Document:

EXHIBIT 10.60

 

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

 

 

 

 

Research & Development Collaboration
Agreement

 

 

F. Hoffmann-La Roche Ltd.

 

 

and

 

 

Affymetrix, Inc.

 

 

dated

 

 

January 29, 2003

 

 

TABLE OF CONTENTS

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1

  	
  Statement
  of Purpose

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2

  	
  Common Terms and
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3

  	
  Management

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4

  	
  Project Proposals
  and Implementation

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5

  	
  Projects for
  Diagnostic Products

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6

  	
  Market Development
  Activities.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7

  	
  Performance
  of Collaboration Projects for Instrumentation and Other Products

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8

  	
  License Grants

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9

  	
  General Applicable
  Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10

  	
  Warranty
  Disclaimers

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11

  	
  Infringement, Indemnity,
  Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12

  	
  Term
  and Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13

  	
  Limitation
  of Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 14

  	
  No
  Implied Obligations

  	
   

  

 

2

 

RESEARCH & DEVELOPMENT COLLABORATION AGREEMENT

January 29, 2003

 

THIS RESEARCH & DEVELOPMENT
COLLABORATION AGREEMENT (“Agreement”) is effective as of the date first written
above (the “Effective Date”) between F. Hoffmann-La Roche Ltd. (“Roche”)
and Affymetrix, Inc., a Delaware corporation (“Affymetrix”).

R E C I T A L S

A.            The Parties desire
to collaborate (the “Collaboration” as more specifically defined in the
“Common Terms Agreement” dated as of even date herewith, between
Affymetrix and Roche) in the development and commercialization of diagnostic
products in connection with and in the field of DNA chip technology and in the
development of certain instrumentation and related software for use with
microarrays using Affymetrix Technology. 
In connection with such Collaboration, the Parties are entering into the
Collaboration Agreements.

B.            Pursuant to the
Collaboration, the Parties desire that Affymetrix, upon Roche’s request in accordance
with the terms of this Agreement, shall undertake mutually agreed research and
development projects, in collaboration with Roche, focusing on the development
and validation of specific Diagnostic Products for Diagnostic Use.

C.            The Parties further desire
that Roche (and/or its Affiliates), pursuant to the Collaboration, will
undertake research and development activities in collaboration with Affymetrix
to develop instrumentation for use with Arrays which shall have a cost and
throughput which makes feasible the widespread use of such instrumentation by
Customers and other purchasers of Diagnostic Products.  The Parties also contemplate that they may
undertake related collaborative research and development activities to develop
improved chip packaging based on Affymetrix’ Existing Technology as well as
analytical software for use with Roche’s instruments.

D.            In connection with
such research and development projects, the Parties will combine certain of
their scientific, intellectual property, development and financial resources as
specified herein and under the Collaboration Agreements, to (i) facilitate the
development of such specific Diagnostic Products for Diagnostic Use, which
Diagnostic Products will be commercialized as described in the Collaboration
Agreements; and (ii) to facilitate the development by the Parties of
instrumentation for use with Arrays and such improved chip packaging and
analytical software for use with such instruments.

E.             The Parties intend
that the research and development goals and the responsibilities for any given
research and development project pursuant to this Agreement shall be formulated
by the Parties on a project-by-project basis, and that all research and
development activities between the Parties shall be governed by and conducted
in accordance with the terms and conditions set forth in this Agreement,
subject to any express modifications made in a Project Plan.

 

3

 

A G R E E M E N T

NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants, promises and undertakings set forth herein,
the Parties agree as follows:

Section 1                                             Statement of Purpose

 

The Parties wish to pursue collaborative
activities in the development and commercialization of Diagnostic Products,
chip packaging, instrumentation and related software in connection with and in
the field of DNA chip technology.  This
Agreement, together with the Collaboration Agreements, provides the terms,
conditions and covenants which will govern their relationship for purposes of
such research and development, both with respect to specifically identified
projects and general cooperative research and development undertakings.

Section 2                                             Common Terms and Definitions

 

2.1           Common
Terms

(a)            All capitalized terms not otherwise
defined herein shall have the meanings set forth in the Common Terms Agreement.

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

2.2           Definitions

(a)            “Hosted Employees” means, as applicable, employees
of either Affymetrix or Roche, or their respective Affiliates, who are invited
to participate in research, development or other activities located at the
other Party’s or its Affiliate’s facilities and who participate in such
activities. “Hosted Employees” means all Hosted Employees, Affymetrix’ Hosted
Employees or Roche’s Hosted Employees, as the context may require.

(b)           “Jointly-Owned IP” shall have the meaning set forth
in Section 9.3(a).

(c)            “Project Managers” means those individuals so
designated in accordance with Section 3.2.

(d)           “Standard Fully Loaded FTE” means (i) [***], such as [***], incurred in a period related to an
activity plus (ii) [***] (i.e., [***] and [***]), plus [***], [***] and [***] for the equivalent number of full-time
employees in a 12-month period (with the portion of a full-time equivalent year
devoted by an employee to the Collaboration determined by dividing the number
of days during any 12-month period devoted by such employee to the
Collaboration by the total number of working days during the 12-month period,
with appropriate proportional adjustment for normal vacation and holiday days).

4

 

Section 3                                             Management

 

3.1           Joint
Research Management Committee.  The
Parties shall establish and maintain a Joint Research Management Committee (the
“Joint Research Management Committee” or “JRMC”) in accordance
with the following provisions:

(a)            The JRMC shall consist of six members, three members to
be appointed by each of Affymetrix and Roche, with one of the three designated
each Party’s JRMC primary contact (a “Primary Contact”).  Each Party may, with notice to the other
Party, replace any of its members serving on the JRMC.  The Parties shall designate their respective
members within ten (10) days of the Effective Date.  The JRMC shall propose recommendations to the Parties regarding
the Project Plans.  All recommendations
of the JRMC shall be made unanimously. 
No chairperson shall be appointed and each member of the JRMC shall have
only one vote.

(b)           The JRMC shall be responsible for negotiating, preparing,
executing, implementing, managing and reviewing compliance with the Project
Plans and shall in particular: (i) evaluate projects proposed by either Party
and make recommendations to the Parties regarding projects selected for
approval; (ii) negotiate, prepare and execute Project Plans, including, without
limitation, schedules of work and budgets for each such Project Plan; (iii)
review and propose amendments to the Project Plans from time to time in such
manner as may be appropriate; (iv) monitor progress of the Project Plans; (v)
report regularly to the Executive Representatives of the Parties upon the
progress of the Project Plans; and (vi) via each Party’s Primary Contact, be
the initial medium for transfer of information between the Parties regarding
current or proposed projects.

3.2           Appointment
of Managers.  Each Party will
designate Project Managers to represent and lead that Party in the day-to-day
activities associated with each project undertaken pursuant to this Agreement
or a Project Plan.  The Project Managers
will lead their respective development teams in the day-to-day development work
to be performed under the Agreement, including: planning and coordination of
all technical efforts; reviewing and responding to proposals presented by the
other Party’s Project Managers; helping in the preparation of Project Plans;
reporting to the JRMC; and working together to resolve any conflicts that may
arise in connection with a project. 
Either Party may change its Project Managers upon written notice to the
other Party, but, as with their Executive Representatives, the Parties agree to
exercise this right with restraint to help ensure reasonable continuity in
management of the relationship.

3.3           JRMC
Meetings

(a)            The JRMC shall meet as needed at any time upon the
reasonable request of either Party during the term of the Project Plans, and in
any event no less frequently than quarterly, to review the current status of
the Collaboration, to consider potential additional areas of cooperation, and
to resolve any escalations.  The Project
Managers will assist the Primary Contacts in the preparation of agendas for the
JRMC meetings.  Additionally, the
Project Managers will present information concerning progress on areas of
Collaboration as requested by the JRMC, as well as provide input on potential
areas for future cooperation between the Parties.

5

 

(b)           Unless otherwise agreed by the Parties, all meetings of
the JRMC shall be held by teleconference or in person in Alameda or Santa Clara
Counties, California or as may be otherwise agreed.  Meetings shall be scheduled with at least thirty (30) day’s notice
(provided that conference calls may be scheduled with at least fifteen (15)
day’s notice); the Primary Contact of the Party that seeks to convene a
particular meeting shall be responsible for the meeting notice and scheduling.  The quorum for JRMC meetings shall be at
least two members from each Party.

