Exhibit 10.74
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(b)(4)
AND 240.24B-2
SUPPLY AGREEMENT
AMENDMENT NUMBER ONE
THIS SUPPLY AGREEMENT AMENDMENT NUMBER ONE ("Amendment") is made and entered
into as of June 4, 2004 ("Amendment Effective Date"), by and between GEN-PROBE
INCORPORATED, a Delaware corporation, with its principal place of business at
00000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 ("Gen-Probe") and MGM
INSTRUMENTS, INC., a Nevada corporation, with its principal place of business at
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxx 00000 ("MGM"). All capitalized terms
used but not defined in this Amendment will have the respective meaning given to
them in the Agreement (defined below).
RECITALS
WHEREAS, MGM and Gen-Probe previously entered into a Supply Agreement
having an effective date of January 1, 2002 ("Agreement"); and
WHEREAS, MGM has developed a thermoelectric device known as the
Shaker/Xxxxx, which Gen-Probe desires to have MGM manufacture and supply to
Gen-Probe for sale or lease to Gen-Probe's customers under the terms and
conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the parties agree to
amend the Agreement as follows:
1. DEFINITIONS
1.1. "Affiliate" shall mean, as to any Person, any other Person which directly
or indirectly controls, is controlled by, or is under common control with such
Person. For purposes of the preceding definition, "control" shall mean
beneficial ownership of more than fifty percent (50%) of the outstanding shares
or securities or the ability otherwise to elect a majority of the board of
directors or other managing authority.
1.2. "[...***...]" shall mean the [...***...].
1.3. "[...***...]" shall mean the [...***...].
1.4. "Instrument" or "Instruments" shall mean those items identified in EXHIBIT
C to the Agreement and in EXHIBIT C-1, which is attached hereto and incorporated
by reference herein.
1.5. "MGM Technology" shall mean all techniques, ideas, inventions (including
patentable inventions), practices, methods, knowledge, know-how, trade secrets,
skill, experience, documents, data or apparatus relating to, and all Patents
claiming, any aspect or component of the Shaker/Xxxxx Instrument.
1.6. "Shaker/Xxxxx Instrument" shall mean the instrument described on EXHIBIT
C-1 hereto.
*CONFIDENTIAL TREATMENT REQUESTED
1.7. "Specifications" shall mean with respect to the Shaker/Xxxxx Instrument,
the specifications and drawings of the Shaker/Xxxxx Instrument provided by MGM
as they may be modified from time to time in accordance with Article 3 of the
Agreement.
1.8. "Patent" shall mean any (a) U.S. or foreign patent, re-examination,
reissue, renewal, extension or term restoration, or (b) pending application for
a U.S. or foreign patent, including, without limitation, any provisional
application, continuation, continuation-in-part, divisional or substitute
application, or inventors' certificate.
1.9. "Person" shall mean any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, government or any department or
agency of any government.
1.10. "Repair" shall mean to bring an instrument to working order.
1.11. "Retrofit" shall mean to upgrade an instrument to the latest revision or
version of an instrument.
1.12. "Refurbishment" shall mean to bring an instrument to nearly new condition.
1.13. "Parts" for purposes of this Amendment shall have the meaning set forth in
Section 2.2.
1.14. "Supply Term" for purposes of this Amendment shall have the meaning set
forth in Section 4.1 of this Amendment.
1.15. "Third Party" shall mean any Person other than MGM, Gen-Probe or an
Affiliate of MGM or Gen-Probe.
1.16. "Warranty Period" for purposes of this Amendment shall have the meaning
set forth in Section 10.3.1 of this Amendment.
2. SCOPE OF WORK TO BE PERFORMED BY MGM AND GEN-PROBE
2.1 For purposes of this Amendment and only with respect to the Shaker/Xxxxx
Instrument, Section 2 of the Agreement shall be amended and replaced in its
entirety as follows:
"2.1 MGM shall manufacture, supply, deliver and service the Shaker/Xxxxx
Instrument in accordance with the terms of the Agreement and this
Amendment.
2.2 Gen-Probe may purchase spare parts listed on EXHIBIT E-1 ("Spare Parts
Price List"), attached hereto and incorporated by reference herein
("Parts") and the Shaker/Xxxxx Instruments from MGM and then distribute,
sell, resell, rent, lease or otherwise dispose of such instruments and
parts to users and distributors pursuant to Section 4 of this Amendment."
