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AMENDMENT NO. 2 TO LICENSE, DEVELOPMENT AND COOPERATION AGREEMENT

Cooperation Agreement

AMENDMENT NO. 2 TO LICENSE, DEVELOPMENT AND COOPERATION AGREEMENT | Document Parties: GEN PROBE INC | DiagnoCure, Inc You are currently viewing:
This Cooperation Agreement involves

GEN PROBE INC | DiagnoCure, Inc

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Title: AMENDMENT NO. 2 TO LICENSE, DEVELOPMENT AND COOPERATION AGREEMENT
Date: 8/6/2009
Industry: Scientific and Technical Instr.     Sector: Technology

AMENDMENT NO. 2 TO LICENSE, DEVELOPMENT AND COOPERATION AGREEMENT, Parties: gen probe inc , diagnocure  inc
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EXHIBIT 10.99

***Text Omitted and Filed Separately
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4)
and 240.24b-2.

AMENDMENT NO. 2 TO
LICENSE, DEVELOPMENT AND COOPERATION AGREEMENT

     This Amendment No. 2 (“ Amendment No. 2 ”) is entered into effective as of April 28, 2009 (the “ Amendment Effective Date ”), pursuant to and amending that certain License, Development and Cooperation Agreement (the “ Agreement ”) between Gen-Probe Incorporated, a Delaware corporation (“ Gen-Probe ”) and DiagnoCure, Inc., a company organized under the laws of the Province of Quebec, Canada (“ DiagnoCure ”). Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement.

Recitals

     A. The parties entered into the Agreement as of November 19, 2003 pursuant to which, among other things, the parties described their respective rights and obligations with respect to the development, manufacture, marketing and distribution of Licensed Products for the detection and measurement of PCA3 as a marker for prostate cancer. The Agreement was previously amended on May 24, 2006 (“ Amendment No. 1 ”).

     B. Pursuant to the Agreement, Gen-Probe has commenced development of an in vitro diagnostic test kit for the detection and measurement of PCA3 as a marker for prostate cancer.

     C. The parties desire to clarify and/or modify certain aspects of their relationship pursuant to the Agreement, in the manner set forth in this Amendment No. 2.

Agreement

     NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth in this Amendment No. 2, the parties hereby agree to amend the Agreement as follows:

     1. Unless otherwise stated herein, all capitalized terms shall have the meaning set forth in the Agreement.

     2. Section 1.31 of the Agreement shall be deleted and replaced in its entirety by the following:

     1.31 “ Net Sales ” shall mean the aggregate amount of revenue in U.S. Dollars (converted as necessary for sales made in a currency other than U.S. Dollars into U.S. Dollars at the applicable Exchange Rate) realized by Gen-Probe or its Affiliates or its or their respective sublicensees or distributors from End Users for any Licensed Product sold or otherwise disposed of, or Licensed Methods practiced, for consideration less only the allowable deductions set forth in subsections (a) through (c) below (and Gen-Probe shall ensure that all sales and other dispositions of the Licensed Products in any country shall be by Gen-Probe or its Affiliates or its or their respective sublicensees or distributors directly to End Users); provided , however, in any country of the world that is not a Major Country (as defined below in this Section) where it is not commercially feasible

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for Gen-Probe to have a direct sales force or a sublicensee and where Gen-Probe has a contract with a distributor for the sale of Licensed Product in such non-Major Country as specified in such contract (such distributor, an “ Authorized Distributor ,” such country, a “ Distributor Country ” and such contract, a “ Distributor Contract ”), “Net Sales” shall mean the aggregate amount of revenue in U.S. Dollars (converted as necessary for sales made in a currency other than U.S. Dollars into U.S. Dollars at the applicable Exchange Rate) realized by Gen-Probe or its Affiliates for any Licensed Product sold or otherwise disposed of, or any Licensed Methods practiced, in such Distributor Country (less only the allowable deductions set forth in subsections (a) through (c) below), and shall not mean revenue based upon End User pricing for such Licensed Product ( unless such Licensed Product was not sold or otherwise disposed of by the Authorized Distributor for such Distributor Country under the applicable Distributor Contract, in which event, this proviso shall not apply and the sale or other disposition of such Licensed Product in such Distributor Country shall be treated in the same manner as it would be treated in any country that is not a Distributor Country and mean revenue based upon End User pricing). For purposes of this Section, “ Major Country ” shall mean (i) [...***...], and/or (ii) [...***...] (A) in which any Licensed Product is sold or otherwise disposed of, or any Licensed Methods are practiced, by or though Gen-Probe or any of its Affiliates, or any of its or their respective sublicensees or distributors and which sublicensee or distributor (or any of their respective Affiliates) has its primary place of business in [...***...], and/or (B) from which any Licensed Product is distributed, sold or otherwise disposed of by Gen-Probe or any of its Affiliates or any of its or their respective sublicensees or distributors into [...***...].

For any Licensed Product sold or otherwise disposed of, or Licensed Methods practiced, for consideration other than cash, the revenue from each such Licensed Product shall be deemed to be the average price charged for identical or similar (after reasonable adjustments) Licensed Products sold or Licensed Methods practiced by Gen-Probe or its Affiliates during the same royalty period in “arms-length” transactions.

