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SUPPLY AND PURCHASE AGREEMENT

Supply Agreement

SUPPLY AND PURCHASE AGREEMENT | Document Parties: GEN PROBE INC | F. HOFFMANN-LA ROCHE LTD | ROCHE MOLECULAR SYSTEMS, INC You are currently viewing:
This Supply Agreement involves

GEN PROBE INC | F. HOFFMANN-LA ROCHE LTD | ROCHE MOLECULAR SYSTEMS, INC

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Title: SUPPLY AND PURCHASE AGREEMENT
Governing Law: California     Date: 5/10/2005
Industry: Scientific and Technical Instr.     Sector: Technology

SUPPLY AND PURCHASE AGREEMENT, Parties: gen probe inc , f. hoffmann-la roche ltd , roche molecular systems  inc
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Exhibit 10.81

SUPPLY AND PURCHASE AGREEMENT

     This Supply and Purchase Agreement (“Agreement”), effective as of the 15 th day of February, 2005 (the “Effective Date”), is by and between F. HOFFMANN-LA ROCHE LTD., a Swiss limited liability company with a place of business at Grenzacherstrasse 124, CH-4070 Basle, Switzerland and ROCHE MOLECULAR SYSTEMS, INC., a Delaware corporation with a place of business at 4300 Hacienda Drive, Pleasanton, CA 94588 (collectively, “ROCHE”), and GEN-PROBE INCORPORATED, a Delaware corporation with a place of business at 10210 Genetic Center Drive, San Diego, CA 92121 and its Affiliates (as such term is defined below) (collectively, “GPRO”).

BACKGROUND

     GPRO requests that ROCHE supply all of GPRO’s requirements for HPV Products (as such term is defined below) solely for use with or in HPV TMA Test Kits (as such term is defined below), and ROCHE is willing to supply those requirements all on the terms and subject to the conditions specified in this Agreement.

          NOW, THEREFORE, the parties agree as follows:

1.  

Definitions .

 

   

When used in this Agreement, the following terms shall have the meanings set forth below.

 

 

 

 

 

1.1  

“Affiliates” means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with, that Person, provided however, that in each case any such other Person shall be considered to be an Affiliate only during the time period during which such control exists. For purposes of this definition, “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct and/or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. With regard to ROCHE, the term Affiliate shall not include Genentech, Inc., 1 DNA Way, South San Francisco, California 94080-4990, U.S.A. (“Genentech”) or Chugai Pharmaceutical Co., Ltd, 1-9 Kyobashi 2-chome, Chuo-ku, Tokyo, 104-8301, Japan (“Chugai”).

 

 

1.2  

“Certificate of Analysis” means the documentation that accompanies the HPV Products and confirms that such products meet the Specifications.

 

 

 

 

1.3  

“Confidential Information” means: (i) any information designated in writing by either party as proprietary or confidential, or if orally disclosed, identified at the time of disclosure as proprietary or confidential and confirmed in writing to be proprietary and confidential within thirty (30) days of disclosure; (ii) ROCHE’s business and marketing plans with respect to the HPV Patent Rights and any other

 

 

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intellectual property rights owned by or licensed to ROCHE; and (iii) the terms and conditions of this Agreement and the negotiations between the parties with respect to this Agreement.

 

 

1.4  

“Days” means calendar days.

 

 

 

 

1.5  

“HPV” means the human papilloma virus.

 

 

 

 

1.6  

“HPV Products” means the HPV Reagent Products and the HPV RNA Transcript and HPV DNA Products.

 

 

 

 

1.7  

“HPV Reagent Products” means certain oligonucleotide reagents manufactured by ROCHE under this Agreement pursuant to the applicable Specifications (as such term is defined below) for use by GPRO in developing the HPV TMA Test Kits and for incorporation by GPRO into the HPV TMA Test Kits (as such term is defined below) all for use only with TMA (as defined below).

 

 

 

 

1.8  

“HPV RNA Transcript and HPV DNA Products” means certain HPV transcripts and/or HPV DNA manufactured by or on behalf of ROCHE under this Agreement pursuant to the applicable Specifications (as such term is defined below) for use by GPRO solely for development, formulation and quality control of the HPV TMA Test Kits (as such term is defined below).

 

 

 

 

1.9  

“HPV TMA Test Kits” means the diagnostic test kits for HPV (inclusive of ASR reagent products) developed and sold by GPRO for use only with TMA, which are designed to run on any current or future instrument appropriate for such purpose.

