**Exhibit 10.331**

 
| **CONFIDENTIAL** | ** ** | **REDACTED  VERSION** |
|------------------|------------|-----------------------|

 

**[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTEDAND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTEDPORTIONS.**

 

 

**MODIFIED BLOOD SCREENING INSTRUMENT –**

**eSAS 2 ADDENDUM**

 

**AMENDING**

 

**AGREEMENT ENTERED INTO AS OF JUNE 11,1998**

 

**BY AND BETWEEN**

 

**GEN-PROBE INCORPORATED, A DELAWARECORPORATION**

 

**AND**

 

**CHIRON CORPORATION**

 

**effective as of January 1, 2002**

 

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TABLE OF CONTENTS

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

 

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

 

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| **CONFIDENTIAL** | ** ** | **REDACTED  VERSION** |
|------------------|------------|-----------------------|

 

 

**MODIFIED BLOOD SCREENING INSTRUMENT –**

**eSAS 2 ADDENDUM**

 

This Modified BloodScreening Instrument — eSAS 2 Addendum (“eSAS 2 Addendum”) is entered into,effective as of January 1, 2002 (“Addendum Effective Date”) pursuant toand amending that certain Agreement entered into as of June 11, 1998 (“Agreement”)by and between Gen-Probe Incorporated, a Delaware corporation (“Gen-Probe”)with a principal place of business at 10210 Genetic Center Drive, San Diego CA92121, and Chiron Corporation, a Delaware corporation (“Chiron;” Chiron andGen-Probe each is individually referred to as “Party” and collectively are referred to as the “Parties”) with a placeof business at 4560 Horton Street, Emeryville, CA 94608.

 

Recitals

 

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

 

B.                                     Inthe Agreement, the Parties agreed to discuss, during the term thereof, theselection and establishment of one or more Development Programs for one or moreBlood Screening Instruments.

 

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

 

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

 

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

 

2

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Agreement

 

NOW, THEREFORE, for andin consideration of the mutual covenants and agreements set forth in this eSAS2 Addendum, the Parties agree as follows:

 

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

#  

## 1.1         Agreement means the Agreement (asdefined in the Preamble of this eSAS 2 Addendum), as amended by the agreementsreferred to in Recital A of this eSAS 2 Addendum and as may be subsequentlyamended.

##  

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

##  

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

##  

## 1.4         eSAS 2 Instrument is defined on Schedule 1.4.

##  

## 1.5         eSAS2 Development Costs means, with respect to this eSAS 2 Addendum only, thedevelopment costs defined in Section 5 hereof.

##  

## 1.6         eSAS2 Development Program means the development program for the development ofthe eSAS 2 Instrument system under the terms of this eSAS 2 Addendum, anoutline of which is set forth in Schedule 1.6 hereto and as suchdevelopment program for each module of the eSAS 2 Instrument system isdescribed in the Binder, and consisting of (i) the Product RequirementsDocuments, (ii) the Software Requirements Specifications, (iii) theTechnical Plan, (iv) the Resource Plan included within the Technical Plan,and (v) the Budget.

##  

## 1.7                                 eSAS2 Addendum Term is defined in Section 8.1.

##  

## 1.8                                 FTELabor Rate is defined in Section 5.2.1.

##  

## 1.9                                 FullyBurdened Manufacturing Costs is defined in Section 6.1.1.

##  

## 1.10                           MaterialModification means a change or amendment to the eSAS 2 Development Programthat materially affects the requirements set forth in the then-current ProductRequirements Document, Software Requirement Specifications, Technical Plan,Resource Plan or Budget, including without limitation any modification thatcould significantly degrade the assay sensitivity or specificity all as furtherdefined in Section 3.3.

 

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## 1.11                           Non-materialModification means a change or amendment to the eSAS 2 Development Programother than a Material Modification. Agreement among the Project Management that a modification is a “Non-materialModification” hereunder as described in Section 3.2 below shall beconclusive.

##  

## 1.12                           ProductRequirements Document (or “PRD”) means the specifications for each modulewithin the eSAS 2 Instrument system, each of which includes as a componentthereof the applicable Software Requirements Specifications.  The initial Product Requirements Document fortwo of the five (5) modules described in Schedule 1.4 are attachedhereto as Schedule 1.12-A and Schedule 1.12-B.  The PRD for each of the remaining three (3) modulesdescribed in Schedule 1.4 will be developed, and each PRD after agreementbetween the parties may be amended from time to time in accordance with theprovisions of Section 3 below.  EachPRD, as it may be developed and/or amended from time to time, shall be retainedin the Binder under the heading “Product Requirements Document (PRD, Revision    ,dated xx/xx/xx).”

##  

## 1.13                           ResourcePlan means the description of (i) a Party’s personnel to be allocatedto the eSAS 2 Development Program, including the name of the specific personnelor the qualification or grade of unidentified personnel, and dedicated amountof time and periods for the commitment of such personnel required for the eSAS2 Development Program, and (ii) equipment, tools, software, or otherspecial items, the purchase, license or leasing of which is specificallyrequired for use by such personnel to support the eSAS 2 DevelopmentProgram.  The initial Resource Plan isattached hereto as Schedule 1.13. The Resource Plan may be amended from time to time in accordance withthe provisions of Section 3 below. The Resource Plan, as it may be amended from time to time, shall beretained in the Binder under the heading “Resource Plan.”

##  

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

##  

## 1.15                           TechnicalPlan means the statement of work prepared for the development of the eSAS 2Instrument, including the responsibilities to be performed by each Party, theresponsibilities to be performed jointly, the schedule for performance ofthose responsibilities, an overall development timeline and a ResourcePlan.  The initial Technical Plan isattached hereto as Schedule 1.15. The Technical Plan may be amended from time to time in accordance withthe provisions of Section 3 below. The Technical Plan, as it may be amended from time to time, shall beretained in the Binder under the heading “Technical Plan, Revision    ,dated xx/xx/xx.”

##  

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

 

## 1.17                           Timelinemeans the overall development timeline included within the Technical Plan.

 

4

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# 2.               eSAS 2 Development Program.

#  

## 2.1         Objective.  Subject to the terms of the Agreement, asamended by this eSAS 2 Addendum, the Parties each shall conduct theirrespective obligations under the eSAS 2 Development Program as established inaccordance with the terms hereof, and shall apply for and endeavor to obtainsuch regulatory approvals as necessary or appropriate to make and sell the eSAS2 Instrument in the Territory for use in the Blood Screening Field.

##  

## 2.2         GeneralConduct of Development.  The Parties,using Commercially Reasonable Efforts, shall conduct their respectiveobligations under the eSAS 2 Development Program in compliance in all materialrespects with all requirements of applicable laws and regulations and allapplicable good laboratory, clinical and manufacturing practices.  In addition, the Parties each shall proceeddiligently with their respective obligations under the eSAS 2 DevelopmentProgram and shall use their respective Commercially Reasonable Efforts toachieve the objectives of the eSAS 2 Development Program efficiently andexpeditiously.  The Parties each shallallocate such personnel, equipment, facilities and other resources to the eSAS2 Development Program to carry out their respective obligations and toaccomplish the objectives thereof, all as is more particularly described in theeSAS 2 Development Program, as amended from time to time during the term ofthis eSAS 2 Addendum, in accordance with the provisions of Section 3.  Each Party shall have the right to consultwith the other Party regarding the eSAS 2 Development Program and theobligation to reasonably consider the other Party’s advice.

##  

## 2.3         NoLiability if Commercially Reasonable Efforts Are Expended. Neither Partywill be in breach of its obligations to the other hereunder and such Partyshall be deemed to have exercised Commercially Reasonable Efforts, so long assuch Party shall have committed the resources described in the eSAS 2Development Program.  The payment of eSAS2 Development Costs between the Parties shall be due and payable withoutrespect to the achievement of any particular deliverable specified in the eSAS2 Development Program.

