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EXHIBIT 10.13
 
FINAL
 
LICENSE AGREEMENT
 
This License Agreement (“Agreement”) is entered into as of January 30, 2009 (the
“Effective Date”) by and between Health Discovery Corporation, a Georgia
corporation having its principal place of business at 2 East Bryan Street, Suite
#601, Savannah, GA 31401 (“HDC”), and Abbott Molecular Inc., a Delaware
corporation having its principal place of business at 1300 East Touhy Avenue,
Des Plaines, IL 60018 and its Affiliates (as defined below) (collectively
“Abbott”).
 
WHEREAS, HDC and Abbott each desires to establish a collaboration and license
relationship between them.
 
NOW, THEREFORE, the parties agree as follows:
 
Article 1 – Definitions
 
The following capitalized terms shall have the following meanings:

   
1.1
          “Affiliate” of a party shall mean a corporation or other business
entity controlled by, controlling or under common control with, such party. For
this purpose, control of a corporation or other business entity shall mean
direct or indirect beneficial ownership of more than fifty percent (50%) of the
voting interest in, or a greater than fifty percent (50%) interest in the equity
of, such corporation or other business entity.
   
1.2
          “Analyte Specific Reagent” or “ASR” shall mean the finished, packaged
and labeled assembly of a Licensed Product in the form of assay components,
purchased by commercial laboratories to test for the detection and/or
quantification of an analyte under the United States Code of Federal
Regulations, Title 21, Paragraphs 809.10, 809.30, 864.4010 and 864.4020.
   
1.3
          “Change of Control” means (a) the acquisition of a party by another
entity by means of any transaction or series of related transactions (including,
without limitation, any reorganization, merger or consolidation) that results in
the transfer of fifty percent (50%) or more of the voting securities of such
party, (b) a sale of all or substantially all of the assets of a party, or (c)
the acquisition by any person or other entity (other than a party and its
Affiliates or employee benefit plans), including any person or group as defined
in Paragraphs 3(a)(9) and 13(d), 14(d) and Rule 13d-5 of the Exchange Act of
more than fifty percent (50%) of the voting securities of such party; provided,
however, that no Change in Control shall occur by reason of (i) an initial
public offering, or (ii) a reorganization, merger, consolidation or sale, the
sole purpose of which is to change the state of a party’s incorporation or to
create a holding company that will be owned in substantially the same
proportions by the persons who held such party’s securities immediately before
such transaction.

 
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1.4
            “Collaboration” shall mean that term as it is defined in Paragraph
2.1.
     
1.5
            “Collaboration Term” means the time period commencing upon the
Effective Date and continuing until the first to occur of the date three (3)
years after such date or completion of the research contemplated by the FDA
Submission Plan.
     
1.6
            “Confidential Information” shall mean the terms and conditions of
this Agreement, and all information developed by the parties pursuant to the
Collaboration and all other disclosed by one party to the other in writing and
clearly marked “Confidential” or, if communicated orally, specified as
confidential at the time of disclosure and confirmed in writing within thirty
(30) days after such oral communication and clearly marked “Confidential”;
provided, however, that Confidential Information shall not include information
that:
         
          1.6.1          is already in the public domain, or on or after the
Effective Date comes into the public domain other than as a result of the
wrongful disclosure by either party to this Agreement;
         
          1.6.2          is already known to the recipient as evidenced by
prior-dated written documents already in the recipient’s possession, which
documents were not furnished by the other party to this Agreement;
         
          1.6.3          is disclosed to the other party by any third party
having the right to make that disclosure;
         
          1.6.4          is required by law to be disclosed in connection with
the registration or filing with, or approval or certification from any
governmental agency or body including, without limitation, the United States
Food and Drug Administration, provided that the information is not the inventive
subject matter of an unpublished patent application, or is required to be
disclosed to comply with the terms of contractual relationships and provided
that each party undertakes to use its best endeavors to maintain to the maximum
extent possible and to make any third parties to whom such information is
disclosed aware of the confidentiality of such information; or
         
          1.6.5          can be proven to have been independently developed by
the party receiving the information under this Agreement without the aid,
application or use in any way of Confidential Information received from the
disclosing party.
     
1.7
            “FDA Submission Plan” shall mean the plan for the Collaboration
attached hereto as Exhibit C.      
1.8
            “Field” shall mean the use of a molecular diagnostic assay using the
Licensed Prostate Markers in in vitro diagnostics relating to prostate cancer,
including the detection of the presence or risk of prostate cancer, or the
selection of therapy, or in a Research Application related to prostate cancer.

 
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1.9
            “First Commercial Sale” or “FCS” shall mean the first time, except
in the context of a clinical trial, Abbott transfers title of Licensed Product
to an independent third party for monetary consideration or provides a
Diagnostic Test Service using Licensed Product to an independent third party for
monetary consideration.
     
1.10
            “IVD” shall mean an assay which claims an intended use, and is
approved by a governmental regulatory body for sale, as an in vitro diagnostic
kit, and which is not an ASR or labeled for “Research Use Only”, including an
assay that is CE Marked.
     
1.11
            “Joint Inventions” shall mean all new inventions jointly made, by
the parties as part of the Collaboration.
     
1.12
            “Joint Patent Rights” shall mean all patents and/or patent
applications for Joint Inventions.
     
1.13
            “Know-How” shall mean, without limitation, all trade secrets and
technology, as well as non-patented, non-public inventions, improvements,
discoveries, formulae, processes, data, and reagents discovered or developed by
HDC, and owned or legally acquired by or licensed to HDC without restriction on
dissemination and licensing, before or during the Collaboration Term, whether
patentable or not, and which relate to the Field and the use of Licensed
Prostate Markers in the Field.
     
1.14
            “Laboratory Developed Test” shall mean the provision of test results
from use of a Licensed Product or Licensed Products to assay a patient urine or
prostate biopsy sample, to be entered into the medical history record of the
patient providing the urine or prostate biopsy sample.
     
1.15
            “Licensed Product(s)” shall mean finished products consisting of one
or more nucleic acid detection reagents for the assay of one or more Prostate
Marker(s) for use in the Field, the manufacture, use, sale or importation of
which, but for the rights granted herein, would infringe a Valid Claim within
Patent Rights.
     
1.16
            “Net Sales” shall mean:
         
          1.16.1          The amount charged for Licensed Product to a
non-Affiliated third party, less a lump sum of five percent (5%) to cover all
usual deductions, such as cash discounts allowed and taken; amounts for
transportation, insurance or shipping; amounts repaid, credited or rebated for
rejections or returns of Licensed Product; and taxes and duties. Net Sales shall
not include Licensed Products used for clinical trials, research, evaluation of
customer acceptance, charitable or humanitarian donations, commercial samples or
other noncommercial uses as long as Abbott receives no financial compensation
for such use or donation.

 
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          1.16.2          If the price of Licensed Product sold by Abbott or its
Affiliates is increased to include an amount to cover the amortized cost of an
instrument system or other equipment or the cost of supplying maintenance for
such system or equipment under a Reagent Agreement Plan, Reagent Rental Plan or
other successor similar plan (collectively referred to as “RAP”), the Net Sales
for such Licensed Product shall be reduced an additional ten percent (10%).
         
          1.16.3          In the event that Abbott or its Affiliates sells
Licensed Product to a third party together with one or more other products (each
a “Combination Product”), the Net Sales with respect to such Combination Product
shall mean the price of such Combination Product billed to customers, less the
allowances and adjustments above, multiplied by a percentage equal to the
fraction A/(A+B), where A is the stand-alone market value of the Licensed
Product and B is the stand-alone market value of the other product(s).
         
