CONFIDENTIAL EXHIBIT 10.28
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (this "Agreement") is made effective as of
the 17th day of December, 2004 (the "Effective Date") by and among ILLUMINA,
INC., a Delaware corporation having its principal place of business at 9885
Towne Centre Drive, San Diego, California, 92121 ("Illumina"), and INVITROGEN
CORPORATION, a Delaware corporation having its principal place of business at
1600 Faraday Avenue, Carlsbad, California, 92008 ("Invitrogen"). Illumina and
Invitrogen are sometimes referred to herein individually as a "Party" and,
collectively, as the "Parties."
RECITALS
The Parties separately possess intellectual property and have developed
instrumentation, technology and standard operating procedures for the
development, manufacturing and commercialization of oligonucleotides.
The Parties desire to enter into an exclusive collaboration, pursuant and
subject to the terms of this Agreement, whereby (a) Invitrogen markets, sells
and supports certain oligonucleotides ("Oligos") in tubes and plates to
customers throughout the world, (b) Illumina contributes certain oligonucleotide
synthesis technology, (c) Invitrogen manufactures certain Oligos that are to be
sold to customers throughout the world, excluding North America, and (d)
Illumina manufactures certain Oligos that are to be sold to customers in North
America and certain Oligos that are to be sold to customers throughout the
world.
NOW, THEREFORE, in consideration of the premises, covenants and agreements
set forth herein, and for other good and valuable consideration, the mutual
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the Parties hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the following meanings:
"AAA" shall have the meaning set forth in Section 12.1.
"Affiliate" shall mean any corporation or other business entity (a) in
which a Party owns or controls, directly or indirectly, at least fifty percent
(50%) of the outstanding stock or other voting rights entitled to elect
directors, or (b) which owns or controls, directly or indirectly, at least fifty
percent (50%) of the outstanding stock or other voting rights entitled to elect
directors, of a Party, or (c) which is under common control with a Party,
through ownership or control of at least fifty percent (50%) of the outstanding
stock or other voting rights entitled to elect directors; provided, however, in
any country where the local law does not permit foreign equity participation of
at least fifty percent (50%), then an "Affiliate" includes any company in which
the Party owns or controls or is owned or controlled by, directly or indirectly,
the maximum percentage of outstanding stock or voting rights permitted by local
law.
CONFIDENTIAL
"Agreement" shall have the meaning set forth in the preamble.
"Bankruptcy Code" shall have the meaning set forth in Section 6.5.
"Big Bird" shall mean the fourth generation synthesis technology currently
in design and development by Illumina for the synthesis of Oligos. Illumina
anticipates that this platform will be capable of synthesizing an estimated [*]
at an estimated starting synthesis scale range of [*].
"Big Bird Milestone Payment" shall have the meaning set forth in Section
7.2.
"Build-out Dates" shall mean each of the dates on which Illumina completes
the build-out stages of the collaboration's manufacturing capacity as described
in clauses (a) through (b) of Section 3.1, and Invitrogen completes the
build-out stages of the collaboration's manufacturing capacity as described in
clause (c) of Section 3.1.
"Budget" shall mean the annual region-by-region pro forma income and
related statements for the Collaboration, covering, among other things, costs
and expenses for capital and facility investments, New R&D Projects and
Marketing Programs.
"Collaboration" shall mean the collaboration between the Parties hereunder
to jointly develop, manufacture, sell and market, and provide customers with
support services for Joint Products throughout the world upon the terms and
conditions set forth in this Agreement.
"Collaboration Committee" shall have the meaning set forth in Section 2.1.
"Collaboration Funding" shall have the meaning set forth in Section 7.1.
"Collaboration Profits" shall have the meaning set forth in Section 7.7.
"Commercially Reasonable Efforts" shall mean, with respect to the efforts
to be expended by a Party with respect to any objective, reasonable, diligent,
good faith efforts to accomplish such objective as such Party would normally use
to accomplish a similar objective under similar circumstances.
"Committee Facility Improvements" shall have the meaning set forth in
Section 7.3.
"Confidential Information" shall mean all 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, that is designated as confidential by the disclosing Party or is
treated as confidential by the disclosing Party in the regular course of
business. Notwithstanding any failure to expressly designate it as such, all
Know-How related to Big Bird, the VB Oligator(R) and all Oligator(R) Technology
shall be the Confidential Information of Illumina.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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"Controlled" shall mean, with respect to any Intellectual Property Right,
the possession (whether by license (other than a license granted pursuant to
this Agreement) or ownership, or by control over an Affiliate having possession
by license or ownership) by a Party, of the ability to grant to the other Party
access, a license or sublicense without violating the terms of any agreement
with any third party.
"Cost of Goods" shall have the meaning set forth in Section 7.7.
"Direct Marketing Budget" shall have the meaning set forth in Section 7.4.
"Direct Marketing Expenses" shall have the meaning set forth in Section
7.7.
"Effective Date" shall have the meaning set forth in the preamble to this
Agreement.
"Foreign G&A" shall have the meaning set forth in Section 7.7.
"Future Joint Products" shall mean any composition or product which
becomes a Joint Product after the Effective Date by approval by the
Collaboration Committee.
"GAAP". GAAP shall mean generally accepted accounting principles in the
United States.
"Illumina" shall have the meaning set forth in the preamble to this
Agreement.
"Illumina Facility Improvements" shall mean any and all capital purchases
by Illumina acquired with or produced using the Collaboration Funding and/or the
Big Bird Milestone Payment.
"Illumina Manufacturing Facility" shall mean Illumina's manufacturing
facility currently located in San Diego, California, or any successor facility
or facilities.
"Illumina Manufacturing Territory" shall mean all of North America.
"Illumina Marks" shall have the meaning set forth in Section 6.2(d).
"Illumina Patents" shall have the meaning set forth in Section 6.2(a)
"Independent Accountants" shall have the meaning set forth in Section 8.3.
"Industry Communications" shall mean industry communications and Joint
Product press releases, Joint Product branding, commercial trade show
positioning and presence, scientific publications and joint product related
literature.
"Intellectual Property" shall mean all patents, patent applications, trade
secrets (including proprietary processes, inventions, formulae and ideas),
Know-How, copyrights and other intellectual property and proprietary rights
protectable under the laws of any jurisdiction, together with all rights under
applications therefor and registrations thereof.
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"Invitrogen" shall have the meaning set forth in the preamble to this
Agreement.
"Invitrogen Facility Improvements" shall have the meaning set forth in
Section 7.3.
"Invitrogen Patents" shall have the meaning set forth in Section 6.1(a)
"Invitrogen Manufacturing Facility(ies)" shall mean Invitrogen
Manufacturing Facility (Japan) and Invitrogen Manufacturing Facility (Scotland),
or any successor facility or facilities.
"Invitrogen Manufacturing Facility (Japan)" shall mean Invitrogen's
manufacturing facility currently located in Japan, or any successor facility or
facilities.
"Invitrogen Manufacturing Facility (Scotland)" shall mean Invitrogen's
manufacturing facility currently located in Scotland, or any successor facility
or facilities.
"Invitrogen Manufacturing Territory" shall mean all countries of the
world, excluding North America.
"Invitrogen Marks" shall have the meaning set forth in Section 6.1(d).
"Joint Intellectual Property" shall have the meaning set forth in Section
6.4.
"Joint Products" shall mean those products described in Exhibit A and
those Future Joint Products added to the Collaboration by the Collaboration
Committee. For clarity, Joint Products shall not include (a) Oligos made by
Illumina for use with Illumina's arrays or Kits, or (b) Oligos made by
Invitrogen for use with Invitrogen's arrays or Kits.
"Joint Products Sales Force" shall have the meaning set forth in Section
4.3.
"Know-How" shall mean any information or materials, whether or not
patentable and whether stored or transmitted in oral, documentary, electronic or
other form, Controlled by a Party during the Term that is necessary or useful
for the development, manufacture or commercialization of Oligos. Know-How may
include, without limitation, ideas, concepts, formulas, methods, procedures,
designs, plans, documents, data, inventions, discoveries, developments,
e-commerce tools, works of authorship, standard operating procedures, quality
control testing procedures, customer service software and any information
relating to research and development plans, experiments, results, trade secrets
and technical, manufacturing, marketing, financial, regulatory, commercial,
personnel and other business information and plans, and any scientific,
clinical, regulatory, marketing, financial and commercial information or data;
in each case, to the extent necessary or useful for the development, manufacture
or commercialization of Oligos.
"Kit" means a catalog product that consists of both (a) one or more Oligo
components that, if sold as stand-alone items, would constitute Joint Products,
and
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(b) one or more components that (i) are active ingredients, and (ii) if sold as
stand-alone items, would not constitute Joint Products; provided, however, that
(x) sales bundling of catalog products or Kits with Joint Products do not
constitute a Kit, and (y) custom oligo synthesis components ordered by customers
are not considered components of Kits.
"LIMS" shall mean laboratory information management systems either
developed or Controlled by Illumina.
"Marketing Program" shall mean the Joint Product direct advertising,
electronic marketing, marketing programs, and any other items based on
guidelines provided by the Collaboration Committee.
"Net Sales" shall have the meaning set forth in Section 7.7.
"New R&D Projects" means defined research and development projects
undertaken to improve or expand the production capabilities of Joint Products,
which, for the avoidance of doubt, shall exclude ongoing research and
development undertaken to maintain the production capabilities of Joint
Products.
"North America" shall mean the United States of America, Canada, and
Mexico.
"Oligator(R) Technology" shall mean Intellectual Property Controlled by
Illumina and instrumentation developed by Illumina, in each case, relating to
the development, manufacturing and commercialization of Oligos, including the VB
Oligator, Big Bird and the LIMS, quality control software and business
processing software.
"Oligo Plates" shall mean (a) Oligos ordered by a customer [ * ] in one
order, in a quantity of Oligos greater than [ * ] (greater than [ * ]), or (b)
plate Oligos ordered by [ * ] customers. For customers that have an established
practice of placing multiple single plate orders during one day, it is the
intent that such orders will be considered a single order.
"Oligos" shall have the meaning set forth in the Recitals to this
Agreement.
"Party" shall have the meaning set forth in the preamble to this
Agreement.
"Performance Monitoring" shall mean monitoring the regional pro forma
income statements for the Collaboration, quality specifications, delivery
specifications and other performance metrics as agreed to by the Collaboration
Committee.
"Pricing Guidelines" means the Collaboration's global pricing strategy and
range of pricing for the Joint Products, which are subject to review and
revision by the Collaboration Committee at least on an annual basis, taking into
consideration, changes in currency exchange rates, market conditions,
competitive pricing and industry average sales prices.
"Sales & Marketing" shall have the meaning set forth in Section 7.7.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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"Solely Owned Intellectual Property" shall have the meaning set forth in
Section 6.4.
"Term" shall mean the period of time beginning on the Effective Date and
ending on the date that this Agreement is terminated in accordance with Section
10.
"VB Oligator" means the synthesis platform (capable of synthesizing [* ])
developed by Illumina currently used in production at Illumina's North American
manufacturing facility.
"Website" shall have the meaning set forth in Section 4.4(a).