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3. SUPPLY OF INSTRUMENT AND PARTS
3.1 For purposes of this Amendment and only with respect to the Shaker/Xxxxx
Instrument, Section 4.1 of the Agreement shall be amended as follows:
"4.1 The Shaker/Xxxxx Supply Term shall commence on the Amendment
Effective Date and shall continue for six (6) years from the Amendment
Effective Date ("Supply Term"). Prior to the end of the Supply Term, the
parties may agree to renew this Agreement for additional six (6) year
periods on the same terms and conditions by executing a Renewal Agreement,
an example of which is attached to the Agreement as EXHIBIT G and
incorporated by reference herein."
4. DISTRIBUTION AND EXCLUSIVITY
4.1 MGM grants Gen-Probe the worldwide exclusive right to distribute, sell,
rent, lease or otherwise dispose of the Shaker/Xxxxx Instrument [...***...] for
six (6) years from the Amendment Effective Date ("Initial Distribution Term").
Gen-Probe may, at its option, extend the Initial Distribution Term for
subsequent six (6) year terms (each an "Additional Distribution Term") subject
to the terms of Section 5.1 of the Amendment, by providing written notice to MGM
prior to the expiration of the Initial Distribution Term or any subsequent term.
4.2 If after the first [...***...] of the Initial Distribution Term, Gen-Probe
has failed to distribute, sell, rent, lease or otherwise dispose of any
Shaker/Xxxxx Instrument(s) [...***...], then MGM shall also have the right
(co-exclusive with Gen-Probe) to distribute, sell, rent, lease or otherwise
dispose of the Shaker/Xxxxx Instrument [...***...]. If after the first
[...***...] of the Initial Distribution Term, Gen-Probe has failed to
distribute, sell, rent, lease or otherwise dispose of any Shaker/Xxxxx
Instrument(s) [...***...], then MGM shall also have the right (co-exclusive with
Gen-Probe) to distribute, sell, rent, lease or otherwise dispose of the
Shaker/Xxxxx Instrument [...***...].
5. FEES AND PRICING
5.1 For purposes of this Amendment and only with respect to the Shaker/Xxxxx
Instrument, Section 5 of the Agreement shall be amended as follows:
"5.1 In consideration of the rights granted by MGM to Gen-Probe in Section
4.1 of the Amendment, Gen-Probe shall pay to MGM [...***...], payable upon
execution of this Amendment. In the event Gen-Probe elects to extend the
Initial Distribution Term or any subsequent term for an Additional
Distribution Term, Gen-Probe shall pay MGM [...***...] for each such
Additional Distribution Term, payable within [...***...] of Gen-Probe's
election to extend such term.
5.2 Gen-Probe shall pay to MGM the purchase price of [...***...] for each
Shaker/Xxxxx Instrument ("Shaker/Xxxxx Instrument Purchase Price")
purchased by Gen-Probe from MGM during the period following [...***...]
from the Amendment Effective Date.
*CONFIDENTIAL TREATMENT REQUESTED
3
5.3 Following the [...***...] anniversary of the Effective Date, MGM may
adjust the Shaker/Xxxxx Instrument Purchase Price, [...***...]. In the
event that Gen-Probe elects to extend the Initial Distribution Term or any
subsequent term for Additional Distribution Terms pursuant to Section 4.1
of the Amendment, Gen-Probe shall pay to MGM the Adjusted Price for each
Shaker/Xxxxx Instrument purchased during such Additional Distribution
Term.
5.4 In the event that MGM distributes, sells, rents, leases or otherwise
disposes of the Shaker/Xxxxx Instrument to a party other than Gen-Probe (a
"Third Party") [...***...] described in Section 5.1 of this Amendment;
[...***...].
5.4 Additional discounts/repayments for each calendar year may be agreed
upon by Gen-Probe and MGM, and any such additional discounts/repayments
will be set forth in and made a part of EXHIBIT D ("Additional Discounts
and Repayments") of the Agreement, without the necessity of amendment of
the Agreement or this Amendment.
5.5 Parts and materials shall be priced as shown on EXHIBIT E-1 ("Spare
Parts Price list"). These items will be appropriately wrapped, packaged,
and identified with Gen-Probe's and MGM's part numbers, revision,
description and any other markings or designations requested by Gen-Probe.
5.6 All payments hereunder shall be made in United States dollars.
Gen-Probe shall pay MGM [...***...] for each Shaker/Xxxxx Instrument
[...***...] as set forth in Section 4.2 of the Agreement. The [...***...]
shall be paid by Gen-Probe within [...***...] of Gen-PROBe's receipt and
acceptance of the Shaker/Xxxxx Instrument."
6. SERVICE, MANUALS AND REPLACEMENT PARTS
6.1 For purposes of this Amendment and only with respect to the Shaker/Xxxxx
Instrument, Section 7 shall be amended as follows:
6.2 The following Sections 7.4 and 7.5 shall be added as follows:
"7.4 Within three (3) months of the Amendment Effective Date, MGM will
provide Gen-Probe with procedures for on-site Repair of the Shaker/Xxxxx
Instrument by Gen-Probe service technicians, including a list and pricing
of parts necessary for such on-site Repairs.