          1.16.4          The amount charged for Laboratory Developed Test to a
non-Affiliated third party, less (i) any shortfall in the reimbursement amount
from the amount charged, and (ii) a lump sum of five percent (5%) to cover all
usual deductions, such as cash discounts allowed and taken; amounts for
transportation, insurance or shipping; amounts repaid, credited or rebated for
rejections or returns of Licensed Product; and taxes and duties. Net Sales shall
not include Laboratory Developed Tests used for clinical trials, research,
evaluation of customer acceptance, charitable or humanitarian donations,
commercial samples or other noncommercial uses as long as Abbott receives no
direct financial compensation for such use or donation.
     
1.17
            “Patent Rights” shall mean:
         
          1.17.1          all patent(s) and/or patent applications listed in
Exhibit A hereto that are owned or controlled by HDC as of the Effective Date
that are applicable to the use of the Licensed Prostate Markers in the Field;
         
          1.17.2          any additional patent and/or patent application(s)
which, after the Effective Date and during the Collaboration Term, are solely
owned or controlled by HDC and are free to be licensed and/or sublicensed by HDC
and that are applicable to the Field (for the avoidance of doubt, such
additional patent and/or patent application(s), including, without limitation,
(a) patents and applications acquired or licensed by HDC from third parties that
are applicable to the Field, and (b) such patents and applications covering New
Inventions owned solely by HDC that are applicable to the Field; and

 
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          1.17.3          any and all divisions, continuations,
continuations-in-part, renewals, reissues, extensions and supplemental
protection certificates of any of the patent applications and patents described
in the foregoing clauses of this Paragraph 1.17.
     
1.18
            “Licensed Prostate Markers” shall mean one or more of the nucleic
acid detection targets identified in Exhibit B that are present in a urine or
prostate biopsy sample useful for the diagnostic identification, classification,
therapeutic response prediction or monitoring of prostate cancer.
     
1.19
            “Research Application” shall mean use of a Licensed Product or
component thereof for research and clinical research applications. For purposes
herein, the performance of a clinical trial using a Licensed Product during the
Collaboration shall be deemed a Research Application.
     
1.20
            “FDA Submission Plan” shall mean the plan for the Collaboration
attached hereto as Exhibit C.
   
1.21
            “RUO” shall mean “research use only”, as defined in United States
Code of Federal Regulations, Title 21, Paragraph 809.10(c)(2)(i).
   
1.22
            “Territory” shall mean all the countries in the world.
   
1.23
            “Utility” means the application for a Licensed Product, being (a)
RUO, (b) an ASR, or (c) an IVD for any medical utility.
   
1.24
            “Valid Claim” shall mean any claim of an issued and unexpired patent
within Patent Rights or Joint Patent Rights exclusively licensed to Abbott,
which claim has not been held invalid or unenforceable by a non-appealable
decision of a court or governmental agency having competent jurisdiction.
     
Article 2 - The Collaboration, Materials and Data
     
2.1
            Collaboration. During the Collaboration Term and pursuant to the FDA
Submission Plan, Abbott and HDC agree to collaborate on the performance of the
necessary validation studies and clinical trial(s), and the preparation of and
submission to the U.S. Food and Drug Administration (“FDA’) of either a 510(k)
or PMA application seeking the necessary authorization from the FDA for the U.S.
marketing, use and sale with associated claims of medical utility of a prostate
cancer diagnostic assay (the “Collaboration”). For purposes of the
Collaboration, the parties acknowledge and agree that:
         
          2.1.1          The FDA Submission Plan specifies the responsibilities
of the parties for the clinical trial activities, and may be modified only by a
writing executed by both parties; and

 
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          2.1.2          Initially, Abbott will be solely responsible for the
preparation and submission of the 510(k) or PMA application to the FDA. Abbott
will provide a draft of the submission to HDC for its comment at least thirty
(30) days before the actual filing with the FDA. However, the parties may agree
in writing to a change in the allocation of responsibility. In this event, any
such writing will modify the FDA Submission Plan to establish each party’s
responsibilities and whether any additional time or funding is required.
       
During the Collaboration Term, HDC agrees to exclusively collaborate with Abbott
on the performance of the clinical trials and submission to the FDA.
     
2.2
            Exchange of Materials. During the Collaboration Term, HDC will
provide materials (“HDC Materials”), including, without limitation, test reagent
samples and clinical samples, to Abbott, and Abbott will provide materials,
including, without limitation, test reagents and clinical samples necessary to
complete the Collaboration (collectively, “Abbott Materials”) to HDC for the
purposes described in the FDA Submission Plan. Each shall do so at its sole cost
and expense. The parties shall comply with all applicable laws, rules and
regulations in the packaging and shipment of the HDC Materials and Abbott
Materials, as applicable (collectively, “Materials”). Abbott Materials are and
shall remain the sole property of Abbott. HDC Materials are and shall remain the
sole property of HDC. Each party shall use Materials of the other party solely
for the Collaboration and shall not provide them to any third party for any
purpose without the other party’s prior written consent. Materials shall not be
used for purposes of reporting of patient results, except in the course of a
clinical trial whose protocol expressly provides for such reporting.
   
2.3
            Additional and New Prostate Markers. Abbott and HDC may each
separately bring additional prostate markers (“Additional Prostate Markers”)
into the Collaboration for investigation in combination with one or more of the
Licensed Prostate Markers identified in Exhibit B. The parties may also decide
to collaborate on discovery of new prostate markers (“New Prostate Markers”),
with either Abbott or HDC providing urine or tissue samples that may exhibit
such New Prostate Markers. Any such New Prostate Markers discovered in the
Collaboration will be jointly owned by Abbott and HDC and subject to the
provisions of Paragraphs 8.5 and 8.6 hereof.
   
2.4
            Disclosure of Data. All data and other relevant information
generated by a party pursuant to the Collaboration shall be promptly and fully
disclosed to the other party, and shall be freely usable for internal use and
any regulatory submission by the other party subject to the confidentiality
provisions of Article 7 and intellectual property provisions of Article 8.
   
2.5
            Reporting. At regular intervals to be determined and documented by
the parties, each party shall submit progress and other written status reports
as reasonably requested by the other party. Additionally, the parties shall hold
regular meetings, alternating between their respective headquarters, at least
quarterly, to review and discuss such progress.

 
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Article 3 - Payments
     
3.1
            Signing Fee. Promptly after execution of this Agreement by both
parties, Abbott shall pay to HDC a one-time Signing Fee of One-Hundred-Thousand
U.S. Dollars ($100,000.00). This Signing Fee shall be non-refundable and
non-creditable towards royalties.
     
3.2
 
Phase 1 and 2 Completion Milestone Fee.
         
                    3.2.1          Upon completion of both Phases 1 and 2
described in the FDA Submission Plan, Abbott shall pay to HDC a one-time Phase 1
and 2 Completion Milestone Fee of Two-Hundred-Fifty-Thousand U.S. Dollars
($250,000.00). This Phase 1 and 2 Completion Milestone Fee shall be
non-refundable and non-creditable towards royalties.
     
3.3
            Phase 3 and 4 Completion Milestone Fee. Upon completion of both
Phases 3 and 4 described in the FDA Submission Plan, Abbott shall pay to HDC a
one-time Phase 3 and 4 Completion Milestone Fee of Two-Hundred-Fifty-Thousand
U.S. Dollars ($250,000.00). This Phase 3 and 4 Completion Milestone Fee shall be
non-refundable and non-creditable towards royalties.
   
