COMMERCIAL IN CONFIDENCE DATED 09/17/01

ORCHID BIOSCIENCES, INC. HAS REQUESTED THAT THE MARKED PORTIONS OF THIS DOCUMENT BE ACCORDED 406 CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

 

COMMERCIAL IN CONFIDENCE

 

Exhibit 10.22

 

FORM OF AGREEMENT (Part I)

 

THIS AGREEMENT is made between Secretary of State for Environment, Food and Rural Affairs (“the Authority”) of Nobel House 17 Smith Square, London SW1P 3JR, and Orchid BioSciences Europe Limited (“the Contractor”) having its registered office at 22 Blacklands Way, Abingdon Business Park, Abingdon, Oxon, UK OX4 1DY. Together referred to as (“the Parties”).

 

IT IS AGREED THAT

 

1.1. This Form of Agreement (Part 1) together with the attached Parts II to V inclusive are the documents which collectively form “the Contract”.

 

 

1.2. The Contract effected by the signing of this Form of Agreement constitutes the entire agreement between the Parties relating to the subject matter of the Contract and supersedes all prior negotiations, representations or understandings whether written or oral.

 

SIGNED:

 

For the Contractor		For the Secretary of State for Environment, Food and Rural Affairs
/s/ Christopher P Ashton, Ph.D.		/s/ Mr Noel Cleary
Christopher P Ashton, Ph.D.		Mr Noel Cleary
Vice President and Managing Director		Acting Head, Sheep TSEs Division
7 August 2001		7 August 2001
Date		Date

 

COMMERCIAL IN CONFIDENCE

 

2. CONTRACT VOLUMES

 

2.1 The Authority guarantees to pay the Contractor a sum at least equal to the cost of [*] blood samples to be genotyped per annum for the first three years of the contract.

 

2.2 The Authority undertakes to give the Contractor as much notice as is practically possible of any significant variation expected in sample volumes to be sent to the Contractor. The Authority does not undertake to send all samples collected under the National Scrapie Plan for genotyping to the Contractor.

 

2.3. The Authority will provide the Contractor with a three (3) month rolling forecast of expected sample volumes. The Contractor will take all commercially reasonable steps to handle variations in sample volumes but failure to meet the Authority’s requirement for the reporting of results where the variation in sample volume is greater than [*] of the forecast will not be considered a breach of contract.

 

3. DELIVERY OF SAMPLES

 

3.1 Whole blood samples collected under the NSP will be sent to the Contractor by the Authority once the Authority is content that the Contractor has demonstrated a validated genotyping service as detailed in Conditions 3.2 and 3.3.

 

3.2. The Contractor will demonstrate validation by processing [*] samples supplied by the Authority and reporting [*] correct results to the Authority.

 

3.3. In the event of a failure, a further batch of [*] samples will be tested by the Contractor until [*] correct results are obtained from a sample batch.

 

4. RESULTS

 

4.1. Results will be reported to the Authority, in the electronic format set out in Part V. At least [*] of samples will be reported within no more than [*] working days of receipt of an apparently viable sample in the Contractor’s laboratory. The Contractor will report any results provided outside of the [*] working days period. [*] of samples will be reported. The Contractor will make a maximum of three (3) attempted analyses of an apparently viable sample before notifying the Authority that it is not a viable sample. Such a notification to the Authority shall be made by the Contractor within ten (10) working days of receipt of an apparently viable sample. The Authority may then arrange for a further sample to be submitted for testing.

 

4.2. The Contractor will test all samples that are received in the laboratory in a testable condition, reporting those that are not in a format to be agreed with the Authority. Criteria of acceptability will be set out in writing

 

COMMERCIAL IN CONFIDENCE

 

4.3. The Contractor will be paid for all samples tested and reported, including non-testable samples and re-tested samples, as set forth below.

 

4.4. Any samples received that are accessioned but found not to be testable will be invoiced at the end of each month at [*] the Contractor quotes for [*] samples per week. As a non-limiting example, under the pricing schedule in effect at the starting date of this Agreement, the price to the Authority for fifty thousand samples per week is [*] per sample and the price to the Authority for the non-testable samples would be [*] per sample.

