Sample Business Contracts


Research & Development Agreement - Roche Diagnostics GmbH and CombiMatrix Corp.


                             C O N F I D E N T I A L



                        RESEARCH & DEVELOPMENT AGREEMENT



                                    Between:



                             Roche Diagnostics GmbH
                              Sandhofer Strasse 16
                                 68305 Mannheim
                           Federal Republic of Germany

                       (hereinafter referred to as "RDG")



                                       and



                             CombiMatrix Corporation
                           6500 Harbour Heights Pkwy.
                               Mukilteo, WA 98275
                                       USA

                       - hereinafter referred as to "CBMX"

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                             C O N F I D E N T I A L
                                      -2-


This Research & Development Agreement ("Agreement"), effective as of June 18,
2001 is made and entered into by and between RDG and CBMX. RDG and CBMX may be
referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS

(1)      CBMX and RDG are entering into a broad strategic collaboration in array
         technology comprising this Research & Development Agreement
         ("Agreement") and a License and Supply Agreement (the "License and
         Supply Agreement") all of which are independent and legally binding
         agreements and are signed and enter into effect on this 18th day of
         June 2001 ("Effective Date").

(2)      CBMX has special competence in the field of microarray technology
         whereas RDG has technology and special knowledge in amplification and
         test development and both Parties have now agreed to enter into this
         Agreement and to regulate their mutual rights and obligations in the
         manner hereinafter appearing.


NOW THEREFORE in consideration of the foregoing and the covenants and promises
contained herein, the Parties agree as follows:


1.       DEFINITIONS

1.1 Capitalised terms in this Agreement shall have the same meaning as in the
License Agreement unless defined otherwise in this Agreement. The following
terms shall have the following meaning:

         (1)      "Agreement" shall mean this Research and Development Agreement
                  and all Annexes hereto.

         (2)      "Chiplettes" shall mean smaller (in size) biochips (with
                  biochips being generally [*]) that have Content synthesized
                  prior [*] and do not have [*].

         (3)      "Development Program" shall mean the initial group of Projects
                  attached to this Agreement as ANNEX 1 for the development of
                  products under this Agreement, which Development Program may
                  be amended from time to time by the Parties as set forth
                  herein with advice and consultation of the Development
                  Committee.


          Confidential materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
                                      -3-


         (4)      "Development Committee" shall mean a group of technical
                  representatives from RDG and CBMX responsible for managing the
                  Development Program and for the joint management of the
                  collaboration.

         (5)      "Development Schedule" shall mean the time schedule for the
                  Development Program attached to this Agreement as ANNEX 1 in a
                  preliminary form.

         (6)      "Miniarrays" shall mean smaller (in size) biochips (with
                  biochips being generally [*]) that are [*] and each contain
                  [*].

         (7)      "Results" shall mean any and all results (including but not
                  limited to inventions, data, Know-How, ideas and other
                  expertise) developed within the scope of this Agreement,
                  whether patentable or not.

         (8)      "Specifications" shall mean the general specifications for the
                  products of the Development Program preliminarily set forth on
                  ANNEX 1 attached hereto.

         (9)      "Wafer(s)" shall mean the generally circular silicon-based
                  semiconductor product having the circuitry etched thereon and
                  arranged for a plurality of Arrays, Blank Chips, Miniarrays or
                  Chiplettes [*].


2.       OBLIGATIONS OF CBMX

2.1 EXPANSION. CBMX shall endeavour using commercially reasonable efforts,
pursuant to the Development Program, Specifications and the Development
Schedule, to improve upon and expand the Licensed Products and shall promptly,
subject to the confidentiality requirements hereof, disclose to RDG any such
improvements and developments that are important or material.

