Exhibit 10.44

** Certain information in this exhibit has been omitted and has been filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under Rule 24b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934.

LICENSE, DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT

This LICENSE, DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT (this “Agreement”)
is made and entered into as of December 11, 2006 (“Effective Date”) by and
between IMMUNICON CORPORATION, a Delaware corporation, having its principal
office at 3401 Masons Mill Road, Suite 100, Huntingdon Valley, PA 19006 and its
subsidiaries (collectively, “Immunicon”), and DIAGNOSTIC HYBRIDS, INC., an Ohio
corporation, having its principal office at 350 West State St., Athens, OH 45701
(“DHI”).

 

1. BACKGROUND

1.0 Immunicon has expertise and certain proprietary technology relating to cell
enrichment, isolation and analysis systems, including fluorescence assay
instrumentation, reagents and assays for the isolation and detection and
diagnosis of certain disease states of mammalian and other cells or cellular
components in tissue, blood or other body fluids, and Immunicon has intellectual
property including certain patents and know-how pertaining to such proprietary
technology.

1.1 DHI has expertise in the development, marketing, distribution, and sales of
products used in the detection of certain pathogens in mammalian cells and for
the diagnosis of certain disease states relating thereto, has certain
proprietary technology, including reagents, useful in such products, and has
experience in regulatory matters relating to such products, and further DHI
desires to obtain a license from Immunicon under Immunicon’s aforementioned
patents and know-how in order to allow DHI to develop, market, distribute and
sell new products, and to sell instrumentation supplied by Immunicon, based upon
or utilizing Immunicon’s proprietary technologies.

1.2 Immunicon and DHI desire to collaborate in the development of products in
the aforementioned areas utilizing their respective technologies and expertise,
with the intent that such new products shall be developed and manufactured, in
part by Immunicon and in part by DHI, and marketed and sold for in vitro
diagnostic applications exclusively by DHI in the United States and Canada and
their respective territories and possessions. In addition, the parties will use
their respective best efforts to negotiate commercially reasonable terms and
conditions, to be set forth in a separate written agreement, with respect to
marketing and sale of such products in all other countries in the manner, and
subject to the provisions, of Section 7.2.3 below.

 

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2. DEFINITIONS

As used herein, the following terms shall have the respective meanings set forth
below:

“Affiliate” of a party means any entity that directly or indirectly controls, is
controlled by or is under common control with such party. “Control” (and, with
correlative meanings, the terms “controlled by” and “under common control with”)
means, in the case of a corporation, the ownership of fifty percent (50%) or
more of the outstanding voting securities thereof or, in the case of any other
type of entity, an interest that results in the ability to direct or cause the
direction of the management and policies of such party or the power to appoint
fifty percent (50%) or more of the members of the governing body of the party,
or if not meeting the preceding requirement, any company owned or controlled by
or owning or controlling a party at the maximum control or ownership right
permitted in the country where such party exists.

“Bulk Reagents” means quantities of Capture Reagents supplied by Immunicon to
DHI under this Agreement, including all cartridges and other consumable
accessories.

“Bulk Reagent Cost” means Immunicon’s fully loaded cost of Bulk Reagents
manufactured by Immunicon, determined in accordance with GAAP.

“Calendar Year” means each twelve-month period commencing with January 1 and
ending with December 31.

“Capture Reagent” means [************] having a [*******] and other [*******]
capable of acting as a [************] for a Target Entity, such [*******]
including, but not limited to, [*******], [******], [*****], [*******], or
combinations thereof, and provided to DHI by Immunicon under this Agreement.

“Clinical Trial(s)” means human clinical testing as determined by the Management
Board meeting regulatory requirements and ethical guidelines as may be specified
in individual countries where clinical trials of Products will be conducted or
where such trials will be used to seek approval under Regulatory Authority
requirements to market, use and sell Products in such country.

“Clinical Trial Plan” means the pre-investigational device exemption (IDE)
submitted to the FDA for approval prior to commencing a Clinical Trial for a
Product.

“Commercial Period” means the period commencing upon the first date of receipt
from the FDA of a pre-marketing clearance or approval for a Product.

“Commercialization Plan” means a plan which includes the identification of
target markets, market sizes, sales and marketing strategies and tactics to
achieve Forecasts for Products and Instrument Systems under this Agreement.

“Confidential Information” means (i) any proprietary or confidential information
or other material in a tangible form that is marked as “confidential” at the
time it is delivered to the receiving party thereof, or (ii) proprietary or
confidential information disclosed orally that is identified as confidential or
proprietary when disclosed and such disclosure is confirmed in writing to the
receiving party as confidential or proprietary by the disclosing party within
thirty (30) days following disclosure.

 

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“Detection Reagent” means [*******] or [*********] conjugated with [*******],
[******], [*********] or other labels capable of providing a detectable response
to the presence of a Target Entity captured by a Capture Reagent and detected
using an Instrument System.

“DHI [******] and [*************]” means all [*******] owned by or licensed
[******] which Immunicon [*********] are [**********] in order for it to make
[********] for use in accordance with this Agreement, which [*********] will be
provided by DHI to Immunicon in accordance with this Agreement.

“FDA” means the United States Food and Drug Administration, or any successor
body.

“Field” means the in vitro application of Instrument Systems for the diagnosis
or monitoring of Target Entities for the Infectious Diseases identified in
Exhibit A in humans solely by detection of [*******] or [*********] and/or
[*********] ([*************]) utilizing Products. For the resolution of doubt
but not in limitation, the Field shall not include [********], [*******] or
[**********] or [********] conditions; applications or analysis involving
[********] circulating in blood, [*********], [*********], or [********];
[************], [*******] or [********]; [************], [********] or [******];
[**********] for [*******]; analysis of [****] taken by [*********];
[************], [*******] or [*******]; [***********]; [*********] or
[**********] for assessing [**********]; applications involving [************]
or other [**************] techniques; or applications involving [*************]
techniques.

“GAAP” means U.S. generally accepted accounting principles consistently applied.

“Infectious Disease” means a disease state characterized by the presence of one
or more viruses or bacteria in, on or from the body of a human being.

“Initial Feasibility” means demonstrating proof of principle with respect to the
Initial Product(s) in accordance with a feasibility plan approved by the
Management Board (“Feasibility Plan”), using prototype reagents and existing
laboratory tools, including but not limited to the Immunicon CellTracks®
Analyzer II. It is anticipated that the Management Board, in determining whether
Initial Feasibility has been achieved with respect to a Product, will consider
such factors as sensitivity, specificity, agreement to predicate device methods,
and other key performance characteristics defined as Marketing Essential
Characteristics, as indicative of potential success in the relevant marketplace
for Products.

“Initial Feasibility Period” means the period prior to Product Development for
conducting targeted research and demonstrating Initial Feasibility.

“Instrument System” or “Instrument Systems” means a cell counting device, with
non-consumable ancillary accessories and related components and software, that
is capable of presenting, characterizing, and counting cells, and providing
processed diagnostic information sufficient for detecting the [****************]
through the use of [*******]. By way of example but not limitation, an
Instrument System contemplated at the Effective Date of this Agreement includes
the Immunicon EasyCount™ System together with related components and software,
as

 

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the same may be improved, modified, updated or superceded from time to time. In
addition, if Immunicon has another instrument platform in addition to the Easy
Count System that may be suitable for use as an Instrument System in the Field
utilizing Products, it shall bring the same to the attention of the Management
Board, and the Management Board shall determine the suitability of such other
platform for use as an Instrument System in the Field utilizing Products. If a
decision is taken by the Management Board to undertake a Project Plan for the
use of such other platform for such purpose, DHI and Immunicon shall negotiate
in good faith commercially reasonable terms and conditions, to be set forth in a
separate written agreement, for the sharing of costs associated with such
Project Plan. Immunicon at its sole discretion shall determine the suitability
of the Immunicon CellTracks® Analyzer II System for use as an Instrument System
in the Field utilizing Products, and if a decision is taken to undertake a
Project Plan for the use of the CellTracks® Analyzer II System for such purpose,
DHI and Immunicon shall negotiate in good faith commercially reasonable terms
and conditions, to be set forth in a separate written agreement, for the sharing
of costs associated with such Project Plan. The Instrument System does not
include Bulk Reagents.

“Instrument System Cost” means Immunicon’s standard cost of manufacturing an
Instrument System, as determined in accordance with GAAP.

“Internal End User” means any Affiliate of DHI that is not in the business of
reselling Products and whose use of such Products normally results in such
Products’ consumption.

“Inventions” means the Patents and all inventions (patentable or otherwise),
developments, designs, applications, improvements, formulae, concepts, ideas,
Know-How, methods or processes, discoveries and techniques necessary or
desirable for the development, manufacture, sale or distribution of or otherwise
relating to Products, Bulk Reagents, Detection Reagents or Instrument Systems,
whether owned as of the date hereof or hereafter acquired or licensed.

“In vitro diagnostic” or “IVD” means reagents and/or kits registered for ASR
sale, cleared or approved by FDA via 510(K) or PMA process or an equivalent
international regulatory process.

“Know-How” means any proprietary information including, without limitation, any
trade secret, that is useful in any aspect of the development, use, manufacture
or sale of Products or Instrument System and is not publicly known, disclosed or
published, including, without limitation, all pre-clinical, clinical, chemical,
biochemical, toxicological, analytical, manufacturing, process, formulation and
scientific research information, whether or not capable of precise separate
description but that alone or when accumulated give to the one acquiring it an
ability to study, test, produce, formulate or market Products or Instrument
Systems which one otherwise would not have known to study, test, produce,
formulate or market in the same way.

“Management Board” means the body comprised of management representatives of
Immunicon and DHI as described in Section 3 hereof. The responsibilities of the
Management Board are set forth in Section 3.2.

“Marketing Essential Characteristics” means the set of properties,
characteristics, and functional requirements that must be incorporated in or
displayed by Products and Instrument Systems when combined to make them
commercially acceptable in the market in which they are intended to be sold,
consistent with the competitive positioning and proposed pricing of the Products
and the Instrument Systems.

 

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“Material Breach” means a failure of a party to perform an express covenant or
obligation under this Agreement or a breach of a representation or warranty of a
party which failure or breach has had or would reasonably be expected to have a
material adverse financial consequence to the non-failing or non-breaching
party.

“Patents” means (i) all U.S. and foreign patent applications and patents owned
or licensed by Immunicon or any of its Affiliates or DHI or any of its
Affiliates that have application in the Field; (ii) all U.S. and foreign patent
applications and patents owned by Immunicon or DHI, or owned jointly by
Immunicon and DHI, that claim inventions that have application in the Field and
which are conceived or reduced to practice as part of a Project Plan; and
(iii) all divisions, continuations, continuations-in-part, and substitutions
thereof; and all extensions, reissues and re-examinations of any of the
foregoing; in each case, wherein such patents or applications contain claims
that would, but for the respective ownership of, or license to, Immunicon or DHI
under clause (i), (ii) or (iii) above or licenses granted under this Agreement,
be infringed by Immunicon’s or DHI’s respective activities under this Agreement.
A list of the current Patents of Immunicon is attached to this Agreement as
Schedule 2.

“Product(s)” means a kit consisting of one or more Detection Reagents, Bulk
Reagents, consumable cartridges and other disposable items utilizing an
Instrument System for the purpose of magnetic separation or another separation
method for capture of Target Entities for the detection of a viral or bacterial
microorganism in a Specimen that causes one or more of the Infectious Diseases
identified as such in Exhibit A hereto and which performs to the specifications
set forth in the Marketing Essential Characteristics therefor as determined by
the Management Board, but which in any event shall demonstrate [************] to
[************] for such Target Entities commercially available as of the
Effective Date if such [***********] exist as of the Effective Date. The term
“Initial Products” refers to the Products identified in Exhibit A hereto as
Initial Products.

“Product Development” means activities conducted as described generally in
Section 3 of this Agreement during the period following the Initial Feasibility
Period, including advancing prototypes and design, transfer to manufacturing and
preparing for commercialization of Initial Products and Instrument Systems for
the clinical infectious disease market, under Project Plans as determined by the
Management Board. Product Development activities shall include but not be
limited to developing specific and sensitive capture and detection antibodies
and/or other reagents for Target Entities for the Infectious Diseases identified
in Exhibit A hereto, and preparing and submitting Clinical Trial Plans to the
FDA for Products that meet the related Marketing Essential Characteristics.

“Project Plan” means the written summary, to be developed jointly by Immunicon
and DHI, including the Initial Feasibility, Product Development and Product
commercialization activities that are to be conducted by the parties as
described in Section 3 of this Agreement, in order to develop and commercialize
Products and Instrument Systems under this Agreement. A Project Plan shall be
developed for each proposed Product and/or Family of Products hereunder. A
Project Plan shall satisfy the process design control elements of DHI’s and
Immunicon’s quality management systems. A Project Plan may be modified only in
writing by the Management Board.

 

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“RAP” means a reagent agreement, reagent rental or similar plan or arrangement
wherein Products sold by DHI or an Affiliate are increased in price to include
an amount to cover the amortized cost of an Instrument System, including
maintenance costs, or other equipment (amortized over the useful life thereof)
supplied to a customer of DHI or an Affiliate under an agreement with the
customer to purchase the Product(s) at such increased price in order that the
customer may have the use of such Instrument System and/or other equipment.

“Revenue” or “Revenues” means all of the income received by DHI or any of its
Affiliates (other than Internal End Users) during a given period from the sale
of Products to Third Parties, and income received by DHI from use of Products by
Internal End Users, whether or not such income is recognized by DHI as revenue
in accordance with standard DHI accounting procedures, less the following
amounts: (i) discounts, including cash discounts, or rebates actually allowed or
granted, (ii) credits or allowances actually granted upon claims or returns
regardless of the party requesting the return, (iii) taxes or other governmental
charges levied on or measured by the invoiced amount whether absorbed by the
billing or the billed party. In the event that any Product is sold as a
combination containing one or more other products, Revenue for such combination
will be calculated by multiplying actual Revenue by the fraction A/(A+B) where A
is the invoice price of the Product if sold separately, and B is the total
invoice price of any other product or products in the combination if sold
separately by DHI or any of its Affiliates (or if such other product or products
are not sold separately then the standard costs of the Products and such other
product or products shall be used); provided, however, that in no event shall
such fraction be less than 0.85. In the event that any Products are sold to
Third Parties pursuant to a RAP, DHI shall reasonably determine that portion of
the amount charged under the RAP that is attributable to Products in accordance
with standard DHI accounting procedures reasonably acceptable to Immunicon, and
consistent with GAAP. Revenues shall not include income received by DHI or any
of its Affiliates from the sale of Specimen Collection devices or the Specimen
Transport medium or Revenues received as a commission on the sale of a service
or maintenance plan or contract to a customer of an Instrument System.

“Regulatory Authority” means all governmental entities, including but not
limited to the US Food and Drug Administration (“FDA”), regulating the
development, manufacture, sale, shipping or distribution of Products or
Instrument Systems in any country or groups of countries.

“Regulatory Approval” means any authorization received from a Regulatory
Authority to commence commercial marketing, sale and distribution of a Product
or Instrument System in any country and any other approvals, clearances,
registrations, or permits that may be required to manufacture, market, sell and
distribute Products, Instrument Systems, or any related components of such
Products or Instrument Systems.

“Research Use Only” or “RUO” as applied to Products or Instrument Systems, means
that such Products or Instrument Systems are suitable for use without a
Regulatory Approval by an end-user solely for the limited purpose of the end
user’s internal research. An ASR-designated reagent shall not be considered a
RUO reagent.

 

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“Specimen” means, but is not limited to, a [*********] such as [*****],
[********], [*******], [*****], [********], [******] or [******] which is
subjected to analysis for one or more Target Entities using a Product.

“Specimen Collection” and “Specimen Transport” means the collection device and
transport medium provided by DHI solely at DHI’s responsibility for processing
Specimens prior to analysis by use of Product(s).