 

4.5. The Contractor shall take all commercially reasonable steps to report the results of the re-testing of confirmatory samples to the Authority within three (3) working days of either a request for a re-test or receipt of a duplicate sample. In the event that the volume of confirmatory samples being tested by the Contractor exceeds [*] of the total number of samples submitted at the time of those confirmatory tests, the Contractor will not be required to report the results of the testing of those confirmatory samples within three (3) days of either a request for a re-test or receipt of a duplicate sample, but shall notify the Authority of such delay as soon as reasonably practicable after it occurs and shall aim to report a result within five (5) working days as far as is reasonably possible.

 

4.6. The Contractor will report receipt of batches of samples by notifying the batch number to the Authority on the day it is received in the laboratory.

 

5. QUALITY CONTROL/QUALITY ASSURANCE

 

5.1. The Contractor will provide details of internal QC/QA data as and when requested to do so by the Authority, but at no more than a monthly frequency. The Authority will send the Contractor ‘blind’ samples of known genotype on a regular basis. The Contractor will be paid for these samples but will undertake to discuss immediately with the Authority any unexpected results. The Contractor will take immediate action to make any correction to their procedures or processes which are found to be necessary at no cost to the Authority.

 

5.2. If it transpires that the Contractor has supplied an incorrect result, they will test immediately duplicate samples which may need to be taken. If the contractor has been shown to be responsible for the incorrect result the Authority’s reasonable full economic costs, not to exceed [*] per sample in collecting these samples for re-testing will be debited from the Contractor’s next monthly invoice.

 

6. CONTRACT PRICE

 

6.1. The Authority may order PrP genotyping tests (the “Tests”) from the Contractor at the firm prices contained in the Schedule of prices at Annex II according to the following pricing policy:

 

6.1.1.

The Authority shall pay to the Contractor a Minimum Monthly Testing Fee of [*]

 

COMMERCIAL IN CONFIDENCE

 

[*], this being the equivalent of [*] samples tested at [*] per sample.

 

6.1.2.

A Monthly Invoice Amount will be determined, as follows:

 

6.1.2.1.

At the end of each month, the Contractor will calculate number of Tests performed during that month (the “Monthly Total”). Tests shall include tested samples and re-tested samples but not non-testable samples as described in Condition 4.4.

 

6.1.2.2.

The Monthly Total shall be divided by four (4). The quotient of such division shall termed the Weekly Average Volume.

 

6.1.2.3.

The rate associated with the Weekly Average Volume (the “Monthly Rate”) shall be taken from the applicable line of the Schedule of prices at Annex I.

 

6.1.2.4.

To determine the amount of the Monthly Testing Invoice, the Monthly Total, less the [*] Tests covered by the Minimum Monthly Testing Fee, is multiplied by the Monthly Rate and this product is added to the Minimum Monthly Testing Fee.

 

Monthly Testing Invoice Amount = ((Monthly Total – 4,000) x Monthly Rate) + Minimum Monthly Testing Fee

 

As a non-limiting example, if in one month the Contractor performs [*] tests, the Weekly Average Volume shall be [*] and the Monthly Rate shall be [*] per Test. Therefore, the Monthly Testing Invoice Amount shall be = [*] + [*]

 

Added to each monthly invoice will also be an amount for non-testable samples received that month in accordance with Condition 4.4.

 

6.1.2.5.

The minimum volume of [*] samples specified in the Invitation to Tender and at Condition 2.1 will be determined by actual samples sent to the Contractor by the Authority and accessioned or tested and reported, together with samples not received but for which a fee has been paid by the Authority in accordance with the Minimum Monthly Testing Fee as described at Condition 6.1.1. The monthly invoice referred to at Condition 7.1 will be for not less than the Minimum Monthly Testing Fee set out at Condition 6.1.1 and in Annex I.