2. Management of Collaboration.
2.1 Formation of Collaboration Committee; Purposes and Principles.
Within fourteen (14) days after the Effective Date, Invitrogen and Illumina
shall establish a committee (the "Collaboration Committee") that will govern,
subject to approval by authorized representatives of the respective Parties, and
have overall responsibility for the success of the Collaboration. The purposes
of the Collaboration Committee will be (i) to determine the overall strategy for
the Collaboration consistent with the terms and conditions of this Agreement,
(ii) to coordinate the Parties' activities hereunder, and (iii) to develop,
approve and effectuate plans for the Collaboration as provided herein. It is the
intent of the Parties to assign responsibilities for the various operational
aspects of the Collaboration to those portions of their respective organizations
which have the appropriate resources, expertise and responsibility for such
functions. The Parties intend that their respective organizations will work
together towards the success of the Collaboration.
2.2 Membership. The Collaboration Committee shall be composed of an
equal number of representatives appointed by each Party. The Collaboration
Committee shall initially have six (6) members, consisting of three (3)
representatives from each Party; provided that the Collaboration Committee may
change its size from time to time by unanimous consent of its members. A Party's
representatives shall serve at the discretion of such Party and each Party may
replace any of its Collaboration Committee representatives at any time upon
written notice to the other Party. Each representative appointed by a Party
shall have the requisite experience, knowledge and seniority to be able to make
decisions on behalf of such Party with respect to the Collaboration. From time
to time, the Collaboration Committee may establish subcommittees or subordinate
committees (which may or may not include members of the Collaboration Committee
itself) to oversee particular projects or activities, and such subcommittees or
subordinate committees shall be constituted and shall operate as the
Collaboration Committee agrees until such particular projects or activities are
deemed complete or are no longer required as determined by the Collaboration
Committee.
2.3 Meetings of the Collaboration Committee. The Collaboration Committee
shall hold meetings at such times as it elects to do so, but in no event shall
such meetings be held less frequently than once every calendar quarter. The
Collaboration Committee shall meet alternately at Illumina's facilities in San
Diego, California and Invitrogen's
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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facilities in Carlsbad, California or at such locations as the Parties may
otherwise agree (including by audio or video teleconference with the consent of
each Party). With the consent of the representatives of each Party serving on
the Collaboration Committee, other representatives of each Party or of Third
Parties involved in the collaboration may attend meetings of the Collaboration
Committee as nonvoting participants. Each Party shall be responsible for all of
its own expenses of participating in the Collaboration Committee.
2.4 Specific Responsibilities of the Collaboration Committee. In
addition to its overall responsibility for managing the Collaboration, subject
to approval by the authorized representative of the respective Parties, the
Collaboration Committee shall have exclusive responsibility to:
(a) establish Pricing Guidelines and review them at least quarterly, and
revise as appropriate;
(b) create, review and approve Budgets;
(c) carry out Performance Monitoring;
(d) establish a strategy and an approval process for Industry
Communications;
(e) establish strategy for and review of Marketing Programs;
(f) propose, evaluate and select Future Joint Products to become Joint
Products
(g) propose, evaluate and approve the establishment of Oligo
manufacturing facilities for the production of Joint Products;
(h) perform such other functions as appropriate to further the purposes
of this Agreement as determined by the Parties; and
(i) propose, evaluate, monitor and select Collaboration capital
expenditures and New R&D Projects.
(j) monitor progress of Big Bird development and post synthesis
automation.
2.5 Decision-Making. All decisions of the Collaboration Committee shall
be made by unanimous vote of the Parties, with each Party's representatives
collectively having one (1) vote on behalf of such Party regardless of the
number of representatives in attendance. Any deadlocks in disputes arising from
the Collaboration Committee shall be promptly referred to a designated
representative selected by the Parties' respective Chief Executive Officers
("Representatives") or equivalent for resolution. If the Representatives cannot
resolve such dispute, the parties shall agree to a binding arbitration process
as set forth in section 12.
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2.6 Management Team. Each Party shall appoint a senior representative
(who may be a member of the Collaboration Committee) to act as its project
coordinator for all of the activities contemplated under this Agreement. Such
project coordinators will be responsible for the day-to-day worldwide
coordination of the Collaboration and will serve to facilitate communication
between the Parties. Such project coordinators will be experienced in project
management and have a general understanding of development, regulatory,
manufacturing and sales and marketing issues.
2.7 Collaboration Guidelines.
(a) General. In all matters related to the Collaboration, the Parties
shall strive to balance as best they can the legitimate interests and concerns
of the Parties and to realize the economic potential of the Joint Products and
each Party agrees to use Commercially Reasonable Efforts to carry out the
activities assigned to such Party in this Agreement and/or by the Collaboration
Committee. In conducting activities under this Agreement, neither Party shall
intentionally prejudice the value of any Joint Product by reason of such Party's
activities outside of the Collaboration; provided that nothing in this Agreement
is intended to require either Party to limit or prejudice the development or
commercialization of products that are not Joint Products (including any Oligos
or products based thereon, including Invitrogen's modified, purified, large
scale and specialty Oligos). Each Party acknowledges that the other Party is in
the business of developing, manufacturing and selling Oligos (or products
requiring Oligo synthesis) that are not Joint Products and nothing in this
Agreement shall be construed as restricting such businesses or imposing a duty
to market and/or sell and exploit the Joint Products to the exclusion of, or in
preference to, any other product or process, or in any way other than in
accordance with its normal commercial practices.
(b) Independence. Subject to the terms of this Agreement, the activities
and resources of each Party shall be managed by such Party, acting independently
and in its individual capacity. Nothing in this Agreement shall constitute or
create a joint venture, partnership, or any other similar arrangement between
the Parties. Neither Party is authorized to act as agent for the other Party and
neither Party shall have the power to bind or obligate the other Party in any
manner.
(c) Compliance with Applicable Law. Each Party agrees to conduct all of
its activities in furtherance of or in connection with the Collaboration in
compliance with all applicable laws and regulations.
2.8 Actions by Affiliates. Any action required to be performed by a
Party under this Agreement may be performed by an Affiliate of such Party;
provided, however that such Party shall (a) not thereby be relieved of any of
its responsibilities under this Agreement, and (b) be jointly and severally
responsible with such Affiliate for failure by such Affiliate to comply with all
relevant restrictions, limitations and obligations in this Agreement.
2.9 Exhibits. In the event that the Parties do not revise or amend
Exhibits B and/or C prior to 2011, and except as otherwise provided in this
Agreement, the amounts
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and percentages set forth in Exhibits B and/or C applicable to the calendar year
2010 shall be the amounts and percentages applicable to all calendar years
following 2010 for the purposes of this Agreement.
3. Early Stage Capacity Build-Out; Middleware; Joint Products.
3.1 Manufacturing Build-out. Following the Effective Date, Illumina will
initiate the phased build-out of the Collaboration's manufacturing capacity in
the following stages:
(a) Stage 1: When Illumina has the capability contemplated by this Agreement
to fulfill orders of plate-based Joint Products from Invitrogen at the
Illumina Manufacturing Facility;
(b) Stage 2: When Illumina has the capability contemplated by this Agreement
to support tube-based Joint Product manufacturing at the Illumina
Manufacturing Facility; and
(c) Stage 3: When Invitrogen has the capability to use VB Oligators in both
Invitrogen Manufacturing Facilities, and such instrumentation is fully
validated and demonstrated to be ready to receive and manufacture Oligo
orders as contemplated by this Agreement.
3.2 Middleware. Following the Effective Date, Illumina and Invitrogen
will co-develop e-commerce and middleware systems to enter, validate and route
tube and plate Joint Product orders.
3.3 Drying Instrumentation. It is contemplated that Invitrogen will be
reducing the Oligo production capacity of its manufacturing facility in
Frederick, Maryland. As such production capacity diminishes, Invitrogen shall
deliver to Illumina, at Invitrogen's book value, such of Invitrogen's
proprietary Oligo drying instrumentation (devices for drying Oligos in tubes and
plates) and related standard operating procedures used in connection with such
instrumentation as are no longer required by Invitrogen. Upon the termination of
this Agreement, Illumina shall, at Invitrogen's request, deliver to Invitrogen
all such proprietary Oligo drying instrumentation at Illumina's then current
book value plus delivery costs, subject to an arbitration decision that provides
otherwise from Section 12.
4. Marketing and Sales.
4.1 Marketing. Invitrogen will have the primary responsibilities for
global marketing activities, including account-specific pricing consistent with
the Pricing Guidelines. Invitrogen will promote the Joint Products in accordance
with this Agreement and Collaboration Committee guidelines. Subject to Section
6.2(d), all Joint Products will be co-branded globally with primary Invitrogen
branding and prominent secondary Illumina branding as approved by the
Collaboration Committee.
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4.2 Sales. Invitrogen will have exclusive responsibilities for Joint
Product sales and will book and recognize the revenue from the sales. Invitrogen
will have responsibility for billing the end customer and for collections.
Illumina will work with Invitrogen to make summary data available related to
work in process and shipped orders to facilitate billing.
4.3 Sales Force. Following the Stage 2 Build-out Date, Invitrogen shall
employ a Joint Products sales force whose sole sales responsibility will be to
sell Joint Products ("Joint Products Sales Force") that will have at least [ * ]
members. The Joint Products Sales Force's exclusive sales responsibility shall
be to both serve as Oligo specialists focused on high value opportunities and
support the general Invitrogen sales force in selling Joint Products. [ * ]
4.4 Order Taking and Routing.
(a) Website. Invitrogen will host an order taking front end website for
use with ordering of Joint Products ("Website") co-developed with Illumina that
enables customers to order Joint Products. The Website will be accessible
through Invitrogen's Invitrogen.com website. Invitrogen's Oligo design tools
(e.g., LUX(TM), RNA), which will continue to be hosted at Invitrogen.com
website, will also be integrated into the Website. For the avoidance of doubt,
the Parties agree and acknowledge that neither LUX(TM) (comprised of one labeled
and one unmodified Oligo) nor RNA Oligos are or shall be treated as Joint
Products under this Agreement.
(b) Fax and Email Orders. Invitrogen will receive all email and fax
orders for Joint Products and enter them into the order entry mechanisms.
Invitrogen will maintain sufficient customer service personnel to enter e-mail-
and fax-based orders. Invitrogen will use Commercially Reasonable Efforts to
induce customers to use low transaction cost order channels.
(c) Order Processing. Invitrogen shall comply with the following
order-routing protocol:
(i) After the Stage 1 Build-out Date, all orders for Oligo Plates
that are Joint Products, which are to be sold anywhere in the world
(including the Illumina Manufacturing Territory and/or the Invitrogen
Manufacturing Territory)
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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shall be routed to the Illumina Manufacturing Facility; provided that the
Collaboration Committee may permit exceptions either on a case-by-case
basis or via establishment of criteria to accommodate specific customer
requirements;
(ii) After the Stage 2 Build-out Date, all orders for tube-based
Joint Products to be sold into the Illumina Manufacturing Territory shall
be routed to the Illumina Manufacturing Facility; provided that the
Collaboration Committee may permit exceptions either on a case-by-case
basis or via establishment of criteria, when critical, to accommodate
specific customer requirements;
(iii) All orders for Joint Products (other than orders for Oligo
Plates) to be sold into the Invitrogen Manufacturing Territory shall be
routed to the applicable Invitrogen Manufacturing Facility; provided that
Collaboration Committee may permit exceptions either on a case-by-case
basis or via establishment of criteria to accommodate specific customer
requirements;
(iv) In the event that the Collaboration Committee approves the
establishment of additional manufacturing facilities for the manufacture
of Joint Products, the Collaboration Committee may develop a routing
protocol for these additional facilities.
