Back to top

RESTATED STRATEGIC ALLIANCE AGREEMENT

Strategic Alliance Agreement

RESTATED STRATEGIC ALLIANCE AGREEMENT You are currently viewing:
This Strategic Alliance Agreement involves

APPLERA CORP

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: RESTATED STRATEGIC ALLIANCE AGREEMENT
Date: 5/9/2006
Industry: SCIINS     Sector: TECHNO

Search Strategic Alliance Agreement by:

Document Title:

Entire Document: (optional)

50 of the Top 250 law firms use our Products every day

Exhibit 10.1

RESTATED STRATEGIC ALLIANCE AGREEMENT

among

APPLERA CORPORATION,

CELERA DIAGNOSTICS, LL C

and

ABBOTT LABORATORIES

 

 

 

 

 

 

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

RESTATED STRATEGIC ALLIANCE AGREEMENT

THE FOLLOWING ALLIANCE AGREEMENT EXHIBITS HAVE BEEN OMITTED FROM THIS 10-Q EXHIBIT.

Exhibits will be provided by the Registrant to the Securities and Exchange Commission upon request

Exhibits

 

 

EXHIBIT 1.13

Financial Terms

EXHIBIT 1.22

Carveouts

EXHIBIT 1.62 (a)

NPCD – Development

EXHIBIT 1.62 (b)

NPCD – Feasibility

EXHIBIT 1.77

R&D Plan

EXHIBIT 1.95

Work Plan

EXHIBIT 2.2

Exceptions to Exclusivity

EXHIBIT 2.2(a)

Exceptions to Exhibit 2.2

EXHIBIT 2.6

OEM Alliance Products

EXHIBIT 4.1

Approved NPCDs

EXHIBIT 4.7(a)(i)

Initial R&D Plan

EXHIBIT 4.7(a)(ii)

Initial R&D Plan Budget

EXHIBIT 9.2

Cost and Revenue Statement

EXHIBIT 9.3

Net Investment Statement

EXHIBIT 17.7(c)

Post-Termination Royalties

EXHIBIT 19.12

Further Amendments to Amendment Nos. 2 and 2a

 

i

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

RESTATED STRATEGIC ALLIANCE AGREEMENT

     THIS RESTATED STRATEGIC ALLIANCE AGREEMENT (this “ Agreement ”), effective as of January 9, 2006 (the “ Effective Date ”), is entered into among APPLERA CORPORATION, a Delaware corporation (“ Applera ”), having a place of business at 301 Merritt 7, Norwalk, Connecticut 06851, CELERA DIAGNOSTICS, LLC, a Delaware limited liability company (“ CDx ”), having a place of business at 1401 Harbor Bay Parkway, Alameda, California 94502, and ABBOTT LABORATORIES, an Illinois corporation (“ Abbott ”), having a place of business at 100 Abbott Park Road, Abbott Park, Illinois 60064-6400.

     WHEREAS, Abbott is a global, diversified healthcare company with expertise in the discovery, development, manufacture and marketing of pharmaceuticals, nutritionals, and medical products, including devices and diagnostics;

     WHEREAS, Applera, through its business units Applied Biosystems, Celera Genomics, and CDx, has expertise and technology applicable to genetic research and molecular diagnostic product development;

     WHEREAS, the Parties (as defined below) entered into a Strategic Alliance Agreement dated June 24, 2002, as amended, to engage in a collaborative program for the discovery, research, development and commercialization worldwide of novel molecular in vitro diagnostic products and services; and

     WHEREAS, the Parties desire to modify and clarify such collaborative program in a fully restated agreement on the terms and conditions of this Agreement.

     NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth below, the Parties agree as follows:

Article I   –   DEFINITIONS

 

1.1

Abbott Alliance Patent Rights ” means Alliance Patent Rights that claim inventions conceived solely by employees or agents of Abbott or any Abbott Affiliate.

 

1.2

Abbott Alliance Technology ” means the Alliance Technology Derived solely by employees or agents of Abbott or any Abbott Affiliate.

 

1.3

Abbott Independent Patent Rights ” means Independent Patent Rights owned or Controlled by Abbott or any Abbott Affiliate.

 

1.4

Abbott Independent Technology ” means Independent Technology owned or Controlled by Abbott or any Abbott Affiliate.

