Thermal Cycler Supplier Agreement - PE Biosystems and Cepheid
THERMAL CYCLER SUPPLIER AGREEMENT
This Agreement, effective April 15, 2000, is made by and between PE
Biosystems, a division of PE Corporation, a corporation of the State of
Delaware, having an office at 850 Lincoln Centre Drive, Foster City, California
94404 ("PE CORP"), and Cepheid, a corporation of the State of California, having
an office at 1190 Borregas Avenue, Sunnyvale, California 94089 ("Thermal Cycler
Supplier") hereafter collectively referred to as "The Parties."
Whereas, PE CORP has the power to convey limited rights for research and
in certain other fields under U.S. Patents Nos. 4,683,195, 4,683,202 and
4,965,188, describing and claiming gene amplification processes including, among
others, a process known as the polymerase chain reaction ("PCR") process, which
are owned by Roche Molecular Systems, Inc., and amplification process claims in
corresponding counterpart patents and patent applications in other countries,
owned by F. Hoffmann-La Roche Ltd (both of which are referred to collectively
herein as "Roche").
Whereas, PE CORP offers to PCR users commercial and non-commercial
license rights under these patents and patent applications for automated
performance of the PCR process for research and certain other fields that
include, inter alia, an up-front fee component based on the capacity of thermal
cyclers used to perform the process.
Whereas, PE CORP offers to thermal cycler suppliers license rights under those
patents, namely, an authorization to distribute their instruments with a label
conveying to their customers rights under the up-front fee component of the PCR
licenses described above, and the right to promote their instruments as
"Authorized Thermal Cyclers" for PCR.
Whereas, PE CORP owns US. Patents Nos. 5,038,852 and 5,333,675,
describing and claiming automated apparatus suitable for performing the PCR
process, and apparatus claims in corresponding counterpart patents and patent
applications in other countries.
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Whereas, PE CORP owns U.S. Patent No. 5,475,610, describing and claiming
improvements in thermal cycling apparatus for- PCR, including a pressing heated
cover, and corresponding counterpart patents and patent applications in other
countries.
Whereas, PE CORP owns U.S. Patent No. 5,656,493, describing and claiming
an amplification system comprising PCR reagents and a thermal cycler programmed
to carry out a PCR protocol.
Whereas, PE CORP owns patents and applications outside the U.S. that
claim priority of U.S. application Serial No. 899,061 (filed in 1986) and that
claim automated performance of the PCR process using certain programmed thermal
cyclers.
Whereas, PE CORP offers to PCR users license rights for research and
certain other fields under its amplification system claims and automated method
claims, and offers to thermal cycler suppliers the right to pass such rights to
their thermal cycler customers.
Whereas, PE CORP has offered to Thermal Cycler Supplier the above Roche
process rights, and the PE CORP systems, apparatus, automated method and
pressing heated cover rights separately or in combinations, and Thermal Cycler
Supplier has requested rights under the above Roche PCR process patents and PE
CORP systems patent rights only, without rights under the above identified PE
CORP apparatus, automated method and pressing heated cover patents and
applications.
NOW, THEREFORE, The Parties agree as follows:
1. Definitions
For the purpose of this Agreement the terms set forth
hereinafter shall be defined as fellows;
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1.1 "AFFILIATE" of a party to this Agreement shall mean an
organization: a) whose voting stock is controlled or owned directly or
indirectly to the extent of fifty percent (50%) or more by the party; b) which
directly or indirectly owns or controls fifty percent (50%) or more of the
voting stock of the party; c) whose majority ownership is directly or indirectly
common to that of the party; or d) defined under (a), (b), or (c) above except
the amount of said ownership is less than fifty percent (50%) but that amount is
the maximum amount permitted by law and Thermal Cycler Supplier has effective
control.
1.2 "AMPLIFICATION PATENT RIGHTS" shall mean the nucleic acid
amplification processes, including particularly the PCR process, covered by:
United States Patents Nos. 4,683,195, 4,683,202 and 4,965,188; and any
corresponding amplification process claim in patents and patent applications in
other countries claiming priority of any of them. Amplification Patent Rights
include rights only under the identified Roche patents and applications. They do
not include rights, expressly or by implication, under any other Roche or PE
CORP patent or application, or to any claim to reagents, apparatus, or a system
of reagents and apparatus.
1.3 "AMPLIFICATION SYSTEM PATENT RIGHTS" shall mean U.S. Patent
No. 5,656,493, which describes and claims an amplification system comprising PCR
reagents and a thermal cycler programmed to carry out a PCR protocol.
Amplification System Patent Rights include rights only under the identified PE
CORP patent. They do not include rights, expressly or by implication, under any
other Roche or PE CORP patent or application, or to any claim to reagents,
apparatus, or an amplification process, even if that process is a result of the
natural and intended operation of the system.
1.4 "AUTHORIZED REAGENT" shall mean a DNA polymerase whose use in
performance of the PCR process is covered by the running-royalty component of a
PCR process license under the Amplification Patent Rights for internal research
and development. The running-royalty component of that license may be obtained
through the purchase of reagents bearing a valid label conveying the
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running-royalty component; alternatively, it may be purchased from PE CORP.
Other PCR process licenses in the Fields also require use of Authorized
Reagents.
1.5 "AUTHORIZED THERMAL CYCLER" shall mean a thermal cycler or
temperature cycling instrument whose use in automated performance of the PCR
process is covered by the automated-capacity, up-front fee component of a PCR
process license under the Amplification Patent Rights for internal research and
development. The up-front fee component of that license may be obtained through
the purchase of a thermal cycler or temperature cycling instrument bearing a
valid label conveying the up-front component; alternatively, it may be purchased
from PE CORP. Other PCR process licenses in the Fields also require use of an
instrument whose use is similarly covered, i.e., an "Authorized Thermal
Cycler".
1.6 "FIELDS" shall mean research and development, quality
assurance or control, environmental testing, plant diagnostics, identity testing
(other than parentage testing for humans) and forensics. The Fields specifically
exclude human and veterinary diagnostics.
