Document:

Exhibit 10.325

 

	
  CONFIDENTIAL

  	
   

  	
  REDACTED VERSION

  

 

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

 

AGREEMENT

 

THIS AGREEMENT is made
effective as of the 1st day of July, 2003 (the “Effective Date”), between The
American National Red Cross, a not-for-profit corporation chartered by an act
of Congress, 36 U.S.C. § 30010 et  seq., having a principal
place of business at 2025 E Street, NW, Washington, DC 20006-5009 (“ARCHQ”),
and Chiron Corporation, a Delaware corporation (“Chiron”) having its offices
at 4560 Horton Street, Emeryville, California 94608-2916 (the “Agreement”).

 

Background

 

WHEREAS, ARCHQ, operating through its
Biomedical Services division (“ARC”) provides, inter alia, blood services,
including the collection of blood from donors, and the screening, packaging and
distribution of blood, blood components and derivatives to those in need of
such services;

 

WHEREAS, ARC currently screens for itself
and for other blood banks in the United States, human blood samples for viruses
such as Human Immunodeficiency Virus type-1 (“HIV-1”) and Hepatitis C Virus
(“HCV”)
by performing screening, including without limitation amplified nucleic acid
screening, in five (5) of its national testing laboratories located in San
Diego, Detroit, St. Louis, Charlotte and Philadelphia and as further identified
on Schedule 1.26 (each, an “NTL”, and collectively, the “NTLs”);

 

WHEREAS, Chiron and ARCHQ are parties to
that certain Sale and Servicing Agreement effective as of August 1, 2002
(the “2002
Agreement”), pursuant to which Chiron sells to ARC, and ARC
purchases from Chiron, certain assays and blood screening instruments to
conduct nucleic acid amplification screening to detect the presence of certain
viruses in blood, including HIV-1 and HCV;

 

WHEREAS, Chiron, together with its
collaboration partner, Gen-Probe Incorporated (“Gen-Probe”), is developing an
assay which can be used to conduct amplified nucleic acid tests to detect the
West Nile Virus in pooled and single donor blood samples (the “WNV Assay”);

 

WHEREAS, substantial further development
and testing of the WNV Assay is necessary before Chiron and Gen-Probe may seek
to obtain FDA approval for the commercial distribution and use of such WNV
Assay;

 

WHEREAS, the costs and efforts required for
such further development and testing far exceed those that Chiron and Gen-Probe
will undertake without assistance and collaboration from other entities, and
the absence or delay of such assistance and collaboration of those entities
would significantly delay the further development and testing, and, thus, the
commercial availability of the WNV Assay in the Territory;

 

1

 

WHEREAS, the rapid development and
availability of the WNV Assay for the testing of blood donations is of critical
importance to ARC’s mission and obligation to ensure the safety of the blood
products it manufactures, and to the protection of the public health;

 

WHEREAS, ARC desires to collaborate with
and support Chiron and Gen-Probe in the further development and testing of the
WNV Assay necessary for obtaining FDA approval or licensing for commercial
distribution of the WNV Assay, subject to the terms and conditions stated
below:

 

NOW, THEREFORE, in consideration of the
foregoing premises and of the mutual covenants of the Parties hereinafter
contained, the Parties hereto hereby agree as follows:

 

ARTICLE 1 - DEFINITIONS

 

Capitalized terms used
and not otherwise defined in this Agreement shall have the following meanings:

 

1.1                                 “2002
Agreement” shall mean that certain Sale and Servicing Agreement
effective as of August 1, 2002, between ARCHQ and Chiron pursuant to which
Chiron sells to ARC, and ARC purchases from Chiron, certain assays and blood
screening instruments to conduct nucleic acid amplification screening to detect
the presence of certain viruses in blood, including HIV-1 and HCV.

 

1.2                                 “Affiliate”
shall mean, with respect to any specified Person, any other Person which
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person.  For
purposes of this definition, the term “control” shall mean (i) ownership
interests representing more than fifty percent (50.0%) of the equity or more
than fifty percent (50.0 %) of the ordinary voting power or more than fifty
percent (50.0%) of the general partnership interests are, at the time such
determination is being made, held, directly or indirectly, by such Person, or
(ii) whether used as a noun or verb, refers to the possession, direct or
indirect, of the power to direct, or cause the direction of, the management or
policies of any Person, whether through the ownership of voting securities, by
contract or otherwise.

 

1.3                                 “Agreement”
shall have the meaning set forth in the introductory paragraph of this
agreement.

 

1.4                                 “Amended
Order Request” shall have the meaning set forth in
Section 2.5(b).

 

1.5                                 “ARC Fiscal
Year” shall mean each July 1 to June 30.

 

2

 

1.6                                 “ARC
Indemnitees” shall have the meaning set forth in Section 7.5.

 

1.7                                 “Blood
Screening Field” shall mean the nucleic acid probe-based screening
of (i) human blood, recovered and voluntary source plasma, platelets or other
blood products intended for transfusion or other administration to humans,
including autologous donors and (ii) recovered and voluntary source plasma for
further manufacture, but specifically excluding paid source plasma intended for
further manufacture.

 

1.8                                 “Blood
Screening Systems” shall mean the instrument(s) and the related
software for DNA/RNA amplified assay processing purchased by ARC from Chiron
under the 2002 Agreement, including the Software acquired by ARC under this
Agreement.

 

1.9                                 “Chiron
Indemnitees” shall have the meaning set forth in Section 7.6.

 

1.10                           “Confidential
Information” means any and all technical, business and other
information and materials disclosed by or on behalf of one Party to the other
Party pursuant to this Agreement or during discussions leading to the execution
of this Agreement, except to the extent that the receiving Party can provide
evidence that such information:

 

(a)                                  is
known to the receiving Party prior to its disclosure by the disclosing Party; or

 

(b)                                 is
obtained by the receiving Party from a source other than the disclosing Party
which source (i) did not require the receiving Party to hold such information
in confidence; or (ii) did not limit or restrict the receiving Party’s use
thereof, or

 

(c)                                  has
become public knowledge otherwise than through the fault of the receiving
Party; or

 

(d)                                 has
been developed by the receiving Party independently of the information received
from the disclosing Party as shown by the receiving Party’s written records; or

 

(e)                                  is
required to be disclosed by the receiving Party by law or for the purpose of
complying with governmental regulations and/or the obligations of the receiving
Party to a licensing or regulatory authority in connection with this Agreement,
provided the receiving Party provides the disclosing Party with prompt notice
of such disclosure so that the disclosing Party has the opportunity to seek a
protective order or other appropriate remedy.

 

3

 

1.11                           “Damages” means
any liability for bodily injury, death or property damage (whether arising out
of fault, strict liability or otherwise) in the form of an obligation, loss,
fine, judgment for damages, arbitration award, settlement amount, penalty or
claim, and all reasonable costs and expenses related thereto (including
reasonable costs of investigation, fees and expenses payable to outside
counsel, independent accountants and similar professional advisors or
consultants, but not including any corporate allocation for use, of similar
in-house services or facilities).

 

1.12                           “Data”
shall have the meaning set forth in Section 6.7.

 

1.13                           “Documentation”
shall mean text material, including the Package Insert and Software manuals,
that describes the design, functions, operation, or use of the WNV Assays and
related Software, that is delivered by Chiron to ARC.  Documentation for the Software shall be the same that is provided
to licensees of such Software generally.

 

1.14                           “Effective
Date” means the date set forth in the introductory paragraph on the
first page of this Agreement.

 

1.15                           “Enhancement”
means an alteration or addition to a Product [***], for which a separate
fee will be imposed.

 

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

 

1.17                           “Force
Majeure Event” shall have the meaning set forth in Section 9.1.

 

1.18                           “Gen-Probe”
shall mean Gen-Probe Incorporated, a Delaware corporation.

 

1.19                           “HCV”
means the Hepatitis C virus.

 

1.20                           “HIV-1”
means Human Immunodeficiency virus type 1.

 

1.21                           “Indemnifying
Party” shall have the meaning set forth in Section 7.8.

 

1.22                           “Indemnitee”
shall have the meaning set forth in Section 7.8.

 

1.23                           “IP Claim”
shall have the meaning set forth in Section 7.7(a).

 

1.24                           “IQA
Procedures” shall have the meaning set forth in Section 2.6.

 

1.25                           “Modified
Order” shall have the meaning set forth in Section 2.5(c).

 

1.26                           “Multi-Flavivirus
Assay” means a nucleic acid probe assay that is capable of detecting
the presence of more than one member of the 

 

4

 

Japanese encephalitis
virus complex (which includes St. Louis Encephalitis, Kunjin, Japanese
encephalitis, Murray Valley encephalitis viruses, among others) and/or the
Dengue virus, for use in the Blood Screening Field, and which assay shall have [***].