 

 

 

 

1.10  

“Individual HPV Test Quantity” means that quantity of HPV Reagent Product(s) necessary to generate a diagnostic result for a single patient with respect to one or more types of HPV, as described in the Specifications. Individual HPV Test Quantities shall be reported in appropriate mass units as calculated from the individually measured [...***...] provided to ROCHE by GPRO.

 

 

 

 

1.11  

“Manufacturing Cost” shall mean the fully-burdened cost to ROCHE (expressed on a per unit basis) of manufacturing or having manufactured the HPV Products, together with the packaging thereof, including the cost of materials, direct labor, quality control, and overhead (including royalties paid to Third Parties), all as determined in accordance with ROCHE’s standard accounting practices for other products manufactured. For the avoidance of doubt, Manufacturing Cost shall not include any cost component attributable to excess or idle manufacturing capacity.

 

 

 

 

1.12  

“Person” shall mean an individual or any legally recognized entity, including any corporation, partnership, limited partnership, limited liability company, association or trust.

 

 

***Confidential Treatment Requested

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1.13  

“ROCHE HPV Patents” means certain patent rights owned by or licensed to ROCHE, covering the HPV Products, as further specified in Exhibit A of this Agreement, including all divisionals, continuations, continuations-in-part applications, substitutes, reissues, renewals, re-examinations and extensions of any of the said patent rights, and all patents worldwide issuing on any of the patent applications included within the said patent rights. Additional patent rights developed by ROCHE and, to the extent permitted under the applicable license or acquisition agreement of ROCHE with a third Person, additional patent rights licensed or acquired by ROCHE, directed solely to oligonucleotide probes and methods for their use for the detection of HPV shall also be included within the ROCHE HPV Patents. ROCHE HPV Patents licensed by ROCHE shall be subject to the terms, conditions, limitations and restrictions contained in the applicable license agreement of ROCHE with the third Person.

 

 

1.14  

“Specifications” means the specifications set forth in Exhibit B of this Agreement, pursuant to which ROCHE shall manufacture the HPV Products under this Agreement, which specifications may be modified from time to time upon request of GPRO, subject to the written consent of ROCHE, such consent not to be unreasonably withheld, conditioned or delayed. ROCHE acknowledges that it is aware that GPRO is likely to request modification of the Specifications from time-to-time in connection with GPRO’s development of the HPV TMA Test Kits and prior to any First Commercial Sale thereof.

 

 

 

 

1.15  

“TMA” means “Transcription-Mediated Amplification”, a transcription-based process for amplifying a DNA or RNA target source. TMA comprises a substantially continuous and isothermal process of generating multiple RNA copies of the target sequence or its complement. It is expressly understood that the heating of target RNA to relax the molecule prior to the transcription-based process can comprise a step in “TMA.” Further, it is expressly understood that a transcription-based process, as described herein, that begins with a single stranded DNA or RNA target sequence or a double stranded DNA target sequence includes no more than two cycles of heat denaturation and primer extension, employs only one primer in the first primer extension step, and produces a double stranded promoter sequence is included within the meaning of “TMA.” Finally, it is expressly understood and agreed that the TMA process is not polymerase chain reaction (“PCR”) amplification, namely the amplification of a nucleic acid sequence and the complement of that sequence by more than two cycles of denaturation of a double stranded nucleic acid, annealing and extension of two primers, wherein the sequence and its complement are repeatedly separated, each separated strand serves as a template for primer extension and the resulting double stranded nucleic acid is used in further cycles of denaturation, annealing and extension of primers.

 

 

 

 

1.16  

“Transfer Fee” shall have the meaning provided in Section 3.2, 3.3 or 3.4, as applicable.

 

 

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2.  

Supply and Purchase of HPV Products .

 

 

2.1  

Obligation to Purchase . GPRO shall purchase from ROCHE, upon GPRO’s request as provided in this Agreement, all of its requirements of HPV Reagent Products for use in HPV TMA Test Kits and all of its requirements of HPV RNA Transcript and HPV DNA Products for use in connection with HPV TMA Test Kits. GPRO’s obligation under this Section 2.1 shall terminate upon any termination of this Agreement pursuant to Section 9.

