EXHIBIT 10.57

NOTE: Portions of this Exhibit are the subject of a Confidential Treatment
Request by the Registrant to the Securities and Exchange Commission (the
“Commission”). Such portions have been redacted and are marked with a “[***]” in
place of the redacted language. The redacted information has been filed
separately with the Commission.

DEVELOPMENT AGREEMENT

This Development Agreement (“Agreement”) is entered into as of this      of
December 2005 by and between PRINCETON BIOMEDITECH CORPORATION, a New Jersey
Corporation (“PBM”), having its principal place of business at 4242 U.S. Route
1, Monmouth Junction, New Jersey 08852, and NANOGEN, INC., a Delaware
Corporation (“NANOGEN”), having its principal place of business at 10398 Pacific
Center Court, San Diego, California 92121.

RECITALS

A. PBM and SYN-X Pharma, Inc., an Ontario Corporation (SYNX), having its
principal place of business at 1 Marmac Drive, Toronto, Ontario M9W 1E7, Canada,
have previously entered into a DEVELOPMENT AND MANUFACTURING AGREEMENT as of
October 9, 2001 (“PBM/SYNX Agreement”) directed to the development,
manufacturing and marketing of certain point of care diagnostic products.

B. SYNX is now a wholly owned subsidiary of NANOGEN.

C. SYNX has assigned its intellectual property relating to the PBM/SYNX
agreement to NANOGEN and assigned to NANOGEN its interest in the Cross License
Agreement included in the Roche Agreements.

D. PBM and SYNX have terminated the PBM/SYNX Agreement as of the Effective Date
of this Agreement.

E. NANOGEN now wishes to continue the development with PBM of certain point of
care diagnostic products contemplated to have been developed under the PBM/SYNX
Agreement.

 

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NOW, THEREFORE, in consideration of the foregoing premises, which are
incorporated into and made a part of this Agreement, and of the mutual covenants
which are set forth herein, PBM and NANOGEN hereby agree as follows:

ARTICLE 1

DEFINITIONS

Unless the context requires otherwise, the following terms, when used in this
Agreement, shall have the respective meanings specified in this Article 1, such
meanings to be equally applicable to the singular and plural forms of the
defined terms:

 

  1.1 “Affiliate” shall mean any person or entity which directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, a Party. As used in this definition of “Affiliate”, control
means, with respect to an entity, the legal or beneficial ownership of 50% or
more of the voting or equity interests of the entity or the power or right to
direct the management and affairs of the entity.

 

  1.2 “cGMP” shall mean current good manufacturing practices related to
diagnostic pharmaceutical products under applicable laws, rules and regulations
in all relevant jurisdictions, including without limitation the guidelines of
good manufacturing practices determined by the FDA and the equivalent European
regulatory body.

 

  1.3 “Collaboration Agreements” shall mean this Agreement and the Manufacturing
and Distribution Agreement by and between PBM and NANOGEN of even date herewith.

 

  1.4 “Development Product” shall mean a Product or New Assay that is jointly
developed by the Parties under this Agreement.

 

  1.5 “Development Product Specifications” shall mean the specifications for a
specific Development Product determined as provided in Section 2.2 a).

 

  1.6 “FDA” shall mean the United States Food and Drug Administration, or any
successor entity thereto.

 

  1.7 “FD & C Act” shall mean the United States Federal Food, Drug & Cosmetic
Act, as amended.

 

  1.8 “NANOGEN Reagent” shall mean natural or recombinant antigen controls
and/or antibodies, which can be polyclonal or monoclonal, to NT-proBNP, selected
by NANOGEN and accepted by PBM or, if applicable, previously selected by SYNX
under the PBM/SYNX Agreement, for use by PBM in the development and manufacture
of the Development Products.

 

  1.9 “NANOGEN Reagent Specifications” shall mean the specifications for a
NANOGEN Reagent as provided in Section 2.1 e).

 

  1.10 “New Assay” shall mean a human in vitro diagnostic assay for an analyte
(i) which the Parties undertake to develop under this Agreement and (ii) the
performance criteria and specifications of which assay meet or exceed
specifications and criteria therefore, to which both parties agree in writing
and set forth in Exhibit C.

 

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  1.11 “New Product” shall mean a Product that is not read upon by a claim in a
PBM Patent.

 

  1.12 “Party” shall mean either PBM or NANOGEN and ‘Parties” shall mean PBM and
NANOGEN.

 

  1.13 “PBM Patent” shall mean an issued patent in any country of the world
owned or licensed to and by PBM which is listed on, or which issues from a
patent application listed on Exhibit A hereto, including any reissue patent,
reexamined patent, and patents issuing on continuation, continuation-in-part and
divisional applications of any listed patent application and foreign equivalents
of any of the listed patents and patent applications.

 

  1.14 “PBM Reagents” shall mean all reagents other than NANOGEN Reagents used
in Development Products.

 

  1.15 “Product” shall mean a human in vitro diagnostic assay for NT-proBNP
alone (i) for use restricted to Point of Care market segments, whereby Point of
Care means analysis conducted in an instrument or in a system which is designed
for a throughput of less than [***] specimens per hour; and (ii) the performance
criteria of which assay meets or exceeds the Standard Criteria and
Specifications in Exhibit B attached hereto.

 

  1.16 “Reader” shall mean a reasonably priced quantitative reader for use with
Development Products to determine the amount of a target analyte present in a
patient sample.

 

  1.17 “Regulatory Approval” shall mean, with respect to any country or
jurisdiction, all governmental and regulatory registrations and approvals
(including, but not limited to, approvals of all Product and Quantitative Reader
labeling and packaging) required for the marketing, distribution and sale of
Products and the Quantitative Reader in such country or jurisdiction.

