EXHIBIT 10.52 LICENSE, DEVELOPMENT AND COOPERATION AGREEMENT

 

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                                                                   EXHIBIT 10.52

 

                                            ***TEXT OMITTED AND FILED SEPARATELY

                                                CONFIDENTIAL TREATMENT REQUESTED

                                           UNDER 17 C.F.R. SECTIONS 200.80(b)(4)

                                                                   AND 240.24B-2

 

                 LICENSE, DEVELOPMENT AND COOPERATION AGREEMENT

 

         THIS LICENSE, DEVELOPMENT, AND COOPERATION AGREEMENT (this

"AGREEMENT"), dated as of November 19, 2003 (the "EFFECTIVE DATE"), is entered

into between GEN-PROBE INCORPORATED, a Delaware corporation ("GEN-PROBE") with

its principal place of business at 10210 Genetic Center Drive, San Diego

California 92121, U.S.A., and DIAGNOCURE INC., a company organized under the

laws of the Province of Quebec, Canada ("DIAGNOCURE") with its head office at

2050, Rene-Levesque Blvd. W., 6th floor, Sainte-Foy QC G1V 2K8, Canada.

 

         WHEREAS, DiagnoCure owns or has intellectual property rights with

respect to the PCA3(DD3) gene (as defined below) and certain related technology.

 

         WHEREAS, Gen-Probe desires to obtain an exclusive worldwide license of

DiagnoCure's rights in the PCA3(DD3) gene, DiagnoCure Technology (as defined

below), and certain related technology in order to develop and commercialize

products for use in the Field (as defined below).

 

         NOW, THEREFORE, in consideration of the foregoing premises and the

mutual covenants herein contained, the parties hereby agree as follows:

 

         1.       DEFINITIONS. For purposes of this Agreement, the terms defined

in this Section 1 shall have the respective meanings set forth below:

 

                  1.1      "AFFILIATE" shall mean, with respect to any entity,

any other entity which directly or indirectly controls, is controlled by, or is

under common control with, such entity. An entity shall be regarded as in

control of another entity if it owns, or directly or indirectly controls at

least fifty percent (50%) of the voting stock or other ownership interest of the

other entity, or if it directly or indirectly possesses the power to direct or

cause the direction of the management and policies of the other entity by any

means whatsoever.

 

                  1.2      "APTIMA(R) TECHNOLOGY" shall mean all technology

reasonably necessary to make or use Gen-Probe's APTIMA generation of amplified

nucleic acid assays, including Target Capture (TC), Transcription-Mediated

Amplification (TMA), Hybridization Protection Assay (HPA) and Dual Kinetic Assay

(DKA) technologies, each to the extent in each case that Gen-Probe has a right

to license or sublicense (and subject to the provisions of Section 3.3).

 

                  1.3      "CHANGE-IN-CEO" shall mean the replacement of Henry

L. Nordhoff as Chief Executive Officer of Gen-Probe; provided, however that (a)

no Change-in-CEO will occur if the successor to Mr. Nordhoff has been an

employee of Gen-Probe for at least the one-year period preceding the date on

which he or she is appointed CEO and (b) no Change-in-CEO will occur if Mr.

Nordhoff remains as Chairman of Gen-Probe. In the event that Mr. Nordhoff does

not remain as Chairman, and his successor as President and CEO has not been an

employee of Gen-Probe for at least one year before the later of Mr. Nordhoff's

termination as (i) President and CEO or (ii) Chairman, then DiagnoCure shall

have the option for a period of six months to terminate the right of the

President and CEO of Gen-Probe, pursuant to Section 6.5.2, to make the final

decision in order to resolve a Program Dispute.

 

                                       1.

 

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                  1.4      "CHANGE-IN-CONTROL" shall mean, with respect to

Gen-Probe, (a) the acquisition of Gen-Probe by another entity by means of any

transaction or series of related transactions (including, without limitation,

any reorganization, merger or consolidation, but excluding any merger effected

exclusively for the purpose of changing the domicile of Gen-Probe); (b) the

sale, transfer or other disposition of all or substantially all of the assets of

Gen-Probe (including without limitation all of its assets relating to this

Agreement); or (c) the sale of all or substantially all of the capital stock of

Gen-Probe; unless in each of clauses (a) through (c) above, Gen-Probe's

stockholders of record immediately prior to such acquisition or sale hold (by

virtue of the securities issued in consideration for Gen-Probe's acquisition or

sale or otherwise) greater than fifty percent (50%) of the total voting power of

the surviving or acquiring entity.