 

1.27                           “Normal
Support Hours” shall have the meaning set forth in Schedule 4.0,
paragraph 2.4.

 

1.28                           “NTLs” means
ARC’s national testing laboratories identified on Schedule 1.26.

 

1.29                           “Outbreak
Testing” means screening of samples from up to [***] individual blood
donations in each of the first and second twelve Testing Months during the Term
using a WNV Assay in Single Unit Testing format, where such Single Unit Testing
is determined by ARC to be necessary for any reason, e.g., regional outbreaks of
the West Nile Virus.

 

1.30                           “Package
Insert” shall mean the draft package insert to be submitted to the
FDA for approval for the applicable WNV Assay and attached to Schedule 2.0,
as the same may be amended from time to time.

 

1.31                           “Panel”
shall have the meaning set forth in Section 12.4.

 

1.32                           “Party” or
“Parties” means Chiron, ARC or Chiron and ARC, respectively.

 

1.33                           “Person”
shall mean an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.

 

1.34                           “Pooled
Testing” means the conduct of screening of pools of samples from
blood donations, including allogenic and autologous donors, generally
consisting of:

 

(a)                                  [***]
and

 

(b)                                 [***]

 

1.35                           “Products”
shall mean WNV Assay and related Software.

 

1.36                           “Reagent
Utilization Factor” means, with respect to a specified time period,
the [***].

 

5

 

1.37                           “Regulations”
shall mean all applicable and then current laws, requirements, regulations,
standards, Package Insert, and directives,  promulgated by the FDA or any other state
or federal authorities.

 

1.38                           “Reportable
Result” means a result obtained through the use of a WNV Assay and
Blood Screening System from which it is determined to release for use or hold
and not use (a) a blood donation intended for transfusion or for further
processing for other administration to humans or (b) a product derived from
such donation.

 

1.39                           “Requirement”
shall have the meaning set forth in Schedule 4.0, paragraph 3.3.

 

1.40                           “Rush Order”
shall have the meaning set forth in Section 2.5(d).

 

1.41                           “Services”
shall have the meaning set forth in Article 4.

 

1.42                           “Single Unit
Testing” means screening of blood donations consisting of (i)
screening a sample from each individual blood donation using a WNV Assay,
including allogenic and autologous donors, (ii) screening of individual samples
relating to tissue and/or organ donation and (iii) follow up repeat testing of
positive results.

 

1.43                           “Software” means
the following software programs, including any subsequent Upgrades released
during the Term of this Agreement that ARC elects to acquire pursuant to this
Agreement, but specifically excluding NAT Tracker:

 

Procleix® WNV Assay
Software, Version 2.0.1.0

 

1.44                           “Specifications”
shall mean with respect to each Product, the specifications, tests,
procedures, process description, storage and handling requirements and other
information relating to such Product and packing thereof prepared by Chiron,
its Affiliates, Gen-Probe or other Third Party manufacturers provided to ARC by
Chiron under separate cover, including without limitation such information
contained within the Documentation, which may be amended from time to time by
Chiron after as much advance written notice to ARC of such amendment as is
reasonably practicable is given; provided, however that the foregoing
information shall be consistent with the IND and/or other information required
by the Regulations of each of Chiron and Gen-Probe, or any of their respective
Affiliates, in connection with their performance under this Agreement.

 

1.45                           “Standing
Order” shall have the meaning set forth in Section 2.5(b).

 

6

 

1.46                           “Technologists”
means the employees of ARC trained at a facility of ARC by either a Trainer or
Chiron technical representative.

 

1.47                           “Term”
shall have the meaning set forth in Section 8.1.

 

1.48                           “Territory”
means the United States of America, including Puerto Rico, Guam and all other
protectorates of the United States.

 

1.49                           “Testing
Month” means a calendar month during which ARC makes use of the
Products to generate Reportable Results for [***] of the blood donations
screened by ARC during such month for HCV and HIV-1 under the 2002 Agreement.

 

1.50                           “Third
Party” shall mean any Person other than ARC, and Chiron.

 

1.51                           “Trainer”
shall mean an employee of ARC trained by Chiron to perform troubleshooting,
training of Technologists and such other services to ARC as set forth in the
“Train the Trainer” program referenced in paragraph 2.2 of Schedule 4.0.

 

1.52                           “Upgrades”
means (i) changes to a Product that are made available to correct design
faults, discrepancies or defects (so called “bugs”), (ii) alterations to a
Product [***],
for which a separate charge will not be imposed and (iii) changes to a Product
that are mandated by the FDA.

 

1.53                           “West Nile
Virus” means a mosquito-borne flavivirus, classified as a member of
the Japanese encephalitis virus complex. 
The virus primarily infects birds, but has been found in several other
animal species, including horses, dogs, alligators and humans.  Humans are a ‘dead-end’ host for the virus,
hence the majority of infected humans (~80 %) are asymptomatic.  Another ~20% of infected individuals develop
a mild fibrile disease, sometimes accompanied by rash.  A final ~1% of all humans infections result
in severe and fatal encephalitis.  The
virus has been shown to be transmissible by blood transfusion or by transplant
with infected organs.

 

1.54                           “WNV Assays”
shall mean the nucleic acid probe assays under development by Chiron and Gen-Probe
that are provided by Chiron under this Agreement, which shall be used by ARC in
the Territory to screen for the West Nile Virus in the Blood Screening Field
pursuant to this Agreement, and which assays shall have [***], as defined in the
Specimen Collection, Storage and Handling section of the Package Insert.

 

7

 

ARTICLE 2 - PROVISION OF WNV ASSAYS

 

2.1                                 Supply,
Handling and Storage Obligation. 
During the Term of this Agreement Chiron agrees to supply to ARC the WNV
Assays specified on Schedule 2.0 to permit each NTL to conduct
screening of blood donations in the Territory. 
ARC agrees to store and handle all WNV Assays in accordance with the
applicable Package Insert and other Specifications.  Any WNV Assays lost or damaged due to failure to comply with the
applicable Package Insert and such Specifications will be replaced at ARC’s
expense.

 

2.2                                 Purchase
Obligation.  During the Term of this
Agreement, ARC agrees to acquire from Chiron ARC’s requirements of WNV Assays
in the Territory.  However, nothing in
this Agreement will restrict the right of ARC to evaluate new technologies and
products commercially available from Third Parties or to perform, in its
discretion, any confirmatory and supplementary nucleic acid screening with
Third Party products.

 

2.3                                 Packing
and Delivery of WNV Assays.  Chiron
shall ensure that all WNV Assays will be suitably packed and transported to
ensure safe transport to ARC in accordance with applicable Specifications and
delivered to ARC’s designated NTL, and each delivery will be accompanied by a
packing slip indicating the quantity delivered, the Product lot number(s) and
the expiration date(s).  WNV Assays will
be delivered during normal business hours and accompanied by storage
instructions and arrive at the temperatures specified in the applicable
Specifications or Package Insert.  The
WNV Assays will be delivered in kit form, with appropriate distribution between
screening tests, discriminatory tests and related calibrators.

 

2.4                                 Shipping.  Except as set forth in this
Section 2.4, all shipping, handling and risk of loss charges for the
Products will be borne entirely by Chiron on shipments to the NTLs pursuant to
a Standing Order or a back order and will be shipped, fully insured, to the
designated NTL.  All shipping, handling
and risk of loss charges for shipping requests other than to an NTL as
requested by ARC, and all incremental shipping, handling and risk of loss
charges for Modified Orders or Rush Orders, will be borne by ARC.

 

2.5                                 Forecasts
and Orders.

 

(a)                                  ARC
will provide Chiron with a written twelve month forecast by NTL of its
requirements of WNV Assays (each a “Product Requirements Forecast”) for each
ARC Fiscal Year during the Term of this Agreement on or prior to the
May 1st immediately prior to the commencement of such ARC Fiscal
Year.  Such Product Requirements
Forecasts shall include the requested delivery dates for WNV Assays for each
NTL.  ARC may modify its Product
Requirements Forecasts for any ARC Fiscal Year upon thirty (30) days advance
written notice, provided that if ARC elects to suspend 

 

8

 

use of WNV Assays for any
period of greater than thirty (30) days, ARC shall provide not less than ninety
(90) days notice.

 

(b)                                 Each
month within the then current Product Requirements Forecast shall constitute a
standing order (“Standing Order”) and may be amended either on a temporary
(i.e., with respect to one or two (2) months) basis by ARC (an “Amended
Order Request”).  ARC will
provide Chiron as much advance written notice as reasonably practicable if ARC
desires to amend its Standing Order with an Amended Order Request.

