EXHIBIT 10.59

 

Confidential Treatment has been requested for portions of this exhibit. This
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

 

 

 

 

 

Affymetrix Instrument and Chip Supply Agreement

 

F. Hoffmann-La Roche Ltd.

and

Affymetrix, Inc.

 

dated

 

January 29, 2003

 

 

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TABLE OF CONTENTS

 

I.

Introduction

 

 

II.

Common Terms and Definitions.

 

 

III.

Chip and Affymetrix Instrument Supply

 

 

IV.

Custom Array Development

 

 

V.

Proprietary Rights

 

 

VI.

Compensation

 

 

VII.

Manufacturing Process Change.

 

 

VIII.

Technical Support and Product Service

 

 

IX.

Intellectual Property Ownership

 

 

X.

Warranty

 

 

XI.

Limited Liability

 

 

XII.

Indemnity

 

 

XIII.

Term and Termination

 

 

XIV.

Miscellaneous.

 

Annex 1:

Current Form of Customer Service Provider Addendum

 

 

Annex 2:

Current Affymetrix Instrument Service Level Packages

 

 

Annex 3:

Software Maintenance Terms and Conditions

 

 

 

 

Exhibit A:

Affymetrix Instrument Pricing Schedule

 

 

Exhibit B:

Catalog Chip and Custom Array Pricing Schedule

 

 

 

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AFFYMETRIX INSTRUMENT AND CHIP SUPPLY AGREEMENT

 

January 29, 2003

This AFFYMETRIX INSTRUMENT AND CHIP SUPPLY AGREEMENT (“Agreement”) is effective
as of the date first written above (“Effective Date”) between Affymetrix, Inc.,
a Delaware corporation (“Affymetrix”), and F. Hoffmann-La Roche Ltd. ( “Roche”).

I.              Introduction.

(a)           Affymetrix has research, development and manufacturing
capabilities and facilities, and has developed certain rights relevant to DNA
probe array-based technology.

(b)           Roche has research, development and manufacturing capabilities
required for the development and commercialization of diagnostic products
utilizing DNA probe array-based technology.

(c)           As part of the Collaboration, Affymetrix and Roche desire to enter
into an agreement whereby Affymetrix will supply Roche with DNA probe arrays,
instruments related thereto and other products related to the foregoing for use
in or with Diagnostic Products developed by the Parties pursuant to the
Collaboration.

(d)           In consideration of the mutual covenants and promises contained in
this Agreement, Affymetrix and Roche agree as follows:

II.            Common Terms and Definitions.

 

(a)           Common Terms.

(i)            Unless otherwise defined herein, all capitalized terms shall have
the meanings set forth in the Common Terms Agreement, dated as of even date
herewith, between Affymetrix and Roche (the “Common Terms Agreement”).

(ii)           This Agreement shall be governed by and subject to the provisions
contained in the Common Terms Agreement, in accordance with its terms.

(b)           Definitions.

(i)            “Affymetrix Instrument Pricing Schedule” shall have the meaning
set forth in Section III(g)(i).

(ii)           “Affymetrix Instrument Service Level Packages” shall have the
meaning set forth in Section III(i).

(iii)          “Affymetrix Service Levels” shall have the meaning set forth in
Section VIII(a).

(iv)          “Chip Improvement Inventions” shall mean all inventions that are
conceived or first reduced to practice by an employee or contractor of a Party
or its

 

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Affiliates resulting from design or use of the Arrays supplied hereunder which
relate to probe Array manufacturing techniques, probe Array layouts, probe Array
packaging techniques, probe Array assay techniques (but only insofar as such
assay techniques relate to processes that occur following nucleic acid
extraction and are directly related to Arrays of nucleic acid probes), and probe
Array software analysis techniques relating to the creation of genetic
information such as but not limited to genotypes, sequences, base calls and
qualitative or quantitative expression levels.  Chip Improvement Inventions
shall not include analytic software which takes such genetic information
discussed in the preceding sentence and from such information derives
predictions, prognoses, diagnoses, treatment recommendations, or related
information or is specific to particular Content. It is hereby understood that
inventions made independently of design or use of Arrays (such as those
inventions made in the course of design or use of Roche’s proprietary
technologies or other non-Affymetrix technologies) are not Chip Improvement
Inventions within the meaning of this Agreement. Chip Improvement Inventions
shall further not include any other inventions that are conceived of or reduced
to practice by an employee or contractor of a Party or its Affiliates including,
for example, expression data or discoveries resulting therefrom, targets
identified through the use of the Arrays, or correlations between genetic
sequences and function.

(v)           “Content Chips” shall have the meaning set forth in Section
III(a)(iii).

(vi)          “Fully Loaded Cost Plus Basis” shall mean, for a particular
Catalog Chip or Custom Array, as the case may be, the sum of (i) [***] and (ii)
the [***].

(vii)         “[***] Transfer Prices” shall have the meaning given to such term
on Exhibit B hereto.

(viii)        “Initial Design Fee” shall have the meaning set forth in Section
VI(a).

(ix)           “Manufacturing Facility Fee” shall mean the amount specified in
the Development Plan for a Diagnostic Product that Affymetrix may need to build,
staff, and otherwise prepare a manufacturing facility for the production of
Arrays for a Diagnostic Product.

(x)            “Projected Base Markup” shall mean the product of (i) [***]
multiplied by (ii) the [***].

(xi)           “Projected Fully Loaded Cost” shall mean the [***].

(xii)          “Projected Fully Loaded Cost Plus Basis” shall mean, for a
particular Array, as the case may be, the sum of (i) [***] and (ii) the [***].

(xiii)         “Projected Markup Percentage” shall mean the percentage mark up
over [***] embedded in the [***] as set forth in the Supply Agreement as of the
Effective Date, which percentage [***] the Collaboration.

 

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(xiv)        “Return Materials Authorization” shall have the meaning set forth
in Section VI(d).

(xv)         “Services” shall mean technical support and product service
(including support for adaptation for diagnostic uses).

(xvi)        “Specification” shall mean written design and/or manufacturing
specifications for a particular Array or Diagnostic Product incorporating an
Array, as applicable, either set forth in the Development Plan as then in effect
or as provided by Roche to Affymetrix.

III.           Chip and Affymetrix Instrument Supply.

(a)           Chip Supply.  Beginning on the Effective Date, Affymetrix agrees
to deliver Chips to Roche, in accordance with and subject to the terms of this
Agreement, as follows:

(i)            for Roche’s use as components of Diagnostic Products (“Component
Chips”);

(ii)           for Roche’s use in connection with its own development of
Diagnostic Products (“Development Chips”);

(iii)          in a quantity limited to an aggregate number of Chips of up to
[***] such Chips per [***] through [***], for Roche’s use exclusively to develop
Content for Diagnostic Products (“Content Chips”); provided that Roche shall,
for each Content development program, notify Affymetrix of the Content intended
to be developed and its expected application; and

(iv)          in the event Roche needs additional Chips for Content discovery,
Roche may propose to Affymetrix specific content discovery programs and
Affymetrix will consider extending the right to purchase Content Chips,
specifically considering that such past and further use does not erode or
otherwise compromise Affymetrix’ research supply business with its customers.

(b)           Physical Defects.  Affymetrix will promptly replace any Chips that
have Physical Defects [***] Roche; provided Roche gives notice to Affymetrix and
returns such Chips within the Chips’ remaining shelf life and otherwise in
accordance with the procedures in Section VI(d) hereof.  If such Component Chip
has already been incorporated into a Diagnostic Product that has been shipped to
a Customer, then to the extent that Diagnostic Products can be salvaged on a
commercial basis, Affymetrix will pay the [***], and to the extent the
components of that Diagnostic Product cannot be salvaged, Affymetrix will
reimburse Roche for Roche’s [***] in which such Component Chip was included.