 

  1.18 “Roche Agreements” shall mean collectively that certain Settlement
Agreement among SYN-X Pharma, Inc. et al and Roche Diagnostics GmbH et al having
an effective date of July 17, 2003 and that certain Cross License Agreement
between SYN-X Pharma, Inc. and Roche Diagnostics GmbH having an effective date
of July 17, 2003.

ARTICLE 2

PRODUCT DEVELOPMENT

The Parties will continue to undertake under this Agreement the development of a
certain Development Product that was being developed under the PBM/SYNX
Agreement, more specifically a Development Product for the quantitative
determination of NT-proBNP

*** Confidential portions omitted and filed separately with the Commission.

 

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under a license granted NANOGEN in the Roche Agreements and which incorporates
proprietary technology of PBM. The Parties acknowledge that the PBM-SynX
agreement predates the Roche Agreements and under the PBM Syn-X agreement, PBM
had the exclusive right to develop and manufacture the Development Product; and
subsequently that NANOGEN’s rights to develop, have PBM participate in the
development and manufacture of, and market the Development Product and to grant
distribution rights therefor are subject to the Roche Agreements. Nanogen
assumes full responsibility to assure that PBM’s rights, as defined elsewhere in
this agreement, for exclusive development and manufacturing is not unreasonably
compromised under the separate Roche Agreements. The Parties also intend to
cooperate in the development of the Reader. Responsibilities and obligations of
the Parties with respect to the development of Development Products and the
Reader are set forth herein below in this Article 2.

 

  2.1 NANOGEN Development Obligations and Responsibilities.

 

  a) NANOGEN will use commercially reasonable efforts to develop and produce
NANOGEN Reagents which meet specifications and in quantities reasonably
sufficient for use by PBM in PBM’s development activities for Development
Products and for the production of Development Products for use in clinical
trials and other studies required for Regulatory Approval and for any other
developmental purpose to which the Parties mutually agree. Notwithstanding
anything to the contrary in this Agreement, NANOGEN will not be obliged to
provide NANOGEN Reagents to PBM for use in any Development Product that (i) does
not fall within the “SYN-X Licensed Field” as that term is defined in the Roche
Agreements, (ii) is not intended to meet or exceed requirements of the Standard
Performance Criteria and Specifications in Exhibit B hereto and (iii) is not
manufactured for or licensed to NANOGEN and/or SYN.X. NANOGEN shall also provide
PBM with internal controls for use in the development of Development Products.

 

  b) NANOGEN will take such measures as it deems necessary and appropriate in
the exercise of its sole discretion with respect to obtaining and maintaining
patent protection for Development Products and NANOGEN Reagents.

 

  c) NANOGEN will take such measures as it deems appropriate in its sole
discretion to develop scientific interest in the Development Products and
NANOGEN Reagents, through obtaining publication of research and other and other
articles in scientific journals and trade publications, giving papers and other
similar measures. PBM will assist Nanogen with test product supply for such a
study and two parties shall work together in selection study sites and providing
study protocols if needed.

 

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  d) NANOGEN will conduct, or contract with SYNX or third parties to conduct,
all such clinical trials and other testing of Development Products and NANOGEN
Reagents as is reasonably required in order to obtain Regulatory Approval for
the marketing and sale of Development Products from the governmental or other
authority in any jurisdiction in which the Parties desire that Development
Products be marketed and sold. The data will be provided to PBM for review and
comment. The Parties will use their best efforts, in consultation with each
other to obtain Regulatory Approval for the marketing and sale of Development
Products in the United States and other jurisdictions determined by NANOGEN or
reasonably requested by PBM after consultation with NANOGEN. The Regulatory
Approval for a Development Product which is an assay for NT-proBNP shall be
owned by NANOGEN.

 

  e) NANOGEN, in consultation with PBM, shall be responsible for the development
of manufacturing and other specifications to be met by each batch of a NANOGEN
Reagent to be supplied by NANOGEN to PBM for the development and commercial
production of Development Products.

 

  f) NANOGEN will fund [***]% of the development cost of the Reader, up to a
maximum of $[***] (U.S.), less any amounts already paid for development of the
Reader by SYNX following the receipt by NANOGEN from PBM of an invoice for its
share of the costs and a summary schedule detailing such development costs.
Development costs of the Reader are to include materials, actual engineering
salaries marked up at PBM’s standard overhead rates, and travel related to
development of the Reader. NANOGEN shall have the right to audit PBM’s costs
incurred for development of the Reader, which audit must be requested within 30
days of receipt of the summary schedule detailing the direct development costs.
The audit will be conducted at PBM’s facility in Monmouth Junction, New Jersey
on a date and at a time proposed by NANOGEN and reasonably acceptable to PBM.
For purposes of the audit, detailed costs on the summary schedule shall be
supported by invoices, labor schedules, time cards of non-exempt employees and
like documentation. If the result of the audit is not acceptable to NANOGEN, the
Parties shall each appoint a person who will negotiate in good faith to resolve
issues raised by NANOGEN. At the request of PBM, the designated individuals
shall meet in person at least one day in Monmouth Junction. If after 30 days of
the initiation of the negotiations, the Parties have not reached an agreement on
the issues raised by NANOGEN, the Parties shall select an independent certified
accountant reasonably acceptable to both and submit the issue with a written
explanation of its position on the amount of direct costs incurred by PBM to the
independent accountant. NANOGEN shall

*** Confidential portions omitted and filed separately with the Commission.

 

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pay the cost of the independent audit and the Parties will be bound by the
decision of the independent accountant. NANOGEN’s payment of its share of the
costs will be due the later of (i) 30 days from the receipt of the invoice or
(ii) completion of the audit if NANOGEN requests such audit.