 

(c)                                  If
the variance between any Amended Order Request exceeds [***] of that originally projected
in the Standing Order for the same month(s) in the Product Requirements
Forecast (measured on a number of WNV Assays requested), Chiron will notify ARC
within five (5) business days after receipt of the amendment as to whether it
accepts such Amended Order Request and the delivery date(s) referenced
therein.  If Chiron doesn’t respond to
an Amendment Order Request within the five (5) day period, acceptance of the
Amended Order Request shall be presumed by the Parties.  If an Amended Order Request is accepted
unmodified, Chiron agrees to deliver such amounts of WNV Assays on the delivery
date(s) stated therein.  If an Amended
Order Request is not accepted, the Parties will use all commercially reasonable
efforts to agree on modifications to the Amended Order Request (a “Modified
Order”), subject to Gen-Probe’s ability to accommodate Chiron’s
requests for changes in forecasted amounts. 
Chiron’s failure, if any, to deliver any volume of WNV Assays in excess
of the Standing Order amount would not constitute a breach by Chiron under this
Agreement, provided that Chiron uses commercially reasonable efforts to deliver
such increased volume in accordance with an accepted Amended Order Request or
Modified Order and notifies ARC in writing as promptly as practicable of the
extent Chiron expects to deliver such increased volume.

 

(d)                                 Shipments
of WNV Assays based on Standing Orders shall be made by Chiron automatically to
each NTL every fourteen (14) or twenty-eight (28) days at the election of each
NTL.  Shipments of WNV Assays pursuant
to Standing Orders shall always take place within the first three (3) days of a
calendar week.  These shipment policies
may be altered by agreement between Chiron and any NTL.  From time to time, ARC may request that a
portion of a Standing Order for Products be shipped for the same day or next
day delivery (a “Rush Order”). Chiron shall use commercially reasonable efforts
to ship Rush Orders within twenty-four (24) hours after such request is made.

 

9

 

2.6                                 IQA
Procedures.  As of the Effective
Date, Chiron and ARC have reviewed and agreed to adapt and adopt the existing
“IQA Procedures” approved pursuant to the 2002 Agreement for quality assurance
testing of WNV Assays received by ARC and/or any of its NTLs under this
Agreement (“IQA Procedures”). 
Chiron and ARC must agree to any modifications to such IQA Procedures.
The IQA Procedures include procedures for testing and notice to Chiron and for
implementing the return of WNV Assays for replacement.  Chiron agrees to replace, at its sole cost
and expense, WNV Assays which fail the IQA Procedures.  If testing by Chiron or its supplier
confirms the non-conformity of the WNV Assays, Chiron will bear the shipping
costs associated with replacement.  If
Chiron’s testing provides reasonably acceptable evidence that the WNV Assays do
conform to their Package Insert, the shipping costs incurred by Chiron will be
reimbursed by ARC.  The principal
inspection and testing and acceptance point by ARC for WNV Assays under this
Agreement will usually be the NTLs. 
However, the inspection, testing and acceptance activities may take
place at any point, including Chiron’s facility, with prior notice to Chiron.

 

2.7                                 Technical
Support.  Chiron will provide ARC
with technical support to facilitate the operation by ARC of the WNV Assays on
the Blood Screening Systems in accordance with the terms set forth in Schedule 4.0.

 

2.8                                 Nature
of Screening.  ARC acknowledges that
it has determined, in its sole discretion, to use the WNV Assays supplied by
Chiron to conduct Pooled Testing.  If
ARC desires to change from Pooled Testing to Single Unit Testing or to any
other pool size, ARC and Chiron shall enter into an amendment to this Agreement
reflecting any additional instrumentation or any other amendments that may be
applicable by reason of such change.

 

2.9                                 Performance
Objectives.

 

(a)                                  Chiron
hereby acknowledges that the accuracy and operational efficiency of blood
screening tests is of critical importance to ARC.  Accordingly, Chiron and ARC have agreed to establish the certain
performance objectives for the Products set forth on Schedule 2.9
hereto (the “Performance Objectives”). 
Chiron and ARC acknowledge the Performance Objectives set forth on Schedule 2.9
represent Chiron’s expectations regarding the Products based on results
obtained through the use of the Products during their development.  Accordingly, Chiron does not represent or
warrant that the Products will be capable of achieving the Performance
Objectives.  Notwithstanding the
foregoing, Chiron, together with ARC, will monitor the actual performance of
the Products on a quarterly basis throughout the Term beginning
September 1, 2003 as against the Performance Objectives set forth on Schedule 2.9
(each period, a “Performance Measurement Period”).  [***]

 

10

 

(b)                                 If
the FDA requires any greater analytical sensitivity level than that set forth
in the Performance Objectives on Schedule 2.9, Gen-Probe and Chiron
shall take all reasonable steps to attain the required sensitivity.  If the only reasonable means by which to
attain the required sensitivity is reduced pool size, ARC and Chiron will
negotiate in good faith to achieve reasonable and equitable distribution of the
attendant incremental cost while striving to mitigate costs to either party.

 

ARTICLE 3 -BLOOD SCREENING
SYSTEMS; SOFTWARE

 

3.1                                 Blood
Screening Systems.

 

(a)                                  General.  The ARC shall use the WNV Assay only on the
Blood Screening Systems purchased and maintained pursuant to the 2002
Agreement.  Chiron bears no
responsibility with respect to any use of the WNV Assays on instrument systems
other than the Blood Screening Systems.

 

(b)                                 Upgrades.  All Blood Screening Systems shall be revised
as needed to incorporate Upgrades necessary to perform the WNV Assay at no
additional cost to ARC.  Chiron shall
coordinate the installation of Upgrades with ARC to minimize the impact on
ARC’s operations.  If requested by
Chiron, ARC shall return prior versions of Blood Screening Systems to Chiron
within a reasonable period of time following completion of the Upgrade
installation.

 

(c)                                  Warranties.  Use by ARC of the WNV Assay on the Blood
Screening Systems in accordance with this Agreement shall not void the
warranties set forth in Section 3.1(e) of the 2002 Agreement.

 

3.2                                 Software
and Documentation.

 

(a)                                  Software.  Chiron agrees to provide to ARC, at no
additional charge, all Software and Documentation necessary to run the WNV
Assays on the Blood Screening Systems as contemplated by this Agreement;
provided, further that Chiron shall make available to ARC, at no additional
cost, all of the same to the extent that any Software has been provided by a
licensor other than Chiron.

 

(b)                                 Title.  Chiron, or the applicable licensor of
the Software to be provided hereunder, shall own and retain title to the
Software, including all intellectual property rights embodied therein.  Any copy which ARC makes of the Software, in
whole or in part, is and shall 

 

11

 

remain the property of
Chiron or the applicable licensor. If ownership of the Software or any work
product does not result as provided in this Agreement or by operation of law,
then the Parties each assign and shall cause their respective employees,
agents, and contractors to assign, without further consideration, the ownership
thereof, including all associated intellectual property rights, as necessary to
give effect to the ownership terms specified in this Agreement.  Each Party agrees to perform, at the
reasonable request of the other Party, such further acts as may be necessary or
desirable to transfer ownership of, and to perfect and defend, the Software in
order to give effect to such ownership terms.

 

(c)                                  Upgrades.  All Software shall be revised as needed to
incorporate Upgrades at no additional cost to ARC.  Chiron shall coordinate the installation of Upgrades with ARC to
minimize the impact on ARC’s operations. 
If requested by Chiron, ARC shall return prior versions of Software to
Chiron within a reasonable period of time following completion of the Upgrade
installation.

 

(d)                                 License.  Chiron hereby grants, and ARC hereby
accepts, subject to the terms and conditions of this Agreement, a nonexclusive,
nontransferable and nonassignable (except as permitted under this Agreement)
object code license (or sublicense, as applicable) to use the Software at the
NTLs solely for ARC’s own use in connection with the operation of the WNV
Assays on the Blood Screening Systems during the Term of this Agreement, and to
copy the Software solely for the purposes expressly authorized under this
Section 3.2.  In addition, Chiron
hereby grants to ARC the right to use the Documentation in connection with its
use of the Software hereunder. 
Documentation may not be copied. 
Additional copies of the Documentation may be obtained from Chiron,
subject to payment of Chiron’s reasonable copying charges then in effect.  No right to use, copy, display, or print the
Software or Documentation, in whole or in part, is granted, except as expressly
provided in this Agreement.

 

(e)                                  Confidentiality.  ARC acknowledges that the Software is the
proprietary intellectual property of Chiron or the applicable
manufacturer/licensor, and ARC shall take reasonable precautions to protect the
Software and to prevent the disclosure thereof to Third Parties.