4.5 Customer Service; Technical Support. Invitrogen will provide
customer service and technical support to all Joint Product customers. Illumina
will establish a point of contact who will be available to assist Invitrogen in
resolving customer service and technical support issues arising from Joint
Products manufactured at the Illumina Manufacturing Facility.
4.6 Diligence. Invitrogen agrees to use Commercially Reasonable Efforts
to allocate and focus the appropriate sales and marketing resources to
substantiate the fixed sales and marketing allocation expenses outlined in
Exhibit B line item 5 in promoting and selling Joint Products. During the first
(2) two years of the Collaboration, any changes in the Joint Products Sales
Force in number or region shall be approved by the Collaboration Committee.
Nothing in the foregoing shall prevent Invitrogen from ceasing at any time, in
its sole discretion, to employ any member of the Joint Products Sales Force for
cause, provided only that Invitrogen use Reasonable Commercial Efforts to
promptly replace such individual. Thereafter, Invitrogen will be responsible for
the size and staffing of the Joint Products Sales Force.
4.7 End-User Agreement. The Collaboration Committee shall approve all
forms of end-user agreements to be used in sales of Joint Products to customers.
Nothing in the foregoing shall imply that the Collaboration Committee shall have
any approval rights over Invitrogen's standard terms of sale, which shall govern
the majority of sales. A copy of Invitrogen's current standard terms of sale is
attached hereto as Exhibit E. Invitrogen at its sole discretion may change such
standard terms of sale from time to time; provided that such standard terms are
not inconsistent with standard terms for all other Invitrogen products, and
Invitrogen shall provide a copy to Illumina.
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5. Manufacturing.
5.1 Illumina Manufacturing. Illumina shall exclusively manufacture all
Joint Products to be sold into the Illumina Manufacturing Territory and Joint
Products that are Oligo Plates to be sold anywhere in the world. Invitrogen
shall obtain its supply of Joint Products to be sold into the Illumina
Manufacturing Territory and its supply of Joint Products that are Oligo Plates
exclusively from Illumina. Illumina will implement the quality controls set
forth on Exhibit D-1 for the manufacture of tube and plate Joint Products at the
Illumina Manufacturing Facility. Illumina will work with Invitrogen to develop
capability to make readily available the summary of manufacturing status and
quality-control data to Invitrogen customer service and technical support staff
for supporting Joint Product customers. Illumina will utilize its
post-processing capabilities described in Exhibit D-1. Illumina will develop its
pick, pack and ship capabilities to accommodate tube orders and to support
combined volume of Joint Products and forecast growth as outlined by the
Collaboration Committee. Illumina will further endeavor to automate its pick,
pack and ship capabilities to accommodate increased volume of Joint Products.
Illumina shall conduct the activities described in this Section 5.1 in
accordance with such additional summary quality control data and other
specifications adopted by the Collaboration Committee from time to time.
5.2 Invitrogen Manufacturing.
(a) Invitrogen shall exclusively manufacture Joint Products (other than
Oligo Plates) to be sold into the Invitrogen Manufacturing Territory.
(b) Within three (3) months of Big Bird becoming operational in the
Illumina Manufacturing Facility, Illumina will deliver to Invitrogen's
Affiliates that operate the two current Invitrogen Manufacturing Facilities [ *
] VB Oligators per Invitrogen Manufacturing Facility solely for the purpose of
manufacturing Joint Products subject to the license granted in Section 6 of this
Agreement; provided, however, that (i) Illumina will use Commercially Reasonable
Efforts to deliver such VB Oligators within [ * ] following the Effective Date,
and (ii) Illumina will in no event deliver such VB Oligators later than [ * ]
after the Effective Date. Illumina will provide to Invitrogen (i) Illumina's
expertise and technical support at the Invitrogen Manufacturing Facilities to
facilitate the establishment of the manufacturing and related capabilities
efficiently and effectively, and (ii) the quality control systems identified on
Exhibit D-2 for use by Invitrogen's Affiliates solely at the Invitrogen
Manufacturing Facilities. Invitrogen shall reimburse Illumina for Illumina's
costs (including, the then-current book value of the VB Oligators, installation
costs, and delivery costs) out of Invitrogen's [ * ]-per-Invitrogen
Manufacturing Facility funding described in Section 7.3; provided, however, in
the event that new VB Oligators must be built for Invitrogen, the purchase price
of such new VB Oligators to Invitrogen shall not exceed the then book value of
the existing VB Oligators that the parties contemplated would have been provided
to Invitrogen under this Agreement. Illumina shall not charge Invitrogen for the
cost of assembling such VB Oligators in the event that such VB Oligators have
not been assembled. Invitrogen shall own the VB Oligators it purchases. Upon
termination of this Agreement, Invitrogen shall, at Illumina's request, resell
to
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Illumina all VB Oligators at Invitrogen's then current book value plus delivery
costs, subject to an arbitration decision that provides otherwise from Section
12.
(c) Invitrogen will establish, with Illumina technical support, low-cost
manufacturing, which will require additional automation for formatting and
handling tubes in the Invitrogen Manufacturing Facilities, the costs for which
are included in the [ * ]-per-Invitrogen Manufacturing Facility funding
described in Section 7.3. Invitrogen will be responsible for facilitating all
pick, pack and ship requirements in the Invitrogen Manufacturing Facilities.
Invitrogen shall conduct the activities described in this Section 5.2 in
accordance with such additional quality control and other specifications adopted
by the Collaboration Committee from time to time.
5.3 Additional Manufacturing Facilities. Except as expressly authorized
in this Section 5 or by the Collaboration Committee, neither Party shall be
permitted to (a) prepare or establish any additional Oligo manufacturing
facilities or capacity with the intent to produce Joint Products, or (b) build
out existing manufacturing facilities with the intent or capability to produce
Joint Products. Following the Effective Date, the Collaboration Committee may
authorize one or both Parties to establish additional manufacturing facilities
utilizing the [ * ] VB Oligator instrument set-up utilized by the Invitrogen
Manufacturing Facilities (as described in Section 5.2) to manufacture Joint
Products to be sold into the Invitrogen Manufacturing Territory.
5.4 Cost Containment. The Collaboration Committee will work together to
achieve lowest practical Cost of Goods by (a) introducing and maintaining best
practices among the Illumina Manufacturing Facility and the Invitrogen
Manufacturing Facilities, and (b) minimizing raw materials and overhead costs,
and (c) increasing efficiency.
6. Intellectual Property.
6.1 Invitrogen Grants.
(a) Invitrogen hereby grants during the Term, under Intellectual
Property Controlled by Invitrogen (other than the Invitrogen Marks) that, but
for the license granted in this Section 6.1(a) would be infringed or otherwise
violated, to Illumina a royalty-free (except to the extent that royalties are
owed to third party licensors, in which event such royalties shall be deducted
by Invitrogen in determining Net Sales), non-exclusive right and license, with
the right to grant sublicenses only as permitted under Section 6.3, solely to
manufacture the Joint Products at the Illumina Manufacturing Facility. An
initial list of the patents and patent applications to be licensed pursuant this
subparagraph is listed on the attached Exhibit F, and shall be referred to as
"Invitrogen Patents". Invitrogen Patents shall also include all continuing
applications including divisions, substitutions, and continuations-in-part, and
any patents issuing on any of the foregoing applications including reissues,
reexaminations and extensions; and all foreign applications and patents
corresponding to any of the foregoing.
(b) Invitrogen hereby grants during the Term, under all Intellectual
Property Controlled by Invitrogen (other than the Invitrogen Marks) that, but
for the license granted in this Section 6.1(b) would be infringed or otherwise
violated, to Illumina a royalty-free (except to the extent that royalties are
owed to third party licensors, in which
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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event such royalties shall be deducted by Invitrogen in determining Net Sales),
non-exclusive right and license, with the right to grant sublicenses only as
permitted under Section 6.3, solely to enable Illumina to perform its
obligations under this Agreement relating to the commercialization of Joint
Products.
(c) Invitrogen hereby grants, under all Intellectual Property that (i)
Invitrogen develops during the Term, and (ii) was developed by funding approved
by the Collaboration Committee, to Illumina a perpetual, royalty-free (except to
the extent that royalties are owed to third party licensors, in which event such
royalties shall be deducted by Invitrogen in determining Net Sales),
non-exclusive right and license, with the right to grant sublicenses only as
permitted under Section 6.3, to manufacture, use or sell Oligos. Such rights
shall survive termination of this Agreement.
(d) Invitrogen hereby grants Illumina during the Term, a limited,
royalty-free, non-exclusive right and license, with the right to grant
sublicenses only as permitted under Section 6.3, to the use of certain of its
trademarks and service marks, trade names and logos to be specifically
identified by Invitrogen (collectively hereinafter referred to as "Invitrogen
Marks") solely in connection with the commercialization activities provided for
in this Agreement. Illumina agrees to comply with Invitrogen's guidelines
delivered to Illumina from time to time with respect to manner of use, and to
maintain the quality standards of Invitrogen with respect to the goods sold and
services provided in connection with the Invitrogen Marks. Illumina recognizes
and agrees that no ownership rights are vested or created by the limited rights
of use granted to Illumina in connection with this use of the Invitrogen Marks,
and that all use thereof inures to the benefit of Invitrogen. Further, Illumina
shall submit to Invitrogen any materials bearing the Invitrogen Marks for review
and approval prior to the use thereof and shall make no use of the Invitrogen
Marks without Invitrogen's prior written consent. Each Party shall execute any
documents required in the reasonable opinion of the other Party for Illumina to
be entered as a "registered user" or recorded licensee of the Invitrogen Marks,
or to be removed as registered user or licensee thereof.
6.2 Illumina Grants.
(a) Illumina hereby grants during the Term, under all Intellectual
Property Controlled by Illumina (other than the Illumina Marks) that, but for
the license granted in this Section 6.2(a) would be infringed or otherwise
violated, to Invitrogen a royalty-free (except to the extent that royalties are
owed to third party licensors, in which event such royalties shall be deducted
by Invitrogen in determining Net Sales, or added to Cost of Goods by Illumina,
as applicable), non-exclusive right and license, with the right to grant
sublicenses only as permitted under Section 6.3, solely to manufacture the Joint
Products at the Invitrogen Manufacturing Facilities. An initial list of the
patents and patent applications to be licensed pursuant this subparagraph is
listed on the attached Exhibit G, and shall be referred to as "Illumina
Patents". Illumina Patents shall also include all continuing applications
including divisions, substitutions, and continuations-in-part, and any patents
issuing on any of the foregoing applications including reissues, reexaminations
and extensions; and all foreign applications and patents corresponding to any of
the foregoing.
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(b) Illumina hereby grants during the Term, under all Intellectual
Property Controlled by Illumina (other than the Illumina Marks) that, but for
the license granted in this Section 6.2(b) would be infringed or otherwise
violated, to Invitrogen a royalty-free (except to the extent that royalties are
owed to third party licensors, in which event such royalties shall be deducted
by Invitrogen in determining Net Sales, or added to Cost of Goods by Illumina,
as applicable), non-exclusive right and license, with the right to grant
sublicenses only as permitted under Section 6.3, solely to enable Invitrogen to
perform its obligations under this Agreement relating to the commercialization
of Joint Products.