3.4
            FDA Submission Milestone Fee. Promptly after the filing by Abbott
with the FDA of either a 510(k) or PMA submission, Abbott shall pay to HDC a
one-time FDA Submission Fee of Five-Hundred-Thousand U.S. Dollars ($500,000.00).
This Fee shall also be irrevocable and non-creditable against any royalty
obligation.
   
3.5
            FDA Approval Fee. Promptly after the receipt by Abbott of a written
notification from the FDA of the approval of the applicable 510(k) or PMA
submission, Abbott shall pay to HDC a one-time FDA Approval Fee of
Five-Hundred-Thousand U.S. Dollars ($500,000.00). This Fee shall also be
irrevocable and non-creditable against any royalty obligation.
   
Article 4 - License Terms and Royalty.
     
4.1
 
License Grant.
         
4.1.1.          Exclusive License: HDC hereby grants Abbott an exclusive,
worldwide, royalty-bearing license and right to make, have made, use, sell and
import Licensed Products, with the right to sublicense, under Patent Rights,
under HDC’s interest in Joint Patent Rights and Know-How. The exclusive license
granted herein shall be exclusive even as to HDC with respect to the making,
have made, sale and import of Licensed Products.

 
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                     4.1.2 Co-Exclusive License: HDC hereby grants Abbott a,
co-exclusive, worldwide, royalty-bearing license for the performance of
Laboratory Developed Tests, including the right to make and have made and import
Licensed Products used in the performance of Laboratory Developed Tests, which
co-exclusive license will be shared with the co-licensees identified in Exhibit
D hereto. For as long as this Agreement remains in effect, apart from the
identified co-licensees, HDC shall not retain nor have any right to grant
further sublicenses.
     
4.2
 
Royalty.
         
                     4.2.1 For each Licensed Product that is sold by Abbott,
Abbott shall pay HDC a running royalty equal to:
         
          (a)      For Licensed Products with medical utility claims solely for
use on prostate tissue samples, ten percent (10%) of Abbott’s Net Sales of such
Licensed Product; and
         
          (b)      For Licensed Products with medical utility claims solely for
use on urine samples, five percent (5%) of Abbott’s Net Sales of such Licensed
Product
         
                    4.2.2 For each Laboratory Developed Test that is sold by
Abbott, Abbott shall pay HDC:
         
          (a)      a running royalty equal to ten percent (10%) of Abbott’s Net
Sales of such Laboratory Developed Test performed on a prostate tissue; or
         
          (b)      a running royalty equal to five percent (5.0%) of Abbott’s
Net Sales of such Laboratory Developed Test performed on a urine sample.
         
                    4.2.3 Abbott shall make all such payments in respect of
running royalties within forty-five (45) days after the end of each calendar
quarter following the FCS.
     
4.3
            Sales Milestones. Upon the sale by Abbott of the specified number of
Licensed Products with a medical utility claim for use on a urine sample, Abbott
agrees to pay HDC, promptly after reaching each Sales Milestone:
         
          (a)      1st Sales Milestone: After the sale of Fifty-thousand
(50,000) tests in a calendar year, a one-time 1st Sales Milestone Fee of
Two-Hundred-Thousand U.S. Dollars ($200,000.00);
         
          (b)      2nd Sales Milestone: After the sale of Two-hundred-thousand
(200,000) tests in a calendar year, a one-time 2nd Sales Milestone Fee of
Seven-Hundred-Fifty-Thousand U.S. Dollars ($750,000.00); and

 
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          (c)      3rd Sales Milestone: After the sale of Five-hundred-thousand
(500,000) tests in a calendar year, a one-time 3rd Sales Milestone Fee of
One-Million-Five-Hundred-Thousand U.S. Dollars ($1,500,000.00);
       
The fees payable under Paragraph 4.3 shall not be creditable against the running
royalty obligation of Paragraph 4.2. Abbott shall make all such payments under
Paragraph 4.2.3 within forty-five (45) days after the end of each calendar
quarter in which the Sales Milestone is reached.
     
4.4
            Required Third Party Licenses. In the event one or more third party
licenses are required, in Abbott’s reasonable judgment, for Abbott to
commercialize a Licensed Product or Laboratory Developed Test, then Abbott may
reduce the running royalty otherwise payable to HDC for such Licensed Product
under Paragraph 4.2.1 and 4.2.2 by the percentage amount of any running royalty
payable by Abbott under such third-party license; provided, that such reduction
may not be more than fifty percent (50%) of the rates specified in Paragraphs
4.2.1 and 4.2.2.
     
Article 5- Warranties and Representations
     
5.1
 
HDC. HDC warrants and represents to Abbott that:
         
                    5.1.1 to the best of its knowledge, it has the full legal
right to grant Abbott the licenses to Patent Rights provided herein;
         
                    5.1.2 during the Collaboration Term, HDC will not
collaborate with any third party with respect to any portion of the
Collaboration or the development of any IVD assay covered by Patent Rights;
         
                    5.1.3 to the best of its knowledge, no third party is
challenging in any jurisdiction the validity of any of the Patent Rights;
         
                      5.1.4 Exhibit A lists all patent(s) and/or patent
applications owned or controlled by HDC as of the Effective Date that are
applicable to the Field;
         
                    5.1.5 it has not received any written or oral communication
asserting that the HDC 4-gene expression assay for prostate cancer to be tested
in Phase 1 of the Validity Studies of the FDA Submission Plan, infringes any
intellectual property right, including any patent right, owned or controlled by
any third party;
         
                    5.1.6 it has the corporate power and authority to enter into
this Agreement and the person executing this Agreement on behalf of HDC has been
authorized to do so;

 
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                    5.1.7 the terms of this Agreement do not conflict with or
violate any contract binding upon HDC; and
         
                      5.1.8 it has not granted and will not grant to any third
party, including the co-exclusive licensees listed in Exhibit D, any rights
under Patent Rights to make, have made, import or sell Licensed Products.
     
5.2
            Abbott. Abbott warrants and represents to HDC that it has the
corporate power and authority to enter into this Agreement, that the person
executing this Agreement on behalf of Abbott has been authorized to do so, and
that the terms of this Agreement do not conflict with or violate any contract
binding upon Abbott.
     
5.3
            Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE TO
THE OTHER UNDER ANY CIRCUMSTANCES FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL OR
SPECIAL DAMAGES, INCLUDING LOST PROFITS, RESULTING FROM THE PARTY’S PERFORMANCE
OR FAILURE TO PERFORM UNDER THIS AGREEMENT.
     
Article 6 - Term and Termination
     
6.1
            Term. This Agreement shall become effective on the Effective Date
and shall terminate upon the expiration of the last to expire of Patent Rights
licensed hereunder, unless sooner terminated as provided herein.
     
6.2
            Termination for Cause. Either HDC or Abbott may unilaterally
terminate this Agreement upon thirty (30) days written notice to the other in
the event of:
         
                      6.2.1 the non-terminating party’s insolvency; or
         
                    6.2.2 a material breach of the Agreement by a party, which
breach is not cured within thirty (30) days of notice of such breach by the
other party.
     
6.3
            Abbott’s Termination Right.  Abbott may unilaterally and without
cause terminate this Agreement upon ninety (90) days written notice to HDC.
     
