Document:

Exclusive License Agreement - Cornell Research Foundation, Inc.

 Exhibit 10.8 
 Confidential Treatment Requested by 
 Pacific Biosciences of California,
Inc. 
 EXCLUSIVE LICENSE AGREEMENT 
 THIS AGREEMENT is effective as of February 1, 2004 (“Effective Date”) between Nanofluidics, Inc. (“LICENSEE”), a corporation of the State of Delaware, that has a principal place
of business at 31 Dutch Mill Road, Ithaca, New York 14850, and Cornell Research Foundation, Inc. (“FOUNDATION”), a non-profit corporation of the State of New York, having an office at 20 Thornwood Drive, Suite 105, Ithaca, NY 14850.
FOUNDATION and LICENSEE (individually “Party” and collectively, “Parties”) hereby agree as follows: 
 ARTICLE 1:
INTRODUCTION 
  

	1.1	FOUNDATION is a wholly owned subsidiary of Cornell and holds the ownership interests of patents, trademarks, copyrights, and proprietary materials made by
Cornell’s employees and administers licenses in a manner consistent with the policies of Cornell. 

  

	1.2	The Technology outlined in FOUNDATION dockets: [...***...] have been invented by employees of Cornell University (“Cornell”), assigned to FOUNDATION,
and FOUNDATION has filed for patent protection on such inventions related to Technology 

  

	1.3	LICENSEE desires to obtain the right to develop and to commercialize the Technology. 

 

	1.4	The work leading to the Technology was supported in part by an agency of the United States Government, and FOUNDATION is obligated to comply with United States OMB
Circular A-124 and 37 CFR Part 401. This license is subject to the applicable terms of United States Government regulations concerning Government funded inventions. 

 

	1.5	The Parties agree to the terms and conditions hereinbelow in order to develop the Technology for commercial purposes, and utilize them in the public interest.

 ARTICLE 2: DEFINITIONS 
  

	2.1	“Affiliate” shall mean (1) any corporation or other noncorporate entity owning directly, or indirectly controlling, [...***...] of the stock
normally entitled to vote for election of directors of LICENSEE; (2) any corporation owned or controlled by LICENSEE through ownership of [...***...] of the stock entitled to elect directors or any other entity actually controlled by
LICENSEE, (3) any corporate or noncorporate entity under common control with LICENSEE. 

  

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	2.2	“Applications” shall mean United States Patent Application entitled [...***...] serial number [...***...] filed [...***...],
[...***...] serial number [...***...] filed [...***...], [...***...] filed [...***...] and [...***...] serial number [...***...] filed [...***...] and any other United States patent applications that
may be filed on Technology, and any continuations, continuations-in-part, divisions of these applications, and any foreign patent applications that correspond to United States patent applications. 

 

	2.3	“Patents” shall mean United States Patent Number [...***...] issued [...***...], United States Patent Number [...***...] issued
[...***...], United States Patent Number [...***...] issued [...***...], United States Patent Number [...***...] issued [...***...], any corresponding foreign patent applications, and any patent that issues on
Applications, including any reissues and reexaminations. 

  

	2.4	“Exclusive” shall mean that during the term of this Agreement FOUNDATION will not grant commercial rights to Technology to any other party.

  

	2.5	“Field-of-Use” shall mean [...***...]. 

  

	2.6	“Licensed Territory” shall mean all territories in the world where there are pending Applications or unexpired Patents that have not been declared invalid in
an unappealed decision by a court having jurisdiction 

  

	2.7	“License Year” shall mean each twelve-month period beginning on January 1 and ending on December 31. However, the first License Year (alternatively,
License Year 1) shall commence on the Effective Date and end on December 31 of the same calendar year. 

  

	2.8	“Products” shall mean any product or service which is covered by claims in Applications or Patents or which are made by a process which is covered by claims
in Applications or Patents and any services which is covered by claims in Applications or Patents. 

  

	2.9	“Net Sales” shall mean the gross amount received for sales and other dispositions of Products by LICENSEE, and Sublicensees, to an independent third party on
an arm’s length basis less (i) all trade, quantity, and cash discounts actually allowed on Products, including discounts or rebates to governmental or managed care organizations; (ii) all credits and allowances actually granted on
Products on account of rejection, returns, billing errors, and retroactive price reductions, (iii) charges for freight, insurance and other transport costs related to the delivery of the product; (iv) duties actually paid on Products; and
(v) excise, sale and use taxes, and equivalent taxes or charges actually paid on Products. 

  

	2.10	“Sublicense” shall mean a rights-granting contract with an independent third party other than an Affiliate in which LICENSEE conveys rights granted to
LICENSEE in 4.1 and 4.2 of this Agreement. 

  

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	2.11	“Sublicensees” shall mean any entity granted a Sublicense by LICENSEE, and acceptable to FOUNDATION, under this Agreement. 

 

	2.12	“Technology” shall mean the novel methods, compositions and devices contained in the following FOUNDATION Dockets [...***...] which are described in
United States Patent Number [...***...] issued [...***...], United States Patent Number [...***...] issued [...***...], United States Patent Application Number [...***...] filed [...***...], United States Patent
Application Number [...***...] filed [...***...], United States Patent Application Number [...***...] filed [...***...], United States Provisional Patent Application Number [...***...] filed [...***...], and
United States Provisional Patent Application Number [...***...] filed [...***...] and any other United States patent applications that may be filed on the listed FOUNDATION Dockets, and any other patent applications, continuations,
continuations-in-part, divisions of these applications related thereto, and any foreign patent applications that correspond to United States patent applications. FOUNDATION shall use reasonable efforts to assist LICENSEE in accord with any LICENSEE
funded sponsored research undertaken at Cornell and separately contracted with Cornell’s Office of Sponsored Programs 

  

	2.13	“Valid Claim” shall mean a claim in an issued, unexpired patent or in a pending patent application within the Applications and Patents that (a) has not
been finally cancelled, withdrawn, abandoned or rejected by any administrative agency or other body of competent jurisdiction, (b) has not been revoked, held invalid, or declared unpatentable or unenforceable in a decision of a court or other
body of competent jurisdiction that is unappealable or unappealed within the time allowed for appeal, (c) has not been rendered unenforceable through disclaimer or otherwise, and (d) is not lost through an interference proceeding.

 ARTICLE 3: APPLICATIONS AND PATENTS 
  

	3.1	FOUNDATION shall hold title to all Applications and Patents. 

  

	3.2	FOUNDATION agrees to use reasonable efforts to file and prosecute Applications and maintain Patents. At any time during the term of this Agreement, LICENSEE may elect
in writing to be released from its license in any of the Patents or Applications, in which event LICENSEE shall thereafter have no obligation to reimburse FOUNDATION for any future expenses relating to such Patents or Applications, and FOUNDATION
shall have the option at its sole discretion and expense to file, prosecute, maintain and license to a third party such Patents or Applications. 

  

	3.3	 [...***...] for preparation, filing, prosecution and maintenance of Applications and Patents except for those Applications and

  

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Patents for which it has waived its rights, in writing, as described in Section 3.2. Such reimbursable expenses [...***...]. Such expenses shall be paid to FOUNDATION by LICENSEE
within thirty (30) days of receipt of an invoice therefore unless FOUNDATION has otherwise agreed, in writing. LICENSEE shall [...***...] by LICENSEE for reimbursable expenses under this agreement. 

 

	3.4	FOUNDATION shall have final authority over selection of patent attorneys and all decisions concerning filing and prosecution of Applications and maintenance of Patents.
However, FOUNDATION shall keep LICENSEE informed of its filing, prosecution and maintenance activities, such information to include without limitation copies of all documents related to the filing, prosecution and maintenance of Applications and
Patents, and shall give LICENSEE the option to actively participate, including the right to co-counsel, in making major decisions concerning such activities. 

 ARTICLE 4: LICENSE GRANT AND COMMERCIAL EFFORTS 
  

	4.1	Subject to the terms and conditions of this Agreement and to the rights of and obligations to the United States Government as set forth in United States Office of
Management & Budget Circular A-124 or 37 CFR Part 401 et seq., FOUNDATION hereby grants and LICENSEE hereby accepts an EXCLUSIVE right to make, use, sell, offer for sale, lease, import, export or otherwise dispose of Products under
Applications and Patents in Field-of-Use in Licensed Territory for the term of this Agreement as specified in Section 7.1. 

  

	 	(i)	The right of LICENSEE to make Products includes the right to have Products made by contract with third parties within the Licensed Territory. Such contractual
arrangements with third parties shall be subject to and conditioned upon appropriate supervision and quality assurance and control of the third party by LICENSEE and the third party shall be bound in writing to respect all rights of FOUNDATION.