 

 

2.2  

Obligation to Supply . ROCHE shall supply all of GPRO’s requirements of HPV Reagent Products for use in HPV TMA Test Kits and all of GPRO’s requirements of HPV RNA Transcript and HPV DNA Products for use in connection with HPV TMA Test Kits, as requested by GPRO under Section 2.1. ROCHE will manufacture, or have manufactured, the HPV Products in accordance with the Specifications and appropriate Quality Systems Regulations and then current Good Manufacturing Practices (cGMP) controls. Any material deviations from the prescribed ROCHE manufacturing process shall be communicated to GPRO prior to ROCHE’s release of the HPV Products. Manufacturing records for the HPV Products will be kept at the facility where such HPV Products were manufactured and will be available for necessary regulatory inspections as provided in Section 6.2.1.

 

 

 

 

2.3  

Scope of GPRO’s Rights for HPV Products . GPRO shall utilize HPV Reagent Products purchased under this Agreement solely for development of and incorporation into HPV TMA Test Kits, and for no other purpose. GPRO shall utilize HPV RNA Transcript and HPV DNA Products purchased under this Agreement solely for its own internal development, formulation and quality control of HPV TMA Test Kits, and for no other purpose. GPRO shall not have the right to resell the HPV Products on a standalone basis or as incorporated into any other product, but only as incorporated into HPV TMA Test Kits (including as one component of ASR reagent products). GPRO shall have the unrestricted and unconditional right to incorporate the HPV Reagent Products into the HPV TMA Test Kits and GPRO shall have the unrestricted and unconditional right to use and sell the HPV TMA Test Kits (including to its distributors).

 

 

 

 

2.4  

Restriction on Supply by ROCHE . ROCHE shall not sell or supply the HPV Products manufactured by it under this Agreement to any third Person.

 

 

 

 

2.5  

Failure a Material Breach . Failure by a party to comply with Sections 2.1, 2.2, 2.3 and 2.4 shall constitute a material breach of this Agreement by such party.

 

 

 

3.  

Fees .

 

 

3.1  

Manufacturing Access Fee and Additional Charge for Patented Products . In consideration of ROCHE’s agreement to manufacture and supply the HPV Products to GPRO under the ROCHE HPV Patents pursuant to this Agreement, GPRO shall pay to ROCHE a non-refundable manufacturing access fee and

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additional charge for the HPV Products of Thirty Million United States Dollars (US$30,000,000), payable in two installments as follows: (i) Twenty Million United States Dollars (US$20,000,000) within ninety (90) days after the Effective Date; and (ii) Ten Million United States Dollars (US$10,000,000) within the earlier of (A) [...***...] ([...***...])[...***...], or (B) [...***...]. As used in this Agreement, a “First Commercial Sale” shall mean the first commercial sale by GPRO of any HPV TMA Test Kit (not including any use or transfer for Non-Commercial Use (as defined below) or Clinical Trial Use (as defined below)).

 

 

3.2  

Transfer Fees for HPV Reagent Products . As additional consideration for ROCHE’s agreement to manufacture and supply the HPV Reagent Products to GPRO under this Agreement, GPRO shall pay to ROCHE, for the supply of bulk quantities of the HPV Reagent Products during the term of this Agreement, transfer fees (the “Reagent Transfer Fee”) as follows:

 

 

 

 

3.2.1  

Each purchase order submitted by GPRO will ordinarily include each of the HPV Reagent Products to be incorporated into the HPV TMA Test Kits. As to each such order, GPRO shall pay to ROCHE in respect of each Individual HPV Test Quantity of HPV Reagent Products manufactured and sold by ROCHE to GPRO as follows: (i) from the Effective Date until [...***...] ([...***...])[...***...] after GPRO achieves the First Commercial Sale of a HPV TMA Test Kit, US$[...***...] per Individual HPV Test Quantity; (ii) for [...***...] ([...***...]) to [...***...] ([...***...]) after GPRO achieves the First Commercial Sale of a HPV TMA Test Kit, US$[...***...] per Individual HPV Test Quantity; (iii) for [...***...] ([...***...]) to [...***...] ([...***...]) after GPRO achieves the First Commercial Sale of a HPV TMA Test Kits, US$[...***...] per Individual HPV Test Quantity; (iv) for [...***...] ([...***...]) to [...***...] ([...***...]) after GPRO achieves the First Commercial Sale of a HPV TMA Test Kit, US$[...***...] per Individual HPV Test Quantity; and (iv) for the remainder of the term of this Agreement, the greater of (A) US$[...***...] per Individual HPV Test Quantity, or (B) the Manufacturing Cost thereof (or ROCHE’s actual incurred cost if manufactured for ROCHE by a third Person), plus a margin of [...***...] percent ([...***...]%), provided however, that for individual orders of GPRO made during such remainder of the term of the Agreement for a lot size of at least [...***...] ([...***...]) Individual HPV Test Quantities per order, such Transfer Fee shall not exceed US$[...***...] per Individual HPV Test Quantity.

