Exhibit 10.100



 





*** Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4)

And 240.24b-2




Exhibit 10.100




DEVELOPMENT AGREEMENT

FOR PANTHER INSTRUMENT SYSTEM




     THIS AGREEMENT is effective as of the last date of execution hereof (the “Effective Date”) and
is made by and between Gen-Probe Incorporated, (Gen-Probe) a corporation of the State of Delaware,
USA, located at 10210 Genetic Center Drive, San Diego, California 92121-4362 and STRATEC Biomedical
Systems AG (“STRATEC”), having its principal place of business at Gewerbestrasse 37, D-75217
Birkenfeld-Graefenhausen, Germany.



     WHEREAS, Gen-Probe is engaged in the business of designing, developing, and marketing nucleic
acid diagnostic products.



     WHEREAS, STRATEC is engaged and has expertise and experience in consulting for and the design,
development, and manufacture of In Vitro Diagnostic analytical systems and components therefore.



     WHEREAS, Gen-Probe has requested that STRATEC develop and manufacture an instrument based on
Gen-Probe’s existing prototype of an automated molecular analyzer system (Panther) on the terms and
the conditions set forth herein.



     WHEREAS, STRATEC has previously delivered to Gen-Probe the Project Proposal attached as
Exhibit “A” describing its understanding of the instrument and its proposal for development of the
instrument.



     NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein set
forth, the Parties hereto agree as follows:



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ARTICLE 1

DEFINITIONS 



1.1 Acceptance Criteria – As used herein, “Acceptance Criteria” shall mean the criteria
contained in the approved PRD in effect at the time of the acceptance decision (such criteria being
intended to verify fulfillment of the product requirements) to be applied by Gen-Probe in
determining whether a Panther instrument received from STRATEC shall be accepted. The Acceptance
Criteria for Prototype, Validation, Pre-Production and Production Instruments will be finalized and
approved by both parties in Phase 1.



1.2 Affiliate – As used herein, “Affiliate” shall mean an incorporated or unincorporated
entity, wherever organized, which controls, is controlled by or is under common control with
Gen-Probe or STRATEC. Control means the direct or indirect legal, equitable or factual power to
select a majority of the members of, or otherwise to direct the decisions made by, the directors or
other governing authorities of an organization (determined without regard to events of default of
fiduciary obligations which might limit or restrict exercise of such power).



1.3 Agreement – As used herein, “Agreement” shall mean the body of this Development
Agreement and the Exhibits attached hereto.



1.4 Cancellation Charges – As used herein, “Cancellation Charges” shall mean the aggregate
dollar amount of the following charges related solely to the cancellation, in connection with a
termination of this Agreement permitted by Section 2.6 (c) at the following rates: (i)
non-returnable parts and material in stock, at STRATEC’s actual cost; (ii) Panther instruments, at
the Transfer Price rate determined under Section 3.2 times the percentage each such Instrument has
been finally completed (final completion meaning completion to the point of meeting Shipping
Criteria) (iii) STRATEC labor costs directly and solely related to such termination (including, but
not limited to, working with vendors, packing items for shipment, and development cell tear-down)
at STRATEC’s then full normal and customary rates, including profit; (iv) a payment in the amount
of [***] as compensation to STRATEC for having allocated resources to development and production
planning activities; (v) costs reasonably incurred by STRATEC in preparing for production of
Pre-Production Instruments




***Confidential Treatment Requested




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under this Agreement and Production Instruments under the Supply Agreement; and (vi) any other
direct costs incurred by STRATEC as a sole result of such termination (including without limitation
vendor cancellation fees or non-cancelable vendor commitments) at the actual cost to STRATEC.
STRATEC shall use its best efforts to minimize Cancellation Charges.




1.5 Change Control – As used herein, “Change Control” shall mean a secure mechanism that is
used to track and document versions of hardware, software, and documentation, which incorporate
mutually agreed upon changes to the previous configuration.



1.6 Currency – All currency amounts set forth in this Agreement are stated in United States
Dollars (US$) and all amounts due hereunder shall be calculated in US-Dollars (US$), it being the
intention of the parties that all benefit or detriment due to changes in currency exchange rates
following the Effective Date shall be borne by STRATEC.



1.7 Designated Project Members – As used herein, “Designated Project Members” shall
comprise Gen-Probe and STRATEC personnel that have individually been named by Gen-Probe and STRATEC
for the purposes of communicating with each other regarding the development activities to be
performed hereunder. The Designated Project Members are listed in Exhibit D.



1.8 Gen-Probe IP Rights – As used herein, “Gen-Probe IP Rights” shall mean the property
rights of every kind (including patents, trademarks, copyrights or proprietary know-how) owned by
Gen-Probe concerning the Pre-Existing Gen-Probe Technology and the New Gen-Probe Technology. For
purposes of this Section 1.8, “proprietary know-how” shall consist only of such proprietary
information as Gen-Probe can establish by written documentation to have been known by Gen-Probe
prior to the time it became known to STRATEC as the result of a communication from Gen-Probe;
provided further that with respect to know-how concerning instrument design or operation,
“proprietary know-how” provided by Gen-Probe to STRATEC shall consist only of such proprietary
information as is



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disclosed in writing by Gen-Probe to STRATEC and designated in writing at the time of disclosure as
proprietary know-how.



1.9 GMP – As used herein, “GMP” means current good manufacturing practices, including
without limitation the FDA’s Quality System Regulations pursuant to Title 21 of the United States
Code of Federal Regulations, Part 820, as applicable to the manufacture of a Class 2 medical
instrument to gain 510(k) approval by the FDA.



1.10 Know-How – As used herein, “Know-How” shall mean any information of a commercial,
technical, manufacturing or other nature such as designs, drawings, blueprints, parts lists and
specifications, test data, charts and graphs, manufacturing procedures, operation sheets, bills of
material and lists and any other information, formulas, methods or equipment relating to
Pre-Existing Gen-Probe Technology, Pre-Existing STRATEC Technology and any New Technology as
described hereunder.



1.11 New Technology – As used herein, “New STRATEC Technology” shall refer to technology
developed by STRATEC during the development under the scope of this Agreement and “New Gen-Probe
Technology” shall refer to technology developed by Gen-Probe during the development under the scope
of this Agreement.



1.12 Payment – As used herein, “Payment” shall mean the remittance of an amount of money in
response to an invoice that has been issued by one of the Parties hereto and received by the other
party.



1.13 Panther – As used herein, “Panther” shall mean a low to mid volume molecular
diagnostic instrument designed to process a comprehensive menu of assays sold by Gen-Probe. The
Panther instrument shall be developed by STRATEC and Gen-Probe from Gen-Probe’s existing Panther
instrument design pursuant to and in accordance with the Project Parameters as defined below.
Without any limitation, the objectives of the development program shall be the improvement of
throughput of Gen-Probe’s existing Panther instrument design and achieving the targeted
reliability.



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1.14 Panther Prototypes – As used herein, “Panther Prototypes” shall mean the first
functional Panther prototype units, containing the planned hardware modules, enclosure and baseline
software functionality to conduct assay integration, software integration, support hardware
verification testing, develop manufacturing and test procedures and support preliminary reliability
testing. Some components may not represent final parts (example: vacuum-formed instead of molded,
machined instead of cast, etc). The software functionality will be limited at this stage and some
workarounds may be required. STRATEC shall use reasonable efforts for Prototype units to be
upgradeable to Validation Instruments by configuration management and module replacement
procedures.



1.15 Panther Validation Instruments – As used herein, “Panther Validation Instruments”
shall mean Panther instruments suitable to support hardware, software, and system verification and
validation including formal reliability testing. These systems will be built with the planned
production hardware modules, enclosure and other features and most of the planned software features
implemented. Lessons learned from the manufacture of the Prototypes will be incorporated, as much
as possible, into the Validation Instruments. The Validation Instruments will be used to finalize
the manufacturing and test procedures in preparation for the pre-production build. These units will
be used for most of the verification tasks and to generate assay performance data for regulatory
submissions, and must be sufficiently final for use in such applications. The differences between
validation system and pre-production level hardware are mostly limited to manufacturing techniques
(ex: machined parts instead of molded parts for lower risk components), and final labeling.



