##### 



***Text Omitted and Filed Separately  Confidential Treatment Requested  Under 17 C.F.R. §§ 200.80(b)(4)  And 240.24b-2
 SETTLEMENT AGREEMENT
 st
 Gen-Probe Inc. v. Bayer
HealthCare LLC, et al. Gen-Probe Inc. v. Bayer HealthCare
 1




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##### 



LLC, et al. Bayer HealthCare, LLC v. Gen-Probe Incorporated Gen-Probe Incorporated v. Bayer HealthCare LLC, et al. Bayer HealthCare LLC v.
Gen-Probe Incorporated
    2




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##### 



1.0 Definitions
     ®
 3




---



##### 



4




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##### 



Schedule
1.
  Schedule
2
   5




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â â â
 
          6




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,
 7




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Schedule 3
 provided, however
 8




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Schedule 4.
    ®
   9




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##### 



10




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2.0 Execution and Delivery of Releases
 Exhibit A
 Exhibit B
 3.0 Sublicense Granted by Bayer to Gen-Probe
 Exhibit
C
 4.0 Freedom to Operate Rights
  11




---



##### 



12




---



##### 



13




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##### 



5.0 Payments
 ,
  14




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##### 



6.0 Disposition of Actions
 Exhibits A, B and C
 15




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##### 



Exhibit D
 Exhibits A, B and C Exhibit E
 Exhibits A, B and C Exhibit F
 Exhibits A, B and C Exhibit G
 16




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##### 



17




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7.0 Supply Arrangement
  8.0 Governing Law; Dispute Resolution
   18




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##### 



9.0 Mutual Representations and Warranties
     19




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##### 



10.0 Advice of Counsel
  20




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##### 



11.0 Integration
  12.0 Counterparts
  13.0 Headings
   21




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##### 



14.0 Severability
  15.0 No Other Representations
  16.0 Confidentiality
  22




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##### 



provided provided further
 provided
 provided
 23




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##### 



17.0 Further Assurances
  18.0 No Waiver
  19.0 Binding Effect
   24




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##### 



provided however provided further
 provided however
  25




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##### 



20.0 No Third-Party Beneficiaries
  21.0 Notices
  26




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##### 



(a) If to Bayer:
    
    Bayer HealthCare LLCDiagnostics Division511 Benedict AvenueTarrytown, New York 10591Attention: Law & Patents(b) If to Gen-Probe:
    
    Gen-Probe Incorporated10210 Genetic Center DriveSan Diego, California 92121-4362Attention: General Counsel
 22. Press Release
   27




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##### 



BAYER HEALTHCARE LLC
    
    
    
    GEN-PROBE INCORPORATEDBy:
    
    /s/ Anthony P. Bihl, III
    
    
    
    By:
    
    /s/ Henry L. NordhoffAnthony P. Bihl, III
    
    
    
    
    
    Henry L. NordhoffTitle:
    
    President, Diagnostics Division
    
    
    
    Title:
    
    President and CEODate: August 2, 2006
    
    
    
    Date: August 1, 2006
 BAYER CORPORATIONBy:
    
    /s/ George J. LykosTitle:
    
    Sr. VP, Chief Legal Officer
  28




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##### 



LIST OF SCHEDULES AND EXHIBITS
 Schedule 1
    
    Chiron US PatentsSchedule 2
    
    Current Bayer NAD ProductsSchedule 3
    
    Specific Bayer PatentsSchedule 4
    
    Specific Gen-Probe PatentsExhibit A
    
    Release by BayerExhibit B
    
    Release by Gen-ProbeExhibit C
    
    Sublicense AgreementExhibit D
    
    Stipulation of Dismissal of California Action 565Exhibit E
    
    Stipulation of Dismissal of California Action 1668Exhibit F
    
    Stipulation of Dismissal of Massachusetts ActionExhibit G
    
    Final Award in JAMS ArbitrationsExhibit H
    
    Alternative Dispute Resolution




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##### 



Schedule 1
 Chiron US Patents
 Inventors
    
    US Patent No
    
    Patent DateHoughton, et al.
    
    
    5,714,596
    
    
    02-03-98
    
    
    6,074,816
    
    
    06-13-00
    
    
    5,712,088
    
    
    01-27-98
    
    
    5,863,719
    
    
    01-26-99Miyamura, et al.
    
    
    5,372,928
    
    
    12-13-94
    
    
    5,959,092
    
    
    09-28-99Cha, et al.
    
    
    6,071,693
    
    
    06-06-00Chien, et al.
    
    
    6,416,944
    
    
    07-09-00Weiner
    
    
    5,851,759
    
    
    12-22-98Luciw, et al.
    
