exv10w10







Exhibit 10.10





CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A
CONFIDENTIAL TREATMENT REQUEST, PURSUANT TO RULE 406 OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. THE REDACTED TERMS HAVE BEEN MARKED
IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH THREE ASTERISKS [***].







	 		
	Confidential
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SUPPLY & DISTRIBUTION AGREEMENT




This
Supply & Distribution Agreement (“Agreement”) is made
as of this 26th day of
October 2007 (“Effective Date”) by and between RULES-BASED MEDICINE, INC., a corporation organized
and existing under the laws of the State of Delaware, with an address of 3300 Duval Road, Austin,
TX 78759 (“RBM”) and EMD CHEMICALS INC., a corporation organized and existing under the laws of the
State of New York, with an address of 441 Charmany Drive, Madison, WI 53719 (“EMD”).



WITNESSETH THAT:




WHEREAS, RBM owns or controls certain Technology and Know-How, as defined below, related to
multiplexed immunoassays;



WHEREAS, EMD desires to obtain a license under said Technology and Know-How and RBM is willing to
license rights under said Technology and Know-How to EMD;



WHEREAS, RBM also manufactures certain Products as defined below and is willing to supply EMD with
such Products for resale by EMD;



NOW THEREFORE, the parties hereto agree as follows:



ARTICLE I — DEFINITIONS




For the purposes of this Agreement the following words shall have the following meanings:




	1.1	 	“Affiliate” means any entity directly or indirectly controlling, controlled by or
under common control with a party hereto; the term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of a
party, whether through the ownership of voting securities, by contract or otherwise.
	 
	1.2	 	“Agreement” means this Supply & Distribution Agreement between RBM and EMD.
	 
	1.3	 	“Assay Kits” means the items to be assembled hereunder and xMAP Immunoassay Kits sold
by EMD, and which incorporate the Technology and Know-How and the Products.




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	1.4	 	“Field of Use” means the application areas defined in Exhibit C.
	 
	1.5	 	“Intracellular Protein” means any protein or glycoprotein analyte that has a primary
biological location and function on the intracellular side of the plasma membrane of a cell
whereby disruption of the cell or tissue, commonly referred to as lysis, is required for
release and quantification of said target analyte.  Intracellular Proteins do not include
secreted proteins or glycoproteins or proteolytically shed extracellular domains of
trans-membrane or membrane associated proteins.
	 
	1.6	 	“Non-RBM Products” means Luminex xMAP Bead Based Immunoassay set or sets commonly referred to
as “xMAP” or “MAP” that are not within RBM’s testing services business portfolio and/or other
Luminex xMAP Bead Based Immunoassays as further detailed in Exhibit A or that are developed
during the term of this Agreement. 
	 
	1.7	 	“Products” means Luminex xMAP Bead Based Immunoassay set or sets commonly referred to
a “xMAP” or “MAP”, which are currently within RBM’s testing services business portfolio and/or
other Luminex xMAP Bead Based Immunoassays as further detailed in Exhibit A and/or that are
developed during the term of this Agreement for RBM’s “general” (i.e. non-custom) testing
services business and are not subject to a restricted agreement with a third party. The
Products shall consist of assay components including standards which conform to the Quality
Guidelines as defined in Exhibit B. The Products may include one or more single (i.e.
non-multiplexed) Luminex or xMAP Immunoassays.
	 
	1.8	 	“Quality Guidelines” means the quality characteristics for the Products as defined in
Exhibit B.
	 
	1.9	 	“Net Sales” means the total amounts invoiced by EMD for all Assay Kits sold to end
users, Affiliates or third party distributors less (i) trade, cash and volume discounts and
rebates; (ii) allowances given or made for rejection or return of a previously sold Assay
Kits; (iii) customs duties, sales taxes and/or use taxes, value added taxes, excise taxes
and/or duties or tariffs and/or other similar taxes imposed upon the sale, transportation or
delivery of Product; and (iv) freight, insurance and other direct shipment expenses.
	 
	1.10	 	“Technology and Know-How” means RBM’s knowledge and expertise related to the
development and commercialization of Products and all patents and applications now or




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	 	 	hereafter owned or controlled by RBM which are necessary or useful in connection with the
manufacture or use of the Products, and all unpatented scientific, engineering, economic or
other know-how, technical data or information, all methods, processes and procedures and all
instruments, tooling, test equipment, test fixtures, manufacturing alignment and process
jigs, machines and apparatus now or at any time owned or controlled by RBM relating to or
useful in connection with the manufacture, sale or use of the Products.
	 
	1.11	 	“Territory” means all countries of the world.





ARTICLE 2 — GRANT





	2.1	 	RBM hereby grants to EMD during the Term (defined below) of this Agreement an exclusive,
personal, non-transferable, royalty-bearing license, without the right to grant sublicenses,
to make, use, offer to sell, and sell the Products as part of the Assay Kits solely in the
Field of Use in the Territory. The foregoing includes the rights to (a) convey to customers
the right to use the Products as part of the Assay Kits in the Field of Use, (b) employ
Affiliates to use and sell Assay Kits in the Field of Use, and (c) employ Third Party
distributors to sell Assay Kits in the Field of Use. None of the foregoing shall be construed
as a sublicense. EMD acknowledges that it has no interest in any intellectual property rights
of RBM other than the license with respect to the Technology and Know-How and the Products as
part of the Assay Kits solely in the Field of Use set forth in this Section 2.1 and RBM will
remain the sole and exclusive owner of all right, title and interest in any such rights. RBM
shall be free to exploit and commercialize all its intellectual property rights, and to
conduct its testing services business, without any duty or obligation to EMD other than as
stipulated in this Agreement.
	 
	2.2	 	The start date of the Initial Term (as defined in Section 20.1) shall also be the start date
of Sales Year 1. The exclusive rights granted in Section 2.1 shall remain valid for an
initial period of three (3) Sales Years based upon EMD reaching the sales targets for Sales
Years 1, 2, and 3 defined below (the “Sales Targets”). An additional two (2) year exclusivity
period for Sales Year 4 and Sales Year 5 will be automatically granted if the Sales Targets
for Sales Year 1 through Sales Year 3 have been achieved by EMD. If EMD does not reach the
Sales Targets for Sales Year 1 through Sales Year 3, RBM and EMD will mutually establish a
reasonable sales recovery plan for Sales Year 4 through Sales Year 5 to allow EMD to maintain
exclusivity during this two (2) year period. If EMD achieves




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	 	 	all of the Sales Targets and the sales targets for Sales Years 4 and 5, on a cumulative
basis by Sales Year 5, an automatic two (2) year extension of the exclusivity period will
occur. Both parties agree to negotiate in good faith ongoing Sales Targets for the period
after Sales Year 5 until the expiration or termination of the Agreement.
	 