1.7 "NET SALES PRICE" for thermal cyclers, temperature cycling
instruments and add-on modules distributed under this Agreement shall refer to
the sales price charged to unrelated Third-Party end users as to whom the price
is not affected by any other purchase, by any other dealing or by any special
course of dealing, and shall mean the gross invoice price to such an end user
less the following deductions where applicable: (i) discounts allowed and taken,
in amounts customary in the trade, and (ii) sales and/or use taxes and/or duties
for particular sales. No allowance or deduction shall be made for commissions or
collections, by whatever name known. Thermal cyclers, temperature cycling
instruments and add-on modules subject to this Agreement shall be separately
invoiced items.
For distributions other than sales described by the preceding
paragraph, including any sale, loan, lease, consignment, gift or other
distribution (i) to an end user that is Thermal Cycler,
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Supplier itself, an Affiliate or a distributor, (ii) to an end user that enjoys
a special course of dealing with Thermal Cycler Supplier, an Affiliate or
distributor, or (iii) is under a reagent rental agreement or other arrangement
that is not a sale to an unrelated Third-Party end user as to whom the price is
unaffected by other purchase, dealing or special course of dealing, the Net
Sales Price shall be determined by reference to the Net Sales Price which would
be applicable in an arm's length sale to a similarly situated unrelated
Third-Party end user as to whom the price is not affected by any other purchase,
by any other dealing or by any special course of dealing.
Net Sales Price shall be calculated on the basis of sales or
transfers to end users by Thermal Cycler Supplier, its Affiliate or a
distributor of either, as the case may be. In the event Thermal Cycler Supplier
is unable to account for end-user sales by any distributor, the Net Sales Price
shall be calculated as the price to the final distributor multiplied by [**],
which factor represents a [**] margin on sales to end users by the distributor.
1.8 "TERRITORY" shall mean worldwide.
1.9 "THIRD PARTY" shall mean a party other than The Parties.
1.10 "TEMPERATURE CYCLING INSTRUMENT", as used in this Agreement,
shall mean an instrument, whether in single or multiple modules, that includes a
thermal cycler as defined in Article 1.11 and additional structure for
performing one or more other functions.
1.11 "THERMAL CYCLER", as used in this Agreement, shall mean an
instrument, whether in single or multiple modules, that is capable in itself of
automatically cycling samples in the PCR process.
2. GRANT
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2.1 Upon the terms and subject to the exceptions and conditions of
this agreement, PE CORP grants to Thermal Cycler Supplier the following
personal, non-transferable, royalty-bearing, non-exclusive rights in the
Territory under the Amplification Patent Rights:
(a) Thermal Cycler Supplier is hereby authorized to sell
and distribute to end users under Thermal Cycler Supplier's
name and trademarks the specific thermal cyclers and
temperature cycling instruments described in Exhibit 1 (i.e.
the Smart Cycler(R) System, Smart Cycler(R) XC System and
GeneXpert(TM) Prototype, in the configurations described) and
any thermal cycler or temperature cycling instrument
containing one or more I-CORE(TM) modules (as defined in
Exhibit 1) manufactured by Thermal Cycler Supplier, but not
otherwise to sell or distribute to thermal cycler suppliers,
with a label conveying to end users (including Thermal Cycler
Supplier itself) in the Fields the up-front rights of PCR
process licenses under the Amplification Patent Rights as
specified in the label set forth in Section 5.1 below, that
is, with an Authorized Thermal Cycler label; and
(b) Thermal Cycler Supplier may advertise and promote
such thermal cyclers and temperature cycling instruments as
described in Exhibit 1 and so labeled as Authorized Thermal
Cyclers for PCR.
The grant of this Section 2.1 conveys no right or immunity, express or implied,
under the Amplification System Patent Rights.
2.2 Upon the terms and subject to the exceptions and conditions of
this Agreement, PE CORP grants to Thermal Cycler Supplier a personal,
non-transferable, royalty-bearing, non-exclusive right under the Amplification
System Patent Rights to convey to end-user customers (including Thermal Cycler
Supplier itself) of Thermal Cycler Supplier's Authorized Thermal Cyclers a non-
exclusive license to use the same in the Fields in the Territory. The grant of
this Section 2.2 includes no right or immunity, express or implied, under the
Amplification Patent Rights.
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2.3 No right, immunity, authorization or license is granted,
expressly or by implication, for any other purpose, or in any other field,
including: to make, have made, use or sell any polymerase (such as Taq),
amplification reagent or kit; or to perform PCR or nucleic acid amplification
that is not fully licensed under the Amplification Patent Rights. No right,
immunity, authorization or license is granted, expressly or by implication,
under any patent or patent application that is not expressly included in the
Amplification Patent Rights, or the Amplification System Patent Rights.
Specifically, but without limitation, no right, immunity, authorization or
license is granted, expressly or by implication, under patents and applications
of PE CORP or Roche that cover apparatus, methods, or reagents for real-time
detection (for example, U.S. Patent No. 5,928,907 and published European patent
applications EP 872562 and EP 512334) or for homogeneous assay (for example,
U.S. Patents Nos. 5,210,015, 5,487,972, 5,538,848, all related to the 5'
nuclease assay).
2.4 Rights granted to Thermal Cycler Supplier by this Agreement
are personal to Thermal Cycler Supplier alone. Thermal Cycler Supplier shall
have no right to sublicense, assign or otherwise transfer or share its rights
hereunder.
2.5 Notwithstanding the prohibition of Section 2.4, Thermal Cycler
Supplier's rights to sell to end users under the grants of Sections 2.1 and 2.2
include the right to sell through Affiliates (so long as Thermal Cycler Supplier
reports and pays under this Agreement on their behalf) and through distributors
of Thermal Cycler Supplier and such Affiliates, as well as directly.
2.6 Thermal Cycler Supplier agrees not to promote, directly or
through distributors, the unlicensed use of the Amplification Patent Rights by
the sale of unauthorized thermal cyclers or temperature cycling instruments, or
by selling add-on modules for thermal cyclers or temperature cycling instruments
other than as additions to Authorized Thermal Cyclers.
