or Distributors, and that the consequences of such warranty issue are
set forth in the applicable Supply Agreement for such PacBio Product.

(b)      Training / Support.  PacBio shall provide to Roche, on a PacBio
Product-by-PacBio Product basis, appropriate training sessions to Roche’s
qualified technical support personnel to ensure that such personnel will have a
reasonable and appropriate level of product knowledge and support expertise to
enable them to provide end customer support of such PacBio

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Product, [***].  Additionally, Roche and PacBio may decide for PacBio to provide
installation, support and maintenance services, or parts replacement services,
with respect to the Instrumentation Products on Roche’s or its Affiliate’s or
Distributor’s behalf, and in such event, the Parties shall enter into a separate
services agreement consistent with the standard terms and conditions provided by
PacBio to its distributors for such services [***].

5.11     Remote Access Software.  In connection with the training provided
pursuant to Section 5.10(b) above, PacBio shall provide to Roche appropriate
information in PacBio’s possession relating to remote access functionality of
the PacBio Software.  The Parties shall use Commercially Reasonable Efforts to
cooperate to create Software that is interoperable with Roche’s and its
Affiliates’ existing IT solution used to provide product support. 

5.12     Know-How and Software Transfer.  PacBio shall provide Roche with all
reasonably requested PacBio Know-How and PacBio Software regarding any Product
or Service for the Field reasonably necessary for Roche to exercise its rights
or perform its obligations to [***], commercialize and distribute the Products
for the Field (including to support and maintain the Products for the Field) and
to provide the Services for the Field in accordance with the terms and
conditions of this Agreement; provided that PacBio shall not be obligated to
provide PacBio Software in source code unless and until Roche can exercise its
rights to such PacBio Software pursuant to Sections 4.3(b) or 6.3(c) and the
Parties enter into separate software license agreement consistent with this
Agreement, the terms and conditions of Third Party licensors of the PacBio
Software, and other standard and customary terms and conditions for such
license.

5.13     Competing Products.  In the event that Roche or any of its Affiliates
sell a Competing Product (as defined below), or a service using a Competing
Product, for the Field, PacBio shall have the right, at its sole discretion, to
convert the rights and licenses granted to Roche and its Affiliates under
Section 2.1 above and elsewhere in this Agreement to non-exclusive by giving
Roche written notice.  For purposes of this Section 5.13, “Competing Product”
shall mean any sequencing instrument that competes with any Instrumentation
Product; provided that Competing Product excludes (i) any product that Roche or
any of its Affiliates is selling or has sold for the Field prior to or as of the
Effective Date (each a “Pre‑existing Roche Product”) and (ii) any Product. For
clarity, Roche or its Affiliates may sell new sequencing products which are
Pre-existing Roche Products (i.e., based on, using or incorporating
substantially the same technology(ies) and the same sequencing system
platform(s)) which have been further developed or improved and such sequencing
products shall be treated as Pre-existing Roche Products for the purpose of this
Section 5.13.  Notwithstanding anything to the contrary, nothing in this Section
5.13 shall be construed to expand or limit the rights and licenses granted to
Roche under Section 2.1 or elsewhere in this Agreement.

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ARTICLE 6

SUPPLY

6.1     Supply.

(a)      Exclusivity.  Subject to the terms and conditions of this Agreement
(including, without limitation, Section 6.3(c)), (i) Roche shall exclusively
purchase from PacBio all of its and its Affiliates’ and Distributors’
requirements of the PacBio Products for the Field in accordance with this
ARTICLE 6; (ii) PacBio shall manufacture, or have manufactured, and supply all
of Roche’s and its Affiliates’ and Distributors’ requirements of the PacBio
Products for the Field to Roche; and (iii) PacBio shall not manufacture, have
manufactured or supply the PacBio Products for the Field to any Person other
than Roche, its Affiliates and, at Roche’s request, Roche’s Distributors. 

(b)      Exhibit M.  Promptly following the Effective Date, the Parties shall
negotiate in good faith an exhibit to this Agreement setting forth the form of
Supply Agreement for the Instrumentation Products and an exhibit to this
Agreement setting forth the form of Supply Agreement for the Consumable
Products, each such exhibit containing the terms and conditions under which
PacBio shall manufacture and supply to Roche the applicable PacBio Products,
including, without limitation, terms and conditions relating to warranties
(including the warranty timeframes set forth in Section 5.10), quality,
forecasting, purchase orders (issuance and acceptance) and invoicing, payment,
shipping, returns and recalls, and, unless otherwise agreed by the Parties, the
provisions of Section 6.3.  Once agreed upon, such exhibits shall be attached to
this Agreement as the relevant Exhibit M pursuant to an amendment to this
Agreement.  If the Parties have not so attached such two Exhibits M to this
Agreement within [***] of the Effective Date, then either Party may escalate the
remaining terms of such forms for establishment in accordance with ARTICLE 16. 

(c)      Supply Agreement.  For each PacBio Product or, as determined by the
JSC, group of PacBio Products, the Parties shall enter into a separate supply
agreement substantially in the applicable form of Exhibit M agreed upon pursuant
to Section 6.1(b) and attached hereto as consecutively numbered Exhibits M-1,
M-2, M-3, and so forth (each a “Supply Agreement”), pursuant to which Roche
shall purchase, and PacBio shall supply, such PacBio Product in accordance with
the terms and conditions therein.  It is understood that a particular Supply
Agreement for a PacBio Product or group of PacBio Products may be different from
the applicable form of Exhibit M to accommodate the specific characteristics of
such PacBio Product(s).  Each Supply Agreement, once executed, is hereby
incorporated herein by reference and made a part of this Agreement.  A Supply
Agreement may only be amended by a written amendment signed by an authorized
representative of each Party.

(d)      Clinical Supplies.  To the extent Roche will conduct any clinical
development activities involving the PacBio Products pursuant to and in
accordance with the Development Plan, PacBio shall supply Roche with such
quantities of the PacBio Products [***] 

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as are reasonably requested by Roche in order for it to conduct such clinical
development activities in accordance with the Development Plan (“Clinical
Supplies”).  The Parties acting through the JSC shall establish reasonable,
mutually agreed procedures for Roche to forecast and submit, and PacBio to
promptly fill orders for, the PacBio Products for such purposes.  Such
procedures shall be in lieu of the forecasting and ordering procedures set forth
in any applicable Supply Agreement and shall include in all events reasonable
lead times (consistent with PacBio’s lead time requirements in existence as of
the Effective Date, unless the Parties otherwise agree) and a reasonable
delivery schedule.  Notwithstanding the foregoing, PacBio shall not be obligated
to supply any quantities of the PacBio Products in excess of the Products
reasonably necessary for Roche to conduct the clinical development activities in
accordance with the Development Plan.  Roche agrees that if any such PacBio
Products supplied pursuant to this Section 6.1(d) are used or resold by Roche
for commercial purposes, and not solely for performing clinical development of
such PacBio Products for the Field in accordance with the Development Plan,
Roche shall (i) notify PacBio in advance of such use or resale and (ii) [***]. 

6.2     Transfer Price.  The transfer price for each PacBio Product shall be
determined in accordance with Paragraph 3 of Exhibit 7.1 (the “Transfer Price”).

6.3     Shortage of Supply; Cooperation. 

(a)      General.  PacBio and Roche through the JSC shall cooperate to establish
reasonable plans and procedures to avoid any shortage of supply of the PacBio
Products, including reasonable procedures for buffer stock inventories to be
maintained by Roche or PacBio.

(b)      Procedures.  If at any time PacBio becomes unable, or concludes that it
will be unable, to supply Roche’s requirements for the PacBio Product ordered
and accepted in accordance with the applicable Supply Agreement, PacBio shall
immediately notify Roche in writing.  In such event, the JSC shall immediately
convene to address the problem, including locating alternate suppliers and
facilities to increase manufacturing capacity and identifying other actions as
may be necessary to resolve the problem.  Based on such interactions, the JSC
shall reasonably establish appropriate measures to remedy the shortage and the
Parties shall promptly implement such measures.  In any event, both Parties
agree to respond with the level of speed and diligence commensurate with the
severity of the problem.

(c)      Back-Up Manufacturing Right. 

(i)      In the event of a Supply Failure with respect to a PacBio Product,
Roche on behalf of PacBio shall have the right [***], for such PacBio Product
for commercial sale and to have its and its Affiliates’ and Distributors’
requirements for such PacBio Product manufactured and supplied to PacBio, so
that PacBio may supply Roche until PacBio itself is able to resume supply of
such quantities.  If Roche so elects to exercise its rights under this Section
6.3(c), then the JSC shall develop a reasonable, mutually agreed process
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shall further establish a process for PacBio to resume supply of such PacBio
Product to Roche in accordance with the terms of this Agreement as soon as
practicable; provided that no costs or expenses resulting solely from the
transfer of the manufacture of such PacBio Product from and to PacBio pursuant
to this Section 6.3(c) shall be included in the Transfer Price for such PacBio
Product.  For the avoidance of doubt, Roche’s obligations under Section 6.1(a)
and any similar exclusive purchasing obligations under any Supply Agreement
shall be suspended and of no force or effect for the applicable PacBio Product
during any time period during which Roche has rightfully exercised its rights
under this Section 6.3(c).

(ii)      PacBio hereby grants to Roche and its Affiliates under the PacBio
Intellectual Property Rights, PacBio Product Documentation, PacBio Know-How and
PacBio Software a non-exclusive, non-transferable worldwide license, without the
right to sublicense, to manufacture (or have manufactured [***]) each PacBio
Product in accordance with this Agreement.  [***]    

ARTICLE 7

PAYMENTS

7.1     Payments.  In consideration of the exclusive rights and licenses granted
to Roche with respect to the Products and Services and the development and
supply of Products to Roche hereunder, in each case, for the Field, Roche shall
pay to PacBio the amounts as set forth in Exhibit 7.1.

7.2     Reports.  Roche shall provide to PacBio on a calendar quarterly basis a
report of (a) its sales of Products in connection with the monitoring of its
Sales Minimum Requirements and (b) the PacBio Products that are Consumable
Products that were used in the performance of Services for sale by Roche or its
Affiliates [***].  Such report shall be provided no later than [***] after the
end of the applicable calendar quarter.  [***]

ARTICLE 8

PAYMENTS; BOOKS AND RECORDS

8.1     Payment Method.  Except as expressly provided otherwise under any Supply
Agreement, all payments under this Agreement shall be made by bank wire transfer
in immediately available funds to an account designated by the Party to which
such payments are due.  Any payments or portions thereof due under this
Agreement that are not paid by the date such payments are due under this
Agreement shall bear interest at a rate equal to:  (i) 10% per year; or (ii) if
lower, the maximum rate permitted by Applicable Law; calculated on the number of
days such payment is delinquent, compounded annually and computed on the basis
of a three hundred sixty-five (365) day year.  All amounts specified in this
Agreement are in United States Dollars, and all payments by one Party to the
other Party under this Agreement shall be paid in United States Dollars.

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8.2     Withholding.  If Applicable Law requires withholding by Roche of any
taxes imposed upon PacBio on account of any payments paid by Roche under this
Agreement, such taxes shall be deducted by Roche as required by Applicable Law
from such payment and shall be paid by Roche to the proper taxing
authorities.  Official receipts of payment of any withholding tax shall be
secured and sent to PacBio as evidence of such payment.  The Parties will
exercise their reasonable efforts to ensure that any withholding taxes imposed
are reduced as far as possible under the provisions of any applicable tax
treaty, and shall cooperate in filing any forms required for such
reduction.  Without limiting the foregoing, it is understood by the Parties as
of the Effective Date that no withholding of any taxes with respect to any
payments to be made by Roche under this Agreement is required under Applicable
Laws.

8.3     Records; Inspection.

(a)      Roche.  Roche shall keep complete, true and accurate books of accounts
and records for the purpose of confirming achievement of the Sales Minimum
Requirements and providing the reports described in Section 7.2.  Such books and
records shall be kept for three (3) years following the end of the calendar
quarter to which they pertain.  Such records will be open for inspection during
such three (3) year period by an independent internationally recognized auditor
chosen by PacBio for the purpose of verifying the achievement of Sales Minimum
Requirements and the reports submitted in accordance with Section 7.2.  Such
inspections may be made no more than once each calendar year, at reasonable
times and on reasonable prior written notice.  Such records for any particular
calendar year shall be subject to no more than one inspection.  PacBio’s
independent auditor shall be obligated to execute a reasonable confidentiality
agreement prior to commencing any such inspection.  Inspections conducted under
this Section 8.3(a) shall be at the expense of PacBio, unless a variation or
error producing an underpayment in amounts payable exceeding five percent (5%)
of the amount paid for a period covered by the inspection is established or such
inspection determines that Roche failed to achieve the Sales Minimum
Requirements which Roche had claimed to have achieved, in which case all
reasonable costs relating to the inspection for such period shall be paid by
Roche.  PacBio shall ensure that the inspection shall not cause undue disruption
to Roche’s normal business activities.

(b)      PacBio.  PacBio shall keep complete, true and accurate books of
accounts and records for the purpose of determining Manufacturing Costs, U.S.
list prices, average selling prices and payments due from Roche related
thereto.  Such books and records shall be kept for three (3) years following the
end of the calendar quarter to which they pertain.  Such records will be open
for inspection during such three (3) year period by an independent
internationally recognized auditor chosen by Roche for the purpose of verifying
such amounts payable by Roche hereunder.  Such inspections may be made no more
than once each calendar year, at reasonable times and on reasonable prior
written notice.  Such records for any particular calendar year shall be subject
to no more than one inspection.  Roche’s independent auditor shall be obligated
to execute a reasonable confidentiality agreement prior to commencing any such
inspection.  Inspections conducted under this Section 8.3(b) shall be at the
expense of Roche, unless a

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variation or error producing an overpayment in amounts payable exceeding five
percent (5%) of the amount paid for a period covered by the inspection is
established, in which case all reasonable costs relating to the inspection for
such period shall be paid by PacBio. In addition any overpaid amounts that are
discovered shall be paid by PacBio together with interest on such overpaid
amounts at a rate equal to: (i) 10% per year; or (ii) if lower, the maximum rate
permitted by Applicable Law, calculated on the number of days from when the
overpayment was made, compounded annually and computed on the basis of a three
hundred sixty-five day (365) year.  Roche shall ensure that the inspection shall
not cause undue disruption to PacBio’s normal business activities.

ARTICLE 9

CONFIDENTIALITY

9.1     Confidential Information.  Except as expressly provided in this
Agreement, the Parties agree that the receiving Party shall not publish or
otherwise disclose and shall not use for any purpose any information furnished
to it by the other Party pursuant to this Agreement (collectively, “Confidential
Information”).  Notwithstanding the foregoing, Confidential Information shall
not include information that, in each case as demonstrated by written
documentation:

(a)      was already known to the receiving Party or its Affiliates, other than
under an obligation of confidentiality to the disclosing Party, at the time of
disclosure or, as shown by written documentation, was developed by the receiving
Party or its Affiliates prior to its disclosure by the disclosing Party;

(b)      was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the receiving Party or its Affiliates;

(c)      became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement (including information readily
apparent by the routine inspection or authorized use of a Product sold to a
Third Party in accordance with this Agreement);

(d)      was subsequently lawfully disclosed to the receiving Party or its
Affiliates by a Person other than the disclosing Party, and who did not directly
or indirectly receive such information from the disclosing Party; or

(e)      is developed by the receiving Party or its Affiliates without use of or
reference to any Confidential Information disclosed by the disclosing Party.

9.2     Permitted Disclosures.  Notwithstanding the provisions of Section 9.1
above and subject to Sections 9.3 and 9.4 below, each Party may use and disclose
the other Party’s Confidential Information to its Affiliates, licensees,
sublicensees, contractors and any other Third Parties to the extent such use or
disclosure is reasonably necessary to exercise the rights granted

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to it, or reserved by it, under this Agreement, prosecuting or defending
litigation, complying with Applicable Law, submitting information to tax or
other governmental authorities or, with respect to Roche and its Affiliates as
the receiving Party, conducting clinical trials hereunder with respect to any
Product or Service.  If a Party is required by Applicable Law to make any such
disclosure of the other Party’s Confidential Information, to the extent it may
legally do so, it will give reasonable advance notice to the other Party of such
disclosure and, save to the extent inappropriate in the case of patent
applications or otherwise, will use its good faith efforts to secure
confidential treatment of such Confidential Information prior to its disclosure
(whether through protective orders or otherwise).  For any other disclosures of
the other Party’s Confidential Information, including to Affiliates, licensees,
sublicensees, contractors and other Third Parties, the receiving Party shall
ensure that the recipient thereof is bound by a written confidentiality
agreement or ethical obligations as materially protective of such Confidential
Information as this ARTICLE 9.