  

	4.2	LICENSEE shall also have the right to grant Sublicenses under this Agreement, [...***...]. LICENSEE agrees to provide FOUNDATION a copy of any Sublicense granted
pursuant to this Article 4. Sublicenses under this Agreement will be considered to be Confidential Information as specified in Section 8.2. Any such Sublicense shall contain provisions that are consistent with all the provisions of this
Agreement which are protective of and beneficial to FOUNDATION. FOUNDATION shall have the right to require that said Sublicense be terminated in the event that a Sublicense materially breaches the above provision. LICENSEE shall be responsible to
FOUNDATION for the [...***...]. LICENSEE shall [...***...] of any up-front Sublicense fees, or other up-front consideration, not including (i) payments made in consideration of the LICENSEE’S issuance of equity, or debt
securities of the LICENSEE and (ii) payments made to LICENSEE in consideration of or as support for research and development activities. LICENSEE’S obligation to pay FOUNDATION’S share of Sublicense consideration described above shall
be considered incurred as of the date on which such Sublicense consideration is received by LICENSEE. 

  

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	4.3	FOUNDATION and Cornell retain an irrevocable, nonexclusive, and nontransferable right to practice for their own educational and research purposes, the inventions
claimed in Applications and Patents and such purposes shall include limited, non-commercial collaboration with other non-profit research institutes as long as it does not adversely affect or compete with the business of LICENSEE as determined by an
objective third party acceptable to both parties. 

  

	4.4	Nothing in this Agreement shall be construed to give LICENSEE rights in any inventions currently owned or developed in the future by FOUNDATION or Cornell other than
those explicitly specified in this Agreement. Nothing in this Agreement shall be construed to give FOUNDATION rights in inventions currently owned or developed in the future by LICENSEE other than those explicitly specified in this Agreement.

  

	4.5	The rights granted by this Agreement are to LICENSEE alone and not to any third parties or to any subsidiary or Affiliate of LICENSEE. However, LICENSEE may transfer
this Agreement by way of sale of LICENSEE, through merger, sale of assets and/or sale of stock. LICENSEE shall provide written notice to FOUNDATION of any such transfer. 

 

	4.6	LICENSEE shall use reasonable commercial efforts, consistent with sound and reasonable business practices and judgment, to affect commercialization of Products as soon
as practicable and to maximize sales thereof. Failure of LICENSEE to meet the diligence milestones of this Section 4.6 shall be a material breach of this Agreement. 

 

	 	(i)	In the event that the FOUNDATION identifies any other markets for DNA sequencing in Licensed Territory and/or other Products and/or geographical area markets as
significant, LICENSEE shall agree in writing to evaluate the potential for commercialization therein itself or through appropriate Sublicense in a timely manner. If LICENSEE elects not to pursue said commercialization in said market(s) or in
FOUNDATION’s sole judgment LICENSEE has failed to evaluate such commercialization, then LICENSEE agrees to Sublicense with reasonable commercial terms to a Sublicensee for said market(s) or terminate this LICENSEE’S rights under this
Agreement only for said significant Products and/or geographical area markets 

  

	 	(ii)	 FOUNDATION may terminate this Agreement if LICENSEE has not sold Product for any period of one (1) year after the end of the [...***...] License
Year. 

  

	4.7	Beginning with the first (1st) License Year, within sixty (60) days after the start of each License Year and until LICENSEE markets Products, LICENSEE shall
make a written annual report to FOUNDATION covering the preceding License Year, regarding the progress of LICENSEE toward commercial use of Products. Such report shall include, at a minimum, information sufficient to enable FOUNDATION to satisfy
reporting requirements of the United States Government and for FOUNDATION to ascertain progress by LICENSEE toward meeting the reasonable commercial efforts of this Article 4. LICENSEE shall provide these reports with the royalty report specified in
Article 5. Such report will be considered to be Confidential Information as specified in Section 8.2. 

  
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	4.8	LICENSEE shall not use, nor shall LICENSEE permit Sublicensee to use, the names, trademarks and indicia of FOUNDATION or of Cornell, nor the names of any employee,
student or faculty member of FOUNDATION nor of Cornell without prior written approval from FOUNDATION, which will not be unreasonably withheld. 

  

	4.9	LICENSEE shall alone have the obligation to ensure that Products it makes, uses, sells, offers for sale, leases, imports, exports, or otherwise disposes of are not
defective, that Products satisfy all applicable government regulations and that export of Products satisfies government export requirements. 

 ARTICLE 5: PAYMENTS, ROYALTIES, REPORTS AND RECORDS 
  

	5.1	As consideration for entering into this Agreement, [...***...], in the event that LICENSEE [...***...] related series of transactions with total proceeds to
LICENSEE of at least [...***...] (a “Major Financing”) and following such Major Financing, FOUNDATION’S “Equity Ownership” of LICENSEE, which includes the shares of LICENSEE’S non-voting Common Stock then held by
FOUNDATION (or any shares of LICENSEE’S voting common stock issued upon conversion thereof), is less than [...***...] of LICENSEE’S outstanding capital stock (including all outstanding common stock, preferred stock, options or
warrants to purchase common or preferred stock, and any options reserved for issuance under any equity incentive plan, hereinafter referred to as “on a fully diluted basis”); then 

 

	 	(a)	LICENSEE shall issue to the FOUNDATION, pursuant to a common stock purchase agreement in the form attached hereto as Exhibit B, that number of shares of common stock
equal to the number of shares necessary to increase FOUNDATION’S Equity Ownership to [...***...] of LICENSEE’S outstanding capital stock, following such Major Financing, on a fully diluted basis. If the Major Financing exceeds
[...***...], LICENSEE will not issue any shares of common stock to provide an adjustment to FOUNDATION’S Equity Ownership for the amount of the Major Financing in excess of [...***...]; and 

 

	 	(b)	LICENSEE shall grant to FOUNDATION the same registration and information rights granted to the investors in the Major Financing. 

 

	 	(c)	LICENSEE will use its commercially reasonable efforts to cause the common stock issued pursuant to Section 5.1(a) hereof to not be subject to any lock-up periods
that may be required in connection with the LICENSEE’S initial public offering. 

 A Major Financing shall
only include the first financing of LICENSEE that meets the [...***...] proceeds threshold. 
  

	5.2	FOUNDATION hereby consent to any conversion of the non-voting Common Stock held by it to voting Common Stock in connection with the Major Financing.

  

	5.3	FOUNDATION hereby agrees that all previous provisions of, rights granted and covenants made regarding the issuance of the LICENSEE’S capital stock are hereby
waived, released and superseded in their entirety by the provisions of this Section 5 and shall have no further force or effect. 

  

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	5.4	For the license granted hereunder, commencing on the date of the first commercial sale of Product, LICENSEE shall pay or cause to be paid to FOUNDATION a royalty of
[...***...] on Net Sales of Products on a country by country basis [...***...]. In the event that Products incorporate at least one claim described in third party [...***...] (each such third-party [...***...] being defined
as a “Non-Foundation Right”) the royalty shall be (i) the amount of Net Sales for the Products incorporating Non-Foundation Rights, (ii) multiplied by [...***...], and (iii) [...***...]. Such stacking shall
become effective on LICENSEE providing reasonable evidence to FOUNDATION that additional Applications or Patents are applicable to the Product. In the event of a disagreement as to the inclusion of any [...***...], the Parties agree that an
independent neutral party shall be consulted to determine the appropriateness of inclusion of the [...***...] such royalty calculation. 

  

	5.5	 Beginning with the [...***...] License Year and in each License Year thereafter, LICENSEE shall pay FOUNDATION a minimum annual royalty for
that License Year. Payment shall be due within thirty (30) days of the first day of the License Year and [...***...] and the royalty reports required under Section 5.7 should reflect [...***...]. None of the minimum annual
royalties are refundable or applicable to a succeeding License Year. Such minimum annual royalty payments shall be made according to the following schedule and [...***...]: 

 

					
	 License Year
	  	 Payment Due Date
	  	Min. Royalty Payment
	 [...***...]
	  	 [...***...]
	  	[...***...]
	 [...***...]
	  	 [...***...]
	  	[...***...]
	 [...***...]
	  	 [...***...]
	  	[...***...]
	 [...***...]
	  	 [...***...]
	  	[...***...]

