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Custom Instrument Development and Commercialization Agreement [Amendment No. 2] - Ortho-McNeil Pharmaceutical Inc. and ACLARA BioSciences Inc.

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   Second Amendment to the Custom Instrument Development and Commercialization
   Agreement Between The R. W. Johnson Pharmaceutical Research Institute and
                            ACLARA Biosciences, Inc.

     This second amendment to the Custom Instrument Development and
Commercialization Agreement (the "Second Amendment"), is entered into as of
October 26, 2001 (the "Second Amendment Effective Date"), by and between The R.
W. Johnson Pharmaceutical Research Institute, a division of Ortho-McNeil
Pharmaceutical, Inc., a Delaware corporation having a business address at 920
U.S. Route 202, Raritan, New Jersey (hereinafter "PRI"), and ACLARA BioSciences,
Inc., a Delaware corporation having a principal place of business at 1288 Pear
Avenue, Mountain View California 94043-1432 (hereinafter "ACLARA"). PRI and
ACLARA are referred to in this Second Amendment individually or collectively as
Party or Parties, as the case may be, and all references to PRI and ACLARA shall
include their Affiliates, as defined in the Custom Instrument Development and
Commercialization Agreement.

     WHEREAS, PRI, ACLARA, and Applied Biosystems Group, a business of Applera
Corporation and now doing business under the name Applied Biosystems, Inc., and
having a principal place of business at 850 Lincoln Center Drive, Foster City,
California 94404 (hereinafter "ABG") previously entered into a Custom Instrument
Development and Commercialization Agreement (the "1998 Agreement") effective as
of October 1, 1998 for the period October 1, 1998 through March 31, 2001;

     WHEREAS, PRI, ACLARA entered into the 1998 Agreement, pursuant to which
they pursued the goal of designing, developing and producing prototype
high-throughput chip reading devices incorporating microfluidic technology;

     WHEREAS, PRI, ACLARA, and ABG previously entered into a first amendment to
the 1998 Agreement (the "First Amendment") in which the 1998 Agreement was as
amended by the parties thereto as of October 1, 2001 (the "First Amendment
Signing Date") and was retroactively effective as of September 30, 2000 (the
"First Amendment Effective Date");

     WHEREAS, ABG has withdrawn from further participation in collaborative
research under the 1998 Agreement pursuant to the First Amendment as of the
First Amendment Effective Date;

     WHEREAS,  as of the First  Amendment  Effective Date, the Goal had not been
achieved;

     WHEREAS, although the Goal was not achieved, collaborative research under
the 1998 Agreement has produced significant experimental results that provide
insight into the technology required to achieve such Goal, as well as the
feasibility of implementing identified technical solutions;


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.

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     WHEREAS, ACLARA has developed proprietary eTag and [ * ] technologies for
[ * ] instrumentation, or chip based systems incorporating microfluidic
technology, respectively;

     WHEREAS, PRI and ACLARA desire to continue some aspects of the
collaborative research under the 1998 Agreement beyond and after the First
Amendment Effective Date, and desire to restate the Goal and other aspects of
the 1998 Agreement in order to continue the collaborative research initiated
under the PRI Agreement. PRI is also interested in obtaining access to the eTag
and [ * ] technologies;

     WHEREAS,  this Second  Amendment  shall not replace or supersede  the First
Amendment;

     WHEREAS, PRI and ACLARA desire to amend the 1998 Agreement and incorporate
this Second Amendment therein;

NOW, THEREFORE, PRI and ACLARA agree as follows:

1.       Section 1.2 is deleted in its entirety.

2.       Section 1.6 is deleted in its entirety.

3.       Section 1.7 is deleted in its entirety.

4.       Section 1.8 is deleted in its entirety.

5.       Section 1.14 shall be deleted in its entirety and replaced with the
         following:

         1.14 "High Throughput Screening" or "HTS" shall mean methods utilizing
         Microfluidic Chips, [ * ] ACLAmate or [ * ] instruments which involve:
         (i) [ * ] of candidate compounds are contacted with the target, the
         result of which contact [ * ], said activity being determined based
         upon subsequent analysis [ * ] (ii) [ * ] of candidate compounds are
         contacted with the target, the result of which contact [ * ] being
         determined based upon subsequent analysis [ * ] eTag Technology, and [
         * ].

