EXHIBIT 10.51

 

CONFIDENTIAL PORTIONS HAVE BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934 AND HAVE
BEEN SEPARATELY FILED WITH THE COMMISSION

 

AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED COLLABORATION, LICENSE

AND SUPPLY AGREEMENT

BETWEEN

EPOCH BIOSCIENCES, INC. (FORMERLY EPOCH PHARMACEUTICALS, INC.)

AND

APPLERA CORPORATION (SUCCESSOR TO PERKIN-ELMER CORPORATION)

 

This Amendment No. 1 to Second Amended and Restated Collaboration, License and
Supply Agreement (the “Amendment”) is entered into this 26TH day of July, 2002.

 

RECITALS

 

A. Epoch Biosciences, Inc. (formerly known as Epoch Pharmaceuticals, Inc.)
(“Epoch”) and Applera Corporation (successor to PE Corporation (NY) (formerly
known as The Perkin-Elmer Corporation)), through its Applied Biosystems Group,
(“ABG”) are parties to that certain Second Amended and Restated Collaboration,
License and Supply Agreement, dated August 17, 2000, (the “Collaboration
Agreement”) as supplemented by that certain First Side Agreement (“First Side
Agreement”), effective as of October 31, 2001.

 

B. As contemplated by Section 4 of the First Side Agreement, the Parties desire
to further amend the Collaboration Agreement to clarify certain definitions and
modify the royalty rates and the minimum royalty and minimum purchase
obligations for certain categories of Licensed Products.

 

C. The Parties also desire to clarify certain other language of the
Collaboration Agreement.

 

AGREEMENT

 

NOW, THEREFORE, the Parties agree as follows:

 

1. All capitalized terms not defined herein shall have the meaning set forth in
the Collaboration Agreement.

2. Section 2.12 is amended to read as follows:

“2.12 “Bare Probe” means a MGB Oligonucleotide provided alone or with primers.”

 

3. Section 2.18 is amended to read as follows:

“2.18 “Human In Vitro Diagnostics Field (“HIVD Field”) means products and
processes for the measurement of attributes, characteristics, diseases, traits
or other conditions of a human being for the medical management of that human
being.”

 

4. Section 5.04(a) is amended, effective for all Net Sales after September 30,
2001, to read as follows:

“5.04 (a) Percentage Royalties. ABG will pay to Epoch percentage royalties on
the Net Sales of Licensed Products sold or otherwise disposed of under the
license granted under Sections 4.01 and 4.02 of this Agreement. For purposes of
determining the royalty payable with respect to a given Licensed Product,
Licensed Products (other than algorithms and related software) shall be
classified into three categories as follows:

 

  Category 1 A Licensed Product comprising an MGB Oligonucleotide (with or
without a fluorescent label and/or a fluorescent quencher) for which an ABG
customer specifies primer (if any) and probe sequences (except in the case of
certain reorders described under Category 2 below). Bare Probes will be
considered Category 1 Licensed Products. ABG’s current TaqManTM MGB Probes
product is an example of a Category 1 Licensed Product.

--------------------------------------------------------------------------------

  Category  2 A Licensed Product comprising an MGB Oligonucleotide (with or
without a fluorescent label and/or a fluorescent quencher) for which an ABG
customer specifies a target sequence to ABG, and ABG determines primer and probe
sequences. In a re-order situation where the customer provides primer and probe
sequences, which primer and probe sequences were originally determined by ABG as
part of an original order, then such reordered Licensed Product shall also be
deemed a Category 2 Licensed Product. AB’s current “Assay-by-Design” product is
an example of a Category 2 Licensed Product.

 

  Category  3 A Licensed Product comprising an MGB Oligonucleotide (with or
without a fluorescent label and/or a fluorescent quencher) for which an ABG
customer chooses from a menu of pre-defined primers and probes, and ABG chooses
a target and determines primer and probe sequences. Also included within the
definition of Category 3 Licensed Products are all microfluidic devices
containing or packaged with MGB Oligonucleotides, regardless of who provides
primer, probe or target sequences. AB’s current “Assay-on-Demand” product is an
example of a Category 3 Licensed Product.

 

The applicable royalty rates for each Licensed Product for all Net Sales from
October 1, 2001 to December 31, 2002 shall be as follows:

 

Category 1 Licensed Products covered by a Valid Claim

   [ *]%

Category 2 Licensed Products covered by a Valid Claim

   [ *]%

Category 3 Licensed Products covered by a Valid Claim

   [ *]%

Category 1 Licensed Products not covered by a Valid Claim

   [ *]%

Category 2 Licensed Products not covered by a Valid Claim

   [ *]%

Category 3 Licensed Products not covered by a Valid Claim

   [ *]%

Algorithms and related software

   [ *]%

 

The applicable royalty rates for each Licensed Product for all Net Sales
commencing January 1, 2003 shall be as follows:

 

* CONFIDENTIAL POTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.