3. FEES, ROYALTIES, RECORDS AND REPORTS
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3.1 For the licenses and rights granted under Article 2, Thermal
Cycler Supplier shall pay to PE CORP:
(a) license issue fee of US$[**];
(b) for each Smart Cycler(R) System or Smart Cycler(R) XC
System thermal cycler as described in Exhibit 1
(including all modules and components), or any
thermal cycler or temperature cycling instrument
containing one or more I-CORE(TM) modules (as defined
in Exhibit 1) having a maximum capacity, if fully
expanded, of more than [**] individual samples,
delivered or invoiced by Thermal Cycler Supplier or
an Affiliate after the effective date of this
Agreement, US$[**] plus [**] percent ([**]%) of the
Net Sales Price, and for each add-on module, [**]
percent ([**]%) of the Net Sales Price;
(c) for each GeneXpert(TM) Prototype temperature cycling
instrument as described in Exhibit 1 (including all
modules and components), or any thermal cycler or
temperature cycling instrument containing one
I-CORE(TM) module (as defined in Exhibit 1) having a
non-expandable capacity of no more than [**]
individual sample, delivered or invoiced by Thermal
Cycler Supplier or an Affiliate after the effective
date of this Agreement, US$[**] plus [**] percent
([**]%) of the Net Sales Price; and
(d) for each thermal cycler or temperature cycling
instrument containing one or more I-CORE(TM) modules
(as defined in Exhibit 1) having a maximum capacity,
if fully expanded, of at least [**] but no more than
[**] individual samples, delivered or invoiced by
Thermal Cycler Supplier or an Affiliate after the
effective date of this Agreement, US$[**] plus [**]
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[**] percent ([**]%) of the Net Sales Price, and for
each add-on module, [**] percent ([**]%) of the Net
Sales Price.
The license issue fee shall be paid on the effective date of this Agreement. The
per-thermal cycler payments specified in this Section 3,1 shall be paid as
specified in Sections 3.4 and 3.5. Each thermal cycler or temperature cycling
instrument for which those payments are paid shall be an Authorized Thermal
Cycler and shall be so designated pursuant to Article 5 hereof.
3.2 All amounts payable hereunder shall be payable in United
States dollars. Sales in other countries shall be converted to U.S. dollars
based on the New York rate of exchange as quoted in the Wall Street Journal for
the last business day of the applicable quarter. If not so published, The
Parties may agree on a substitute publication. In the event there is no
comparable publication, the applicable rate for such date by the appropriate
governmental agency in such country shall apply.
3.3 Thermal Cycler Supplier shall keep, and shall require its
pertinent Affiliates to keep, full, true and accurate books of account
containing all particulars necessary to show the amount payable to PE CORP under
this Agreement. Such books and the supporting data shall be open at all
reasonable times, for three (3) years following the end of the calendar year to
which they pertain (and access shall not be denied thereafter, if reasonably
available), to the inspection of an independent inspector retained by PE CORP.
If in dispute, such records shall be kept until the dispute is settled.
Inspection shall be at PE CORP's expense, unless the inspector concludes that
the amount payable that is stated in a report is understated by five percent
(5%) or more, in which case expenses shall be paid by Thermal Cycler Supplier.
3.4 Thermal Cycler Supplier shall within thirty (30) days after
the first of each January, April, July and October deliver to PE CORP a true and
accurate accounting report. This report shall be on a country-by-country basis
and shall give such particulars of the business conducted by Thermal Cycler
Supplier in each country during the preceding three (3) calendar months as are
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pertinent to accounting under this Agreement and shall be in accordance with,
and include all information specified in, the royalty report form attached
hereto as Appendix A.
The correctness and completeness of each report shall be
attested to in writing by the responsible financial officer of Thermal Cycler
Supplier or by Thermal Cycler Supplier's external auditor.
3.5 Simultaneously with the delivery of each royalty report,
Thermal Cycler Supplier shall pay to PE CORP the monies then due under this
Agreement for the period covered by the report. Each report and payment shall be
sent by the due date to the following address:
PE Biosystems
PE Corporation
850 Lincoln Centre Drive
Foster City, California, 94404 U.S.A.
Attention: Director of Licensing
or to any address that PE CORP may advise in writing.
3.6 If Thermal Cycler Supplier shall fail to pay any amount owing
under this Agreement by the due date, the amount owed shall bear interest at two
percent (2%) over the Citibank NA base lending rate ("prime rate") from the due
date until paid, provided, however, that if this interest rate is held to be
unenforceable for any reason, the interest rate shall be the maximum rate
allowed by law at the time the payment is due.
3.7 Failure of Thermal Cycler Supplier to pay any amount specified
under this Agreement within thirty (30) days after the due date will give PE
CORP the right to terminate under Section 6.7.
3.8 If all patents included in the Amplification Patent Rights
expire before all patents included in the Amplification System Patent Rights,
or vice versa, the per-thermal cycler payments
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specified in Section 3.1 shall thereafter be reduced to the amount PE CORP is
then charging for the remaining claims.
4. PAST SALES SALES AND ACTIVITIES
4.1 On the effective date of this Agreement, Thermal Cycler
Supplier shall pay to PE CORP the sum of $[**]. In consideration thereof all
thermal cyclers and temperature cycling instruments delivered or invoiced by
Thermal Cycler Supplier and its Affiliates (including thermal cyclers and
temperature cycling instruments delivered to themselves for use) prior to the
effective date of this Agreement shall be considered Authorized Thermal Cyclers
subject to the conditions of Section 4.2 and 5.3; and all earlier use of such
thermal cyclers or temperature cycling instruments by customers, direct or
indirect, of Thermal Cycler Supplier shall be deemed to have been use of a
thermal cycler or temperature cycling instrument within the grant of this
Agreement. This section does not apply to thermal cyclers or temperature cycling
instruments already authorized by PCR users.