 

1.5

Abbott Existing Product(s) ” means the LCx instrument system and uniquely associated accessories and consumables (“ System ”) and the LCx HIV and HCV assays (collectively “ Viral Assays ”).

1

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

1.6

Affiliate(s) ” means, with respect to any person or entity, any other person or entity, which controls, is controlled by or is under common control with such person or entity. For purposes of this definition, a person or entity is in “control” of an entity if it owns or controls more than fifty percent (50%) of the equity securities of the subject entity entitled to vote in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority), or otherwise has the power to control the management and policies of such other entity. An entity only retains the rights and is subject to the obligations of an Affiliate for so long as such entity continues to satisfy the definition in this Section 1.6.

 

1.7

Alliance Accounting Policies ” means the accounting policies adopted by the JRB (as defined in Section 3.1) to be used in determining the net of sharing of Revenue less Allowable Expenses pursuant to Article IX.

 

1.8

Alliance Field ” means the manufacture, use or Commercialization of any product or service for the in vitro amplification, detection, quantification, extraction or sequencing of a nucleic acid in or from a human biological sample for the purpose of: (a)  diagnosing, detecting or monitoring any disease, state, condition, trait or characteristic of a human being for medical management; (b) exercising quality assurance and quality control testing of human blood or plasma from which biological therapeutic agents may be derived for resale; (c) [**********]; or (d) screening human organs, tissues or cells for transplantation. The Alliance Field does not include the research, development, manufacture, use or Commercialization of any Carveout; the internal research by either Party for therapeutic development, including clinical trials; or research, development, manufacture, use, Commercialization, or testing in Epidemiology or Biosecurity (as each such term is defined below).

 

1.9

Alliance Patent Rights ” means Patent Rights that claim any Alliance Technology.

 

1.10

Alliance Program ” means the collaborative research and Development, manufacturing, regulatory and Commercialization activities in the Exclusive Areas undertaken pursuant to a JRB-approved Work Plan conducted by the Parties in accordance with this Agreement or the Prior Alliance Agreement. The Alliance Program does not include such activities by a Party on Non-Alliance Products.

 

1.11

Alliance Product(s) ” means any product, including, without limitation, any Reagent, kit, consumable or Instrument described in Sections 8.4 and 8.5, or any combination or component thereof, that: (a) is Commercialized under the Alliance Program; or (b) is the subject of a JRB-approved Work Plan; or (c) otherwise becomes an Alliance Product pursuant to this Agreement. An Alliance Product will include software to the extent such software is distributed in connection with the Reagent or kit. Alliance Product does not include: (x) any Carveout; or (y) any Non-Alliance Product. For purposes of this Agreement, the term “ Alliance Product ” will also include any service that: (d) is Commercialized under the Alliance Program; (e) is the subject of a JRB-approved Work

2

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

 

Plan; or (f) is provided by or for a Party (i) through use of an Alliance Product or (ii) in support of a customer’s use of an Alliance Product.

 

 

1.12

Alliance Technology ” means Technology and/or Materials that are Derived by or for a Party during performance of the Alliance Program or a program approved by the JRB under the Prior Alliance Agreement and the Derivation of which is jointly funded by the Parties pursuant to this Agreement or pursuant to a program approved by the JRB under the Prior Alliance Agreement.

 

1.13

Allowable Expenses ” has the meaning defined in Exhibit 1.13 hereof.

 

1.14

Analyte Specific Reagents ” or “ ASR ” means nucleic acid sequences, and similar reagents which, through specific binding or chemical reactions with substances in a specimen, are intended for use in a diagnostic application for identification and/or quantification of an individual chemical substance in a biological specimen, as further defined in 21 CFR 864.4020(a), as may be amended or replaced from time to time, or in equivalent foreign regulations.

 

1.15

Applera Alliance Patent Rights ” means Alliance Patent Rights that claim inventions conceived solely by employees or agents of Applera or any Applera Affiliates.

 

1.16

Applera Alliance Technology ” means Alliance Technology Derived solely by employees or agents of Applera or any Applera Affiliates.

 

1.17

Applera Existing Products ” means: (a) ViroSeq HIV Genotyping Kit and associated software; (b) HLA Sequencing based typing Kits (HLA-DRB, Codon 86 for HLA-DRB, HLA-A, HLA-B) and associated software; and (c) Cystic Fibrosis mutation screening system available as Analyte Specific Reagents and General Purpose Reagents.

