1
EXHIBIT 10.4
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS AND
ENCLOSED BY BRACKETS. THE CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
- --------------------------------------------------------------------------------
COMMERCIAL AGREEMENT
BY AND BETWEEN
ANSYS DIAGNOSTICS, INC.
AND
ROCHE DIAGNOSTIC SYSTEMS, INC.
DATED
APRIL 1, 1993
- --------------------------------------------------------------------------------
2
COMMERCIAL AGREEMENT
This Agreement, effective as of April 1, 1993 by and between Roche Diagnostic
Systems, Inc. ("RDS"), a corporation organized and existing under the laws of
the State of New Jersey with offices at 1080 Highway 202 Branchburg, New Jersey,
08876, and ANSYS, Inc. ("ANSYS") (formerly known as Toxi-Lab, Inc.), a
corporation organized and existing under the laws of the State of California
with offices at 2 Goodyear, Irvine, California, 92718.
WHEREAS, RDS is engaged in the business of research, development,
marketing and sales of various products used in the field of in vitro
immunoassay and chromatography diagnostics; and
WHEREAS, RDS owns certain proprietary information, materials,
intellectual property, technology and products relating to drugs of abuse
testing; and
WHEREAS, ANSYS owns certain proprietary information and technology
relating to the design, manufacturing and packaging of, in vitro diagnostic
products; and
WHEREAS, RDS and Toxi-Lab, Inc. entered into a Design and Feasibility
Agreement, dated November 15, 1992, under which RDS and Toxi-Lab, Inc.
collaborated in research activities to determine the feasibility of developing
new diagnostic products utilizing Toxi-Lab's and RDS's technology; and
WHEREAS, under the Design and Feasibility Agreement, RDS and Toxi-Lab,
Inc. developed a new device that can hold, transport, sample and test various
fluids for chemical and biological analytes, including drugs of abuse utilizing
RDS's technology; and
WHEREAS, Toxi-Lab, Inc. caused its corporate name to be changed to
ANSYS, Inc. effective March 5, 1993;
WHEREAS, RDS has agreed to pay ANSYS a fee as provided herein to
further develop and optimize the new device for RDS; and
WHEREAS, RDS has agreed to make ANSYS its exclusive manufacturer and
supplier for the new device; and
WHEREAS, in consideration of RDS paying ANSYS a developmental fee,
making ANSYS its exclusive manufacturer and supplier of the new device, and
giving ANSYS certain licensing rights to the new device, ANSYS has agreed to
assign to RDS all its rights to such new device.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants of the parties set forth herein, the parties agree as follows:
2
3
1.0 DEFINITIONS
1.1 "Affiliate" shall mean:
(a) a business entity which owns, directly or indirectly,
a controlling interest in RDS, by stock ownership or
otherwise; or,
(b) a business entity which is owned by RDS, either
directly or indirectly, by stock ownership or
otherwise; or,
(c) a business entity, the majority ownership of which is
directly or indirectly common to the majority
ownership of RDS.
Anything to contrary in this paragraph notwithstanding, Genentech, Inc., a
Delaware corporation, shall not be deemed an Affiliate of RDS.
1.2 "Confidential Information" shall mean a party's technology,
data, know-how, or information whether technical or
non-technical, financial statements and reports, pricing,
trade secrets, secret processes, formulas and customer data
(including customer lists), and the like, that is disclosed to
the other party and which at the time of disclosure is clearly
marked as "Confidential." Oral communications shall be
considered Confidential Information provided that such
communication is reduced to writing, marked as "Confidential"
and provided by the disclosing party to the other party within
thirty (30) days after such oral disclosure.
1.3 "No-Step Kit" shall mean the device developed by RDS and ANSYS
under the Design and Feasibility Agreement dated November 15,
1992, that can hold, transport, sample and test various fluids
for biological and chemical analytes, including, without
limitation, certain drugs of abuse through the utilization of
RDS's Reagent Technology. The product specifications for the
No-Step Kit are set forth on Exhibit A, which RDS may, at its
sole option, modify from time to time. A copy of Exhibit A is
attached hereto and made a part hereof.
1.4 "RDS Reagent Technology" shall mean the products, reagents,
patents, patent rights, technology, manufacturing methods and
processes, formulas, designs, technical data, product
development and research data, know-how, secret processes,
trade secrets, intellectual property rights, quality control
and quality assurance protocols, and the like, owned or
controlled by RDS that can be used to test for certain drugs
of abuse through the use of immunoassay and chromatography
technology.
1.5 "RDS" shall mean Roche Diagnostic Systems, Inc. and its
Affiliates.
3
4
2.0 OWNERSHIP AND PATENT RIGHTS
2.1 Ownership. (a) RDS shall own the entire right, title and
interest in and to the RDS Reagent Technology and ANSYS shall
have no right, title or interest therein.
(b) RDS shall own the entire right, title and
interest in and to the No-Step Kit, and ANSYS shall have no
right, title or interest therein, except as provided in
Article 6 of this Agreement.