 

  g) NANOGEN will fund [***]% of the actual development cost for and actual cost
of equipment that will print a test identification, lot number, and/or patient
identification on the cartridge used in the Development Product, up to a maximum
of US $[***], within thirty (30) days following the receipt by NANOGEN from PBM
of an invoice for its share of the costs and a summary schedule detailing such
development and equipment costs. Development costs of the equipment are to
include materials, actual engineering salaries marked up at PBM’s standard
overhead rates, and travel related to development of the equipment. The
equipment cost shall be the cost of procuring and setting up the equipment and
the ancillary materials needed to produce and apply the labels to the cartridge.
NANOGEN shall have the right to audit PBM’s development and equipment costs
incurred for development of the equipment, which audit must be requested within
30 days of receipt of the summary schedule detailing the costs.

 

  h) NANOGEN, in addition to the obligations and responsibilities set forth
above in this Section 2.1, will provide such other assistance to PBM as
reasonably required to support PBM in the discharge of its obligations and
responsibilities to develop Development Products as provided in Section 2.2. All
activities conducted by NANOGEN under this Section 2.1 shall be at NANOGEN’s
sole cost and expense.

 

  2.2 PBM Development Obligations and Responsibilities.

 

  a) PBM will cooperate with NANOGEN in determining the specifications for
NANOGEN Reagents to be included in Development Products and PBM will be
responsible, in consultation with NANOGEN, for determining the specifications
for PBM Reagents and Development Products (Development Product Specifications)
in order to incorporate into the Development Products proprietary technology of
PBM. PBM will also be responsible for determining the specifications for the
Reader.

 

  b) PBM will conduct such research and development as is reasonably required to
optimize NANOGEN Reagents for commercial use and to develop and produce PBM
Reagents and Development Products, in each case utilizing NANOGEN Reagents
supplied by NANOGEN.

*** Confidential portions omitted and filed separately with the Commission.

 

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  c) PBM will supply NANOGEN with sufficient quantities of developmental stage
Development Products as is reasonably necessary for NANOGEN to carry out its
responsibilities and obligations set forth in Section 2.1.

 

  d) Each of the Parties will cooperate in sharing information including
clinical, and validation data with the other Party to facilitate the preparation
of applications for Regulatory Approval of Development Products.

 

  e) PBM will use commercially reasonable best efforts to promptly complete, on
its own or using a subcontractor, the development of a Reader and to obtain
Regulatory Approval for the Reader meeting specifications reasonably acceptable
to NANOGEN in the United States and other jurisdictions reasonably requested by
NANOGEN. The Regulatory Approvals for the Reader shall be owned by PBM.

 

  f) PBM shall provide NANOGEN a report not later than January 15 and July 15 of
each year summarizing the status of the development of Development Products
during the prior six month period and the report shall include the expected date
of the first sale of a Development Product in each of the United States, Japan
and Germany in order for NANOGEN to comply with provisions of Section 6.3 of the
Cross License Agreement of the Roche Agreements.

 

  g) Not later than the receipt of the first Regulatory Approval for a
Development Product, PBM and NANOGEN together shall compile a written summary of
the protocols of all tests used to demonstrate that that Development Product
meets the Standard Performance Criteria and Specifications set forth in the
Roche Agreements and test data accumulated under those protocols that would
prove that the Development Product meets the Standard Performance Criteria and
Specifications as required under Section 6.3 of the Cross License Agreement of
the Roche Agreements.

 

  h) PBM, in addition to the obligations and responsibilities set forth above in
this Section 2.2, will provide such other assistance to NANOGEN as reasonably
required to support NANOGEN in carrying out its responsibilities and obligations
under Section 2.1. All activities carried out by PBM under this Section 2.2
shall be at PBM’s sole cost and expense.

 

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ARTICLE 3

NEW PRODUCTS AND OTHER PRODUCTS

 

  3.1 New Products.

NANOGEN shall have the right to develop and commercialize New Products without
obligation to PBM except as otherwise specifically provided herein or elsewhere
in the Collaboration Agreements; provided, however, that NANOGEN shall not use
the same trademark for New Products, other than the trade name NANOGEN or the
tradename of an Affiliate, that it adopts for Development Products. If NANOGEN
develops a New Product alone or in collaboration with a third party in which it
retains the right to manufacture the New Product, it will negotiate in good
faith with PBM for a period of not less than 90 days concerning the nonexclusive
manufacture of the New Product by PBM for NANOGEN upon commercially reasonable
terms. NANOGEN’S right to develop and commercialize New Products as provided in
this Section 3.1 is not expressly or by implication a grant of a license or
other rights under a PBM Patent to develop or commercialize New Products.

 

  3.2 Other Products.

In the event NANOGEN undertakes to develop other products for the detection of
biological markers that, as of the date of this agreement, it owns, or for which
it has a license with the right to grant a sublicense, for congestive heart
failure, stroke or traumatic brain injury, PBM shall have the option to obtain a
nonexclusive license or sublicense, but not the obligation, to develop, make,
have made, use and sell products for the detection of those markers in a
point-of-care assay for congestive heart failure, stroke and traumatic brain
injury and to purchase antigens and antibodies for such products from NANOGEN at
commercially reasonable terms and price. NANOGEN shall have no obligation to
support PBM’s development of such other products other than to supply the
antigen and antibody reagents. The Parties shall negotiate in good faith
concerning the compensation to be paid NANOGEN on sales of such other products
by PBM which may be in the form of a royalty or if the Parties agree on a
co-development approach, an arrangement similar as provided in Section 4.2 of
the Manufacturing and Distribution Agreement between the Parties of even date
herewith, or on any other basis to which the Parties agree. If the Parties are
unable to agree upon the form of compensation for NANOGEN after negotiation for
a period of not less than 90 days, PBM, at its option, shall pay NANOGEN [***]%
royalty plus an amount equal to the amount of royalty that NANOGEN is obligated
to pay any third party. Any such other product developed by PBM shall not use
the same trademark as, or confusingly similar to the trademarks used by NANOGEN
for Development Products or New Products. As used in this Section 3.2, the term
“point-of-care assay” means an assay designed principally for use in a doctor’s
office or clinic lacking a central laboratory, or directly in a hospital’s
emergency room and not in its central laboratory and that is not sold for use in
a reference laboratory or for use on an instrument with

*** Confidential portions omitted and filed separately with the Commission.

 

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random access capability or on an instrument with the ability to analyze
multiple patient samples. However, this does not inhibit PBM from selling the
Development Product to the central or reference laboratory. NANOGEN will have no
indemnity obligation to PBM arising from its supply of NANOGEN Reagents to PBM
for the development and/or marketing of other products and makes no warranties
of any kind with respect to such antibody NANOGEN Reagents.