(c) Illumina hereby grants, under all Intellectual Property that (i)
Illumina develops during the Term, and (ii) was developed with the Collaboration
Funding, Big Bird Milestone Payment, and/or funding approved by the
Collaboration Committee, to Invitrogen a perpetual, royalty-free (except to the
extent that royalties are owed to third party licensors, in which event such
royalties shall be deducted by Invitrogen in determining Net Sales, or added to
Cost of Goods by Illumina, as applicable), non-exclusive right and license, with
the right to grant sublicenses only as permitted under Section 6.3 to
manufacture, use or sell Oligos. Such rights shall survive termination of this
Agreement.
(d) Illumina hereby grants Invitrogen during the Term, a limited,
royalty-free, non-exclusive right and license, with the right to grant
sublicenses only as permitted under Section 6.3, to the use of certain of its
trademarks and service marks, trade names and logos to be specifically
identified by Illumina (collectively hereinafter referred to as "Illumina
Marks") solely in connection with the commercialization activities provided for
in this Agreement. Invitrogen agrees to comply with Illumina's guidelines
delivered to Invitrogen from time to time with respect to manner of use, and to
maintain the quality standards of Illumina with respect to the goods sold and
services provided in connection with the Illumina Marks. Invitrogen recognizes
and agrees that no ownership rights are vested or created by the limited rights
of use granted to Invitrogen in connection with this use of the Illumina Marks,
and that all use thereof inures to the benefit of Illumina. Further, Invitrogen
shall submit to Illumina any materials bearing the Illumina Marks for review and
approval prior to the use thereof and shall make no use of the Illumina Marks
without Illumina's prior written consent. Each Party shall execute any documents
required in the reasonable opinion of the other Party for Invitrogen to be
entered as a "registered user" or recorded licensee of the Illumina Marks, or to
be removed as registered user or licensee thereof.
6.3 Sublicensing and Extension of Rights. Either Party may, subject to
the prior written approval of the other Party on a case-by-case basis,
sublicense its rights under the licenses granted pursuant to Section 6.1 or 6.2,
as the case may be; provided, however, that no consent or approval shall be
required for either Party to extend such a sublicense to its Affiliates and/or
third party distributors for Joint Products. All such sublicenses (other than
sublicenses to Affiliates and/or third party distributors for Joint Products)
shall be granted pursuant to a written agreement that subjects the sublicensee
to all relevant restrictions, limitations and obligations in this Agreement;
provided, that no such sublicensee shall be permitted to further sublicense. A
Party sublicensing its rights pursuant to this Section 6.3 shall be jointly and
severally responsible with each of its
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sublicensees (including its Affiliates) for failure by such sublicensee to
comply with all relevant restrictions, limitations and obligations in this
Agreement.
6.4 Ownership; Reservation of Rights. The Parties shall jointly own all
inventions and Intellectual Property developed jointly during the term of this
Agreement by employees, agents and consultants of Invitrogen, on the one hand,
and employees, agents and consultants of Illumina, on the other hand, on the
basis of each Party having an undivided interest in the whole (collectively,
"Joint Intellectual Property"). Other than Joint Intellectual Property, each
Party shall own, to the exclusion of the other Party, all inventions and
Intellectual Property developed by such Party, its employees, agents and
consultants (collectively, "Solely Owned Intellectual Property"). For purposes
of determining whether an invention or Intellectual Property Right is Joint
Intellectual Property or Solely-Owned Intellectual Property, questions of
inventorship and/or ownership shall be resolved in accordance with applicable
United States laws. Each Party reserves all rights not expressly granted in this
Agreement, and no licenses are granted by such Party under this Agreement,
whether by implication, estoppel or otherwise, except as expressly set forth
herein and nothing in this Agreement is intended to be or should be construed as
an assignment of any Intellectual Property Controlled by either Party prior to
the Effective Date or thereafter.
6.5 Bankruptcy. All rights and licenses granted pursuant to this
Agreement are, for purposes of Section 365(n) of Title 11 of the United States
Code, as amended, and any foreign equivalents thereof ("Bankruptcy Code"),
licenses of rights to "intellectual property" as such term is used in Bankruptcy
Code. Each Party in its capacity as a licensor hereunder agrees that, in the
event of the commencement of bankruptcy proceedings by or against such Party
under Bankruptcy Code, the other Party, in its capacity as a licensee of rights
under this Agreement, shall retain and may fully exercise all of such licensed
rights under this Agreement (including the license granted hereunder) and all of
its rights and elections under Bankruptcy Code.
6.6 Infringement by Third Parties. Each Party shall promptly notify the
other Party in writing of any suspected, alleged or threatened infringement or
violation of any Intellectual Property Controlled by either Party that covers
the manufacture, use or sale of the Joint Products which it becomes aware. The
Party Controlling the Intellectual Property suspected, alleged or threatened to
be infringed shall have the right, but not the obligation, to control the
prosecution of any infringement or violation. In the event that such Party
brings an infringement action in accordance with this Section 6.6, the other
Party shall cooperate fully, including, if required to bring such action, the
furnishing of a power of attorney. If one Party brings any such action or
proceeding, the other Party agrees to be joined as a party plaintiff and to give
the first Party reasonable assistance and authority to file and prosecute the
suit. The costs of any litigation commenced pursuant to this Section 6.6,
including attorneys' fees and expenses, shall be borne by the Party commencing
such litigation. The Party bringing or threatening such litigation shall be
entitled to any recovery realized as a result of any settlement or litigation.
6.7 Defense and Settlement of Third-Party Claims Against Joint Products.
If a third party asserts that an Intellectual Property right Controlled by it is
infringed or
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otherwise violated by the manufacture, use or sale of any Joint Product, the
Party first obtaining knowledge of such a claim shall immediately provide the
other Party notice of such claim and the related facts in reasonable detail. In
such event, except for third party claims covered by Sections 11.5 or 11.6:
(a) the Parties shall determine how best to control the defense of
any such claim (including the bringing of a declaratory judgment action)
with respect to the Joint Products;
(b) The Party receiving the claim shall have the right, but not
the obligation, to control such defense, and in such event the other Party
shall cooperate in the defense and shall have the right to be represented
separately by counsel of its own choice;
(c) The Party (whether Invitrogen or Illumina) that controls the
defense of a given claim with respect to Joint Products shall also have
the right to control settlement of such claim; provided, however, that if
one Party controls, no settlement shall be entered into without the
consent of the other Party if such settlement would adversely affect the
interests of such other Party in a manner different from the interests of
the defending Party; and
(d) The expenses of defending and/or settling a third-party claim
relating to Joint Products shall be a shared expense of the Parties.
7. Financial Provisions.
7.1 Collaboration Funding. Invitrogen shall pay to Illumina a
non-refundable, non-creditable, collaboration payment of $2,300,000 (the
"Collaboration Funding") in accordance with the following schedule:
(a) $1,200,000 million within fifteen (15) days of the Effective Date;
and
(b) $1,100,000 within three (3) months following the Effective Date.
7.2 Big Bird Milestone Payment. Invitrogen shall pay to Illumina a
non-refundable, non-creditable, milestone payment of $1,100,000 ("Big Bird
Milestone Payment") upon delivery of the Big Bird synthesis platform to the
Illumina Manufacturing Facility with a commercially reasonable demonstration of
the ability of the Big Bird to manufacture to the expected scale and to
specifications no less stringent than those specified for VB Oligators-made
Oligos, such that the VB Oligators then being operated may be delivered to an
Invitrogen Manufacturing Facility.
7.3 Invitrogen Manufacturing Facility Funding. With respect to each of
the Invitrogen Manufacturing Facilities, the first [ * ] in capital costs and
expenses as described in Section 5.2(b) incurred in preparing each such
Invitrogen Manufacturing Facility shall be paid by Invitrogen ("Invitrogen
Facility Improvements"). Of such [ * ] per Invitrogen Manufacturing Facility in
capital costs and expenses, it is anticipated that approximately [ * ] will be
allocated to the purchase of the
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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VB Oligators described in Section 5.2(b), provided that the actual amount so
allocated will be the book value of the VB Oligators as of the date of transfer
by Illumina. All additional financial expenditures required for improving the
Invitrogen Facility Improvements must be approved by the Collaboration Committee
("Committee Facility Improvements") and shall be borne equally by the Parties.
7.4 Direct Marketing Budget. The Collaboration Committee will approve
and oversee the implementation of a rolling twelve (12) month direct marketing
budget ("Direct Marketing Budget"). The aggregate amount that the Collaboration
Committee is permitted to allocate to the Direct Marketing Budget shall be:
(a) for calendar year 2005, [ * ] of Net Sales forecasted for 2005 on
Exhibit B;
(b) for calendar year 2006, an amount not less than [ * ] and no greater
than [ * ] of Net Sales in 2006; and
(c) for the calendar year 2007 and each calendar year thereafter, an
amount not less than [ * ] and no greater than [ * ] of Net Sales in
such year.
The Direct Marketing Budget funds will be used by the Collaboration Committee
for Marketing Programs.
7.5 Additional Collaboration Funding Generally. Subject to Section 7.1
through 7.4, the Parties shall share equally in all costs and expenses
associated with Collaboration capital purchases (e.g., for Committee Facility
Improvements described in Section 7.3), New R&D Projects and any other
expenditures, in each case, approved by the Collaboration Committee. Except as
otherwise set forth in this Agreement, each Party shall otherwise be responsible
for the costs and expenses incurred in performing its obligations under this
Agreement, including sales and marketing expenses and the costs and expenses of
operating the Parties' respective manufacturing facilities. It is understood
that sustained manufacturing support for the Parties' respective manufacturing
facilities shall be treated as a cost and expense of the respective
manufacturing facilities, to be funded by the Party operating such facility, and
shall not be treated as a capital expenditure or New R&D Project.
7.6 Purchases of Joint Products. Joint Products manufactured at the
Illumina Manufacturing Facility for delivery to customers shall be purchased by
Invitrogen as follows:
(a) In respect of the sale of such Joint Products to Invitrogen,
Illumina shall invoice Invitrogen for the Cost of Goods of Joint Products
manufactured at the Illumina Manufacturing Facility, FCA shipping point.
Invitrogen shall bear the risk of loss during shipment, and shall pay for all
other expenses, including shipping expenses and insurance, which shall not be
included in Cost of Goods for purposes of calculating Collaboration Profits.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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(b) Invitrogen shall pay the amount invoiced within forty-five (45) days
after the date of invoice.
(c) In the event that Illumina is unable to fill customer orders for
Joint Products in a timely basis, Invitrogen may fill such customer orders.
(d) Any excess and obsolete inventory related to customer orders for
Joint Products and cancelled customer orders shall be purchased by Invitrogen,
and Illumina shall invoice Invitrogen for the cost of goods of such excess and
obsolete inventory of Joint Products.
7.7 Profit Sharing. Within fourteen (14) business days following the end
of each calendar quarter, Invitrogen shall pay to Illumina an amount equal to
fifty percent (50%) of the Collaboration Profits for that calendar quarter. For
the purpose of this Agreement:
(a) "Collaboration Profits" shall mean Net Sales minus (i) Cost of Goods, (ii)
Sales and Marketing, (iii) Direct Marketing Expenses, and (iv) Foreign G&A
(i.e., Net Sales - (Cost of Goods + Sales and Marketing + Direct Marketing
Expenses + Foreign G&A)).