##  

## 2.4         ProjectManagement.

##  

### 2.4.1                        Principlesof Project Management.  The Partiesagree that in the process of exercising their responsibilities, the ProjectManagement (consisting of the Project Manager and Project Leaders, as set forthherein) should have routine access to such information needed to assessprogress under and costs of the eSAS 2 Development Program.  Specifically, the Parties agree that theProject Leaders shall be invited to participate in all team meetings, and willhave access to team meeting minutes, timecards and other expense records,except to the extent the Project Leader for the Party assigned principalresponsibility under Section 2.5.3 of this eSAS 2 Addendum for an activitydetermines in its reasonable discretion that any such meetings or minutescontain confidential, proprietary information of the responsible Party.  In such cases, the Project Manager shall (i) determinewhether the Project Leader for the Party not having primary responsibility forthe activity can attend all or a portion of such meeting, (ii) provide acopy of the meeting minutes to the Project Leader not having primaryresponsibility for the activity with such confidential, proprietary informationredacted, and (iii) to the extent that such minutes had proprietary orconfidential information redacted, inform the Project Leader not having primaryresponsibility of the general nature of any decisions made at such meetingwhich affect the PRD, SRS, Timeline or Budget; provided, however that theProject Manager may only redact information comprising Chiron intellectualproperty and know how or confidential business issues.  Project Leaders will have access tonon-confidential and non-proprietary information of the other Party necessaryto perform their responsibilities under the eSAS 2 Development Program,including those listed under 2.4.4. Project Leaders will inform and coordinate all activities, includingmeetings with

 

5

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### personnel involved in the performance of the eSAS 2 DevelopmentProgram, with the Project Manager.  Theprimary point of contact for the eSAS 2 Development Program at Chiron will beChiron’s Project Manager, the primary point of contact at Gen-Probe will beGen-Probe’s Project Leader.  In order tomaintain an efficient and orderly development the Parties will communicatethrough the primary points of contact as much as possible when requestinginformation concerning the progress of the eSAS 2 Development Program.  Confidentiality will be maintained inaccordance with Section 8.1 of the Agreement, and disclosure of anyinformation under this Section 2.4.1 shall be governed by that certainConfidentiality and Joint Interest Agreement, by and between the Parties, datedas of October 30, 2001.

###  

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

###  

### 2.4.3        Project Manager’sResponsibilities.  The ProjectManager shall be responsible for the following activities, together with suchother activities as the Parties may agree:

###  

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

####  

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

####  

#### (c)  Submittingand receiving the reports, materials and documents required to be deliveredunder this eSAS 2 Addendum;

####  

#### (d)  Overseeingthe process of proposing, and submitting to the Parties, any proposedmodifications to the Product Requirements Document, Software RequirementSpecifications, Technical Plan, Resource Plan or Budget, and in the event theParties cannot agree, presenting the same to the Supervisory Board in anobjective and neutral manner;

####  

#### (e)  Arrangingany meetings to be held between the Parties and participating, to the extentthe Project Manager deems appropriate, in meetings of the Project Leaders;

####  

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

####  

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

####  

#### (h)  Fosteringgood communication between the Parties. It is intended by the Parties that both Parties share, through reportsfrom the Project Leaders to the Project Manager, in the information concerningthe progress made in the eSAS 2 Development Program and the cause of anydelays.  It is expected that the ProjectLeaders will make recommendations to the Project Manager for

 

6

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

####  

#### (i)  It isunderstood that both companies hold proprietary trade secret know-how andprocesses regarding their respective technologies that are not necessarilyshared as part of this Agreement.  Onoccasion it may occur that a full understanding of difficulties in the progressof development may require a detailed understanding of this proprietaryknow-how and processes.  Each Party willendeavor to appraise the other of the outcomes and consequences of thesedifficulties, while protecting the confidentiality of the information.

####  

### 2.4.4                        ProjectLeaders.  Gen-Probe and Chiron willeach appoint a project leader (each a “Project Leader”) who is responsible for (a) assemblingproject teams for his or her respective Party and (b) completing projectresponsibilities allocated to such Party in Section 2.5.  For the purposes of completing the eSAS 2Development Program, these Project Leaders will report to the ProjectManager.  The Project Leader employed bya Party shall be responsible for reporting to the employing Party whether he orshe believes the other Party has proceeded diligently with its statedobligations under the eSAS 2 Development Program, has allocated sufficientpersonnel, equipment, facilities and other resources to achieve the objectivesof the eSAS 2 Development Program and has exercised Commercially ReasonableEfforts to achieve its objectives efficiently and expeditiously.

###  

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

###  

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

###  

## 2.5         DevelopmentResponsibilities.

##  

### 2.5.1                        PrincipalResponsibility; General Statement. The Parties’ intention is the smooth and efficient conduct ofdevelopment, and the Parties desire by this Section 2.5 to provide guidingprinciples by which the responsible Party may make day-to-day decisions and bywhich the approval process more particularly described in Section 3 belowshall be governed.  The Parties intendthat the eSAS 2 Instrument development will be conducted primarily andprincipally by **[***]**withconsultation and discussion from **[***]**,under the supervision of the Project Manager, as follows: (i) **[***]** will have principal responsibilityunder this eSAS 2 Addendum for the **[***]**ofthe eSAS 2 Instrument, **[***]**and **[***]**for **[***]**and **[***]**, **[***]**with **[***]**for **[***]**and**[***]**of the eSAS 2 Instruments, **[***]**of **[***]**and **[***]**of**[***]**, and **[***]**of **[***]**and**[***]**, and (ii) **[***]** will assist in the development andapproval of **[***]**of eachinstrument, provide **[***]**to its **[***]**(meaning **[***]**from the **[***]**and**[***]**as applicable) to facilitatedevelopment of a**[***]**, provide **[***]**to its **[***]**, provide **[***]**including**[***]**to **[***]**required for the development underthe confidentiality terms of

 

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### the Agreement, and will have principal responsibility under this eSAS 2Addendum for the **[***]**of the **[***]**and **[***]**,for the development of the **[***]**for**[***]**specifically related to the **[***]**and **[***]**,and for the formulation of the **[***]**for**[***]**and for each **[***]**with **[***]**to the **[***]**for**[***]**.  The Parties shall jointly agree upon allvalidation activities and software development per PRD and SRS.  The Party to whom principal responsibility isallocated in this Section 2.5 has the power to make day-to-day decisionsregarding matters within the area of such responsibility, consistent with theoverall eSAS 2 Development Program.  TheParties’ obligations with respect to certain warehousing and shipping aresubject to Amendment No. 3.

###  

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

###  

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

###  

# 3.               Modifications.

#  

## 3.1         eSAS2 Development Program Definition. 

##  

### 3.1.1                        **[***]**Modules.  The Parties have prepared and agreed upon aneSAS 2 Development Program, as described in the Binder, for **[***]** modules in the eSAS2 Instrumentsystem,

 

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

###  

### 3.1.2                        **[***]**Modules.  Either Party may propose an eSAS 2Development Program for each of the **[***]**modulesin the eSAS2 Instrument system.  Eachsuch proposal shall describe (i) the Product Requirements Documents, (ii) theSoftware Requirements Specifications, (iii) the Technical Plan, (iv) theResource Plan included within the Technical Plan, and (v) the Budget forthe development of one module in the eSAS 2 Instrument system.  The Project Manager, and under his or hersupervision, the Project Leaders and their respective teams, will review eachsuch proposed eSAS 2 Development Program. Upon agreement between the Project Leaders, then such approved eSAS 2Development Program shall be included within the Binder.  If the Project Leaders are unable to agreeupon a proposed eSAS 2 Development Program, then the Supervisory Board shallreview the proposed eSAS 2 Development Program and make a determination withrespect to whether such proposed eSAS 2 Development Program shall be approvedby the parties.  If the Supervisory Boardhas met and consulted without resolution, then the parties shall implement theescalation procedure described in Article 13 of the Agreement to resolvesuch impasse.

###  

## 3.2         Modifications.

##  

### 3.2.1                        Requestfor Modifications.  

###  

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

####  

##### (i)                                     Chironmay propose and implement such Modifications from time to time in its solediscretion.  However, unless Gen-Probeshall have approved a Material Modification using the process more particularlyset forth in this Section 3, Chiron shall have no right to reimbursementof Development Costs for such Material Modification and Gen-Probe shall have noobligation to pursue regulatory approval or otherwise pursue developmentefforts with respect thereto.