ARTICLE 4

OWNERSHIP OF INTELLECTUAL PROPERTY;

LICENSES; CONFIDENTIALITY

 

  4.1 Intellectual Property.

a) Nothing in this Agreement shall be deemed to give PBM any rights in, right to
use or license in any of NANOGEN’s existing or future intellectual property,
including without limitation, patents, confidential information, technology,
production methods and procedures, know-how and the like (collectively
“Intellectual Property”), except as explicitly provided herein, .NANOGEN
Intellectual Property does include any rights granted SYNX under the Roche
Agreements.

b) Nothing in this Agreement shall be deemed to give NANOGEN any rights in,
right to use or license in any of PBM’s existing or future Intellectual
Property, except as explicitly provided herein.

c) Any Intellectual Property exclusively developed after the date hereof by
NANOGEN shall remain the sole and exclusive property of NANOGEN.

d) Any Intellectual Property exclusively developed after the date hereof by PBM
shall remain the sole and exclusive property of PBM.

e) Any Intellectual property that is jointly or cooperatively developed by the
Parties after the date hereof shall be jointly owned to the extent of the
respective contributions thereto (the “Jointly Owned Intellectual Property”).
Each Party hereby grants to the other a fully paid-up, perpetual exclusive
license to all licensing and commercialization rights in such Jointly Owned
Intellectual Property for the field pertaining to the other party’s business
(the “Field-Exclusive Jointly Owned Intellectual Property License”). Any Party
may transfer the Jointly Owned Intellectual Property, as well as the
Field-Exclusive Jointly Owned Intellectual property License, in connection with
the sale of all or substantially all of its assets. The parties shall share
equally in the cost of and responsibility for patent filing, maintenance and
enforcement, and shall cooperate fully in any such endeavor.

 

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  4.2 Licenses.

a) NANOGEN hereby grants to PBM a license to NANOGEN’s Intellectual Property in
the NANOGEN Reagents and the Development Products to develop the Development
Products in accordance with the Development Product Specifications, subject to
the terms and conditions of this Agreement, for the sole and exclusive purpose
of incorporating the NANOGEN Reagents into Development Products.

b) The license granted in subparts a) of this Section 4.2 are without the right
to grant sublicenses but PBM is permitted to subcontract development activities
to others who are not parties to this Agreement.

 

  4.3 Confidential Information.

a) During the term of this Agreement and for a period of five (5) years
thereafter, the receiving party (the “Receiving Party”) shall maintain in
confidence all Confidential Information, as defined in Section 4.3 (b) below,
and shall not use, disclose or grant use of such Confidential Information except
as expressly authorized in this Agreement. The Receiving Party may disclose the
Confidential Information, as authorized hereunder, only to those employees or
consultants of the Receiving Party who agree to be bound by the terms of this
Section 4.3. The Receiving Party shall use the strictest standard of care which
is practical to ensure that such employees do not disclose or make any
unauthorized use of the Confidential Information. The Receiving Party shall
promptly notify the Disclosing Party upon discovery of any unauthorized use or
disclosure of the Confidential Information.

b) As used in this Agreement, the term “Confidential Information” shall mean any
information, either enabling or disabling, including the terms of this
Agreement, any batch record, any order or other commercial relationship between
the Parties, know-how, trade secret, research, inventions, patented or
patentable subject matter, patent applications, data, process, technique,
algorithm, program, design, drawing, future development, scientific,
manufacturing, marketing, business plan, financial or personnel matter relating
to the disclosing party (the “Disclosing Party”), its present or future
products, sales, suppliers, employees, investors or business, whether in oral,
written, graphic, or electronic form and whether received from the Disclosing
Party or a third party. The term “Confidential Information” shall include,
without limitation (i) any cost information related to the manufacture of the
NANOGEN Reagents and/or Development Products, (ii) the NANOGEN Reagent
Specifications and (iii) Development Product Specifications and/or Reader and
Reader Specification.

c) The term “Confidential Information” shall not be deemed to include
information which the Receiving Party can demonstrate by

 

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competent written proof: (i) is now, or hereafter becomes, through no act or
failure to act on the part of the Receiving Party, generally known or available;
(ii) is known by Receiving Party at the time of receiving such information as
evidenced by its records; (iii) is hereafter furnished to the Receiving Party by
a third party, as a matter of right and without restriction or disclosure; or
(iv) is the subject of written permission to disclose provided by the Disclosing
Party. Further, the obligations of confidentiality under this Article shall not
apply to the extent that the Receiving Party is required to disclose information
in support of a product approval application or by an order or regulation of a
governmental agency or in the course of litigation, provided that in all cases
the Receiving Party shall give the other party prompt notice of the pending
disclosure and shall seek an order maintaining the confidentiality of the
information.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

 

  5.1 Existence and Power.

Each Party hereby represents and warrants to the other Party that such party
(a) is duly organized, validly existing and in good standing under the laws of
the state and country in which it is organized; (b) has the power and authority
and the legal right to own and operate its property and assets, to lease the
property and assets it operates under lease, and to carry on its business as it
is now being conducted; and (c) is in compliance with all requirements of
applicable law, except to the extent that any noncompliance would not materially
adversely affect such party’s ability to perform its obligations under the
Agreement.