 

1.18

Applera Independent Patent Rights ” means Independent Patent Rights owned or Controlled by Applera or any Applera Affiliate.

 

1.19

Applera Independent Technology ” means Independent Technology owned or Controlled by Applera or any Applera Affiliate.

 

1.20

Biosecurity ” means the detection of biological or chemical agents, pathogens, microorganisms or other infectious agents in the environment, agriculture, food or water.

 

1.21

[**********].

 

1.22

Carveout(s) ” means, collectively and individually, the products described in Exhibit 1.22 hereto. For purposes of this Agreement, Carveouts are not in the Alliance Field.

 

1.23

Commencement Date ” means January 1, 2006 with respect to matters pertaining to budgets to be approved by the JRB.

3

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

1.24

Commercial Entity ” means any Third Party or its Affiliates that is engaged in the commercial sale of products in the In Vitro Diagnostics Field.

 

1.25

Commercialize ” and cognates thereof mean the sale, transfer or co-promotion of a product or service to a Third Party for commercial purposes. For example, an Alliance Product will be Commercialized when it or its use is provided to any Third Party for cash or other consideration.

 

1.26

Competing Product(s) ” means any product in the Alliance Field that (a) is, or is intended to be, Commercialized in the current or intended Customer Segment as, and (b) except as provided in Section 2.5(b), has or incorporates the same Clinical Intent as, an Alliance Product. A product in the Alliance Field may be a Competing Product despite differences in the marker used or the technology employed. “ Clinical Intent ” means providing the same clinical utility, intended use or the same clinical information. “ Customer Segment ” means distinct customer types on a country-by-country basis, for example, clinical diagnostic labs, blood/specimen screening labs and point of care customers. A product in the Alliance Field having the same Clinical Intent in the same Customer Segment as an Alliance Product will be a Competing Product despite differences in effectiveness, efficiency or price. In no event will a product Commercialized outside the Alliance Field be considered a Competing Product. For purposes of this Agreement, the term “Competing Product” will include any service in the Alliance Field that is, or is intended to be, Commercialized in the same Customer Segment as, and, except as provided in Section 2.5(b), has the same Clinical Intent as, a service that is an Alliance Product. As provided in Section 2.5(e), a product sold to purchasers before JRB-approval of an NPCD-Development for a competing Alliance Product will be a Competing Product only for sales to new customers, which sales occur after JRB approval of the NPCD-Development for the Alliance Product. Competing Products will not include primers and probes labeled “For Research Use Only” or other comparable label that are sold as reagents to an individual customer for testing with the same Clinical Intent as an Alliance Product unless they are used for testing in the Exclusive Areas as defined in Sections 1.39(a) – (d) or in the Exclusive Areas as defined in Sections 1.39(e) – (g) and they incorporate Alliance Technology. In such case the Party supplying the research use primers and probes as reagents to the individual customer may not Facilitate the sale of such primers and probes to additional customers.

 

1.27

Conditionally Exclusive Areas ” means any product or service in the Alliance Field that is [**********]. “Conditionally Exclusive Areas” specifically excludes [**********]unless they are Alliance Products.

 

1.28

Confidential Information ” means non-public proprietary data, information, Materials, Technology or Instruments (and all tangible and intangible embodiments thereof), which is owned or Controlled by a Party, is disclosed by such Party (“ Disclosing Party ”) to the other Party (“ Receiving Party ”) pursuant to this Agreement, and is designated as Confidential Information by the Disclosing Party at the time of disclosure or pursuant to this Agreement. Confidential Information will not include data, information, Materials, Technology or Instruments which, and only to the extent, a Receiving Party can establish