#####  

##### (ii)                                  Gen-Probemay propose such Modifications from time to time.  The process applicable to approval andimplementation of any such proposed modifications shall be as described in thisSection 3.

#####  

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

####  

#### (c)  TheProject Manager, and under his or her supervision, the Project Leaders andtheir respective teams, will review any proposed modification to the eSAS 2Development Program;

 

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#### if the two Project Leaders mutually agree that aparticular modification is a Material Modification or is a Non-materialModification, then such determination shall be conclusive.  If the Project Leaders are unable to agreewhether a particular requested modification is a Material or Non-materialModification, then the Supervisory Board shall review the requested change andmake a determination with respect to whether such requested modification is aMaterial or Non-material Modification. If the Supervisory Board has met and consulted without resolution, theneither Party may, in its discretion, determine that the Parties have reached animpasse with respect thereto and implement the escalation procedure describedin Article 13 of the Agreement to resolve such impasse.

####  

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

####  

### 3.2.2                        MonthlyProgress Reports.  Unless changes tothe specifications described in Section 3.2.1 constitute a Material Modification,any Non-Material Modifications shall be reported in the monthly summaryprogress reports pursuant to Section 2.4.4 and shall not be subject to theapproval process described in Section 3.3.

###  

## 3.3         MaterialModifications. 

##  

### 3.3.1                        Requestfor Material Modifications.  In theevent that one Party desires to request a Material Modification to the eSAS 2Development Program from time to time during the term hereof, such Party (the “requestingparty”) shall submit to the other Party such request in writing, in sufficientdetail to enable the other Party (the “receiving party”) to evaluate therequest.   Without limiting theforegoing, the requesting party shall prepare a revised draft version of theBudget, reflecting any changes necessary to fully implement the requestedMaterial Modification to the eSAS 2 Development Program.

###  

### 3.3.2                        InitialAnalysis of Impact of Proposed Material Modification.  Promptly upon receipt of such request, but inany event not more than **[***]**thereafter, the Parties shall conduct a preliminary analysis of the impact thatthe requested Material Modification would have, including without limitationthe impact any such proposed Material Modification would have on the Budgetand/or the PRD and/or SRS, and shall meet and conduct an analysis of the impactof such Material Modification on the economics of marketing and sale of theeSAS 2 Instrument.  Should either Partyconclude, in its reasonable discretion, that the potential for **[***]**is **[***]**and **[***]**by anyproposed change to the eSAS 2 Development Program requested in accordance withthis Section 3.3, the Party shall notify the other of such determinationin writing.  In such event, Chiron mayelect among one of the following three choices: (i) to terminate participation in the eSAS 2 Development Programunder the provisions of Section 8.3, (ii) to implement the MaterialModification without Gen-Probe’s approval under this Section 3, in whichevent Chiron shall have no right to reimbursement of Development Costs for suchMaterial Modification and Gen-Probe shall have no obligation to pursueregulatory approval or otherwise pursue development efforts with respectthereto, or (iii) to continue the eSAS 2 Development Program unaffectedwithout such Material Modification.

###  

### 3.3.3                        Preparationof Modified eSAS 2 Development Program. Unless Chiron terminates the eSAS 2 Development Program under Section 8.3below or elects to continue the eSAS 2 Development Program unaffected withoutsuch Material Modification under Section 3.3.2, promptly upon completionof the review and analysis under Section 3.3.2, Chiron shall complete anddeliver to

 

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### Gen-Probe revisions to the Product Requirements Document, SoftwareRequirements Specification, Technical Plan, Resource Plan or Budget, asapplicable, responsive to the request. Costs incurred by Chiron to prepare such response to the request shallbe included in eSAS 2 Development Costs hereunder.

###  

### 3.3.4                        Acceptanceof Modified eSAS 2 Development Program.

###  

#### (a)  UnlessChiron terminates the eSAS 2 Development Program under Section 8.3 belowor elects to continue the eSAS 2 Development Program unaffected without suchMaterial Modification under Section 3.3.2, the Parties shall promptly, butnot later than thirty (30) days after preparation by Chiron of a modified eSAS2 Development Program under Section 3.3.2 meet and consult with respect tothe proposed modified eSAS 2 Development Program.  Without limiting the other bases on which itshall be reasonable for Gen-Probe to withhold approval, it shall be reasonablefor Gen-Probe to withhold approval of any Modification that could result in amaterial degradation in assay sensitivity or specificity, or that affectsGen-Probe’s effort or contribution of resources or the amount of costs forwhich Gen-Probe is entitled to be reimbursed by Chiron.  Subject to the unconditional rights ofGen-Probe under Section 3.2.1(a) above to preclude Chiron fromreimbursement for Material Modifications and to withhold participation in theregulatory approval process, it shall be unreasonable to withhold approval ofany request for modification made (i) to reflect actual eSAS 2 DevelopmentCosts incurred (or not incurred) to the date of such proposed modification that(A) with respect to the eSAS 2 Instrument taken as a whole, whenaggregated with all previously authorized modifications, falls within **[***]**percent (**[***]**%) of the original Budget approved and in effect as ofthe date this eSAS 2 Addendum was executed by the Parties, or (B) withrespect to any discreet component, when aggregated with all previous authorizedmodifications for such component, falls within **[***]**percent (**[***]**%)of the original portion of the Budget for such component approved and in effectas of the date this eSAS 2 Addendum was executed by the Parties, or (ii) toreflect actual changes to the Timeline incurred to the date of such proposedmodification which do not impact the Budget in excess of the foregoingthresholds.

####  

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

####  

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

####  

#### (d)  If theSupervisory Board has met and consulted without resolution, then either Partymay, in its discretion, determine that the Parties have reached an impasse withrespect to any proposed modification and implement the escalation proceduredescribed in Article 13 of the Agreement to resolve such impasse.  Notwithstanding anything to the contrary inthis eSAS 2 Addendum or the

 

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#### Agreement, all Material Modifications, whether agreedor determined through arbitration, shall be finally determined and documentedin accordance with this Section 3.3.

####  

### 3.3.5                        EffectiveDate of Modified eSAS 2 Development Program.  At such time as the Parties (or, ifapplicable, the Supervisory Board) shall have accepted a modified eSAS 2Development Program incorporating a Material Modification, or any portionthereof, the Parties shall evidence such agreement by initialing the revisedProduct Requirements Document, Software Requirements Specification, TechnicalPlan, Resource Plan or Budget, as applicable. The eSAS 2 Development Program as so modified and approved shallconstitute the eSAS 2 Development Program hereunder and be incorporated byreference into this eSAS 2 Addendum, and shall supersede the preceding eSAS 2Development Program, or applicable portions thereof, for all purposes.  In order to evidence their agreement to therevised eSAS 2 Development Program, the Parties shall include it in anadditional volume of the Binder, labeled “Amendments to eSAS 2 DevelopmentProgram,” in which all amendments and modifications to the eSAS 2 DevelopmentProgram will be kept.

###  

## 3.4         Noticeof Significant Changes.  Each Partywill give three (3) calendar months notice to the other Party prior to anyproposal of a significant reduction or increase in resources from thethen-current Resource Plan in order to allow the Parties time to divertresources either to or from the eSAS 2 Development Program.  Any significant changes to the Budget or theResource Plan shall be effective only upon the expiration of three (3) monthsfrom the delivery of such notice, unless the Parties both agree to a shorterperiod of time in writing.

##  

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

#  

# 5.               eSAS 2 Development Costs.

#  

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

##  

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

 

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### 5.2.1                        eSAS2 Development Costs; FTE Labor Rate. 

###  

#### (a)  In lieu ofaccounting specifically for and receiving direct reimbursement for certain eSAS2 Development Costs, the Parties have agreed to include reimbursement for thosecertain categories of eSAS 2 Development Costs within an agreed-upon labor ratefor full time equivalent personnel (the “FTE Labor Rate”).  Each party will calculate its own FTE LaborRate.  Those categories of “eSAS 2Development Costs” included within the FTE Labor Rate are those costs moreparticularly described on Schedule 5.2.1a, in paragraph 2entitled “eSAS 2 Development Costs included within FTE Labor Rate”.  Neither Party shall be reimbursed separatelyfor eSAS 2 Development Costs included within FTE Labor Rate.  Those categories of “eSAS 2 Development Costs”not included within the FTE Labor Rate are those costs more particularlydescribed on Schedule 5.2.1a, in paragraph 3 entitled “eSAS 2Development Costs not included within FTE Labor Rate”.  Each Party shall be reimbursed separately foreSAS 2 Development Costs not included within FTE Labor Rate.