“Third Party” means any person or entity other than Immunicon, DHI or their
respective Affiliates.

“Transfer Price” means the price charged to DHI by Immunicon for an Instrument
System or Bulk Reagents supplied to DHI under this Agreement.

“Target Entity(ies)” means any aspect or component of a biological sample that
upon appropriate analysis with Product(s) and Instrument Systems, would provide
diagnostically relevant information in assessing an Infectious Disease
condition. A Target Entity may include, without limitation, cells, cell
components, an infectious agent, or combinations thereof and specifically
includes the Target Entities listed in Exhibit A.

 

3. PRODUCT DEVELOPMENT

3.1 Project Plans. Immunicon and DHI shall conduct Product Development under
Project Plans with the goal of developing Products and Instrument Systems for
commercial sale by DHI in accordance with this Agreement. Immunicon and DHI
shall each use its reasonable efforts to conduct the activities for which it is
responsible with respect to Product Development, in accordance with Project
Plans and the provisions of this Agreement, in each case within the time
schedule set forth therein and herein. Immunicon and DHI will conduct such
activities in a prudent and skillful manner and in accordance in all material
respects with the Project Plan then in effect, and further in accordance with
all applicable Federal, state and local laws, rules, regulations and other
requirements (including, without limitation, Good Laboratory Practices, cGMP,
QSR, ISO and the regulations of other non-US Regulatory Authorities).

3.2 Management Board. The Management Board shall provide oversight and advice
for the conduct of Product Development as follows:

3.2.1 The Management Board shall be composed of four (4) management
representatives of each of Immunicon and DHI, including the Chief Executive
Officer of each, and senior sales and marketing, research and development and
finance executives. Each party may substitute one or more of its
representatives, from time to time in its sole discretion, effective upon notice
to the other party of such change. Immunicon shall appoint the chairperson of
the Management Board (who shall in any event be the Chief Executive Officer of
Immunicon or DHI until after the one year anniversary date of the commencement
of the Commercial Period) and so inform DHI, including any changes to the
designated chairperson.

 

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3.2.2 The activities of the Management Board with respect to developing,
managing and overseeing execution of the Project Plan(s) from feasibility
through commercialization shall include:

 

  (a) Initial Feasibility Period. Provide oversight and guidance during the
Initial Feasibility Period, including developing feasibility plans and
establishing Marketing Essential Characteristics for Products.

 

  (b) Product Development Period. Provide oversight and guidance during Product
Development, including:

(i) developing the Project Plan for each Product and the Instrument System,
including the Product Development Plan, the Clinical Trial Plan and the
Commercialization Plan,

(ii) reviewing and approving activities and progress under each Project Plan and
approving any modifications to Project Plans,

(iii) approving all Clinical Trial Plans and any modifications to Clinical Trial
Plans.

(iv) reviewing progress of all Clinical Trials, and reviewing and evaluating
data and conclusions developed from Clinical Trials,

(v) reviewing the process for seeking Regulatory Approvals of Products and
Instrument Systems, and

(vi) reviewing and authorizing submissions for Regulatory Approval.

 

  (c) Commercialization Period.

(i) review and approve Commercialization Plans including Firm Forecasts, and

(ii) consider and adopt any modifications to the Commercialization Plans.

 

  (d) Additional Responsibilities. Carry out such other activities as the
parties may from time to time agree.

3.2.3 Unless otherwise agreed, the Management Board shall meet no less
frequently than quarterly. Each party shall be responsible for its own costs
incurred in connection with such meetings. The site of the meetings shall
alternate between a site chosen by Immunicon and a site chosen by DHI.

 

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3.2.4 The representatives of DHI to the Management Board, voting together, shall
have one vote, and the representatives of Immunicon, voting together, shall have
one vote. Any approval, determination, decision or other action by the
Management Board shall require the approval of the DHI representatives and the
Immunicon representatives. Notwithstanding the foregoing and except as otherwise
provided in Section 6.8.2(d), in the event the DHI representatives to the
Management Board and the Immunicon representatives to the Management Board are
unable to reach agreement on a Firm Forecast (as defined in Section 6.8.1),
other than the Firm Forecasts for the first and second forecast years, the
Immunicon representatives to the Management Board shall cast the deciding vote
on such Firm Forecast.

3.2.5 The chairperson of the Management Board or his/her designee shall prepare
and deliver to the members of the Management Board within thirty (30) days after
the date of a Management Board meeting minutes of such meeting summarizing the
matters reviewed and any actions taken and decisions made at such meetings in
form and content reasonably acceptable to the parties.

3.3 Project Representative. DHI and Immunicon each shall appoint a person (a
“Project Representative”) to oversee the progress of each Project Plan. The
Project Representative of each party shall be the primary contact between the
parties for day-to-day collaboration pursuant to this Agreement. Each party
shall notify the other within thirty (30) days after the commencement of each
Project Plan hereunder of the appointment of its Project Representative and
shall notify the other party as soon as practicable upon changing this
appointment.

3.4 Development Responsibilities of Immunicon and DHI.

3.4.1 Immunicon shall develop the Instrument System(s) and Bulk Reagents, and
DHI shall develop the Detection Reagents and conduct the pre-Clinical Trial and
Clinical Trial evaluations of Products, as described more fully in one or more
Project Plans. Notwithstanding the foregoing, the parties acknowledge that in
order to assure optimization of Bulk Reagents and Detection Reagents and
integration thereof into Products, the parties must collaborate in certain of
their respective development activities with respect thereto, and accordingly
each party hereby agrees to cooperate and collaborate with the other party to
provide such scientific, technical and other resources as it in good faith deems
to be necessary to assist the other party in its development responsibilities
hereunder. Immunicon shall be allowed to utilize its judgment and expertise in
such development of Instrument Systems and Bulk Reagents but recognizes that DHI
wishes to be informed of all key decisions in advance of their execution and be
afforded the opportunity to influence the same. DHI shall be allowed to utilize
its judgment and expertise in such development of Detection Reagents but
recognizes that Immunicon wishes to be informed of all key decisions in advance
of their execution and be afforded the opportunity to influence the same.

3.4.2 DHI, in consultation with Immunicon and as directed by the Management
Board, shall conduct evaluations of Bulk Reagents and Detection Reagents for use
in Products and evaluate the utilization of same on Instrument Systems, develop
Marketing Essential Characteristics and Commercialization Plans, and manage,
coordinate, implement and administer Clinical Trials in

 

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accordance with one or more Project Plans subject to the approval of the
Management Board. All Clinical Trials of Products and Instrument Systems shall
be conducted in accordance with all applicable legal and regulatory requirements
and under the direction of the Management Board. DHI shall not depart in any
material manner from the Clinical Trial Plan for a Clinical Trial that is
established by the Management Board, without the prior approval of the
Management Board.

3.4.3 Immunicon will provide assistance, consultation and advice as appropriate
and as determined necessary by the Management Board in connection with Clinical
Trials for the filing of submissions with Regulatory Authorities by DHI, and
with respect to all other aspects of Regulatory Approval processes. To the
extent that the FDA or any other Regulatory Authority requests information with
respect to Immunicon in connection with any regulatory filing, Immunicon shall
provide such information promptly at no cost to DHI. Immunicon shall use all
reasonable efforts to cooperate fully with DHI to comply with and obtain
appropriate Regulatory Approvals from Regulatory Authorities necessary for DHI
to market, sell and distribute Products and Instrument Systems in accordance
with this Agreement. Immunicon agrees to provide DHI (and any appropriate
Regulatory Authority) reasonable access to its data, records, facilities,
employees and consultants in order to assist in the Regulatory Approval process,
subject to appropriate protections for Immunicon’s Confidential Information.

3.5 Funding/Sharing of Revenue.

3.5.1 In consideration of the license granted to DHI by Immunicon hereunder and
for Immunicon’s agreement to the terms and conditions hereof, DHI shall pay to
Immunicon a non-refundable, non-creditable license fee of $1,500,000 to be paid
in the following manner;

(a) an initial payment of $500,000 shall be due and payable upon the Effective
Date;

(b) provided that this Agreement has not terminated earlier pursuant to its
terms, a second payment of $1,000,000 shall be due and payable immediately upon
the approval by the FDA of a Clinical Trial Plan for the first Initial Product.

3.5.2 In consideration for the performance of Immunicon’s obligations under
Section 3.4 hereof, DHI shall pay to Immunicon Two Hundred Thousand Dollars
($200,000) per calendar quarter for the first six (6) calendar quarters
following the Effective Date, such payment to be due and payable at the
commencement of each calendar quarter. Immunicon agrees that it will use its
reasonable judgment in accordance with accepted commercial practices in the
industry to engage individuals of appropriate experience and product development
expertise on development of the Initial Products and Instrument System. Product
and Instrument System development payments for Products that are not Initial
Products which are developed under this Agreement after the commencement of the
Commercial Period shall be subject to mutual agreement of, and negotiated in
good faith by, Immunicon and DHI and set forth in written amendments to this
Agreement.

3.5.3 Except as otherwise set forth herein, Immunicon and DHI shall each be
responsible for the funding of its own activities and responsibilities under
this Agreement.

 

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3.5.4 DHI may purchase from Immunicon up to twenty (20) Instrument Systems prior
to the commencement of the Commercial Period at a Transfer Price to DHI for each
such Instrument System to be determined in good faith by Immunicon, but which
shall not be [******] Immunicon’s [*************] of such Instrument System plus
[*********].

3.5.5 DHI may purchase from Immunicon up to two (2) CellTracks® Analyzer II
Systems prior to the commencement of the Commercial Period at a Transfer Price
for each such CellTracks® Analyzer II System to DHI to be determined in good
faith by Immunicon, but which shall not be [*******] Immunicon’s [***********]
of a comparable CellTracks® Analyzer II System.

3.5.6 Following commencement of the Commercial Period, Immunicon and DHI shall
share all Revenue from Products as follows:

Within thirty (30) days after the end of each calendar quarter during the
Commercial Period, DHI shall remit to Immunicon (in order to compensate
Immunicon for Bulk Reagents supplied to DHI and a royalty under Immunicon
Patents and Know-How) an amount equal to (a) forty-one percent (41%) of Revenues
during such calendar quarter less (b) the total Bulk Reagent Cost during such
quarter for that amount of Bulk Reagents that was incorporated in and/or used to
make the Products that generated such Revenues. Notwithstanding the foregoing,
DHI’s share of Revenues as provided for in the preceding sentence shall be
appropriately increased by the parties in the event that, with respect to any
Product, technical modifications requiring the use of [************] are
necessary for meeting the Marketing Essential Characteristics for such Product
and such technical modifications have the effect of increasing the projected
cost to DHI of producing such Product by more than [****] above DHI’s initial
projection of such cost. The parties will negotiate and determine in good faith
the terms of any such modification of the revenue sharing arrangement.

3.6 Reports and Exchange of Information.

3.6.1 Reports. (a) Immunicon and DHI shall report to each other the status of
their activities under this Agreement including all relevant findings and all
results from the performance of Project Plans in a manner and at such intervals
as the parties shall reasonably agree, but no less frequently than in a written
report every calendar quarter, and provide such report to members of the
Management Board no less than one week prior to their scheduled meetings. Each
such quarterly written report shall summarize the progress and results during
the previous quarter in implementing Project Plans and achieving the goals
thereof, and shall provide such other related information as Immunicon or DHI
shall reasonably request.

(b) DHI shall report the status of efforts to commercialize and
commercialization of the Products and Instrument System before and after
commencement of the Commercial Period, in a manner and at such intervals as the
parties shall reasonably agree but no less frequently than in a written report
every calendar quarter, and provide such report to members of the Management
Board no less than one week prior to their scheduled meetings. Each such
quarterly written report shall summarize the progress of DHI’s commercialization
efforts during the previous quarter toward achieving commercialization goals
established in the Project Plans. DHI also shall provide such other related
information as Immunicon shall reasonably request.

 

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3.6.2 Access to Facilities. Each party agrees to permit personnel of the other
party to visit the facilities that are utilized in connection with the
production, quality assurance, research and development of Products and
Instrument Systems, at mutually agreed upon times, during normal business hours
to observe the activities being conducted.

3.6.3 Audit Rights. Each party shall have the right, upon reasonable notice to
the other party and during regular business hours, to inspect and audit the
books and records of such other party to assure compliance with the provisions
of this Agreement including, without limitation, compliance with Sections 3.5.4,
3.5.5, 3.5.6, and 6.2. The parties acknowledge that the provisions of this
section granting certain audit rights shall in no way relieve either party of
any of its obligations under this Agreement, nor shall such provisions require
either party to conduct any such audits.

 

4. PRE-COMMERCIALIZATION ACTIVITIES

4.1 Marketing Essential Characteristics. DHI shall, in consultation with
Immunicon, define the Marketing Essential Characteristics for Products,
Instrument Systems, and related components and materials and shall apprise
Immunicon of any changes therein. In the event of disagreement regarding
Marketing Essential Characteristic definitions, the Management Board shall
decide the matter and such decision shall be final.

4.2 Regulatory Approval Submissions. DHI shall, with the consultation of
Immunicon and at DHI’s sole expense, have the responsibility for submissions in
connection with Regulatory Approvals for any Product or Instrument System and
determine when any regulatory filing for such Products and Instrument System
should be submitted to a Regulatory Authority. Prior to any submission to any
Regulatory Authority, DHI shall consult with, and provide a final draft copy of
the proposed submission to Immunicon, which shall, within thirty (30) days after
receipt of the draft, provide any written comments to DHI. DHI shall consider in
good faith and consult with Immunicon regarding any such comments, but DHI shall
have final decision making authority with respect to all regulatory filings.
Necessary filings required for Regulatory Approvals shall be filed within sixty
(60) days after completion of the relevant Clinical Trials.

4.3 Supplemental Submissions. DHI shall consult with Immunicon concerning all
supplemental or additional regulatory and other governmental submissions related
to Products and Instrument Systems, and all components and materials related
thereto, and provide Immunicon with access to such submissions prior to filing
the same.

4.4 Ownership of Regulatory Approvals. All documents filed with Regulatory
Authorities shall be prepared and submitted by and in the name of DHI or one of
its Affiliates, and DHI shall own all such Regulatory Approvals unless otherwise
required by applicable law.

4.5 Filling and Packaging. At DHI’s own cost and expense, including, without
limitation, the cost and expense of validation, DHI shall make ready a facility
(either owned by DHI or an Affiliate

 

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thereof or by a Third Party) for producing and packaging Products consistent
with the Firm Forecast as approved by the Management Board.

 

5. COMMERCIAL ACTIVITIES

5.1 Manufacturing and Supply Arrangement. Except as expressly provided elsewhere
in this Agreement, Immunicon shall manufacture (or cause to be manufactured) and
supply DHI with DHI’s requirements of Bulk Reagents, Instrument Systems and
components and materials related thereto, and DHI shall source such requirements
exclusively from Immunicon, as follows:

5.1.1 (a) Prior to the commencement of the Commercial Period and if approved by
the Management Board in a Project Plan, Immunicon will manufacture and supply
DHI with DHI’s requirements for Bulk Reagents for DHI to create finished
Products, in amounts reasonably requested by DHI from time to time in connection
with DHI’s validation of finishing and packaging facilities, and marketing
activities, as well as the performance by DHI of its obligations hereunder with
respect to making appropriate regulatory filings under Article 4. The Bulk
Reagents shall meet the specifications as set forth in Schedule 5.1.1 hereto, as
may be amended from time to time by mutual agreement of the parties (the
“Reagent Specifications”).

(b) From and after the commencement of the Commercial Period, Immunicon shall
manufacture and supply DHI with DHI’s requirements for Bulk Reagents for DHI to
produce finished Products, as ordered by DHI and meeting the Reagent
Specifications, and for Instrument Systems in accordance with the terms and
conditions of the Distribution Agreement, attached hereto as Exhibit B and
incorporated herein by reference (the “Distribution Agreement”). The
Distribution Agreement shall be entered into between DHI and Immunicon
immediately upon commencement of the Commercial Period.