    
    6,531,276
    
    
    03-11-03




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##### 



Schedule 2
 Current Bayer NAD Products
 VERSANTâ bDNA Products
 
 VERSANTâ LIPA Products
 
 TRUGENEâ Genotyping Products
 
 Quantigene Products




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##### 



Schedule 3
 Specific Bayer Patents




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Schedule 4
 Specific Gen-Probe Patents




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Exhibit A
 Release by Bayer




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RELEASE
  1




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##### 



®
   THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 ARE HEREBY EXPRESSLY WAIVED BY RELEASORS
 2




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3




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st
 BAYER CORPORATIONBy:
    
    George J. LykosTitle:
    
    Sr. VP, Chief Legal OfficerBAYER HEALTHCARE LLCBy:
    
    /s/ Anthony P. Bihl, IIITitle:
    
    President
 4




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Exhibit B
 Release by Gen-Probe
 1




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##### 



RELEASE




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THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 ARE HEREBY EXPRESSLY WAIVED BY RELEASOR
 2




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3




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st
 GEN-PROBE INCORPORATEDBy:
    
    /s/ Henry L. NordhoffTitle:
    
    CEO
 4




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Exhibit C
 Sublicense Agreement




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Sublicense Agreement
    -1-




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-2-




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ARTICLE
1  DEFINITIONS
  
   
   -3-




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-4-




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® ®
        -5-




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-6-




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i)
    
    Discounts actually allowed and taken;ii)
    
    Amounts repaid or credited by reason of rejection or return;iii)
    
    To the extent separately stated on purchase orders, invoices or
other documents of sale, taxes levied on and/or other governmental charges made
as to production, or transportation or insurance charges;iv)
    
    The reasonable value of the instrument, instrument financing,
consumables other than the products in question, and service components of an
operating or capital lease for instrumentation on which the products are used,
for which the charges are included in the price of the products purchased by
the lessee, provided that the methods for determining such values shall be
proposed by Gen-Probe and subject to Bayers written consent, not to be
unreasonably withheld, conditioned or delayed;v)
    
    Charges for freight handling and transportation paid by the
selling entity; andvi)
    
    Sales, use and value-added taxes and other similar taxes
incurred and separately stated on invoices.
  -7-




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-8-




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-9-




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®
     -10-




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ARTICLE
2  LICENSE AND OPTION GRANTS
 License Grant  TMA Qual Assays for Existing Instruments
 License Grant  TMA Qual Assays for Future Instruments
   Option to Extend License(s)
 -11-




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No OEM or Third Party Product Licenses
 -12-




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No Implied Licenses
 Collaboration Agreement
 -13-




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Chiron IVD Know-How
 ARTICLE
3  PAYMENTS TO BAYER
 Royalty Payments
 -14-




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ARTICLE
4  PAYMENTS AND RECORDS
 Records and Reports
 -15-




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Audit
 -16-




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Payment
 Late Payment
 Withholding Tax
 Currency
 Currency Control
 -17-




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ARTICLE
5  REPRESENTATIONS; COVENANTS; INFRINGEMENT
 Representations and Warranties of Bayer
  -18-




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-19-




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-20-




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Mutual Representations and Warranties
  -21-




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Certain Limitations
   -22-




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Performance under Chiron License Agreement
 -23-




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Infringement by Third Parties
 -24-




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Indemnification
  -25-




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-26-




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Survival of Representations and Warranties
 Marking; Regulatory Filings
 -27-




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ARTICLE
6  CONFIDENTIALITY
       -28-




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-29-




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-30-




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ARTICLE
7  TERM AND TERMINATION
 Termination
  -31-




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Term
 Survival
 Unforeseen Circumstances
 -32-




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ARTICLE
8  ASSIGNMENT AND CHANGE OF CONTROL
 ab initio
  provided however provided further
 provided
 -33-




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ARTICLE 9  FIELD RESTRICTIONS AND OTHER COVENANTS
 Gen-Probe Covenant Regarding Blood Screening
    -34-




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Gen-Probe Covenant Regarding Product Labeling
 ARTICLE
10  OTHER PROVISIONS
 Governing Law
 Construction
 -35-




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##### 



Notices
 (a) If to Bayer:
    
    Bayer HealthCare LLCDiagnostics Division511 Benedict AvenueTarrytown, New York 10591Attention: Law & Patents(b) If to Gen-Probe:
    
    Gen-Probe Incorporated10210 Genetic Center DriveSan Diego, California 92121-4362Attention: General Counsel
 -36-




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Effect of Headings
 Integration
 Waiver
 Independent Contractors
 Severability
 -37-




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Multiple Executions
 Further Assurances
 Alternative Dispute Resolution
  BAYER HEALTHCARE LLC
    
    GEN-PROBE INCORPORATEDBy:
    
    /s/ Anthony P. Bihl, III
    
    By:
    
    /s/ Henry L. NordhoffAnthony P. Bihl, III
    
    
    
    Henry L. NordhoffTitle:
    
    President, Diagnostics Division
    
    Title:
    
    President and Chief Executive OfficerDate: August 2, 2006
    
    Date: August 1, 2006
 -38-




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##### 



SCHEDULE 1: CHIRON US PATENTS
 Inventors
    
    US Patent No
    
    Patent DateHoughton, et al.
    