 

(f)                                    Restrictions
on Use.  The grant of rights stated
in this Section 3.2 is subject to the terms and conditions of this
Agreement as well as the following restrictions:

 

12

 

(i)                                     Use
of the Software may be subsequently transferred to other NTLs, provided (A) the
total number of NTLs at which the Software is used does not exceed the number
of NTLs specified in this Agreement and (B) ARC provides Chiron with written
notice thirty (30) days before such transfer.

 

(ii)                                  In
the event that disaster or other circumstances affecting ARC prevents ARC from
using the Software at the NTLs identified in this Agreement, the effected NTLs
shall have the right to use the Software at a disaster recovery facility
without prior notice to Chiron, but shall promptly notify Chiron as soon as
circumstances permit.

 

(iii)                               ARC
shall not use (or cause to be used) the Software for rental, in the operation
of a service bureau or for any similar purpose, nor shall ARC allow access to
the Software through terminals located outside ARC’s business premises by
persons who are not ARC’s employees or authorized agents, contractors or
representatives.

 

(iv)                              ARC
shall not distribute the Software, in whole or in any part, to any Third Party
or parties, nor permit its sublicensing, leasing, or other transfer, except as
permitted under Section 13.3 of this Agreement.

 

(v)                                 ARC
shall not, either directly, or through a Third Party, reverse engineer,
disassemble or decompile the Software, or make any attempt in any fashion
except as specifically provided in this Agreement to obtain the source code to
any Software.

 

(vi)                              Any
use of the Software not in accordance with this Agreement, or any modification
or alteration of the Software not expressly authorized in writing by Chiron,
shall be deemed a breach of this Agreement.

 

(vii)                           Upon
expiration or termination of this Agreement, ARC shall (A) cease all use of the
Software and the Documentation; (B) return to Chiron the Software and the
Documentation and any copies thereof (unless required to retain such material
for regulatory purposes); and (C) erase from memory all copies of the Software
(unless required to retain such material for regulatory purposes).  ARC shall certify in writing to Chiron that
it has not retained the Software and Documentation or any copies thereof
(unless required to retain such material for regulatory purposes).

 

13

 

(g)                                 Electronic
Records; Electronic Signatures. 
Chiron shall utilize commercially reasonable efforts to develop and
install Upgrades necessary to ensure the Software is capable of being utilized
in compliance with 21 CFR Part 11.  ARC
shall have the right to perform an audit of the Software to ensure such
compliance.

 

(h)                                 Warranties;
Limitation of Liability.

 

(i)                                     Performance.  Chiron warrants that the Software, under
normal use and service, will perform all of the material functions described in
the Documentation of such Software. 
Chiron warrants that the Documentation shall be free from material
defects in materials and workmanship. 
If any such defect or deviation appears during the applicable periods,
the Software or Documentation may be returned to Chiron for replacement by
Chiron without charge;

 

(ii)                                  Anti-Virus.  Chiron warrants that to the best of its
knowledge after employing reasonable technical means to detect computer
viruses, the Software at the time of delivery will not contain any virus or
computer software code, routines or devices designed to disable, damage,
impair, or erase the Software or other software or data.  For failure to comply with this warranty,
Chiron shall, at Chiron’s expense, immediately replace all copies of the
affected Software in the possession of ARC; and

 

(iii)                               Chiron
warrants that as of the Effective Date of this Agreement it has full rights and
authority to license the Software to ARC, or the authority to do so without
infringing the rights of any Third Party. 
Chiron shall not incorporate any other software having any limitation on
its use or transfer into any Software provided to ARC without giving prior
written notice to ARC and receiving written approval from ARC.

 

ARTICLE 4 - SERVICES

 

Installation, training, telephone
support, and other servicing of any of the Products (collectively, “Services”),
shall be provided to ARC by Chiron in accordance with the terms and conditions
set forth in Schedule 4.0 attached hereto.

 

14

 

ARTICLE 5 - COMPENSATION,
PAYMENTS

 

5.1                                 Support.  ARC agrees to assist with the costs related
to the development and supply of the WNV Assay and other costs incurred by
Chiron and Gen-Probe under this Agreement by paying to Chiron the amounts set forth
in Schedule 5.0 attached hereto for the Products and Services.

 

5.2                                 Payments.  All payments shall be made as set forth in Schedule 5.0.  All payments due to Chiron hereunder shall
be paid in full by ARC in U.S. Dollars within thirty (30) calendar days of the
applicable invoice date.  In the event
of late payment, interest shall be charged at the rate of [***], as reported in the
Wall Street Journal on the date such payment was due, until the date of actual
payment, such interest to accrue daily and both before and after judgment.

 

Chiron’s invoices must be
submitted to The American National Red Cross, Shared Services Center, Post
Office Box 410500, Charlotte, North Carolina 28241-0500.  Chiron shall invoice incremental freight
charges relating to Modified Orders and Rush Orders separately.

 

Each invoice must
contain:

 

•                  Chiron’s
name and address;

•                  Agreement
and purchase order number;

•                  any
applicable task or shipping instruction number;

•                  a
description of the goods or services and the dates delivered or performed;

•                  any
applicable unit prices and extensions;

•                  shipping
and payment terms; and

•                  any
additional information required by this Agreement.

 

5.3                                 Books
& Records; Audit.  ARC shall
keep reasonably detailed and accurate records and books of account to enable a
determination of the amounts payable by ARC to Chiron for Reportable Results as
provided hereunder.  Upon thirty (30)
days written notice by Chiron, not more frequently than once per calendar year,
Chiron, at its cost (except as otherwise provided below in this
Section 5.3) may have such records and books of account relating solely to
Reportable Results examined at an ARC location during reasonable business hours
by an independent certified public accountant selected by Chiron for the purpose
of verifying the amounts due hereunder and engaged on payment terms reasonably
acceptable to ARC.  A copy of any final
written report provided by the independent accountant to Chiron shall be given
concurrently to ARC.  [***]  In all cases, such examination by Chiron
shall not be permitted unless [***] to which the books and records
pertain.  Where such examination results
in a finding that ARC underpaid Chiron [***], ARC 

 

15

 

shall reimburse Chiron
for its reasonable costs and expenses in conducting such examination.  ARC and Chiron shall promptly rectify
underpayments and overpayments by repaying such amounts, together with interest
thereon accruing from and, at the rate of [***] as reported in the Wall Street
Journal on, the date such under- or overpayments [***] in the aggregate for
such Fiscal Year, until the date of actual payment.

 

5.4                                 Taxes.  Chiron hereby acknowledges that ARC is a
not-for-profit, charitable corporation, exempt from the payment of sales and
use taxes and ARC shall have no tax liability on Products unless specifically
legislated by a particular state. 
Chiron is responsible for requesting and obtaining all tax exemption
numbers as required.  [***]  Notwithstanding the above, if any federal,
state, provincial, county or municipal sales or use tax, excise or similar
charge, or other tax assessment (other than that assessed against income), is
assessed or charged on the sale of the WNV Assays and Blood Screening Systems
sold to ARC by Chiron pursuant to this Agreement, it shall be paid by ARC.

 

ARTICLE 6 - CERTAIN AGREEMENTS

 

6.1                                 WNV
Assay IND.  Gen-Probe has prepared
and submitted an Investigational New Drug Application in accordance with the
Regulations to the FDA (“IND”) to permit the ARC to conduct nucleic acid
amplification screening to detect the presence of the West Nile Virus using the
Products (BB-IND 10920).  Gen-Probe, or
Chiron on Gen-Probe’s behalf, shall notify ARC in advance and provide ARC with
a copy of any amendment to Gen-Probe’s IND.

 

6.2                                 Protocol
IND.  ARC has prepared and submitted
an IND to the FDA for the clinical protocol and preclinical studies to be
undertaken in connection with the screening of blood, plasma, other blood
components and tissue and organ samples using the Products, which application
shall cover the donor, product, and recipient management (BB-IND 11036).

 

6.3                                 ARC
Use of WNV Assays Per IND.  ARC
shall not use the Products in a manner not specifically described in the ARC’s
or Gen-Probe’s IND protocol at any time. 
ARC shall notify Chiron in advance and provide Chiron with a copy of any
amendment to ARC’s IND.

 

6.4                                 Provision
of Facilities by ARC.  ARC agrees to
make available, at its sole expense and discretion, adequate facilities
(including any necessary facility improvements) and personnel necessary to
conduct the clinical trials described in ARC’s IND and otherwise for use of the
Products in accordance with all applicable Regulations and Documentation.