4

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

 

by written documentation: (a) is part of the public domain prior to disclosure of such information by the Disclosing Party to the Receiving Party or becomes part of the public domain, without the fault of the Receiving Party, subsequent to disclosure of such information by the Disclosing Party to the Receiving Party; (b) has been received by the Receiving Party at any time from a source, other than the Disclosing Party, rightfully having possession of and the right to disclose such information free of confidentiality obligations; (c) has been otherwise known by the Receiving Party free of confidentiality obligations prior to disclosure of such information by the Disclosing Party to the Receiving Party; (d) has been independently developed by employees or others on behalf of the Receiving Party without access to or use of such information disclosed by the Disclosing Party to the Receiving Party. Specific aspects or details of Confidential Information will not be deemed to be within the public knowledge or in the prior possession of the Receiving Party merely because the aspects or details of the Confidential Information are embraced by general disclosures in the public domain. In addition, any combination of Confidential Information will not be considered in the public knowledge or in the prior possession of the Receiving Party merely because individual elements thereof are in the public domain or in the prior possession of the Receiving Party unless the combination and its principles are in the public knowledge or in the prior possession of the Receiving Party. With respect to Confidential Information which is jointly created, owned or Controlled by the Parties under this Agreement, exceptions (a) through (d) of this Section 1.28 will continue to apply; provided , however , that for application of exceptions (b) through (d) of this Section 1.28, a Party must establish that the exception applies by virtue of written documentation from a Third Party rather than the written documentation of the Receiving Party. Further, for avoidance of doubt, Confidential Information will include Confidential Information received by the Disclosing Party from a Third Party. Prior to disclosure of such Third Party Confidential Information to the Receiving Party the Disclosing Party will determine that it has the right to make such disclosure, advise the Receiving Party that the disclosure includes Third Party Confidential Information and provide the Receiving Party with the terms and conditions of any agreement between the Third Party and the Disclosing Party respecting such Third Party Confidential Information.

 

 

1.29

Contract Half Year ” means a consecutive and continuous six (6)-month period commencing on January 1, 2006 and on each subsequent July 1 and January 1 thereafter during the term of this Agreement.

 

1.30

Contract Year ” means a consecutive and continuous twelve (12)-month period commencing on January 1, 2006 and on each subsequent January 1 during the term of this Agreement.

 

1.31

Controls ” or “ Controlled ” and cognates thereof mean with respect to Technology, Patent Rights, Materials, and/or Confidential Information, the possession of the ability to grant licenses or sublicenses, to distribute Copyrighted Works or to otherwise disclose, without violating the terms of any agreement or other arrangement with, or the rights of, any Third Party.

5

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

1.32

Copyrighted Works ” means original works of authorship, including, without limitation, computer programs (in source code, object code or other form), notes, sketches, drawings and reports.

 

1.33

Deliverable Alliance Technology ” means that portion of Alliance Technology that is responsive to goals and deliverables specifically identified in NPCDs.

 

1.34

Derived ” and cognates thereof mean obtained, developed, acquired, made, invented, discovered, created, synthesized, designed, or resulting from, based upon or otherwise generated (whether directly or indirectly, or in whole or in part).

 

1.35

Development ” means actions or activities by a Party following proof of feasibility to validate the design of a product or service for eventual Commercialization.

 

1.36

Development Costs ” has the meaning defined in Exhibit 1.13 hereof.

 

1.37

Distributor ” means, with respect to an Alliance Product, the Party that Commercializes such Alliance Product in accordance with this Agreement.

 

1.38

Epidemiology ” means the screening or testing of groups of people or populations for the study of the patterns, causes, or control of disease in groups of people.

 

1.39

Exclusive Areas ” means the products and services that are used or distributed for use in the Alliance Field in:

 

 

(a)

detecting, classifying or quantifying nucleic acid sequences of any of the following[**********];

 

 

(b)

detecting, classifying or quantifying any human gene or genetic variation that causes or is linked to[**********];

 

 

(c)

detecting, classifying or quantifying any human gene or genetic variation that causes or is linked to[**********];

 

 

(d)

detecting, classifying or quantifying the combination of [**********]genes and genetic variations therein for predicting [**********], or any modifications thereof approved by the JRB;

 

 

(e)

detecting, classifying or quantifying human genes and expression products encoded by such genes for predicting [**********] as those products are defined in the JRB-approved Work Plans dated July 12, 2005, or any modifications thereof approved by the JRB;

 

 

(f)

detecting, classifying or quantifying any human gene or genetic variation for predicting [**********] as that product is defined in the JRB-approved Work Plan dated July 12, 2005, or any modifications thereof approved by the JRB; and

6

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

 

(g)

detecting, classifying or quantifying nucleic acid sequences of any other [**********] associated with a human medical condition expressly added to the Exclusive Areas by decision of the JRB pursuant to a JRB-approved Work Plan under this Agreement.