6.4
            HDC Termination Right. HDC may unilaterally terminate this Agreement
upon one-hundred-eighty (180) days written notice to Abbott, which is given
after Abbott has given written notice to HDC that the Completion Standards of
Phase 2 were not met and that Abbott is not proceeding with Phase 3 and 4.
     
6.5
            Survival. Paragraph 5.3, Articles 7, 8, 9 (subject to Paragraph 9.4)
and 10 shall survive termination of this Agreement.

 
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Article 7 - Confidential Information
   
7.1
            Confidential Treatment. A party receiving the Confidential
Information (“Receiving Party”) of the other party (“Disclosing Party”) agrees
to hold that Confidential Information in trust and confidence for Disclosing
Party. A Receiving Party will not use Confidential Information other than for
the purposes of this Agreement. Each party shall, to the extent applicable
hereunder, provide the other party with patient information as allowed by law
and the Receiving Party shall maintain the confidentiality of all such patient
information as required by law.
   
7.2
            Limitation of Dissemination. A Receiving Party will only disclose
Confidential Information received hereunder, whether oral or in writing, in
tangible, intangible or electronic format, to those persons within the Receiving
Party’s organization or its agents (a) who have a need to know the Confidential
Information in order to perform the Receiving Party’s obligations under this
Agreement, (b) who have been informed of the confidential nature of the
Confidential Information, and (c) who are obligated to maintain the
confidentiality of the Confidential Information consistent with the terms of
this Agreement.
   
7.3
            Standard of Care. A Receiving Party will treat the Confidential
Information of the Disclosing Party with the same care as the Receiving Party’s
own proprietary information of like kind.
   
7.4
            Handling of Information. A Receiving Party shall not (a) reverse
engineer or otherwise exploit the Confidential Information in violation of this
Agreement, and (b) remove or export from the United States or re-export any of
such Confidential Information or any direct product thereof except in compliance
with and with all licenses and approvals required under applicable export laws
and regulations, including, without limitation, those of the U.S. Department of
Commerce.
   
7.5
            Compelled Disclosure. In the event that a Receiving Party is ordered
by a court of competent jurisdiction or is compelled by law, order or regulation
of a governmental agency or by subpoena to disclose all or any portion of the
Confidential Information of the Disclosing Party to a third party, the Receiving
Party shall give the Disclosing Party prompt notice of such order or subpoena,
together with a copy thereof, so that the Disclosing Party may seek an
appropriate protective order, if applicable. If, in the absence of a protective
order, the Receiving Party is nonetheless compelled to disclose Confidential
Information, the Receiving Party may disclose such information without liability
hereunder; provided, however, that the Receiving Party gives the Disclosing
Party notice of the Confidential Information to be disclosed as far in advance
of its disclosure as is practicable and the Receiving Party uses its best
efforts to obtain assurances that confidential treatment will be accorded to
such Confidential Information.

 
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7.6
            Return of Confidential Information. Upon termination of this
Agreement, the Receiving Party will return to the Disclosing Party or destroy
all written Confidential Information, as well as any copies thereof, and will
promptly destroy all memoranda, notes and other writings (whether in tangible,
intangible or electronic format) prepared by the Receiving Party or on the
Receiving Party’s behalf based upon the Confidential Information of the
Disclosing Party, except that the Receiving Party may retain one (1) copy of
such Confidential Information for archival purposes, which copy shall be subject
to obligations set forth herein. The Receiving Party shall also provide the
Disclosing Party with a certificate of an appropriate representative of the
Receiving Party to the effect that the Receiving Party has fully complied with
the requirements of this Paragraph.
   
7.7
            Injunctive Relief. Receiving Party acknowledges that the
Confidential Information of Disclosing Party has been developed by Disclosing
Party with substantial effort and at substantial cost and therefore has value to
Disclosing Party, and that the breach of any of the provisions of this Agreement
could cause Disclosing Party irreparable injury for which no adequate remedy at
law exists. Accordingly, Disclosing Party shall have the right, in addition to
any other rights it may have to seek from any court having jurisdiction a
temporary or permanent restraining order or injunction restraining or enjoining
Receiving Party from any violation of this Agreement.
   
Article 8 - Inventions
   
8.1
            Ownership of Existing Inventions. Existing inventions and
technologies of HDC and Abbott as of the Effective Date (including, without
limitation, Licensed Prostate Markers and Additional Prostate Markers that each
separately bring to the Collaboration) shall respectively remain the sole and
separate property of HDC and Abbott and the ownership thereof shall not be
affected by this Agreement. Except for the license granted Abbott hereunder,
neither party shall have any claims to or rights in such existing inventions and
technologies of the other party.
   
8.2
            Ownership of New Inventions. Any new invention, development or
discovery relating to the Field or New Prostate Markers for the Field conceived,
made or reduced to practice by either party as part of the Collaboration, the
FDA Submission Plan or with the use of Materials of the other party (each a “New
Invention”) shall be promptly disclosed in writing to the other party. Each
party shall retain sole ownership in each Invention made solely by that party.
   
8.3
 
Patent Prosecution and Maintenance.
         
                    8.3.1 HDC shall pay all costs associated with the filing,
prosecution and maintenance of patent applications and issued patents within the
Patent Rights.

 
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                    8.3.2 HDC shall notify Abbott of any change in status of
patents and/or patent applications listed in Exhibit A and of the filing of any
patent applications within the scope of the Patent Rights within sixty (60) days
of any such change. HDC shall update Exhibit A at least annually to reflect any
such changes. In the event any of the Patent Rights shall become involved in an
opposition or interference proceeding, HDC shall manage the proceeding, at its
own expense, and shall keep Abbott informed of the status of any such proceeding
and may consider Abbott’s views in formulating HDC’s strategy in the proceeding.
         
                    8.3.3 For New Inventions owned solely by HDC, HDC shall
prepare, apply for and maintain issued patents for such New Inventions
throughout the Territory in such countries and in such manner as HDC shall
determine after reasonable consideration of the views of Abbott.
         
                    8.3.4 If HDC elects not to file a patent application for a
New Invention solely owned by HDC or to abandon an existing issued patent or
pending patent application within the Patent Rights or do so in any particular
jurisdiction within the Territory, HDC shall notify Abbott within a time
sufficient for Abbott to familiarize itself with the case and make a decision
before abandoning or failing to pursue the relevant issued patent or pending
application. Abbott shall have thirty (30) days from the date of such notice
within which it may notify HDC that Abbott has elected to assume the obligation
and costs of filing and prosecuting or maintaining such patent application or
issued patent. If Abbott elects to assume such obligation and costs, HDC shall
assign its rights in the relevant patent application or issued patent to Abbott
for only the affected jurisdiction(s); provided, however, that such assignment
shall be coupled with the grant by Abbott to HDC of a fully-paid, nonexclusive
license, without the right to sublicense, in the assigned patent application or
issued patent for internal research purposes only. Any patent application or
issued patent assigned to and maintained by Abbott provided in this subparagraph
shall not be considered Patent Rights under this Agreement and Abbott shall have
no royalty or fee obligations to HDC for Abbott’s commercial use under such
patent applications or issued patents.
     
8.4
 
Joint Inventions.
         
                    8.4.1 Each Joint Invention shall be jointly owned by the
parties and each party shall have an undivided interest in such Joint Inventions
and any Joint Patent Rights resulting therefrom, including the rights to
commercialize Joint Inventions and grant licenses to third parties under the
Joint Patent Rights. Inventorship for Joint Patent Rights shall be determined in
accordance with U.S. patent law.