 

6.5                                 Regulatory
Compliance.

 

16

 

(a)                                  ARC
shall be solely responsible for compliance with all reporting and other
regulatory requirements imposed on it by the Regulations, including, but not
limited to, 21 C.F.R. Part 812.  Upon
reasonable request of Chiron, ARC shall provide Chiron with copies of reports
to the FDA relating to the use of the Products, so long as such information
requested does not violate any Regulations or confidentiality obligations of
ARC to Third Parties.

 

(b)                                 Chiron
shall be solely responsible for compliance with all reporting and other
regulatory requirements imposed on it by the Regulations, including, but not
limited to, 21 C.F.R. Part 812.  Upon
reasonable request of ARC, Chiron shall provide ARC with copies of reports to
the FDA relating to the use of the Products, so long as such information
requested does not violate any Regulations or confidentiality obligations of
Chiron to Third Parties.

 

(c)                                  Gen-Probe
shall be solely responsible for, or Chiron on Gen-Probe’s behalf shall be solely
responsible for, Gen-Probe’s compliance with all reporting and other regulatory
requirements imposed on it by the Regulations, including, but not limited to,
21 C.F.R. Part 812.  Upon reasonable
request of the ARC, Gen-Probe, or Chiron on Gen-Probe’s behalf, shall provide
ARC with copies of reports to the FDA relating to the use of the Products, so
long as such information requested does not violate any Regulations or
confidentiality obligations of Chiron or Gen-Probe to Third Parties.

 

(d)                                 Any
Party hereunder agrees to make available to the requesting Party (with
authority to provide to its Affiliates or any governmental regulatory agency)
such records as may be reasonably required in accordance with a reasonably
based legal opinion for the requesting Party to satisfy its regulatory
requirements in the United States.

 

(e)                                  Each
Party agrees to provide access to their facilities and documents pertaining to
this Agreement, without any prior or written notice, to the FDA should it
require access in accordance with any FDA policy, communication, or regulation.
To the extent that the FDA requires access and is investigating Products
related to this Agreement, the Party being investigated shall give notice to
the other Party.

 

(f)                                    Each
Party, and Chiron on behalf of Gen-Probe, agrees to perform, on reasonable
request of the other Party, such further acts as may be reasonably necessary or
desirable for the requesting Party to stay compliant with the Regulations;
provided that the non-

 

17

 

requesting Party may
disagree or deny such request if such Party deems such request to require more
than commercially reasonable efforts to satisfy the request.

 

6.6                                 FDA
Approval.  Each Party, and Chiron on
behalf of Gen-Probe, agrees to exercise due diligence and commercially
reasonable efforts to obtain the requisite approval from the FDA to
commercially distribute the Products during the Term.  Notwithstanding the above, if the FDA alters its recommendation
for the screening of human blood, covered and voluntary source plasma,
platelets or other blood products intended for transfusion or other
administration to humans for the presence of the West Nile Virus to recommend
screening using a Multi-Flavivirus Assay, then the obligation of the parties to
seek FDA approval to commercially distribute the Products shall be suspended
and ARC and Chiron shall meet and confer regarding the development of a
Multi-Flavivirus Assay, including without limitation, the discriminatory assays
relating thereto.

 

6.7                                 Data.   ARC shall provide to Chiron and, at
Chiron’s request and direction, to Gen-Probe, in an agreed format data
generated in connection with the use of the Products as required for proper
submission of the Gen-Probe IND and otherwise as is sufficient to monitor the
performance of the Products for quality assurance and to perform their
respective regulatory obligations in the Territory (collectively the “Data”).  Each Party shall have the right to disclose,
and as to Chiron, to have Gen-Probe disclose, such data to the FDA in support
of the IND without prior written consent of the other Party.  The Data shall be deemed confidential
information of ARC.

 

(a)                                  Each
Party acknowledges the other party’s interest in disclosing or publishing, in
oral or written form, certain information related to ARC’s use of the Products
to obtain recognition within the scientific community, to advance the state of
scientific knowledge and for marketing purposes.  Each Party also recognizes the other Party’s interest in
preserving the confidentiality of certain information.  Therefore, neither party will publish any
information relating to use of the Products, including Data each Party
generates during clinical trials, without the express written consent of the
other Party, which consent shall not be unreasonably withheld.  A Party wishing to publish shall provide a
copy of the draft publication and provide the other Party not less than thirty
(30) to review and comment prior to publication.  Any such publication shall appropriately acknowledge the
contributions of the other Party.  At
the request of either Party, the Parties shall reasonably consider joint
publications.

 

(b)                                 Chiron,
and on behalf of its Affiliates or Gen-Probe, shall have the right to request
use of Data in connection with other regulatory applications, submissions and
notifications, in any country, with 

 

18

 

respect to the Products,
Blood Screening Systems or related products.

 

(c)                                  The
Parties acknowledge and agree that nothing in this Agreement or otherwise will
require ARC to disclose to Chiron patient-specific, or donor or recipient
identifying information (including information that could identify a group of
donors, recipients or their geographical location), unless and to the extent
that such information is required by any applicable law, regulation or court
order.  In such event, (i) Chiron must
provide notice to ARC in writing immediately on becoming aware of such a
requirement so that ARC has an opportunity to seek a protective order or other
remedy; and (ii) ARC shall provide the required identifying information to the
extent it has such information, subject to the terms of such protective order
or other remedy.

 

6.8                                 Confidentiality.   During the Term of this Agreement and [***],
absent the consent of the other Party, (i) ARC agrees to keep in confidence and
not to disclose to any Third Party other than its Affiliates, agents or
contractors who need to know in connection with ARC activities under this
Agreement, or use for any purpose, except pursuant to, and in order to carry
out, the terms and objectives of this Agreement, any Confidential Information
of Chiron, including Confidential Information of Gen-Probe which is disclosed
to ARC by or through Chiron; and (ii) Chiron agrees to keep in confidence and
not to disclose to any Third Party other than Gen-Probe and their respective
Affiliates, agents or contractors who need to know in connection with Chiron
activities under this Agreement, or use for any purpose, except pursuant to,
and in order to carry out, the terms and objectives of this Agreement, any
Confidential Information of ARC.  
Disclosures of Confidential Information to Third Parties authorized hereunder
shall be permitted only if the Third Party is bound by confidentiality
obligations not less restrictive than those set forth herein.

 

(a)                                  Subject
to this Section 6.8 and except as required by a court order issued by a
court having appropriate jurisdiction, the Parties agree not to disclose to any
Third Party any financial terms of this Agreement, or any terms of this
Agreement relating to the WNV Assays and Blood Screening Systems provided
hereunder, without the prior written consent of the non-disclosing Party;
provided, however, that the Parties may disclose the existence and general
nature of this Agreement to Third Parties.

 

(b)                                 The
Parties acknowledge that a violation of this Section 6.8 may cause
irreparable harm to the non-disclosing Party for which no adequate remedy at
law exists and the Parties therefore agree that, in addition to any other
remedies available, the non-disclosing Party 

 

19

 

shall be entitled to seek
injunctive relief to enforce the terms of this Section 6.8.

 

6.9                                 Intellectual
Property; Inventions.  The provision
by Chiron to ARC of the Products hereunder includes the implied license or
sublicense under Chiron and Gen-Probe intellectual property to use the Products
in the Territory as provided herein. 
Except for such implied license to the Products, and except as
specifically set forth herein, nothing in this Agreement conveys to either
Party any rights or licenses to any intellectual property of the other
Party.  The Parties do not anticipate
that use of the Products as provided herein will result in new inventions by
ARC.   However, in the event that any
such new invention is made, solely by ARC or persons obligated to assign
inventions to ARC, arising from the use of the Products, ARC will own such
invention and ARC grants to Chiron the option to obtain a non-exclusive
worldwide license to such invention (with a right to sublicense for
manufacturing purposes only), on commercially reasonable terms to be negotiated
by the Parties in good faith.  If an
invention is made jointly by ARC or persons obligated to assign inventions to
it, and Chiron or persons obligated to assign inventions to it, such invention
will be owned jointly by the Parties. 
All inventions made solely by Chiron or persons obligated to assign
inventions to it will be owned by Chiron.

 

6.10                           Inventory
Levels.  Chiron shall, at no cost to
ARC, assist each NTL monthly in managing its inventory, as well as actual
Product usage versus the Product Requirement Forecasts.

 

6.11                           Technical
and Operational Reviews.  From time
to time, Chiron shall conduct technical and operational reviews with ARC of the
Products and other Services provided by Chiron, as well as Agreement
performance, at each Party’s respective expense.  The Parties shall mutually agree upon the scheduling and
locations of such reviews.