 

 

“Exclusive Areas” specifically excludes [**********] unless they are Alliance Products. The products and services specified in this definition are subject to the provisions of Section 2.4.

 

1.40

Existing Patent Rights ” means Patent Rights that are reasonably necessary for performance under this Agreement and that are owned or Controlled by a Party as of the effective date of the Prior Alliance Agreement.

 

1.41

Existing Products ” means Abbott Existing Products and Applera Existing Products.

 

1.42

Existing Technology ” means Technology and Materials that are reasonably necessary for performance under this Agreement and that are owned or Controlled by a Party as of the effective date of the Prior Alliance Agreement.

 

1.43

Exploit ” means: (a) with respect to a Patent Right, making, having made, using, selling, offering for sale or importing an invention claimed in such Patent Right or granting license rights under such Patent Right; (b) with respect to Technology, using or transferring the Technology or part thereof in conjunction with the making, having made, using, selling, offering for sale and importing of a product or method or granting license rights under such Technology; and (c) with respect to Copyrighted Works, copying, performing or distributing the Copyrighted Work or granting license rights under such Copyrighted Work.

 

1.44

FDA ” means the Food and Drug Administration of the United States, or a successor thereto and any foreign equivalent.

 

1.45

Facilitate ” and cognates thereof means to sell, distribute or promote a product or a service, or to partner with a Third Party to sell, distribute or promote a product or service, where such product or service is promoted as a Competing Product or distributed with knowledge of its use as a Competing Product. In the case of Instruments, “facilitating” is distributing or loading Instruments with software, or distributing, promoting or actively assisting in the development of software for the Instrument, that is specific to a Competing Product (i.e., software specific to a diagnostic application).

 

1.46

General Purpose Instrument ” means a device which, if introduced into the United States, is not or would not be subject to pre-market notification or approval under then-applicable FDA regulations.

 

1.47

General Purpose Reagent ” or “ GPR ” means chemical or biological reagents that (a) are not Analyte Specific Reagents and (b) have general laboratory application.

7

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

1.48

In Vitro Diagnostics Field ” means the products related to and services associated with in vitro measuring, observing and/or determining attributes, characteristics, diseases, traits or other conditions of a human being for medical management.

 

1.49

Incremental Net Sales ” means:

 

 

(a)

With respect to an Alliance Product Commercialized after rejection of the NPCD as described in Section 4.4 (a) (“ New Alliance Product ”), Incremental Net Sales means:

 

 

 

(i)

where the New Alliance Product, if sold outside the Alliance Program, would have been a Competing Product, all sales of such New Alliance Product less any Cannibalized Sales of Alliance Products which were being sold at the time such New Alliance Product was first sold. “ Cannibalized Sales ” for purposes of this Section 1.49(a)(i) means sales resulting solely from the switch by an existing customer from an existing Alliance Product to the New Alliance Product where both such Alliance Products have the same Clinical Intent, but does not include any increased sales resulting from price or volume increases attributable to the switch by an existing customer to the New Alliance Product; or

 

 

 

(ii)

where the New Alliance Product, if sold outside the Alliance Program, would not have been a Competing Product, all sales of such New Alliance Product.

 

 

(b)

With respect to an OEM Instrument or Alliance Instrument that is Commercialized after rejection as described in Section 8.7 (“ New Alliance Instrument ”), Incremental Net Sales means:

 

 

 

(i)

where the New Alliance Instrument, if sold outside the Alliance Program, would have been a Competing Product, all sales of such New Alliance Instruments, all service revenue associated with such New Alliance Instruments, and all sales of other Alliance Products which are for use on such New Alliance Instruments, less any Cannibalized Sales of other Alliance Products which were being sold at the time such New Alliance Instruments were first sold. “ Cannibalized Sales ” for purposes of this Section 1.49(b)(i) means sales resulting solely from the switch by an existing customer from an existing OEM Instrument or Alliance Instrument to the New Alliance Instrument, but does not include any increased sales resulting from price or volume increases attributable to the switch by an existing customer to the New Alliance Instrument; or

 

 

 

(ii)

where the New Alliance Instrument, if sold outside the Alliance Program, would not have been a Competing Product, all sales of such New Alliance Instruments, all service revenue associated with such New Alliance Instruments, and all sales of other Alliance Products which are for use on such New Alliance Instruments.

