MassARRAY(TM) Distribution Contract Terms - Sequenom Inc. and Nissei Sangyo Co. Ltd.
CONFIDENTIAL
MassARRAY(TM) Distribution Contract Terms
SEQUENOM, Inc ("Sequenom")
and
Nissei Sangyo Co., Ltd. ("Nissei Sangyo")
Between, Nissei Sangyo Co., Ltd., ("Nissei Sangyo") a corporation duly
organized and existing under the laws of Japan having offices at 24-14, Nishi-
shimbashi, 1-chome, Minato-ku, Tokyo, 105-8717 Japan and Sequenom, Inc.
("Sequenom") a Delaware corporation having its principal place of business at
11555 Sorrento Valley Road, San Diego, California 92121-1331, U.S.A.
(collectively the "parties"); and
Whereas, Sequenom is in the business of, among other things, designing,
developing, manufacturing and selling proprietary biopolymer analysis products
and related software and consumables; and
Whereas, Sequenom has expertise in the development and utilization of mass
spectrometry for biopolymer analysis and has developed Sequenom's proprietary
MassARRAY(TM) products for high-throughput DNA analysis;
Whereas, Nissei Sangyo and Sequenom desire to enter into a relationship
pursuant to which Sequenom will grant Nissei Sangyo certain rights to distribute
Sequenom's MassARRAY products and consumables throughout Japan and Nissei Sangyo
will actively market, sell, and service such products throughout Japan.
Whereas, Sequenom and Nissei Sangyo would like to set forth the general
terms and conditions of such an arrangement in this binding Letter of Intent,
which upon execution, obligates the parties as follows:
1. General Terms
1.1 Exclusivity: Nissei Sangyo will act as Sequenom's exclusive distributor of
MassARRAY systems, software and consumables in the Territory.
1.2 Field of Use: Sequenom grants Nissei Sangyo the right to sub-license
MassARRAY technology for the field of individual DNA genotyping in the
Territory under the condition that each new MassARRAY customer in the
Territory shall sign a separate sub-licensing agreement consistent with the
terms set forth in the distribution agreement.
1.2.1 Sequenom grants Nissei Sangyo the right to sub-license MassARRAY to
parties in the Territory for internal R&D purposes without
additional
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Sequenom consent provided that the party executes an R&D sub-
licensing agreement.
1.2.2 Sequenom grants Nissei Sangyo the right to sub-license MassARRAY to
parties in the Territory for commercial purposes but only with
Sequenom's prior written consent and provided that the party
executes a commercial sub-licensing agreement. Such commercial
sublicensing agreement will provide for royalty payments to Nissei
Sangyo for such commercial use, with a portion thereof to be paid by
Nissei Sangyo to Sequenom.
1.3 Territory: Territory for the contract is Japan.
1.4 Term: [...***...].
1.4.1 Termination date is [...***...].
1.4.2 Renewable on an annual basis thereafter upon mutual agreement.
1.5 Products: All new assays, instruments and software products that are
commercially available for distribution will be made available for Nissei
Sangyo to sell in the Japanese market for the duration of the Distribution
Contract.
1.5.1 Sequenom will provide a protocol and components for a commercial
homogeneous MassEXTEND assay (hME) to Nissei Sangyo for sale in the
Territory as soon as it is a commercially available product
(estimated commercial release: by the end of 2000).
1.5.2 Nissei Sangyo will have access to Sequenom developed genotyping
assay panels (however, not including specific diagnostic panels) at
a standard distribution transfer price, and the right to sell such
assay panels in the Territory when they are commercially released
for customer use.
1.5.3 The Distribution Contract does not provide Nissei Sangyo with the
right to sell or make use of Sequenom's proprietary technology for
rapid Allele Frequency Determination by Pooling. The sale or support
of genotyping programs within the Territory that would make use of
this Pooling technology will require completion of a separate and
independent agreement. Also, Nissei Sangyo will only have the right
to sell Sequenom diagnostic panels on a non-exclusive basis and
under licensing and royalty conditions defined in a separate
diagnostic assay licensing and royalty agreement. The term
commercial diagnostic service applies to the provision of a
commercial service providing medical diagnostic information to a
patient or to an intermediate company/provider that would then
transfer this result to a patient.