 

  5.2 Authorization and Enforcement of Obligations.

Each Party hereby represents and warrants to the other Party that such party
(a) has the power and authority and the legal right to enter into the Agreement
and to perform its obligations hereunder and thereunder and (b) has taken all
necessary action on its part to authorize the execution and delivery of the
Agreement and the performance of its obligations hereunder. The Agreement has
been duly executed and delivered on behalf of such party, and constitutes a
legal, valid, binding obligation, enforceable against such party in accordance
with its terms.

 

  5.3 No Consents.

Each Party hereby represents and warrants to the other Party that all necessary
consents, approvals and authorizations of all governmental authorities and other
persons required to be obtained by such party in connection with the Agreement
have been obtained.

 

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  5.4 No Conflict.

Each Party hereby represents and warrants to the other Party that the execution
and delivery of the Agreement and the performance of such party’s obligations
hereunder and thereunder (a) do not conflict with or violate any requirement of
applicable laws or regulations or any material contractual obligations of such
party and (b) do not materially conflict with, or constitute a material default
or require any consent under, any material contractual obligation of such party.
The Parties shall not in any event enter into any agreement or arrangement with
any Other party that would prevent or in any way interfere with their
obligations pursuant to this Agreement.

 

  5.5 Compliance with Laws.

Each Party shall comply with regulations, requirements and laws of any and all
applicable state, provincial and local authorities and agencies, including
without limitation all law and regulations which are applicable to the
transportation, storage, use, handling and disposal of hazardous materials. The
Parties shall maintain during the term of this Agreement all governmental
permits, including without limitation health, safety and environmental permits,
necessary for the conduct of the actions and procedures that they undertake
pursuant to this Agreement.

 

  5.6 Documentation.

The Parties shall keep complete, accurate and authentic accounts, notes, data
and records of the work performed under this Agreement. Each party shall
maintain complete and adequate records pertaining to the methods and facilities
used for the manufacture, processing, testing, packing, labeling, holding and
distribution of the Development Products in accordance with the applicable laws
and regulations.

 

  5.7 Limited Warranty.

 

  a) NANOGEN represents and warrants that the NANOGEN Reagents to be delivered
hereunder will (i) be manufactured by NANOGEN in accordance with all applicable
rules and regulations and cGMP, (ii) be manufactured in accordance with the
agreed upon manufacturing procedures, (iii) conform to the NANOGEN Reagent
Specifications agreed to at the time of delivery, and will not be
(iv) adulterated or misbranded within the meaning of the FD & C Act, (v) an
article that may not be introduced into interstate commerce under the provisions
of Sections 404 and 505 of the FD & C Act, (vi) manufactured, sold or shipped in
violation of any agreement, judgment, order or decree to which NANOGEN is a
party or (vii) otherwise manufactured, sold or shipped in violation of any
applicable federal, provincial, state or local law, rule, regulation or
ordinance in any material respect. PBM’s remedies and NANOGEN’S liability with
respect to this warranty are set forth below.

 

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  b) NANOGEN represents and warrants that there is no claim, suit, proceeding,
or other investigation pending, or to the actual knowledge of NANOGEN, overtly
threatened against NANOGEN which is likely to prevent or materially interfere
with NANOGEN’s performance under this Agreement or materially adversely affect
the rights of PBM hereunder.

 

  c) NANOGEN represents and warrants that neither it nor any member of its staff
has been disqualified or debarred by the FDA for any purpose. If during the term
of this Agreement, NANOGEN becomes aware that any member of its staff is or is
about to become disqualified or debarred, NANOGEN will provide immediate written
notice of same to PBM.

 

  d) NANOGEN represents and warrants to PBM that it owns or has a license to the
rights to the intellectual property and any technology required to manufacture,
use and sell the NANOGEN Reagents in the Development Products

 

  e) NANOGEN makes no warranty with respect to whether the Development Products
as developed by PBM fall within the scope of any intellectual property owned by
NANOGEN or would infringe the intellectual property rights of any third party.

 

  f) PBM makes no warranty with respect to whether the NANOGEN Reagents as
developed and manufactured by NANOGEN fall within the scope of any intellectual
property owned by PBM or would infringe the intellectual property rights of any
third party.

 

  g) PBM represents and warrants that the Development Products to be delivered
hereunder will (i) be manufactured by PBM in accordance with all applicable
rules and regulations and cGMP, (ii) be manufactured in accordance with the
agreed-upon manufacturing procedures (iii) conform to the Development Products
Specifications agreed to at the time of delivery, and will not be
(iv) adulterated or misbranded within the meaning of the FD&C Act, (v) an
article that may not be introduced into interstate commerce under the provisions
of Sections 404 and 505 of the FD & C Act, (vi) manufactured, sold or shipped in
violation of any agreement, judgment, order or decree to which PBM is a party or
(viii) otherwise manufactured, sold or shipped in violation of any applicable
federal, provincial, state or local law, rule, regulation or ordinance in any
material respect. NANOGEN’s remedies and PBM’s liability with respect to this
warranty are set forth below.

 

  h) PBM represents and warrants that there is no claim, suit, proceeding, or
other investigation pending, or to the actual knowledge of PBM, overtly
threatened against PBM which is likely to prevent or materially interfere with
PBM’s performance under this Agreement or materially adversely affect the rights
of NANOGEN hereunder.