 

6.12                           Clinical
Monitor Fees.  In consideration of
ARC’s allocation of resources, facilities and Data pursuant to this Agreement,
Chiron shall pay ARC [***] for such amount from ARC, to offset
those costs incurred by ARC from the engagement of Medical Marketing
Consultants in connection with monitoring of Products pursuant to the existing
IND applications (BB-IND 10920 and BB-IND 11036 for each of Gen-Probe and ARC,
respectively).

 

ARTICLE 7 - REPRESENTATIONS & WARRANTIES; WARRANTY
DISCLAIMER; INDEMNIFICATION; LIMITATION OF LIABILITY; INSURANCE

 

7.1                                 Chiron
Representations & Warranties. Chiron hereby represents, warrants and
covenants to ARC that:

 

20

 

(a)                                  All
Products and Services provided pursuant to this Agreement shall conform to the
Regulations, including, but not limited to, 21 C.F.R. Part 812.

 

(b)                                 [***]

 

(c)                                  (i)
Chiron is duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it was organized, (ii) this Agreement, when
executed and delivered by Chiron, will be the legal, valid and binding
obligation of Chiron, enforceable against Chiron in accordance with its terms,
(iii) the execution, delivery and performance of this Agreement by Chiron does
not and will not (1) conflict with, or constitute a breach or default under,
Chiron’s organizational documents or any material agreement, contract,
commitment, or instrument to which Chiron is a party or (2) require the
consent, approval or authorization of, or notice, declaration, filing or
registration with, any Third Party or any governmental or regulatory authority,
and (iv) Chiron has not previously granted and will not grant any rights to any
Third Party which are, nor has contracted or will contract with any Third Party
in any manner which is, inconsistent with the rights granted herein.

 

(d)                                 There
are no FDA proceedings or other regulatory actions pending, threatened (orally
or in writing) or probable of assertion against Chiron or any employee, agent
or subcontractor thereof for violations of any requirements of the United
States Food, Drug and Cosmetic Act, the Public Health Service Act and/or
accompanying regulations, or any other Regulations, which would prohibit or
limit the provision of the Products as set forth in this Agreement.

 

(e)                                  Chiron
has commercial insurance necessary to conform with the terms and conditions of
this Agreement and all Chiron commercial insurance shall be and remain in full
force and effect during the Term of this Agreement.  In no event shall any ARC Indemnitee’s recovery for Damages
assumed by Chiron be limited to the amount of the insurance limits requested.

 

7.2                                 ARC
Representations & Warranties. ARC hereby represents, warrants and
covenants that:

 

(a)                                  ARC
shall not make any warranty or representation, either express or implied, with
respect to any Product, which differs from any warranty or representation made
by Chiron or the applicable manufacturer in the applicable Documentation for
the Product.

 

21

 

(b)                                 ARC
shall store, handle and use the Products in its control in conformity with the
Package Insert and shall comply with all Regulations applicable to the use of
such Products.

 

(c)                                  (i)
ARC is a not for profit corporation chartered by an act of Congress, 36 U.S.C.
§ 30010 et  seq., and has the full and unrestricted corporate
power and authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby, (ii) this Agreement, when executed and
delivered by ARC, will be the legal, valid and binding obligation of ARC,
enforceable against ARC in accordance with its terms, and (iii) the execution,
delivery and performance of this Agreement by ARC does not and will not (1)
conflict with, or constitute a breach or default under, ARC’s organizational
documents or any material agreement, contract, commitment, or instrument to
which ARC is a party or (2) require the consent, approval or authorization of,
or notice, declaration, filing or registration with, any Third Party or any
governmental or regulatory authority that is material to ARC’s ability to
carryout the transactions contemplated hereby.

 

(d)                                 ARC
has commercial insurance necessary to conform with the terms and conditions of
this Agreement and all ARC commercial insurance shall be and remain in full
force and effect during the Term of this Agreement.  In no event shall any Chiron Indemnitee’s recovery for Damages
assumed by ARC be limited to the amount of the insurance limits requested.

 

7.3                                 Limitation
of Warranty.  Chiron is not the
manufacturer of the WNV Assays provided to ARC under this Agreement.  Further, the WNV Assays are not licensed by
the FDA or any other regulatory body for use in the screening and release of
blood, plasma or other blood components and are development stage products,
provided to ARC pursuant to an IND submitted to the FDA.  EXCEPT AS EXPRESSLY PROVIDED ELSEWHERE IN
THIS AGREEMENT, CHIRON MAKES NO WARRANTIES OF ANY KIND AS TO THE PRODUCTS
PROVIDED HEREUNDER, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

 

7.4                                 Pass-Through
Warranty.  With no further act
required by ARC, Chiron agrees to pass through to ARC the benefit of
Gen-Probe’s manufacturer warranties with respect to each of the Products, and
Chiron with respect to any other Third Party manufacturer’s shall also pass
through to ARC the benefit of any manufacturer’s warranties with respect to
each of the Products, to the extent it is legally permitted to so by the
applicable Third Party manufacturers.

 

22

 

7.5                                 Indemnity
by Chiron.  Chiron agrees to
protect, defend, indemnify and hold harmless ARC, the NTLs and all ARC units,
including without limitation, all ARC chapters and other operating units, and
their respective officers, directors, governors, employees, Affiliates,
assigns, successors, and agents (collectively, the “ARC Indemnitees”) and agrees
to hold them harmless from and against all Damages arising from the negligence
or willful misconduct of any of the Chiron Indemnitees or Gen-Probe in the
performance of Chiron’s or Gen-Probe’s obligations under this Agreement,
including without limitation:

 

(a)                                  any
breach or violation by Chiron, Gen-Probe or any Chiron Indemnitee of any of the
applicable Regulations related to Chiron’s or Gen-Probe’s performance under
this Agreement;

 

(b)                                 Chiron’s
provision of any Services pursuant to this Agreement;

 

(c)                                  [***];
or

 

(d)                                 loss
or damage to any of Chiron’s or any Chiron Indemnitee’s property, real or
personal, while performing Chiron’s or Gen-Probe’s respective obligations
pursuant to this Agreement;

 

provided,
that in all of the above cases Chiron’s indemnification responsibilities
to ARC Indemnitees shall be reduced to the extent that any of such Damages
claimed by any ARC Indemnitee results from the willful misconduct, negligence
or omission of ARC or any ARC Indemnitee or ARC’s breach of its
representations, warranties, covenants or other agreements and obligations
provided in this Agreement.

 

7.6                                 Indemnity
by ARC.  ARC agrees to protect,
defend, indemnify and hold harmless Chiron and its Affiliates, and their
respective officers, directors, employees, assigns, successors, contractors,
subcontractors, suppliers and agents (collectively, the “Chiron Indemnitees”) and
agrees to hold them harmless from and against all Damages arising from the
negligence or willful misconduct of any of the ARC Indemnitees in the
performance of ARC’s obligations under this Agreement, including without
limitation:

 

(a)                                  any
breach or violation by ARC or any ARC Indemnitee of any of the applicable
Regulations related to ARC’s performance under this Agreement;

 

(b)                                 any
use of the Products by ARC or any ARC Indemnitee other than in accordance with
the Package Insert and/or Documentation for such Products; or

 

23

 

(c)                                  loss
or damage to any of ARC’s or any ARC Indemnitee’s property, real or personal, while
performing their respective obligations pursuant to this Agreement;

 

provided,
that in all of the above cases ARC’s indemnification responsibilities
will be reduced to the extent that any of such Damages claimed by any Chiron
Indemnitee results from the willful misconduct, negligence or omission of
Chiron or any Chiron Indemnitee or Chiron’s breach of its representations,
warranties, covenants or other agreements and obligations provided in this
Agreement.

 

7.7                                 IP
Infringement Indemnity.

 

(a)                                  In
addition to Chiron’s indemnification obligations set forth herein, Chiron, at
its own expense, will defend and indemnify ARC from any Damages from any suit
or claim which may be brought against any ARC Indemnitee for the infringement,
misappropriation or other violation of any Third Party’s patent(s),
trademark(s), copyright(s), trade secret(s), moral right(s), semi-conductor
chip protection, proprietary information, confidential information or other
proprietary right (“IP Claim”) resulting from ARC’s use of any
of the Products, and in such suit Chiron will satisfy any final judgment or
award for any such infringement, misappropriation or other violation.

 

(b)                                 Notwithstanding
the foregoing, Chiron shall have no liability hereunder to the extent that the
IP Claim arises from or is attributable to (i) the use of the Products in
combination with other products or materials not provided by Chiron hereunder;
(ii) part (or all) of the Products being used for a purpose other than that
indicated by this Agreement; or (iii) use of the Products other than in
accordance with the Documentation provided by Chiron to ARC.  Chiron’s obligation to indemnify shall be
subject to ARC promptly notifying Chiron in writing of such claim and providing
reasonable cooperation to Chiron in the defense of such claim or proceeding.