7.5 Within [...***...] of the Amendment Effective Date, MGM will:
7.5.1 Establish repair facilities in the United States and the
European Union for the Repair, Refurbishment and/or Retrofit of the
Shaker/Xxxxx Instruments beyond the Warranty Period.
*CONFIDENTIAL TREATMENT REQUESTED
4
7.5.2 Establish a menu and price list for each Repair, Refurbishment
and Retrofit and update such price list annually for reasonable cost
of living and material increases or decreases only.
7.5.3 Establish a list and prices for replacement parts for
preventative maintenance recommended every three (3) years at MGM's
repair facilities and update such price list annually for reasonable
cost of living and material increases or decreases only."
7. REPRESENTATION AND WARRANTIES
7.1 For purposes of this Amendment and only with respect to the Shaker/Xxxxx
Instrument, Section 10.1 and Section 10.3.1 of the Agreement shall be amended as
follows:
"10.1 MGM represents and warrants to Gen-Probe that: (i) it has full
corporate authority to enter into the Agreement and this Amendment and to
consummate the transactions contemplated herein and to fulfill its
obligations set forth in the Agreement and this Amendment; and (ii) the
MGM Technology and the Shaker/Xxxxx Instrument do not infringe the
intellectual property rights of any Third Party."
"10.3.1 The Shaker/Xxxxx Instruments and Parts delivered will (i) perform
in accordance with the requirements of the Specifications, the ATP, and
Article 12 of the Agreement; and (ii) be free from defects in material,
design, and workmanship for a period of twenty-four (24) months beginning
from the date of delivery of the Shaker/Xxxxx Instrument to Gen-Probe (the
"Warranty Period"). As to any such Shaker/Xxxxx Instrument defect, MGM
shall be relieved of all obligations of liability under Section 10.3.1 of
the Agreement if the Shaker/Xxxxx Instrument is operated with any
accessory or part not manufactured in accordance with the approved
Specifications, or is operated with any fluid or material not jointly
approved by MGM and Gen-Probe, or is not operated or maintained in
accordance with the Operator's and/or Service Manuals."
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8. BACK-UP MANUFACTURING RIGHTS
8.1 If MGM: (i) discontinues or permanently ceases to manufacture the
Shaker/Xxxxx Instrument (unless otherwise agreed to in advance by Gen-Probe); or
(ii) otherwise breaches its supply obligations hereunder ("Back-up License
Event"), then, effective as of the occurrence of such Back-up License Event,
Gen-Probe shall have a right to purchase from MGM, at a reasonable purchase
price to be negotiated in good faith and to conclusion by the parties pursuant
to Section 8.3 below, and MGM shall grant to Gen-Probe a non-exclusive,
worldwide, irrevocable and perpetual license under the MGM Technology necessary
or useful to the manufacture, use, importation or sale of the Shaker/Xxxxx
Instrument ("Back-up License"), solely to enable Gen-Probe to make or have made
the Shaker/Xxxxx Instruments for distribution, sale, rental, lease or other
disposition of the Shaker/Xxxxx Instrument by Gen-Probe. In the event of a
Back-up License Event during the Initial Distribution Term or any Additional
Distribution Term, MGM shall refund to Gen-Probe a pro-rata amount of exclusive
distribution fee paid by Gen-Probe for any remaining portion of such term
following a Back-up License Event.
8.2 If a Back-up License Event has occurred, and Gen-Probe has purchased the
Back-up License from MGM pursuant to Section 8.1 above, MGM shall cooperate with
Gen-Probe in effecting the disclosure and/or transfer, as appropriate, of such
MGM Technology as is reasonably necessary to commence or continue commercial
manufacture of Shaker/Xxxxx Instrument, and shall provide such technical
assistance as Gen-Probe may reasonably require, at Gen-Probe's cost to the
extent of any out-of-pocket expenses incurred by MGM in connection therewith.
Such cooperation shall include the prompt assignment to Gen-Probe of any Third
Party manufacturing or supply contracts relevant to the manufacture of the
Shaker/Xxxxx Instrument, or, where assignment is impractical because such Third
Party is performing other services for MGM under the same contract, MGM shall
take reasonable steps to facilitate a similar agreement between such Third Party
and Gen-Probe directly.