	 	 	Sales Targets:





	 	 	 	 	 	 	 
	 
	 	Sales Year 1	 	 	[***] 	in Net Sales
	 
	 	Sales Year 2	 	 	[***] 	in Net Sales
	 
	 	Sales Year 3	 	 	[***] 	in Net Sales
	 
	 	Sales Year 4	 	 	[***] 	in Net Sales
	 
	 	Sales Year 5	 	 	[***] 	in Net Sales








	 	 	Note. Sales Year 1 begins on the date of receipt by EMD of the First Group of
Products as defined in Exhibit A.
	 
	2.3	 	If EMD does not meet the Sales Targets defined in Section 2.2, the rights granted under this
Section 2 will convert at RBM’s option to non-exclusive after Sales Year 5, or any time
thereafter.
	 
	2.4	 	RBM agrees that Sales Targets are only achievable if RBM meets defined Product introduction
timelines and continuity of Product supply to EMD as stipulated under this Agreement. The
parties thus agree to reduce Sales Targets by a mutually agreed upon percent if the timelines
and continuity of Product supply are not met by RBM.





ARTICLE
3 — PRODUCT SUPPLY





	3.1	 	Within one (1) year of the Effective Date of this Agreement, RBM will supply EMD with the
First Group of Products (as defined in Exhibit A). RBM shall notify EMD in writing of the
firm delivery date of such Products no less than one (1) month prior to said delivery date RBM
will maintain an appropriate validation and notification system for changes in components
agreed to be critical for performance of the Products as part of the Assay Kits. EMD will be
responsible for incorporating and packaging the Products into the Assay Kits.




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	3.2	 	RBM warrants that the Products shall conform to the Quality Guidelines detailed in Exhibit B
and, at the time of delivery, RBM shall have good title to and the right to transfer such
Products, and that the same shall be delivered free of encumbrances. Within sixty (60) days
prior to the delivery of each group of unique Products, RBM will provide performance and
quality characteristics (Product Specific Performance and Quality Report) that will make up
final Product specifications relating to such group of Products; such assay performance data
package shall include, without limitation, the data set forth in Exhibit B. In the event the
Products supplied by RBM do not conform to the Quality Guidelines, RBM shall, within sixty
(60) days of EMD notifying RBM of such non-conformance, replace such defective Products at no
cost to EMD, inclusive of all shipping costs associated with the return of the defective
Products, and EMD’s rights under this sentence shall constitute EMD’s sole remedy with respect
to a breach of warranty under this Section 3.2. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL
OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WRITTEN OR ORAL, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
	 
	3.3	 	EMD is solely responsible for establishing the retail price for each Assay Kit.  EMD
recognizes that RBM has unique knowledge of the applications and markets for these Assay Kits
and agrees to discuss the pricing strategy with RBM prior to EMD’s launch of any Assay Kit.
	 
	3.4	 	RBM agrees to maintain the unit prices set forth in Exhibit A through January 1, 2010.
Thereafter, price increases shall be no more than four percent (4%) per year and such
increases shall be documented in writing. Price increases in excess of four percent (4%) per
year may be necessary due to certain market conditions and shall be negotiated in good faith
between the parties. For price changes to become effective on January 1 of a given calendar
year, such price changes must be communicated to EMD by September 1 of the previous calendar
year. On or around the second anniversary of this Agreement, RBM and EMD will review the
prices of all Products. The transfer price per Product shall be defined on a per panel basis
as detailed in Exhibit A, and will scale appropriately, based on the number of analytes
measured using each Product, the market value of each Product, and competitive considerations.
	 
	3.5	 	RBM will guarantee supply of all orders as provided in Section 3.8 subject to the force
majeure provisions set forth in Section 24.2 of this Agreement. The maximum




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	 	 	lead-time for delivery of Products will be eight (8) weeks from the date of EMD’s Purchase
Order submission to the date of EMD’s Products receipt at EMD’s designated warehouse. The
product will ship F.O.B. point of shipment, at which time the title will transfer to EMD.
Products will be shipped using EMD’s preferred carrier, Federal Express (Account #
092100103). Shipping documentation (commercial invoice, packing slip) must include the
following statements as well as any other statements required by law:






	 	•	 	For laboratory research use only
	 
	 	•	 	Not for human, veterinary, or drug use
	 
	 	•	 	Purchase Order Number






	 	 	Purchase orders will be sent to:




Pat Gallant

Accounting Manager

Rules-Based Medicine, Inc.

3300 Duval Road

Austin, TX 78759

Phone: 512-835-8026



Fax:     512-835-4687





	 	 	Products will be invoiced to:




EMD Chemicals Inc.

480 South Democrat Road

Gibbstown, NJ 08027

Attn: Accounts Payable




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	 	 	Products will be shipped to:




EMD Chemicals Inc.

441 Charmany Drive

Madison, WI 53719

Attn: Receiving





	3.6	 	Terms of payment for Products are net thirty (30) days from date of invoice, (which shall be
no sooner than the Product ship date), unless otherwise agreed to in writing by both parties.
	 
	3.7	 	All costs associated with assembling and packaging the Products into Assay Kits and shipping
the Assay Kits from EMD’s warehouse to end-users will be paid by EMD.
	 
	3.8	 	Within thirty (30) days after receipt by EMD of the First Group of Products as defined in
Exhibit A, EMD shall provide RBM a rolling written forecast of orders that it expects to place
during the next four (4) calendar quarters, including expected delivery dates. Revised
forecasts shall thereafter be submitted within ten (10) days of the beginning of each calendar
quarter; said calendar quarters shall be deemed to end on March 31st, June
30th, September 30th and December 31st respectively. The
forecast for the first calendar quarter of each revised forecast shall constitute a binding
commitment by EMD to purchase the quantities of Products indicated (a “Firm Commitment”) and,
unless rejected by RBM in writing within five (5) business days of receipt of such forecast, a
binding commitment from RBM to deliver such quantities of Products subject to receipt of
Purchase Orders pursuant to Section 3.9.  The forecast for the remaining calendar quarters of
each revised forecast shall be based on EMD’s good faith estimate as of the date thereof and
except as provided below shall not bind EMD or RBM in any way (“Non-Binding Forecasts”).  Any
Firm Commitment for any calendar quarter may differ from the Non-Binding Forecasts for such
calendar quarter previously provided by EMD; provided, however, that RBM shall not be
obligated to supply quantities of Products to EMD in any given calendar quarter in excess of
the amount specified for such calendar quarter in the most recent Non-Binding Forecast
provided by EMD. Notwithstanding the foregoing, RBM shall use commercially reasonable efforts
in an attempt to supply EMD with such excess quantity of Products. EMD shall provide Purchase
Orders in accordance with the terms of this Agreement, specifying the Products, quantity and
requested delivery date. 