4.2 Thermal Cycler Supplier shall send to the original end-user
customers of the thermal cyclers and temperature cycling instruments that are
the subject of Section 4.1, Authorized Thermal Cycler notices in accord with
Section 5.1 with a means reasonably satisfactory to PE CORP to relate each such
notice to the appropriate thermal cycler or temperature cycling instrument. Any
such thermal cycler or temperature cycling instrument not having an
authorization notice within one hundred and twenty (120) days after the
effective date of this Agreement shall cease to be an Authorized Thermal Cycler
unless Thermal Cycler Supplier establishes to the reasonable satisfaction of PE
CORP that (a) the thermal cycler or temperature cycling instrument falls within
Section 4.1 and (b) the Authorized Thermal Cycler notice for the thermal cycler
or temperature cycling instrument has not been applied to another instrument.
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5. AUTHORIZATION NOTICE
5.1 Thermal Cycler Supplier agrees to include prominently in the
front of the user's manual for each Authorized Thermal Cycler, and for no other
thermal cycler or temperature cycling instrument, a Notice as specified from
time to time by PE CORP. Unless and until PE CORP reasonably instructs
differently, the Notice shall be:
AUTHORIZED THERMAL CYCLER
THIS INSTRUMENT, SERIAL NO. ____, IS AN AUTHORIZED THERMAL
CYCLER. ITS PURCHASE PRICE INCLUDES THE UP-FRONT FEE COMPONENT
OF A LICENSE UNDER THE PATENTS ON THE POLYMERASE CHAIN
REACTION (PCR) PROCESS, WHICH ARE OWNED BY ROCHE MOLECULAR
SYSTEMS INC. AND F. HOFFMANN-LA ROCHE LTD, TO PRACTICE THE PCR
PROCESS FOR INTERNAL RESEARCH AND DEVELOPMENT USING THIS
INSTRUMENT. THE RUNNING ROYALTY COMPONENT OF THAT LICENSE MAY
BE PURCHASED FROM PE BIOSYSTEMS OR OBTAINED BY PURCHASING
AUTHORIZED REAGENTS. THIS INSTRUMENT IS ALSO AN AUTHORIZED
THERMAL CYCLER FOR USE WITH APPLICATIONS LICENSES AVAILABLE
FROM PE BIOSYSTEMS. ITS USE WITH AUTHORIZED REAGENTS ALSO
PROVIDES A LIMITED PCR LICENSE IN ACCORDANCE WITH THE LABEL
RIGHTS ACCOMPANYING SUCH REAGENTS. PURCHASE OF THIS PRODUCT
DOES NOT ITSELF CONVEY TO THE PURCHASER A COMPLETE LICENSE OR
RIGHT TO PERFORM THE PCR PROCESS. FURTHER INFORMATION ON
PURCHASING LICENSES TO PRACTICE THE PCR PROCESS MAY BE
OBTAINED BY CONTACTING THE DIRECTOR OF LICENSING AT PE
CORPORATION, 850 LINCOLN CENTRE DRIVE, FOSTER CITY, CALIFORNIA
94404.
NO RIGHTS ARE CONVEYED EXPRESSLY, BY IMPLICATION OR ESTOPPEL
TO ANY PATENTS ON REAL-TIME METHODS, INCLUDING BUT NOT LIMITED
TO 5' NUCLEASE ASSAYS, OR TO ANY PATENT CLAIMING A REAGENT OR
KIT.
PE BIOSYSTEMS DOES NOT GUARANTEE THE PERFORMANCE OF THIS
INSTRUMENT.
5.2 Thermal Cycler Supplier agrees to affix permanently and
prominently to each Authorized Thermal Cycler the designation "Authorized
Thermal Cycler", its Serial Number and a direction to consult the user's manual
for license information.
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5.3 Thermal Cycler Supplier further agrees to instruct the
ultimate purchaser that transfer of the thermal cycler or temperature cycling
instrument without the Serial Number or the Notice shall automatically terminate
the authorization granted by this Agreement and the thermal cycler or
temperature cycling instrument shall cease to be an Authorized Thermal Cycler.
5.4 To avoid confusion among thermal cycler users, Thermal Cycler
Supplier agrees not to designate or refer to thermal cyclers or temperature
cycling instruments covered by this Agreement as "licensed" unless it fully and
simultaneously explains that the thermal cyclers or temperature cycling
instruments do not convey with their purchase a complete license under the
Amplification Patent Rights.
5.5 No Authorization Notice shall be supplied with an add-on
module or anything else which is less than a complete thermal cycler or
temperature cycling instrument.
6. TERM AND TERMINATION
6.1 This Agreement, unless sooner terminated, shall continue until
the expiration of the last-to-expire of the patents under which rights are
granted in this Agreement.
6.2 This Agreement shall terminate upon a holding of invalidity or
unenforceability of all patent claims licensed hereunder by a final court
decision from which no appeal is or can be taken.
6.3 Thermal Cycler Supplier may terminate this Agreement for any
reason by giving written notice to PE CORP and ceasing to advertise or promote
its thermal cyclers or temperature cycling instruments as described in Exhibit 1
as Authorized Thermal Cyclers. Such termination shall be effective ninety (90)
days after said notice or cessation, whichever is later.
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6.4 The decision of a Court or Administrative body finding PE CORP
liable or culpable due to Thermal Cycler Supplier's manufacture of thermal
cyclers or temperature cycling instruments covered by this Agreement or due to
the sale or distribution of those thermal cyclers or temperature cycling
instruments by Thermal Cycler Supplier, an Affiliate or a distributor shall give
PE CORP the right to terminate this Agreement immediately upon notice.
