Supply Agreement - Tactical Fabs Inc. and Sequenom Inc.
SUPPLY AGREEMENT
by and between
Tactical Fabs, Inc. ("Seller")
51 Whitney Place
Freemont, CA 94539
and
SEQUENOM, Inc. ("Buyer")
11555 Sorrento Valley Rd
San Diego, CA 92121-1331
This Agreement dated April 1, 1999 (the "Execution Date") is by and between
SEQUENOM, Inc., a corporation organized and existing under the laws of the State
of California and having its principal office at 11555 Sorrento Valley Road, San
Diego, California 92121-1331 ("Buyer"), and Tactical Fabs, Inc., a corporation
organized and existing under the laws of the State of California and having its
principal office at 51 Whitney Place, Fremont, CA 94539 ("Seller").
INTRODUCTION
The parties agree that the Seller shall design, manufacture and supply chips
("DIE") as specified by Buyer under this Agreement. Seller and Buyer in
addition agree to work cooperatively to further pursue the development of DIE
for applications in mass spectrometry.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises and covenants set forth below, Seller and Buyer mutually agree as
follows:
Article 1. DEFINITIONS
When used in this Agreement, each of the following, terms shall have the
meanings set forth in this Article I:
SECTION 1.1 "Affiliate" means any corporation, company, partnership, joint
venture and/or firm which controls, is controlled by, or is under common control
with a specified person or entity. For purposes of this Section 1.1, "control"
shall mean (a) in the case of corporate entities, direct or indirect ownership
of at least fifty percent (50%) of the stock or shares having the right to vote
for the election of directors, and (b) in the case of non-corporate entities,
direct or indirect ownership of at least fifty percent (50%) of the equity
interest with the power to direct the management and policies of such non-
corporate entities.
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SECTION 1.2 "Agreement" shall mean this Supply Agreement, as amended from
time to time.
SECTION 1.3 "Delivery Date" shall mean a date for which delivery of Product
is properly requested in a purchase order.
SECTION 1.4 "Initial Term" shall have the meaning set forth in Section 5. 1.
SECTION 1.5 "Party" means Buyer or Seller; "Parties" means Buyer and Seller.
As used in this Agreement, references to "third parties" do not include a Party
or its Affiliates.
SECTION 1.6 "Product" shall mean each product supplied hereunder by Seller in
its completed and functional form and that is listed in and meets in all
material respects the specifications set forth in Exhibit I, attached hereto and
made a part hereof, as such Exhibit is amended by the parties from time to time.
SECTION 1.7 "Change of Control" means a merger, consolidation, sale or other
transfer of all or substantially all of the assets of either Party to a third
party.
SECTION 1.8 "Confidential Information" means all materials, know-how or other
information, including, without limitation, proprietary information and
materials (whether or not patentable) regarding a Party's technology, products,
business information or objectives, which is designated as confidential in
writing by the disclosing Party, whether by letter or by the use of an
appropriate stamp or legend, prior to or at the time any such material, trade
secret or other information is disclosed by the disclosing Party to the other
Party. Notwithstanding the foregoing to the contrary, materials, know-how or
other information which is orally, electronically or visually disclosed by a
Party, or is disclosed in writing without an appropriate letter, stamp or
legend, shall constitute Confidential Information of a Party (a) if the
disclosing Party, within thirty (30) days after such disclosure, delivers to the
other Party a written document or documents describing the materials, know-how
or other information and referencing the place and date of such oral, visual,
electronic or written disclosure and the names of the persons to whom such
disclosure was made, or (b) such information is of the type that is customarily
considered to be confidential information by persons engaged in activities that
are substantially similar to the activities being engaged in by the Parties
hereunder. Notwithstanding the foregoing, any technical or financial
information of a Party disclosed at a meeting of Seller and the Buyer or
disclosed through an audit or royalty reports shall constitute Confidential
Information of a Party unless otherwise specified.
SECTION 1.9 "Executive Officers" means the Chief Executive Officer of Buyer
(or an executive of Buyer designated by such Chief Executive Officer) and the
Chief Executive Officer of Seller (or an officer of Seller designated by such
Chief Executive Officer).
