Exhibit
10.28


 


The symbol [***] is used to indicate that a portion of
the exhibit has been omitted and filed separately with the commission.  Confidential treatment has been requested
with respect to the omitted portion.


 


IVD PRODUCTS PATENT LICENSE AGREEMENT


 


This LICENSE AGREEMENT (the
“Agreement”) is entered into
effective as of the this July 1, 2004, by and between Cepheid, a California corporation with its
principal place of business at 904 Caribbean Drive, Sunnyvale, California
94089-1189 (“CEPHEID”) and F. Hoffmann-La Roche Ltd, a Swiss limited
liability company with its principal place of business at Grenzacherstrasse
124, CH-4070 Basel, Switzerland (“Roche/Basel”),
on behalf of itself and Roche Molecular
Systems, Inc., a Delaware corporation with its principal place of
business at 4300 Hacienda Drive, Pleasanton, California 94588 USA (“Roche/USA”) (Roche/Basel and Roche/USA
shall hereinafter be referred to collectively (or separately as the context
requires) as “Roche”) (hereinafter
CEPHEID and Roche may separately be referred to as a “Party” or collectively referred to as “the Parties”).


 


RECITALS


 


WHEREAS, Roche/Basel owns or controls all right,
title and interest in and to, or has the right to sublicense, certain patents
and patent applications outside of the United States the claims of which are
directed to aspects of nucleic acid amplification technology and Roche/USA owns
or controls all right, title and interest in and to, or has the right to
sublicense, corresponding patents and patent applications in the United States;


 


WHEREAS, CEPHEID is interested in acquiring a
worldwide license from Roche under certain of Roche’s patents for the purpose
of developing and commercializing PCR based in vitro human
diagnostic products for use in clinical diagnostic testing;


 


WHEREAS, Roche is willing to grant such license to
CEPHEID upon the terms and conditions set forth below; and


 


NOW
THEREFORE, for and in
consideration of the covenants and undertakings hereinafter set forth, CEPHEID
and Roche hereby agree as follows:


 


ARTICLE 1



DEFINITIONS


 


In addition to other terms
defined elsewhere herein, the following terms shall have the following meanings
when used herein (any term defined in the singular shall have the same meaning
when used in the plural and vice versa, unless stated otherwise):


 


1.1          “Affiliate”
means: (i) an organization, which directly or indirectly controls either Party;
or (ii) an organization, which is directly or indirectly controlled by either
Party; or (iii) an organization, which is controlled, directly or indirectly,
by the ultimate parent company of either Party. For purposes of this Section,
control is defined as owning fifty percent (50%) or more of the voting stock of
a company or having otherwise the power to govern the financial and the
operating policies or to appoint the management of an organization. The term
“Affiliate” of Roche shall not include Genentech, Inc., 1 DNA Way, South San
Francisco, California 94080-4990, U.S.A. or Chugai Pharmaceutical Co., Ltd,
1-9, Kyobashi 2-chome, Chuo-ku, Tokyo, 104-8301, Japan.


 

















 


1.2          “CEPHEID
Sellers” means CEPHEID and its Affiliates and Distributors.


 


1.3          “Complete
Diagnostic Kit” means a product dedicated for use in connection with the
practice of PCR in the In Vitro Human Diagnostics Field (it being understood
that a product shall be deemed to be so dedicated if it is either: (i) a
product having a package insert indicating its use primarily in connection with
the practice of PCR; or (ii) a product which by virtue of its design, operation
or construction has no other substantial practical utility), and which product
is comprised of, at a minimum, the essential active reagents for amplification
and detection of a target nucleic acid in the In Vitro Human Diagnostics Field.
For purposes of this Agreement, CEPHEID shall only convey the necessary rights
for End-Users to perform PCR in the In Vitro Human Diagnostics Field with the
Sale of a Complete Diagnostic Kit.


 


1.4          “Component
System” means any kit, reagent or group of reagents Sold together or separately,
which will provide an End-User customer with the essential active reagents
necessary to perform one or more of the following processes in connection with
the practice of PCR:


 


(a)           Sample
preparation, that is, the treatment of a sample in order to render a nucleic
acid therein amplifiable: such a Component System may have as its essential
active reagents, for example, the cell lysing, stabilization and/or
precipitation reagents essential to expose and prepare DNA for amplification;


 


(b)           The
amplification of one or more designated nucleic acid sequences: such a
Component System may have as its essential active reagents, for example, the
oligonucleotides and/or nucleotides, enzymes, buffers and associated
co-reactants essential to perform amplification of nucleic acid using PCR;
and/or


 


(c)           Detection,
that is, the treatment or modification of an amplified nucleic acid so as to
render it detectable, identifiable and/or quantifiable: such a Component System
may include labeled primers, probes, fluorescent intercalating or tagging
agents, and any device provided therewith to enable the detection,
identification or quantification of the nucleic acid.


 


1.5          “Diagnostic
Services” means any use of PCR as a testing service to provide to a Person
data, results or interpretations of any application of PCR for purposes of
therapy or diagnosis of a human being, including, without limitation, clinical
laboratory services, whether or not a fee is charged for such services.


 


1.6          “Distributors”
means the distributors performing a bona  fide distribution
function to which CEPHEID or any of its Affiliates grants the right to Sell
Licensed Products. CEPHEID’s Affiliates shall not be deemed to be
“Distributors” for purposes of this Agreement.


 


1.7          “Effective
Date” means the date set forth in the preamble to this Agreement.


 


1.8          “End-Users”
means the customers, such as doctors, hospitals and testing and research
institutions which perform PCR (including Diagnostic Services), and clinical
and other laboratories, purchasing and using Licensed Products.


 


2

















 


1.9          [***]


 


1.10        “Instrument”
means an electrical, mechanical or electro-mechanical device that is intended
to be used in connection with the practice of PCR.


 


1.11        [***]


 


1.12        “Licensed
Patents” means the Valid Claims contained in the United States
Patents set forth in Appendix 1 to this Agreement, including any
divisional, continuation (but not continuations-in part claiming patentably
distinct subject matter), reissue, and re-exam, and corresponding foreign
patents and patent applications.


 


1.13        “Licensed
Product” means a product for use in the In Vitro Human Diagnostics Field,
the manufacture, importation, use, offer for Sale or Sale of which would
infringe a Valid Claim of Licensed Patents, made by or specifically for CEPHEID
or any of its Affiliates only pursuant to CEPHEID’s or its Affiliates
specifications, which is any of the following or a combination of any of the
following:


 


(a)           Complete
Diagnostic Kit;


 


(b)           A
reagent, accessory, device or system which
is used or Sold to be used by End-Users in connection with the practice
of PCR, including the steps of sample preparation, amplification and detection;


 


3

















 


(c)           A
Component System; and/or


 


(d)           Reagents
Sold to be used by End-Users as replacement components in regard to a Component
System.


 


Licensed Products include Not Yet Approved or Not Yet
Registered In Vitro Human Diagnostics Products.


 


1.14        “Net
Sales” has the meaning set forth in Article 3 herein.


 


1.15        “Not
Yet Approved or Not Yet Registered In Vitro Human Diagnostics Products”
means Complete Diagnostic Kits and/or Component Systems which are Sold to
End-Users who use them for diagnostic purposes and/or health care of a human
subject and whose use is, in countries with an approval or registration
process, Not Yet Approved by a regulatory agency having jurisdiction over the
Sale of such products regardless of whether the labeling and/or other written
materials accompanying such products contain recommendations and/or
instructions for such use. In countries without an approval or registration
process, the labeling has to clearly identify the intended use of the product
(e.g. for In Vitro Diagnostic Use). The Parties agree that regulatory
submissions for Not Yet Approved or Not Yet Registered In Vitro Human
Diagnostic Products shall, in countries with an approval or registration
process, be filed not more than twenty-four (24) months after the first
commercial Sale of such Not Yet Approved or Not Yet Registered In Vitro Human
Diagnostic Product.


 


1.16        “PCR”
means the polymerase chain reaction process and technology involving the
amplification of a nucleic acid sequence and the complement of that sequence by
repeated cycles of oligonucleotide mediated, template directed synthesis
involving the extension of a component primer oligonucleotide by incorporation
of monomeric nucleotide triphosphates whereby the sequence, its complement and
subsequent synthetic copies thereof are repeatedly separated and used as
templates for further cycles of synthesis.


 


1.17        “PCR
Related Invention” means any process, method, test, kit, reagent and/or
group of reagents for performing or, by virtue of its design, operation and/or
construction, has no other substantial practical utility than for performing,
one or more of the following operations in connection with the practice of PCR:


 


(a)           Sample
collection, preparation, transport and/or isolation of nucleic acid sequences
from a sample, that is, the treatment of a sample in order to render a nucleic
acid therein amplifiable and/or detectable, which may have as its essential
active reagents, for example, the cell lysing, stabilization and/or
precipitation reagents essential to expose and prepare DNA for amplification
and/or detection; and/or


 


(b)           The
amplification of one or more designated nucleic acid sequences using PCR, which
may have as its essential active reagents, for example, the oligonucleotides
and/or nucleotides, enzymes, buffers and associated co-reactants essential to
perform amplification of nucleic acid using PCR; and/or


 


4

















 


(c)           Detection,
that is, the treatment or modification of nucleic acid amplified using PCR so
as to render it detectable, identifiable and/or quantifiable: which may include
as its essential active reagents labeled primers, probes (including binding
partners or reporter molecules), and fluorescent intercalating or tagging
agents; and/or


 


(d)           The
synthesis, purification, labeling, and/or immobilization of nucleic acid probes
used in PCR (i.e., one or more compounds that is/are: (y) composed of one or
more nucleotides or analogs thereof; or (z) capable of binding with one or more
nucleotides or analogs thereof); and/or


 


(e)           The
control of contamination.


 


1.18        “Person”
means a natural person, a corporation, a partnership, a trust, a joint venture,
any governmental authority or any other entity or organization


 


1.19        “Reagent
Agreement Plan” or “RAP” means a program (whether known as a Reagent
Agreement Plan, Reagent Rental Plan or other successor or similar plan) for the
Sale of one or more Component Systems in conjunction with the supply of an
Instrument whereby the price for such Royalty Product includes the acquisition
cost or leasing cost of an Instrument, the cost of servicing such Instrument,
interest charged for the financing of such Instrument and/or other items of
cost recovery in connection with the supply of such Instrument.