 

                  1.5      "CONFIDENTIAL INFORMATION" shall mean, with respect

to a party, all information of any kind whatsoever (including without

limitation, data, compilations, formulae models, patent disclosures, procedures,

processes, projections, protocols, results of experimentation and testing,

specifications, strategies and techniques), and all tangible and intangible

embodiments thereof of any kind whatsoever (including without limitation,

apparatus, compositions, documents, drawings, machinery, patent applications,

records, reports), (i) which is disclosed by such party to the other party under

this Agreement and is marked, identified as or otherwise acknowledged to be

confidential at the time of disclosure to the other party and (ii) which was

disclosed by such party to the other party under the Confidential Disclosure

Agreement between the parties dated November 15, 2002. Notwithstanding the

foregoing, Confidential Information of a party shall not include information

which the other party can establish by written documentation (a) to have been

publicly known prior to disclosure of such information by the disclosing party

to the other party, (b) to have become publicly known without fault on the part

of the other party, subsequent to disclosure of such information by the

disclosing party to the other party, (c) to have been received by the other

party at any time from a source, other than the disclosing party, rightfully

having possession of and the right to disclose such information, (d) to have

been otherwise known by the other party prior to disclosure of such information

by the disclosing party to the other party, or (e) to have been independently

developed by employees or agents of the other party without access to or use of

such information disclosed by the disclosing party to the other party.

 

                  1.6      "CONTRACT DEVELOPMENT" shall mean the funded work as

more particularly described in Section 6.3.

 

                  1.7      "DIAGNOCURE KNOW-HOW RIGHTS" shall mean all of

DiagnoCure's rights in and to Know-How that directly relates to the DiagnoCure

Technology (other than University Know-How Rights) and is reasonably necessary

for the purposes of this Agreement.

 

                  1.8      "DIAGNOCURE PATENT RIGHTS" shall mean all Patent

Rights owned or licensed by DiagnoCure that claim any discovery or invention

directly related to the DiagnoCure Technology (other than University Patent

Rights), including but not limited to those patents and patent applications (and

patents issued thereon) listed in Schedule 1 attached hereto and made a part

hereof, together with any divisions, continuations, extensions, renewals,

reissues reexamination certificates and continuations of such patents and the

foreign equivalents of any of the foregoing.

 

                                       2.

 

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                  1.9      "DIAGNOCURE PRODUCT" shall mean the [...***...] for

the detection of PCA3(DD3) that are being sold by DiagnoCure prior to the date

that Gen-Probe provides the notice under Section 10.1.1 that a Licensed Product

is ready for commercial launch.

 

                  1.10     "DIAGNOCURE TECHNOLOGY" shall mean all technology

relating to PCA3(DD3) or the use, measurement or detection thereof, within the

Field.

 

                  1.11     "DISPUTE" shall mean any dispute, disagreement,

controversy, stalemate or claim arising out of or relating to this Agreement, or

the breach, termination or validity thereof.

 

                  1.12     "END USER" shall mean, with respect to a Licensed

Product, a Third Party that uses such Licensed Product to generate data and

report the results of such data.

 

                  1.13     "EXCHANGE RATE" shall mean, with respect to any

amount to be converted from a foreign currency to U.S. dollars hereunder, the

exchange from the foreign currency to the U.S. dollars currency using the

average closing buying rate for such currency quoted in the continental terms

method of quoting exchange rates (local currency per US$1) by Bank of America

NT&SA in London, England on each of the last business day of each month in the

quarter prior to the relevant date.

 

                  1.14     "FDA" shall mean the United States Food and Drug

Administration, or the successor thereto.

 

                  1.15     "FIELD" shall mean the detection and/or measurement

of PCA3(DD3) as:

 

                           (a)      a marker for the diagnosis, monitoring,

prognosis, or drug susceptibility of prostate cancer; and/or

 

                           (b)      a marker for cancer (without limitation),

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

 

         The "FIELD" shall not include the use of any assay in drug discovery.

 

                  1.16     "FIRST COMMERCIAL SALE" shall mean, with respect to

any Licensed Product, the first commercial sale of such Licensed Product by

Gen-Probe, its Affiliates, distributors or (sub)licensees to customers in any

country who are not Affiliates.

 

                  1.17     "FULLY-BURDENED COST" shall mean the fully-burdened

cost to a party (expressed on a per unit basis) of manufacturing or having

manufactured such product, together with the packaging thereof, including the

following specified costs of manufacturing:

 

                           1.17.1 direct manufacturing and quality control costs

(i.e., those costs which vary with production), including, without limitation,

direct labor and benefit expenses for manufacturing and quality control

personnel, actual cost of raw materials, components, consumable bulk, costs

associated with scrap and other production materials incorporated into a

product; plus

 

                                               *CONFIDENTIAL TREATMENT REQUESTED

 

                                       3.