2.2 Patent Applications. (a) ANSYS shall prepare and file the
necessary patent applications to protect any and all
patentable inventions relating to the No-Step Kit. ANSYS shall
assign to RDS, in such patent applications, any and all of its
rights to such inventions.
(b) ANSYS shall not file any such patent applications
without RDS's prior written approval, and ANSYS shall make any
changes requested by RDS to the applications before the filing
thereof.
2.3 Additional Patent Rights to the No-Step Kit. In the event that
during the term of this Agreement, or any renewal thereof, an
invention is made relating to the No-Step Kit that results in
additional patentable rights to such product, then the
following provisions shall apply.
(a) All such additional patent rights shall belong to RDS
regardless of whether it was developed by (i) RDS,
(ii) ANSYS, or (iii) jointly by RDS and ANSYS.
(b) In the event that the additional patent rights are
developed (i) jointly by ANSYS and RDS, or (ii)
solely by ANSYS, then ANSYS shall prepare and file
the necessary patent applications to protect such
additional patent rights. ANSYS shall assign to RDS,
in such patent applications, all of its rights to
such inventions.
(c) ANSYS shall not file any such patent applications
without RDS's prior written approval, and ANSYS shall
make any changes requested by RDS to the applications
before the filing thereof.
(d) RDS shall (i) pay for all reasonable expenses
associated with the preparation and filing of any
patent application provided for in this Section 2.3
and Section 2.2, (ii) pay for the maintenance of any
patents issued, and (iii) reimburse ANSYS for any
reasonable expenses incurred by ANSYS in connection
with the preparation and filing of the application.
Such reimbursement shall be in addition to the fees
that RDS shall pay ANSYS under Section 3.1(c).
4
5
2.4 Other Patent Rights. If a patent application is filed or
issues in connection with activities performed under this
Agreement or any renewal thereof, that does not cover the
No-Step Kit and thus is not covered by the Section 2.3, but
that relates to inventions arising from or relating to the
development or manufacture of the No-Step Kit then this
Section shall apply.
(a) Patent rights to such invention resulting solely from
the efforts of RDS shall be owned solely by RDS and
any such invention shall be promptly disclosed in
writing by RDS to ANSYS.
(b) Patent rights to an invention resulting solely from
the efforts of ANSYS shall be owned solely by ANSYS
and any such invention shall be promptly disclosed in
writing by ANSYS to RDS.
(c) Patent rights to an invention resulting from the
collaborative efforts of both parties shall be
jointly owned by the parties.
3.0 DEVELOPMENT, MANUFACTURE AND SUPPLY OF THE NO-STEP KITS
3.1 Development. (a) ANSYS shall work in collaboration with RDS to
further develop and optimize the No-Step Kit for RDS which
shall include optimizing the design of the No Step Kit,
completing product development, initiating production
activities, and manufacturing and supplying RDS with various
prototypes of the kit for preclinical and clinical studies and
other applications.
(b) ANSYS shall use its best efforts to complete, to
the satisfaction of RDS, any activities that RDS requests
ANSYS perform under this Section. ANSYS shall not on its own
initiate any activities hereunder without receiving prior
written approval from RDS.
(c) In consideration of the services that ANSYS will
provided under this Section 3.1, RDS shall pay ANSYS a monthly
fee of $[***], for each month that ANSYS is performing
services hereunder, or a pro rata portion thereof, but in no
event shall RDS pay ANSYS more than $[***] to further develop
and optimize the No-Step Kit for RDS. Notwithstanding that
ANSYS will receive a maximum of $[***] for performing services
under this Section, ANSYS shall continue to work on and
complete the development and optimization of the No-Step Kit
until it meets the product specifications listed on Exhibit A,
even if it takes more than eight (8) months to accomplish.
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
5
6
(d) In the event that RDS makes substantial changes
to the product specifications listed on Exhibit A, after
August 1, 1993 but before the first commercial manufacturing
of the product pursuant to Section 3.6, the fees and time
schedule stated herein shall be renegotiated in good faith by
the parties.
(e) ANSYS shall not start manufacturing the No-Step
Kit for RDS pursuant to Section 3.6 until: (i) all the
services requested herein by RDS have been completed by ANSYS,
to the satisfaction of RDS; (ii) pricing for the No-Step Kit
has been finalized by the parties pursuant to Section 3.5; and
(iii) ANSYS receives written notice from RDS to proceed with
such manufacturing and supply.
3.2 Government Approvals. (a) RDS shall have the responsibility
for securing and maintaining governmental approvals to market
and sell the No-Step Kit. RDS shall, in its sole discretion,
determine in which countries it will pursue, and discontinue
the pursuit of, such governmental approval.
(b) ANSYS shall assist RDS, as requested by RDS, in
securing and maintaining such governmental approvals for the
No-Step Kit. ANSYS's assistance may include conducting studies
and providing to RDS data or other information required or
requested by the governmental authorities and assisting in the
completion and filing of applications and other forms
necessary for such governmental approvals.