  

	5.6	Royalties shall be payable only once with respect to the same unit of Products. 

 

	5.7	 LICENSEE shall provide FOUNDATION with semi-annual written reports, due June 30th and December 31st of each License Year, of all sales, leases or other dispositions of Products by LICENSEE and Sublicensees. In order to
minimize LICENSEE time spent on royalty reports, a brief one-page Royalty Report Form is provided in Exhibit A that will satisfy FOUNDATION’S reporting requirements. The report shall be made within thirty (30) days of the end of each
semiannual period. FOUNDATION agrees to keep the information in these reports confidential, except as may be necessary to maintain an action against LICENSEE for breach of this Agreement. Royalty payments for sales, leases, and other dispositions of
the Products invoiced during a semi-annual period shall accompany the Royalty Report Form for that particular semi-annual period. The Royalty Report Form shall be submitted regardless of whether or not royalties are owed. Payments shall be made in
United States dollars, Conversion from foreign currencies, 

  

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if any, shall be based upon the conversion rate published in The Wall Street Journal on the last day of the particular semi-annual accounting period (or on the last business day on which The Wall
Street Journal is published during said semi-annual period) for which royalties are due. Royalty checks shall be made payable to Cornell Research Foundation and mailed to the address specified in section 13.4. 

 

	5.8	LICENSEE shall keep and maintain, and LICENSEE shall require that Sublicensees keep and maintain, any and all records necessary to certify compliance of LICENSEE with
the terms of this agreement, including but not limited to accounting general ledgers, Sublicense and distributor agreements, price lists, catalogs, marketing materials, audited financial statements, income tax returns, sales tax returns, inventory
records, and shipping documents of Products. Such records shall be open to inspection at reasonable times by a certified public accountant chosen by FOUNDATION and acceptable to LICENSEE, which shall not unreasonably withhold such acceptance. Such
inspection shall be made at FOUNDATION’S expense. However, if the results of any audit reveal additional royalties owed to FOUNDATION that differ by more the [...***...] percent) from those royalties already paid, LICENSEE shall also
reimburse FOUNDATION for the costs of the audit. FOUNDATION agrees to hold such records confidential, except as may be necessary to maintain an action against LICENSEE for breach of this Agreement. The records required by this paragraph shall be
maintained and available for inspection for a period of six (6) years following the calendar quarter to which they pertain. This paragraph shall survive termination of this Agreement. 

 

	5.9	LICENSEE shall reimburse FOUNDATION for the expenses specified in Section 3.3 within thirty (30) days of written invoice from FOUNDATION. Such invoice shall
specify the date the expense was incurred, the purpose of the expense (including, as applicable, a summary of patent attorney services giving rise to the expense), and the Applications or Patents to which the expense relates,

  

	5.10	Payments due under Sections 5.1 and 5.5 shall be considered late if not received by the dates specified in Sections 5.1 and 5.5 respectively, whether invoiced or not.
Payments due under Section 5.9, and any other payments due under this Agreement, other than the payments due under Sections 5.1 and 5.5 and royalty payments, shall be considered late if not received within sixty (60) days of the date of
invoice. Royalty payments due under Section 5.7 of this Agreement and payment of FOUNDATION’S share of Sublicense consideration shall become late if not paid within sixty (60) days after the end of the semi-annual in which the payment
obligation was incurred. Late payments [...***...]. 

  

	5.11	LICENSEE agrees to make a written report to FOUNDATION within ninety (90) days after the expiration of this Agreement pursuant to Section 7.1. LICENSEE shall
continue to make reports pursuant to the provisions of this Section 5.7 concerning royalties payable in accordance with Section 5.4 in connection with the sale of Products after expiration of the license, until such time as all such
Products produced under the license have been sold or destroyed. Concurrent with the submittal of each post-termination report, LICENSEE shall pay FOUNDATION all applicable royalties. 

 

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 ARTICLE 6: INFRINGEMENT

  

	6.1	In the event that either party determines that a third party is making, using, selling, offering for sale, or importing a product that may infringe Patents, it will
promptly notify the other party in writing. LICENSEE may elect, with the prior written consent of FOUNDATION, to bring suit against such alleged infringer. Such election must be made within thirty (30) days of receipt of said written consent
from FOUNDATION. All recoveries in such suit shall belong to LICENSEE except that LICENSEE may elect to grant FOUNDATION the right to elect to pay up to fifty percent (50%) of the litigation costs and receive a percentage of any recovery equal
to the percentage of litigation costs paid. If such suit involves claims of infringement of Non-Foundation Rights, FOUNDATION’S right of election to pay litigation costs and corresponding rights in recovery shall be limited to 50% multiplied by
the fraction expressed in section 5.4 (iii). FOUNDATION must make such election within thirty (30) days of its receipt of notice that LICENSEE has elected to bring suit. FOUNDATION shall also have the right to choose to be represented by
separate counsel in any such suit at its own expense. Such expense for separate counsel shall not be considered as part of “litigation costs” for purposes of determining FOUNDATION’S share of any recovery in accordance with the
sentence above. If LICENSEE elects not to bring a suit against the alleged infringer, it shall promptly notify FOUNDATION of that fact and FOUNDATION shall have the right to commence such actions at its own cost and expense, in which case any
recoveries shall belong to FOUNDATION. In such suits by FOUNDATION, LICENSEE shall have rights of participation and recovery that are the same as FOUNDATION rights as provided above when LICENSEE elects to sue, except in this case the fraction
expressed in section 5.4 (iii) shall not be applied. 

  

	6.2	Regardless of which party controls a suit brought against an infringer, both parties shall participate in any settlement discussions and each will be a signatory to any
settlement agreement. 

 ARTICLE 7: TERM AND TERMINATION 

 

	7.1	This Agreement shall commence on Effective Date, and shall continue as a Field-of-Use Exclusive license until the last of all Patents has either expired or been
invalidated in an unappealed decision by a court having jurisdiction so long as LICENSEE’S covenants under the Agreement are being performed and the LICENSEE is in good standing, and provided this Agreement is not earlier terminated as provided
for herein. 

  

	7.2	FOUNDATION may terminate this Agreement if LICENSEE: 

  

	 	(i)	is in default in payment of license fees, royalties or cost reimbursements or in providing reports; 

 

	 	(ii)	is in material breach of any provision of this Agreement; 

  

	 	(iii)	provides any false report; 

  

	 	(iv)	if LICENSEE does not have Products available for commercial sale prior to [...***...]; 

 

	 	(v)	 has not sold Products for any period of one (1) year after the end of the [...***...] License Year; 

  
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	 	(vi)	if LICENSEE fails to provide written notice to FOUNDATION for the transfer of this Agreement upon the sale of LICENSEE in accordance to Section 4.5 or for a
Sublicense of this Agreement in accordance with Section 4.2 

 and LICENSEE fails to remedy any such default,
breach, or false report within sixty (60) days after receiving written notice thereof by FOUNDATION. 
  

	7.3	LICENSEE may terminate the license granted hereunder at any time upon sixty (60) days notice to FOUNDATION. FOUNDATION agrees that any expenses initiated by
FOUNDATION during the sixty (60) day termination period will not be LICENSEE’S financial obligation although all other obligations under this Agreement shall continue to accrue during the sixty (60) day notice period, including the
obligation to make any payments due under this Agreement. 

  

	7.4	Upon termination of this Agreement for any reason, including the end of term as specified above, all rights and obligations under this Agreement shall terminate, except
those that have accrued prior to termination and except as specified in this Agreement. 

 ARTICLE 8: PUBLICATION AND
CONFIDENTIALITY 
  

	8.1	It is the policy of FOUNDATION and Cornell to promote and safeguard free and open inquiry by faculty, students and others. To further this policy, FOUNDATION and
Cornell shall retain the right to publish information described in Applications and Patents. 

  

	8.2	Both parties agree to keep any information identified as confidential by the disclosing party confidential using methods at least as stringent as each party uses to
protect its own confidential information, except as may be necessary to maintain an action against LICENSEE for breach of this Agreement or to audit LICENSEE as specified under Section 5.8. “Confidential Information” shall include the
progress report required under Section 4.7 and any other information marked confidential or accompanied by correspondence indicating such information is confidential exchanged between the parties hereto. The confidentiality and use obligations
set forth above apply to all or any part of the Confidential Information disclosed hereunder except to the extent that: 

  

	 	(a)	LICENSEE or FOUNDATION can show by written record that it possessed the information prior to its receipt from the other party; 

 

	 	(b)	The information was already available to the public or became so through no fault of the LICENSEE or FOUNDATION; 

 

	 	(c)	The information is subsequently disclosed to LICENSEE or FOUNDATION by a third party that has the right to disclose it free of any obligations of confidentiality; or

  

	 	(d)	Five years have elapsed from the expiration of this Agreement. 

 ARTICLE 9: ARBITRATION AND JUDICIAL REMEDIES 
  

	9.1	If a controversy arises under or related to this Agreement, and any disputed claim by either party against the other under this Agreement excluding any dispute relating
to patent validity or infringement arising under this Agreement, the parties shall endeavor to resolve such controversy or dispute by mutual, good faith conciliation and mediation and, failing that, may mutually agree to settle the controversy or
dispute by arbitration in accordance with the Licensing Agreement Arbitration Rules of the American Arbitration Association. 