 

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                           1.17.2 fixed manufacturing overhead costs allocable

to the product based on actual utilization for manufacturing work directly

related to such product conducted at the relevant manufacturing facility,

including, but not limited to, direct benefit and labor expenses for technical

services and support services, depreciation, maintenance and repairs and

insurance costs associated with such utilization of the manufacturing facility;

plus

 

                           1.17.3 any and all royalties payable for rights used

in the manufacture of the product, in each case in accordance with GAAP and

consistent with the cost structures used by the party for the same or similar

materials, components or products in its business operations outside the scope

of this Agreement.

 

         The fully-burdened manufacturing cost shall be subject to the right of

audit.

 

                  1.18     "GEN-PROBE IP RIGHTS" shall mean, collectively, the

Gen-Probe Patent Rights and the Gen-Probe Know-How Rights.

 

                  1.19     "GEN-PROBE KNOW-HOW RIGHTS" shall mean all of

Gen-Probe's rights in and to Know-How that directly relates to the APTIMA

Technology and is reasonably necessary for the purposes of this Agreement.

 

                  1.20     "GEN-PROBE PATENT RIGHTS" shall mean all Patent

Rights owned or controlled by Gen-Probe that claim any discovery or invention

directly related to and reasonably necessary for practicing the APTIMA

Technology, including those identified in Schedule 2, in each case that

Gen-Probe has a right to license or sublicense (and subject to the provisions of

Section 3.3).

 

                  1.21     "IUO KIT" shall mean a kit to measure the expression

of PCA3(DD3) intended and technically sufficient to be used for FDA (or similar

governmental authority) mandated clinical trials.

 

                  1.22     "JOINT ADVISORY COMMITTEE" shall mean the committee

established pursuant to Section 6.

 

                  1.23     "JOINT WORKING TEAM" shall mean the team established

pursuant to Section 5.4.

 

                  1.24     "KNOW-HOW" shall mean all information and data, which

is not generally known including, but not limited to, formulae, procedures,

protocols, techniques, market research, copies of regulatory filings, and

results of experimentation and testing.

 

                  1.25     "LICENSE AGREEMENT" shall mean that certain License

Agreement between the University of Nijmegen and DiagnoCure dated May 1, 2000

and any amendments thereto.

 

                  1.26     "LICENSED KNOW-HOW RIGHTS" means the DiagnoCure

Know-How Rights and the University Know-How Rights.

 

                                       4.

 

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                  1.27     "LICENSED METHOD" shall mean any method or process

used in the Field which if used absent the license granted hereunder would

infringe a Valid Claim of the Licensed Patent Rights, or which otherwise uses

the Licensed Know-How Rights.

 

                  1.28     "LICENSED PATENT RIGHTS" means the DiagnoCure Patent

Rights and the University Patent Rights.

 

                  1.29     "LICENSED PRODUCT" shall mean any product for use in

the Field, which if made, used, sold, offered for sale or imported absent the

license granted hereunder would infringe a Valid Claim of the Licensed Patent

Rights, or which otherwise uses or incorporates the Licensed Know-How Rights.

 

                  1.30     "LICENSED IP RIGHTS" shall mean, collectively, the

Licensed Patent Rights and the Licensed Know-How Rights.

 

                  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, sublicensees, or distributors from End

Users for any Licensed Product sold or otherwise disposed of for consideration

(for any such Licensed Product sold or otherwise disposed of 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),

less only the following:

 

                           (a)      customary credits and allowances granted by

Gen-Probe and its Affiliates (if any) for such Licensed Products on account of

refunds, price 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 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 in connection with the sales of

such Licensed Products

 

                  1.32     "PATENT RIGHTS" shall mean (a) all patent

applications heretofore or hereafter filed or having legal force in any country

worldwide; (b) all patents, including utility, model and design patents and

certificates of invention; and (c) all divisionals, continuations,

continuations-in-part, reissues, renewals, extensions or additions to the

foregoing.

 

                  1.33     "PCA3(DD3") shall mean the PCA3(DD3) gene more

particularly described in the patents included within the DiagnoCure Patent

Rights and the University Patent Rights, together with and any derivative,

polymorphism, progeny, splice variant, or part thereof (including introns and

exons).

 

                                       5.

 

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                  1.34     "PROGRAM" shall mean the collaborative program

described in Section 5.