3.4           Technical
Reports and Access to Information. 
Each Party will keep and maintain adequate records containing technical
and laboratory data generated in the course of the performance of such Party’s
responsibilities under the Project Plans to enable it to furnish complete and
accurate information to the other Party regarding such Project Plans activities
and results.  Each Party shall provide
reasonably-detailed written reports describing the results of the development
work performed by such Party pursuant to the Project Plans.  Such reports shall be delivered to the other
Party at the JRMC meetings within forty-five (45) days following each March 31,
June 30, September 30 and December 31, after commencement of the initial
project plan, or at such other time(s) as the JRMC requires.  Without limiting the foregoing, each Party
agrees to provide the other Party reasonable access to appropriate data and
information relating to the Collaboration hereunder, and to give required
notices and to respond to inquiries in a reasonable timeframe in order to
facilitate the timely completion of the Project Plans contemplated herein.

Section 4                                             Project Proposals and Implementation

 

4.1           Proposal
and Evaluation of Projects.  Either
Party may, from time to time, deliver to the JRMC a non-binding proposal
regarding an area of cooperation between the Parties.  Such proposal shall be in writing and shall be sent by the
proposing Party to the JRMC and the other Party’s Executive Representative.  The JRMC shall promptly evaluate the
proposal in good faith and the Parties shall mutually agree whether to proceed
with such proposal based on the recommendation of the JRMC.

4.2           Implementation
of Projects.  In the event that the
Parties agree to pursue a proposed area of cooperation, the JRMC shall proceed
in good faith to negotiate, prepare and document the cooperative undertaking in
a Project Plan according to the processes set out in this Agreement.  It shall be the responsibility of the JRMC
in consultation with the Project Managers of the Parties to negotiate, prepare,
agree to and execute Project Plans prior to initiation of proposed
projects.  The Project Managers shall
cooperate and consult with the JRMC in good faith to prepare Project Plan(s) as
appropriate for the activities contemplated by the Parties under this
Agreement.  The Project Managers and/or
the JRMC may associate such other personnel as they or it may deem desirable in
connection with negotiation, preparation and agreement of Project Plans and
may, from time to time, add to, delete from and/or modify the Project Plans as
agreed.

4.3           Hosted
Employees.  During the course of the
relationship established by this Agreement, it is anticipated that the Parties
may choose to allow Hosted Employees to visit and/or work on the Parties’ or
their respective Affiliates’ respective premises.  Each Hosted Employee shall retain his or her status as an
employee of his or her respective company while

6

 

assigned to work at the hosting Party’s premises.  Each assigning Party shall have sole and
exclusive discretion and control in selecting those of its employees assigned
as Hosted Employees, but shall exercise such discretion and control in good
faith and with the goal of providing competent and productive personnel capable
of promoting and advancing the objectives of the particular assignment.

4.4           Responsibility
for Hosted Employees.  Each Party
shall be solely responsible for all wages and other compensation, and for all
U.S., Swiss or other federal, state, cantonal, local, FICA and other similar
withholding and payments required in connection with all its employees assigned
as Hosted Employees at the other Party’s or its Affiliates’ facilities and
shall defend, indemnify and hold the hosting Party harmless from and against
any claim or liability which may accrue as a result of any failure to pay or
withhold any of the foregoing.  Each
Party shall maintain insurance or, if applicable, shall adequately self insure
to protect itself and the hosting Party from claims: (i) by its employees
assigned as Hosted Employees under workers’ compensation, disability acts and
similar laws; (ii) for damages because of bodily injury, disease or death of
any such Hosted Employee or of any other person that arise out of any negligent
act or omission or willful misconduct of any such Hosted Employee; and
(iii) any property damages arising from negligent acts or omissions or
willful misconduct of any such Hosted Employees.

4.5           Conduct
and Activities of Hosted Employees

(a)            Hosted Employees will observe the working hours, working
rules and holiday schedule of the hosting Party while working at the hosting
Party’s premises.  Each hosting Party
shall have the right to request the replacement of any Hosted Employee for any
reasonable cause.  Upon such a request,
the assigning Party shall recall such disapproved personnel as soon as is
reasonably possible and may replace the disapproved personnel with another
qualified employee.

(b)           Where Hosted Employees are assigned to particular
activities managed by the Project Managers in accordance with this Agreement,
such Project Managers shall jointly coordinate the day-to-day activities of
Hosted Employees; except that, where a Party’s Project Manager is not also a
Hosted Employee (i.e. is not resident at the other Party’s facilities with the
Hosted Employees), the hosting Party’s Project Manager shall coordinate the
day-to-day activities with the assigning Party’s Project Manager.

(c)            The hosting Party shall, at its expense, use reasonable
efforts to supply a suitable work environment, including capital equipment and
supplies reasonably required by Hosted Employees in order to carry out the
purposes of their assignment.

4.6           Compliance
with Laws.  In performing all
research and development projects pursuant to this Agreement, each Party shall
comply with all applicable laws and regulations pertaining to the performance
of its obligations under this Agreement and any Project Plan.

4.7           Performance
of Research & Development Projects. 
Each Party agrees to use its commercially reasonable efforts to faithfully perform and complete the research and
development tasks and related tasks assigned
to it and to cooperate with the other Party as may be mutually agreed
pursuant to Project Plans from time to time.

7

 

Section 5                                             Projects for Diagnostic Products

 

5.1           Performance
of Projects Relating to Diagnostic Products.  Affymetrix, upon Roche’s request in accordance with the terms of
this Agreement, agrees to use its commercially reasonable efforts to perform
research and development projects in collaboration with Roche, pursuant to
mutually agreed Project Plans, focusing on the development and validation of
specific Diagnostic Products for Diagnostic Use, to assist in accordance with
the reasonable request of Roche in conducting clinical trials for such
Diagnostic Products and to assist Roche in seeking Regulatory Approval, at
Roche’s cost, for such Diagnostic Products. 
The research and development goals and responsibilities shall be
formulated by the Parties on a project-by-project basis.  Roche shall own all data and information
resulting from clinical trials and all Regulatory Approvals relating to such
Diagnostic Products, unless otherwise agreed in any Project Plan.

5.2           Payments.  Subject to the terms of applicable Project
Plans, Roche will reimburse Affymetrix for [***], within the budget set forth in the
applicable Project Plan, in connection with the performance of its obligations
under this Section 5, as mutually agreed upon in advance, on a [***] determined annually, together with [***] used in connection with such research
and development, plus [***] on such supplies. 
Affymetrix will submit invoices to Roche on a monthly basis in arrears
for such costs and expenses.  All
amounts shall be stated and paid in U.S. Dollars.  Roche shall make payments to Affymetrix hereunder within sixty (60) days after the date of Affymetrix’
invoice therefor; provided,
however, that if Roche, in good faith, disputes the amount of any invoice line
item, Roche may withhold the payment of the disputed portion upon notice to
Affymetrix within thirty (30) days after receipt of the applicable
invoice, and the Parties shall resolve the dispute in accordance with Section
IV of the Common Terms Agreement.

5.3           Budgetary
Control.  Notwithstanding the terms
and conditions of any Project Plan, Roche shall have [***], to [***] the budgeted level of any Project Plan
within the scope of this Section 5 or to [***] such projects.  Any such [***] or [***] shall be made upon reasonable notice to Affymetrix
not less than thirty (30) days nor 
longer than ninety (90) days. In the event of any such [***] or [***], Roche will [***] Affymetrix [***] of [***] or [***] performance after such [***] or [***] incurred within 180 days of notice of
termination.

Section 6                                             Market Development Activities.

 

6.1           Option.  At Affymetrix’ option, exercisable at any
time during the term of this Agreement upon written notice to Roche, Roche
agrees to use its commercially reasonable efforts to provide the relevant
skills, know-how and human resources as reasonably requested by Affymetrix to
assist Affymetrix to obtain Regulatory Approval of tests for in vitro diagnostic applications being
developed by Affymetrix independently of the Collaboration.  If Affymetrix exercises its option
hereunder:

(a)            the market development goals and responsibilities for any
such assistance shall be formulated by the Parties on a project-by-project
basis and set forth in a written Market Development Plan.