(c)           Forecasts.  On at least a quarterly basis, Roche will provide a
reasonable, good faith forecast of Custom Arrays and Catalog Chips to be
supplied by Affymetrix (such forecasts to be supplied with the Affymetrix part
number, if any).  The forecasts shall indicate, with respect to each part number
(or Chip design in the absence of part number), whether those

 

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Chips are to be used as Component Chips, Development Chips or Content Chips, and
will provide a [***]-quarter rolling projection of product demand; provided that
(i) the next quarter in such forecast shall constitute a firm commitment
obligating Roche to issue purchase orders for delivery of at least [***]% of the
next quarter forecast quantities (100% of such next quarter forecast quantities,
the “Firm Commitment”) of each type of Chip (by part number, if any) set forth
therein in such quarter, and (ii) the subsequent quarters of such forecast will
be for capacity planning purposes only, and shall not constitute a firm
commitment to issue any purchase orders.  The forecast will be provided
according to a mechanism and on forms to be agreed upon in good faith by the
Parties. Affymetrix shall supply at least [***]% of the Firm Commitment and will
use commercially reasonable efforts to supply [***]% of the Firm Commitment of
Chips in any forecast period and to meet the time specified in any purchase
order in any forecast period; provided, that manufacture will be firmly
scheduled and specific delivery times will be confirmed by Affymetrix only after
receipt of the purchase order specific to those Chips to be delivered.  After
the initial forecast, if the aggregate number of ordered Chips of a particular
type forecast for a quarter increases by more than [***]% from the forecast
provided for the previous quarter, then [***]% of the number of such Chips above
the [***]% increase shall be supplied in a reasonable time after the initial
delivery time projection, but shall not be subject to breach on account of late
supply thereof, unless Affymetrix has given its prior consent to supply such
Chips.

(d)           Use and Transfer of Chips and Data Therefrom.

(i)            Roche may not: (A) transfer the Chips to Third Parties, except
Component Chips as components of a Diagnostic Product and pursuant to the
License Agreement; (B) purposefully use any Chip, or data generated by any Chip
supplied pursuant to this Agreement or any Database to develop or discover
Content (other than Content Chips); (C) reverse engineer Chips delivered
hereunder; (D) reuse any individual Chip; (E) use Chips or Sell Chips for use in
diagnostic or other settings requiring FDA or other regulatory agency approval
unless Roche obtains such approval; or (F) use Chips or sell such Chips for use
in any manner that is inconsistent with any legal or regulatory requirement. 
Roche understands that neither the Chips nor the Affymetrix Instruments have
received FDA or other regulatory agency approval as supplied under this
Agreement.

(ii)           Unless otherwise expressly permitted by any Collaboration
Agreement, Roche shall not sell, distribute or otherwise transfer to Third
Parties any data or Database derived from any Arrays supplied pursuant to this
Agreement, except in connection with a Diagnostic Product, provided that Roche
shall not sell, distribute or transfer on a commercial basis a standalone
Database.

(e)           Packing and Shipping.  Arrays will be packed in Affymetrix’
standard shipping packages and shipped to the address specified by Roche in
accordance with quality assurance and packaging procedures determined by
Affymetrix from time to time.  If a particular Custom Array requires any
packaging, process or procedure other than those Affymetrix utilizes for its
Catalog Chips, then upon the reasonable request of Roche, Affymetrix shall
perform such packaging, processes or procedures at an additional charge on a
[***].  Roche agrees to provide to Affymetrix, [***], the training, Technology,
know-how, equipment and Intellectual Property

 

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licenses required to perform such packaging, processes and procedures requested
by Roche that are different than those Affymetrix utilizes for its Catalog
Chips.

Deliveries of Arrays will be F.O.B. Affymetrix’ facility or the facility of its
sales representative. Affymetrix will ship via a carrier selected by Roche or,
if none is specified by Roche, Affymetrix will select the carrier. Title and
risk of loss or damage for deliveries will pass to Roche upon Affymetrix’ actual
delivery of the Arrays to the carrier for shipment to Roche.  Roche will pay all
shipping costs, duties and sales taxes.  Roche will advise Affymetrix in writing
if insurance is desired on any shipments of Arrays, and will reimburse
Affymetrix for all such insurance charges.

(f)            Genetic Information.  Affymetrix will endeavor to provide Roche
with sufficient genetic information to identify the Genes on each Catalog Chip
provided, if any.  If Affymetrix updates its information about any Catalog Chips
to include additional or different genetic sequence information relevant to the
development of Diagnostic Products, Affymetrix will endeavor to provide such
information to Roche.

(g)           Affymetrix Instruments.

(i)            Affymetrix Instrument Purchases by Roche for Diagnostic Product
Development.  Affymetrix agrees to supply Roche and its Affiliates with
Affymetrix Instruments for use with Arrays for use in the development of
Diagnostic Products in accordance with the Collaboration Agreements.  Such
Affymetrix Instruments shall be purchased pursuant to purchase orders provided
to Affymetrix at the prices and on terms and conditions set forth on the
Affymetrix Instrument Pricing Schedule (the “Affymetrix Instrument Pricing
Schedule”) attached hereto as Exhibit A, and Affymetrix will fill such orders
with not less than the priority afforded any other purchaser.  Roche shall have
the option to [***] hereunder for [***] Affymetrix [***] Affymetrix’ [***] then
in effect.  Roche shall have no right to sell, distribute or otherwise transfer
any Affymetrix Instrument supplied under this Agreement except to its Affiliates
exclusively for use in the development of Diagnostic Products or in subsection
(ii) below.

(ii)           Affymetrix Instrument Purchases for Reagent Agreement Plans. 
Affymetrix agrees to supply Roche and its Affiliates with Affymetrix Instruments
for use with Diagnostic Products that are sold pursuant to a Reagent Agreement
Plan.  Such Affymetrix Instruments shall be purchased pursuant to purchase
orders provided to Affymetrix at the prices and on terms and conditions set
forth on the Affymetrix Instrument Pricing Schedule attached hereto as Exhibit
A, and Affymetrix will fill such orders with not less than the priority afforded
any other purchaser.  Roche shall have no right to sell, distribute or otherwise
transfer any Affymetrix Instrument supplied under this Section, except to its
Affiliates exclusively for use in a Reagent Agreement Plan.

(iii)          Affymetrix Instrument Purchases by Customers of Roche.  Other
than as set forth in Section III(g)(ii) above, Affymetrix agrees to supply Roche
Customers of Diagnostic Products with Affymetrix Instruments for use with
Diagnostic Products that are sold pursuant to the Collaboration Agreements,
provided that such Customers are located and taking delivery in an Affymetrix
Territory.  Such Affymetrix Instruments

 

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shall be purchased pursuant to purchase orders provided by the Customer to
Affymetrix at Affymetrix’ then current prices and terms and conditions, and
Affymetrix will fill such orders with not less than the priority afforded any
other purchaser.  Affymetrix Instrument purchases by Customers who are located
or taking delivery in an Unserved Territory shall be governed by the terms of
the Agency Agreement.

(iv)          Affymetrix Instrument Packaging and Shipping.  Affymetrix
Instruments purchased by Roche or its Affiliate will be packed in Affymetrix’
standard shipping packages and shipped to the address specified by Roche or its
Affiliate in accordance with quality assurance and packaging procedures
determined by the Parties from time to time.  Deliveries will be F.O.B.
Affymetrix’ facility or the facility of its sales representative. Affymetrix
will ship via a carrier selected by Roche or its Affiliate or, if none is
specified by Roche or its Affiliate, Affymetrix will select the carrier. Title
and risk of loss or damage for deliveries will pass to Roche or its Affiliate
upon Affymetrix’ actual delivery of the Affymetrix Instruments to the carrier
for shipment to Roche or its Affiliate.  Roche or its Affiliate will pay all
shipping costs, duties and sales taxes.  Roche or its Affiliate will advise
Affymetrix in writing if insurance is desired on any shipments of Affymetrix
Instruments, and will reimburse Affymetrix for all such insurance charges.

(h)           Terms of Service.

