***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. §§ 200.80(b)(4)
And 240.24b-2

Exhibit 10.79

MODIFIED BLOOD SCREENING INSTRUMENT -
eSAS 2 ADDENDUM

AMENDING

AGREEMENT ENTERED INTO AS OF JUNE 11, 1998

BY AND BETWEEN

GEN-PROBE INCORPORATED, A DELAWARE CORPORATION

AND

CHIRON CORPORATION

effective as of January 1, 2002

 

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TABLE OF CONTENTS

              Page  
1. Definitions
    2  
1.1 Agreement
    2  
1.2 Binder
    2  
1.3 Budget
    2  
1.4 eSAS 2 Instrument
    2  
1.5 eSAS 2 Development Costs
    2  
1.6 eSAS 2 Development Program
    2  
1.7 eSAS 2 Addendum Term
    2  
1.8 FTE Labor Rate
    2  
1.9 Material Modification
    2  
1.10 Non-material Modification
    2  
1.11 Product Requirements Document
    3  
1.12 Resource Plan
    3  
1.13 Software Requirements Specifications
    3  
1.14 Technical Plan
    3  
1.15 Timeline
    3  
2. eSAS 2 Development Program
    4  
2.1 Objective
    4  
2.2 General Conduct of Development
    4  
2.3 No Liability if Commercially Reasonable Efforts Are Expended
    4  
2.4 Project Management
    4  
2.4.1 Principles of Project Management
    4  
2.4.2 Project Manager
    5  
2.4.3 Project Manager’s Responsibilities
    5  
2.4.4 Project Leaders
    6  
2.4.5 Reports
    6  
2.4.6 Meetings of the Supervisory Board
    6  
2.5 Development Responsibilities
    6  
2.5.1 Principal Responsibility; General Statement
    6  
2.5.2 Regulatory/Licensure
    7  
2.5.3 Project Leader Disagreements
    7  
3. Modifications
    7  
3.1 eSAS 2 Development Program Definition
    7  
3.1.1 [...***...] Modules
    7  
3.1.2 [...***...] Three Modules
    8  
3.2 Modifications
    8  
3.2.1 Request for Modifications
    8  
3.2.2 Monthly Progress Reports
    9  
3.3 Material Modifications
    9  
3.3.1 Request for Material Modifications
    9  
3.3.2 Initial Analysis of Impact of Proposed Material Modification
    9  
3.3.3 Preparation of Modified eSAS 2 Development Program
    9  
3.3.4 Acceptance of Modified eSAS 2 Development Program
    10  
3.3.5 Effective Date of Modified eSAS 2 Development Program
    10  
3.4 Notice of Significant Changes
    11  
4. Changes to eSAS 2 Instrument after Completion Date
    11  

***Confidential Treatment Requested

-i-

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TABLE OF CONTENTS
(continued)

              Page  
5. eSAS 2 Development Costs
    11  
5.1 Chiron to pay Development Costs
    11  
5.2 Definition and Calculation of eSAS 2 Development Costs
    12  
5.2.1 eSAS 2 Development Costs; FTE Labor Rate
    12  
5.2.2 Comparison with Resource Plan
    12  
5.2.3 Methodology
    12  
5.3 Payment of eSAS 2 Development Costs
    12  
5.3.1 Accrued eSAS 2 Development Costs
    13  
5.3.2 Monthly Notices; Payments
    13  
5.3.3 Invoices
    13  
5.4 Reimbursement of eSAS 2 Development Costs
    13  
6. Manufacturing and Commercialization
    13  
6.1 eSAS 2 Instrument Manufacturing Costs
    13  
6.2 Rights to Manufacture and Sell
    13  
6.2.1 Blood Screening Field
    13  
6.2.2 Clinical Diagnostic Field
    14  
6.2.3 Right to Acquire All Rights to Manufacture and Commercialize
    14  
6.3 Consideration on eSAS 2 Instrument Sales
    14  
6.4 Authorization Letter
    17  
7. Ownership; License Grant
    17  
7.1 Ownership
    17  
7.2 License Grant
    17  
7.3 Roche Immunity
    17  
8. Addendum Effective Date; Term; Termination
    18  
8.1 Term of eSAS 2 Addendum
    18  
8.2 Termination for Breach
    18  
8.2.1 Default
    18  
8.2.2 Right to Cure Event of Default
    18  
8.2.3 Effect of Termination for Breach
    19  
8.3 Termination by Chiron
    19  
8.4 Continuance of eSAS 2 Development Program following Termination
    19  
8.4.1 Election
    19  
8.4.2 Funding and Conduct of Development
    19  
8.4.3 Reimbursement of Development Costs
    19  
8.4.4 Control of the Program upon Unilateral Funding
    20  
8.4.5 Rights under Agreement
    20  
9. Escalation
    20  
9.1 Escalation Process
    20  
9.2 Remedies in Event of Default
    20  
9.3 Survival
    21  
10. No Other Amendment
    21  
11. Counterparts
    21  

 

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MODIFIED BLOOD SCREENING INSTRUMENT -
eSAS 2 ADDENDUM

     This Modified Blood Screening Instrument — eSAS 2 Addendum (“eSAS 2
Addendum”) is entered into, effective as of January 1, 2002 (“Addendum Effective
Date”) pursuant to and amending that certain Agreement entered into as of
June 11, 1998 (“Agreement”) by and between Gen-Probe Incorporated, a Delaware
corporation (“Gen-Probe”) with a principal place of business at 10210 Genetic
Center Drive, San Diego CA 92121, and Chiron Corporation, a Delaware corporation
(“Chiron;” Chiron and Gen-Probe each is individually referred to as “Party” and
collectively are referred to as the “Parties”) with a place of business at 4560
Horton Street, Emeryville, CA 94608.

Recitals

     A. The Parties entered into the Agreement as of June 11, 1998. The
Agreement was amended by the following: (i) June 11, 1998 Supplemental letter
agreement, (ii) June 26, 1998 Addendum to Collaboration Agreement,
(iii) June 30, 1998 Supplemental letter agreement, (iv) June 30, 1998 Consent,
(v) December 7, 1999 Amendment to Collaboration Agreement, (vi) February 1, 2000
Amendment No. 2 to Collaboration Agreement, (vii) June 7, 2001 Supplemental
agreement no. 1 (Customer training and Support), (viii) October 30, 2001
Confidentiality and Joint Interest Agreement, (ix) April 1, 2002 Amendment No. 3
(warehousing and shipping), (x) the Short Form Agreement dated November 16, 2001
and the Definitive Written Settlement Agreement dated December 5, 2001, (xi) the
Future Blood Screening Assay — Ultrio Addendum dated as of January 1, 2002 (the
“Ultrio Development Addendum”), (xii) March 5, 2003 Amendment No. 4 (Milestone
for Ultrio on Tigris); (xiii) the Future Blood Screening Assay — WNV Addendum
dated as of June 1, 2003 (the “Ultrio Development Addendum”) and
(xiv) January 1, 2004 Amendment No. 5 (Applicable Purchase Price).

     B. In the Agreement, the Parties agreed to discuss, during the term
thereof, the selection and establishment of one or more Development Programs for
one or more Blood Screening Instruments.

     C. The Parties have discussed the proposed development of an eSAS 2
Instrument system, consisting of the following multiple modules: (i) a front end
pipettor; (ii) an automated reagent addition station; (iii) an automated target
capture bay; (iv) an automated incubation module; and (v) a data management to
track sample and system interactions to meet customer demands of throughput and
automation required for pooled donor screening by NAT.

     D. The Parties intend that the development of each module in the eSAS 2
Instrument system will provide improved automation or replacement of current
aging or obsolete instrument components with newer technology, all without
[...***...] the assay sensitivity or specificity; subject to all the terms and
conditions of this eSAS 2 Addendum, the Parties will agree that each such module
within the eSAS 2 Instrument system will be a modification to a “Blood Screening
Instrument”, as provided in Section 3.3.7 of the Agreement.

     E. By this eSAS 2 Addendum, the Parties desire to provide for the
development of the eSAS 2 Instrument by Chiron pursuant to the Agreement, as
clarified and amended by the terms and conditions more particularly described in
this eSAS 2 Addendum.

***Confidential Treatment Requested

2

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Agreement

     NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth in this eSAS 2 Addendum, the Parties agree as follows:

1. Definitions. All capitalized terms used but not defined in this eSAS 2
Addendum shall have the meanings set forth in the Agreement.

     1.1 Agreement means the Agreement (as defined in the Preamble of this eSAS
2 Addendum), as amended by the agreements referred to in Recital A of this eSAS
2 Addendum and as may be subsequently amended.

     1.2 Binder means that certain three-ring binder, with one or more volumes,
entitled “eSAS 2 Development Program for the eSAS 2 Instrument (Gen-Probe/Chiron
eSAS 2 Development Addendum, dated as of ___, 2004) Binder,” in which certain
documents, materials or other items incorporated into this eSAS 2 Addendum by
reference are kept. The original Binder and an additional volume of the Binder,
labeled “Amendments to eSAS 2 Development Program” and reflecting any changes,
modifications or amendments to the Binder, are maintained by and located at the
premises of Chiron. A copy of the original Binder, and a copy of the additional
volume of the Binder, each signed by both Parties, shall be maintained by and
located at the premises of Gen-Probe.

     1.3 Budget means the budgeted eSAS 2 Development Costs of the eSAS 2
Development Program. The Budget shall include the estimated cost of the eSAS 2
Development Program on a monthly basis through the end of the eSAS 2 Development
Program. A preliminary Budget is attached hereto as Schedule 1.3. The Budget may
be amended from time to time in accordance with the provisions of Section 3
below.

     1.4 eSAS 2 Instrument is defined on Schedule 1.4.

     1.5 eSAS 2 Development Costs means, with respect to this eSAS 2 Addendum
only, the development costs defined in Section 5 hereof.

     1.6 eSAS 2 Development Program means the development program for the
development of the eSAS 2 Instrument system under the terms of this eSAS 2
Addendum, an outline of which is set forth in Schedule 1.6 hereto and as such
development program for each module of the eSAS 2 Instrument system is described
in the Binder, and consisting of (i) the Product Requirements Documents,
(ii) the Software Requirements Specifications, (iii) the Technical Plan,
(iv) the Resource Plan included within the Technical Plan, and (v) the Budget.

     1.7 eSAS 2 Addendum Term is defined in Section 8.1.