8

 

(b)           Affymetrix will [***] Roche for Roche’s [***] within the [***] as set forth in the Market Development
Plan, in connection with the performance of its obligations under this Section
6, including any [***] Regulatory Approvals, on a [***] determined annually, together with [***] and [***] used in connection with such market
development, plus [***] on such materials and supplies.  All amounts shall be stated and paid in U.S.
Dollars.  Affymetrix shall make payments
to Roche hereunder within sixty (60) days after the date of Roche’s invoice therefor; provided, however, that if Affymetrix, in
good faith, disputes the amount of any invoice line item, Affymetrix may
withhold the payment of the disputed portion upon notice to Roche within thirty
(30) days after receipt of the applicable invoice, and the Parties shall
resolve the dispute in accordance with Section IV of the Common Terms Agreement.

(c)            the Joint Steering Committee will oversee the execution
of the Market Development Plan.

Section 7                                             Performance of Collaboration Projects
for Instrumentation and Other Products

 

7.1           Development
of Instrumentation.  Subject to such
terms as may be agreed between the Parties and set forth in any Project Plan,
Roche (and/or its Affiliates), in its sole discretion, may undertake research
and development activities in collaboration with Affymetrix to develop
instrumentation for use with Arrays which shall have a cost and throughput
which makes feasible the widespread use of such instrumentation by Customers
and other purchasers.  The Parties also
contemplate that they may undertake related collaborative research and
development activities to develop improved chip packaging based on Affymetrix’
Existing Technology and analytical software for use with Roche Instruments, and
that the terms of any such projects shall be detailed in appropriate Project
Plans and/or separate written agreement(s) between the Parties.

7.2           Payments.  Subject to the terms of applicable Project
Plans, Roche will [***] Affymetrix for [***], within the budget set forth in the
applicable Project Plan, in connection with the performance of its obligations
under this Section 7, as mutually agreed upon in advance, on a [***] determined annually, together with [***] used in connection with such research
and development, plus [***] on such supplies. 
All amounts shall be stated and paid in U.S. Dollars.  Roche shall make payments to Affymetrix
hereunder within sixty (60) days after the date of Affymetrix’ invoice therefor; provided, however, that if Roche, in good
faith, disputes the amount of any invoice line item, Roche may withhold the
payment of the disputed portion upon notice to Affymetrix within thirty
(30) days after receipt of the applicable invoice, and the Parties shall
resolve the dispute in accordance with Section IV of the Common Terms
Agreement.

7.3           Budgetary
Control.  Notwithstanding the terms
and conditions of any Project Plan, Roche shall have [***], to [***] the budgeted level of any Project Plan
within the scope of this Section 7 or to [***] such projects.  Any such [***] or [***] shall be made upon reasonable notice to Affymetrix
not less than thirty (30) nor longer than ninety (90) days.  In the event of any such [***] or [***], Roche will [***] Affymetrix [***] of [***] or [***] performance after such [***] or [***] incurred within 180 days of notice of
termination.

9

 

Section 8                                             License Grants.

 

8.1           R&D
License to Affymetrix.  Upon the terms and subject to the
conditions of this Agreement, including the limitations set forth in Section 8.2
below, and subject to any expressly contrary terms in any Project Plan, Roche
hereby grants (to the extent Roche is not prevented under its existing
contracts to license such technology to Affymetrix and its Affiliates) to
Affymetrix and its Affiliates during the term of this Agreement a limited, [***], [***],[***] (except as provided in Section VI(i)
of the Common Terms Agreement), [***], [***] license to use and develop the [***], and [***] thereof, solely as necessary for
purposes of Affymetrix’ (or its Affiliates’) research and development
activities under this Agreement to develop [***] for sale to [***].

8.2           Limitations
on R&D License to Affymetrix. 
The license granted in Section 8.1 is to be used only for [***] activities under this Agreement, and not
for [***].   Nothing in this Agreement shall be
construed to grant Affymetrix or its Affiliates the [***], or any of Affymetrix’ or its
Affiliates’ license rights hereunder, and any such sublicensing is strictly
prohibited.  Affymetrix, on behalf of
itself and its Affiliates, hereby acknowledges that: (i) the rights and
licenses granted by Roche to Affymetrix and its Affiliates are [***], and (ii) nothing in this Agreement
shall limit or restrict Roche’s right to grant similar rights and licenses to
one or more additional persons, firms or entities, or to exercise such rights
itself.

8.3           R&D
License to Roche.  Upon the terms and subject to the conditions
of this Agreement, including the limitations set forth in Section 8.4
below, and subject to any expressly contrary terms in any Project Plan,
Affymetrix hereby grants (to the extent Affymetrix is not prevented under its
existing contracts to license such technology to Roche and its Affiliates) to
Roche and its Affiliates during the term of this Agreement a limited, [***], [***], [***] (except as provided in Section VI(i)
of the Common Terms Agreement), [***], [***] license to use and develop the [***], and [***] thereof, solely as necessary for
purposes of Roche’s (or its Affiliates’) research and development activities
under this Agreement to develop [***] for sale to [***].

8.4           Limitations
on R&D License to Roche.  The
license granted in Section 8.3 is to be used only for [***] activities under this Agreement, and not
for [***].  Nothing in this Agreement shall be construed
to grant Roche or its Affiliates the [***], or any of Roche’s or its Affiliates’
license rights hereunder, and [***] is strictly prohibited.  Roche, on behalf of itself and its
Affiliates, hereby acknowledges that: (i) the rights and licenses granted by
Affymetrix to Roche and its Affiliates are non-exclusive, and (ii) subject to
the provisions of the Collaboration Agreements, this Agreement shall not
otherwise limit or restrict Affymetrix’ right to grant similar rights and
licenses to one or more additional persons, firms or entities, or to exercise
such rights itself.

8.5           Instrument
License to Roche.  Upon the terms and subject to the conditions
of this Agreement, including the limitations set forth in Section 8.6
below, and subject to any expressly contrary terms in any Project Plan,
Affymetrix hereby grants (to the extent Affymetrix is not prevented under its
existing contracts to license such technology to Roche and its Affiliates) to
Roche and its Affiliates during the term of this Agreement a [***], [***], [***], [***] (except as

10

 

provided in Section VI(i) of the Common Terms Agreement), [***], [***] license to [***], [***] incorporating or using [***] and [***] solely for the [***] and [***] of [***] for [***] use with [***] incorporating [***] in accordance with the Collaboration
Agreements.

8.6           Limitations
on Instrument License to Roche. 
Nothing in this Agreement shall be construed to grant Roche or its
Affiliates the right to [***] the [***], or any of Roche’s or its Affiliates’
license rights hereunder, and any such [***] is strictly prohibited.  Roche, on behalf of itself and its
Affiliates, hereby acknowledges that: (i) the rights and licenses granted by
Affymetrix to Roche and its Affiliates are [***], and (ii) subject to the provisions
of the Collaboration Agreements, this Agreement shall not otherwise limit or
restrict Affymetrix’ right to grant similar rights and licenses to one or more
additional persons, firms or entities, or to exercise such rights itself.

Section 9                                             General Applicable Provisions

 

9.1           Application.
The Parties understand and agree that it is generally desirable that the
activities contemplated in this Agreement be governed by Project Plans
negotiated and drafted pursuant to this Agreement whenever practicable.  However, in addition to the Common Terms
Agreement, the Parties wish to set forth below certain provisions, as provided
in Sections 9 through Section 14 hereof, which will govern
and apply as default provisions in the event that the terms of a specific
Project Plan do not encompass such provisions, or in the event that any
activities involving the exchange or development of information and/or
technology occur outside the scope of a Project Plan for any reason (including
that either Party may elect not to establish a Project Plan or that the Parties
may have already exchanged or developed information prior to execution of this
Agreement).  In the event of an
inconsistency between the generally applicable provisions set forth in the
Common Terms Agreement, in Sections 9 through Section 14 of
this Agreement and the terms of a specific Project Plan, the terms set forth in
the Project Plan will supersede these generally applicable articles.

9.2           Title
and Property Rights in Technology.

(a)            Ownership of Intellectual Property.  Unless otherwise expressly agreed between
the parties and set forth in any Project Plan, all right, title and interest in
and to Collaboration IP will be owned as set forth in Section V of
the Common Terms Agreement.

(b)           Licenses Relating to Collaboration IP.  Each Party agrees to grant, and hereby does
grant, to the other Party under such Party’s respective right, title and
interest in and to its Collaboration IP a limited, non-exclusive,
non-sublicensable, non-transferable (except as provided in Section VI(i)
of the Common Terms Agreement), fully paid, royalty-free license to use and
develop Collaboration IP, and Improvements thereof, solely for the development,
manufacture, marketing and sale of Diagnostic Products and/or Diagnostic
Instruments in accordance with the Collaboration Agreements.