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1.6 Nissei Sangyo will obtain, or will assist Sequenom in obtaining, any
required licenses or permits and will assist Sequenom in complying with
applicable laws, rules and regulations, including Japanese import
regulations. Nissei Sangyo will pay any fees associated with any required
licenses or permits.
1.7 All trademarks, trade names, trade dress and other trade rights of Sequenom
remain the property of Sequenom and will be licensed for use by Nissei
Sangyo in conjunction with, and limited to, its use for distribution of
Sequenom products.
1.8 SEQUENOM shall be entitled to establish an independent Joint Venture (JV)
with [...***...] or their representative for the purposes of identifying
SNP markers of diagnostic or therapeutic utility in the Japanese
population.
1.8.1 SNP markers that are generated out of the JV may be made available
to Nissei Sangyo at the discretion of the JV's management.
1.8.2 [...***...].
1.8.3 Nissei Sangyo acknowledges that Sequenom has been negotiating a
joint venture with [...***...] for some time now, and that such
joint venture, if and when established, will likely purchase and
consume MassARRAY products. While Sequenom intends that Nissei
Sangyo will distribute MassARRAY products to the JV (at discounted
pricing to be agreed upon), Sequenom reserves the right to
independently supply MassARRAY products to the JV in the event that
the parties cannot reach agreement on pricing and/or for any other
reason involving potential or actual interference with the timely
supply of such products to the JV for its needs.
1.8.4 Nissei Sangyo will be responsible for installation, support and
service for MassARRAY systems installed at the JV, as for any
Japanese customer.
1.9 Sequenom has the right to change its products, the configuration of
products offered or product pricing from time to time. Sequenom commits to
use best efforts in providing Nissei Sangyo with a notification of future
product, product configuration and pricing changes at least one month prior
to implementation.
1.10 Sequenom will sell SpectroDESIGNER Assay Design Software to Nissei Sangyo
for use by Hitachi Life Science Group in their Core Facility for provision
of commercial genotyping services. The transfer of this software is beyond
the scope of product distribution and will be covered in a separate
document, and for the avoidance of doubt, this will not be referenced in
the distribution contract.
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1.11 Confidentiality: This Letter of Intent and the information contained
herein, including all Exhibits, is considered the Confidential Information
of Sequenom. Nissei Sangyo agrees to (i) hold such Confidential Information
in strict confidence; (ii) not disclose it to any third parties or to use
it in any way, commercially or otherwise; and (iii) not allow any
unauthorized person access to such Confidential Information, without the
prior consent of Sequenom.
1.12 Agreement: A formal, detailed agreement, that will include the terms
herein, will be executed by the parties within thirty (30) days following
the execution of this binding Letter of Intent.
2. Nissei Sangyo Support Commitments
2.1 Nissei Sangyo commits to provide all necessary infrastructures for
MassARRAY system sales, support, service and maintenance for the Territory
for the term of the agreement.
2.2 Nissei Sangyo commits to stock adequate supplies of consumable items and
spare parts to ensure a two-day supply time to local customers.
2.3 Nissei Sangyo commits to translate and do any and all necessary
modifications of Sequenom's sales and marketing materials into Japanese
language within three months of signing the MassARRAY Distribution
Agreement.
2.3.1 Nissei Sangyo agrees to provide Sequenom with final copies of all
sales and marketing materials prior to local supply. Sequenom does
have to authorize local language sales document release, for
trademark and tradename use.
2.4 Nissei Sangyo shall ensure all necessary hardware and software manuals and
training documentation necessary for the routine operation of the MassARRAY
system are translated into Japanese language within three months of signing
the MassARRAY distribution agreement.
2.4.1 Nissei Sangyo agrees to provide Sequenom with final copies of all
instruction manuals and training materials prior to local supply.
Sequenom does have to authorize local language instruction document
release, except to the extent necessary to insure proper use of its
trademarks and tradenames.
2.5 Nissei Sangyo will use its best efforts to sell the MassARRAY system in the
Territory, and in consideration for the exclusive arrangement, Nissei
Sangyo will not sell or distribute competing products and/or technologies
(with the exception of products pursuant to Nissei's prior relationship
with Nanogen) while this agreement is in effect, without the written
permission of Sequenom.
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2.6 Nissei Sangyo will provide Sequenom with a rolling sales forecast with a 12
(twelve)-month projection on a quarterly basis.