 

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  i) PBM represents and warrants that neither it nor any member of its staff has
been disqualified or debarred by the FDA for any purpose. If during the term of
this Agreement, PBM becomes aware that any member of its staff is or is about to
become disqualified or debarred, PBM will provide immediate written notice of
same to NANOGEN.

 

  (j) PBM represents and warrants to NANOGEN that it owns the rights or freedom
to use the intellectual property and any technology required to manufacture, use
and sell the Development Products, except for the rights to make, use and sell
Development Products under intellectual property of third parties that would be
infringed only because of the use in the Development Products of the NANOGEN
Reagents.

 

  (k) PBM makes no warranty with respect to whether the Development Products as
developed by PBM fall within the scope of any intellectual property owned by PBM
or would infringe the intellectual property rights of any third party and
NANOGEN acknowledges that [***]

ARTICLE 6

INDEMNIFICATION

 

  6.1 Indemnity.

a) NANOGEN shall indemnify, defend and hold harmless PBM, its directors,
officers, employees and agents and the parent, subsidiary or related company of
PBM and the directors, officers , employees and agents of any PBM parent,
subsidiary or related company (“the PBM Indemnitees”) from and against any and
all damages incurred by or claims asserted against the PBM Indemnitees of
whatever kind or nature as a result of any making, using or selling of a
Development Product that infringes the intellectual property of a third party
which would only be infringed by reason of the presence of the NANOGEN Reagents
in the Development Products.

b) PBM shall indemnify, defend and hold harmless NANOGEN, its directors,
employees and agents and NANOGEN’s parent, subsidiary or related company and the
directors, officers, employees of any NANOGEN parent, subsidiary or related
company (the “NANOGEN Indemnitees “) from and against any and all damages
incurred by or claims asserted against the NANOGEN Indemnitees of whatever kind
or nature as a result of any making, using or selling of a Development Product
that infringes the intellectual property of a third party except the
intellectual property of a third party which would be infringed only because of
the inclusion of the NANOGEN Reagents in the Development Products.

*** Confidential portions omitted and filed separately with the Commission.

 

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c) In the event that the Parties cannot in good faith agree as to the
application of subsections a) or b) above to any particular loss or claim, the
Parties may (i) after the Executives’ Meetings provided for by Section 7.2
hereof, proceed to arbitration by mutual agreement, or, alternatively, in the
discretion of the Party seeking indemnification, (ii) conduct separate defenses
of such claim and that Party shall be relieved of its obligation to tender to
the indemnifying Party the exclusive ability to defend such claim or suit as a
condition of indemnification. The exercise by a Party of the right to defend a
claim against it as provided in this subsection c) shall not constitute a waiver
of the right to indemnification by the other Party.

 

  6.2 Expenses.

No Party shall be required to pay over to another amounts called for under this
Article until the final resolution of the claim, suit or proceeding from which
the right to such payment arose.

 

  6.3 Payments.

All amounts payable under this Article 6 shall be paid promptly after receipt by
the indemnifying Party of written notice from the indemnified Party stating that
such indemnified amounts have been incurred, the amount thereof and of the
related indemnity payment and substantiation of such amount and such indemnity
payment, provide, however, any disputed amounts shall be due and payable
promptly after such amounts are finally determined to be owing by the
indemnifying Party to the indemnified Party.

 

  6.4 Conduct of Litigation.

a) Each Party indemnified under the provisions of this Agreement, upon receipt
of written notice of any claim, or the service of a summons or other initial
legal process upon it in any action instituted against it, in respect of the
agreements contained in this Agreement, shall promptly give written notice of
such claim, or the commencement of such action, or threat thereof to the Party
from whom indemnity shall be sought hereunder; provided, however, the failure to
provide such notice within a reasonable period of time shall not relieve the
indemnifying Party of any of its obligations hereunder except to the extent the
indemnifying Party is prejudiced by such failure;

b) The indemnifying Party shall be entitled at its own expense to participate in
the defense of such claim or action, or, if it shall elect, to assume such
defense, in which event such defense shall be conducted by counsel chosen by
such indemnifying Party, which counsel may be any counsel reasonably
satisfactory to the indemnified Party against whom such claim is asserted, or
who shall be the defendant in such action, and such indemnified Party shall bear
all fees and expenses of any additional counsel retained by it;

 

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c) Notwithstanding the immediately preceding paragraph, if the named parties in
such action (including impleaded parties) include the indemnified and the
indemnifying Parties, and the indemnified Party has been advised by counsel that
there may be a conflict between the positions of the indemnifying Party and the
indemnified Party in conducting the defense of such action, or that there are
legal defenses available to such indemnified Party different from or in addition
to those available to the indemnifying Party, then the indemnified Party shall
be entitled, at its election, to conduct such separate defense as is necessary
to protect its own interests, at its own expense, if it is determined by
agreement of the indemnifying Party and the indemnified Party or by a court of
competent jurisdiction that the indemnified Party is entitled to indemnification
hereunder for the Indemnified Amounts giving rise to such action;

d) If the indemnifying Party shall elect not to assume the defense of such claim
or action, such indemnifying Party shall reimburse such indemnified Party for
the reasonable fees and expenses of any counsel retained by it, and shall be
bound by the results obtained by the indemnified Party in respect of such claim
or action if it is determined by agreement of the indemnifying Party and the
indemnified Party or by a court of competent jurisdiction that the indemnified
Party is entitled to indemnification hereunder for the Indemnified Amounts
giving rise to such action; provided, however, that no such claim or action
shall be settled without the written consent of the indemnifying Party.

 

  6.5 Survival of Indemnification Obligations.

The provisions of this Article shall survive the expiry or termination of this
Agreement.

 

  6.6 Disclaimer of Consequential Damages.

In no event shall either Party be liable to the other for incidental, special or
consequential damages, including, but not limited to, any claims for damages
based upon lost profits as a result of any breach of this Agreement, including
the breach of any warranty, or as a result of any claim for indemnity.