     1.8 FTE Labor Rate is defined in Section 5.2.1.

     1.9 Fully Burdened Manufacturing Costs is defined in Section 6.1.1.

     1.10 Material Modification means a change or amendment to the eSAS 2
Development Program that materially affects the requirements set forth in the
then-current Product Requirements Document, Software Requirement Specifications,
Technical Plan, Resource Plan or Budget, including without limitation any
modification that could significantly degrade the assay sensitivity or
specificity all as further defined in Section 3.3.

3

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     1.11 Non-material Modification means a change or amendment to the eSAS 2
Development Program other than a Material Modification. Agreement among the
Project Management that a modification is a “Non-material Modification”
hereunder as described in Section 3.2 below shall be conclusive.

     1.12 Product Requirements Document (or “PRD”) means the specifications for
each module within the eSAS 2 Instrument system, each of which includes as a
component thereof the applicable Software Requirements Specifications. The
initial Product Requirements Document for two of the five (5) modules described
in Schedule 1.4 are attached hereto as Schedule 1.12-A and Schedule 1.12-B. The
PRD for each of the remaining three (3) modules described in Schedule 1.4 will
be developed, and each PRD after agreement between the parties may be amended
from time to time in accordance with the provisions of Section 3 below. Each
PRD, as it may be developed and/or amended from time to time, shall be retained
in the Binder under the heading “Product Requirements Document (PRD, Revision
___, dated xx/xx/xx).”

     1.13 Resource Plan means the description of (i) a Party’s personnel to be
allocated to the eSAS 2 Development Program, including the name of the specific
personnel or the qualification or grade of unidentified personnel, and dedicated
amount of time and periods for the commitment of such personnel required for the
eSAS 2 Development Program, and (ii) equipment, tools, software, or other
special items, the purchase, license or leasing of which is specifically
required for use by such personnel to support the eSAS 2 Development Program.
The initial Resource Plan is attached hereto as Schedule 1.13. The Resource Plan
may be amended from time to time in accordance with the provisions of Section 3
below. The Resource Plan, as it may be amended from time to time, shall be
retained in the Binder under the heading “Resource Plan.”

     1.14 Software Requirements Specifications (or “SRS”) means the
specifications for the software component of the eSAS 2 Development Program. The
initial Software Requirements Specifications for two of the five (5) modules
described in Schedule 1.4 are attached hereto as Schedule 1.14-A and
Schedule 1.14-B. The SRS for each of the remaining three (3) modules described
in Schedule 1.4 will be developed, and each SRS after agreement between the
parties may be amended from time to time in accordance with the provisions of
Section 3 below. The SRS, as it may be developed and/or amended from time to
time, shall be retained in the Binder under the heading “Software Requirements
Specifications (SRS, Revision ___, dated xx/xx/xx).”

     1.15 Technical Plan means the statement of work prepared for the
development of the eSAS 2 Instrument, including the responsibilities to be
performed by each Party, the responsibilities to be performed jointly, the
schedule for performance of those responsibilities, an overall development
timeline and a Resource Plan. The initial Technical Plan is attached hereto as
Schedule 1.15. The Technical Plan may be amended from time to time in accordance
with the provisions of Section 3 below. The Technical Plan, as it may be amended
from time to time, shall be retained in the Binder under the heading “Technical
Plan, Revision ___, dated xx/xx/xx.”

     1.16 Third Party OEM means any third party original equipment manufacturer
supplying any component of the eSAS 2 Instrument, including without limitation
pipettors, automated reagent addition stations, automated target capture bays or
automated incubation modules.

     1.17 Timeline means the overall development timeline included within the
Technical Plan.

4

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2. eSAS 2 Development Program.

     2.1 Objective. Subject to the terms of the Agreement, as amended by this
eSAS 2 Addendum, the Parties each shall conduct their respective obligations
under the eSAS 2 Development Program as established in accordance with the terms
hereof, and shall apply for and endeavor to obtain such regulatory approvals as
necessary or appropriate to make and sell the eSAS 2 Instrument in the Territory
for use in the Blood Screening Field.

     2.2 General Conduct of Development. The Parties, using Commercially
Reasonable Efforts, shall conduct their respective obligations under the eSAS 2
Development Program in compliance in all material respects with all requirements
of applicable laws and regulations and all applicable good laboratory, clinical
and manufacturing practices. In addition, the Parties each shall proceed
diligently with their respective obligations under the eSAS 2 Development
Program and shall use their respective Commercially Reasonable Efforts to
achieve the objectives of the eSAS 2 Development Program efficiently and
expeditiously. The Parties each shall allocate such personnel, equipment,
facilities and other resources to the eSAS 2 Development Program to carry out
their respective obligations and to accomplish the objectives thereof, all as is
more particularly described in the eSAS 2 Development Program, as amended from
time to time during the term of this eSAS 2 Addendum, in accordance with the
provisions of Section 3. Each Party shall have the right to consult with the
other Party regarding the eSAS 2 Development Program and the obligation to
reasonably consider the other Party’s advice.

     2.3 No Liability if Commercially Reasonable Efforts Are Expended. Neither
Party will be in breach of its obligations to the other hereunder and such Party
shall be deemed to have exercised Commercially Reasonable Efforts, so long as
such Party shall have committed the resources described in the eSAS 2
Development Program. The payment of eSAS 2 Development Costs between the Parties
shall be due and payable without respect to the achievement of any particular
deliverable specified in the eSAS 2 Development Program.

     2.4 Project Management.

          2.4.1 Principles of Project Management. The Parties agree that in the
process of exercising their responsibilities, the Project Management (consisting
of the Project Manager and Project Leaders, as set forth herein) should have
routine access to such information needed to assess progress under and costs of
the eSAS 2 Development Program. Specifically, the Parties agree that the Project
Leaders shall be invited to participate in all team meetings, and will have
access to team meeting minutes, timecards and other expense records, except to
the extent the Project Leader for the Party assigned principal responsibility
under Section 2.5.3 of this eSAS 2 Addendum for an activity determines in its
reasonable discretion that any such meetings or minutes contain confidential,
proprietary information of the responsible Party. In such cases, the Project
Manager shall (i) determine whether the Project Leader for the Party not having
primary responsibility for the activity can attend all or a portion of such
meeting, (ii) provide a copy of the meeting minutes to the Project Leader not
having primary responsibility for the activity with such confidential,
proprietary information redacted, and (iii) to the extent that such minutes had
proprietary or confidential information redacted, inform the Project Leader not
having primary responsibility of the general nature of any decisions made at
such meeting which affect the PRD, SRS, Timeline or Budget; provided, however
that the Project Manager may only redact information comprising Chiron
intellectual property and know how or confidential business issues. Project
Leaders will have access to non-confidential and non-proprietary information of
the other Party necessary to perform their responsibilities under the eSAS 2
Development Program, including those listed under 2.4.4. Project Leaders will
inform and coordinate all activities, including meetings with

5

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personnel involved in the performance of the eSAS 2 Development Program, with
the Project Manager. The primary point of contact for the eSAS 2 Development
Program at Chiron will be Chiron’s Project Manager, the primary point of contact
at Gen-Probe will be Gen-Probe’s Project Leader. In order to maintain an
efficient and orderly development the Parties will communicate through the
primary points of contact as much as possible when requesting information
concerning the progress of the eSAS 2 Development Program. Confidentiality will
be maintained in accordance with Section 8.1 of the Agreement, and disclosure of
any information under this Section 2.4.1 shall be governed by that certain
Confidentiality and Joint Interest Agreement, by and between the Parties, dated
as of October 30, 2001.

          2.4.2 Project Manager. The project associated with development and
commercial sale of the eSAS 2 Instrument will be managed under a Project
Manager, the responsibilities of which are described in Section 2.4.3. A Project
Manager appointed by Chiron will manage the eSAS 2 Development Program. As of
the Addendum Effective Date, the Project Manager shall be [...***...]. Any
change by Chiron of the Project Manager must be approved by the Supervisory
Board, which approval shall not be unreasonably withheld.

          2.4.3 Project Manager’s Responsibilities. The Project Manager shall be
responsible for the following activities, together with such other activities as
the Parties may agree:

               (a) Managing all matters relating to the eSAS 2 Development
Program under this eSAS 2 Addendum, including each Party’s respective
responsibilities and contributions and receiving reports from the Project
Leaders;

               (b) Providing written progress reports monthly to the Parties and
presenting status reports to the Supervisory Board in accordance with
Section 2.4.6 below;

               (c) Submitting and receiving the reports, materials and documents
required to be delivered under this eSAS 2 Addendum;

               (d) Overseeing the process of proposing, and submitting to the
Parties, any proposed modifications to the Product Requirements Document,
Software Requirement Specifications, Technical Plan, Resource Plan or Budget,
and in the event the Parties cannot agree, presenting the same to the
Supervisory Board in an objective and neutral manner;

               (e) Arranging any meetings to be held between the Parties and
participating, to the extent the Project Manager deems appropriate, in meetings
of the Project Leaders;

               (f) Maintaining, for record keeping purposes, a log book or notes
containing summaries and dates of all material communications and deliveries
between the Parties of which the Project Manager is aware, consistent with the
Parties’ protocol for such sharing of confidential information set forth in that
certain Confidentiality and Joint Interest Agreement, by and between the
Parties, dated as of October 30, 2001;

               (g) Implementing appropriate practices and procedures to manage
the progress under this eSAS 2 Addendum;

               (h) Fostering good communication between the Parties. It is
intended by the Parties that both Parties share, through reports from the
Project Leaders to the Project Manager, in the information concerning the
progress made in the eSAS 2 Development Program and the cause of any delays. It
is expected that the Project Leaders will make recommendations to the Project
Manager for

***Confidential Treatment Requested

6

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preferred paths when substantial delays are identified and multiple paths
forward are identified. Understanding that it takes time for information to flow
up the chain of command, the Project Manager will inform Gen-Probe of delays and
progress on resolution as soon as it becomes available to him; and

               (i) It is understood that both companies hold proprietary trade
secret know-how and processes regarding their respective technologies that are
not necessarily shared as part of this Agreement. On occasion it may occur that
a full understanding of difficulties in the progress of development may require
a detailed understanding of this proprietary know-how and processes. Each Party
will endeavor to appraise the other of the outcomes and consequences of these
difficulties, while protecting the confidentiality of the information.