9.3           Content.

(a)            Ownership of New Content.  Pursuant to this Agreement, as set forth in

11

 

any Project Plan, the Parties may
agree to develop Content, and thereby create New Content.  Unless otherwise expressly agreed in writing
with respect to a specific Project Plan, any New Content developed by either
Party (whether alone or with any Third Party) pursuant to this Agreement shall
be (i) the exclusive property of Roche if it was developed (whether by
Roche, Affymetrix or a Third Party) pursuant to a Project Plan funded by Roche;
(ii) the exclusive property of Affymetrix if it was developed (whether by
Roche, Affymetrix or a Third Party) pursuant to a Project Plan funded by
Affymetrix; and (iii) if not so developed, the property of the Party that
actually discovered, developed, obtained, licensed or derived such New
Content.  If any such New Content is
developed on a collaborative basis (with both Parties funding and actively
participating in the research and development of such New Content), then such
New Content shall be owned jointly by the Parties (the “Jointly-Owned IP”),
each Party having an undivided and equal co-ownership interest therein, and
each Party hereby agrees to assign and transfer, and hereby assigns and
transfers, to the other Party an undivided and equal co-ownership interest
therein.  As co-owners of such
Jointly-Owned IP, each of the Parties may make, have made, use, import, offer
for sale, sell and otherwise exploit such Jointly-Owned IP, without paying
royalties or accounting to the other Party with respect to royalties or other
revenue received.

(b)           Interests in Content.  Except as otherwise provided in any Collaboration Agreement, in
the event that any New Content owned by Affymetrix or Roche in accordance with
the terms of Section 9.3(a) above embodies or uses inventions
claimed by the Existing Technology, existing Content (as of the Effective Date)
or other previously existing patents held by the other Party, the Party who
holds such rights shall offer the other Party a non-exclusive license (without
any right to sublicense) under such rights on reasonable terms, including
reasonable compensation, to make, have made, use, import, offer to sell and
sell products or to practice processes and methods embodying or using such
inventions as necessary to make, have made, use, import, offer to sell and sell
such New Content.  Subject to any such
rights of the other Party as contemplated herein, and subject to
Section 9.3(c) below, each Party shall have the right to assign its
interests and grant non-exclusive licenses on any terms and conditions that it
desires under such Party’s exclusively-owned New Content and all associated
IPR’s therein and appurtenant thereto, and such Party may retain any
consideration that it may receive therefor without having to account to the
other Party.

(c)            Licenses Relating to New Content.  During the term of this Agreement, each
Party agrees to grant, and hereby does grant, to the other Party under such
Party’s respective right, title and interest in and to its New Content a
limited, non-exclusive, non-sublicensable, non-transferable (except as provided
in Section V(i) of the Common Terms Agreement), fully paid,
royalty-free license to use and develop New Content, and Improvements thereof,
solely as necessary for purposes of the research and development activities
under this Agreement.

9.4           Patent
Applications.  In respect of each
Party’s separately owned Collaboration IP, New Content and other IPR’s, the
owner thereof shall have the right, in its sole discretion, to determine if,
when and where to file patent applications thereon and shall be solely
responsible, in its discretion, for preparing, filing, maintaining and
prosecuting the same worldwide and shall

12

 

bear all related costs.  In the
case of Jointly-Owned IP, the Party whose Existing Technology most
predominantly and closely relates to such Jointly-Owned IP shall have the first
right of election to file patent applications thereon in the United States and
other countries in the Parties’ names as joint owners.  The filing Party shall give prompt notice of
its election to file such patent applications to the non-filing Party.  In each instance, the non-filing Party will
indicate in writing whether it will agree to pay one-half of the reasonable
expenses for preparing, filing, maintaining and prosecuting each joint
application, the issuance of the patent, and such taxes or annuities as may
become due on the issued patent.  The
non-filing Party must indicate its decision in writing within fifteen (15) days
of such notice.  If the non-filing Party
does not agree to assume its share of such expenses, such Party will relinquish
its right, title and interest in and to such application and whatever patent
may issue in the jurisdiction in question subject, however, to retention of a
perpetual, paid-up, nonexclusive, nontransferable option, in favor of the
relinquishing Party and its Affiliates, to obtain a covenant not to sue from
the filing party with respect to any patent that may issue upon payment of a
reasonable arm’s length fee.  In the
event that the filing Party shall determine to abandon, or otherwise not to
prosecute, any jointly owned patent application, or not to maintain, defend or
otherwise renew any jointly owned patent, it shall notify the non-filing Party
thereof, in writing, and such Party shall have the right, at its expense, to
prosecute such application or to take up such maintenance or defense or
prosecute such renewal, as the case may be. 
In such event, the Party exercising its right according to the preceding
sentence shall be deemed the filing Party. 
The process and rights set out in this paragraph shall apply for each
invention constituting Jointly-Owned IP hereunder, and in each country for
which a patent is sought covering such Jointly-Owned IP.

9.5           Technology
Disclosures and Treatment of Disclosed Information.  It is anticipated that the Parties may, at
various times during the term of this Agreement, engage in candid and on-going
exchanges of information and technology. 
The classification and treatment of such information and technology
shall be as set forth in the Common Terms Agreement.

Section 10                                      Warranty Disclaimers

 

10.1         As
Is. All Confidential Information, Existing Technology, Content,
Collaboration IP and New Content, and all associated IPR’s therein and
appurtenant thereto, are provided AS IS, WITH ALL FAULTS and without warranty
of any kind.

10.2         Disclaimer.
EACH PARTY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO
TECHNOLOGY, IPR’s OR GOODS AND SERVICES PROVIDED UNDER THIS AGREEMENT
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF DESIGN, NON-INFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ARISING FROM A COURSE
OF DEALING.

Section 11                                      Infringement, Indemnity, Etc.

 

11.1         Notification
of Infringement. Each Party shall notify the other Party promptly upon
discovery of any material potential or actual infringement by a Third Party of
any IPR’s or proprietary rights in or appurtenant to any technology, materials
or products delivered or developed pursuant to this Agreement or any
unauthorizeddisclosure or use of any Confidential Information and shall provide
any available evidence of such infringement or such unauthorized

13

 

disclosure or use.

11.2         Roche
Actions.  Subject to any expressly
contrary provisions in any Project Plan or as set forth in the Collaboration
Agreements, Roche shall have the exclusive right at its own cost to bring,
defend and maintain any appropriate suit, action or proceeding involving the
infringement of any Roche Technology and to keep and retain for itself any and
all compensation awarded in connection therewith.

11.3         Affymetrix
Actions.  Subject to any expressly
contrary provisions in any Project Plan or as set forth in the Collaboration
Agreements, Affymetrix shall have the exclusive right at its own cost to bring,
defend and maintain any appropriate suit, action or proceeding involving the
infringement of any Affymetrix Technology and to keep and retain for itself any
and all compensation awarded in connection therewith.

11.4         Jointly-Owned
IP.  In the event of any material
potential or actual infringement by a Third Party of any Jointly-Owned IP, the
Parties will confer and agree as to which Party shall bring, defend and
maintain any appropriate suit, action or proceeding in connection therewith and
the other Party shall join in such suit, action or proceeding to the extent
necessary to maintain and prosecute it. 
In the event that the Parties are unable to agree as to which Party
shall bring such suit, action or proceeding, either Party shall be free to
pursue such suit, action or proceeding, and the other Party shall join therein
to the extent necessary to maintain and prosecute it.  In either event, any and all judgments, recoveries or
compensation (e.g., payments on account of past infringement or future
royalties) with respect to Jointly-Owned IP shall be shared equally by the
Parties, after deduction of all litigation expenses incurred by the prosecuting
Party.  In addition, during the pendency
of any such suit, action or proceeding, neither Party shall release or license
the Third Party infringer or assign any ownership interest in Jointly-Owned IP
to such Third Party infringer, without the prior written consent of the other
Party, which consent may be withheld in the sole discretion of the other Party.

11.5         Indemnification.
In order to help ensure the free flow of information between the Parties, the
Parties agree that, except for any express obligations set forth in the
Collaboration Agreements or in  any
Project Plan(s), neither Party shall have any obligation to defend, indemnify
or hold the other harmless from or against any claim of (i) patent, copyright
or trade secret infringement or any other claim of infringement of an
intellectual property right of any third Party, or (ii) any claim of product
liability with respect to any product distributed by either Party.