6.5 This Agreement shall terminate upon (i) an adjudication of
Thermal Cycler Supplier as bankrupt or insolvent, or Thermal Cycler Supplier's
admission in writing of its inability to pay its obligations as they mature;
(ii) an assignment by Thermal Cycler Supplier for the benefit of creditors;
(iii) the appointment of, or Thermal Cycler Suppliers applying for or consenting
to the appointment of, a receiver, trustee or similar officer for a substantial
part of its property; (iv) the institution of or any act of Thermal Cycler
Supplier instituting any bankruptcy, insolvency arrangement, or similar
proceeding; (v) the issuance or levy of any judgment, writ, warrant of
attachment or execution or similar process against a substantial part of the
property of Thermal Cycler Supplier; or (vi) loss of Thermal Cycler Suppliers
federal or state licenses, permits or accreditation necessary for distribution
of Authorized Thermal Cyclers.
6.6 PE CORP may terminate this Agreement immediately on notice
upon any change in the ownership or control of Thermal Cycler Supplier or of its
assets. For such purposes, a "change in ownership or control" shall mean that
30% or more of the voting stock of Thermal Cycler Supplier becomes subject to
the ownership or control of a person or entity, or any related group of persons
or entities acting in concert, which person(s) or entity(ies) did not own or
control such portion of voting stock on the Effective Date hereof. PE CORP shall
have the same right to terminate upon any transfer of 30% or more of the assets
of Thermal Cycler Supplier.
6.7 Upon any breach of or default of a material term under this
Agreement by Thermal Cycler Supplier, PE CORP may terminate this Agreement upon
thirty (30) days' written notice. PE CORP will withdraw such notice if, during
the notice period, Thermal Cycler Supplier fully cures such breach or default to
PE CORP's reasonable satisfaction.
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6.8 Upon expiration or termination of this Agreement, all rights
granted to Thermal Cycler Supplier shall revert to or be retained by PE CORP.
6.9 Thermal Cycler Supplier's obligations to report and pay
royalties as to activities under this Agreement shall survive termination or
expiration.
7. CONFIDENTIALITY - PUBLICITY
7.1 In advertisements, catalogs, brochures, sales literature and
promotional literature for Authorized Thermal Cyclers, Thermal Cycler Supplier,
Affiliates and distributors shall state the following prominently in type and
location:
Practice of the patented polymerase chain reaction (PCR)
process requires a license. The <Supplier's Model> Thermal
Cycler is an Authorized Thermal Cycler and may be used with
PCR licenses available from PE Corporation. Its use with
Authorized Reagents also provides a limited PCR license in
accordance with the label rights accompanying such reagents.
7.2 With respect to Thermal Cycler Supplier's distribution of any
written information to Third Parties, including but not limited to advertising,
brochures, catalogs, promotional and sales material, and public relations
material, PE CORP shall have the right to prescribe changes regarding references
to, or descriptions of: PE CORP, PCR, the patents under which rights are granted
in this Agreement, PCR licenses or authorizations, or this Agreement. Thermal
Cycler Supplier agrees to comply with PE CORP's reasonable prescriptions.
7.3 Except as provided in Sections 7.1 and 7.2, Thermal Cycler
Supplier shall, to the extent reasonably practicable, maintain the
confidentiality of the provisions of this Agreement and shall refrain from
disclosing the terms of this Agreement without the prior written consent of PE
CORP, except to the extent Thermal Cycler Supplier concludes in good faith that
such disclosure is required under applicable law or regulation, in which case PE
CORP shall be notified in advance
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8. COMPLIANCE AND QUALITY
8.1 In the exercise of any and all rights and in performance
hereunder, it shall be the duty of Thermal Cycler Supplier, not PE CORP, to
comply fully with all applicable laws, regulations and ordinances and to obtain
and keep in effect licenses, permits and other governmental approvals (federal,
state or local) necessary or appropriate to carry on activities hereunder.
8.2 PE CORP does not approve or endorse thermal cyclers or
temperature cycling instruments of Thermal Cycler Supplier in any way or for any
purpose, including PCR Quality and quality control with respect to suitability
for PCR, according to standards and requirements that may exist in the
marketplace from time to time, are the sole responsibility of Thermal Cycler
Supplier.
9. ASSIGNMENT
9.1 This Agreement shall not be assigned by Thermal Cycler
Supplier (including without limitation any assignment or transfer that would
arise from a sale or transfer of Thermal Cycler Supplier's business).
9.2 PE CORP may assign all or any part of its rights and
obligations under this Agreement at any time without the consent of Thermal
Cycler Supplier. Thermal Cycler Supplier agrees to execute such further
acknowledgments or other instruments as PE CORP may reasonably request in
connection with such assignment.
10. NEGATION OF WARRANTIES AND INDEMNITY
10.1 Nothing in this Agreement shall be construed as: (a) a
warranty or representation by PE CORP as to the validity or scope of any patent;
(b) a warranty or representation that the practice under the Amplification
Patent Rights or the Amplification System Patent Rights is or will be free from
infringement of patents of Third Patties; (c) an authority or obligation to
sublicense or to sue
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Third Parties for infringement; (d) except as expressly set forth herein,
conferring the right to use in advertising, publicity or otherwise, in any form,
the name of, or any trademark or trade name of, PE CORP or Roche; (e) conferring
by implication, estoppel or otherwise any license, immunity or right under any
patent owned by or licensed to PE CORP or Roche other than those specified,
regardless of whether such patent is dominant or subordinate to the patents
under which rights are granted in this Agreement; (f) an obligation to furnish
any know-how; or (g) creating any agency, partnership, joint venture or similar
relationship between PE CORP or Roche and Thermal Cycler Supplier.
10.2 PE CORP MAKES NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
10.3 Thermal Cycler Supplier agrees to take all reasonable
precautions to prevent death, personal injury, illness and property damage from
the use of Authorized Thermal Cyclers. Thermal Cycler Supplier shall assume full
responsibility for its operation under the patents under which rights are
granted in this Agreement, the manufacture of Authorized Thermal Cyclers and the
use thereof and shall defend, indemnify and hold PE CORP harmless from and
against all liability, demands, damages, expenses (including attorneys fees) and
losses for death, personal injury, illness, property damage or any other injury
or damage, including any damages or expenses arising in connection with state or
federal regulatory action, in view of the use by Thermal Cycler Supplier, its
officers, directors, agents and employees of the Amplification Patent Rights and
the Amplification System Patent Rights, and the manufacture and use of
Authorized Thermal Cyclers except that Thermal Cycler Supplier shall not be
liable to PE CORP for injury or damage arising solely because of PE CORP's
negligence.