(c) RDS shall be responsible for paying all costs
associated with obtaining such governmental approvals and
shall reimburse ANSYS for any costs incurred by ANSYS in
connection with such activities.
3.3 Manufacturing Equipment. (a) ANSYS shall be responsible for
selecting and purchasing the equipment and materials,
including product designs, necessary to manufacture the
No-Step Kits. ANSYS shall not purchase any equipment or
materials without RDS's prior written approval.
(b) RDS shall pay for all equipment and materials,
including product designs, that it approves the purchase
thereof under Section 3.3(a). Upon such payment, RDS shall own
the entire right, title and interest to such equipment and
materials, and ANSYS shall have no right, title or interest
therein, except to use such equipment and materials to
manufacture and supply the No-Step Kit to RDS pursuant to the
terms of this Agreement. Such, equipment and materials shall
be delivered by ANSYS to RDS upon the expiration or
termination of this Agreement.
6
7
3.4 Reagents. RDS shall supply ANSYS with the reagents necessary
to manufacture the No-Step Kit.
3.5 Price. (a) The parties shall negotiate in good faith pricing
for the No-Step Kits. Within a reasonable time from the
execution date of this Agreement, but in no event later than
one hundred and twenty (120) days prior to the scheduled date
of the product launch by RDS of the No-Step Kits, the parties
shall finalize the pricing for such kits and attach a copy
hereto as Exhibit B. In the event that the parties are unable
to reach an agreement on pricing within this 120 day time
frame, either party may terminate the Agreement.
3.6 Exclusivity. ANSYS shall manufacture the No-Step Kits at its
facilities in Irvine California and shall supply such products
to RDS on an exclusive basis, even as to ANSYS, worldwide;
provided however, that in the event ANSYS receives a license
under Article 6, ANSYS may manufacture and supply the No-Step
Kits in those markets or market segments covered by such
license.
3.7 Packaging. ANSYS shall label the No-Step Kit with language to
be supplied by RDS and shall package the product with a
package insert, the language of which shall also be supplied
by RDS. RDS shall have the right, in its sole discretion, to
make changes to the label, package insert and other labeling
for the No-Step Kits, which changes shall be submitted by RDS
to the applicable governmental authorities, if required.
ANSYS's name may, at RDS's sole discretion, appear on the
label, package insert and other labeling for the No-Step Kits.
3.8 Quality Control and Assurance. (a) ANSYS shall manufacture the
No-Step Kits in accordance with the then current product
specifications as set forth on Exhibit A, as well as with the
then current quality control specifications, which, at RDS's
sole discretion, it may modify from time to time. A copy of
the quality control specifications will be provided by RDS
within a reasonable period after execution of this Agreement
and shall be attached hereto as Exhibit C.
(b) ANSYS shall manufacture the NO-Step Kits so that
they comply with all federal, state and local laws and
regulations.
(c) ANSYS shall perform quality control and quality
assurance testing and verification to ensure that the No-Step
Kits comply with the requirements set forth in Sections 3.8(a)
and (b).
(d) Each time ANSYS ships the No-Step Kits to RDS,
ANSYS shall provide RDS with a Certificate of Analysis at the
time of shipment, certifying that the products have been
evaluated by ANSYS's Quality Control and Quality Assurance
departments and that the product complies with the
requirements set forth in Sections 3.8(a) and (b). Within a
reasonable period after execution of this Agreement RDS shall
provide ANSYS with a sample Certificate of Analysis which
ANSYS shall use pursuant to this Section.
7
8
4.0 ORDERS, DELIVERY, INVOICING AND PAYMENT
4.1 Forecasts. Within a reasonable time from the date of this
Agreement, but in no event later than sixty (60) days prior to
the scheduled date of the product launch by RDS of the No-Step
Kit, RDS shall supply ANSYS with its current estimates for the
No-Step Kits for each of the four (4) three-calendar-month
periods following the product launch date. Each such estimate
for four (4) three-calendar-months periods hereinafter is
called a "Rolling Forecast." RDS shall thereafter provide
ANSYS with Rolling Forecasts on a quarterly basis. No minimum
units for any three-calendar-month period of any Rolling
Forecast are required to be forecasted by RDS; provided
however, that the quantity of No-Step Kits for the initial
three-calendar month period of any Rolling Forecast may,
without the consent of ANSYS, vary upward or downward from
RDS's prior estimate for such three calendar month period by
an amount not to exceed twenty percent (20%). RDS and ANSYS
shall be bound by RDS's estimates, if any, for the first
three-calendar month period of each such Rolling Forecast.
ANSYS's obligations to manufacture the No-Step Kits for RDS
under this Agreement shall be subject to its maximum
production capacity.