Section 12                                      Term and Termination

 

12.1         Term.
This Agreement shall commence on the Effective Date and shall terminate
automatically upon and simultaneously with termination of the License
Agreement.

12.2         Rights
and Obligations on Termination. 
Upon termination or expiration of this Agreement, all rights and
obligations of the Parties hereunder shall terminate except as specified in
this Section 12.2.  The
Parties further agree that in the event of a termination of this Agreement for
any reason, (i) all obligations to pay money accrued prior to such
termination shall remain in effect and shall be paid on the earlier of the due
date or thirty (30) days after

14

 

termination, (ii) all obligations arising or resulting from (a)
any breach of this Agreement, (b) the Common Terms Agreement (including Section
II (Confidentiality)), (c) Section 8.5 through Section 14
herein, (d) any corollary provisions of a Project Plan, and (e) any other
provision of this Agreement or a Project Plan necessary to implement the
foregoing and the termination, shall survive, and neither Party shall have any
further obligation to the other Party under any non-surviving provisions
hereof.

Section 13                                      Limitation of Liability

 

NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR
EQUITABLE THEORY FOR ANY PUNITIVE, MULTIPLE OR EXEMPLARY DAMAGES, OR LOST
PROFITS.

Section 14                                      No Implied Obligations

 

Nothing in this Agreement shall impose any
implied obligation on any Party not expressly set forth herein.  Without limiting the generality of the
foregoing, neither Party shall have an obligation to initiate, proceed with or
continue any particular Project Plan or any Project Plan at all.  Without expanding the scope of any license
or right with respect to Intellectual Property under this Agreement or any of
the other Collaboration Agreements, each Party and its Affiliates may pursue
independent research and development activities provided such Party does not
violate the Intellectual Property rights of the other Party.

15

IN WITNESS HEREOF
the Parties have caused this Agreement to be signed by their duly authorized
representatives effective as of the Effective Date.

 

	
  AFFYMETRIX:

  	
  ROCHE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   Affymetrix, Inc.

  	
  F.
  Hoffmann-La Roche Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Barbara
  A. Caulfield

  	
  By:

  	
  /s/ Heino
  von Prondzynski

  
	
   

  	
  Name:  Barbara A. Caulfield 

  	
   

  	
  Name:  Heino von Prondzynski

  
	
   

  	
  Title: 
  Executive Vice President and General Counsel

  	
   

  	
   

  	
  Title:  Head, Diagnostic Division

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory
  F. Heath

  
	
   

  	
   

  	
  Name:  Gregory F. Heath

  
	
   

  	
   

  	
  Title:  Head, Business Development and

  
	
   

  	
   

  	
  LicensingEXHIBIT 10.61

 

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

 

 

 

Diagnostic Product and Instrument Agency Agreement

 

F. Hoffmann-La Roche Ltd.

 

and

 

Affymetrix, Inc.

 

dated

 

January 29, 2003

 

 

 

CONTENTS

 

	
  I.

  	
  Common Terms and Definitions

  
	
  II.

  	
  Appointment; Licenses

  
	
  III.

  	
  Payments

  
	
  IV.

  	
  Supply of Diagnostic Products and Roche
  Instruments

  
	
  V.

  	
  Covenants

  
	
  VI.

  	
  Term and Termination

  
	
  VII.

  	
  Warranty and Warranty Disclaimers

  
	
  VIII.

  	
  Limited Liability

  
	
  IX.

  	
  Indemnity

  

 

i

 

DIAGNOSTIC
PRODUCT AND INSTRUMENT AGENCY  AGREEMENT

January  29,
2003

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

I.                                         Common
Terms and Definitions.

 

(a)           Common Terms.

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

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

(b)           Definitions.

(i)            “Agency Net Sales”
shall mean the gross amount invoiced by Roche or Roche’s Affiliates to
end-users, distributors, agents or the like, for sales of a Diagnostic Product
and Roche Instrument, less:

(1)           Commissions thereon;
and then

(2)           volume discounts,
sales rebates, allowances, returns and sales taxes (to the extent such sales
taxes are, in all cases, invoiced separately by end-users’ distributors or
agents) in all cases, other than as included in Sales Expenses; and then

(3)           [***]% of the remaining amount after the
deduction in (i) above for Sales Expenses; and then

(4)           if a Reagent
Agreement Plan is utilized for a Diagnostic Product or Roche Instrument, [***]% of the remaining amount, after the
deductions in (1), (2) and (3) above, as an agreed deduction for Reagent Rental
Expenses; and then

(5)           to the extent PCR
Technology is included as a necessary component of a Diagnostic Product, one of
the following deductions (reflecting the agreed upon value attributable to
Roche’s PCR Technology from time to time):

 

2

 

a.             for Diagnostic Product sales
through December 31, 2005, [***]% of the remaining amount from the sale of such Diagnostic
Product;

b.             for Diagnostic Product sales after
December 31, 2005 through December 31, 2010, [***]% of the remaining amount from the sale
of such Diagnostic Product;

c.             for Diagnostic Product sales after
December 31, 2010 through December 31, 2015, [***]% of the remaining amount from the sale
of such Diagnostic Product; or

d.             for Diagnostic Product sales after
December 31, 2015, [***].

Notwithstanding
the foregoing, in the case of internal use by Roche or its Affiliate of
Diagnostic Products in connection with providing diagnostic services to
customers on a commercial basis, Agency Net Sales for such Diagnostic Products
will be (i) if such Diagnostic Product is then sold or furnished to Third
Parties, the then current average Agency Net Sales per such Diagnostic Product
so sold or furnished, and (ii) if not then so sold or furnished, a reasonable
Agency Net Sales amount that would apply between Roche and its arm’s length
customers, taking into account the Agency Net Sales amount of any comparable
Diagnostic Products and all other relevant factors.

(ii)           “Affymetrix
Customer” shall have the meaning set forth in Section II(c)(ii).

(iii)          “Affymetrix
Instrument Distribution Right” shall have the meaning set forth in Section
II(b)(i).

(iv)          “Affymetrix Product
Distribution Right” shall have the meaning set forth in Section II(a)(i).

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

(vi)          “Termination Date”
shall have the meaning set forth in Section VI(a).

II.                                     Appointment;
Licenses.

 

(a)           Diagnostic
Product Distribution Rights.

(i)            Subject to the
terms and conditions of this Agreement and, specifically, the limitations set
forth in Section II(a)(ii) below, during the term of this Agreement,
Roche hereby appoints Affymetrix as its exclusive agent for distribution of
Diagnostic Products, together with the documentation and other materials
therefor (whether developed by Roche, Roche’s Affiliates or Third Parties on
behalf of Roche or its Affiliates) to [***] for internal development purposes (as opposed
to, for example, use

 

3

 

by a CRO as an
independent contractor for a [***]) (the “Affymetrix Product Distribution Right”).

(ii)           Roche may request
that Affymetrix allow Roche or its Affiliates to sell a particular Diagnostic
Product, together with the documentation and other materials therefor, to a
particular [***] for its
use, on a case-by-case basis, by providing a written request, giving details of
the specific Affymetrix customer (an “Affymetrix Customer”) and the
reasons for and purposes of the proposed sale. 
Affymetrix shall respond to Roche’s request within fifteen (15) business
days of receipt of such request and agrees to not unreasonably withhold its
consent to such sale.  If Affymetrix
does not respond within such period, its lack of or delay in response shall be
deemed its consent to such sale.  If
Affymetrix notifies Roche in writing prior to expiration of the fifteen (15)
business-day period that it does not consent to such sale, Roche may elect to
escalate the decision through the meet and confer and dispute resolution
provisions provided in Section IV of the Common Terms Agreement.  Affymetrix’ consent to any particular sale
pursuant to this provision shall not further alter the Affymetrix Product
Distribution Right for future Diagnostic Product sales to any Affymetrix
Customer.

(b)           Roche Instrument
Distribution Rights.

(i)            Subject to the
terms and conditions of this Agreement, during the term of this Agreement,
Roche hereby appoints Affymetrix as its exclusive agent for the distribution of
Roche Instruments, together with the documentation and other materials for such
Roche Instruments, to [***] for internal development purposes (as opposed to, for
example, use by a CRO as an independent contractor for a [***]) (the “Affymetrix Instrument
Distribution Right”).