          2.4.4 Project Leaders. Gen-Probe and Chiron will each appoint a
project leader (each a “Project Leader”) who is responsible for (a) assembling
project teams for his or her respective Party and (b) completing project
responsibilities allocated to such Party in Section 2.5. For the purposes of
completing the eSAS 2 Development Program, these Project Leaders will report to
the Project Manager. The Project Leader employed by a Party shall be responsible
for reporting to the employing Party whether he or she believes the other Party
has proceeded diligently with its stated obligations under the eSAS 2
Development Program, has allocated sufficient personnel, equipment, facilities
and other resources to achieve the objectives of the eSAS 2 Development Program
and has exercised Commercially Reasonable Efforts to achieve its objectives
efficiently and expeditiously.

          2.4.5 Reports. In addition to the records and reports required to be
kept by the Parties under Section 3.5 of the Agreement, each Project Leader will
provide to the Project Manager, in writing, a progress report delivered on or
before the 15th day of each calendar month during the term of the eSAS 2
Development Program. These reports will cover technical progress as well as
financial expenditures. The Project Manager may rely on any such reports for the
purpose of making his or her progress report to the Supervisory Board described
in Section 2.4.6 below.

          2.4.6 Meetings of the Supervisory Board. The Supervisory Board shall
meet from time to time during the term of this eSAS 2 Addendum, but not less
frequently than once each calendar quarter during the term hereof. Not less
frequently than quarterly, a regular agenda item at the regularly scheduled
Supervisory Board meeting shall be to receive a report from the Project Manager
and conduct a review of the eSAS 2 Development Program to assess progress of the
development and the potential for commercialization of the eSAS 2 Instrument.

     2.5 Development Responsibilities.

          2.5.1 Principal Responsibility; General Statement. The Parties’
intention is the smooth and efficient conduct of development, and the Parties
desire by this Section 2.5 to provide guiding principles by which the
responsible Party may make day-to-day decisions and by which the approval
process more particularly described in Section 3 below shall be governed. The
Parties intend that the eSAS 2 Instrument development will be conducted
primarily and principally by [...***...] with consultation and discussion from
[...***...], under the supervision of the Project Manager, as follows: (i)
[...***...] will have principal responsibility under this eSAS 2 Addendum for
the [...***...] of the eSAS 2 Instrument, [...***...] and [...***...] for
[...***...] and [...***...],[...***...] with [...***...] for [...***...] and
[...***...] of the eSAS 2 Instruments, [...***...] of [...***...] and
[...***...] of [...***...], and [...***...] of [...***...] and [...***...], and
(ii) [...***...] will assist in the development and approval of [...***...] of
each instrument, provide [...***...] to its [...***...] (meaning [...***...]
from the [...***...] and [...***...] as applicable) to facilitate development of
a [...***...], provide [...***...] to its [...***...],

***Confidential Treatment Requested

7

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provide [...***...] including [...***...] to [...***...] required for the
development under the confidentiality terms of the Agreement, and will have
principal responsibility under this eSAS 2 Addendum for the [...***...] of the
[...***...] and [...***...], for the development of the [...***...] for
[...***...] specifically related to the [...***...] and [...***...], and for the
formulation of the [...***...] for [...***...] and for each [...***...] with
[...***...] to the [...***...] for [...***...]. The Parties shall jointly agree
upon all validation activities and software development per PRD and SRS. The
Party to whom principal responsibility is allocated in this Section 2.5 has the
power to make day-to-day decisions regarding matters within the area of such
responsibility, consistent with the overall eSAS 2 Development Program. The
Parties’ obligations with respect to certain warehousing and shipping are
subject to Amendment No. 3.

          2.5.2 Regulatory/Licensure. Gen-Probe and Chiron have entered into
that certain Definitive Written Settlement Agreement, dated December 5, 2001.
Section 2(a) of the Definitive Written Settlement Agreement incorporates by
reference the provisions of the Short Form Agreement (attached as Exhibit A to
the Definitive Written Settlement Agreement). The Parties hereby expressly
incorporate the provisions of Section F.6 of the Short Form Agreement between
the Parties, dated November 16, 2001, into this eSAS 2 Addendum, as amended by
the memorandum from [...***...] to [...***...] setting forth the parties’ agreed
upon regulatory strategy, attached hereto as Schedule 2.5.2. Pursuant and
subject to Section F.6 of the Short Form Agreement, as amended by
Schedule 2.5.2, Gen-Probe agrees to use its best efforts to (i) regularly review
blood screening regulatory/licensure strategy and management of regulatory
submissions with Chiron, (ii) provide draft copies of all written regulatory
submissions to Chiron at least five working days prior to the proposed date of
their submission, (iii) make available the appropriate personnel for a
discussion of any advice or recommendations of Chiron on any regulatory
submissions and (iv) reasonably consider such advice or recommendations, but
Gen-Probe is not required to accept such advice and recommendations; in each
case as reasonably attainable by Gen-Probe. All disagreements on
regulatory/licensure issues shall be addressed by the Supervisory Board and, if
necessary, by implementation of the escalation procedure described in Article 13
of the Agreement, excluding arbitration. For issues that cannot be resolved
through such procedures, Gen-Probe’s Chief Executive Officer shall have the
right to make a final decision. Gen-Probe shall have no obligation under this
eSAS 2 Addendum to apply for or endeavor to obtain regulatory approval for any
eSAS 2 Instrument (or any module within the eSAS 2 Instrument system) that fails
to meets the criteria set forth in the applicable PRD and SRS. Costs of all
regulatory and licensing activities (including Gen-Probe internal eSAS 2
Development Costs) will be included in the eSAS 2 Development Costs and paid for
by Chiron.

          2.5.3 Project Leader Disagreements. It is recognized that the Project
Leaders may disagree on approaches. Even though one Party has the principal
responsibility for development in the functional area described in Section 2.5,
disagreements that cannot be resolved by Project Management may be brought to
the Supervisory Board. However, work will proceed in accordance with the choice
of the principally responsible Party, while being discussed at the Supervisory
Board. In the event that the Parties do not agree at the Supervisory Board
level, the Party with principal responsibility may continue to proceed per their
best judgment. If a disagreement arises in a functional area for which
responsibility is shared and resolution cannot be achieved at the Supervisory
Board, except as to Regulatory/Licensure Strategy that shall be governed by
Section 2.5.2 above, work shall be suspended in such functional area until a
resolution is reached through Article 13 of the Agreement, including
arbitration.

3. Modifications.

     3.1 eSAS 2 Development Program Definition.

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          3.1.1 [...***...] Modules. The Parties have prepared and agreed upon
an eSAS 2 Development Program, as described in the Binder, for [...***...]
modules in the eSAS2 Instrument system, and will need to prepare and agree upon
an eSAS 2 Development Program for the remaining [...***...] modules in the eSAS2
Instrument system. The eSAS 2 Development Program, as described in the Binder
with respect to [...***...] modules and as prepared and agreed upon with respect
to the remaining [...***...] modules, will govern the rights and
responsibilities of the Parties until changed in accordance with the provisions
hereof. The Parties recognize and anticipate that additional clarification and
refinement of the eSAS 2 Development Program, including changes, if any,
necessary to reflect accepted delays in, or increases in costs of, development,
will be required as development proceeds. The Parties intend that this eSAS 2
Addendum establish a process by which the Parties will amend the eSAS 2
Development Program, in accordance with the terms described in this Section 3.

          3.1.2 [...***...] Modules. Either Party may propose an eSAS 2
Development Program for each of the remaining [...***...] modules in the eSAS2
Instrument system. Each such proposal shall describe (i) the Product
Requirements Documents, (ii) the Software Requirements Specifications, (iii) the
Technical Plan, (iv) the Resource Plan included within the Technical Plan, and
(v) the Budget for the development of one module in the eSAS 2 Instrument
system. The Project Manager, and under his or her supervision, the Project
Leaders and their respective teams, will review each such proposed eSAS 2
Development Program. Upon agreement between the Project Leaders, then such
approved eSAS 2 Development Program shall be included within the Binder. If the
Project Leaders are unable to agree upon a proposed eSAS 2 Development Program,
then the Supervisory Board shall review the proposed eSAS 2 Development Program
and make a determination with respect to whether such proposed eSAS 2
Development Program shall be approved by the parties. If the Supervisory Board
has met and consulted without resolution, then the parties shall implement the
escalation procedure described in Article 13 of the Agreement to resolve such
impasse.

     3.2 Modifications.

          3.2.1 Request for Modifications.

               (a) Either party may propose either Material or Non-material
Modifications to any part of the eSAS 2 Development Program, including the
Product Requirements Document (and the Software Requirements Specifications that
form part thereof), the Resource Plan (and the Technical Plan that forms part
thereof), and the Budget, and including without limitation a request for a
change to the FTE Labor Rate, as defined in Section 5.2.1, from time to time, as
follows:

                    (i) Chiron may propose and implement such Modifications from
time to time in its sole discretion. However, unless Gen-Probe shall have
approved a Material Modification using the process more particularly set forth
in this Section 3, Chiron shall have no right to reimbursement of Development
Costs for such Material Modification and Gen-Probe shall have no obligation to
pursue regulatory approval or otherwise pursue development efforts with respect
thereto.

                    (ii) Gen-Probe may propose such Modifications from time to
time. The process applicable to approval and implementation of any such proposed
modifications shall be as described in this Section 3.

               (b) Changes, modifications or improvements to the eSAS 2
Instrument, after the Completion Date, are governed by the provisions of
Section 4 below.

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               (c) The Project Manager, and under his or her supervision, the
Project Leaders and their respective teams, will review any proposed
modification to the eSAS 2 Development Program; if the two Project Leaders
mutually agree that a particular modification is a Material Modification or is a
Non-material Modification, then such determination shall be conclusive. If the
Project Leaders are unable to agree whether a particular requested modification
is a Material or Non-material Modification, then the Supervisory Board shall
review the requested change and make a determination with respect to whether
such requested modification is a Material or Non-material Modification. If the
Supervisory Board has met and consulted without resolution, then either Party
may, in its discretion, determine that the Parties have reached an impasse with
respect thereto and implement the escalation procedure described in Article 13
of the Agreement to resolve such impasse.

               (d) If the two Project Leaders mutually agree that a particular
modification is a Non-material Modification and both Project Leaders mutually
agree to implement such Non-material Modification, no additional approval shall
be needed from the parties to implement such Non-material Modification.

          3.2.2 Monthly Progress Reports. Unless changes to the specifications
described in Section 3.2.1 constitute a Material Modification, any Non-Material
Modifications shall be reported in the monthly summary progress reports pursuant
to Section 2.4.4 and shall not be subject to the approval process described in
Section 3.3.