(c) Prior to the commencement of the Commercial Period, DHI shall manufacture
and supply all of its requirements for Detection Reagents in order for DHI to
create finished Products as required for validation of finishing and packaging
facilities, for marketing activities and the performance by DHI of its
obligations with respect to making appropriate regulatory filings under Article
4. The Detection Reagents shall meet the appropriate specifications as set forth
in the Reagent Specifications.

(d) From and after the commencement of the Commercial Period, DHI shall
manufacture and supply Detection Reagents meeting the Reagent Specifications to
satisfy its entire requirements to produce finished Products.

5.1.2 Transfer Pricing for Bulk Reagents. DHI shall pay to Immunicon an amount
equal to the Bulk Reagent Cost for that amount of Bulk Reagent shipped to DHI
that meets the Reagent Specifications within thirty (30) days after receipt by
DHI of the invoice therefor, except that prior to the commencement of the
Commercial Period Immunicon will ship to DHI reasonable amounts as determined
solely by Immunicon (not to exceed, in the aggregate, $[*******] worth of Bulk
Reagent at Bulk Reagent Cost) of Bulk Reagent [*******] in order for DHI to make
ready and validate its facility for producing and packaging Products pursuant to
Section 4.5.

 

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6. DISTRIBUTION OF INSTRUMENT SYSTEMS

From and after the commencement of the Commercial Period and until this
Agreement expires or is terminated as provided herein, DHI shall act as
Immunicon’s distributor for Instrument Systems, pursuant to the terms and
conditions of this Agreement and as set forth in the Distribution Agreement. To
the extent any of the terms and conditions of the Distribution Agreement may be
inconsistent, or are in conflict with, the terms and conditions of the body of
this Agreement, the latter shall govern and prevail.

6.1 Sales and Training Costs. DHI shall be responsible for all expenses which it
may incur in carrying out sales and training with respect to Products and
Instrument Systems hereunder including, without limitation, all travel expenses
(including meals and lodging) and those expenses associated with the training of
its employees and officers at the facilities of DHI and elsewhere related to the
Instrument Systems. Immunicon shall be responsible for providing appropriate
training to DHI, as determined by Immunicon, to enable DHI to train customers in
use of Products and Instrument Systems.

6.2 Promotional Efforts; Materials. DHI shall be responsible for all expenses
which it may incur in marketing, selling and promoting Instrument Systems, to
include but not limited to, (i) selling aids, (ii) promotional materials and
(iii) distribution related items. In any event, Immunicon shall have the right
to review materials relating to DHI’s promotional efforts with respect to
Instrument Systems.

6.3 Instrument System Specifications; Validation. The Instrument Systems
supplied to DHI shall meet applicable specifications for such Instrument Systems
as agreed to by the Management Board and as may be amended from time to time by
the Management Board. References in this Agreement to the applicable
specifications for the Instrument Systems shall refer to such specifications as
agreed to by the Management Board, as amended from time to time. Immunicon shall
perform all software development and validation of Instrument Systems and all
testing and quality assurance release functions for Instrument Systems generally
as well as the software contained therein; provided that the quality assurance
release criteria shall be subject to approval by the Management Board and the
application thereof shall be subject to the audit and inspection rights of DHI.

6.4 Pricing to Customers. DHI shall set the pricing for sales to its customers
of Instrument Systems supplied to DHI by Immunicon pursuant to the Distribution
Agreement.

6.5 Customer Support; Warranty and Service; Service Contracts.

6.5.1 Immunicon shall provide to those customers of DHI who purchase, lease or
otherwise acquire an Instrument System in the ordinary course of business from
DHI and which has been supplied by Immunicon under the Distribution Agreement of
Exhibit B, with a warranty covering parts and labor for, or replacement of, the
Instrument System, which warranty shall run for a period of twelve (12) months
after the date such system is installed at an end user site (such period, the
“Initial Warranty Period”), which means that in the event that such system fails
to

 

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operate in accordance with the applicable specifications for the Instrument
System during the Initial Warranty Period Immunicon shall be responsible for
paying cost of repairs and/or replacement of parts or the entirety of the
Instrument System. In the event that during the Initial Warranty Period for any
Instrument System a customer utilizing such system reports a problem with such
system to DHI, DHI shall use its best reasonable efforts to notify Immunicon of
such problem within two business days of its receipt of the report of such
problem.

6.5.2 (a) Immunicon shall have sole responsibility for repair or replacement of
any Instrument System within the Initial Warranty Period or thereafter.
Immunicon shall receive all revenue from servicing or repair of Instrument
Systems, whether or not such repair or service is performed under warranty or
under a service contract, or similar service or maintenance plan. All revenue
received by DHI from sale of service contracts or similar service or maintenance
plans on Instrument Systems shall be remitted to Immunicon within thirty
(30) days of the receipt of such revenue by DHI, [**********************].
[*************************]. In the event DHI includes a service contract or
similar service or maintenance plan as a component of a transaction involving an
Instrument System that is placed under a RAP or similar arrangement,
[*****************] or similar [******************] shall [******************]
for [****************] and shall be [***********] in full as provided above,
provided that DHI shall be [******************] of such [*************] or
similar arrangement that is attributable to the service contract or similar
service or maintenance plan.

(b) The service contracts to be offered by Immunicon to DHI’s Instrument System
customers will be for a term of [********]. After the Initial Warranty Period
the price of such service contracts will be [**********] for the [******] and
[********]. After DHI has completed its first [********] of Instrument Sales,
Immunicon and DHI will evaluate whether the price of the service contracts is
commercially reasonable in light of the historical and estimated future cost to
Immunicon of providing service under such contracts, and will adjust the price
if and to the extent appropriate based on such evaluation.

(c) In order to minimize downtime during operation of Instrument Systems by
customers, DHI shall use its best commercially reasonable efforts to encourage
at least [*************] of its purchasers of Instrument Systems and customers
of Instrument Systems placed under a RAP or similar arrangement to purchase
service contracts or substantially equivalent service or maintenance plans
covering such Instrument Systems or to include the price of such service
contracts or substantially equivalent service or maintenance plans in the RAP or
similar arrangement. If fewer than [***********] of DHI’s purchasers of
Instrument Systems and customers of Instrument Systems placed under a RAP or
similar arrangement over any twenty-four month period purchase service contracts
or substantially equivalent service or maintenance plans or include service
contracts or substantially equivalent service or maintenance plans in their RAP
or similar arrangement covering their Instrument Systems, then Immunicon will
thereafter have the right to [**********************], and DHI shall no longer
[***********************]. In the event the circumstances of the immediately
preceding sentence are triggered, DHI shall provide to Immunicon within
[********] following the closing of each transaction with customers of
Instrument Systems the [*******************] to enable Immunicon to
[*************] regarding such service contract or substantially equivalent
service or maintenance plan.

 

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6.6 Forecasting; Supply Process. In order to expedite the supply process, DHI
will be responsible for forecasting Instrument System requirements on which
Immunicon’s manufacturing plans will be based in accordance with the provisions
set forth in Section 6.8.

6.7 Limitation of Use of Instrument Systems. DHI acknowledges and agrees that
Instrument Systems shall be limited to accepting and utilizing Products (as such
term is defined in this Agreement). DHI acknowledges that Immunicon has a
legitimate interest in protecting its intellectual property rights related to,
and the quality and integrity of, Instrument Systems, and in furtherance thereof
DHI shall not, and shall not authorize or permit any Third Party, including but
not limited to any customer of DHI or any other acquirer of an Instrument System
from DHI, to utilize any reagents, assays, or similar products other than
Products in connection with an Instrument System, or to modify any aspect of an
Instrument System to accept or utilize any reagents, assays, or similar products
other than Products.

6.8 Sales Forecasts

6.8.1 Strategic Forecast. Prior to commencement of the Commercial Period, DHI
shall develop and submit to the Management Board for its review and approval an
initial three (3) year strategic forecast (the “Strategic Forecast”) and a
twelve-month forecast for sales of Products and Instrument Systems (each, a
Twelve-Month Forecast”). The first Twelve-Month Forecast will cover a
twelve-month period commencing as of the first day of the first full month
following the commencement of the Commercial Period. Upon approval by the
Management Board (with such modifications as may be agreed to by the Management
Board), the Twelve-Month Forecast for the first forecast year will be deemed to
be a Firm Forecast for purposes of Section 6.8.2 below. The Strategic Forecast
will be updated annually with the next succeeding year (each such year, a
“Forecast Year”) being deemed a Firm Forecast for purposes of Section 6.8.2. DHI
will develop and submit to the Management Board for its review and approval a
revised Strategic Forecast and an updated Twelve-Month Forecast at least ninety
(90) days prior to the commencement of each Forecast Year. Forecasted Revenues
for new Products will be reflected in the Twelve-Month Forecast and will then be
rolled into the three year Strategic Forecast; provided, however, that the
parties recognize that such new Products may be subject to delays with respect
to their anticipated commercial launch due to factors that were unanticipated by
the parties when the Firm Forecast containing such new Products was created,
which factors may include but not limited to unanticipated Product development
delays and delays in obtaining Regulatory Approvals. Accordingly, the parties
agree that they will make reasonable adjustments to any Firm Forecast which may
be subject to such unanticipated new Product delays as provided in the
immediately preceding sentence. Each Twelve-Month Forecast shall reflect a good
faith effort to forecast reasonably anticipated sales for the relevant time
period or periods, taking into account all relevant factors including, without
limitation, actual sales in prior periods, performance of the Products and the
Instrument Systems, competition, and pricing.

 

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6.8.2 Failure of DHI to Achieve Revenue Forecasts. (a) If Revenue does not equal
or exceed Minimum Performance (as defined below) in the third, fourth or fifth
Forecast Years, DHI will owe to Immunicon, in addition to Immunicon’s share of
Revenue calculated in accordance with Section 3.5.6, the amount set forth in the
following table:

 

Forecast Year

 

Minimum Performance by DHI

 

Additional Amount Owing to

Immunicon by DHI

[***]   [***] of forecasted Revenue in Firm Forecast   [***] percent of the
forecasted Revenue in the Firm Forecast for each [***] percent below [***]% of
such forecasted Revenue up to a maximum additional amount of [***] percent of
the forecasted Revenue in the Firm Forecast. [***]  

[***] of forecasted Revenue in

Firm Forecast

  [***] percent of the forecasted Revenue in the Firm Forecast for each [***]
percent below [***]% of such forecasted Revenue up to a maximum additional
amount of [***] percent of the forecasted Revenue in the Firm Forecast. [***]  
[***] of forecasted Revenue in Firm Forecast   [***] percent of the forecasted
Revenue in the Firm Forecast for each [***] percent below [***]% of such
forecasted Revenue up to a maximum additional amount of [***] percent of the
forecasted Revenue in the Firm Forecast.

(b) In the event this Agreement terminates prior to the end of the [***]
Forecast Year, no additional amount shall be owing by DHI to Immunicon pursuant
to Section 6.8.2 for the Forecast Year in which this Agreement terminates or for
any future Forecast Year. If this Agreement extends beyond the [***] Forecast
Year and Revenue for the [***] Forecast Year or any Forecast Year thereafter
does not equal or exceed [***]% of forecasted Revenue for such Forecast Year as
established by the applicable Firm Forecast, then DHI will owe to Immunicon, in
addition to its share of Revenue calculated in accordance with Section 3.5.6, an
amount equal to [***] percent ([***]%) of the difference between [***]% of such
forecasted Revenue and actual Revenue for such Forecast Year. Any such
additional amount will be due and payable thirty (30) days after the final
determination of Revenue for such Forecast Year.

(c) Any additional amount owing by DHI to Immunicon pursuant to this
Section 6.8.2 shall be due and payable thirty (30) days after the final
determination of Revenue for the Forecast Year for which such payment is owing.
When calculating the difference between Minimum Performance for a Forecast Year
and DHI actual Revenue for such Forecast Year, DHI shall be given credit for any
Revenue that DHI can reasonably establish was not recognized in such Forecast

 

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Year because of the failure of Immunicon to meet and fill orders for Bulk
Reagents or Instrument Systems or to deliver such items to DHI or its Affiliates
in accordance with this Agreement. Any Revenue that DHI is given credit for
pursuant to the preceding sentence shall not be recognized again by DHI in any
subsequent Forecast Year for purposes of Section 6.8.2.

(d) Any other provision of Section 6.8.2 to the contrary notwithstanding, if
Revenue payable to Immunicon under Section 3.5.6 and this Section 6.8.2 for any
Forecast Year equals or exceed $[*****] DHI shall have no obligation to make any
payment to Immunicon under this Section 6.8.2 for any subsequent Forecast Year
and the representatives of Immunicon to the Management Board will no longer have
the right to cast the deciding vote on the Firm Forecast for any such subsequent
Forecast Year; provided, however, that if Revenue payable to Immunicon in any
Forecast Year thereafter is less than $[*********], DHI’s obligation to make
payment to Immunicon under this Section 6.8.2 shall be reinstated for such
Forecast Year and for any subsequent Forecast Year in which the Revenue payable
to Immunicon is less than $[**********], and the representatives of Immunicon to
the Management Board will again have the right to cast the deciding vote on the
Firm Forecast for the subsequent Forecast Year and thereafter for as long as the
Revenue payable to Immunicon remains less than $[*********] in any Forecast
Year.

6.9 Orders and Order Forecasts

6.9.1 Forecasts. At least thirty (30) days prior to the beginning of each and
every three-month period (a “Quarter”), commencing with the first three-month
period that is included in the first Firm Forecast, DHI shall provide Immunicon
with a written forecast (the “Quarterly Forecast”) of DHI’s expected
requirements for Bulk Reagents and Instrument Systems for each of the next four
Quarters, the first Quarter of which shall be approved by the Management Board
and shall be binding upon both parties with respect to Bulk Reagents only and
the remaining three Quarters shall be provided for planning purposes only and
shall not be binding upon either party.

6.9.2 Limits on Product Orders. Immunicon shall use commercially reasonable
efforts but shall otherwise not be required to fill any orders of DHI for Bulk
Reagents or Instrument Systems for any Quarter to the extent the amount of Bulk
Reagents or Instrument Systems ordered for such Quarter exceeds [***]% of the
amount of Bulk Reagents or Instrument Systems ordered by DHI during the
immediately preceding Quarter to the extent Immunicon was required to fill the
products so ordered by DHI during such preceding Quarter.

6.9.3 Orders. DHI shall place any binding orders for quantities of Bulk
Reagents, by written or electronic purchase order (or by any other means agreed
to by the parties) to Immunicon, which shall be placed at least thirty (30) days
prior to the desired date of delivery. Immunicon shall not be obligated to
accept and fill orders that exceed (but only to the extent of such excess) the
Quarterly Forecast by over [***]%.

6.9.4 Conflicts. To the extent of any conflict or inconsistency between this
Agreement and any purchase order, purchase order release, confirmation,
acceptance or any similar document, including the Distribution Agreement, the
terms of this Agreement shall govern and control.

 

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6.9.5 Country Forecast. During the Commercial Period, DHI shall develop and
provide to Immunicon an annual forecast (the “Country Forecast”), for each
country where Products and Instrument Systems are anticipated to be sold, ninety
(90) days prior to the commencement of the each Calendar Year (commencing with
the first full Calendar Year during which Products and Instrument Systems are
approved for sale in such country) which forecast will also set forth the number
of units and sales of each Product and of Instrument Systems that are forecasted
to be sold during such Calendar Year.

6.10 Delivery and Inventory

6.10.1 Delivery. All charges for packing, hauling, storage, bar coding, and
transportation to point of delivery are included in the Transfer Prices unless
otherwise agreed to by the parties. All shipments must be accompanied by a
packing slip that describes the articles, states the purchase order number and
shows the shipment’s destination. Immunicon agrees to promptly forward the
original bill of lading or other shipping receipt for each shipment in
accordance with DHI’s instructions. Immunicon further agrees to promptly render,
after delivery of goods or performance of services, correct and complete
invoices to DHI, and to accept payment by check or at DHI’s discretion, other
cash equivalent (including electronic transfer of funds).