1.16 Pre-Production Instruments – As used herein, “Pre-Production Instruments” are systems,
built with all series-level hardware features, manufactured using series-level manufacturing
techniques and manufactured under full scope of the preliminary Device Master Record and used to
declare production readiness. These units will be suitable for clinical trials and initial ex-US
launch.



1.17 Pre-Existing Gen-Probe Technology – As used herein, “Pre-Existing Gen-Probe
Technology” shall mean any and all proprietary technical information which Gen-Probe owns



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or has the right to use as of the Effective Date, including without limitation instrument designs,
data, specifications, software, hardware components, and design concepts and all chemistry-related
Know-How.



1.18 Pre-Existing STRATEC Technology – As used herein, “Pre-Existing STRATEC Technology”
shall mean any and all proprietary technical information which STRATEC owns or has the right to use
as of the Effective Date, including without limitation STRATEC’s existing software, components and
design concepts, instrument designs, data, specifications, software, hardware components, and
concepts and all fluid management-related Know-How.



1.19 Program Material – As used herein, “Program Material” shall mean the Technical Design
History File, Device Master Record and other documentation that would be sufficient to allow
Gen-Probe to complete the development and manufacture of the Panther, including but not limited to
object code (but not source code) for software included within the Pre-Existing STRATEC Technology.
Disclosure of Program Material by STRATEC will be sufficient if it enables Gen-Probe to (a) make
or (b) acquire either from a third party supplier or from STRATEC the materials (including, but not
limited to, STRATEC generic material such as specific pumps or probes) necessary to complete the
development of Panther and manufacture of the instruments. Where the Program Material consists of
STRATEC generic material such as specific pumps or probes, STRATEC shall also provide, if
necessary, object code (but not source code) for software included within the Pre-Existing STRATEC
Technology. The transfer price for any material, excluding software, to be acquired by Gen-Probe
from STRATEC shall be established on the basis of STRATEC’s COS’s (cost of sales) plus a margin
[***].



1.20 Project Parameters – As used herein, “Project Parameters” shall mean: (a) the Product
Requirements Document (PRD) Specifications; (b) the Product Specification Document (“PSD”); and (c)
the project planning documents, including the Project Schedule, containing a list of project
milestones and the dates of completion for those milestones. The preliminary Project Parameters, as
they exist as of the Effective Date, are attached hereto as Exhibit B. The revised Project
Parameters will be established during Phase 1 of the project and are subject to


***Confidential Treatment Requested




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further revision after Phase 1 in accordance with the terms of Section 2.3(c) of this Agreement.



1.21 Reliability Requirements – As used herein, “Reliability Requirements” shall mean the
document attached as Exhibit C, approved by both Parties, setting forth the reliability
requirements necessary to meet the Product Requirements Document. After the Effective Date, the
Reliability Requirements shall not be modified without each party’s specific written consent. The
parties will prepare a more detailed Reliability Program Plan during Phase 1, which shall cover all
development related activities in detail. STRATEC and Gen-Probe shall update the Reliability
Program Plan during the development to include learnings from prior phase(s) and cover the post
launch reliability activities.



1.22 Shipping Criteria – As used herein, “Shipping Criteria” shall mean the criteria
instrument requirements contained in the approved PRD in effect at the time of intended shipment
(such criteria being intended to verify fulfillment of the product requirements) to be applied by
STRATEC in determining whether a Panther instrument is suitable for shipment to Gen-Probe. The
Shipping Criteria for Prototype, Validation, Pre-Production and Production Instruments will be
finalized and approved by both parties in Phase 1.



1.23 Steering Committee – As used herein, “Steering Committee” shall mean a committee which
shall consist of six members, three to be appointed by Gen-Probe and three to be appointed by
STRATEC. The Steering Committee shall supervise the performance of the program. Each Party to this
Agreement may substitute its designees with another employee by providing written notice of the
same. The Steering Committee can, if necessary and upon mutual consent, have employees and/or
consultants of either Party attend its meetings to be consulted on certain issues. All decisions
taken by the Steering Committee have to be agreed upon in mutual consent, provided, however, that
any deadlocks shall be resolved by the decision of the Chief Executive Officer of Gen-Probe, on the
conditions that (a) Gen-Probe shall reimburse STRATEC for any additional costs resulting from such
CEO decision and shall adjust the Project Schedule to reflect to such CEO decision and (b)
Gen-Probe shall relieve STRATEC of its obligations under Sections 6.2 and 6.3 to the extent such
CEO decision negatively impacts the reliability of the instrument.



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1.24 STRATEC IP Rights – As used herein, “STRATEC IP Rights” shall mean the property rights
of every kind (including patents, trademarks, copyrights or proprietary know-how) owned by STRATEC
concerning the Pre-Existing STRATEC Technology and the New STRATEC Technology.



1.25 Training – As used herein, “Training” shall mean instruction in the theory, operation,
and maintenance of the Panther.



ARTICLE 2

DEVELOPMENT AND ADAPTATION, PAYMENTS, TERMINATION




2.1 Development and Adaptation Activities –



a. STRATEC shall develop the Panther in accordance with the Project Parameters. As outlined in the
Project Parameters, the parties will share responsibility for the work elements included within the
development program. The parties’ initial responsibilities for the work elements shall be as set
forth in the Project Proposal, subject to change by action of the Steering Committee. The Parties
shall apply and assign personnel, equipment, supplies, and all other appropriate resources at their
disposal to develop the Panther. The Parties shall use their best efforts to cooperate and
coordinate in connection with all design activities. STRATEC shall review and accept or reject
development work performed by Gen-Probe such that STRATEC may make the commitments set forth in
Sections 6.2 and 6.3(a) of this Agreement and STRATEC’S obligations pursuant to Sections 6.2 and
6.3(a) shall not be excused by the nature of any work performed by Gen-Probe.



b. In connection with the performance of the development activities hereunder, STRATEC shall
provide Gen-Probe with monthly written reports indicating the status and the timeline of the
Panther project including the common project plan. Upon Gen-Probe’s request and at reasonable
intervals, STRATEC shall provide Gen-Probe with additional interim reports.



c. The parties intend that their activities pursuant to this Agreement will divided into three
phases, as follows: Phase 1, Instrument Specification and Project Planning; Phase 2, Design



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and Development; Phase 3, Transition to Manufacturing. Phase 2 will be divided into two subparts,
(a) and (b), for the design, assembly, and delivery of Prototype and Validation Instruments,
respectively.




1. Phase 1 shall be completed no later than 6 months following the execution of this
Agreement. Immediately upon completion of Phase 1, STRATEC shall provide Gen-Probe with
written notice of completion, the revised Project Parameters, and the Phase 1 Summary
described in Section 2.3(c). If Gen-Probe has not previously authorized the commencement of
Phase 2 development activities, Gen-Probe shall have sixty (60) days from the delivery of
STRATEC’s notice of Phase 1 completion to deliver such authorization to STRATEC. If
Gen-Probe fails to deliver such authorization within the time allowed, STRATEC may terminate
this Agreement in its sole discretion without any obligation to Gen-Probe.




2. Dates for the completion of Phases 2, 3, and 4 shall be established during Phase 1 in
accordance with Section 1.20. The parties agree that time is of the essence with respect to
the development program and completion of each Phase by the agreed completion date shall be
a material condition of Gen-Probe’s obligations under this Agreement, provided that the
period for STRATEC’s performance of Phase 2 activities shall not begin until Gen-Probe has
delivered its written authorization to commence such activities. Should Gen-Probe fail to
authorize STRATEC to commence the performance of Phase 2 activities within two weeks after
completion of STRATEC’s Phase 1 activities then the time for completion of all subsequent
Development Milestones and Phases will be postponed by the period elapsed between STRATEC’s
notification of completion of Phase 1 and Gen-Probe’s delivery of said written
authorization.



d. Obligation to Cooperate. Each of Gen-Probe and STRATEC shall use its commercially reasonable
efforts to provide promptly the cooperation, feedback, directions and updates of any documentation
and information upon which the other party is providing its development activities, or as otherwise
reasonably requested by the other party from time to time.