 

                  1.35     "PROGRAM DISPUTE" shall mean any and all disputes,

disagreements, or stalemates between the parties arising from or relating to the

design, modification, or execution of the Program or any activity thereunder,

including but not limited to issues arising in connection with Third Party

patent infringement claims as referred to in Section 11.4.

 

                  1.36     "PROGRAM INVENTION" shall mean any invention,

discovery, composition technology, enhancement, data or information (whether or

not patentable), made or conceived by employees or others on behalf of

Gen-Probe, DiagnoCure or both in the performance of the Program during the term

of the Program.

 

                  1.37     "PROGRAM PATENT RIGHTS" shall mean all Patent Rights

which claim any Program Invention.

 

                  1.38     "ROYALTY TERM" shall mean, with respect to each

Licensed Product in each country, if the manufacture, use or sale of such

Licensed Product in such country was at the time of the First Commercial Sale in

such country covered by a Valid Claim of the Licensed Patent Rights, the term

for which such Valid Claim remains in effect and would be infringed but for the

license granted by this Agreement. For each country in which no Valid Claim has

ever existed because DiagnoCure has not filed a patent application in that

country, the parties agree that the Royalty Term shall be determined by

reference to the status of a Valid Claim in the United States.

 

                  1.39     "THIRD PARTY" shall mean any person or entity other

than Gen-Probe or DiagnoCure or any of their Affiliates.

 

                  1.40     "THIRD PARTY MARKER" shall mean a biomarker (a)

detected by a Licensed Product (other than for control purposes) that is not

covered by the Licensed Patent Rights and (b) for which Gen-Probe owes a royalty

to a Third Party for the making, using or selling of such Licensed Product that

detects such marker.

 

                  1.41     "UNIVERSITY KNOW-HOW RIGHTS" means all rights in and

to Know-How licensed from the University of Nijmegen to DiagnoCure or otherwise

provided by the University of Nijmegen to DiagnoCure, in each case to the extent

that directly related to the DiagnoCure Technology and reasonably necessary for

the purposes of this Agreement.

 

                  1.42     "UNIVERSITY PATENT RIGHTS" means all Patent Rights

licensed from the University of Nijmegen to DiagnoCure directly related to the

DiagnoCure Technology.

 

                  1.43     "VALID CLAIM" shall mean, in the case of an issued

and unexpired patent within the Licensed Patent Rights, a claim of an issued and

unexpired patent which has not been held permanently revoked, unenforceable or

invalid by a decision of a court or other governmental agency of competent

jurisdiction, unappealable or unappealed within the time allowed for appeal, and

which has not been admitted to be invalid or unenforceable through reissue or

disclaimer or otherwise, and in the case of a United States or foreign patent

application, a claim that has not been cancelled, withdrawn, or abandoned

without being refiled

 

                                       6.

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in another application or that has not been finally rejected by an

administrative agency action from which no appeal can be taken.

 

         2.       REPRESENTATIONS AND WARRANTIES. Each party hereby represents

and warrants to the other party as follows:

 

                  2.1      CORPORATE EXISTENCE. Such party is a corporation duly

organized, validly existing and in good standing under the laws of the state or

jurisdiction in which it is incorporated.

 

                  2.2      AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Such

party (a) has the corporate power and authority and the legal right to enter

into this Agreement and to perform its obligations hereunder, and (b) has taken

all necessary corporate action on its part to authorize the execution and

delivery of this Agreement and the performance of its obligations hereunder.

This Agreement has been duly executed and delivered on behalf of such party, and

constitutes a legal, valid, binding obligation, enforceable against such party

in accordance with its terms.

 

                  2.3      CONSENTS. All necessary consents, approvals and

authorizations of all governmental authorities and other entities required to be

obtained by DiagnoCure in connection with this Agreement have been obtained. All

necessary consents, approvals and authorizations of all governmental authorities

and other entities required to be obtained by Gen-Probe in connection with this

Agreement have been obtained.

 

                  2.4      NO CONFLICT. The execution and delivery of this

Agreement and the performance of such party's obligations hereunder (a) do not

conflict with or violate any requirement of applicable laws or regulations, and

(b) do not conflict with, or constitute a default under, any contractual

obligation of it.

 

                  2.5      LICENSE NEGOTIATIONS WITH [...***...]. Gen-Probe

represents, warrants, and agrees that, without the prior written consent of

DiagnoCure, Gen-Probe shall not at any time after the Effective Date seek to

acquire, for itself or any Third Party, rights under any patent or patent

application owned or controlled by [...***...] to make, use or sell a product or

service that measures or detects PCA3(DD3) in order to reduce any financial

obligation of Gen-Probe to DiagnoCure under this Agreement. For the avoidance of

doubt, nothing herein shall restrict Gen-Probe's right to negotiate with

[...***...], subject to the terms of this Agreement and, particularly, in

compliance with the terms of Sections 5 and 6, if the Licensed Patent Rights are

insufficient to provide freedom-to-operate as to PCA3(DD3) as a marker for

prostate cancer.