9.3     Confidential Terms.  Each Party agrees not to disclose to any Third
Party the terms of this Agreement without the prior written consent of the other
Party, except each Party may disclose the terms of this Agreement:  (a) to
advisors (including, without limitation, financial advisors, attorneys and
accountants), actual or potential acquisition partners or private investors, and
others on a need to know basis, in each case under appropriate confidentiality
provisions substantially equivalent to those in this Agreement; or (b) to the
extent necessary to comply with Applicable Law and court orders, including,
without limitation, securities laws, regulations or guidances; provided that in
the case of clause (b) the disclosing Party shall, to the extent it may legally
do so, (i) promptly notify the other Party and (ii) (other than in the case
where such disclosure is necessary, in the reasonable opinion of the disclosing
Party’s legal counsel, to comply with securities laws, regulations or guidances)
allow the other Party a reasonable opportunity to oppose with the body
initiating the process and, to the extent allowable by law, to seek limitations
on the portion of the Agreement that is required to be disclosed.  Each Party
may disclose to Third Parties the information disclosed in accordance with
clause (b) without the need for further approval by the other Party. 

9.4     Publication of Product Information.  Prior to its publishing, publicly
presenting or submitting for written or oral publication to a broad audience a
manuscript, abstract or the like that includes Data or other information
relating to any Product, in each case, that would be reasonably expected to have
a material adverse effect on the other Party’s Intellectual Property Rights
hereunder or respective field, and that has not previously published pursuant to
this Section 9.4, a Party shall provide the other Party a copy thereof for its
review for at least thirty (30) days (unless such Party is required by
Applicable Law to publish such information sooner).  Such Party shall consider
in good faith any comments provided by the other Party during such thirty- (30)
day (or such shorter) period.  In addition, the publishing Party shall, at the
request of the other Party but subject to its rights and obligations under
Section 9.3(b), remove any Confidential Information of the non-publishing Party
therefrom.  The contribution of each Party shall be noted in all publications or
presentations by acknowledgment or co-authorship, whichever is appropriate.

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9.5     Publicity Review.    The Parties acknowledge the importance of
supporting each other’s efforts to publicly disclose results and significant
developments regarding the Products and other activities in connection with this
Agreement that may reflect the terms of this Agreement or information that is
not otherwise permitted to be disclosed under this ARTICLE 9, beyond what is
required by Applicable Law, and each Party may make such disclosures from time
to time with the approval of the other Party, which approval shall not be
unreasonably withheld or delayed.  Such disclosures may include, without
limitation, achievement of milestones, significant events in the development and
regulatory process, commercialization activities and the like.  When a Party
(the “Requesting Party”) elects to make any such public disclosure under this
Section 9.5, it will give the other Party (the “Cooperating Party”) at least
five (5) Business Days’ notice to review and comment on such statement, it being
understood that if the Cooperating Party does not notify the Requesting Party in
writing within such five Business Day period of any reasonable objections, as
contemplated in this Section 9.5, such disclosure shall be deemed approved, and
if the Cooperating Party timely raises its objections, the Parties shall work
diligently and reasonably to agree on the text of any proposed disclosure in an
expeditious manner.

9.6     Certain Principles.  The principles to be observed in any disclosures
described in Sections 9.4 and 9.5 shall be accuracy, compliance with Applicable
Law, reasonable sensitivity to potential negative reactions of any Regulatory
Authority and the need to keep investors informed regarding the publishing
Party’s business.  Accordingly, a Party shall not unreasonably withhold its
approval of a proposed disclosure or publication that complies with such
principles.

9.7     Prior Non-Disclosure Agreements.  Upon execution of this Agreement, the
terms of this ARTICLE 9 shall supersede any prior non-disclosure, secrecy or
confidentiality agreement between the Parties or their Affiliates, including
that certain Mutual Non-Disclosure Agreement between PacBio and Roche
Diagnostics GmbH, dated January 17, 2013 (collectively, the “CDAs”); and any
information disclosed under such prior agreements shall be deemed disclosed
under this Agreement.

ARTICLE 10

INTELLECTUAL PROPERTY

10.1     Ownership of Intellectual Property.

(a)      Background Technology.  All rights, title and interest in and to
Inventions, and all Intellectual Property Rights therein and thereto, (i)
Controlled by a Party or its Affiliates prior to the Effective Date or (ii)
made, developed, conceived, authored, acquired or created by or on behalf of a
Party or its Affiliate independently of the other Party and its Affiliates
outside the performance of activities under this Agreement (with respect to each
Party, its “Background Technology”) shall remain owned by the owner.

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(b)      Foreground Technology. 

(i)      General.  Each Party or its Affiliates, as applicable, shall own all
right, title, and interest in and to the Foreground Technology made, developed,
conceived, authored, acquired or created (any of the foregoing, “Made”) by or on
behalf of such Party or its Affiliate independently of the other Party and its
Affiliates, and all Intellectual Property Rights therein and thereto.  The
Parties shall jointly own all right, title, and interest in and to the
Foreground Technology Made jointly by or on behalf of each Party or their
respective Affiliates, and all Intellectual Property Rights therein and thereto.

(ii)      Improvements.  Notwithstanding Section 10.1(b)(i) above, PacBio shall
own all right, title and interest in and to any Foreground Technology that
constitutes an improvement, enhancement, or modification (“Improvement”) Made by
or on behalf of Roche or its Affiliate (whether independently or jointly) of
PacBio’s Background Technology disclosed to Roche or its Affiliate under this
Agreement and which is based on such Background Technology, and all Intellectual
Property Rights therein and thereto, and Roche shall own all right, title and
interest in and to any Foreground Technology that constitutes an Improvement
Made by or on behalf of PacBio or its Affiliate (whether independently or
jointly) of Roche’s Background Technology disclosed to PacBio or its Affiliate
under this Agreement and which Improvement is based on such Background
Technology, and all Intellectual Property Rights therein and thereto.  In the
event that any Foreground Technology constitutes an Improvement of both PacBio’s
Background Technology disclosed to Roche or its Affiliate under this Agreement
and Roche’s Background Technology disclosed to PacBio or its Affiliate under
this Agreement, and which Improvement is based on such Background Technologies,
PacBio and Roche shall jointly own all right, title and interest in and to such
Improvement and all Intellectual Property Rights therein and thereto with no
duty to account to the other Party.

(iii)     Roche and its Affiliates shall retain a perpetual, irrevocable,
worldwide, royalty-free, non-exclusive license under Improvements of PacBio’s
Background Technology Made by or on behalf of Roche or its Affiliate (whether
independently or jointly) that are assigned by Roche to PacBio hereunder, and
all Intellectual Property Rights therein and thereto, for all purposes.  PacBio
and its Affiliates shall retain a perpetual, irrevocable, worldwide,
royalty-free, non-exclusive license under Improvements of Roche’s Background
Technology Made by or on behalf of PacBio or its Affiliate (whether
independently or jointly) that are assigned by PacBio to Roche hereunder, and
all Intellectual Property Rights therein and thereto, for all purposes.

(iv)     Inventorship.  It is understood that except as expressly set forth
under this Section 10.1, inventorship, authorship and other indicia of which
Party made, developed, conceived, acquired or created an Invention or
Intellectual Property Right will be determined in accordance with United States
or the relevant foreign intellectual property laws under which the relevant
foreign Intellectual Property Right exists in effect at the time of making,
development, conception, authorship, acquisition or creation, as applicable. 

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(c)      Sole Inventions.

(i)      Assignment.  With respect to any Foreground Technology specified as
solely owned by a Party (the “Assignee”) in Section 10.1(b)(ii) above (a “Sole
Invention”), the other Party (the “Assignor”) shall assign and hereby does
assign any and all of Assignor’s right, title and interest in and to such Sole
Invention (for clarity, excluding, however, in all cases any and all Background
Technology incorporated therein), including all Intellectual Property Rights
therein and thereto (collectively, the “Assigned IP”) to Assignee.  For clarity,
Assigned IP assigned to PacBio shall be deemed PacBio Intellectual Property
Rights, PacBio Software or PacBio Know-How and Assigned IP assigned to Roche
shall be deemed Roche Intellectual Property or Roche Know-How, as applicable,
and Assigned IP shall be subject to the licenses granted to the relevant
Assignor by the relevant Assignee hereunder, as applicable.

(ii)      Further Assurances.  Assignor agrees to execute such documents, render
such assistance, and take such other action as an Assignee may reasonably
request, to apply for, register, perfect, confirm, and protect Assignee’s rights
in all Assigned IP assigned to Assignee hereunder.  Each Assignor agrees that if
the Assignee is unable because of Assignor's unavailability, dissolution or
incapacity, or for any other reason, to secure Assignor's signature to apply for
or to pursue any application for any United States or foreign patents or mask
work or copyright registrations within the Assigned IP assigned to Assignee
above, then Assignor hereby irrevocably designates and appoints the Assignee and
its duly authorized officers and agents as Assignor's agent and attorney in
fact, to act for, and in Assignor's behalf and stead, to execute and file any
such applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyright and mask work registrations
thereon with the same legal force and effect as if executed by Assignor. 

(d)      Patent Prosecution.  Subject to this Section 10.1(d), the Party who
owns, or whose Affiliate(s) own, all right, title and interest in and to any
Sole Invention (the “Prosecuting Party”) shall have the sole right, at its own
expense, to execute and control all patent filing, patent prosecution, patent
maintenance and patent defense activities of any and all Patents claiming such
Sole Invention.  If the Prosecuting Party determines to abandon any such Patent
solely due to financial reasons, the Prosecuting Party shall provide the other
Party with written notice at least sixty (60) days (or if less, as long as
reasonably practicable) prior to taking such action, or the date on which such
abandonment would become effective, and at the request of the other Party, the
Prosecuting Party shall consider in good faith to permit the other Party to pay
reasonable out-of-pocket costs incurred by the Prosecuting Party to continue the
prosecution or maintenance of such Patent.  In addition, where the Prosecuting
Party files a patent application claiming a Sole Invention in one jurisdiction
but elects not to in any other jurisdiction(s), the Prosecuting Party shall
provide the other Party with written notice at least sixty (60) days (or if
less, as long as reasonably practicable) prior to the filing deadline for such
other jurisdiction(s), and at the request of the other Party, the Prosecuting
Party shall consider in good faith prosecuting a patent application in such
other jurisdictions as are requested by the other Party, provided that the other
Party pays reasonable out-of-pocket costs incurred by the Prosecuting

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Party for such prosecution and the maintenance of any resulting Patent(s).  For
clarity, the Prosecuting Party shall have the sole right (but not obligation) to
file for any Patents claiming such Sole Invention or to abandon any Patents
claiming such Sole Invention for any reason (e.g., strategic reasons) other than
solely due to financial reasons, provided that the Prosecuting Party shall first
discuss with the other Party any non-financial reasons for not filing or
abandoning any Patent claiming a Sole Invention and consider in good faith any
alternative courses of action proposed by the other Party.

(e)      Joint Inventions.  With respect to any Foreground Technology jointly
owned by the Parties (alone or through their Affiliates) as determined in
accordance with Section 10.1(b) above (“Joint Inventions”), except as expressly
provided in this Agreement, it is understood that neither Party shall have any
obligation to obtain any approval of, nor pay a share of the proceeds to, the
other Party or its Affiliates to practice, enforce, license, assign or otherwise
exploit such Joint Inventions, and each Party hereby waives any right it may
have under the laws of any jurisdiction to require such approval or
accounting.  Patent filing, patent prosecution, patent maintenance and patent
defense of any jointly owned Patent claiming a Joint Invention shall be solely
as mutually agreed; provided that the Party which Made more than fifty percent
(50%) of the underlying invention shall have the first right and the other Party
shall have a backup right, in the event such Party elects not to do so, to take
the lead in drafting, filing, prosecution, maintenance and defense of such
Patent, and the Party taking the lead will also carry all external expenses such
as legal fees and outside counsel expenses.

10.2     Patent Challenges. 

(a)      In partial consideration for the licenses and rights granted hereunder,
Roche agrees, during the term of this Agreement, as follows:  if Roche or any of
its Affiliates commences or actively participates in (other than in response to
a court order, in accordance with Applicable Law, in response to any claim
brought by PacBio, or in response to any claim brought by any Person with
respect to any PacBio Patents) (with respect to this Section 10.2(a),
“Supports”) any challenge to the patentability, validity or enforceability of
(i) any patent application or patent within the PacBio Patents set forth on
Exhibit 1.26 or (ii) any PacBio Patent not set forth on Exhibit 1.26 where
PacBio’s Control thereof is clearly set forth in publicly available records of
the U.S. Patent and Trademark Office or equivalent agency in the relevant
foreign jurisdiction (with respect to this Section 10.2(a), a “Patent
Challenge”) in any court or before any government entity or national or
international agency with authority to determine the patentability, validity,
enforceability or scope of such patent application or patent (each of the
foregoing, a “Patent Authority”), then PacBio shall be entitled to terminate the
licenses granted by PacBio to Roche and its Affiliates under Section 2.1 and
elsewhere in this Agreement with respect to such PacBio Patent by giving Roche
written notice, unless, within thirty (30) days after written notice by PacBio
to Roche following PacBio’s receipt of notice of the initiation of such Patent
Challenge, Roche causes such Patent Challenge to terminate with prejudice prior
to any determination by the applicable Patent Authority (to the extent Roche has
the right to do so) and takes no other actions to Support such Patent Challenge.

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(b)      In partial consideration for the licenses and rights granted hereunder,
PacBio agrees, during the term of this Agreement, as follows:  if PacBio or any
of its Affiliates commences or actively participates in (other than in response
to a court order, in accordance with Applicable Law, in response to any claim
brought by Roche, or in response to any claim brought by any Person with respect
to any Roche Patents) (with respect to this Section 10.2(b), “Supports”) any
challenge to the patentability, validity or enforceability of any Roche Patents
where Roche’s Control thereof is clearly set forth in publicly available records
of the U.S. Patent and Trademark Office or equivalent agency in the relevant
foreign jurisdiction (with respect to this Section 10.2(b), a “Patent
Challenge”) in or before any Patent Authority, then Roche shall be entitled to
terminate the licenses granted by Roche to PacBio under Section 2.2(a)(ii) with
respect to such Roche Patent by giving Roche written notice unless, within
thirty (30) days after written notice by Roche to PacBio following Roche’s
receipt of notice of the initiation of such Patent Challenge, PacBio causes such
Patent Challenge to terminate with prejudice prior to any determination by the
applicable Patent Authority (to the extent PacBio has the right to do so) and
takes no other actions to Support such Patent Challenge.

10.3     Enforcement of Roche Patents.  As between the Parties, Roche and its
Affiliates shall have the sole right to enforce the Roche Patents in their sole
discretion.

10.4     Enforcement of PacBio Patents. 

(a)      Notice.  In the event that a Party reasonably believes that any PacBio
Patent covering a Product hereunder is being infringed by a Third Party, or is
subject to a declaratory judgment action arising from such infringement, in each
case with respect to the development, manufacture, sale, offering for sale,
importation, support or use of a product for the Field (an “Infringing
Product”), such Party shall promptly notify the other Party.

(b)      Initiating Enforcement Actions.  Subject to this Section 10.4(b),
PacBio shall have the sole right (but not the obligation), at its own expense,
to enforce the PacBio Patents with respect to such Infringing Product, or to
defend any declaratory judgment action with respect thereto (for purposes of
this Section 10.4, an “Enforcement Action”).  PacBio agrees not to settle any
Enforcement Action, or make any admissions or assert any position in such
Enforcement Action, in a manner that would materially adversely affect Roche’s
rights or interests in the Products for the Field, without the prior written
consent of Roche, which shall not be unreasonably withheld or delayed.  PacBio
may not bring an Enforcement Action seeking recovery for Roche’s or its
Affiliates’ or Distributors’ damages with respect to such Infringing Product,
without the prior written consent of Roche and separate agreement between the
Parties with respect to allocation of any resulting damages award.  In the event
that PacBio fails to initiate an Enforcement Action under this Section 10.4(b)
to enforce the PacBio Patents against a commercially significant infringement by
a Third Party in a Major Market, which infringement consists of the manufacture,
sale or use of an Infringing Product for the Field in such Major Market, within
one hundred eighty (180) days of a request by Roche to initiate such Enforcement
Action, the Parties shall agree on and enter into a reasonable “common interest
agreement,” if

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necessary, to protect the Parties’ interests in the PacBio Patents, wherein such
Parties will agree to their shared, mutual interest in the outcome of such
potential dispute, and thereafter, the Parties shall (through the JSC) promptly
meet to consider and cooperate to develop an appropriate course of action with
respect to enforcing the PacBio Patents with respect to such Infringing Product
or to defend such declaratory judgment action with respect to the PacBio
Patents, as applicable, in a manner that takes into account the impact on the
market for, and Roche’s sales of, the Products and Services for the Field and
the reasonable likelihood of an adverse effect on the validity, enforceability
or scope of the PacBio Patents being infringed, which course of action may, if
agreed by the Parties (such agreement not to be unreasonably withheld, delayed
or conditioned), include the right for Roche to initiate or maintain such
Enforcement Action as to such PacBio Patents.  In any event, Roche agrees not to
settle any Enforcement Action, or make any admissions or assert any position in
such Enforcement Action, in a manner that would adversely affect the validity,
enforceability or scope of any PacBio Patent, without the prior written consent
of PacBio, which shall not be unreasonably withheld or delayed.