     3.3 Material Modifications.

          3.3.1 Request for Material Modifications. In the event that one Party
desires to request a Material Modification to the eSAS 2 Development Program
from time to time during the term hereof, such Party (the “requesting party”)
shall submit to the other Party such request in writing, in sufficient detail to
enable the other Party (the “receiving party”) to evaluate the request. Without
limiting the foregoing, the requesting party shall prepare a revised draft
version of the Budget, reflecting any changes necessary to fully implement the
requested Material Modification to the eSAS 2 Development Program.

          3.3.2 Initial Analysis of Impact of Proposed Material Modification.
Promptly upon receipt of such request, but in any event not more than
[...***...] thereafter, the Parties shall conduct a preliminary analysis of the
impact that the requested Material Modification would have, including without
limitation the impact any such proposed Material Modification would have on the
Budget and/or the PRD and/or SRS, and shall meet and conduct an analysis of the
impact of such Material Modification on the economics of marketing and sale of
the eSAS 2 Instrument. Should either Party conclude, in its reasonable
discretion, that the potential for [...***...] is [...***...] and [...***...] by
any proposed change to the eSAS 2 Development Program requested in accordance
with this Section 3.3, the Party shall notify the other of such determination in
writing. In such event, Chiron may elect among one of the following three
choices: (i) to terminate participation in the eSAS 2 Development Program under
the provisions of Section 8.3, (ii) to implement the Material Modification
without Gen-Probe’s approval under this Section 3, in which event Chiron shall
have no right to reimbursement of Development Costs for such Material
Modification and Gen-Probe shall have no obligation to pursue regulatory
approval or otherwise pursue development efforts with respect thereto, or
(iii) to continue the eSAS 2 Development Program unaffected without such
Material Modification.

          3.3.3 Preparation of Modified eSAS 2 Development Program. Unless
Chiron terminates the eSAS 2 Development Program under Section 8.3 below or
elects to continue the eSAS 2

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Development Program unaffected without such Material Modification under
Section 3.3.2, promptly upon completion of the review and analysis under
Section 3.3.2, Chiron shall complete and deliver to Gen-Probe revisions to the
Product Requirements Document, Software Requirements Specification, Technical
Plan, Resource Plan or Budget, as applicable, responsive to the request. Costs
incurred by Chiron to prepare such response to the request shall be included in
eSAS 2 Development Costs hereunder.

          3.3.4 Acceptance of Modified eSAS 2 Development Program.

               (a) Unless Chiron terminates the eSAS 2 Development Program under
Section 8.3 below or elects to continue the eSAS 2 Development Program
unaffected without such Material Modification under Section 3.3.2, the Parties
shall promptly, but not later than thirty (30) days after preparation by Chiron
of a modified eSAS 2 Development Program under Section 3.3.2 meet and consult
with respect to the proposed modified eSAS 2 Development Program. Without
limiting the other bases on which it shall be reasonable for Gen-Probe to
withhold approval, it shall be reasonable for Gen-Probe to withhold approval of
any Modification that could result in a material degradation in assay
sensitivity or specificity, or that affects Gen-Probe’s effort or contribution
of resources or the amount of costs for which Gen-Probe is entitled to be
reimbursed by Chiron. Subject to the unconditional rights of Gen-Probe under
Section 3.2.1(a) above to preclude Chiron from reimbursement for Material
Modifications and to withhold participation in the regulatory approval process,
it shall be unreasonable to withhold approval of any request for modification
made (i) to reflect actual eSAS 2 Development Costs incurred (or not incurred)
to the date of such proposed modification that (A) with respect to the eSAS 2
Instrument taken as a whole, when aggregated with all previously authorized
modifications, falls within [...***...] percent ([...***...]%) of the original
Budget approved and in effect as of the date this eSAS 2 Addendum was executed
by the Parties, or (B) with respect to any discreet component, when aggregated
with all previous authorized modifications for such component, falls within
[...***...] percent ([...***...]%) of the original portion of the Budget for
such component approved and in effect as of the date this eSAS 2 Addendum was
executed by the Parties, or (ii) to reflect actual changes to the Timeline
incurred to the date of such proposed modification which do not impact the
Budget in excess of the foregoing thresholds.

               (b) Each Party shall, upon completion of the consultation and
review under paragraph (a), deliver to the other Party either a written
acceptance of the proposed modified eSAS 2 Development Program or a detailed
written statement specifying the basis for rejection. The requesting party may,
in response to a rejection, revise the proposed modified eSAS 2 Development
Program to reflect the discussions of the Parties, and redeliver the revised
proposed modified eSAS 2 Development Program for further review, until the
Parties agree upon the Material Modification. Either Party may, in its
discretion and with notice to the other Party, determine that the Parties have
reached an impasse with respect to any proposed material modification and
deliver the request to the Supervisory Board for determination.

               (c) If a Party delivers the request to the Supervisory Board for
determination, the Supervisory Board shall promptly, but not later than the
later of (i) thirty (30) days after receipt of a requested modified eSAS 2
Development Program, or (ii) the next regularly scheduled Supervisory Board
meeting, meet and discuss the proposed Material Modification to eSAS 2
Development Program.

               (d) If the Supervisory Board has met and consulted without
resolution, then either Party may, in its discretion, determine that the Parties
have reached an impasse with respect to any proposed modification and implement
the escalation procedure described in Article 13 of the Agreement

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to resolve such impasse. Notwithstanding anything to the contrary in this eSAS 2
Addendum or the Agreement, all Material Modifications, whether agreed or
determined through arbitration, shall be finally determined and documented in
accordance with this Section 3.3.

          3.3.5 Effective Date of Modified eSAS 2 Development Program. At such
time as the Parties (or, if applicable, the Supervisory Board) shall have
accepted a modified eSAS 2 Development Program incorporating a Material
Modification, or any portion thereof, the Parties shall evidence such agreement
by initialing the revised Product Requirements Document, Software Requirements
Specification, Technical Plan, Resource Plan or Budget, as applicable. The eSAS
2 Development Program as so modified and approved shall constitute the eSAS 2
Development Program hereunder and be incorporated by reference into this eSAS 2
Addendum, and shall supersede the preceding eSAS 2 Development Program, or
applicable portions thereof, for all purposes. In order to evidence their
agreement to the revised eSAS 2 Development Program, the Parties shall include
it in an additional volume of the Binder, labeled “Amendments to eSAS 2
Development Program,” in which all amendments and modifications to the eSAS 2
Development Program will be kept.

     3.4 Notice of Significant Changes. Each Party will give three (3) calendar
months notice to the other Party prior to any proposal of a significant
reduction or increase in resources from the then-current Resource Plan in order
to allow the Parties time to divert resources either to or from the eSAS 2
Development Program. Any significant changes to the Budget or the Resource Plan
shall be effective only upon the expiration of three (3) months from the
delivery of such notice, unless the Parties both agree to a shorter period of
time in writing.

4. Changes to eSAS 2 Instrument after Completion Date. Notwithstanding the
provisions of Section 3, the Parties recognize that, after the eSAS 2 Instrument
development is completed, the market may demand or regulatory changes may
require that special enhancements or modifications be made to the eSAS 2
Instrument, and that either Party may desire to adopt such changes. Any such
enhancements or modifications shall be governed by Section 3.3 of the Agreement.

5. eSAS 2 Development Costs.

     5.1 [ *** ] to pay Development Costs. [...***...] is responsible for and
agrees to pay the [...***...] eSAS 2 Development Costs, as defined in and
subject to Section 5.2 below. Such costs shall be payable as described in
Section 5.3 herein. The Budget has been prepared for the purpose of permitting
[...***...] to plan for eSAS 2 Development Program expenditures related to eSAS
2 Development Costs hereunder and represents the Parties’ best estimate of such
eSAS 2 Development Costs, but does not represent a “fixed price maximum” or
other guaranteed maximum cost of the development required for the eSAS 2
Development Program.

     5.2 Definition and Calculation of eSAS 2 Development Costs. “eSAS 2
Development Cost” with respect to the eSAS 2 Development Program means the
fully-burdened cost of conducting the research and development (including
domestic and international regulatory and licensing activities) of the eSAS 2
Instrument, and shall include the [...***...] of [...***...] that are
[...***...] for the [...***...] and [...***...] of such quantities of the eSAS 2
Instrument [...***...] the [...***...]. Costs will be calculated in accordance
with United States generally accepted accounting principles, consistently
applied (“U.S. GAAP”), or as otherwise mutually agreed in writing between the
Parties.

          5.2.1 eSAS 2 Development Costs; FTE Labor Rate.

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               (a) In lieu of accounting specifically for and receiving direct
reimbursement for certain eSAS 2 Development Costs, the Parties have agreed to
include reimbursement for those certain categories of eSAS 2 Development Costs
within an agreed-upon labor rate for full time equivalent personnel (the “FTE
Labor Rate”). Each party will calculate its own FTE Labor Rate. Those categories
of “eSAS 2 Development Costs” included within the FTE Labor Rate are those costs
more particularly described on Schedule 5.2.1a, in paragraph 2 entitled “eSAS 2
Development Costs included within FTE Labor Rate”. Neither Party shall be
reimbursed separately for eSAS 2 Development Costs included within FTE Labor
Rate. Those categories of “eSAS 2 Development Costs” not included within the FTE
Labor Rate are those costs more particularly described on Schedule 5.2.1a, in
paragraph 3 entitled “eSAS 2 Development Costs not included within FTE Labor
Rate”. Each Party shall be reimbursed separately for eSAS 2 Development Costs
not included within FTE Labor Rate.

                    (i) The FTE Labor Rate in effect as of the Addendum
Effective Date is set forth in paragraph 1 on the attached Schedule 5.2.1a, and
is included in the Resource Plan and reflected in the Budget. Either Party shall
have the right to request a change in the FTE Labor Rate reflected on the
attached Schedule 5.2.1a on a prospective basis under the approval process set
forth in Section 3. In the event aggregate actual eSAS 2 Development Costs
incurred by a Party during any calendar year that are reimbursed through the FTE
Labor Rate exceeded, or fell short of, the agreed FTE Labor Rate reflected in
the Budget for such calendar year, either Party may seek a request for
modification of the eSAS 2 Development Program to reflect such actual costs.
Acceptance of such request for modification shall be governed by Section 3.3.4.
Notwithstanding the foregoing, throughout the term of this eSAS 2 Addendum, in
the event either Party requests a modification to the FTE Labor Rate hereunder,
the modified FTE Labor Rate shall be calculated using the same methodology as
that used to calculate the FTE Labor Rate in effect as of the Addendum Effective
Date. The methodology used to calculate the FTE Labor Rate in effect as of the
Addendum Effective Date is described on the attached Schedule 5.2.1b, entitled
“FTE Labor Rate Analysis”.

