PERIOD
STARTING ON THE EFFECTIVE DATE, THE EXTRA-KIT AMOUNT IS [ * ].
IN EACH
SUCCESSIVE 12-MONTH PERIOD, THE EXTRA-KIT AMOUNT IS [ * ] THAN IN THE PREVIOUS
12-MONTH PERIOD.
3.7
OPTION FOR [ * ]EXCLUSIVITY. ILLUMINA HAS A [
* ] PERIOD THAT STARTS ON THE EFFECTIVE DATE AND ENDS [ * ] AFTER THE EFFECTIVE
DATE TO PURCHASE [ * ] EXCLUSIVITY.
[ * ]
3
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. "[ * ]" BRACKETED ASTERISKS DENOTE SUCH OMISSIONS.
CONFIDENTIAL
[ * ].
ILLUMINA CAN PURCHASE [ * ] EXCLUSIVITY [ * ].
IF AND WHEN PURCHASED, [
* ] EXCLUSIVITY TERMINATES IF ILLUMINA PURCHASES LESS THAN A ROLLING TWO QUARTER
AVERAGE OF [ * ] WORTH OF COMBIMATRIX PRODUCTS IN ANY QUARTER STARTING FROM THE
TIME [ * ] EXLUSIVITY STARTS AND CONTINUING ON THEREAFTER. ILLUMINA WILL BE
GIVEN THE CHANCE TO MAKE UP ANY SHORTFALL IN PURCHASE WITHIN [ * ] AFTER THE END
OF THE QUARTER IN ORDER TO MAINTAIN [ * ] EXCLUSIVITY.
THIS ADDITIONAL PURCHASE
COUNTS IN THE SHORTFALL ROLLING AVERAGE PERIOD BUT NOT OUTSIDE THE SHORTFALL
ROLLING-AVERAGE PERIOD (I.E., NEXT PERIOD'S ROLLING AVERAGE) - I.E., NO DOUBLE
COUNTING. IF [ * ] EXCLUSIVITY BEGINS DURING A QUARTER, THE [ * ] PURCHASE
MINIMUM WILL BE PRORATED ACCORDINGLY. [ * ]. "[ * ] EXCLUSIVITY" IS DEFINED AS
THE [ * ] OF [ * ] BY COMBIMATRIX TO ILLUMINA AND ITS AFFILIATES AND COMBIMATRIX
NOT ENTERING INTO AGREEMENTS WITH [ * ] WHERE COMBIMATRIX IS A SUPPLIER OF [ * ]
FOR [ * ], WHEREIN THE [ * ] ARE USED IN [ * ] PRODUCTS [ * ].
3.8
AUDIT AND INSPECTION.
ILLUMINA OR ITS
DESIGNEE SHALL HAVE THE RIGHT TO INSPECT, AUDIT AND/OR TEST ALL [ * ] OR
SERVICES ORDERED HEREUNDER, AND THE FACILITIES IN WHICH THEY ARE PRODUCED OR
OFFERED, AT REASONABLE TIMES BEFORE, DURING AND/OR AFTER MANUFACTURE OR
PERFORMANCE AS WELL AS AFTER DELIVERY OR PERFORMANCE. IF ANY INSPECTION OR TEST
IS MADE ON COMBIMATRIX'S PREMISES, IT SHALL BE DONE AT A DATE AND TIME MUTUALLY
AGREEABLE, AND ILLUMINA SHALL PROVIDE COMBIMATRIX WITH AT LEAST FIFTEEN (15)
BUSINESS DAYS ADVANCE NOTICE PRIOR TO SUCH INSPECTION. COMBIMATRIX SHALL PROVIDE
REASONABLE FACILITIES AND ASSISTANCE FOR THE SAFETY AND CONVENIENCE OF
ILLUMINA'S INSPECTORS IN SUCH MANNER AS SHALL NOT UNREASONABLY HINDER OR DELAY
COMBIMATRIX'S PERFORMANCE HEREUNDER.
IN THE EVENT OF A NONCONFORMANCE OR AN
ISSUE DURING AN INSPECTION OR AUDIT, ILLUMINA MAY, AT ILLUMINA'S SOLE
DISCRETION, SEND COMBIMATRIX A WRITTEN NOTICE REQUESTING THAT COMBIMATRIX
PROVIDE A WRITTEN CORRECTIVE AND PREVENTATIVE ACTION PLAN TO ILLUMINA (THE
"CORRECTIVE AND PREVENTATIVE ACTION PLAN").
THE CORRECTIVE AND PREVENTATIVE
ACTION PLAN SHALL BE SUBMITTED TO ILLUMINA WITHIN TEN (10) BUSINESS DAYS OF SUCH
NOTICE AND SHALL INCLUDE EITHER (1) A DESCRIPTION OF THE REASONS FOR THE
NON-CONFORMITY OR DEFECT AND THE ACTIONS COMBIMATRIX HAS TAKEN OR WILL TAKE TO
REDUCE THE LIKELIHOOD THAT A SIMILAR