SECTION 1.10 ADDITIONAL DEFINITIONS. Each of the following definitions set
forth in the section of this Agreement indicated below:
DEFINITION SECTION
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"Breaching Party" "Extension Period" "Intellectual Property" "Non-Breaching
Party" "Notification" "Response Period" "Software Developments" "Specified
Process Technology" "Termination Date" "Backorder"
Article 2. SALE AND PURCHASE OF PRODUCTS
SECTION 2.1 SALE AND PURCHASE. Seller, within the limitations contained in
this Article, agrees to exclusively sell to Buyer such quantities of Product as
Buyer may order in accordance herewith. Subject to the provisions of Section
4.1 and 5.1 hereof, so long as this Agreement shall remain in effect, Buyer
agrees, for itself, its Affiliates and sublicensees, to satisfy solely through
Buyer's purchase of Products under this Agreement *** of Buyer's and Buyer's
Affiliates' and sublicensees' requirements of Product or any other products with
the characteristics that meet the specifications as described in Exhibit I
("Requirements").
It is understood that Seller shall have the right in connection with supply
hereunder to subcontract with third parties as Seller deems advisable to
manufacture Product, provided, however, that Seller shall remain fully
responsible hereunder and the subcontractors are bound by the terms and
conditions hereunder.
SECTION 2.2 QUANTITY; FORECASTS.
A. Buyer and Seller will mutually agree within thirty (30) days of signing
this Agreement, an initial order volume and the first delivery date. Buyer
at this time will provide a reasonable best estimate of the next three
quarter's forecast for the Product.
B. Commencing on the second year of this Agreement, Buyer will provide Seller
a forecast of Buyer's quantity requirements for such Product for at least
the next four (4) full calendar quarters. Thereafter, Buyer shall deliver
to Seller at or prior to the end of each calendar quarter, Buyer's firm
order for such Product for the second calendar quarter following such
calendar quarter and a forecast of its quantity requirements for such
Product for the three (3) following calendar quarters.
C. Commencing in the second year of this Agreement, the amount of any Product
forecasted for delivery in the first of the three calendar quarters
forecasted of year two of this Agreement shall be ***
*** of the most recent previous forecast for such a quarter.
D. After the first year of this Agreement the total amount of each Product
ordered by Buyer for delivery in any calendar quarter for which an order is
required may ***
** of Buyer's most recent forecast of its requirements for
such Product for such quarter. In addition, Seller's supply obligation will
not extend ***
*** of Buyer's most recent forecast of its requirements for
such
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Product for such quarter. If a Buyer Product requirement for any quarter
exceeds *** of Buyer's most recent forecast of it requirements for such
Product for such calendar quarter, Seller and Buyer will discuss in good
faith the additional amount, if any, that Seller is willing to supply
consistent with its other obligations and Buyer will adjust its order
accordingly. Buyer shall indemnify Seller and reimburse it promptly upon
request for all reasonable out of pocket costs and expenses, including the
cost of carrying increased inventory, to the extent caused by any deviation
in order quantities from the limits imposed by the preceding sentence, and
Seller will act reasonably to mitigate any such costs and expenses.
SECTION 2.3 TECHNOLOGY CHANGE
*
SECTION 2.4 BACKORDERS.
A. Backorders are defined as orders that have not been fully received at the
Buyer within the guaranteed order lead time.
B. Backorders must show an approximate shipping date and indicate the reason
for such backorder.
C. The Seller is required to provide any backorders without service or
delivery charges.
D. It is the responsibility of the Seller to manage backorders and provide the
Buyer, at no additional cost, with required product to ensure stock-outs do
not occur.
E. The Seller will be in default if the Product is backordered for more than
ten (10) working days, or if the Buyer feels that the approximate shipping
date provided by the Seller for the backordered Product(s) jeapordizes the
Buyer's commercial operations and the operation of its Customers.
(i) In case of default, and after notifying the Seller, Buyer may obtain
the same quantity of the Product from other suppliers.
(ii) The Seller will be responsible, for the cost difference between the
Product and the Product from other suppliers.
SECTION 2.5 DELIVERY.
A. Delivery will be Free On Board (FOB) the Buyer's receiving dock and will
include delivery, packaging, and unloading costs. The Buyer will not
assume any of these costs.
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B. Include all costs in the quoted unit price.