(c)      Cooperation.  The Party initiating or defending any Enforcement Action
pursuant to this Section 10.4 shall keep the other Party reasonably informed of
the progress of any such Enforcement Action, and such other Party shall have the
right to participate with counsel of its own choice and at its own expense.  In
addition, the Parties shall assist one another and cooperate in any such
Enforcement Action at the other’s reasonable request (including joining as a
party plaintiff to the extent necessary or so requested by the other Party). 

(d)      Recoveries.  Any damages or other monetary awards recovered from an
Enforcement Action shall be allocated first to reimburse the reasonable
out-of-pocket costs and expenses of the Party who initiates the Enforcement
Action and, if the other Party joins as a party plaintiff, then the reasonable
out-of-pocket costs and expenses of the other Party.  Any amounts remaining
shall be retained by the Party who initiates the Enforcement Action; provided
that if the Parties jointly initiate or maintain the Enforcement Action, then
the Parties shall agree on an appropriate allocation of any such amounts based
on the share of the costs and expenses to initiate and maintain such Enforcement
Action.  

10.5     Third Party Technologies. 

(a)      Generally.  The obligations of PacBio and the rights of Roche under
this Agreement shall be subject to, and limited by, (i) any agreements pursuant
to which PacBio acquired or licensed any particular PacBio Patents, PacBio
Know-How, PacBio Software or other PacBio Intellectual Property Rights and any
supply agreements for proprietary products or components, in each case in the
form of such agreements in effect as of the Effective Date and with respect to
which PacBio has provided to Roche an accurate copy thereof prior to the
Effective Date (such copy may be redacted provided such redactions do not
materially prejudice Roche’s ability to accurately understand the scope of
relevant rights obtained by PacBio under such agreements) and (ii) such other
agreements entered into by PacBio after the Effective Date

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in accordance with this Section 10.5 to obtain access to New Technology
(collectively, and in each case as may be amended from time to time in
accordance therewith, the “Existing In-Licenses”).  With respect to the
prosecution and maintenance, and enforcement, of PacBio Patents licensed by
PacBio from a Third Party, to the extent PacBio has the right to do so, PacBio
shall cooperate with Roche to prosecute and maintain, and to enforce, such
PacBio Patents in the same manner as set forth in Sections 10.1(d) and (e) and
10.4 above.  As between PacBio and Roche, any recoveries from enforcement of
such PacBio Patents licensed from a Third Party (including any amounts that
PacBio receives from the Third Party licensor as a result of such enforcement)
shall be shared in accordance with Section 10.4, after deducting from such
recoveries any amounts owed to the Third Party licensor for such enforcement;
provided that the costs and expenses incurred by PacBio in such enforcement
action shall include, without limitation, the costs and expenses reimbursed or
required to be reimbursed by PacBio to the Third Party licensor in such
enforcement action.

(b)      New [***] Technology.  If, after the Effective Date, PacBio determines
that it is necessary or desirable to include subject matter controlled by a
Third Party within the PacBio Intellectual Property Rights, PacBio Software or
PacBio Know-How for the development, manufacture, support or commercialization
of a PacBio Product [***] (“New [***] Technology”) that is subject to (i) terms
or conditions as to packaging or resale of such Product that materially limit
the rights and licenses granted to Roche under Section 2.1 and are additional to
or materially different from the then-current restrictive terms or conditions as
to packaging or resale of the same or a comparable PacBio Product then being
supplied to Roche or its Affiliate for the Field under this Agreement, or (ii)
terms or conditions of sale or license of such PacBio Product for the Field that
materially limit the rights and licenses granted to Roche under Section 2.1 and
are additional to or materially different from the then-current terms or
conditions set forth in Exhibit 5.8(a) for a Label License Agreement or set
forth in Exhibit 5.8(b) for an End User License Agreement,  then PacBio shall
notify and provide Roche with a description of such terms and conditions, and
Roche shall notify PacBio within ten (10) Business Days of receipt of such
notice from PacBio if it elects to incorporate such New [***] Technology in the
development, manufacture or commercialization of such PacBio Product for the
Field.  If Roche does not timely elect to incorporate such New [***] Technology,
then such New [***] Technology shall be deemed excluded from the PacBio Patents,
PacBio Intellectual Property Rights and PacBio Know-How for all purposes of this
Agreement, and if such New [***] Technology would constitute a Product or
component of a Product, then such New [***] Technology shall be deemed excluded
from the Products; and all rights of Roche and obligations of PacBio with
respect to such New [***] Technology shall terminate (including any
indemnification obligations of PacBio under Sections 14.1 and 14.3(a) with
respect to such New [***] Technology).  For clarity, it is understood that
PacBio may include New [***] Technology within the PacBio Intellectual Property
Rights, PacBio Software or PacBio Know-How for the development, manufacture,
support or commercialization (whether for the Field, outside the Field, or both)
of PacBio Products [***] at its sole discretion and such inclusion shall not
require review or approval by Roche or the JSC; Roche may advise but shall not
have any right of approval with respect to such inclusion.

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(c)      New Field Specific Technology.  If either Party desires to incorporate
Third Party subject matter in the development, manufacture or commercialization
of a [***] for the Field or Roche desires for PacBio to incorporate Third Party
subject matter in the development or manufacture of a PacBio Product (“New Field
Specific Technology”), then such Party shall provide the details of such New
Field Specific Technology to the JSC for its review and consideration. The JSC
shall determine whether to seek a license or other rights to such New Field
Specific Technology, which Party(ies) should attempt to negotiate a license or
other rights to such New Field Specific Technology, the terms and conditions
which the Parties would be willing to accept with respect to such New Field
Specific Technology, and how the Parties will allocate the costs associated with
such New Field Specific Technology.

(d)      Additional Covenants Regarding Existing In-Licenses. 

(i)     PacBio represents that it has, as of the Effective Date, fulfilled, and
agrees that it shall use Commercially Reasonable Efforts to fulfill, its
obligations under the Existing In-Licenses, in each case to the extent that
failure to have fulfilled, or to use Commercially Reasonable Efforts to fulfill,
as applicable, would materially adversely affect Roche, its Affiliates, or any
of Roche’s or its Affiliates’ rights hereunder or under any Supply Agreement;
and

(ii)      PacBio shall not, without Roche’s prior written consent, not to be
unreasonably withheld, terminate, modify or amend any Existing In-License in any
way that would materially adversely affect Roche’s rights under this Agreement
or any Supply Agreement, and PacBio shall provide Roche with a copy of all
modifications to or amendments of the Existing In-Licenses that materially
affect Roche’s rights under this Agreement or any Supply Agreement, regardless
of whether Roche’s consent was required with respect thereto.

(e)      Updates to Exhibit.  PacBio shall, at Roche’s request, not more often
than on an annual basis, update Exhibit 1.26 to reflect the then-current list of
Patents claiming priority to the patent applications listed, as of the Effective
Date, on Exhibit 1.26 or to the patent applications from which any such patents
issued. 

10.6     Non-Infringement of Third Party Intellectual Property Rights.  PacBio
warrants and represents, as of the Effective Date, that: 

(a)      except as otherwise disclosed by PacBio to Roche in the data room prior
to the Effective Date, to its Knowledge, there are no Intellectual Property
Rights as of the Effective Date necessary for PacBio’s carrying out its
obligations, or for Roche and its Affiliates to exercise its rights for the
Field under this Agreement with respect to Products contemplated to be developed
or manufactured by PacBio hereunder as of the Effective Date (but without regard
to any specific Roche Content or use or application of any Product, whether or
not known or anticipated), other than the Intellectual Property Rights of which
PacBio is sole legal and beneficial owner or to which PacBio has access under
license agreements included in the

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Existing In-Licenses and which are PacBio Intellectual Property Rights or PacBio
Know-How or PacBio Software (the “IPR Agreements”), in each case, consistent
with the terms and conditions of this Agreement;

(b)      PacBio Controls the Patents listed, as of the Effective Date, on
Exhibit 1.26 without encumbrance, except as described in the Existing
In-Licenses or that would not materially adversely affect Roche’s rights
hereunder;

(c)      without prejudice to the foregoing and save to the extent specified in
the IPR Agreements, there are no agreements of any kind to which PacBio or its
Affiliate are a party as of the Effective Date which preclude the use,
licensing, or grant of rights by PacBio to Roche and its Affiliates under
Sections 2.1 and 5.7 of this Agreement;

(d)      except with respect to rights granted to the U.S. government pursuant
to 35 USC Sec. 202, et seq. or otherwise as a result of the use of U.S.
government funding or resources,  PacBio has not granted and is not obliged to
grant any license or other permission to any Third Party in respect of any
PacBio Intellectual Property Rights or PacBio Know-How that would materially
adversely affect Roche’s rights hereunder;

(e)      except as otherwise disclosed by PacBio to Roche, as of the Effective
Date (i) to its Knowledge, the PacBio Patents that claim the PacBio Technology
Platform (collectively, the “Platform Patents”) are not being infringed by any
Third Party, (ii) the Platform Patents are not the subject of any claim,
opposition or action related to validity, enforceability or scope, and (iii) to
its Knowledge, there is no circumstance which is reasonably likely to be the
basis for any such claim, opposition or action;

(f)      to its Knowledge, all issued Patents within the PacBio Patents as of
the Effective Date are valid and subsisting;

(g)      to its Knowledge, the performance by PacBio of its obligations under
this Agreement with respect to [***] contemplated to be developed or
manufactured by PacBio hereunder as of the Effective Date (but without regard to
any specific Roche Content or use or application of any Product, whether or not
known or anticipated) will not infringe any rights to Patents or other
Intellectual Property Rights held by any Third Party or involve the unauthorized
use of confidential information, Know-How or software of a Third Party disclosed
to PacBio, in each case, in circumstances which would entitle the Third Party to
rightfully make a claim against PacBio or Roche;

(h)      to its Knowledge, PacBio’s execution of this Agreement will not entitle
any other party to any IPR Agreement as of the Effective Date to exercise any of
its rights (whether of termination or otherwise) that would reasonably be
expected to and would have a material adverse effect on Roche’s rights
hereunder; and

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(i)      as of the Effective Date, each of the IPR Agreements is in full force
and effect and to PacBio’s Knowledge, each is valid and binding and there exist
no material grounds upon which any such IPR Agreement may be terminated by any
other party thereto; nor has PacBio received notice of termination of any IPR
Agreement.

For the purposes of this Section 10.6, “Knowledge” shall mean, the actual
knowledge, after having made customary inquiry, of PacBio’s in-house legal
counsel as of the Effective Date.

10.7     Patent Marking.  The Parties agree that they will cooperate to
determine the content and format of any patent markings for a Product as
necessary to comply with any applicable terms or conditions of any Third Party
licensor of such Product.

ARTICLE 11

TERM AND TERMINATION

11.1     Term.  This Agreement shall commence on the Effective Date, and unless
terminated earlier as provided in this ARTICLE 11, shall continue in full force
and effect until thirteen (13) years from the Effective Date (“Initial
Term”).  This Agreement shall extend for additional successive periods of five
(5) years (each, a “Renewal Term”) after the expiration of the Initial Term or
the then-current Renewal Term, as applicable, unless one or more of the
following have occurred as of the date of such expiration:  (i) Roche has
breached a material provision of this Agreement, which breach was not cured in
accordance with the timing set forth in Section 11.2, mutatis mutandis, (ii)
Roche has failed to meet the Sales Minimum Requirements hereunder, or (iii)
Roche failed to provide PacBio notice at least one (1) year in advance of the
expiration of the Initial Term or the then-current Renewal Term, as applicable,
and referencing this Section 11.1 that it desires to extend this Agreement. 

11.2     Termination for Breach.  Either Party to this Agreement may terminate
this Agreement in the event the other Party shall have materially breached or
defaulted in the performance of any of its material obligations hereunder, and
such default shall have continued for ninety (90) days after written notice
thereof was provided to the breaching Party by the non-breaching Party.  Any
such termination shall become effective at the end of such ninety (90) day
period unless the breaching Party has cured any such breach or default prior to
the expiration of the ninety (90) day period.

11.3     Termination by Roche.  Roche may terminate this Agreement in its
entirety for any reason upon sixty-(60) days prior written notice to PacBio;
provided, however, in the event that Roche terminates this Agreement pursuant to
this Section 11.3 prior to [***], Roche shall pay PacBio any unpaid Milestone
Payments set forth in Paragraph 2 of Exhibit 7.1 in the event the corresponding
Milestone is achieved on or prior to [***].  

11.4     Termination for Cessation.  After the First Commercial Sale of a
Product or Service by Roche or its Affiliates, in either case, for the Field, in
the event Roche ceases to sell,

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other than due to a Supply Failure or an External Factor, all Products and
Services for the Field, for a [***] period, PacBio may terminate this Agreement
in its entirety upon [***] prior written notice to Roche. 

ARTICLE 12

EFFECT OF TERMINATION

12.1     Accrued Obligations.  The expiration or termination of this Agreement
for any reason shall not release either Party from any liability that, at the
time of such expiration or termination, has already accrued to the other Party
or that is attributable to a period prior to such expiration or termination, nor
will any expiration or termination of this Agreement preclude either Party from
pursuing all rights and remedies it may have under this Agreement, or at law or
in equity, with respect to breach of this Agreement.

12.2     Effect of Termination.  For any expiration or termination of this
Agreement, the following shall apply: 

(a)      Wind-Down Period.  

(i)      Development.  With respect to a termination of this Agreement by PacBio
pursuant to Sections 11.2 or 11.4 or by Roche pursuant to Section 11.2 or 11.3,
in the event there are any ongoing development activities of the Products being
conducted by or on behalf of Roche or Affiliates, at PacBio’s request, Roche
agrees to promptly provide a summary and a detailed report of the development
status quo achieved to PacBio, and to be available for questions regarding the
status quo achieved for a period requested up to a maximum [***] after the
effective date of such termination.  Roche may, in its discretion but to the
extent consistent with Applicable Law, terminate or continue any clinical trial
then ongoing with respect to a Product or Service for the Field. 

(ii)      Commercialization.  With respect to termination of this Agreement
after the First Commercial Sale of a Product or Service by Roche or its
Affiliates, in each case, for the Field, to avoid a disruption in the supply of
Products, Roche and its Affiliates and Distributors may continue to distribute,
market and promote (but shall not be obligated to distribute, market or promote)
Products and provide Services, in accordance with the terms and conditions of
this Agreement, and PacBio shall continue to provide services with respect to
the Instrumentation Products for installation, support and maintenance or parts
replacement pursuant to and in accordance with any services agreement entered
into between the Parties as contemplated in Section 5.10 for (A) with respect to
a termination of this Agreement by Roche pursuant to Section 11.2 or 11.3, [***]
following the effective date of any such termination, or (B) with respect to a
termination of this Agreement by PacBio pursuant to Section 11.2 or 11.4, [***]
following the effective date of any such termination (in either case, the
“Wind-Down Period”).  Any Products or Services sold or disposed by Roche, its
Affiliates or Distributors, during the Wind-Down Period shall be subject to
payments under Exhibit 7.1 and the provisions

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of Sections 5.6(c), 5.8, 7.1, 7.2 and 10.7.  In the event Roche terminates this
Agreement pursuant to Section 11.2 and to the extent Roche notifies PacBio,
Roche shall have the right to cancel any outstanding purchase orders for
Products ordered.  In other events, PacBio shall continue to fulfill any
purchase orders placed by Roche and accepted by PacBio in accordance with the
relevant Supply Agreement during the Wind-Down Period for delivery within the
Wind-Down-Period and Roche shall purchase Product so delivered in accordance
with the terms and conditions of this Agreement and the relevant Supply
Agreement, and within [***] of expiration of the Wind-Down Period, Roche shall
notify PacBio of any quantity of the Products remaining in Roche’s inventory and
PacBio may, at its option (unless this Agreement is terminated by Roche pursuant
to Section 11.2, in which case, PacBio shall), repurchase any such quantities of
the Products, as applicable, from Roche at a price equal to the amounts paid by
Roche for such Products. 

(b)      Return of Materials.  Promptly upon a request by a Party on the later
of  (i) expiration or termination of this Agreement or (ii) expiration of the
Wind-Down Period, the other Party shall either return to the other Party or
destroy, Confidential Information of the other Party or its Affiliates that is
in its possession.  Effective upon the expiration of the Wind-Down Period, each
Party shall cease to use all of the other Party’s trademarks and trade names. 