2.2 MODIFICATIONS. The Parties may further modify the Specifications,
Development Plans and Development Schedules for the Products listed in Annex 1
based upon the advice and guidance of the Development Committee. However, both
Parties must mutually agree to any such modifications. RDG and CBMX may both
propose changes of and additions to the Specifications with the goal of
improving performance and quality. The change notification procedures to be
implemented in such updating of the Specifications shall be agreed upon by the
Development Committee. The Parties agree that, except with respect to Project 4
in Annex 1, in the event of an inability to agree regarding an amendment to a
particular Specification, CBMX shall ultimately make the decision giving due
consideration to the reasonable concerns expressed by RDG, provided that any
such amendment to the Specifications does not adversely affect physical or
functional interchangeability or performance of any Project deliverable under
Annex 1.


          Confidential materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
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3.       COLLABORATION STRUCTURE

3.1 EXCHANGE OF INFORMATION. The Parties hereto agree that the success of the
mutual collaboration is dependent in part on mutual trust and on a regular
exchange of information between both Parties. To this extent the Parties shall
exchange regularly, depending on the progress made, experiences, information and
all Results in appropriate written or oral form, preferably through the exchange
of electronic files. The exchange of information relating to the Development
Program shall be made to all members of the Development Committee.

3.2 COMMITTEE FORMATION. Upon execution of this Agreement by both Parties, the
Development Committee shall be formed and shall consist of three (3) technical
individuals from RDG and three (3) technical individuals from CBMX. The
Development Committee shall be co-chaired by one representative from RDG and one
representative from CBMX. The Development Committee shall manage, and if
necessary and with the written approval of both Parties, amend the Development
Program, the Specifications and the Development Schedule, subject to Section
2.2. The Development Committee shall meet at least twice per year in person
alternating between Europe and the Seattle area and shall meet more frequently
through other means (E.G., video conferencing, telephone conferencing, emails,
etc.) as needed.

3.3 COMMUNICATIONS. All communications regarding between the Parties, other than
communications among the Development Committee members, shall be directed to the
persons set forth below:

              for RDG:                           RDG Diagnostics GmbH

                                                 Legal Department
                                                 Sandhofer Strasse 116
                                                 68305 Mannheim

                                                 Germany
                                                 Tel.: 0621-759
                                                 Fax: 0621-759

                                                 cc: Head of R&D

                                                 Nonnenwald 2, 82372 Penzberg,
                                                 Germany


              for CBMX:                          Combimatrix Corporation
                                                 6500 Harbour Heights Parkway
                                                 Mukilteo, WA 98275 US
                                                 Attn: General Counsel
                                                 Tel +425 493 2000
                                                 Fax + 425 493 2010


Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
                                      -5-


3.4 DEVELOPMENT PROPOSAL. (a) Either Party may propose design changes,
modifications, or improvements to the Licensed Products, or new products related
to the Licensed Products that the Party wishes to develop under this Article 3.
Any such proposal will be referred to as a "Development Proposal." The Party
receiving the Development Proposal shall respond to the proposal within sixty
(60) days after receiving written notice of the Development Proposal. Neither
Party shall be required to act on or implement any Development Proposal. RDG
shall not make any change, modifications, improvements, or new products based on
the Licensed Products or other CBMX products without the prior written consent
of CBMX, which may be withheld in CBMX's sole discretion. In the event that the
Parties elect to act jointly on a Development Proposal, they will enter into an
addendum ("Project Addendum") that addresses intellectual property rights
including patent rights and copyrights to changes, modifications, improvements,
on a product and to new products arising out of a Project and that authorizes
the Parties to enter into a project ("Project") to develop and commercialize the
change, modification, or improvement to the Licensed Products or the new product
to be developed. Any technology owned by CBMX, which CBMX discloses to RDG,
remains the property of CBMX and cannot be used by RDG without CBMX's consent. .