* Seller agrees the terms of this Agreement may be renegotiated upon written
notice from Buyer, with such renegotiated terms to take effect no sooner
than 90 days after such initial notice from Seller to Buyer, if, in the
opinion of the Buyer, the Product provided by the Seller has been displaced
by other technologies; provided however, Buyer shall afford Seller a
reasonable opportunity to supply alternative technology.
C. Seller will package the Products in accordance with the specifications
set forth in Exhibit I hereto. Seller will include with each shipment
copies of all applicable quality and testing records.
SECTION 2.6 REJECTION OF PRODUCT IN CASE OF NONCONFORMITY.
A. Buyer may reject any portion of shipment of Product that does not
conform to the specifications contained in Exhibit I. In order to reject
a shipment, Buyer must (i) give notice to Seller of Buyer's intent to
reject the shipment within ten (10) days of receipt together with a
detailed written indication of the reasons for such possible rejection,
and (ii) as promptly as reasonably possible thereafter, provide Seller
with notice of final rejection and the full basis thereof. After notice
of intent to reject is given, Buyer shall cooperate with Seller in
determining whether rejection is necessary or justified. If no such
notice of intent to reject is timely received, Buyer shall be deemed to
have accepted such delivery of Product, provided, however, in the case
of Products having latent defects which upon diligent examination by
Buyer could not have been discovered, Buyer must give notice of Buyer's
intent to reject within thirty (30) days after discovery of such
defects, provided that such notice may in no event be given later than
ninety (90) days after receipt of the shipment. In any event, Buyer
shall pay for the shipment as otherwise provided herein and shall be
entitled to a refund of the purchase price (together with insurance and
freight charges if applicable) of properly rejected Products at the time
they are ultimately rejected. Seller shall notify Buyer as promptly as
reasonable possible whether it accepts Buyer's basis for any rejection.
B. Whether or not Seller accepts Buyer's basis for rejection, promptly on
receipt of a notice of rejection, Seller shall use its reasonable
efforts, at Buyer's request to provide replacement Product which shall
be purchased by Buyer as provided in this Agreement.
C. Unless Seller requests the return of the rejected batch within sixty
(60) days of receipt of buyer's notice of rejection, Buyer shall destroy
such batch promptly and provide Seller with certification of such
destruction. Buyer shall, upon receipt of Seller's request for return,
promptly dispatch said batch to Seller, at Seller's cost.
Article 3. PRICE AND PAYMENTS
SECTION 3.1 PRICE. The price Buyer shall pay to Seller for Product purchased
hereunder is as indicated in Exhibit II. Prices shall be negotiated on a annual
basis between the two parties with price negotiations commencing no later than
three (3) months prior to the
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anniversary date and completed no later than two (2) months prior to the
anniversary date of this Agreement.
SECTION 3.2 Prices quoted in Exhibit II are net costs, in United States
dollars. Federal Tax and State Sales Tax extra, where applicable. Duty and
brokerage costs, if applicable are to be included in unit prices.
SECTION 3.3 CURRENCY AND METHOD OF PAYMENTS; LATE PAYMENTS. All payments
under this Agreement shall be made in United States dollars by wire transfer to
such bank account as Seller may designate from time to time within no more than
ten (10) days when such payment is due. Buyer shall pay interest to Seller on
the aggregate amount of any payments that are not paid on or before the date
such payments are due under this Agreement at a rate per annum equal to ***
as reported by Seller's bank from time to time calculated on the number of days
such payment is delinquent.
ARTICLE 4. ANNUAL BUSINESS REVIEW
SECTION 4.1 Within thirty (30) days of the anniversary date of this Agreement
both Parties shall meet to review the performance of each party under this
Agreement and if necessary outline steps to improve performance.
Article 5. PARTIAL TERMINATION
SECTION 5.1 TERMINATION OF PURCHASE OBLIGATIONS; FAILURE TO DELIVER. In
addition to any termination of this Agreement under Article 6 hereof, this
Agreement shall terminate as to a particular Product as follows:
A. If at any time after the Initial Term (as defined in Section 5.1) Buyer
notifies Seller that Buyer has received a written good faith firm quote
from a reputable third party supplier of recognized standing (other than an
Affiliate) to supply Buyer for a period of
***
*** Seller shall have sixty (60) days
after receipt of such notice to notify Buyer that Seller intends or does
not intend to reduce its then applicable transfer price of such Product to
a price ***
*** upon the expiration of such sixty (60) day period. If Seller
fails to give such notice or notifies Buyer that it does not intend to so
reduce its then applicable transfer price of such Product, Buyer may, upon
thirty (30) days' prior notice to Seller, elect to terminate its
obligations hereunder to purchase, and Seller's obligations to supply, such
Product. Notwithstanding the foregoing, Buyer shall have no rights under
this Section 4.1 (A) if the third-party quote is given in connection with
or in anticipation of some other relationship with the Buyer.