    
    5,714,596
    
    
    02-03-98
    
    
    6,074,816
    
    
    06-13-00
    
    
    5,712,088
    
    
    01-27-98
    
    
    5,863,719
    
    
    01-26-99Miyamura, et al.
    
    
    5,372,928
    
    
    12-13-94
    
    
    5,959,092
    
    
    09-28-99Cha, et al.
    
    
    6,071,693
    
    
    06-06-00Chien, et al.
    
    
    6,416,944
    
    
    07-09-00Weiner
    
    
    5,851,759
    
    
    12-22-98Luciw, et al.
    
    
    6,531,276
    
    
    03-11-03
 -39-




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SCHEDULE 2: ROYALTY PAYMENTS
 [***]
 *** Confidential Treatment Requested
 -40-




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SCHEDULE 3
  *** Confidential Treatment Requested
 -41-




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SCHEDULE 4
  ** Confidential Treatment Requested
 -42-




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Exhibit D
 Stipulation of Dismissal of California Action 565




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##### 



GEN-PROBE INCORPORATED,
    
    CASE NO. 04-CV-565 LAB (WMc)Plaintiff,
    
    STIPULATION FOR DISMISSAL WITHPREJUDICE, AND [PROPOSED] ORDERv.
    
    
    
    
    
    THEREONBAYER HEALTHCARE LLC and BAYER CORPORATION,Defendants.BAYER HEALTHCARE LLC, et al.,Counterclaim Plaintiffs,v.GEN-PROBE INCORPORATED,Counterclaim Defendant.
 
 Attorneys At LawSan Diego




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##### 



IT IS SO STIPULATED:
 LATHAM
& WATKINS LLP
    
    SELTZER CAPLAN MCMAHON VITEKBy:
    
    /s/ Alexander E. Long, Esq.
    
    By:
    
    /s/ Richard A. Clegg, Esq.Alexander E. Long, Esq.
    
    
    
    Richard A. Clegg, Esq.Attorney for Plaintiff
    
    
    
    Attorney for Defendants BayerGen-Probe, Incorporated
    
    
    
    Healthcare LLC and Bayer Corp.GEN-PROBE INCORPORATED
    
    BAYER HEALTHCARE LLCBy:
    
    /s/ R. William Bowen, Jr.
    
    By:
    
    /s/ Anthony P. Bihl, IIIR. William Bowen, Jr.
    
    
    
    Anthony P. Bihl, IIIVice President, General
    
    
    
    President, Diagnostics DivisionCounsel & SecretaryBAYER CORPORATIONBy:
    
    /s/ George J. LykosGeorge J. LykosSenior Vice President
 IT IS SO ORDERED:
  /s/ William McCurine, Jr.The Honorable William McCurine, Jr.UNITED STATES MAGISTRATE JUDGE
 (LATHAM LOGO)Attorneys At LawSan Diego
 1




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Exhibit E
 Stipulation of Dismissal of California Action 1668




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##### 



GEN-PROBE INCORPORATED,
    
    CASE NO. 05-CV-1668 B (WMc)Plaintiff,
    
    STIPULATION FOR DISMISSAL WITHPREJUDICE, AND [PROPOSED] ORDERv.
    
    
    
    
    
    THEREONBAYER HEALTHCARE LLC and BAYER CORPORATION,Defendants.BAYER HEALTHCARE LLC, et al.,Counterclaim Plaintiffs,v.GEN-PROBE INCORPORATED,Counterclaim Defendant.
 (LATHAM LOGO)Attorneys At LawSan Diego




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##### 



IT IS SO STIPULATED:
 LATHAM
& WATKINS LLP
    
    SELTZER CAPLAN MCMAHON VITEKBy:
    
    /s/ Alexander E. Long, Esq.
    
    By:
    
    /s/ Richard A. Clegg, Esq.Alexander E. Long, Esq.
    
    
    
    Richard A. Clegg, Esq.Attorney for Plaintiff
    
    
    
    Attorney for Defendants BayerGen-Probe, Incorporated
    
    
    
    Healthcare LLC and Bayer Corp.GEN-PROBE INCORPORATED
    
    BAYER HEALTHCARE LLCBy:
    
    /s/ R. William Bowen, Jr.
    