 

                  2.6      LICENSED IP RIGHTS.

 

                           2.6.1    As of the Effective Date, DiagnoCure

represents, warrants and covenants to Gen-Probe that, except as DiagnoCure has

expressly informed Gen-Probe in writing prior to the Effective Date, (a)

DiagnoCure is the sole owner or exclusive licensee of the Licensed IP Rights,

and has not granted to any Third Party any license or other interest in the

Licensed IP Rights; (b) to the best of DiagnoCure's knowledge, there are not and

will not be any Third Party Patent Rights related to PCA3(DD3) that are or will

be infringed by (i) the making, using, selling or importing of Licensed Products

incorporating the Licensed IP Rights in the

 

                                               *CONFIDENTIAL TREATMENT REQUESTED

 

                                       7.

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Field, or (ii) practicing a method of detecting, measuring, monitoring or

diagnosing prostate cancer utilizing PCA3(DD3) in the Field; (c) to the best of

DiagnoCure's knowledge, DiagnoCure is not aware of any infringement or

misappropriation by a Third Party of the Licensed IP Rights; and (d) the License

Agreement (i) is in full force and effect, (ii) is not in a state of breach, and

(iii) except as DiagnoCure has expressly provided to Gen-Probe, has not been

amended in any manner.

 

                           2.6.2    As of the Effective Date, Gen-Probe

represents, warrants and covenants to DiagnoCure that, except as Gen-Probe has

expressly informed DiagnoCure in writing prior to the Effective Date, (a)

Gen-Probe is the owner or licensee of the Gen-Probe IP Rights; (b) to the best

of Gen-Probe's knowledge, there are not and will not be any Third Party Patent

Rights related to APTIMA technology that are or will be infringed by (i) the

making, using, selling or importing of Licensed Products incorporating the

APTIMA Technology in the Field; and (c) to the best of Gen-Probe's knowledge,

Gen-Probe is not aware of any infringement or misappropriation by a Third Party

of the Gen-Probe Patent Rights and Gen-Probe Know-How Rights.

 

         3.       LICENSE GRANT

 

                  3.1      LICENSED IP RIGHTS. Subject to the terms of this

Agreement, DiagnoCure hereby grants to Gen-Probe a worldwide, exclusive license

and sublicense (including the right to grant sublicenses) in the Field under the

Licensed IP Rights to research, develop, make, have made, use, offer for sale,

sell and import Licensed Products, and practice Licensed Methods, in each case

for the detection and/or measurement of PCA3(DD3) as a marker for the diagnosis

monitoring, prognosis, or drug susceptibility of prostate cancer. Subject to the

terms of this Agreement, DiagnoCure hereby grants to Gen-Probe a worldwide,

co-exclusive license (co-exclusive with DiagnoCure and its future sublicensees)

and sublicense (including the right to grant sublicenses) in the Field under the

Licensed IP Rights to research, develop, make, have made, use, offer for sale,

sell and import Licensed Products, and practice Licensed Methods, in each case

for the detection and/or measurement of PCA3(DD3) as a marker for cancer

(without limitation) [...***...]. For the avoidance of doubt, nothing contained

herein shall constitute a license to Gen-Probe for the use of any assay in drug

discovery.

 

                  3.2      DIAGNOCURE RIGHTS. Notwithstanding the exclusive

license granted to Gen-Probe under Section 3.1, subject to the terms of this

Agreement DiagnoCure shall have the following worldwide rights under the

Licensed IP Rights:

 

                           3.2.1    pursuant to Sections 3.3 and 3.4, to

research and develop (but not to offer for sale or sell) assays solely for

non-commercial, research applications.

 

                           3.2.2    until Gen-Probe provides written notice to

DiagnoCure that a Licensed Product is ready for commercial launch pursuant to

Section 10.1.1., to make, have made, use, offer for sale, sell and import the

DiagnoCure Product;

 

                                               *CONFIDENTIAL TREATMENT REQUESTED

 

                                       8.

 

<PAGE>

 

                           3.2.3    after Gen-Probe provides such notice, to

sell its then-current inventory of DiagnoCure Product until the earlier of the

date (i) DiagnoCure has sold off such inventory, or (ii) [...***...] after

Gen-Probe has provided such notice; and

 

                           3.2.4    subject to the oversight and governance of

the Joint Advisory Committee, to co-promote the DiagnoCure Technology as used in

Licensed Products, but not to co-market or to sell the Licensed Products.