(b) "Net Sales" shall mean the gross sales revenues for Joint Products sold by
Invitrogen and/or its Affiliates minus deductions for (i) import, export,
excise, sales, value added and use taxes, custom duties, any and all
freight and insurance expenses related to shipment of Joint Products; (ii)
trade discounts (but not free samples) given in accordance with the
Pricing Guidelines; (iii) credits for returns, allowances or trades,
actually granted; and (iv) royalties paid by Invitrogen to third party
licensors resulting from the manufacture, use or sale of Joint Products.
For the purposes of calculating Net Sales, (1) with respect to Joint
Products sold in a given month, the gross sales revenues shall be deemed
to be the greater of (x) the amount that Invitrogen invoices its customers
in the aggregate for Joint Products, or (y) the aggregate amount for such
Joint Products based on the Pricing Guidelines; and (2) with respect to
each order of Joint Products that are bundled with non-Joint Products
offered by Invitrogen, the gross sales revenues attributable to such order
shall be deemed to be the greater of (x) the amount that Invitrogen
invoices the customer for said order in respect of the Joint Products
included in the order, or (y) the average price that Invitrogen charges
customers for similar volume purchases of such Joint Products that are not
bundled with non-Joint Products.
(c) "Cost of Goods" shall mean (i) with respect to Joint Products manufactured
at the Illumina Manufacturing Facility, Illumina's actual cost of goods as
determined by GAAP, excluding, however, depreciation recognized in
connection with the Illumina Facility Improvements, and (ii) with respect
to Joint Products synthesized at one of the Invitrogen Manufacturing
Facilities, Invitrogen's actual cost of goods to synthesize the Joint
Products as determined by GAAP; provided, however, that (x) so long as [ *
] of the sales forecasts for each site set forth in
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Exhibit C are met or exceeded, the cost-per-base charge of unmodified
Oligo Joint Products shall not, for the purposes of clauses 7.7(c)(i) and
(ii), [ * ] of the cost-per-base forecasts set forth in Exhibit C, and (y)
for the purposes of clause 7.7(c)(i) only, the cost-per-base amount of
unmodified Oligo Joint Products manufactured at the Illumina Manufacturing
Facility shall not be [ * ] of the cost-per-base forecasts set forth in
Exhibit C. The cost-per-base forecasts and variance will be reviewed
annually and adjusted if agreed to by the Collaboration Committee. For
years after 2010, the cost-per-base charge for such years shall not be [ *
] or [ * ] used to determine Cost of Goods for such prior year, in
accordance with this paragraph. The cost-per-base forecast for the
Invitrogen Manufacturing Facilities are estimates, since those facilities
are not currently manufacturing Joint Products and the Parties do not have
a historical basis for estimating costs. The Parties agree that the
cost-per-base forecast for the Invitrogen Manufacturing Facilities shall
be reviewed and adjusted by the Collaboration Committee, based on actual
costs, once such facilities commence production of Joint Products. Subject
to the foregoing, depreciation recognized in connection with the
Invitrogen Facility Improvements and the Committee Facility Improvements
shall be included in the Cost of Goods; however, depreciation recognized
in connection with the Illumina Facility Improvements shall be excluded
from the Cost of Goods. Cost of Goods will also exclude inventory
obsolescence.
(d) "Sales & Marketing" shall mean an amount equal to [* ] of Net Sales. Sales
and Marketing costs shall exclude reserves for bad debt.
(e) "Direct Marketing Expenses" shall mean the amount Invitrogen actually
spent in support of Marketing Programs, provided, however, that for a
given calendar year, such amount shall not exceed the Direct Marketing
Budget for that calendar year.
(f) "Foreign G&A" shall mean an amount equal to [ * ] of Net Sales for Joint
Products that are (i) manufactured at Invitrogen Manufacturing Facilities,
or (ii) manufactured at the Illumina Manufacturing Facility and sold in
the Invitrogen Manufacturing Territory.
7.8 Delinquent Payments. Any amounts not paid when due under Sections
7.6 or 7.7 of this Agreement shall be subject to a late fee equal to the prime
lending rate published by the Wall Street Journal applicable to such period plus
two percent (2%).
7.9 United States Dollars. All payments required to be made pursuant to
this Agreement shall be made in United States dollars. All dollar ($) amounts
specified in this Agreement are United States Dollar amounts. For purposes of
computing Collaboration Profits, all revenues earned or expenses incurred in
foreign currencies shall be converted to United States dollars using the same
foreign exchange rate Invitrogen uses for preparing its consolidated financial
statements filed with the United States
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Securities and Exchange Commission. Any benefit or detriment to either Party
resulting from currency exchange rate fluctuations shall be shared equally by
the Parties.
7.10 Tax Matters. The Parties shall use all reasonable efforts to reduce
or otherwise optimize, in a manner consistent with applicable laws, tax
withholding on payments, if any, made pursuant to this Agreement. Each Party
agrees to cooperate in good faith to provide the other Party with such documents
and certifications as are reasonably necessary to enable such other Party to
minimize any withholding tax obligations. The Parties will reasonably cooperate
in providing one another with documentation of the payment of any withholding
taxes paid pursuant to this Section 7.9 and in completing and filing documents
required under the provisions of any applicable tax laws or under any other
applicable law in connection with the making of any required tax payment or
withholding payment, or in connection with any claim to a refund of or credit
for any such payment.
8. Records, Reports and Audits.
8.1 Records. Each Party shall keep accurate books and accounts of record
relating to the manufacture, marketing and sale of the Joint Products (including
the Collaboration Profits, number of bases sold, gross sales revenues for Joint
Products, Net Sales, Cost of Goods and SG&A), in sufficient detail to permit
accurate determination of all figures necessary for verification of amounts
required to be paid hereunder. Each Party shall maintain such records for a
period of at least two (2) years after the end of the calendar year in which
they were generated.
8.2 Reports. Within seven (7) business days following the end of each
calendar month, Illumina shall submit to Invitrogen a written report prepared in
accordance with GAAP setting forth in reasonable detail in the same form as
Illumina keeps its records for the Cost of Goods for Joint Products synthesized
at the Illumina Manufacturing Facility. Within ten (10) business days following
the end of each calendar month, Invitrogen shall submit to Illumina a written
report prepared in accordance with GAAP setting forth in reasonable detail at
least as detailed as an income statement, on a product-by-product (e.g., plates
vs. tubes) and region-by-region basis, including following information
(pro-rated, where applicable) with respect to such calendar month (a) the
Collaboration Profits, (b) number of bases sold, (c) Gross sales revenues for
Joint Products excluding shipping, freight, insurance, and taxes (e.g., sales,
use, and value added tax) (d) the Net Sales, (e) the Cost of Goods, and (f) the
Direct Marketing Expenses in the same form as Invitrogen keeps its records for
its other products.
8.3 Audits. During the Term and for one (1) year thereafter, each Party
shall permit, upon thirty (30) days' prior written notice from the other Party,
an independent certified public accounting firm of national standing selected by
the auditing Party (the "Independent Accountants") to examine its relevant books
and records as may be reasonably necessary to verify the accuracy of any
payments or invoicing required to be made hereunder. Such examination shall be
limited to the pertinent books and records for any calendar year ending not more
than two (2) years before the date of the request. Neither Party shall be
entitled to an examination of the other Party's books and records
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under this Section 8.3 more than once in any calendar year. The Independent
Accountants shall be provided access to such books and records at the audited
Party's facility(ies), as applicable, where such books and records are normally
kept and such examination shall be conducted during normal business hours.
Either Party may require the Independent Accountants to sign a standard
non-disclosure agreement before providing the Independent Accountants access to
facilities or records. Upon completion of the examination, the Independent
Accountants shall provide to both Parties a written report disclosing whether
the reports submitted by the audited Party are correct or incorrect, whether the
relevant payments are correct or incorrect, and, in each case, the specific
details concerning any discrepancies. No other information will be provided to
the auditing Party by the Independent Accountants.
8.4 Reconciliation. If the review by the Independent Accountants reveals
an over- or under-payment under this Agreement, then the Parties shall reconcile
such payments within thirty (30) days following the delivery of the Independent
Accountants' report pursuant to Section 8.3. The auditing Party shall bear the
costs and fees of the Independent Accountants associated with examinations
pursuant to Section 8.3; provided, however, that in the event that it is
determined by the Independent Accountants that the aggregate amount of payments
remitted by the audited Party to the auditing Party during the time period
covered by the records reviewed by the Independent Accountants were less than
ninety-five percent (95%) of the aggregate amount of payments that should have
been paid by the audited Party during such time period, then the audited Party
shall reimburse the auditing Party for the fees and expenses of the Independent
Accountants with respect to such audit except, in the case of Invitrogen, to the
extent that such error was caused by errors in Illumina's calculation of the
Cost of Goods for Joint Products manufactured at the Illumina Manufacturing
Facility.
8.5 GAAP. All books and accounts of record required to be kept pursuant
to Section 8.1, all reports required to be submitted pursuant to Section 8.2,
and all calculations of gross sales revenues for Joint Products, Net Sales, Cost
of Goods and SG&A made for the purposes of calculating Collaboration Profits
pursuant to Section 7.7, shall, in each case, be prepared and maintained in
accordance with GAAP, subject to depreciation of the Illumina Facility
Improvements in Section 7.7(c), consistently applied on the same basis as in
prior years throughout the Term.
9. Confidentiality.
9.1 Confidentiality. All Confidential Information disclosed by a Party
to the 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, and shall
not 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 disclosed by the
Disclosing Party, as can be demonstrated by the receiving Party's records
however maintained: (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 by the disclosing Party to the receiving Party, is
lawfully disclosed to the
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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), without the receiving Party or
its sublicensees violating this Article 9; or (d) is independently developed by
or for the receiving Party without reference to or reliance upon the disclosing
Party's Confidential Information.
9.2 Remedies. Each Party acknowledges that due to the unique nature of
the Confidential Information, any breach of the restrictions contained in this
Section 9 is a material breach of this Agreement, which may cause immediate and
irreparable harm for which money damages would not be an adequate remedy. Any
such breach shall entitle the disclosing Party to seek injunctive relief in
addition to all remedies that may be available in law, in equity or otherwise.
9.3 Publicity. Each Party intends to issue a press release after the
execution of this Agreement, subject to the provisions of the following
sentence. Neither Party shall issue any press release or public announcement
relating to the Joint Products or this Agreement without the prior written
approval of the other Party, which approval shall not be unreasonably withheld,
except that a Party may issue such a press release or public announcement if
required by Law, including without limitation by the rules or regulations of the
United States Securities and Exchange Commission or any stock exchange or
Nasdaq; provided that the other Party has received prior notice of such intended
press release or public announcement if practicable under the circumstances and
the Party subject to the requirement includes in such press release or public
announcement only such information relating to the Joint Products or this
Agreement as is required by such Law. The rights of approval and notice granted
to a Party in accordance with the preceding sentence shall not apply to
subsequent public discussions relating to a press release or public announcement
that has previously been reviewed and approved by the other Party, provided that
the contents of such subsequent public discussions are substantially similar to
the information that has previously been reviewed and approved.