The following deductions shall be permitted to the extent customary and actually taken and allowed in the applicable country, and, in each case, as determined and allocated in accordance with U.S. generally accepted accounting principles, consistently applied (GAAP) (and, in each case, solely to the extent such deduction is directly related to a sale of a Licensed Product in the applicable country where such sale was made):

          (a) customary credits and allowances granted by Gen-Probe and its Affiliates (if any) for such Licensed Products on account of refunds, price

 

 

 

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***Confidential Treatment Requested

 


 

reductions, price discounts or rebates, whether arising out of recalls, rejections, returns or otherwise relating to Licensed Products sold during or prior to such royalty period (and for which royalties were previously paid to DiagnoCure hereunder);

          (b) excise taxes, sales taxes, value added taxes, consumption taxes, customs duties and other taxes or duties (excluding income taxes or franchise taxes) imposed with respect to such Licensed Products; and

          (c) transportation charges (including packing, insurance, and freight costs) actually incurred by Gen-Probe or its Affiliate in connection with the sales of such Licensed Products.

     3. A new Section 3.2.5 shall be added to the Agreement as follows:

          3.2.5 Gen-Probe shall supply Gen-Probe’s current TMA PCA3 ASR product to DiagnoCure until the date on which the FDA approves a Gen-Probe in vitro diagnostic test for PCA3. Gen-Probe shall supply the current TMA PCA3 ASR product to DiagnoCure on commercial terms [...***...]. Gen-Probe hereby grants DiagnoCure an option to a sublicense to develop, make, have made, use, sell, offer for sale and import Licensed Products intended for use as laboratory developed tests within DiagnoCure’s or its Affiliate’s laboratories in the United States. Such option to a sublicense shall only be exercisable by DiagnoCure if [...***...] and, as a result, [...***...] (in which event, upon exercise of the option by DiagnoCure upon written notice to Gen-Probe, DiagnoCure would have the right under the sublicense to develop and commercialize the laboratory developed test and Gen-Probe would use its best efforts to promptly grant such sublicense to DiagnoCure). The parties acknowledge that, unless otherwise agreed by the parties, such option shall not include the right for DiagnoCure to sell Licensed Products in the United States to Third Parties for use in laboratories other than those laboratories owned by DiagnoCure and/or its Affiliates.

     4. A new Section 4.1.6 shall be added to the Agreement as follows:

          4.1.6 Gen-Probe shall pay DiagnoCure Five Hundred Thousand U.S. Dollars (US$500,000) on an annual basis, which payment shall be non-refundable and non-cancelable and due and payable within ten (10) days of the Amendment Effective Date for 2009, and shall be due and payable by [...***...] of each subsequent calendar year. Subject to, and without limiting, Section 10.2.5, Gen-Probe shall continue to pay this annual payment to DiagnoCure (A) until the earlier of (i) two (2) years after Gen-Probe’s filing of an application with the FDA for regulatory approval of a Licensed Product that is a TMA PCA3 assay

 

 

 

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***Confidential Treatment Requested

 


 

in the United States, (ii) FDA approval of a Licensed Product that is a PCA3 assay in the United States, or (iii) the date on which DiagnoCure obtains co-exclusive rights pursuant to Section 10.2.4; and (B) if applicable, as set forth in Section 10.2.5. Fifty percent (50%) of each such annual payment ( e.g. , US$250,000) (each, a “ Permitted Deduction Amount ”) may be deducted by Gen-Probe against future royalties due and payable to DiagnoCure by Gen-Probe pursuant to Section 4.2. Solely during the period that Gen-Probe is deducting the Permitted Deduction Amounts, the royalty payment thresholds shall be as set forth in the table below instead of as set forth in Section 4.2(a). For the avoidance of doubt, upon Gen-Probe’s recoupment of the Permitted Deduction Amounts as set forth herein, the provisions set out in the table below shall no longer have any force or effect and the applicable royalty payment thresholds shall again be those set forth in Section 4.2(a).

 

 

 

 

 

Permitted Deduction Amounts

 

Royalty thresholds

 

Royalty thresholds for

deductible from future

 

for 8% annual

 

16% annual royalties on

royalties

 

royalties on Net Sales

 

Net Sales of Licensed

(by way of example)

 

of Licensed Products

 

Products

If there is one Permitted Deduction Amount equal to US$250,000

 

Up to US$53.125 million in cumulative Net Sales

 

In excess of US$53.125 million in cumulative Net Sales

 

 

 

 

 

If there are two Permitted Deduction Amounts, each equal to US$250,000

 

Up to US$56.25 million in cumulative Net Sales

 

In excess of US$56.25 million in cumulative Net Sales

 

 

 

 

 

If there are three Permitted Deduction Amounts, each equal to US$250,000

 

Up to US$59.375 million in cumulative Net Sales

 

In excess of US$59.375 million in cumulative Net Sales

     5. A new Section 4.5 shall be added to the Agreement as follows:

               4.5 Preferred Stock .

          (a) Issuance of Shares . Within fifteen (15) days after the Amendment Effective Date (the “ Closing Date ”), Gen-Probe shall purchase Four Million Nine Hundred Thousand (4,900,000) shares of DiagnoCure Series A convertible preferred shares of DiagnoCure for an aggregate purchase price of Five Million U.S. Dollars (US$5,000,000) (the “ Original Purchase Price ”), no par value (the “ Series A Preferred ”).

          (b) Conversion . Each share of the Series A Preferred shall initially be convertible into one share of DiagnoCure’s common stock (the “ Common Shares ”). The conversion rate will be subject to adjustment for dilutive issuances as provided below. The Series&


 
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