exv10w80



 







	 	 
	 	***Text Omitted and Filed
Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4)

And 240.24b-2




Exhibit 10.80




AMENDMENT NO. 6 TO

AGREEMENT




     This Amendment No. 6 (“Amendment No. 6”) effective as of January 1, 2004 (the “Amendment
Effective Date”) to that certain Agreement between Gen-Probe Incorporated, a Delaware corporation
(“Gen-Probe”) and Chiron Corporation, a Delaware corporation (“Chiron”) dated as of June 11, 1998,
as amended from time to time as of the Amendment Effective Date (the “Agreement”).



Recital




     Chiron and GenProbe wish to make certain changes and clarifications to their respective
rights and obligations under the Agreement for the revenue sharing and accounting thereto relating
to the Tigris Instrument all in accordance with the terms and conditions of this Amendment No. 6.
Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement.



Agreement




     NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth
in this Amendment No. 6, the parties agree as follows:



1. Amendments.




     1.1 Amendment to Definition of Net Sales. The first full paragraph of Section 1.46
(Net Sales) of the Agreement is hereby amended by deleting such paragraph in its entirety and
replacing it with the following



“Net Sales” shall mean with respect to any Product(s), except as otherwise provided
in this Section 1.46, on a per unit basis where applicable and in the aggregate where
applicable, the gross sales price of such Product(s) invoiced by any of (i) Chiron, (ii)
Chiron’s Affiliates, (iii) Gen-Probe, (iv) CDS or, (v) only as to Blood Screening Assays,
[...***...], (all of which are individually referred to hereafter in this Section 1.46 as
“Seller”) following shipment to unaffiliated Third Parties less, to the extent actually paid
or accrued by such Seller (a) discounts, rebates or chargebacks actually allowed and taken,
to the extent consistent with industry practices and price reductions given for similar
products by such Seller; and/or (b) amounts repaid or credited by reason of rejection,
spoilage, expiration or return; and/or (c) to the extent separately stated on purchase
orders, invoices or other documents of sale, taxes levied on and/or other governmental
charges made as to production, or transportation or insurance charges; and/or (d) charges
for freight, handling and transportation; and/or (e) sales, use and value-added taxes and
other similar taxes incurred and separately stated on invoices; and/or (f) customs duties,
surcharges and other governmental charges incurred in exporting or importing such Product.
Transfer to any unaffiliated Third Party of a Blood Screening Instrument qualifying for sale
treatment under generally accepted accounting principles (GAAP) will be deemed to be a
“sale” for purposes of this Agreement, including without limitation the calculation of “Net
Sales” under this Section 1.46 and the



***Confidential Treatment Requested




 1.









 








compensation due Gen-Probe on account of sales under Section 3.3.6 (including Sections
3.3.6(b) and (c)).



     1.2 Additional Provisions for Net Sales. Section 1.46 is further modified by adding new
Sections 1.46.5 and 1.46.6 immediately following the end of Section 1.46.4:



1.46.5 With respect to Blood Screening Assays and Future Blood Screening Assays sold
concurrently or in connection with the placement of Tigris Instruments [...***...] under any
arrangement where the cost of the Tigris Instrument is included in the price of such Blood
Screening Assays or Future Blood Screening Assays, i.e., without separate charge to the
Customer for any such Tigris Instrument, Net Sales shall be calculated in accordance with
this Section 1.46.5. With respect to such Blood Screening Assays and Future Blood Screening
Assays, “Net Sales” shall mean the gross sales price of such Blood Screening Assays and/or
Future Blood Screening Assays less the cost of such Tigris Instrument, where the Tigris
Instrument has been provided by Chiron or its Affiliates without separate charge to the
Customer using such Tigris Instrument (the “Applicable Site”), as follows:



     (a) For purposes of calculating “Net Sales” under this Section 1.46.5, Tigris
Instrument “cost” shall be (i) an amount equal to the Transfer Price actually paid to
Gen-Probe by Chiron for such Tigris Instrument, amortized over a period of not less than
five (5) years and applied pro-rata to such period for which Net Sales is calculated, and
(ii) all shipping costs associated with initial delivery of such Tigris Instrument to the
Applicable Site, to the extent shipping costs are permitted to be deducted under Section
3.3.6(a) hereof.