(i)            Any service provided by Affymetrix on Affymetrix Instruments
shall be governed by Affymetrix’ then-current forms of Customer Service Provider
Addendum and  Current Affymetrix Instrument Service Level Packages, the current
forms of which are attached hereto as Annexes 1 and 2 (the “Affymetrix
Instrument Service Level Packages”); and

(ii)           Notwithstanding anything to the contrary in this Agreement, Annex
3 hereto, or such amended version as may be reasonably adopted from time to
time, shall govern the terms of all Software maintenance and upgrades.

IV.           Custom Array Development.

(a)           Product Specifications. In addition to the terms of Section III
above, with respect to each Custom Array required for a Diagnostic Product,
Roche shall supply Specifications for such Custom Array along with an initial
supply forecast for the Diagnostic Product incorporating such Custom Array. 
Without limitation, Affymetrix acknowledges and agrees that the Specifications
constitute Roche Technology (to the extent the technology contained in the
Specifications does not constitute the Intellectual Property of Affymetrix or a
Third Party).

(b)           Shelf Life of Arrays. Each Custom Array shall have a shelf life of
at least [***] after the Array has been shipped by Affymetrix to Roche. 
Affymetrix shall use commercially reasonable efforts to increase shelf life and
to use appropriate shipping methods to preserve shelf life.

 

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(c)           Affymetrix Development Obligations. In addition to the terms of
Section III above, for each Custom Array for which Affymetrix receives
Specifications, Affymetrix will use reasonable commercial efforts to undertake
and complete non-clinical development of the applicable Custom Array according
to the Specifications, including manufacturing scale-up.  Affymetrix shall also
prepare and provide Roche with non-clinical development information for each
applicable Custom Array, each as required by the applicable Development Plan.

V.            Proprietary Rights.

Other than as agreed by the Parties pursuant to the Collaboration, Roche shall
not buy arrays of diverse nucleic acids on solid supports from a Third Party if
such arrays materially infringe or would materially infringe the patent or
copyright rights of Affymetrix or its Affiliates.  Roche and Affymetrix will
notify each other of: (i) any potential infringement of any of Affymetrix’
Intellectual Property (i.e., Affymetrix Technology) of which that Party becomes
aware; (ii) any potential infringement by any Third Party of any of the
Affymetrix Intellectual Property incorporated in, embodied by or relied upon to
manufacture a Diagnostic Product; or (iii) any potential infringement by a
Diagnostic Product of any Content or Intellectual Property owned or asserted to
be owned by a Third Party of which that Party becomes aware.  All notifications
under this Section V shall be treated as Confidential Information and shall not
be disclosed to the alleged infringer or any other party.

VI.           Compensation.

(a)           Initial Design Fees. With respect to the Specifications for each
Custom Array Roche provides to Affymetrix, Roche shall pay Affymetrix a design
fee equal to [***] of the design of such Custom Array [***] thereon for each
Custom Array set design that Affymetrix would need to create to implement the
Development Plan for such Diagnostic Product (the “Initial Design Fee”). Roche
will pay such Initial Design Fee upon delivery of the Specifications, including
the complete target sequence for each mask set design.

(b)           Pricing of Chips, Affymetrix Instrumentation and Custom Arrays.

(i)            Custom Arrays and Catalog Chips.

(a)           Array Pricing. Affymetrix shall sell all Chips supplied to Roche
under this Agreement [***] other than Chips in [***] per year for Content
Development in the first [***] years of this Agreement in [***] Arrays (or an
equivalent) pursuant to Section III(c.  To set a baseline for the [***] and to
provide [***] transfer prices, Exhibit B hereto contains a schedule of the [***]
Transfer Prices for Chips (the [***] price that Affymetrix will charge for
Component Chips and Development Chips sold to Roche) produced in the format,
with the number of features, for the particular year and with packaging [***],
as set forth therein.  For Component Chips and Development Chips, the purchase
price will be subject to the [***] Transfer Price.  Although the Parties agree
that [***] of a Chip may differ depending on a variety of cost factors,
including, but not limited to, wafer size, number of features on the Chip, and
manufacturing and packaging costs, Affymetrix agrees that [***], as set forth on
Exhibit B, shall be [***] during the term of this Agreement and shall be subject
to Roche’s audit in accordance with Section VI(e) below.  Affymetrix shall
determine the amount of any [***] of a

 

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Chip versus the projected [***] of such Chip on a quarterly basis within 45 days
of each quarter.  To the extent such [***] exceeds [***]% for that quarter, (i)
in the case of an [***], Roche will be credited the amount of the [***] in the
next quarter following the [***], and (ii) in the case of an [***], Affymetrix
will be credited the amount of the [***] in the next quarter following the
[***].  Pricing for [***] purchased pursuant to Section III(a)(iv) will be at
prices equal to Affymetrix’ [***] price of [***], which is [***] each.

(b)           Price [***].  The Array pricing set forth on Exhibit B is based on
technological improvements Affymetrix expects to make over time.  Affymetrix
agrees to [***] for Arrays purchased by Roche pursuant to this Agreement as
described on Exhibit B, [***].

(c)           Technology Reinvestment Covenant.  In addition, Affymetrix agrees
to invest at least [***] of the [***] in the Affymetrix Technology and
broad-based applications research.

(ii)           Affymetrix Instrumentation. Pricing shall be subject to Section
III(g).

(c)           Manufacturing Facilities Fee.  Upon adoption of each Development
Plan (or as agreed between the Parties in advance if there is no Development
Plan for a Diagnostic Product), Roche shall pay Affymetrix the Manufacturing
Facility Fee, if any, specified in such Development Plan. Affymetrix shall make
available to Roche the records specifically showing how each Manufacturing
Facility Fee was spent on a product-by-product basis. If circumstances result in
an underage or an overage in connection with a Manufacturing Facility Fee paid
to Affymetrix, the Joint Research Management Committee shall resolve, in good
faith, adjustment of the Manufacturing Facility Fee and the impact on the
corresponding Diagnostic Product and Development Plan and on each Party’s
respective Manufacturing Cost. The Parties acknowledge that Affymetrix, at its
sole discretion, may apply the Manufacturing Facility Fee to the fabrication or
establishment of new facilities, or to the renovation of, addition of new lines
to, or other modification or extension of existing facilities.

(d)           Acceptance; Payment Terms.  All amounts referred to in this
Section VI will be invoiced by Affymetrix when due.  All Arrays will be deemed
accepted unless they are returned to Affymetrix within [***] days of delivery to
Roche, with a written explanation of the basis on which such Arrays have been
returned on Affymetrix’ standard “Return Materials Authorization” according to
the procedures provided for in such Return Materials Authorization.  All
payments will be made to Affymetrix [***] days from the acceptance by Roche, but
no more than [***] days after delivery.  Late payments shall bear interest at
the lower of: (i) the Bank of America prime or (ii) the maximum rate allowed by
law.  All payments in this Agreement will be made in the form of a check or wire
transfer to Affymetrix in U.S. Dollars.  Acceptance of Arrays by Roche shall
have no effect on the provisions set forth in Section X (Warranty) and Section
XII (Indemnity) of this Agreement.

(e)           Records and Audit Rights. Affymetrix shall keep complete and
accurate records reflecting all information necessary or useful in verifying the
accuracy of each invoice and the determination of the [***] for any Arrays
supplied to Roche or its Affiliates hereunder

 

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and the difference between the [***] and the [***] for any such Arrays. Roche
shall have the right to hire an independent certified public accountant to
inspect all records required to be kept by Affymetrix pursuant to this Agreement
(which accountant shall be reasonably acceptable to Affymetrix and shall keep
all information confidential except to disclose the fact and amount of any
discrepancies), provided, such audit: (i) is conducted during normal business
hours, (ii) is conducted no more often then once per year, (iii) is conducted
only after Roche has given Affymetrix at least thirty (30) days’ prior written
notice, and (iv) Affymetrix has the ability to review the accountant’s report on
discrepancies to confirm the report does not contain any other Confidential
Information. Affymetrix shall, at its own expense, make such records (or copies
thereof) available to the accountant at a single location in the U.S. Roche
shall bear the full cost and expense of such audit, unless the actual amount
determined in such review to be payable by Roche is more than [***]% lower than
the amount charged to Roche by Affymetrix, in which event Affymetrix shall bear
the full cost and expense of such audit. Regardless of the amount of discrepancy
discovered, all discrepancies (and interest thereon at the rate set forth in
Section VI(d) above) shall be due and payable within 30 days of the discovery of
the discrepancy.