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	3.9	 	Based on the Firm Commitments, EMD shall provide RBM with Purchase Orders at least eight (8)
weeks prior to the delivery date specified in such forecast. Purchase Orders shall specify
the quantity of Products ordered, which shall not be less than the required Firm Commitment
quantity identified in Section 3.8 and shall be a minimum of
[***] units for the first order of
any Sub-Panel as defined in Exhibit A and a minimum of [***] units for any subsequent orders of
any Sub-Panel as defined in Exhibit A. EMD shall be obligated to purchase all such Products
ordered by EMD and delivered by RBM pursuant to this Article 3 provided that such Products
meet Products warranty set forth in Section 3.2 above. If RBM believes there will be a delay
in the shipment beyond the delivery date specified in the Purchase Order, RBM will promptly
notify EMD of such expected delay and will use best efforts to minimize such delay. Without
limitation of the foregoing, EMD acknowledges that RBM is dependent on Luminex for its supply
of Beads and certain other suppliers for its supply of protein reagents for use in
manufacturing Products, and, provided RBM is not in breach of any of its obligations to
Luminex or such other suppliers, RBM shall not be liable for any delays in delivery of
Products resulting from a failure or delay on the part of Luminex in supplying Beads to RBM or
of said other suppliers in supplying protein reagents.
	 
	3.10	 	EMD and RBM shall jointly establish batch acceptance testing protocols to measure the
compliance of the Products with the Quality Guidelines. Subject to Section 3.11, EMD shall
have forty-five (45) days from the date of receipt of each batch of Products to confirm
conformity with the Quality Guidelines.  EMD shall notify RBM in writing within such
forty-five (45) day period of its acceptance or rejection of any batch of Products delivered
by RBM, which notice of rejection must contain the reason for such rejection or such batch
shall be deemed for all purposes under this Agreement to have been accepted by EMD. If EMD
fails to provide such notice with respect to some or all of a particular shipment within
forty-five (45) days after receipt thereof, EMD will be deemed for all purposes under this
Agreement to have accepted such shipment. Notwithstanding the foregoing, EMD’s acceptance of
any shipment of Products shall not limit EMD’s rights under Section 3.11 below or
indemnification obligations under this Agreement. RBM will use best efforts to replace
promptly (and no later than sixty (60) days from EMD’s notification per Section 3.2) any
properly rejected batches of Products which the Parties agree, or an independent laboratory
ultimately determines (pursuant to Section 3.12 below), fail to meet the Quality Guidelines,
or at EMD’s request, credit EMD with the amounts paid by EMD for such batches. EMD shall
return to RBM any




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	 	 	rejected batch of Products at its sole expense. RBM shall reimburse EMD for shipping costs
incurred in returning any properly rejected Products that the parties agree, or an
independent laboratory ultimately determines (pursuant to Section 3.12 below) fail to meet
the Quality Guidelines.
	 
	3.11	 	EMD may reject any Product at any time up to the expiration date stated on the Certificate of
Analysis for said Product if all of the following apply:






	 	3.11.1	 	said Product does not comply with a warranty stated in this Agreement or in any
schedule herewith, and
	 
	 	3.11.2	 	such non-compliance is caused by a change, deterioration or spontaneous modification
which shall have occurred following the date the Product was shipped to EMD; and
	 
	 	3.11.3	 	such non- compliance is not due to failure of EMD or by a customer or agent of EMD to
handle or store the Product as required by the labeling; and
	 
	 	3.11.4	 	non-compliance under Sections 3.11.1 and 3.11.2 will allow EMD to return Product as
defined under Section 3.10; and
	 
	 	3.11.5	 	EMD provides such information pertaining to any of the above matters as RBM may
reasonably request






	3.12	 	Notwithstanding the foregoing, RBM reserves the right to test any batch of rejected Products
to determine compliance with the Quality Guidelines. In the event of a conflict regarding
whether or not Products meet the Quality Guidelines at the time of delivery, which RBM and EMD
are unable to resolve after a good faith attempt by both Parties to resolve such matter in a
period of thirty (30) days after the conflict arises, a sample of the Products shall be
submitted by EMD to an independent laboratory reasonably acceptable to both parties for
testing against the Quality Guidelines.  The results obtained by such laboratory shall be
final and controlling for purposes of this Agreement.  The fees and expenses of all such
laboratory testing shall be borne entirely by the party in error.  In the event the
independent laboratory test results indicate that the Products in question did not meet the
Quality Guidelines, RBM shall replace such Products at no additional cost in accordance with
Section 3.10. In the event the independent laboratory test results indicate that the rejected
Products in question meet the Quality Guidelines, then EMD shall pay all additional shipping
and transportation costs incurred as a result of the conflict and shall accept and pay for the
previously rejected Products in accordance with all applicable provisions hereunder.




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ARTICLE
4 — INITIAL DEVELOPMENT FEE AND ROYALTY





	4.1	 	Within thirty (30) days of the Effective Date of this
Agreement, EMD will pay RBM the sum of [***] for the development of the First Group of Products.
	 
	4.2	 	In consideration of the license granted under Article 2, EMD shall pay royalties to RBM at a
rate of [***] on Net Sales of Assay Kits sold by EMD in the Territory.
	 
	4.3	 	In the event that EMD is required to obtain additional licenses from third parties in order
to use or sell the Products supplied by RBM, EMD will have the right to reduce the royalties
for the Assay Kits paid to RBM under Section 4.2 by no more than fifty percent (50%) of the
royalty rate owed by EMD to RBM. The royalty rate reduction shall be calculated by
subtracting one half a percent (0.5%) for each one percent (1%) in royalty payable to the
third party. It is understood that this royalty rate reduction excludes any royalties owed by
EMD to Luminex Corporation as noted in Article 8. EMD shall provide written notice to RBM
regarding the required licenses and the patents or technology covered under such licenses.