Subject to the terms of the Agreements, all technical information, patent
rights, copyrights, and other intellectual property owned by a Party and made
available to the other Party under this Agreement, including any Project
Addendum ("Disclosed Intellectual Property") shall be and remain the property of
the Party who owns it. To the extent required for the Party who obtains
Ownership Rights to exploit fully a Project Deliverable, that Party shall have a
royalty free and perpetual license to use the Disclosed Intellectual Property,
unless otherwise agreed in a Project Addendum. Any Disclosed Intellectual
Property shall be subject to the confidentiality obligations of this Agreement,
unless an exception to those obligations is applicable.


4.       CONSIDERATION FOR DEVELOPMENT EFFORTS

4.1 PAYMENTS In consideration of CBMX development efforts and the expanded
license rights contemplated by this Agreement, RDG shall, commencing on July 31,
2001, make the payments according to the Development Schedule and the
Development Plan and upon demonstrations of completion as contemplated by Annex
1.

4.2 PROJECTS If the deliverables contemplated by the Development Schedule and
the Development Plan are completed early, then the corresponding payments from
RDG shall be made within 45 days of such completion. RDG shall pay to CBMX a
total of [*] over a period of five (5) years from the Effective Date herein.
Projects 1, 2, and 3 described in Annex 1 shall represent a total of [*] of the
total of [*]. The Development Committee shall be responsible for defining and
managing additional Projects representing the remaining [*] designated by
Project 4 on Annex I. The payments shall be made according to the Project
Schedule attached hereto and as amended from time to time by the Parties.


          Confidential materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
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In the event of termination by RDG of the License and Supply Agreement under
Section 10.4 therein, all payments due for all scheduled projects under this
Agreement that have been initiated as of the date of termination shall become
immediately payable as of the date of termination.


5.       INTELLECTUAL PROPERTY

5.1 RESULTS Any and all Results developed under this Agreement whether
patentable, patented or not and generated and owned partly or entirely by CBMX
shall automatically be owned exclusively by CBMX and shall be included in the
definitions of "Know How" and "Licensed Patents," as applicable, under the
License and Supply Agreement.

5.2 PRODUCTS Miniarrays, Chiplettes, Desk Top Synthesizers or any other products
developed under this Agreement shall automatically be included without further
initial payments in the license grant under Section 2 of the License and Supply
Agreement and shall otherwise be subject to all of the other terms and
conditions of the License and Supply Agreement.


6.       CONFIDENTIALITY

CBMX and RDG shall each retain in confidence and not disclose to Third Parties
Confidential Information obtained from the other under this Agreement. Receiving
party will not utilize Confidential Information except for the express purposes
of performing this Agreement. Both Parties shall be allowed to disclose
Confidential Information if it is disclosed to:

         (i) Consultants and Affiliates of the receiving Party who have a
genuine need to know in connection with the receiving Party's performance of
this Agreement and are obligated to maintain it in confidence pursuant to
written agreements; or

         (ii) A governmental agency or authority if necessary to obtain
regulatory approval, reviews clearance, registration, or authorization in order
to manufacture, develop, market or sell any of the Licensed Products, provided
that the receiving Party or its may, without liability hereunder, disclose only
that portion of the which legal counsel advises the receiving Party is legally
required to be disclosed (and only to such persons as such counsel advises the
receiving Party are legally required) and that the receiving Party exercise its
best efforts to preserve the confidentiality of the Confidential Information,
including, without limitation, by cooperating with the providing Party to obtain
an appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Information; or

         (iii) To patent authorities as reasonably may be required in a patent
application filed by CBMX or RDG covering subject matter which is encompassed
within this Agreement upon consent of the originator of the Confidential
Information, which consent shall not be unreasonably withheld; or

         (iv) To other entities as may be required by law, regulation or
judicial order, subject to the proviso in subparagraph (ii) above.


Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
                                      -7-


Each Party acknowledges that the restrictions contained in this Paragraph are
necessary and reasonable to protect the legitimate interests of the Parties. The
provisions of this Paragraph shall survive the expiration or termination of this
Agreement for a period of five (5) years. Notwithstanding any other provision of
this Agreement, the receiving Party or its Affiliates will be permitted to
disclose any Confidential Information if such disclosure:

         (a)      Is in response to a valid order by a court or other
                  governmental body having jurisdiction; or
         (b)      Is otherwise required by law or by the requirements of any
                  competent securities regulatory authority;

PROVIDED, HOWEVER, that the receiving Party will make every effort to inform the
disclosing Party of the order, law or requirement such that the disclosing Party
will have a reasonable opportunity to seek an appropriate protective order.


7.       PUBLICATIONS

In case of scientific publications that concern the Development Program, each
Party agrees to take the other Party' s interests into account. Therefore, each
Party will send the other Party a manuscript of any intended publication prior
to its publication in order to give the other Party the opportunity to make
comments and to make sure that any applications for intellectual property rights
are not endangered by such publication. Each Party will send its comments within
three weeks after receipt of the manuscript. Special agreements can be made for
"abstracts" because of their urgency.


8.       TERM AND TERMINATION

8.1 TERM AND TERMINATION. This Agreement shall commence on the Effective Date
and shall continue thereafter for five years from the Effective Date unless
terminated in accordance with the clauses set forth herein. Either Party shall
have the right to terminate this Agreement with immediate effect by notice in
writing to the other Party, upon occurrence of any of the following events:

(a) If the other Party commits a material breach of any of the terms and
conditions of this Agreement or the License and Supply Agreement and does not
cure a material breach susceptible of being cured within a period of 60 (sixty)
days after having been requested to do so by the non-defaulting Party period
(provided, however, that nothing in this subsection shall prevent a Party from
seeking immediate, injunctive relief where appropriate to protect proprietary
information or such Party's proprietary or intellectual property rights); or

(b) if the other Party enters into liquidation whether compulsorily or
voluntarily otherwise than for the purpose of amalgamation or reconstruction, or
a petition in bankruptcy is filed by or against either Party in any competent
court and the same is not dismissed within 120 days; or

(c) if the other Party is adjudicated bankrupt or insolvent or if the other
ceases to do business, or otherwise terminates its business operations


Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
                                      -8-


(d) if either Party terminates this Agreement in accordance with the terms of
this Agreement.

(e) [*].


8.2 EFFECTS OF TERMINATION. Subject to this Section 8.2, upon any termination or
expiration of this Agreement, the Parties' rights and obligations under this
Agreement shall terminate and expire. Upon any termination or expiration of this
Agreement, the rights and obligations of the Parties as set forth out in
Paragraphs 5-11 of this Agreement and any accrued obligations under this
Agreement at the date of such termination shall survive any termination as well
as any other provision intended by their nature to survive termination of this
Agreement.


9.       DISPUTE RESOLUTION

9.1 FIRST STAGE CONSULTATION. The Parties agree to first try in good faith to
resolve and settle all disputes, controversies and differences which may arise
between them in respect of this Agreement through mutual consultation among
senior representatives of the Parties within thirty (30) days of a written
settlement request of either Party.

9.2 ICC ARBITRATION. Any disputes arising out of or in connection with this
Agreement, including any question regarding its existence, validity, breach,
violation or termination, shall be exclusively and finally settled under the
Rules of Conciliation and Arbitration of the International Chamber of Commerce
effective January 1st 1998 in the then applicable form ("ICC Rules") by three
arbitrators (the "Arbitral Tribunal") appointed in accordance with the said
Rules. Any award granted by the Arbitral Tribunal shall be final, binding and
enforceable against the Parties. The arbitration shall at all times be held in
the English language, provided, however, that (i) a Party may submit documents
in the German language and such submitted documents will only be translated into
the English language if the Arbitral Tribunal or a Party so requests, and (ii)
that the cost of translation of any such German language documents shall be at
the sole expense of the Party submitting such documents. Any arbitration arising
pursuant to this Agreement shall be held in New York, N.Y., and discovery shall
only be admissible to the extent permitted under or not prohibited under Art. 20
of the ICC-Rules and agreed upon by the Parties who shall cooperate with one
another at the outset of the proceeding to define the extent of discovery
reasonably needed to complete the proceeding. The procedural law of the State of
New York shall otherwise be applied to any proceedings held in connection with
said arbitration. Judgment upon an award rendered by the Arbitrator shall be
binding and may be entered in any court with appropriate jurisdiction, and the
Parties consent to jurisdiction therein for the purpose of such enforcement.
Notwithstanding anything to the contrary contained in this Agreement or
elsewhere, each of the parties hereby acknowledges and expressly agrees that any
breach by it of this Agreement,