VII.          Manufacturing Process Change. 

                                (a)              Affymetrix shall, prior to
implementing any manufacturing or packaging change to an Array utilized in a
Diagnostic Product or an Affymetrix Instrument used or to be used in connection
with a Diagnostic Product, in each case, for which the Manufacturing Lockup
Point has occurred, provide written notice of any proposed manufacturing or
packaging change to the Head of Regulatory Affairs of Roche Molecular Systems to
the extent such change could (i) reasonably be seen to have a regulatory impact
on the Diagnostic Product or its distribution, or (ii) otherwise be material. 
Such notice shall include details of the planned manufacturing or packaging
change to allow Roche to consider the impact of such change on the safety,
efficacy or regulatory requirements for such Diagnostic Product.  Affymetrix
will not undertake such proposed change without the prior written consent of
Roche, which consent shall be provided within 20 business days after receipt of
such notice from Affymetrix.

                                (b)           In addition to the foregoing,
Affymetrix agrees to use commercially reasonable efforts to notify Roche in
advance in writing of every manufacturing or packaging change not falling within
subsection (a)(i) or (ii) above with respect to Arrays or Affymetrix Instruments
utilized in or for a Diagnostic Product for which the Manufacturing Lockup Point
has occurred.  Affymetrix shall certify to Roche in such notice that Affymetrix
reasonably believes that the change specified in any such notice could not
reasonably be expected to have an adverse regulatory impact on the Diagnostic
Product, the relevant Affymetrix Instrument or its components.

VIII.        Technical Support and Product Service.

(a)           Support and Service.  Affymetrix shall offer Services for
purchasers of Affymetrix Instruments supplied under this Agreement on terms of
Affymetrix’ standard Affymetrix Instrument Service Agreement attached as Annex 1
hereto (which may be reasonably modified by Affymetrix from time to time) and at
Roche’s specified service level (which current service levels are listed on
Annex 2 hereto (which may be reasonably modified by Affymetrix from time to
time), the “Affymetrix Service Levels”) at the election of Roche.  Fees for each

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Affymetrix Service Level shall be determined from time-to-time by Affymetrix and
quoted to the end-user of an Affymetrix Instrument at the time of sale of such
product.

(b)           Support and Service for Software.  Affymetrix shall offer
maintenance and upgrades for Software for all end-users of Affymetrix
Instruments (including Roche and its Affiliates) in accordance with and on the
terms and conditions of its standard Software Maintenance Agreement attached as
Annex 3 hereto (which may be reasonably modified by Affymetrix from time to
time).

IX.           Intellectual Property Ownership.

Any inventions made during the course of and as part of this Agreement shall be
owned as set forth in Section V of the Common Terms Agreement.  In addition,
Roche and its Affiliates agree to assign to Affymetrix at Affymetrix’ cost all
Chip Improvement Inventions.  Each Party agrees to provide periodic written
reports to the other Party identifying inventions, technological improvements
and developments assignable to the other Party under Section V of the Common
Terms Agreement relating to probe array technology.

X.            Warranty.

(a)           Affymetrix warrants only to Roche that the Custom Arrays, during
the shelf life marked on such Custom Arrays, will conform to the applicable
Specifications (which shall include appropriate agreed-upon tolerance levels)
and is otherwise free of Physical Defects, and that the Catalog Chips,
Affymetrix Instruments, and related software will conform in all material
respects to Affymetrix’ then-current standard customer warranty included in
Affymetrix’ applicable customer sales agreement. The foregoing warranties do not
apply to Arrays, Affymetrix Instruments, or software that have been mishandled,
mistreated or used or maintained or stored other than in conformity with
Affymetrix’ instructions. ROCHE’S SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF
THE FOREGOING WARRANTIES SHALL BE THOSE SET FORTH IN SECTIONS III(b), XII(a) AND
XII(b) OF THIS AGREEMENT.

(b)           EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, AFFYMETRIX DOES
NOT WARRANT THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
ARRAYS, INSTRUMENTS, RELATED SOFTWARE OR DIAGNOSTIC PRODUCTS OR PERFORMANCE OR
NON-INFRINGEMENT THEREOF, DOES NOT MAKE ANY WARRANTY, EXPRESS, IMPLIED OR
OTHERWISE, WITH RESPECT TO ARRAYS, INSTRUMENTS, RELATED SOFTWARE OR DIAGNOSTIC
PRODUCTS, SPECIFICATIONS, SUPPORT, SERVICE OR ANYTHING ELSE, AND DOES NOT MAKE
ANY WARRANTY OF ANY KIND TO ROCHE CUSTOMERS OR ROCHE’S AGENTS. AFFYMETRIX HAS
NOT AUTHORIZED ANYONE TO MAKE ANY REPRESENTATION OR WARRANTY OTHER THAN AS
PROVIDED ABOVE.

XI.           Limited Liability.

EXCEPT IN CONNECTION WITH SECTION II (CONFIDENTIALITY) OF THE COMMON TERMS
AGREEMENT OR AMOUNTS PAYABLE UNDER SECTION X (WARRANTY) OR SECTION XII
(INDEMNITY) OF THIS AGREEMENT, NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER

 

10

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ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY
FOR ANY PUNITIVE, MULTIPLE, OR EXEMPLARY DAMAGES, OR LOST PROFITS.

XII.         Indemnity.

(a)           Indemnification from Infringement.

(i)            Affymetrix shall indemnify, defend and hold harmless the Roche
Indemnitees from and against liability resulting from any Third Party claim of
infringement by the Arrays of any Third Party patent (other than Roche patents,
patents of any Affiliate of Roche or patents of Genentech or Chugai) or from any
matter referred to in the second sentence of (ii) below, provided Affymetrix is
promptly notified of any and all threats, claims and proceedings related thereto
and given reasonable assistance and the opportunity to assume sole control over
the defense and all negotiations for a settlement or compromise; Affymetrix will
not be responsible for any settlement it does not approve in writing (provided,
however, that Affymetrix will consult with Roche if a proposed settlement or
compromise could reasonably be interpreted to impact the benefits that Roche
receives under this Agreement in a materially negative manner). The foregoing
obligation of Affymetrix does not apply with respect to Arrays or portions or
components: (w) not supplied by Affymetrix; (x) made in whole or in part in
accordance to Specifications or requests of Roche, to the extent the
infringement was caused thereby; (y) which are modified by Roche or any Third
Party after shipment by Affymetrix, if the alleged infringement relates to such
modification; or (z) combined, processed or used with other products (including,
without limitation, as part of Diagnostic Products), processes or materials
where the alleged infringement relates to such combination, process or use.

Where Roche facilitates or fails to stop (to the extent within its power)
allegedly infringing activity after being notified thereof or after being
informed of modifications that would have avoided the alleged infringement, the
foregoing indemnification provisions will apply but Affymetrix will not need to
pay any settlement, judgment, or other amounts attributable to events occurring
after giving such notice to Roche.

 

(ii)           Roche shall indemnify, defend and hold harmless the Affymetrix
Indemnitees from and against liability resulting from any Third Party claim of
infringement by Roche Technology incorporated into any Array pursuant to the
Specifications provided by Roche to Affymetrix (other than Affymetrix patents,
patents of any Affiliate of Affymetrix or patents of Perlegen) or from any
matter referred to in the second sentence of subsection (i) above, provided
Roche is promptly notified of any and all threats, claims and proceedings
related thereto and given reasonable assistance and the opportunity to assume
sole control over the defense and all negotiations for a settlement or
compromise; Roche will not be responsible for any settlement it does not approve
in writing (provided, however, that Roche will consult with Affymetrix if a
proposed settlement or compromise could reasonably be interpreted to impact the
benefits that Affymetrix receives under this Agreement in a materially negative
manner).  The foregoing obligation of Roche does not apply with respect to Roche
Technology

 

11

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used in Diagnostic Products: (y)  which are modified by Affymetrix or any Third
Party after shipment by Roche, if the alleged infringement relates to such
modification; or (z) combined, processed or used with other products, processes
or materials where the alleged infringement relates to such combination, process
or use.