          5.2.2 Comparison with Resource Plan. The planned resources, and the
associated costs, will be broken out on a monthly basis and analyzed against the
Resource Plan included within the Technical Plan, and reflected in the Budget.

     5.3 Payment of eSAS 2 Development Costs. In addition to the provisions of
Article 7 of the Agreement, the Parties agree as follows:

          5.3.1 Accrued eSAS 2 Development Costs. Each Party has already
incurred, prior to the date of execution of this eSAS 2 Addendum, certain eSAS 2
Development Costs. [...***...] shall reimburse [...***...] for its eSAS 2
Development Costs incurred prior to and until the date of execution of this eSAS
2 Addendum. Attached to this eSAS 2 Addendum as Schedule 5.3.1 is a summary of
the eSAS 2 Development Costs incurred by the Parties prior to the execution of
this eSAS 2 Addendum.

          5.3.2 Monthly Notices; Payments. At the end of each month, each Party
shall calculate its actual expenditures and FTE Labor amounts for eSAS 2
Development Costs it incurred during such month and shall promptly provide to
the other Party a reasonably detailed written breakdown of such costs.
[...***...] shall invoice [...***...] for the amount of such costs incurred by
[...***...] during such month under Section 5.3.3 below.

          5.3.3 Invoices. [...***...] will invoice [...***...] for the amounts
described in this Section 5.3 and all invoices will be due and payable thirty
(30) days from the date of the invoice. In the event payment is not received
within such period, Chiron shall pay a service charge equal to the amount

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overdue multiplied by the LIBOR in effect on the first day of such calendar
month, but not exceeding the maximum allowable rate.

     5.4 Reimbursement of eSAS 2 Development Costs. Chiron will be entitled to
reimbursement, if at all, of eSAS 2 Development Costs solely from revenues from
the eSAS 2 Instrument, as more particularly described in Section 3.3.6 of the
Agreement as amended by Section 6.3 of this Addendum.

6. Manufacturing and Commercialization.

     6.1 eSAS 2 Instrument Manufacturing Costs.

          6.1.1 The “Fully-Burdened Manufacturing Costs” of the eSAS 2
Instrument for purposes of this eSAS 2 Addendum (including revised Section 3.3.6
of the Agreement) shall mean [...***...] percent ([...***...] %) of the
reasonable Third Party OEM invoice cost of the eSAS 2 Instrument (including
freight, taxes, etc.,). The foregoing amount shall be used in lieu of the actual
internal costs incurred or allocated to the purchase for QA, purchasing,
receiving and warehousing, etc.

          6.1.2 Gen-Probe is entitled to review, evaluate, and in its discretion
independently verify the basis of Chiron’s Fully-Burdened Manufacturing Cost
using an independent Third Party, in accordance with the provisions of
Section 7.3 of the Agreement.

     6.2 Rights to Manufacture and Sell.

          6.2.1 Blood Screening Field. Notwithstanding Section 3.3.3 of the
Agreement, Chiron shall have the exclusive right and obligation during the eSAS
2 Addendum Term to manufacture (and have manufactured) the eSAS 2 Instruments to
satisfy Chiron’s requirements of eSAS 2 Instruments in the Territory for use in
the Blood Screening Field. If Chiron elects to subcontract the manufacture of
the eSAS2 Instrument, then Chiron shall comply with the requirements of Section
3.3.3(d) of the Agreement. Gen-Probe agrees to comply with the obligation to
provide reasonable technical assistance, at Chiron’s sole cost, as necessary or
appropriate to enable Chiron to fulfill its obligation and exercise the right to
manufacture (or have manufactured) the eSAS 2 Instrument for use in the Blood
Screening Field, including delivering specifications and other know-how to
Chiron and causing responsive Gen-Probe personnel that possess such know-how to
be available to Chiron, in each case as reasonably necessary to enable Chiron to
exercise the rights granted and fulfill its obligations hereunder. Chiron shall
have the exclusive distribution right in the Territory to promote, market and
sell the eSAS 2 Instrument to conduct Blood Screening Assays in the Blood
Screening Field, as set forth in Section 3.3.4 of the Agreement. Nothing in this
eSAS 2 Addendum shall affect Gen-Probe’s obligations to Chiron under the
Agreement with respect to the manufacture and supply of existing Blood Screening
Instruments or Chiron’s obligations to Gen-Probe under the Agreement with
respect to the commercialization of existing Blood Screening Instruments.

          6.2.2 Clinical Diagnostic Field. Notwithstanding Section 6.2.1 of this
eSAS 2 Addendum or Sections 3.3.4 or 4.4.3 of the Agreement, Gen-Probe shall
have the exclusive right to manufacture (and have manufactured) the eSAS 2
Instruments for use in the Clinical Diagnostic Field. Chiron agrees to provide
Gen-Probe such reasonable technical assistance, at Gen-Probe’s sole cost, as
necessary or appropriate to enable Gen-Probe to exercise the right to
manufacture (or have manufactured) the eSAS 2 Instrument for use in the Clinical
Diagnostic Field, including without limitation delivering manufacturing
drawings, specifications and other know-how to Gen-Probe and causing responsive
Chiron personnel that possess such know-how to be available to Gen-Probe, in
each case as reasonably

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necessary to enable Gen-Probe to exercise the rights granted hereunder.
Notwithstanding Section 4.4.4 of the Agreement, Gen-Probe shall have the
exclusive distribution right in the Territory to promote, market and sell the
eSAS 2 Instrument in the Clinical Diagnostic Field to the extent, as of the
Addendum Effective Date, that Chiron has the ability to grant such rights to
Gen-Probe.

          6.2.3 Right to Acquire All Rights to Manufacture and Commercialize.
Gen-Probe shall have the right, but not the obligation, to acquire from Chiron
the exclusive right to manufacture and distribute the eSAS 2 Instrument in all
fields at the expiration or sooner termination of the eSAS 2 Addendum Term for
any reason under Section 8 of this Addendum. Gen-Probe may exercise such right
by providing Chiron with written notice of election under this Section 6.2.3,
together with payment in an amount equal to the eSAS 2 Development Costs for
which [...***...] is entitled to reimbursement hereunder but for which
[...***...] has not yet received reimbursement under Section 3.3.6(b) of the
Agreement, as amended by Section 6.3 below. Gen-Probe may rely upon and base its
calculation of such amount upon the accounting [...***...] from time to time
from [...***...] under Section 3.3.6 of the Agreement, as amended by Section 6.3
below.

     6.3 Consideration on eSAS 2 Instrument Sales. In consideration for the
rights granted and obligations undertaken by the Parties in this eSAS 2
Addendum, the consideration received on the sale, transfer or other disposition
of the eSAS 2 Instrument will be governed by this Section 6.3. Except as
otherwise provided in Section 8.3 of this eSAS 2 Addendum, Section 3.3.6 of the
Agreement is amended and restated in its entirety as follows but solely with
respect to consideration on the sale, transfer or other disposition of the eSAS
2 Instrument.

     “3.3.6 Compensation for eSAS 2 Instruments. In consideration for the rights
granted, and the obligations accepted, by the Parties, each Party shall pay to
the other the applicable amounts described in this Section 3.3.6.

          a) Definitions.

               (i) Revenues from the eSAS 2 Instrument. As used in this
Section 3.3.6 “revenues from the eSAS 2 Instrument” for a fiscal quarter shall
mean all amounts received by a Party or a Party’s Affiliates for the sale,
transfer, placement, lease or other disposition of the eSAS 2 Instruments during
such fiscal quarter; provided, however, that:

                    (A) Revenues for Collaboration Combination Products. If an
eSAS 2 Instrument is sold in combination with one or more non-eSAS instruments
or instrument components (a “Collaboration Combination Product”) for a single
price or on a single invoice to the customer, the “revenues from the eSAS 2
Instrument” with respect to such Collaboration Combination Product shall be
calculated by multiplying the total amount received by a Party or its Affiliates
for such Collaboration Combination Product by the fraction A/B, where A is gross
selling price of the eSAS 2 Instrument sold separately and B is the gross single
price or aggregate prices on a single invoice to the customer for such
Collaboration Combination Product. Such calculation of the Collaboration
Combination Product revenues shall be negotiated in good faith between the
Parties and resolved pursuant to Article 13 if they are unable to agree.

                    (B) Revenues for Lease, Rental or Placement Programs. If the
eSAS 2 Instrument is not sold separately but rather is leased, placed or rented
pursuant to a reagent/rental program or comparable sale or lease program
(including instrument upgrade/maintenance programs) (each a “Program”) where the
instrument revenue is included in

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such Program revenue, then the “revenues from the eSAS 2 Instrument” with
respect to such Program shall: (i) be [...***...] percent ([...***...] %) of the
Fully Burdened Manufacturing Costs [...***...] % until Chiron has been
reimbursed for all eSAS 2 Development Costs, and [...***...] percent
([...***...] %) thereafter; based upon an imputed instrument depreciation factor
consistent with Chiron’s then-current accounting policy that provides for a
depreciation of at least three (3) years for each eSAS 2 Instrument.

                    (C) Nothing herein shall amend the manner in which the
Agreement determines the revenues for Combination Products where the eSAS 2
Instrument is sold in combination with one or more Third Party products.

               (ii) As used in this Section 3.3.6:

                    (A) the “Chiron Blood Screening Split” used under
Section 3.3.6(b) below with respect to sales of the eSAS 2 Instrument in the
Blood Screening Field shall be the remainder of (I) [...***...] percent
([...***...] %) less (II) the Gen-Probe Blood Screening Split.

                    (B) the “Gen-Probe Blood Screening Split” used under
Section 3.3.6(b) below with respect to sales of the eSAS 2 Instrument in the
Blood Screening Field shall be calculated, for a given fiscal quarter, by taking
the dollar weighted average of the Applicable Purchase Price earned by Gen-Probe
for all Blood Screening Assays sold as calculated under 1.2.1 and 1.2.3 of the
Agreement during such fiscal quarter.

                    (C) the “Chiron Clinical Diagnostic Split” used under
Section 3.3.6(c) below with respect to sales of the eSAS 2 Instrument in the
Clinical Diagnostic Field shall be equal to the Gen-Probe Blood Screening Split.

                    (D) the “Gen-Probe Clinical Diagnostic Split” used under
Section 3.3.6(c) below with respect to sales of the eSAS 2 Instrument in the
Clinical Diagnostic Field shall be equal to the Chiron Blood Screening Split.

          b) Instrument Sales; Chiron Sales of eSAS 2 Instruments.