4.2 Orders. RDS will order products by providing ANSYS with
written Purchase Orders, which shall contain the purchase
order number, product numbers, names and quantities, unit and
total purchase price and shipping instructions. No additional
terms or conditions shall be permitted to be added by ANSYS to
any Purchase order, whether by way of altering same or
providing a document that purports to contain additional
terms, and any such additional terms and conditions shall be
void and of no force or effect, notwithstanding that RDS may
accept and perform its obligations hereunder with respect to
any such allegedly modified Purchase Order without rejecting
specifically such additional terms and conditions.
4.3 Shipments. ANSYS shall ship and deliver the No-Step Kits
F.O.B. ANSYS's shipping point to such RDS locations as
requested by RDS. RDS may select the freight carrier used by
ANSYS to ship the products and may monitor ANSYS's
shipping/freight practices as they pertain to this Agreement.
ANSYS shall ship the No-Step Kits within thirty (30) days of
receipt of a Purchase Order from RDS.
4.4 Invoices and Payment. ANSYS shall submit to RDS, with each
shipment of the No-Step Kits, an invoice covering such
shipment. Each such invoice shall identify the RDS Purchase
Order number, product numbers, names and quantities, unit
price, freight charges and total amount to be remitted by RDS.
RDS shall pay for all such invoices within thirty (30) days
after its receipt of such invoices.
8
9
4.5 Lot Numbering/Expiration Dates. ANSYS shall make arrangements
for and implement the imprinting of lot numbers and expiration
dates for each No-Step Kit shipped. Such lot numbers and
expiration dates shall be affixed on the product and on the
shipping carton of each product as is required under good
commercial practice.
5.0 COOPERATION
5.1 Technical Support. ANSYS shall provide reasonable technical
support and training relating to the No-Step Kits to RDS as
requested by RDS.
5.2 Records and Accounting by ANSYS. ANSYS shall keep records of
the manufacture, testing and shipping of the products supplied
hereunder by ANSYS, and retain samples of such products that
are necessary to assist with, and support, good manufacturing
practices, product complaints, investigations and other
regulatory requirements. Such records and samples shall be
made available to RDS upon its request, and shall be retained
by ANSYS and be available to RDS for a period of three (3)
years following termination of this Agreement, or longer if
required by law.
5.3 Product Recalls. ANSYS and RDS shall each maintain records as
may be necessary to permit a recall or a field correction of
any No-Step Kit delivered to RDS or customers of RDS, effected
voluntarily or under a threat of, or a directive by, any
governmental agency. Each party shall give immediate notice by
telephone (to be confirmed in writing) to the General Counsel
of the other party upon discovery that any No-Step Kit should
be recalled or corrected, or may be required to be recalled or
corrected, and, each party upon receiving any such notice or
upon any such discovery, shall cease and desist from further
shipments of No-Step Kits in its possession or control until a
decision has been made whether a recall or some other
corrective action is necessary. The decision to initiate a
recall or to take some other corrective action shall be made
by RDS after conferring with ANSYS. Each party shall cooperate
with the other in developing any necessary recall plan, and
the manner and extent of such plan shall be subject to prior
consultation, which consultation shall not delay such plan by
more than forty-eight (48) hours from the time of initial
notice. Any such recall or corrective action shall be made at
ANSYS's cost and expense if, and to the extent that, such
recall or corrective action results from, or arises out of,
any breach by ANSYS of its warranties or covenants hereunder.
5.4 Product Returns. RDS shall have the responsibility for
handling customer returns of the No-Step Kits. ANSYS shall
provide RDS with such assistance as RDS may need to handle
such returns. Any such return shall be made at ANSYS's cost
and expense if, and to the extent that, such return results
from, or arises out of, any breach by ANSYS of its warranties
or covenants hereunder.
9
10
5.5 Governmental Agencies. Each party may communicate with any
Governmental agency, including but not limited to the United
States Food and Drug Administration, regarding the No-Step
Kits if in the opinion of that party's counsel, such
communication is necessary to comply with the terms of this
Agreement or the requirements of any law, governmental order
or regulation; provided however, that unless in the reasonable
opinion of its counsel there is a legal prohibition against
doing so, such party shall permit the other party to accompany
and take part in any communications with the agency, and to
receive copies of all such communications from the agency.
5.6 Customer Questions And Complaints. (a) RDS shall have the
responsibility for responding to questions and complaints
regarding the No-Step Kits. Questions or complaints received
by ANSYS shall be promptly referred to RDS. RDS shall provide
ANSYS with reports summarizing such complaints and customer
questions, as requested by ANSYS, but in no event shall RDS
have to provide such reports more frequently than on a
quarterly basis.
(b) Within a reasonable time from the date of this
Agreement, but in no event later than the sixty (60) days
prior to the scheduled date of the product launch by RDS of
the No-Step Kit, ANSYS shall provide RDS with all necessary
information that will enable RDS to respond properly and
promptly to questions or complaints relating to the No-Step
Kits. ANSYS shall use its best efforts to keep such
information current.
(c) ANSYS shall provide RDS with such other
assistance as RDS may need to investigate and respond to
customer questions or complaints.