 

                  3.3      LICENSE TO DIAGNOCURE. Subject to supervision of the

Joint Advisory Committee and subject to the terms of this Agreement, Gen-Probe

hereby grants to DiagnoCure under the Gen-Probe Know-How Rights and Gen-Probe

Patent Rights a non-exclusive, royalty-free license to research and develop

assays using the APTIMA Technology in the Field in conjunction with the

DiagnoCure Technology for non-commercial applications, including research. With

respect to technology that Gen-Probe uses in connection with the APTIMA

Technology, but that is not APTIMA Technology and/or not owned by Gen-Probe, and

that is reasonably necessary, as determined by the Joint Advisory Committee, for

DiagnoCure to practice its license above, Gen-Probe shall use best efforts to

obtain rights for DiagnoCure to practice such technology.

 

                  3.4      ADDITIONAL APPLICATIONS WITHIN THE FIELD. If, at any

time during the term of this Agreement, DiagnoCure becomes aware of any

additional PCA3(DD3) application within the Field (the "ADDITIONAL

APPLICATION"), which application is then not the subject of a Licensed Product

that is planned for development, in development, or being sold pursuant to this

Agreement (an "EXISTING APPLICATION"), then DiagnoCure shall have the right to

present such Additional Application, with reasonable supporting documentation

and/or data, to the Joint Advisory Committee for review. For the period of

[...***...] following such presentation Gen-Probe shall have the following

options:

 

                           (a)      Committing to develop and commercialize such

Additional Application in accordance with a schedule to be mutually agreed by

both parties; or

 

                           (b)      Electing to license such Additional

Application to a Third Party licensee, in accordance with a schedule to be

mutually agreed by both parties, on terms that shall provide that DiagnoCure

shall receive [...***...] of any consideration received from such licensee for

such license and Gen-Probe shall receive [...***...] of such consideration.

 

         Gen-Probe shall exercise its option by delivering written notice to

DiagnoCure. If Gen-Probe does not elect either of the options set forth above

within the time allowed, and if the proposed Additional Application will not

substantially compete with an Existing Application, then DiagnoCure may elect to

license such Additional Application to a Third Party licensee on terms that

shall provide that DiagnoCure shall receive [...***...] of any consideration

received from such licensee for such license and Gen-Probe shall receive

[...***...] of such consideration. For purposes of this section, an Additional

Application will be deemed to "substantially compete" with an Existing

Application if the Additional Application is reasonably expected to erode more

than [...***...] of the market for the Existing Application.

 

                                               *CONFIDENTIAL TREATMENT REQUESTED

 

                                       9.

 

<PAGE>

 

                  3.5      ADDITIONAL UTILITY OUTSIDE THE FIELD. If, at any time

during the term of this Agreement, DiagnoCure becomes aware of any PCA3(DD3)

utility outside the Field, DiagnoCure shall notify Gen-Probe in writing and,

upon Gen-Probe's written request [...***...] of such written notification,

DiagnoCure shall enter into good faith negotiations with Gen-Probe concerning

the possible expansion, on commercially reasonable terms to be negotiated by the

parties in good faith, of the license rights granted hereunder to encompass the

additional utility of PCA3(DD3) outside the Field. If such good faith

negotiations do not result in a mutually-acceptable agreement [...***...] from

the date of Gen-Probe's written request, then Gen-Probe's right of first

negotiation hereunder shall terminate and DiagnoCure shall have no further

obligation to Gen-Probe with under this section.

 

         4.       FINANCIAL TERMS

 

                  4.1      FEES. In consideration of this Agreement and subject

to the terms hereof including in particular Gen-Probe's rights of termination

under Section 12, Gen-Probe shall pay to DiagnoCure non-refundable fees of Nine

Million Dollars ($9,000,000) to be paid as follows:

 

                           4.1.1    Gen-Probe shall pay to DiagnoCure upon

execution of this Agreement the sum of three million dollars ($3,000,000).

 

                           4.1.2    Gen-Probe shall pay to DiagnoCure within

[...***...] following the Effective Date the additional sum of one million

dollars ($1,000,000).

 

                           4.1.3    Gen-Probe shall pay to DiagnoCure within

[...***...] following the Effective Date the additional sum of three million

dollars ($3,000,000).

 

                           4.1.4    Gen-Probe shall pay to DiagnoCure within

[...***...] following the Effective Date the additional sum of two million

dollars ($2,000,000).