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e. Regulatory Compliance. STRATEC shall design and develop the Panther instrument in accordance
with each and every applicable requirement of the following regulations and requirements, to the
extent (and only to the extent) such regulations and requirements are effective prior to STRATEC’s
Release for Manufacturing: (a) Federal Food, Drug and Cosmetics Act, as amended, including in
particular, the then current Quality Systems Regulations (“QSR”) as established by the
United States Food and Drug Administration in accordance with GMPs covering devices
regulated by each FDA Center governing the intended use of the Instrument, i.e., blood screening
and diagnostic testing; (b) applicable standards of the Underwriters Laboratories or CSA;
(c) international electrical safety approval, meeting the EN 61010-1:2001 Medical Electrical
Equipment Standards; and (e) European CE Standards (IVDD 98/72/EC).



2.2 Payments by Gen-Probe –



a. Subject to the termination provisions of Section 2.6, Gen-Probe shall pay STRATEC a total of US$
6,270,000.00 for the activities to be performed by STRATEC hereunder. Gen-Probe’s Payments to
STRATEC shall be in accordance with the following Payment Schedule:




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PAYMENT SCHEDULE




	 	 	 	 	 	 	 	 	 
	MS	 	Phases	 	Development Milestone	 	Payment	 
	1
	 	0	 	Execution of Agreement	 	 	[***]	 
	2
	 	1	 	Completion of phase 1 and mutual sign-off of PRD including Shipping and Acceptance Criteria	 	 	[***]	 
	3
	 	2a	 	Gen-Probe’s written authorization for STRATEC to commence Phase 2 activities	 	 	[***]	 
	4
	 	2a	 	Delivery of Panther Prototypes	 	 	[***]	 
	5
	 	2a	 	Acceptance of Panther Prototypes	 	 	[***]	 
	6
	 	2b	 	Delivery of Panther Validation Instruments	 	 	[***]	 
	7
	 	2b	 	Acceptance of Panther Validation Instruments	 	 	[***]	 
	8
	 	3	 	Release for manufacturing	 	 	[***]	 
	 
	 	 	 	 	 	US$	6,270,000.00	 






Each party shall bear its own costs in connection with its performance under this Agreement,
including costs for staff travel reasonably necessary to accomplish the purposes of the Agreement.



b. Upon execution of this Agreement STRATEC shall invoice Gen-Probe for the amount due. Gen-Probe
shall remit Payment to STRATEC within thirty (30) days of receipt of the invoice.



c. Milestones 1, 2 and 3: Upon completion of each of Milestones 1, 2 and 3. STRATEC shall
invoice Gen-Probe for the amount due. Gen-Probe shall remit Payment to STRATEC within thirty (30)
days of receipt of the invoice.



d. Milestone 4: Upon STRATEC’s completion of the prototype phase (Milestone 4) STRATEC
shall provide Gen-Probe with a written notice thereof including evidence that Shipping Criteria
have been met. Within 10 working days after Gen-Probe’s receipt of such notice Gen-Probe is
requested to (i) release the shipment of the Panther Prototype unit(s) or (ii)



***Confidential Treatment Requested




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to decline STRATEC’s achievement of Shipping Criteria, providing STRATEC with a detailed written
justification thereof. If Gen-Probe declines STRATEC’s achievement of Shipping Criteria the
procedure as outlined in section (i) of this paragraph shall apply. If Gen-Probe releases the
shipment of the Panther Prototype unit(s) or fails to decline STRATEC’s achievement of Shipping
Criteria within 10 working days after Gen-Probe’s receipt of STRATEC’s notice STRATEC shall be
allowed to both ship the Panther Prototype unit(s) and invoice Gen-Probe for the amount due.
Gen-Probe shall remit Payment to STRATEC within thirty (30) days of receipt of the invoice.



e. Milestone 5: Within a period not exceeding thirty (30) days following STRATEC’s shipment
of the first Panther Prototype Gen-Probe shall complete testing in accordance with a subset, to be
mutually agreed, of the Acceptance Testing Criteria as outlined in the PRD and (i) provide STRATEC
with a written statement confirming that such Acceptance Criteria (Milestone 5) have been met, or
(ii) provide STRATEC with detailed written deviation report. If Gen-Probe declines STRATEC’s
achievement of Acceptance Criteria the procedure as outlined in Section j. of this paragraph shall
apply. If Gen-Probe confirms the achievement of the Acceptance Criteria or fails to decline
STRATEC’s achievement of the Acceptance Criteria within the said period of thirty (30) days STRATEC
shall be allowed to invoice Gen-Probe for the amount due. Gen-Probe shall remit Payment to STRATEC
within thirty (30) days of receipt of the invoice.



f. Milestone 6: Upon STRATEC’s completion of the activities resulting in the availability
of Validation Instruments (Milestone 6) STRATEC shall provide Gen-Probe with a written notice
thereof including evidence that Shipping Criteria have been met. Within 10 working days after
Gen-Probe’s receipt of such notice Gen-Probe is requested to (i) release the shipment of the
Validation Instruments (validation unit(s)) or (ii) to decline STRATEC’s achievement of Shipping
Criteria, providing STRATEC with a detailed written justification thereof. If Gen-Probe declines
STRATEC’s achievement of Shipping Criteria the procedure as outlined in Section i. of this
paragraph shall apply. If Gen-Probe releases the shipment of the Panther Validation Instruments or
fails to decline STRATEC’s achievement of Shipping Criteria within 10 working days after
Gen-Probe’s receipt of STRATEC’s notice STRATEC



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shall be allowed to both ship the Validation Instruments and invoice Gen-Probe for the amount due.
Gen-Probe shall remit Payment to STRATEC within thirty (30) days of receipt of the invoice.



g. Milestone 7: Within a period not exceeding thirty (30) days following STRATEC’s shipment
of the first Validation Instrument, Gen-Probe shall complete testing in accord with a subset, to be
mutually agreed, of the Acceptance Testing Criteria as outlined in the PRD and (i) provide STRATEC
with a written statement confirming that such Acceptance Criteria have been met, or (ii) provide
STRATEC with a detailed written deviation report. If Gen-Probe declines STRATEC’s achievement of
Acceptance Criteria the procedure as outlined in Section j. of this paragraph shall apply. If
Gen-Probe confirms the achievement of the Acceptance Criteria or fails to decline STRATEC’s
achievement of the Acceptance Criteria within the said period of thirty (30) days STRATEC shall be
allowed to invoice Gen-Probe for the amount due. Gen-Probe shall remit Payment to STRATEC within
thirty (30) days of receipt of the invoice.



h. Milestone 8: Within a period not exceeding thirty (30) days following STRATEC’s
declaration of production readiness Gen-Probe shall complete all of Gen-Probe’s procedures required
and authorize STRATEC to release the Panther instrument into series production. If Gen-Probe
declines to authorize STRATEC to release the Panther instrument into series production Gen-Probe is
requested to provide STRATEC with a detailed written justification thereof and the procedure as
outlined in Section j. of this paragraph shall apply. If Gen-Probe authorizes the release for
manufacturing or fails to decline such release within the said period of thirty (30) days, STRATEC
shall invoice Gen-Probe for the amount due and Gen-Probe shall remit Payment to STRATEC within
thirty (30) days of receipt of the invoice.



i. In case of Gen-Probe’s declination pursuant to Sections 2.2 d. or 2.2 f above Gen-Probe shall,
within ten (10) days following Gen-Probe’s declination, assess at STRATEC’s site whether the
Shipping Criteria have been met. Should, as a result of such assessment, Gen-Probe and STRATEC
agree that Shipping Criteria have been met or deviations from the Shipping Criteria are irrelevant
at this stage Gen-Probe shall release the relevant shipment. If