ARTICLE 7

ARBITRATION

 

  7.1 Binding Arbitration.

Except for issues relating to indemnification, confidentiality, competition and
intellectual property rights, or disputes relating to whether the Development
Products meet the Development Product Specifications or the NANOGEN Reagents
meet the NANOGEN Reagent Specifications, any and all disputes,

 

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controversies, differences, claims or the like between the parties under,
arising out of or related to this Agreement, or the performance, enforcement,
breach, termination or validity of this Agreement (collectively, “Disputes”)
which cannot be resolved by mutual agreement among the executives of the Parties
shall be submitted to final and binding arbitration in accordance with the terms
of this Agreement. Any situation not expressly covered by this Agreement shall
be decided in accordance with the UNCITRAL Model Rules of conciliation and
arbitration then prevailing. The arbitration shall be commenced when one party
serves the other with a written demand to arbitrate. The number of arbitrators
shall be 3, one of whom is selected by each of the Parties, and the third to be
selected by the other 2 arbitrators.

 

  7.2 Executives’ Meetings.

Prior to making any demand for arbitration, the Parties agree that there shall
be at least two face to face meetings (each such meeting an “Executives’
Meeting”) attended by the senior representatives of the Parties. Whenever there
shall be a requirement under this Agreement for two Executives’ Meetings, at
least one of such meeting shall be held in San Diego or such other place in the
United States as may be designated by NANOGEN, and at least one such meetings
shall be held in Princeton, New Jersey, or such other place in the United States
as may be designated by PBM.

 

  7.3 Arbitration Location.

Any arbitration initiated by a written demand of PBM shall be conducted in San
Diego, California, or such other place in the United States as shall be
agreeable to NANOGEN in its sole discretion. Any arbitration initiated by the
written demand of NANOGEN shall be conducted in Mercer County, New Jersey USA,
or such other place in the United States as shall be agreeable to PBM in its
sole discretion. The Parties consent to the personal jurisdiction of the courts
in each such location for any cause arising out of or otherwise related to this
arbitration, its conduct and its enforcement.

 

  7.4 Language of Arbitration.

Any arbitration shall be conducted in the English language and documents and
submissions shall be in the English language.

 

  7.5 Choice of Law.

This Agreement will be governed and interpreted in accordance with the laws of
the State of New Jersey and the federal laws of the United States applicable
therein, without regard to the conflict of laws principles thereof.

 

  7.6 Award Enforcement.

Each Party agrees to abide by the law rendered in any arbitration conducted
pursuant to this Article 7 and agrees that the courts may award full faith and
credit to such judgment in order to enforce such award.

 

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  7.7 Costs.

Each Party shall bear its own legal fees, including costs and expenses.

ARTICLE 8

TERM AND TERMINATION

 

  8.1 Term.

This Agreement shall be effective for a period that begins upon the date of
execution of this Agreement and ends upon the seventeen (17) years from and
after the date of execution of this Agreement, and which 17 year term shall
automatically renew for successive terms of five (5) years unless terminated by
either Party by the giving of notice at least one year before the expiration of
the original seventeen (17) year term or any five (5) year extension.

 

  8.2 Effect of Termination of Manufacturing and Development Agreement.

This Agreement will terminate upon termination or expiration of the
Manufacturing and Distribution Agreement.

 

  8.3 Events of Default.

The following events shall entitle a Party to terminate this Agreement, upon 30
days written notice to the other:

a) in the event either of the Parties commits a material breach of its
respective obligations under this Agreement, and said breach is not cured within
ninety (90) days after receipt of written notice specifying said breach, then
the non-breaching Party may terminate this Agreement upon delivery to the
breaching Party of a written notice of termination prior to the breach being
cured; provided, however, that the Parties shall conduct no less than two
Executives’ Meetings during such 90 day period;

b) if the other Party ceases for any reason to carry on business (but not as the
result of a merger, acquisition or reorganization with one or more entities
whether in a single transaction or a series of transactions) or convenes a
meeting of its creditors or has a receiver or manager appointed in respect of
substantially all of its assets or is the subject of an application for an
administration order or of any proposal for a voluntary arrangement or enters
into liquidation (whether compulsory or voluntarily) or undergoes any analogous
act or proceedings under the laws of any relevant jurisdiction; or

 

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c) if the enactment of any law, order or regulation by a government unit that
would render it impossible for the other Party to perform its obligations
hereunder.

 

  8.4 Surviving Obligations.

Expiration or termination of this Agreement shall not:

a) affect any other rights of any Party which may have accrued up to the date of
such expiration or termination; or

b) relieve the Parties from their obligation to pay any sums due in respect of
Development Products or Readers delivered prior to such expiration or
termination; and

without limiting the generality of the foregoing, the provisions of Sections
4.1, 4.2, 4.3a), b), c) and Articles 6 and 7 shall survive such expiration or
termination.

ARTICLE 9

MISCELLANEOUS

 

  9.1 Use of Name.

No right, express or implied, is granted by this Agreement to any Party to use
in any manner the name of the other or ay other tradename or trademark of the
other in connection with the performance of this Agreement.

 

  9.2 Independent Parties.

A Party is not an employee, agent or other legal representative of the other
Party for any purpose. Neither Party shall have the authority to enter into any
contracts in the name or on behalf of the other Party.

 

  9.3 English language.

This Agreement has been prepared in the English language and the English
language shall control its interpretation.

 

  9.4 Notice.

All notices required or permitted to be given under this Agreement shall be in
writing and deemed to have been received upon the earlier of confirmation of
actual receipt and may be sent by (a) hand delivery, (b) overnight courier, or
(c) confirmed facsimile transmission, in each case addressed to the address
first set forth above for a Party.

 

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  9.5 Severability.