(c)      Supply Agreement.  Upon expiration or termination of this Agreement,
any Supply Agreement shall automatically terminate, except to the extent Roche
may continue to purchase, and PacBio may continue to supply, quantities of
Products during the Wind-Down Period in accordance with Section 12.2(a) above. 

(d)      Licenses.  Upon expiration or termination of this Agreement, all rights
and licenses granted to a Party under the other Party’s Intellectual Property
Rights and Know-How in this Agreement shall terminate; except that (i) Sections
2.1, 2.2, 4.3(b), 5.6(b), 5.7, 6.3(c) and 15.2 shall survive (provided that the
rights and licenses granted therein shall continue on a non-exclusive basis)
during the Wind-Down Period until expiration of the Wind-Down Period, and (ii)
the rights and licenses granted to Roche under Sections 2.1, 4.3(b) (to the
extent such license was exercised during the term of this Agreement) and 5.7
shall continue on a non-exclusive basis thereafter solely (A) to support and
maintain the Products which had been sold by Roche, its Affiliates and
Distributors prior to the end of the Wind-Down Period and (B) to perform
Services for the Field using Products which had been sold, by PacBio to Roche or
its Affiliates or by Roche, its Affiliates and Distributors, prior to the end of
the Wind-Down Period.  Upon PacBio’s request, the Parties shall negotiate in
good faith on commercially reasonable terms and conditions for a non-exclusive,
royalty-bearing license under Roche Intellectual Property Rights and Roche
Know-How as may be reasonably necessary or useful for the development,
manufacture or commercialization of Products (but without regard to any specific
Roche Content) for in and/or outside the Field. 

12.3     No Renewal, Extension or Waiver.  Acceptance of any order from, or sale
or license of, any Products or Services to Roche after the effective date of
expiration or termination

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of this Agreement in its entirety shall not be construed as a renewal or
extension hereof, or as a waiver of termination of this Agreement.

12.4     Survival.  Upon the expiration or termination of this Agreement in its
entirety, all rights and obligations of the Parties under this Agreement shall
terminate except those described in the following Sections:  Sections 2.6, 8.3,
9.1, 9.2, 9.3, 10.1(a), 10.1(b), 10.1(c), 10.1(d) (solely with respect to Sole
Inventions which are Assigned IP), 10.1(e), 12, 13.4, 13.5, 14, 16 (other than
any obligations relating to the JSC) and 17.3 through 17.14; and, in addition,
to the extent that any Products is sold during the Wind-Down Period defined in
Section 12.2(a)(ii) above, the following Sections shall survive:  (a) Section
2.5 shall survive with respect to the units of Products referenced therein, and
(b) Section 4.4(b) shall survive with respect to the right to cross-reference
any DMF, to the extent necessary to maintain any Marketing Approval
Authorization with respect to such units of Products.

12.5     Non-exclusive Remedy.  Termination of this Agreement shall be in
addition to, and shall not prejudice, the Parties’ remedies at law or in equity,
including the Parties’ ability to receive legal damages or equitable relief with
respect to any breach of this Agreement, regardless of whether or not such
breach was the reason for the termination.  Except as expressly set forth in
this Agreement, all rights and remedies of a Party are cumulative.

ARTICLE 13

REPRESENTATIONS AND WARRANTIES

13.1     General Representations.  Each Party hereby represents and warrants to
the other Party as of the Effective Date as follows:

(a)      Duly Organized.  Such Party is a corporation duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation, is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the conduct of its business or the
ownership of its properties requires such qualification and failure to have such
would prevent such Party from performing its obligations under this Agreement.

(b)      Due Execution; Binding Agreement.  This Agreement is a legal and valid
obligation binding upon such Party and enforceable in accordance with its
terms.  The execution, delivery and performance of this Agreement by such Party
have been duly authorized by all necessary corporate action and do not and will
not:  (i) require any consent or approval of its stockholders; (ii) to such
Party’s knowledge, violate any law, rule, regulation, order, writ, judgment,
decree, determination or award of any court, governmental body or administrative
or other agency having jurisdiction over such Party; nor (iii) conflict with, or
constitute a default under, any agreement, instrument or understanding, oral or
written, to which such Party is a party or by which it is bound.

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13.2     Representations and Warranties of PacBio.  PacBio represents and
warrants to Roche that, as of the Effective Date:

(a)      it has the full right and authority to grant the rights and licenses as
provided herein;

(b)      all necessary consents, approvals and authorizations of all Regulatory
Authorities, other governmental authorities and other Persons required to be
obtained by PacBio in order to enter into this Agreement have been obtained; and

(c)      neither PacBio nor any of its Affiliates has been debarred under 21
U.S.C. §§335a or similar Applicable Law.

13.3     Representations and Warranties of Roche.  Roche represents and warrants
to PacBio that, as of the Effective Date: 

(a)      it has the full right and authority to grant the rights granted herein;
and

(b)      all necessary consents, approvals and authorizations of all Regulatory
Authorities, other governmental authorities and other Persons required to be
obtained by Roche in order to enter into this Agreement (if any) have been
obtained.

13.4     DISCLAIMER.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OR VALIDITY
OF ANY PATENTS ISSUED OR PENDING.

13.5     LIMITATION OF LIABILITY.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR
OTHERWISE, OTHER THAN BY REASON OF A BREACH OF ARTICLE 9 (CONFIDENTIALITY) ABOVE
OR THE GRANT OF RIGHTS OR LICENSES BY PACBIO TO A THIRD PARTY IN CONFLICT WITH
THE EXCLUSIVE RIGHTS AND LICENSES GRANTED BY PACBIO TO ROCHE UNDER SECTIONS 2.1
OR 5.7, AS APPLICABLE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER WITH RESPECT
TO ANY SUBJECT MATTER OF THIS AGREEMENT (WHETHER UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY) FOR ANY INCIDENTAL,
INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS
OF PROFITS; PROVIDED HOWEVER THAT NOTHING IN THIS SECTION 13.5 SHALL BE DEEMED
TO LIMIT THE INDEMNIFICATION OBLIGATIONS OF EITHER PARTY UNDER ARTICLE 14 TO THE
EXTENT A THIRD PARTY RECOVERS ANY INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR LOST PROFITS, FROM AN INDEMNITEE.

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ARTICLE 14

INDEMNIFICATION AND INSURANCE

14.1     Indemnification of PacBio.  Except with respect to IP Infringement
Claims set forth under Section 14.3 below, Roche shall indemnify and hold
harmless each of PacBio, its Affiliates and the directors, officers and
employees of such entities and the successors and assigns of any of the
foregoing (the “PacBio Indemnitees”), from and against any and all losses,
damages, penalties, fines, costs and expenses paid to a Third Party (“Losses”)
incurred by any PacBio Indemnitee arising from, or occuring as a result of, any
claims, actions, suits or proceedings brought by a Third Party (a “Third Party
Claim”), to the extent such Third Party Claim arises from, or occurs as a result
of: (a) any material breach of any representations or warranties by Roche in
ARTICLE 13; (b) the design, development, manufacture or sale of a Product by
Roche or any of its Affiliates, or a Third Party at the direction of Roche; or
(c) the gross negligence or willful misconduct of a Roche Indemnitee or
Distributor; except, in each case, to the extent such Third Party Claims fall
within the scope of PacBio’s indemnification obligations set forth in
Section 14.2 below.

14.2     Indemnification of Roche.  Except with respect to IP Infringement
Claims set forth under Section 14.3 below, PacBio shall indemnify and hold
harmless each of Roche, its Affiliates and the directors, officers and employees
of such entities and the successors and assigns of any of the foregoing (the
“Roche Indemnitees”), from and against any and all Losses incurred by any Roche
Indemnitee arising from, or occuring as a result of, any Third Party Claim, to
the extent such Third Party Claim arises from or occurs as a result of (a) any
material breach of any representations or warranties by PacBio in Section 10.6
or ARTICLE 13; (b) any material breach of the warranties by PacBio in the
applicable Supply Agreement (as provided in accordance with the terms and
conditions therein); (c) the design, development, manufacture or sale of the
Products by PacBio or any of its Affiliates, or a Third Party at the direction
of PacBio; or (d) the gross negligence or willful misconduct of a PacBio
Indemnitee; except, in each case, to the extent such Third Party Claims fall
within the scope of Roche’s indemnification obligations set forth in
Section 14.1 above.

14.3     IP Infringement.

(a)      By PacBio. 

(i)      PacBio shall indemnify and hold harmless the Roche Indemnitees from and
against any and all Losses incurred by any Roche Indemnitee to the extent
arising from, or occurring as a result of, an IP Infringement Claim.  In
connection with any such IP Infringement Claim, in the event the development,
manufacture, use or sale of a Product is found to infringe or misappropriate any
Intellectual Property Right of a Third Party or the use or sale of a Product is
enjoined, or in the reasonable opinion of PacBio, a Product is likely to become
the subject of such an adjudication or injunction, PacBio, at its election and
expense, will (A) procure for Roche the right to continue using and selling such
Product for the Field; (B) modify

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or replace, as applicable, such Product so that it becomes non-infringing while
providing substantially equivalent performance and functionality; or (C) in the
event PacBio is unable to achieve either of the foregoing (A) or (B) despite
using Commercially Reasonable Efforts, cease supply of such Product to Roche and
provide to Roche a credit of the amounts paid to PacBio with respect to such
Product, including all units thereof purchased by any of its Affiliates or
Distributors, calculated on a pro-rata basis, as applicable, on a straight-line
basis over the most recent period of 5 years.

(ii)      The foregoing obligations in Section 14.3(a)(i) above shall not apply
to the extent that such IP Infringement Claim arises from, or occurs as a result
of (in each case, with respect to the Product giving rise to such IP
Infringement Claim): (A) such Product not being a PacBio Product; (B)
modifications to such Product by a Person other than by or on behalf of PacBio
and without PacBio’s consent; (C) failure to use the most recent version of the
Software (including any updates, patches, or bug fixes to portions of the
Software) provided by PacBio, provided that such version provides substantially
equivalent or better performance and functionality as the previous version, or
to otherwise take any commercially reasonable corrective action, including
implementing such modifications or revisions to such Product, directed by
PacBio, in each case within thirty (30) days after provision by PacBio to Roche;
(D) the combination of such Product with any other information, materials,
technology or other items or service (including any Roche Content) not expressly
recommended by PacBio in writing, where there would be no claim but for such
combination; (E) compliance with the Product Specifications for such Product
[***]; (F) compliance with any other content, design, feature, or procedure
expressly required by Roche in writing [***]; or (G) use of any information,
materials, or other items expressly required by Roche in writing [***]; or (H)
any use or application of such Product by Roche, its Affiliate or Distributor,
or their direct or indirect customers, including any medical claim made by
Roche, its Affiliates or Distributors with regard to a Product or Service or the
use of any data resulting therefrom, to the extent such use or application is
not specified by PacBio in the PacBio Product Documentation [***].

(b)      By Roche.  Roche shall indemnify and hold harmless the PacBio
Indemnitees from and against any and all Losses incurred by any PacBio
Indemnitee to the extent arising from or occurring as a result of an IP
Infringement Claim, to the extent such IP Infringement Claim arises from, or
occurs as a result of (in each case with respect to the Product giving rise to
such IP Infringement Claim): (A) modifications to such Product by or on behalf
of Roche or its Affiliates and in each case without PacBio’s consent; (B)
compliance with the Product Specifications expressly required by Roche in
writing [***]; (C) failure to use Commercially Reasonable Efforts to make
available for installation within thirty (30) days the most recent version of
the Software (including any updates, patches, or bug fixes to portions of the
Software) provided by PacBio, provided that such version provides substantially
equivalent or better performance and functionality as the previous version; (D)
compliance with any other content, design, feature, or procedure expressly
required by Roche in writing [***]; or (E) use of any information, materials, or
other items expressly required by Roche in writing [***]; or (F) any use or
application of such Product by Roche, its Affiliate or Distributor, or their
direct or

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indirect customers, including any medical claim made by Roche, its Affiliates or
Distributors with regard to a Product or Service, to the extent such use or
application is directed or authorized by Roche, its Affiliates, or Distributors
and in each case that is not specified by PacBio in the PacBio Product
Documentation [***].

14.4     Procedure.  Each PacBio Indemnitee or Roche Indemnitee (each, an
“Indemnitee”) shall promptly notify the other Party (the relevant “Indemnitor”)
in writing of any Third Party Claim to which the Indemnitee is entitled to
indemnification under this ARTICLE 14 and, when known, the facts constituting
the basis for the Third Party Claim and with respect to such claim, to the
extent possible, the Parties shall meet and discuss their mutual interest in the
defense or outcome of such potential dispute and cooperate to develop the
appropriate course of action in accordance with this Section 14.4.  Neither
Party shall without the prior written consent of the other Party, settle or
compromise any Third Party Claim in any way that would adversely affect such
other Party’s rights or obligations hereunder.  Notwithstanding the foregoing
provisions of this Article 14, except to the extent otherwise agreed in writing
by the Parties, each Party shall be responsible for its own attorney’s fees and
its own other costs and expenses incurred in the defense or settlement of any
Third Party Claim and such fees, costs and expenses shall not constitute
“Losses” hereunder.

14.5     Insurance.  Reasonably in advance of the anticipated First Commercial
Sale of a Product or Service for the Field, PacBio will procure and maintain in
continuous force adequate and sufficient liability insurance coverage,
consistent with industry standards, with respect to the operation of the
business associated with in vitro diagnostic devices and related services and
that it will, at its own expense, list Roche and its Affiliates (and ensure they
remain listed) as additional insureds for primary and noncontributing insurance
coverage under each of its general liability, product liability, errors &
omissions, excess and umbrella liability insurance policies against relevant
liabilities that may arise out of or in relation to any Product or Service and
with a coverage level for product liability consistent with industry standards,
with respect to its activities hereunder.  PacBio agrees to provide the Roche
with copies of such insurance policies and declarations promptly upon Roche’s
written request.

ARTICLE 15

BANKRUPTCY LAW; FIRST RIGHT OF NEGOTIATION; ESCROW

15.1     Bankruptcy.  All rights and licenses granted by PacBio to Roche and/or
its Affiliates under or pursuant to this Agreement, including, without
limitation, those set forth in Section 2.1, are and shall otherwise be deemed to
be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
right to “intellectual property” as defined under Section 101 of the U.S.
Bankruptcy Code.  The Parties agree that Roche and its Affiliates shall retain
and may fully exercise all of their rights and elections under the U.S.
Bankruptcy Code and any foreign counterpart thereto.  The Parties further agree
that that upon commencement of a bankruptcy proceeding by or against PacBio
under the U.S. Bankruptcy Code, Roche will be entitled to a complete duplicate
of, or complete access to (as Roche deems appropriate), all such intellectual

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property and all embodiments of such intellectual property.  Such intellectual
property and all embodiments of such intellectual property will be promptly
delivered to Roche (a) upon any such commencement of a bankruptcy proceeding and
upon written request by Roche, unless PacBio elects to continue to perform all
of its obligations under this Agreement, or (b) if not delivered under (a)
above, upon the rejection of this Agreement by or on behalf of PacBio and upon
written request by Roche.  PacBio (in any capacity, including
debtor-in-possession) and its successors and assigns (including any trustee)
agree not to interfere with the exercise by Roche and its Affiliates of its
rights and licenses to such intellectual property and such embodiments of
intellectual property in accordance with this Agreement, and agree to assist
Roche and its Affiliates in obtaining such intellectual property and such
embodiments of intellectual property in the possession or control of PacBio’s
Affiliates or any Third Parties as reasonably necessary for Roche to exercise
such rights and licenses in accordance with this Agreement.  The foregoing
provisions are without prejudice to any rights Roche or its Affiliates may have
arising under the U.S. Bankruptcy Code or other Applicable Laws.

15.2     Escrow.  No later than such time as PacBio is obligated to deposit the
Escrow Materials (as defined below) for the first PacBio Product [***] for the
Field, the Parties shall enter into a mutually agreed escrow agreement (the
“Escrow Agreement”) with an escrow agent chosen by Roche, such Escrow Agreement
to be negotiated in good faith.  Pursuant to the terms of such Escrow Agreement:

(a)      Initial Deposit.  Upon Roche’s filing of a Marketing Approval
Application for a PacBio Product [***] for the Field, PacBio shall deposit in
escrow the PacBio Know-How, PacBio Software and PacBio Product Documentation
used to manufacture such PacBio Product for the Field, which may include
documentation consisting of, containing or relating to technical information,
computer programs, source code, object code, ideas, concepts, processes,
procedures, designs, schematics, works-in-progress, prototypes, works of
authorship, inventions, documentation, techniques, information and materials
arising out of or relating to the manufacture of such PacBio Product for the
Field, including, without limitation, process sheets, manufacturing assembly
instructions, bills of material, approved vendor lists, schematics, artwork,
tooling drawings, specifications, blueprints, test procedures, fixtures and test
beds, internal/external software and firmware (in binary and source code form),
diagnostics, device drivers, and test verification results, and information
filed (or which would be filed) in a DMF and the relevant Quality Systems
Information (collectively, the “Escrow Materials”).  [***] 

(b)      Updates.  PacBio will update the Escrow Materials deposited with the
escrow agent in accordance with the Escrow Agreement, but in no event shall such
updates be performed less than once in each calendar year.