ARTICLE
5 — ROYALTY PAYMENTS





	5.1	 	Royalty payments due under Article 4 shall be made in US Dollars within forty-five (45) days
after the last day of March, June, September and December, for royalties due in the preceding
quarter Royalty reports as described in Section 5.2 will be submitted along with royalty
payments. Within ten (10) days of the end of a calendar quarter, EMD will submit to RBM a
written report estimating the amount of royalties payable to RBM for the prior calendar
quarter.
	 
	5.2	 	Each royalty payment shall be accompanied by a written statement which shall set forth the
Net Sales upon which such royalties are computed and including at least:






	 	i)	 	Catalog Number and Description of Assay Kits sold through EMD;
	 
	 	ii)	 	Net Sales of Assay Kits
	 
	 	iii)	 	Breakdown of Net Sales by territory
	 
	 	iv)	 	Royalty percentage;
	 
	 	v)	 	Total royalties payable to RBM;




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	 	 	If no royalties or other payments are due, a statement shall be sent to RBM stating such
fact. For the purpose of computing Net Sales for which a currency other than U.S. Dollars
is received, such currency shall be converted in U.S. Dollars using fixed date rates based
on the Merck KGaA FINAVIGATE system, which relies on Reuters. The rate is calculated at the
end of each calendar month. These currency conversion rates shall be available to RBM upon
request.
	 
	5.3	 	In computing of royalties, Assay Kits shall be deemed sold when billed or invoiced by EMD to
any third party, including Affiliates or Third Party distributors. EMD will sell Assay Kits
to Affiliates and/or Third Party distributors at prices consistent with EMD’s past practices,
its internal transfer price policy and then current market conditions and will not arbitrarily
establish lower prices to avoid paying a higher royalty to RBM. EMD will not attempt to delay
or mischaracterize any payments received from its sale or other transfer of Assay Kits that
could result in a lower royalty owed to RBM.
	 
	5.4	 	In the event that a royalty payment is not made by the due date, any unpaid amount shall bear
interest from the due date until paid in full, at an interest rate equal to the lesser of one
and a half percent (1.5%) per month or the maximum rate allowed by law.
	 
	5.5	 	On reasonable notice and during regular business hours, but no more than once per year, RBM
or the authorized representative of RBM shall have the right to inspect the books of accounts,
records and other relevant documentation of EMD insofar as they relate to the production,
marketing and sale of the Assay Kits, in order to ascertain or verify the amount of royalties
and other payments due to RBM hereunder, and the accuracy of the information provided to RBM
in the aforementioned reports. Inspections conducted under this Section 5.5 shall be at the
expense of RBM, unless a variation or error producing an underpayment in amounts payable
exceeding five percent (5%) of the amount paid for any period covered by the inspection is
established in the course of any such inspection, whereupon all costs relating to the
inspection for such period and any unpaid amounts that are discovered shall be paid by EMD.
EMD shall keep for three (3) years from the date of each royalty payment complete and accurate
records of any Net Sales by EMD in sufficient detail to allow the payment of royalties
hereunder to be determined accurately.




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ARTICLE
6 — ADDITIONAL DEVELOPMENT FEE




After delivery and within thirty (30) days of acceptance as defined in Section 3.10, of the First
Group of Products as detailed in Section 3.1, EMD will pay RBM a
Development Fee of [***]  for development of the Second Group of Products. RBM will
use commercially reasonable efforts to deliver to EMD the Second Group of Products (as defined in
Exhibit A) within fifteen (15) months of the Effective Date.



ARTICLE
7 —ADDITIONAL PAYMENTS





	7.1	 	In addition to the payment for the Products (Article 3), the Development Fee and Royalties
(Article 4), and the Additional Development Fee (Article 6), EMD agrees and will make
additional milestone payments to RBM according to the following schedule:





Payment of US$[***] upon Cumulative Product Purchase Target of US$[***]

Payment of US$[***] upon Cumulative Product Purchase Target of US$[***]

Payment of US$[***] upon Cumulative Product Purchase Target of US$[***]





	 	 	“Cumulative Product Purchase Target” shall mean the total amounts invoiced by RBM for
Products sold to EMD during the term of this Agreement. Such milestone payments shall be due
and payable within thirty (30) days of the date RBM informs EMD in writing that the
Cumulative Product Purchase Target has been met. Milestone payments shall only be due and
payable under this Section 7.1 if, at the time the applicable Cumulative Product Purchase
Target described in the foregoing schedule is met, the exclusive rights granted in Section
2.1 still remain exclusive as provided in Section 2.2.
	 
	7.2	 	If RBM fails to deliver the First Group of Products in conformity with the Quality Guidelines
(as defined in Exhibit A) to EMD on or before September 1, 2008, then the parties will agree
to a three (3) month recovery plan. If RBM fails to deliver any sub-panel in conformity with
the Quality Guidelines included in the First Group of Products to EMD by December 1, 2008,
then RBM will pay EMD [***]  on or before
February 1, 2009 (or a pro rata portion of such amount based on the number of sub-panels set
forth on Exhibit A that are not delivered by such date or which do not conform to the Quality
Guidelines).
	 
	7.3	 	If RBM fails to deliver any sub-panel included in the Second Group of Products (as




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	 	 	defined in Exhibit A) to EMD on or before June 1, 2009, or if such Products fail to conform
to the Quality Guidelines, then the parties will agree to a three (3) month recovery plan.
If RBM then fails to deliver any subpanel included in the Second Group of Products to EMD by
September 1, 2009, or if such Products fail to conform to the Quality Guidelines, then RBM
will pay EMD [***] on or before November 1, 2009 (or
a pro rata portion of such amount based on the number of sub-panels set forth on Exhibit A
that are not delivered by such date or which do not conform to the Specifications and the
Quality Guidelines).





ARTICLE 8 — DEVELOPMENT AND SUPPLY AGREEMENT WITH LUMINEX




EMD has entered into a separate Development and Supply Agreement with Luminex Corporation
(“Luminex”) under which EMD purchases certain products from Luminex for incorporation into kits
developed and commercialized by EMD (“Luminex Agreement”)”). EMD will be responsible for any
royalty obligations due to Luminex under the terms of the Luminex Agreement.