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B. If Seller fails to timely deliver *** of the amount of any Product ordered
by Buyer as required hereunder for any reason, excluding force majeure, as
measured over any period of ninety (90) or more consecutive days, then
Buyer may upon twenty (20) days' prior notice to Seller elect to terminate
Buyer's obligations to purchase, and Seller's obligation to supply, such
Product hereunder.
Article 6. TERMINATION, RIGHTS AND OBLIGATIONS UPON
TERMINATION
SECTION 6.1 TERM. Unless terminated for any particular Product pursuant to
Sections 5.1(A) or 5.1(B) hereof or by either party pursuant to the other
provisions of this Article 6, this Agreement shall continue in effect until
three (3) years from the date of First Commercial Sale of the first Product
supplied hereunder (the "Initial Term"), and shall thereafter remain in effect
until terminated by either Party upon at least ninety (90) days prior written
notice to the other Party.
SECTION 6.2 TERMINATION FOR DEFAULT. If either party materially defaults in
the performance of any material Agreement, condition or covenant of this
Agreement and such default or noncompliance shall not have been remedied, or
steps initiated to remedy the same to the other party's reasonable satisfaction,
within ninety (90) days (or 10 days in the case of non-payment) after receipt by
the defaulting party of a notice thereof from the other party, the party not in
default may terminate this Agreement.
SECTION 6.3 RIGHTS AND OBLIGATIONS ON EXPIRATION OR TERMINATION. Except to
the extent expressly provided to the contrary, the following provisions shall
survive the termination of this Agreement: this Section 6.3 and Articles 7
through 10. Any rights of Seller to payments accrued through termination as
well as obligation of the parties under firm orders for purchase and delivery of
Products at the time of such termination shall remain in effect, except that in
the case of termination under Section 6.2, the terminating party may elect
whether obligations under firm orders will remain in effect, except that Seller
will have no obligation with respect to Delivery Dates more than six (6) months
after termination.
Article 7. CONFIDENTIALITY
SECTION 7.1 CONFIDENTIAL INFORMATION. All Confidential Information disclosed
by a Party to any other Party during the term of this Agreement shall not be
used by the receiving Party except in connection with the activities
contemplated by this Agreement, shall be maintained in confidence by the
receiving Party (except to the extent reasonably necessary for regulatory
approval of products developed by Buyer, Seller or any of their respective
Affiliates), and shall not otherwise be disclosed by the receiving Party to any
other person, firm, or agency, governmental or private, without the prior
written consent of the disclosing Party, except to the extent that the
Confidential Information (as determined by competent documentation):
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A. was known or used by the receiving Party prior to its date of disclosure to
the receiving Party; or
B. either before or after the date of the disclosure to the receiving Party is
lawfully disclosed to the receiving Party by sources other than the
disclosing Party rightfully in possession of the Confidential Information;
or
C. either before or after the date of the disclosure to the receiving Party
becomes published or generally known to the public (including information
known to the public through the sale of products in the ordinary course of
business) through no fault or omission on the part of the receiving Party
or its sublicensees; or
D. is independently developed by or for the receiving Party without reference
to or reliance upon the Confidential Information; or
E. is required to be disclosed by the receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, PROVIDED THAT the receiving Party provides prior
written notice of such disclosure to the disclosing Party and takes
reasonable and lawful actions to avoid and/or minimize the degree of such
disclosure, PROVIDED THAT, specific information shall not be deemed to be
within any of these exclusions merely because it is embraced by more
general information falling within these exclusions.
SECTION 7.2 EMPLOYEE AND ADVISOR OBLIGATIONS. Seller and Buyer each agree
that they shall provide Confidential Information received from any of the other
Parties only to their respective employees, consultants and advisors, and to the
employees, consultants and advisors of such Party's Affiliates, who have a need
to know and have an obligation to treat such information and materials as
confidential.