11. MOST FAVORED LICENSEE
11.1 If after signature of this Agreement, PE CORP grants to any
unrelated third party, other than Roche, a license of substantially the same
scope as granted to Thermal Cycler Supplier
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<PAGE> 18
herein but under more favorable royalty rates than those given to Thermal Cycler
Supplier under this Agreement, PE CORP shall promptly notify Thermal Cycler
Supplier of said more favorable royalty rates, and Thermal Cycler Supplier shall
have the right and option to substitute such more favorable royalty rates for
the royalty rates contained herein. Thermal Cycler Supplier's right to elect
said more favorable royalty rates shall extend only for so long as and shall be
conditioned on Thermal Cycler Supplier's acceptance of all the same conditions,
favorable or unfavorable, under which such more favorable royalty rates shall
be available to such other third party. Upon Thermal Cycler Supplier's
acceptance of all such terms of said third-party agreement, the more favorable
royalty rates shall be effective as to Thermal Cycler Supplier on the date of
execution of such other third party license agreement. Notwithstanding the
foregoing, in the event that PE CORP and/or Roche shall receive substantial
other nonmonetary consideration, for example, such as intellectual property
rights, as a part of the consideration for its granting of such license to a
third party, then this Section 11.1 shall not apply.
12. GENERAL
12.1 This Agreement constitutes the entire agreement between The
Parties as to the subject matter hereof, and all prior negotiations,
representations, agreements and understandings are merged into, extinguished by
and completely expressed by it. This Agreement may be modified or amended only
by a writing executed by authorized officers of each of The Parties.
12.2 Any notice required or permitted to be given by this Agreement
shall be given by postpaid, first class, registered or certified mail, or by
courier or facsimile, properly addressed to the other party at the respective
address as shown below:
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<PAGE> 19
If to PE CORP:
PE Biosystems
PE Corporation
850 Lincoln Centre Drive
Foster City, California 94404 U.S.A.
Attn.: Director of Licensing
If to Thermal Cycler Supplier:
Cepheid
1190 Borregas Avenue
Sunnyvale, California 94089
Attn.: President
Either party may change its address by providing notice to the other. A notice
shall be deemed given four (4) full business days after the day of mailing, or
one full day after the date of delivery to the courier, or the date of facsimile
transmission, as the case may be.
12.3 Governing Law and Venue. This Agreement shall be deemed made
in the State of Delaware, and it shall be construed and enforced in accordance
with the law of the State of Delaware. The Parties agree that the exclusive
jurisdiction and venue for any dispute or controversy arising from this
Agreement shall be in the state or federal courts in Delaware.
12.4 Nothing in this Agreement shall be construed to require the
commission of any act contrary to law, and wherever there is any conflict
between any provision of this Agreement or concerning the legal right of The
Parties to enter into this contract and any statute, law or ordinance, the
latter shall prevail, but the provision shall be limited only to the extent
necessary.
12.5 If any provision of this Agreement is held or discovered to
both parties' satisfaction to be illegal, invalid or unenforceable in any
jurisdiction or to render any patent in that jurisdiction unenforceable, the
provision as it applies to that jurisdiction only shall be replaced
automatically, as part of the document, by a provision as similar in terms as
possible but not subject to such infirmity, in order to achieve the intent of
the parties to the extent possible. In any event, as to that
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<PAGE> 20
jurisdiction all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
IN WITNESS WHEREOF, The Parties hereto have duly executed this Agreement on the
date(s) indicated below.
PE BIOSYSTEMS CEPHEID
----------------------------------
(THERMAL CYCLER SUPPLIER)
By: /s/ [Signature Illegible] By: /s/ THOMAS L. GUTSHALL
------------------------------------- -------------------------------
Title: V. P., Intellectual Property Title: CEO & Chairman
---------------------------------- ----------------------------
Date: 4/13/00 Date: 4/6/00
----------------------------------- -----------------------------
20
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<TABLE>
<S><C>
APPENDIX A
SUMMARY ROYALTY/FEE REPORT
THERMAL CYCLER SUPPLIER AGREEMENT
FOR THE PERIOD: ________ TO ________ FOR SALES IN THE COUNTRY OF ________
THERMAL CYCLER (TC) SUPPLIER: CEPHEID EFFECTIVE DATE: 4/15/00 ROYALTY/FEE RATE: ________
[ ] Check here if there were no sales for this period.
TC/TCI/Add-on Mod. # of Gross Invoice Price Deductions Allowed Net Sales Price
Model # TC/TCI/Add-on Mod. (actual) (explain) (actual) Royalty/Fee Due
______________ ______________ ______________ ______________ ______________ ______________
______________ ______________ ______________ ______________ ______________ ______________
______________ ______________ ______________ ______________ ______________ ______________
______________ ______________ ______________ ______________ ______________ ______________
______________ ______________ ______________ ______________ ______________ ______________
TC/TCI/Add-on Mod. # of Calculated Net
Model # TC/TCI/Add-on Mod. Price to Distributor Sales Price Royalty/Fee Due
______________ ______________ ______________ ______________ ______________
______________ ______________ ______________ ______________ ______________
______________ ______________ ______________ ______________ ______________
______________ ______________ ______________ ______________ ______________
______________ ______________ ______________ ______________ ______________
TOTAL ROYALTY/FEE EARNED: ______________
ROYALTY/FEE PAYMENT DUE: ______________
I hereby certify the information set forth above is correct and complete with respect to the amounts due under the
applicable license agreement.