	 	(i)	Upon request by either party, arbitration will be by a third party arbitrator mutually agreed upon in writing by LICENSEE and FOUNDATION within thirty (30) days of
such arbitration request. If the parties fail to mutually agree upon said third party arbitrator within the allotted thirty days, then the arbitration will be by a panel of three arbitrators comprising one arbitrator selected by each party within a
further thirty (30) day period and a third arbitrator selected by the preceding two arbitrators. If one party fails to select an arbitrator within the allotted thirty day period, then said arbitration panel will consist solely of the arbitrator
chosen by the other party. 

  

	 	(ii)	The parties shall be entitled to discovery in like manner as if the arbitration were a civil suit in the New York Superior Court. The Arbitrator may limit the scope,
time and/or issues involved in discovery. 

  

	 	(iii)	Any arbitration shall be held at Ithaca, NY, unless the parties hereto mutually agree in writing to another venue. 

 

	9.2	FOUNDATION reserves the right and power to proceed with direct judicial remedies against LICENSEE without conciliation, mediation or arbitration for breach of the
royalty payment and sales reporting provisions of this Agreement after giving written notice of such breach to LICENSEE followed by an opportunity period of thirty (30) days in which to cure such breach. In collecting overdue royalty payments
and securing compliance with reporting obligations, FOUNDATION may use all judicial remedies available. 

 ARTICLE 10:
INDEMNIFICATION 
  

	10.1	LICENSEE agrees to indemnify and hold harmless FOUNDATION and Cornell and their respective trustees, officers, employees, students, and agents against any and all
claims for death, illness, personal injury, property damage, damages, expenses, losses and improper business practices arising out of (i) the manufacture, use, sale, or other disposition of Patents or Products by LICENSEE, Sublicensee, or their
customers, (ii) a third party’s use of a Products purchased, leased, or otherwise acquired from LICENSEE or Sublicensee, (iii) a third party’s manufacture or provision of a Products at the request of LICENSEE or Sublicensee.

  

	10.2	FOUNDATION shall not be liable for any indirect, special, consequential, or other damages whatsoever, whether grounded in tort (including negligence), strict liability,
contract or otherwise. FOUNDATION shall not have any responsibilities or liabilities whatsoever with respect to Products. 

  

	10.3	LICENSEE and Sublicensee shall at all times comply, through insurance or self-insurance, with all statutory workers’ compensation and employers’ liability
requirements covering any and all employees with respect to activities performed under this Agreement. 

	10.4	LICENSEE agrees to obtain and maintain insurance against liability, damage, destruction and loss comparable to that which is maintained by companies in similar
businesses at similar stages in their growth. 

	10.5	The provisions of this article shall survive termination of this Agreement. 

 ARTICLE 11: WARRANTIES AND LIMITATIONS 
  

	11.1	FOUNDATION and LICENSEE each represent and warrant that they have the right to enter into this Agreement. FOUNDATION warrants that it has the right to convey to
LICENSEE the rights granted under this Agreement. 

  

	11.2	FOUNDATION warrants that is the owner of Applications and Patents. 

  

	11.3	FOUNDATION makes no representation or warranty that Applications will result in issued Patents. 

 

	11.4	FOUNDATION makes no representations or warranties concerning the validity or scope of Patents. 

 

	11.5	FOUNDATION does not warrant that Products made, used, sold, leased, imported, exported or otherwise disposed of under the license of this Agreement is or will be free
from infringement of patents of third parties. 

  

	11.6	Nothing herein shall be construed as granting by implication, estoppel, or otherwise any licenses or rights under patents or other rights of FOUNDATION or Cornell or
other persons other than Patents, regardless of whether such patents or other rights are dominant or subordinate to any Patents. 

  

	11.7	FOUNDATION is under no obligation to furnish any technology or information other than that described and claimed in Applications and Patents. 

 

	11.8	Nothing herein shall be construed to grant LICENSEE rights under any applications or patents other than Applications and Patents. 

 

	11.9	FOUNDATION does not make any representations, extend any warranties of any kind, express or implied, or assume any responsibility whatever concerning the manufacture,
use, or sale, lease or other disposition by LICENSEE or its vendees or transferees of Products. 

  

	11.10	Except as expressly set forth in this Agreement, FOUNDATION MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED. THERE ARE NO
EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF PRODUCTS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OR ANY OTHER EXPRESS OR IMPLIED WARRANTIES.

 ARTICLE 12: MARKING 
  

	12.1	Prior to the issuance of patents on the Applications, LICENSEE shall mark, and agrees to require that Sublicensees shall mark, Products (or their containers or labels)
made, sold, leased, imported, exported or otherwise disposed of by it under the license granted in this Agreement with the words “Patent Pending,” and following the issuance of one or more Patents, with the numbers of Patents.

 ARTICLE 13: MISCELLANEOUS PROVISIONS 
  

	13.1	Terms in this Agreement which appear capitalized, other than the names of the parties and article headings, have the meanings given in Article 2 and retain those
meanings whether used in the singular or plural. 

  

	13.2	This Agreement shall be binding upon and be to the benefit of the Parties hereto and their heirs, successors and assignees. However, neither Party shall assign this
Agreement, in whole or in part, without the written consent of the other. 

  

	13.3	All issues and questions concerning the construction, validity and interpretation of this Agreement and the Schedules and Exhibits hereto shall be governed by, and
construed in accordance with, the laws of the State of New York without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York. In furtherance of the foregoing, the internal law of the State of New York shall control the interpretation and construction of this Agreement (and all Schedules and Exhibits hereto), even
though under that jurisdiction’s choice of law or conflict of law analysis, the substantive law of such other jurisdiction would ordinarily apply. The parties hereto hereby irrevocably and unconditionally submit to the exclusive jurisdiction of
any State court sitting in Tompkins County, State of New York or Federal court sitting in Syracuse, New York over any suit, action or proceeding arising out of or relating to this Agreement and agree that no such suit, action or proceeding shall be
brought in any other court, forum or jurisdiction. The parties hereto hereby irrevocably and unconditionally waive any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in an inconvenient forum. 

  

	13.4	All notices required or permitted hereunder shall be in writing and be served on the parties at the addresses set forth below. Any such notices shall be either
(a) sent by a nationally recognized overnight courier, in which case notice shall be deemed delivered when delivery is made according to the records of such courier, (b) sent by facsimile, in which case notice shall be deemed delivered
upon receipt of confirmation of transmission of such facsimile notice, or (c) sent by personal delivery, in which case notice shall be deemed delivered upon receipt. Any notice by facsimile or personal delivery and delivered after 5:00 p.m.,
Eastern Daylight Time, shall be deemed received on the next Business Day. A party’s address may be changed by written notice to the other parties; provided, however, that no notice of a change of address shall be affected until actual receipt
of such notice. 

 In the case of FOUNDATION: 

President 

Cornell Research Foundation, Inc. 
 20 Thornwood Drive, Suite 105 
 Ithaca, NY 14850 

In the case of LICENSEE: 
 President 
 Nanofluidics, Inc. 

31 Dutch Mill Road 
 Ithaca, NY 14850 
  

	13.5	No term or provision of this Agreement shall be waived and no breach excused unless such waiver or consent shall be in writing and signed by the party claimed to have
waived or consented. No waiver of a breach shall be deemed to be a waiver of a different or subsequent breach. 

  

	13.6	This Agreement may not be modified, changed or terminated orally. No change, modification, addition or amendment shall be valid unless in writing and signed by the
parties hereto. 

  

	13.7	In the event any provision of this Agreement is determined to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

  

	13.8	This Agreement constitutes and contains the entire agreement of the parties respecting its subject matter and supersedes any and all prior negotiations, correspondence,
understandings and agreements, whether written or oral, between the parties respecting its subject matter. 

 IN WITNESS of this
Agreement, FOUNDATION and LICENSEE have caused this Agreement to be executed by their duly authorized officers on the dates indicated. 
  

							
	Cornell Research Foundation, Inc.	  	Nanofluidics, Inc.
				
	By:	  	 /s/ Richard S. Cahoon
	  	By:	  	 /s/ Stephen W. Turner

		  	Richard S. Cahoon	  		  	Stephen W. Turner
				
	Title:	  	 Senior Vice President
	  	Title:	  	 President

				
	Date:	  	 March 2, 2004
	  	Date:	  	 March 2, 2004

  
 EXHIBIT A - ROYALTY
REPORT 
 Report royalty payment information to the Cornell Research Foundation, Inc (CRF) using the report format or facsimile attached to
these instructions. This minimal information must be provided in order to correctly record royalty related events required by your license agreement with CRF. 
 Use a separate report to record royalty information for each license agreement. For each licensee agreement, report royalty sales by CRF docket number, which identifies the technology. List each
contributing technology if more than one technology is used to produce a royalty generating process/product. This level of detail permits evaluation of the use of each technology under license with your company. 