ARTICLE 9 — EMD ASSAYS UNDER DEVELOPMENT





	9.1	 	EMD shall be free to continue developing any Non-RBM Products specific for Intracellular
Proteins or other Non-RBM Products currently under development as listed in Exhibit D, which
is hereby incorporated into and made a part of this Agreement. Additional exceptions will be
evaluated on a case-by-case basis and documented via written amendments to this Agreement.
Except for any products which, as of the Effective Date of this Agreement, EMD is obligated by
contract to purchase from third parties listed in Exhibit D RBM shall be EMD’s exclusive
source of supply of the Products and any similar products to EMD during the term of this
Agreement. In the event that RBM is unable or unwilling to develop and supply certain Products
listed in Exhibit A to EMD within a reasonable timeframe and at a market competitive cost -
price structure, EMD shall be allowed to develop or source such Products from third parties as
needed.
	 
	9.2	 	Subject in each instance to the terms and conditions of any end user license provisions of
any other agreement to which EMD is a party, EMD shall make the Non-RBM Products listed in
Exhibit D available for sale to RBM for use in RBM’s testing services business.  EMD will sell
the Non-RBM Products to RBM in bulk form at prices




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	 	 	consistent with the transfer pricing model contemplated by this Agreement.  Terms of
ordering, quality, shipping, and acceptance will be determined in good faith when the first
purchase order is submitted by RBM.





ARTICLE 10 — RBM CUSTOM PRODUCTS




RBM shall have the right to sell custom Products to those of its customers that make a specific
request for such custom Products. EMD shall have access to these custom Products within the Field
of Use, unless restricted by the requesting customer. RBM shall make reasonable efforts to obtain
permission for general distribution of custom Products.



ARTICLE 11 — NON-COMPETITION




RBM and EMD agree that competitors of the RBM testing services business could unfairly benefit by
purchasing from EMD Assay Kits and other products that are similar to or are competitive with the
Products described in this Agreement. EMD will use all commercially reasonable efforts to prevent
sales of Product outside the Field, particularly sales of Products used for testing services
competitive to RBM’s testing services. If RBM has reason to believe that EMD is making Product
sales outside the Field, EMD will analyze its sales and, if necessary, revise its sales order
processes to cease such sales.



ARTICLE
12 — PROGRESS REPORTS




At EMD’s request, RBM will provide EMD with monthly Progress Reports related to the timeliness of
Product supply to EMD.



ARTICLE
13 — REPRESENTATIONS, WARRANTIES AND COVENANTS





	13.1	 	Representations and Warranties of Each Party. Each party hereby represents and
warrants to the other party, as of the Effective Date and the date that each Product, or Group
of Products is added to this Agreement pursuant to Article 3, that:






	 	(a)	 	it is a corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation;
	 
	 	(b)	 	the execution, delivery and performance of this Agreement by such party has
been




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	 	 	 	duly authorized by all requisite corporate action and does not require any
shareholder action or approval;
	 
	 	(c)	 	it has the power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement; and
	 
	 	(d)	 	it is not a party to any oral or written agreement or arrangement that is
inconsistent with its obligations under this Agreement.






	13.2	 	Additional Representations and Warranties by RBM. In addition to the
representations and warranties made by RBM elsewhere in this Agreement, RBM hereby represents
and warrants to EMD, as of the Effective Date, except as set forth in Schedule 13.2, that:






	 	(a)	 	All of the RBM Technology and Know-How is, to the best of RBM’s knowledge,
valid and in full force and effect, (b) RBM is the owner or licensee of the RBM
Technology and Know-How, (c) each of its licenses for a patent or other intellectual
property necessary for the development, manufacture, use or sale of the Products is in
full force and effect and RBM is and shall at all times during the term of this
Agreement remain in compliance with each of its duties and obligations thereunder, and
(d), none of the RBM Technology and Know-How is subject to any cancellation or
re-examination proceeding or any other proceeding challenging their extent or validity
and, to the best of RBM’s knowledge, are not being infringed by any third party;
	 
	 	(b)	 	RBM has and will have the full and exclusive right, power and authority to
grant all of the right, title and interest in the licenses to RBM Technology and
Know-How and the Products granted in Section 2.1;
	 
	 	(c)	 	Other than Luminex Corporation, no third party has any right, title or interest
in or to any of the RBM Technology and Know-How and Products with respect to which EMD
has been granted or is to be granted a license under this Agreement;
	 
	 	(d)	 	No portion of the RBM Technology and Know-How relating to any Product is
subject to any funding agreement with any government or government agency;
	 
	 	(e)	 	To the best of RBM’s knowledge, the practice of the RBM Technology and Know-How
and commercialization of any Product, each do not infringe any issued patents and
know-how owned or possessed by any third party other than




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	 	 	 	Luminex Corporation;
	 
	 	(f)	 	To the best of RBM’S knowledge, the RBM Technology and Know-How constitute
all of the intellectual property owned, controlled or licensed by RBM or its
Affiliates that claim the Products;
	 
	 	(g)	 	RBM has not received any claims from any third party that there are any legal
deficiencies of the RBM Technology and Know-How or Products licensed under this
Agreement (other than office actions received from one (1) or more patent offices in
the course of prosecuting the RBM Technology and Know-How) and there are no claims,
judgments or settlements against or owed by RBM or any of its Affiliates or pending or,
to the knowledge of RBM, threatened claims or litigation in either case related to the
RBM Technology and Know-How or Products.






	13.3	 	Representations and Warranties by RBM upon Addition of Additional Product to this
Agreement. Upon adding any additional Products to this Agreement, RBM makes each of the
representations and warranties set forth in Section 13.2 (Additional Representations and
Warranties by RBM) as of the date that such additional Products are added to this Agreement
and may update Schedule 13.2 as appropriate to reflect any matters affecting such additional
Products.






	13.4	 	Covenants by Each Party. Each party hereby covenants to the other party that,
from and after the Effective Date:






	 	a.	 	it shall at all times comply with all material laws and regulations applicable
to its activities under this Agreement; and
	 
	 	b.	 	it shall not enter into any oral or written agreement or arrangement that would
be inconsistent with its obligations under this Agreement.
	 
	 	c.	 	it is, as of the Effective Date, and will remain through the Term of this
Agreement a Luminex licensee in good standing.






	13.5.	 	EMD agrees to notify RBM promptly of each suspected or confirmed infringement of such
patented technology of which EMD is or becomes aware.