(c)      Verification.  The Escrow Agreement shall include verification services
to confirm that the Escrow Materials are complete, correct and
accurate.  Additionally, Roche will have the right under the terms of the Escrow
Agreement to inspect any Escrow Materials after

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delivery to the escrow agent, but only on the premises of the escrow agent and
only as is necessary to verify the completeness of such Escrow Materials.

(d)      Fees.  Roche will be responsible for the fees and costs of the escrow
agent; provided, however, that if the verification process set forth in Section
15.2(c) determines that the deposit is incomplete, PacBio will be responsible
for such fees and costs of such verification.

(e)      Release Conditions.  Upon the occurrence of one or more of the
following events (an “Escrow Triggering Event”), Roche may receive the Escrow
Materials as follows:  (i) if a Supply Failure of a PacBio Product occurs and
PacBio does not perform the transfer of such Escrow Materials to Roche
referenced under and in accordance with Section 6.3(c) within thirty (30) days
of Roche’s written request for such transfer to the extent PacBio has not
already previously provided such Escrow Materials to Roche hereunder, then Roche
may receive the Escrow Materials with respect to such PacBio Product; or (ii) if
a Supply Failure of all Products occurs as a result of PacBio commencing
proceedings (or has proceedings commenced against it) under Chapter 7 of the
U.S. Bankruptcy Code, then Roche may receive the Escrow Materials with respect
to all PacBio Products. 

(f)      Deposited Materials License.  PacBio hereby grants to Roche a limited,
non-exclusive, royalty-free, worldwide license (with the right to grant
sublicenses to Third Parties acting on Roche’s behalf), under all Intellectual
Property Rights Controlled by PacBio in and to the Escrow Materials with respect
to the PacBio Products, to use the Escrow Materials to manufacture (or have
manufactured by the CMO (which manufacture the Parties understand may, in either
case, need to be on PacBio’s behalf to satisfy PacBio’s obligations to, or
licensed conditions imposed by, one or more Third Parties)) PacBio Products in
accordance with the terms and conditions of this Agreement.  Roche covenants
that it will not exercise its rights under the foregoing license to use the
Escrow Materials unless and until an Escrow Triggering Event occurs and then
only with respect to the PacBio Product to which such Escrow Triggering Event
relates, only until PacBio may resume manufacture and supply of such Product
pursuant to Section 6.3(c), and solely to the applicable Product Specifications
as they exist as of such Escrow Triggering Event (for clarity, Roche shall not
have any license to manufacture any PacBio Product to any other Product
Specification). Roche’s rights under the foregoing license to use the PacBio
Software in source code will be further subject to a separate software license
agreement entered into by the Parties consistent with the terms and conditions
of Third Party licensors of the PacBio Software and other standard and customary
terms and conditions for such license.  The grant of rights and licenses under
this Section 15.2(f) above shall include a grant to the Affiliates of Roche;
provided that Roche shall remain responsible to PacBio hereunder for all
activities of its Affiliates to the same extent as if such activities had been
undertaken by Roche itself.  Except as expressly granted in this Section
15.2(f), PacBio reserves all rights, title and interest in and to the Escrow
Materials, including, without limitation, all Intellectual Property Rights
therein and thereto, and all Escrow Materials shall be deemed PacBio’s
Confidential Information pursuant to the terms of this Agreement. 

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(g)      Support in Use of Escrow Materials.  For a period of ninety (90) days
after delivery of the Escrow Materials to Roche, PacBio agrees to use
Commercially Reasonable Efforts to provide technical support, by mail, email and
phone, with regard to Roche’s use of the Escrow Materials in accordance with the
terms and conditions of the license grant under Section 15.2(f) above on a time
and materials basis at PacBio’s then applicable hourly rates.

(h)      Suspension of Purchase Obligations.  For purposes of clarity, upon the
occurrence of an Escrow Triggering Event for any PacBio Product, Roche’s
exclusivity obligations under Section 6.1(a) to purchase such PacBio Product and
any similar exclusive purchasing obligations under any Supply Agreement with
respect to such PacBio Product shall be suspended and of no force or effect for
such PacBio Product during any time period during which Roche has rightfully
exercised its rights under Section 15.2(f).

15.3     Roche Right of First Negotiation.  Prior to PacBio or any of its
Affiliates entering into any negotiations regarding terms or entering into any
definitive agreement with a Third Party for [***],  PacBio shall provide written
notice to Roche of its bona fide intent to engage in [***] at such time (the
“ROFN Notice”), which ROFN Notice shall include information in reasonable detail
sufficient to enable Roche to make an informed decision with respect to
[***].  If Roche notifies PacBio in writing within [***] of receipt of the ROFN
Notice (the “ROFN Response Period”, such notice, the “ROFN Response”) that it
has a bona fide interest in discussing the acquisition of rights with respect to
[***], the Parties shall enter into good faith negotiations with respect thereto
on an exclusive basis, on such terms as may be mutually agreeable.  If Roche
does not provide the ROFN Response during the ROFN Response Period, or Roche
provides the ROFN Response during the ROFN Response Period but the Parties are
unable, after good faith negotiations, to reach mutual agreement and execute a
definitive agreement with respect to [***], PacBio and its Affiliates shall be
free thereafter to enter into a transaction (including execution of a definitive
agreement) relating to [***] with one or more Third Parties.  To the extent
PacBio or any of its Affiliates agrees [***], such agreement to assign shall not
constitute [***] for purposes of this Section 15.3.  The foregoing shall not
limit PacBio’s obligations with respect to Sections 10.5 and 10.6.  For clarity,
an assignment by PacBio (or its Affiliate if PacBio has assigned this Agreement
to such Affiliate) to a Person that acquires substantially all of the business
or assets of PacBio (or its Affiliate if PacBio has assigned this Agreement to
such Affiliate) relating to this Agreement, whether by merger, acquisition or
otherwise, shall not constitute [***] for purposes of this Section 15.3.

ARTICLE 16

DISPUTE RESOLUTION

16.1     Dispute Resolution.  The Parties agree that all disputes arising out of
or in connection with this Agreement, including, without limitation, any dispute
regarding the interpretation, performance, enforcement, termination or
invalidity of this Agreement or the failure of the JSC to reach unanimous
agreement on any issue within its respective authority

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under this Agreement (each a “Dispute”), shall be resolved by the Parties in
accordance with this ARTICLE 16:

16.2     Pre‑Arbitration Dispute Resolution.  No Dispute under this Agreement
shall be referred to arbitration proceedings under Section 16.3 below until the
following procedures in this Section 16.2 have been satisfied, unless the Senior
Executives have already attempted to resolve such Dispute pursuant to Section
3.4, in which case, either Party may submit such Dispute for resolution pursuant
to Section 16.3; provided that any applicable statute of limitations with
respect to such Dispute shall be tolled while the Parties attempt to resolve
such Dispute in accordance with Section 3.4 or this Section 16.2.  In the event
of a Dispute, the Dispute shall be first referred by either Party to the JSC,
which shall meet as soon as practicable discuss in good faith and attempt to
achieve a mutually agreeable solution to recommend to the respective Senior
Executive of each Party.  Following such recommendation, or following the
determination by either Party that the JSC that it will not reach such a
mutually agreeable recommendation, the Senior Executives shall meet as soon as
practicable.  If the Dispute is not resolved by the Senior Executives by mutual
agreement within ninety (90) days after the Dispute was first referred to the
JSC, either Party may at any time thereafter provide the other Party notice of
its decision to commence arbitration proceedings in accordance with the
procedures set forth under Section 16.3 below.  If the Parties should resolve
such Dispute, a memorandum setting forth their agreement will be prepared and
signed by both Parties.  For clarity, in no event shall a Party be obligated to
wait more than ninety (90) days after a Dispute is first referred to the JSC,
before commencing arbitration proceedings in accordance with the procedures set
forth under Section 16.3 below with respect to such Dispute.

16.3     Disputes.  Subject to Section 16.2 above, all Disputes, upon written
notice by either Party to the other Party, shall be submitted for resolution by
final, binding arbitration in the manner described in this Section 16.3: 

(a)      Conduction of the Arbitration.  Any arbitration pursuant to this
Section 16.3 shall be administered by the International Chamber of Commerce
(“ICC”) pursuant to the Rules of Arbitration of the International Chamber of
Commerce then in effect, except as modified below.  The arbitration shall be
conducted by three (3) arbitrators.  Each Party shall appoint one (1) arbitrator
by written notice to the other Party and the two Party-appointed arbitrators
shall select the third arbitrator to serve as the Chairperson of the arbitration
panel within thirty (30) days of their appointment.  If the Party-appointed
arbitrators are unable to agree upon the third arbitrator, the third arbitrator
shall be appointed by the ICC.

(b)      Arbitration Proceedings.  The Parties and the arbitrator(s) shall use
all reasonable efforts to complete any arbitration under this Section 16.3
within twelve (12) months after the appointment of the arbitrator(s).  It is the
intent of the Parties that the arbitration be conducted in as expeditious and
cost effective a manner as possible.  In that regard, the Parties agree that
discovery in any arbitration be limited as follows:  (i) discovery shall be
limited to the Parties or their respective Affiliates and with respect to a
Party’s Affiliates, discovery shall be

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limited to that which is reasonably necessary to establish such Party’s and its
Affiliates’ compliance with this Agreement; and (ii) allowable document requests
and exchanges shall be limited to documents that are directly relevant to the
issues in dispute.  The arbitration proceedings and all pleadings, responses and
evidence shall be in the English language. 

(c)      Decision of the Arbitrator(s).  The arbitrator(s) shall issue a
reasoned decision or award.  The Parties agree that the decision or award
rendered by the arbitrator(s) shall be the sole, exclusive and binding remedy
between them regarding any Dispute presented to the arbitrator(s) and that the
arbitrator(s) may rule on the bearing of reasonable costs (including reasonable
attorney’s fees).  Any decision or award of the arbitrator(s) may be entered in
any court of competent jurisdiction for judicial recognition of the decision and
an order of enforcement.  Except and to the extent one or both Parties have a
legal obligation under Applicable Laws to do so, neither the existence or
proceedings of the arbitration nor the decision of the arbitrator(s) shall be
made public without the joint consent of the Parties and each Party shall
maintain the confidentiality of such proceedings and decision unless each Party
otherwise agrees in writing; provided that either Party may make such
disclosures as are permitted for Confidential Information of the other Party
under ARTICLE 9 above.

(d)      Location; Costs.  Unless otherwise mutually agreed by the Parties, the
arbitration proceeding shall be conducted in New York, New York.  The Parties
agree that they shall share bear the costs of arbitration according to the Rules
of Arbitration of the International Chamber of Commerce subject to a ruling of
the arbitrators on costs. 

ARTICLE 17

GENERAL PROVISIONS

17.1     Responsibilities.  Each Party shall conduct its activities under this
Agreement in accordance with all Applicable Laws and except as otherwise
provided herein, each Party shall be responsible for and bear its own costs and
expenses arising therefrom.

17.2     Force Majeure.  If the performance of any part of this Agreement
(except for any payment obligation under this Agreement) by either Party is
prevented, restricted, interfered with or delayed by reason of force majeure
(which is defined as a cause beyond the reasonable control of the affected
Party, and may include fire, flood, embargo, power shortage or failure, acts of
war, insurrection, riot, terrorism, strike, lockout or other labor disturbance
or acts of God), the Party so affected shall, upon giving written notice to the
other Party, be excused from such performance to the extent of such prevention,
restriction, interference or delay; provided that the affected Party shall use
its reasonable efforts to avoid or remove such causes of non-performance and
shall continue performance with the utmost dispatch whenever such causes are
removed. 

17.3     Governing Law.  This Agreement and all questions regarding its validity
or interpretation, or the breach or performance of this Agreement, shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York, without reference

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to conflict of law principles.  The Parties hereby disclaim application of the
United Nations Convention on Contracts for the International Sale of Goods. 

17.4     Waiver of Breach.  Except as otherwise expressly provided in this
Agreement, any term of this Agreement may be waived only by a written instrument
executed by a duly authorized representative of the Party waiving
compliance.  The delay or failure of either Party at any time to require
performance of any provision of this Agreement shall in no manner affect such
Party’s rights at a later time to enforce the same.  No waiver by either Party
of any condition or term in any one or more instances shall be construed as a
further or continuing waiver of such condition or term or of another condition
or term.

17.5     Modification.  No amendment or modification of any provision of this
Agreement shall be effective unless in writing signed by a duly authorized
representative of each Party.  No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by a duly authorized representative of each Party.

17.6     Severability.  In the event any provision of this Agreement should be
held invalid, illegal or unenforceable in any jurisdiction, such provision shall
be severed from this Agreement and the Parties shall negotiate in good faith a
valid, legal and enforceable substitute provision that most nearly reflects the
original intent of the Parties and all other provisions of this Agreement shall
remain in full force and effect in such jurisdiction.  Such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of such provision in any other jurisdiction. 

17.7Entire Agreement.  This Agreement (including the Exhibits attached hereto),
the Supply Agreements (when executed) and any other agreements that may be
entered into between the Parties or their respective Affiliates as contemplated
herein, altogether constitute the entire agreement between the Parties relating
to their subject matter and supersede all prior or contemporaneous agreements,
understandings or representations, either written or oral, between PacBio and
Roche with respect to such subject matter, including the CDAs and the Letter of
Intent between PacBio and F. Hoffman-La Roche Ltd.

17.8     Notices.  Unless otherwise agreed by the Parties or specified in this
Agreement, all communications between the Parties relating to, and all written
documentation to be prepared and provided under, this Agreement shall be in the
English language.  Any notice required or permitted under this Agreement shall
be in writing in the English language and:  (a) delivered personally; (b) sent
by registered or certified mail (return receipt requested and postage prepaid);
(c) sent by express courier service providing evidence of receipt, postage
pre-paid where applicable; or (d) sent by facsimile and a copy promptly sent by
another permissible method of providing notice described in clauses (a), (b), or
(c) above, each to the following addresses of the receiving Party or such other
address for a Party as may be specified by like notice:

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To PacBio:

Pacific Biosciences of California, Inc.
1380 Willow Road
Menlo Park, CA 94025
Telephone:  (650) 521-8000
Facsimile:   (650) 323-9420
Attention:   Office of the CEO

To Roche:

F. Hoffmann-La Roche Ltd

Grenzacherstrasse 124

CH-4070 Basel

Switzerland

Facsimile:  +41 616 88 1396

Attention:   Legal Department - Diagnostics

With a copy to:

Pacific Biosciences of California, Inc.

1380 Willow Road

Menlo Park, CA 94025

Telephone:  (650) 521-8000

Facsimile:   (650) 323-9420

Attention:   Legal Department

With a copy to:

Roche Molecular Systems, Inc.

4300 Hacienda Drive

Pleasanton, CA 94588

Facsimile:  (925) 225-1128

Attention:   Roche Sequencing Unit Legal Department

Any notice required or permitted to be given concerning this Agreement shall be
effective upon receipt by the Party to whom it is addressed or within seven (7)
days of dispatch whichever is earlier.

17.9     Assignment.  This Agreement shall not be assignable by either Party to
any Third Party without the written consent of the other Party; except either
Party may assign this Agreement without the other Party’s consent to a Person
that acquires substantially all of the business or assets of the assigning Party
relating to this Agreement, whether by merger, acquisition or otherwise,
provided that the Person to whom this Agreement is assigned assumes this
Agreement in writing or by operation of law.  In addition, either Party shall
have the right to assign this Agreement to an Affiliate upon written notice to
the non-assigning Party; provided that the assigning Party guarantees the
performance of this Agreement by such Affiliate; and provided further that, if
such assignment results in the imposition of any withholding taxes on the other
Party, which withholding taxes would not otherwise have been imposed on such
other Party other than as a result of such assignment, and such other Party
could not recover such withholding tax through the exercise of Commercially
Reasonable Efforts, then (a) the assigning Party shall pay to such other Party
such additional amounts as are necessary so that such other Party receives the
amounts that it would have received if such payments were not subject to such
withholding tax as a consequence of such assignment, and (b) if such other Party
recovers a withholding tax amount, such other Party, shall return such recovered
amount to the assigning Party within thirty (30) days after such recovery.  Upon
an Acquisition: (i) the Acquiring Entity, and its Affiliates who were not
Affiliates of the Acquired Party prior to such Acquisition, shall not obtain any
rights or licenses under any Intellectual Property Rights of the other Party or
its Affiliates hereunder, except as required to perform its obligations under
this Agreement and (ii)

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

 

the Acquired Party will enter into a written agreement with the Acquiring Entity
under which Know-How and Intellectual Property Rights owned or licensed by the
Acquiring Entity and its Affiliates that are used or generated in the course of
performance of activities under this Agreement are deemed Controlled by the
Acquired Party hereunder and licensed to the other Party under the terms and
conditions of this Agreement.  Subject to the foregoing, this Agreement shall
inure to the benefit of each Party, its successors and permitted assigns.  Any
assignment of this Agreement in contravention of this Section 17.9 shall be null
and void.