Submit this information along with appropriate payment to: 
 Cornell Research Foundation, Inc. 
 ATTN: Finance and Accounting 

20 Thornwood Drive, Suite 105 
 Ithaca, NY 14850

 (607) 257-1081

www.crf.cornell.edu 
 For your
convenience, payments may be made by FEDWIRE or ACH to: 
 Tompkins Trust Company 
 The Commons 
 Ithaca, NY 14851 
 (607) 273-3210 
 www.tompkinstrust.com 

Account: [...***...], ABA: [...***...] 

  
 ***
Confidential Treatment Requested 

 ROYALTY REPORT – [licensee NAME] 

 

							
	LICENSEE NAME:	 	  
	  	CRF LICENSE NUMBER:	 	  

 

					
	REPORTING PERIOD:	 	  
	  	

 Individual to contact concerning this information: 

 

									
	Name:	 	  
	  	Phone # or email ID:	  	  
	  	

 For each product/item subject to a royalty payment provision, provide the following information as applicable.

  

					
	 PRODUCT/ITEM:
	 	  
	 	

  

															
	 CRF Docket Number
	 	 Country
	 	 Number of

Units/Products Sold
	 	 Gross Sales By

Country
	 	 Net Sales By

Country
	 	 Royalty Rate
	 	 Less Minimum Royalty

Payment Made
	 	 Net Royalty

Payment Made

		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 		 	
		 		 		 		 		 		 	 Total Payment
	 	

  

 16License Agreement  - GE Healthcare Bio-Sciences Corp.

 Exhibit 10.9 
 Confidential Treatment Requested by 
 Pacific Biosciences of California,
Inc. 
 LICENSE AGREEMENT 
 THIS LICENSE AGREEMENT (this “Agreement”), dated as of September 11, 2006 (the “Effective Date”), is made by and between GE Healthcare Bio-Sciences Corp., with a principal
place of business at 800 Centennial Avenue, Piscataway, New Jersey 08855 (“GEHC”), and Pacific Biosciences of California, Inc., with a principal place of business at 1505 Adams Drive, Menlo Park, CA 94025 (“Licensee”).

 RECITALS 
 WHEREAS, GEHC is the owner of the patents and/or patent applications set forth on Schedule 1 attached hereto; and 
 WHEREAS, Licensee desires to license from GEHC, and GEHC desires to license to Licensee, the Licensed Patents on the terms and subject to the conditions set forth herein. 

NOW, THEREFORE, in consideration of the mutual premises and covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending to be legally bound do hereby agree as follows: 
  

	1.	DEFINITIONS 

  

	 	1.1.	“Affiliate” of a party means any entity that, directly or indirectly, controls, is controlled by or is under common control with such party.
“Control” (and, with correlative meanings, the terms “controlled by” and “under common control with”) means: (i) the ownership of fifty percent (50%) or more of the outstanding voting securities of an entity;
or (ii) the power, whether by ownership of voting securities, by contract or otherwise, to appoint fifty percent (50%) or more of the members of the governing body of an entity. 

 

	 	1.2.	“Confidential Information” shall mean all information of a confidential or secret nature, including without limitation, any financial and scientific data,
technical and business information, sales data, information regarding advertising, distribution, marketing or strategic plans, product plans, customer information, business strategies, information regarding costs or profits, formulae, productivity
or technological advances, product designs and specifications, development schedules, computer programs and systems, designs, data bases, inventions, engineering techniques and procedures, equipment, materials, test and test quality assurance
procedures, research and research projects that, if disclosed in tangible form, is marked as “confidential” at the time of disclosure or, if disclosed orally, is orally identified as confidential or proprietary when disclosed.

  

	 	1.3.	Consumables shall mean a kit as sold as a single unit that includes sequencing reagent components and/or waiveguides. 

 

	 	1.4.	“Consumable Kit” shall mean any sequencing reagent and/or waiveguide. 

 

	 	1.5.	“Effective Date” shall have the meaning given to it in the first paragraph hereof. 

 

	 	1.6.	“Field of Use” shall mean DNA sequencing applications. 

  

	 	1.7.	“First Commercialization Date” shall mean the date when a Licensed Product or Licensed Service, as applicable, is first sold to a Third Party.

  
 1 

	 	1.8.	“Licensed Patents” shall mean all patents and patent applications listed in Schedule 1, any applications claiming priority to the listed patents or patent
applications, including but not limited to continuations, divisions, continuing prosecution applications, reissues and reexams, any foreign counterparts of any of the listed patents or patent applications, and any patents or patent applications that
claim priority from any common application from which any of the listed patents and patent applications claim priority. 

  

	 	1.9.	“License Fees” shall have the meaning given to it in Section 4.1 hereof. 

 

	 	1.10.	“Licensed Products” shall mean any product the manufacture, importation, use, distribution, performance, offer for sale, sale, lease or other transfer of
which would but for the license granted herein infringe, directly or indirectly, a valid claim of a Licensed Patent. 

  

	 	1.11.	“Licensed Services” shall mean any service (including, but not limited to, funded research, collaboration service, fee-for-service or laboratory service),
which would but for the license granted herein infringe, directly or indirectly, a valid claim of a Licensed Patent. 

  

	 	1.12.	“Minimum Annual Royalty” shall have the meaning given to it in Section 4.3 hereof. 

 

	 	1.13.	“Net Sales” shall mean Net Sales of Licensed Products and/or Net Sales of Licensed Services, as applicable. 

 

	 	1.14.	“Net Sales of Licensed Products” shall mean the invoice price of all sales of Licensed Products sold during the applicable period (i) by Licensee to end
users, (ii) by Licensee to Permitted Distributors and/or (iii) by Permitted Distributors to end users, in each case, less the following amounts: (A) regular trade and quantity discounts actually taken; (B) government rebates
actually taken; (C) actual returns of Licensed Products for which no replacement Licensed Products are provided; (D) taxes and duties directly imposed against the amount invoiced and actually paid by Licensee and (E) charges for
packaging, handling and shipping separately stated on the invoice but before deduction of any other items. 

  

	 	1.15.	“Net Sales of Licensed Services” shall mean either: (i) the invoice price of Licensed Services provided by Licensee, less the following amounts:
(A) support costs, including, but not limited to, full-time equivalent (“FTE”) support, warranty support and service support; (B) regular trade and quantity discounts actually taken; (C) government rebates actually taken;
(D) taxes and duties directly imposed against the amount invoiced and actually paid by Licensee and (E) charges for packaging, handling and shipping separately stated on the invoice but before deduction of any other items, or (ii) if
Consumables or Consumable Kits that are Licensed Products are ordinarily sold, catalogued or invoiced separately from Licensed Services by Licensee, then Net Sales of Licensed Services shall be defined as the ordinary selling, catalogue or invoice
price of such Consumables or Consumable Kits that are used by Licensee in the provision of such Licensed Services, less the deductions set forth in the foregoing clause (i). 

 

	 	1.16.	“Net Sales Royalties” shall have the meaning given to it in Section 4.2 hereof. 

 

	 	1.17.	“Permitted Distributor” shall mean any distributor of Licensed Products whose engagement has been approved by GEHC in accordance with Section 5.1 hereof.

  

	 	1.18.	“Royalties” shall mean, collectively, the Net Sales Royalties and the Minimum Annual Royalty. 

 

	 	1.19.	“Term” shall have the meaning given to it in Section 9.1 hereof. 

 

	 	1.20.	“Territory” shall mean the world. 

  

	 	1.21.	“Third Party” shall mean any person or entity, other than Licensee, GEHC or their respective Affiliates, including, without limitation, any end user of
Licensed Products. 

  

 2 

	2.	LICENSE 

  

	 	2.1.	License and Restrictions 

  

	 	2.1.1	During the Term and subject to the terms hereof, GEHC hereby grants to Licensee, and Licensee hereby accepts from GEHC, a non-exclusive, non-transferable license
(without the right to sub-license except as to Permitted Distributors in compliance with Section 5 of this Agreement) under the Licensed Patents in the Territory to (i) make, have made, import, use, distribute, offer to sell and sell
Licensed Products and (ii) perform Licensed Services, in each case, solely to end users all within the Field of Use. Notwithstanding anything to the contrary, GEHC reserves the right to practice the Licensed Patents for itself, and to grant
further licenses, assign or otherwise transfer the Licensed Patents to others for any purpose whatsoever, provided that any such assignment or transfer does not affect the rights granted to Licensee hereunder. 

 

	 	2.1.2	Licensee will ensure that all sales of Licensed Products to end users, whether directly by Licensee or by one or more Permitted Distributors, shall be expressly
conditional upon such end user’s acceptance of the terms and conditions set forth on Exhibit A attached hereto, including, but not limited to, the restrictions on re-sale. 