5.7 Product Modifications. (a) ANSYS shall only make alterations,
modifications or improvements to the product specifications or
performance characteristics for the No-Step Kits supplied by
ANSYS to RDS under this Agreement if (i) prior written
approval is given by RDS, and (ii) new pricing for the No-Step
Kits, if necessary because such alteration, modification or
improvement changes the cost to manufacture the kits, is
agreed upon by the parties.
6.0 LICENSE
6.1 RDS shall offer in writing to license the No-Step Kit to ANSYS
in those markets or market segments that RDS has determined it
will not sell the product.
6.2 (a) In the event that RDS offers in writing to license the
No-Step Kit to ANSYS pursuant to Section 6.1, ANSYS shall have
ninety (90) days from the receipt of such written offer to
inform RDS in writing that it desires to obtain such a license
10
11
from RDS. Thereafter, the parties agree to negotiate in good
faith a licensing agreement that shall include a licensing fee
not to exceed three percent (3%) of net sales of the product.
Agreement by the parties on all the terms of the licensing
agreement shall be a precondition before any such license can
become effective.
(b) In the event that ANSYS does not notify RDS
within the 90 day period set forth in Section 6.2(a) informing
RDS that it desires to obtain the license offered by RDS, then
RDS shall be free to offer such license to third parties
without any further obligations to ANSYS.
6.3 ANSYS expressly acknowledges and agrees that in the event that
it receives a license from RDS to the No-Step Kit under this
Article 6 it shall have no right to sublicense, assign or
otherwise transfer its rights under such license, without
prior written approval of RDS.
6.4 The terms and conditions of this Article 6 shall survive
termination or expiration of this Agreement and shall extend
until all of RDS's patent rights in No-step Kit expire.
7.0 TERM, RENEWAL AND TERMINATION
7.1 Term. This Agreement, effective as of April 1, 1993, shall end
on December 31, 1999 unless terminated by one of the parties
in accordance with this Agreement.
7.2 Renewal. RDS shall have the option, in its sole discretion, to
extend this Agreement for additional three (3) year terms, or
a portion thereof, upon written notice, subject to the same
terms and conditions of this Agreement. In the event that RDS
renews this Agreement, the parties agree to negotiate in good
faith a mutually acceptable price for the No-Step Kits. In the
event that the parties fail to agree upon new prices, the
pricing structure as set forth in Exhibit B shall remain
effective.
7.3 Non-Renewal. In the event that RDS elects not to renew this
Agreement pursuant to Section 7.2, and provided that ANSYS is
not in breach of the Agreement, then and only then RDS shall
pay ANSYS a fee, to be negotiated in good faith by the
parties, for each No-Step Kit sold by RDS after the expiration
of this Agreement. Such fee shall not exceed three percent
(3%) of net sales of the No-Step Kits. RDS shall have no
obligation to pay ANSYS such fee in the event that the
Agreement is terminated by either party under Section 7.4.
7.4 Termination. (a) Upon failure of either party to remedy its
breach of any of the obligations or provisions of this
Agreement within thirty (30) days following receipt of written
notice of said breach, the aggrieved party shall have the
right to
11
12
terminate this Agreement immediately by written notice;
provided however, that if the breach is due to a product
failure or defect in the No-Step Kit and the parties agree
that the actions needed to cure such problem requires more
than 30 days, then the cure period may be extended, upon
mutual agreement of the parties, for a reasonable period of
time.
(b) Either party at its sole option may immediately
terminate this Agreement upon written notice, but without
prior advance notice, to the other party in the event that (i)
the other party is declared insolvent or bankrupt by a court
of competent jurisdiction; (ii) a voluntary petition of
bankruptcy is filed in any court of competent jurisdiction by
such other party; or (iii) this Agreement is assigned by such
other party for the benefit of creditors.
(c) RDS may terminate this Agreement upon thirty (30)
days' written notice in the event that the Food Drug
Administration takes any action, or raises any objection, that
prevents RDS from importing, exporting, purchasing or selling
the No-Step Kits to customers.
(d) Any termination or expiration of this Agreement
shall not affect any outstanding obligations or payments due
hereunder prior to such termination or expiration, nor shall
it prejudice any other remedies that the parties may have
under this Agreement.
8.0 REPRESENTATIONS AND WARRANTIES
8.1 Product Specifications. ANSYS represents and warrants that the
No-Step Kits shall comply with the then current product
specifications and then current quality control specifications
and with all federal, state and local laws and regulations.
8.2 Good Manufacturing Practices. ANSYS represents and warrants
that the No-step Kits shall comply with and will be
manufactured in accordance with all applicable Good
Manufacturing Practices ("GMPs").
8.3 Warranty of Purpose. ANSYS represents and warrants that the
No-Step Kits supplied under this Agreement are suitable and
may be used for the purposes for which RDS is selling such
kits.
