Sample Business Contracts

MassARRAY(TM) Core Facility Contract Terms - Sequenom Inc. and Hitachi Ltd. Life Science Group


                  MassARRAY(TM) Core Facility Contract Terms

                          SEQUENOM, Inc. ("Sequenom")
                           11555 Sorrento Valley Rd
                           San Diego, CA 92121-1331


               Hitachi, Ltd., Life Science Group ("Hitachi LS")
                               1-3-1, Minamidai
                       Kawagoe, Saitama, 350-1165, Japan

     Between, Hitachi, Ltd., Life Science Group ("Hitachi LS") a corporation
duly organized and existing under the laws of Japan and having offices at 1-3-1,
Minamidai, Kawagoe, Saitama, 350-1165, Japan, and Sequenom, Inc. ("Sequenom") a
Delaware corporation having its principal place of business at 11555 Sorrento
Valley Road, San Diego, California 92121-1331, U.S.A. (collectively the

     Whereas, Sequenom is in the business of, among other things, designing,
developing, manufacturing and selling proprietary biopolymer analysis products
and related software and consumables;

     Whereas, Sequenom has expertise in the development and utilization of mass
spectrometry for biopolymer analysis and has developed Sequenom's proprietary
MassARRAY(TM) products, technology, assays, assay design protocols and methods,
and related know-how for high-throughput DNA analysis;

     Whereas, Hitachi LS desires to license Sequenom's MassARRAY technology and
have access to Sequenom's related know-how, including Sequenom's assay design
abilities and Sequenom desires to provide the same in exchange for certain fees,
intellectual property and revenue sharing rights; and

     Whereas, Sequenom and Hitachi LS would like to set forth the general terms
and conditions of such an arrangement in this binding Letter of Intent, which
upon execution, obligates the parties as follows:

1.  General Terms

  1.1  Research License. Sequenom grants Hitachi LS the right to use Sequenom's
       MassARRAY technology for individual sample "DNA Genotyping" (as defined
       in 1.1.1) in the Territory for Hitachi LS's "Internal Research and
       Development Purposes" (as defined in 1.1.2).

       1.1.1  "DNA Genotyping" means performing services involving analysis of
              biopolymer samples to discover, test, confirm, or validate
              potential or known mutations or polymorphisms or identifying and
              characterizing mutations or polymorphisms as to genotype and/or

       1.1.2  "Internal Research and Development Purposes" means purposes and
              activities within Hitachi LS that are limited to research and
              development activities involving DNA Genotyping.

1.2    Commercial License. Sequenom grants Hitachi LS the right to use MassARRAY
       technology for individual sample "Commercial DNA Genotyping" (as defined
       in 1.2.1) and individual sample "Commercial Diagnostics Services" (as
       defined in 1.3.1) in the Territory.

       1.2.1  "Commercial DNA Genotyping" means DNA Genotyping (as defined in
              1.1.1) for customers or collaborators in exchange for a fee or fee

       1.2.2  For all Commercial DNA Genotyping services using MassARRAY
              technology, Hitachi LS will pay Sequenom [...***...] of the
              revenues from such services.

       1.2.3  Where a combination of commercial services (including Commercial
              DNA Genotyping services) is provided to a customer of Hitachi LS,
              the value of the MassARRAY based services component will be fairly
              allocated, independently identified, and a payment applied to this
              component only. Activities involving -assay design, sample
              preparation, sample amplification, genotype analysis and calling
              are all considered to be MassARRAY based services and will be
              included in the fair allocation and payment to Sequenom.

       1.2.4  The revenues associated with a Commercial DNA Genotyping service
              using MassARRAY technology must fairly reflect the value of such
              service in the Territory.

       1.2.5  For Commercial DNA Genotyping services that include Diagnostic
              Assays developed or co-developed by Sequenom, an additional
              payment will be paid by Hitachi LS to Sequenom as set forth under
              sections and below.

1.3    Diagnostic Assays: The parties recognize and acknowledge that Hitachi LS
       and Sequenom will each be designing and developing assays and assay
       panels useful for providing Commercial Diagnostics Services (as defined
       in 1.3.1). These assays and assay panels for Commercial Diagnostics
       Services will be referred to as "Diagnostic Assays." The following
       outlines the parties' understanding in this regard.