 
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                    8.4.2 Neither party will file applications for U.S. or
foreign patents for a Joint Invention without first consulting the other party.
In the event that both parties agree to file an application for a patent for a
Joint Invention, the parties will share equally all costs associated with
filing, prosecuting, and maintaining Joint Patent Rights directed to any Joint
Invention. The parties will mutually agree which of them will be responsible for
filing, prosecution, and maintenance of a particular patent application or
patent based upon the relative contribution of each party to the related Joint
Invention.
         
                    8.4.3 The filing party shall make commercially reasonable
efforts to minimize the cost of the filing and prosecution of patent
applications for Joint Inventions and neither shall charge the other for
overhead costs associated with prosecution undertaken by employed, in-house
patent counsel of the filing party. The filing party shall promptly provide the
non-filing party with copies of papers regarding the prosecution of such
applications (including, without limitation, all patent office actions, any
response to any office action affecting the scope or nature of the Joint
Invention) and will use commercially reasonable efforts to consult with the
non-filing party regarding its interest in the application and seek claims
reasonably consistent with the interests of the non-filing party prior to making
any such claims or responding to any office action relating thereto.
         
                    8.4.4 The non-filing party agrees to provide all reasonable
assistance and cooperation to the filing party, including the execution of
documents.
         
                    8.4.5 Either party may elect at any time not to participate
in the filing of a patent application or maintaining an issued patent for a
Joint Invention by giving notice to the other and assigning all of its rights in
such Joint Invention (including, without limitation, all related Joint Patent
Rights) to the other party. The party making such election shall have no further
obligations to undertake or underwrite the cost, as the case may be, to
prosecute, maintain, and enforce any such Joint Patent Right, except as to costs
and expenses that have accrued prior to such assignment.
         
                    8.4.6 Each party will bring to the attention of the other
party any third party infringement of any patent for a Joint Invention of which
it becomes aware. Neither party will enforce any U.S. or foreign patents for a
Joint Invention against a third party without the prior written consent of the
other party, which consent shall not be unreasonably withheld or delayed. In the
event that both parties agree to enforce a patent for a Joint Invention, the
parties will use good faith efforts to determine which party will be responsible
for enforcement of such Joint Patent Rights against such third party infringers
and apportion the costs of enforcement based upon the commercial interest of
each party to the infringing activity. The parties will apportion any recoveries
based upon their contributions to the cost of enforcing such patent.

 
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                    8.4.7 Neither party will grant a license to any third party
to any U.S. or foreign patents for a Joint Invention without the prior written
consent of the other party. In the event that either party grants a license to a
patent for a Joint Invention, the parties will share equally in the gross
revenues, including, but not limited to, license fees and royalties, realized
for the license to the Joint Invention by the licensing party. Payments shall be
made within forty-five (45) days after the end of each calendar quarter and
accompanied by a report, setting forth the gross amounts received from the
license). Upon reasonable request, the reporting party shall provide the
requesting party copies of applicable reports due from the license under the
license relating to royalties payable to the licensor party. Such reports shall
constitute the licensor party’s Confidential Information and shall be returned
to the licensor party after the requesting party has had a reasonable
opportunity to review the reports.
         
                    8.4.8 If after good faith negotiations the parties cannot
reach agreement as to any dispute regarding Joint Inventions and Joint Patent
Rights, the dispute may be submitted to Alternative Dispute Resolution as
provided for in Paragraph 10.12.
     
Article 9- Indemnification
     
9.1
            HDC. HDC shall indemnify, defend and hold harmless Abbott and its
Affiliates, employees, officers, directors and agents from and against any suit,
proceeding, claim, liability, loss, damage, costs or expense, including
reasonable attorneys’ fees, which Abbott may hereinafter incur, suffer, or be
required to pay arising out of or resulting from (a) any breach by HDC of the
representations and warranties set forth in Paragraph 5.1 of this Agreement, and
(b) any injury or other harm caused solely by HDC in carrying out its
obligations pursuant to the Collaboration.
   
9.2
            Abbott. Abbott shall indemnify, defend, and hold harmless HDC and
its Affiliates, employees, officers, directors and agents from and against any
suit, proceeding, claim, liability, loss, damage, costs or expense, including
reasonable attorneys’ fees, which HDC may hereinafter incur, suffer or be
required to pay arising out of or resulting from (a) any breach by Abbott of the
representations and warranties set forth in Paragraph 5.2 of this Agreement, and
(b) any injury or other harm caused solely by Abbott in carrying out its
obligations pursuant to the Collaboration.
   
9.3
            Notice and Cooperation. With respect to any claim for which a party
seeks indemnification from the other hereunder, the party seeking
indemnification shall provide prompt notice to the other of the claim for which
indemnification is sought, shall provide reasonable cooperation and assistance
to the indemnifying party in the defense of such claim, and shall not settle or
otherwise compromise such claim without the indemnifying party’s prior written
consent.

 
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FINAL

   
9.4
            Termination of Indemnification Obligations. All obligations for
indemnification on the part of parties hereto shall expire two (2) years from
the date of termination of this Agreement, except with respect to claims for
indemnification made prior to the end of such two (2) year period.
   
Article 10 - Miscellaneous
     
10.1
            Notices. Any notice, report, payment or statement required or
permitted under this Agreement shall be considered to be given in writing when
sent by certified mail (return receipt requested), postage prepaid, or faxed
then mailed, or if sent via courier and addressed to the party for whom it is
intended at its address of record. The record addresses of the parties are as
follows:

 

 
If to HDC:
Chairman and CEO
   
Health Discovery Corporation
   
2 East Bryan Street, Suite #601
   
Savannah, GA 31401
   
FAX: (912) 443-1989
         
with a copy to:
   
Procopio, Cory, Hargreaves & Savitch LLP
   
530 B Street, Suite 2100
   
San Diego, CA 92101
   
Fax: 619-744-5478
   
Attn: Eleanor M. Musick, Esq.
       
If to Abbott:
Director, Licensing & Business Development
   
Abbott Molecular Inc.
   
1300 E. Touhy Ave, 3C
   
Des Plaines, IL 60018-3315
   
Fax: (224) 361-7054
         
With a copy to:
         
VP, Domestic Legal
   
Abbott Laboratories
   
Dept. 322, Bldg. AP-6A
   
100 Abbott Park Road
   
Abbott Park, IL 60064-6049
   
Fax: (847) 938-1206
     
10.2
            Compliance with Laws. The parties will comply with applicable laws
in conducting the Collaboration, including, if applicable, any requirements for
Institutional Review Board approval.

 
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FINAL

   
10.3
            No Partnership. The parties do not intend to create any partnership,
joint venture or agency relationship under this Agreement.
   
10.4
            Use of a Party’s Name. Neither party will, without the prior written
consent of the other party, (a) use in advertising, publicity or otherwise, the
name of any employee or agent, any trade-name, trademark, trade device, service
mark, symbol, or any abbreviation, contraction or simulation thereof owned by
the other party, or (b) represent, either directly or indirectly, that any
product or service of the other party is a product or service of the
representing party or that it is made in accordance with or utilizes the
information or documents of the other party.
   
10.5
            Entire Agreement. This Agreement and all attached Exhibits contain
the entire agreement and understanding between the parties as to its subject
matter. It merges all prior discussions between the parties and neither party
will be bound by conditions, definitions, warranties, understandings, or
representations concerning such subject matter except as provided in this
Agreement or as specified on or subsequent to the Effective Date of this
Agreement in a writing signed by properly authorized representatives of the
parties. This Agreement may only be modified by written agreement duly signed by
persons duly authorized on behalf of both HDC and Abbott.
   