SECTION 7.3 COMPETITION. Seller agrees that for the term or the Agreement
and for a period of three (3) years after the expiration of the Agreement,
Seller shall not share, contract or make available for purposes of sale, any
information, technology, process technology and/or product technology developed
under this Agreement by either party with its customers or potential customers
that are either manufacturers of mass spectrometers or companies that perform or
intend to perform biopolymer analysis using mass spectrometry.
SECTION 7.4 EQUITABLE RELIEF. Seller acknowledges and agrees that due to the
unique nature of Buyer's Proprietary Information, there can be no adequate
remedy at law for any breach of its obligations hereunder, that any such breach
may allow Seller or third parties to unfairly compete with Buyer resulting in
irreparable harm to Buyer, and therefore, that upon any such breach or threat
thereof, Buyer shall be entitled to injunctions and other appropriate equitable
relief in addition to whatever remedies it may have at law.
SECTION 7.5 TERM. All obligations of confidentiality imposed under this
Article 7 shall continue for a period of at least five (5) years following
termination or expiration of this Agreement.
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Article 8. REPRESENTATIONS AND WARRANTIES
SECTION 8.1 REPRESENTATION OF AUTHORITY; CONSENTS. Seller and Buyer each
represent and warrant to the other Parties that as of the Execution Date it has
full right, power and authority to enter into this Agreement, this Agreement has
been duly executed by such Party and constitutes a legal, valid and binding
obligation of such Party, enforceable in accordance with its terms, and all
necessary consents, approvals and authorizations of all government authorities
and other persons required to be obtained by such Party in connection with the
execution, delivery and performance of this Agreement have been and shall be
obtained.
SECTION 8.2 NO CONFLICT. Each Party represents to the other Parties that
notwithstanding anything to the contrary in this Agreement, the execution and
delivery of this Agreement and the performance of such Party's obligations
hereunder (a) do not conflict with or violate such Party's Articles of
Incorporation and Bylaws or any requirement of applicable laws or regulations
and (b) do not and shall not conflict with, violate or breach or constitute a
default or require any consent under, any contractual obligation of such Party.
SECTION 8.3 KNOWLEDGE OF PENDING OR THREATENED LITIGATION. Each Party
represents and warrants to the other Parties that there is no claim,
investigation, suit, action or proceeding pending or, to the knowledge of such
Party, expressly threatened, against such Party before or by any governmental
entity or arbitrator that, individually or in the aggregate, could reasonably be
expected to (i) have a material adverse effect on such Party, (ii) materially
impair the ability of such Party to perform any obligation under this Agreement
or (iii) prevent or materially delay or alter the consummation of any or all of
the transactions contemplated hereby.
SECTION 8.4 EMPLOYEE AND CONSULTANT OBLIGATIONS. Each Party represents and
warrants that all of its employees, officers, and consultants have executed
agreements or have existing obligations under law requiring, in the case of
employees and officers, assignment to such Party of all inventions made during
the course of and as the result of their association with such Party and, in the
case of employees, officers and consultants, obligating the individual to
maintain as confidential such Party's Confidential Information as well as
confidential information of a third party which such Party may receive, to the
extent required to support such Party's obligations under this Agreement.
SECTION 8.5 FULL DISCLOSURE. Each Party has disclosed to the other Parties
in good faith, all material information such Party believes is relevant to the
subject matter of this Agreement, and to such Party's ability to observe and
perform its obligations hereunder.
SECTION 8.6 WARRANTIES. Seller warrants to Buyer that, when shipped to Buyer
by Seller, the Products will conform in all respects to the specifications set
forth in Exhibit I, as then in effect, and (ii) will not be adulterated.