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the Parties agree on improvements to be implemented prior to Gen-Probe’s release for shipment, the
Parties shall in good faith agree on an additional period between thirty (30) and ninety (90) days
to be given to STRATEC to undertake the necessary steps to ensure that the Panther units meet the
Shipping Criteria. If STRATEC fails to meet the Shipping Criteria during such period of time
Gen-Probe shall have the right but not the obligation to initiate the termination procedure
pursuant to Section 2.6 b.



j. If Gen-Probe declines STRATEC’s achievement of the agreed subset of Acceptance Criteria pursuant
to Sections 2.2 e. or 2.2 g. above or declines to authorize STRATEC to release the Panther
instrument into series production pursuant to Section 2.2 h. above Gen-Probe shall, within ten (10)
days following Gen-Probe’s declination, assess whether the relevant criteria have been met. Should,
as a result of such assessment, Gen-Probe and STRATEC agree that the said criteria have been met or
deviations from the criteria are irrelevant Gen-Probe shall release the relevant milestone. If the
Parties agree on improvements to be implemented prior to Gen-Probe’s relevant release, the Parties
shall in good faith agree on an additional period between thirty (30) and ninety (90) days to be
given to STRATEC to undertake the necessary steps to ensure that the Panther units meet the
relevant criteria. If STRATEC fails to meet the criteria during such period of time Gen-Probe shall
have the right but not the obligation to initiate the termination procedure pursuant to Section 2.6
b.



2.3 Communication and Changes to Project Parameters –



a. The responsibilities of the Parties to this Agreement are set forth in the Project Proposal and
the Project Parameters (Exhibits A and B). In the event of a conflict between the terms and
conditions among the body of this Development Agreement and/or the Exhibits, the terms and
conditions that govern shall be determined by the following in the following order: (a) the body of
the Development Agreement, (b) the Exhibits and appropriate attachments, and (c) any other
documentation associated with this Agreement.



b. Each party shall name a finite number of personnel as Designated Project Members. The Designated
Project Members must comprise at least one Project Manager each for Gen-Probe and STRATEC. Each
party shall primarily communicate to the other party through, and



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direct any and all communication regarding the development activities performed under this
Agreement to, the other party’s Project Manager. When appropriate, Designated Project Members of
each party may communicate directly. Any communication from one party to the other party that is
not directed to a Designated Project Member shall be deemed as being outside the scope of this
Agreement and shall not bind either party.



c. Following the Effective Date of this Agreement (1) Gen-Probe may request changes to the Project
Parameters, (2) STRATEC may reject, pursuant to section 2.1(a), development work performed by
Gen-Probe, so that STRATEC proposes to re-allocate responsibility for such development work from
Gen-Probe to STRATEC, and (3) STRATEC may propose other changes to the Project Parameters. The
party proposing a change to the Project Parameters shall deliver to the other party a proposed
“Work Statement.” Any “Work Statement” submitted after Phase 1 shall generally contain the
following information: a description of the proposed change and associated services; the party
proposed to perform such services; the estimated cost of development any services required from
STRATEC and the proposed payment schedule; the estimated time schedule for performance and delivery
of the deliverables; completion and acceptance criteria; and the effect, if any, on the proposed
transfer price of each type of instrument affected. Upon receipt of a proposed Work Statement, the
parties shall negotiate in good faith to mutually agree upon a final Work Statement.



At the conclusion of Phase 1, STRATEC shall provide Gen-Probe with a summary of any changes in the
cost of development services or transfer prices as a result of changes in the Project Parameters
during Phase 1. The Phase 1 Summary and all subsequent Work Statements must be in writing and may
only be submitted by the parties’ respective project managers. If approved, such written work
statements shall be attached to this Agreement as an amendment to Exhibit B.



Work Statements that are likely to result in a delay to the Project Schedule of less than thirty
(30) working days and increase the costs of the development of the Panther by less than [***] or
will impact the transfer price by less than [***] may be approved by the parties’ respective
project managers. Otherwise, Work Statements must be approved by the Steering Committee.



***Confidential Treatment Requested




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STRATEC shall not refuse to accept any Work Statement if Gen-Probe agrees to pay the cost of the
development services and the adjusted transfer prices. Gen-Probe shall not have any obligation to
approve any Work Statement. If Gen-Probe refuses to pay the costs associated with STRATEC’S
rejection of Gen-Probe’s work pursuant to Section 2.1(a), then STRATEC shall be relieved of its
obligations under Sections 6.2 and 6.3 to the extent such decision negatively impacts the
reliability of the instrument.



d. STRATEC shall be responsible for establishing and maintaining the Change Control for all
released STRATEC documents regarding any changes to design of the Panther. STRATEC shall establish
a shared file system and Gen-Probe shall have online access to it. Change Control shall start
immediately after the prototype phase of the development, using a modified process to be agreed
upon between the Parties. Beginning with the manufacturing of Panther Validation Instruments the
Parties shall employ a Change Control process in its full scope, comprising ECN (engineering change
notice) / ECR (engineering change request) / TB (technical bulletin) equivalent to STRATEC’s SOPs
2.4.3, 2.4.4 and 2.4.5 attached hereto as Exhibit E.



2.4 Training –



a. Prior to the shipment of Panther Prototype units STRATEC shall supply reasonable and timely
Training to adequately qualified Gen-Probe personnel or its representatives in the design,
servicing and operation of the Panther Prototype unit(s). Such Training will be provided at no cost
to Gen-Probe and take place in one Training session at STRATEC’s facility and be restricted to a
total five trainees. Such sessions shall be for the purpose of “Training the trainer.” Gen-Probe
shall be responsible for all travel related expenses incurred by Gen-Probe in connection with this
Section 2.4(a).



b. STRATEC shall provide all standard maintenance training and support services to Gen-Probe for
the Panther unit(s), including, if applicable, training concerning maintenance, technical service,
and repair at a facility of Gen-Probe’s choosing in the United States or Europe for one thousand
one hundred and twenty-five Dollars (US$ 1,125) per STRATEC trainer per day. Gen-Probe shall be
responsible for all travel related expenses incurred by



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STRATEC in connection with this Section 2.4(b).



2.5 Shipping –



a. Delivery – Upon STRATEC’s choice Panther Prototypes and other units of the Panther shall
be shipped FCA (according to the meaning ascribed to the term by INCOTERMS in their latest
revision) from STRATEC’s site in either Birkenfeld, Germany, or Neuhausen a.R., Switzerland.
Gen-Probe shall designate the shipper and all shipping charges shall be billed directly from the
shipper to Gen-Probe. Gen-Probe shall be responsible for the Payment of all shipping and insurance
charges. Prior to the first shipment of a Panther Prototype, STRATEC shall obtain written
confirmation from Gen-Probe that Gen-Probe has obtained satisfactory insurance for damage during
transit. Gen-Probe shall bear the risk of loss and cost of transportation upon delivery by STRATEC
to the carrier.



b. Shipping Instructions – STRATEC shall ship Panther Prototypes and other units of the
Panther in accordance with Gen-Probe’s shipping instructions, including, if requested by Gen-Probe,
drop shipments to its designated locations. In the absence of specific instructions, STRATEC
reserves the right to ship by the method it, in good faith, deems most appropriate to Gen-Probe’s
San Diego, California, U.S.A. facility.



c. Shipping Containers – As part of the development program, STRATEC shall design and
validate appropriate shipping containers for the Panther instrument and spare parts.



d. Title – Title to any Panther instrument shall pass to Gen-Probe only upon Payment of the
relevant STRATEC invoice in accordance with this Agreement, and not simply upon shipment.



e. Damage Claims – All claims for loss or breakage and damage, whether concealed or
obvious, must be made to the carrier by Gen-Probe within a reasonable time after receipt of the
shipment, and STRATEC shall provide reasonable assistance in making claims to the carrier upon
Gen-Probe’s request. STRATEC shall not be responsible for any such breakage or damage, unless
directly attributable to STRATEC’s negligence or willful misconduct.