17.10    No Partnership or Joint Venture.  Nothing in this Agreement is
intended, or shall be deemed, to establish a joint venture or partnership
between PacBio and Roche.  Neither Party to this Agreement shall have any
express or implied right or authority to assume or create any obligations on
behalf of, or in the name of, the other Party, or to bind the other Party or any
of its Affiliates to any contract, agreement or undertaking with an Affiliate or
any Third Party.

17.11    Third Party Subcontractors.  Either Party may subcontract or delegate
all or any portion of its obligations under this Agreement to a Third Party;
provided that such Party shall ensure that each of its Third Party
subcontractors is bound by a written agreement containing provisions as
protective of the other Party’s rights with respect to the Products and Services
as this Agreement, including provisions consistent with the obligations of
intellectual property rights and confidentiality in this Agreement; and shall
remain responsible to the other Party for all activities of its Third Party
subcontractors to the same extent as if such activities had been undertaken by
such Party itself.

17.12    Export Laws.  Notwithstanding anything to the contrary contained
herein, all obligations of PacBio and Roche are subject to prior compliance with
the export regulations of the United States, the European Union or any other
relevant country and such other laws and regulations in effect in the United
States, the European Union or any other relevant country as may be applicable,
and to obtaining all necessary approvals required by the applicable agencies of
the governments of the United States, the countries within the European Union
and any other relevant countries.  PacBio and Roche shall cooperate with each
other and shall provide assistance to the other as reasonably necessary to
obtain any such required approvals.

17.13    Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.

17.14     Affiliates.  For clarity and without limitation, Roche shall have the
right to exercise any of its rights and licenses or perform or delegate all or
any portion of any of its obligations through any of its Affiliates; provided
that Roche shall remain responsible to PacBio hereunder for all activities of
its Affiliates to the same extent as if such activities had been undertaken by
Roche itself.

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.

 

 

 

 

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

 

 

 

BY:

 

 

 

 

 

NAME:

Michael W. Hunkapiller

 

 

 

 

TITLE:

Chairman, CEO and President

 

 

 

 

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.

 

F. HOFFMANN-LA ROCHE LTD

 

 

 

 

 

BY:

 

 

 

 

 

 

NAME:

 

 

 

 

 

 

TITLE:

 

 

 

 

 

 

 

BY:

 

 

 

 

 

 

NAME:

 

 

 

 

 

 

TITLE:

 

 

 

 

 

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

 

Exhibit 1.26

 

PacBio Patents

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

 

Exhibit 1.30

PacBio Technology Platform

 

“PacBio Technology Platform” shall mean [***].

 

“Chip Product” shall mean [***].

 

“Instrumentation Product” shall mean [***].

 

For clarity, for purposes of this Agreement, (a) “Instrumentation Product”
excludes the PacBio RS and RS II sequencing instruments that PacBio or any of
its Affiliates is selling or has sold prior to or as of the Effective Date, and
any improvements thereto and new versions thereof which, in each case, do not
incorporate the PacBio Technology Platform [***].

 

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Exhibit 1.34

Exemplary Consumable Product Categorization

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

Exhibit 4.2

OUTLINE OF DEVELOPMENT ACTIVITIES

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

Exhibit 5.4

Non-Binding Examples of Sales Minimum Requirements

 

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

Exhibit 5.7(b)

Listed Trademarks

(i)       PacBio Listed Trademarks

 

a.         Listed Trademarks for which the license in Section 5.7 is exclusive:

{None as of the Effective Date – to be inserted in accordance with Section
5.7(b) if/when adopted by PacBio}

 

b.         Listed Trademarks for which the license in Section 5.7 is
non-exclusive:

 

Pacific Biosciences®,  Picture 2 [pacb-20130930ex101383ecag1.jpg], PacBio®,
SMRT® and SMRTbell™

 

 

(ii)       Roche Listed Trademarks

 

{None as of the Effective Date – to be inserted in accordance with Section
5.7(b) if/when adopted by Roche}

 

 

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Exhibit 5.8(a)

Label Licenses

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Exhibit 5.8(b)

(i)        PacBio’s End User License, available at
http://www.pacificbiosciences.com/licenses.html:

End User License Agreement

These license terms are part of the agreement (“Agreement”) between Pacific
Biosciences of California, Inc. or its subsidiary (“PacBio”), and you (the
“Licensee”). They apply to the software that accompanies these license terms,
which includes the media on which you received it, if any. BY USING THE
SOFTWARE, YOU ACCEPT THESE TERMS. PacBio does not accept, and PacBio expressly
rejects hereby any conflicting or additional terms presented by Licensee, and
such terms shall have no effect, whether or not PacBio communicates the
rejection again specifically after receipt of Licensee’s terms. The Agreement
only consists of these terms and any other terms that PacBio issues or expressly
accepts in a duly signed writing.

1.      CERTAIN Definitions and Related Matters

1.1         Product” means each item, including any PacBio Instrument, Licensed
Software and/or PacBio Consumable, listed in the applicable written sales
quotation issued by PacBio (“Quotation”), or in the event a Quotation is not
issued, listed in PacBio’s then-current price list applicable to Licensee’s
jurisdiction, and rightfully obtained by Licensee from PacBio or its authorized
distributor.

1.2         PacBio Instrument” means a PacBio-branded instrument (including any
PacBio® RS sequencing instrument).

1.3         PacBio Consumables” means PacBio SMRT® Cells and/or associated
PacBio-branded reagent kits, and labware intended by PacBio for use with PacBio
Instruments.

1.4         Licensed Software” means the (i) PacBio Instrument operating system
software and firmware, including PacBio Instrument control, data collection and
the PacBio Instrument’s touch screen user interface (“O/S Software”) and (ii)
primary analysis software, including signal processing, base calling and quality
assessment functions (“Primary Analysis Software”), in each case provided by
PacBio to Licensee pre-installed on, and/or on DVD or other media delivered
with, a PacBio Instrument unit and/or made available by PacBio for download, in
object code or executable form only.

1.5         Documentation” means the user documentation accompanying, or
provided by PacBio regarding or for use in connection with a Product or related
service.

1.6         Other Software” means (i) any PacBio software or firmware, other
than the Licensed Software, that PacBio makes available for use with PacBio
Instruments or otherwise (e.g., alignment/assembly and consensus calling
functions), and (ii) any third party software or firmware. “Other Software” may
include open source software.

1.7         Other License Terms” means, with respect to any Other Software, all
of the terms, conditions and use restrictions set forth in the end user license
agreement(s) and/or documentation accompanying and/or applicable to such Other
Software.

2.     License and Use Restrictions

2.1         Limited License.  Subject to the terms and conditions of this
Agreement and, with respect to Other Software, to the applicable Other License
Terms, PacBio grants to Licensee a non-exclusive, non-transferable,
non-sublicensable license to use the Licensed Software and Documentation in
connection with other Products in accordance with the applicable, then-current
Documentation.  PacBio hereby reserves all rights to the Licensed Software and
Documentation, except for the rights expressly granted herein. No other license
or authorization is granted, by implication, estoppel, or otherwise. For
example, and without limiting the preceding sentence, no right or license is
granted or implied, and Licensee is not authorized, to use any Product in
combination with any product or method not provided, licensed or specifically
recommend in writing by PacBio for such use.

2.2         Title.  Licensee acknowledges that PacBio retains title to the
Licensed Software and Documentation and each copy thereof provided to or made by
Licensee, which copies are licensed to Licensee for use in accordance with this

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

Agreement. PacBio only licenses Software and Documentation. PacBio never sells
Software or Documentation or copies thereof.

2.3         Copies.  Licensee may make a single machine-readable copy of the
Licensed Software for backup or archival purposes.  Licensee may make a
reasonable number of copies of the Documentation in support of its use of the
Licensed Software pursuant to this Agreement. Licensee shall not make any other
copies of the Licensed Software or Documentation.  Licensee shall maintain
accurate and up‑to‑date records of the number and location of all copies of the
Licensed Software and Documentation and, upon request, inform PacBio in writing
of such location.  All copies of the Licensed Software and Documentation will be
subject to the terms and conditions of this Agreement.  On each copy Licensee
shall reproduce, and shall not modify, obscure, or efface, any and all titles,
trademark symbols, copyright symbols, notices and legends, and other proprietary
markings on or in the Licensed Software and Documentation.

2.4         No Source Code.  Licensee is granted no rights with respect to the
Licensed Software source code.  Licensee is granted no rights to, and Licensee
agrees that it will not, and will not authorize or permit any third party to,
decompile, disassemble, or reverse engineer, or attempt to derive the source
code for the Licensed Software, in whole or in part.

2.5         Other Restrictions.  Licensee shall not, and shall not authorize or
permit any third party to: (a) sell, lease, license, sublicense, or otherwise
transfer the Licensed Software or the Documentation; (b) provide, disclose, or
make the Licensed Software or Documentation available to any third party, or
permit access to or use of the Licensed Software or Documentation by any person
other than Licensee’s employees, agents, or contractors who are, by agreement,
bound by the terms of this Agreement to the same extent as Licensee; (c) merge
or combine the Licensed Software with other software, or modify the Licensed
Software, or create any derivative software or any other software based upon, or
any derivative work of, the Licensed Software or Documentation; or (d) modify or
efface any titles, trademark symbols, copyright symbols, notices or legends, or
any other proprietary markings on or in the Licensed Software or Documentation.
All license restrictions specified in Sections 2.4 and 2.5 and elsewhere in the
Agreement shall apply to the maximum extent permissible under applicable law. If
Licensee believes that it has additional rights or the right to act contrary to
the express license restrictions specified in this Agreement under mandatory
laws (including, without limitation, national laws implementing Directive
91/250/EEC and similar laws), Licensee agrees that it shall provide PacBio with
at least 30 days prior written notice and any reasonably requested information
before exercising such rights, to allow PacBio to offer alternatives at PacBio’s
sole discretion, for example interface information to achieve interoperability
with independently created computer programs.

2.6         Regulatory Compliance. Licensee acknowledges that the Licensed
Software does not have United States Food and Drug Administration (“FDA”) or
equivalent non-U.S. regulatory agency approval (“Approval”). Accordingly,
Licensee acknowledges that the Licensed Software is intended FOR RESEARCH USE
ONLY and NOT FOR USE IN DIAGNOSTIC PROCEDURES. The Licensed Software should be
used by qualified professionals in strict accordance with applicable
instructions, warnings and other information in user manuals and other
Documentation. Unless otherwise expressly stated by PacBio in writing, no claim
or representation is made or intended by PacBio (i) as to any diagnostic or
other clinical use of the Licensed Software; (ii) that any Licensed Software has
any Approval for use in any diagnostic or other clinical procedure, or for any
other use requiring compliance with any law, regulation or governmental policy
concerning medical devices, laboratory tests or the like (collectively,
“Regulatory Laws”); (iii) that any Licensed Software will satisfy the
requirements of the FDA or any other regulatory agency; or (iv) that any
Licensed Software or its performance is suitable or has been validated for
clinical or diagnostic use, for safety and effectiveness, for any specific use
or application, or for importation into Licensee’s jurisdiction. Licensee agrees
that if it elects to use the Licensed Software for a purpose that would subject
Licensee, its customers or any Product to the application of Regulatory Laws or
any other law, regulation or governmental policy, Licensee shall be solely
responsible for obtaining any required Approvals and otherwise ensuring that the
importation of the Products into Licensee’s jurisdiction and Licensee’s use of
Products complies with all such laws, regulations and policies. The burden of
proof for safe use and handling of the Licensed Software is entirely the
responsibility of Licensee.

2.7         U.S. Government End Users.  The Licensed Software and Documentation
provided by PacBio pursuant to this Agreement are “commercial items,” as the
term is defined at 48 C.F.R. §2.101, consisting of “commercial computer
software” and “commercial computer software documentation,” as such terms are
used in 48 C.F.R. §12.212 or 48

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C.F.R. §227.7202, as applicable.  Consistent with 48 C.F.R. §12.212 or 48 C.F.R.
§§227.7202-1 through 227.7202-4, as applicable, the commercial computer software
and commercial computer software documentation are licensed to United States
Government end users (i) only as commercial items and (ii) with only those
rights as are granted pursuant to the terms of this Agreement.

2.8         Other Software and Other License Terms.  The Licensed Software may
contain, be accompanied by and/or be intended by PacBio to interact with, Other
Software, which is provided under separate Other License Terms.  Such Other
Software and/or the applicable Other License Terms may be listed or identified
in the Licensed Software or Documentation or contained in a file or directory
provided with the delivery of the Licensed Software.  Licensee’s use of such
Other Software in conjunction with the Licensed Software in a manner consistent
with the terms of this Agreement is permitted. However, the Licensee may have
broader rights with respect to the Other Software under the applicable Other
License Terms and nothing in this Agreement is intended to impose further
restrictions on the Licensee’s use of such Other Software.

3.     No Standalone Warranty; Liability Limitations and Disclaimers

3.1         No Standalone Warranty for Licensed Software.  PacBio’s product
warranty for each PacBio Instrument (including its use in connection with the
most current version of Licensed Software, or, with PacBio approval, a previous
version of the Licensed Software) is included with shipment of such PacBio
Instrument, or can be obtained directly by contacting PacBio. PacBio makes no
standalone warranty with regard to Licensed Software. CONSEQUENTLY, THE LICENSED
SOFTWARE (AND ANY OTHER SOFTWARE) IS PROVIDED BY PACBIO “AS-IS” WITHOUT (AND
PACBIO HEREBY DISCLAIMS) ANY WARRANTY, STATUTORY, EXPRESS OR IMPLIED. PacBio
may, at Licensee’s request, furnish technical assistance, advice and information
with respect to the Licensed Software (beyond the scope of PacBio’s applicable
product warranty or service contract for the PacBio Instrument(s) used by
Licensee in connection with the Licensed Software). It is expressly agreed that
there is no obligation to provide such assistance, advice or information, which
are provided “AS IS,” without additional charge, and at Licensee’s sole risk.

3.2         Disclaimer; No Other Warranties.  ANY WARRANTY PROVIDED IN
CONNECTION WITH THE PACBIO INSTRUMENT(S) USED BY LICENSEE IN CONNECTION WITH THE
LICENSED SOFTWARE AND/OR OTHER SOFTWARE (AND ANY REMEDY THEREIN PROVIDED) ARE IN
LIEU OF, AND PACBIO HEREBY DISCLAIMS, ALL REMEDIES AND WARRANTIES, EXPRESS,
STATUTORY, IMPLIED, OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES
OF MERCHANTABILITY, SATISFACTORY QUALITY, NONINFRINGEMENT, OR FITNESS FOR A
PARTICULAR PURPOSE, OR REGARDING RESULTS OBTAINED THROUGH THE USE OF THE
LICENSED SOFTWARE AND/OR OTHER SOFTWARE (INCLUDING, WITHOUT LIMITATION, ANY
CLAIM OF INACCURATE, INVALID OR INCOMPLETE RESULTS), IN EACH CASE HOWEVER
ARISING, INCLUDING WITHOUT LIMITATION FROM A COURSE OF PERFORMANCE, DEALING OR
USAGE OF TRADE, OR OTHERWISE.  IN NO EVENT SHALL PACBIO BE LIABLE FOR COSTS OF
SUBSTITUTE GOODS OR SERVICES, OR FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL,
EXEMPLARY OR INDIRECT DAMAGES FOR BREACH OF WARRANTY.

3.3         Limitation of Liability. EXCEPT AS OTHERWISE EXPRESSLY AGREED BY
PACBIO IN WRITING, PACBIO’S LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, THE LICENSED SOFTWARE AND/OR OTHER SOFTWARE SHALL BE LIMITED TO THE
AMOUNT PAID (IF ANY) BY THE LICENSEE FOR THE LICENSED SOFTWARE AND/OR OTHER
SOFTWARE GIVING RISE TO THE LIABILITY, OR ONE HUNDRED UNITED STATES DOLLARS
(US$100.00), WHICHEVER IS GREATER, AND IN NO EVENT SHALL PACBIO’S AGGREGATE
LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE LICENSED
SOFTWARE AND/OR OTHER SOFTWARE EXCEED THE TOTAL AMOUNTS RECEIVED BY PACBIO UNDER
THE APPLICABLE AGREEMENT(S) WITH PACBIO GOVERNING LICENSEE’S PURCHASE OF THE
PACBIO INSTRUMENT(S) WITH WHICH THE LICENSED SOFTWARE IS USED BY LICENSEE. IN NO
EVENT SHALL PACBIO BE LIABLE FOR COSTS OF SUBSTITUTE GOODS OR SERVICES, OR FOR
ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, EXEMPLARY OR INDIRECT DAMAGES, HOWEVER
CAUSED AND UNDER ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, TORT, WARRANTY,
PURSUANT TO ANY STATUTE, OR ON ANY OTHER BASIS, ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, THE LICENSED SOFTWARE, OTHER SOFTWARE AND/OR SALE OF THE
PRODUCTS OR SERVICES , WHETHER OR NOT

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FORESEEABLE AND WHETHER OR NOT PACBIO IS ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES ARISING FROM OR RELATED TO LOSS OF
USE, LOSS OF DATA, OR DOWNTIME, OR FOR LOSS OF REVENUE OR PROFITS. THESE
LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY.