 


1.20        “Research
Collaborator of CEPHEID” means a Third Party solely performing research and
development for CEPHEID and/or its Affiliates under a contract with CEPHEID
and/or any of its Affiliates, which contract:


 


(a)           Provides
that the work performed by such Third Party under the contract is directed toward
the development of Licensed Products;


 


(b)           Requires
that the work performed under the contract be in accordance with a protocol
which is a part of the contract; and


 


(c)           Provides
that all reagents necessary to perform the work under the contract are supplied
free of charge by CEPHEID or its Affiliates and requires that such reagents may
be used only for the purposes of the protocol and that any reagents not
consumed in performing the work under the contract either be returned to
CEPHEID and its Affiliates or be disposed of as laboratory waste.


 


1.21        “Roche
Patented Enzyme” means any enzyme the manufacture, use or Sale of which
would infringe a Valid Claim of a Roche patent, provided that such Valid Claim
covers a composition of matter claim.


 


1.22        “Royalty
Payment Period” means the period beginning on the Effective Date and ending
on the expiration of the current calendar quarter and each calendar quarterly
period thereafter.


 


1.23        “Royalty
Product” means any Licensed Product Sold for use in the In Vitro Human
Diagnostics Field and any Instrument, accessory, device or system made by or
for


 


5

















 


CEPHEID or any of its Affiliates and Sold (whether or not pursuant to
or in connection with a RAP) for use in the In Vitro Human Diagnostics Field.


 


1.24        “Sale”
means the act of selling, leasing or otherwise placing or distributing
(including by means of Reagent Agreement Plans, if applicable).


 


1.25        “Sell”
means to make or cause to be made a Sale.


 


1.26        “Sold”
means to have made or caused to be made a Sale.


 


1.27        “Territory”
means all countries of the world.


 


1.28        “Third
Party” means any Person that is neither a Party to this Agreement nor an
Affiliate of a Party to this Agreement.


 


1.29        “United
States” or “U.S.” means the United States of America, its
territories and possessions, including the Commonwealth of Puerto Rico.


 


1.30        “Valid
Claim” means, in any country, the claim of a patent or pending patent
application which (a) has not expired, (b) has not been disclaimed, or (c) has
not been revoked, held invalid or otherwise declared unenforceable by a
tribunal of competent jurisdiction over such claim in such country from which
no further appeal may be taken.


 


ARTICLE 2



GRANTS


 


2.1          License
Grants By Roche To CEPHEID.


 


(a)           Subject
to the terms and conditions of this Agreement, including the limitations set
forth at Section 2.2 and the payment provisions set forth at Article 4, Roche
grants to CEPHEID and its Affiliates, a non-exclusive license under the
Licensed Patents as follows:


 


(i)            to
make, have made, import, use, offer to Sell and Sell Licensed Products in the
In Vitro Human Diagnostics Field in the Territory, and authorize End-Users to
perform Diagnostic Services using such Licensed Products in processes covered by
the Licensed Patents in accordance with the label license provided with the
purchase of such Licensed Products as set forth in Article 5 below (the “Label
License”).


 


(ii)           to
grant a limited, non-transferable, royalty free sublicense under the Licensed Patents
to Research Collaborators of CEPHEID and/or its Affiliates to practice PCR
under their respective contracts with CEPHEID and/or its Affiliates, in
accordance with the terms and conditions of this Agreement, solely for purposes
of doing applied research and development for CEPHEID and/or its Affiliates of
Licensed Products to be Sold in the In Vitro Human Diagnostics Field in
accordance with the other terms and conditions of this Agreement; and


 


6

















 


(iii)         to
use PCR technology for the research, development, improvement and quality
control and quality assurance of Licensed Products, in each case by CEPHEID and
its Affiliates, internally, for Sale in the In Vitro Human Diagnostics Field.


 


2.2          Restrictions.  Notwithstanding Section 2.1 or any other
term or condition of this Agreement, CEPHEID understands and agrees that the
licenses set forth in this Agreement to CEPHEID and its Affiliates shall not
include:


 


(a)           the
right to grant sublicenses or to convey any implied licenses, except to the
limited extent expressly provided in 2.1(ii) and Article 5;


 


(b)           the
right to Sell Roche Patented Enzymes other than as replacement enzymes for use
with Component Systems made by or for CEPHEID or its Affiliates;


 


(c)           the
right to convey with the Sale of Roche Patented Enzymes, Instrument or other
product on a stand-alone basis (i.e. independent of the Sale of a Licensed
Product which has a Label License) the right to practice any process, method or
test covered by any Valid Claim of any Licensed Patents;


 


(d)           the
right to make or “have made” Roche Patented Enzymes;


 


(e)           the
right to “have made” Licensed Products other than Roche Patented Enzymes by a
Third Party unless:


 


(i)            all
of such products so manufactured by such Third Party carry CEPHEID’s or its
Affiliates’ own name and only those trademarks, tradenames, brand names and/or
labels that CEPHEID is using on such products when Sold by CEPHEID or its
Affiliates and, in the event that any such products also carry the name of such
Third Party, it shall be only to the effect that such Third Party manufactured
such product, or a part thereof, for CEPHEID and is otherwise consistent,
including by its size and location, with recognition of the product as an
CEPHEID product;


 


(ii)           all
such products so manufactured by such Third Party are purchased by or otherwise
transferred to CEPHEID or its Affiliates; and


 


(iii)         such
Third Party manufacturing for CEPHEID shall not otherwise be a Seller or
distributor of unlicensed products which infringe Valid Claims of the Licensed
Patents.


 


(f)            the
right, under the Licensed Patents for CEPHEID or its Affiliates to perform or
otherwise engage in Diagnostic Services, other than clinical trials performed
by or on behalf of CEPHEID or its Affiliates for purposes of clinical research
and development of Licensed Products or the registration of Licensed Products;
and


 


(g)           the
right to convey the necessary rights for End-Users to perform Diagnostic
Services under Licensed Patents except in conjunction with the Sale of a
Complete Diagnostic Kit.


 


7

















 


2.3          No
Further Licenses.  The licenses
granted herein by Roche to CEPHEID and its Affiliates pursuant to Section 2.1
may be used solely for the purposes expressed in Section 2.1, subject to the
restrictions in Section 2.2 and Article 5. Except for such limited grants, no
further licenses are granted or given to CEPHEID or any of its Affiliates in or
under this Agreement, either expressly, by implication or estoppel.


 


2.4          Grant
Back Licenses.  At the request of
Roche, CEPHEID shall enter into good faith negotiations with Roche for a
worldwide, royalty-bearing, field-limited, non-exclusive license agreement with
respect to CEPHEID patent rights claiming PCR Related Inventions.


 


2.5          Termination
of Licenses to Affiliates.


 


(a)           Unless
terminated sooner pursuant to Section 8.2 herein, the licenses granted herein
by Roche to each of CEPHEID’s Affiliates shall terminate immediately with
respect to any of CEPHEID’s Affiliates without any notice or action on the part
of CEPHEID or Roche if such affiliated corporation or other entity no longer
meets the definition of an Affiliate set forth above.


 


(b)           Upon
such termination, all rights granted hereunder to such affiliated corporation
or other entity shall terminate immediately, except for the rights and
obligations surviving termination set forth in Section 8.3 herein, where
applicable, until such time as such affiliated corporation or other entity
again meets the definition of an Affiliate set forth above, whereupon such
license shall be deemed to be granted anew to such affiliated corporation or
other entity.


 


2.6          Grant
of Option to CEPHEID.  Upon payment
to Roche the amount of [***] at any time prior to the fifth anniversary of the
Effective Date of this Agreement, CEPHEID may elect to modify the definition of
“In Vitro Human Diagnostics Field” as set forth in Section 1.11 to delete the
following provision: “In no event shall the term In Vitro Human Diagnostics
Field include or be construed to include products and processes utilizing PCR
for the detection of pathogens for use in blood bank screening and the plasma
fractionation industry” with the effect at such time that the field of In Vitro
Human Diagnostics will include the detection of pathogens for use in blood bank
screening and the plasma fractionation industry.


 


ARTICLE 3



NET SALES


 


3.1          Calculation
of Net Sales.  Net Sales with
respect to the Sale of Royalty Products by an CEPHEID Seller to End-Users shall
mean the gross invoice price to End-Users for such Royalty Products, less (1)
deductions for allowances, discounts, including cash discounts, and returns all
to the extent customarily given in the trade by the CEPHEID Seller (except that
discounts, credits or similar allowances provided to purchasers of Royalty
Products in consideration of the purchaser’s agreement to purchase non-Royalty
Products shall not be deducted), and (2) sales taxes, and duties and
transportation, if separately stated on the invoice.


 


8

















 


With respect to any Royalty
Products used by CEPHEID or any of its Affiliates in connection with (including
but not limited to) internal research, development, validation or marketing of
any CEPHEID or CEPHEID Affiliate’s products other than a Licensed Product, the
Net Sales of such Royalty Products shall be determined based upon the average
Selling price of such Royalty Product to all Third Party End-users during the
Reporting Period or if no average Selling price of such Royalty Product is
available for such period, at a reasonable value based upon the average Selling
prices of products available in the marketplace similar to such Royalty
Products.


 


3.2          Distributor
Net Sales.  In the event Royalty
Products are Sold to Distributors and CEPHEID cannot obtain accurate and
complete End-User Sales figures for such Royalty Products, then CEPHEID may use
the gross invoice price, less the allowable adjustments as set forth in 3.1
above, multiplied by [***] as the Net Sales for such Royalty Products.


 


3.3          RAP
Sales.  In the case of the Sale
under a Reagent Agreement Plan of a Complete Diagnostic Kit or Component
System, the Net Sales of such Complete Diagnostic Kit or Component System shall
be reduced by a percentage (“RAP Deduction”)
to allow for deduction of instrumentation service charges included in such Net
Sales, including such charges as interest for the financing of Instruments
supplied and the cost of Instrument service. The RAP Deduction (a) shall be
determined by CEPHEID according to generally accepted accounting principles
prior to the first commercial Sale of such Complete Diagnostic Kit or Component
System and shall be subject to the reasonable acceptance of Roche, and (b)
shall be adjustable by CEPHEID, but not more than once per calendar year, and
shall be subject (prior to its implementation) to the reasonable acceptance of
Roche.