 

 

3.2.2  

Notwithstanding the fact that each purchase order submitted by GPRO will ordinarily include each of the HPV Reagent Products to be incorporated into the HPV TMA Test Kits, GPRO shall have the right to separately order and purchase from ROCHE one or more individual oligonucleotide reagents included within the HPV Reagent Products. As to each such order, GPRO shall pay to ROCHE a Transfer Fee per Individual HPV Test Quantity of each individual oligonucleotide reagent.

 

 

***Confidential Treatment Requested

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Such Transfer Fee shall be equal to the Transfer Fee set forth in Section 3.2.1, above, multiplied by [...***...], where “[...***...]” is the [...***...] of [...***...] then [...***...] within the [...***...] and [...***...] by [...***...] into the [...***...]. Nothing contained in this Section 3.2.2 shall diminish GPRO’s obligation under Section 2.1 to purchase from ROCHE all of GPRO’s requirements of HPV Reagent Products for use in HPV TMA Test Kits.

 

 

3.3  

Transfer Fees for HPV RNA Transcript and HPV DNA Products . As additional consideration for ROCHE’s agreement to manufacture and/or supply the HPV RNA Transcript and HPV DNA Products to GPRO under this Agreement, GPRO shall pay to ROCHE, for the supply of bulk quantities of the HPV RNA Transcript and HPV DNA Products during the term of this Agreement, a transfer fee in respect of such HPV RNA Transcript and HPV DNA Products sold by ROCHE to GPRO (the “Transcript Transfer Fee”) equal to ROCHE’s Manufacturing Cost, plus a margin of [...***...] percent ([...***...]%), or ROCHE’s actual incurred cost if manufactured for ROCHE by a third Person, plus a margin of [...***...] percent ([...***...]%), provided however, that if HPV RNA Transcript and HPV DNA Products are manufactured by ROCHE and sold to GPRO, the Transcript Transfer Fee shall not exceed [...***...] percent ([...***...]%) of the Transcript Transfer Fee that GPRO can reasonably demonstrate would have been charged if ROCHE had alternatively had such HPV Transcript Product manufactured by a third Person for ROCHE for sale to GPRO.

 

 

3.4  

HPV Reagent Products for Non-Commercial Use . Notwithstanding Section 3.2 of this Agreement, GPRO shall be entitled to purchase a limited quantity of the HPV Reagent Products for “Non-Commercial Use”. For the purpose of this Section 3.4, “Non-Commercial Use” shall mean that the intended use of such HPV Reagent Products, as demonstrated by GPRO to ROCHE’s reasonable satisfaction, shall be solely for GPRO’s internal research and development and not for transfer or sale by GPRO to any third Person. GPRO currently estimates that it will require approximately [...***...] Individual HPV Test Quantities for Non-Commercial Use.

 

 

 

 

3.5  

HPV Reagent Products for Clinical Trials . Notwithstanding Section 3.2 of this Agreement, GPRO shall be entitled to purchase a limited quantity of the HPV Reagent Products for use only in those clinical trials required to obtain applicable governmental regulatory approvals (“Clinical Trial Use”), provided that GPRO shall furnish such HPV Reagent Products (and/or corresponding HPV TMA Test Kits) to the clinical trial researchers or governmental agencies at no charge and shall not sell such HPV Reagent Products (and/or corresponding HPV TMA Test Kits) to any third Person and, provided further, that GPRO may only purchase up to [...***...] Individual HPV Test Quantities of the HPV Reagent Products for use for such purposes, and provided finally, that if GPRO can demonstrate to ROCHE’s reasonable satisfaction that additional HPV Test Quantities are reasonably needed by GPRO for such purposes, GPRO may purchase an

 

 

***Confidential Treatment Requested

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additional amount of HPV Test Quantities up to a maximum of [...***...] additional Individual HPV Test Quantities for use only for such purposes.