 

	 	2.2.	Compliance with Law. Licensee shall, and shall use its reasonable best efforts to cause any Permitted Distributor and/or any third-party manufacturer to, comply
with all applicable laws, rules and regulations issued by the country of origin, the U.S. Government, the United Nations or other similar international organization in connection with (i) the making, having made, importing, use, distribution,
sale of and/or offer to sell any Licensed Product and (ii) the performance of Licensed Services. 

  

	3.	INTELLECTUAL PROPERTY 

  

	 	3.1.1.	Any improvement to the Licensed Patents conceived during the Term of this Agreement, which improvement cannot be practiced absent the license granted hereunder
(hereafter “Improvement”), whether patentable or not, conceived solely by one party shall be solely owned by such party with all rights appurtenant thereto; [...***...]. 

 

 *** Confidential Treatment Requested 

3 

	4.	LICENSE FEES; ROYALTIES 

  

	 	4.1.	License Fees: In consideration of the rights granted to it under this Agreement, Licensee shall pay the following license fees (collectively, “License
Fees”) to GEHC: 

  

	 	4.1.1.	[...***...] payable on the Effective Date; 

  

	 	4.1.2.	[...***...] payable upon the First Commercialization Date. 

  

	 	4.2.	Net Sales Royalties. In consideration of the rights granted to it under this Agreement, Licensee shall pay the following royalties (collectively, “Net Sales
Royalties”) to GEHC: 

  

	 	4.2.1.	Licensed Products Royalty: 

  

	 	4.2.1.1.	[...***...] of Net Sales of Licensed Products that are Consumables and/or Consumable Kits sold by Licensee directly to end users. 

 

	 	4.2.1.2.	For sales by one or more Permitted Distributors, the lesser of (a) [...***...] of Net Sales of Licensed Products that are Consumables and/or Consumable Kits
sold by Licensee to such Permitted Distributor(s) and (b) [...***...] of Net Sales of Licensed Products that are Consumables and/or Consumable Kits sold by such Permitted Distributor(s) to end users. 

 

	 	4.2.2.	Licensed Services Royalty: [...***...] of Net Sales of Licensed Services. 

 

	 	4.3.	 Minimum Annual Royalty: In consideration of the rights granted to it under this Agreement, Licensee shall pay to GEHC a minimum annual royalty
equal to [...***...] (“Minimum Annual Royalty”) commencing upon the earlier to occur of (a) the [...***...] and (ii) the [...***...] anniversary of the Effective Date. The Minimum Annual Royalty shall be
fully creditable against Licensed Product Royalties due for any 12 month period beginning upon the date required for such Minimum Annual Royalty Payment. 

 

	 	4.4.	Payments. Net Sales Royalties shall be paid on Net Sales accruing during each calendar quarter within thirty (30) days following the end of such calendar
quarter. The Minimum Annual Royalty shall be paid on each anniversary of its commencement date pursuant to Section 4.3 above. All payments hereunder shall be made by wire transfer of immediately available funds to an account specified in
writing by GEHC. Except by termination of this Agreement under Section 9 of this Agreement, and notwithstanding the pendency of any infringement (or other) claim or action by or against Licensee, Licensee shall have no right to terminate or
suspend (or escrow) payment of any amounts required to be paid to GEHC hereunder. 

  

	 	4.5.	Royalty Reports. Concurrently with each payment of Net Sales Royalties, Licensee shall deliver to GEHC a report setting forth in reasonable detail
(a) Licensee’s total revenue in the Field of Use during the applicable calendar quarter; (b) a calculation of the Net Sales during such calendar quarter and (c) a calculation of the Net Sales Royalties for such calendar quarter.

  

 *** Confidential Treatment Requested 

4 

	 	4.6.	 Minimum Revenue. Licensee hereby acknowledges that the financial terms set forth in this Agreement are based on the understanding that no later
than the [...***...] anniversary of the First Commercialization Date, the total revenue generated by sales of Licensed Products that are Consumables and/or Consumable Kits in the Field of Use will equal at least [...***...] of the
total revenue generated by Licensee in the Field of Use at such date. Licensee hereby agrees that if the total revenue generated by sales of Licensed Products that are Consumables and/or Consumable Kits in the Field of Use equals less than
[...***...] of the total revenue generated by Licensee in the Field of Use on the [...***...] anniversary of the First Commercialization Date or at any time thereafter during the Term, the parties shall in good faith negotiate an
equitable adjustment to the financial terms of this Agreement commensurate with such revenue shortfall. 

  

	 	4.7.	Taxes. GEHC shall bear the taxes to be levied on the income of GEHC arising under this Agreement. Licensee shall bear the taxes to be levied on the income of
Licensee arising under this Agreement. Withholding or other taxes (if any) assessed on GEHC in connection with the payment of Royalties and other consideration due hereunder and which Licensee is required by law to deduct and withhold when making
payments, shall be paid by Licensee to the competent authority on behalf of GEHC. The original of the official government receipt evidencing payment of such taxes by Licensee on GEHC’s behalf shall be delivered by Licensee to GEHC not later
than five (5) working days after the date of payment, together with supporting documentation identifying the Royalties to which such taxes relate. Upon receipt of such government receipts, the sums so paid by Licensee shall be credited by GEHC
in partial discharge of Licensee’s obligation for the payment of such Royalties. 

  

	 	4.8.	Records. During the Term and for a period of [...***...] thereafter, Licensee shall keep accurate records of all Net Sales in sufficient detail to enable
GEHC to verify the Royalties payable thereon and Licensee’s compliance with the minimum revenue requirement set forth in Section 4.6 hereof. 

  

	 	4.9.	Audit. Upon reasonable advance written notice from GEHC, Licensee shall provide access to its relevant books and records (including, without limitation, sales
records), at Licensee’s facilities, to an auditor appointed by GEHC and reasonably acceptable to Licensee to verify Licensee’s compliance with the terms of this Agreement, including, without limitation, the minimum revenue requirement set
forth in Section 4.6 hereof. If an audit reveals a violation by Licensee of the terms of this Agreement, Licensee will immediately and at its sole cost and expense, take all requisite actions to remedy such violation. If any audit reveals an
underpayment of Royalties in excess of [...***...] percent [...***...] during the period being audited, Licensee shall pay within thirty (30) days of the audit results (a) the full costs of such audit plus
(b) interest on such Royalties at the rate of [...***...]. 

  

	5.	PERMITTED DISTRIBUTORS; THIRD-PARTY MANUFACTURERS; ADDITIONAL LICENSES 

 

	 	5.1.	 Permitted Distributors. In the event Licensee intends to engage one or more distributors to import, distribute and/or sell Licensed Products, it
shall give prompt written notice of such intention to GEHC and provide GEHC with an opportunity to negotiate in good faith with Licensee to provide such distribution services, which opportunity shall extend for no less than thirty (30) days
from the date of GEHC’s receipt of such written notice. If Licensee and GEHC fail to reach agreement in regard to the provision of such distribution services within such 30-day period, then Licensee may engage a third-party distributor to
provide such distribution services; provided, however, that (a) the engagement of such third-party distributor shall be subject to GEHC’s express prior written approval, which approval shall not be unreasonably withheld; it being
acknowledged and agreed that in 

  

 *** Confidential Treatment Requested 

5 

	 	 
the event that GEHC wishes to withhold consent, GEHC shall provide Licensee with an objective, commercially reasonable basis for such withheld consent within thirty (30) days of such written
notice from Licensee; (b) the engagement of such third-party distributor shall be conditioned upon such distributor having agreed in writing to be bound by the terms and conditions of this Agreement and (c) Licensee shall remain liable for
the payment of all royalties on Net Sales made by such distributor in accordance with Section 4.2.1.2, hereof. Each such third-party distributor engaged by Licensee in compliance with this Section 5.1 shall hereinafter be referred to as a
“Permitted Distributor.” 

  

	 	5.2.	Third-Party Manufacturer. In the event Licensee intends to engage one or more manufacturers to make Licensed Products, it shall give prompt written notice of
such intention to GEHC and provide GEHC with an opportunity to negotiate in good faith with Licensee to provide such manufacturing services, which opportunity shall extend for no less than thirty (30) days from the date of GEHC’s receipt
of such written notice. Subject to the foregoing sentence, nothing in this section shall be construed as restricting Licensee’s rights to negotiate, agree or contract with any third party the right to manufacture Licensed Products for Licensee
at any time. 

  

	 	5.3.	Additional Licenses. Upon Licensee’s written request, Licensor shall negotiate in good faith the terms of a license to any technology or intellectual
property owned or licensed by Licensor which is necessary for Licensee to practice the license granted herein; provided, however, that Licensor’s obligation to so negotiate shall be limited to the extent expressly permitted by the agreements
(if any) to which such technology or intellectual property is subject. 