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2.6 Termination and Activities After Termination –



a. Termination for Insolvency – Either party may terminate this Agreement by thirty (30)
days prior written notice to the other party if: (a) either party shall become insolvent or make a
general assignment for the benefit of creditors; or (b) a petition under any bankruptcy act or
similar statute is filed by or against either party and is not vacated within ten (10) days after
it is filed.



b. Termination for Breach – Either party may terminate this Agreement at any time for
substantial breach of any of the material provisions hereof upon sixty (60) days prior written
notice to the other. The breaching party shall have a sixty (60) day period to cure the breach or
default in accordance with the Project Parameters. A second attempt by the breaching party to cure
such substantial or material breach is allowed, provided, however, that the duration of such second
attempt shall not exceed twenty (20) business days. Otherwise if such breach or default is not
cured within this total time this Agreement shall terminate.



c. Gen-Probe Termination Right – Until 90 days following the date Gen-Probe has declared
Prototype Acceptance pursuant to section 2.2(e), Gen-Probe shall have the right to terminate this
Agreement in good faith for reasonable commercial purposes (e.g., for any reason other than those
referred to in Sections 2.6 (a) and (b)), upon thirty (30) days written notice to STRATEC;
provided, however, that Gen-Probe may only terminate for convenience if it terminates the Panther
development and manufacturing program as a whole and does not continue such program in any way
whatsoever, neither by themselves nor with a partner or contractor. If Gen-Probe terminates this
Agreement for its convenience pursuant to this Section 2.6(c) prior to Gen-Probe’s written
authorization to STRATEC to commence Phase 2 development activities (Milestone 3), then Gen-Probe
shall have no obligation to STRATEC other than the [***]. If Gen-Probe terminates this Agreement
for its convenience pursuant to this Section 2.6(c) following commencement of Phase 2, then
Gen-Probe shall pay STRATEC the [***]. Gen-Probe shall have no other liability to STRATEC for such
termination under this Section 2.6(c). Gen-Probe shall make the payments required under this
Section within thirty (30) days of delivery of STRATEC’s invoice. [***]. Upon payment of
the Cancellation Charges or deposit of such



***Confidential Treatment Requested




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amount in escrow, STRATEC shall deliver to Gen-Probe all materials in possession of STRATEC for
which Gen-Probe has made payment. The right to terminate this Agreement pursuant to this Section
2.6(c) shall be personal to Gen-Probe and shall not apply to any third party assignee, successor in
right, and/or any legal entity acquiring a controlling interest in Gen-Probe. “Third party
assignee” and “successor in right” shall not include an entity which is an Affiliate subsidiary of
Gen-Probe.



2.7 Continued Development –



a. Continued Development of Panther – In the event of termination of this Agreement by
Gen-Probe, pursuant to sections 2.6(a) and (b) above, then Gen-Probe shall have the right to
complete the development of the Panther. Upon completion of development of the Panther pursuant to
this paragraph, Gen-Probe shall have the right to manufacture the Panther or have the Panther
manufactured by a third party for delivery to a Gen-Probe customer. STRATEC shall deliver to
Gen-Probe all the Program Material for which Gen-Probe has made payment, including any specialty
tooling paid for by Gen-Probe.



b. Portal Access and Escrow – At any time after execution of this Agreement, Gen-Probe may
request in writing that STRATEC provide Gen-Probe with portal access to certain information and/or
place certain information into an Escrow account. Within thirty (30) days of receipt of such a
request, STRATEC agrees to establish portal access and/or to deposit the Program Material. Any
escrow shall be established with an agency mutually agreed upon between Gen-Probe and STRATEC who
shall act as the Escrow Agent. In such event, STRATEC, Gen-Probe and the Escrow Agent shall enter
into the Escrow Agreement. All expenses incurred in connection with entering into the Escrow
Agreement shall be borne by Gen-Probe.



ARTICLE 3

PURCHASE OF TOOLING, PROTOTYPE INSTRUMENTS AND

VALIDATION INSTRUMENTS




3.1 Purchase of Panther Tooling – Beyond the scope of the tools, fixtures and control
systems commonly used by STRATEC, STRATEC shall procure all special tools, fixtures, and



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control systems required to manufacture the Prototype Instruments, Validation Instruments,
Pre-Production Instruments, and Production Instruments (collectively, the “Panther Tooling”).
Gen-Probe shall pay STRATEC the actual cost of the Panther Tooling, which is targeted at [***] and
which shall not exceed [***] without Gen-Probe’s prior written consent. Should Gen-Probe reject
such consent STRATEC shall be allowed to procure such Panther Tooling at its own expense and any
such tooling shall remain STRATEC’s sole property. STRATEC shall inform Gen-Probe of the cost of
the Panther Tooling at the completion of delivery of Panther Validation Instruments. Upon payment
by Gen-Probe of the cost of the Panther Tooling, the Panther Tooling shall be owned by Gen-Probe.



3.2
Procurement of Panther units under this Development
Agreement –

During the execution of this Agreement Gen-Probe shall be entitled to purchase and STRATEC shall be
required to sell:




	 	–	 	 up to [***] Panther Prototypes at a transfer price of [***] per unit, [***].
Two of these Panther Prototype units shall be Gen-Probe’s property but remain at
STRATEC until the end of the development program. The total number of Panther
Prototypes to be ordered shall be mutually agreed upon no later than at the end of
Phase 1.
	 
	 	–	 	 Up to [***] Panther Validation Instruments (validation units in STRATEC’s
terminology) at a transfer price of [***]. Four of these Panther Validation Instruments
shall be Gen-Probe’s property but remain at STRATEC until the end of the development
program. The total number of Panther Validation Instruments to be ordered shall be
mutually agreed upon no later than at the end of Phase 1.





     Up to [***] Pre-Production Instruments at a transfer price of [***]. The total number of
Pre-Production Instruments to be ordered shall be mutually agreed upon no later than at the end of
Phase 1.




	 	–	 	 The parties will use reasonable efforts to implement a cost reduction
program which may reduce the transfer prices set forth above.
	 
	 	–	 	 Gen-Probe may request delivery of reasonable quantities of additional
Prototype, Validation, and Pre-Production Instruments. STRATEC shall not unreasonably
withhold its consent to such request. The parties shall reasonably negotiate any





***Confidential Treatment Requested




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	 	 	 	price changes based on changes in STRATEC’s costs for the additional instruments.





3.3 Taxes – All amounts shown in this agreement are exclusive of any sales, use, excise,
customs, value added (“VAT”), goods and services or similar transactional taxes. All such
transactional taxes shall be borne by Gen-Probe. STRATEC will use reasonable efforts to notify
Gen-Probe in advance when STRATEC concludes that VAT will be charged on a particular type of
transaction. Gen-Probe acknowledges that it may owe VAT on Panther Tooling, Panther Prototypes,
and Panther Validation Instruments where these items will remain at STRATEC until the end of the
development program. Gen-Probe and STRATEC shall reasonably cooperate with each other in lawfully
minimizing tax withholdings and payments and in connection with communications with tax authorities
about matters related to this Agreement.



3.4 Manufacture of Panther – Simultaneously with the signing of this development Agreement,
the Parties are signing a Supply Agreement for the manufacture, distribution and supply of the
Panther. The Parties’ rights and obligations under the Supply Agreement are expressly conditioned
on the successful completion of this Development Agreement and Gen-Probe’s validation of the
Instrument in accordance with the PRD. Any termination of this Development Agreement in accordance
with its terms shall also automatically terminate the Supply Agreement, without liability to the
terminating party except as set forth in this Development Agreement.