10.6
            Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and assigns. Notwithstanding
the foregoing, neither party may assign, delegate or otherwise transfer any of
its rights or obligations under this Agreement without the prior written consent
of the other party which will not be unreasonably withheld; provided, however,
that either party may transfer its rights and obligations without the consent of
the other party (a) upon a Change in Control, or (b) to any of its Affiliates
provided that the assigning party guarantees the performance of its Affiliate.
   
10.7
            Waiver. The failure of a party in any instance to insist upon the
strict performance of the terms of this Agreement will not be construed to be a
waiver or relinquishment of any of the terms of this Agreement, either at the
time of the party’s failure to insist upon strict performance or at any time in
the future, and such terms will continue in full force and effect.
   
10.8
            Severability. Each clause of this Agreement is a distinct and
severable clause and if any clause is deemed illegal, void or unenforceable, the
validity, legality or enforceability of any other clause or portion of this
Agreement will not be affected thereby.
   
10.9
            Governing Law. The rights and obligations of this Agreement will be
governed and construed in accordance with the laws of the State of Delaware,
United States of America (excluding and without regard to its or any other
jurisdiction’s rules concerning conflicts of laws).

 
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FINAL

   
10.10
            Titles. All titles and articles headings contained in this Agreement
are inserted only as a matter of convenience and reference. They do not define,
limit, extend or describe the scope of this Agreement or the intent of any of
its provisions.
   
10.11
            Alternative Dispute Resolution. The parties recognize that a dispute
as to certain matters (other than those specified in Exhibit E) may arise from
time to time during the term of this Agreement which relates to either party's
rights and/or obligations under this Agreement. The parties agree to resolve any
such dispute exclusively according to the provisions set forth in Exhibit E.
Notwithstanding the foregoing, any dispute between the parties relating to
patent validity and enforceability shall not be resolved under this Paragraph
10.11, nor by any other form of alternative dispute resolution, but rather by
litigation in U.S. Federal Court.
   
10.12
            Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
     
In witness thereof, HDC and Abbott have duly executed this Agreement as of the
Effective Date.

 
ABBOTT MOLECULAR INC.
HEALTH DISCOVERY CORPORATION
           
By 
/s/ Stafford O’Kelly
 
By 
/s/ Stephen D. Barnhill, M.D.
     
Stafford O’Kelly
   
Stephen D. Barnhill, M.D.
   
President
   
Chairman and CEO

 
Date
January 30, 2009
 
Date
January 30, 2009
 

18

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Exhibit A
 
Patent(s) or Patent Application(s)

         
Country/Region
 
Patent/ Publication/
Application No.
 
Title
U.S.
 
7,117,188
 
Method of Identifying Patterns in Biological Systems and Uses Thereof
U.S.
 
12/025,724
 
Biomarkers Upregulated in Prostate Cancer
U.S.
 
12/242,264
 
Biomarkers Overexpressed in Prostate Cancer
U.S.
 
12/327,823
 
Methods for Screening, Predicting and Monitoring Prostate Cancer
U.S.
 
12/349,437
 
Methods for Screening, Predicting and Monitoring Prostate Cancer
Australia
 
2002253879
 
Methods of Identifying Patterns in Biological Systems and Uses Thereof
Canada
 
2,435,254
 
Method of Identifying Patterns in Biological Systems and Uses Thereof
Europe
 
1459235
 
Method of Identifying Patterns in Biological Systems and Uses Thereof
Japan
 
2002-560076
 
Method of Identifying Patterns in Biological Systems and Uses Thereof
Europe
 
1828917
 
Biomarkers for Screening, Predicting, and Monitoring Prostate Disease

 
Exhibit A - 1

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

 
 
Exhibit B
 
LICENSED PROSTATE MARKERS

                         
Num
 
Archival
Unigene ID
 
Current
Unigene ID
 
Symbol
 
Affy probe
 
Pathway
 
Target Description
                           
12337
 
Hs.7780
 
Hs.480311
 
DKFZp564
 
212412_at
 
Unknown
 
  Consensus includes gb:AV715767 /FEA=EST /DB_XREF=gi:10797284 /DB_XREF=
est:AV715767 /CLONE=DCBATH02 /UG=Hs.7780 Homo sapiens mRNA; cDNA DKFZp564A072
(from clone DKFZp564A072)
                         
9373
 
Hs.21293
 
Hs.492859
 
UAP1/AGX-1
 
209340_at
 
Aminosugar
metabolism
 
  gb:S73498.1 /DEF=Homo sapiens AgX-1 antigen mRNA; complete cds. /FEA=mRNA
/PROD=AgX-1 antigen /DB_XREF=gi:688010 /UG=Hs.21293 UDP-N-acteylglucosamine
pyrophosphorylase 1 /FL=gb:AB011004.1 gb:NM_003115.1 gb:S73498.1
                         
876
 
Hs.79037
 
Hs.476231
 
HSPD1
 
200807_s_at
 
Mitochondrial
control of
apoptosis
 
  gb:NM_002156.1 /DEF=Homo sapiens heat shock 60kD protein 1 (chaperonin)
(HSPD1); mRNA. /FEA=mRNA /GEN=HSPD1 /PROD=heat shock 60kD protein 1 (chaperonin)
/DB_XREF=gi:4504520 /UG=Hs.79037 heat shock 60kD protein 1 (chaperonin)
/FL=gb:BC002676.1 gb:BC003030.1 gb:M34664.1 gb:M22382.1 gb:NM_002156.1
                         
1961
     
Hs.75432
 
IMPDH2
 
201892_s_at
 
de novo
guanine
nucleotide
biosynthesis
 
  gb:NM_000884.1 /DEF=Homo sapiens IMP (inosine monophosphate) dehydrogenase 2
(IMPDH2); mRNA. /FEA=mRNA /GEN=IMPDH2 /PROD=IMP (inosine monophosphate)
dehydrogenase 2 /DB_XREF=gi:4504688 /UG=Hs.75432 IMP (inosine monophosphate)
dehydrogenase 2 /FL=gb:J04208.1 gb:NM_000884.1

 
Exhibit B - 1

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

 
 
Exhibit C
 
FDA Submission Plan
 
Feasibility & Validation Studies

       
I.          Costs and Performance Site for Phase 1 and 2:
     
Abbott and HDC agree to have the experimental testing of Phase 1 and 2 performed
at *, with *, as the principal investigator. HDC is negotiating an experimental
testing agreement in place with * that will cover the performance of Phase 1 and
2. HDC warrants that it will have the right under the agreement with * to
transfer the data resulting from Phase 1 and 2 testing to Abbott and that Abbott
will have the royalty-free right to use the data in any regulatory submission.
Abbott shall be responsible for payment to HDC of *’s actual costs for
performance of the Phase 1 and 2 experimental testing, up to a maximum of
One-Hundred-Thousand Dollars ($100,000.00). HDC shall be responsible for payment
to * of all costs in excess of the One-Hundred-Thousand Dollars ($100,000.00).
Abbott shall make the payments to HDC within thirty (30) days of receipt of
invoice from HDC, and HDC shall make the payment to * for any excess costs
within thirty (30) days of receipt of notice from Abbott.

 
          II.          Phase 1 (expected duration 1.5 months): Develop an assay
for the 4-gene prostate cancer test in prostate cancer cells present in urine.