  

	6.	ACKNOWLEDGEMENT OF PATENTS AND TRADEMARKS 

  

	 	6.1.	Patents. Any and all packaging, insert sheets and/or promotional literature accompanying or referencing Licensed Products shall include the following statement:
“This product or portions thereof is manufactured and sold under license from GE Healthcare under patents [NOTE: FILL IN PATENT NUMBERS] and other pending and foreign patent applications.” 

 

	 	6.2.	Trademarks. GEHC may from time to time require Licensee to affix, at Licensee’s expense, certain of GEHC’s trade names and/or trademarks on Licensed
Products (including packaging, insert sheets and/or promotional literature accompanying or referencing such Licensed Products), in which case GEHC shall provide written instructions to Licensee (i) identifying the trade names and/or trademarks
to be so affixed; (ii) identifying which Licensed Products shall carry such trade names and/or trademarks and (iii) setting forth guidelines for the use of such trade names and/or trademarks, provided that, consistent with the foregoing
that matters relating to size and positioning of marks shall be subject to Licensee’s reasonable marketing requirements. 

  

	 	6.3.	Ownership and Use of Trademarks. Licensee acknowledges and agrees that: 

 

	 	6.3.1.	GEHC is the owner of all GEHC trademarks and trade names appearing on packaging, insert sheets and promotional literature used in relation to Licensed Products pursuant
to Section 6.1 above; 

  

	 	6.3.2.	Licensee may only use such GEHC trademarks and trade names for the purpose and during the Term in accordance with Section 6.2 above; 

 

 6 

	 	6.3.3.	Any rights Licensee may acquire in such GEHC trademarks and trade names pursuant to Licensee’s use of such trademarks and tradenames under this Agreement shall be
assigned to GEHC absolutely; and 

  

	 	6.3.4.	Licensee shall not do or omit to do anything whereby the goodwill and reputation of such GEHC trademarks and trade names is reasonably likely to be prejudiced or
damaged. Nothing in this section 6.3.4 shall preclude either party from exercising its legal rights under this Agreement or otherwise. 

  

	7.	INDEMNIFICATION AND INSURANCE 

  

	 	7.1.	Licensee Indemnification. Licensee hereby agrees to indemnify, save, defend and hold GEHC and its Affiliates, and each of their respective directors, officers,
employees and agents, harmless from and against any and all claims, suits, actions, demands, liabilities, expenses and/or losses, including reasonable attorneys’ fees and expenses, arising out of or relating to (i) any act or omission by
Licensee, any of its Affiliates or any Permitted Distributor, or any of their respective directors, officers, employees and agents; (ii) claims (including, without limitation, claims of infringement or alleged infringement, death, personal
injury, illness or property damage) arising out of Licensee’s exploitation of the licenses and rights granted under this Agreement or otherwise arising out of the use of any Licensed Patent; or (iii) Licensee’s or any end user’s
use or disposition of Licensed Products and/or Licensed Services. 

  

	 	7.2.	Insurance. Licensee shall procure and maintain in full force and effect during the Term valid and collectible insurance policies in connection with its
activities and indemnification obligations as contemplated hereby, which policies shall provide for the types and amounts of coverage as set forth in Schedule 2 attached hereto. Licensee shall notify GEHC in writing at least thirty
(30) days prior to any modification to such insurance coverage. Upon GEHC’s request, Licensee shall deliver to GEHC a certificate of coverage or other written evidence reasonably satisfactory to GEHC of such insurance coverage.

  

	8.	CONFIDENTIALITY 

  

	 	8.1.	During the Term and for a period of five (5) years thereafter, each of Licensee and GEHC (each, a “Recipient”) agrees not to disclose to any third party
any Confidential Information disclosed to it by the other party (each, a “Disclosing Party”) and not to use such Confidential Information other than for the purpose of this Agreement. 

 

	 	8.2.	The undertakings of non-disclosure and non-use in this Section 8 shall not apply to information which: 

 

	 	8.2.1.	at the time of disclosure or subsequently is published or otherwise generally available to the public other than through any act or omission on the part of the
Recipient; 

  

	 	8.2.2.	was in the possession of the Recipient at the time of disclosure; 

  

	 	8.2.3.	was acquired from a third party who has the lawful right to make such disclosure; 

 

	 	8.2.4.	is independently developed by the Recipient without reference to the materials comprising the Confidential Information disclosed under this Agreement; or

  

	 	8.2.5.	the Recipient notifies the Disclosing Party is required to be disclosed by the Recipient pursuant to a legally enforceable order, direction or other regulation but any
disclosure shall be only so far as necessary to give effect thereto. 

  

 7 

	9.	TERM AND TERMINATION 

  

	 	9.1.	Term. The term (the “Term”) of this Agreement shall commence on the Effective Date and shall terminate on the earlier to occur of (a) the date
when none of the Licensed Patents remains in force in the Territory and (b) the date when this Agreement is terminated in accordance with the terms hereof. 

 

	 	9.2.	Termination by Licensee. Licensee may terminate this Agreement at any time by providing GEHC written notice of such termination at least 90 days in advance of an
effective date of such termination. Notwithstanding termination under this Section 9.2, Licensee shall be obligated to make payments for any amounts accruing up to the effective date of such termination. 

 

	 	9.3.	Termination for Breach or other Event of Default. In the event of a breach by either party, the other party may terminate this Agreement by giving such party
notice of such breach. The party receiving such notice shall have thirty (30) days from the date of receipt thereof to cure such breach. If such breach is not cured within such thirty (30) day period, then the non-breaching party shall
have the right to terminate this Agreement effective as of the end of such period. 

  

	 	9.4.	Termination for Minimum Revenue Shortfall: In the event the parties are unable to negotiate an equitable adjustment to the financial terms of this Agreement
pursuant to Section 4.6 hereof within [...***...] of commencing such negotiations, GEHC shall have the right to terminate this Agreement upon written notice to Licensee. 

 

	 	9.5.	Change of Control. 

  

	 	9.5.1.	Licensee shall deliver to GEHC advance written notice of any proposed Change of Control Event (as defined below) accompanied by a list of all Licensed Patents (if any)
under which Licensee at the time of such notice (a) makes, has made, imports, uses, distributes, offers to sell and/or sells any Licensed Products or (b) has an ongoing and active development program at the proof of concept or prototype
stage (clauses (i) and (ii) collectively, the “Utilized Patents”). Failure to give advance written notice of a Change of Control Event to GEHC shall constitute a breach of this Agreement by Licensee. 

 

	 	9.5.2.	For purposes of this Agreement, the term “Change of Control Event” shall mean any transaction or series of related transactions pursuant to which (a) a
Third Party becomes the beneficial owner of fifty percent (50%) or more of the total voting power of all classes of voting stock or securities of Licensee then outstanding; (b) Licensee consolidates with or merges into another entity, or
another entity consolidates with or merges into Licensee, as a result of which fifty percent (50%) or more of the total voting power of all classes of voting stock or securities of Licensee then outstanding is acquired by a Third Party; or
(c) Licensee conveys, transfers, leases or sells all or substantially all of the assets of Licensee to which this Agreement relates to a Third Party. 

  

	 	9.5.3.	Upon the effective date of such Change of Control Event: 

  

	 	9.5.3.1.	Licensee shall pay to GEHC an amount equal to [...***...] in consideration of such assignment; and 

 

	 	9.5.3.2.	Subject to receipt by GEHC of the fee set forth in Section 9.5.3.1 above, this Agreement shall (a) be assigned by operation of law to such Third Party with
respect to all Utilized Patents; (b) automatically terminate and be of no further force and effect with respect to all Licensed Patents other than Utilized Patents and (c) be amended by the parties to delete all Licensed Patents other than
Utilized Patents from Schedule 1 attached hereto. 

  

 *** Confidential Treatment Requested 

8 

	 	9.6.	Termination upon Bankruptcy or Insolvency. If Licensee becomes bankrupt or insolvent, or if the business of Licensee is placed in the hands of a receiver or
trustee, whether by voluntary act or otherwise, this Agreement shall immediately and automatically terminate. 

  

	 	9.7.	Effect of Termination. Upon termination or expiration of this Agreement, Licensee shall have no further license or rights under this Agreement with respect to
the Licensed Patents and shall, and shall use its reasonable efforts to cause any Permitted Distributors to, immediately cease to (a) make, have made, import, use, distribute, sell or offer to sell Licensed Products and (b) perform or have
performed any Licensed Services. Each party shall promptly return to the other party or destroy any and all Confidential Information or other proprietary information of such other party upon termination or expiration of this Agreement. Expiration or
termination of this Agreement will not relieve either party from any obligations which have accrued prior to such expiration or termination. Notwithstanding anything to the contrary, Sections 3 (Intellectual Property), 4.8 (Records), 4.9 (Audit), 7
(Indemnification and Insurance), 8 (Confidentiality), 10 (Disclaimer and Limitation of Liability), and 11 (Miscellaneous), and any other provision of this Agreement that by its nature should survive, shall survive the expiration or termination of
this Agreement. 