 


3.4          Interaffiliate
Transfers.  If CEPHEID transfers any
Royalty Products to an Affiliate which becomes the End-User, then the Net Sales
of such Royalty Products shall be determined based on the average Selling price
of such Royalty Product to all Third Party End-Users during the Royalty Payment
Period or, if no average Selling price of such Royalty Product is available for
such period, at a reasonable value based upon the average Selling prices of
products available in the marketplace similar to such Royalty Product.


 


3.5          Licensed
Products with Multiple Uses.


 


(a)           Where
Royalty Products are Sold for use in connection with the practice of PCR, but
are also used by End-Users for purposes other than in connection with the
practice of PCR, the Net Sales of such Royalty Product shall be the proportion
of the Net Sales thereof equal to the proportion of such Royalty Product’s use
in connection with the practice of PCR, provided that CEPHEID reasonably
demonstrates to Roche the proportionate uses of such Royalty Product in
accordance with generally accepted accounting principles.


 


(b)           Where the Royalty
Product in subsection (a) above is an Instrument which is Sold independently of
a Reagent Agreement Plan in a given Royalty Payment Period, then the royalties
payable on the Net Sales of such Instruments shall equal the Net Sales of such
Instruments multiplied          by the
fraction AB where A is the number of assays Sold for use in such Instruments in
such period involving the practice of PCR,
and B is the aggregate number of assays of all types Sold for use in such
Instruments in such period.


 


9

















 


ARTICLE 4



CONSIDERATION AND
PAYMENTS


 


4.1          License
Fee Due to Roche.  CEPHEID shall pay
to Roche a non-refundable, non-creditable total license fee in the amount of
[***].


 


The Basel Fee and the USA
Fee shall be paid in US Dollars made by wire transfer to the following
accounts:


 


Basel Fee:


 


UBS
AG, Zurich, Switzerland

To the account of: F. Hoffmann-La Roche Ltd

Account No. 230-10345032.0

SWIFT Code: UBSWCHZH80A

With the reference: Contract No. 12242


 


USA Fee:


 


Chase
Manhattan Bank of New York

To the account of: Roche Molecular Systems, Inc.

Account No.: 323839657

ABA No.: 021000021

With the reference: Contract No. 12242


 


4.2          Royalties Due to
Roche/Basel.  CEPHEID shall account
to and pay to Roche/Basel for each Royalty Payment Period during the term of
this Agreement a royalty equal to the percentages, listed below, of the Net
Sales of Royalty Products Sold in the countries comprising all European Union
Member States and Switzerland, Norway, Liechtenstein and Iceland (“Europe”) for
use in connection with the practice of PCR when such practice involves the use
of a process, method or composition which is covered by one or more Valid
Claims of Licensed Patents:


 


(a)           [***]
until December 31, 2005; and


 


(b)           [***]
thereafter, with expiration of individual Licensed Patents to be considered for
the purposes of this Agreement for the sake of convenience to expire on a
worldwide basis on the date which constitutes the mid-point between the
expiration of the corresponding U.S. and European patents.


 


4.3          Royalties
Due to Roche/USA.  CEPHEID shall
account to and pay to Roche/USA for each Royalty Payment Period during the term
of this Agreement a royalty equal to the percentages, listed below, of the Net
Sales of Royalty Products Sold in the United States for use in connection with
the practice of PCR when such practice involves the use of a process, method or
composition which is covered by one or more Valid Claims of Licensed Patents:


 


(a)           [***]
until December 31, 2005;


 


10

















 


(b)           [***]
from January 1, 2006 until December 31, 2010; and


 


(c)           [***]  thereafter, with expiration of individual
Licensed Patents to be considered for the purposes of this Agreement for the
sake of convenience to expire on a worldwide basis on the date which constitutes
the mid-point between the expiration of the corresponding U.S. and European
patent.


 


4.4          Other
Royalties to Roche/Basel.  CEPHEID
shall account to and pay to Roche/Basel for each Royalty Payment Period during
the term of this Agreement a royalty equal to the percentages, listed in
Section 4.3 (a), (b) and (c), of the Net Sales of Royalty Products Sold in any
country or territory of the world excluding the United States and Europe, for
use in connection with the practice of PCR when such practice involves the use
of a process, method or composition which is covered by one or more Valid
Claims of Licensed Patents.


 


4.5          Reporting
and Payment.


 


(a)           With
respect to the royalties required pursuant to Sections 4.2, 4.3 and 4.4,
CEPHEID shall, within sixty (60) days after the close of each Royalty Payment
Period, provide to:


 


KPMG
Fides

Steinengraben 5

CH-4003 Basel, Switzerland

To the attention of: Licensing Trustee

Fax: +41 61 286-9401


 


or another trustee as
notified to CEPHEID by Roche/Basel, an account of all Net Sales of such Royalty
Products in Europe, in the United States and those countries outside the United
States and Europe, and of the royalty due pursuant to Sections 4.2, 4.3 and 4.4
in respect of the preceding Royalty Payment Period, according to the royalty
report forms in Appendix 2. Simultaneously, when it delivers such account,
CEPHEID shall make payment of the royalty amount shown, as follows:


 


Credit
Suisse, Basel

Switzerland

To the account of: KPMG Fides

Account No.: 0504-920654-62

SWIFT Code: CRESCHZ80A

IBAN: CH79 0050 4092 0654 6200 0


 


(b)           The
royalties due by CEPHEID to Roche pursuant to Section 4.2, 4.3 and 4.4 on the
Net Sales by CEPHEID and its Affiliates of all Royalty Products Sold outside of
the United States shall be paid in U.S. Dollars and shall be converted by
CEPHEID from the currency in which the Sales were made, and shall be
definitively discharged by payment in U.S. Dollars as converted based on the
applicable New York rate of exchange as quoted in The Wall Street Journal (“WSJ”)
for the last business day of the applicable Royalty Payment Period. If the WSJ
does not publish any such rate, a comparable publication shall be agreed upon
from time to


 


11

















 


time by the Parties, and with respect to each country for which such
rate is not published in the WSJ or in a comparable publication, the Parties
shall use the applicable rate for such date as published by the appropriate
governmental agency in such country.


 


4.6          Withholding.


 


(a)           Any
withholding tax levied by a government, in the country where payment
originates, on payments made by CEPHEID to Roche shall be borne by Roche.
CEPHEID shall use its best efforts to do all things necessary to enable Roche
to claim exemption therefrom under any double taxation or similar agreement in
force and shall produce to Roche proper evidence of payment of all withholding
tax and other certification that might be required by the respective double
taxation agreement.


 


(b)           In
case any taxing authority holds: (i) that any payment from any Affiliate of
CEPHEID to CEPHEID is in effect a royalty payment from such Affiliate of
CEPHEID to Roche, and (ii) such royalty payment to Roche is subject to a
withholding tax, then, at such time, the Parties will discuss the issue and try
to find an appropriate solution satisfying the business interests of both
Parties.


 


(c)           Except
as otherwise provided in subsections (a) and (b) above, all payments of
royalties and other consideration made by CEPHEID to Roche under this Agreement
shall be made in full without deduction of taxes, charges and any other duties
that may be imposed on such payments to Roche.


 


4.7          Books
and Records.


 


(a)           CEPHEID
shall keep a complete and accurate set of books and records relating to the
quantity of Royalty Products shipped by or for CEPHEID and its Affiliates and
the Sales of Royalty Products by CEPHEID and its Affiliates. Such books and
records shall contain sufficient detail to substantiate the computation of the
Net Sales of Royalty Products and the amount of royalties payable under this
Article 4 as well as all other information in the statements of account
provided for in Section 4.5 above, and shall be maintained by CEPHEID for a
period of not less than three (3) years from the date of such Sales.


 


(b)           Roche
shall be entitled, upon thirty (30) days notice to CEPHEID, to have such books
and records audited by an independent certified public accounting firm retained
by Roche and reasonably acceptable to CEPHEID (which acceptance shall not be unreasonably
withheld), provided that any such audit occurs during CEPHEID’s normal business
hours not more than once in any calendar year. Roche also shall be entitled to
have the books and records of each of CEPHEID’s Affiliates and Distributors
relating to the quantity of Royalty Products shipped by or for such Affiliate
or Distributor and such Affiliate’s or Distributor’s Sales of Royalty Products
audited, upon reasonable notice to such Affiliate or Distributor, by an
independent certified public accounting firm retained by Roche and reasonably
acceptable to such Affiliate or Distributor (which acceptance shall not be
unreasonably withheld), provided that any such audit occurs during such
Affiliate’s or Distributor’s normal business hours not more than once in any
calendar year. CEPHEID shall cause each such Affiliate and Distributor to
comply with any such audit request by Roche.


 


12

















 


(c)           Roche
agrees that all audited information shall be confidential to CEPHEID and
CEPHEID’s Affiliates and Distributors. Any Person conducting an audit on behalf
of Roche will be required to protect the confidentiality of such information
and shall provide to Roche a report only of the ultimate conclusions resulting
from such audit. Except as provided below, CEPHEID shall pay promptly to Roche
the amount of any royalties determined by such an audit to be outstanding,
along with interest accrued up to and including the date of payment as provided
in Section 4.8 below. The costs of such an audit shall be borne by Roche;
provided, however, that, if such audit determines that the royalties paid by
CEPHEID for any audited Royalty Payment Period were at least five percent (5%)
less than the royalties otherwise due and payable, then CEPHEID shall reimburse
Roche for the costs of such audit. If such audit determines that CEPHEID has
overpaid the amount of royalties otherwise due and payable for the audited
Royalty Payment Period, then Roche shall credit the amount of such overpayment
to CEPHEID against future royalties payable by CEPHEID.


 


4.8          Past
Due Payments.  If CEPHEID fails to
pay any amount specified under this Agreement after the due date thereof, the
amount owed shall bear an interest of one percent (1%) per month from the due
date until paid, provided, however, that if this interest rate is held to be
unenforceable for any reason, the interest rate shall be the maximum rate
allowed by law at the time the payment is made.


 


4.9          No
Multiple Royalties.  At no time
shall more than one royalty be payable by CEPHEID upon the Sale of any one
Royalty Product by CEPHEID or its Affiliates, regardless of whether the
manufacture, use and/or Sale of such Royalty Product would Infringe more than
one Valid Claim of one or more the Licensed Patents regardless of whether such
product qualifies as an “Royalty Product” for purposes of this Agreement under
more than one of the criteria for designating a product to be a “Royalty
Product” as provided in Article 1 above.