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ARTICLE 4

PROPRIETARY RIGHTS




4.1 Freedom to Use
– STRATEC represents that any Pre-Existing STRATEC Technology used on
the Panther either made, used or sold alone, or in combination with other components of the
Panther, will not infringe the IP Rights of any third party nor will making, using or selling such
components interfere with any contractual relations between STRATEC and any third party. STRATEC
hereby grants to Gen-Probe, and if necessary, shall obtain for Gen-Probe from any third-party,
paid-up licenses to use all IP Rights necessary for Gen-Probe to sell, and its customers to use,
the Panther. STRATEC warrants that it will use commercially reasonable efforts to avoid the need
for the use of third-party IP in the Panther instruments or development thereof; provided ,
however, that the parties recognize that despite such efforts by STRATEC, third-party IP may be
required and may be used and incorporated by STRATEC upon written notice to Gen-Probe and a
reasonable opportunity to discuss available alternatives. Further, in all cases where third-party
IP is used, STRATEC guarantees that it shall obtain all necessary licenses for use of such IP in
the development of the Panther. STRATEC warrants that for manufacture, sale and use of the Panther
such third-party IP is either available under (i) regular commercial terms for Gen-Probe, in which
case, STRATEC shall identify such IP in writing to Gen-Probe prior to completion of the development
project; or (ii), if required, a label license that automatically transfers the IP to the purchaser
of component parts at no further cost to the purchaser. STRATEC shall use its best effort to
support Gen-Probe to obtain such licenses. For the avoidance of doubt, the transfer prices for all
instruments include all amounts to be paid for third party IP. In case of any dispute arising from
this section 4.1 Parties agree to use their best effort to reach mutual consensus in resolving such
dispute, such efforts to include a minimum of two meetings of the Steering Committee as well as a
retention period for any and all further legal action of 90 days following the notice of the event
causing such dispute.



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4.2 IP Rights Relating to Existing Components –



a. The Pre-Existing Gen-Probe Technology shall remain the sole property of Gen-Probe. Gen-Probe
hereby grants STRATEC a non-exclusive, royalty-free license, during the term of this Agreement, to
use the Pre-Existing Gen-Probe Technology to develop and manufacture Panther instruments.



b. The Pre-Existing STRATEC Technology shall remain the sole property of STRATEC, subject to the
rights of use granted Gen-Probe by this Agreement.




i. During the period STRATEC is supplying the Panther to Gen-Probe, STRATEC hereby grants to
Gen-Probe and its customers a non-exclusive, royalty-free license under any STRATEC IP
Rights to the extent necessary to use, import, and sell Panther Instruments.




ii. In the event Gen-Probe should terminate this Agreement pursuant to section 2.6(a) or
2.6(b), then STRATEC grants to Gen-Probe a non-exclusive license under STRATEC IP Rights to
make, use, import, and sell Panther Instruments, but for no other reasons. The license
granted hereunder shall be royalty-bearing at a rate of [***] per Panther instrument
manufactured.




iii. STRATEC grants Gen-Probe an option to negotiate a license on reasonable commercial
terms to make, use, import, and sell other Gen-Probe instrument systems incorporating the
Pre-Existing STRATEC Technology and the New STRATEC Technology, each to the extent such
technology is incorporated into the Panther instrument. The “reasonable commercial terms”
for the license of the New STRATEC Technology shall take into account, among other relevant
considerations, (a) the fact that Gen-Probe has funded the development work by STRATEC under
this Agreement, (b) the degree of the relationship between the New STRATEC Technology and
the Pre-Existing STRATEC Technology, (c) the level of inclusion of such Pre-Existing STRATEC
Technology in other instruments developed and manufactured by STRATEC, (d) the
competitive edge the incorporation of such Pre-Existing STRATEC



***Confidential Treatment Requested




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Technology in other Gen-Probe instrument systems could offer to Gen-Probe, and (e) the
impact of the competitive disadvantage the incorporation of such Pre-Existing STRATEC
Technology in other Gen-Probe instrument systems could have for STRATEC.



4.3 IP Rights Relating to New Technology –



a. Any IP Rights relating to New Technology that are based on, derived from, or are improvements
to, any Pre-Existing Gen-Probe Technology shall be property of
Gen-Probe (New Gen-Probe Technology).



b. Any IP Rights relating to New Technology that are improvements to any Pre-Existing STRATEC
Technology and conceived and/or reduced to practice by STRATEC during the course of STRATEC’s
performance of this Agreement shall be the property of [***].



c. Any IP Rights to New Technology conceived or reduced to practice by STRATEC during the
performance of the development under this Agreement and not falling under section 4.3(b) above
shall, subject to [***], be the property of [***], and [***] shall be free to use such IP Rights
for any purpose. If [***].



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d. STRATEC hereby assigns and conveys to Gen-Probe all right, title, and interest in and to any IP
Rights as outlined in section 4.3(c) above and agrees to execute any and all legal instruments
reasonably requested by Gen-Probe to effect, acknowledge, or perfect such assignment and
conveyance.



e. Gen-Probe hereby grants STRATEC a non-exclusive, royalty-free license, during the term of this
Agreement, to use the Gen-Probe New Technology to develop and manufacture Panther instruments.
STRATEC hereby grants Gen-Probe a non-exclusive license to use the STRATEC New Technology to
develop and manufacture Panther instruments, within the scope of and subject to the same terms as
set forth in Section 4.2(b) with respect to Pre-Existing STRATEC Technology.



4.4 Gen-Probe Ownership of Software and Design – Notwithstanding any other provision of
this Agreement, Gen-Probe shall be the sole owner of Panther-specific software developed by STRATEC
under this Agreement and Gen-Probe shall be the sole owner of the final design concept for the
Panther instrument. STRATEC shall be the sole owner of all generic software and all hardware
included within the Pre-Existing STRATEC Technology or New Technology derived from or based on
Pre-Existing STRATEC Technology, subject to the rights of use and options granted to Gen-Probe
under this Agreement.



4.5 Invention Disclosure – The Parties to this Agreement shall make a complete and prompt
written disclosure to each other specifically detailing the features and concepts of any and all
ideas, designs, discoveries, inventions, improvements, and, in general, all things encompassed
within the IP Rights as outlined in sections 4.3(b) and 4.3(c) above and identifiable as such that
are conceived or first actually reduced to practice, solely or jointly by the Parties hereto and/or
persons working under the Parties direction and/or persons employed or retained by the Parties
during the term of and in performance of service under this Agreement.



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4.6 Use of Know-How – STRATEC shall not be limited in the use of Pre-Existing STRATEC
Technology or the use of New STRATEC Technology and STRATEC may use such technology outside the
scope of this Agreement.



4.7
Enforcement –

a. Gen-Probe shall have the sole power and discretion to enforce and exploit any existing IP Rights
or any IP Rights pursuant to sections 4.3(a) or 4.3(c) above against third parties by civil lawsuit
or licensing. STRATEC shall cooperate and assist Gen-Probe as reasonably requested in any legal
action to enforce such rights. All costs of any such legal action, including any reasonable STRATEC
charges and expenses, shall be borne by Gen-Probe and any monetary relief granted as a result of
such legal action shall accrue to Gen-Probe.



b. Gen-Probe may request that STRATEC enforce existing STRATEC IP Rights to the extent necessary to
prevent non-licensed third parties from making, using, selling or offering to sell the Panther or
components of the Panther. If STRATEC does not elect to enforce such IP Rights, STRATEC shall take
whatever actions necessary to enable Gen-Probe to enforce any such IP Rights against third parties
by civil lawsuit. Any steps Gen-Probe considers to take shall only be taken in cooperation with
STRATEC. If STRATEC does not elect to enforce the IP Rights as outlined in this section, Gen-Probe
shall pay all costs indemnities and fees associated with bringing the lawsuit and shall have
control over selection of counsel and all strategic decisions relating to the lawsuit. Gen-Probe
shall retain any damages awarded for successful litigation of such claims and shall be solely
responsible for paying any damages against Gen-Probe or STRATEC.



ARTICLE 5

CONFIDENTIALITY




5.1 Confidential Information – Prior to the execution of this Agreement STRATEC and
Gen-Probe entered into a Confidentiality Agreement dated September 15, 2004 and its latest
amendment of July 25, 2006 hereto. The terms of this Confidentiality Agreement and its latest
amendment are hereby incorporated by reference subject to the terms of this Article 5.