 

 

3.6  

Transfer Fee and Order Size for Non-Commercial Use and Clinical Trial Use . The Transfer Fee and order size for GPRO’s purchase of HPV Reagent Products for Non-Commercial Use and Clinical Trial Use shall be in accordance with Exhibit C to this Agreement. With respect to any Individual HPV Test Quantities ordered by GPRO pursuant to this Section 3.6 that are not used by GPRO for Non-Commercial Use or Clinical Trial Use as provided in Sections 3.4 and 3.5 and are instead reclassified by GPRO for commercial use and incorporation by GPRO into HPV TMA Test Kits, upon the earlier of such reclassification or incorporation into HPV TMA Test Kits, GPRO shall immediately notify ROCHE. GPRO shall concurrently pay ROCHE the difference between the applicable Transfer Fees in effect pursuant to Section 3.2 as of the date of original delivery thereof for such Individual HPV Test Quantities and the applicable price previously paid by GPRO for such Individual HPV Test Quantities as provided in Exhibit C .

 

 

 

 

3.7  

Third Party Royalties . Any royalties or other fees owed by ROCHE to any third Person for the practice of the ROCHE HPV Patents shall be borne exclusively by ROCHE. Any royalties or other fees owed to any third Person for or in connection with the HPV TMA Test Kits or the practice of TMA shall be borne exclusively by GPRO.

 

 

 

 

3.8  

Replacement of Scrapped HPV Reagent Products. During the term of this Agreement, if GPRO demonstrates to ROCHE’s reasonable satisfaction that any HPV Reagent Products, ordered by GPRO for incorporation into HPV TMA Test Kits and paid for pursuant to Section 3.2, have been fully and finally scrapped by GPRO due to GPRO internal accidental damage or loss, then ROCHE shall supply replacement HPV Reagent Products and GPRO shall pay ROCHE [...***...] percent ([...***...]%) of the Transfer Fee then in effect but in no event less than the greater of (a) US$[...***...] per Individual HPV Test Quantity, or (b) the Manufacturing Cost thereof plus a margin of [...***...] percent ([...***...]%). For the avoidance of doubt, this Section 3.8 shall not apply to HPV Reagent Products ordered by GPRO for Non-Commercial Use or Clinical Trial Use.

 

 

 

4.  

Forecasts and Orders .

 

 

4.1  

Forecast . Each calendar quarter, on or about the first day of each quarter, GPRO will provide to ROCHE a rolling forecast of its requirements for HPV Products for the next ([...***...])[...***...], based on GPRO’s good faith estimates of anticipated sales of HPV TMA Test Kits. Such forecast shall include good faith estimates of anticipated delivery dates. Failure to provide such information may result in product shortages or delays. GPRO’s forecasts shall not be binding.

 

 

4.2  

Purchase Orders . GPRO shall purchase HPV Products hereunder by issuing a written purchase order identifying the HPV Products to be purchased, the

 

 

***Confidential Treatment Requested

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quantity, total order purchase price based on the then applicable Transfer Fees, delivery instructions, delivery dates and any other special information. The delivery date specified in each purchase order shall be at least sixty (60) days after the date of the purchase order when ordering [...***...] to [...***...] lots of HPV Reagent Products, ninety (90) days after the date of the purchase order when ordering [...***...] to [...***...] lots of HPV Reagent Products and one hundred twenty (120) days after the date of the purchase order when ordering [...***...] to [...***...] lots of HPV Reagent Products, provided however, that GPRO recognizes that delivery dates for initial shipments of HPV Products may be longer than the periods set forth in this Section 4.2 and the parties agree to confer and reasonably agree upon reasonable lead times for the delivery of initial shipments of the HPV Products with the goal and intention of achieving lead times as close to one hundred twenty (120) days as possible with commercially reasonable efforts. Except as otherwise provided in Exhibit C, a “lot” of HPV Reagent Product shall be the equivalent of one million Individual HPV Test Quantities and the minimum order for a purchase order shall be one (1) lot and the maximum order for a purchase order shall be [...***...] lots. Each purchase order shall specifically reference this Agreement. Within seven (7) days of the delivery of each purchase order, as partial pre-payment for the applicable HPV Products, GPRO shall deposit with ROCHE US$[...***...] per Individual HPV Test Quantity for the HPV Reagent Products that were the subject of the purchase order and the Transfer Fee pursuant to Section 3.3 for the HPV RNA Transcript and HPV DNA Products that were the subject of the purchase order.

