Exhibit 10.4


 


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 SECURITIES AND EXCHANGE COMMISSION.


 


AMENDMENT TO LICENSE AGREEMENT


BETWEEN


PREDICTION SCIENCES, LLC.


AND


CLARIENT, INC.


 


This Amendment to License Agreement (the “Amendment”)
is entered as of October 1, 2009 (the “Amendment Date”).


 


R E C I T A L S


 


A.                                   Prediction
Sciences, LLC (“Prediction Sciences”) and Clarient, Inc. (“Clarient”) are
parties to a License Agreement, dated January 8, 2008, relating to the
Insight®Dx (formerly known as, GeneRxTM) Breast Cancer Profile technology of
Prediction Sciences (the “License Agreement”).


 


B.                                     The parties
desire to amend the License Agreement to modify the content of certain
provisions and Exhibits thereto, and add other provisions.


 


A G R E E M E N T


 


NOW, THEREFORE, the parties hereto agree as follows:


 


1.                                       a.  Payment for CBCTR Study Expenses.  The parties acknowledge that Clarient has
paid Prediction Sciences fifty thousand dollars ($50,000) in May, 2009, as
reimbursement for a portion of Prediction Sciences’ expenses in connection with
the study of the Insight®Dx Breast Cancer Profile technology on clinical
specimens from the CBCTR.  Clarient shall
have no obligation to reimburse Prediction Sciences’ expenses in excess of that
amount.  Prediction Sciences retains
ownership of all specimens and clinical data from the CBCTR.


 


b.  Payment for New CBCTR TMAs.   Within 15 business days of Prediction
Sciences submitting an invoice, together with a confirmation of purchase,
Clarient shall pay Prediction Sciences an amount not to exceed one hundred
thirty thousand dollars ($130,000) for the immediate purchase of CBCTR breast
cancer TMA datasets in order to perform additional studies to aid in the
marketing of the InsightDx Breast Cancer Profile.  Clarient shall have no
obligation to pay the NCI or Prediction Sciences for such datasets in excess of
that amount.  Prediction Sciences retains ownership of all specimens and
clinical data from the CBCTR and Clarient shall have a right to use such
clinical data for all purposes permitted under the License Agreement.


 


2.                                       Section 3.1.  The reference in Section 3.1 to “up to 350,000
shares of Clarient’s common stock” shall be changed to “up to 400,000 shares of
Clarient’s common stock.”


 

















 


3.                                       EXHIBIT
B.  Exhibit B is amended to
remove [***] from the list of IHC markers and the list of “Non-Standard Markers
until further notice to be agreed upon by Clarient and Prediction Sciences.”


 


4.                                       EXHIBIT
C.  Milestone # 5 in Exhibit C
shall be amended to read in its entirety as follows:


 


“Milestone
#5 — [***] shares


Milestone
#5 is subdivided into five tranches, as follows:


 


A.                                   Milestone
#5A.  Within [***] of [***], Clarient
shall issue to Prediction Sciences [***] ([***]) shares of Clarient’s common
stock.


 


B.                                     Milestone
#5B.  Within [***] of [***], Clarient
shall issue to Prediction Sciences [***] ([***]) shares of Clarient’s common
stock.


 


i.
[***].


 


C.                                     Milestone
#5C.  Within [***] of [***], Clarient
shall issue to Prediction Sciences [***] ([***]) shares of Clarient’s common
stock.


 


i. [***].


 


ii.
[***].


 


D.                                    Milestone
#5D.  Within [***] of [***], Clarient
shall issue to Prediction Sciences [***] ([***]) shares of Clarient’s common
stock.


 


i.
[***].


 


ii.
[***].


 


E.                                      Milestone
#5E.  Within [***] of [***], Clarient
shall issue to Prediction Sciences [***] ([***]) shares of Clarient’s common
stock.”


 


i.
[***].


 






*** CONFIDENTIAL PORTIONS
OMITTED AND FILED SEPARATELY WITH THE COMMISSION


 

















 


5.                                       EXHIBIT
C.  Exhibit C is amended as
follows:


 


All references to “registered”
in the descriptions of Clarient’s common stock shall be deleted.


 


The following is added to
Exhibit C:


 


“Registration Rights


 


In the event that at any
time after the Amendment Date, Clarient files a registration statement under
the Securities Act of 1933, as amended, Clarient shall use  commercially reasonable efforts to include
such shares so that Prediction Sciences may freely sell them under such
registration statement.  Clarient agrees
to include the shares in the S-3 Registration Statement currently intended to
be effective in December, 2009.