10. Term and Termination.
10.1 Term. The initial Term of this Agreement shall begin on the
Effective Date and end on the eighth (8th) anniversary of the Effective Date.
Thereafter, this Agreement may be renewed for consecutive one (1) year terms, if
one year prior to the expiration of the initial term or any succeeding term, the
Parties mutually agree to renew the Agreement.
10.2 Termination. This Agreement may be terminated by a Party ( the
"Non-defaulting Party") in the event that the other Party (the "Defaulting
Party"): (a) or one or more of its Affiliates materially breaches any term of
this Agreement, if after written notification the breach is not cured within
ninety (90) days, or (b) becomes the subject of a voluntary or involuntary
petition in bankruptcy or any proceeding relating to insolvency, receivership,
liquidation or composition for the benefit of creditors that is not dismissed
within sixty (60) days. If the Defaulting Party disputes it is in material
breach,
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CONFIDENTIAL
then it may institute an arbitration proceeding as provided in Section 12. If
the cure period for material breach expires, and the Non-Defaulting Party
terminates this Agreement, the Non-Defaulting Party may institute an arbitration
proceeding as provided Section 12 to seek its remedies.
10.3 Effect of Termination. All rights and obligations of the Parties set
forth herein that expressly or by their nature survive the expiration or
termination of this Agreement, including provisions of Sections 1, 3.3, 5.2(b)
as to repurchase of VB Oligators, 6.1(c), 6.2(c), 6.4, 6.5, 7, 8, 9, 10.2, 10.3,
11, 12 and 13 shall continue in full force and effect subsequent to and
notwithstanding the expiration or termination of this Agreement, until they are
satisfied or by their nature expire and shall bind the Parties and their legal
representatives, successors, and permitted assigns. Termination of this
Agreement shall not relieve the Parties of any liability which accrued hereunder
prior to the effective date of such termination nor preclude either Party from
pursuing all rights and remedies it may have hereunder or at law or in equity
with respect to any breach of this Agreement nor prejudice either Party's right
to obtain performance of any obligation.
11. Representations and Warranties; Limitation of Liability.
11.1 Mutual Representations and Warranties. Each Party represents and
warrants to the other Party that (i) it has the full corporate right, power and
authority to enter into this Agreement and to perform its obligations hereunder,
(ii) the execution of this Agreement and the performance of its obligations
hereunder does not and shall not conflict with or result in a material breach
(including with the passage of time) of any other agreement to which it is a
party or by which any of its assets or properties is bound or affected, and
(iii) this Agreement has been duly executed and delivered by such Party and
constitutes the valid and binding agreement of such Party, enforceable against
such Party in accordance with its terms, except to the extent that
enforceability is limited by public policy or creditors' rights generally.
11.2 Representations by Illumina. Illumina represents and warrants to
Invitrogen that (i) the VB Oligators it will provide to Invitrogen for the
Invitrogen Manufacturing Facilities will be suitable in design and
manufacturing, and that such VB Oligators will manufacture Joint Products that
comply with product quality specifications, unless due to the negligence or
willful misconduct of Invitrogen; and (ii) the Joint Products that it
manufactures will comply with product quality specifications. In the event that
such Joint Products fail to meet the product quality specifications, Illumina
shall replace the non-conforming Joint Products with conforming Joint Products.
If, during the first twelve (12) months of this agreement, the VB Oligators
Illumina provides to Invitrogen fails to manufacture Joint Products that comply
with product quality specifications, and cannot be repaired, Illumina shall
replace such VB Oligators at Illumina's expense.
11.3 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER
PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
WITH RESPECT TO ANY JOINT PRODUCTS, THE VB OLIGATOR, THE OLIGATOR TECHNOLOGY OR
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ANY OTHER PRODUCTS OR SERVICES PROVIDED IN CONNECTION WITH THIS AGREEMENT,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NONINFRINGEMENT, OR ARISING FROM COURSE OF PERFORMANCE, DEALING, USAGE
OR TRADE.
11.4 Without prejudice to the foregoing, the Collaboration Committee
shall approve of the representations and warranties that may be granted to Joint
Product customers by Invitrogen and the liabilities arising from breaches of
such representations and warranties and any insurance obtained to limit such
liabilities shall be divided between the Parties.
11.5 Indemnification by Illumina. Illumina shall indemnify, defend and
hold harmless Invitrogen (including its officers, trustees, employees and
Affiliates) against any and all third party claims, costs or liabilities,
including attorneys' fees and court costs, for any loss, damage, injury or loss
of life, arising out of the manufacture, use or sale of Joint Products under
this Agreement to the extent attributable to Illumina's technology, execution of
responsibilities under this Agreement, negligence or willful misconduct.
Invitrogen shall promptly notify Illumina in writing after Invitrogen has
received notice of any claim under this paragraph. Illumina shall have the sole
control of the defense, trial and any related settlement negotiations, provided
that Invitrogen may be represented at its own expense by counsel of its own
choosing and provided further that Illumina may not enter into any settlement
that diminishes the rights or interests of Invitrogen or requires an admission
on the part of Invitrogen or incurs financial obligation on the part of
Invitrogen, without Invitrogen's prior written consent. Invitrogen shall fully
cooperate with Illumina in the defense of any such claim.
11.6 Indemnification by Invitrogen. Invitrogen shall indemnify, defend
and hold harmless Illumina (including its officers, trustees, employees and
Affiliates) against any and all third party claims, losses, damages, costs or
liabilities, including attorneys' fees and court costs, for any loss, damage,
injury or loss of life, arising out of the manufacture, use or sale of Joint
Products under this Agreement to the extent attributable to Invitrogen's
technology, execution of responsibilities under this Agreement, negligence or
willful misconduct. Illumina shall promptly notify Invitrogen in writing after
Illumina has received notice of any claim under this paragraph. Invitrogen shall
have the sole control of the defense, trial and any related settlement
negotiations, provided that Illumina may be represented at its own expense by
counsel of its own choosing and provided further that Invitrogen may not enter
into any settlement that diminishes the rights or interests of Illumina or
requires an admission on the part of Illumina or incurs financial obligation on
the part of Illumina, without Illumina's prior written consent. Illumina shall
fully cooperate with Invitrogen in the defense of any such claim.
11.7 LIMITATION OF LIABILITY. EXCEPT FOR VIOLATIONS OF SECTION 9, NEITHER
PARTY HERETO WILL BE LIABLE HEREUNDER FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL,
SPECIAL, EXEMPLARY OR MULTIPLE DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF
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THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, REGARDLESS OF ANY NOTICE
OF SUCH DAMAGES.
12. Arbitration.
12.1 Any dispute, controversy or claim arising out of or relating to the
validity, construction, enforceability or performance of this Agreement,
including disputes relating to alleged breach or to termination of this
Agreement and disputes that cannot be resolved by the Collaboration Committee,
shall be settled by arbitration administered by the American Arbitration
Association ("AAA") under its Commercial Arbitration Rules, in each case, not
inconsistent with the terms of this Agreement, and judgment on the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. Notwithstanding the above, any disputes, controversies or claims
relating in any way to patents, patent applications, trade secrets, know-how or
other Intellectual Property or relating to a breach of Section 9 shall not be
subject to this Section 12. In the event an arbitration is initiated on an
alleged breach, the cure period of Section 10.2 for such alleged breach is
stayed pending the outcome of the arbitration, thus preventing the termination
of this Agreement during the arbitration process.
12.2 The arbitration shall be conducted in San Diego, California by a
panel of three (3) arbitrators of the AAA selected as follows: within thirty
(30) days after initiation of arbitration, each Party shall select one (1)
person to act as arbitrators and the two (2) Party-selected arbitrators shall
select a third arbitrator within five (5) days of their appointment. If the
arbitrators selected by the Parties are unable or fail to agree upon the third
arbitrator, the third arbitrator shall be appointed by the AAA as soon as
practicable.
12.3 Each Party shall share equally in the Parties' total costs of the
arbitration, except that each Party shall be responsible for the costs and
expenses incurred in presenting its own case to the arbitrators, including
attorneys' fees and expenses. Except to the extent necessary to confirm an award
or as may be required by law, neither a Party nor an arbitrator may disclose the
existence, content, or results of an arbitration without the prior written
consent of both Parties.
12.4 In no event shall arbitration be initiated after the date when
commencement of a legal or equitable proceeding based on the dispute,
controversy or claim would be barred by the applicable California statute of
limitations.
12.5 Remedies for material breach. At the completion of an arbitration,
the arbitrator may declare one party in material breach of this Agreement. The
arbitrator shall issue an order which will contain provisions to resolve the
dispute to return the Collaboration to its pre-notice of breach condition. If
such order is implemented, the material breach will be deemed to have been
cured. If unsuccessful, and the Agreement terminates as a result of the material
breach, the arbitrators in their discretion may order a remedy to the
Non-defaulting party to allow the Non-Defaulting party to remain in the business
of commercializing Oligos that were Joint Products during the term of this
Agreement. These remedies could include financial compensation, requirements for
continued supply, and/or licenses to Intellectual Property, such that both
Parties are fairly
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compensated. The arbitrators have no authority to prevent either Party from
commercializing Oligos that were Joint Products under this Agreement.
13. Miscellaneous.
13.1 Severability. If any provision of this Agreement is held invalid or
unenforceable, such provision shall be enforced to the maximum extent
permissible so as to effect the intent of the Parties, and the remainder of this
Agreement will continue in full force and effect.
13.2 Waiver. The failure of either Party to exercise any right granted
herein or to require any performance of any term of this Agreement or the waiver
by either Party of any breach of this Agreement shall not prevent a subsequent
exercise or enforcement of, or be deemed a waiver of any subsequent breach of,
the same or any other term of this Agreement.
13.3 No Third-Party Beneficiaries. Nothing in this Agreement is intended
to or shall confer upon any person who is not a Party to this Agreement any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement, nor shall any such person be entitled to assert any claim hereunder.
13.4 Export Control. This Agreement is made subject to any restrictions
concerning the export of products or technical information from the United
States of America or other countries which may be imposed upon or related to
Invitrogen or Illumina from time to time. Each Party agrees that it will not
export, directly or indirectly, any technical information acquired from the
other Party under this Agreement or any products using such technical
information to a location or in a manner that at the time of export requires an
export license or other governmental approval, without first obtaining the
written consent to do so from the appropriate agency or other governmental
entity.
13.5 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this Agreement and
shall be deemed to have been sufficiently given for all purposes on the third
day following the date of mailing if mailed by first class certified or
registered mail, postage prepaid and on the date of delivery if by express
delivery service or personally delivered. Unless otherwise specified in writing,
the mailing addresses of the Parties shall be as described below:
For Invitrogen: Invitrogen Corporation
1600 Faraday Avenue
Carlsbad, CA 92008
Attn: Contracts Department
With a Copy to: Invitrogen Corporation
1600 Faraday Avenue
Carlsbad, CA 92008
Attention: General Counsel
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For Illumina: Illumina, Inc.
9885 Towne Centre Drive
San Diego, CA 92121
Attention: President
With a copy to: Illumina, Inc.