       1.3.1  "Commercial Diagnostics Services" means, in exchange for a fee or
              fee equivalent, performing DNA Genotyping in conjunction with (a)
              the diagnosis or monitoring of any disease, state, or condition in
              humans, or (b) the selection of treatment of any disease, state,
              or condition in humans, or (c) the determination of genetic traits
              in humans. Commercial Diagnostics Services includes the use of DNA
              Genotyping in conjunction with a clinical diagnostic test
              (regardless of whether such clinical diagnostic test has been
              approved by the United State FDA or any governmental or regulatory
              authority in Japan or elsewhere). Commercial Diagnostics Services
              includes the provision of medical diagnostic information to a
              patient/individual or to an intermediate company/provider that
              transfers this information a patient/individual or their medical

*** Confidential Treatment Requested

       1.3.2  Hitachi LS will have the ability to license Sequenom Diagnostic
              Assays (that is, assays from Sequenom that are not a standard
              distribution product that would be available through Nissei Sangyo
              Co., Ltd.) on a non-exclusive basis for Commercial Diagnostics
              Services to be provided by Hitachi LS in the Territory. The only
              exception will be for Sequenom Diagnostic Assays which, prior to
              entering into this Letter of Intent, have already been exclusively
              licensed to another party.

       In addition to the [...***...] payment obligation under
                        section 1.2.2 for Commercial DNA Genotyping, Hitachi LS
                        shall pay Sequenom an additional payment of [...***...]
                        of the revenues from Commercial Diagnostics Services
                        using a Sequenom Diagnostic Assay. For clarity, Hitachi
                        LS's total payment obligation to Sequenom for Commercial
                        Diagnostics Services using a Sequenom Diagnostic Assay
                        will be [...***...].

       1.3.3  For Diagnostic Assays that are co-developed by Hitachi LS and
              Sequenom, Sequenom shall grant an exclusive license to Hitachi LS
              to Sequenom's rights in such Diagnostic Assays, for Commercial
              Diagnostics Services in the Territory for a period of [...***...]
              from the date such Diagnostic Assay is available for use in
              Commercial Diagnostics Services. Following the expiration of this
              [...***...] period, such co-developed Diagnostic Assays may be
              licensed by Sequenom to other parties.

       In addition to the [...***...] payment obligation under
                        section 1.2.2 for Commercial DNA Genotyping, Hitachi LS
                        shall pay Sequenom an additional payment of [...***...]
                        the revenues from Commercial Diagnostics Services using
                        a co-developed Diagnostic Assay. For clarity, Hitachi
                        LS's total payment obligation to Sequenom for Commercial
                        Diagnostics Services using a co-developed Diagnostic
                        Assay will be [...***...].

       1.3.4  For Diagnostic Assays designed and developed solely by Hitachi LS
              that are used in Commercial Diagnostics Services, Hitachi LS will
              be obligated to pay Sequenom the [...***...] payment for
              Commercial DNA Genotyping as set forth under section 1.2.2. For
              clarity, Hitachi LS's total payment obligation to Sequenom for
              Commercial Diagnostics Services using a Hitachi LS developed
              Diagnostic Assay will be [...***...].

1.4    Revenue Sharing. For the commercial license payments and diagnostic assay
       payments refererenced under sections 1.2 and 1.3 payable to Sequenom that
       are based upon percentages of revenues, the parties agree to [...***...]
       that will be payable to Sequenom [...***...]. Hitachi LS agrees to
       provide Sequenom [...***...] and the parties agree to [...***...] that
       will be payable to Sequenom.

*** Confidential Treatment Requested

1.5    Pooling Technology. At least for the present time, this licensed right
       will not include the right for Hitachi LS to use Sequenom's proprietary,
       quantitative, pooled sample analysis technology for determining allele
       frequencies in populations for more than one biopolymer sample,
       simultaneously. The sale or support of DNA Genotyping programs or
       services by Hitachi LS that would make use of this pooling technology
       will require completion of a separate and independent agreement between
       Sequenom and Hitachi LS. Should such opportunities arise, the parties
       agree to negotiate the terms of such an agreement in good faith.

1.6    Access to Distribution Products. Hitachi LS will have access (that is,
       access through Nissei Sangyo as a Distributor of Sequenom products,
       including assays) to Sequenom developed genotyping assay panels (subject
       to the limitations and restrictions as set forth in the Letter of Intent
       re Distribution between Nissei Sangyo and Sequenom) at Nissei's cost, at
       Nissei's discretion.

1.7    Assay Design and Oligo QC Software. Sequenom will sell SpectroDESIGNER
       Assay Design Software and SpectroCHECK Oligo QC software to Nissei Sangyo
       Co., Ltd. for the use by and benefit of Hitachi Ltd., Life Science Group
       in their Core Facility for Commercial Genotyping Services. The transfer
       of this software is beyond the scope of the present Core Facility
       Agreement and will be provided for separately in an Agreement with Nissei
       Sangyo Co., Ltd.