####  

##### (i)                                     TheFTE Labor Rate in effect as of the Addendum Effective Date is set forth inparagraph 1 on the attached Schedule 5.2.1a, and is includedin the Resource Plan and reflected in the Budget.  Either Party shall have the right to requesta change in the FTE Labor Rate reflected on the attached Schedule 5.2.1aon a prospective basis under the approval process set forth in Section 3.  In the event aggregate actual eSAS 2Development Costs incurred by a Party during any calendar year that arereimbursed through the FTE Labor Rate exceeded, or fell short of, the agreedFTE Labor Rate reflected in the Budget for such calendar year, either Party mayseek a request for modification of the eSAS 2 Development Program to reflectsuch actual costs.  Acceptance of suchrequest for modification shall be governed by Section 3.3.4.  Notwithstanding the foregoing, throughout theterm of this eSAS 2 Addendum, in the event either Party requests a modificationto the FTE Labor Rate hereunder, the modified FTE Labor Rate shall becalculated using the same methodology as that used to calculate the FTE LaborRate in effect as of the Addendum Effective Date.  The methodology used to calculate the FTELabor Rate in effect as of the Addendum Effective Date is described on theattached Schedule 5.2.1b, entitled “FTE Labor Rate Analysis”.

#####  

### 5.2.2                        Comparisonwith Resource Plan.  The plannedresources, and the associated costs, will be broken out on a monthly basis andanalyzed against the Resource Plan included within the Technical Plan, andreflected in the Budget.

###  

## 5.3         Paymentof eSAS 2 Development Costs.  Inaddition to the provisions of Article 7 of the Agreement, the Partiesagree as follows:

##  

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

###  

### 5.3.2                        MonthlyNotices; Payments.  At the end ofeach month, each Party shall calculate its actual expenditures and FTE Laboramounts for eSAS 2 Development Costs it incurred during such month and shallpromptly provide to the other Party a reasonably detailed written breakdown ofsuch costs.  **[***]**shall invoice **[***]**forthe amount of such costs incurred by **[***]**duringsuch month under Section 5.3.3 below.

###  

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

 

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

###  

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

##  

# 6.               Manufacturing andCommercialization.

#  

## 6.1         eSAS2 Instrument Manufacturing Costs.

##  

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

###  

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

###  

## 6.2         Rightsto Manufacture and Sell.  

##  

### 6.2.1                        BloodScreening Field.  Notwithstanding Section 3.3.3 of the Agreement, Chironshall have the exclusive right and obligation during the eSAS 2 Addendum Termto manufacture (and have manufactured) the eSAS 2 Instruments to satisfy Chiron’srequirements of eSAS 2 Instruments in the Territory for use in the BloodScreening Field.  If Chiron elects tosubcontract the manufacture of the eSAS2 Instrument, then Chiron shall complywith the requirements of Section 3.3.3(d) of the Agreement.  Gen-Probe agrees to comply with theobligation to provide reasonable technical assistance, at Chiron’s sole cost,as necessary or appropriate to enable Chiron to fulfill its obligation andexercise the right to manufacture (or have manufactured) the eSAS 2 Instrumentfor use in the Blood Screening Field, including delivering specifications andother know-how to Chiron and causing responsive Gen-Probe personnel thatpossess such know-how to be available to Chiron, in each case as reasonablynecessary to enable Chiron to exercise the rights granted and fulfill itsobligations hereunder.  Chiron shall havethe exclusive distribution right in the Territory to promote, market and sellthe eSAS 2 Instrument to conduct Blood Screening Assays in the Blood ScreeningField, as set forth in Section 3.3.4 of the Agreement.  Nothing in this eSAS 2 Addendum shall affectGen-Probe’s obligations to Chiron under the Agreement with respect to themanufacture and supply of existing Blood Screening Instruments or Chiron’sobligations to Gen-Probe under the Agreement with respect to the commercializationof existing Blood Screening Instruments.

###  

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

 

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### necessary to enable Gen-Probe to exercise the rights grantedhereunder.  Notwithstanding Section 4.4.4of the Agreement, Gen-Probe shall have the exclusive distribution right in theTerritory to promote, market and sell the eSAS 2 Instrument in the ClinicalDiagnostic Field to the extent, as of the Addendum Effective Date, that Chironhas the ability to grant such rights to Gen-Probe.

###  

### 6.2.3                        Rightto Acquire All Rights to Manufacture and Commercialize.  Gen-Probeshall have the right, but not the obligation, to acquire from Chiron theexclusive right to manufacture and distribute the eSAS 2 Instrument in allfields at the expiration or sooner termination of the eSAS 2 Addendum Term forany reason under Section 8 of this Addendum.  Gen-Probe may exercise such right byproviding Chiron with written notice of election under this Section 6.2.3,together with payment in an amount equal to the eSAS 2 Development Costsfor which **[***]**is entitled toreimbursement hereunder but for which **[***]**hasnot yet received reimbursement under Section 3.3.6(b) of theAgreement, as amended by Section 6.3 below.  Gen-Probe may rely upon and base itscalculation of such amount upon the accounting **[***]**from time to time from **[***]**under Section 3.3.6 of the Agreement, as amended by Section 6.3below.

###  

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

##  

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

 

a)                                      Definitions.

 

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

 

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

 

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

 

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

 

(C)                                 Nothingherein shall amend the manner in which the Agreement determines the revenuesfor Combination Products where the eSAS 2 Instrument is sold in combinationwith one or more Third Party products.

 

(ii)                                  Asused in this Section 3.3.6:

 

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

 

(B)                                the“Gen-Probe Blood Screening Split” used under Section 3.3.6(b) belowwith respect to sales of the eSAS 2 Instrument in the Blood Screening Fieldshall be calculated, for a given fiscal quarter, by taking the dollar weightedaverage of the Applicable Purchase Price earned by Gen-Probe for all BloodScreening Assays sold as calculated under 1.2.1 and 1.2.3 of the Agreementduring such fiscal quarter.

 

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

 

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

 

b)                                     InstrumentSales; Chiron Sales of eSAS 2 Instruments.

 

(i) Until **[***]**hasbeen reimbursed for all eSAS 2 Development Costs, within forty-five (45) daysfollowing the end of each fiscal quarter Chiron shall (A) first, calculate(and provide written notice to Gen-Probe of such calculation) the revenues fromeSAS 2 Instruments sold and received by Chiron or its Affiliates during suchfiscal quarter; (B) second, calculate (and provide written notice toGen-Probe of such calculation) **[***]**percent(**[***]**%) of the Fully BurdenedManufacturing Costs for the eSAS 2 Instruments sold in such fiscal quarter byChiron and its Affiliates; (C) third, calculate (and provide writtennotice to Gen-Probe of such calculation) and retain the lesser of(I) revenues from eSAS 2 Instruments sold and received by Chiron and itsAffiliates in such fiscal quarter or (II) **[***]**percent (**[***]**%)of the Fully Burdened Manufacturing Costs for the eSAS 2 Instruments sold insuch fiscal quarter by Chiron and its Affiliates; (D) fourth, apply andcredit (and provide written notice to Gen-Probe of such calculation) thedifference between such retained amount and **[***]**percent (**[***]**%) of theFully Burdened Manufacturing Costs for the eSAS 2 Instruments sold in suchfiscal quarter by Chiron and its Affiliates as reimbursement to Chiron of theeSAS 2 Development Costs; (E) fifth, calculate (and provide written noticeto Gen-Probe of such calculation) and retain the Chiron

 

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Blood Screening Split, if any; and (F) sixth, pay to Gen-Probe anamount equal to the Gen-Probe Blood Screening Split, if any.