Where Affymetrix facilitates or fails to stop (to the extent within its power)
allegedly infringing activity after being notified thereof or after being
informed of modifications that would have avoided the alleged infringement, the
foregoing indemnification provisions will apply but Roche will not need to pay
any settlement, judgment, or other amounts attributable to events occurring
after giving such notice to Affymetrix.

 

(b)           Indemnity Relating to Products

(i)            Affymetrix shall indemnify, defend and hold harmless the Roche
Indemnitees from and against all Damages based upon or arising out of Physical
Defects.

(ii)           Roche shall indemnify, defend and hold harmless the Affymetrix
Indemnitees from and against any and all Damages based upon or arising out of
Roche’s or its Affiliate’s import, sale or use of Diagnostic Products except to
the extent that such Damages (i) relate to or arise from Physical Defects or
(ii) arise after the transfer of such Diagnostic Products to Affymetrix pursuant
to Section VI(b) of the License Agreement.

(c)           Conditions of Indemnification.  If either Party proposes to seek
indemnification from the other under the provisions of this Section XII, it
shall notify the other Party within 15 days of receipt of notice of any Claim
and shall cooperate fully with the other Party in the defense of such claims or
suits. The indemnified Party shall cooperate with the indemnifying Party (at the
indemnifying Party’s expense) in all respects in connection with the defense of
any such Claim.  The indemnifying Party shall, upon written notice from the
indemnified Party of a Claim, undertake to conduct all proceedings or
negotiations in connection with the Claim, assume the defense thereof, and all
other required steps or proceedings to settle or defend any such Claim,
including the selection of counsel that shall be approved by the indemnified
Party, which approval shall not be unreasonably withheld, and payment of all
reasonable expenses.  The indemnified Party shall have the right to employ
separate counsel and participate in the defense at the indemnified Party’s sole
expense.  If the indemnifying Party fails to defend or settle in good faith any
Claim as provided above, then the indemnified Party shall have the right to take
over sole control of the defense of the Claim and all negotiations for its
settlement or compromise, provided that the indemnifying Party shall be liable
for (and shall pay as they become due) all costs and expenses (including
attorneys’ fees) reasonably incurred by the indemnified Party in its defending
or negotiating settlement of the Claim.  Notwithstanding the foregoing, the
Party primarily responsible for handling the Claim (as determined above) will
first obtain the prior written consent of the other Party for any settlement of
a Claim that (i) does not include a complete release of the other Party from all
liability with respect thereto, (ii) compromises the rights of the other Party,
or (iii) imposes any restrictions on the other Party.

 

12

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XIII.        Term and Termination.

(a)           Term. Unless terminated earlier as provided herein, this Agreement
shall commence on the Effective Date and shall terminate on December 31, 2020
(the “Termination Date”).

(b)           Early Termination without Cause. Roche shall have the option of
terminating this Agreement in its entirety effective on either December 31,
2007, June 2, 2013 or any date after June 2, 2013 but prior to the Termination
Date by written notice to Affymetrix (“Early Termination Notice”) as provided
herein.  An Early Termination Notice must be provided at least one year prior to
early termination.  Affymetrix shall continue to supply Arrays and Affymetrix
Instruments for Diagnostic Products through the end of the year following the
date such Early Termination Notice was provided.  No Arrays or Affymetrix
Instruments may be ordered by Roche after delivery of an Early Termination
Notice to Affymetrix if the delivery date, as reasonably determined by
Affymetrix, would be later than the date of this Agreement is to be terminated
pursuant to the Early Termination Notice (regardless of Development Plans or
forecasts setting different product delivery projections, orders or schedules).

(c)           Termination for Cause. This Agreement may be terminated in its
entirety by a Party for cause immediately upon the occurrence of any of the
following events:

(i)            If the other ceases to do business, or otherwise terminates its
business operations;

(ii)           If the other Party materially breaches any material provision of
this Agreement and fails to cure such breach within 180 days of written notice
describing the breach and the intent of such Party to terminate if such breach
is not cured within such period (provided, however, that nothing in this
subsection shall prevent a Party from seeking immediate, injunctive relief where
appropriate to protect Proprietary Information, such Party’s proprietary or
intellectual property rights or otherwise for any reason to mitigate damages);
or

(iii)          If the other Party shall seek protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against the other Party (and
not dismissed within 90 days).

(d)           Effect of Termination. Sections X (Warranty), XI (Limited
Liability) XII (Indemnity) and XIII (Term and Termination), all rights to
payment in effect through the final termination date of this Agreement pursuant
to Section XIII (Term and Termination), the Common Terms Agreement, remedies for
breaches or any other provision that, by its terms, should survive termination
to carry out the purposes of this Agreement, shall survive termination of this
Agreement. Obligations of the Parties under firm orders for purchase and
delivery of Arrays and Affymetrix Instruments at the time of such termination
shall remain in effect, except that in the case of termination under Section
XIII(c) the terminating Party may elect whether obligations under firm orders
will remain in effect; provided, however, that Affymetrix will not be obligated
with respect to any delivery dates (for firm orders or otherwise) more than
thirty (30) days after the effective date of termination if the reason for
termination is not due to a breach by Affymetrix, or more than one hundred
eighty (180) days after termination if the reason

 

13

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for termination is due to a breach by Affymetrix. Each Party will promptly
return or destroy all Confidential Information of the other in accordance with
Section II(f) of the Common Terms Agreement. Termination is not the sole remedy
under this Agreement and, whether or not termination is effected, all other
remedies will remain available.

XIV.        Miscellaneous.

(a)           No Regulatory Approval.  ROCHE UNDERSTANDS THAT THE ARRAYS AND
AFFYMETRIX INSTRUMENTS DELIVERED HEREUNDER ARE DELIVERED WITHOUT APPROVAL BY THE
FDA OR ANY COMPARABLE FOREIGN REGULATORY AGENCY. ROCHE AGREES NOT TO USE THE
ARRAYS OR AFFYMETRIX INSTRUMENTS DELIVERED HEREUNDER IN ANY CLINICAL OR OTHER
SETTING REQUIRING FDA (OR COMPARABLE AGENCY) REVIEW OR APPROVAL IN THE ABSENCE
OF OBTAINING SUCH APPROVAL. THE ARRAYS AND SYSTEMS ARE NOT LICENSED EXCEPT AS
SPECIFICALLY RECITED HEREIN OR IN ANY COLLABORATION AGREEMENT UNDER ANY
INTELLECTUAL PROPERTY RIGHTS OF AFFYMETRIX.

 

14

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their properly and duly authorized officers or representatives as of the date
first above written.

 

AFFYMETRIX:

ROCHE:

 

 

Affymetrix, Inc.

F. Hoffmann-La Roche Ltd.

 

 

 

 

By:

/s/ Barbara A. Caulfield

By:

/s/ Heino von Prondzynski 

 

Name:

Barbara A. Caulfield

 

Name:

Heino von Prondzynski

 

Title:

Executive Vice President and
General Counsel

 

Title:

Head, Diagnostic Division

 

 

 

 

 

 

 

By:

/s/ Gregory F. Heath 

 

 

Name:

Gregory F. Heath

 

 

Title:

Head, Business Development and
Licensing

 

 

 

 

 

 

 

 

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

ANNEX 1

 

FORM OF CUSTOMER SERVICE PROVIDER ADDENDUM

 

[See attached]

 

 

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

Affymetrix Instrument Service Terms and Conditions

1.             General. This agreement (“Service Contract”) is made and entered
into by and between [Affymetrix] (“Affymetrix”) and the customer (“Customer”)
identified on the related purchase order for the provision of the services
described on the related Affymetrix quote pertaining to Affymetrix instruments,
probe arrays, applications, software, and/or services which have been sold or
leased by Affymetrix to Customer (the “Affymetrix Instrument(s)”), and any
Affymetrix software installed on the workstation, which software is owned and
licensed by Affymetrix to Customer (the “Applications”). Any part or subassembly
of an Affymetrix Instrument that is sold or provided to Customer by Affymetrix
shall be deemed “Covered Parts.” The Applications and Affymetrix Instruments are
collectively referred to herein as the “System.”