In the event any provision of this Agreement is held to be invalid or
unenforceable, the otherwise valid or enforceable portion thereof and the
remaining provisions of this Agreement will remain in full force and effect.

 

  9.6 Waiver.

Any waiver (express or implied) by any Party of any breach of this Agreement
shall not constitute a waiver of any other or subsequent breach.

 

  9.7 Entire Agreement.

This Agreement and the exhibits attached hereto, constitute the entire, final,
complete and exclusive agreement between the Parties and supersede all previous
agreements or representations, written or oral, with respect to the subject
matter of this Agreement. All information to be kept confidential under any
earlier agreements between any Party shall be maintained by the receiving party
under the obligations set forth in Article 5 of this Agreement. This Agreement
may not be modified or amended except upon mutual agreement of the Parties in
writing signed by a duly authorized representative of NANOGEN and PBM.

The terms and conditions set forth herein constitute the final, complete,
exclusive and entire agreement between NANOGEN and PBM with respect to the
subject matter hereof. Any term or condition in any order, confirmation or other
document furnished by NANOGEN or PBM which is in any way inconsistent with the
terms set forth herein is hereby expressly rejected.

 

  9.8 Assignability; Binding on Successors.

Neither this Agreement nor any of the rights hereunder may be assigned by either
Party except upon the prior written consent of the other Party, except in the
event of a merger, corporate reorganization, or a sale of all or substantially
all of the assets of the business of a Party relating to the subject matter
hereof. This Agreement shall be binding upon, and inure to the benefit of, the
permitted successors and assigns of the Parties hereto.

 

  9.9 Force Majeure.

No Party shall be liable to the other for its failure to perform any of its
obligations under this Agreement, except for payment obligations, during any
period in which such performance is delayed or does not occur because such
performance is rendered impracticable or impossible due to circumstances beyond
its reasonable control, including without limitation earthquakes, governmental
or regional regulation, fire, flood, labor difficulties, strikes, interruption
of supply of key raw

 

20

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materials, civil disorder, and acts of God, provided that the Party experiencing
the delay promptly notifies the other Party of the delay; the nature thereof and
the extent to which the affected party will be unable to fulfill its obligations
hereunder. Each Party further agrees to use reasonable efforts to mitigate the
effects of a Force Majeure event as quickly as possible and to give the other
prompt written notice when it is again able to full perform such obligations.
Notwithstanding the foregoing, nothing herein shall be deemed to modify the
provisions of Articles 2 hereof.

 

  9.10 Termination as a Result of a Force Majeure Event.

If as a result of a Force Majeure Event, a Party is unable to fully perform its
obligations hereunder for any consecutive period of 180 days, the other Party
shall have the right to terminate this Agreement in its entirety, upon providing
written notice to the non-performing Party, such termination to be effective 30
days from the date thereof.

 

  9.11 Publicity.

No Party will make any announcement or other public statement concerning the
existence and terms of this Agreement without the consent of the other Party,
excepting only for such disclosures as may be required by applicable law or
regulation.

 

  9.12 Captions.

The Parties agree that the headings in this Agreement are used for the
convenience of the Parties only and are not intended to be used in the
interpretation of the Agreement.

 

  9.13 Termination of Original Agreement and Release of Claims.

As of the date of execution by the last party to execute this Agreement, the
PBM/SYNX Agreement is terminated by mutual agreement of the PBM and SYNX and of
no further force or effect. In consideration of the promises and covenants set
forth in this Agreement, NANOGEN and PBM, on behalf of themselves, their
officers, directors, employees, agents, subsidiaries, affiliated entities and
parent entities, assigns and successors, hereby fully and forever releases,
discharges and covenants not to sue or otherwise institute or prosecute any
legal, administrative or other proceedings against each other, and their
officers, directors, attorneys, shareholders, affiliated or related entities,
employees, assignees and successors, or any of them, with respect to any and all
liabilities, claims, demands, contracts, agreements, instruments, debts,
obligations, causes of action, damages, suits, debts, sums of money, accounts,
bonds, bills, covenants, controversies, promises, judgments and demands of any
nature, kind and description, whether in law, equity or otherwise, whether or
not now known or ascertained which currently do or may exist, including without
limitation any matters, cause or claim arising out of, or related to, or
connected with the PBM/SYNX Agreement.

 

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  9.14 Counterparts.

This Agreement may be executed in counterparts with the same force and effect as
if each of the signatories had executed the same instrument. Signatures may be
transmitted by facsimile.

IN WITNESS WHEREOF, the Parties have executed this Agreement effective the date
first set forth above.

 

PRINCETON BIOMEDITECH CORPORATION By:  

 

Name:   Jemo Kang Title:   President, Chief Executive Officer

 

NANOGEN, INC. By:  

 

Name:   David Ludvigson Title:   President, Chief Operating Officer

 

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Exhibit A

PBM Patent Portfolio

One-Step, Rapid Immunoassay on lateral flow membrane

¨U.S. Patent 5,656,448 — Dipstick Immunoassay Device

¨U.S. Patent 5,252,496 — Carbon Black Immunochemical Label

¨U.S. Patent 5,559,041 — Immunoassay Devices and Materials

¨U.S. Patent 5,728,587 — Immunoassay Devices and Materials

¨U.S. Patent 6,027,943 — Immunoassay Devices and Materials

¨U.S. Patent 6,541,277 — Immunoassay Devices and Materials

 

3 U.K. Patents   3 French Patents   4 Swiss Patents   2 Taiwanese Patents   3
Italian Patents   3 German Patents   2 Australian Patents   2 Japanese Patents  

 

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Exhibit B

Standard Criteria and Specifications of the Cross License Agreement of the Roche

Agreements.

[***]

*** Confidential portions omitted and filed separately with the Commission.

 

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