 

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

 

(iii) If the eSAS 2 Instrument is not sold separately by Chironbut rather is leased, placed or rented by Chiron pursuant to a Program (asdefined in subsection 3.3.6(a)(i)(B)), within forty-five (45) daysfollowing the end of each fiscal quarter Chiron shall calculate (and (providewritten notice to Gen-Probe of such calculation) and shall be entitled toretain any and all revenues from the eSAS 2 Instruments sold, leased, placed orrented pursuant to a Program and received by Chiron and its Affiliates in suchfiscal quarter.

 

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

 

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

 

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

 

## 6.4         AuthorizationLetter.  Chiron will allow Gen-Probeto directly access OEM suppliers of eSAS-2 Instruments to purchase or modifyeSAS- 2 Instruments for the Clinical Diagnostic Field.

 

17

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

##  

# 7.               Ownership; License Grant.

#  

## 7.1         Ownership.  Ownership of any Inventions incorporated inthe eSAS 2 Instrument or otherwise made in the course of the eSAS 2 DevelopmentProgram shall be “Joint Inventions” and shall be allocated as provided in Section 9.1of the Agreement for Joint Inventions; provided, however, that (a) duringthe eSAS 2 Addendum Term Gen-Probe hereby grants to Chiron under its rights inand to such Joint Inventions an exclusive right to make, use, sell and importsuch Joint Inventions in the Blood Screening Field and (b) during the eSAS2 Addendum Term, Chiron hereby grants to Gen-Probe under its rights in and tosuch Joint Inventions an exclusive right to make, use, sell and import suchJoint Inventions in the Clinical Diagnostic Field.  Neither Party shall have the right tosublicense or otherwise transfer its right, title or interest in or to theJoint Inventions without the prior written consent of the other Party.

##  

## 7.2         LicenseGrant.  During the eSAS 2 AddendumTerm, Gen-Probe hereby grants to Chiron a license under all intellectualproperty rights of Gen-Probe now-owned or hereafter acquired to the extentreasonably necessary for Chiron to perform its obligations under the eSAS 2Development Program and for the manufacture, use or sale of eSAS 2 Instrumentsin the Blood Screening Field, but only to the extent that Gen-Probe has orhereafter acquires an ownership or other licensable interest in suchintellectual property rights and has the right to grant licenses, immunities orother rights thereunder.  During the eSAS2 Addendum Term, Chiron hereby grants to Gen-Probe a license under allintellectual property rights of Chiron now-owned or hereafter acquired to theextent reasonably necessary for Gen-Probe to perform its obligations under theeSAS 2 Development Program and for the manufacture, use or sale of eSAS 2Instruments in the Clinical Diagnostic Field, but only to the extent thatChiron has or hereafter acquires an ownership or other licensable interest insuch intellectual property rights and has the right to grant licenses,immunities or other rights thereunder. The licenses hereby granted shall extend only to the extent of thedesign of the eSAS 2 Instrument as of the date of this eSAS 2 Addendum and toany future design modifications approved and adopted in accordance with theterms hereof.  The license hereby grantedshall be royalty-free except to the extent the licensing Party has anobligation to pay royalties to a Third Party pursuant to the Agreement.  The license granted by Gen-Probe in Section 3.3.5(c) ofthe Agreement shall apply to the manufacture of eSAS 2 Instruments by or forChiron for use in the Blood Screening Field. Except as expressly provided herein, neither Party grants to the otherParty any license or other interest in and to such Party’s intellectualproperty rights or other rights.  For theavoidance of doubt, nothing in this Section 7.2 shall be construed as agrant by Chiron to Gen-Probe for an express or implied license in, to or underthe Chiron HIV Patent Rights or the Chiron HCV Patent Rights.

##  

## 7.3         **[***]**Immunity.  For the avoidance of doubt, **[***]**confirms that **[***]**shall be entitled to the benefit ofthe immunity from suit previously granted to **[***]**,and subject to the limitations as granted to **[***]**,by **[***]**and **[***]**under the **[***]**related Patents, which immunity was previously grantedto **[***]**(and a party to bedesignated by **[***]**) by **[***]**and**[***]**.

 

18

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# 8.               Addendum Effective Date; Term;Termination.

#  

## 8.1         Termof eSAS 2 Addendum.  This eSAS 2Addendum shall become effective on the Addendum Effective Date and shallcontinue in effect through the Blood Screening Term, as it may be amended orextended from time to time, unless sooner terminated in accordance with theprovisions hereof.  Termination of thiseSAS 2 Addendum shall be governed by the terms of this Section 8 andtermination of the Agreement is governed by Section 11 of the Agreement.

##  

## 8.2         Terminationfor Breach.  

##  

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

###  

#### (a)  if a Partyfails to make a payment required under Sections 5.3.1 or 5.3.3 hereunder;

####  

#### (b)  if a Partyinvoices for amounts using expenditures not falling within the definition ofeSAS 2 Development Costs or not included within the Budget.

####  

#### (c)  if a Partyfails to exercise Commercially Reasonable Efforts to commit the resourcesdescribed in the eSAS 2 Development Program or to exercise CommerciallyReasonable Efforts achieve the objectives of the eSAS 2 Development Program;provided, however, that the failure to successfully complete the development ofthe eSAS 2 Instrument, or to complete the development of the eSAS 2 Instrumenton the Timeline set forth in the Technical Plan or for the amounts described inthe Budget or to the specifications set forth in the PRD or the SRS shall notbe deemed to be a breach of this eSAS 2 Addendum; and

####  

#### (d)  if a Partydefaults under the Agreement or this eSAS 2 Addendum which default results inthe termination of the Agreement of this eSAS 2 Addendum.

####  

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

###  

### 8.2.3                        Effectof Termination for Breach.  Upon atermination of this eSAS 2 Addendum for default under this Section 8.2:

###  

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

####  

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

 

19

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

####  

#### (d)  The defaulting party’s rights underthe Agreement and this eSAS 2 Addendum with respect to the eSAS 2 Instrumentshall terminate and be of no further force and effect.  The defaulting party may not undertake adevelopment substantially similar to the eSAS 2 Development Program with anyother Party for a period of **[***]**fromthe date of termination.

####  

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

####  

## 8.3         Terminationby Chiron.  Chiron may elect toterminate this eSAS 2 Addendum under this Section 8.3 for convenience atany time during the eSAS Term in its sole discretion upon written notice toGen-Probe. Following any such termination, Chiron shall pay, promptly uponreceipt of an invoice therefor, to Gen-Probe an amount equal to (i) **[***]**in the **[***]**for which an **[***]**hasbeen **[***]**and (ii) **[***]**not yet **[***]**but **[***]**inthe **[***]**, whether or notdisputed, as set forth in the approved Budget.

##  

## 8.4         Continuanceof eSAS 2 Development Program following Termination.  

##  

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

###  

### 8.4.2                        Fundingand Conduct of Development.  IfGen-Probe elects pursuant to this Section 8.4 to continue funding the eSAS2 Development Program, Gen-Probe shall be solely responsible for the currentfunding of all eSAS 2 Development Costs, including those applicable to, orincurred by Chiron under the terms of this Agreement, from and after theeffective date of termination under Section 8.2, subject to the right toreimbursement more particularly described below.

###  

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

 

 “3.3.6A                                                     Notwithstandinganything to the contrary in this Section 3.3.6, until Gen-Probe has beenreimbursed for all eSAS 2 Development Costs, within forty-five (45) daysfollowing the end of each fiscal quarter Chiron shall (A) first, calculate(and provide written notice to Gen-Probe of such calculation) the revenues fromthe eSAS 2 Instrument received by Chiron or its Affiliates during such fiscalquarter; (B) second, calculate and retain (and provide written notice toGen-Probe of such

 

20

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calculation) **[***]**(**[***]**%)of the Fully Burdened Manufacturing Costs for the eSAS 2 Instruments sold insuch fiscal quarter; (C) third, calculate and pay to Gen-Probe the lesserof  (I) the remainder of the revenuescalculated in (A) and the Fully Burdened Manufacturing Costs retained in (B) from each eSAS 2 Instrument sold in such fiscal quarter received by Chiron orits Affiliates or (II) **[***]**percent (**[***]**%) of the FullyBurdened Manufacturing Costs of such eSAS 2 Instruments sold in such fiscalquarter (and provide written notice to Gen-Probe of such calculation); (D) fourth,apply and credit the difference between such amount paid to Gen-Probe for theeSAS 2 Instrument sold in such fiscal quarter as reimbursement to Gen-Probe forthe eSAS 2 Development Costs (and provide written notice to Gen-Probe of suchcalculation); (E) fifth, calculate (and provide written notice toGen-Probe of such calculation) and retain the Chiron Blood Screening Split, ifany; and (F) sixth, pay to Gen-Probe an amount equal to the Gen-ProbeBlood Screening Split, if any.  Untilsuch time as Chiron receives written notice from Gen-Probe that Gen-Probe hasbeen reimbursed for all eSAS 2 Development Costs, then the provisions of Section 3.3.6of the Agreement (amended as provided in Section 6.3 above) shall governthe distribution of consideration received on sale, transfer or otherdistribution of the eSAS 2 Instrument.”