--------------------------------------------------------------------------------

Category 1 Licensed Products covered by a Valid Claim

   [ *]%

Category 2 Licensed Products covered by a Valid Claim

   [ *]%

Category 3 Licensed Products covered by a Valid Claim

   [ *]%

Category 1 Licensed Products not covered by a Valid Claim

   [ *]%

Category 2 Licensed Products not covered by a Valid Claim

   [ *]%

Category 3 Licensed Products not covered by a Valid Claim

   [ *]%

Algorithms and related software

   [ *]%

 

No percentage royalties will be owed under this Section 5.04 (a) for the sale by
ABG of any Category 1, 2 or 3 Licensed Products not covered by a Valid Claim in
the event that (i) the Licensed Know-How becomes publicly available, (ii) ABG is
placed at a commercial disadvantage as a result of such know-how becoming
publicly available, and (iii) such know-how was not made publicly available by
ABG. In addition, no percentage royalties will be owed under this Section
5.04(a) for the sale by ABG of any Bare Probes purchased by ABG from Epoch
pursuant to Section 6.02.”

 

5. Section 5.04(b) is amended, effective October 1, 2002, to read as follows:

“5.04(b) Quarterly Minimum Royalties. Notwithstanding the foregoing, ABG shall
pay minimum quarterly royalties (each a “Quarterly Minimum Royalty”) with
respect to each calendar quarter as follows:

 

*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.

--------------------------------------------------------------------------------

FOR THE CALENDAR QUARTER ENDING

  QUARTERLY MINIMUM ROYALTY

December 31, 2002

 

  $[*]

March 31, 2003

 

  $[*]

June 30, 2003

 

  $[*]

September 30, 2003

 

  $[*]

   

Total:  $[*]

December 31, 2003

 

  $[*]

March 31, 2004

 

  $[*]

June 30, 2004

 

  $[*]

September 30, 2004

 

  $[*]

   

Total:  $[*]

December 31, 2004

 

  $[*]

March 31, 2005

 

  $[*]

June 30, 2005

 

  $[*]

September 30, 2005

 

  $[*]

   

Total:  $[*]

If total royalties paid by ABG under Section 5.04(a) above for Net Sales in any
applicable calendar quarter are less than the Quarterly Minimum Royalty for such
quarter, then ABG shall pay to Epoch the difference between actual royalties
paid and the Quarterly Minimum Royalty within forty-five (45) days after the end
of each such calendar quarter, along with the payment and statement under
Section 5.06 for such quarter.”

 

6. Section 6.02 is amended, effective October 1, 2002, to read as follows:

“6.02 Purchases of Bare Probes. Subject to the terms and conditions of this
Agreement, ABG may purchase Bare Probes from Epoch.”

The Parties acknowledge that pursuant to this Section 6, after October 1, 2002,
ABG shall have no obligation to purchase Bare Probes from Epoch pursuant to
Section 6.02 of the Collaboration Agreement.

7. The Parties acknowledge that the terms of Section 6.02 of the Collaboration
Agreement and the First Side Agreement shall remain

in effect until September 30, 2002, and that ABG shall pay to Epoch all
“Remainder Payments” (as defined in the First Side Agreement) with respect to
Bare Probe purchase obligations for all quarters through the quarter ending
September 30, 2002, with the last such payment due by September 30, 2002 (i.e.,
for example, assuming that ABG has purchased no Bare Probes from Epoch during
the period of October 1, 2001 to September 30, 2002, ABG shall have paid Epoch
an aggregate of $[*] in Remainder Payments for such period). No Remainder
Payments will be owed by ABG to Epoch after September 30, 2002.

8. In addition, pursuant to Section 5.04(b) of the Collaboration Agreement, to
the extent that the percentage royalties accrued on Net

Sales with respect to the License Year of October 1, 2001 to September 30, 2002,
do not equal $[*], then ABG shall pay to Epoch such shortfall no later than
November 15, 2002.

9. In all other respects, the Collaboration Agreement is hereby ratified and
confirmed. In the case of direct conflict or conflict by

reason of interpretation between any provision of this Amendment and the
Collaboration Agreement, the Amendment shall control and supercede the terms of
the Collaboration Agreement.

 

[Signature page follows.]

 

*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH COMMISSION.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties, through their authorized officers, have
executed this Amendment No. 1 as of the date first written above.

 

EPOCH BIOSCIENCES, INC.

 

APPLERA CORPORATION,

THROUGH ITS APPLIED

BIOSYSTEMS GROUP

By: /s/ William G. Gerber                        

  By: /s/ Deborah A. Smeltzer                        

Name: William G. Gerber

  Name: Deborah A. Smeltzer

Title: Chief Executive Officer

  Title: VP, Knowledge Business Applied Biosystems