BUYER'S SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF THE FOREGOING WARRANTIES OR
FOR PRODUCT DEFECTS SHALL BE ITS RIGHT UNDER SECTIONS 2.6 AND 9.1 HEREOF OR
REPLACEMENT OF OR, AT SELLER'S OPTION OF IF REPLACEMENT IS IMPRACTICAL, REFUND
FOR RETURNED NONCONFORMING UNITS OF PRODUCT PROVIDED TO SELLER WITHIN
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THREE (3) MONTHS AFTER THE ORIGINAL NONCONFORMING UNITS (BUT NOT REPLACEMENTS)
ARE SHIPPED BY SELLER. EXCEPT FOR THE FOREGOING WARRANTIES, SELLER DOES NOT
WARRANT THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PRODUCTS
OR THE PERFORMANCE OR NONINFRINGEMENT THEREOF, DOES NOT MAKE ANY WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCTS, SPECIFICATIONS, SUPPORT, SERVICE
OR ANYTHING ELSE AND DOES NOT MAKE ANY WARRANTY TO BUYER'S CUSTOMERS OF AGENTS.
SELLER HAS NOT AUTHORIZED ANYONE TO MAKE ANY REPRESENTATION OR WARRANTY OTHER
THAN AS PROVIDED ABOVE. THE FOREGOING LIMITATIONS OF WARRANTIES SHALL NOT IN ANY
WAY LIMIT BUYER'S RIGHTS UNDER SECTION 9.1 THEREOF.
Article 9. MISCELLANEOUS PROVISIONS
SECTION 9.1 PRODUCT LIABILITY INDEMNIFICATION.
A. BUYER. Buyer agrees to defend Seller and its affiliates at Buyer's cost,
and will indemnify and hold Seller and their respective directors,
officers, employees and agents ("the Seller Indemnified Parties") harmless
from and against any losses, costs, damages, fees or expenses arising out
of any claim relating to (i) any breach by Buyer of any of their respective
representations, warranties or obligations pursuant to this Agreement, or
(ii) personal injury from the use, sale or other disposition of any product
or service offered by Buyer and/or its respective licensees or
collaborators. In the, event of any such claim against the Seller
Indemnified Parties by any third party, Seller shall promptly notify Buyer
in writing of the claim and Buyer shall manage and control, at their sole
expense, the defense of the claim and Buyer shall manage and control, at
their sole expense, the defense of the claim and its settlement. The
Seller Indemnified Parties shall cooperate with Buyer and may, at their
option and expense, be represented in-any such action or proceeding. Buyer
shall not be liable for any litigation costs or expenses incurred by the
Seller Indemnified Parties without Buyer's prior written authorization. In
addition, Buyer shall not be responsible for the indemnification of any
Seller Indemnified Party arising from any negligent or intentional acts by
such party.
B. SELLER. Seller agrees to defend Buyer and its Affiliates at Seller's cost,
and will indemnify and hold Buyer and their Affiliates and their respective
directors, officers, employees and agents (the "Buyer Indemnified Parties")
harmless from and against any losses, costs, damages, fees or expenses
arising out of any claim relating to (i) any breach by Seller of any of its
representations, warranties or obligations pursuant to this Agreement or
(ii) personal injury from the development or manufacture of an Product.
Provided however, Seller shall have no indemnity obligations for any
personal injury claims arising after delivery of the Product to Buyer, or
arising out of the use or sale of the Product by Seller or its licenses or
collaborators. In the event of any claim against the Buyer Indemnified
Parties by any third party, Buyer shall promptly notify Seller in writing
of the claim and Seller shall manage and control, at its sole expense, the
defense of the claim and its settlement. The Buyer Indemnified Parties
shall cooperate with Seller and may, at their option and expense, be
represented in any such action or
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proceeding. Seller shall not be liable for any litigation costs or expenses
incurred by the Buyer Indemnified Parties without Seller's prior written
authorization. In addition, Seller shall not be responsible for the
indemnification of any Buyer Indemnified Party arising from any negligent
or intentional acts by such party.
SECTION 9.2 GOVERNING LAW. This Agreement shall be construed and the
respective rights of the Parties hereto determined according to the substantive
laws of the State of California notwithstanding the provisions governing
conflict of laws under such California law to the contrary, except matters of
intellectual property law which shall be determined in accordance with the
national intellectual property laws relevant to the intellectual property in
question.
SECTION 9.3 ASSIGNMENT. Neither Seller, on one hand, nor Buyer, on the
other hand, may assign this Agreement in whole or in part without the consent of
the other, except if such assignment occurs in connection with the sale or
transfer of all or substantially all of the business and assets of Seller, on
the one hand, or Buyer, on the other, to which the subject matter of this
Agreement pertains. Notwithstanding the foregoing, any Party may assign its
rights (but not its obligations) pursuant to this Agreement in whole or in part
to an Affiliate of such Party.