 

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

###  

### 8.4.4                        Rightsunder Agreement.  Except as expresslymodified by this Section 8.3, the Parties shall retain all rights andobligations allocated pursuant to Section 3.2 of the Agreement.

###  

# 9.               Escalation.

#  

## 9.1         EscalationProcess.  Prior to implementing thearbitration process more particularly described in Article 13 of theAgreement, the Parties agree to escalate any dispute first to a discussionbetween responsible managers, and if they cannot agree, then to the SupervisoryBoard.  However the Parties explicitlyacknowledge that in the event of the need for an urgent decision the Party withprimary responsibility will proceed to make the decision, and implement.  It is agreed that the Party with primaryresponsibility will make all reasonable and timely efforts to inform the otherParty of the issue requiring decision, particularly where the issue is one ofsome consequence.

##  

## 9.2         Remediesin Event of Default.  Neither Partyshall be entitled to exercise any remedy otherwise available to it at law or inequity unless and until such Party shall have provided the other Party withnotice of such event of default, reasonably specifying the nature of thedefault, and any applicable period of time for cure thereof shall have expiredwithout cure, and the procedures defined in Article 13 of the Agreementshall have been first exhausted.

##  

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

##  

# 10.         No Other Amendment.  Except as expressly set forth in this eSAS 2Addendum, all other terms and conditions of the Agreement, the Parties’Definitive Written Settlement Agreement, dated December 5, 2001, and theShort Form Agreement, dated November 16, 2001, are hereby ratifiedand shall continue in

 

21

----

 

# full force and effect. All other terms and conditions of the Agreement, the Definitive WrittenSettlement Agreement, and the Short Form Agreement shall continue in fullforce and effect.  In the event of aconflict between the terms of this eSAS 2 Addendum and the Agreement, the termsof this eSAS 2 Addendum shall control. The provisions of this eSAS 2 Addendum are intended to, and hereby,supercede any provisions in the Definitive Written Settlement Agreement enteredinto by and between the Parties, dated December 5, 2001, and the Short Form Agreemententered into by and between the Parties, dated November 16, 2001, on thesame subject matter.

#  

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

 

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

 
| GEN-PROBE  INCORPORATED,  a Delaware corporation | CHIRON  CORPORATION,  a Delaware corporation |
|--------------------------------------------------|----------------------------------------------|
|                                             |                                         |
|                                             |                                         |
| By:                                              | /s/HANK NORDHOFF                             |   | By: | /s/ GENE W.  WALTHER |   |
| Its:                                             | President &  CEO                    |   | Its: | President |   |
| Date:                                            | 12-21-04                                     |   | Date: | 18 Feb. 2005 |   |
|                                                  |                                              |  |  |  |  |  |  |  |  |  |  |

 

22

----

 

Schedule 1.3

 

Budget

 

**Preliminary Budget**

 
| **2002**                 |       |      |       |
|--------------------------|------------|-----------|------------|
| CBT Grand Total  Hours   | ** ** | **[***]** | ** ** |
| CBT Avg Monthly  FTE     | ** ** | **[***]** | ** ** |
| CBT cost @ **[***]**/FTE | ** ** | **[***]** | ** ** |
| GP cost @ **[***]**/FTE  |       | —    |       |
| Total Project            | ** ** | **[***]** | ** ** |
| ** **               |       |      |       |
| **2003**                 |       |      |       |
| CBT Grand Total  Hours   | ** ** | **[***]** | ** ** |
| CBT Avg Monthly  FTE     | ** ** | **[***]** | ** ** |
| CBT cost @ **[***]**/FTE | ** ** | **[***]** | ** ** |
| GP cost @ **[***]**/FTE  | ** ** | **[***]** | ** ** |
| Total Project            | ** ** | **[***]** | ** ** |
| ** **               |       |      |       |
| **2004**                 |       |      |       |
| CBT Grand Total  Hours   | ** ** | **[***]** | ** ** |
| CBT Avg Monthly  FTE     | ** ** | **[***]** | ** ** |
| CBT cost @ **[***]**/FTE | ** ** | **[***]** | ** ** |
| GP cost @ **[***]**/FTE  | ** ** | **[***]** | ** ** |
| Total Project            | ** ** | **[***]** | ** ** |
|                     |       |      |       |
| **Total  Budget**        | ** ** | **[***]** | ** ** |

 

----

 

Schedule 1.4

 

Description of eSAS 2 Instrument system

 

The eSAS 2 Instrumentsystem consists of the following modules: 
| **Name  of Module**                                                                                                                                                   | ** ** | **Specifications** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------|
|                                                                                                                                                                  |       |               |
| (i) a front  end pipettor                                                                                                                                        |       |               |
|                                                                                                                                                                  |       |               |
| (ii) an  automated reagent addition station                                                                                                                      |       |               |
|                                                                                                                                                                  |       |               |
| (iii) an  automated target capture bay                                                                                                                           |       |               |
|                                                                                                                                                                  |       |               |
| (iv) an  automated incubation module                                                                                                                             |       |               |
|                                                                                                                                                                  |       |               |
| (v) a data  management to track sample and system interactions to meet customer demands  of throughput and automation required for pooled donor screening by NAT |       |               |

 

----

 

Schedule 1.6

 

eSAS 2 Development Program Outline

 

1.               ProductRequirements Document (PRD)

 

2.               SoftwareRequirements Specification

 

3.               Technical Plan

 

4.               Resource Plan

 

5.               Budget

 

----

 
| **CONFIDENTIAL** | ** ** | **REDACTED  VERSION** |
|------------------|------------|-----------------------|

 

Schedule 1.12-A

PRD – robotic sample handling and transport system

 

----

 
| **CONFIDENTIAL** | ** ** | **REDACTED  VERSION** |
|------------------|------------|-----------------------|

 

Schedule 1.12-B

PRD – front end pipettor

 

----

 

Schedule 2.5.2

 

eSAS 2 Regulatory Strategy

 

 

**INTEROFFICEMEMORANDUM**

 
| **To:**     | ** ** | **[***],**             |
|-------------|------------|------------------------|
|        |       |                   |
|        |       | **[***]**              |
|        |       |                   |
| **Date:**   | ** ** | **May 30,  2003** |
|        |       |                   |
| **From:**   | ** ** | **[***]**              |
|        |       |                   |
| **Copies:** |       | **[***]**              |

 

**Subject:****   eSAS 2.0 Regulatory Strategyand Contract Requirements**

 

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

 

Background:  **[***]**instrumentsare intended for the eSAS 2.0 system. The **[***]** is to be used asa **[***]** for the addition of **[***]** and **[***]**,and replaces the **[***]**instrument.  The **[***]**instrument, called the **[***]**, will automate current manual **[***]** steps for **[***]**of **[***]**,**[***]**, etc. These **[***]**instrumentswill be placed in separate areas of the lab, as the steps associated with theiruse are during the **[***]**and **[***]**stages of the **[***]** procedure.

 

Current timelines reflecta **[***]** launch of the **[***]** instruments in **[***]** approximately **[***]**. Within the **[***]**, theinitial estimate on the timeline is **[***]**,**[***]** launch plan for bothinstruments.  This date will be updatedconcurrent with the completion of the relevant Gen-Probe/Chiron Agreement.