8.4 Product Defects. ANSYS represents and warrants that the
No-Step Kits supplied under this Agreement are free from all
defects and that the work performed by ANSYS under this
Agreement is of recognized standard quality or better.
8.5 Product Development. ANSYS represents and warrants that the
No-Step Kits will be manufactured by ANSYS, or by third
parties for ANSYS free and clear of any claims by such third
parties.
12
13
8.6 Authority. Each party represents and warrants to the other
party that it has the full right and authority to enter into
this Agreement, and that it is not aware of any impediment
that would inhibit its ability to perform its obligations
hereunder.
8.7 Consequential Damages. In the event of a breach of any
representation or warranty, express or implied, in addition to
other rights RDS may have, it may withhold payment and/or
cause such breach to be corrected and charge ANSYS; therefore
ANSYS shall be liable for all consequential damages. Except as
specifically provided herein, ANSYS makes no other
representations or warranties express or implied.
9.0 INDEMNITY
9.1 (a) RDS agrees to defend, indemnify and hold ANSYS, its
officers, directors, employees and agents harmless against any
and all losses, damages, costs, claims, demands, judgments and
liability resulting from, or relating to RDS's performance
under this Agreement, except to the extent that any such
losses, damages, costs, demands, costs, claims, judgments and
liability are due to the negligence or wrongful act(s) of
ANSYS, its employees or agents.
(b) If by reason of manufacturing or selling the
No-Step Kit to RDS under this Agreement ANSYS is sued or
threatened with suit for alleged patent infringement covering
(i) the No-Step Kit, or (ii) the process for producing the
No-Step Kit, RDS shall, at its own expense, defend such suit
and indemnify ANSYS against all losses and expenses incurred
in connection with such suit or threatened suit including
judgments, decrees, court costs and attorney fees, except to
the extent that the claim relates to, or results from ANSYS's
noncompliance with the terms of this Agreement.
9.2 ANSYS agrees to defend, indemnify and hold RDS, its officers,
directors, employees and agents harmless against any and all
losses, damages, costs, claims, demands, judgments and
liability resulting from, or relating to ANSYS's performance
under this Agreement, except to the extent that any such
losses, damages, costs, demands, costs, claims, judgments and
liability are due to (i) the negligence or wrongful act(s) of
RDS, its employees or agents, or (ii) patent infringement
suits or threatened suits that, pursuant to Section 9.1(b),
RDS has agreed to defend and provide indemnification to ANSYS.
10.0 CONFIDENTIALITY
10.1 During and in furtherance this Agreement, each party may
disclose certain of its Confidential Information to the other
party.
13
14
10.2 During the Term of this Agreement, and for a period of five
(5) years from the termination thereof, RDS and ANSYS each
agree (i) to use the Confidential Information only in
connection with the terms of this Agreement, (ii) to treat the
Confidential Information as it would its own proprietary
information, and (iii) to take all reasonable precautions to
prevent the disclosure of the Confidential Information to any
third party, other than an Affiliate, without the prior
written consent of the other party.
10.3 A party shall be relieved of any and all of the obligations
under Section 10.2 regarding Confidential Information which
(i) was known to the party receiving the Confidential
Information (the "receiving Party") prior to receipt
hereunder, (ii) at the time of disclosure to by the disclosing
party to the Receiving Party, was generally available to the
public, or which after disclosure hereunder becomes generally
available to the public through no fault attributable to the
Receiving Party; or (iii) is hereafter made available to the
Receiving Party for use or disclosure by the Receiving Party
from any third party having a right to do so.
11.0 MISCELLANEOUS
11.1 Independent Contractors. The parties shall be deemed to be
independent contractors, and this Agreement shall not be
construed to create between ANSYS and RDS any other
relationship such as, by way of example only, that of
employer-employee, principal agent, joint-venturer, copartners
or any similar relationship, the existence of which is
expressly denied by the parties hereto.
11.2 Inspection. RDS may inspect ANSYS reports and records relating
to the performance under this Agreement during normal business
hours and with reasonable advance notice.
11.3 Access. ANSYS shall provide RDS access to any of its
facilities, during normal business hours and with reasonable
advance notice, in which the No-Step Kits are manufactured,
stored, handled, shipped or used in order to permit RDS
verification of ANSYS's compliance with this Agreement and
applicable laws.
11.4 Insurance. ANSYS shall maintain liability and other insurance
coverage satisfactory to RDS, during the term of this
Agreement and for five (5) years thereafter, which insurance
shall name RDS as an additional insured. Such insurance shall
include comprehensive general, liability contractual
liability, and product liability and have limits no less than
$2,000,000.00 per occurrence. ANSYS shall provide to RDS a
Certificate of Insurance evidencing such coverage and shall
provide RDS with notice of any change or modification thereto.
11.5 Taxes. ANSYS shall be liable for any and all local, state and
federal taxes and license fees, arising out of the sale of
No-Step Kits to RDS pursuant to this Agreement.