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	13.6.	 	In the event that RBM and EMD jointly develop any new invention that relate to the Products
or Assay Kits, RBM and EMD shall jointly own such invention so long as at least one employee
of each party is a named inventor as determined under U.S. patent laws and that both parties
jointly file any related patents. The costs for such joint filing and fees shall be shared
equally. In the event of joint inventions, the parties shall agree on the same legal counsel
to assist with patent filing.





ARTICLE 14 — TRAINING




RBM agrees to provide reasonable training to EMD personnel on the use and benefits of each discrete
Product within sixty (60) days prior to the delivery of all unique Products.



ARTICLE 15 — CONFIDENTIALITY





	15.1	 	Both EMD and RBM agree to treat as confidential all proprietary information made available by
RBM to EMD or by EMD to RBM. Either party may disclose proprietary information under
confidentiality with its Affiliates, Board, investors, attorneys or advisors for purposes of
any information required.
	 
	15.2	 	Neither EMD nor RBM shall be bound by the provisions of this Article 15 with respect to
information which (i) is known to the receiving party at the time of the disclosure; or (ii)
is in the public domain at the time of the disclosure; or (iii) becomes a part of the public
domain after the time of disclosure, other than through disclosure by the receiving party; or
(iv) is required to be disclosed by law or contract. If the receiving party is compelled to
disclose any of the disclosing party’s confidential information, the receiving party shall
disclose as little as possible and immediately notify the disclosing party of this request and
provide reasonable assistance in obtaining a protective order or any other available remedy.
	 
	15.3	 	The obligation of EMD and RBM under this Article 15 shall survive by five (5) years the
expiration or earlier termination of all or any other part of this Agreement.





ARTICLE
16 — USE OF NAMES





	16.1	 	EMD agrees to co-brand the Assay Kits and any related promotional literature with the Novagen
and RBM name. EMD will place the statement “Manufactured by Rules Based




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	 	 	Medicine” on all marketing and packaging materials used in connection with the Assay Kits.
As appropriate, RBM will provide EMD with any required licensing language to include in
promotional literature for the Assays Kits.
	 
	16.2	 	Both parties must agree to the wording in any press release related to this Agreement. Once
approved in writing by both parties, such press release may be disclosed to third parties.





ARTICLE 17 — PROMOTION AND CUSTOMER SUPPORT




EMD shall be responsible for all costs associated with the promotion of the Assay Kits and for
direct customer support for the Assay Kits. RBM will provide reasonable support to EMD for the
Products and Assay Kits via telephone, fax, or e-mail, and where necessary and possible use its
best efforts to provide detailed technical information in a timely fashion (i.e. within two (2)
business days) to EMD, thereby facilitating timely responses to customers.



ARTICLE 18 — RBM SOFTWARE




RBM will make its PlateReader and PlateViewer software available at no additional cost to end-users
of the Products, subject to the terms of RBM’s standard software license agreements. RBM and EMD
will define optimal procedures for providing the PlateReader and PlateViewer software at a later
date.



ARTICLE 19 — RIGHT TO AUDIT




EMD shall have the right to audit RBM to the extent reasonably necessary to ensure that RBM is only
supplying Products to EMD and not to third parties, except as described in Article 10.



ARTICLE 20 — TERM AND TERMINATION





	20.1	 	This Agreement shall come into force on the Effective Date. The initial term of this
Agreement shall be seven (7) years beginning on the first day of the month immediately
following receipt by EMD of the First Group of Products, or if received on the first day of a
month, beginning on that day (“Initial Term”). Thereafter the Agreement will automatically
renew for successive one (1) year terms (“Extended Term(s)”). The Initial Term and any
Extended Terms together shall be referred to herein as the “Term”. Either




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	 	 	party may terminate this Agreement effective on the expiration of the Initial Term or on the
expiration of any Extended Term by giving not less than twelve (12) months’ prior written
notice to the other party. Notwithstanding the foregoing, after such time as the exclusive
rights granted in Section 2.1 are not exclusive, either party may terminate this Agreement
at its convenience upon no less than one-hundred and eighty (180) days written notice to the
other party.
	 
	20.2	 	If either party fails to comply with, or breaches, any of the provisions contained herein and
such non-compliance, or breach, is not cured within thirty (30) days after notice thereof to
the breaching party, the non-breaching party may terminate this Agreement. The breaching
party, subject to any and all liability limitations set forth in this Agreement, will be
liable for any damages suffered by the non-breaching party on account of such breach or
termination.
	 
	20.3	 	Any termination of this Agreement shall be without prejudice to any other rights or remedies
available under this Agreement or at law and neither party shall be relieved of any of its
obligations incurred prior to such termination. All provisions herein relating to payments
accrued through the date of termination, and associated reporting and inspection obligations,
as well as all provisions relating to confidentiality, indemnification and liability shall
survive termination.





ARTICLE 21 — INDEMNITY





	21.1.	 	Each party hereto shall indemnify and hold harmless the other for all liability, loss and
expense incurred by the other party resulting from the willful and wrongful, or negligent act
or omission, of the party at fault, its agents, subcontractors or assigns in performance under
this Agreement. Further, in the event the parties are jointly at fault, they agree to
indemnify each other in proportion to their relative fault. Notwithstanding the foregoing,
and except to the extent of a willful and wrongful act or omission, neither party shall have
any liability for incidental, consequential or special damages of any description, whether
arising out of warranty or contract, negligence or other tort, or otherwise, including,
without limitation, any damages resulting from lost profits or lost business opportunity.
	 
	21.2.	 	RBM represents and warrants that it is not aware that any Product to be supplied hereunder
infringes any patent, copyright or other proprietary right of any third party. If notice is
received by either Party charging that any Product or Assay Kit hereunder




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	 	 	infringes any patent, copyright or other proprietary right of such third party, such
notified Party will promptly notify the other. RBM and EMD agree to enter into
discussions, and where necessary, to develop, if possible, a mutually acceptable change in
such Product or Assay Kit to avoid such alleged infringement. If no such mutually
satisfactory change can be worked out, RBM agrees to enter into negotiations with such
third party for the purpose of attempting to procure for EMD on commercially reasonable
terms, the right to continue selling the Assay Kit. If RBM and EMD cannot develop such a
mutually acceptable change and if RBM is unable to so procure for EMD such right, EMD
shall have the right to immediately terminate its obligations under this Agreement to
purchase said Product. RBM agrees to purchase unsold inventories of said Product under
the same terms and conditions as those upon which said Products were supplied to EMD. Time
shall be of the essence for all actions to be taken under this Section 21.2.