               (i) Until [...***...] has been reimbursed for all eSAS 2
Development Costs, within forty-five (45) days following the end of each fiscal
quarter Chiron shall (A) first, calculate (and provide written notice to
Gen-Probe of such calculation) the revenues from eSAS 2 Instruments sold and
received by Chiron or its Affiliates during such fiscal quarter; (B) second,
calculate (and provide written notice to Gen-Probe of such calculation)
[...***...] percent ([...***...]%) of the Fully Burdened Manufacturing Costs for
the eSAS 2 Instruments sold in such fiscal quarter by Chiron and its Affiliates;
(C) third, calculate (and provide written notice to Gen-Probe of such
calculation) and retain the lesser of (I) revenues from eSAS 2 Instruments sold
and received by Chiron and its Affiliates in such fiscal quarter or (II)
[...***...] percent ([...***...] %) of the Fully Burdened Manufacturing Costs
for the eSAS 2 Instruments sold in such fiscal quarter by Chiron and its
Affiliates; (D) fourth, apply and credit (and provide written notice to
Gen-Probe of such calculation) the difference between such retained amount and
[...***...] percent ([...***...]%) of the Fully Burdened Manufacturing Costs for
the eSAS 2 Instruments sold in such fiscal quarter by Chiron and its Affiliates
as reimbursement to Chiron of the eSAS 2 Development Costs; (E) fifth, calculate
(and provide written notice to Gen-Probe of such

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calculation) and retain the Chiron Blood Screening Split, if any; and (F) sixth,
pay to Gen-Probe an amount equal to the Gen-Probe Blood Screening Split, if any.

               (ii) After [...***...] has been reimbursed for all eSAS 2
Development Costs under subparagraph 3.3.6(b)(i) above, within forty-five
(45) days following the end of each fiscal quarter Chiron shall thereafter
(A) first, calculate (and provide written notice to Gen-Probe of such
calculation) revenues from eSAS 2 Instruments sold and received by Chiron and
its Affiliates in such fiscal quarter; (B) second, calculate (and provide
written notice to Gen-Probe of such calculation) and retain [...***...] percent
([...***...] %) of the Fully Burdened Manufacturing Costs for the eSAS 2
Instruments sold in such fiscal quarter by Chiron and its Affiliates; (C) third,
calculate (and provide written notice to Gen-Probe of such calculation) and
retain the Chiron Blood Screening Split, if any; and (D) fourth, pay to
Gen-Probe an amount equal to the Gen-Probe Blood Screening Split, if any.

               (iii) If the eSAS 2 Instrument is not sold separately by Chiron
but rather is leased, placed or rented by Chiron pursuant to a Program (as
defined in subsection 3.3.6(a)(i)(B)), within forty-five (45) days following the
end of each fiscal quarter Chiron shall calculate (and (provide written notice
to Gen-Probe of such calculation) and shall be entitled to retain any and all
revenues from the eSAS 2 Instruments sold, leased, placed or rented pursuant to
a Program and received by Chiron and its Affiliates in such fiscal quarter.

          c) Instrument Sales; Gen-Probe Sales of eSAS 2 Instruments.

               (i) Within forty-five (45) days following the end of each fiscal
quarter Gen-Probe sells eSAS 2 instruments Gen-Probe shall (A) first, calculate
(and provide written notice to Chiron of such calculation) the revenues for the
eSAS 2 Instruments received by Gen-Probe and its Affiliates during such fiscal
quarter from the sale, transfer, placement, lease or other disposition of the
eSAS 2 Instrument in the Clinical Diagnostic Field; (B) second, calculate (and
provide written notice to Chiron of such calculation) and retain [...***...]
percent ([...***...]%) of the Fully Burdened Manufacturing Costs for such eSAS 2
Instruments; (C) third, calculate (and provide written notice to Chiron of such
calculation) and retain an amount equal to the Gen-Probe Clinical Diagnostic
Split, if any; and (D) fourth, pay to Chiron an amount equal to the Chiron
Clinical Diagnostic Split, if any.

          d) Service Revenues. Each Party is entitled to retain the aggregate
commercially reasonable revenues received by such Party and its Affiliates in
consideration for required maintenance and servicing of the eSAS 2 Instruments
consistent with standard industry practices; provided, however that the revenues
retained may not exceed [...***...] percent ([...***...] %) of the Fully
Burdened Manufacturing Costs of the eSAS 2 Instruments per year; provided
however that in the event that the revenues exceed [...***...] percent
([...***...]%) of the Fully Burdened Manufacturing Costs of the eSAS 2
Instruments in any given year, such excess shall be shared by Gen-Probe and
Chiron such that, for maintenance and service revenues of eSAS 2 Instruments
used in the Blood Screening Field, the parties shall receive such amount equal
to their respective Blood Screening Splits, and for maintenance and service
revenues of eSAS2 Instruments used in the Clinical Diagnostic Field, the parties
shall receive such amount equal to their respective Clinical Diagnostic Splits.

     6.4 Authorization Letter. Chiron will allow Gen-Probe to directly access
OEM suppliers of eSAS-2 Instruments to purchase or modify eSAS- 2 Instruments
for the Clinical Diagnostic Field.

***Confidential Treatment Requested

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Chiron will not make any agreement with sub-contract manufacturers that will
restrict Gen-Probe’s ability to negotiate its own contract with the vendors for
the manufacture and purchase of modified eSAS- 2 Instruments for the Clinical
Diagnostic Field. In addition, the Parties acknowledge that Gen-Probe shall have
the right to purchase the eSAS 2 Instrument from any Third Party that Chiron
employs to manufacture the eSAS 2 Instrument. Promptly following the execution
of an agreement between Chiron and a Third Party for the manufacture of the eSAS
2 Instrument, and at Gen-Probe’s written request, Chiron shall execute the
authorization letter attached hereto as Schedule 6.4 (“Sales Authorization
Letter”).

7. Ownership; License Grant.

     7.1 Ownership. Ownership of any Inventions incorporated in the eSAS 2
Instrument or otherwise made in the course of the eSAS 2 Development Program
shall be “Joint Inventions” and shall be allocated as provided in Section 9.1 of
the Agreement for Joint Inventions; provided, however, that (a) during the eSAS
2 Addendum Term Gen-Probe hereby grants to Chiron under its rights in and to
such Joint Inventions an exclusive right to make, use, sell and import such
Joint Inventions in the Blood Screening Field and (b) during the eSAS 2 Addendum
Term, Chiron hereby grants to Gen-Probe under its rights in and to such Joint
Inventions an exclusive right to make, use, sell and import such Joint
Inventions in the Clinical Diagnostic Field. Neither Party shall have the right
to sublicense or otherwise transfer its right, title or interest in or to the
Joint Inventions without the prior written consent of the other Party.

     7.2 License Grant. During the eSAS 2 Addendum Term, Gen-Probe hereby grants
to Chiron a license under all intellectual property rights of Gen-Probe
now-owned or hereafter acquired to the extent reasonably necessary for Chiron to
perform its obligations under the eSAS 2 Development Program and for the
manufacture, use or sale of eSAS 2 Instruments in the Blood Screening Field, but
only to the extent that Gen-Probe has or hereafter acquires an ownership or
other licensable interest in such intellectual property rights and has the right
to grant licenses, immunities or other rights thereunder. During the eSAS 2
Addendum Term, Chiron hereby grants to Gen-Probe a license under all
intellectual property rights of Chiron now-owned or hereafter acquired to the
extent reasonably necessary for Gen-Probe to perform its obligations under the
eSAS 2 Development Program and for the manufacture, use or sale of eSAS 2
Instruments in the Clinical Diagnostic Field, but only to the extent that Chiron
has or hereafter acquires an ownership or other licensable interest in such
intellectual property rights and has the right to grant licenses, immunities or
other rights thereunder. The licenses hereby granted shall extend only to the
extent of the design of the eSAS 2 Instrument as of the date of this eSAS 2
Addendum and to any future design modifications approved and adopted in
accordance with the terms hereof. The license hereby granted shall be
royalty-free except to the extent the licensing Party has an obligation to pay
royalties to a Third Party pursuant to the Agreement. The license granted by
Gen-Probe in Section 3.3.5(c) of the Agreement shall apply to the manufacture of
eSAS 2 Instruments by or for Chiron for use in the Blood Screening Field. Except
as expressly provided herein, neither Party grants to the other Party any
license or other interest in and to such Party’s intellectual property rights or
other rights. For the avoidance of doubt, nothing in this Section 7.2 shall be
construed as a grant by Chiron to Gen-Probe for an express or implied license
in, to or under the Chiron HIV Patent Rights or the Chiron HCV Patent Rights.

     7.3 [...***...] Immunity. For the avoidance of doubt, [...***...] confirms
that [...***...] shall be entitled to the benefit of the immunity from suit
previously granted to [...***...], and subject to the limitations as granted to
[...***...], by [...***...] and [...***...] under the [...***...] related
Patents,

***Confidential Treatment Requested

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which immunity was previously granted to [...***...] (and a party to be
designated by [...***...]) by [...***...] and [...***...].

8. Addendum Effective Date; Term; Termination.

     8.1 Term of eSAS 2 Addendum. This eSAS 2 Addendum shall become effective on
the Addendum Effective Date and shall continue in effect through the Blood
Screening Term, as it may be amended or extended from time to time, unless
sooner terminated in accordance with the provisions hereof. Termination of this
eSAS 2 Addendum shall be governed by the terms of this Section 8 and termination
of the Agreement is governed by Section 11 of the Agreement.

     8.2 Termination for Breach.

          8.2.1 Default. Either Party (the “nondefaulting party”) has the right,
upon written notice to the other Party (the “defaulting party”), to terminate
the eSAS 2 Development Program, upon the occurrence of any of the following
events of default and the expiration of any applicable period of time for cure:

               (a) if a Party fails to make a payment required under
Sections 5.3.1 or 5.3.3 hereunder;

               (b) if a Party invoices for amounts using expenditures not
falling within the definition of eSAS 2 Development Costs or not included within
the Budget.

               (c) if a Party fails to exercise Commercially Reasonable Efforts
to commit the resources described in the eSAS 2 Development Program or to
exercise Commercially Reasonable Efforts achieve the objectives of the eSAS 2
Development Program; provided, however, that the failure to successfully
complete the development of the eSAS 2 Instrument, or to complete the
development of the eSAS 2 Instrument on the Timeline set forth in the Technical
Plan or for the amounts described in the Budget or to the specifications set
forth in the PRD or the SRS shall not be deemed to be a breach of this eSAS 2
Addendum; and

               (d) if a Party defaults under the Agreement or this eSAS 2
Addendum which default results in the termination of the Agreement of this eSAS
2 Addendum.