6.10.2 Shipment. The risk of loss with respect to Bulk Reagents and Instrument
Systems shall transfer to DHI upon leaving Immunicon’s facilities, or upon
leaving the facilities of any contract manufacturer of Bulk Reagents or
Instrument Systems for Immunicon, as the case may be. Immunicon will pack all
Bulk Reagents and Instrument Systems ordered hereunder in a manner suitable for
shipment and sufficient to withstand the effects of shipping, including handling
during loading and unloading.

6.11 Improvements and Changes to Bulk Reagents, Instrument Systems and Detection
Reagents

Immunicon will notify the Management Board and consult with DHI regarding any
significant changes or modifications to the method or process of manufacture or
production of any Bulk Reagents or Instrument Systems. In the event of any such
changes or modifications, DHI shall establish an appropriate qualification
protocol, and DHI and Immunicon shall determine an appropriate inventory level
for all pre-change Bulk Reagents or Instrument Systems, as the case may be, in
order to cover on-going requirements during the qualification process. DHI will
notify the Management Board and consult with Immunicon regarding any significant
changes or modifications to the method or process of manufacture or production
of any Detection Reagents. In the event of any such changes or modifications,
Immunicon shall establish an appropriate qualification protocol, and DHI and
Immunicon shall determine an appropriate inventory level for all pre-change
Detection Reagents, in order to cover on-going requirements during the
qualification process.

6.12 Quality Inspections/Testing

6.12.1 Inspections. (a) DHI shall have the right, upon reasonable notice to
Immunicon and during regular business hours, to inspect and audit the facilities
being used by Immunicon (or any

 

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third party) for production and storage of Bulk Reagents or Instrument Systems
to assure compliance by Immunicon (and its suppliers) with GMP and applicable
FDA and other rules and regulations and with other provisions of this Agreement.
Immunicon shall within thirty (30) days remedy or cause the remedy of any
deficiencies which may be noted in any such audit or, if any such deficiencies
can not reasonably be remedied within such thirty (30) day period, present to
DHI a written plan to remedy such deficiencies as soon as possible; and the
failure by Immunicon to remedy or cause the remedy of any such deficiencies
within such thirty day period or to present such a plan within such thirty
(30) day period and then use its commercially reasonable efforts to remedy or
cause the remedy of such deficiencies in accordance with such written plan, as
the case may be, shall be deemed a Material Breach of this Agreement. Immunicon
acknowledges that the provisions of this Section granting DHI certain audit
rights shall in no way relieve Immunicon of any of its obligations under this
Agreement, nor shall such provisions require DHI to conduct any such audits.

(b) Immunicon shall have the right, upon reasonable notice to DHI and during
regular business hours, to inspect and audit the facilities being used by DHI
for finishing and filling the Products and the storage of such Products, and the
production and storage of Detection Reagents, to assure compliance by DHI with
GMP and applicable FDA and other rules and regulations and with other provisions
of this Agreement. DHI shall within thirty (30) days remedy or cause the remedy
of any deficiencies which may be noted in any such audit or, if any such
deficiencies can not reasonably be remedied within such thirty (30) day period,
present to Immunicon a written plan to remedy such deficiencies as soon as
possible; and the failure by DHI to remedy or cause the remedy of any such
deficiencies within such thirty (30) day period or to present such a plan within
such thirty (30) day period and then use its commercially reasonable efforts to
remedy or cause the remedy of such deficiencies in accordance with such written
plan, as the case may be, shall be deemed a Material Breach of this Agreement.
DHI acknowledges that the provisions of this section granting Immunicon certain
audit rights shall in no way relieve DHI of any of its obligations under this
Agreement, nor shall such provisions require Immunicon to conduct any
such audits.

6.12.2 Bulk Reagent and Instrument System Quality. Immunicon represents that any
Bulk Reagents or Instrument Systems provided to DHI hereunder shall conform in
all respects to applicable specifications and shall be free from defects in
design, material and workmanship. Immunicon shall replace at its own cost and
expense, including reimbursement of freight and disposition costs incurred by
DHI or any DHI customer of Instrument Systems, any Bulk Reagents or Instrument
Systems that fail to conform with applicable specifications or has any such
defects. DHI shall notify Immunicon of the existence and nature of any
non-conformance or defect and Immunicon shall have a reasonable opportunity, not
to exceed ten (10) days from receipt of notification, to inspect such defective
Bulk Reagents or Instrument Systems, as the case may be, and provide DHI or the
Instrument System customer with detailed written instructions to return or
dispose of such defective Bulk Reagents or Instrument Systems, as the case may
be. DHI shall have no obligation to pay for any Bulk Reagents or Instrument
Systems, as the case may be, that is subject to such a claim of non-conformance
or defect. If Immunicon fails to so inspect and instruct DHI as to the
disposition of such defective Bulk Reagents or Instrument Systems, as the case
may be, DHI may dispose of such defective Bulk Reagents or Instrument Systems as
it sees fit and Immunicon shall promptly (1) reimburse DHI for all direct,
out-of-pocket costs incurred by DHI in such disposition, and (2) replace such
defective Bulk Reagents or Instrument Systems at its own cost and expense.

 

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6.12.3 Independent Testing of Bulk Reagents and Instrument Systems. If, after
Immunicon’s inspections of such Bulk Reagents or Instrument Systems, as the case
may be, the parties disagree as to whether the Bulk Reagents or Instrument
Systems conform to applicable specifications or whether the Bulk Reagents or
Instrument Systems have a defect, either party may deliver the item to a
validated, independent third-party laboratory, mutually and reasonably
acceptable to both parties, for analytical testing to confirm such item’s
conformance to the applicable specifications or the presence or absence of
defects. All costs associated with such third-party testing shall be at DHI’s
expense unless the tested item is deemed by such third-party to be defective or
not in conformance with the applicable specifications, in which case all such
costs, including reimbursement of freight and disposition costs, shall be
promptly paid by Immunicon. No inspection or testing of or payment for Bulk
Reagents or Instrument Systems, as the case may be, by DHI or any third-party
agent of DHI shall constitute acceptance by DHI thereof, nor shall any such
inspection or testing be in lieu or substitution of any obligation of Immunicon
for testing, inspection and quality control as provided in the applicable
specifications or under applicable local, state, or federal laws, rules,
regulations, standards, codes or statutes.

6.12.4 Detection Reagents and Product Quality. DHI represents that any Detection
Reagents or Products manufactured hereunder shall conform in all respects to
applicable specifications and shall be free from defects in design, material and
workmanship. DHI shall replace at its own cost and expense, including
reimbursement of freight and disposition costs incurred by Immunicon or any
customer of Products, any Detection Reagent or Product that fails to conform to
applicable specifications or has any such defects. Immunicon shall notify DHI of
the existence and nature of any non-conformance or defect of which Immunicon
becomes aware, and DHI shall have a reasonable opportunity, not to exceed ten
(10) days from receipt of notification, to inspect such defective Detection
Reagents or Products, as the case may be, and provide Immunicon or such customer
with detailed written instructions to return or dispose of such defective
Detection Reagents or Products, as the case may be. DHI may dispose of such
defective Detection Reagents or Products as it sees fit at its own cost and
expense and, if Immunicon has incurred any direct, out-of-pocket expenses in
connection therewith, shall promptly reimburse Immunicon for all direct,
out-of-pocket costs incurred by Immunicon with respect to any such defective
Detection Reagents or Products in such disposition.

6.12.5 Independent Testing of Detection Reagents and Products. If, after DHI’s
inspection of such Detection Reagents or Products, as the case may be, the
parties disagree as to whether any Detection Reagents or Products conform to the
applicable specifications or whether such Detection Reagents or Products have a
defect, either party may deliver the item to a validated, independent
third-party laboratory, mutually and reasonably acceptable to both parties, for
analytical testing to confirm such item’s conformance to the applicable
specifications or the presence or absence of defects. All costs associated with
such third-party testing shall be at Immunicon’s expense unless the tested item
is deemed by such third-party to be defective or not in compliance with the
applicable specifications, in which case all such costs, including reimbursement
of freight and disposition costs, shall be promptly paid by DHI. No inspection
or testing of or payment for Detection Reagents or Products, as the case may be,
by Immunicon or any third-party agent of

 

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Immunicon shall constitute acceptance by Immunicon thereof, nor shall any such
inspection or testing be in lieu or substitution of any obligation of DHI for
testing, inspection and quality control as provided in the applicable
specifications or under applicable local, state, or federal laws, rules,
regulations, standards, codes or statutes.

6.12.6 Corrective Action. In the event any governmental agency having
jurisdiction shall request or order, or if DHI shall determine to undertake such
request or order, any corrective action with respect to any Product or
Instrument System, as the case may be, including any recall, corrective action
or market action, and the cause or basis of such recall or action is
attributable to any cause, fact or condition other than a breach by DHI of any
of its warranties, guarantees, representations, obligations or covenants
contained herein, then Immunicon shall be liable, and shall reimburse DHI for
the reasonable costs of such action including the cost of any Product or
Instrument System, as the case may be, that is so recalled whether or not any
specific unit of Bulk Reagents or Instrument Systems shall be established to be
in breach of any warranty by Immunicon hereunder. If any such corrective action
is taken as result of a breach by DHI of any of its warranties, guarantees,
representations, obligations or covenants contained herein, DHI shall reimburse
Immunicon for its costs.

6.13 Supply Assurances; Failure To Supply; Force Majeure

6.13.1 Supply Assurances; Failure to Supply. The parties recognize that the
availability of adequate quantities of Bulk Reagents, Detection Reagents,
Instrument Systems and Products, consistent with the forecasts as required under
Sections 6.8.1 and 6.9.1 of this Agreement, is essential for the commercial
success of Products. The parties therefore agree as follows:

(a) Immunicon shall maintain an inventory of Bulk Reagents and Instrument
Systems sufficient to satisfy the Quarterly Forecasts for such items, as
approved by the Management Board, for at least [*********]. DHI shall maintain
an inventory of Detection Reagents and Products to satisfy the next succeeding
[*********] period in each Firm Forecast, as approved by the Management Board.

(b) Immunicon shall use its best reasonable commercial efforts to supply
adequate quantities of Bulk Reagents and Instrument Systems to meet market
demand for Products and Instrument Systems, pursuant to its rights and
obligations hereunder. If Immunicon, for more than [*********] consecutive days
during the term of this Agreement, for reason other than Material Breach of this
Agreement by DHI or the inability or failure of DHI to supply sufficient DHI
[******] and [******] [********], is unable to meet at least [********] ([***]%)
of the applicable Firm Forecast with respect to Bulk Reagents or Instrument
Systems, applicable to such [********] day period, then upon [********] days
written notice from DHI, DHI shall be free to make or have made Bulk Reagents or
Instrument Systems, unless Immunicon thereafter is able to fully resume its
supply obligations hereunder, whereupon DHI shall be required to source its
requirements of Bulk Reagents for Products and Instrument Systems exclusively
from Immunicon commencing with the [***********] date of such resumption. In
furtherance of the foregoing, if this paragraph becomes operable and only during
such time (but in no event for a period surviving the termination or expiration
of this Agreement), Immunicon shall use its best efforts to give DHI access to
any [*****************************] that, absent which, Bulk Reagents, Products
or

 

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Instrument Systems, as the case may be, would [*************] or any other
[************************], as well as to provide all technical and proprietary
materials, information, know-how and techniques necessary or helpful for DHI to
produce or arrange an alternative supplier of Bulk Reagents and Instrument
Systems, and provide advice and consultation in connection therewith. The
percentage of Revenue due to DHI under Section 3.5.6 during any such shortfall
period shall be increased by [****]%.

(c) DHI shall use its best reasonable commercial efforts to supply adequate
quantities of Products and to distribute sufficient Instrument Systems to meet
market demand for same, pursuant to its rights and obligations hereunder. If
DHI, for more than [******] ([***]) consecutive days during the term of this
Agreement, for reason other than Material Breach of this Agreement by Immunicon
or the inability or failure of Immunicon to supply sufficient Bulk Reagents or
Instrument Systems, is unable to meet at least [**************] ([***]%) of the
applicable Firm Forecast with respect to Products, applicable to such [*****]
([***]) day period, then upon [*******] ([***]) days written notice from
Immunicon, if such failure to supply market demand involves Products, Immunicon
shall be free to make or have made Detection Reagents and Products, or utilize
an alternative supplier to make or have made Detection Reagent and Products, in
order to meet the shortfall in supply of Products and to supply or to utilize a
Third Party to supply Instrument Systems to purchasers of such Products. In
furtherance of the foregoing, if this paragraph becomes operable and only during
such time (but in no event for a period surviving the termination or expiration
of this Agreement), DHI shall use its best efforts to give Immunicon access to
any [*******************] that, absent which, any component of Detection
Reagents or Products would [************************], as well as to provide all
technical and proprietary materials, information, know-how and techniques
necessary or helpful for Immunicon to produce or arrange an alternative
manufacturer of Detection Reagents and Products during such shortfall period,
and to provide advice and consultation in connection therewith. The percentage
of Revenue due to Immunicon under Section 3.5.6 during any such shortfall period
shall be increased by [***]%.

(d) During the period that Immunicon has undertaken to meet the foregoing supply
shortfalls under section 6.13.1(c), DHI shall have no obligation to purchase
Bulk Reagents from Immunicon necessary to manufacture Products. If DHI
thereafter is able to fully resume its supply obligations hereunder, DHI shall
resume its obligations under this Agreement to purchase Bulk Reagents from
Immunicon, and DHI shall again have the exclusive right to distribute Products
and Instrument Systems under this Agreement commencing with the [***********] of
such resumption.

6.13.2 Force Majeure Events. If either party is prevented from performing any of
its obligations hereunder due to any cause which is beyond the non-performing
party’s reasonable control, including fire, explosion, flood, or other acts of
God; acts, regulations, or laws of any government; war or civil commotion;
strike, lock-out or labor disturbances; or failure of public utilities or common
carriers (a “Force Majeure Event”), such non-performing party shall not be
liable for breach of this Agreement with respect to such non-performance to the
extent any such non-performance is due to a Force Majeure Event. Such
non-performance will be excused for three months or as long as such event shall
be continuing (whichever occurs sooner), provided that the non-performing party
gives immediate written notice to the other party of the Force Majeure Event.

 

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Such non-performing party shall exercise all reasonable efforts to eliminate the
Force Majeure Event and to resume performance of its affected obligations as
soon as practicable.

6.14 Product Labeling; Artwork

DHI, subject to approval of the Management Board, shall have the right to
determine the appearance and text of any labeling and packaging used in
connection with any Product.

6.15 Bulk Reagent and Instrument System Representations and Warranties

6.15.1 Immunicon represents and warrants to DHI that all Bulk Reagents or
Instrument Systems, as the case may be, supplied in connection with this
Agreement shall be of merchantable quality, free from defects in material and
workmanship and shall be manufactured and provided in accordance and conformity
with the applicable specifications and in compliance with this Agreement.
Immunicon represents and warrants that it shall comply with all present and
future statutes, laws, ordinances and regulations relating to the manufacture
and supply of Bulk Reagents and Instrument Systems, including, without
limitation, those enforced by the United States Food and Drug Administration
(including compliance with good manufacturing practices) and International
Standards Organization Rules.

6.15.2 DHI represents and warrants to Immunicon that all Detection Reagents and
Products shall be of merchantable quality, free from defects in material and
workmanship and shall be manufactured and provided in accordance and conformity
with the applicable specifications and in compliance with this Agreement. DHI
represents and warrants that it shall comply with all present and future
statutes, laws, ordinances and regulations relating to the manufacture and
supply of Detection Reagents and Products, including, without limitation, those
enforced by the United States Food and Drug Administration (including compliance
with good manufacturing practices) and International Standards Organization
Rules.