3.4         Third Party Disclaimers.  Unless otherwise expressly indicated in
the Quotation, Documentation or any Other License Terms, none of PacBio’s
suppliers or licensors of any Product or other item provided by PacBio, or
portion thereof (under this Agreement or otherwise) (each, a “Supplier”)
provides ANY WARRANTY WHATSOEVER, EXPRESS, STATUTORY, IMPLIED, OR OTHERWISE, TO
LICENSEE, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY,
SATISFACTORY QUALITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, AND
ALL SUCH WARRANTIES ARE DISCLAIMED.  IN NO EVENT SHALL ANY SUPPLIER BE LIABLE TO
LICENSEE FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, EXEMPLARY, DIRECT, INDIRECT
OR OTHER DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE
PRODUCTS.

3.5         Indemnification of PacBio. Licensee agrees to defend PacBio against
any third party claim, proceeding or action (“Claim”) that arises in connection
with Licensee’s use of the Licensed Software (a) for any clinical purpose or
application, (b) in violation of any applicable law or regulation, or (c) in the
provision of services under any ‘fee for service’ agreement or other
arrangement. Licensee will pay all damages awarded, and settlements approved by
Licensee, in connection therewith, provided that (i) PacBio provides to Licensee
written notice of the Claim within thirty (30) days of receipt by PacBio of such
Claim, (ii) PacBio allows Licensee to control the defense and settlement of the
Claim, and (iii) PacBio provides to Licensee reasonable assistance in connection
therewith, at no charge to Licensee. PacBio may employ counsel at its own
expense to assist it with respect to any such Claim, provided that this shall
not obligate Licensee or its counsel to consult with or advise such PacBio
counsel, nor affect Licensee’s control of the defense and settlement of the
Claim.

4.     Miscellaneous

4.1         Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first class mail
(registered or certified if available; air mail if overseas), postage prepaid,
or otherwise delivered by hand, commercial courier service, messenger or
telecopy, addressed to the addresses first set forth above or at such other
address furnished with a notice in the manner set forth herein. Such notices
shall be deemed to have been effective when delivered or, if delivery is not
accomplished by reason of some fault or refusal of the addressee, when tendered
(which tender, in the case of mail, shall be deemed to have occurred upon
posting, and in the case of telecopy (fax), shall be deemed to have occurred
upon transmission). All notices shall be in English.

4.2         Governing Law and Venue. This Agreement and any disputes arising out
of or relating do this Agreement (including its formation or termination) or
PacBio’s goods, software or related services (“Disputes”) shall be governed by
and interpreted in accordance with the laws of the State of California, U.S.A.,
excluding in all cases choice of law provisions and excluding the United Nations
Convention on Contracts for the International Sale of Goods. If Licensee is
located within the U.S., any Disputes may be brought in the state courts located
in Santa Clara County, California or the U.S. District Court for the Northern
District of California, and each party consents to the personal and
non-exclusive jurisdiction and venue of these courts. If Licensee is located
outside the U.S., any Disputes shall be resolved by final and binding
arbitration under the rules and auspices of the International Centre for Dispute
Resolution in Santa Clara County, California, in English language proceedings
whereby either party can request a written opinion from the arbitrator(s)
appointed in accordance with the rules, which shall award legal fees (including
reasonable attorneys’ fees) to the party winning the proceedings, provided
however, that either party may seek injunctive relief (including preliminary and
permanent injunctive relief) before any court of competent jurisdiction. This
section shall not apply if Licensee is an agency of the U.S. Government.

4.3         Export Controls. Licensee agrees that it will not export or transfer
the Licensed Software or Documentation for re-export in violation of any United
States laws or the laws of any other jurisdiction, or to any denied or
prohibited person, entity, or embargoed country in violation of such laws.

4.5         Severability. If any section, paragraph, provision or clause or any
portion thereof in this Agreement shall be found or be held to be invalid or
unenforceable in any jurisdiction in which this Agreement is being performed,
the

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remainder of this Agreement shall be valid and enforceable and the parties shall
negotiate, in good faith, a substitute, valid and enforceable provision which
most nearly effects the parties’ intent in entering into this Agreement.

4.6         Force Majeure. Neither party shall be liable to the other party for
any failure or delay in the performance of any of its obligations under this
Agreement for the period and to the extent such failure or delay is caused by
civil unrest, threat of or actual acts of terrorism or war, embargoes,
governmental actions, acts of God, earthquakes, floods, storms, fires, supplier
delay , accidents, explosions, epidemics, quarantine restrictions, or other such
contingencies beyond the reasonable control of the applicable party (“Force
Majeure”). The party affected shall notify the other party as soon as
practicable of any anticipated delay due to Force Majeure.

4.7         No Third Party Beneficiaries. This Agreement has been made and is
made solely for the benefit of PacBio and Licensee and their respective
permitted subsidiaries, successors and assigns. Except as set forth in Section
3.4 (with respect to Suppliers), nothing in this Agreement is intended to confer
any rights or remedies under or by reason of this Agreement on any persons or
entity other than the parties to this Agreement and their respective permitted
successors and assigns, or relieve or discharge the obligation or liability of
any third persons or entities to any party to this Agreement.

4.8         General. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The English language shall govern the meaning
and interpretation of this Agreement. This Agreement (including without
limitation all exhibits hereto and all attachments thereto, which are
incorporated herein by this reference as though fully set forth in the body of
this Agreement) embodies the final and complete understanding of the parties
with respect to the subject matter hereof, superseding all prior oral or written
communications between them, and neither of the parties shall be bound by any
conditions, definitions, warranties, understandings, or representations with
respect to the subject matter hereof other than as expressly provided herein.
Each party acknowledges that it has not entered into this Agreement in reliance
on any statement or representation not expressly set out herein. No oral
explanation or oral information by either party hereto shall alter the meaning
or interpretation of this Agreement.

 

(ii)      End User License for Microsoft Windows 7 For Embedded Systems (if
applicable):

 

MICROSOFT SOFTWARE LICENSE TERMS

WINDOWS 7 ULTIMATE FOR EMBEDDED SYSTEMS

WINDOWS  7 PROFESSIONAL FOR EMBEDDED SYSTEMS (ALL VERSIONS)

These license terms are an agreement between you and Pacific Biosciences of
California, Inc. (“PacBio”).  Please read them.  They apply to the software
included on this device.  The software also includes any separate media on which
you received the software.

The software on this device includes software licensed from Microsoft
Corporation or its affiliate.

The terms also apply to any Microsoft

·

updates,

·

supplements,

·

Internet-based services, and

·

support services

for this software, unless other terms accompany those items.  If so, those terms
apply.

If you obtain updates or supplements directly from Microsoft, then Microsoft,
and not PacBio, licenses those to you.

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As described below, using the software also operates as your consent to the
transmission of certain computer information for Internet-based services.

By using the software, you accept these terms.  If you do not accept them, do
not use the software. Instead, contact PacBio to determine its return policy for
a refund or credit.

If you comply with these license terms, you have the rights below.

1.   OVERVIEW.

a.Software. The software includes desktop operating system software. This
software does not include Windows Live services. Windows Live services are
available from Microsoft under a separate agreement.

2.   USE RIGHTS.

a.Use.  The software license is permanently assigned to the device with which
you acquired the software.  That device is the “licensed device”.  You may use
the software on the licensed device.

b.Processor Limit.  You may use the software with no more than two processors at
any one time.

c.Alternative Versions.  You may only use the version of the software that is
installed on the licensed device.  You may not change it to any other version
(such as the 32-bit or 64-bit version, or another language version).

3.   ADDITIONAL LICENSING REQUIREMENTS AND/OR USE RIGHTS.

a.Specific Use.  PacBio designed the licensed device for a specific use.  You
may only use the software for that use.

b.Other Software.  You may use other programs with the software as long as the
other programs

directly support the specific use for the licensed device, or

provide system utilities, resource management, or anti-virus or similar
protection.

Software that provides consumer or business tasks or processes may not run on
the licensed device.  This includes email, word processing, spreadsheet,
database, scheduling and personal finance software.  The licensed device may use
terminal services protocols to access such software running on a server.

c.Device Connections.  You may not use the software as server software.  In
other words, more than one device may not access, display, run, share or use the
software at the same time.  You may allow up to ten other devices to access the
software to use

File Services,

Print Services,

Internet Information Services, and

Internet Connection Sharing and Telephony Services.

The ten connection limit applies to devices that access the software indirectly
through “multiplexing” or other software or hardware that pools
connections.  You may use unlimited inbound connections at any time via TCP/IP.

d.Remote Access Technologies. You may access and use the software remotely from
another device using remote access technologies as follows.

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Remote Desktop. The single primary user of the licensed device may access a
session from any other device using Remote Desktop or similar technologies.  A
“session” means the experience of interacting with the software, directly or
indirectly, through any combination of input, output and display
peripherals.  Other users may access a session from any device using these
technologies, if the remote device is separately licensed to run the software.

Other Access Technologies. You may use Remote Assistance or similar technologies
to share an active session.

Other Remote Uses. You may allow any number of devices to access the software
for purposes other than those described in the Device Connections and Remote
Access Technologies sections above, such as to synchronize data between devices.

e.Font Components. While the software is running, you may use its fonts to
display and print content. You may only

·

embed fonts in content as permitted by the embedding restrictions in the fonts;
and

·

temporarily download them to a printer or other output device to print content.

f.Icons, images and sounds. While the software is running, you may use but not
share its icons, images, sounds, and media.

4.   POTENTIALLY UNWANTED SOFTWARE.  The software includes Windows Defender.  If
Windows Defender is turned on, it will search this device for “spyware,”
“adware” and other potentially unwanted software.  If it finds potentially
unwanted software, the software will ask you if you want to ignore, disable
(quarantine) or remove it.  Any potentially unwanted software rated “high” or
“severe,” will be automatically removed after scanning unless you change the
default setting.  Removing or disabling potentially unwanted software may result
in

·

other software on your computer ceasing to work, or

·

your breaching a license to use other software on this device.

By using this software, it is possible that you will also remove or disable
software that is not potentially unwanted software.

5.   SCOPE OF LICENSE.  The software is licensed, not sold.  This agreement only
gives you some rights to use the software.  PacBio and Microsoft reserve all
other rights.  Unless applicable law gives you more rights despite this
limitation, you may use the software only as expressly permitted in this
agreement.  In doing so, you must comply with any technical limitations in the
software that allow you to use it only in certain ways.  For more information,
see the software documentation or contact PacBio.  You may not:

•work around any technical limitations in the software;

•reverse engineer, decompile or disassemble the software;

•make more copies of the software than specified in this agreement;

•publish the software for others to copy;

•rent, lease or lend the software; or

•use the software for commercial software hosting services.

Except as expressly provided in this agreement, rights to access the software on
this device do not give you any right to implement Microsoft patents or other
Microsoft intellectual property in software or devices that access this device.

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•INTERNET-BASED SERVICES.  Microsoft provides Internet-based services with the
software.  Microsoft may change or cancel them at any time.

a.Consent for Internet-Based Services.  The licensed device may contain one or
more of the software features described below.  These features connect to
Microsoft or service provider computer systems over the Internet.  In some
cases, you will not receive a separate notice when they connect.  For more
information about these features, visit

go.microsoft.com/fwlink/?linkid=104604.

By using these features, you consent to the transmission of this information.
 Microsoft does not use the information to identify or contact you.

Computer Information.  The following features use Internet protocols, which send
to the appropriate systems computer information, such as your Internet protocol
address, the type of operating system and browser, and the name and version of
the software you are using.  Microsoft uses this information to make the
Internet-based services available to you.  One or more of the following features
may be enabled in the licensed device.

×

Plug and Play and Plug and Play Extensions.  You may connect new hardware to
your device. Your device may not have the drivers needed to communicate with
that hardware.  If so, the update feature of the software can obtain the correct
driver from Microsoft and install it on your device.

×

Web Content Features.  Features in the software can retrieve related content
from Microsoft and provide it to you.  Examples of these features are clip art,
templates, online training, online assistance and Appshelp. You may choose not
to use these web content features.

×

Digital Certificates.  The software uses x.509 version 3 digital
certificates.  These digital certificates confirm the identity of users sending
information to each other and allow you to encrypt the information. The software
retrieves certificates and updates certificate revocation lists over the
Internet.

×

Auto Root Update.    The Auto Root Update feature updates the list of trusted
certificate authorities. You can switch off this feature.

×

Windows Media Digital Rights Management.  Content owners use Windows Media
digital rights management technology (WMDRM) to protect their intellectual
property, including copyrights.  This software and third party software use
WMDRM to play and copy WMDRM-protected content.  If the software fails to
protect the content, content owners may ask Microsoft to revoke the software’s
ability to use WMDRM to play or copy protected content.  Revocation does not
affect other content.  When you download licenses for protected content, you
agree that Microsoft may include a revocation list with the licenses.  Content
owners may require you to upgrade WMDRM to access their content.  Microsoft
software that includes WMDRM will ask for your consent prior to the upgrade.  If
you decline an upgrade, you will not be able to access content that requires the
upgrade. You may switch off WMDRM features that access the Internet.   When
these features are off, you can still play content for which you have a valid
license.

×

Windows Media Player. When you use Windows Media Player, it checks with
Microsoft for

compatible online music services in your region;

new versions of the player; and

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codecs if your device does not have the correct ones for playing content.

For more information, go to:  go.microsoft.com/fwlink/?linkid=104605.

×

Malicious Software Removal/Clean On Upgrade.  Before installation of the
software, the software will check and remove certain malicious software listed
at www.support.microsoft.com/?kbid=890830 (“Malware”) from your device.  When
the software checks your device for Malware, a report will be sent to Microsoft
about any Malware detected or errors that occurred while the software was
checking for Malware.  No information that can be used to identify you is
included in the report.

×

Network Awareness.  This feature determines whether a system is connected to a
network by either passive monitoring of network traffic or active DNS or HTTP
queries. The query only transfers standard TCP/IP or DNS information for routing
purposes. You can switch off the active query feature through a registry
setting.

×

Windows Time Service.  This service synchronizes with www.time.windows.com once
a week to provide your computer with the correct time.  The connection uses
standard NTP protocol.

b.Use of Information. Microsoft may use the computer information, error reports,
and Malware reports to improve our software and services.  We may also share it
with others, such as hardware and software vendors.  They may use the
information to improve how their products run with Microsoft software.

c.Misuse of Internet-based Services.  You may not use these services in any way
that could harm them or impair anyone else’s use of them.  You may not use the
services to try to gain unauthorized access to any service, data, account or
network by any means.

6.   VALIDATION.

a.Validation verifies that the software has been activated and is properly
licensed. It also verifies that no unauthorized changes have been made to the
validation, licensing, or activation functions of the software. Validation may
also check for certain malicious or unauthorized software related to such
unauthorized changes. A validation check confirming that you are properly
licensed, permits you to continue to use the software, certain features of the
software or to obtain additional benefits. You are not permitted to circumvent
validation. This is to prevent unlicensed use of the software. For more
information, see go.microsoft.com/fwlink/?Linkid=104610.

b.The software will from time to time perform a validation check of the
software. The check may be initiated by the software or Microsoft. To enable the
activation function and validation checks, the software may from time to time
require updates or additional downloads of the validation, licensing or
activation functions of the software. The updates or downloads are required for
the proper functioning of the software and may be downloaded and installed
without further notice to you. During or after a validation check, the software
may send information about the software, the computer and the results of the
validation check to Microsoft. This information includes, for example, the
version and product key of the software, any unauthorized changes made to the
validation, licensing or activation functions of the software, any related
malicious or unauthorized software found and the Internet protocol address of
the computer. Microsoft does not use the information to identify or contact you.
By using the software, you consent to the transmission of this information. For
more information about validation and what is sent during or after a validation
check, see go.microsoft.com/fwlink/?Linkid=104611.