          8.2.2 Right to Cure Event of Default. Upon the occurrence of any event
of default entitling a Party to terminate this eSAS 2 Addendum, the
non-defaulting party shall send to the defaulting party notice of event of
default, specifying in reasonable detail the nature of the default. The
defaulting party will have thirty (30) days following the date of receipt of
such notice within which to cure the breach or event of default. Failure to cure
the default within such time period will result in termination of the eSAS 2
Development Program without further notice by the non-defaulting party, unless
such non-defaulting party extends the cure period by written notice or withdraws
the default notice. (The expiration of the period for such right to cure without
cure, extension or withdrawal of the default notice is referred to as the
“effective date of termination”.)

          8.2.3 Effect of Termination for Breach. Upon a termination of this
eSAS 2 Addendum for default under this Section 8.2:

               (a) Subject to the rights of the Parties under Section 9.3, the
eSAS 2 Development Program shall be terminated.

***Confidential Treatment Requested

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               (b) The non-defaulting party’s rights under the Agreement and
this eSAS 2 Addendum shall remain in full force and effect unchanged.

               (c) The defaulting party’s rights under the Agreement and this
eSAS 2 Addendum with respect to all Products, other than the eSAS 2 Instrument,
shall remain in full force and effect unchanged.

               (d) The defaulting party’s rights under the Agreement and this
eSAS 2 Addendum with respect to the eSAS 2 Instrument shall terminate and be of
no further force and effect. The defaulting party may not undertake a
development substantially similar to the eSAS 2 Development Program with any
other Party for a period of [...***...] from the date of termination.

               (e) If Chiron is the defaulting party, Chiron shall pay to
Gen-Probe in addition to any other rights or remedies available to Gen-Probe at
law or equity, promptly upon receipt of an invoice therefore, an amount equal to
(i) [...***...] for which an [...***...] has been [...***...], (ii) [...***...]
not yet [...***...] but [...***...] in the [...***...], whether or not disputed,
as [...***...] in the [...***...], and (iii) an [...***...] by [...***...], with
[...***...] provided to [...***...], to [...***...] the [...***...] of
[...***...] the [...***...], if applicable.

     8.3 Termination by Chiron. Chiron may elect to terminate this eSAS 2
Addendum under this Section 8.3 for convenience at any time during the eSAS Term
in its sole discretion upon written notice to Gen-Probe. Following any such
termination, Chiron shall pay, promptly upon receipt of an invoice therefor, to
Gen-Probe an amount equal to (i) [...***...] in the [...***...] for which an
[...***...] has been [...***...] and (ii) [...***...] not yet [...***...] but
[...***...] in the [...***...] whether or not disputed, as set [...***...] in
the [...***...].

     8.4 Continuance of eSAS 2 Development Program following Termination.

          8.4.1 Election. Following any termination of this eSAS 2 Addendum for
breach by Chiron in accordance with Section 8.2 or termination by Chiron in
accordance with Section 8.3, Gen-Probe may elect to continue the eSAS 2
Development Program by providing written notice to Chiron on or before the
effective date of termination under Section 8.2.

          8.4.2 Funding and Conduct of Development. If Gen-Probe elects pursuant
to this Section 8.4 to continue funding the eSAS 2 Development Program,
Gen-Probe shall be solely responsible for the current funding of all eSAS 2
Development Costs, including those applicable to, or incurred by Chiron under
the terms of this Agreement, from and after the effective date of termination
under Section 8.2, subject to the right to reimbursement more particularly
described below.

               Reimbursement of Development Costs. If Gen-Probe elects to
continue development of the eSAS 2 Instrument in accordance with this
Section 8.4, then before distribution of compensation as provided in revised
Section 3.3.6 of the Agreement (amended as provided in Section 6.3 above),
Gen-Probe shall be first entitled to reimbursement of all eSAS 2 Development
Costs incurred by Gen-Probe from and after the effective date of such
termination and election to continue. Section 3.3.6 of the Agreement is amended
to add the following, as a new Section 3.3.6A, inserted before revised
Section 3.3.6 of the Agreement (amended as provided in Section 6.3 above), as
follows

***Confidential Treatment Requested

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“3.3.6A Notwithstanding anything to the contrary in this Section 3.3.6, until
Gen-Probe has been reimbursed for all eSAS 2 Development Costs, within
forty-five (45) days following the end of each fiscal quarter Chiron shall
(A) first, calculate (and provide written notice to Gen-Probe of such
calculation) the revenues from the eSAS 2 Instrument received by Chiron or its
Affiliates during such fiscal quarter; (B) second, calculate and retain (and
provide written notice to Gen-Probe of such calculation) [...***...]
([...***...] %) of the Fully Burdened Manufacturing Costs for the eSAS 2
Instruments sold in such fiscal quarter; (C) third, calculate and pay to
Gen-Probe the lesser of (I) the remainder of the revenues calculated in (A) and
the Fully Burdened Manufacturing Costs retained in (B) from each eSAS 2
Instrument sold in such fiscal quarter received by Chiron or its Affiliates or
(II) [...***...] percent ([...***...] %) of the Fully Burdened Manufacturing
Costs of such eSAS 2 Instruments sold in such fiscal quarter (and provide
written notice to Gen-Probe of such calculation); (D) fourth, apply and credit
the difference between such amount paid to Gen-Probe for the eSAS 2 Instrument
sold in such fiscal quarter as reimbursement to Gen-Probe for the eSAS 2
Development Costs (and provide written notice to Gen-Probe of such calculation);
(E) fifth, calculate (and provide written notice to Gen-Probe of such
calculation) and retain the Chiron Blood Screening Split, if any; and (F) sixth,
pay to Gen-Probe an amount equal to the Gen-Probe Blood Screening Split, if any.
Until such time as Chiron receives written notice from Gen-Probe that Gen-Probe
has been reimbursed for all eSAS 2 Development Costs, then the provisions of
Section 3.3.6 of the Agreement (amended as provided in Section 6.3 above) shall
govern the distribution of consideration received on sale, transfer or other
distribution of the eSAS 2 Instrument.”

          8.4.3 Control of the Program upon Unilateral Funding. Gen-Probe shall
have the right to appoint the Project Manager from and after the effective date
of termination by Chiron under Section 8.3 and the decision to continue the
program. Gen-Probe shall have the right to make such Material Modifications to
the eSAS 2 Development Program that it deems necessary or prudent in its
reasonable discretion, without the acceptance of the other Party as otherwise
required under Section 3.3.4 of this eSAS 2 Addendum. Notwithstanding the above,
Gen-Probe shall remain obligated to provide Chiron with a copy of the eSAS 2
Development Program, and all notice and reporting obligations set forth herein
shall remain in full force and effect.

          8.4.4 Rights under Agreement. Except as expressly modified by this
Section 8.3, the Parties shall retain all rights and obligations allocated
pursuant to Section 3.2 of the Agreement.

9. Escalation.

     9.1 Escalation Process. Prior to implementing the arbitration process more
particularly described in Article 13 of the Agreement, the Parties agree to
escalate any dispute first to a discussion between responsible managers, and if
they cannot agree, then to the Supervisory Board. However the Parties explicitly
acknowledge that in the event of the need for an urgent decision the Party with
primary responsibility will proceed to make the decision, and implement. It is
agreed that the Party with primary responsibility will make all reasonable and
timely efforts to inform the other Party of the issue requiring decision,
particularly where the issue is one of some consequence.

     9.2 Remedies in Event of Default. Neither Party shall be entitled to
exercise any remedy otherwise available to it at law or in equity unless and
until such Party shall have provided the other Party with notice of such event
of default, reasonably specifying the nature of the default, and any applicable
period of time for cure thereof shall have expired without cure, and the
procedures defined in Article 13 of the Agreement shall have been first
exhausted.

***Confidential Treatment Requested

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     9.3 Survival. Upon a termination of this eSAS 2 Addendum, the following
provisions of this eSAS 2 Addendum shall survive such termination: Sections 2.3,
2.4.1, 8, 9, and 10.

10. No Other Amendment. Except as expressly set forth in this eSAS 2 Addendum,
all other terms and conditions of the Agreement, the Parties’ Definitive Written
Settlement Agreement, dated December 5, 2001, and the Short Form Agreement,
dated November 16, 2001, are hereby ratified and shall continue in full force
and effect. All other terms and conditions of the Agreement, the Definitive
Written Settlement Agreement, and the Short Form Agreement shall continue in
full force and effect. In the event of a conflict between the terms of this eSAS
2 Addendum and the Agreement, the terms of this eSAS 2 Addendum shall control.
The provisions of this eSAS 2 Addendum are intended to, and hereby, supercede
any provisions in the Definitive Written Settlement Agreement entered into by
and between the Parties, dated December 5, 2001, and the Short Form Agreement
entered into by and between the Parties, dated November 16, 2001, on the same
subject matter.

11. Counterparts. This eSAS 2 Addendum may be executed in counterparts, each of
such shall be deemed an original, and all of which together shall constitute one
and same instrument.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

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     IN WITNESS WHEREOF, the Parties have caused this eSAS 2 Addendum to be
executed and the persons signing below warrant that they are duly authorized to
sign for and on behalf of the respective Parties.

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

  /s/ Henry L. Nordhoff       /s/ Gene W. Walther

           
Its:
      Its:    

  President & CEO       President

           
Date:
      Date:    

  12-21-04       18 Feb. 2005

           

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Schedule 1.12-A
PRD – robotic sample handling and transport system

24

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Schedule 1.12-B
PRD – front end pipettor

25

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Schedule 1.3

Budget

Preliminary Budget

         
2002
       
CBT Grand Total Hours
  [...***...]    
CBT Avg Monthly FTE
  [...***...]    
CBT cost @ [...***...]/FTE
  [...***...]    
GP cost @ [...***...]/FTE
  —      

       
Total Project
  [...***...]      

         
2003
       
CBT Grand Total Hours
  [...***...]    
CBT Avg Monthly FTE
  [...***...]    
CBT cost @ [...***...]/FTE
  [...***...]    
GP cost @ [...***...]/FTE
  [...***...]    

       
Total Project
  [...***...]      