          Confidential materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
                                      -9-


which does or may result in loss of confidentiality of the Confidential
Information, would cause irreparable harm to the other party for which money
damages would not be an adequate remedy. Therefore, each of the Parties hereby
agree, that in the event of any breach of this Agreement by it, the
non-breaching Party will have the right to seek injunctive relief in a court of
competent jurisdiction against continuing or further breach by the breaching
Party, without the necessity of proof of actual damages, in addition to any
other right which either Party may have under this Agreement, or otherwise in
law or in equity.


10.      APPLICABLE LAW. This Agreement shall be governed by and construed under
the laws of the State of New York, and the United States without regard to
conflicts of laws provisions thereof and without regard to the United Nations
Convention on Contracts for the International Sale of Goods. In any action or
proceeding to enforce rights under this Agreement, the prevailing Party shall be
entitled to recover costs and attorneys' fees.

11.      MISCELLANEOUS.

11.1 ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
between the Parties hereto concerning the subject matter hereof and supersedes
all other agreements, arrangements and understandings, written or oral,
concerning such subject matter between the Parties, including any existing
confidentiality agreement between them and except for the accompanying License
and Supply Agreement.

11.2 AMENDMENTS. Any modification of or amendment to this Agreement must be made
in writing. The same applies to any agreement waiving this requirement.

11.3 WAIVERS. A failure or delay on the part of any Party hereto in exercising
any power or right hereunder shall not operate as a waiver by such Party of any
succeeding default by the other, nor shall any single or partial exercise of
such right or power preclude any other or further exercise thereof or the
exercise of any other right or power. A Party's consent to or waiver, express or
implied, of the other Party's breach of its obligations hereunder shall not be
deemed to be construed as a consent to or waiver of any other breach of the same
or any other obligations of the other Party. A Party's failure to complain of
any act, or failure to act, by the other Party, to declare the Party in default,
to insist upon the strict performance of any obligation or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof,
no matter how such failure continues, shall not constitute a waiver by such
Party of its rights hereunder, of any such succeeding breach, or of any other
obligation or condition. A Party's consent in any one instance shall not limit
or waive the necessity to obtain such Party's consent in any future instance and
in any event no consent or waiver shall be effective for any purpose hereunder
unless such consent or waiver is in writing and signed by the Party granting
such consent or waiver.

11.4 STATUS OF PARTIES. In its performance under this Agreement, each Party
shall be an independent contractor and neither Party (nor any employee or agent
thereof) shall be an agent or partner of the other Party. Neither party shall
have the right to assume or create obligations on the others behalf, express or
implied.


Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
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11.5 HEADINGS. The headings of the various Paragraphs and Sections of this
Agreement are used solely for the convenience of the Parties, do not form part
of this Agreement and are not intended to affect the interpretation or meaning
of this Agreement or to define, limit, extend or describe its scope or intent.

11.6 THIRD PARTIES. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any Third Party except where otherwise expressly
provided in this Agreement.

11.7 DATES. In computing any period of time pursuant to this Agreement, the day
or date of the act, notice, event or default from which the designated period of
time begins to run will not be included. The last day of the period so computed
will be included, unless it is a Saturday or Sunday or other public holiday in
either of the Parties countries of origin in which event the period runs until
the end of the next day which is not a Saturday or Sunday or public holiday.