ARTICLE 22 — ASSIGNMENT




This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. The Agreement may not be assigned by EMD without the prior
written consent of RBM, which consent may be withheld in the non-assigning party’s sole discretion
and any purported assignment without such consent shall be void; provided, however, that EMD may,
without such consent, assign this Agreement in connection with the sale or transfer of all or
substantially all of its business or in connection with a merger or other consolidation with
another entity. In the event of a sale or transfer of all or substantially all of EMD’s business
or in connection with a merger or other consolidation of EMD to or with another entity that RBM’s
deems to be a competitor, RBM may require EMD to remove any and all attribution to RBM from EMD’s
product labeling, etc., such removal to become effective as each and every Product is newly
manufactured after the effective date of any such sale, merger or other consolidation.



ARTICLE 23 — NOTICES




Any notices to be given hereunder shall be sufficient if signed by the party (or party’s attorney)
giving same and either: (a) delivered in person; (b) mailed certified mail return receipt
requested; or (c) faxed to other party if the sender has evidence of successful
transmission and if the sender promptly sends the original by ordinary mail, in any
event to the following addresses:



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If to RBM:


Rules-Based Medicine, Inc.

3300 Duval Road

Austin, TX 78759

Attn: Craig Benson

President and CEO

Fax: (512) 835-4687




If to EMD:


EMD Chemicals Inc.

441 Charmany Drive

Madison, WI 53719

Attn: Lisa Johnson

Vice President, Corporate Development

Fax: (608) 238-1388




By such notice either party may change their address for future notices. Notices delivered in
person shall be deemed given on the date delivered. Notices sent by fax shall be deemed given on
the date faxed. Notices mailed shall be deemed given on the date postmarked on the envelope.



ARTICLE 24 — MISCELLANEOUS





	24.1	 	Any failure of either party to enforce, at any time or for any period of time, any of the
provisions of this Agreement shall not be construed as a waiver of such provision or of any
other provision hereof.
	 
	24.2	 	If the performance of this Agreement or of any obligation thereunder by either party (except
for monetary payments) is impeded by reasons of a force majeure such as terrorist act, war,
revolution, riot, civil commotion, blockade, embargo, act or restraint of government, strike,
weather-related events, lock-out or damage by fire or flood or by reason of any other
circumstance beyond its reasonable control, the Party so affected shall, upon giving notice to
the other, be excused from such performance to the extent such force majeure necessitates,
provided that it shall use its best endeavors to avoid or




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	 	 	remove or minimize the cause of non-performance and shall continue performance of its
obligations under this Agreement with the utmost dispatch whenever such force majeure shall
be removed. Should a party declaring force majeure be unable, due to the force majeure, to
resume performance of this Agreement within ninety (90) days of the declaration of force
majeure, then the other party may, after expiration of said ninety (90)_day period, but
prior to the resumption of performance by the party declaring force majeure, terminate this
Agreement by written notice.
	 
	24.3	 	This Agreement may not be modified, changed or terminated orally. No change, modification,
addition or amendment shall be valid unless in writing and signed by the parties hereto.
	 
	24.4	 	This Agreement shall be construed and enforced in accordance with the laws of the State of
Texas, excluding any choice of law rules that may direct the application of the laws of any
other jurisdiction.
	 
	24.5	 	All disputes concerning this Agreement which cannot be settled in an amicable way between the
parties hereto shall be finally settled by arbitration using one neutral arbitrator skilled in
the subject matter under dispute to be held in Austin, TX within sixty (60) days of the
written notice of the dispute. Judgment in writing by the arbitrator shall be rendered within
six (6) months of the first hearing. The award rendered shall be final and binding on both
parties. The language to be used in the arbitral proceedings shall be English. Either party
may submit the written judgment of the arbitrator in a court binding on the other party for
enforcement.
	 
	24.6	 	It is not the intent of the parties to create a partnership or joint venture or to assume
partnership responsibility or liability. The obligations of the parties shall be limited to
those set out herein and such obligations shall be severable and not joint.
	 
	24.7	 	This Agreement constitutes and contains the entire agreement of the parties regarding the
subject matter hereof and supersedes any and all prior negotiations, correspondence,
understanding, and agreements, whether written or oral, between the parties respecting the
subject matter hereof.
	 
	24.8	 	Each party shall comply with all applicable national and international laws, rules, treaties,
and regulations related to the activities contemplated by this Agreement. In particular,




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	 	 	each party shall comply with all laws, administrative regulations, and executive orders of
any applicable jurisdiction relating to the control of imports and exports of commodities
and technical data. Each party shall subject to any and all liability limitations contained
in this Agreement, indemnify and hold the other harmless against all claims, cost, damage,
expense, or liability arising out of or in connection with a breach of this Section 24.8.





IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate on the day and
year first written above.



	 	 	 	 	 	 	 	 	 
	RULES-BASED MEDICINE, INC.	 	 	 	EMD CHEMICALS INC.
	 
	/s/ Craig Benson
	 	 	 	/s/ Meiken Krebs
	 	 	 	 	 
	Craig Benson	 	 	 	Meiken Krebs
	President and CEO	 	 	 	President and CEO
	 
	 	 	 	 	 	 	 	 
	Date:

	 	10/31/07	 	 	 	Date:	 	10-31-07
	 

	 	 
	 	 	 	 	 	 





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EXHIBIT A




PRODUCTS & TRANSFER PRICING




The Products and Sub-Panels listed below contain various numbers of analytes.  As further
development and marketing data becomes available, RBM and EMD may agree to alter the analyte
quantity and composition of these Products and Sub-Panels.