     (b) Chiron may apply the deductions described in this Section 1.46.5 only if the
Applicable Site screens at least [...***...] donations per calendar year.



     (c) Subject to the foregoing, Chiron may apply all deductions set forth in this Section
1.46.5(c) with respect to Net Sales of the Ultrio Assay Product (as defined in the Future
Blood Screening Assay – Ultrio Addendum entered into between the parties effective as of
January 1, 2001) only if (i) with respect to Applicable Sites that use pools greater than or
equal to [...***...], the per donation price exceeds [...***...] dollars ($[...***...]) per
donation (where Chiron does not separately charge for any Blood Screening Instrument), and
(ii) with respect to Applicable Sites that use pools less than [...***...] and sites that
perform IDT testing, the per donation price exceeds [...***...] dollars ($[...***...]) per
donation (where Chiron does not separately charge for any Blood Screening Instrument). If
the donation prices are less than [...***...] dollars ($[...***...]) for Applicable Sites
using pools greater than or equal to [...***...] and [...***...] dollars ($[...***...]) for
Applicable Sites using pools less than [...***...] or that perform IDT testing, the
following pro rata deductions shall be applied based on the corresponding price per
donation:



***Confidential Treatment Requested




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	 	Percentage of
deduction (described
in Section 1.46.5
above) allowed

	 	 	Pools of [...***...]
(or greater)
	 	 	Pool size less than
[...***...]
(including IDT)	 
	 	100%

	 	 	$[...***...] per
donation
	 	 	$[...***...] per
donation	 
	 	75%

	 	 	$[...***...]
	 	 	$[...***...]	 
	 	50%

	 	 	$[...***...]
	 	 	$[...***...]	 
	 	25%

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





The foregoing deductions in this clause (c) may be applied by Chiron solely to the Ultrio
Assay Product. The parties shall meet and negotiate in good faith a schedule of allowable
deductions applicable to any other Future Blood Screening Assays.




     (d) Chiron shall provide to Gen-Probe, no later than thirty (30) days following the end
of a calendar year, an annual report approved by the Vice President of Finance and
Operations for Chiron Blood Testing, that (i) identifies with specificity the number of
Blood Screening Assays and Future Blood Screening Assays sold concurrently or in connection
with the placement of Tigris Instruments outside the U.S. or Canada, and the applicable
deductions permitted pursuant to clause (c) above, and (ii) describes in reasonable detail
the location and information evidencing that the standards described in clause (c) above
applicable thereto have been met. Gen-Probe shall have the right to audit the books and
records of Chiron to determine the accuracy and sufficiency of any such report in accordance
with this Agreement not more than once every other year.



1.46.6 With respect to Tigris Instruments that were originally placed at an Applicable Site
under an operating lease, reagent rental agreement or similar arrangement [...***...] which
are subsequently sold by Chiron or its Affiliates to the Applicable Site, Net Sales shall
mean the gross sales price of such Tigris Instrument (less any applicable deductions
described in subparagraphs (a) through (c) of Section 1.46.5), calculated as follows:



gross sales price = (A/B) x [...***...], where



‘A’ is the actual sales price for such Tigris Instrument invoiced by Seller; and



‘B’ is the remainder of [...***...] minus the number of months the Tigris Instrument
was placed in service under the operating lease, reagent rental agreement or similar
arrangement.



By way of an example but not limitation, if the Tigris Instrument was placed in service
under an operating lease, reagent rental agreement or similar arrangement for [...***...]
months and then purchased for $[...***...], the gross sales price of such Tigris Instrument
for purposes of the Net Sales under this Section 1.46, shall be equal to [($[...***...]) x
[...***...]] = $[...***...] (less any applicable deductions described in subparagraphs (a)
through (c) of Section 1.46.5).