         
2004
       
CBT Grand Total Hours
  [...***...]    
CBT Avg Monthly FTE
  [...***...]    
CBT cost @ [...***...]/FTE
  [...***...]    
GP cost @ [...***...]/FTE
  [...***...]    

       
Total Project
  [...***...]      

         
Total Budget
[...***...]      

***Confidential Treatment Requested

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Schedule 1.4

Description of eSAS 2 Instrument system

     The eSAS 2 Instrument system consists of the following modules:

                Name of Module     Specifications    
(i) a front end pipettor
         
(ii) an automated reagent addition station
         
(iii) an automated target capture bay
         
(iv) an automated incubation module
         
(v) a data management to track sample and system interactions to meet customer
demands of throughput and automation required for pooled donor screening by NAT
         

27

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Schedule 1.6

eSAS 2 Development Program Outline

1.   Product Requirements Document (PRD)   2.   Software Requirements
Specification   3.   Technical Plan   4.   Resource Plan   5.   Budget

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Schedule 5.2.1a
eSAS 2 Development Costs

1. Reimbursable FTE Rate. [$[...***...] per FTE per calendar year]

2. eSAS 2 Development Costs included within FTE Labor Rate. eSAS 2 Development
Costs included within FTE Labor Rate consist of all attributable costs
associated with the development of the eSAS 2 Instrument and modifications to
associated instrument system platforms that may be required for such eSAS 2
Instrument (calculated in accordance with United States generally accepted
accounting principles, or as otherwise mutually agreed in writing between the
Parties) incurred prior to the Completion Date and includes pilot development;
validation studies necessary for product and process licensure; clinical
studies; licensing activities; and the manufacture and ultimate disposition of
conformance lots of material, calculated as follows:

               (a) Shared development costs include: research and development
associated with the eSAS 2 Development Program; clinical studies; validation
exclusively associated with the particular analyte; development lots; document
preparation specific to the development;

               (b) The planned resources, and the associated costs, will be
broken out on a monthly basis and analyzed against the Resource Plan included
within the Technical Plan, and reflected in the Budget;

               (c) Salaried staff costs included within the Budget will be
adjusted to reflect actual staff costs. Salary information may be aggregated to
protect the identity of individuals. This salary information will be verifiable
on a need to know basis to a select number of personnel from each company;

               (d) Cost for wage laborers plus the applicable overhead charge
for such labor (calculated at the rates and charges described in Section 5.2.1)
paid to personnel described in the Resource Plan, including the eSAS 2
Development Program project manager and personnel engaged to perform QA testing
for the eSAS 2 Development Program;

               (e) Costs for engineering prototypes and manufacturing pilot
modules required for the eSAS 2 Development Program;

               (f) Costs of inventory consumed in the eSAS 2 Development
Program, including raw material, intermediates and finished goods, and
conformance lots, whether reject or not, that arise from the eSAS 2 Development
Program or are necessary to support the eSAS 2 Development Program, and scrap
material, including raw materials and development materials that arise from the
eSAS 2 Development Program but excluding eSAS 2 Instrument and scrap materials
used strictly for internal research purposes or consumed in development programs
other than the eSAS 2 Development Program;

               (g) Costs for conformance product documentation;

               (h) Costs for courier and mail service fees for delivery of items
between Gen-Probe and Chiron;

               (i) Costs of travel, lodging and reasonable per diem expenses for
employee and consultants of Gen-Probe or Chiron incurred in furtherance of their
activities hereunder, providing

***Confidential Treatment Requested

 

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training or participating on the Supervisory Board to the extent such costs are
not included within the overhead charge applicable to labor costs;

               (j) Costs of foreign registration, marketing studies to support
registration, and market research costs necessary to better define requirements
or to support national decision-making;

               (k) Such other categories as the Parties may agree from time to
time using the approval process described in Section 2.5.2.

               (l) All budgeted expenses of Departments directly involved with
the eSAS 2 Development Program

               (m) Appropriate portions of budgeted costs of departments
indirectly involved in the eSAS 2 Development Program.

3. eSAS 2 Development Costs not included within FTE Labor Rate.

               (a) Cost of conformance lot materials consumed in performance of
eSAS 2 Development Product or clinical trials.

               (b) Significant Third Party consultant charges (i.e. CRO,
regulatory expertise, etc.) to the extent not captured within the FTE rates in
Item 2 above.

               (c) Third Party development and hardware acquisition costs.

 

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Schedule 5.2.1b

FTE Labor Rate Analysis

                                                                               
                              (Controllable)     (Controllable)    
(Controllable)                                                                  
  Salary & Wage     Other     Total             Deprec/                    
Indirect     Total Cost     eSAS     eSAS   Cost Center           Expense    
Costs     Costs     Benefits     Amort     Facilities     I/S     Allocation    
per Employee     HC     Cost  
Quality Assurance
    11038       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
VP Operations
    13010       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
Ots Engineering
    13011       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
Ots Development Manufacturing
    13012       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
Ots Bb Product Support
    13017       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
Program Management
    16015       [***]       [***]       [***]       [***]       —       [***]  
    [***]       [***]       [***]       [***]       [***]  
Clinical Affairs
    16021       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
VP Regulatory & Quality
    16022       [***]       [***]       [***]       [***]       —       [***]  
    [***]       [***]       [***]       [***]       [***]  
Regulatory Affairs
    16023       [***]       [***]       [***]       [***]       —       [***]  
    [***]       [***]       [***]       [***]       [***]  
Research
    16041       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
Bloodbank
    16071       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
Marketing-Bloodbank
    17019       [***]       [***]       [***]       [***]       —       [***]  
    [***]       [***]       [***]       [***]       [***]  
Validation
    11039       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
VP Diagnostic Development
    16056       [***]       [***]       [***]       [***]       —       [***]  
    [***]       [***]       [***]       [***]       [***]  
Std Development
    16052       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
VP Sales/Marketing
    17005       [***]       [***]       [***]       [***]       —       [***]  
    [***]       [***]       [***]       [***]       [***]  
Prod.Planning
    11005       [***]       [***]       [***]       [***]       —       [***]  
    [***]       [***]       [***]       [***]       [***]  
QC Microbiology
    11023       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
Stability
    11035       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
QC Analytical
    11037       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
Instrument Development
    16019       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
Performance QC
    13016       [***]       [***]       [***]       [***]       [***]      
[***]       [***]       [***]       [***]       [***]       [***]  
 
                                                                    —          
               
Total
            [***]       [***]       [***]       [***]       [***]       [***]  
    [***]       [***]               [***]       [***]  
Adjusted Controllable Total (total less non cc
                                                                               
    [***]       [***]  
related expenses)
                            [***]                                              
        [***]       [***]  

         
Cost/FTE w/o 6021
    [***]  
Cost/FTE w-6021
    [***]  
Cost/FTE w/o 6021 & w/o G&A
    [***]  

                                      HR     Finance               G&A
Allocations:   *Based on H/C     **Based on Tot Cont     ***Bonus Pool    
Allocations  
Controllables
    [***]       [***]               [***]  
Benefits
    [***]       [***]               [***]  
Deprec/Ammort
    —       [***]               [***]  
Facilities
    [***]       [***]               [***]  
Human Resources
    [***]       [***]               [***]  
Total Allocation
    [***]       [***]       [***]       [***]  

         
Changes to center 60-71 Controllables
       
Remove Inventory Used (AC620)
    [***]  
Remove Inventory Used Valuation Adjustment
    [***]  
Remove Inventory Used-Clin
    [***]  
Remove Inventory Used-Adjs
    [***]  
Remove Standard Cost Applied
    [***]  
Remove Work Order Scrap-Diag
    [***]  
 
    [***]  

***Confidential Treatment Requested.

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

 

Schedule 5.3.1

Accrued eSAS 2 Development Costs

         
2002 Summary
       
CBT Grand Total Hours
  [...***...]    
CBT Avg Monthly FTE
  [...***...]    
CBT cost @[...***...]/FTE
  [...***...]    
GP cost @ [...***...]/FTE
  —      

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

         
2003 Summary
       
CBT Grand Total Hours
  [...***...]    
CBT Avg Monthly FTE
  [...***...]    
CBT cost @ [...***...]/FTE
  [...***...]    
GP cost @ [...***...]/FTE
  [...***...]    

       
Total Project
  [...***...]      

         
6 Months 2004 Summary
       
CBT Grand Total Hours
  [...***...]    
CBT Avg Monthly FTE
  [...***...]    
CBT cost @ [...***...]/FTE
  [...***...]    
GP cost @ [...***...]/FTE
  [...***...]    
Total Project
  [...***...]      

         
Total Accrued Development Cost
  [...***...]    

***Confidential Treatment Requested

 

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

 

Schedule 6.4

Sales Authorization Letter

[DATE]

[NAME OF THIRD PARTY MANUFACTURER]

Dear Sir or Madam:

Chiron Corporation (“Chiron”) and [NAME OF THIRD PARTY MANUFACTURER] entered
into that certain [NAME OF AGREEMENT] dated as of ______ (the “Chiron/[NAME OF
THIRD PARTY MANUFACTURER] Agreement”) for the manufacture of eSAS 2 instruments
for use in blood screening (the “eSAS 2 Instruments”). As used herein, “blood
screening” means the nucleic acid probe based testing of human blood, plasma or
other human blood products intended for transfusion or other administration to
humans for purpose of detecting the presence or absence of viral organisms, and
expressly excludes diagnostic testing. Chiron and Gen-Probe Incorporated
(“Gen-Probe”) are parties to certain agreements pursuant to which, among other
things, Chiron has granted Gen-Probe the right to purchase certain eSAS 2
Instruments directly from NAME OF THIRD PARTY MANUFACTURER.

Accordingly, Chiron therefore authorizes [NAME OF THIRD PARTY MANUFACTURER] to:
accept orders from, manufacture for and deliver to Gen-Probe eSAS 2 Instruments
under the financial terms and conditions contained in the Chiron/[NAME OF THIRD
PARTY MANUFACTURER] Agreement.

Sincerely,

Chiron Corporation

 

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

 

Schedule 2.5.2

eSAS 2 Regulatory Strategy

(GEN-PROBE LOGO) [a08166a0816600.gif]

INTEROFFICE MEMORANDUM

To: [...***...]

Date: May 30, 2003

From: [...***...]

Copies: [...***...]

Subject: eSAS 2.0 Regulatory Strategy and Contract Requirements

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

This memo is to document the Regulatory strategy and expectations for eSAS 2.0,
and address both U.S. and International submission requirements.

[...***...]

This concludes the Regulatory Strategy.

***Confidential Treatment Requested