8

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

1.50

Independent Patent Rights ” means Existing Patent Rights and Post-Signature Patent Rights.

 

1.51

Independent Technology ” means Existing Technology and Post-Signature Technology.

 

1.52

[**********].

 

1.53

Initial Activities ” means NPCDs and Work Plans for Alliance Products that the Parties have proposed to be the focus of the first three (3) Contract Years, including the budget for each of the first three (3) Contract Years.

 

1.54

Instrument ” means any hardware, software, device, platform or any combination or component thereof, including any uniquely associated accessories and consumables, which is related to the automation of in vitro amplification, detection, quantification, or sequencing of a nucleic acid in or from a human biological sample for the purpose of: (i) diagnosing, detecting or monitoring any disease, state, condition, trait or characteristic of a human being for medical management; (ii) exercising quality assurance and quality control testing of human blood or plasma from which biological therapeutic agents may be derived for resale; (iii) [**********]; or (iv) screening human organs, tissues or cells for transplantation. The term “Instrument” excludes (a) Reagents and kits containing Reagents, (b) instruments for the preparation of human biological samples containing nucleic acids, (c) instruments which are the subject of supply arrangements existing as of the Effective Date between a Party and a Third Party, including modifications, amendments or extensions to such arrangements, provided such arrangements are not inconsistent with such Party’s obligations under this Agreement, and (d) instruments which are manufactured by Abbott as of the Effective Date and in any subsequent modified form, provided such instruments are not Competing Products.

 

1.55

Joint Alliance Patent Rights ” means Alliance Patent Rights that claim inventions jointly conceived by employees or agents of both Parties.

 

1.56

Joint Alliance Technology ” means Technology and Materials that are Derived jointly by or for both Parties during performance of the Alliance Program and the Derivation of which is jointly funded by the Parties pursuant to this Agreement or the Prior Alliance Agreement.

 

1.57

Licensing Revenue ” means the aggregate cash or other consideration received by a Party in consideration for a license under Alliance Technology or Alliance Patent Rights (including, without limitation, royalties received by such Party based on sales by a Third Party of products or services incorporating Alliance Technology or covered by Alliance Patent Rights.) In the event consideration for license rights under Alliance Technology or Alliance Patent Rights is not monetary, the Parties will agree upon the monetary value of such consideration or a means for sharing the non-monetary consideration.

 

1.58

Major Market Country ” means the United States, the member countries of the European Patent Convention, Japan and Canada.

9

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

1.59

Materials ” means, individually and collectively, Reagents, formulations, nucleic acids including DNA, RNA and PNA, plasmids, microbiological cultures or strains, cell lines, peptides, compounds, compositions, and combinations or components thereof.

 

1.60

Net Investment ” means, with respect to the Alliance Program, the following net assets of a Party: (a) inventory; (b) receivables (including any receivables from the other Party in accordance with this Agreement); (c) equipment placed as part of a Reagent Rental Program net of depreciation; and (d) cumulative amounts paid to the other Party pursuant to Section 9.3(c); less (e) cumulative amounts received from the other Party pursuant to Section 9.3(c) and payables (including amounts payable by one Party to another in accordance with this Agreement) and other liabilities, if any. Net Investment will not include any amounts payable by one Party to another pursuant to Section 9.3.

 

1.61

Net Sales ” means:

 

 

(a)

the gross invoiced price of an Alliance Product or Alliance Products sold by a Party to a Third Party, less the following, to the extent charged as part of the invoiced price, separately stated on the invoice and paid by or credited to, as the case may be, the Third Party:

 

 

 

(i)

credits, allowances, discounts and rebates to, and charge backs from the account of, Third Parties for spoiled, damaged, out-dated, rejected or returned Alliance Products;

 

 

 

(ii)

actual freight, postage, transportation and insurance costs incurred in delivering Alliance Products;

 

 

 

(iii)

reasonable and customary cash, quantity and trade discounts actually given to Third Parties;

 

 

 

(iv)

sales, use, value-added and other direct taxes to the extent billed to and paid by the Third Party; and

 

 

 

(v)

customs duties, surcharges and other governmental charges incurred in connection with the exportation or importation of Alliance Products.