9885 Towne Centre Drive
San Diego, CA 92121
Attention: Chief Financial Officer
13.6 Assignment. Neither Party shall assign or transfer this Agreement or
any rights or obligations under this Agreement, whether voluntary, by operation
of law or otherwise, without the prior written consent of the other Party,
except that either Party may assign or transfer this Agreement in its entirety
to a successor in connection with the sale of all or substantially all of such
Party's stock, assets or business, provided that such successor agrees in
writing to be bound by and perform the obligations of the such Party under this
Agreement and is capable of performing such obligations. A change in control of
a Party shall be deemed to be an assignment to a successor for purposes of this
Section 13.6. Any assignment or transfer of this Agreement made in contravention
of the terms hereof shall be a material breach and shall be null and void.
Subject to the foregoing, this Agreement shall be binding on and inure to the
benefit of the Parties' respective successors and permitted assigns.
13.7 Governing Law and Venue. This Agreement and performance by the
Parties hereunder shall be construed in accordance with the laws in effect in
the State of California, U.S.A., without regard to provisions on the conflicts
of laws. Each Party consents to the exclusive jurisdiction of, and venue in, the
state and federal courts within San Diego County, California, U.S.A.
13.8 Force Majeure. Neither Party shall be responsible for any failure to
perform or delay attributable in whole or in part to any cause beyond its
reasonable control (other than any payment obligations), including Acts of God,
fire, flood, tornado, earthquake, hurricane, lightning, government actions,
actual or threatened acts of war, terrorism, civil disturbance or insurrection,
sabotage, labor shortages or disputes, failure or delay in delivery by suppliers
or subcontractors, transportation difficulties, shortage of energy or raw
materials or equipment, or the other Party's fault or negligence.
13.9 Entire Agreement and Modifications. This Agreement supersedes all
prior communications, transactions, and understandings, whether oral or written,
with respect to the subject matter hereof and constitutes the sole and entire
agreement between the Parties pertaining to the subject matter thereof. No
modification, addition or deletion, or waiver of any of the terms and conditions
of this Agreement shall be binding on either Party unless made in a written
agreement clearly understood by both Parties to be a modification or waiver, and
signed by a duly authorized representative of each Party.
13.10 Counterparts. This Agreement may be executed in one or more
counterparts, each in the English language and each of which shall be deemed to
be an
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original instrument, and all such counterparts shall together constitute the
same agreement.
13.11 Interpretation. Sections, titles, headings and any table of contents
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation hereof. The Exhibits referred to
herein shall be construed with and as an integral part of this Agreement to the
same extent as if they were set forth verbatim herein. As used in this
Agreement, except as the context may otherwise require, "include," "includes"
and "including" are deemed to be followed by "without limitation," whether or
not they are in fact followed by such words or words of like import; references
to any gender include the other; the singular includes the plural and vice
versa; and references to "Section" or another subdivision or to an "Exhibit" are
to a section or subdivision hereof or an "Exhibit" annexed hereto. As used
herein, the term "business days" shall mean all days other than Saturdays,
Sundays or state (recognized in California) or federal holidays. Ambiguities, if
any, in this Agreement shall not be construed against any Party, irrespective of
which Party may be deemed to have authored the ambiguous provision.
13.12 Non-solicitation. Without the prior written approval of the other Party
and except as otherwise permitted in Section 4.3, neither Party shall solicit
the employment or engagement (as employee, consultant or agent), of any officer,
director or employee of the other Party or solicit such person to terminate his
or her employment and/or engagement with the other Party prior to twelve (12)
months after the termination of this Agreement or services of such effected
employee, officer or director with either Party. A general advertisement or a
request for employment which is initiated exclusively by an officer, director or
employee of the other shall not be considered a solicitation pursuant to this
section.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the day and year first
written above.
ILLUMINA, INC.
By: /s/ JOHN R. STUELPNAGEL
----------------------------------------
Name: John R. Stuelpnagel
Title: Senior Vice President, Operations
INVITROGEN CORPORATION
By: /s/ JOHN D. THOMPSON
----------------------------------------
Name: John D. Thompson
Title: Senior Vice President
29
EXHIBIT A
COLLABORATION JOINT PRODUCTS
1. Any Oligos that are (i) made for sale to third parties and (ii)
synthesized using the Oligator Technology. Such oligos will be Joint Products to
the extent they are (i) sold by or for Invitrogen and (ii) sold by or for
Illumina after the time specified in clause 4 below.
2. [ * ] Oligos ranging from a [ * ] sold to third parties for delivery
anywhere in the world which are capable of being manufactured on Oligator
Technology in Oligo Plates received by Invitrogen and/or its Affiliates, except
where such Oligos are excluded from Joint Products elsewhere in the Agreement.
All orders for such Oligos received by Invitrogen and/or its Affiliates will be
deemed Joint Products as soon as Illumina reasonably demonstrates that the
Illumina infrastructure is ready to receive and manufacture timely such orders.
Until such time, such products in such orders will not be Joint Products.
3. [ * ] Oligos ranging from a [ * ] sold to third parties for delivery
in the US and Canada which are capable of being manufactured on Oligator
Technology in tubes in orders received by Invitrogen and/or its Affiliates. All
orders for such Oligos received by Invitrogen and/or its Affiliates will be
deemed Joint Products as soon as Illumina reasonably demonstrates that the
Illumina infrastructure is ready to receive and manufacture timely such orders.
Until such time, such products in such orders will not be Joint Products.
4. [ * ] Oligos ranging from a [ * ] sold to third parties pursuant to
orders received by Illumina and/or its Affiliates for delivery anywhere in the
world. All such orders received by Illumina and/or its Affiliates will be deemed
Joint Products as soon as Illumina begins receiving the North American tube
orders from Invitrogen (see paragraph 3 above). Until such time, such products
in such orders will not be Joint Products.
5. [ * ] Oligos sold to third parties ranging from a [ * ] pursuant to
orders received by Invitrogen and/or its Affiliates which are made in
Invitrogen's Manufacturing Facilities, which are capable of being manufactured
on Oligator Technology. All orders for such Oligos received by Invitrogen and/or
its Affiliates will be deemed Joint Products as soon as Illumina transfers the
VB Oligators or other Oligator Technology in accordance with the Agreement and
such instrumentation is fully validated and demonstrated to be ready to receive
and manufacture timely such orders. Until such time, such products in such
orders will not be Joint Products.
6. All other [ *] Oligos manufactured in future locations once these
sites have been approved by the Collaboration Committee and the required
equipment and software has been validated and is ready to receive orders, and
manufacture timely.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
CONFIDENTIAL
7. All Future Products, when and where agreed by the Collaboration
Committee.
8. Any [ * ] Oligos scales less than [ * ] will be analyzed on a
case-by-case basis by the Collaboration Committee and may be added to the Joint
Products in Exhibit A, but only if the parties mutually agree to add such Oligos
as Joint Products.
9. Any Oligos that meet all of the requirements in (a), (b) and (c)
below shall be excluded from Joint Products:
(a) that are not Oligo Plates,
(b) that are made by either Party; and
(c) made in (i) [ * ], and sold to end users and distributors for
sale to end-users in [ * ]; or (ii) manufacturing facilities
established or expanded by Invitrogen not using Oligator
Technology, if the Collaboration Committee makes a
determination that the geographic market demand does not
warrant the two (2) VB Oligator instrument set-up.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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EXHIBIT B
CONSENSUS COLLABORATION FINANCIAL STRUCTURE
[*]
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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EXHIBIT C
COGS CONSENSUS
[*]
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
EXHIBIT D-1
QUALITY CONTROL SYSTEMS
- 100% OD260 analysis
- 100% real time digital trityl monitoring using Illumina's
proprietary Cyclops trityl imaging system
- Statistical CE or mass spec analysis using Illumina's proprietary
modified CE instruments and customized analytical and data
management software
- Illumina standard operating procedures covering the manufacture and
delivery of Joint Products, including standard operating procedures
covering incoming materials management through picking, packaging
and shipping of Joint Products.
POST-PROCESSING CAPABILITIES
Illumina will utilize its automated and integrated post-processing
capabilities for plate orders. Illumina will also develop capabilities for
formatting and handling tubes with ability to maintain end-to-end LIMS control.
In addition to plate-to-tube rearray (as of the Effective Date, all Oligos will
be manufactured in plates and, as indicated by the order, rearrayed into tubes),
standard post-processing capabilities will include volume and concentration
normalization, aliquoting, primer mixing, and drying of Joint Products.
EXHIBIT D-2
QUALITY CONTROL SYSTEMS
- Real-time digital trityl monitoring
- Software and control systems to support real-time digital trityl
monitoring
Notwithstanding the above, instrumentation for CE, mass spec and OD260
analysis will be provided by Invitrogen in the facilities outside North America.
CONFIDENTIAL
EXHIBIT E
INVITROGEN'S CURRENT STANDARD TERMS OF SALE
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INVITROGEN CORPORATION -- GENERAL TERMS AND CONDITIONS
1. ACCEPTANCE GOVERNING PROVISIONS: In these General Terms and Conditions (the
"Conditions") "we," "us," and "our" means Invitrogen Corporation or the
Invitrogen affiliate that is processing this order or purchase of goods, and
"you" and "your" means the person, company or other legal entity that orders or
buys goods from us and in each case their respective successors and/or assigns.
We are shipping these goods subject to these Conditions. You will be deemed to
have assented to these Conditions unless you return the goods to us within 15
days after your receipt of the goods and this form. Our failure to object to
provisions contained in any purchase order or other form or document from you
shall not be construed as a waiver of these Conditions nor an acceptance of any
such provision. These Conditions, including all writings incorporated herein by
reference, any quotation issued to you by us, and those specific terms of a
purchase order or other document that are either consistent with these
Conditions or expressly agreed upon by us in writing, constitute the entire
contract between us (the "Contract"), and supersede all prior agreements and
understandings between us, whether written or oral, relating to the subject
matter hereof. In the event of a conflict, a quotation takes precedence over
these Conditions, and a written contract signed by both of us takes precedence
over either. If one or more of these Conditions are held to be invalid, illegal,
or unenforceable by a court of competent jurisdiction, the remaining Conditions
shall be unimpaired.
2. DELIVERY: Unless specified differently in writing, all sales are FCA our
shipping point. We reserve the right to make delivery in installments, all such
installments to be separately invoiced and paid for when due per invoice.
3. INSPECTION AND RETURNS: Upon your receipt of goods shipped hereunder, you
shall inspect the goods and notify our Customer Services Department of any
claims for shortages, defects or damages. If you fail to so notify us within
three days after you receive the goods, the goods shall conclusively be deemed
to conform to these Conditions and to have been irrevocably accepted by you.
Authorization for all product returns must be approved by our Customer Services
Department and a return authorization number given to you prior to the return of
goods. Not all items will be authorized for return, due to temperature and
packing requirements. Items authorized for return must arrive at our facilities
in a state satisfactory for resale to be eligible for product credit. A
restocking charge of 25% or $25 (whichever is greater) shall be charged on
returns that are not the result of any error or fault of ours. Shipping charges
will not be credited. Goods may not be returned for credit after 20 days after
your receipt of the goods.
4. CREDITS AND REFUNDS: At our discretion, we may issue a product credit or
refund for the product value and shipping charges. No product credit shall be
available for use if a past due balance is outstanding on the account. Any
product credit not used within six months of the date of issue shall expire.