 

(c)                                  If,
in Chiron’s opinion, a Product furnished hereunder is likely to or does become
the subject of any IP Claim, then without diminishing Chiron’s obligation to
satisfy any final judgment or award, Chiron may, at its option, substitute for
that Product a modified version thereof that is satisfactory to ARC or, at
Chiron’s option and expense, obtain the right for ARC and the NTLs to continue
using the Product.  If the use of such
Product by ARC or the NTLs shall be prevented by permanent injunction, or
Chiron is unable to procure the right for ARC and the NTLs to continue using
such Product at a reasonable cost, ARC may terminate this Agreement as to the
affected Product and upon such termination, Chiron shall 

 

24

 

accept the return of the
remaining unused affected WNV Assays and refund the amount paid Chiron for such
unused WNV Assays and/or accept the return of the affected Blood Screening
Systems.  Chiron shall also reimburse
ARC for any shipping charges paid by ARC to return the Products to Chiron and
bear all risk of loss during shipment.

 

7.8                                 Indemnification
Procedures.  Any ARC Indemnitee or
Chiron Indemnitee claiming indemnification (the “Indemnitee”) shall notify the
Party from which indemnification is claimed (the “Indemnifying Party”) in
writing promptly upon becoming aware of any claim to which such indemnification
may apply.  Failure to provide such
notice shall constitute a waiver of the Indemnifying Party’s indemnity
obligations hereunder if, and only to the extent that, the Indemnifying Party
is materially damaged thereby.  The
Indemnifying Party shall have the right to assume and control the defense of
the claim at its own expense.  If the
right to assume and have sole control of the defense is exercised, the
Indemnitee shall have the right to participate in, but not to control, such
defense at its own expense.  If the
Indemnifying Party does not assume the defense of the claim, the Indemnitee may
defend the claim at the Indemnifying Party’s expense.  The Indemnitee will not settle or compromise the claim without
the prior written consent of the Indemnifying Party, and the Indemnifying Party
will not settle or compromise the claim in any manner which would have an
adverse effect of the Indemnitee without the consent of Indemnitee, which
consent, in each case, will not be unreasonably withheld.  The Indemnitee shall reasonably cooperate
with the Indemnifying Party and will make available to the Indemnifying Party
all pertinent information under the control of the Indemnitee.

 

7.9                                 Exclusion
of Consequential Damages; Limitation of Liability.  Unless recovery for such damages is
otherwise expressly provided for in this Agreement, neither Party shall be
liable with respect to the subject matter of this Agreement under breach of
contract, negligence, strict liability or any other cause of action for any
consequential, incidental or indirect loss or damage (whether arising directly
or indirectly from a breach of this Agreement), including loss of profit or for
any cost of procurement of substitute goods, technology or services, except to
the extent of liability to Third Parties for bodily injury or death as to which
each of the Parties are obligated to indemnify each other under Sections 7.5
and 7.6, respectively.  Notwithstanding
any provision herein to the contrary, in no event shall Chiron be liable to ARC
with respect to the subject matter of this Agreement under breach of contract,
negligence, strict liability or any other cause of action in an aggregate that
exceeds the total amount paid by ARC to Chiron hereunder, except to the extent
of liability to Third Parties for bodily injury or death as to which Chiron is
obligated to indemnify ARC under Section 7.5.

 

25

 

7.10                           Insurance.  Chiron and ARC agree to maintain insurance
as follows:

 

(a)                                  Insurance
Required of Chiron.  Chiron shall
maintain at its sole cost and expense the following insurance coverages in full
force and effect for the Term of this Agreement [***]:

 

(i)                                     A
Commercial General Liability policy with each ARC Indemnitee named as an
additional insured as their interests may appear as respects this Agreement,
and the amount of the policy will be at least [***] combined single limit
for each occurrence and in the aggregate for each policy term;

 

(ii)                                  A
Products Liability policy applicable to the design, manufacture, production and
recall of any Product supplied to ARC under this Agreement with at least [***]
for each occurrence and in the aggregate and naming each ARC Indemnitee as an
additional insured as their interests may appear with respect to this
Agreement;

 

(iii)                               A
Commercial Auto Liability policy including owned and non-owned and hired
vehicles with at least [***] in coverage with each ARC Indemnitee
named as an additional insured as their interests may appear as respects this
Agreement;

 

(iv)                              Workers’
Compensation coverage with statutory limits for each jurisdiction where the
work required under this Agreement is performed;

 

(v)                                 An
employers’ liability policy with at least the following limits: [***]
per accident, [***] per disease, and [***] disease (each employee); and

 

(vi)                              “All
Risk” property insurance policy at full replacement cost on all facilities,
property and equipment used in manufacturing the Products.  Chiron shall also maintain an “All Risk”
transit insurance policy at full replacement cost insuring all Products while
being shipped to or from ARC.

 

(b)                                 Insurance
Required of ARC.  ARC shall maintain
at its sole cost and expense the following insurance coverages in full force
and effect for the Term of this Agreement [***]:

 

(i)                                     A
Commercial General Liability policy with each Chiron Indemnitee named as an
additional insured as their interests may appear as respects this Agreement,
and the amount of 

 

26

 

the policy will be at
least [***]
combined single limit for each occurrence and in the aggregate for each policy
term;

 

(ii)                                  A
Professional Liability (Errors and Omissions) policy in an amount not less than
[***]
each claim and in the aggregate;

 

(iii)                               A
Commercial Auto Liability policy including owned and non-owned and hired
vehicles with at least [***] in coverage with each Chiron
Indemnitee named as an additional insured as their interests may appear as
respects this Agreement;

 

(iv)                              Workers’
Compensation coverage with statutory limits for each jurisdiction where the
work required under this Agreement is performed;

 

(v)                                 An
employers’ liability policy with at least the following limits: [***]
per accident, [***] per disease, and [***] disease (each employee);

 

(vi)                              “All
Risk” property insurance policy at full replacement cost on all facilities,
property and equipment used in connection with the Products, other than such
facilities, property and equipment for which this Agreement requires the
provision of insurance by Chiron.

 

(c)                                  All
liability policies will be written as primary coverage and not contributing
with, or in excess of, any coverage which the other Party shall carry with
respect to the obligations of each Party. 
All workers’ compensation policies shall contain a waiver of subrogation
for the benefit of the other Party, except as to [***].  All insurance required under this Agreement
that is provided through commercial carriers shall be placed with insurers
which, at the time the insurance is placed, [***].  This insurance shall be and remain in full
force and effect during the Term of this Agreement.  Each Party shall provide the other with certificates of insurance
evidencing the coverage required herein upon execution of this Agreement, and
renewal certificates on request from the other Party.  Such certificates shall provide for thirty (30) days prior
written notice to the certificate holder in the event of the non-renewal or
cancellation of the policies.  Each
Party shall provide the other with prompt written notice of (i) any material
change to the coverage, limits, terms, or conditions of any insurance below
those required herein, (ii) the exercise of the batching provision under its
catastrophic insurance coverage, whether related to any potential liabilities
under this Agreement or otherwise, or (iii) any other potential impairment of
the coverage provided under any of the 

 

27

 

insurance policies set
forth in Section 7.10(a) or (b) above. 
All information contained within such notice shall be deemed
Confidential Information of the notifying Party.  Following delivery of such notice, the Parties will meet and
confer regarding the impact of the occurrence described in such notification on
the Parties. Each of the Parties acknowledge that during the period which the
Parties are meeting and conferring with one another, as provided in the immediately
preceding sentence, the notified Party shall refrain from submitting a notice
of termination under Section 8.2(a) on the basis of the information
provided to it pursuant to this Section 7.10(c), until at least thirty
(30) days have passed from the date the Section 7.10(c) notice was first
received.

 

ARTICLE 8 - TERM AND TERMINATION

 

8.1                                 Term.  This Agreement shall be effective as of the
Effective Date and shall continue  [***]
(the “Term”),
unless terminated earlier by mutual agreement of the Parties without penalty,
or otherwise in accordance with this Agreement.  The obligations under this Agreement shall terminate and expire
without any further action by the Parties upon the expiration of the Term
unless, no less than six (6) months before the expiration of this Agreement,
the Parties mutually agree in writing to extend this Agreement.