First Group of Products




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Product	 	Sub-Panel	 	Target	 	Analytes	 	Rank	 	Transfer Price
	Toxicology
	 	Panel 1	 	Rodent	 	 	6	 	 	 	A	 	 	$	[***]	 
	Toxicology
	 	Panel 2	 	Rodent	 	 	6	 	 	 	A	 	 	$	[***]	 
	Cardiovascular
	 	Acute phase	 	Human	 	 	6	 	 	 	B	 	 	$	[***]	 
	Cardiovascular
	 	Apolipoproteins	 	Human	 	 	7	 	 	 	B	 	 	$	[***]	 
	Cardiovascular
	 	Cytokine	 	Human	 	 	6	 	 	 	C	 	 	$	[***]	 
	Cardiovascular
	 	Other	 	Human	 	 	16	 	 	 	B	 	 	$	[***]	 
	Cancer
	 	Tumor markers	 	Human	 	 	6	 	 	 	B	 	 	$	[***]	 
	Cancer
	 	Growth factors	 	Human	 	 	11	 	 	 	B	 	 	$	[***]	 






Second Group of Products




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Product	 	Sub-Panel	 	Target	 	Analytes	 	Rank	 	Transfer Price
	Metabolic
	 	Panel 1	 	Human	 	 	9	 	 	 	B	 	 	$	[***]	 
	Metabolic
	 	Panel 2	 	Human	 	 	7	 	 	 	A	 	 	$	[***]	 
	Metabolic
	 	Hormone	 	Human	 	 	7	 	 	 	C	 	 	$	[***]	 
	Metabolic
	 	Steroid	 	Human	 	 	4	 	 	 	B	 	 	$	[***]	 






General Pricing Guidelines



Products may be divided into Sub-Panels in order to match expected analyte concentrations to sample
dilutions. RBM and EMD will review product specifications and marketing research results to rank
Products on a Sub-Panel basis using the following guidelines:



Panel rank based on novelty and market value





	A 	 	>70% novel analytes plus added value; e.g. Rat toxicity panel
	 
	B 	 	30-70% of panel analytes are novel
	 
	C 	 	Multiple competitors; e.g. cytokines





The transfer price charged to EMD is determined from the following table using the number of
analytes and ranking of each Product.



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	 	 	 	 	 	 	A	 	B	 	C
	Analytes	 	 	 	panel price	 	panel price	 	panel price
	 	1	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	2	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	3	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	4	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	5	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	6	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	7	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	8	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	9	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	10	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	11	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	12	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	13	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	14	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	15	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	16	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	17	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	18	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	19	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 	20	 	 	 
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 





This generic schedule will serve as a basis for establishing the transfer prices for future (i.e.
Year 3 and beyond) Groups and Panels including the Stem Cell, Human Toxicity and Cytokine Products.
Naturally, the indicative prices detailed in this schedule may be adjusted upwards to allow for
annual inflation and / or any other standard or extraordinary market events.


Pricing is based on the complete set of reagents sufficient to process one 96-well plate and does
not include common consumables such as the 96-well filter plate. All prices are subject to change,
depending on the final Quality Guidelines for the Products.


Pricing does not include applicable U.S. federal or state sales or use taxes, which will be paid by
EMD as and when due; however, RBM shall bear and pay all Federal, State and Local taxes based upon
or measured by its net income, and all franchise taxes based upon its corporate existence, or its
general corporate right to transact business Such taxes shall be added as a separate line item to
the invoice.


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EXHIBIT B




QUALITY GUIDELINES

PERFORMANCE AND QUALITY CHARACTERISTICS




At a time not less than sixty (60) days prior to the launch of each Product under this Agreement,
RBM shall submit to EMD performance and quality characteristics (Product Specific Performance and
Quality Report) that will make up final Product specifications. The following are general
characteristics that RBM will monitor during the development of each Product.



      1. Lower Limit of Detection (LLOD)




LLOD is determined from the average of the signal for a minimum of twenty (20)
replicate determinations of the standard curve blank for each assay. Two standard
deviations are added to the average of the signal, and this value is converted to
concentration as interpolated from the dose response curve.



     2. Cross-reactivity




Cross-reactivity is the ability of an assay to differentiate and quantify the
analyte of interest in the presence of other similar analytes in the sample that
could have a positive or negative effect on the assay value. It is determined by
testing high concentrations of each analyte across a multiplex panel.



     3. Spike Recovery




Spike recovery is performed as an assessment of accuracy which is often not possible
for biological products due to the unavailability of pure “gold” standards. It is
used to account for interference caused by compounds introduced from the physical
composition of the sample or sample matrix that may affect the accurate measurement
of the analyte. It is performed by spiking different amounts of standard spanning
the assay range into standard curve diluent (control spike) and known samples. The
average percentage recovery is calculated as the proportion of spiked standard in
the sample (observed) to that of the control spike (expected) following analysis.



      4. Linearity of Dilution/Parallelism




Linearity is the ability of the assay to obtain test results that are proportional
to the concentration of analyte in a sample when serially diluted to produce values



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within the dynamic range of the assay. The average percentage recovery throughout
the dilution series is then calculated as observed vs. expected concentration.



      5. Reproducibility/Precision




Precision is defined by the agreement between replicate measurements of the same
material when measured within Run (intra-assay CV) and over a series of Runs
(inter-assay or Total CV). It is determined by measuring 3 levels of controls in
duplicate over a minimum of 5.



      6. Stability




Stability studies will be conducted with the goal of delivering products with 18
months of stability; 12 months once received by end-user customers, 6 months at EMD.



      7. Range




The dynamic range is defined as the range of standard used to produce the standard
curve. It is determined during assay development when standards are analyzed in a
wide range above and below the expected concentrations using full-log dilutions.
The standards are subsequently retested using reduced serial dilutions that target
the useful, linear part of the standard curve.



      8. Acceptable sample types




For all products made to measure secreted or shed proteins, plasma, serum, and
tissue culture supernatants will be the acceptable sample types. Other sample types
will be listed when known or appropriate.



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EXHIBIT C




FIELD OF USE




“Field of Use” means products used solely for research purposes, more specifically, including
biomedical research, but excluding laboratory testing for clinical diagnostics and therapeutic
purposes.



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EXHIBIT D




EMD ASSAYS UNDER DEVELOPMENT




As of the date of execution EMD has disclosed that it is developing the following Non-RBM Products.



MMPs




MMP 1

MMP 3

MMP 7

MMP 8

MMP 9

MMP 10

MMP 13




Kinases (total and phospho)




EGFR

HGFR

IGFR

PDGFRo

PDGFRo

Erb2

ErbB3

InsR

VEGFR-2

Tie2




Breast Cancer Panel




Angiogenin

Angiopoetin2

Cadherin

Catenin

EGFR

ER

ErbB2

Fas

FasL

IGFBP3

IGFR

PAI

PR

TIMP1

TIMP2

uPA

VEGFR2




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Schedule 13.2




Exceptions to Additional Representations and Warranties





30