     
The objective of this phase of the study is to develop the HDC 4-gene expression
assay in urine. The assay may be done in up to four separate RT-PCR reactions or
in one or more multiplex groupings. The urine sediment containing the tumor
cells, obtained after centrifugation, will be extracted to obtain mRNA. Primers
and probes for real time, RT-PCR assays will be developed by HDC for the 4 genes
of interest and for 5 potential candidates to serve as the reference
(housekeeping) genes. While the B2M was the most stable gene in the preliminary
studies, a re-evaluation of all five gene candidates will be required. One or
more may be selected as the reference gene(s) for the 4-gene assay. In this
first phase of the study, prostate cancer cells obtained from tissue culture
will be used, and preparations of tissue culture cells will be spiked into urine
containing RNAse enzyme inhibitors.
     
The collection of patient urine, serum and tissue specimens for both Phase 1 and
2 will be initiated and the specimens properly stored beginning immediately upon
IRB approval. This will allow specimen collection to be completed in advance of
the start of Phase 2.

 
Exhibit C - 1

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

 

 
Phase 1 Feasibility Results Completion Standard:
     
The successful completion of Phase I will be the demonstration of “Feasibility”
for the assay, and will be determined by Abbott in its sole discretion.
Feasibility will be demonstrated by showing an ability of the assay to identify
prostate cancer as present based on an elevated expression of the genes of
interest in prostate cells in urine specimens compared to the background
expression levels of the normal epithelial cells, using a cut-off that will have
*% sensitivity and *% specificity.
     
III. Phase 2 (expected duration 2 months): Assess the utility of the 4-gene
urine test for prostate cancer detection.
     
The objective of the Phase 2 validation study is to determine if the assay can
detect cancer cells in urine from patients with prostate cancer with a high
degree of sensitivity. Urine samples obtained from * patients with prostate
cancer will be tested. The testing will be done on urine samples obtained pre
and post prostatectomy. Greater than or equal to *% sensitivity on pre-op
specimens is expected, with all urine positive patients becoming negative when
tested one month post-prostatectomy.
     
A control group of * non-prostate cancer subjects will be tested in a similar
fashion on two specimens collected one month apart. One control group of *
subjects will be less than 30 years old and have a serum PSA value less than 1.0
ng/mL and the second control group will have serum PSA value greater than 2.5
ng/mL and less than 10ng/mL and will have had one previous negative biopsy. The
HDC 4-gene test developed in Phase 1 will be performed on these patients before
the second biopsy is performed. The result of the HDC 4-gene test will then be
compared to the result of the second biopsy. Control subjects with low PSA are
likely to have no prostatic enlargement, while subjects with PSA values greater
than 2.5 ng/mL will likely have some degree of prostatic enlargement (BPH). All
of the subjects in the control group with a PSA value less than 1ng/mL are
expected to have negative results for the urine gene test. Greater than or equal
to *% specificity is expected. Serum PSA testing will be performed on all
subjects at each time of a urine collection.
     
For the * cancer subjects, the Gleason Score will be determined and the total
tumor volume obtained from the prostatectomy tissue will be measured. The urine
HDC 4-gene score for low grade (Gleason Score), low volume subjects as well as
those with high grade, high volume cancers will be compared.
     
In addition, in the * cancer subjects, cancer cells from the formalin fixed
tissue slide will be obtained by micro dissection after being carefully
identified by the pathologist, and the assay tissue score will be compared with
the respective assay urine score.

 
Exhibit C - 2

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

 

 
Phase 2 Results Completion Standard:
     
The successful completion of Phase 2 will be determined by Abbott in its sole
discretion, and will be: (i) the demonstration of performance for the assay of
sensitivity greater than or equal to *% and specificity greater than or equal to
*%, and (ii) demonstration of informative test results for informative urine
specimens collected without DRE (success rate) based on sufficient quantity of
tumor mRNA for evaluation of greater than or equal to *%. Specificity will be
reported against normal and BPH subjects.
     
IV. Phase 3 and 4 studies (below) will be initiated only upon the review and
acceptance of Phase 1 & 2 as meeting the Result Completion Standards.
     
Costs and Performance Site for Phase 3 and 4:
     
Abbott at its sole discretion shall select the institution to perform the Phase
3 and 4 testing. Abbott shall be responsible for negotiating and signing the
test performance agreement with the institution selected. Abbott shall be
responsible for the costs of the selected institution for the performance of
Phase 3 and 4.
     
V. Phase 3 (expected duration 1 month): Determine if DRE performed prior to
collection of urine specimens will increase the sensitivity of prostate cancer
detection.
     
The effect of the digital rectal examination to enhance the detection rate will
be assessed using urine samples collected from * prostate cancer patients and *
non-cancer patients. This data will determine if a random urine collection will
give a 4-gene test result that is equivalent to a post-DRE sample.
     
Phase 3 Results Completion Standard:
     
Demonstrate a preferred method of urine specimen collection with a success rate
(% informative) of greater than or equal to the success rate reported for
competitor’s assays (PCA3, *%)

 
Exhibit C - 3

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

 

 
Phase 4 (expected duration 4 Months): Specificity and Assay Optimization Studies
     
The optimal reaction conditions for the urine assay will be developed, and
detection limits and the inter and intra precision for assay will be
established.
     
Stability of the mRNA in urine tumor cells under various storage conditions,
i.e. * and * will be determined and optimal urine collection and storage
conditions will be defined.
     
With the optimized assay, a preliminary assessment or test specificity of the
4-gene urine test will be accomplished by a) assessing the interference of
leukocytes in urine as a result of inflammation or by blood contamination of the
urine sample by spiking negative and positive urine samples with leukocytes and
b) assessing the tissue specificity of the assay by a survey of urine samples
from * patients with cancer types that could interfere with the assay, such as
bladder, kidney and others.
     
The mRNA or c-DNA from the phase 1-4 validation studies will be stored at - 70
degrees C for future use in validating any new RT-PCR platform which might be
used in an FDA clearance study.
     
With the optimized assay, detection of tumors with a range of Gleason scores,
stages, and various patient characteristics (age, ethnic characteristic) will be
evaluated.
     
Phase 4 Results Completion Standard:

 
1) The test should demonstrate no cross-reactivity with cancer types that could
interfere with the assay, such as bladder, kidney and others.
 
2) The test should demonstrate reproducible performance under specimen
storage/shipping conditions compatible with standard laboratory workflow.
 
3) The test should demonstrate utility in a range of patient populations and
tumor characteristics (grade, stage) with a sensitivity and specificity each
greater than or equal to *%.

 
FDA Submission Study
 
To be developed and performed by Abbott after successful completion of the Phase
1 through 4 Studies above.
 
Exhibit C - 4

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

 
 
Exhibit D
 
Co-Exclusive Licensees
 
HDC has granted or intends to grant to the following companies co-exclusive
licenses in the indicated Territories and Fields to perform, use, market and
sell Laboratory Developed Tests based on the Licensed Prostate Markers:

       
Quest Diagnostics, Inc. (Madison, NJ):
   
Territory: United States of America, its territories and possessions.
   