6.16 Compliance

In the performance of this Agreement, the parties agree to comply with the
applicable provisions of any law and all executive orders, rules and regulations
issued thereunder, whether now or hereafter in force, and any provisions,
representations or agreements required thereby to be included in this Agreement
are hereby incorporated by reference. If any Bulk Reagents or Instrument
Systems, as the case may be, are ordered or contracted for sale by DHI under
U.S. government contracts, Immunicon agrees that all applicable federal statutes
and regulations applying to DHI as a U.S. government contractor are accepted and
binding upon Immunicon insofar as Immunicon may be deemed a subcontractor and
DHI shall give Immunicon prior notice of its entering into any such government
contracts and the terms thereof to enable Immunicon to take such steps to comply
with such statutes and regulations.

6.17 Taxes

If DHI is required under applicable law to withhold any amount otherwise payable
to Immunicon under this Agreement, it shall promptly pay such amount to the
appropriate

 

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governmental authority on behalf of Immunicon, and DHI shall furnish Immunicon
with proof of payment of such tax, together with official or other appropriate
evidence issued by the appropriate governmental authority, sufficient to enable
Immunicon to support a claim for income tax credit with respect of any sum so
withhold. Any such tax required to be withheld shall be an expense of and borne
by Immunicon.

 

7. INTELLECTUAL PROPERTY/LICENSE

7.1 Ownership of Inventions

All right, title, and interest in and to any intellectual property rights of
either party hereto existing as of the date of this Agreement, will be retained
by the current holder. All right, title, and interest in and to Inventions
invented solely by Immunicon personnel, as determined by U.S. Patent Law, during
the term of this Agreement shall be owned by Immunicon. All right, title, and
interest in and to Inventions invented solely by DHI personnel, as determined by
U.S. Patent Law, during the term of this Agreement shall be owned by DHI. Title
to all Inventions made jointly by employees or agents of Immunicon, on the one
hand, and employees or agents of DHI, on the other hand, shall be jointly owned
by Immunicon and DHI as tenants in common.

7.2 License Grants

7.2.1 Immunicon hereby grants to DHI and its Affiliates during the Term of this
Agreement, an exclusive right and license in the United States of America and
Canada and their respective territories and possessions, under Immunicon
Inventions to make, have made, use, sell, and have sold Products and Instrument
Systems within the Field, subject to the limitations and terms and conditions
set forth elsewhere in this Agreement. DHI shall not have the right to
sublicense the aforementioned rights and licenses to Third Parties except as may
be approved in writing by Immunicon. For the resolution of doubt, the grant of
this license shall have no effect on Immunicon’s rights outside the Field.

7.2.2 DHI hereby grants to Immunicon and its Affiliates during the Term of this
Agreement a fully paid up, non-royalty bearing, exclusive right and license in
the United States of America and Canada and their respective territories and
possessions, under all intellectual property and other proprietary rights owned
by or licensed to DHI, to use and have used [******] and [********] for the
development, manufacture and supply of Bulk Reagents for use with the Products
within the Field, subject to the limitations and terms and conditions set forth
elsewhere in this Agreement. Immunicon shall not have the right to sublicense
the aforementioned rights and license to Third Parties except as may be approved
in writing by DHI. For the resolution of doubt, the grant of this license shall
have no effect on DHI’s rights outside the Field.

7.2.3 (a) Each party acknowledges that it desires to grant additional rights and
licenses to those granted as provided in Sections 7.2.1 and 7.2.2 above, under
its respective intellectual property and other proprietary rights as described
in this Agreement, to the other party in order that Instrument Systems and
Products may be commercialized in countries

 

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outside the United States and Canada and their respective territories and
possessions (the “Extended Territory”). Accordingly, the parties agree to use
their respective best efforts to negotiate commercially reasonable terms and
conditions for the grant of such additional rights and licenses in the Extended
Territory, such negotiations to commence within a reasonable period of time
following the end of the Initial Feasibility Period.

(b) The parties recognize that at the Effective Date of this Agreement they
cannot determine the conditions and circumstances, or the form of agreement,
under which such additional rights in the Extended Territory may be granted,
including but not limited to potential success of additional anticipated
products, costs of development of such additional products and anticipated
revenue therefrom. Notwithstanding the foregoing, Immunicon agrees that it will
accept a license fee of no more than an additional $[******] in total under any
and all such Extended Territory agreements for the grant to DHI of exclusive
rights to make, have made, use, sell and have sold Products and Instrument
Systems in the Extended Territory. All other terms and conditions of such
Extended Territory agreement shall be negotiated in good faith between the
parties. Each of the parties further agrees that for a period of [*****] ([***])
months following the commencement of the Commercial Period that it will not
grant or negotiate to grant to any Third Party any such rights and licenses in
the Extended Territory; provided, however, that a party shall not be subject to
such restriction in the event the other party is in Material Breach of this
Agreement.

7.3 Third Party Licenses

Immunicon shall be responsible for and shall bear all costs, fees, royalties, or
other payments associated with obtaining any license from a Third Party that
upon reasonable advice of Immunicon’s counsel is required to develop,
manufacture, use or commercialize Bulk Reagents or Instrument Systems in
accordance with this Agreement. DHI shall be responsible for and shall bear all
costs, fees, royalties, or other payments associated with obtaining any license
from a Third Party that upon reasonable advice of DHI’s counsel is required to
develop, manufacture, use or commercialize Detection Reagents in accordance with
this Agreement or to develop, manufacture and use [********] and [**********]
and to supply them to Immunicon as contemplated by this Agreement, and to
commercialize [*********] and [***********] as components of Bulk Reagents and
Products. DHI has informed Immunicon
[**********************************************************************************************************
***********************************************************************************************************
*******************************************].

[**********************************************************************************************************
************************]; provided, however, that anything in this Section 7.3
or elsewhere in this Agreement to the contrary notwithstanding, neither DHI nor
Immunicon shall be required to obtain any license from a Third Party if the
costs, fees, royalties and other payments under such license and any and all
other required Third Party licenses would exceed, in the aggregate, [***]% of
the revenues to be received by DHI and/or Immunicon from the sale of the Product
or Product component for which such licenses are required.

 

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8. PATENTS

8.1 Prosecution. Each party shall promptly report to the other all Inventions in
the Field whether or not such Inventions are patentable. DHI and Immunicon shall
jointly select Inventions jointly made for which they wish to file patent
applications or perfect other intellectual property rights therein. Upon such
selection, Immunicon shall, using patent counsel of its choice, reasonably
acceptable to DHI, take all necessary steps to file, prosecute and maintain, the
requested patent protection on such joint Inventions. Either party shall have
the right upon thirty (30) days prior written notice to the other party, at its
sole cost and expense, to file and prosecute a patent application or maintain a
patent covering all or a part of any jointly-held Invention in any country which
such other party does not select as set forth above, unless upon receipt of such
notice and before the end of the notice period, such other party selects such
country.

8.2 Each party shall provide to the other copies of all applications covering
joint Inventions, all prior art searches relating to such patent applications,
and all correspondence to and from the United States Patent and Trademark Office
relating to the same. Upon request, the party prosecuting a patent application
shall make available to the other party all related correspondence with other
patent offices.

8.3 Each party shall promptly inform the other party of all patent applications
filed on its Inventions in the Field and shall provide to such other party
copies of all such applications, all prior art searches relating to such patent
applications, and all correspondence to and from the United States Patent and
Trademark Office relating to the same. Upon the request of either party, the
other party shall make available to the requesting party related correspondence
with other patent offices.

8.4 Assuming Prosecution for Joint Inventions

In the event that a party wishes to discontinue or abandon prosecution of any
patent or patent application on any joint Invention, or elects to cease paying
maintenance fees of any resulting patent, it shall promptly inform the other
party; such other party shall then be entitled to continue the prosecution of
any such application, pay any expense or cost, and take any other action
necessary to continue the prosecution of such patent application or keep any
resulting patent in force on behalf of the parties. In the event that any
Product or Instrument System subsequently released into the stream of commerce
comes within the scope of any patent whose prosecution or maintenance has been
so assumed, then the party that elected to discontinue or abandon prosecution or
maintenance shall refund to the other party the costs borne by the other party
in taking such actions with respect to the patent(s) in question.

8.5 Costs. All patent attorney fees and all patent registration, patent filing,
patent translation and patent maintenance fees, costs and expenses with respect
to the Patents and the Inventions solely owned by a party shall be borne by that
party. All such fees, costs, and expenses with respect to Patents and the
Inventions owned jointly by the parties shall be shared equally by the parties.

8.6 In all events concerning patent prosecution of the application under this
Section, DHI and Immunicon shall cooperate with each other.

 

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9. THIRD PARTY INFRINGEMENT

9.1 Enforcement. If either party becomes aware that any of the Patents are being
or have been infringed by any Third Party, such party shall promptly notify the
other party hereto in writing describing the facts relating thereto in
reasonable detail. Except as provided below, Immunicon shall have the initial
right, but not the obligation, to institute, prosecute and control any action,
suit or proceeding (an “Action”) with respect to such infringement, including
any declaratory judgment action, at its expense, using counsel of its choice.
DHI shall cooperate with Immunicon and provide such non-monetary assistance as
Immunicon may reasonably request in connection with any such Action. Any
recovery of damages by Immunicon for any such Action shall be applied first in
satisfaction of any costs incurred by Immunicon relating to the Action
(including attorneys’ and expert fees) and the balance remaining from any
recovery shall be recovered by Immunicon. Notwithstanding the foregoing, with
respect to any infringement relating to any intellectual property or other
proprietary right in or to [******] and [********] or Patents owned or licensed
by DHI, including but not limited to infringement of any patent relating solely
to [********] and [**********], DHI shall have the right to institute, prosecute
and control any Action with respect to such infringement, including any
declaratory judgment action, at its expense, using counsel of its choice.
Immunicon shall cooperate with DHI and provide such non-monetary assistance as
DHI may reasonably request in connection with any such Action. Any recovery of
damages by DHI for any such Action shall be applied first in satisfaction of any
costs incurred by DHI relating to the Action (including attorneys’ and expert
fees) and the balance remaining from any recovery shall be recovered by DHI.

9.2 Joint Enforcement. In the event that a party initiates an Action pursuant to
Section 9.1 above, the other party shall have the right to intervene in such
Action and the initiating party shall not oppose such intervention, provided
that (i) the intervening party notifies the court of its intention to intervene
within one hundred twenty (120) days of its receipt of notice of the
commencement of such Action, and (ii) the intervening party shares equally with
the initiating party the total costs incurred by the initiating party
(including, without limitation, attorneys’ and expert fees) of conducting such
Action. The parties shall cooperate and provide each other such assistance as
either may reasonably request in connection with any such Action, provided, the
initiating party shall retain the control of the conduct and settlement of any
such Action. Any recovery of damages for any such suit shall be applied first in
satisfaction of any actual out-of-pocket costs and expenses incurred by either
of the parties relating to the Action (including, without limitation, attorneys’
and expert fees), and the balance remaining from any recovery shall be divided
into fifty (50%) percent to each party.

9.3 Enforcement by DHI. In the event that Immunicon fails to initiate or defend
any Action involving the Patents in the Field within [****************] ([***])
days of receiving notice of any alleged infringement, DHI may, at its option,
initiate and control such an Action (including Actions for past infringements),
and Immunicon shall cooperate with DHI and provide such non-monetary assistance
as DHI may reasonably request in connection with any such Action. Any recovery
of damages by DHI for any such suit shall be applied first in satisfaction of
any costs incurred by DHI relating to the Action (including attorneys’ and
expert fees), and the balance remaining from any recovery shall be divided as
follows: (a) DHI shall recover [******] percent ([***]%) of such remaining
balance, and (b) Immunicon shall be entitled to [****]% of such remaining
balance. In addition to the foregoing, DHI shall have the right to be included
as a co-plaintiff or named plaintiff in any litigation involving Inventions in
the Field for the purpose of calculating and obtaining damages due under the law
or in equity adequate to compensate DHI for its losses.

 

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9.4 Costs. The costs of litigation referred to in this Section 9 shall include
but not be limited to such out-of-pocket expenses as court costs and court fees,
reasonable travel expenses, reasonable charges for the professional services of
outside counsel and experts, and shall exclude only the time that regular
employees of DHI or Immunicon devote to such litigation.

9.5 Assistance. Immunicon agrees that in the event that DHI chooses to prosecute
an action for infringement of a Patent under Section 9.3 herein but cannot do so
in its own name, to sign and give to, within thirty (30) days after request by
DHI, all necessary documents in order for DHI to prosecute such infringement in
the name of Immunicon. Immunicon also agrees to cooperate with DHI, at DHI
expense for out-of-pocket costs, in the prosecution of such infringement.

 

10. THIRD PARTY CLAIM OF INFRINGEMENT

10.1 If a claim of patent infringement or misappropriation or wrongful use of a
trade secret or other proprietary right is brought against a party hereto in any
country by reason of any act conducted in the furtherance of this Agreement, or
if a party becomes aware of any potentially-infringing patent or other
proprietary right owned by a Third Party in any country, such party shall
promptly give notice thereof to the other party and provide it with all
information in its possession regarding such claim or potential infringement.

10.2 Each party shall indemnify, defend and hold harmless the other party
against any damages, costs, expenses and liabilities (including reasonable
attorneys’ fees and expenses) arising out of a claim of patent infringement or
misappropriation or wrongful use of a trade secret or other proprietary right
based on the manufacture, use, or anticipated sale of any Product that embodies
the indemnifying party’s Invention. The indemnifying party shall conduct the
defense of any such suit for infringement, misappropriation, or misuse at its
expense. The indemnified party may participate in such defense, at its option
and expense, and shall furnish to the indemnifying party such assistance as it
may reasonably need and request from time to time for the conduct of the defense
of such suit. Neither party shall dispose of or settle any such claim in any
manner which may compromise or affect the validity of any of the other party’s
Inventions , without that party’s prior written consent, which shall not be
unreasonably withheld. No indemnification of any claim for infringement,
misappropriation, or misuse shall apply under this Section 10.2 where the claim
arises out of the manufacture, use, or anticipated sale of products embodying
joint Inventions.

 

11. PATENT MARKING

DHI shall mark Products with appropriate patent numbers or indicia at
Immunicon’s instruction and election, as, when and where DHI may reasonably
accommodate same, given packaging, printing schedules and other factors, in
those countries where such markings have notice value as against infringing
persons.

 

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12. CONFIDENTIALITY AND PUBLICATION

12.1 Confidential Information. All Confidential Information disclosed by one
party to the other shall not be used by the receiving party except in connection
with the activities contemplated by this Agreement, shall be maintained in
confidence by the receiving party, and shall not be disclosed by the receiving
party to any other person, firm or agency, governmental or private, without the
prior written consent of the disclosing party, except to the extent Confidential
Information is:

(1) known by or in possession of the receiving party at the time of its receipt
as documented in written records;

(2) independently developed outside the scope of this Agreement by employees of
the receiving party having no access to or knowledge of the Confidential
Information disclosed hereunder as documented in written records;

(3) in the public domain at the time of its receipt or thereafter becomes part
of the public domain through no fault of the receiving party;

(4) received without an obligation of confidentiality from a Third Party having
the right to disclose such information;

(5) required to be disclosed to governmental agencies, or disclosure is
otherwise required by law, regulation or governmental or court order or the
requirements of any securities exchange upon which a party’s securities are
traded (so long as the receiving party provides notice of such disclosure, seeks
to obtain protective orders or other available confidentiality treatment and, in
the case of disclosures to the SEC, seeks confidential treatment to the extent
reasonably requested by the disclosing party);

(6) released from the restrictions of this Section by the express written
consent of the disclosing party; or

(7) disclosed to agents, consultants, assignees, sublicensees or subcontractors
of DHI or Immunicon or their Affiliates which have a need to know such
information in connection with the performance of this Agreement, provided that
such persons are or agree to be subject to the provisions of this Section or
substantially similar provisions.