5. PAYMENTS: Unless otherwise specified in a written quotation we provide to you
or written contract between the parties: goods will be billed at the price in
effect at the time shipment is made; such prices shall be subject to change from
time to time without notice; terms of sale are net 30 days of date of invoice,
in U.S. Dollars. If you default in making any payment to us when due, we, at our
option and without prejudice to our other lawful remedies, may defer delivery or
cancel the Contract. If you provide a purchase order number which proves to be
erroneous or invalid, you agree to pay the invoice(s) upon receipt of a "proof
of delivery (POD)" and/or a proof of shipment "signed and executed bill of
lading/airbill from us.
6. TAXES AND OTHER CHARGES: Any use tax, sales tax, excise tax, duty, inspection
or testing fee, or any other tax, fee or charge imposed by any governmental
authority, on or measured by the transaction between us shall be paid by you in
addition to the prices quoted or invoiced. If we are required to pay any such
tax, fee or charge, you shall
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reimburse us therefor or provide us at the time the order is submitted an
exemption certificate or other document acceptable to the authority imposing the
tax, fee or charge.
7. WARRANTY: We warrant to you, our direct customer, that our goods shall
conform substantially to the description of such goods as provided in our
catalogues and literature accompanying the goods until their respective
expiration dates or, if no expiration date is provided, for 6 months from the
date of your receipt of such goods. THIS WARRANTY IS EXCLUSIVE, AND WE MAKE NO
OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. Our warranty shall not be
effective if we determine, in our sole discretion, that you have altered or
misused the goods or have failed to use or store them in accordance with
instructions furnished by us. Our sole and exclusive liability and your
exclusive remedy with respect to goods proved to our satisfaction (applying
analytical methods reasonably selected by us) to be defective or nonconforming
shall be the replacement of such goods free of charge, upon the return of such
goods in accordance with our instructions, although at our discretion we may
provide a credit or refund in accordance with Section 4 above. IN NO EVENT SHALL
WE BE LIABLE UNDER ANY LEGAL THEORY (INCLUDING BUT NOT LIMITED TO CONTRACT,
NEGLIGENCE, STRICT LIABILITY IN TORT OR WARRANTY OF ANY KIND) FOR ANY INDIRECT,
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES (INCLUDING BUT NOT
LIMITED TO LOST PROFITS), EVEN IF WE HAD NOTICE OF THE POSSIBILITY OF SUCH
DAMAGES. If we manufacture custom goods for you based on instructions,
specifications, or other directions you provide to us, we shall not be liable
for the lack of sufficiency, fitness for purpose or quality of the goods to the
extent attributable to such instructions, specifications, or other directions.
We shall not be liable for any loss, damage or penalty as a result of any delay
in or failure to manufacture, deliver or otherwise perform hereunder due to any
cause beyond our reasonable control.
8. COMPLIANCE WITH LAWS AND REGULATIONS: We certify that to the best of our
knowledge: our goods are produced in compliance with all applicable federal,
state, and local statutes, rules, regulations, ordinances, and orders, including
applicable requirements of the Fair Labor Standards Act, as amended, the
Occupational Safety and Health Act of 1970 and Executive Order 11246; we have a
written Affirmative Action Program and annually file Standard Form 100 (EEO-1);
we do not discriminate against any employee or prospective employee because of
race, creed, color, national origin, sex, age or handicap, nor permit
discrimination in any form nor maintain segregated facilities for our employees;
we actively pursue employment of minorities, females, handicapped, disabled
veterans and veterans of the Vietnam era; and we use our best efforts to award
contracts to and place purchase orders with minority business enterprises and
with labor surplus area concerns and small business concerns.
9. INTELLECTUAL PROPERTY RIGHTS
9.1 We warrant to you that the manufacture and sale by us of goods manufactured
by or for us without reliance upon instructions, specifications, or other
directions provided by you and delivered hereunder, to our knowledge will not
infringe the claims of any patent, trademark or copyright ("Intellectual
Property") of any third party. We do not warrant that the manufacture and sale
by us of goods manufactured in reliance upon instructions, specifications, or
other directions provided by you or your use or resale of goods delivered
hereunder will not infringe the claims of any Intellectual Property of any third
party.
9.2 If any claim is made against you or us for infringement of Intellectual
Property rights of any third party arising directly and solely from the
manufacture or sale of goods by us in circumstances in which the manufacture of
such goods was not based upon instructions, specifications, or other directions
provided by you,
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we shall assume the defense of any ensuing litigation and conduct all
negotiations for settlement of such claims and will bear the costs of any
payment made in settlement or resulting from an award; provided that you shall
give us notice in writing as early as is reasonably practicable of any such
claim being made or action threatened or brought against you, shall make no
admission of liability or take any other action in connection with such matter
and shall permit us to defend such claim and shall (at our expense) give all
reasonable information, co-operation and assistance to us (including without
limitation lending your name to proceedings) in relation thereto. The foregoing
describes our entire liability to you and your exclusive remedies against us in
connection with claims made against you based on or resulting from such
infringement of Intellectual Property rights of third parties.
9.3 If any claim is made against us for infringement of Intellectual Property
rights of any third party as a result of (i) the manufacture or sale of goods
based upon instructions, specifications, or other directions provided by you or
(ii) your use or resale of goods purchased from us, you shall indemnify us,
defend us and hold us harmless from and against any and all losses, damages and
expenses (including reasonable attorneys' fees and other costs of defending any
action) that we may incur as a result thereof. You shall fully cooperate with us
in any investigation relating to any such claims and make available to us all
related statements, reports and tests available to you.
10. AUTHORIZED USES
10.1 Except as otherwise agreed in writing by our authorized representative, the
purchase of goods only conveys to you the non-transferable right for only you to
use the quantity of goods and components of goods purchased in compliance with
the applicable intended use statement, limited use statement or limited label
license, if any, in our catalogues or on the label or other documentation
accompanying the goods (all such statements or licenses being incorporated
herein by reference as if set forth herein in their entirety). Unless otherwise
authorized, no right to resell the goods, or any portion of them, is conveyed
hereunder.
10.2 Unless otherwise expressly indicated in our catalogues or on the label or
other documentation accompanying the goods, the goods are intended for research
use only and are not to be used for any other purposes including, but not
limited to, unauthorized commercial purposes, in vitro diagnostic purposes, ex
vivo or in vivo therapeutic purposes, investigational use, in foods, drugs,
devices or cosmetics of any kind, or for consumption by or use in connection
with or administration or application to humans or animals. You acknowledge that
the goods have not been tested by or for us for safety or efficacy, unless
expressly stated in our catalogues or on the label or other documentation
accompanying the goods. Without limiting the foregoing restrictions, you warrant
to us that should you use or sell the goods for any use other than research, you
shall conduct all necessary tests, comply with all applicable regulatory
requirements, issue all appropriate warnings and information to subsequent
purchasers and/or users and be responsible for obtaining any required
Intellectual Property rights.
10.3 You represent and warrant to us that: you will properly test, use, and, to
the extent authorized, manufacture and market any goods purchased from us and
any final articles made from them in accordance with the practices of a
reasonable person who is an expert in the field, including, but not limited to,
a technically qualified individual (40 C.F.R. Section 720.3(ee)), and in strict
compliance with all applicable national, state, provincial, and local food,
drug, device, and cosmetic and other relevant laws and regulations, now and
hereinafter enacted; and any final articles manufactured from the goods shall
not be adulterated or misbranded within the meaning of the Federal Food, Drug
and Cosmetic Act and shall not be articles which may not, under Sections 404,
505, or 512 of the Act, be introduced into interstate commerce.
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10.4 You realize that, because our goods are intended primarily for research
purposes, they may not be on the Toxic Substances Control Act (TSCA) inventory.
You assume responsibility to ensure that the goods purchased from us are
approved for use under TSCA, if applicable. Consistent with your agreement to
comply with all TSCA R&D substance exemption requirements applicable to the
purchase, you agree and warrant that you will comply with all requirements
necessary to maintain the R&D exemption, including using the R&D substance under
the supervision of a technically qualified individual, maintaining all necessary
labeling, and providing all necessary notifications. You also agree and warrant
that you will use or sell (if otherwise so authorized) the R&D substance
exclusively for R&D purposes or specified exempt commercial purposes. You
specifically agree and warrant that you will not sell or distribute the R&D
substance to consumers.
10.5 You have the responsibility to conduct any research necessary to learn the
hazards involved for any of your uses of goods purchased from us and to warn
your customers, employees and any auxiliary personnel (such as freight handlers,
etc.) of any risks involved in using or handling the goods. You agree to comply
with instructions for use of the goods furnished by us, if any, and not to
misuse the goods. If the goods purchased from us are to be repackaged, relabeled
or used as starting materials or components of other products, you will verify
our assay of the goods, qualify the goods provided by us for such applications,
and comply with all governmental requirements relating to labeling or providing
other communications to customers. You acknowledge that we provide Material
Safety Data Sheets (MSDS) for our products, and that they are available
electronically on our web site at www.invitrogen.com, or in paper copy by
calling our Customer Service Tech line at 800-955-6288, and that you are willing
and able to access MSDS by these means. You also agree to inform your employees
of the risks, if any, involved in using or handling the goods and to train and
equip them to handle the goods safely.
10.6 You acknowledge that products received from us are subject to U.S. export
control laws and regulations. You represent and warrant to us that you will not,
directly or indirectly, (1) sell, export, reexport, transfer, divert, or
otherwise dispose of any products, software, or technology (including products
derived from or based on such technology) received from US to any destination,
entity, or person prohibited by the laws or regulations of the United States, or
(2) use the product for any use prohibited by the laws or regulations of the
United States and/or your local jurisdiction, without obtaining prior
authorization from the competent government authorities as required by those
laws and regulations
11. INDEMNITY: You shall, at your own expense, indemnify us, defend us and hold
us harmless from and against any and all losses, damages and expenses (including
reasonable attorneys' fees and other costs of defending any action) that we may
incur as a result of any claim of negligence, breach of implied warranty, strict
liability in tort, or other theory of law, by you, your officers, agents or
employees, your successors and assigns, and your customers, whether direct or
indirect, in connection with the use or resale of any goods sold pursuant hereto
either as a standalone product or a component part or raw material of another
product, or by reason of your breach of or failure to perform any of your
obligations hereunder, except to the extent provided in Condition 9.2 above or
caused by a breach by us of the express warranty set forth in Condition 7
herein. You shall notify us promptly of any incident involving goods sold
pursuant hereto resulting in personal injury or damage to property, and you
shall fully cooperate with us in the investigation of such incident and provide
us with all related statements, reports and tests available to you.
12. TECHNICAL ASSISTANCE: Unless otherwise agreed, all technical assistance and
information we provide to you regarding the goods will be provided gratis, and
you assume sole responsibility for results obtained in reliance thereon. We make
no warranty regarding such technical assistance or information.
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13. MISCELLANEOUS: The Contract shall be governed by and construed in accordance
with the laws of the State of California, without giving effect to the
principles of conflicts of laws. Our exercise of any option, or failure to
exercise any rights hereunder shall not constitute a waiver of our rights to
damages for breach of contract and shall not constitute a waiver of any
subsequent failure, delay, or breach by you. We may assign our rights and/or
obligations under the Contract to any person in whole or in part.
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EXHIBIT F
INVITROGEN'S PATENT RIGHTS
[*]
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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EXHIBIT G
ILLUMINA'S PATENT RIGHTS
[*]
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
43