SECTION 9.4 AMENDMENTS. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof, and supersedes
all previous arrangement with respect to the subject matter hereof, whether
written or oral. Any amendment or modification to this Agreement shall be made
in writing signed by both Parties.
SECTION 9.5 NOTICES.
Notices to Buyer shall be addressed to:
Sequenom, Inc.
11555 Sorrento Valley Rd
San Diego, CA 91212-1331
Attention: Chief Executive Officer
Facsimile No.: (619) 350-0344
Notices to Seller shall be addressed to:
Tactical Fabs, Inc.
51 Whitney Place
Freemont, CA 94539
Attention: Chief Executive Officer
Facsimile No.: (510) 770-8879
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Any Party may change its address by giving notice to the other Parties in
the manner herein provided. Any notice required or provided for by the
terms of this Agreement shall be in writing, and shall be (a) sent by
registered or certified mail, return receipt requested, postage prepaid,
(b) sent via a reputable overnight courier service, or (c) sent by
facsimile transmission, in each case properly addressed in accordance with
the paragraph above. The effective date of notice shall be the actual date
of receipt by the Party receiving the same.
SECTION 9.6 FORCE MAJEURE. No failure or omission by the Parties hereto in
the performance of any obligation of this Agreement shall be deemed a breach of
this Agreement or create any liability if the same shall arise from any cause or
causes beyond the control of the Parties, including, but not limited to, the
following: acts of God; acts or omissions of any government; any miles,
regulations or orders issued by any governmental authority or by any officer,
department, agency or instrumentality thereof; fire; storm; flood; earthquake;
accident; war; rebellion; insurrection; riot; and invasion and provided that
such failure or omission resulting from one of the above causes is cured as soon
as is practicable after the occurrence of one or more of the above-mentioned
causes.
SECTION 9.7 PUBLIC ANNOUNCEMENTS. Any announcements or similar publicity
with respect to the execution of this Agreement shall be agreed upon among the
Parties in advance of such announcement. All Parties understand that this
Agreement is likely to be of significant interest to investors, analysts and
others, and that any of the Parties therefore may make such public announcements
with respect thereto. The Parties agree that any such announcement will not
contain confidential business or technical information and, if disclosure of
confidential business or technical information is required by law or regulation,
will make reasonable efforts to minimize such disclosure and obtain confidential
treatment for any such information which is disclosed to a governmental agency
or group. Each Party agrees to provide to the other Parties a copy of any
public announcement as soon as reasonably practicable under the circumstances
prior to its scheduled release. Except under extraordinary circumstances, each
Party shall provide the other with an advance copy of any press release at least
five (5) business days prior to the scheduled disclosure. Each Party shall have
the right to expeditiously review and recommend changes to any announcement
regarding this Agreement or the subject matter of this Agreement. Except as
otherwise required by law, the Party whose press release has been reviewed shall
remove any information the reviewing Party reasonably deems to be inappropriate
for disclosure.
SECTION 9.8 DEPENDENT CONTRACTORS. It is understood and agreed that the
relationship between the Parties hereunder is that of independent contractors
and that nothing in this Agreement shall be construed as authorization for
either Seller, on the one hand, or Buyer, or the other hand, to act as agent for
the other.
SECTION 9.9 NO STRICT CONSTRUCTION. This Agreement has been prepared jointly
and shall not be strictly construed against any Party.
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SECTION 9.10 HEADINGS. The captions or headings of the sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
SECTION 9.11 NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the part
of Seller, on the one hand, or Buyer on the other hand, to exercise, and no
delay in exercising, any right, power, remedy or privilege under this Agreement,
or provided by statute or at law or in equity or otherwise, shall impair,
prejudice or constitute a waiver of any such right, power, remedy or privilege
or be construed as a waiver of any breach of this Agreement or as an
acquiescence therein, nor shall any single or partial exercise of any such
right, power, remedy or privilege preclude any other or further exercise thereof
or the exercise of any other right, power, remedy or privilege.
SECTION 9.12 SEVERABILITY. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, (a) all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the Parties as nearly as may be possible
and (b) such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, Seller and Buyer
hereby waive any provision of law that would render any provision hereof
prohibited or unenforceable in any respect.