Field: Laboratory Developed Tests in urine
     
Clarient, Inc.(Aliso Viejo, CA):
   
Territory: Worldwide
   
Field: Laboratory Developed Tests in biopsied prostate tissue

 
Exhibit D - 1

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

 
 
Exhibit E
 
Alternative Dispute Resolution
 
The parties recognize that bona fide disputes as to certain matters may arise
from time to time during the term of this Agreement which relate to either
party’s rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute Resolution (“ADR”) provision, a party first must send
written notice of the dispute to the other party for attempted resolution by
good faith negotiations between their respective presidents (or their designees)
of the affected subsidiaries, divisions, or business units within twenty-eight
(28) days after such notice is received (all references to “days” in this ADR
provision are to calendar days).
 
If the matter has not been resolved within twenty-eight (28) days of the notice
of dispute, or if the parties fail to meet within such twenty-eight (28) days,
either party may initiate an ADR proceeding as provided herein. The parties
shall have the right to be represented by counsel in such a proceeding.

   
1.
To begin an ADR proceeding, a party shall provide written notice to the other
party of the issues to be resolved by ADR. Within fourteen (14) days after its
receipt of such notice, the other party may, by written notice to the party
initiating the ADR, add additional issues to be resolved within the same ADR.
   
2.
Within twenty-one (21) days following receipt of the original ADR notice, the
parties shall select a mutually acceptable neutral to preside in the resolution
of any disputes in this ADR proceeding. If the parties are unable to agree on a
mutually acceptable neutral within such period, either party may request the
President of the CPR Institute for Dispute Resolution (“CPR”), 366 Madison
Avenue, 14th Floor, New York, New York 10017, to select a neutral pursuant to
the following procedures:

 
          (a)     The CPR shall submit to the parties a list of not less than
five (5) candidates within fourteen (14) days after receipt of the request,
along with a Curriculum Vitae for each candidate. No candidate shall be an
employee, director or shareholder of either party or any of their subsidiaries
or affiliates.
     
          (b)     Such list shall include a statement of disclosure by each
candidate of any circumstances likely to affect his or her impartiality.
     
          (c)     Each party shall number the candidates in order of preference
(with the number one (1) signifying the greatest preference) and shall deliver
the list to the CPR within seven (7) days following receipt of the list of
candidates. If a party believes a conflict of interest exists regarding any of
the candidates, that party shall provide a written explanation of the conflict
to the CPR along with its list showing its order of preference for the
candidates. Any party failing to return a list of preferences on time shall be
deemed to have no order of preference.

 
Exhibit E - 1

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          (d)     If the parties collectively have identified fewer than three
(3) candidates deemed to have conflicts, the CPR immediately shall designate as
the neutral the candidate for whom the parties collectively have indicated the
greatest preference. If a tie should result between two candidates, the CPR may
designate either candidate. If the parties collectively have identified three
(3) or more candidates deemed to have conflicts, the CPR shall review the
explanations regarding conflicts and, in its sole discretion, may either (i)
immediately designate as the neutral the candidate for whom the parties
collectively have indicated the greatest preference, or (ii) issue a new list of
not less than five (5) candidates, in which case the procedures set forth in
subparagraphs 2(a) - 2(d) shall be repeated.

 
3.
No earlier than twenty-eight (28) days or later than fifty-six (56) days after
selection, the neutral shall hold a hearing to resolve each of the issues
identified by the parties. The ADR proceeding shall take place at a location
agreed upon by the parties. If the parties cannot agree, the neutral shall
designate a location other than the principal place of business of either party
or any of their subsidiaries or affiliates.
   
4.
At least seven (7) days prior to the hearing, each party shall submit the
following to the other party and the neutral:

 

 
          (a)     a copy of all exhibits on which such party intends to rely in
any oral or written presentation to the neutral;
     
          (b)     a list of any witnesses such party intends to call at the
hearing, and a short summary of the anticipated testimony of each witness;
     
          (c)     a proposed ruling on each issue to be resolved, together with
a request for a specific damage award or other remedy for each issue. The
proposed rulings and remedies shall not contain any recitation of the facts or
any legal arguments and shall not exceed one (1) page per issue.
     
          (d)     a brief in support of such party’s proposed rulings and
remedies, provided that the brief shall not exceed twenty (20) pages. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.

 
Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery shall
be required or permitted by any means, including depositions, interrogatories,
requests for admissions, or production of documents.
   
5.
The hearing shall be conducted on two (2) consecutive days and shall be governed
by the following rules:

 
          (a)     Each party shall be entitled to five (5) hours of hearing time
to present its case. The neutral shall determine whether each party has had the
five (5) hours to which it is entitled.

 
Exhibit E - 2

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          (b)     Each party shall be entitled, but not required, to make an
opening statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately after their direct
testimony, and cross-examination time shall be charged against the party
conducting the cross-examination.
     
          (c)     The party initiating the ADR shall begin the hearing and, if
it chooses to make an opening statement, shall address not only issues it raised
but also any issues raised by the responding party. The responding party, if it
chooses to make an opening statement, also shall address all issues raised in
the ADR. Thereafter, the presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall proceed in the same
sequence.
     
          (d)     Except when testifying, witnesses shall be excluded from the
hearing until closing arguments.
     
          (e)     Settlement negotiations, including any statements made
therein, shall not be admissible under any circumstances. Affidavits prepared
for purposes of the ADR hearing also shall not be admissible. As to all other
matters, the neutral shall have sole discretion regarding the admissibility of
any evidence.

6.
Within seven (7) days following completion of the hearing, each party may submit
to the other party and the neutral a post-hearing brief in support of its
proposed rulings and remedies, provided that such brief shall not contain or
discuss any new evidence and shall not exceed ten (10) pages. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.
   
7.
The neutral shall rule on each disputed issue within fourteen (14) days
following completion of the hearing. Such ruling shall adopt in its entirety the
proposed ruling and remedy of one of the parties on each disputed issue but may
adopt one party’s proposed rulings and remedies on some issues and the other
party’s proposed rulings and remedies on other issues. The neutral shall not
issue any written opinion or otherwise explain the basis of the ruling.
   
8.
The neutral shall be paid a reasonable fee plus expenses. These fees and
expenses, along with the reasonable legal fees and expenses of the prevailing
party (including all expert witness fees and expenses), the fees and expenses of
a court reporter, and any expenses for a hearing room, shall be paid as follows:

 
          (a)     If the neutral rules in favor of one party on all disputed
issues in the ADR, the losing party shall pay 100% of such fees and expenses.
     
          (b)     If the neutral rules in favor of one party on some issues and
the other party on other issues, the neutral shall issue with the rulings a
written determination as to how such fees and expenses shall be allocated
between the parties. The neutral shall allocate fees and expenses in a way that
bears a reasonable relationship to the outcome of the ADR, with the party
prevailing on more issues, or on issues of greater value or gravity, recovering
a relatively larger share of its legal fees and expenses.

 
Exhibit E - 3

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9.
The rulings of the neutral and the allocation of fees and expenses shall be
binding, non-reviewable, and non-appealable, and may be entered as a final
judgment in any court having jurisdiction.
   
10.
Except as provided in paragraph 9 or as required by law, the existence of the
dispute, any settlement negotiations, the ADR hearing, any submissions
(including exhibits, testimony, proposed rulings, and briefs), and the rulings
shall be deemed Confidential Information. The neutral shall have the authority
to impose sanctions for unauthorized disclosure of Confidential Information.
   
11.
All disputes referred to ADR, the statute of limitations, and the remedies for
any wrong that may be found, shall be governed by the laws of the State of
Illinois.
   
12.
The neutral may not award punitive damages. The parties hereby waive the right
to punitive damages.
   
13.
The hearings shall be conducted in the English language.

 
Exhibit E - 4