 

                           4.1.5    Notwithstanding the foregoing, the parties

acknowledge and agree that if, on the date any license fee payment is due to

DiagnoCure under this Section 6.1, at least one (1) Third Party has acquired

rights under a Valid Claim of a patent or patent application owned or controlled

by [...***...] to make, use or sell a product or service that measures or

detects PCA3(DD3) and competes with a Licensed Product and the Third Party has

sold such competing product or service prior to the date the license fee payment

is due, then each such license fee payment when due shall be reduced by

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

 

                  4.2      ROYALTIES

 

                           (a)      As additional consideration for licenses

granted to Gen-Probe hereunder, following the First Commercial Sale of a

Licensed Product, Gen-Probe shall pay to DiagnoCure during the Royalty Term

annual royalties equal to (i) eight percent (8%) of Net Sales of Licensed

Products by Gen-Probe its Affiliates or sublicensees up to fifty million dollars

($50,000,000) in cumulative Net Sales, and (ii) sixteen percent (16%) of Net

Sales of Licensed Products by Gen-Probe its Affiliates or sublicensees in excess

of fifty million dollars ($50,000,000) in cumulative Net Sales.

 

                                               *CONFIDENTIAL TREATMENT REQUESTED

 

                                      10.

 

<PAGE>

 

                           (b)      Notwithstanding the foregoing, the parties

acknowledge and agree that, on a country-by-country basis, if, at the time a

royalty is due under this Section 4.2(a) for a Licensed Product sold in such

country, Gen-Probe does not have worldwide exclusive rights under Section 3.1 in

the Field because a Third Party has acquired rights under a Valid Claim of a

patent or patent application owned or controlled by [...***...] to make, use and

sell a product OR service that measures or detects PCA3(DD3) and competes with a

Licensed Product, then

 

                                    (i)      for so long as [...***...] in such

country is selling a product or service that measures or detects PCA3(DD3) in

the Field and such product or service would, if made, used or sold in the United

States, infringe a Valid Claim of the Licensed Patent Rights, then the

applicable royalty rate set forth in (a) above shall be reduced to the

[...***...] of the stated royalty rate in such country; and

 

                                    (ii)     for so long as [...***...] in such

country are selling products or services that measure or detect PCA3(DD3) in the

Field and such products OR services would, if made, used or sold in the United

States, infringe a Valid Claim of the Licensed Patent Rights, then the

applicable royalty rate set forth in (a) above shall be reduced to the

[...***...] of the stated royalty rate in such country.

 

                           (c)      In the event a Licensed Product detects or

measures a Third Party Marker, as determined by the Joint Advisory Committee,

then the Net Sales of such Licensed Product, for purposes of royalty payments on

such Licensed Product, shall be calculated by multiplying the Net Sales of that

Licensed Product by the quotient of (a) [...***...] (b) [...***...]. In no event

shall the Net Sales on such Licensed Product be reduced under this Section

4.2(c) to less than [...***...] of the amount of Net Sales of such Licensed

Product before giving effect to the application of this Section 4.2(c).

 

                           (d)      For the avoidance of doubt, the financial

obligation of Gen-Probe to DiagnoCure in connection with sales of Licensed

Products under this Agreement shall be solely the royalty obligations set forth

in this Section 4.2.

 

                  4.3      CONTRACT DEVELOPMENT. In consideration for the

research and development to be conducted by DiagnoCure pursuant to Schedule 3,

Gen-Probe shall, commencing on January 1, 2004, pay to DiagnoCure seven hundred

and fifty thousand dollars ($750,000) per year for two (2) consecutive years

thereafter, each such yearly funding payable in twelve (12) equal monthly

installments. The Contract Development periods may be extended at Gen-Probe's

option on an annual basis at a rate to be mutually-agreed upon, by the delivery

of written notice not later than ninety (90) days prior to the expiration of the

then-existing period. Gen-Probe shall provide to DiagnoCure, at Gen-Probe's

cost, the instruments and reagents more particularly described in Schedule 3 for

DiagnoCure's internal non-commercial purposes, including research. Except as

expressly set forth in this Section 4.3, any additional research and development

funding by Gen-Probe shall be negotiated in good faith by the parties and

subject in each case to written approval by the Joint Advisory Committee.

DiagnoCure shall have the right to request during the term of this Agreement,

that Gen-Probe supply instruments and reagents to

 

                                               *CONFIDENTIAL TREATMENT REQUESTED

 

                                      11.