 


4.10        Most
Favored Licensee.


 


(a)           If,
after the Effective Date, Roche grants to any Third Party a license in the In
Vitro Human Diagnostics Field under substantially equivalent terms and
conditions as granted to CEPHEID herein but under more favorable royalty rates
than those given to CEPHEID under this Agreement, Roche shall promptly notify
CEPHEID of such more favorable royalty rates, and CEPHEID shall have the right
and option to substitute such more favorable royalty rates for the royalty
rates contained herein. Such right and option shall be exercisable by CEPHEID
by providing written notice of acceptance to Roche within ninety (90) days of
the date of receipt of notice from Roche of such more favorable royalty rates
(“Acceptance Notice”).


 


(b)           CEPHEID’s
right to elect such more favorable royalty rates shall extend only for so long
as and shall be conditioned on CEPHEID’s acceptance of all the same conditions,
favorable or unfavorable, under which such more favorable royalty rates shall
be available to such Third Party including any limitations or restrictions in
the applicable scope of license, any increase in license fees and/or the
application of milestones payments, if any. Upon CEPHEID’s acceptance of all
such terms of such Third Party agreement, pursuant to an Acceptance Notice within
the ninety (90) day period as provided above, the more favorable royalty rates
shall be effective as to CEPHEID as of the effective date of such Third Party
agreement.


 


13

















 


(c)           Notwithstanding
the foregoing, in the event that Roche shall receive substantial non-monetary
consideration in the form of technology or intellectual property rights to
technology, as a part of the consideration for its granting such a license to a
Third Party, then subsections (a) and (b) this Section 4.10 shall not apply.


 


(d)           If
and to the extent this Section 4.10 is found to be inconsistent with the
requirements of the EC Commission Decision of 4 February 1998 (Official Journal
L 234, 21/08/1998 p.0014-0038), this Section 4.10 shall be deemed automatically
amended so as to make this Section 4.10 compliant with the requirements of such
EC Commission Decision and the Parties shall proceed accordingly.


 


4.11        Trustee.  It is understood by the Parties that a
trustee has been appointed by Roche/Basel, who will be managing royalty
reporting and royalty payments from CEPHEID under this Agreement as described
in Section 4.5. At present, KPMG Fides, Basel, Switzerland is the said trustee.


 


4.12        Sales Prior to
Effective Date.  For Royalty Products
manufactured, used, imported, offered for Sale and Sold prior to the Effective
Date (and excluding those products specifically licensed under the Existing
License Agreements) CEPHEID shall report and pay to the trustee royalties as
set forth in sections 4.2, 4.3, 4.4, and 4.5, within five (5) days following
the Effective Date. Upon receipt by the trustee of such royalties, CEPHEID’s
customers’ use of such products purchased from CEPHEID shall be considered to have been licensed, in
accordance with the appropriate Label License for purposes of this Agreement.


 


ARTICLE 5



LABEL LICENSES


 


5.1          Label
Licenses on Licensed Products Sold in the In Vitro Human Diagnostics Field.


 


(a)           CEPHEID’s
right to sublicense under the grant of Section 2.1 is limited to the right to
convey use rights pursuant to a Label License under process claims and
composition-of-matter claims (not apparatus, device or system claims), only to
End-User customers, and only through the Sale of Licensed Products.


 


(b)           CEPHEID
agrees that it shall mark conspicuously all Complete Diagnostic Kits made by or
for it, and shall cause each of its Affiliates to mark conspicuously all such
Complete Diagnostic Kits made by or for such Affiliates, with a Label License
bearing the following legend or such alternative legend as shall be mutually
agreed to by the parties:


 


THE PURCHASE OF THIS PRODUCT ALLOWS THE PURCHASER TO
USE IT FOR THE PERFORMANCE OF DIAGNOSTIC SERVICES FOR HUMAN IN VITRO
DIAGNOSTICS. NO GENERAL PATENT OR OTHER LICENSE OF ANY KIND OTHER THAN THIS
SPECIFIC RIGHT OF USE FROM PURCHASE IS GRANTED HEREBY.


 


14

















 


(c)           CEPHEID
agrees that it shall mark conspicuously all Component Systems for amplification
made by or for it, and shall cause each of its Affiliates to mark conspicuously
all such Component Systems made by or for such Affiliates, with a Label License
bearing the following legend or such alternative legend as shall be mutually
agreed to by the Parties:


 


THE PURCHASE OF THIS PRODUCT ALLOWS THE PURCHASER TO
USE IT FOR AMPLIFICATION OF NUCLEIC ACID SEQUENCES FOR HUMAN IN VITRO
DIAGNOSTICS. NO GENERAL PATENT OR OTHER LICENSE OF ANY KIND OTHER THAN THIS
SPECIFIC RIGHT OF USE FROM PURCHASE IS GRANTED HEREBY.


 


(d)           CEPHEID
agrees that it shall mark conspicuously all Component Systems for detection
made by or for it, and shall cause each of its Affiliates to mark conspicuously
all such Component Systems made by or for such Affiliates, with a Label License
bearing the following legend or such alternative legend as shall be mutually
agreed to by the Parties:


 


THE PURCHASE OF THIS PRODUCT ALLOWS THE PURCHASER TO
USE IT FOR DETECTION OF NUCLEIC ACID SEQUENCES FOR HUMAN IN VITRO DIAGNOSTICS.
NO GENERAL PATENT OR OTHER LICENSE OF ANY KIND OTHER THAN THIS SPECIFIC RIGHT
OF USE FROM PURCHASE IS GRANTED HEREBY.


 


(e)           CEPHEID
agrees that it shall mark conspicuously all Component Systems for amplification
and detection made by or for it, and shall cause each of its Affiliates to mark
conspicuously all such Component Systems made by or for such Affiliates, with a
Label License bearing the following legend or such alternative legend as shall
be mutually agreed to by the Parties:


 


THE PURCHASE OF THIS PRODUCT ALLOWS THE PURCHASER TO
USE IT FOR AMPLIFICATION OF NUCLEIC ACID SEQUENCES AND FOR DETECTION OF NUCLEIC
ACID SEQUENCES FOR HUMAN IN VITRO DIAGNOSTICS. NO GENERAL PATENT OR OTHER
LICENSE OF ANY KIND OTHER THAN THIS SPECIFIC RIGHT OF USE FROM PURCHASE IS
GRANTED HEREBY.


 


(f)            CEPHEID
agrees that it shall mark conspicuously all Royalty Products other than
Complete Diagnostic Kits, Component Systems for amplification, Component
Systems for detection and Component Systems for amplification and detection
made by or for it and Sold in the In Vitro Human Diagnostics Field, and shall
cause each of its Affiliates to mark conspicuously all such Royalty Products,
with the following legend or such alternative legend as shall be mutually
agreed to by the Parties:


 


THE PURCHASE OF THIS PRODUCT ALONE DOES NOT IMPLY ANY
LICENSE UNDER PATENTS OWNED BY ROCHE MOLECULAR SYSTEMS, INC. OR F. HOFFMANN-LA
ROCHE LTD COVERING PCR AMPLIFICATION OR DETECTION.


 


5.2          Maintenance
of Label Licenses by Distributors. 
CEPHEID agrees to use its reasonable efforts to ensure that the CEPHEID
Distributors maintain on all Royalty Products Sold by such Distributors the
Label Licenses and other legends provided for in this Article 5 that are to be
applied by CEPHEID and its Affiliates.


 


15

















 


5.3          Misuse
by End-Users of Licensed Products. 
In the event that Roche becomes aware that any End-User of any Licensed
Product is misusing the purchased Licensed Product in violation of the
applicable Label License on such Licensed Product and is thereby infringing the
Licensed Patents, Roche may provide evidence of such misuse to CEPHEID. Upon
receipt of such evidence, CEPHEID shall notify such End-User of the End-User’s
misuse and shall use its reasonable efforts to obtain a written assurance from
such End-User that the End-User shall not engage in such misuse in the future.
If the End-User refuses to provide such written assurance, then CEPHEID shall
cease, to the extent permitted by any applicable law or statute, the Sale to
such End-User of the Licensed Product which was being misused until such time
as the End-User provides such written assurance. If, notwithstanding the
End-User’s provision of such written assurance, the End-User persists in
misusing the Licensed Product, then CEPHEID shall discontinue, to the extent
permitted by any applicable law or statute, the Sale to such End-User of such
Licensed Product.


 


5.4          Additional
Label Licenses.  In addition to the
Label Licenses provided for in Section 5.1 above, Roche may request that
CEPHEID apply additional Label Licenses on Licensed Products made by or for
CEPHEID or its Affiliates. The Parties shall negotiate in good faith concerning
the need for and/or the content of any such additional Label Licenses.


 


5.5          Incorrect
Application of Label Licenses.  In
the event that Roche notifies CEPHEID that CEPHEID or any of its Affiliates is
incorrectly applying any of the Label Licenses provided for above, then CEPHEID
shall consult and cooperate with Roche in taking such reasonable steps as it or
Roche may suggest to apply such Label License correctly and comply with the
provisions of this Article 5.


 


ARTICLE 6



THIRD PARTY CLAIMS;
LIMITATION ON LIABILITY


 


6.1          Third
Party Claims of Infringement.  In
the event that any Third Party brings a legal action or administrative
proceeding against CEPHEID or any of its Affiliates claiming that the
manufacture and/or Sale of Licensed Products, or otherwise that the practice or
use of PCR by CEPHEID, any of its Affiliates or Distributors infringes a patent
or other proprietary rights of such Third Party, then (a) CEPHEID shall notify
Roche promptly in writing of such legal action or administrative proceeding and
keep Roche advised in reasonable detail of the status thereof, and (b) Roche
may, at its option and expense, participate in the defense of such legal action
or administrative proceeding and, if Roche so participates, the Parties shall
cooperate with one another in such defense. Notwithstanding the participation
of Roche, CEPHEID shall maintain control of such defense, including any decision
as to settlement, and shall bear the total costs of any court award or
settlement of such legal action or administrative proceeding and all other
costs, fees and expenses (other than any costs, fees and expenses incurred by
Roche, if Roche participates) related to the resolution thereof and shall be
entitled to keep the entire amount of any damages awarded.