    By:
    
    /s/ Anthony P. Bihl, IIIR. William Bowen, Jr.
    
    
    
    Anthony P. Bihl, IIIVice President, General
    
    
    
    President, Diagnostics DivisionCounsel & SecretaryBAYER CORPORATIONBy:
    
    /s/ George J. LykosGeorge J. LykosSenior Vice President
 IT IS SO ORDERED:
  /s/ William McCurine, Jr.The Honorable William McCurine, Jr.UNITED STATES MAGISTRATE JUDGE
 (LATHAM LOGO)Attorneys At LawSan Diego
 1




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Exhibit F
 Stipulation of Dismissal of Massachusetts Action




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##### 



)BAYER HEALTHCARE LLC,
    
    
    ))Plaintiff,
    
    
    ))v.
    
    
    )
    
    
    CIVIL ACTION NO. 05-12084-RCL)GEN-PROBE INCORPORATED,
    
    
    ))Defendant.
    
    
    ))
 STIPULATION OF DISMISSAL
  BAYER HEALTHCARE LLC
    
    GEN-PROBE INCORPORATEDBy its attorneys,
    
    By its attorneys,/s/
Brian A. Davis
    
    /s/ Michael P. BoudettBrian A. Davis (BBO No. 546462)
    
    Michael P. Boudett (BBO No. 558757)Laurence D. Pierce (BBO No. 399283)
    
    Barbara A. Fiacco (BBO No. 633618)CHOATE, HALL & STEWART LLP
    
    FOLEY HOAG LLPTwo International Place
    
    155 Seaport BoulevardBoston, Massachusetts 02110
    
    Boston, Massachusetts 02110Tele: 617-248-5000
    
    Tele: 617-832-1000Date: August ___, 2006




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Exhibit G
 Final Award in JAMS Arbitrations




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##### 



)GEN-PROBE INCORPORATED,
    
    
    ))Claimant,
    
    
    ))v.
    
    
    )
    
    
    JAMS Ref. No. 1240015058)BAYER CORPORATION
    
    
    )and BAYER HEALTHCARE LLC,
    
    
    ))Respondents and Counter-Claimants.
    
    
    ))and)BAYER HEALTHCARE LLC,
    
    
    ))Claimant,
    
    
    ))v.
    
    
    )
    
    
    JAMS Ref. No. 1100045987)GEN-PROBE INCORPORATED,
    
    
    ))Respondent.
    
    
    ))
 STIPULATED FINAL AWARD




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##### 



1.
    
    The parties and the Arbitrator hereby adopt and incorporate by reference the
terms of the Interim Arbitrators Opinion and Award, dated June 24, 2005, and appended
hereto as Exhibit 1 (the Interim Award), provided, however,that the Arbitrators
award of attorneys fees and costs to Gen-Probe contained in such Interim Award shall
be deemed to have been satisfied by Bayer. No additional payment of attorneys fees or
costs by Bayer shall be required;
 2.
    
    Except as modified pursuant to Paragraph 3 hereof, the parties and the
Arbitrator hereby adopt and incorporate by reference the terms of the Award Following
Supplemental Hearing Related to Royalty Issues, dated March 3, 2006, and appended
hereto as Exhibit 2 (the Supplemental Award), provided, however,that neither party
shall be entitled to recover any attorneys fees or costs in connection with the
proceedings related to such Supplemental Award;
 3.
    
    The parties have separately approved and signed a written Sublicense Agreement
to implement the terms of the Supplemental Award; and
 4.
    
    Any and all claims or counterclaims of the parties in the consolidated
arbitration proceeding titled Bayer HealthCare LLC v. Gen-Probe Incorporated, JAMS Ref.
No. 1100045987, shall be dismissed with prejudice and without attorneys fees or costs
to either party.
 5.
    
    This Stipulated Final Award shall be binding, non-reviewable, and
non-appealable.
   -2-




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Date:   August 8, 2006
    LATHAM & WATKINS LLPBy:

/s/
Stephen P. SwintonStephen P. SwintonAttorneys for Gen-Probe IncorporatedDate:   August 3, 2006
    CHOATE, HALL & STEWART LLPBy:

/s/
Brian A. DavisBrian A. DavisAttorneys for Bayer Corporation and 
Bayer
HealthCare LLCSO ORDERED BY THE ARBITRATOR:Date:   August 18, 2006
    By:

/s/
Edward J. WallinHon. Edward J. Wallin (Ret.)Arbitrator  -3-




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Exhibit H
 Alternate Dispute Resolution




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##### 



Alternate Dispute Resolution
  Negotiation.
 Mediation.
 1




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##### 



Arbitration.
  2




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3




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4