(ii)           To the extent
Affymetrix permits Roche to sell one or more Diagnostic Products to a [***] pursuant to Section II(a)(ii)
above, Affymetrix shall continue to be entitled to sell to such [***] any Roche Instruments, together with the
documentation, software and other materials therefore, that are required to use
the Diagnostic Products so sold by Roche pursuant to Section II(a)(ii)
for the purpose(s) identified to Affymetrix in Roche’s request under such
section.

(c)           Technology
License.

(i)            Except to the
extent expressly and unambiguously set forth herein, Roche retains all rights
and licenses with respect to the Diagnostic Products and Roche Instruments, and
Affymetrix has no right to use any Diagnostic Product or Roche Instrument for
its own purposes except to solicit orders and otherwise exercise its rights and
fulfill its obligations hereunder. 
Subject to the terms and conditions of this Agreement, Roche hereby
grants to Affymetrix and its Affiliates a [***], [***], [***], [***], [***] license to solicit orders of Diagnostic Products, Roche Instruments, and the documentation, software and
other materials therefor, and otherwise fulfill its obligations hereunder, in
accordance with the provisions of Section II(a) and (b) above.

 

4

 

(ii)           Roche agrees to
provide all post-sale training, installation, technical support and service for
Diagnostic Products and Roche Instruments to Affymetrix Customers on
substantially similar terms and conditions as Roche or its Affiliates offer
such support and services to their respective customers of Diagnostic Products
and Roche Instruments.  To the extent
that Affymetrix Customers desire post-sale training, installation, technical
support or services for Diagnostic Products and Roche Instruments, Affymetrix
Customers shall enter into the required agreements with Roche or its Affiliates
directly to obtain such services.

(d)   Labeling.  All Diagnostic Products and Roche
Instruments, the documentation, software and other materials therefor and any
related promotional or instructional materials shall be branded and carry the
same Designations as required for Diagnostic Products and Diagnostic
Instruments sold under the License Agreement. 
In addition, all Diagnostic Products and Roche Instruments, the
documentation, software and other materials therefor and any related
promotional or instructional materials shall be labeled in accordance with the
provisions of the License Agreement and in compliance with applicable
regulatory requirements.  Such labeling
shall not be altered by Affymetrix in any manner without Roche’s prior written
consent.  Notwithstanding the foregoing,
Roche shall label Diagnostic Products and Roche Instruments, and the
documentation, software and other materials therefor, appropriately under
applicable regulations in order to permit Affymetrix’ marketing of such
products and instruments to Affymetrix Customers in accordance with this
Agreement.

(e)   Method of Marketing.  Affymetrix (and its Affiliates’) marketing
of Diagnostic Products and Roche Instruments must be at Roche’s then-current
prices to its customers (without additional markup) and shall be sold pursuant
to and be accompanied by Roche’s standard terms and conditions (as provided by
Roche to Affymetrix and which may be amended from time to time by Roche in
Roche’s sole and absolute discretion). 
Notwithstanding the foregoing, Roche and its Affiliates agree to grant
to any Affymetrix Customer who purchases Diagnostic Products and/or Roche
Instruments (and in each case, the documentation, software and other materials
therefor) the normal implied use license and/or software license associated
with such sale.  To the extent
Affymetrix becomes aware that any Affymetrix Customer is violating Roche’s
terms and conditions of sale (as agreed by such Affymetrix Customer),
Affymetrix shall use its commercially reasonable efforts to notify Roche of
such conduct, but in any event Affymetrix shall have no liability for such
Affymetrix Customer conduct absent Affymetrix inducement to cause such
violation or Affymetrix’ participation in such violation.

(f)    Product Modification or Discontinuation. 
Roche reserves the right to materially modify or discontinue any
Diagnostic Product or Roche Instrument 
at any time with 90 days prior written notice to Affymetrix after (i)
fulfilling any orders already submitted to Roche under this Agreement for such
discontinued Diagnostic Product or Roche Instrument and (ii) agreeing to
continue to supply any ongoing clinical trial or development program then in
progress utilizing a Diagnostic Product or Roche Instrument sold under this
Agreement (for the stated duration of such clinical trial or development
program), provided, however, that
Roche shall only be obligated to continue supplying ongoing clinical trials or
development programs lasting longer than 12 months from the date of first sale
of Diagnostic Products under this Agreement for which Roche has given its prior
written consent, which consent shall not be unreasonably withheld.  Notwithstanding the foregoing, Roche may
materially modify or

 

5

 

discontinue the
supply of any Diagnostic Product or Roche Instrument if the discontinuation is
as a result of a legal requirement or due to potential harm or detriment to an
end-user of the discontinued Diagnostic Product or Roche Instrument.

III.                                 Payments.

 

(a)           Commission.  Affymetrix shall receive a [***] percent ([***]%) commission on [***] less  [***], [***] (to the extent such [***] are invoiced separately by end-users’
distributors or agents) and [***] (the “Commission”) of Diagnostic Products and
Roche Instruments distributed pursuant to Section II above.  Payment for Diagnostic Products and Roche
Instruments sold by Affymetrix or its Affiliates pursuant to this Agreement
shall be made by Affymetrix Customers directly to Roche or its Affiliate. Roche
shall make quarterly payments for the relevant quarter to Affymetrix equal to
the aggregate amount of Commissions on Diagnostic Products and Roche
Instruments sold under this Agreement. 
Such payment and a payment report in form reasonably satisfactory to
Affymetrix detailing the computation of the preceding quarter’s Gross Sales and
the Commission for that quarter, including the Diagnostic Products and Roche
Instruments sold, the Gross Sales associated therewith, Commissions earned and
payments made (and any credits or offsets taken), shall be remitted to
Affymetrix within 60 days following the end of such quarter.  Commissions shall be earned by Affymetrix
upon Roche’s (or its Affiliate’s) invoicing of Affymetrix Customers hereunder
for sales of Diagnostic Products and Roche Instruments.  Payment shall be made for the preceding quarter
at the time payment is made.  If
Affymetrix receives any payment for Diagnostic Products and/or Roche
Instruments distributed under this Agreement, Affymetrix shall remit promptly
the full amount of such payment to Roche in full so that Roche may properly
account for payment of such sale.

(b)           Royalties.  Roche shall owe Affymetrix royalties on
Agency Net Sales from Diagnostic Products and Roche Instruments sold by
Affymetrix or its Affiliate pursuant to this Agreement according to Section
III(c) of the License Agreement. 
Such royalty payments are fully creditable to the extent permitted under
Section III(c)(i) of the License Agreement.  Royalties shall be earned by Affymetrix in accordance with the
foregoing upon Roche’s (or its Affiliate’s) invoicing of Affymetrix Customers
hereunder for sales of Diagnostic Products and/or Diagnostic Instruments.

(c)           Interest.  Late payments shall bear interest at the
lower of: (i) the Bank of America prime rate or (ii) the maximum rate allowed
by law.

(d)           Records and Audit Rights.  Each Party shall, on behalf of itself and
its Affiliates, keep, in the English language, sufficiently detailed records to
document and confirm amounts payable under this Agreement, and shall maintain
such records for at least three years.  Each
Party shall have the right to hire an independent certified public accountant
to inspect all records of the other Party required to be kept or submitted by
the other Party pursuant to this Agreement (which accountant shall be
reasonably acceptable to the other Party and shall keep all information
confidential, except to disclose the fact and amount of any discrepancies); provided: (i) such audit is conducted
during normal business hours, (ii) such audit is conducted no more often then
once per year, (iii) such audit is conducted only after the auditing Party has
given 30 days prior written notice and (iv) the audited Party has the ability
to review the accountant’s report on any discrepancies to confirm the report
does not contain any other Confidential

 

6

 

Information. The audited
Party shall, at its own expense, make such records (or copies thereof)
available to the accountant at a single location in the U.S.  The auditing Party shall bear the full cost and
expense of such audit, unless a discrepancy in excess of 5% in favor of the auditing Party is
discovered, in which event, the audited Party shall bear the full cost and
expense of such audit.  Regardless of
the amount of discrepancy discovered, all discrepancies (and interest thereon
at the rate set forth in Section III(b)) shall be immediately due and
payable.