 

 

4.3  

Acceptance of Purchase Orders . ROCHE may accept or reject purchase orders within seven (7) working days of ROCHE’s receipt of written purchase orders. Provided that a purchase order does not request lot quantities of HPV Products greater than [...***...]% of previously forecasted quantities, ROCHE shall accept all purchase orders that are issued in conformance with the provisions of this Agreement. ROCHE shall use commercially reasonable efforts to accommodate lot quantities of HPV Products greater than [...***...]% of previously forecasted quantities. Upon acceptance of a purchase order, such purchase order and acceptance shall constitute a binding contract between GPRO and ROCHE (subject to the terms and conditions of this Agreement).

 

 

 

 

4.4  

Deferral and Cancellation . Prior to the scheduled delivery date specified on a purchase order, GPRO may defer delivery of HPV Products specified in such purchase order for a period not to exceed [...***...] ([...***...]) days, provided however, that in all cases upon the expiration of such [...***...] ([...***...]) days, ROCHE may deliver the HPV Products and invoice for the applicable amount due. Deferrals related to that purchase order must be by written notice, and shall be subject to a charge of [...***...]% of the unpaid purchase price for the deferred HPV Products for each thirty (30) days deferred based on the Transfer Fee in effect on the date of the purchase order.

 

 

***Confidential Treatment Requested

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4.5  

Acceptance or Rejection . GPRO shall inspect all HPV Products within [...***...] ([...***...]) Days of receipt thereof, and may reject any HPV Product that does not conform to the Specifications, provided that it has not been used, abused or damaged by GPRO or GPRO’s agents. Any HPV Product not properly and timely rejected by GPRO shall be deemed accepted. To reject an HPV Product, GPRO shall notify ROCHE in writing within sixty (60) Days of receipt of the HPV Product of its rejection and shall promptly return the rejected HPV Product to ROCHE. All returned HPV Products shall be accompanied by suitable documentation, as specified by ROCHE in response to GPRO’s notification of rejection. GPRO shall also provide all reasonable assistance to ROCHE to facilitate ROCHE’s investigation and confirmation of the non-conformance basis for rejection. After confirmation of the non-conformance basis for rejection, ROCHE shall replace the rejected HPV Product with conforming HPV Product as promptly as reasonably possible and within the periods set forth in Section 4.2. Notwithstanding the foregoing, if GPRO first discovers any non-conforming condition in HPV Products as manufactured by or for ROCHE after the aforementioned 60-day period and such condition would not have been detected in an initial inspection using commercially reasonable inspection methods (a “Latent Defect”) and GPRO immediately notifies ROCHE of such non-conforming condition, then such HPV Product shall be deemed to be non-conforming under this Agreement and GPRO shall have all remedies originally available to it under this Section 4.5 with respect to such non-conforming HPV Products.

 

 

4.6  

Inconsistencies . Notwithstanding the content of GPRO’s purchase order. ROCHE’s invoice, or any other document submitted by one party to the other, this Agreement shall take precedence over such purchase order or other document, and this Agreement shall govern and control over any conflicting or inconsistent terms of such purchase order(s), invoices(s) or other documents, and all terms which are inconsistent with those provided in this Agreement shall be null and void.

 

 

 

 

4.7  

Product Modifications . Each party will notify the other party promptly (and, in any case, no later than thirty (30) Days) after it receives information that the processes, Specifications or materials used to manufacture the HPV Products will be changed. Without pre-approval by GPRO, which shall not be unreasonably withheld, conditioned or delayed, ROCHE shall not make any change in the manufacturing process for the HPV Products that would cause the HPV Products not to meet the Specifications. The parties shall discuss any such changes and agree on their acceptability and any potential financial impact the changes may have on the Transfer Fee. Any such agreement shall be in the form of a signed amendment to this Agreement.

 

 

 

5.  

Packing and Delivery.