2.             Services. Subject to the service level elected by the Customer
(as initially specified on Annex 2 of the Supply Agreement), during the Term of
this Service Contract and in exchange for Customer’s payment of the agreed to
fee, Affymetrix shall provide to Customer the services as stated on the related
quote (the “Covered Services”), which can include:

(a)           Repair. Affymetrix or its designee shall repair or otherwise
correct any material reproducible failure or malfunction. A failure or
malfunction shall be “material” if it represents a substantial nonconformity
with Affymetrix’ current published specifications for the Affymetrix Instrument
and Customer determines (and notifies Affymetrix) that such error or malfunction
substantially interferes with Customer’s normal use of the Affymetrix
Instrument. All Affymetrix instruments require a consistent and reliable power
source in order to perform optimally. The GeneArray Scanner also requires a
significant amount of current, 13-15A on a 110V line, or 6-8A on a 220V line. 
Whichever system configuration is chosen, both systems require a dedicated
circuit or line in order to allow for peaks in power required and the headroom
that entails. Affymetrix assumes no responsibility for damage caused by any
power supply circuit or related units.

(b)           Preventative Maintenance and Performance Checks. Affymetrix or its
designee will perform on-site preventative maintenance and performance checks on
the instruments as set forth in Affymetrix’ current published preventative
maintenance procedures and instrument service specifications.

(c)           Customer Support. Telephone customer support shall be provided by
Affymetrix during normal business hours. Reasonable telephone support shall be
available only to those employees of Customer who have been trained by
Affymetrix in the use of the instruments.

(d)           Service Limitations. Customer agrees to follow the operation
procedures published by Affymetrix, including procedures for routine
maintenance. Affymetrix shall have no obligation to support the following:

(i)            Neglect, misuse, accidents, or the failure to perform routine
operational maintenance;

(ii)           Improper or inadequate adjustment, calibration or operation of
the Affymetrix Instruments by Customer or its designee;

(iii)          Modifications made to the Affymetrix Instrument or System without
the prior written approval of Affymetrix;

(iv)          Unapproved Relocation of the Affymetrix Instrument or System;

(v)           Failure or fluctuation of electrical power, lightning or static;
fire, water spill, flooding, chemical spill, earthquake, military or civil
disturbance, or acts of God;

(vi)          The use of media, supplies or other products not supplied or
approved by Affymetrix;

(vii)         The use of any equipment, software, or peripherals which are not
part of the Affymetrix Instrument or System; or

(viii)        Any computer related hardware, unless otherwise on the Sales
Quote.

Customer shall reimburse Affymetrix at Affymetrix’ then-current service call
fees, including all labor, parts and zone charges, for all work of Affymetrix or
its designee incurred in investigating any failure or malfunction that
Affymetrix reasonably determines not to be part of the Covered Services.

 

 

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3.             Installation Services. When this Service Contract is entered into
concurrently with the initial purchase, lease or license of the System, and upon
Customer’s request, Affymetrix or its designee may provide on-site installation
assistance for the System and such other services as Affymetrix reasonably
determines are necessary to permit Customer to begin use of the System. Customer
shall promptly perform all tasks reasonably requested by Affymetrix or its
designee in connection with such installation and site preparation.

4.             Limitations. Any and all instruments, software, other products,
or any parts or subassemblies of the foregoing that are not provided by
Affymetrix or its designee shall be deemed “Non-Covered Equipment.” Affymetrix
shall have no obligations with respect to Non-Covered Equipment; moreover, and
notwithstanding anything herein to the contrary, Affymetrix shall have no
obligation to provide Covered Services in connection with any Affymetrix
Instruments or Covered Parts:

(a)           that have been substantially altered by Customer, including any
serial numbers or other identifying markings;

(b)           that do not incorporate all of Affymetrix’ engineering
improvements or other fixes that Affymetrix requests Customers to implement;

(c)           that incorporate Non-Covered Equipment or have Non-Covered
Equipment attached to them;

(d)           that have been operated in conditions outside of Affymetrix’
environmental or electrical site specifications as defined in the product
operation, installation or maintenance manuals provided with the Affymetrix
Instruments;

(e)           that have been operated in hazardous environments or used to
analyze hazardous materials that may cause residual contamination;

(f)            that have been repaired or maintained by anyone other than
Affymetrix or its designee, except such routine operational maintenance as set
forth in the product operation, installation or maintenance manuals provided
with the Affymetrix Instrument.

5.             Access and Service Safety. Customer will provide Affymetrix and
its designees reasonable and safe access to all Affymetrix Instruments and
Systems for the provision of any services and for any audit of compliance with
Affymetrix’ installation and operational guidelines. If environmental or
operational contamination creates a hazard for Affymetrix personnel, Affymetrix
may supervise Customer’s performance of service procedures. Customer is
responsible for proper disposal of all contaminated material and of contaminated
parts that cannot be safely returned to Affymetrix. Any Affymetrix services that
Affymetrix may provide in connection with the activities contemplated by this
paragraph shall be deemed not to be Covered Services, and Customer shall
reimburse Affymetrix at Affymetrix’ then-current service call fees, including
all labor, parts and zone charges, for all such work of Affymetrix or its
designee.

6.             Relocation of Covered Equipment. If any Affymetrix Instrument is
moved from its installation position, Affymetrix may, at its discretion,
determine that such Affymetrix Instrument has been relocated (a “Relocation”).
Relocation of Affymetrix Instruments may result in service charges as follows:

(a)           “Approved Relocation.” Relocation of Affymetrix Instruments by
Affymetrix or its designees is permitted.  Affymetrix Instruments may be moved
with the assistance of Affymetrix at Affymetrix’ service call fees, including
all labor, parts and zone charges. With prior written approval of Affymetrix,
Customer may move specified Affymetrix Instruments without incurring any
charges. Customer will contact Affymetrix prior to moving any Affymetrix
Instrument.

(b)           “Unapproved Relocation.” Any Service Contract or warranty covering
an Affymetrix Instrument shall be rendered void and unenforceable by Relocation
of such Affymetrix Instrument without the prior written approval of Affymetrix.
At the discretion of Affymetrix, upon completion of a maintenance inspection and
service at Affymetrix’ then-current service call fees, including all labor,
parts and zone charges, the subject Service Contract or warranty may be
reinstated.

(c)           “New Site Location.” Relocation of Affymetrix Instruments may
result in additional service charges and modification of response times, as
determined by Affymetrix.

 

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

 

7.             Obsolete Products. Covered Parts, Affymetrix Instruments or
System that are no longer offered for sale or license by Affymetrix (“Obsoleted
Items”) will be maintained and repaired on a reasonable efforts basis by
Affymetrix. If Affymetrix determines in its discretion that support and service
of such Obsolete Items is no longer reasonable, Affymetrix shall notify Customer
of such determination and such Obsoleted Item shall be deemed not to be a
Covered Part, Affymetrix Instrument or System.

8.             Billable Services. All services performed by Affymetrix on
Customer’s Non-Covered Equipment or which are not Covered Services
(collectively, “Billable Services”) shall be billable to Customer at Affymetrix’
then-current service call fees, including all labor, parts and zone charges.