8.3 If Gen-Probe notifies MGM in writing that Gen-Probe believes a Back-up
License Event has occurred and that Gen-Probe elects to exercise its right to a
Back-up License, the parties shall immediately negotiate the purchase price for
the Back-up License pursuant to terms of this Section 8.3. If the parties are
unable to agree on the purchase price within 10 days despite their best efforts,
then each party shall notify the other in writing of its final purchase price
offer. With its notice, Gen-Probe shall deliver to MGM payment in an amount
equal to its final purchase price offer. MGM shall then immediately take the
actions required by Section 8.2. The parties shall then submit the purchase
price dispute to arbitration pursuant to Section 16 of the Agreement for
decision within 45 days. The arbitrator shall determine the purchase price by
selecting one party's final purchase price offer made in accordance with this
Section 8.3. If the arbitrator finds that a Back-up License Event did not occur,
the arbitrator shall award MGM [...***...] of the purchase price determined by
the arbitrator, as MGM's sole relief; provided, however, that if the arbitrator
determines that Gen-Probe acted with intentional bad faith in declaring a
Back-up License Event, then the arbitrator may award MGM not more than
[...***...] of the purchase price, as MGM's sole relief. Gen-Probe shall pay any
additional amount due MGM as a result of the arbitrator's decision within
[...***...] business days of the award.
*CONFIDENTIAL TREATMENT REQUESTED
6
9. INDEMNIFICATION AND LIMITATIONS
9.1 MGM will indemnify and hold harmless Gen-Probe, its officers, directors,
employees and agents ("Indemnified Parties") from and against any and all
losses, damages, liabilities, expenses and costs, including reasonable legal
expense and attorneys' fees ("Losses") to which such Indemnified Parties may
become subject as a result of any claim, demand, action or other proceeding by
any Third Party to the extent such Losses arise directly or indirectly out of
(a) a breach by MGM of any warranty, representation, covenant or agreement made
by MGM in this Amendment, or (b) personal injury resulting from the manufacture
of the Shaker/Xxxxx Instrument by MGM, except in each case, to the extent such
Losses result from, the breach of this Agreement by, or the gross negligence or
willful misconduct of, any of the Indemnified Parties.
9.2 Notwithstanding Section 9.1 above or any other provision of this Agreement,
MGM will have no liability for any claim based on: (i) Gen-Probe's noncompliance
with MGM's Specifications, (ii) any modification of or damage to the
Shaker/Xxxxx Instrument after shipment by MGM, including any repair of the
Shaker/Xxxxx Instrument performed by a party other than MGM or its designated
agent(s), or (iii) use of the Shaker/Xxxxx Instrument in combination with
materials or instrumentation from third parties not provided or approved by MGM
and used in a manner that is materially inconsistent with the Operator's and
Service Manuals for the Shaker/Xxxxx Instrument.
10. LIMITATION OF LIABILITY.
Except for liability for breach of Section 11 of the Agreement, neither
party shall be entitled to recover from the other party any special, incidental,
consequential or punitive damages in connection with the Agreement or this
Amendment; provided however, that this Section 10 shall not be construed to
limit either Gen-Probe's indemnification rights or obligations under Section 9
of this Amendment.
11. FULL FORCE AND EFFECT
All other terms and conditions of the Agreement remain unchanged and in
full force and effect.
12. SIGNATURES
Facsimile signatures are deemed equivalent to original signatures for
purposes of this Amendment.
13. ENTIRE AGREEMENT
The Agreement and this Amendment constitute the entire agreement and
understanding between the parties with respect to the subject matter hereof and
there are no promises, representations, conditions, warranties, commitments,
understanding, provisions or terms related thereto other than those set forth in
the Agreement and this Amendment, and the Agreement and this Amendment supercede
all previous understandings, agreements and representations between
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the parties, written or oral with respect to the subject matter hereof. The
provisions of this Agreement may not be waived, changed, modified or amended
except by a writing signed by both parties.
IN WITNESS WHEREOF, the parties have entered into this Amendment by their
duly authorized representatives as of the date first written above.
GEN-PROBE INCORPORATED MGM INSTRUMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxx Xxxxxx
----------------------------------- ----------------------
Xxxxx X. Xxxxxxxx Xxxxxx Xxxxxx
President & Chief Executive Officer Chief Executive Officer
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LIST OF EXHIBITS
EXHIBIT C-1 LIST OF INSTRUMENTS/PRICING
EXHIBIT E-1 SPARE PARTS PRICE LIST
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EXHIBIT C-1
LIST OF INSTRUMENTS/PRICING
Shaker/Xxxxx Instrument: Thermoelectric device capable of active heating and
cooling as well as mixing.
Gen-Probe part number: [...***...]
Description: [...***...]
Price: $ [...***...]
*CONFIDENTIAL TREATMENT REQUESTED
10
EXHIBIT E-1
SPARE PARTS PRICE LIST
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
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