 


16

















 


6.2          Limitation
on Liability.


 


(a)           Roche
shall not be liable to CEPHEID, any of CEPHEID’s Affiliates, any of the
Distributors or any other Person for any costs, losses, expenses, judgments or
damages (including, without limitation, personal injury or property damage or
consequential damages) (collectively, “Losses”) incurred or alleged to have
been incurred arising out of or resulting from the manufacture, use and/or Sale
of Licensed Products, or otherwise from the practice or use of PCR, by CEPHEID,
or any of its Affiliates or Distributors; and CEPHEID shall indemnify and hold
Roche and Roche’s Affiliates, and their respective directors, officers,
employees and agents, harmless from any and all claims or causes of action
which any Third Party may assert or have against Roche or any of its Affiliates
arising out of or resulting from such manufacture, use and/or Sale of Licensed
Products or otherwise from such practice or use of PCR by CEPHEID and its
Affiliates or Distributors (including all reasonable costs, fees and expenses
which Roche may incur in defense thereof). If any such claim or cause of action
is asserted against Roche or any of its Affiliates, then (i) Roche shall notify
CEPHEID promptly in writing of such claim or cause of action, and (ii) Roche
shall give CEPHEID the option to (A) assume, at CEPHEID’s expense, the sole
defense of such claim or cause of action or (B) participate with Roche, at
CEPHEID’s expense, in the defense of such claim or cause of action and, if
CEPHEID so participates, the Parties shall cooperate with one another in such
defense, provided that in such event CEPHEID shall maintain control of such
defense, including any decision as to settlement. In either case, CEPHEID shall
bear the total costs of any court award or settlement of such claim or cause of
action and all other costs, fees and expenses related to the resolution thereof
and shall be entitled to keep the entire amount of any damages awarded.


 


(b)           The
limitations on liability and indemnifications provided for in Section 6.2(a)
above shall not be construed to release any Party from liability, and shall not
be deemed to apply, in any situation where one Party is supplying any product
or products to another Party pursuant to a separate agreement between the
Parties.


 


ARTICLE 7



PATENT ENFORCEMENT


 


7.1          Notice
of Substantial Infringement.  In the
event CEPHEID becomes aware of an alleged Substantial Infringement of a
Licensed Patent in a given country by an unlicensed Third Party, CEPHEID may
invoke the provisions of this Article 7 as to enforcement and royalty abatement
by providing adequate written notice thereof to Roche inclusive of documentary
evidence of infringement and market data as to the infringing Sales activity
which are in Roche’s good faith judgment reasonably reliable. “Substantial Infringement” or “Substantially Infringing” as used in this
Article 7 shall mean that the alleged infringing Sales of the Third Party in
the given country are at least [***] of total Sales of Competing Products in
such country. “Competing Products”
means all products essentially equivalent to a Complete Diagnostic Kit and
which test for the same analytes and which directly compete with each other for
use in or in conjunction with PCR.


 


7.2          Enforcement
and Royalty Abatements.  If Roche
fails, within sixty (60) days of such notice of Substantial Infringement of a
Licensed Patent by a Third Party in a given country, to enter into license
negotiations with or enforcement proceedings against such Third Party, or if
having timely entered into license negotiations with such Third Party, Roche
fails to obtain an


 


17

















 


executed license agreement or enter into enforcement proceedings with
such Third Party within six (6) months of said notice, then CEPHEID shall be
entitled to a [***] reduction in royalties on CEPHEID’s or its Affiliates’ Net
Sales of Licensed Products which are Competing Products with such Substantially
Infringing Sales in such country as of such notice, continuing until Roche
provides written notice to CEPHEID that either a license has been granted to
such Third Party or enforcement proceedings have been brought against such
Third Party. In the event the Substantially Infringing Sales shall exceed [***]
of total Sales of Competing Products in any particular Royalty Payment Period,
then the royalty reduction shall be [***] for such Royalty Payment Period. An
enforcement proceeding shall mean a court action or other legal action brought
before a competent patent authority in the relevant country. An enforcement
proceeding pursued against an infringer for Sales of an infringing product in
one Major Territory shall satisfy Roche’s obligation to pursue enforcement
hereunder against such products in all countries. If no Substantial
Infringement exists in any such Major Territory, then a suit in any other
country where Substantial Infringement exists shall satisfy Roche’s obligation
hereunder. “Major Territory” shall
mean any of the United States, Great Britain, Germany, France, Italy. The
Netherlands and Japan.


 


7.3          Continuing
Royalty Payment Obligations.  Except
to the extent provided in Section 7.2 above with respect to specific Licensed
Products, CEPHEID’s obligation to pay royalties on the Net Sales of Royalty
Products Sold by CEPHEID and its Affiliates shall remain in effect to the
extent provided for in this Agreement notwithstanding any alleged infringement
by any Third Party of any of the Licensed Patents.


 


7.4          No
CEPHEID Right to Enforce the Licensed Patents.  It is expressly understood that nothing contained herein shall in
any way grant or be construed to grant to CEPHEID the right to enforce the
Licensed Patents. Roche shall have the sole right to bring legal action to
enforce the Licensed Patents against any alleged infringement by any Third
Party.


 


ARTICLE 8



TERM AND TERMINATION


 


8.1          Term.  The term of this Agreement (“Term”) shall commence as of the Effective
Date and shall continue in full force and effect, unless terminated sooner in
accordance with Section 8.2 below, until the expiration date of the last to
expire of the Valid Claims of the Licensed Patents.


 


8.2          Termination.


 


(a)           CEPHEID
may terminate this Agreement with respect to all or any one or more of the
Licensed Patents for any reason by written notice to Roche at any time during
the term.


 


(b)           Either
CEPHEID or Roche may terminate this Agreement as to any one or more or all of
the Licensed Patents at any time upon ninety (90) days’ prior written notice to
the other Party, for breach by the other Party of any of the material
provisions hereof, including, but not limited to, nonpayment of royalties or
other monies to be paid, provided that during such


 


18

















 


ninety (90) day period the default is not cured to the reasonable
satisfaction of the Party giving notice. In the event CEPHEID fails to make any
installment of the Basel Fee or the USA Fee, which failure remains uncured for
ninety (90) days, Roche may immediately terminate this Agreement and all sums
due including any unpaid portion of the Basel Fee and/or USA Fee shall be
immediately due and payable along with interest as provided herein.


 


(c)           Either
CEPHEID or Roche may terminate this Agreement upon fifteen (15) days’ prior
written notice to the other Party if:


 


(i)            the
other Party shall become insolvent or make a general assignment for the benefit
of creditors; or


 


(ii)           a
petition or case under any bankruptcy act or similar statute is filed or
commenced by or against such other Party and is not vacated within ten (10)
days after it is filed.


 


(d)           Roche
shall have the right to terminate this Agreement by written notice to

CEPHEID, effective immediately, upon CEPHEID’s (i) dissolution, liquidation or
otherwise termination of its existence, except as a consequence of a merger
into, consolidation with or sale of substantially all of its assets to, another
Person which agrees to assume the rights and obligations of CEPHEID under this
Agreement and which has received the prior written approval therefore by Roche,
or (ii) taking any action to challenge the validity of any of the Licensed
Patents in any administrative or legal proceeding, or assisting any third
Person to take any such action.


 


(e)           In
the event of the termination of any license, in whole or in part, under this
Agreement, the manufacture and/or Sale by the CEPHEID Sellers of products
covered by such license shall cease immediately to the extent that such
manufacture and/or Sale no longer is licensed as a result of such termination,
except that such products in inventory as of the date of such termination may
be Sold in accordance with the terms and subject to the conditions and
restrictions of this Agreement for a period of one hundred eighty (180) days
following such termination and royalties shall be due and payable on the Net
Sales of such products in accordance with the terms and conditions of this
Agreement.


 


(f)            Expiration
or termination of this Agreement shall not affect the ability of any Party to
seek resolution of any matter arising prior to such expiration or termination
pursuant to Article 11 herein.


 


(g)           The
Parties acknowledge, without conceding the right of CEPHEID to make any such
challenge or raise any such issue, that in the event of any challenge made or
issue raised by CEPHEID as to whether the scope of any claim of any Licensed
Patents covers any Licensed Product or technology or whether the claims of any
Licensed Patents are invalid or unenforceable, the obligation of CEPHEID to pay
the royalties and other consideration due and payable by CEPHEID hereunder
shall remain in effect notwithstanding the pendency of such challenge. CEPHEID
agrees that there shall be a presumption that the withholding or escrowing of
such royalties or other consideration as a result of such challenge and during
the pendency of


 


19

















 


such challenge shall constitute a material breach of this Agreement for
which Roche is entitled to immediately terminate the Agreement.


 


8.3          Survival
of Certain Rights Upon Expiration or Termination.  All rights granted to and obligations undertaken by the Parties
hereunder shall terminate immediately upon the expiration of the Term of this
Agreement (as set forth in Section 8.1 above) or the termination of this
Agreement (pursuant to Section 8.2 above) except for:


 


(a)           The
obligations of CEPHEID to pay any and all royalties or other consideration accrued
hereunder prior to such expiration or termination (or during the one hundred
eighty (180) day period following termination in the case of inventory as of
the date of termination, as provided in Section 8.2(e) above);


 


(b)           The
right of Roche to have audited by an independent certified public accounting
firm the books and records of CEPHEID and CEPHEID’s Affiliates and Distributors
as provided in Section 4.7 above;


 


(c)           The
indemnification provisions of Section 6.2 above;


 


(d)           The
procedures set forth in Article 11 herein in respect of any matter arising
prior to such expiration or termination;


 


(e)           Any
and all confidentiality obligations provided for in this Agreement; and


 


(f)            Any
other provision(s) of this Agreement which would reasonably be expected to
survive expiration or termination.


 


ARTICLE 9



ADDITIONAL COVENANTS
AND AGREEMENTS


 


9.1          CEPHEID
shall not, and shall cause each of its Affiliates not to, enter into any joint
venture or other arrangement with any Third Party that would result in the express
or implied conveyance to such Third Party of benefits substantially equivalent
to those that would he received from a sublicense under the Licensed Patents.
Nothing in the foregoing shall restrict or limit CEPHEID’s rights to
sublicense, assign or transfer its rights hereunder to the extent expressly
permitted in Article 5 and Section 2.1(ii).