12.2 Publication. Prior to public disclosure or submission for publication of a
manuscript or other work describing the result of any aspect of scientific or
clinical activity or collaboration between DHI and Immunicon relating to any
activity under the terms of this Agreement, the party disclosing or submitting
such a manuscript (“Disclosing Party”) shall send the other party (“Responding
Party”) a copy of the manuscript to be submitted and shall allow the Responding
Party not less than thirty (30) calendar days in which to determine whether the
manuscript contains subject matter for which patent protection should be sought
prior to publication of such manuscript for the purpose of protecting an
invention of commercial value to the Responding Party, or whether the manuscript
contains confidential information belonging to the Responding Party, or whether
the manuscript contains information that should not yet be revealed for other
business reasons. After the expiration of such thirty (30) calendar day period,
if the Responding Party has not objected, the Disclosing Party may submit such
manuscript for publication and publish or otherwise disclose to

 

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the public such research results. If the Responding Party believes the subject
matter of the manuscript contains confidential information or a patentable
invention of commercial value to the Responding Party or should not yet be
otherwise revealed, then prior to the expiration of such thirty (30) calendar
day period, the Responding Party shall notify the Disclosing Party in writing of
its determination. Upon receipt of such written notice from the Responding
party, the Disclosing Party shall delay public disclosure of such information or
submission of the manuscript for an additional period of sixty (60) calendar
days to permit preparation and filing of a patent application on the disclosed
subject matter or for such other period and for such other reasons as the
parties shall mutually agree. The Disclosing Party shall thereafter be free to
publish or disclose such information, except that the Disclosing Party may not
disclose any Confidential Information of the Responding Party without the prior
written consent of the Responding Party.

 

13. TERM AND TERMINATION

13.1 Term. Unless earlier terminated pursuant to a right of termination provided
elsewhere in this Agreement, the Term of this Agreement shall commence on the
Effective Date and shall remain in effect for a period ending on the fifth
anniversary of the date of commencement of the Commercial Period (the “Original
Term”). Thereafter, either party may elect to extend the Original Term for one
additional five (5) year period (the “Extended Term”) by giving written notice
of such extension to the other party at least ninety (90) days prior to the
expiration of the Original Term; provided, however, that neither DHI nor
Immunicon shall have the right to elect to extend the Original Term if it is in
Material Breach of the Agreement at the time it makes such election. The
Original Term together with the Extended Term, if any, is herein referred to as
the “Term.”

13.2 Termination by Mutual Agreement. This Agreement may be terminated at any
time upon the mutual agreement of the parties in writing.

13.3 Termination for Breach. In the event of a Material Breach by either party,
then the other party may terminate this Agreement by giving such party notice of
such Material Breach. The party receiving such notice shall have ninety
(90) days from the date of receipt thereof to cure such Material Breach. If such
Material Breach is not curable or is not cured within such ninety (90) day
period, then the non-breaching party shall have the right to terminate this
Agreement effective as of the end of such period. In the event such Material
Breach is cured during such period, such notice shall be of no force or effect
and this Agreement shall not be terminated.

13.4 Early Termination. This Agreement shall automatically terminate in the
event the Commercial Period does not commence on or before July 1, 2009.

13.5 Termination by Either Party. Either DHI or Immunicon, not earlier than
eighteen (18) months after the Effective Date may terminate this Agreement upon
written notice to the other party, for any reason or for no reason; provided,
however, that neither party make exercise its right to terminate this Agreement
under this Section 13.5 if a Clinical Trial Plan for the first Initial Product
has been submitted to the FDA and the payment provided for in Section 3.5.1(b)
has been made. In the event of termination of this Agreement in accordance with
this Section 13.5, the provisions of Section 13.6 (c) shall apply.

 

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13.6 Effect of Termination.

(a) Termination under Sections 13.2 or 13.4. Following expiration of the Term or
the termination of this Agreement pursuant to Section 13.2 or Section 13.4,
neither DHI nor Immunicon shall have any rights under the licenses granted to
them in Section 7.2 and such licenses shall thereafter be null and void, and all
rights granted to each party by the other party shall immediately upon such
termination revert to the granting party without the necessity of any further
written agreement.

(b) Termination under Section 13.3. In the event of termination of this
Agreement pursuant to Section 13.3, the breaching party shall have no rights
under the license granted to it in Section 7.2 and such license shall thereafter
be null and void, and all rights granted hereunder to such breaching party by
the other party hereto shall immediately upon such termination revert to the
granting party without the necessity of any further written instrument. The
non-breaching party shall have the right, by giving written notice to the
breaching party within thirty (30) days of the effective date of such
termination, to retain the license granted to it pursuant to Section 7.2 for the
remainder of the Original Term or then applicable Extended Term. In the event
that the non-breaching party elects to retain such license it shall pay to the
other party an amount equal to [***] percent ([***]%) of the net revenues
(calculated in accordance with the calculation applicable to Revenue hereunder)
from the sale of products or the performance of services by the non-breaching
party utilizing such right and license. If Immunicon is the non-breaching party
and elects to retain the license granted to it in Section 7.2 as provided for in
the preceding sentence, DHI will use commercially reasonable efforts (which
shall in no event include the payment of any transfer or other fee other than
the royalty provided above) to license, provide access or to transfer to
Immunicon [***********************************************************] as well
as any [****************************************************************] in the
possession of DHI or any of its Affiliates necessary or useful for Immunicon to
make, use, import/export, market and sell Products and Instrument Systems. If
DHI is the non-breaching party and elects to retain the license granted to it in
Section 7.2, Immunicon will use commercially reasonable efforts to continue to
supply Instrument Systems and Bulk Reagents to DHI under the terms and
conditions of this Agreement and the Distribution Agreement. If Immunicon is
unable to supply Instrument Systems or Bulk Reagents to DHI pursuant to the
immediately preceding sentence, then DHI shall be free to make or have made Bulk
Reagents or Instrument Systems. In such case, Immunicon shall use commercially
reasonable efforts (which shall in no event include the payment of any transfer
or other fee other than the royalty provided above) to license, provide access
or transfer to DHI any product registrations or Regulatory Approvals that may be
registered in the name of Immunicon or any of its Affiliates as well as any
trademarks, licenses and all intellectual property and technology, know-how,
software, permits, approvals, relevant manufacturing information and other
information in the possession of Immunicon or any of its Affiliates necessary or
useful for DHI to make, have made, use, import/export, market and sell
Instrument Systems and Products and to make, have made and use Bulk Reagents in
the manufacture of Products as contemplated by this Agreement. The breaching
party will also provide advice and consultation to the non-breaching party with
respect to its use of the technology and other property of the breaching party
pursuant to this paragraph.

 

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(c) Termination under Section 13.5. In the event of termination of this
Agreement pursuant to Section 13.5, the right and license granted to the
terminating party under Section 7.2 shall thereafter be null and void, and shall
immediately upon such termination revert to the granting party without the
necessity of any further written instrument; provided, however, that the
non-terminating party shall have the right, upon giving written notice to the
terminating party within thirty (30) days following the receipt of notice of
termination from the terminating party in accordance with Section 13.5, to
retain the right and license granted to it pursuant to Section 7.2, subject to
and as modified by this Section 13.6(c), by electing in such written notice one
of the following options:

(i) If the non-terminating party is DHI, DHI may elect to retain the exclusive
right and license granted under Section 7.2.1, in which case such exclusive
right and license shall continue for a period of [****] ([***]) [****] from the
commencement of the Commercial Period (the “DHI Exclusivity Period”), after
which period, unless DHI elects one of the additional options set forth in this
paragraph, such right and license shall be null and void, and shall immediately
revert to Immunicon without the necessity of any further written instrument. In
the event that DHI elects to retain such exclusive right and license, DHI shall
pay to Immunicon during the DHI Exclusivity Period a royalty in an amount equal
to forty one percent (41%) of Revenues (as defined below) until the total amount
of royalty paid equals [********] ($[*********]), at which time the royalty
payable will be reduced to an amount equal to [******] percent ([***]%) of
Revenues. Such royalty shall be due and payable within thirty (30) days after
the end of each calendar quarter. Prior to the end of the DHI Exclusivity
Period, DHI may elect, by written notice to Immunicon given at least ninety
(90) days prior to the last day of the DHI Exclusivity Period, either (A) to
maintain such exclusive right and license, in which case DHI shall pay to
Immunicon a one-time lump-sum payment of [*************] ($[********]) within
thirty (30) days after the last day of the DHI Exclusivity Period in addition to
continuing to pay to Immunicon a royalty of [*****] percent ([***]%) of Revenues
payable as above, in which case such exclusive right and license shall continue
until the last to expire of the [******] included in [************] or so long
as a license is required by DHI to utilize the [************] to make, have
made, use, import/export, market and sell [***********] and to make, have made
and use [***********] in the manufacture of [*********], or (B) to convert such
exclusive right and license to a non-exclusive right and license by paying to
Immunicon a lump-sum payment of [*********] ($[*****]) within thirty (30) days
after the last day of the DHI Exclusivity Period and thereafter paying to
Immunicon a royalty equal to [***] percent ([**]%) of Revenues. Such
non-exclusive right and license shall continue until the last to expire of the
[********] included in [************] or so long as a license is required by DHI
to utilize the [***********] to make, have made, use, import/export, market and
sell [*************] and to make, have made and use [***********] in the
manufacture of [*******]. Any royalty payable under this paragraph (i) shall be
due and payable within thirty (30) days after the end of each calendar quarter.

(ii) If the non-terminating party is DHI, DHI may elect to convert the exclusive
right and license granted under Section 7.2.1 to a non-exclusive license, in
which case such non-exclusive right and license shall continue until the last to
expire of the [********] included in [**********] or so long as a license is
required by DHI to utilize the [************]] to make, have made, use,
import/export, market and sell [*************] and to make, have made and use
[*********] in the manufacture of [******]. In the event that DHI elects such
non-exclusive right and license,

 

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DHI shall pay to Immunicon a lump-sum payment of [**********] dollars
($[*******]) within thirty (30) days after the Agreement termination date and a
royalty equal to [***] percent ([***]%) of Revenues. Any royalty payable under
this paragraph (ii) shall be due and payable within thirty (30) days after the
end of each calendar quarter following the Agreement termination date.

(iii) If the non-terminating party is Immunicon, Immunicon may elect to retain
the exclusive right and license granted under Section 7.2.2, in which case such
exclusive right and license will continue for a period of [***] ([***]) [***]
from the commencement of the Commercial Period (the “Immunicon Exclusivity
Period”), after which period, unless Immunicon elects one of the additional
options set forth in this paragraph, such right and license shall thereafter be
null and void, and shall immediately revert to DHI without the necessity of any
further written instrument. In the event that Immunicon elects to retain such
exclusive right and license, Immunicon shall pay to DHI during the Immunicon
Exclusivity Period a royalty in an amount equal to [*****] percent ([***]%) of
Revenues until the total amount of royalty paid equals [*********] ($[*****]),
at which time the royalty payable will be reduced to an amount equal to [******]
percent ([***]%) of Revenues. Prior to the end of the Immunicon Exclusivity
Period, Immunicon may elect, by written notice to DHI given at least ninety
(90) days prior to the lat day of such period, either (A) to maintain such
exclusive right and license, in which case Immunicon shall pay to DHI a lump-sum
payment of [***************] ($[********]) within thirty (30) days after the
last day of the Immunicon Exclusivity Period in addition to continuing to pay to
DHI a royalty equal to [*****] percent ([***]%) of Revenues, in which case such
exclusive right and license shall continue for [**********] of the intellectual
property and other proprietary rights owned by or licensed to DHI related to
[*********] and [**********], or (B) to convert such exclusive right and license
to a non-exclusive right and license by paying to DHI a lump-sum payment of
[***********] ($[*****]) within thirty (30) days after the last day of the
Immunicon Exclusivity Period and thereafter paying to DHI a royalty equal to
[***] percent ([***]%) of Revenues. Such non-exclusive right and license shall
continue for [*********] of the intellectual property and other proprietary
rights owned by or licensed to DHI related to [*********] and [**********]. Any
royalty payable under this paragraph (iii) shall be due and payable within
thirty (30) days after the end of each calendar quarter.

(iv) If the non-terminating party is Immunicon, Immunicon may elect to convert
the exclusive right and license granted under Section 7.2.2 to a non-exclusive
license, in which case such non-exclusive right and license shall continue for
[*********] of the intellectual property and other proprietary rights owned by
or licensed to DHI related to [***********] and [********]. In the event that
Immunicon elects a non-exclusive right and license, Immunicon shall pay to DHI a
lump-sum payment of [***********] ($[*****]) within thirty (30) days after the
Agreement termination date and a royalty equal to [****] percent ([***]%) of
Revenues. Any royalty payable under this paragraph (iv) shall be due and payable
within thirty (30) days after the end of each calendar quarter following the
Agreement termination date.

(d) In the event the terminating party under Section 13.5 is Immunicon and DHI
elects to retain a right and license under Sections 13.6 (c) (i) or (ii),
Immunicon will use commercially reasonable efforts (which shall in no event
include the payment of any transfer or other fee other than the royalty provided
above) to license, provide access or transfer to DHI
[******************************************] as well as any

 

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[*********************************************************************]
necessary or useful for DHI to make or have made, use, import/export, market and
sell Instrument Systems and Products and to make and use Bulk Reagents in the
manufacture of Products. In the event the terminating party under Section 13.5
is DHI and Immunicon elects to retain a right and license under Sections
13.6(c)(iii) or (iv), DHI will use commercially reasonable efforts (which shall
in no event include the payment of any transfer or other fee other than the
royalty provided above) to license, provide access or to transfer to Immunicon
[***************************] as well as any [********], [********],
[************], [***********] and all other [*****************] in the
possession of DHI or any of its Affiliates necessary or useful for Immunicon to
make or have made, use, import/export, market and sell Products and Instrument
Systems. The terminating party will also provide advice and consultation to the
non-terminating party with respect to its use of the technology and other
property of the terminating party pursuant to this Section. The provisions of
Section 7.3 of the Agreement shall continue to be applicable to technology
rights licensed by DHI.

(e) For purposes of Section 13.6(d) and notwithstanding the definitions given to
such terms in Section 2 of this Agreement, the following terms shall have the
respective meanings set forth below:

(i) “Product(s)” shall have the meaning given to that term in Section 2 of this
Agreement, except that it shall include all Products, including the Products
listed as “Additional Products” in Exhibit A hereto, whether or not any such
Product shall have been approved by the Management Board prior to the time of
termination of this Agreement. When reference is made in Section 13.6(d) to a
right and license granted to a party under Section 7.2.1 or Section 7.2.1 of
this Agreement, the term “Products” as used in such Section 7.2.1 or
Section 7.2.2, as the case may be, shall be deemed to refer to the definition of
the term “Products” provided for in the immediately preceding sentence.

(ii) “Revenues” shall have the meaning given to such term in Section 2 of this
Agreement, except that (i) when such term is used in Section 13.6(d) in
reference to amounts received by Immunicon all references to DHI and/or its
Affiliates in such Section 2 definition of “Revenues” shall be deemed to refer
to Immunicon and/or its Affiliates and (ii) all references to “Products” in such
Section 2 definition of “Revenues” shall be deemed to refer to Products as
defined in this Section 13.6(e).

(f) During the DHI Exclusivity Period, Immunicon shall not manufacture, promote,
market, sell or distribute, or license any of its intellectual property so that
a Third Party may manufacture, promote, market, sell or distribute, any Products
(as defined in Section 13.6(e)) or Instrument Systems (whether or not previously
approved by the Management Board) for use in the Field. During the Immunicon
Exclusivity Period, DHI shall not manufacture, promote, market, sell or
distribute, or license any of its intellectual property so that a Third Party
may manufacture, promote, market, sell or distribute, any Products (as defined
in Section 13.6(e)) for use in the Field.