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[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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<PAGE>

6.       Section 1.15 shall be deleted in its entirety and replaced with the
         following:

         1.15 "HTS Chip Device" shall mean a microfluidic high throughput
         screening instrument which may be developed as part of the Project,
         which may consist of one or more components and peripherals, capable of
         performing approximately one hundred thousand (100,000) individual
         assays per instrument per [ * ] day, or such other number as the
         Parties may agree in writing from time to time, that uses Microfluidic
         Chips to perform High Throughput Screening for drug discovery.

7.       Section 1.20 shall be deleted in its entirety and replaced with the
         following:

         1.20 "Microfluidic Chip" shall mean a device made of a substrate that
         [*], that employs electric field driven fluidics combined with
         electrophoretic separation in microchannels formed in such substrate
         that is intended to be used with HTS Chip Devices, Low Throughput
         Devices, Prototype HTS Chip Devices, Substitute Prototype Devices,
         ACLAmate Instruments or [ * ] Instruments and that is developed as part
         of the Project, and any improvements thereto that are developed by
         ACLARA.

8.       Section 1.22 shall be deleted and replaced in its entirety with the
         following:

         1.22 "Most Favored Price" shall mean a price no higher than the lowest
         price paid by a customer prior to the date of receipt by ACLARA of an
         order for a product or service including but not limited to ACLAmate
         instruments, Microfluidic Chips, and eTag Reagents and [ * ] Reagents
         which are supplied by ACLARA (a) that is not an agency, department,
         division or other manifestation of a country, federal, state or local
         government or (b) that did not receive a special price based on a
         quantity discount or other special terms and conditions, unless PRI
         purchases at least a substantially similar quantity on substantially
         the same terms and conditions, in a transaction in which no
         consideration of material value other than cash was exchanged for the
         product or service.

9.       Section 1.25 shall be deleted and replaced in its entirety with the
         following:

         1.25 "Prototype HTS Chip Device" shall mean an HTS Chip Device
         developed to the point of a prototype instrument, but not developed or
         certified as a Commercial Instrument, that is functionally capable,
         when operated by trained personnel under reasonable operating
         conditions, of performing with one or more types or designs of
         Microfluidic Chips an assay in each of the following categories: [ * ],
         at an assay throughput of approximately 100,000 assays, or such other
         number as the Parties may agree in writing, per [ * ] day with only
         reasonable process interruptions consistent with the prototype nature
         of the instrument, that otherwise materially satisfies the Functional
         Requirements. In

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[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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<PAGE>

         the event that PRI determines to accept and pay for Substitute
         Prototype Devices pursuant to Section 6.4, each such Substitute
         Prototype Device shall be deemed to be Prototype HTS Chip Device
         within the meaning of this Agreement. For the purposes of this
         Agreement, Low Throughput Devices may be deemed to be Substitute
         Prototype Devices [ * ] in which case the provisions of Section 24
         shall not apply.

10.      Section 1.27 is deleted in its entirety.

11.      Section 1.30 shall be deleted and replaced in its entirety with the
         following:

         12.30 "Term of the Project" shall mean the original [ * ] term [ * ]
         and the additional period from [ * ], unless further extended by mutual
         agreement of the Parties. If the Project is terminated by a Party, the
         "Term of the Project" shall mean the period beginning as of October 1,
         1998 and ending on the effective date of termination.

12.      New Section 1.33 is added as follows:

         1.33 "ACLAmate Instrument" shall be included in the definition of Low
         Throughput Chip Device as defined in Section 1.19.

13.      New Section 1.34 is added as follows:

         1.34 "eTag Technology" shall have the meaning assay technology [ * ]

14.      New Section 1.35 is added as follows:

         1.35 "eTag  Reagents"  shall have the meaning  reagents for use in eTag
         Technology.


15.      New Section 1.36 is added as follows:

         1.36 "[ * ] Technology" shall have the meaning assay technology [ * ]

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[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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<PAGE>

16.      New Section 1.37 is added as follows:

         1.37 "[ * ]Reagents"  shall have the meaning  reagents for use in [ * ]
         Technology.

17.      New Section 1.39 is added as follows:

         1.38 "[ * ] Instrument" shall be included in the definition of Low
         Throughput Chip Device as defined in Section 1.19.