***Confidential Treatment Requested


 3.









 








     1.3 Amendment to Definition of “Transfer Price”. For purposes of the Blood Screening
Products (but not the Clinical Diagnostic Products), Section 1.58.8 (Transfer Price) of the
Agreement is hereby deleted in its entirety and restated to read as follows:



1.58.8 The “Transfer Price” for the Tigris Instrument shall be calculated in accordance with
this Section 15.8.8. Prior to the date Chiron, its Affiliates and the Major Distributor has
received aggregate Net Sales from the sale or placement of Blood Screening Instruments equal
to the Blood Screening Instrument Cap (as defined in Section 3.3.6(b) below), the Transfer
Price for each Tigris Instrument shall be equal to the lesser of (a) [...***...] and
[...***...] dollars ($[...***...]), or (b) the amount [...***...] to Gen-Probe by its
manufacturer. After Chiron, its Affiliates and the Major Distributor has received aggregate
Net Sales from the sale or placement of Blood Screening Instruments equal to the Blood
Screening Instrument Cap, the Transfer Price for each Tigris Instrument shall be equal to
the amount [...***...] to Gen-Probe by its manufacturer. The Transfer Price for any Blood
Screening Instrument, other than the Tigris Instrument and the Leader/Magnetic Separation
Instrument, shall be negotiated between the parties concurrently with the negotiation of any
development program for such other Blood Screening Instrument pursuant to Section 3.3.1
(Development Program) or as part of the offer described in Section 3.3.8 (Other Blood
Screening Instruments).



     1.4 Amendment to Transfer Price. For purposes of the Blood Screening Products (but
not the Clinical Diagnostic Products), Section 3.3.6(a) (Transfer Price) of the Agreement is hereby
amended and restated in its entirety as follows:



(a) Transfer Price; Shipping. Within thirty (30) days of invoice, Chiron shall pay
to Gen-Probe the Transfer Price for each Blood Screening Instrument purchased by Chiron, its
Affiliates or the Major Distributor. Chiron shall pay all shipping costs for such Blood
Screening Instrument from Gen-Probe’s manufacturer’s warehouse to the location requested by
such Seller. From and after the date Chiron, its Affiliates and the Major Distributor has
received aggregate Net Sales from the sale or placement of Blood Screening Instruments in
the United States and Canada equal to the Blood Screening Instrument Cap, Chiron may deduct
shipping costs actually paid by any Seller (other than Gen-Probe or CDS) in calculating Net
Sales.



     1.5 Amendment to Instrument Sales in the United States and Canada. For purposes of
the Blood Screening Products (but not the Clinical Diagnostic Products), Section 3.3.6(b)
(Instrument Sales in the United States and Canada) of the Agreement is hereby amended and restated
in its entirety as follows:



(b) Instrument Sales in the United States and Canada.




     (i) Chiron, its Affiliates and the Major Distributor (as applicable) shall be entitled
to retain an aggregate amount of Net Sales (including lease revenues and instrument
placement fees) from the sale or placement of Blood Screening Instruments by Chiron, its
Affiliates or the Major Distributor in the United States or Canada, (the “Blood Screening
Instrument Cap”). The Blood Screening Instrument Cap shall be a dollar amount equal to
[...***...] the [...***...] actual Transfer Price of the Tigris Instruments sold to Chiron



***Confidential Treatment Requested




 4.









 








(such average actual Transfer Price to be calculated from time-to-time until such time as
Chiron, its Affiliates and the Major Distributor (as applicable) have retained an aggregate
amount of Net Sales of Blood Screening Instruments equal to the Blood Screening Instrument
Cap). (By way of example, and not by way of limitation, if the Transfer Price for each
Tigris Instrument is $[...***...] then the Blood Screening Instrument Cap is [...***...] and
[...***...] dollars ($[...***...]); or if the Transfer Price for ten Tigris Instruments is
$[...***...] and for [...***...] Tigris Instruments is $[...***...], then the Blood
Screening Instrument Cap is [...***...] $[...***...] or $[...***...]).