1.8    Territory: Territory for the contract is Japan.

       1.8.1  Hitachi LS may provide Commercial DNA Genotyping services to
              companies or entities (third parties) that have an established
              business office in the Territory and that are headquartered or are
              principally located outside of the Territory, provided that the
              provision of services to this company or entity does not conflict
              with the business interests of Sequenom in dealing with the same
              company or entity outside of the Territory.

       1.8.2  Hitachi LS must obtain written authorization from Sequenom prior
              to the provision of Commercial DNA Genotyping Services using
              MassARRAY technology for any company, entity, or individual
              outside the Territory.

1.9    Term:  Until [...***...]; renewable on an annual basis thereafter upon
       mutual agreement.

1.10   Confidentiality. This Letter of Intent and the information contained
       herein, is considered the Confidential Information of Sequenom. Hitachi
       LS agrees to (i) hold such Confidential Information in strict confidence;
       (ii) not disclose it to any third parties or to use it in any way,
       commercially or otherwise; and (iii) not allow any unauthorized person
       access to such Confidential Information, without the prior written
       consent of Sequenom.

1.11   Detailed Agreement. Both parties agree that a formal, detailed agreement,
       that will include the terms herein, will be executed by the parties
       within sixty (60) days following the execution of this binding Letter of

*** Confidential Treatment Requested

2.  Sequenom Support Commitment

  2.1  Sequenom will provide Hitachi LS personnel with comprehensive training
       covering system installation, support and service; applications and
       systems software, assay development and implementation.

3.  Intellectual Property

  3.1  Inventions, discoveries, products, assays, improvements, and
       modifications that are conceived and developed by Hitachi LS will be
       owned by Hitachi LS (or jointly owned in the case of joint conception or
       development with Sequenom) except where such inventions, discoveries,
       products, assays, improvements, or modifications pertain to improvements,
       modifications, or revisions to the MassARRAY System, related software,
       related consumables, or Sequenom assays, in which case Hitachi LS will
       grant back to Sequenom an exclusive, perpetual, royalty-free license to
       such improvements, modifications, or revisions, for all purposes, while
       Hitachi LS will reserve the royalty free right to use such improvements,
       modifications, or revisions for Hitachi LS's internal use only, without
       sublicense rights. For co-developed Diagnostic Assays, as set forth in
       section 1.3.3 and, ownership shall be joint, but subject to the
       license rights set forth in sections 1.3.3 and

4. Trademarks and Brand Ownership

  4.1  All trademarks, trade names, trade dress and other trade rights of
       Sequenom remain the property of Sequenom, however, Hitachi LS will use
       such trade rights in connection with its supply of MassARRAY based DNA
       Genotyping Services and Diagnostics Services to customers, provided that
       such use has been approved and authorized by Sequenom, in writing, in
       advance. Nothing in this section should be construed to prevent Hitachi
       LS from using brand or trade names of its own, in conjunction with those
       of Sequenom, for MassARRAY based assays developed solely by Hitachi LS,
       co-developed with Sequenom, or those exclusively licensed to Hitachi LS
       by Sequenom.

5. Payment Terms

  5.1  Hitachi LS will pay Sequenom a [...***...] Core Facility fee of
       [...***...]. Hitachi LS will pay [...***...] by wire transfer to an
       account designated by Sequenom [...***...]. Hitachi LS will pay to
       Sequenom the remaining portion [...***...] of the Core Facility fee due,
       by wire transfer within thirty (30) days of [...***...].

  5.2  All fees due and prices are net amounts due to Sequenom, exclusive of any
       and all taxes, customs, duties, or other fees that may be governmentally
       imposed or otherwise.

  5.3  All payments shall be made in United States dollars and are fixed amounts
       regardless of exchange rate fluctuations.

*** Confidential Treatment Requested

     In Witness Whereof, both Sequenom and Hitachi LS have executed this Letter
of Intent, in duplicate originals, by their respective employee hereunto duly
authorized, as of the date below.

Sequenom, Inc.                             Hitachi Ltd., Life Science Group

By:  /s/ Rick Episcopo                  By:  /s/ Idiroya Taguchi
   ---------------------------------       --------------------------------
Name:  Rick Episcopo                    Name:  Idiroya Taguchi
     -------------------------------         ------------------------------
Title:  Sr. V.P. Commercial Ops.        Title:  President & CEO
      ------------------------------          -----------------------------
Date:  December 9, 2000                 Date:  11 Dec. 2000
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