14
15
11.6 New Drugs of Abuse Products. (a) RDS shall have the right of
first refusal to market exclusively any and all new
immunoassay drugs of abuse products developed by ANSYS.
(b) In the event that ANSYS manufactures or develops
such a product, ANSYS shall so immediately, notify RDS in
writing and shall provide RDS with sufficient information,
data, and samples, for RDS to evaluate the product and
determine its interest, if any, in the product. RDS shall have
ninety (90) days from receipt of such information, data and
samples to evaluate the product and if interested shall notify
ANSYS in, writing within ten (10) business days of the
conclusion, of this evaluation period.
(c) In the event that RDS expresses such an interest,
the parties shall negotiate in good faith to enter into an
exclusive marketing agreement upon terms and conditions that
are commercially reasonable. In the event that the parties
fail to reach a negotiated agreement within seventy (70) days
from RDS's completion of the evaluation, ANSYS may then offer
such product to other potential companies, provided that such
offer shall not be more favorable to such company than
previously offered to RDS.
11.7 Choice of Law. This Agreement shall be construed under, and
the rights of the parties hereto shall be governed by the laws
of the state of New Jersey, without giving effect to New
Jersey's choice of law principles. The parties agree that the
Superior Court of New Jersey and the United States District
Court for the District of New Jersey shall have exclusive
jurisdiction to hear and determine any and all disputes
pertaining directly or indirectly to this Agreement. The
parties expressly consent to venue and to the exercise of
personal jurisdiction by the aforesaid courts. Additionally,
each party expressly waives any and all right to commence and
maintain any lawsuit against the other party, whether at law
or in equity, in any other court or jurisdiction.
11.8 Disputes. In the event of any law suit between ANSYS and RDS
in connection with this Agreement, the unsuccessful party
shall pay to the prevailing party all costs and expenses,
including reasonable attorneys' fees, incurred in such action
or proceeding and in any appeal in connection therewith by
such prevailing party, and any such costs, expenses and
reasonable attorneys' fees shall be included as a part of any
such judgment entered in favor of such prevailing party.
11.9 Other Products. Nothing in the Agreement shall be, construed
to prevent or limit either party from selling any of its other
products in any market.
11.10 No Waiver. Either party's failure to require the other party
to comply with any provision of this Agreement shall not be
deemed a waiver of such provision or any other provision of
this Agreement.
15
16
11.11 Severability. In the event that one or more of the provisions
of this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect
any of the other provisions of this Agreement, but this
Agreement shall be construed as if such invalid, illegal or
unenforceable provision or provisions had never been contained
herein.
11.12 Assignment. This Agreement shall not be assignable nor its
rights hereunder transferred in any way by either party hereto
other than to an Affiliate, except with the written consent of
the other party, which consent shall not be unreasonable
withheld.
11.13 Binding Effect. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors
and permitted assigns.
11.14 Force Majeure. Neither party shall be liable for the failure
to perform its obligations under this Agreement if such
failure is occasioned by a contingency beyond such party's
reasonable control, including, but not limited to, strikes or
other labor disturbances, lockouts, riots, wars, fires, floods
or storms. A party claiming a right to excused performance
under this Section shall immediately notify the other party
writing of the extent of its inability to perform, which
notice shall specify the occurrence beyond its reasonable
control that prevents such performance.
11.15 Notices. Any notice, or other written communication, required
or permitted hereunder shall be sufficiently made or given to
the other party by personal in-ha delivery, by telecopier
communication or by sending t same by first class mail,
postage prepaid to the mail address, or telecopier numbers set
forth below:
If to RDS:
Roche Diagnostic Systems, Inc.
1080 Highway 202
Branchburg, New Jersey 08876-1760
Attention: Vice President, International
Drug Monitoring Business Unit
Telecopier No: (908) 253-7645
with a copy to
Jordan D. Cooper, Esq.
Roche Diagnostics Systems, Inc.
340 Kingsland Street
Nutley, N.J..07110
Telecopier No: (201) 235-3500
16
17
If to ANSYS:
ANSYS, Inc.
2 Goodyear
Irvine, California 92718
Attention: President
Telecopier (714) 768-0311
or to such other addresses or telecopier numbers provided to
the other party in accordance with the terms of this Section.
Notices or written communications made or given by personal
in-hand delivery or by telecopier shall be deemed to have been
sufficiently made or given when sent, or if mailed, three (3)
days after being deposited in the United States Mail, postage
prepaid or upon receipt, whichever is sooner.
11.16 Entire Agreement. This Agreement constitutes the full,
complete, final and integrated agreement between the parties
hereto relating to the subject matter hereof and supersedes
all previous written or oral negotiations, commitments,
agreements, transactions or understandings with respect to the
subject matter hereof. Except for Exhibit A (Product
Specifications) and Exhibit C (Quality Control Specifications)
which RDS may modify, at its sole option, from time to time,
any modification, amendment or supplement to this Agreement
must be in writing and signed by authorized representatives of
both parties.