11.8 CONSTRUCTION. The Parties agree that each Party has reviewed this Agreement
and that any rule of construction, to the effect of ambiguities, are to be
resolved against the drafting Parties shall not apply to the interpretation of
this Agreement.

11.9 ASSIGNMENT. This Agreement, and the License, rights and duties contained in
this Agreement shall not be assigned by RDG to any party, except as part of a
sale of RDG's business(es) pertaining to all of the Licensed Products and, in
such event, only collectively and in their entirety. RDG shall give CBMX prior
written notice of such assignment and obtain RDG's assignees' written agreement
to abide by the terms of this Agreement and assume all of RDG's obligations
under this Agreement. Upon such assignment, the term RDG as used in this
Agreement shall thereafter mean the assignee of RDG. This Agreement and rights
and duties contained in this Agreement shall not be assigned by CBMX to any
party, except as part of a sale of CBMX's business(es) pertaining to all of the
Licensed Products and, in such event, only collectively and in their entirety.
CBMX shall give RDG prior written notice of such assignment and obtain CBMX's
assignees' written agreement to abide by the terms of this Agreement and assume
all of CBMX's obligations under this Agreement. Upon such assignment, the term
CBMX as used in this Agreement shall thereafter mean the assignee of CBMX.
Except as otherwise provided in this Agreement, neither Party will have the
right to assign or transfer any of its rights or to delegate any of its duties
under this Agreement without the prior written consent of the other Party. Any
attempted assignment or transfer without such consent will be void and of no
effect, and will automatically terminate all rights of the Party attempting such
assignment or transfer under this Agreement.

11.10 SEVERABILITY. Should any provision of this Agreement be or become invalid
or unenforceable, then the validity and enforceability of the remaining
provisions shall thereby not be affected. The Parties of this Agreement are
under the obligation to use good faith efforts to substitute, if possible, any
invalid or unenforceable provision by a legally effective provision which comes
as close as possible to the economic purpose of the invalid or unenforceable
provision. The same applies to any amendment to this Agreement.

11.11 SURVIVORSHIP. The Agreement will be binding upon and will inure to the
benefit of the Parties hereto and their respective successors and permitted
assigns.


Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
                                      -11-


11.12 OFFICIAL LANGUAGE. The official language of this Agreement is English.
Documents or notices not originally written in English will have no effect under
this Agreement until they have been translated into English and the English
translation will then be the controlling form of the document or notice.

11.13 INTERPRETATION. When a reference is made in this Agreement to Articles ors
Sections, such reference will be to a Article or Section of this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement they will be deemed to be followed by the
words "without limitation." The phrases "the date of this Agreement," "the date
hereof" and terms of similar import, unless the context otherwise requires, will
be deemed to refer to the date appearing in the introductory paragraph of this
Agreement.

11.14 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
all of which taken together will be considered one and the same agreement and
will become effective when two or more counterparts have been signed by each of
the Parties and delivered to the other Parties, it being understood that all
Parties need not sign the same counterpart.

11.15 FORCE MAJEURE. If the performance of any obligation under this Agreement
(except payment of monies due) by either Party is prevented, restricted or
interfered with by reason of casualty, accident, fire, strikes or labor
disputes, inability to procure materials or components, power or supplies, war
or other violence, any law, order, proclamation, regulation, ordinance, demand
or requirement of any government agency or intergovernmental body, or any other
act, circumstance or condition whatsoever beyond the reasonable control of such
Party, the Party so affected, upon giving notice to the other Party, shall be
excused from such performance to the extent of such prevention, restriction or
interference.

11.16 LIMITATION OF LIABILITY. Notwithstanding anything to the contrary in this
Agreement, in no event will either Party be liable for any indirect, punitive,
special, incidental or consequential damage in connection with or related to
this agreement (including loss of profits, use, data, or other economic
advantage), howsoever arising, either out of breach of this agreement, including
breach of warranty, or in tort, even if the other Party has been previously
advised of the possibility of such damage.


Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
                                      -12-


IN WITNESS WHEREOF the Parties hereto have signed this Agreement:



Mannheim, Germany                                       Mukilteo, Washington


ROCHE DIAGNOSTICS GMBH                                  COMBIMATRIX CORPORATION


By: _________________                                   By: ___________________
    Dr. Raehs                                               Gerald D. Knudson


i.V.


By: _________________                                   By: ___________________
    S. Willemsen                                            Edward M. Eadeh


Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
                                      -13-


ANNEX 1


          DEVELOPMENT PROGRAM, SPECIFICATIONS AND DEVELOPMENT SCHEDULE


OVERVIEW

Three projects are outlined for completion over the next [*] months.
Deliverables are defined relative to the initial start dates of the projects.
Two Progress Payments are shown per project: one at the completion of the
prototype phase and the other when the project is released.

         Project 1 - Miniarrays) [*]
         Project 2 - [*] Chiplettes from [*]
         Project 3 - Desktop Synthesizer with [*]
         Project 4 - To be determined by Development Committee [*]

PAYMENT PROCESS: At each deliverable outlined below, CBMX shall notify RDG of
completion of the deliverable. Within thirty (30) days of such notice, either
the Development Committee or other Party representatives shall either meet or
participate at CMBX's offices, if appropriate, for a demonstration of completion
according to the Development Program and the Specifications under Annex 1 of
this Agreement as amended from time to time. Following such demonstration of
completion RDG shall make the payment associated with the deliverable within
thirty (30) days.. If through the fault of RDG no demonstration of completion
could be demonstrated within sixty (60) days from CBMX notice of the completion
of the deliverable despite good faith offer and opportunity provided by CBMX to
perform such demonstration, RDG shall make the payments associated with such
deliverable due at the end of such 60 days period.


PROJECT 1 - MINIARRAYS [*]

There are two components to this Project. The first is a modified Minicassette
(that is, a Cassette modified to accommodate Miniarrays) to accommodate the [*]
of a Miniarray. The second component is [*]. This Project 1 will begin within
[*]following the Effective Date. The Miniarrays are designed to [*].

The first payment of [*] shall be made upon prototype demonstration. Prototype
demonstration shall consist of presentation to RDG of a Minicassette containing
[*]. It is anticipated that the prototype demonstration will be completed within
[*] after initiation of Project 1, which shall be within [*] from the Effective
Date.


          Confidential materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

Research & Development Agreement, Combimatrix                      June 18, 2001

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                             C O N F I D E N T I A L
                                      -14-


The second and final payment of [*] shall be made upon Project 1 completion.
Project completion shall mean a demonstration of a functional [*], and obtaining
the expected results, upon [*], with a test sample corresponding to the test
Content with positive, negative and null controls. It is anticipated that the
Project completion will occur approximately [*] following Project initiation.

The anticipated preliminary specifications of the Miniarray (subject to change)
are:

                                            [*]        [*]
                 Feature                    [*]        [*]

           [*]                              [*]        [*]
           [*]                              [*]        [*]
           [*]                              [*]        [*]
           [*]                              [*]        [*]
           [*]                              [*]        [*]
           [*]                              [*]        [*]
           [*]                              [*]        [*]


PROJECT [*] CHIPLETTES FROM [*]

A Chiplette is designed to [*]. This Project [*] will be initiated within [*]
after the Effective Date. It is anticipated that Chiplettes will be [*].
Therefore the first progress payment of [*] shall be made upon delivery to RDG
of a completed Chiplette wafer [*]. It is not anticipated that this initial
wafer will be functional. It is anticipated that the first progress delivery
will occur approximately [*] following Project [*] initiation.

Project [*] completion shall occur upon delivery to RDG of [*], and obtaining
the expected results, upon [*], with a test sample corresponding to the test
Content with positive, negative and null controls. It is anticipated that the
Project [*] completion will occur approximately [*] following Project [*]
initiation.