 

 

(b)

With respect to Combination Products, the gross invoiced price of such Combination Products billed to Third Parties by a Party, less: the allowances and adjustments referred to in Sections 1.61(a)(i)-(v), multiplied by the fraction A/A+B, where A is the gross selling price of the Alliance Product sold separately during the royalty period in question, and B is the gross selling price of the other diagnostic product(s) in the Combination Product having significant, independent utilities sold separately during the royalty period in question and that are not covered by Valid Claims of the non-selling Party’s Patent Rights or employing the non-selling Party’s Confidential Information. If there is no established current gross selling price for the Alliance Product A or for the other diagnostic product(s) B, then for the purposes of calculating Net Sales, the Parties agree to

10

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

 

 

discuss in good faith the relative values of Alliance Product A and the other diagnostic product(s) B so as to arrive at a fair gross invoiced price for Combination Products upon which to base the Net Sales thereof. For purposes of this Agreement, “ Combination Product ” means an Alliance Product that is sold together in combination with one (1) or more diagnostic products having significant independent diagnostic utility and not covered by a Valid Claim of the non-selling Party’s Patent Rights or employing the non-selling Party’s Confidential Information.

 

 

 

 

(c)

With respect to an Alliance Product for which the gross invoiced price includes an amount to compensate a Party for the amortized cost of instrumentation, services, and/or other equipment supplied without charge to a customer under a RAP or other successor or similar plan (collectively a “ RAP Product ”), the Net Sales of such RAP Product will first be calculated in accordance with the definition of Net Sales under paragraph (a) of this Section 1.61 and then will be reduced by the amount of the price increase reasonably and demonstrably attributable solely to the amortized cost of the instrumentation, equipment and service which is provided to customers free of charge, in accordance with the United States Generally Accepted Accounting Practices (“ GAAP ”) of such Party consistently applied.

 

 

(d)

Net Sales will not include Alliance Products used in clinical trials, for research or other non-commercial uses, or supplied as commercial samples or as charitable or humanitarian donations, so long as a Party receives no compensation in any form for such use/donation.

 

 

(e)

Net Sales for services will be the gross revenue received therefor.

 

 

(f)

Net Sales for products other than Alliance Products will be calculated in the same manner set forth in this Section 1.61 to the extent applicable.

 

1.62

New Product Concept Document ” or “ NPCD ” means

 

 

(a)

in the case of an “ NPCD – Development ”, a written description of a concept of interest to a Party for Development of a product or service in the Alliance Field that describes the proposed Alliance Product including the following information: (i) test or service type; (ii) intended diagnostic use or expected medical indications or disease state for such use; (iii) target customers; (iv) sampling requirements; (v) testing frequency; (vi) expected product or service pricing; (vii) peak unit sales and revenues; (viii) description of freedom to operate issues or special technologies necessary to develop the product, service or technology; (ix) competitive landscape issues, including market research; (x) each Party’s Independent Technology and Independent Patent Rights expected to be applicable to the proposed product or service and its manufacture or use and associated royalties and milestones owed to Third Parties; (xi) the specific proposed study design, including identification of each goal and deliverable of the proposed study; (xii) the proposed Supplier; (xiii) the proposed Distributor; (xiv) synergies

11

[**********] Indicates omitted material that is the subject of a confidential treatment request filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


Back to Contents

 

 

with other Alliance Products or Carveouts; and (xv) estimated pro-forma profit and loss statement. An NPCD – Development will generally be in the form attached hereto as Exhibit 1.62(a); and

 

 

 

 

(b)

in the case of an “ NPCD – Feasibility ”, a written description of a concept of interest to a Party for establishing feasibility of a product or service in the Alliance Field that describes the proposed Alliance Product including the following information: (i) test or service type; (ii) intended diagnostic use or expected medical indications or disease state for such use; (iii) testing frequency; (iv) description of freedom to operate issues or special technologies necessary to develop the product, service or technology; and (v) the details of a feasibility study including expected outcomes or feasibility objectives. An NPCD – Feasibility will generally be in the form attached hereto as Exhibit 1.62(b) and will be limited to a maximum of twelve (12) months of feasibility studies, unless extended by mutual agreement of the Parties.

 

 

(collectively, NPCD – Development and NPCD – Feasibility will be referred to in this Agreement as “NPCD”).

 

1.63