 

BusinessAssumptions:  The following informationis intended to outline responsibility, per the current Gen-Probe/ChironAgreement for U.S. and International submissions as they relate to thisproject.  Certain assumptions with regardto contractual obligations have been made to complete this assessment.  Those are:

 

1.                                       **[***]**is the **[***]** entity responsible for **[***]**or **[***]****[***]**regarding the **[***]**,**[***]**orany other component that is an addition to, or modification of, the currenteSAS blood screening system.

2.                                       **[***]**responsible for **[***][***][***]** for the blood screeningsystem.

3.                                       **[***]**will receive a complete copy of the **[***]**, including **[***]**and reports, relating to the development of the **[***]** instrument, hardware and softwarecomponents.

4.                                       Theremay be more than one model number applied to the **[***]** instrument, with modifications to the instrument asnecessary for subsequent applications.  Therefore, **[***]**will havedirect access to **[***]**.

5.                                       The**[***]**instrument will be **[***]** marked according to the appropriatedirective(s) (e.g. EMC directive, Medical Device Directive) prior to beingdelivered to **[***]**as a completedcomponent of the eSAS system.

 

----

 

6.                                       Nochanges or improvements in the instrument or software will be made, onceapproved by **[***]**, without priorapproval by **[***]**.

 

Because a **[***]** launch of the **[***]** and **[***]**is planned in **[***]** the **[***]**and **[***]**,no considerations have been made in regard to **[***]**requirements for **[***] [***]**component.  A **[***]**, or **[***]**,approach to implementation of the **[***]**and **[***]** could alter theregulatory strategy presented below.

 

# 4.

#  

AdditionalBackground:  The original eSAS submission(formally called the Chiron Procleix System) incorporated general purposelaboratory equipment, primarily the **[***]**,**[***]**, and **[***]**.  Two **[***]**components, the **[***]** and **[***]**),were developed for the system.  The **[***]** is **[***]**from 510(k) submission requirements and only **[***]** brief descriptions in the **[***]**510(k).  The **[***]**wasa **[***]** for FDA and the **[***]**of the submission was about the **[***]**of the **[***]** components.

 

**[***]****Requirements and Strategy:**

 

# 5.                                       The**[***]**and **[***]**

#  

The **[***]** is intended to replace the **[***]**instrument, and will have **[***]**, which **[***]**replace the **[***]**currently used with the **[***]**.  The **[***]**is a **[***]**that will not interactwith either the **[***]** or the **[***]**.

 

The **[***]** reads **[***]** and **[***]**,creates **[***]**,**[***]**and **[***]**into the appropriate **[***]**withinthe **[***]**and sends the **[***]**to the **[***]**.  The **[***]** is partly responsible for **[***]**, and as such is ultimately classifiedas a “**[***]**under FDA guidance on **[***]**in medical devices.  This FDA guidance document specifies which **[***]**must be submitted according to the **[***]**, and will be used as the guidancewithin the project team for determining the deliverables for thesubmission.  Additionally, **[***]** testing will be required and theprotocol(s) and results will be presented in the submission.  All changes to **[***]** will also be submitted. Because this is **[***]**of a **[***]** instrument, but does not affect **[***]** or **[***]**steps, it is anticipated that this will be designated as a **[***]**. A **[***]**typically has a **[***]**review cycle.  The sheer volume of the **[***]**and **[***]**documentation, and the protocols and results from the **[***]**testing may be **[***]**to the typical 30 day cycle, however.

 

The **[***]**is basically an **[***]**that is usually classified by **[***]**as **[***]**.  Because it is **[***]**and does not interact or interfere with the normal **[***]** or **[***]**process, it should be presented to FDA that there are **[***]**for this particular component, otherthan a **[***]**in the **[***]**of the component itself and it’s usein the overall system.

 

If a **[***]**, or **[***]**implementation is planned for the **[***]**and the **[***]**, then it should bepresented to FDA that a **[***]**willbe submitted for the **[***]** and it’sassociated **[***]**, but **[***]** submission is intended for the **[***]**.

 

**[***]**

 

Any changes to **[***]**as a result of the implementation ofthe **[***]** or **[***]** will require a **[***]**, since the **[***]**are **[***]**specific and were submitted through the **[***]**process.  All **[***]** is to be submitted **[***]**and **[***]**in all submissions to allow the most rapid **[***]** review.

 

## 5.1                                 **[***]** Regulatory Requirements and Strategy

 

----

 

Any component that ispart of an **[***]**system must firstbe tested to ensure that it meets the safety requirements of the appropriate **[***]**for that component (e.g. **[***]**). Once that has been established, the use of the component (or instrument)is defined for the **[***]** systemand “**[***]**” testing isperformed.  This testing demonstratesthat the instrument **[***]** as **[***]** within the **[***]**system.  Uponsuccessful **[***]**testing, theinstrument (and its associated software) is **[***]**compliant with the **[***]**for that **[***]** application.

 

A **[***]**has **[***]**been approved by **[***]** (Gen-Probe’s**[***]**) for the Chiron Procleix HIV-1/HCVAssay and the Chiron Procleix System. The major components of the Chiron Procleix System were **[***]** according to each component’sappropriate **[***]**by the component’s**[***]**prior to the development ofthe **[***]**for the overall **[***]** and system.  This has **[***]**to be an **[***]** and **[***]** manner to **[***]**that the system component meets it’s safetyrequirements, and can be **[***]** todifferent **[***]** applications aslong as **[***]**is achieved for each**[***]** application.

 

The **[***]** instrument should be tested accordingto the standards of the appropriate **[***]**priorto being delivered to **[***]**.  **[***]**testing(which should be the same as the **[***]**testingmentioned in the **[***]**section ofthis document) can be performed at **[***]**or**[***]**, and the results of thattesting, along with the **[***]** of **[***]** product **[***]** testing for the instrument, will be presented to the **[***]**to amend the current **[***]**. While the **[***]** and **[***]** documentation may be required for the**[***]**for the instrument itself,it is **[***]**that extensive **[***]**documentation will be required forthe **[***]** submission.  However, the **[***]** will **[***]**audit **[***]**.  In addition, results of the **[***]**testing will **[***]** be required for the **[***]**amendment as well as **[***]**or **[***]**.

 

This concludes theRegulatory Strategy.

 

----

 

Schedule 5.2.1a

eSAS 2 Development Costs

 

# 1.               ReimbursableFTE Rate.   [$**[***]** per FTE per calendar year]

#  

# 2.               eSAS2 Development Costs included within FTE Labor Rate.  eSAS 2 Development Costs included within FTELabor Rate consist of all attributable costs associated with the development ofthe eSAS 2 Instrument and modifications to associated instrument systemplatforms that may be required for such eSAS 2 Instrument (calculated inaccordance with United States generally accepted accounting principles, or asotherwise mutually agreed in writing between the Parties) incurred prior to theCompletion Date and includes pilot development; validation studies necessaryfor product and process licensure; clinical studies; licensing activities; andthe manufacture and ultimate disposition of conformance lots of material,calculated as follows:

#  

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

####  

#### (b)  Theplanned resources, and the associated costs, will be broken out on a monthlybasis and analyzed against the Resource Plan included within the TechnicalPlan, and reflected in the Budget;

####  

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

####  

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

####  

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

####  

#### (f)  Costs ofinventory consumed in the eSAS 2 Development Program, including raw material,intermediates and finished goods, and conformance lots, whether reject or not,that arise from the eSAS 2 Development Program or are necessary to support theeSAS 2 Development Program, and scrap material, including raw materials anddevelopment materials that arise from the eSAS 2 Development Program butexcluding eSAS 2 Instrument and scrap materials used strictly for internalresearch purposes or consumed in development programs other than the eSAS 2Development Program;

####  

#### (g)  Costs forconformance product documentation;

####  

#### (h)  Costs forcourier and mail service fees for delivery of items between Gen-Probe andChiron;

####  

#### (i)  Costs oftravel, lodging and reasonable per diem expenses for employee and consultantsof Gen-Probe or Chiron incurred in furtherance of their activities hereunder,providing training or participating on the Supervisory Board to the extent suchcosts are not included within the overhead charge applicable to labor costs;

 

----

 

#### (j)  Costs offoreign registration, marketing studies to support registration, and marketresearch costs necessary to better define requirements or to support nationaldecision-making;

####  

#### (k)  Such othercategories as the Parties may agree from time to time using the approvalprocess described in Section 2.5.2.