 


9.2          CEPHEID
shall not, and shall cause each of its Affiliates not to, arrange Sales of
Royalty Products (or utilize the definitions relating thereto) to reduce the
Net Sales for which royalties are payable by CEPHEID hereunder not in good
faith.


 


9.3          CEPHEID
shall not permit the violation of, and shall enforce the provisions of, any
contract with a Research Collaborator of CEPHEID in the event that such
Research Collaborator of CEPHEID fails to adhere to the provisions of its
contract with CEPHEID and/or any of its Affiliates requiring that all reagents
necessary to perform the work under such contract may be used only for the
purposes of the protocol and that any reagents not consumed in


 


20

















 


performing the work under such contract either be returned to CEPHEID
and its Affiliates or be disposed of as laboratory waste.


 


9.4          CEPHEID
acknowledges that the inclusion of its Affiliates within the license grants
pursuant to Section 2.1 is intended to enable CEPHEID to utilize the
manufacturing and Sales capabilities of its Affiliates in connection with the
manufacture and Sale of Licensed Products in a manner substantially similar and
equivalent to the involvement of such Affiliates in the manufacture and Sale of
CEPHEID’s products generally. Accordingly, CEPHEID shall not, directly or
indirectly, take any action having or intended to have the effect of
sublicensing CEPHEID’s rights under any of the Licensed Patents, other than to
a bona  fide Affiliate, including, without limitation, by creating
Affiliates specifically in connection with Licensed Products, or through other
Third Party arrangements such as joint ventures, collaborations or distribution
arrangements with distributors.


 


9.5          CEPHEID
shall not arrange its, and shall cause each of its Affiliates not to arrange
their, relationship with a Third Party Licensee and its Affiliates so as to
eliminate or reduce the full benefits to Roche of the rights under this
Agreement.


 


ARTICLE 10



REPRESENTATIONS AND
WARRANTIES


 


10.1        Representations
and Warranties of CEPHEID.  CEPHEID
hereby represents and warrants to Roche as follows:


 


(a)           The
execution, delivery and performance of, and the consummation by CEPHEID of the
transactions contemplated by, this Agreement have been duly authorized by all
necessary action on the part of CEPHEID and no further consents by CEPHEID are
needed in order to consummate the transactions contemplated hereby.


 


(b)           This
Agreement, when executed and delivered by Roche in accordance with the
provisions hereof, shall be a legal, valid and binding obligation of CEPHEID,
enforceable against CEPHEID in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the enforcement of creditors’ rights
generally and by limitations on the availability of specific performance and
other equitable remedies against CEPHEID.


 


(c)           CEPHEID’s
execution of this Agreement does not constitute a breach or default under any
contract, instrument or agreement to which CEPHEID or any of its Affiliates is
a party or by which CEPHEID or any of its Affiliates is bound.


 


(d)           All
Persons who will execute this Agreement on behalf of CEPHEID have been duly
authorized to do so by all necessary action on the part of CEPHEID.


 


10.2        Representations
and Warranties of Roche.  Roche
hereby represents and warrants to CEPHEID as follows:


 


21

















 


(a)           Roche
has the full power and right to grant to CEPHEID and CEPHEID’s Affiliates the
licenses set forth in Section 2.1.


 


(b)           Appendix
1 constitutes the list of all selected U.S. patents and representative corresponding
published European patent or application, owned by Roche, in whole or in part,
as of the Effective Date, claiming inventions for PCR subject to the terms,
conditions and limitations of this Agreement and as selected by CEPHEID.
CEPHEID, its Affiliates, Distributors and End-Users shall be immune from any
suit for infringement of any Roche patent right that would constitute an
intentional failure by Roche of this representation and warranty.


 


(c)           The
execution, delivery and performance of, and the consummation by Roche of the
transactions contemplated by, this Agreement have been duly authorized by all
necessary action on the part of Roche, and no further consents by Roche are
needed in order to consummate the transactions contemplated hereby.


 


(d)           This
Agreement, when executed and delivered by CEPHEID in accordance with the
provisions hereof, shall be a legal, valid and binding obligation of Roche,
enforceable against Roche in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the enforcement of creditors’ rights
generally and by limitations on the availability of specific performance and
other equitable remedies against Roche.


 


(e)           Roche’s
execution of this Agreement shall not constitute a breach or default under any
contract, instrument or agreement to which Roche or any of its Affiliates is a
party or by which Roche or any of its Affiliates is bound.


 


(f)            All
Persons who will execute this Agreement on behalf of Roche have been duly
authorized to do so by all necessary action on the part of Roche.


 


10.3        No
Representation or Warranty as to Validity of Patents.  Roche hereby disclaims any representation or
warranty, express or implied, as to the validity of the Licensed Patents or as
to whether CEPHEID in practicing the PCR claimed in such Licensed Patents for
the purposes licensed hereunder will be free from any infringement of the
intellectual property rights of any Third Party.


 


10.4        No
Other Representations or Warranties. 
Except as otherwise expressly set forth herein, the Parties make no
other representation or warranty, express or implied, with regard to PCR or any
other matter hereunder whatsoever.


 


ARTICLE 11



DISPUTE RESOLUTION


 


11.1        Good
Faith Resolution.  The Parties shall
attempt to settle amicably by good faith discussions any dispute or
disagreement between them relating to or arising out of any provision of this
Agreement. If the Parties are unable to resolve the dispute or disagreement by
such


 


22

















 


discussions, then the Parties shall refer the dispute or disagreement
for resolution to the following designated officers (or their designees) of the
Parties:


 


	
  For
  CEPHEID:

  	
   

  	
  Vice
  President, General Counsel

  
	
   

  	
   

  	
   

  
	
  For
  Roche:

  	
   

  	
  President,
  Roche Molecular Systems, Inc.

  



 


The Parties further
acknowledge that Roche/Basel and Roche/USA shall be treated as a single Party
in any dispute resolution proceeding.


 


11.2        Arbitration.  If the Parties are unable to resolve such
dispute or disagreement within thirty (30) days after the referral of such
dispute or disagreement to their designated officers, then such dispute or
disagreement shall be arbitrated by final and binding arbitration pursuant to
the Rules of Conciliation and Arbitration of the International Chamber of
Commerce (Paris) as hereinafter provided:


 


(a)           The
arbitration tribunal shall consist of one (1) or three (3) arbitrators. If the
Parties cannot agree on one (1) arbitrator each Party shall nominate in the
request for arbitration and the answer thereto one (1) arbitrator, and the two
(2) arbitrators so named will then jointly appoint a third neutral arbitrator
as chairman of the arbitration tribunal. If one Party fails to nominate an
arbitrator or, if the Parties’ arbitrators cannot agree on the person to be
named as chairman within sixty (60) days, the court of arbitration of the
International Chamber of Commerce shall make the necessary appointments for
arbitrator or chairman.


 


(b)           The
arbitration proceedings shall be held in the English language. The place of
arbitration shall be Zurich (Switzerland).


 


11.3        Continuation
of Payment Obligations.  Except as
to any amounts specifically in dispute (“Disputed
Amounts”) in any arbitration proceeding, the obligations of CEPHEID
to pay any and all royalties and other consideration due and payable hereunder
shall remain in effect notwithstanding the institution of such arbitration.
Payment obligations with respect to Disputed Amounts shall be stayed during the
pendency of the arbitration.


 


ARTICLE 12



CONFIDENTIALITY


 


12.1        Confidential
Information Defined.  As used herein
the term “Confidential Information”
means all information and documentation of either Party disclosed to or
accessed by the other Party in connection with this Agreement, including (1)
all non-public information of either Party relating to such Party’s customers,
suppliers, contractors and other third Persons identified as confidential by a
legend on the face thereof prior to disclosure to the other Party, (2) all
non-public information regarding the Licensed Products or documentation which
has been identified as confidential by a legend prominently displayed on the
face thereof prior to that material being made available to the other Party,
(3) any other non-public information which is proprietary to either Party and
which has been identified as confidential by a legend prominently displayed on
the face thereof prior to that material being made available to the other
Party, (4)


 


23

















 


the terms of this Agreement and (5) any information developed by
reference to or use of either Party’s Confidential Information; provided,
however, that except to the extent otherwise provided by law, the term “Confidential
Information” shall not include information that (a) is independently developed
or conceived by the recipient, as demonstrated by the recipient’s written
records, without reference to the disclosing Party’s Confidential Information,
(b) is or becomes commonly known to persons engaged in the relevant industry
(other than through unauthorized disclosure by the recipient), (c) is already
known by the recipient at the time of disclosure, as demonstrated by the
recipient’s written records, and with respect to which the recipient has no
obligation of confidentiality (other than pursuant to this Agreement or any
other agreements between the Parties), or (d) is disclosed to the recipient by
a source other than the disclosing Party, provided that such source is not
known by the recipient to be prohibited from providing the information to the
recipient by a confidentiality agreement with the disclosing Party or any other
Person.


 


12.2        General
Confidentiality Obligations.


 


(a)           Except as expressly
provided otherwise herein, each Party shall, during the Term and for five (5)
years thereafter, use all commercially reasonable efforts to (i) keep
confidential all Confidential Information of the other Party, (ii) use such
Confidential Information only in connection with and as contemplated by this
Agreement, (iii) not make any commercial use of such Confidential Information
for the benefit of itself or any third Person beyond the scope of this
Agreement, and (iv) except where
required by law or by order of any court or government authority, not make any
such Confidential Information, or parts thereof, available to any third Person.


 


(b)           In
the event a Party is obliged to disclose Confidential Information of the other
Party by law, statute or court order, such Party shall (1) only disclose the
Confidential Information required to be disclosed, inform the recipient of the
Confidential Information that the information released is confidential and use
all commercially reasonable endeavors to ensure that the information is kept
confidential by such recipient, and (2) promptly notify the other Party prior
to the release of the Confidential Information specifying the information to be
disclosed, the intended recipient of the information and the circumstances
giving rise to the duty to disclose it.


 


12.3        Return
of Confidential Information.


 


(a)           Upon
termination of this Agreement for any reason, each Party shall, upon request by
the other Party, return to the other Party all Confidential Information of the
other Party, including all copies thereof, under its possession or control or
under the possession or control of its Affiliates, or destroy or purge its own
systems and files, and cause the purging of its Affiliates’ systems and files,
of any such Confidential Information and deliver to the other Party a written
confirmation that such destruction and purging have been carried out.