3. Sequenom Support Commitments
3.1 Sequenom will provide Nissei Sangyo personnel with comprehensive training
covering; system installation, support and service; applications and
systems software; assay development and implementation.
3.2 Sequenom will transfer to Nissei Sangyo its standard limited warranty as
normally provided to customers. This warranty will also be set forth in
end-user sub-license agreements consistent with the terms of the
Distribution agreement. Nissei Sangyo will handle and be responsible for
all local warranty returns from customers.
3.3 Sequenom will ensure instrument service support is made available to Nissei
Sangyo from all secondary equipment suppliers who have a Japanese presence,
including but not limited to PerSeptive, Bruker and Beckman. Nissei Sangyo
is to maintain these relationships once established by Sequenom.
4. Payment Terms
4.1 Nissei Sangyo will pay Sequenom a [...***...] exclusive distribution
license fee of [...***...]. Nissei Sangyo will pay a portion of this fee
[...***...] by wire transfer to an account designated by Sequenom
[...***...]. Nissei Sangyo will pay to Sequenom a second portion of the
exclusive license distribution fee [...***...] by wire transfer
[...***...]. The remaining balance [...***...] is due upon [...***...].
4.2 All payments shall be made in U.S. dollars and are fixed amounts regardless
of exchange rate fluctuations.
4.3 Nissei Sangyo will pay Sequenom [...***...] to cover costs in establishing
MassARRAY installation and support infrastructure. This payment will be
made to Sequenom within thirty (30) days of executing the Distribution
Agreement.
4.4 All fees due and prices are net amounts due to Sequenom, exclusive of any
and all taxes, customs, duties, or other fees that may be governmentally
imposed or otherwise.
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4.5 To the extent that an EndUser licenses a particular technology, software,
or assay from Sequenom that is not a standard distribution product (for
example, pooling software as mentioned in section 1.5.3), Sequenom will pay
to Nissei Sangyo [...***...] of the license fee. This provision will not
apply where the EndUser is the Joint Venture referenced in section 1.8.
5. Product Pricing Schedule
5.1 Refer to Exhibits I and II.
5.2 Discount Levels: Nissei Sangyo's MassARRAY Consumables pricing will start
at Level 1 for the first order. The Level will be adjusted according to the
Accrued Element Purchase Volume as outlined in the table below for
subsequent orders. All discounts will be taken from the applicable List
Prices for the MassARRAY Consumables listed in Exhibit II.
5.3 Prices do not include shipping costs, applicable duties or taxes, or other
fees.
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Discount Level Accrued Element* Purchase Volume Discount Percentage from
List Price
----------------------------------------------------------------------------------------------
Level I [...***...] [...***...]%
----------------------------------------------------------------------------------------------
Level 2 [...***...] [...***...]%
----------------------------------------------------------------------------------------------
Level 3 [...***...] [...***...]%
----------------------------------------------------------------------------------------------
Level 4 [...***...] [...***...]%
----------------------------------------------------------------------------------------------
Level 5 [...***...] [...***...]%
----------------------------------------------------------------------------------------------
Level 6 [...***...] [...***...]%
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* An Element comprises solid-phase sample conditioning and one position on
Sequenom's SpectroCHIP. Each Element can accommodate multiple assays or
run a multiplexed genotyping reaction, for a single person or organism's
DNA.
In Witness Whereof, both Sequenom and Nissei Sangyo have executed this
Letter of Intent, in duplicate originals, by their respective employee hereunto
duly authorized, as of the date below.
Sequenom, Inc. Nissei Sangyo Co., Ltd.
By: /s/ Rick Episcopo By: /s/ Hisayoshi Ishihara
------------------------ ----------------------
Name: Rick Episcopo Name: Hisayoshi Ishihara
------------------------ ----------------------
Title: Sr. V.P. Commercial Ops. Title: General Manager
------------------------ ----------------------
Date: December 8, 2000 Date: Dec. 11, 2000
------------------------ ----------------------
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Exhibit I
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MassARRAY(TM) Equipment Pricing
-------------------------------
------------------------------------------------------------------------------------------------------------
Product Price
------------------------------------------------------------------------------------------------------------
High-speed SpectroREADER array mass spectrometer for separation, [...***...]
detection and characterization of the analyte molecules from a
miniaturized array; configured with:
. Workstation, post processing software
------------------------------------------------------------------------------------------------------------
SpectroJET, 4-Channel, v1.1, dispenser for nanoliter sample transfer [...***...]