 

<PAGE>

 

a Third Party for non-commercial research and development conducted by such

Third Party for the benefit of DiagnoCure. Subject to approval of any such

request by the Joint Advisory Committee and subject to such Third Party entering

into an agreement acceptable to Gen-Probe regarding intellectual property

ownership, non-disclosure and restrictions on further transfer of such

instruments and reagents, Gen-Probe shall provide such instruments and reagents

to such Third Party at a cost no greater than [...***...] of the Fully-Burdened

Costs of such instruments and reagents.

 

                  4.4      INSTRUMENTS, ETC. [...***...] instruments, analyzers

or similar equipment, [...***...].

 

         5.       THE PROGRAM

 

                  5.1      PROGRAM.

 

                           5.1.1    Following the Effective Date, the parties

shall work together in a timely manner to conduct the Program to research,

develop, and commercialize Licensed Products, to identify applications related

to the DiagnoCure Technology, to manage the intellectual property related to

PCA3(DD3), and to coordinate marketing of the DiagnoCure Product. During the

term of the Program, DiagnoCure shall use its best efforts to provide to

Gen-Probe, for no additional consideration other than that described in Section

4, all information and assistance of DiagnoCure as is reasonably necessary to

Gen-Probe under the Program in the following areas:

 

                           (a)      assay development capabilities including

providing research and prototype development assistance;

 

                           (b)      network of tissue banks (including without

limitation providing access to all specimens included within DiagnoCure's

network of tissue banks as of the Effective Date);

 

                           (c)      input and assistance so that the Product

Requirements Document ("PRD") may be approved within six weeks following the

Effective Date, and expertise and assistance for the technical aspects of

clinical trial and regulatory authorizations;

 

                           (d)      access to experts and market development

expertise in the fields of urology and oncology (to the best of DiagnoCure's

ability and subject to Gen-Probe bearing its own costs and any costs of third

parties in connection therewith); and

 

                           (e)      all Know-How available to DiagnoCure

regarding the DiagnoCure Technology which is reasonably necessary to the

performance of this Agreement.

 

                           5.1.2    During the term of the Program, and subject

to the supervision of and approval of the Joint Advisory Committee, Gen-Probe

shall use reasonable commercial efforts to provide to DiagnoCure, at Gen-Probe's

cost, introductions to Gen-Probe customers who may be potential purchasers of

the DiagnoCure Product. During the term of the Program, and subject to the

approval of, and supervision by, the Joint Advisory Committee, Gen-Probe

 

                                               *CONFIDENTIAL TREATMENT REQUESTED

 

                                      12.

 

<PAGE>

 

shall provide to DiagnoCure for its internal use only, at no charge to

DiagnoCure, such instruments and reagents as mutually agreed upon by the parties

and reasonably necessary for DiagnoCure to conduct research and development

activities under the Program using the APTIMA Technology pursuant and subject to

the license grant set forth in Section 3.3. Gen-Probe shall provide commercially

reasonable training to DiagnoCure with respect to the instruments and reagents

and Gen-Probe know-how, as reasonably necessary in connection with DiagnoCure's

activities under the Program. Each Party shall bear its own costs in connection

with such training. DiagnoCure shall have the right to request during the term

of this Agreement that Gen-Probe supply instruments and reagents to a Third

Party for noncommercial research and development conducted by such Third Party

for the benefit of DiagnoCure under the Program. Subject to approval of any such

request by the Joint Advisory Committee and subject to such Third Party entering

into an agreement acceptable to Gen-Probe regarding intellectual property

ownership, non disclosure and restrictions on further transfer of such

instruments and reagents, Gen-Probe shall provide such instruments and reagents

to such Third Party at a cost no greater than [...***...] of the Fully-Burdened

Cost of such instruments and reagents.

 

                  5.2      CONDUCT OF PROGRAM. Each party shall conduct the

Program in a manner consistent with good scientific practice, and in compliance

in all material respects with all requirements of applicable laws and

regulations to attempt to achieve the Program's objectives efficiently and

expeditiously. Each party shall proceed diligently with its responsibilities

under the Program, and shall allocate such personnel, equipment, facilities and

other resources as reasonably necessary to conduct its obligations under the

Program and to accomplish the objectives thereof.

 

                  5.3      RESULTS.

 

                           5.3.1    REPORTS. Within [...***...] following the

end of [...***...] during the term of the Program and within [...***...]

following the expiration or termination of the Program, each party shall

prepare, and provide to the other party, a reasonably detailed written report

which shall describe the work performed by such party, and the results achieved,

to date under the Program, together with copies of all data resulting from the

tests and evaluation performed by such party to date under the Program.

 

                           5.3.2    RECORDS. Each party shall maintain records,

in sufficient detail and in a manner consistent with good s