 


(b)           Notwithstanding
Section 12.3(a), upon termination of this Agreement for any reason, each Party
shall have the right to retain in its possession Confidential Information of
the other Party that is reasonably necessary to perform any of the first
Party’s obligations hereunder that survive such termination, but only for as
long as strictly necessary for performing


 


24

















 


such obligations. Such Party shall promptly return or destroy and purge
such retained Confidential Information in accordance with Section 12.3(a) after
such obligations shall have been fully performed and shall deliver to the other
Party a written confirmation that such destruction and purging have been
carried out.


 


12.4        Irreparable
Injury.  Each Party acknowledges
that in the event of any breach of this Article 12 by a Party, the
non-breaching Party may suffer irreparable injury not fully compensable by
money damages and for which such Party will not have an adequate remedy
available at law. The non-breaching Party shall be entitled to seek such
injunctive or other equitable relief to prevent or curtail any such breach,
threatened or actual. The foregoing shall be in addition to and without
prejudice to such other rights as the non-breaching Party may have under this
Agreement or by applicable law.


 


12.5        Legends.  Each Party agrees that it will not remove,
deface or obscure, any statutory copyright notice or other notice,
identification or evidence of confidentiality contained on or included in any
of the Confidential Information. Each Party shall reproduce any such notice or
identification on any reproduction or modification of any of the Confidential
Information and shall add any Label License, statutory copyright notice,
confidentiality notice or other evidence of confidentiality to the Confidential
Information upon request by the other Party.


 


12.6        Cooperation.  Each Party agrees that, either upon learning
of, or upon a showing by the other Party of, any threatened or actual breach of
any of the provisions of this Article 12 or of any threatened or actual
unauthorized use or disclosure of the Confidential Information of the other
Party by its officers, directors, employees, agents or subcontractors, or in
the event of any loss of, or inability to account for, any of the Confidential
Information of the other Party or any such information or materials, the Party
learning of the threatened or actual breach or the unauthorized disclosure
shall notify the other Party thereof and shall cooperate as reasonably
requested by the other Party in conjunction with the other Party’s efforts to
seek appropriate injunctive relief or otherwise to prevent or curtail such
threatened or actual breach or unauthorized use or disclosure or to recover
such Confidential Information.


 


12.7        CEPHEID’s
Responsibility For CEPHEID Sellers. 
CEPHEID shall ensure that each CEPHEID Seller fully meets in all
respects the confidentiality obligations set forth in this Article 12 with
respect to Roche’s Confidential Information (including, as may be applicable,
the obligation to return to Roche its Confidential Information as set forth
herein). CEPHEID agrees that it shall be jointly and severally responsible for
any material breach by any of the CEPHEID Sellers of any such confidentiality
obligations.


 


ARTICLE 13


 


MISCELLANEOUS


 


13.1        Relationship
of the Parties.  Nothing in this
Agreement is intended or shall be deemed to constitute a partnership, agency,
franchise or joint venture relationship between or among the Parties hereto.


 


25

















 


13.2        Applicable
Law.  This Agreement shall be
governed by, interpreted and construed in accordance with the laws of
Switzerland.


 


13.3        Counterparts.  This Agreement may be executed
simultaneously in any number of counterparts and may be executed by facsimile.
Any single counterpart or set of counterparts signed in either case by all of
the Parties hereto shall constitute a full and binding Agreement for all
purposes.


 


13.4        Notices.  In any case where any notice or other
communication is required or permitted to be given hereunder, such notice or
communication shall be in writing and deemed to have been duly given and
delivered: (a) if delivered in person, on the date of such delivery, (b) if
sent by confirmed facsimile transmission (with answer back received), on the
date of such facsimile transmission, or (c) if sent by overnight express or
registered or certified mail (with return receipt requested), on the date of
receipt of such mail, and shall be sent to
the following address (or such other address as such Party may designate
from time to time in writing):


 


If to CEPHEID, to each of
the following:


 


Cepheid

904 Caribbean Drive

Sunnyvale, California 94089-1189

Attention: VP, General Counsel

Telephone: 408-541-4191

Facsimile: 408-541-4192


 


If to Roche, to each and all
of the following:


 


F.
Hoffmann-La Roche Ltd

Urenzacherstrasse 124

CH-4070 Basel, Switzerland

Attention: Corporate Law Department

Telephone: +41 61-688-5974

Facsimile: +41 61-688-1396


 


Roche
Molecular Systems, Inc.

4300 Hacienda Drive

Pleasanton, California 94588

Attention: President

Telephone: 925-730-8250

Facsimile: 925-225-0369


 


Roche
Molecular Systems, Inc.

1145 Atlantic Avenue

Alameda, California 94501

Attention: Licensing Department

Telephone: 510-814-2823

Facsimile: 510-814-2763


 


26

















 


Roche
Molecular Systems, Inc.

1145 Atlantic Avenue

Alameda, California 94501

Attention: General Counsel

Telephone: 510-814-2898

Facsimile: 510-814-2956


 


13.5        Applicable
Legal Requirements.  CEPHEID shall
be responsible for obtaining and maintaining all necessary approvals of
governmental agencies and authorities which may be required for the
manufacture, use or Sale of Licensed Products by CEPHEID and the CEPHEID
Sellers or otherwise to permit CEPHEID to enjoy the full benefit of the
licenses granted hereunder.


 


13.6        Force Majeure.  Should any circumstance beyond the
reasonable control of any Party occur which delays or renders impossible the
performance of its obligations under this Agreement on the dates herein
provided, such obligation shall be postponed for such time as such performance
necessarily has had to be suspended or delayed on account thereof, provided
such Party shall notify the other Party in writing as soon as practicable, but
in no event more than thirty (30) days after the occurrence of such force
majeure. In either such event, the Parties shall meet promptly to determine an
equitable solution to the effects of any such event, provided that any Party
who fails because of force majeure to perform its obligations hereunder will
upon the cessation of the force majeure take all reasonable steps within its
power to resume with the least possible delay compliance with its obligations.
Events of force majeure shall include, without limitation, war, revolution, invasion, insurrection, riots, mob violence,
sabotage or other civil disorders, acts of God, strikes or other labor
disputes, acts, laws, regulations or rules of any government or governmental
agency, limitations imposed by exchange control regulations or foreign
investment regulations or similar regulations.


 


13.7        Binding
Effect; Assignment.  Neither CEPHEID
nor Roche may assign or transfer (whether by merger, operation of law or in any
other manner) any of its rights or delegate any of its obligations under this
Agreement without the express prior written consent of the other Party;
provided that, without limitation of or breaching this Section 13.7: (i) a
Party may assign or transfer any of its rights or delegate any of its
obligations under this Agreement, in whole or in part, to any of its
Affiliates, without the consent of the other Party, but without relieving the
delegating Party from the responsibility for performance of any of such
obligations, and (ii) a Party may assign or transfer its rights or delegate its
duties and obligations (in whole and not in part) under this Agreement to any
Person which acquires all, or substantially all, of its assets and/or business,
without the consent of the other Party, provided that such assignee or
transferee duly and effectively assumes all of the obligations of the assigning
or transferring Party hereby by an instrument reasonably satisfactory to the
other Party, and provided further, that in the case of CEPHEID’s assignee or
transferee, such assignee or transferee shall be approved in writing by Roche
(in its discretion) prior to such assignment or transfer. Any assignment or
transfer in violation of the provisions of this section shall be void and shall
constitute a material breach of this Agreement. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of each Party’s
respective permitted successors and permitted assigns.


 


27

















 


13.8        Entire
Agreement.  This Agreement, the
Appendixes appended hereto embody and constitute the entire understanding
between the Parties with respect to the transactions contemplated herein and
therein and supersedes all previous communications between or among the Parties
with respect to the subject matter of this Agreement. No Party has entered into
this Agreement in reliance upon any representation, warranty, covenant or
undertaking of the other Party that is not set out or referred to in this
Agreement. Neither this Agreement nor any provision hereof may be waived,
modified, amended, discharged or terminated except by an instrument signed by the
Party against whom the enforcement of
such waiver, modification, amendment, discharge or termination is sought,
and then only to the extent set forth in such instrument.


 


13.9        Appendixes.  Each Appendix attached hereto is
incorporated by reference and made a part of this Agreement.


 


13.10      Severability.  If any provision of this Agreement is held
to be illegal, invalid or unenforceable in a final, unappealable order or
judgment or under any present or future law (such provision to be hereinafter
referred to as an “Invalid Provision”), then such Invalid Provision shall be
severed from this Agreement and shall be rendered inoperative. The Parties
shall promptly negotiate in good faith a lawful, valid and enforceable
provision that is as similar in terms to such Invalid Provision as may be
possible while giving effect to the future benefits and burdens accruing to the
Parties hereunder; and the remaining provisions of this Agreement shall remain
binding on the Parties hereto. In the event that the Parties cannot agree on a
provision to replace an Invalid Provision, then the Parties shall submit such
disagreement for resolution in accordance with the procedures set forth in
Article 11 above. It is expressly agreed by the Parties that amounts previously
paid by one Party to the other Party under this Agreement shall not be
recoverable to the paying Party as part of the replacement of an Invalid
Provision unless this Agreement is invalidated within one (1) year from the
Effective Date.


 


13.11      Headings.  The descriptive headings of the several
articles and sections of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.


 


13.12      No
Waiver of Rights.  No failure or
delay on the part of either Party in the exercise of any power or right
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right or power hereunder shall operate as a waiver of such right or of any
other right or power. The waiver by any Party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach hereunder.


 


13.13      Publicity
and Confidentiality.  Each Party and
its Affiliates shall maintain the confidentiality of all provisions of this
Agreement and neither Party nor any of its Affiliates shall make any public
announcement of or otherwise disclose to any Third Party this Agreement or any
of its terms without the prior written consent of the other Party, except that
a Party may disclose such information as may have entered into the public
domain through no fault of the receiving Party or as required by any applicable
law or regulation based upon the written advice of counsel and then only with
prior notice to the other Party as far in advance as reasonably possible and with
reasonable consideration to the advice of the other Party as to how such
disclosure could be modified to conform with applicable laws and regulations
and still protect the confidentiality interests of the affected Party.
Notwithstanding the foregoing, Roche may


 


28

















 


disclose to prior product licensees in the In Vitro Human Diagnostics
Field, either by way of a summary or by reproduction of selected pages of this
Agreement, those terms of this Agreement as Roche in its sole discretion deems
necessary and appropriate for Roche to comply with “most favored licensee”
provisions in said prior licensees’ agreements. The Parties further agree that
in the event that any Party wishes to prepare and publicly disseminate a press
release announcing the grant of rights referenced herein, such Party shall
provide the other Party a written draft of such release at least fifteen (15)
days prior to the intended date of release, and the other Party shall have the
right to make reasonable modifications to such press release during such
fifteen (15) day review period.