9.             Ownership. All replaced parts removed from the System in
connection with any services shall become the property of Affymetrix upon their
replacement. Any and all modifications to the Affymetrix Instrument or System,
including all intellectual property rights associated therewith, made or
provided by Affymetrix pursuant to the Service Contract, whether alone or with
any contribution from Customer or its employees, agents or contractors, shall be
owned exclusively by Affymetrix. To the extent Customer or its employees, agents
or contractors, may acquire any right or interest therein by operation of law,
Customer irrevocably assigns all such right and interest exclusively to
Affymetrix. Customer shall maintain and enforce agreements and policies with its
employees, agents and contractors sufficient to give effect to the provisions of
this Paragraph.

10.          Limited Warranty. Affymetrix warrants that it will render the
services hereunder in a good and workmanlike manner. As Affymetrix’ sole
responsibility and Customer’s exclusive remedy in the event of any material
failure to meet such standard, Affymetrix shall make a reasonable effort to
remedy any resulting discrepancies. Any claim based on the foregoing warranty
must be submitted in writing in accordance with Affymetrix’ standard procedures
within thirty (30) days after delivery or the date of the required delivery of
the pertinent services at issue. EXCEPT AS EXPRESSLY SET FORTH IN THIS
PARAGRAPH, AFFYMETRIX MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED,
AS TO ANY MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE SERVICES.
AFFYMETRIX SPECIFICALLY DISCLAIMS, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.

11.          Limitation of Liability. The total liability of Affymetrix
(including its employees, agents, subcontractors and suppliers) for all claims,
whether in contract, tort (including negligence, product liability and strict
liability), or otherwise, arising out of, connected with, or resulting from any
performance or on performance hereunder shall not exceed the total fees
hereunder allocable to the services that give rise to the claim, up to a maximum
of twelve (12) months for the services at issue. In no event shall Affymetrix be
liable for any incidental, consequential, indirect, or special damages
(including, without limitation, damages for loss of revenue, cost of capital,
claims of customers for service interruptions or failure of supply, and costs
and expenses incurred in connection with labor, overhead, transportation,
installation, or removal of equipment or programming or substitute facilities or
supply sources), even if Affymetrix has been advised of the possibility of such
damages.

12.          Delays. The time within which Affymetrix obligations are required
to be fulfilled hereunder will be extended for a period equal to the time lost
by reason of any delay arising directly or indirectly from causes beyond
Affymetrix’ reasonable control, including without limitation, acts of God,
unforeseeable circumstances, acts or omissions of any governmental authority,
war riot, revolution, fires, floods, earthquakes, strikes, labor disputes,
sabotage, epidemics, failure to obtain timely instructions or information from
Customer, or necessary and proper labor, materials, components, facilities or
transportation.

 

AFFYMETRIX

 

 

By: __________________________

 

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

CUSTOMER

 

 

By: __________________________

 

 

 

 

 

Name:

 

 

Title:

 

 

 

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ANNEX 2

CURRENT INSTRUMENT SERVICE LEVEL PACKAGES

 

Phone Coverage

Telephone Response

On-Site Response

Emergency Visits

Preventative Maintenance Visits

Applications Training

Affymetrix Instrument Relocation

Exclusions

Annual Price

Diagnostic Premium Service

Mon-Fri; 8am-5pm, excluding holidays

8 hours or less

96 hours or less

Three

One

None

None

Scanner Laser, Power Supply and Consumables

Standard Affymetrix pricing

Prevention Plus

Mon-Fri; 8am-5pm, excluding holidays

8 hours or less

96 hours or less

Three

One

None

None

Scanner Laser, Power Supply and Consumables

Standard Affymetrix pricing

Assurance

Mon-Fri; 8am-5pm, excluding holidays

8 hours or less

72 hours or less

Unlimited

One

None

None

Consumables

Standard Affymetrix pricing

Elite

Mon-Fri; 8am-5pm, excluding holidays

4 hours or less

48 hours or less

Unlimited

One

2 Days

1 Per Year

Consumables

Standard Affymetrix pricing

Diagnostic Level

*

*

*

*

*

*

*

*

*

 

*  Roche or a purchaser of Affymetrix Instruments may request that Affymetrix
roll out a new service level suitable for the diagnostics marketplace.  Upon
receipt of such a request, Affymetrix will use commercially reasonable efforts
to meet such request (and set a corresponding commercially reasonable price for
such enhanced services).

Affymetrix reserves the right to modify its service levels in effect (and prices
therefor) from time to time.

 

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ANNEX 3

 

Affymetrix Software Maintenance Terms and Conditions

1. General — This agreement (the “Software Maintenance Agreement”) constitutes
an offer by [Affymetrix] (“Affymetrix”) to provide to the customer (“Customer”)
identified below certain services described herein relating to the
instrumentation software (the “SOFTWARE”).  The Software Maintenance Agreement
shall be effective as of the date Customer first receives the SOFTWARE (the
“Effective Date”). If Customer’s service order is deemed an offer, Affymetrix’
acceptance is expressly conditional on Customer’s acceptance of these terms; if
these terms are considered an offer by Affymetrix, Customer’s acceptance is
expressly limited to these terms. Any additional or different terms or
conditions proposed by Customer shall not become part of this Agreement. To the
extent that a purchase order or other form is used by Customer for accounting
convenience, Affymetrix objects to any proposed changes. Subject to the terms
hereof, Affymetrix will provide Support Services to Customer for the number of
copies of SOFTWARE for which Customer is licensed.

2. Support Services — “Support Services” consist of (a) Error Correction and
Telephone Support provided to the technical support contact concerning the
installation and use of the then-current release of SOFTWARE and the Previous
Sequential Release thereof and (b) Product Updates / Upgrades that Affymetrix in
its sole discretion makes generally available (if Customer has purchased such
Product Upgrade). Notwithstanding the foregoing, nothing herein shall be
construed as a guarantee that Affymetrix will release Product Updates / Upgrades
during the term, or any renewal term, of this Software Maintenance Agreement.

A “Product Update” consists of one (1) copy of published revisions to the
printed documentation and one (1) copy of revisions to the SOFTWARE which are
not designated by Affymetrix as products for which it charges a separate fee.

A “Product Upgrade” is a new software product that contains enhancements to the
SOFTWARE. Affymetrix shall advise Customer of recent Product Upgrades.

All Product Updates and Upgrades provided to Customer hereunder shall be
governed by the terms of the applicable license agreement(s) (including without
limitation the Server Software License Agreement and/or End-User License
Agreement) relating to the SOFTWARE (collectively, the “License Agreement”).
Upon installation of Product Updates or Upgrades, all prior versions or releases
thereof shall be destroyed by Customer. Upon written request from Affymetrix,
Customer shall certify in writing the destruction of all such prior versions in
accordance with this section.

Customer shall pay Affymetrix, at Affymetrix’ then-current standard consulting
rates plus related expenses incurred therewith, for all additional services
rendered by Affymetrix hereunder, including without limitation, for Product
Upgrades that Customer has elected to purchase and re-installation of any
SOFTWARE as a result of hardware or software upgrades.

3. Fees and Payment — Customer shall pay Affymetrix the Annual Maintenance Fee
for the initial term, and each renewal term, of the Software Maintenance
Agreement.  Annual Maintenance Fees will be billed on an annual basis and
payable in advance. Overdue payment of any such fee shall bear interest at the
lesser of eighteen percent (18%) per annum or the maximum rate allowed under
applicable law.

If Customer elects to obtain Support Services, Support Services must be
purchased to cover all copies of the applicable SOFTWARE. If Customer fails to
purchase/renew maintenance for the Software, or if such maintenance is
terminated pursuant to the terms of this Agreement, Customer may continue to use
such Software pursuant to the License granted hereunder but will not be entitled
to receive maintenance services for such Software. To reinstate such services,
Customer must pay all maintenance fees on a cumulative basis for periods during
which Customer did not purchase coverage.  Customer shall be responsible for all
taxes associated with Support Services other than U.S. taxes based on
Affymetrix’ net income. Each payment by Customer is due within thirty (30) days
from receipt of the applicable Affymetrix invoice.

If any payment is not made within one hundred and eighty (180) days of the
applicable due date, Support Services will be Terminated.