(g) Termination of this Agreement for any reason shall not release any party
hereto from any liability (or obligation assumed and substantially undertaken
but not yet accrued) which, at the time of such termination, has already accrued
to the other party or which is attributable to a period

 

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prior to such termination, nor preclude either party from pursuing any rights
and remedies it may have hereunder at law or in equity which accrued or are
based upon any event occurring prior to such termination, subject to any
limitations on damages expressly set forth herein.

 

14. DISPUTE RESOLUTION

14.1 Any dispute, except a dispute involving infringement of Third Party
intellectual property rights or any intellectual property rights owned or
controlled by a party, shall be submitted to arbitration, which shall be
exclusive, final, binding, and conducted by three arbitrators in accordance with
the rules of the American Arbitration Association (“AAA”) applicable to
commercial disputes. The decision of the arbitrators shall be final and in
writing setting forth the award and the reasons therefor. All hearings in the
arbitration shall be held in Wilmington, Delaware and the arbitrators shall
apply the substantive law of Delaware (except where the law conflicts with this
clause) except that the interpretation and enforcement of this arbitration
provision shall be governed by the Federal Arbitration Act. The arbitrators
shall be neutral, independent, disinterested, impartial and shall abide by the
Code of Ethics for Arbitrators in Commercial Disputes approved by the AAA.
Within thirty (30) days of initiation of arbitration, the parties shall reach
agreement upon and thereafter follow procedures assuring that the arbitration
will be concluded and the award rendered within no more than three (3) months
from selection of the arbitrators. Failing such agreement, the AAA will design
and the parties will follow procedures that meet such a time schedule. Each
party has the right before or, if the arbitrators cannot hear the matter within
an acceptable period, during the arbitration to seek and obtain from the
appropriate court provisional remedies such as attachment, preliminary
injunction, replevin, etc., to avoid irreparable harm, maintain the status quo
or preserve the subject matter of the arbitration. Depositions shall not be
permitted in any arbitration unless the arbitrators decide otherwise upon good
cause shown by a party. Each party shall bear its own fees and expenses,
including attorneys’ fees. The fees and expenses of the arbitrators and the cost
of the arbitration shall be borne equally by the parties. THE ARBITRATORS SHALL
NOT AWARD ANY PARTY PUNITIVE, EXEMPLARY, MULTIPLIED OR CONSEQUENTIAL DAMAGES,
AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO SEEK SUCH DAMAGES. NO
PARTY MAY SEEK OR OBTAIN PREJUDGMENT INTEREST OR ATTORNEYS’ FEES OF COSTS. Any
decision of the arbitrators may be entered as a judgment in any court of
competent jurisdiction and may be enforced as such in accordance with the
provisions of the award. This agreement to arbitrate shall be specifically
enforceable by the parties.

14.2 Any dispute involving infringement of Third Party intellectual property
rights or any intellectual property rights owned or controlled by a party, will
be resolved exclusively in the Federal courts located in the State of Delaware.
Each of the parties hereby expressly submits to the personal jurisdiction of the
foregoing courts located in Delaware and waives any objection or defense based
on personal jurisdiction or venue that might otherwise be asserted to
proceedings in such courts. The parties further hereby irrevocably waive, to the
fullest extent permitted by law, all rights to trial by jury in any action,
proceeding or counterclaim (whether in contract, statute, tort (including
negligence) or otherwise) relating to or arising from the Agreement. In any
litigation, each party shall bear its own fees and expenses, including
attorneys’ fees.

 

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15. REPRESENTATIONS, INDEMNIFICATION, NON-COMPETITION

15.1 Representations of Immunicon. Immunicon represents and warrants to DHI
that:

15.1.1 The execution, delivery and performance of this Agreement by Immunicon
will not, with or without notice, the passage of time or both, result in any
violation of, be in conflict with, or constitute a default under, any contract,
obligation or commitment to which Immunicon is a party or by which it is bound,
or to Immunicon’s knowledge, any statute, rule or governmental regulation
applicable to Immunicon.

15.1.2 Immunicon has all requisite legal and corporate power and authority to
enter into this Agreement and to carry out and perform its obligations under the
terms of this Agreement. All corporate action on the part of Immunicon and its
employees, agents, officers, directors and stockholders necessary for the
performance of Immunicon’s obligations hereunder has been taken. This Agreement
constitutes a valid and binding obligation of Immunicon, enforceable in
accordance with its terms, except as (i) the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors’ rights and remedies generally, (ii) the
availability of equitable remedies (e.g., specific performance, injunctive
relief, and other equitable remedies) may be limited by equitable principles of
general applicability, and (iii) that no representation is made regarding the
effect of laws relating to competition, antitrust or misuse.

15.1.3 Immunicon, as of the Effective Date, is not a party to any material
contract (other than this Agreement) with a Third Party with respect to the
Field.

15.2 Representations of DHI. DHI represents and warrants to Immunicon that:

15.2.1 The execution, delivery and performance of this Agreement by DHI will
not, with or without notice, the passage of time or both, result in any
violation of, be in conflict with, or constitute a default under any contract,
obligation or commitment to which DHI is a party or by which it is bound, or to
DHI’s knowledge, any statute, rule or governmental regulation applicable to DHI.

15.2.2 DHI has all requisite legal and corporate power and authority to enter
into this Agreement and to carry out and perform its obligations under the terms
of this Agreement. All corporate action on the part of DHI and its employees,
agents, officers and directors necessary for the performance of its obligations
hereunder has been taken. This Agreement constitutes a valid and binding
obligation of each such party, enforceable in accordance with its terms, except
as (i) the enforceability hereof may be limited by applicable bankruptcy laws
and other similar laws affecting creditors’ rights and remedies generally,
(ii) the availability of equitable remedies (e.g. specific performance,
injunctive relief and other equitable remedies) may be limited by equitable
principles of general applicability, and (iii) that no representation is made
regarding the effects of laws relating to competition, antitrust or misuse.

 

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15.2.3 DHI, as of the Effective Date, is not a party to any material contract
(other than this Agreement) with a Third Party with respect to the manufacture
or sale of Products or Instrument Systems in the Field.

15.3 Indemnification by DHI. DHI shall at all times, during the term of this
Agreement and thereafter, indemnify and hold harmless Immunicon and its
Affiliates, stockholders, directors, officers, agents and employees from any
claim, proceeding, loss, expense, and liability of any kind whatsoever
(including but not limited to those resulting from death, personal injury,
illness or property damage and including reasonable legal expenses and
attorneys’ fees) (collectively, “Damages”) arising out of or resulting from
(a) the material inaccuracy of any representation or the breach of any warranty,
covenant or agreement made by DHI in this Agreement or (b) the negligence or
willful misconduct of DHI or any of its employees or agents in connection with
activities undertaken by DHI under this Agreement; provided, however that there
shall be apportionment in accordance with responsibility when such indemnity
obligation derives in part from acts of DHI and in part from acts of Immunicon
(and the parties hereby agree to split all third party product liability or
personal injury claims arising from the sale, use or distribution of any Product
or Instrument System that meets the applicable specifications and is not
otherwise defective as agreed to by the parties and if the parties are unable to
reach such agreement then such matter shall be determined in accordance with the
arbitration procedures set forth herein and the arbitrators shall make such
determination in accordance with the relative fault of the parties); provided,
further, however, Immunicon shall bear all Damages which arise out of or result
from the sale, use or distribution of any Product or Instrument System that does
not meet the applicable specifications or is otherwise defective or not
consistent with any warranty as to Bulk Reagents or Instrument Systems made by
Immunicon hereunder.

15.4 Indemnification by Immunicon. Immunicon shall at all times, during the term
of this Agreement and thereafter, indemnify and hold harmless DHI and its
Affiliates, stockholders, directors, officers, agents and employees from any
claim, proceeding, loss, expense, and liability of any kind whatsoever
(including but not limited to those resulting from death, personal injury,
illness or property damage and including reasonable legal expenses and
attorneys’ fees) arising out of or resulting from (a) the material inaccuracy of
any representation or the breach of any warranty, covenant or agreement made by
Immunicon in this Agreement or (b) the negligence or willful misconduct of
Immunicon or any of its employees or agents in connection with activities
undertaken by Immunicon pursuant to this Agreement; provided, however, that
there shall be apportionment in accordance with responsibility when such
indemnity obligation derives in part from acts of DHI and in part from acts of
Immunicon in the manner provided for in Section 15.3.

15.5 Claims. In any claim for indemnification (an “Indemnity Claim”), the
indemnified party agrees to give the indemnifying party prompt written notice of
any matter upon which such indemnified party intends to base such a claim under
this Agreement. The indemnifying party shall have the right to participate
jointly with the indemnified party in the indemnified party’s defense,
settlement or other disposition of any Indemnity Claim. With respect to any
Indemnity Claim relating solely to the payment of money damages and which could
not result in the indemnified party’s becoming subject to injunctive or other
equitable relief or otherwise adversely affect the business of the indemnified
party in any manner, and as to which the indemnifying party shall have
acknowledged in writing the obligation to indemnify the indemnified party
hereunder, the

 

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indemnifying party shall have the sole right to defend, settle or otherwise
dispose of such Indemnity Claim, on such terms as the indemnifying party, in its
sole discretion, shall deem appropriate; provided that the indemnifying party
shall provide reasonable evidence of its ability to pay any damages claimed and
with respect to any such settlement shall obtain the written release of the
indemnified party from the Indemnity Claim. The indemnifying party shall obtain
the written consent of the indemnified party prior to ceasing to defend,
settling or otherwise disposing of any Indemnity Claim if as a result thereof
the indemnified party would become subject to injunctive or other equitable
relief or the business of the indemnified party would be adversely affected in
any manner. In the event that any such indemnity obligation shall be apportioned
between the parties, Immunicon shall have the right to control the Indemnity
Claim, subject to the participation and involvement of DHI, but no settlement of
any such Indemnity Claim shall be made without the consent of both Immunicon and
DHI.

15.6 Non-Competition. During the Term, except pursuant to the terms of this
Agreement, neither DHI nor Immunicon shall manufacture, promote, market, sell or
distribute, or license any of its intellectual property so that [**********] may
manufacture, promote, market, sell or distribute in the United States of
American and Canada and their respective territories and possessions, any
[*********] or [**********] or any [***************] (as defined below) for use
in the Field. In the event of the termination of this Agreement pursuant to
Section 13.3, the breaching party shall continue to be subject to the
restrictions of the preceding sentence for a period of [************] following
the termination of this Agreement. For purposes of this Section 15.6, a
“*********” refers to a testing system, including instruments, software, and
consumable or disposable items, that can be used to test for any of the
[**********] identified in [********] and which incorporates and uses
[**********] and [************] and [************] for [*********]. For
avoidance of doubt, a fluorescent or light microscope is specifically excluded
from the definition of an [*************] or [************] and kits of the type
currently included in DHI’s product catalog as of the Effective Date are
excluded from the non-competition provisions of this Section 15.6 and the
[***********] shall be deemed an [***********] for purposes of this Section 15.6
only.

 

16. MISCELLANEOUS

16.1 Notices. Any notice to be given hereunder by DHI to Immunicon or by
Immunicon to DHI shall be in writing and delivered personally, or sent by
national overnight delivery service or postage pre-paid registered or certified
U.S. mail, and shall be deemed given: when delivered, if by personal delivery or
overnight delivery service; or upon if so sent by U.S. mail, three business days
after deposit in the mail, and shall be addressed:

If to DHI, to DHI’s address set forth above, to the attention of the Chief
Executive Officer; with a copy to Chief Financial Officer.

If to Immunicon, to Immunicon’s address set forth above, to the attention of the
Chief Executive Officer; with a copy to: Chief Counsel;

or to such other address as any party shall hereafter designate by notice given
in accordance with this Section.

 

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16.2 Payment of Expenses. Except as expressly set forth herein, all costs and
expenses related to this Agreement and the related transactions, including the
fees and expenses of legal counsel, accountants, brokers and other
representatives and consultants, shall be borne by the party incurring such
costs and expenses, whether or not such transactions are consummated.

16.3 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by either party without the prior written
consent of the other party which consent shall not be unreasonably withheld;
except that either party without the consent of the other party may assign this
Agreement and all of such rights, interests and obligations to a Third Party who
acquires all or substantially all of the business and assets, and assumes all or
substantially all of the obligations and liabilities, of the assigning party,
including all of the obligations and liabilities of the assigning party under
this Agreement; provided, however, that any such assignee shall provide written
acknowledgment to the non-assigning party to this Agreement at the time of such
assignment of the foregoing assumption of all of the obligations and liabilities
of the assigning party under this Agreement in a form substantially as set forth
in Exhibit C.

16.4 Public Statements and Press Releases. The parties hereto covenant and agree
that, except as otherwise expressly set forth in this Agreement, each will not,
from and after the Effective Date, make, issue or release any public
announcement, press release, statement or acknowledgment of the existence of, or
reveal publicly the terms, conditions and status of, the transactions
contemplated herein, without the prior written consent of the other party as to
the content and time of release of and the media in which such statement or
announcement is to be made; provided, however, that in the case of
announcements, statements, acknowledgments or revelations which either party is
required by law or regulation to make, issue or release, the making, issuing or
releasing of any such announcement, statement, acknowledgment or revelation by
the party so required to do so by law shall not constitute a breach of this
Agreement so long as the issuing or releasing party, to the extent reasonably
possible, gives the other party an opportunity to review and comment on any such
written announcement or statement prior to its release.

16.5 Modifications and Amendments. This Agreement shall not be modified or
otherwise amended except pursuant to an instrument in writing executed by each
of the parties hereto.

16.6 Headings. The Article and Section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning and
interpretation of this Agreement.

16.7 Waiver. The failure of either party to require the performance of any
provision of this Agreement, or the waiver of either party of any breach of any
provision of this Agreement, shall not prevent a subsequent exercise or
enforcement of such provision or be deemed a waiver of any subsequent breach of
the same or any other provision of this Agreement.

16.8 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

16.9 Invalidity. In the event that any one or more of the provisions (or any
part thereof) of this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid,

 

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illegal or unenforceable in any respect, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement or any other such instrument.

16.10 Construction/Governing Law. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to conflicts of law or choice of law provisions.

16.11 Incorporation of Exhibits and Schedules. The Exhibits, Schedules and other
instruments referred to in this Agreement are incorporated herein by reference
and made a part hereof. In the event of any conflict between the provisions of
any such Exhibit, Schedule or other instrument and those of the body of this
Agreement, the provisions of the body of this Agreement shall govern and
prevail.

16.12 Entire Agreement. It is the desire and intent of the parties to provide
certainty as to their future rights and remedies against each other by defining
the extent of their undertakings herein. This Agreement constitutes and sets
forth the entire agreement and understanding between the parties with respect to
the subject matter hereof and is intended to define the full extent of the
legally enforceable undertakings of the parties hereto, and no promise,
agreement or representation, written or oral, which is not set forth explicitly
in this Agreement is intended by either party to be legally binding. Each party
acknowledges that in deciding to enter into this Agreement and to consummate the
transactions contemplated hereby it has not relied upon any statements, promises
or representations, written or oral, express or implied, other than those
explicitly set forth in this Agreement. This Agreement supersedes all previous
understandings, agreements and representations between the parties, written or
oral, with respect to the subject matter hereof.

16.13 Survival of Certain Provisions. In addition to any other provisions of
this Agreement that expressly survive termination of this Agreement, to the
extent applicable the following Sections shall survive termination of this
Agreement along with any remedies for the breach thereof: Section 7.1 (Ownership
of IP), accrued rights under Section 8 (Patents), 9 (Third Party Infringement),
10 (Infringement), 11 (Marking), 12 (Confidentiality), 14 (Dispute Resolution),
15.1 and 15.2 (Representations), 15.3 and 15.4 (Indemnification) and 15.5
(Claims).