It is anticipated (subject to change) that the specification for Chiplettes are:

                                              [*]            [*]             [*]
                 Feature                      [*]            [*]             [*]

           [*]                                [*]            [*]             [*]
           [*]                                [*]            [*]             [*]
           [*]                                [*]            [*]             [*]
           [*]                                [*]            [*]             [*]
           [*]                                [*]            [*]             [*]
           [*]                                [*]            [*]             [*]


          Confidential materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

Research & Development Agreement, Combimatrix                      June 18, 2001

<PAGE>

                             C O N F I D E N T I A L
                                      -15-


           [*]                                [*]            [*]             [*]
           [*]                                [*]            [*]             [*]


PROJECT [*] - DESK TOP SYNTHESIZER [*]


[*]. The Desk Top Synthesizer would [*]. In addition, the Desk Top Synthesizer
shall [*]. An initial progress payment for Project [*] of [*] will be made upon
acceptance by RDG of the Desk Top Synthesizer design and engineering drawings,
which shall not be unreasonably withheld, conditioned or delayed. This Project
[*] shall begin within [*] following the Effective Date hereof and the initial
design drawing completion is anticipated to occur within [*] following Project
[*] initiation.

The final payment of [*] will be made upon delivery to RDG of a Desk Top
Synthesizer, which Desk Top Synthesizer shall have [*] and have [*], and
obtaining the expected results, upon [*], with a test sample corresponding to
the test Content with positive, negative and null controls. It is anticipated
that the Project [*] completion will occur approximately [*] following Project
[*] initiation.


PROJECT 4 -  TO BE DETERMINED BY DEVELOPMENT COMMITTEE


The Development Committee shall meet to determine the scope, nature and timing
of Project 4 (or multiple projects) at a total budget of [*].


          Confidential materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

Research & Development Agreement, Combimatrix                      June 18, 2001

<PAGE>

                                                    C O N F I D E N T I A L
                                                              -16-

<TABLE>
<CAPTION>
<S>  <C>         <C>     <C>      <C>       <C>             <C>     <C>       <C>        <C>             <C>       <C>      <C>

                                                            [*]
                                                                                                                            [*]

     [*]         [*]     [*]      [*]           [*]         [*]     [*]       [*]            [*]          [*]      [*]      [*]
     [*]         [*]     [*]      [*]           [*]         [*]     [*]       [*]            [*]          [*]      [*]      [*]

[*]                                         [*]                 [*]                      [*]                   [*]  [*]     [*]
[*]                                         [*]                 [*]                      [*]                   [*]  [*]
[*]                                         [*]                 [*]      [*]             [*]                   [*]
[*]                                         [*]                 [*]                      [*]                   [*]
[*]                                         [*]                 [*]   [*]                [*]                   [*]
[*]                  [*]                    [*]                 [*]                      [*]                   [*]
[*]                  [*]                    [*]                 [*]                      [*]                   [*]
[*]                  [*]                    [*]                 [*]                      [*]                   [*]
[*]                  [*]                    [*]                 [*]   [*]     [*]        [*]                   [*]
[*]                  [*]                    [*]                 [*]                      [*]                   [*]
[*]                  [*]                    [*]                 [*]                      [*]                   [*]  [*]     [*]
[*]                  [*]   [*]    [*]       [*]                 [*]      [*]             [*]                   [*]

[*]                        [*]                                        [*]                                           [*]


     [*]         [*]     [*]      [*]           [*]         [*]     [*]       [*]
     [*]         [*]     [*]      [*]           [*]         [*]     [*]       [*]

[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]
[*]                  [*]                    [*]                 [*]

[*]                                                                                [*]


                                  Confidential materials omitted and filed separately with the
                                Securities and Exchange Commission. Asterisks denote omissions.

Research & Development Agreement, Combimatrix                                                                     June 18, 2001
</TABLE>


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