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5.2 Subcontractors – STRATEC and Gen-Probe shall have the right, upon written approval of
the other party, to disclose Confidential Information on a need to know basis to subcontractors who
require knowledge thereof in order to assist Gen-Probe or STRATEC hereunder, provided that such
subcontractors execute a confidentiality agreement commensurate with the terms of this
Confidentiality Agreement dated September 15, 2004 and its latest amendment of July 25, 2006
hereto.



5.3 Standard of Care – STRATEC and Gen-Probe, respectively, shall use the same level of
care in complying with the obligations hereof respecting Confidential Information of the other
party as it does with respect to its own Confidential Information of similar nature. STRATEC and
Gen-Probe, respectively, represent and warrant that each and every officer, employee, agent and
subcontractor who will be given access to the other party’s Confidential Information hereunder
shall be under contractual obligation not to disclose or use such Confidential Information except
as directed by the disclosing party.



5.4 Extension of Obligations – The period of time during which disclosures may be made
pursuant to the Confidentiality Agreement dated September 15, 2004 and its latest amendment of July
25, 2006 hereto, is hereby extended for the term of this Agreement and the term of the Supply
Agreement. All obligations of confidence and non-use shall extend five (5) years from the
termination of this or the Supply Agreement.



ARTICLE 6

COMMERCIAL TERMS




6.1 Conflicting Documents – The terms and conditions of this Agreement shall govern the
performance of the Parties hereunder notwithstanding any inconsistent, conflicting or additional
language as may exist on purchase orders, invoices, confirmation, order acknowledgements or other
forms of communications of either Gen-Probe or STRATEC.



6.2 STRATEC Warranty and Representations – STRATEC guarantees good workmanship in
accordance with generally accepted professional standards (e.g. 21 CFR Part 820) for work of this
nature. STRATEC further guarantees that all work to be performed under



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this Agreement will be suitable for the purpose intended, and be performed in a sound manner, free
from all material defects including defects in STRATEC‘s design. Subject to Section 6.3(a) below,
STRATEC makes no other guarantees or warranties whatsoever, and this warranty is in lieu of all
other warranties, express or implied, including any implied warranty of merchantability. With the
exception of a warranty on material defects discovered prior to the putting into operation of
Panther Prototypes and Panther Validation Instruments, such instruments shall not be covered by any
warranty for wear and tear and the like. STRATEC shall provide a customary warranty on production
instruments and spare parts, to be set forth in the Supply Agreement.



6.3 Indemnification –




	a.	 	Indemnification by STRATEC.






1. STRATEC hereby agrees to defend, indemnify, and hold harmless Gen-Probe and its
Affiliates and their officers, directors, employees and agents from all expenses, costs,
legal fees, and damages arising out of any claim which results in physical damage to
property and/or personal injury (including death) due to any grossly negligent act or
omission of STRATEC and, if applicable, its suppliers.




2. STRATEC hereby agrees to defend, indemnify, and hold harmless Gen-Probe and its
Affiliates and their officers, directors, employees and agents from all expenses, costs,
legal fees, and damages arising out of any third party claim of patent infringement where
the relevant patent was issued prior to completion of development of the Panther Validation
Instrument, but the use of the patented technology in the Panther was not disclosed by
STRATEC to Gen-Probe. In the event of any third party claim subject to this indemnity
obligation, the parties shall meet and confer in good faith and in discuss the claim and
potential responses (including implementation of alternative technologies to avoid the claim
of infringement). Neither party shall respond to the third party, or take any other legal
action beyond the discussions between the parties themselves, for a period of ninety days
from receipt, in order to facilitate the discussion of potential responses.



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3. STRATEC hereby agrees to defend, indemnify, and hold harmless Gen-Probe and its
Affiliates from all additional or incremental expenses, costs and damages arising out of or
related to the failure of production instruments manufactured by or on behalf of STRATEC to
comply with the Reliability Requirements. For the sake of clarity and the avoidance of
doubt, the parties agree that STRATEC’s indemnity obligation shall only include instrument
and component failures resulting from instrument hardware and software design and/or
manufacturing, and that STRATEC’s indemnity obligation shall not include instrument failures
resulting from user error, poor field service, or other causes beyond STRATEC’s direct
control. “User error” shall not include failures resulting from operator actions to the
extent such failures (A) were reasonably foreseeable and (B) could have been reasonably
prevented by software or hardware design (in a manner consistent with (i) the Instrument’s
intended use and (ii) industry practices in effect prior to STRATEC’s Release for
Manufacturing); provided that STRATEC’s indemnity obligation shall not include any such
event that occurs only one time. In no event shall STRATEC be liable to indemnify Gen-Probe
for any consequential, punitive, exemplary or special damages, including, without
limitation, lost profits as a result of deficiencies in instrument reliability. Gen-Probe
will comply with the training and service provisions of the Supply Agreement and will
provide STRATEC with prompt written notice if Gen-Probe believes that instrument reliability
does not meet the Reliability Requirements.



b. Indemnification by Gen-Probe. Gen-Probe hereby agrees to defend, indemnify, and hold
harmless STRATEC and its Affiliates and their officers, directors, employees and agents from all
expenses, costs, legal fees, and damages arising out of any claim which results in physical damage
to property and/or personal injury (including death) due to any grossly negligent act or omission
of Gen-Probe and, if applicable, its suppliers.



6.4 Limitations of Warranties — The above warranties and indemnities, and all other
warranties and indemnities under this contract, are limited warranties and they are the only
warranties and indemnities made by STRATEC under this Agreement with respect to design and
development of the Panther Instrument and/or other deliverables. STRATEC makes and



29 of 35









 







Gen-Probe receives no other indemnity or warranty under this Agreement with respect to the Panther
Instrument or other deliverables express or implied, and STRATEC disclaims all warranties of
merchantability and fitness for a particular purpose except as otherwise provided herein, no other
warranty is made regarding the results obtained by the use of the Panther Instrument or other
deliverables. Neither party shall have any liability with respect to its obligations under this
agreement for consequential, punitive, exemplary, or incidental damages even if the other party has
been advised of the possibility of such damages. The stated express indemnities and warranties are
in lieu of all liabilities or obligations of either party for damages arising out of or in
connection with the delivery, use, or performance of the Panther Instrument and/or other
deliverables. Either party’s liability in connection with this development agreement, whether
arising in contract, negligence, strict liability in tort or warranty or any other legal theory
shall not exceed the greater of (a) US $2 million or (b) the amount actually paid by Gen-Probe to
STRATEC for the development project, up to a maximum of the budget hereunder. Nothing contained in
this section shall limit the rights of either party under the Supply Agreement.



ARTICLE 7

MISCELLANEOUS PROVISIONS




7.1 Interpretation – In this Agreement, unless a clear contrary intention appears:




(i) the singular number includes the plural number and vice versa;




(ii) reference to any person or entity includes such person’s or entity’s successors and
assigns;




(iii) reference to any law, rule, regulation, order, decree, requirement, policy, guideline,
directive or interpretation means, unless specified otherwise, as amended, modified,
codified, replaced or re-enacted, in whole or in part, and in effect on the determination
date, including rules and regulations promulgated thereunder;




(iv) “hereunder”, “hereof”, “hereto”, “herein” and words of similar import shall be deemed
references to this Agreement as a whole and not to any particular article, section or other
provision hereof; and



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(v) “including” (and with correlative meaning “include”) means including without limiting
the generality of any description preceding such term.



7.2 Rights of Inspection and Audit – Gen-Probe shall have the right, during normal business
hours and at reasonable intervals, to visit STRATEC’s facility to conduct evaluations of the
performance by STRATEC under this Agreement. Gen-Probe shall provide reasonable prior written
notice to STRATEC of the time and date of each such visit. STRATEC shall use its best efforts to
permit and enable Gen-Probe to have access, during normal business hours and with reasonable
advance notice, to STRATEC approved agents and subcontractors, including their facilities and
records, retained by STRATEC for the purposes hereof.