16.14 No Agency. Nothing in this Agreement shall be construed to make the
relationship of the parties herein a joint venture, an association, or a
partnership, or to make the parties agents of one another. This Agreement shall
not be construed to authorize the parties to act as agents of one another as to
any matter set forth herein or to make any representations to any third parties
indicating or implying the existence of any such agency relationship, and the
status of the parties shall be that of independent contractors for all purposes
hereunder.

16.15 Rights Upon Insolvency. All rights and licenses granted under or pursuant
to this Agreement by one party (“Licensor”) to the other party (“Licensee”) are,
for all purposes of Section 365(n) of

 

41

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Title 11 of the U.S. Code (“Title 11”), licenses of rights to intellectual
property as defined in Title 11. Each party agrees during the term of this
Agreement to create and maintain current copies or, if not amenable to copying,
detailed descriptions or other appropriate embodiments, of all such Inventions.
If a case is commenced by or against any party hereto under Title 11, then,
unless and until this Agreement is rejected as provided in Title 11, such party
(in any capacity, including debtor-in-possession) and its successors and assigns
(including, without limitation, a Title 11 trustee) shall either perform all of
the obligations provided in this Agreement to be performed by such party or
provide to the other party all such intellectual property (including all
embodiments thereof) held by such party and such successors and assigns, as the
other party may elect in a written request, immediately upon such request. If a
Title 11 case is commenced by or against a party, this Agreement is rejected as
provided in Title 11 and the other party elects to retain its rights hereunder
as provided in Title 11, then such party (in any capacity, including
debtor-in-possession) and its successors and assigns (including, without
limitation, a Title 11 trustee) shall provide to the other party all such
intellectual property (including all embodiments thereof) held by such party and
such successors and assigns immediately upon the other party’s written request
therefor. All rights, powers and remedies of any party, as a Licensee hereunder,
provided herein are in addition to and not in substitution for any and all other
rights, powers and remedies now or hereafter existing at law or in equity
(including, without limitation, Title 11) in the event of the commencement of a
Title 11 case by or against the other party. Licensee, in addition to the
rights, powers and remedies expressly provided herein, shall be entitled to
exercise all other such rights and powers and resort to all other such remedies
as may now or hereafter exist at law or in equity (including Title 11) in such
event.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have each
caused this Agreement to be duly executed as of the date first above written.

 

IMMUNICON CORPORATION By   /s/ Byron D. Hewett   Byron D. Hewett   President and
CEO DIAGNOSTIC HYBRIDS, INC. By   /s/ David R. Scholl   David R. Scholl  
President and CEO

 

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EXHIBIT A

Initial Products

The following Initial Products will be developed for the following Target
Entities and Infectious Diseases:

Respiratory Viruses:

 

  •  

Launch Menu Target Entity Focus

 

  •  

[*********]

 

  •  

[*********]

 

  •  

[*********]

 

  •  

[*********]

 

  •  

Potential Product Descriptions for these Launch Menu Target Entities:

 

  •  

Single Target Entity Products

 

  •  

[***********]

  •  

[***********]

 

  •  

Combination Target Entity Products ([*********])

 

  •  

[**********]

 

  •  

[**********]

 

  •  

[**********]

Sexually Transmitted Disease/[**********]:

 

  •  

Launch Menu Target Entity Focus

 

  •  

[************]

 

  •  

[************]

 

  •  

Potential Product Descriptions for these Launch Menu Target Entities:

 

  •  

Single Target Entity Products

 

  •  

[********]

 

  •  

[********]

 

  •  

Combination Target Entity Products ([*********])

 

  •  

[************]

 

  •  

[************]

Additional Products

Immunicon and DHI currently contemplate the Product Development and
commercialization under a Commercialization Plan approved by the Management
Board of Additional Products for the Target Entities and Infectious Diseases
described below. These Additional Products would be added to the Products
subject to the Agreement.

 

43

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Family Menu of Additional Products

Respiratory Viruses:

  •  

Family Menu Target Entity Focus

 

  •  

[************]

 

  •  

[************]

 

  •  

[************]

 

  •  

[************]

Sexually Transmitted Disease/[********]:

 

  •  

Family Menu Target Entity Focus

 

  •  

[*********]

 

  •  

[*********]

 

  •  

[*********]

Emerging Opportunity Menu of Additional Products

Respiratory Viruses:

 

  •  

Emerging Opportunity Target Entity Focus

 

  •  

[*******]

 

  •  

[*******]

 

  •  

[*******]

 

  •  

[*******]

 

  •  

[*******]

Sexually Transmitted Disease/[*********]:

 

  •  

Emerging Opportunity Target Entity Focus

 

  •  

[***********]

Procedures for Introducing Additional Products

DHI currently intends to develop Detection Reagents for one or more of the
Additional Products identified in the Family Menu or the Emerging Opportunities
Menu above. If DHI is successful in developing at least [***] Detection Reagent
for an Additional Product and has demonstrated such success to Immunicon, it may
thereafter propose from time to time to the Management Board that one or more of
the Additional Products identified in the Family Menu and/or the Emerging
Opportunity Menu above be developed and commercialized as a Product or Products
under the Agreement. DHI will give written notice (the “DHI Proposal”) to the
Management Board of its desire to develop and commercialize an Additional
Product, which notice shall include a forecast of estimated revenue from the
sale of such Additional Product for the first three years of the Additional
Product’s Commercial Period. If the Management Board then decides to develop a
Project Plan for such Additional Product, DHI and Immunicon will negotiate in
good faith commercially reasonable terms and conditions for the sharing of costs
associated with such Project Plan within sixty days (60) following the decision
of the Management Board to develop the Project Plan. Immunicon will not seek
[***********] for the development and commercialization of the Additional
Products.

 

44

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If DHI and Immunicon reach agreement on the terms and conditions for sharing the
costs associated with a Additional Product Project Plan and a decision is made
to pursue the development and commercialization of such Additional Product, the
Management Board will follow substantially the same procedures as would be
applicable if such Additional Product was an Initial Product including the
determination of Initial Feasibility, conducting Product Development and the
development of a Commercialization Plan, and including forecast sales of such
Additional Product in the applicable strategic forecast and twelve-month
forecast.

If, within [*********] of the Effective Date, DHI has not developed a Detection
Reagent for at least [***] Additional Product and submitted a DHI Proposal to
the Management Board, the provisions of this Exhibit A with respect to the
development of Additional Products shall no longer be effective.

 

45

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Exhibit B

Distribution Agreement (Distribution Agreement”) with respect to Distribution of
Immunicon Corporation (“Immunicon”) Instrument Systems by Diagnostic Hybrids,
Inc. (“Distributor”)

 

1. Instrument Systems. The Instrument System(s) of Immunicon which are the
subject of this Distribution Agreement are defined in and described in detail in
the agreement (“Master Agreement”) to which this Distribution Agreement is
annexed as Exhibit B, and shall additionally include upgraded or improved
Instrument Systems that may become available from Immunicon during the term of
this Distribution Agreement. All Instrument Systems shall conform to Immunicon’s
standard specifications, as may be set forth in the Master Agreement. All
shipping cartons and packaging material shall conform to applicable laws and
specifications. This Distribution Agreement shall be executed by the parties as
of the commencement of the Commercial Period (as defined in the Master
Agreement). Capitalized terms used in this Distribution Agreement without
definition shall have the meanings given to them in the Master Agreement.

 

2. Distribution Rights/No Agency. Immunicon grants to Distributor the exclusive
right to distribute the Instrument Systems in the United States of America and
Canada (including their respective territories) (the “Primary Territory”),
subject to the terms and conditions of the Master Agreement. Distributor shall
be permitted to distribute the Instrument Systems through a third party
subcontractor only with the prior written consent of Immunicon, such consent not
to be unreasonably withheld, and any such subcontractor shall in any event agree
in writing to be bound to the terms and conditions of this Distribution
Agreement and the relevant terms and conditions of the Master Agreement to the
same extent as Distributor hereunder. It is understood and agreed that
Distributor is an independent contractor for all purposes under this
Distribution Agreement and is not, and shall not be construed to be, an agent of
Immunicon for any purpose. Distributor shall not hold itself out to third
parties or represent itself as the agent of Immunicon for any purpose, or hold
itself out to Third Parties as having the authority to enter into or incur on
behalf of Immunicon, any contractual obligation, expense, or liability
whatsoever. It is specifically understood and agreed that employees or agents of
Distributor are not eligible to participate in or to exercise rights under any
of Immunicon’s compensation or benefit plans that Immunicon provides for its
employees.

 

3. Pricing. The prices to Distributor for Instrument Systems to be distributed
under this Distribution Agreement shall be as set forth in Appendix A hereto. No
minimum orders shall be required with respect to volume or cost, except as may
be otherwise set forth in Appendix A or in the Master Agreement, in which case
such minimums shall apply. The prices determined as set forth in Appendix A
shall include all packaging and shipping costs.

 

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4. Payment Terms. Payment terms shall be net thirty (30) days from the receipt
of a valid invoice by Distributor. Immunicon may charge one and one half percent
per month interest on the total amount due on any unpaid invoices more than
thirty (30) days past due.

 

5. Shipping. Immunicon shall ship all Instrument Systems FOB shipping point.

 

6. Information Exchange. Upon the request of Distributor, Immunicon shall use
reasonable efforts to implement full electronic data interchange for receipt of
purchase orders and transmission of invoices.

 

7. Term. The term of this Distribution Agreement shall be concurrent with the
Master Agreement, and, unless otherwise provided in the Master Agreement, shall
expire or terminate upon the expiration or termination of the Master Agreement.
All terms and conditions of the Master Agreement applicable to the purchase,
sale and distribution of Instrument Systems are hereby incorporated in this
Distribution Agreement by reference.

 

8. Breach. A material breach by Distributor or Immunicon of any of the terms and
conditions of this Distribution Agreement, which breach is not cured by the
breaching party within ninety (90) days of its receipt of written notice of the
breach, shall be deemed a Material Breach of the Master Agreement and the
non-breaching party shall have the rights provided for in Section 13.3 of the
Master Agreement.

 

9. Warranties. Immunicon will honor the terms and conditions of any warranties
which may be given by Immunicon on Instrument Systems. A copy of any such
warranties is attached hereto as Appendix B and incorporated herein by
reference. The terms and conditions of any such warranties shall survive the
termination of this Distribution Agreement.

 

10. Trademarks/Intellectual Property. Immunicon’s trademarks, brands, and
goodwill associated with Instrument Systems and all other intellectual property
and other proprietary rights therein shall remain the sole property of
Immunicon. Except as otherwise provided in the Master Agreement, no right or
license under any intellectual property or other proprietary rights of
Immunicon, or in or to any underlying technology embodied in Instrument Systems,
or their use, is granted or is to be implied under this Agreement.

 

11. Promotion. Distributor shall use its commercially reasonable efforts to sell
the Instrument Systems in the Primary Territory, and shall do so in accordance
with any commercially reasonable restrictions or conditions that may be imposed
by Immunicon on the use of the Instrument Systems (provided such conditions are
not inconsistent with the Master Agreement) and communicated in writing to
Distributor and/or as may be specified by Immunicon in Appendix A or in the
Master Agreement. All activities of Distributor shall be conducted in accordance
with applicable law and regulation, and in conformance with representations and
warranties made by Immunicon in its advertising, product labeling and
literature.

 

12.

Confidentiality. The parties expressly agree to hold as confidential any
information (“Confidential Information”) which is provided by one party to the
other hereunder and

 

47

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designated in writing as confidential by the disclosing party at the time of
disclosure thereof. In the event Confidential Information is exchanged according
to these guidelines, such Confidential Information shall be retained by the
receiving party in confidence for a period of five (5) years from the date of
disclosure. The transmittal of such Confidential Information is and shall be
upon the express condition that the Confidential Information is to be used
solely to effectuate this Distribution Agreement and the Master Agreement; and
the receiving party shall not use, publish, or disclose such Confidential
Information, in whole or in part, for any purpose other than that stated herein
or therein. Notwithstanding the foregoing, the above restrictions on disclosure
and use shall not apply to any Confidential Information which the receiving
party can show by competent evidence was known to it at the time of receipt, or
which may be obtained from a Third Party who is not bound by an obligation of
confidentiality to the disclosing party, or which is in the public domain at the
time of disclosure to the receiving party or thereafter becomes in the public
domain through no fault of the receiving party.

 

13. Entire Agreement. Except for the Master Agreement, this Distribution
Agreement constitutes the entire agreement and understanding of the parties with
respect to the matters set forth herein. Any and all understandings and
expectations for and from either party are of no effect unless expressly set
forth herein. Any amendment of this Distribution Agreement must be in writing
and executed by both parties hereto.

 

14. Assignment, Succession and Waiver. This Distribution Agreement and any part
thereof is not assignable by either party without first obtaining the express
written consent of the other party, except that Immunicon or Distributor may
assign this Distribution Agreement without such consent to a purchaser of all or
substantially all of its assets and business who assumes substantially all of
its liabilities, including its obligations under the Master Agreement and this
Agreement, under the same terms and conditions applicable to the assignment of
the Master Agreement. Any such permitted assignment shall not constitute a
modification or amendment of the terms and conditions of the Master Agreement,
all of which terms and conditions shall remain in effect notwithstanding any
such assignment. This Distribution Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and assigns.
No express waiver or any prior breach of this Distribution Agreement shall
constitute a waiver of any subsequent breach hereof and no such waiver shall be
implied. In the event that any provision of this Distribution Agreement
conflicts or is inconsistent with the terms of the Master Agreement, the terms
of the Master Agreement shall control.

Appendix A to Distribution Agreement

The Transfer Price of the Instrument Systems to DHI will be a price that yields
a gross margin of [***]% to Immunicon. Immunicon will provide DHI from time to
time upon its request documentation sufficient to support Immunicon’s
calculation of the Transfer Price of the Instrument Systems. Appendix A will set
forth the procedure by which Immunicon will determine and

 

48

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communicate the Transfer Price to DHI. Once so determined, the Transfer Price
will remain in effect for a period of twelve months before it is revised, if
necessary.

Notwithstanding the foregoing, the Transfer Price of an Instrument System shall
not exceed $[******] per unit, irrespective of the gross margin to Immunicon,
unless the Management Board approves material modifications to the first
commercialized version of the Instrument System (the “Original System”) or
authorizes the use of an Instrument System that is materially different from the
Original System, in which case Immunicon and DHI will review whether the costs
associated with the development and manufacture of the modified or materially
different Instrument System are significantly greater than those associated with
the Original System, and if such costs are significantly greater, the $[*****]
cap on price of the Instrument System shall no longer be applicable.

Appendix B

Warranties

To be agreed by the parties at time of execution of the Distribution Agreement.

 

49

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Schedule 2

Schedule 2 – Patents

 

Patent Number

  

Issue Date

  

Appl. Number

  

Filing

Date

  

Title

  

Inventors

[*******]

   [*******]    [*******]    [*******]    [*******]    [*******]

[*******]

   [*******]    [*******]    [*******]    [*******]    [*******]

[*******]

   [*******]    [*******]    [*******]    [*******]    [*******]

[*******]

   [*******]    [*******]    [*******]    [*******]    [*******]

Schedule 5.1.1 - Specifications

Bulk Reagent Specifications

To be determined by the parties

 

50

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EXHIBIT C

This is to certify that [Acquirer], being the successor to all or substantially
all of the business and assets of the [assigning party], and to all or
substantially all of the obligations and liabilities of the [assigning party],
hereby irrevocably assumes, subject to the right of Acquirer to exercise all of
the rights and benefits of the assigning party thereunder, all of the
obligations and liabilities of the [assigning party] under the certain agreement
entitled “License, Development, Supply and Distribution Agreement, by and
between Immunicon Corporation and DHI and having an Effective Date as provided
therein of                     , including the same as may be amended from time
to time by written agreement of the parties thereto (the “Agreement”); and
further provided that the Acquirer hereby agrees to abide by all of the terms
and conditions of the Agreement applicable to the assigning party subject to its
right to exercise the rights of the assigning party under the Agreement.

 

51