Customer shall pay Affymetrix the purchase price of any Product Upgrades
Customer elects to purchase at Affymetrix’ then current price for such Product
Upgrade.

 

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4. Error Correction - Affymetrix will exercise commercially reasonable efforts
to correct any Error reported by Customer in the then-current, unmodified
release of SOFTWARE in accordance with the priority level reasonably assigned to
such Error by Affymetrix.

(a)   Priority A Errors.  Affymetrix shall promptly commence the following
procedures:

(i)    assign Affymetrix engineers to correct the Error;

(ii)   notify Affymetrix management that such Errors have been reported and of
steps being taken to correct such Error(s);

(iii)  provide Customer with periodic reports on the status of the corrections;
and

(iv)  initiate work to provide Customer with a Workaround or Fix.

(b)   Priority B Errors.  Affymetrix shall exercise commercially reasonable
efforts to include the Fix for the Error in the next regular SOFTWARE
maintenance release.

(c)   Priority C Errors.  Affymetrix may include the Fix for the Error in a
subsequent major release of the SOFTWARE.

If Affymetrix believes that a problem reported by Customer may not be due to an
Error in the SOFTWARE, Affymetrix will so notify Customer. At that time,
Customer may (1) instruct Affymetrix to proceed with problem determination at
its possible expense as set forth below, or (2) instruct Affymetrix that
Customer does not wish the problem pursued at its possible expense.

If Customer requests that Affymetrix proceed with problem determination at its
possible expense and Affymetrix determines that the error was not due to an
Error in the SOFTWARE, Customer shall pay Affymetrix, at Affymetrix’
then-current and standard consulting rates, for all work performed in connection
with such determination, plus reasonable related expenses incurred therewith. If
Customer instructs Affymetrix that it does not wish the problem pursued at its
possible expense or if such determination requires effort by Affymetrix in
excess of Customer’s instructions, Affymetrix may, at its sole discretion, elect
not to investigate the problem with no liability therefor.

Customer shall not be liable for (i) problem determination or repair to the
extent problems are due to Errors in the SOFTWARE, (ii) work performed under
this paragraph in excess of its instructions or (iii) work performed after
Customer has notified Affymetrix that it no longer wishes work on the problem
determination to be continued at its possible expense (such notice shall be
deemed given when actually received by Affymetrix).

5. Exclusions -  Under this Agreement Affymetrix shall have no obligation to
support:

(a)   Any Computer related hardware, unless otherwise agreed in writing by
Affymetrix and the Customer.

(b)   Any On-Site support, unless otherwise agreed in writing by Affymetrix and
the Customer.

(c)   SOFTWARE that is altered, damaged or modified, except by Affymetrix, or
any portion of the SOFTWARE incorporated with or into other software;

(d)   SOFTWARE that is not the then-current release or immediately Previous
Sequential Release;

(e)   SOFTWARE problems caused by Customer’s negligence, abuse or
misapplication, use of SOFTWARE other than as specified in the Affymetrix’ user
manual or Documentation, or by other factors beyond the control of Affymetrix;
or

(f)    SOFTWARE installed on any computer hardware that is not supported by
Affymetrix or any computer or workstation not strictly complying with
specifications listed in Documentation; or Software for which a license under
the License Agreement has not been obtained or applicable fees have not been
paid for any copy of SOFTWARE.

Affymetrix shall have no liability for any changes in Customer’s hardware which
may be necessary to use SOFTWARE due to a Workaround or maintenance release.

 

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8. Definitions —

(a)   “Annual Maintenance Fee” shall be as set forth in the Sales Quote.

(b)   “Documentation” shall mean the manual(s) relating to the use of the
SOFTWARE delivered by Affymetrix to Customer.

(c)   “Error” means an error in the SOFTWARE which significantly degrades the
SOFTWARE as compared to the Affymetrix published performance specifications.

(d)   “Error Correction” means the use of reasonable commercial efforts to
correct Errors..

(e)   “Fix” means the repair or replacement of object or executable code
versions of SOFTWARE to remedy an Error.

(f)    “Previous Sequential Release” means at any time the version or release of
SOFTWARE which has been replaced by the then-current version or release of such
SOFTWARE. Notwithstanding anything to the contrary herein, a Previous Sequential
Release will be supported by Affymetrix only for a period of six (6) months
after release of the then-current version or release.

(g)   “Priority A Error” means an Error which renders SOFTWARE inoperative or
causes the SOFTWARE to fail catastrophically.

(h)   “Priority B Error” means an Error which substantially degrades the
performance of SOFTWARE or materially restricts Customer’s use of the SOFTWARE.

(i)    “Priority C Error” means an Error which causes only a minor impact on the
performance of  SOFTWARE or Customer’s use of SOFTWARE.

(j)    “Support Services” or “Maintenance” means Affymetrix’ support services as
described in Section 2.

(k)   “Telephone Support” means technical assistance provided by Affymetrix to
the technical support contact during normal business hours concerning the
installation and use of the then-current release of SOFTWARE and the Previous
Sequential Release.

(l)    “Workaround” means a change in the procedures followed or data supplied
by Customer to avoid an Error without substantially impairing Customer’s use of
SOFTWARE.

9. Miscellaneous - THESE TERMS AND CONDITIONS CONSTITUTE A SERVICE AGREEMENT AND
NOT A PRODUCT WARRANTY. THE SOFTWARE AND ALL MATERIALS RELATED TO THE SOFTWARE
ARE SUBJECT EXCLUSIVELY TO THE WARRANTIES SET FORTH IN THE LICENSE AGREEMENT.
THIS SOFTWARE MAINTENANCE AGREEMENT SHALL NOT CHANGE OR SUPERSEDE ANY TERM OF
THE LICENSE AGREEMENT EXCEPT TO THE EXTENT UNAMBIGUOUSLY CONTRARY THERETO.

[                                 ]:

By:

 

Name (Print):

 

Title:

 

Date:

 

 

Signature of Buyer Officer or Designee. By signing the above, the signatory is
representing and warranting that they are authorized to enter into this
Agreement on behalf of Buyer.

 

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EXHIBIT A

 

AFFYMETRIX INSTRUMENT PRICING SCHEDULE

 

Number of Affymetrix Instruments Purchased per Calendar Year

 

Discount

 

Projected Sales Price Per Affymetrix Instrument System*

[***]

 

[***]%

 

$[***]

[***]

 

[***]%

 

$[***]

[***]

 

[***]%

 

$[***]

[***]

 

[***]%

 

$[***]

[***]

 

[***]%

 

$[***]

[***]

 

[***]%

 

$[***]

The “Projected Sales Price Per Affymetrix Instrument” is based on [***]
pricing.  The actual sales price will be based on the appropriate discount (as
indicated above) on the [***] Affymetrix price list.

* An “Affymetrix Instrument System” consists of the following components or the
then-comparable version:

        •       GeneChip Scanner 3000;

        •       GeneChip Fluidics Station 400;

        •       GeneChip Hybridization Oven; and

        •       GeneChip Workstation consisting of a computer workstation, a
copy of the Microarray Suite computer software for the Affymetrix Instrument
System and a user license for such software

 

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EXHIBIT B

COMPONENT CHIP AND DEVELOPMENT CHIP PRICING SCHEDULE

 

 

 

2003

 

2004

 

2005

 

2006

 

2007

 

 

 

 

 

 

 

 

 

 

 

Chips per wafer (commercial)

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

Feature size

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

# of features per chip

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

Packaging

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

Projected transfer price

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

[***] Transfer Price

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

Note:

 

•       [***] format available for Roche internal development effort [***]
before commercial availability

•       We expect packaging to be based on [***] after [***]; transfer price
[***] packaging [***]

 

The “[***] Transfer Price” shall be the [***] transfer price set forth above
from 2003 to 2007 ([***] or [***] packaging, as indicated).  The [***] Transfer
Price for [***] Arrays with the specifications set forth above throughout the
remaining term of this Agreement after 2007 shall be equal to the [***] set
forth above in the table ([***], as indicated).

 

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