 

COMMERCIAL IN CONFIDENCE

 

6.2 A central call off point appointed by the Authority will order blood sampling kits from the Contractor. The Contractor will invoice the Authority for blood sampling kits so ordered at the firm prices contained in the Schedule of prices at Annex II.

 

6.3 The Authority will provide the Contractor with a three (3) month rolling forecast of expected sampling kit volumes. The Contractor will take all commercially reasonable steps to handle variations in sample kit volumes but failure to meet demand where the variation in sample volume is greater than [*] of the forecast will not be considered a breach of contract.

 

6.4. The Schedule of prices at Annex I and Annex II forms an integral part of this form of agreement.

 

6.5. The prices at Annex I and Annex II are commercial in confidence between the Authority and the Contractor. They shall not be revealed to a third party, other than the National Audit Office, without the written agreement of both the Authority and the Contractor.

 

6.6 All the contract prices in the Schedule of prices at Annex I and Annex II shall be fixed until [*] from the date of this contract.

 

6. 7 Subsequent price changes following the initial firm price period in 6.6 shall occur no more frequently than every [*].

 

6.8 Any proposed increase or decrease in prices after the date in Condition 6.6 will not exceed, as a maximum [*].

 

6. 9. The prices charged for any additional tests required by the Authority pursuant to Section 50 of the invitation to tender (such as for tests on tissues other than whole blood) shall be agreed between the Authority and the Contractor – and shall be added as a protocol to the price Schedule at Annex II.

 

7. INVOICING PROCEDURE

 

7.1. All invoices shall be forwarded to the head of the Authority’s National Scrapie Plan Branch by the Contractor. The Contractor shall submit a Monthly Testing Invoice, in arrears, in respect of each calendar month for PrP genotyping tests on tested samples and re-tested samples completed in that month, for which the genotype results have been reported by the Contractor to the Authority. The invoice will also include an amount for non-testable samples received that month in accordance with Condition 4.4.

 

7.2. An invoice shall be forwarded to the head of the Authority’s National Scrapie Plan Branch by the Contractor in arrears for blood sampling kits ordered by and delivered to the central call off point as set forth in Condition 6.2.

 

COMMERCIAL IN CONFIDENCE

 

7.3. The invoice in Condition 7.1 will state clearly the number of tests and the unit price per test, as set forth in Condition 6 et seq. The invoice will state clearly and separately any tests (and the unit prices therefore) undertaken in respect of Section 41 and 50.3 of the invitation to tender (i.e. confirmatory tests).

 

8. CONTRACT DURATION

 

8.1. Subject to termination as provided, if the Contractor has demonstrated a valid genotyping service before 17^th September 2001, the starting date of the contract shall be 17^th September 2001. Otherwise, the start date shall be the first date on which the Authority can send the Contractor samples after a validated service has been confirmed.

 

8.2. The contract will be for three (3) years from the start date.

 

8.3. The Authority retains the option to extend this contract by two (2) further terms of one (1) year.

 

9. THE AUTHORITY’S CONDITIONS OF CONTRACT

 

9.1. This Contract is subject to the conditions of Contract as set out in the Invitation to Tender as updated at Annex III.

 

10. HEALTH AND SAFETY

 

10.1. The Authority will ensure that all appropriate health and safety measures and legislation are observed when sending samples to the Contractor. Once the samples are received at the Contractor’s premises, the Authority shall be under no liability to the Contractor for any harm or damage caused by these samples, and the Contractor shall hold the Authority indemnified against any claims from third parties based on any claim of such harm or damage.

 

11. PROJECT MEETINGS

 

11.1 Project meetings will be held between the Authority’s National Scrapie Plan Branch and the Contractor at least every three (3) months. The Authority will use all reasonable endeavours to give as much notice as possible of any change.

 

12. TERMINATION

 

12.1. The conditions for termination are as set out at Sections 15-16 of the Invitation to Tender.

 

13. DEFINITIONS AND INTERPRETATIONS

 

 

COMMERCIAL IN CONFIDENCE

 

 

COMMERCIAL IN CONFIDENCE

 

ANNEX I

 

PRICE SCHEDULE