. SPIP Micropump with 800 nl chamber volume
. droplet volume range of 0.5-2 nl
. CV *2 % dispensing precision of the pump
. 0,1 mm precision of x/y positioning stage
. maximum speed of 41.9 cm/sec
. PC, controller software
------------------------------------------------------------------------------------------------------------
SpectroPREP Automated Multipipettor [...***...]
. 96-channel automated pipettor
. pipetting volume range of 2-200 ul
. magnetic lifter for bead separation
. six-position workdeck
. PC, controller software
------------------------------------------------------------------------------------------------------------
SpectroTYPER Workstation for automated genotype calling and data [...***...]
management
. Workstation (hardware)
. SpectroTYPER software
. Oracle database with license
------------------------------------------------------------------------------------------------------------
* Less Than
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Exhibit II
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MassARRAY(TM) Consumables Pricing
---------------------------------
-------------------------------------------------------------------------------------------------------
MassARRAY 384 Item Number Item Price
---------------------------------------------------------------------------
Core Kit* 10020 10x SpectroCHIP384 - 384 elements [...***...]
--------------------------------------------------------
Beads
--------------------------------------------------------
Binding Buffer
--------------------------------------------------------
Denaturation Solution
--------------------------------------------------------
Wash & Conditioning Solution
--------------------------------------------------------
Recovery Solution
--------------------------------------------------------
Calibrant
-------------------------------------------------------------------------------------------------------
*MassARRAY Enzyme pack for the MassEXTEND(TM) reaction, positive controls and
nucleotide mixes are not included and may be purchased separately.
--------------------------------------------------------------------------------------------------------
MassARRAY Item Number Item Price
----------------------------------------------------------------------------
Enzyme Pack 10200 MassEXTEND Enzyme [...***...]
--------------------------------------------------------------------------------------------------------
MassARRAY Item Number Item Price
----------------------------------------------------------------------------
Positive Control Pack 10300 Positive Control Pack [...***...]
---------------------------------------------------------
--------------------------------------------------------------------------------------------------------
MassARRAY Item Number Item Price
----------------------------------------------------------------------------
Nucleotide Uni-Mix Pack 10400 EXTEND Mix 1 - ddATP/dCTP/dGTP/dTTP [...***...]
---------------------------------------------------------
EXTEND Mix 2 - ddCTP/dATP/dGTP/dTTP
---------------------------------------------------------
EXTEND Mix 3 - ddGTP/dATP/dCTP/dTTP
---------------------------------------------------------
EXTEND Mix 4 - ddTTP/dATP/dCTP/dGTP
--------------------------------------------------------------------------------------------------------
MassARRAY Item Number Item Price
----------------------------------------------------------------------------
Nucleotide Di-Mix Pack 10401 EXTEND Mix 5 - ddATP/ddCTP/dGTP/dTTP [...***...]
---------------------------------------------------------
EXTEND Mix 6 - ddATP/ddGTP/dCTP/dTTP
---------------------------------------------------------
EXTEND Mix 7 - ddATP/ddTTP/dCTP/dGTP
---------------------------------------------------------
EXTEND Mix 8 - ddCTP/ddGTP/dATP/dTTP
---------------------------------------------------------
EXTEND Mix 9 - ddCTP/ddTTP/dATP/dGTP
---------------------------------------------------------
EXTEND Mix 10 - ddGTP/ddTTP/dATP/dCTP
--------------------------------------------------------------------------------------------------------
MassARRAY Item Number Item Price
----------------------------------------------------------------------------
Nucleotide Tri-Mix Pack 10402 EXTEND Mix 11 - ddATP/ddCTP/ddGTP/dTTP [...***...]
---------------------------------------------------------
EXTEND Mix 12 - ddATP/ddCTP/ddTTP/dGTP
---------------------------------------------------------
EXTEND Mix 13 - ddATP/ddGTP/ddTTP/dCTP
---------------------------------------------------------
EXTEND Mix 14 - ddCTP/ddGTP/ddTTP/dATP
--------------------------------------------------------------------------------------------------------
A list of spare parts and accessories for the MassARRAY system with associated
pricing will be provided.
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