IV.                                 Supply
of Diagnostic Products and Roche Instruments .

 

(a)           Diagnostic
Products, Roche Instruments and Related Materials. Affymetrix shall provide
notice of potential orders of (i) Diagnostic Products, (ii) Roche Instruments,
and (iii) software and printed materials relating to the foregoing from Roche
to be distributed pursuant to Sections II(a)(i) and (b)(i)
hereof.  Such Diagnostic Products, Roche
Instruments and related materials shall be purchased pursuant to order notices
provided to Roche on Roche’s then-current terms and conditions, and Roche will
fill such orders with not less than the priority afforded any other purchaser.  Affymetrix may only market such Diagnostic
Products and Roche Instruments that Roche or its Affiliates have made available
for commercial sale.  All order notices
shall specify the name and delivery address of the Affymetrix customer
purchasing such Diagnostic Products, Roche Instruments and related
materials.  Upon receipt of such order
notice, Roche shall provide Roche’s standard documentation for Diagnostic
Products and Roche Instruments (including, without limitation, Roche’s
customary terms and conditions) directly to the purchaser.  All contracts for Diagnostic Products and
Roche Instruments purchased shall be entered into between Roche and the
purchaser directly, except that payment for Diagnostic Products and Roche Instruments
sold by Affymetrix or its Affiliates pursuant to this Agreement shall be made
to Roche or its Affiliate.  Affymetrix
shall assist Roche in collecting payment for sales made by Affymetrix
hereunder.  Roche shall provide to
recipients of the Roche Instruments distributed pursuant to this Agreement the
option to trade such Roche Instruments or components thereof for replacement
products newly developed by Roche, its Affiliates or Third Parties on Roche’s
behalf from time to time if, and on the same terms as are, offered to Roche’s
end-users of such Roche Instruments generally from time to time.

(b)           Confirmation.  Within five (5) business days of receipt of
each order notice from Affymetrix, Roche will send Affymetrix a confirmation
setting forth the quantity of each Diagnostic Product and Roche Instrument that
will be supplied and Roche’s estimated delivery date. Except for terms related
to the specific order notice (such as quantity and delivery dates), no order
notice or confirmation or other documentation shall vary the terms and
conditions of this Agreement unless agreed to in writing signed by both
Parties.  Roche shall have no liability
for delays in filling any order notice filled pursuant to Section IV(a).

(c)           Packing and
Shipping.  Sales of Diagnostic
Products and Roche Instruments shall only be permitted as packaged by Roche
(with no portion of the package obscured). 
Roche will deliver the Diagnostic Products and Roche Instruments
directly to Affymetrix Customers at the address supplied by Affymetrix in its
order notice.  Diagnostic Products and
Roche Instruments will be packed in Roche’s standard shipping packages and
shipped to the address specified by Affymetrix in its order notice in
accordance with quality assurance and packaging procedures determined by Roche
from time to time.  If a particular
Diagnostic Product and Roche Instrument requires any packaging, process or
procedure other than those Roche utilizes for its

 

7

 

catalog,
non-custom designed Diagnostic Products and Roche Instruments, Roche shall
perform such packaging, processes or procedures at Affymetrix’ request, so long
as Roche determines such packaging, process or procedures to be commercially
reasonable.  Any such requests shall be
provided at an additional charge to Affymetrix 
on a Fully Loaded Cost basis plus a reasonable markup (provided, however,
that modifications to labeling done primarily for regulatory purposes shall not
be deemed a packaging change or process that would trigger any additional
charge by Roche to Affymetrix pursuant to this provision).

Deliveries of Diagnostic
Products or Roche Instruments will be F.O.B. Roche’s facility or the facility
of its sales representative. Roche will ship via a carrier selected by
Affymetrix. Title and risk of loss or damage for deliveries will pass to the
Affymetrix Customer upon actual delivery of the Diagnostic Products and Roche
Instruments to the carrier for shipment to the Affymetrix Customer.  Affymetrix or the Affymetrix Customer will
advise Roche in writing if an Affymetrix Customer desires insurance on any
shipments of Diagnostic Products or Roche Instruments.  Roche will pay all shipping costs, duties,
insurance and sales taxes and will invoice Affymetrix Customers directly for
such amounts requesting payment to be remitted to Roche.

(d)           Order
Modifications.  Affymetrix may
increase, decrease, cancel, re-schedule or otherwise modify any order accepted
by Roche only with the written approval of Roche.  Affymetrix acknowledges that Roche may impose a reasonable and customary
charge for any modification of an order that it approves.

(e)           Literature. Roche shall provide to Affymetrix the quantities of
marketing literature for Diagnostic Products and Roche Instruments reasonably
requested by Affymetrix at [***] for such marketing literature.  Roche will also endeavor to provide at
specified prices a limited number of service notes, special jigs or tools or
test equipment, and service documentation and periodic service bulletins specific
to the Diagnostic Products and/or Roche Instruments currently offered by Roche.
Roche shall identify specific technical support and service engineering points
of contact at Roche.

(f)            Software
Maintenance and Upgrades.  To the
extent software is provided with any Diagnostic Product or Roche Instrument,
Roche’s standard software maintenance and upgrade terms and conditions shall
apply, including the customer fees charged therefor.

V.                                     Covenants.  Roche and Affymetrix covenant to one another
as follows:

 

(a)           Training of
Personnel by Roche.  Affymetrix will
ensure that its sales personnel, support personnel and other representatives
are knowledgeable with respect to the Diagnostic Products and Roche
Instruments.  Affymetrix shall, at its
own expense, send representatives as Affymetrix determines necessary to Roche’s
facilities for up to thirty (30) days of training and proficiency certification
including without limitation general product overviews, product positioning and
customary terms and conditions, provided that Affymetrix shall pay all travel
related expenses of its representatives who participate in such training. Roche
shall provide additional training to Affymetrix personnel at Roche’s
then-current rates (not to exceed thirty (30) working-days per year).
Diagnostic Product and Roche Instrument applications support training shall be
provided at no charge, provided that Affymetrix shall pay all travel related
expenses.

 

8

 

(b)           Competitors.  Each Party will advise the other Party
periodically with respect to competitors and the introductions and/or success
of products that are competitive with the Diagnostic Products or Roche
Instruments, so long as such disclosures do not violate confidentiality
obligations that the advising Party has to any Third Party.

(c)           Compliance.  Each Party will maintain compliance with all
laws, rules, codes, regulations and other legal requirements applicable to the
Diagnostic Products and Roche Instruments distributed under this Agreement, in
accordance with the regulatory approach and requirements determined by Roche
for such products and instruments. 
Affymetrix agrees to only distribute Diagnostic Products and Roche
Instruments in accordance with applicable regulatory requirements.

(d)           Communications
with Authorities.  Each Party will
immediately notify the other Party of any adverse or unexpected results with or
before an Authority or any actual or potential action of an Authority relevant
to a Diagnostic Product or Roche Instrument of which the first Party becomes aware.  In the event an Authority raises issues
regarding this Agreement, the Parties will use their reasonable commercial
efforts to satisfy the Authority’s concerns without any change to this
Agreement.  If an Authority cannot be
satisfied without any change to this Agreement, each Party will work with the
other Party, reasonably and in good faith, to attempt to achieve mutually
acceptable resolution that does not materially compromise either Party’s rights
and that changes this Agreement to the minimum extent necessary.  Each Party agrees promptly to provide the
other Party with copies of all correspondence to or from an Authority and
summaries of oral dealings with such Authority.

(e)           Export Control.
Each Party agrees that distribution of the Diagnostic Products and Roche
Instruments under this Agreement shall comply with applicable U.S. export
control laws, rules and regulations, including but not limited to, the U.S.
Export Administration Act, the U.S. International Emergency Economic Powers
Act, the U.S. Trading with the Enemy Act or any other similar law, rule or
regulation imposing restrictions on U.S. trade with foreign countries.

(f)            Assignment of
Modification By Affymetrix to Roche. 
Affymetrix will assign to Roche, without the payment of any additional
consideration to Affymetrix, any and all modifications, design changes, or
improvements of the Diagnostic Products (excluding Arrays) and Roche
Instruments, such that Roche will have all rights to use, incorporate and
otherwise exploit such modifications, design changes, or improvements in
connection with the Diagnostic Products and Roche Instruments.

(g)           Significant
Problems.  Each Party will keep the
other Party informed as to any significant problems encountered with the
Diagnostic Products and Roche Instruments that relate to components or products
supplied by the other Party and any solutions arrived at for those problems,
and will communicate promptly to the other Party any and all material
modifications, design changes or improvements of the Diagnostic Products and
Roche Instruments suggested by any customer or by any employee or agent of such
Party, as long as such disclosures do not violate any existing confidentiality
obligations that such Party has to any Third Party, and such Party shall use reasonable
efforts to obtain the right to disclose such information; and the receiving
Party will, within a reasonable time after receiving any

 

9

 

information about
problems with the Diagnostic Products and Roche Instruments, inform the other
Party of the steps (if any) that the receiving Party intends to take with
respect to such problems.