 

 

5.1  

Delivery . ROCHE will use commercially reasonable efforts to effect delivery on or before the date indicated in GPRO’s purchase order, provided that date is in

***Confidential Treatment Requested

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conformance with the terms and conditions of this Agreement. ROCHE shall not be liable for any delay or failure in performance or delivery where such delay or failure arises or results from any cause beyond ROCHE’s reasonable control, including, but not limited to, strike, boycott, or other labor disputes, failures or delays by common carriers, embargo, governmental regulation, or delay in obtaining materials, earthquakes, storms, power outages or acts of God. In the event of any such delay or failure in performance due to a cause beyond ROCHE’s reasonable control, ROCHE shall have such additional time within which to perform its obligations hereunder as may reasonably be necessary in ROCHE’s reasonable judgment.

 

 

5.2  

Delivery Terms . Delivery of HPV Products shall be made by Roche to GPRO at GPRO’s designated facility or facilities as is specified in GPRO’s purchase order. ROCHE shall invoice GPRO for all transportation charges.

 

 

 

 

5.3  

Packaging . All HPV Products delivered pursuant to this Agreement shall be suitably packed in ROCHE’s standard transportation cartons, marked for delivery to the relevant delivery address, and delivered to GPRO as provided herein. ROCHE shall comply with any special packaging requirements set forth in the Specifications. ROCHE shall select the carrier.

 

 

 

 

5.4  

Custody, Control, Title, Risk of Loss and Location of Sale . Control, custody, title and risk of loss with respect to all HPV Products shall pass from ROCHE to GPRO upon delivery of the HPV Products to GPRO at its designated facility. Accordingly, the sale of HPV Products by ROCHE to GPRO shall occur for all purposes of this Agreement upon delivery to GPRO’s designated facility. The parties further acknowledge, intend and agree that upon ROCHE’s sale of the HPV Products for use in or with the HPV TMA Test Kits that the doctrine of patent exhaustion will apply with respect to such use and as to all claims of the ROCHE HPV Patents. GPRO acknowledges and agrees that following the sale of the HPV Products hereunder GPRO will not transport such HPV Products (including as incorporated into HPV TMA Test Kits) from the jurisdiction in which they were delivered and purchased to any other jurisdiction in which the doctrine of patent exhaustion would not apply to the importation, offer for sale, sale or use thereof based on the original sale and delivery in the first jurisdiction. (By way of example and not of limitation, under current law GPRO acknowledges and agrees that HPV Reagent Products sold to it in the United States will not be transported to, or sold by GPRO in HPV TMA Test Kits in, Europe and GPRO will purchase and take delivery in Europe of all HPV Products to be used in or with HPV TMA Test Kits to be sold in Europe.)

 

 

 

 

5.5  

Disclaimer of Patent Exhaustion or Implied Licenses as to Other ROCHE Patents . In connection with the delivery and sale of HPV Products pursuant to this Agreement, ROCHE hereby disclaims any applicability of the doctrine of patent exhaustion with respect to, or any grant of implied license rights under, any patent rights of ROCHE or its Affiliates other than the ROCHE HPV Patents, and GPRO

 

 

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acknowledges and agrees that it obtains no benefit of the doctrine of patent exhaustion or implied license rights under any other patent rights of ROCHE or its Affiliates.

 

 

5.6  

Certificate of Analysis . ROCHE shall provide a Certificate of Analysis with each delivery of HPV Products.

 

 

 

6.  

Invoicing and Payment; Inspections and Audits, Etc.

 

 

6.1  

Invoicing and Payment . ROCHE will invoice GPRO for the Transfer Fees after ROCHE has delivered the HPV Products. The Transfer Fee to be charged shall be the Transfer Fee in effect pursuant to Section 3.2 on the date the subject HPV Products were delivered to GPRO, less the deposit made by GPRO pursuant to Section 4.2. GPRO shall pay all applicable amounts due in respect of each purchase order within thirty (30) days after receipt of ROCHE’s invoice therefor. Payment terms are net thirty (30) Days from receipt of ROCHE’s invoice to GPRO. GPRO shall be liable for the invoiced price of all HPV Products substantially conforming to a GPRO purchase order, unless GPRO properly rejected the HPV Products in a timely manner. If payment is not received by the due date, a service charge may be added at the rate of [...***...]% per [...***...] ([...***...]% per [...***...]) or the maximum legal rate, whichever is less, to unpaid invoices from the due date thereof, and GPRO agrees to pay such charge. If GPRO consistently fails to make payments when due, ROCHE reserves the right to require alternative payment terms, including, without limitation, sight draft, letter of credit, or payment in advance. Upon making such demand, ROCHE may suspend production and/or deliveries. If, within the period stated in such demand, but in no event longer than thirty (30) Days, GPRO fails to give adequate assurance of due performance, ROCHE may make deliveries under reservation of a security interest and demand payment against tender of documents of title. GPRO hereby represents to ROCHE that GPRO is now solvent and agrees that each acceptance of delivery of HPV Product sold hereunder shall constitute reaffirmation of this representation at such time.