####  

#### (l)  Allbudgeted expenses of Departments directly involved with the eSAS 2 DevelopmentProgram

####  

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

####  

# 3.               eSAS2 Development Costs not included within FTE Labor Rate.

#  

#### (a)                                  Costof conformance lot materials consumed in performance of eSAS 2 DevelopmentProduct or clinical trials.

####  

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

####  

#### (c)                                  ThirdParty development and hardware acquisition costs.

 

----

 

#### Schedule 5.2.1b

####  

FTE Labor RateAnalysis

 

----

 

Schedule 5.2.1b

**FTE Labor Rate Analysis**

 
| **Cost  Center**                                        | ** ** | ** ** | ** ** | **(Controllable)  Salary & Wage  Expense** | ** ** | **(Controllable)  Other  Costs** | ** ** | **(Controllable)  Total  Costs** | ** ** | **Benefits** | ** ** | **Deprec/  Amort** | ** ** | **Facilities** | ** ** | **I/S**    | ** ** | **Indirect  Allocation**                       | ** ** | **Total Cost  per Employee** | ** ** | **eSAS  HC** | ** ** | **eSAS  Cost** | ** ** |
|---------------------------------------------------------|------------|------------|------------|-----------------------------------------------------|------------|----------------------------------|------------|----------------------------------|------------|--------------|------------|--------------------|------------|----------------|------------|------------|------------|------------------------------------------------|------------|------------------------------|------------|--------------|------------|----------------|------------|
|                                                    |       |       |       |                                                |       |                             |       |                             |       |         |       |               |       |           |       |       |       |                                           |       |                         |       |         |       |           |       |
| Quality Assurance                                       |       | 11038      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| VP Operations                                           |       | 13010      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Ots Engineering                                         |       | 13011      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Ots Development  Manufacturing                          |       | 13012      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Ots Bb Product  Support                                 |       | 13017      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Program  Management                                     |       | 16015      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | —             |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Clinical Affairs                                        |       | 16021      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| VP  Regulatory & Quality                       |       | 16022      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | —             |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Regulatory  Affairs                                     |       | 16023      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | —             |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Research                                                |       | 16041      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Bloodbank                                               |       | 16071      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Marketing-Bloodbank                                     |       | 17019      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | —             |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Validation                                              |       | 11039      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| VP Diagnostic  Development                              |       | 16056      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | —             |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Std Development                                         |       | 16052      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| VP  Sales/Marketing                                     |       | 17005      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | —             |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Prod.Planning                                           |       | 11005      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | —             |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| QC Microbiology                                         |       | 11023      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Stability                                               |       | 11035      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| QC Analytical                                           |       | 11037      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Instrument  Development                                 |       | 16019      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
| Performance QC                                          |       | 13016      |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       | [***]                        |       | [***]        |       | [***]          |       |
|                                                    |       |       |       |                                                |       |                             |       |                             |       |         |       |               |       |           |       |       |       |                                           |       |                         |       |         |       |           |       |
| Total                                                   |       |       |       | [***]                                               |       | [***]                            |       | [***]                            |       | [***]        |       | [***]              |       | [***]          |       | [***]      |       | [***]                                          |       |                         |       | [***]        |       | [***]          |       |
| Adjusted  Controllable Total (total less non cc related |       |       |       |                                                |       |                             |       | [***]                            |       |         |       |               |       |           |       |       |       |                                           |       |                         |       | [***]        |       | [***]          |       |
| expenses)                                               |       |       |       |                                                |       |                             |       |                             |       |         |       |               |       |           |       |       |       |                                           |       |                         |       | [***]        |       | [***]          |       |
|                                                    |       |       |       |                                                |       |                             |       |                             |       |         |       |               |       |           |       |       |       |                                           |       |                         |       |         |       |           |       |
|                                                    |       |       |       |                                                |       |                             |       |                             |       |         |       |               |       |           |       |       |       | **Cost/FTE  w/o 6021**                         |       | [***]                        |       |
| ** **                                              | ** ** | ** ** | ** ** | ** **                                          | ** ** | ** **                       | ** ** | ** **                       | ** ** | ** **   | ** ** | ** **         | ** ** | ** **     | ** ** | ** ** | ** ** | **Cost/FTE  w-6021**                           | ** ** | [***]                        | ** ** |
| ** **                                              | ** ** | ** ** | ** ** | ** **                                          | ** ** | ** **                       | ** ** | ** **                       | ** ** | ** **   | ** ** | ** **         | ** ** | ** **     | ** ** | ** ** | ** ** | ** **                                     | ** ** | ** **                   | ** ** |
| ** **                                              | ** ** | ** ** | ** ** | ** **                                          | ** ** | ** **                       | ** ** | ** **                       | ** ** | ** **   | ** ** | ** **         | ** ** | ** **     | ** ** | ** ** | ** ** | **Cost/FTE  w/o 6021 & w/o  G&A** | ** ** | [***]                        | ** ** |

 
| ** **                                  | ** ** | **HR*****Based  on H/C** | ** ** | **Finance******Based  on Tot Cont** | ** ** | *****Bonus Pool** | ** ** | **Allocations** | ** ** |
|---------------------------------------------|------------|--------------------------|------------|-------------------------------------|------------|-------------------|------------|-----------------|------------|
| G&A Allocations:                        |       |                     |       |                                |       |              |       |            |       |
| Controllables                               |       | [***]                    |       | [***]                               |       |              |       | [***]           |       |
| Benefits                                    |       | [***]                    |       | [***]                               |       |              |       | [***]           |       |
| Deprec/Ammort                               |       | —                   |       | [***]                               |       |              |       | [***]           |       |
| Facilities                                  |       | [***]                    |       | [***]                               |       |              |       | [***]           |       |
| Human Resources                             |       | [***]                    |       | [***]                               |       |              |       | [***]           |       |
| Total Allocation                            |       | [***]                    |       | [***]                               |       | [***]             |       | [***]           |       |
|                                        |       |                     |       |                                |       |              |       |            |       |
| Changes to center 60-71 Controllables       |       |                     |       |                                |
| Remove Inventory  Used (AC620)              |       | [***]                    |       |                                |
| Remove Inventory  Used Valuation Adjustment |       | [***]                    |       |                                |
| Remove Inventory  Used-Clin                 |       | [***]                    |       |                                |
| Remove Inventory  Used-Adjs                 |       | [***]                    |       |                                |
| Remove Standard  Cost Applied               |       | [***]                    |       |                                |
| Remove Work  Order Scrap-Diag               |       | [***]                    |       |                                |
|                                        |       | [***]                    |       |                                |

 

----

 

Schedule 5.3.1

 

Accrued eSAS 2 Development Costs

 
| **2002 Summary**               | ** ** | ** ** | ** ** |
|--------------------------------|------------|------------|------------|
| CBT Grand Total Hours          |       | [***]      |       |
| CBT Avg Monthly FTE            |       | [***]      |       |
| CBT cost @ [***]/FTE           |       | [***]      |       |
| GP cost @ [***]/FTE            |       | —     |       |
| Total Project                  |       | [***]      |       |
|                           |       |       |       |
| **2003 Summary**               |       |       |       |
| CBT Grand Total Hours          |       | [***]      |       |
| CBT Avg Monthly FTE            |       | [***]      |       |
| CBT cost @ [***]/FTE           |       | [***]      |       |
| GP cost @ [***]/FTE            |       | [***]      |       |
| Total Project                  |       | [***]      |       |
|                           |       |       |       |
| **6 Months 2004 Summary**      |       |       |       |
| CBT Grand Total Hours          |       | [***]      |       |
| CBT Avg Monthly FTE            |       | [***]      |       |
| CBT cost @ [***]/FTE           |       | [***]      |       |
| GP cost @ [***]/FTE            |       | [***]      |       |
| Total Project                  |       | [***]      |       |
|                           |       |       |       |
| Total Accrued Development Cost |       | [***]      |       |

 

----

 

Schedule 6.4

 

Sales Authorization Letter

 

[DATE]

 

[NAME OF THIRD PARTY MANUFACTURER]

 

Dear Sir or Madam:

 

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

 

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

 

Sincerely,

 

 

Chiron Corporation

 

----