18.      Section 5.3.1.1 shall be deleted in it entirety and replaced with the
         following:

         5.3.1.1 PRICING. Through [ * ] PRI will have the right to purchase from
         ACLARA (a) ACLAmate Instruments and Microfluidic Chips for use thereon
         sold by ACLARA, (b) eTag Reagents sold by ACLARA, (c) [ * ] Reagents
         sold by ACLARA, and (d) [ * ] Instruments and Microfluidic Chips and
         reagents for use thereon (if and when ACLARA, or any instrument partner
         which it may designate, develops said nMAS instrument), all of the
         foregoing at the Most Favored Price for such materials.

19.      Section 5.3.1.2 is deleted in its entirety.

20.      Section 5.3.4 shall be deleted in its entirety.

21.      Section 6.3 shall be deleted in its entirety and replaced with the
         following two new subsections 6.3.1 and 6.3.2:

         6.3.1 [ * ] within thirty (30) days after [ * ];

         6.3.2 [ * ] within thirty (30) days after delivery and acceptance by
         PRI of the ACLAmate Instrument based on demonstration by PRI of the
         functionality of the installed ACLAmate Instrument for protein
         analysis. Such ACLAmate Instrument shall include [ * ], and reasonable
         technical support and assistance to validate and begin using these
         instruments. In addition, ACLARA will allocate certain technical
         support resources to develop eTag Reagents and assays for the ACLAmate
         Instrument for PRI at ACLARA's sole expense. The amount of such
         technical support resources will be [ * ].

22.      Section 6.4 shall be deleted and replaced in its entirety with the
         following:

         6.4 [ * ] of (a) within 30 days after provision of technical support
         services for eTag Reagents on a standard capillary electrophoresis
         intrument or transfer of the eTag Technology to PRI including delivery
         of the eTag Reagents in quantities to be agreed by the Parties, which
         shall together [ * ], or (b) [ * ]. Such [ * ] payment shall include
         pre-paid technical support and eTag Reagents on

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[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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<PAGE>

         standard capillary electrophoresis instruments or on the ACLAmate
         Instrument for protein analysis. Technical support resources provided
         by ACLARA to PRI will be charged against the [ * ] pre-payment [ * ][ *
         ] Certain information on this page has been omitted and filed
         separately with the Securities and Exchange Commission. Confidential
         treatment has been requested with respect to the omitted portions The
         Parties will agree on the extent of such technical support services.
         The total cost of all technical support services and eTag Reagents
         provided by ACLARA to PRI under this Second Amendment [ * ].

23.      Section 7 is deleted in its entirety.

24.      A new Section 8.1.7 is added as follows:

         8.1.7 ACLARA hereby grants to PRI a fully paid up, royalty free license
         to use ACLAmate Instruments and [ * ] Instruments, along with
         Microfluidic Chips, eTag Reagents and [ * ] Reagents for use on said
         instruments, all as provided to PRI by ACLARA pursuant to this
         Agreement, [ * ]. ACLARA also grants PRI a fully paid up, royalty free
         license to use eTag Reagents and [ * ] Reagents provided to PRI by
         ACLARA pursuant to this Agreement [ * ].

25.      Section 11.1 is deleted in its entirety.

26.      Section 11.2 is deleted in its entirety.

         IN WITNESS WHEREOF, this Second Amendment has been entered into by and
between PRI and ACLARA by their respective duly authorized representatives as of
the Second Amendment Effective Date.

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[*] Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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<PAGE>

ACLARA BIOSCIENCES, INC.                THE R. W. JOHNSON
                                        PHARMACEUTICAL RESEARCH
                                        INSTITUTE, INC., a division of Ortho-
                                        McNeil Pharmaceutical, Inc

By: /s/ Joseph M. Limber                By: /s/ Michael R. Jackson, Ph.D.
   -----------------------------------     -------------------------------------

Name: Joseph M. Limber                  Name: Michael R. Jackson, Ph.D.
     ---------------------------------       -----------------------------------

Title: President, CEO                   Title: Sr. V.P. Drug Discovery
      --------------------------------        ----------------------------------

Date: October 26, 2001                  Date: October 26, 2001
     ---------------------------------       -----------------------------------



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