 

 

6.2  

Inspections and Audits .

 

 

6.2.1 GPRO Audits . ROCHE shall permit and assure GPRO access during reasonable business hours and upon thirty (30) days written notice to conduct an audit (i) of those areas of all facilities where the HPV Products are manufactured, tested, filled, released, packaged, labeled, stored and/or handled, as applicable, and (ii) all quality control records, test records and manufacturing records for the HPV Products, each in order for GPRO to perform a quality assurance audit of such facilities and activities, (iii) ROCHE’s qualification policies and procedures for third Person manufacturers and suppliers, and (iv) in the event the Transfer Fee for HPV Products is determined based upon ROCHE’s Manufacturing Cost thereof; the cost basis for such Manufacturing Cost, provided, however, that GPRO shall not cause such an audit to occur more than once in any given

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[...***...] ([...***...])[...***...] period, except as may be required by cGMP or any other applicable law or regulation, and, provided, further, that all such audits shall be conducted in such a manner as to not unreasonably interfere with the conduct of regular business activities at the audited facility. ROCHE shall permit GPRO or a third Person designated by GPRO to copy, under reasonable confidentiality obligations, such documents as GPRO can reasonably establish are required to be copied for regulatory purposes.

6.2.2 GPRO Books and Records . GPRO shall maintain regular and complete records for a period of [...***...] ([...***...]) years after the expiration of the calendar quarter to which they pertain, sufficient to enable verification of GPRO’s compliance with the terms and conditions of this Agreement and the accuracy of all statements and payments made by GPRO. Such records shall be maintained at GPRO’s regular place of business and, on thirty (30) days notice, shall be available for inspection and audit by ROCHE’s outside accountants, acting in confidence, during normal business hours, for [...***...] ([...***...]) years immediately following the end of the calendar quarter to which they pertain; provided, however, that ROCHE shall not cause such an inspection and audit to occur more than once in any given [...***...] ([...***...])[...***...] period or with respect to any records after the expiration of [...***...] ([...***...]) years after the end of the calendar quarter to which such records pertain and, provided, further, that all such inspections and audits shall be conducted in such a manner as to not unreasonably interfere with the conduct of the GPRO’s regular business activities. Should any such audit reveal a payment short fall by GPRO, the amount of the short fall shall be paid promptly by GPRO after the discovery thereof, together with interest thereon calculated at the lower of (i) the prime rate of the Bank of America plus [...***...] percent ([...***...]%), or (ii) the maximum rate provided under applicable law, until paid. If the payment shortfall revealed in any audit is greater than [...***...] percent ([...***...]%), GPRO shall also pay all costs and expenses of the audit, including all charges of ROCHE’s outside accountants.

 

6.3  

Taxes and Duties . The purchase price of all HPV Products is exclusive of any taxes, fees, duties, licenses or levies now or hereinafter imposed upon the production, storage, sale, transportation or use of the HPV Products, and such taxes and items shall be paid by GPRO (other than a tax measured by ROCHE’s net income). In lieu of payment, GPRO shall provide an exemption certificate acceptable to the taxing authorities.

 

7.  

Label Statement; Patent Marking; Trademarks .

 

 

7.1  

Label Statement . GPRO shall include on and with each HPV TMA Test Kit a statement to the effect that the product is sold and intended for use only in Human In Vitro Diagnostics and that all other implied licenses are expressly disclaimed. The location of such label disclaimer shall be on the outside of the packaging for each HPV TMA Test Kit and on any product insert included with the product or

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otherwise published by GPRO, or such other reasonably prominent location(s) as shall be specified by ROCHE from time to time.

 

 

7.2  

Patent Marking . ROCHE will mark all HPV Products as appropriate under statutory patent provisions with respect to the ROCHE HPV Patents. GPRO will also mark all HPV TMA Test Kits as appropriate under statutory patent provisions with respect to the ROCHE HPV Patents on both the outside packaging and any product insert included with the product or otherwise published by GPRO as reasonably directed by ROCHE from time to time. With respect to containers of HPV Products included in


 
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