  

	10.	DISCLAIMER AND LIMITATION OF LIABILITY 

  

	 	10.1.	Disclaimer. EXCEPT FOR THE IMPLIED WARRANTY OF TITLE, THIS AGREEMENT PROVIDES NO OTHER WARRANTIES (STATUTORY OR IMPLIED), INCLUDING WITHOUT LIMITATION, AS TO
LICENSED PRODUCT QUALITY, CONDITION, DESCRIPTION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ALL SUCH OTHER WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED BY GEHC. GEHC HEREBY EXPRESSLY DISCLAIMS ANY WARRANTY REGARDING RESULTS OBTAINED
THROUGH THE USE OF THE LICENSED PRODUCTS, INCLUDING WITHOUT LIMITATION ANY CLAIM OF INACCURATE, INVALID OR INCOMPLETE RESULTS. 

  

	 	10.2.	Limitation of Liability. Notwithstanding anything to the contrary herein contained, GEHC’s liability for damages for any cause related to or arising out of
this Agreement, shall not exceed the aggregate amount of the License Fees and Royalties actually paid by Licensee to GEHC hereunder. 

  

	 	10.3.	Waiver of Consequential Damages. Notwithstanding anything to the contrary herein contained, GEHC shall not be liable for any indirect, consequential, special or
punitive damages of any kind from any cause arising out of this Agreement, including without limitation, due to loss of profits, loss of goodwill or business interruption. 

 

	11.	MISCELLANEOUS 

  

	 	11.1.	Independent Entities. Neither party has any ownership interest in the other, and the relationship between the parties, as established by this Agreement, is
solely that of independent contractors. This Agreement does not create any partnership, joint venture or similar business relationship between the parties. Neither party may assume or create any obligation, representation, warranty or guarantee,
express or implied, on behalf of the other party for any purpose whatsoever. 

  

 9 

	 	11.2.	Assignment. Except to the extent provided for in Section 9.5 hereof, Licensee may not assign this Agreement without GEHC’s prior written consent. This
Agreement shall be freely assignable by GEHC. Any assignment or any attempted assignment in breach of this Section shall be null and void. Subject to the foregoing, this Agreement shall bind and inure to the benefit of the parties hereto and their
permitted successors and assigns. 

  

	 	11.3.	Section Headings. The Section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning and interpretation
of this Agreement. 

  

	 	11.4.	Non-Waiver of Rights. The failure of either party to enforce at any time for any period any provision hereof shall not be construed to be a waiver of such
provision or of the right of such party thereafter to enforce such provision, nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy.
Remedies provided herein are cumulative and not exclusive of any remedies provided at law. 

  

	 	11.5.	Invalid Provisions. In the event that any one or more of the provisions (or any part thereof) contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any
other such instrument. Any term or provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, to the extent the economic benefits conferred by this Agreement to both parties remain substantially unimpaired, not
affect the validity, legality or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 

  

	 	11.6.	Entire Agreement. This Agreement, together with all Schedules and Exhibits attached hereto, constitutes the final, complete and exclusive agreement and
understanding between GEHC and Licensee relating to the subject matter hereof and supersedes all prior and contemporaneous agreements oral or written. To the extent that there are any conflicts between this Agreement and any Schedules or Exhibits
hereto, this Agreement will prevail. 

  

	 	11.7.	Notices. All notices and other communications hereunder shall be in writing. All notices hereunder shall be delivered personally, or sent by national overnight
delivery service or postage pre-paid registered or certified U.S. mail, and shall be deemed given: when delivered, if by personal delivery or overnight delivery service; or if so sent by U.S. mail, three (3) business days after deposit in the
mail, and shall be addressed: 

  

	 	 	If to GEHC: 

  

	 	 	800 Centennial Avenue 

	 	 	Piscataway, NJ 08855 

	 	 	Attention: Legal Department 

  

	 	 	If to Licensee: 

  

	 	 	Pacific Biosciences of California, Inc. 

	 	 	Attn: General Counsel 

	 	 	1505 Adams Drive 

	 	 	Menlo Park, CA 94025 

  

	 	 	or to such other place as either party may designate by written notice to the other in accordance with the terms hereof. 

 

 10 

	 	11.8.	Governing Law. This Agreement shall be governed by the laws of the State of New York, without regard to its conflict of laws principles. Any controversies or
claims arising from or relating to this Agreement shall be adjudicated exclusively by a federal or state court whose territorial jurisdiction encompasses the State of New York. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON, RELATING TO, OR ARISING OUT OF THIS AGREEMENT. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 

  

	 	11.9.	Publicity. Except as may be required by law or regulation (including any applicable stock exchange regulation), no press releases or public disclosure, either
written or oral, regarding the execution of this Agreement or the content hereof, shall be made by either party hereto (or its Affiliates or representatives) without the prior knowledge and written consent of other party hereto, which consent shall
not be unreasonably withheld. 

  

	 	11.10.	Amendment. No amendment or modification of the terms of this Agreement shall be binding upon either party unless reduced in writing and signed by an authorized
representative of the party to be bound. 

  

	 	11.11.	Counterparts. This Agreement may be executed in multiple counterparts, all of which shall be considered one and the same agreement 

[Remainder of Page Intentionally Left Blank] 
  

 11 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates written below. 

 

									
	GE Healthcare Bio-Sciences Corp.	 		 	Pacific Biosciences of California, Inc.
					
	By :	 	 /s/ Eric Roman
	 		 	By :	 	 /s/ Hugh Martin

					
	Title :	 	 GM Genomic Sciences
	 		 	Title :	 	 CEO

					
	Date :	 	 September 6, 2006
	 		 	Date :	 	 September 8, 2006

  

 12 

 SCHEDULE 1 

LICENSED PATENTS 
 [...***...] 
  

 *** Confidential Treatment Requested 

13 

 [...***...] 

 

 *** Confidential Treatment Requested 

14 

 SCHEDULE 2 
 INSURANCE REQUIREMENTS 
  

	1.	Commercial General Liability Insurance in an amount not less than $1 million per occurrence/annual aggregate bodily injury/property damage combined.

  

	2.	As of the First Commercialization Date, Product Liability Insurance in an amount not less than $2 million per occurrence/annual aggregate bodily injury/property damage
combined. 

  

	3.	All Risk Property Insurance covering the full replacement value of Licensee’s property. 

 

	4.	Workers Compensation Insurance - statutory limits. 

  

 15 

 EXHIBIT A 

END USER TERMS AND CONDITIONS 
 Acceptance. These terms and conditions shall govern the purchase, use, transfer and acceptance of the products described in the purchase order, quotation or invoice, which products are sold and
distributed by Pacific Biosciences of California, Inc.to the buyer/transferee of such products (the “End User”). The transfer/sale of products to the End User is expressly conditional upon End User’s acceptance of these terms and
conditions. 
 Restrictions on Use. End Users are specifically not authorized to and are forbidden from reselling, transferring or
distributing any products either as a stand alone product or as a component of another product. The right to use the products does not, in and of itself, include or carry any right of the End User to any GE Healthcare Bio-Sciences Corp.’s
technology or intellectual property other than expressly provided herein. End Users may not use sequence(s) in an attempt to reverse engineer parameters of any of GE Healthcare Bio-Sciences Corp. proprietary products or services. 

DISCLAIMER OF WARRANTIES. GE HEALTHCARE BIO-SCIENCES CORP. PROVIDES NO WARRANTIES TO END USER (STATUTORY OR IMPLIED), INCLUDING WITHOUT
LIMITATION, AS TO PRODUCT QUALITY, CONDITION, DESCRIPTION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. GE HEALTHCARE BIO-SCIENCES CORP. HEREBY EXPRESSLY DISCLAIMS ANY WARRANTY
REGARDING RESULTS OBTAINED THROUGH THE USE OF THE PRODUCTS, INCLUDING WITHOUT LIMITATION ANY CLAIM OF INACCURATE, INVALID OR INCOMPLETE RESULTS. 
 Exclusion of Liability. GE Healthcare Bio-Sciences Corp. and its affiliates shall have no liability to an End User, including, without limitation, for any loss of use or profits, business
interruption or any consequential, incidental, special or other indirect damages of any kind, regardless of how caused and regardless of whether an action in contract, tort, strict product liability or otherwise. 

 

 16

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