11.17 Headings. The titles and headings herein are for convenience
only and shall not be used to interpret or construe the terms
and conditions of this Agreement.
11.18 Singular Terms. Except as otherwise expressly provided herein
or unless the context otherwise requires, all references to
the singular shall include the plural as well.
11.19 Execution in Counterparts. This Agreement may be executed in
two (2) counterparts, each of which shall be deemed an
original, but all of which together shal1 constitute one and
the same instrument.
17
18
IN WITNESS WHEREOF, the duly authorized representatives of the parties
have executed this Agreement as of the dates set forth below.
ANSYS, INC. ROCHE DIAGNOSTIC SYSTEMS, INC.
By: /s/ C. Michael O'Donnell, Ph.D By: /s/ Adrienne Choma
Name: ___________________________ Name: __________________________
Title: __________________________ Title: Vice President
Date: ___________________________ Date: 7/26/93
EXHIBIT A
PRODUCT SPECIFICATION SHEET
ONTRAK GENERATION II
July 1993
I. PRODUCT DESCRIPTION
ONTRAK Generation II for the on-site testing market meeting the
following general requirements:
* No step assay with no reagent addition or urine handling
* Clear endpoint interpretation by non-technical operator
* Multi-drug format to accommodate three to five analytes
II. PERFORMANCE
1. Clinical Claims - Qualitative detection of abused drug or drug
metabolite at specified cut-off level.
2. Linearity - Standard curve should be as steep as possible at
cut-off.
3. Accuracy and Precision - [***]
4. Sensitivity - Comparable to ONTRAK at cut-off.
5. Specificity - Comparable to ONTRAK.
6. Interference's - Comparable to ONTRAK.
7. Cross Reactivities - Comparable to ONTRAK.
8. Stability - [***]
9. Storage Conditions - RT storage with shipment at ambient
temperature via ground transportation. Container with sample
may be stored refrigerated.
10. Controls - Positive and negative controls specimens
commercially available with test incorporating a "test
complete" indication.
11. Cut-off - Consistent with NIDA Guidelines or as established.
III. PROCEDURE 1. Sample Type - Urine 2. Sample Volume - :5 250 /uL.
3. Reagent Volume - Preloaded dose.
4. Number of Off-Line Steps - Zero.
5. Analysis Time - Approximately 3 minutes, no timing steps.
6. Analysis Temperature - 2-450C.
[***] Confidential treatment has been requested for the redacted portions. The
confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
18
19
IV. PRODUCT EMBODIMENT
1. No urine handling.
2. Test embodied in specimen container requiring no specimen or
reagent handling and guards against potential contact or
splashing on operator by contact with lid or cup.
3. Test cannot be inadvertently run, read or adulterated by
client.
4. Positive/Negative and Test Complete read required as part of
mold.
5. Test with specimen must with shippable, leak-proof,
identifiable and allow for recovery of specimen for
confirmation testing.
6. Test must comply with chain of custody requirements.
7. Test must be able to be stored stacked.
8. Assembly of test must be automatable/manufacturable with
capacity to manufacture 100,000 tests per week.
9. No sample overload or constriction of flow tolerable.
10. Test cannot be compatible with generic specimen containers or
lids.
11. Proprietary configuration to discourage competitive offerings.
12. Test results should be able to be photocopied.
13. QC testing of random sampling aggressive enough to assure
product integrity with respect to physical and performance
characteristics. These cycles should be agreed upon mutually
by TLIw and RIDS and will diminish as assurance of quality
increases.
V. LABELING
1. Label must include information regarding client
identification, date, tester, and testers signature. (A lid
label may be incorporated to provide additional labeling
space.)
2. Each test must be color coded consistent with current ONTRAK
product and reflect the Roche identity and product codes and a
pictorial procedure guide.
3. Label must provide Positive/Negative and Test Complete
indication in a limited viewing area, consistent with mold.
4. Label to incorporate Positive/Negative identification "key".
5. A milliliters scale should be present to identify approximate
amount of specimen.
6. The capacity to add bar coding and a temperature strip should
be designed in the label.
19
20
VI. PACKAGING
1. Number of test cups per kit to be defined. Kit to include
individually sealed test cups with drying agent and five
language package insert and any other supplies necessary to
perform the test.
2. Box to serve has outer shipping carton. 3. Kit components to
meet recycling requirements where possible.
3. Kit components to meet recycling requirements where possible.
20
21
EXHIBIT B
PRICING FOR NO-STEP KITS
PRICE TO ROCHE FOR FIRST FULL YEAR OF PRODUCTION: $[***].
[***]
PRICE MAY BE ADJUSTED BY MUTUAL CONSENT AT ANY TIME
ANSYS, INC. ROCHE DIAGNOSTIC SYSTEMS
/S/ STEPHEN K. SCHULTHEIS /S/ ADRIENNE CHOMA
President Vice President
International Drug Monitoring Unit
[***] Confidential treatment has been requested for the redacted portions. The
confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
21