 


13.14      No
Third Party Rights.  Except as
expressly contemplated by this Agreement, this Agreement shall not be deemed or
construed in any way to result in the creation of any rights or obligations in
any Third Party.


 


13.15      Rights
of and Performance by Affiliates. 
To the extent that any term or provision of this Agreement grants rights
to or contemplates, permits or requires performance by any Affiliate of a Party,
such Affiliate shall be considered to be an intended third party beneficiary of
this Agreement and such Party shall use reasonable efforts to cause such
Affiliate to perform each and every obligation under this Agreement in
accordance with the terms and conditions hereof.


 


13.16      Sales
Tax.  In the event any sales, use or
similar tax (if any) is required to be collected or paid in connection with the
transactions or matters contemplated by this Agreement, CEPHEID shall pay the
same and hold Roche harmless with respect thereto.


 


13.17      Usage.  Wherever any provision of this Agreement
uses the term “including” (or “includes”), such term shall be deemed to mean
“including without limitation” and “including but not limited to” (or “includes
without limitation” and “includes but is not limited to”) regardless of whether
the words “without limitation” or “but not limited to” actually follow the term
“including” (or “includes”).


 


13.18      English
Language.  The English language
version of this Agreement shall be controlling, notwithstanding any translation
thereof into another language.


 


IN WITNESS
WHEREOF, the Parties
hereto have caused this Agreement to be executed by their duly authorized
officers effective as of the Effective Date.


 


 


	
  CEPHEID

  	
   

  	
  ROCHE MOLECULAR SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  F. HOFFMANN-LA ROCHE LTD

  	
   

  	
   

  
							



 


29

















 


	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
							



 


30

















 


APPENDIX 1


 


	
  U.S. Patent

  	
   

  	
  Corresponding
  EP Patent

  
	
  4,683,195 - Issued:
  July 28, 1987

  Process for Amplifying, Detecting, and/or Cloning Nucleic Acid Sequences

  	
   

  	
  EP 0 200 362

  
	
   

  	
   

  	
   

  
	
  6,040,166 - Issued:
  March 21, 2000

  Kits for Amplifying and Detecting Nucleic Acid Sequences, Including a Probe

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6,197,563 - Issued:
  March 6, 2001

  Kits for Amplifying and Detecting Nucleic Acid Sequences

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6,514,736 - Issued
  February 4, 2003

  Kits for Amplifying and Detecting Nucleic Acid Sequences

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4,683,202 - Issued:
  July 28, 1987

  Process for Amplifying Nucleic Acid Sequences

  	
   

  	
  EP 0 201 184

  
	
   

  	
   

  	
   

  
	
  4,96.5,188 - Issued:
  October 23, 1990

  Process for Amplifying, Detecting, and/or Cloning NA Sequences Using a
  Thermostable Enzyme

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5,219,727 - Issued: June
  15, 1993

  Quantitation of Nucleic Acids Using the Polymerase Chain Reaction

  	
   

  	
  EP 0 497 784

  
	
   

  	
   

  	
   

  
	
  5,476,774 - Issued:
  December 19, 1995

  Quantitation of Nucleic Acid Using the Polymerase Chain Reaction

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5,322.770 - Issued:
  June 21, 1994

  Reverse Transcription with Thermostable DNA Polymerases

  	
   

  	
  EP 0 506 889

  
	
   

  	
   

  	
   

  
	
  5,641,864 - Issued:
  June 24, 1997

  Kits for High Temperature Reverse Transcription of RNA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5,407.800 - Issued:
  April 18, 1995

  Reverse Transcription With Thermus thermophilus Polymerase

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5,310,652 - Issued: May
  10, 1994

  Reverse Transcription With Thermostable DNA Polymerase

  	
   

  	
   

  



 


31

















 


APPENDIX 1


 


	
  U.S.
  Patent No. 5,057,410

  	
   

  	
  Chimeric
  Messenger RNA Detection Methods

  
	
   

  	
   

  	
   

  
	
  LS.
  Patent No. 5,176,995

  	
   

  	
  Detection
  of Viruses by Amplification and Hybridization

  
	
   

  	
   

  	
   

  
	
  U.S.
  Patent No. 5,210,015

  	
   

  	
  Homogeneous
  Assay System Using the Nuclease Activity of a Nucleic Acid Polymerase

  
	
   

  	
   

  	
   

  
	
  U.S.
  Patent No. 5,389,512

  	
   

  	
  Method
  for Determining the Relative Amount of a Viral Nucleic Acid Segment in a
  Sample by the Polymerase Chain Reaction

  
	
   

  	
   

  	
   

  
	
  U.S.
  Patent No. 5,487,972

  	
   

  	
  Nucleic
  Acid Detection by the 5’-3’ Exonuclease Activity of Polymerases Acting on
  Adjacently Hybridized Oligonucleotides

  
	
   

  	
   

  	
   

  
	
  U.S.
  Patent No. 5,804,375

  	
   

  	
  Reaction
  Mixtures for Detection of Target Nucleic Acids

  



 


32

















 


APPENDIX 2        SUMMARY
ROYALTY REPORT FOR THE PERIOD
                                    
TO
                                    


 


	
  Royalties
  to Roche/Basel for Sales in Europe

  	
   

  	
  Royalty
  Rate(s): [***] to 12/31/05, [***] thereafter

  



 


	
  Licensee: Cepheid

  	
   

  	
  Contract No:
  12242

  	
   

  	
  Effective Date:
  July 1, 2004

  



 


	
  Royalty Product

  	
   

  	
  Number of

  Product Units

  Sold or

  Transferred

  	
   

  	
  Cumulative

  Gross Sales of

  Royalty

  Product

  	
   

  	
  Deductions

  Allowed*

  (Explain)

  	
   

  	
  Net Sales

  	
   

  	
  Royalty
  Due

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Check
  here if there were no Sales for this period

  	
   

  	
  Total
  Royalty Earned

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Royalty
  Payment Due

  	
   

  	
   

  



 


 


I hereby certify the information set forth above is
correct and complete with respect to the amounts due under the applicable
license agreement.


 


	
  By:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
  (authorized signature)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name (please print):

  	
   

  	
   

  	
   

  	
   

  	
   

  
										



 


Send
report to: KPMG
Fides, Steinengraben 5, CH-4003 Basel, Switzerland, to the attention of:
Licensing Trustee, Fax: +41 61 286-9401


 


Send
payment to: Credit
Suisse, Basel, Switzerland, Account No. 0504-920654-62, Swift Code:
CRESCHZH80A, IBAN: CH79 0050 4092 0654 6200 0 Reference: Contract No. 12242,
payment period


 


33

















 


APPENDIX 2        SUMMARY
ROYALTY REPORT FOR THE PERIOD
                                    
TO
                                    


 


	
  Royalties
  to Roche/Basel for Sales in Europe

  	
   

  	
  Royalty
  Rate(s): [***] to 12/31/05, [***] thereafter

  



 


	
  Licensee: Cepheid

  	
   

  	
  Contract No:
  12242

  	
   

  	
  Effective Date:
  July 1, 2004

  



 


	
  Royalty Product

  	
   

  	
  Number of

  Product Units

  Sold or

  Transferred

  	
   

  	
  Cumulative

  Gross Sales of

  Royalty

  Product

  	
   

  	
  Deductions

  Allowed*

  (Explain)

  	
   

  	
  Net Sales

  	
   

  	
  Royalty
  Due

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Check
  here if there were no Sales for this period

  	
   

  	
  Total
  Royalty Earned

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Royalty
  Payment Due

  	
   

  	
   

  



 


 


I hereby certify the information set forth above is
correct and complete with respect to the amounts due under the applicable
license agreement.


 


	
  By:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
  (authorized signature)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name (please print):

  	
   

  	
   

  	
   

  	
   

  	
   

  
										



 


Send
report to: KPMG
Fides, Steinengraben 5, CH-4003 Basel, Switzerland, to the attention of:
Licensing Trustee, Fax: +41 61 286-9401


 


Send
payment to: Credit
Suisse, Basel, Switzerland, Account No. 0504-920654-62, Swift Code:
CRESCHZH80A, IBAN: CH79 0050 4092 0654 6200 0 Reference: Contract No. 12242,
payment period


 


34

















 


APPENDIX 2        SUMMARY
ROYALTY REPORT FOR THE PERIOD
                                    
TO                                     


 


	
  Royalties
  to Roche/Basel for Sales in Europe

  	
   

  	
  Royalty
  Rate(s): [***] to 12/31/05, [***] thereafter

  



 


	
  Licensee: Cepheid

  	
   

  	
  Contract No:
  12242

  	
   

  	
  Effective Date:
  July 1, 2004

  



 


	
  Royalty Product

  	
   

  	
  Number of

  Product Units

  Sold or

  Transferred

  	
   

  	
  Cumulative

  Gross Sales of

  Royalty

  Product

  	
   

  	
  Deductions

  Allowed*

  (Explain)

  	
   

  	
  Net Sales

  	
   

  	
  Royalty
  Due

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Check
  here if there were no Sales for this period

  	
   

  	
  Total
  Royalty Earned

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Royalty
  Payment Due

  	
   

  	
   

  



 


 


I hereby certify the information set forth above is
correct and complete with respect to the amounts due under the applicable
license agreement.


 


	
  By:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
  (authorized signature)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name (please print):

  	
   

  	
   

  	
   

  	
   

  	
   

  
										



 


Send
report to: KPMG
Fides, Steinengraben 5, CH-4003 Basel, Switzerland, to the attention of:
Licensing Trustee, Fax: +41 61 286-9401


 


Send
payment to: Credit
Suisse, Basel, Switzerland, Account No. 0504-920654-62, Swift Code: CRESCHZH80A,
IBAN: CH79 0050 4092 0654 6200 0 Reference: Contract No. 12242, payment period


 


35