By _______________________________________ Title ____________________ Date ___________________
Name (please print) _______________________________
PE CORPORATION
Send report to:
Director of Licensing, PE Biosystems, PE Corporation, 850 Lincoln Centre Drive, Foster City, CA 94404 USA
</TABLE>
<PAGE> 22
EXHIBIT 1
Attached (Exhibits 1a - 1c) are descriptions and specifications for the specific
Cepheid thermal cyclers and temperature cycling instruments referenced in the
"Grant" clause, Article 2.1, paragraph (a):
Exhibit la - Smart Cycler(R) System (2 pages)
Exhibit 1b - Smart Cycler(R) XC System (2 pages)
Exhibit 1c - GeneXpert(TM) Prototype (2 pages)
Also attached (Exhibit 1d) is a prospective set of general specifications for
any thermal cycler or temperature cycling instrument containing one or more
I-CORE(TM) modules which may be manufactured under this Agreement by Cepheid, as
referenced in the "Grant" clause, Article 2.1, paragraph (a).
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<PAGE> 23
Exhibit 1d: General Specifications for Cepheid's Thermal Cycle and Temperature
Cycling Instruments
The instruments are those containing one or more I-CORE(TM) modules. An I-CORE
module is comprised of (1) a single site, discrete, individually controllable
heater sleeve containing a heating element and designed to accept a disposable
reaction tube or cartridge, (2) an integrated cooling mechanism (e.g. a fan)
that enables passage of ambient or cooled air across the heater sleeve, and (3)
optical blocks containing solid state components that enable optical
interrogation of the reaction solution in the reaction tube or cartridge.
In a single site configuration comprised or a single I-CORE module, the I-CORE
module will contain all of the elements listed above.
In a multi-site configuration comprised of multiple I-CORE modules, each I-CORE
module:
a) will contain a single site, discrete, individually
controllable heater sleeve containing a heating element and
designed to accept a disposable reaction tube or cartridge.
b) may or may not contain an integrated cooling mechanism. If an
integrated cooling mechanism is not included, each I-CORE
reaction site will be cooled by the passage of ambient or
cooled air coming from an external source passing across the
heater sleeve.
c) may or may not contain optical blocks. If optical blocks are
not included, the instrument will be optically "blind", that
is, it will not be capable of optical interrogation, or
optical interrogation will occur on a separate module.
23
<PAGE> 24
Exhibit 1a, page 1
[CEPHEID LOGO] BIOANALYSIS FOR THE NEW MILLENNIUM
RAPID THERMAL
CYCLING WITH
REAL-TIME DETECTION
SMART CYCLER(R) SYSTEM
The Smart Cycler(R) from Cepheid is a highly versatile and efficient thermal
cycler with real-time optical detection specifically tailored to the rapidly
evolving needs of today's molecular biology laboratory. Based on state of the
art microelectronic design, the Smart Cycler(R) can be configured by the user
into a series of 1-6 processing blocks, each containing 16 reaction sites. Each
of the 16 sites within a processing block is individually programmable, and
each is capable of 4 channel multiplexed fluorometric detection. Through a
sophisticated PC-based user interface, the operator can define and
simultaneously carry out any number of separate protocols, each with a unique
set of cycling parameters, threshold criterion, and analytical algorithms. In
addition, each site can be thermally and optically monitored on a real-time
basis and results can be analyzed and reported according to user defined modes.
The Smart Cycler(R) is the ideal system for method optimization and for
efficiently processing workloads comprised of variable sample numbers and
protocols.
DILUTION SERIES PERFORMED ON SMART CYCLER(R)
SYSTEM USING A BETA-ACTIN ASSAY
[GRAPH]
o 1-6 PROCESSING BLOCKS
o 16 INDEPENDENTLY PROGRAMMABLE REACTION SITES PER PROCESSING BLOCK
o 4 COLOR REAL-TIME OPTICAL DETECTION IN EACH SITE
o FASTER & MORE SENSITIVE THAN REFERENCE SYSTEMS
<PAGE> 25
Exhibit 1a, page 2
[CEPHEID LOGO] BIOANALYSIS FOR THE NEW MILLENNIUM
SPECIFICATIONS;
PHYSICAL DIMENSIONS
12"W x 12"Lx 10"H (each processing block)
22 lbs per processing block
POWER REQUIREMENTS
85-264 VAC, 47-200 Hz
350 Watts
OPTICS*
2 optic blocks per site
Components: LED's, filters, photo-diodes
4 color excitation
4 color detection from 500 nm - 700 nm
Dye detection limit <10nM
for FAM/TAM/TET/ROX
SITE-LEVEL HEATING/COOLING ASSEMBLY*
Solid state heater and forced air cooling
at each reaction site
16 independently controlled reaction sites
per processing block
1-6 processing blocks can be interconnected
COMPUTER
Pentium(R) computer
WIN 98 OS, WIN 2000
CD ROM
USB
A single host PC supports up to six SmartCycler
instruments
SOFTWARE/USER INTERFACE
Windows 98, Windows 2000 compatible
Menu driven user interface
Point & click protocol definition
(cycle #, temp, times, read points,
melting curve analysis, quantitation)
Qualitative and quantitative data analysis
REACTION TUBES*
Single use, disposable tubes
Polypropylene construction
25 (micro)l & 100 (micro)l reaction volumes
No-leak closure seals and pressurized tube
PERFORMANCE PARAMTERS
Heating ramp rates
6.5 degrees C/sec from 50 degrees C to 95 degrees C
Cooling ramp rates
2 degrees C/sec from 95 degrees C to 50 degrees C
Programmed time at Temperature
+/- 1.0 sec
Temperature accuracy
+/- 0.5 degrees C from 60 degrees C to 95 degrees C
Melt curve programmable ramp rate
0.1 degrees C/sec to 1.0 degrees C/sec
ASSAY PERFORMANCE
Cycle time (Beta Actin assay)
<40 seconds per cycle
<30 minutes for 45 cycles
Analytical sensitivity (Beta Actin assay)
150,000 copies in <28 cycles
150 copes in <34 cycles
<150 copies in 35 - 45 cycles
Analytical precision
Site to site threshold crossing in
+/- 0.5 cycles
*Covered by issued or pending patents
<PAGE> 26
Exhibit 1b, page 1
[CEPHEID LOGO] BIOANALYSIS FOR THE NEW MILLENNIUM
[PHOTO] PORTABLE NUCLEIN ACID DETECTION
SMART CYCLER(R) XC SYSTEM
The Smart Cycler XC (Xtreme Conditions) from Cepheid is a very rapid, highly
efficient, fully ruggedized, battery operated thermal cycler with real-time
optical detection. Based on state of the art microelectronic design, the Smart
Cycler XC is comprised of 16 independently programmable reaction sites, each
with 4 channel multiplexed fluorometric detection. Up to 16 different protocols
can be processed and monitored simultaneously and each reaction can be
terminated as soon as a positive signal threshold is reached. Speed and
sensitivity of the system meets or surpasses that of sophisticated laboratory
systems. The Smart Cycler XC is the solution for rapid, real-time, field-based
pathogen detection or other nucleic acid probe analysis.