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c.If, after a validation check, the software is found to be counterfeit,
improperly licensed, or a non-genuine Windows product, or if it includes
unauthorized changes, then the functionality and experience of using the
software will be affected. For example:

Microsoft may

·repair the software, and remove, quarantine or disable any unauthorized changes
that may interfere with the proper use of the software, including circumvention
of the activation or validation functions of the software; or

·check and remove malicious or unauthorized software known to be related to such
unauthorized changes; or

·provide notice that the software is improperly licensed or a non-genuine
Windows product;

and you may

·receive reminders to obtain a properly licensed copy of the software; or

·need to follow Microsoft’s instructions to be licensed to use the software and
reactivate;

and you may not be able to

·use or continue to use the software or some of the features of the software; or

·obtain certain updates or upgrades from Microsoft.

d.You may only obtain updates or upgrades for the software from Microsoft or
authorized sources (including PacBio). For more information on obtaining updates
from authorized sources see go.microsoft.com/fwlink/?Linkid=104612.

7.   PRODUCT SUPPORT.  Contact PacBio for support options.  Refer to the support
number provided with the device.

8.   MICROSOFT .NET BENCHMARK TESTING. The software includes one or more
components of the .NET Framework (“.NET Components”).  You may conduct internal
benchmark testing of those components. You may disclose the results of any
benchmark test of those components, provided that you comply with the conditions
set forth at go.microsoft.com/fwlink/?LinkID=66406.

Notwithstanding any other agreement you may have with Microsoft, if you disclose
such benchmark test results, Microsoft shall have the right to disclose the
results of benchmark tests it conducts of your products that compete with the
applicable .NET Component, provided it complies with the same conditions set
forth at go.microsoft.com/fwlink/?LinkID=66406.

9.   BACKUP COPY.  You may make one backup copy of the software.  You may use it
only to reinstall the software on the device.

10. DOCUMENTATION. Any person that has valid access to your computer or internal
network may copy and use the documentation for your internal, reference
purposes.

11. UPGRADES. To use upgrade software, you must first be licensed for the
software that is eligible for the upgrade.  Upon upgrade, this agreement takes
the place of the agreement for the software you upgraded from. After you
upgrade, you may no longer use the software you upgraded from.

12. PROOF OF LICENSE.  If you acquired the software on the device, or on a disc
or other media, a genuine Certificate of Authenticity label with a genuine copy
of the software identifies licensed software.  To be valid, this label must be
affixed to the device, or included on or in PacBio’s software packaging.  If you
receive the label separately, it is not valid.  You should keep the label on the

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device or packaging to prove that you are licensed to use the software.  To
identify genuine Microsoft software, see http://www.howtotell.com.

13. TRANSFER TO A THIRD PARTY.  You may transfer the software only with the
device, the Certificate of Authenticity label, and these license terms directly
to a third party.  Before the transfer, that party must agree that these license
terms apply to the transfer and use of the software.  You may not retain any
copies of the software including the backup copy.

14. NOTICE ABOUT THE H.264/AVC VISUAL STANDARD, THE VC-1 VIDEO STANDARD, THE
MPEG-4 VISUAL STANDARD AND THE MPEG-2 VIDEO STANDARD. This software may include
H.264/AVC, VC-1, MPEG-4 Part 2, and MPEG-2 visual compression technology. If the
software includes those visual compression technologies MPEG LA, L.L.C. requires
this notice:

THIS PRODUCT IS LICENSED UNDER ONE OR MORE VIDEO PATENT PORTFOLIO LICENSES SUCH
AS, AND WITHOUT LIMITATION, THE AVC, THE VC-1, THE MPEG-4 PART 2 VISUAL, AND THE
MPEG‑2 VIDEO PATENT PORTFOLIO LICENSES FOR THE PERSONAL AND NON-COMMERCIAL USE
OF A CONSUMER TO (i) ENCODE VIDEO IN COMPLIANCE WITH THE ABOVE STANDARDS (“VIDEO
STANDARDS”) AND/OR (ii) DECODE VIDEO THAT WAS ENCODED BY A CONSUMER ENGAGED IN A
PERSONAL AND NON-COMMERCIAL ACTIVITY OR WAS OBTAINED FROM A VIDEO PROVIDER
LICENSED TO PROVIDE VIDEO UNDER SUCH PATENT PORTFOLIO LICENSES. NONE OF THE
LICENSES EXTEND TO ANY OTHER PRODUCT REGARDLESS OF WHETHER SUCH PRODUCT IS
INCLUDED WITH THIS PRODUCT IN A SINGLE ARTICLE. NO LICENSE IS GRANTED OR SHALL
BE IMPLIED FOR ANY OTHER USE. ADDITIONAL INFORMATION MAY BE OBTAINED FROM MPEG
LA, L.L.C. SEE WWW.MPEGLA.COM. 

15. NOT FAULT TOLERANT.  The software is not fault tolerant.  PacBio installed
the software on the device and is responsible for how it operates on the device.

16. RESTRICTED USE. The Microsoft software was designed for systems that do not
require fail-safe performance.  You may not use the Microsoft software in any
device or system in which a malfunction of the software would result in
foreseeable risk of injury or death to any person.  This includes operation of
nuclear facilities, aircraft navigation or communication systems and air traffic
control.

17. THIRD PARTY PROGRAMS. The software contains third party programs. The
license terms with those programs apply to your use of them.

18. NO WARRANTIES FOR THE SOFTWARE. The software is provided “as is”.  You bear
all risks of using it.  Microsoft gives no express warranties, guarantees or
conditions.  Any warranties you receive regarding the device or the software do
not originate from, and are not binding on, Microsoft or its affiliates.  When
allowed by your local laws, PacBio and Microsoft exclude implied warranties of
merchantability, fitness for a particular purpose and non-infringement. 

19. LIABILITY LIMITATIONS.  You can recover from Microsoft and its affiliates
only direct damages up to two hundred fifty U.S. Dollars (U.S. $250.00), or
equivalent in local currency. You cannot recover any other damages, including
consequential, lost profits, special, indirect or incidental damages.

This limitation applies to:

•anything related to the software, services, content (including code) on third
party internet sites, or third party programs, and

•claims for breach of contract, breach of warranty, guarantee or condition,
strict liability, negligence, or other tort to the extent permitted by
applicable law.

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It also applies even if Microsoft should have been aware of the possibility of
the damages.  The above limitation may not apply to you because your country may
not allow the exclusion or limitation of incidental, consequential or other
damages.

20. EXPORT RESTRICTIONS. The software is subject to United States export laws
and regulations. You must comply with all domestic and international export laws
and regulations that apply to the software. These laws include restrictions on
destinations, end users and end use. For additional information, see
www.microsoft.com/exporting.

21. ENTIRE AGREEMENT. This agreement, additional terms (including any
printed-paper license terms that accompany the software and may modify or
replace some or all of these terms), and the terms for supplements, updates,
Internet-based services and support services that you use, are the entire
agreement for the software and support services.

22. APPLICABLE LAW.

a.United States. If you acquired the software in the United States, Washington
state law governs the interpretation of this agreement and applies to claims for
breach of it, regardless of conflict of laws principles. The laws of the state
where you live govern all other claims, including claims under state consumer
protection laws, unfair competition laws, and in tort.

b.Outside the United States. If you acquired the software in any other country,
the laws of that country apply.

 

(i)

Other Third Party Software Licenses, available at
http://www.pacificbiosciences.com/3rd_Party_Software_Licenses.html:

 

7zip

--------------------------------------------------------------------------------

7zip:
License for use and distribution (available here)

--------------------------------------------------------------------------------

7-Zip Copyright (C) 1999-2011 Igor Pavlov.
Licenses for files are:

·

7z.dll: GNU LGPL + unRAR restriction

·

All other files: GNU LGPL

The GNU LGPL + unRAR restriction means that you must follow both GNU LGPL rules
and unRAR restriction rules.

Note:
You can use 7-Zip on any computer, including a computer in a commercial
organization. You don't need to register or pay for 7-Zip.

GNU LGPL information

--------------------------------------------------------------------------------

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This library is free software; you can redistribute it and/or modify it under
the terms of the GNU Lesser General Public License as published by the Free
Software Foundation; either version 2.1 of the License, or (at your option) any
later version.

This library is distributed in the hope that it will be useful, but WITHOUT ANY
WARRANTY; without even the implied warranty of MERCHANTABILITY or FITNESS FOR A
PARTICULAR PURPOSE. See the GNU Lesser General Public License for more details.

You can receive a copy of the GNU Lesser General Public License from
http://www.gnu.org/

unRAR restriction

 

The decompression engine for RAR archives was developed using source code of
unRAR program. All copyrights to original unRAR code are owned by Alexander
Roshal.

The license for original unRAR code has the following restriction:

The unRAR sources cannot be used to re-create the RAR compression algorithm,
which is proprietary. Distribution of modified unRAR sources in separate form or
as a part of other software is permitted, provided that it is clearly stated in
the documentation and source comments that the code may not be used to develop a
RAR (WinRAR) compatible archiver.

Igor Pavlov

Apache License

 

Portions licensed under the Apache License, Version 2.0, available here.

Boost Software

 

Boost Software License - Version 1.0 - August 17th, 2003 (available here)

Permission is hereby granted, free of charge, to any person or organization
obtaining a copy of the software and accompanying documentation covered by this
license (the "Software") to use, reproduce, display, distribute, execute, and
transmit the Software, and to prepare derivative works of the Software, and to
permit third-parties to whom the Software is furnished to do so, all subject to
the following:

The copyright notices in the Software and this entire statement, including the
above license grant, this restriction and the following disclaimer, must be
included in all copies of the Software, in whole or in part, and all derivative
works of the Software, unless such copies or derivative works are solely in the
form of machine-executable object code generated by a source language processor.

THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A

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PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. IN NO EVENT SHALL THE COPYRIGHT
HOLDERS OR ANYONE DISTRIBUTING THE SOFTWARE BE LIABLE FOR ANY DAMAGES OR OTHER
LIABILITY, WHETHER IN CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN
CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.

BSD License

 

Portions licensed under the BSD License, available here.

Clear BSD License

 

Portions licensed under the Clear BSD License, see below:

Copyright (c) 2012-2013, Pacific Biosciences of California, Inc.

All rights reserved.

Redistribution and use in source and binary forms, with or without modification,
are permitted (subject to the limitations in the disclaimer below) provided that
the following conditions are met:

·

Redistributions of source code must retain the above copyright notice, this list
of conditions and the following disclaimer.

·

Redistributions in binary form must reproduce the above copyright notice, this
list of conditions and the following disclaimer in the documentation and/or
other materials provided with the distribution.

·

Neither the name of Pacific Biosciences nor the names of its contributors may be
used to endorse or promote products derived from this software without specific
prior written permission.

NO EXPRESS OR IMPLIED LICENSES TO ANY PARTY'S PATENT RIGHTS ARE GRANTED BY THIS
LICENSE. THIS SOFTWARE IS PROVIDED BY PACIFIC BIOSCIENCES AND ITS CONTRIBUTORS
"AS IS" AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
ARE DISCLAIMED. IN NO EVENT SHALL PACIFIC BIOSCIENCES OR ITS CONTRIBUTORS BE
LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR
CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE
GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS INTERRUPTION)
HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT
LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF
THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

GMAP-GSNAP License

 

Portions licensed under the GMAP-GSNAP License, available here.

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

GPL License

 

Portions licensed under the GNU Public License (GPL) v3.0, available here.

HDF5

 

Copyright Notice and License Terms for HDF5 (Hierarchical Data Format 5)
Software Library and Utilities (available here)

 

HDF5 (Hierarchical Data Format 5) Software Library and Utilities
Copyright 2006-2011 by The HDF Group.

NCSA HDF5 (Hierarchical Data Format 5) Software Library and Utilities
Copyright 1998-2006 by the Board of Trustees of the University of Illinois.
All rights reserved.

Redistribution and use in source and binary forms, with or without modification,
are permitted for any purpose (including commercial purposes) provided that the
following conditions are met:

·

Redistributions of source code must retain the above copyright notice, this list
of conditions, and the following disclaimer.

·

Redistributions in binary form must reproduce the above copyright notice, this
list of conditions, and the following disclaimer in the documentation and/or
materials provided with the distribution.

·

In addition, redistributions of modified forms of the source or binary code must
carry prominent notices stating that the original code was changed and the date
of the change.

·

All publications or advertising materials mentioning features or use of this
software are asked, but not required, to acknowledge that it was developed by
The HDF Group and by the National Center for Supercomputing Applications at the
University of Illinois at Urbana-Champaign and credit the contributors.

·

Neither the name of The HDF Group, the name of the University, nor the name of
any Contributor may be used to endorse or promote products derived from this
software without specific prior written permission from The HDF Group, the
University, or the Contributor, respectively.

DISCLAIMER:
THIS SOFTWARE IS PROVIDED BY THE HDF GROUP AND THE CONTRIBUTORS "AS IS" WITH NO
WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED. In no event shall The HDF
Group or the Contributors be liable for any damages suffered by the users
arising out of the use of this software, even if advised of the possibility of
such damage.

 

Contributors: National Center for Supercomputing Applications (NCSA) at the
University of Illinois, Fortner Software, Unidata Program Center (netCDF), The
Independent JPEG Group (JPEG), Jean-loup Gailly and Mark Adler (gzip), and
Digital Equipment Corporation (DEC).

 

Portions of HDF5 were developed with support from the Lawrence Berkeley National
Laboratory (LBNL) and the United States Department of Energy under Prime
Contract No. DE-AC02-05CH11231.

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

 

Portions of HDF5 were developed with support from the University of California,
Lawrence Livermore National Laboratory (UC LLNL). The following statement
applies to those portions of the product and must be retained in any
redistribution of source code, binaries, documentation, and/or accompanying
materials:

This work was partially produced at the University of California, Lawrence
Livermore National Laboratory (UC LLNL) under contract no. W-7405-ENG-48
(Contract 48) between the U.S. Department of Energy (DOE) and The Regents of the
University of California (University) for the operation of UC LLNL.

DISCLAIMER:
This work was prepared as an account of work sponsored by an agency of the
United States Government. Neither the United States Government nor the
University of California nor any of their employees, makes any warranty, express
or implied, or assumes any liability or responsibility for the accuracy,
completeness, or usefulness of any information, apparatus, product, or process
disclosed, or represents that its use would not infringe privately- owned
rights. Reference herein to any specific commercial products, process, or
service by trade name, trademark, manufacturer, or otherwise, does not
necessarily constitute or imply its endorsement, recommendation, or favoring by
the United States Government or the University of California. The views and
opinions of authors expressed herein do not necessarily state or reflect those
of the United States Government or the University of California, and shall not
be used for advertising or product endorsement purposes.

LGPL Libraries

 

Certain libraries licensed under the GNU Lesser General Public License (LGPL),
version 2.1 (LGPL-2.1), available here.

Microsoft Public License

 

Portions licensed under the Microsoft Public License (MS-PL), available here.

MIT License

 

Portions licensed under The MIT License (MIT), available here.

Python Software Foundation License

 

Portions licensed under the Python Software Foundation License (Python-2.0),
available here.

 

 

 

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Confidential Treatment Requested by Pacific Biosciences of California, Inc.

Exhibit 7.1

Payments

1. Upfront Payment.  Roche shall pay to PacBio an upfront payment in the amount
of Thirty Five Million Dollars ($35,000,000) within fifteen (15) days following
the Effective Date in accordance with the payment provisions of ARTICLE 8.  The
payment set forth in this Paragraph 1 shall not be refundable or creditable
against any other payments by Roche to PacBio under this Agreement.

2. Milestone Payments. 

(a) Milestone Payments.  Roche shall pay to PacBio each “Milestone Payment”  set
out below following the first achievement of the corresponding milestone set out
below, in accordance with this Paragraph 2 and the payment provisions in ARTICLE
8:

Milestone Event

Milestone Payment

[***]

[***]

(b) Reports and Payments.  The relevant Party shall notify the other Party in
writing within thirty (30) days after the first achievement of each milestone
event set out in Paragraph 2(a) by it or its Affiliate (a “Milestone
Notice”).  Roche shall pay PacBio the corresponding milestone payment for the
first achievement of the milestone event in a Milestone Notice (i) if Roche is
providing such Milestone Notice, together with such Milestone Notice to PacBio,
or (ii) if PacBio is providing such Milestone Notice, upon receipt of such
Milestone Notice from PacBio, or if the achievement of the corresponding
milestone is subject to any acceptance testing as may be set forth in the
Development Plan, upon confirmation by Roche of successful completion of the
milestone acceptance tests.  For the avoidance of doubt, the milestone payments
set forth in this Paragraph 2 shall not be refundable and shall not be
creditable against future milestone payments or other payments to PacBio under
this Agreement. 

3. Transfer Price.  Roche shall pay PacBio a transfer price for [***] the PacBio
Products supplied to Roche pursuant this Agreement, in accordance with the terms
and conditions set out in the applicable Supply Agreement and the payment
provisions in Article 8 as follows: 

[***]

4. No Other Payments.  Except as expressly provided herein, no other payments
are due from Roche to PacBio for PacBio’s performance hereunder and PacBio shall
otherwise perform all activities assigned to it or for which it is responsible
at its own expense.

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EXCHANGE COMMISSION

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