7.3 Official Correspondents – Communications between the Parties during the term hereof
shall be conducted through their designated Team Leaders, each of whom will have the authority and
the knowledge to address technical, financial and administrative issues pursuant to Section 2.3
above. All letters, documents, materials, and in general all things to be transmitted between the
Parties in performing hereunder shall be transmitted by and to the respective Team Leader. Further,
the Team Leaders shall attempt to be present for all telephone conversations, personal meetings and
the like between the Parties. A party may change its Team Leader by prior written notice to the
other party. Gen-Probe hereby designates Brad Blake as its initial Team Leader. STRATEC hereby
designates Ulrich Taibon as its initial Team Leader.



7.4 Independent Contractors – The Parties are, act, and shall act at all times as
independent contractors in carrying out their respective obligations under this Agreement and
nothing contained herein shall be construed, deemed or interpreted otherwise. In performing
hereunder, neither Party is an agent, employee, employer, joint venturer or partner of the other
Party. Neither Party shall enter into or incur, or hold itself out to any third party as having the
authority to enter into or incur, on behalf of the other Party, any contractual expenses,
liabilities or obligations whatsoever.



7.5 Notices – Any notice required or permitted by this Agreement shall be in writing.
Notice to a party shall be deemed to have been given if and when delivered by either party to



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the other in person or if and when mailed by registered or certified mail to the address shown
below, or at such other address as each party instead may from time to time designate in writing to
the other party.



	 	 	 
	          If to Gen-Probe:

	 	Gen-Probe Incorporated
	 

	 	10210 Genetic Center Drive
	 

	 	San Diego, California 92121
	 

	 	USA
	 

	 	Attention: Chief Executive Officer
	 

	 	Copy to: General Counsel
	 
	 	 
	          If to STRATEC:

	 	STRATEC Biomedical Systems AG
	 

	 	Gewerbestrasse 37
	 

	 	D-75217 Birkenfeld
	 

	 	Germany
	 

	 	Attention: Vorstand / Board of Management
	 

	 	Copy to: Rechtsabteilung / Law and Patents






7.6 Compliance with Relevant Laws – Each of the Parties hereto warrants that it has
complied, is complying and will comply with all applicable laws, rules, orders, ordinances, decrees
and regulations relating to the performance hereunder.



7.7 Adverse Information – The Parties hereto warrant that if either one develops or
discovers adverse information regarding the development of the Panther the other party will be
notified immediately.



7.8 Noninterference – STRATEC represents and warrants that no provision of this Agreement
is in any way in conflict with or impairs performance of any present contractual obligation to any
third party and neither STRATEC nor any persons employed by STRATEC or who assist STRATEC in this
project will assume any obligation or restriction which will conflict with or prevent them from
performing any of the services called for by this Agreement.



7.9 Assignments, Succession and Waivers – Except where the assignee is a successor in
business or an Affiliate, this Agreement or any part thereof shall not be assignable, and any
attempted assignment shall be null and void, without first obtaining the express written consent



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of the other party, provided, however, that either party may assign this Agreement to an Affiliate
or to a purchaser of substantially all of the assets of the business to which this Agreement
relates without the prior consent of the other party. This Agreement shall be binding upon and
shall inure to the benefit of the Parties, their successors and permitted assignees. No express
waiver or any prior breach of this Agreement shall constitute a waiver of any subsequent breach
hereof and no waiver shall be implied.



7.10 Unforeseen Circumstances – Neither party shall be liable in damages for, nor shall
this Agreement be terminable or cancelable by reason of, any delay or default in such party’s
performance hereunder if such default or delay is caused by events beyond such party’s reasonable
control including, but not limited to, acts of God, acts of terrorism or other attacks launched as
acts of war against the United States, Germany or Switzerland or any other relevant country
regulation or law or other action of any government or agency thereof, insurrection, civil
commotion, destruction of production facilities or materials by earthquake, fire, flood or storm,
labor disturbances, or epidemic. Each party agrees to use its best efforts to resume its
performance hereunder if such performance is delayed or interrupted by reason of such forces
majeure as listed above



7.11 Integration – This Agreement and the Supply Agreement executed concurrently with this
Agreement express the entire understanding between Gen-Probe and STRATEC with respect to the
subject matter addressed and merge all prior oral discussions or written correspondence between
them. This Agreement and the Supply Agreement shall be read and interpreted together. The Project
Proposal attached as Exhibit A is attached only for reference as to the state of the instrument
design and the preliminary work allocation between the parties as of the Effective Date of this
Agreement, and the commercial terms set forth in the Project Proposal are superseded in their
entirety by this Agreement. No notification, extension, or waiver of this Agreement or any
provision hereof shall be binding unless agreed to in writing by the Parties.



7.12 Publication – Neither Party shall disclose the existence of this Agreement or the
contents thereof to the public or any third parties without the prior written consent of the other



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Party. However, either Party shall have the right to disclose information, including, if
applicable, the Agreement or the contents thereof, only as necessary to meet its legal obligations.
Unless required by law, the Parties hereto shall use their best effort to reach agreement on the
contents and the scheduling of the public disclosure of any such information. STRATEC shall not
refer to this Agreement or the Panther Instrument in marketing materials without Gen-Probe’s prior
written consent, which shall not be unreasonably withheld.



7.13 Governing Law – This Agreement shall be governed by and construed in accordance with
the laws of the state of California, USA. In the event of the promulgation of any state or federal
regulation or law governing the conduct of the services to be performed hereunder, both Parties
shall comply with all such regulations and laws.



7.14 Legal Counsel – Each party is a sophisticated business entity which has involved legal
counsel of its own choosing in the drafting, negotiating and concluding of this Agreement and any
presumption in statutory or common law against the drafter of any particular provision herein, or
against the drafter of this Agreement as a whole, shall be of no effect whatsoever and each party
covenants to, and shall, refrain from asserting or relying upon any such presumption.



7.15 Severability – If any provision of this Agreement is held unenforceable or in conflict
with the law of any jurisdiction, it is the intention of the Parties that the validity and
enforceability of the remaining provisions hereof shall not be affected by such holding.



7.16 Non-Waiver – Failure of either party hereto to insist on strict performance shall not
constitute a waiver of any of the provisions of this Agreement or waiver of any future default of
STRATEC.



7.17 Arbitration – Any controversy or disputes or claims arising between the Parties in
connection with this Agreement which cannot be settled in an amicable way shall be finally settled
under the arbitration rules of the International Chamber of Commerce at London, United Kingdom by
one or more arbitrators appointed in accordance with said rules. Under no



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circumstances shall any arbitration award include any punitive or exemplary damages or any
injunctive relief nor shall the arbitrator(s) have the authority to ignore or vary the terms of
this Agreement. Any award or decision made in such arbitration shall be final and binding upon the
Parties and enforceable in a court of competent jurisdiction.



7.18 Headings – All article and paragraph captions or titles are intended only for
reference purposes and are without contractual significance or effect.



7.19 Survivability – The rights and obligations of the parties that have accrued as of the
expiration or earlier termination of this Agreement under Sections 2.2 and 2.6(c) and Articles 4,
5, 6 and 7 (and under any other provision of this Agreement which by its nature or context is
intended or required to survive the expiration or earlier termination of this Agreement) shall
survive the expiration or termination of this Agreement in full force and effect.



7.20 Multiple Executions – This Agreement may be executed in one or more copies, each of
which will be deemed to be an original, but all of which together will constitute one and the same
instrument, however, this Agreement shall have no force or effect until executed by both Parties.



     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement:



	 	 	 
	Gen-Probe Incorporated

	 	STRATEC Biomedical Systems AG
	 
	 	 
	By
/s/ Niall Conway

	 	By /s/ Hermann Leistner
	   Niall Conway

	 	   Hermann Leistner
	Executive Vice President, Operations

	 	Chairman, Board of Management
	 
	 	 
	By
/s/ R. William Bowen
	 	 
	   R. William Bowen
	 	 
	Vice President & General Counsel
	 	 
	 
	 	 
	Date:
22 November 2006

	 	Date: 22 November 2006







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