(h)           Potential
Infringement.  Each Party will
notify the other Party of: (i) any potential infringement of any of such other
Party’s Intellectual Property of which it becomes aware; (ii) any potential
infringement by any Third Party of any of the Intellectual Property
incorporated in, embodied by or relied upon to manufacture a Diagnostic Product
or Roche Instrument; or (iii) any potential infringement by a Diagnostic
Product or Roche Instrument of any Intellectual Property owned or asserted to
be owned by a Third Party of which it becomes aware.  Either Party’s notice under this Section V(h) shall be
Confidential Information and shall not be disclosed to the alleged infringer or
any other party without the other Party’s prior written consent.

VI.                                 Term
and Termination.

 

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

(b)           Early Termination
without Cause. Roche shall have the option of terminating this Agreement in
its entirety effective on either December 31, 2007, June 2, 2013 or any date
after June 2, 2013 but prior to the Termination Date by written notice to
Affymetrix (“Early Termination Notice”) as provided herein.  An Early Termination Notice must be provided
at least one year prior to early termination. 
If Roche terminates effective as of June 2, 2013 or any time thereafter,
Roche shall continue to provide Diagnostic Products, Roche Instruments and
related materials as set forth herein through the end of the year following the
date such Early Termination Notice was provided.

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

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

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

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

 

10

 

(d)           Effect of
Termination. Sections III (Payments), VI (Term and
Termination), VII (Warranty), VIII (Limited Liability) and IX
(Indemnity), all rights to payment in effect through the final termination date
of this Agreement pursuant to Section VI (Term and Termination), the
Common Terms Agreement, remedies for breaches or any other provision that, by
its terms, survives termination shall survive termination of this
Agreement.  Obligations of the Parties
under firm orders for purchase and delivery of Diagnostic Products and Roche
Instruments at the time of such termination shall remain in effect, except that
in the case of termination under Section VI(c), the terminating Party
may elect whether obligations under firm orders will remain in effect; provided,
however, that Roche will not be obligated with respect to any delivery
dates (for firm orders or otherwise) more than thirty (30) days after the
effective date of termination if the reason for termination is due to a breach
by Affymetrix, or more than one hundred eighty (180) days after such
termination.  Each Party will promptly
return or destroy all Confidential Information of the other in accordance with Section
II(f) of the Common Terms Agreement. Termination is not the sole remedy
under this Agreement and, whether or not termination is effected, all other
remedies will remain available.

VII.                             Warranty
and Warranty Disclaimers.

 

Roche warrants only to
Affymetrix that the Diagnostic Products and Roche Instruments will conform in
all material respects to Roche’s then-current standard customer warranty
included in Roche’s applicable customer sales agreement.  Such warranty does not apply to Affymetrix
components of Diagnostic Products or to units that have been mishandled,
mistreated or used or maintained or stored other than in conformity with
Roche’s instructions.  The warranties to
Affymetrix Customers for Diagnostic Products and Roche Instruments distributed
shall be as set forth in the terms and conditions of such sales agreement.

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

VIII.                         Limited
Liability.

 

EXCEPT IN CONNECTION WITH SECTION II (CONFIDENTIALITY)
OF THE COMMON TERMS AGREEMENT OR AMOUNTS PAYABLE UNDER SECTION VII (WARRANTY)
OR SECTION IX (INDEMNIFICATION) OF THIS AGREEMENT, NEITHER PARTY WILL BE LIABLE
WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY  PUNITIVE, MULTIPLE OR EXEMPLARY DAMAGES, OR
LOST PROFITS.

 

11

 

IX.                                Indemnity.

 

(a)           Indemnification
by Roche from Infringement.  Roche
shall indemnify, defend and hold harmless the Affymetrix Indemnitees from and
against liability resulting from any Third Party Claim of infringement of any
patent (other than Affymetrix patents, patents of any Affymetrix Affiliate or
patents of Perlegen) by Roche Technology incorporated into Diagnostic Products
or Roche Instruments, provided Roche is promptly notified of any and all
threats, Claims and proceedings related thereto and given reasonable assistance
and the opportunity to assume sole control over the defense and all
negotiations for a settlement or compromise; provided, however,
that Roche will consult with Affymetrix if a proposed settlement or compromise
could reasonably be interpreted to impact the benefits that Affymetrix receives
under this Agreement in a materially negative manner; and, provided further,
that Roche will not be responsible for any settlement it does not approve in
writing. The foregoing obligation of Roche does not apply with respect to Roche
Technology used in Diagnostic Products: (W) not supplied by Roche; (X) made in
whole or in part in accordance to Affymetrix specifications or requests, to the
extent the infringement was caused thereby; (Y) which are modified by
Affymetrix or any Third Party after shipment by Roche, if the alleged infringement
relates to such modification; or (Z) combined, processed or used with other
products, processes or materials, including Affymetrix Technology, where the
alleged infringement relates to such combination, process or use.  Affymetrix shall also indemnify Roche
Indemnitees from all damages, settlements, attorneys’ fees and expenses related
to a Claim of infringement or misappropriation excluded from Roche’s indemnity
obligation by the immediately preceding sentence.

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

(b)           Indemnity
Relating to Products.  Roche shall
indemnify, defend and hold harmless the Affymetrix Indemnitees from and against
any and all Damages based upon or arising out of the market, sale or use of
Diagnostic Products, including product liability, other than Damages caused by
the marketing activities of Affymetrix, including changing labeling, or
resulting from a breach of this Agreement. Affymetrix shall indemnify, defend
and hold harmless the Roche Indemnitees from and against all Damages based upon
or arising out of Damages caused by the marketing activities of Affymetrix,
including changing labeling, or resulting from a breach of this Agreement.

(c)           Conditions of
Indemnification.  If either Party
proposes to seek indemnification from the other under the provisions of this Section
IX, it shall notify the other Party within 15 days of receipt of notice of
any Claim and shall cooperate fully with the other Party in the defense of such
claims or suits. The indemnified Party shall cooperate with the indemnifying
Party (at the indemnifying Party’s expense) in all respects in connection with
the defense of any such Claim.  The indemnifying
Party shall, upon written notice from the indemnified Party of a Claim,
undertake to conduct all proceedings or negotiations in connection with the
Claim, assume the defense thereof, and all other required steps or proceedings
to settle

 

12

 

or defend any such
Claim, including the selection of counsel that shall be approved by the
indemnified Party, which approval shall not be unreasonably withheld, and
payment of all reasonable expenses.  The
indemnified Party shall have the right to employ separate counsel and
participate in the defense at the indemnified Party’s sole expense.  If the indemnifying Party fails to defend or
settle in good faith any Claim as provided above, then the indemnified Party
shall have the right to take over sole control of the defense of the Claim and
all negotiations for its settlement or compromise, provided that the
indemnifying Party shall be liable for (and shall pay as they become due) all
costs and expenses (including attorneys’ fees) reasonably incurred by the
indemnified Party in its defending or negotiating settlement of the Claim.  Notwithstanding the foregoing, the Party
primarily responsible for handling the Claim (as determined above) will first
obtain the prior written consent of the other Party for any settlement of a
Claim that (i) does not include a complete release of the other Party from all
liability with respect thereto, (ii) compromises the rights of the other Party,
or (iii) imposes any restrictions on the other Party.

 

13

 

                IN WITNESS WHEREOF,
the undersigned have executed this Agreement as of the Effective Date.

 

	
  AFFYMETRIX:

  	
   

  	
  ROCHE:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Affymetrix,
  Inc.

  	
   

  	
  F.
  Hoffmann-La Roche Ltd.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Barbara
  A. Caulfield

  	
   

  	
  By:

  	
  /s/ Heino
  von Prondzynski

  
	
   

  	
  Name:

  	
  Barbara A.
  Caulfield

  	
   

  	
   

  	
  Name:

  	
  Heino von
  Prondzynski

  
	
   

  	
  Title:

  	
  Executive
  Vice President and General Counsel

  	
   

  	
   

  	
  Title:

  	
  Head,
  Diagnostic Division

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Gregory
  F. Heath

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Gregory F.
  Heath

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Head,
  Business Development and Licensing

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