 


However, Clarient shall
not be obligated to include shares:


 


1.         in a registration statement relating solely to
employee equity based benefit plans, the distribution of securities of Clarient
in a merger or acquisition, or a registration on any form which does not
include substantially the same information as would be required to be included
in a registration statement covering the sale of such Prediction Sciences’
shares;


 


2.         in a registration statement for a firmly underwritten
offering, unless (a) the underwriters consent to the inclusion of such
shares, and (b) Prediction Science enters into customary agreements with
such underwriters; or


 


3.         which may be sold by Prediction Sciences, without
volume restriction, under Rule 144, or another exemption from
registration.”


 


6.                                       EXHIBIT
D, Item C.  Exhibit D,
Item C entitled “Adjustment to Basic Royalty Based on Multi-Variant CPT Code,
shall be amended to read in its entirety as follows:


 


“Medicare
and Similar Government Reimbursements”


 


Medicare,
Medicaid, VA and similar government reimbursed fees for tests including the
Prediction Sciences Algorithm shall be treated as follows:


 


All
royalties for the tests for the markers, where royalties are earned under Exhibit D.
Item B, will be based on Net Sales at [***]. [***].  The base
amount for the Basic Royalty calculation for all [***] markers is thus $[***] (the “Medicare
Expect Amount”), if all IHC markers have computed-assisted scoring).  In no event will Clarient be required to pay
royalties on more than the Net Sales actually collected.  Clarient shall monitor such Medicare Fee
Schedule.


 






*** CONFIDENTIAL PORTIONS
OMITTED AND FILED SEPARATELY WITH THE COMMISSION


 

















 


All
Net Sales greater than the Medicare Expect Amount for the Basic Royalty
calculation, i.e. from additional reimbursement code(s) for the use of the
Prediction Sciences Algorithm, will be distributed [***]% to Prediction
Sciences and [***]% to Clarient.


 


All Other Payments


 


Fees
for tests from other than Medicare, Medicaid, VA and similar governmental third
party payors, including the Prediction Sciences Algorithm shall be treated as
follows:


 


All
royalties for the tests for the markers, where royalties are earned under Exhibit D,
Item B, will be based on Net Sales at [***] (the “Third Party Payor Expect
Amount”).   [By way of example, the Third
Party Payor Expect Amount as of the Amendment Date is $[***]].


 


All
Net Sales greater than the Third Party Payor Expect Amount for the Basic
Royalty calculation, i.e. from additional reimbursement code(s) for the
use of the Prediction Sciences Algorithm, will be distributed [***]% to
Prediction Sciences and [***]% to Clarient.


 


If
a private payor agreement or payment needs to be made at a discount from the “retail
price” to gain the business, as a result of specific negotiations with a
customer and not as a result of reaction to market conditions, which results in
a Net Sales amount less than the “retail price” of the test, both the Third
Party Payor Expect Amount and the incremental amount above the Third Party
Payor Expect Amount for the use of the Prediction Sciences Algorithm will be
discounted by the same proportion. The “retail price” for the full panel of
seven markers plus the algorithm for such allocation shall be deemed to be not
less than $[***].


 


In
no event will Clarient be required to pay royalties on more than the Net Sales
actually collected.  Clarient will keep
Prediction Sciences informed of any decreases in the “retail price” due to
reaction of market conditions.


 


Clarient
shall monitor the Medicare reimbursement amounts for stacked codes and include
such determinations in its quarterly royalty reports under Section 3.2.


 


7.                                       Clarient and
Prediction Sciences hereby acknowledge that all parties have complied with all
terms and provisions of the Agreement to be performed prior to the date of this
Amendment.  In all other respects, the
Agreement is hereby ratified and confirmed and shall continue in full force and
effect in accordance with its terms.


 


8.                                       All capitalized
terms not defined herein shall have the meaning set forth in the License
Agreement.


 






*** CONFIDENTIAL PORTIONS
OMITTED AND FILED SEPARATELY WITH THE COMMISSION


 

















 


IN WITNESS WHEREOF, the parties hereto, through
their authorized officers, have executed this Amendment of the date first
written above.


 




	
  CLARIENT,
  INC.

  	
   

  	
  PREDICTION
  SCIENCES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/David
  J. Daly

  	
   

  	
  By:

  	
  /s/
  Cornelius Diamond

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  David
  J. Daly

  	
   

  	
  Name:

  	
  Cornelius
  Diamond

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  SVP
  of Commercial Ops.

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
  Date:

  	
  October 5,
  2009

  
	
  Date:

  	
  October 5,
  2009