SECTION 9.13 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, taken together,
shall constitute one and the same instrument.
SECTION 9.14 THIRD PARTY BENEFICIARIES. No person or entity other than Buyer,
Seller and their respective Affiliates and permitted assignees hereunder shall
be deemed an intended beneficiary hereunder or have any right to enforce any
obligation of this Agreement.
Article 10. INTELLECTUAL PROPERTY
SECTION 10.1 INTELLECTUAL PROPERTY. Seller represents and warrants to Buyer
that as of the Execution Date:
(i) it is not aware of any claim made against it asserting the invalidity,
misuse, unregistrability, unenforceability or non-infringement of any
of its intellectual property which is the subject of this Agreement
(the "Intellectual Property") or challenging its right to use or
ownership of any of the Intellectual Property or making any adverse
claim of ownership thereof;
(ii) it is not aware of any pending, or threatened claim or litigation
which alleges that Seller's activities to date relating to the
Intellectual Property have violated, or by conducting its business as
currently proposed to be conducted hereunder would violate, the
intellectual property rights of any other person;
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(iii) to the best of Seller's knowledge, there has been no infringement or
misappropriation by a third party of any of the Intellectual
Property;
(iv) to Seller's knowledge, its activities to date have not infringed or,
by conducting its business as proposed to be conducted hereunder
would not infringe, any of the intellectual property rights of any
other person.; and
(v) all Seller Process Technology Patent Rights or Seller Product
Technology Patent Rights are owned by Seller or, to Seller's
knowledge, are validly licensed to Seller, provided, however, that in
no event shall this subsection (v) be interpreted as a representation
or warranty that the Seller Process Technology or Seller Product
Technology does not infringe or misappropriate intellectual property
rights of any third party.
SECTION 10.2 PATENT AND PRODUCT RIGHTS. Title to inventions, developments or
discoveries arising from co-operation conducted under the Supply Agreement shall
be determined in accordance with United States Patent Law, Title 35 United
States Code.
A. Buyer Inventions - All rights to inventions or discoveries made solely by
Buyer shall belong to Buyer and shall be disposed of in accordance with
Buyer policy.
B. Seller Inventions - All rights to inventions or discoveries made solely by
Seller shall belong to the Seller and shall be disposed of in accordance
with Seller policy.
C. Joint Inventions - All rights to inventions or discoveries made jointly by
Seller and Buyer shall be jointly-owned.
To the extent that the Seller has the legal right to do so, the Seller shall
offer to the Buyer, in accordance with the provisions of the following
paragraph, a time-limited first right to negotiate a commercial, royalty-bearing
license, to make, use, and sell any Seller or Joint Invention conceived and
first actually reduced to practice in the performance of research under this
Supply Agreement and having an application in *** for the term of any patent
thereon.
The Seller shall disclose to the Buyer any inventions, process technologies and
product technologies arising under this Supply Agreement. The Buyer shall hold
such disclosure on a confidential basis and will not disclose the information to
any third party without consent of the Seller.
Article 11. EXTENSION OF INITIAL TERM
The Parties acknowledge that they may find it to be mutually beneficial to
continue the relationship established by this Agreement after the termination of
the Initial Term.
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Consequently, the Parties hereby agree to negotiate in good faith, prior to six
(6) months before the expiration of the Initial Term, whether or not to extend
the Initial Term an terms and conditions that are mutually acceptable to the
Parties.
Article 12. APPROVAL/SIGNATURES
This Agreement shall inure to the benefit of and shall be binding upon the
parties hereto, and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.
Sequenom, Inc. Tactical Fabs, Inc.
By /s/ Hubert Koster By /s/ Gerald G. Henderson
------------------------------ ---------------------------------
Name (Print) Hubert Koster, PhD. Name (Print) Gerald G. Henderson
--------------------- -----------------------
Title President & CEO Title President
---------------------------- ------------------------------
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Exhibit I Product Specification
See attached
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DIAGRAM
***
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EXHIBIT II PRODUCT PRICING:
Production cost for the "D" Chip in quantities at die level.
QTY *** QTY *** QTY ***
*** *** ***
Wafers and process to be purchased in *** Shipping will be pre-paid and added.
Payment terms are Net 30 days.
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