[Graph]
O BATTERY OPERATED
O 16 INDEPENDENTLY PROGRAMMABLE REACTION SITES
O 4 COLOR REAL-TIME OPTICAL DETECTION
O FASTER & MORE SENSITIVE THAN LABORATORY SYSTEMS
<PAGE> 27
EXHIBIT 1b, page 2
[CEPHEID LOGO]
BIOANALYSIS FOR THE NEW MILLENNIUM
SPECIFICATIONS:
PHYSICAL DIMENSIONS
26.5" X 18.9 X 13.4
62 lbs w/computer & rechargeable battery pack
POWER REQUIREMENTS
Can run on:
AC (110V/60Hz; 220V/50Hz)
Internal battery pack (1 hour operation)
External battery pack (6 hours operation)
Automobile electrical adaptor or 12V auto battery
OPTICS*
2 optic blocks per site
Components: LED's, filters, photo-diodes
4 color excitation
4 color detection from 500 nm - 700 nm
Dye detection limit <10nM for FAM/TAM/TET/ROX
SITE-LEVEL HEATING/COLLING ASSEMBLY*
Solid state heater and forced air cooling at each reaction site
16 independently controlled reaction sites per processing block
1-4 processing blocks can be interconnected
COMPUTER
Laptop Pentium(R) computer
WIN 98 OS, WIN 2000
USB, modem, ethernet
A single host PC supports up to four Smart Cycler XC instruments
Zip Drive
SOFTWARE/USER INTERFACE WINDOWS 98
Windows 98, Windows 2000 compatible
Menu driven user interface
Point & click protocol definition (cycle #, temp, times, read points,
melting curve analysis, quantitation)
Qualitative and quantitative data analysis
REACTION TUBES*
Single use, disposable tubes
Polypropylene construction
25 ul & 100 ul reaction volumes
No-leak closure seals and pressurized tube
PERFORMANCE PARAMETERS
Heating ramp rates
6.5 degrees C/sec from 50 degrees C to 95 degrees C
Cooling ramp rates
2 degrees C/sec from 95 degrees C to 50 degrees C
Programmed time at Temperature
+/- 1.0 sec
Temperature accuracy
+/- 0.5 degrees C from 60 degrees C to 95 degrees C
Melt curve programmable ramp rate
0.1 degrees C/sec to 1.0 degrees C/sec
ASSAY PERFORMANCE
Cycle time (Beta Actin assay)
<40 seconds per cycle
<30 minutes for 45 cycles
Analytical sensitivity (Beta Actin assay)
150,000 copies in <28 cycles
150 copies <34 cycles
<150 copies in 35 - 45 cycles
Analytical precision
Site to site threshold crossing in +/- 0.5 cycles
RUGGEDIZATION/ENVIRONMENTAL
Meets MIL STD 810E for shock and vibration
Temperature: -32 C to 71 C Storage
0 C to 49 C Operation
*Covered by issued or pending patents
<PAGE> 28
Exhibit 1c, page 1
[CEPHEID LOGO] BIOANALYSIS FOR THE NEW MILLENNIUM
GENEXPERT(TM) PROTOTYPE
[PHOTO] Integrated, Automated, Hands-off DNA Detection
SUMMARY OF DATA - CT/GC ASSAY
Cepheid has integrated its proprietary cartridge-based sample preparation
technology with its rapid thermal cycling and real-time detection platform
(I-CORE(TM)) to produce a revolutionary demonstration system -- the
GeneXpert(TM). The cartridge, which employs a fluid circuit comprised of various
processing elements, automatically carries out a complete sample preparation and
DNA extraction procedure (including filtration, cell lysis, DNA extraction, and
addition of pre-loan assay specific PCR reagents) on 5 ml of urine in less than
5 minutes. The extracted DNA and PCR reaction mixture is delivered automatically
to a closed, integrated reaction tube, where it undergoes rapid thermal cycling,
amplification and real-time optical readings in a Cepheld I-CORE(TM) module.
Using a Taqman based system for homogeneous fluorescent detection, the presence
of Ct can be detected using the TET channel and GC using the FAM channel.
Results are available in less than 30 minutes from the start of the procedure.
<TABLE>
<CAPTION>
CEPHEID FDA APPROVED FDA APPROVED
GENEXPERT(TM) REFERENCE KIT A REFERENCE KIT B
ASSAY TIME CT & GC CT GC
---------- ------------ --------------- ---------------
<S> <C> <C> <C>
TOTAL # OF STEPS 1 23 33
Sample Preparation <5 98 66
(minutes)
Amplification 25 90-100 120
(minutes)
Detection [Real Time] 119 85
(minutes)
TOTAL TIME <30 307 271
(MINUTES)
</TABLE>
<PAGE> 29
EXHIBIT 1c, page 2
[CEPHEID LOGO] BIOANALYSIS FOR THE NEW MILLENNIUM
[GRAPH RAPID LYSIS OF CHLAMYDIA]
[GRAPH MULTIPLEX DETECTION OF CT AND GC IN URINE]
</TEXT>