     (ii) After Chiron, its Affiliates and the Major Distributor have received Net Sales
from the sale or placement of Blood Screening Instruments equal to the Blood Screening
Instrument Cap, within forty-five (45) days after the end of each fiscal quarter, Chiron
shall pay to Gen-Probe an amount equal to [...***...] percent ([...***...]%) of (A) Net
Sales of each Blood Screening Instrument sold by Chiron, its Affiliates or the Major
Distributor to independent customers in the United States and Canada during such fiscal
quarter, less (B) the Transfer Price actually paid to Gen-Probe for each Blood Screening
Instrument included with the calculation of Net Sales for such fiscal quarter.



     1.6 Instrument Service Revenues. Section 3.3.6(d) (Service Revenues) of the Agreement
(as it was modified by paragraph D of the Settlement Agreement) is hereby amended and restated in
its entirety as follows:



Chiron may exclude from Net Sales all revenues received by Chiron in consideration for
providing instrument maintenance and repair service for Blood Screening Instruments,
including TECAN Genesis automatic pipetting stations (whether deemed part of a Blood
Screening Instrument or not), regardless of the form of the instrument transfer (sale,
lease, or rental), location (U.S./Canada or foreign), party providing instrument (Chiron or
Third Party), or party providing service (Chiron or Third Party service provider). Chiron
shall charge no more for such services than commercially reasonable values for the
diagnostic and/or blood screening markets consistent with standard industry practice in
those markets.



2. Effect of Amendment.




     2.1 No Effect of Clinical Diagnostic Products. This Amendment No. 6 is effective as
between Chiron and Gen-Probe with respect to Blood Screening Products only, and nothing herein
shall affect any rights or obligations of Gen-Probe or Bayer with respect to Clinical Diagnostic
Products.



     2.2 TECAN Instruments. Nothing herein is intended to amend provisions applicable to
the sales or placements of TECANs (as defined in paragraph C of the Settlement Agreement between
the parties dated November 16, 2001 (the “Settlement Agreement”)). The provisions of paragraph C
of the Settlement Agreement control the placement and sale of TECAN Instruments, and the sharing of
revenues therefrom.



     2.3 Settlement Agreements. The provisions of this Amendment No. 6 are intended to, and
hereby, supercede any provisions in the Definitive Written Settlement Agreement entered



***Confidential Treatment Requested





 5.









 

d






into by and between the parties, dated December 5, 2001, and the Short Form Agreement entered
into by and between the parties, dated November 16, 2001, on the same subject matter. Except as
expressly set forth in this Amendment No. 6, all other terms and conditions of the Agreement, the
parties’ Definitive Written Settlement Agreement, dated December 5, 2001, and the Short Form
Agreement, dated November 16, 2001, are hereby ratified and shall continue in full force and
effect. In the event of a conflict between the terms of this Amendment No. 6 and the Agreement,
the terms of this Amendment No. 6 shall control.




     2.4 No Other Amendment. Except as is set forth in this Amendment No. 6, all other
terms and conditions of the Agreement shall continue in full force and effect.



3. Counterparts. This Amendment No. 6 may be executed in counterparts, each of which shall
be an original, and all of which together shall constitute one and the same instrument.



     IN WITNESS WHEREOF, the parties have caused this Amendment No. 6 to be executed effective as
of the Amendment Effective Datand the persons signing below warrant that they are duly authorized
to sign for and on behalf of the respective parties.



	 	 	 	 	 	 	 
	Gen-Probe:	 	Chiron:
	 
	 	 	 	 	 	 
	GEN-PROBE INCORPORATED,	 	CHIRON CORPORATION,
	a Delaware corporation	 	a Delaware corporation
	 
	 	 	 	 	 	 
	By:

	 	/s/ Henry L. Nordhoff	 	By:
	 	/s/
Gene W. Walther
	Its:

	 	CEO	 	Its:
	 	President
	Date:

	 	2-17-05	 	Date:
	 	18 Feb. 2005







 6.