 

8.2                                 Termination
for Cause.  This Agreement may be
terminated for cause by written notice to the other Party at any time during  the Term of this
Agreement, which termination shall be effective when such termination notice is
received in accordance with Article 13, as follows:

 

(a)                                  by
either Party if the other Party fails to observe, perform or otherwise
materially breaches any of its covenants, representations, warranties, or
agreements or materially defaults in the performance of its obligations under
this Agreement, provided such breach or failure continues without cure for a
period of thirty (30) days after receipt by the other Party of an initial
written notice thereof specifying such breach or failure;

 

(b)                                 by
either Party if the other Party files a petition in bankruptcy, becomes
bankrupt or insolvent or subject to the reorganization of its business for the
benefit of creditors under any law or regulation relating to bankruptcy, or a
receiver is appointed for all or substantially all of its property or assets,
or upon the making by such other Party of a composition with its creditors, or
upon the taking by such other Party of any act for the winding up of its business,
or upon any governmental authority exercising any power or authority resulting
in the expropriation or confiscation of all or substantially all of its
business and assets.  If Chiron enters
into 

 

28

 

proceedings relating to
bankruptcy, whether voluntary or involuntary, Chiron will furnish, by certified
mail, written notification of the bankruptcy to the person identified in
Section 13.5.  The notification must
be furnished within [***] of the initiation of the bankruptcy
proceedings.  The notification must
include the date on which the petition was filed, and a list of ARC purchase
orders for which final payment has not yet been made.  This obligation remains in effect until final payment under this
Agreement;

 

(c)                                  by
either Party if a Force Majeure Event prevents a Party from performing its
obligations under this Agreement for a period exceeding [***], measured from the day
notice is received of the existence of such Force Majeure Event; or

 

(d)                                 by
either Party if any of the Regulations are amended in a way that precludes a
Party from lawfully performing its obligations under this Agreement, effective
upon the effective date of such amended Regulation; provided, however, that [***]
prior written notice must be given by the Party intending to terminate under
this subsection and such Party shall make a good faith effort to implement
commercially reasonable strategies for compliance with any amended Regulations.

 

(e)                                  by
either Party if (i) the notifying Party’s institutional review board (“IRB”)
withdraws approval of an IND before the expiration of the Term or (ii) the FDA
revokes any approval of any of the Products or a Party’s IND;

 

(f)                                    [***];
or

 

(g)                                 [***].

 

ARTICLE 9 - FORCE MAJEURE

 

9.1                                 Force
Majeure.  Neither Party shall be
liable for any failure or delay in performing any of its obligations under this
Agreement to the extent that such failure or delay is due to any cause beyond
the affected Party’s reasonable control, including without limitation war,
terrorism, riot, insurrection or other civil commotion, any strike, lockout or
other labor dispute, any governmental or court order, decree or regulation, any
fire, flood, epidemic, earthquake, unusually severe weather condition or other
act of God, or any freight embargo or public utility failure (a “Force
Majeure Event”).

 

(a)                                  The
affected Party shall give prompt notice to the other Party of, and shall
exercise due diligence to eliminate or remedy all such 

 

29

 

causes, and shall give
the other Party prompt notice when such causes have been eliminated or
remedied. Notwithstanding the foregoing, (i) a Party affected by a Force
Majeure Event shall use commercially reasonable efforts (taking into
consideration the adverse effect and duration of the Force Majeure Event) to
mitigate and ameliorate the adverse effects thereof, and (ii) the obligations
of such Party shall not be suspended pursuant to this Section 9.1 to the
extent that performance of such obligations was due before the occurrence of
the Force Majeure Event.  Further, the
affected Party shall have the burden of proving the existence, duration and
adverse effect of such Force Majeure Event.

 

(b)                                 If
Chiron is the Party affected by the Force Majeure Event and such Force Majeure
Event has prevented Chiron from performing its obligations under this Agreement
for in excess of [***], [***].

 

ARTICLE 10 - CONSEQUENCES OF THE
TERMINATION OF THIS AGREEMENT

 

10.1                           Outstanding
Payment Obligations Unaffected.  The
termination of this Agreement for any reason whatsoever shall not affect any
Party’s obligations to perform those obligations due and already accrued prior
to such termination.  In the event that
termination occurs at a time prior to ARC having made full payment that is due
and owing for any Products, the Parties agree that Chiron shall have all
applicable ownership rights to such Products until such payment has been made
in full to Chiron.

 

10.2                           Reimbursement
upon Termination.  If this Agreement
is terminated other than by mutual agreement of the Parties or for cause by ARC
pursuant to Section 8.2, then ARC shall be obligated to reimburse Chiron
for certain un-recovered costs and expenses related to the development of the
Products in an amount to be calculated in accordance with Schedule 5.0,
paragraph 2.

 

10.3                           Transition.  If the Term of this Agreement expires, upon
such expiration and for a period of no more than [***] thereafter, Chiron
shall continue to make available to ARC for purchase, at prices not to exceed [***]
of the then current prices for such quantity of Products under this Agreement,
such quantity of Products and Services as ARC deems necessary for its use in
the Blood Screening Field to facilitate an orderly transition to the
replacement service provider.

 

In the event of a
termination of this Agreement by ARC for any reason, Chiron shall cooperate
with ARC in the transfer of Chiron’s obligations hereunder to a replacement
service provider.  After receiving
notice of such termination and except as otherwise directed by ARC, Chiron
shall 

 

30

 

continue to make
available to ARC for purchase, at prices not to exceed [***] of the then current
prices for such quantity of Products under this Agreement, such quantity of
Products and Services as ARC deems necessary for its use in the Blood Screening
Field to facilitate an orderly transition to the replacement service provider
during the time period required for such transition, not to exceed [***].

 

During any such
transition following expiration or termination by ARC, ARC’s purchase
obligations with respect to the quantity of such Products and/or Services shall
be reduced to the extent ARC deems necessary to transition to the replacement
service provider.

 

10.4                           Survival
of Certain Provisions.  In addition,
notwithstanding anything herein to the contrary, the following provisions of
this Agreement shall survive termination of this Agreement: Sections
3.2(f)(vii), 5.3, 6.5(d), 6.7, 6.8, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, and 7.10
and Articles 10, 11, 12 and 13.

 

10.5                           Return
of Confidential Information.  Upon
termination of this Agreement for any reason whatsoever, the Parties shall
immediately return to the other all confidential information in documentary or
printed form and any copies or extracts thereof and shall thereafter cease to
use such information but without prejudice to the then surviving
confidentiality obligations provided for in Section 6.8 hereof.

 

10.6                           No Other
Payment.  No indemnity or
compensation in any form  whatsoever shall be paid by either Party
to the other in connection with a termination in accordance with the terms
hereof (subject to any liability that may exist in respect of any material
breach prior to such termination).

 

ARTICLE 11 - APPLICABLE LAW

 

This Agreement shall be
governed by and construed in accordance with the laws of the State of
California, without giving effect to any conflict of law rules and regulations.

 

ARTICLE 12 - DISPUTES

 

12.1                           To the
extent that there are disputes with respect to performance under this
Agreement, such disputes (other than non-payment) are not cause for Chiron to
stop performance under this Agreement, but will be resolved in due course to
the extent possible in accordance with this Article.

 

12.2                           The
Parties to this Agreement will attempt to resolve any problem or dispute
arising out of, or related to, this Agreement through good faith consultation
in the ordinary course of business.

 

31

 

12.3                           If the
Parties are unable to resolve the problem or dispute within thirty (30) days,
either Party may initiate and submit a matter through the dispute resolution
procedure set forth in Section 12.4 below.  No Party may institute litigation until the dispute resolution
procedure has been completed unless, and to the extent that, doing so is
necessary to avoid irreparable harm.

 

12.4                           Dispute
Resolution Procedure.  If any
problem or dispute arising out of or related to this Agreement is not resolved
by the Parties in the above described manner, the Parties hereby agree to
resolve such dispute by arbitration conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association.  The place of arbitration shall be Arlington,
Virginia.  The arbitration panel shall
consist of three arbitrators, one arbitrator appointed by each of the Parties,
and the third arbitrator appointed by the two appointed arbitrators (the “Panel”).  The Panel may, at its discretion, provide
for discovery by the Parties not to exceed a period of sixty (60) days from the
date of filing of the notice of arbitration. 
The Panel shall render its decision within ninety (90) days from the
date of filing the notice of arbitration and may, at its discretion, award
costs and expenses but shall not have the right to award punitive damages.  The decision of the Panel shall be final and
binding on the Parties, and shall be enforceable in any court of competent
jurisdiction.

 

12.5                           The
prevailing Party shall be entitled to recover all costs and expenses, including
reasonable attorney’s fees, incurred because of any legal action arising in
relation to this Agreement.

 

ARTICLE 13- MISCELLANEOUS

 

13.1                           National
Testing Laboratories.  The full
names and addresses of the NTLs participating in this Agreement are set forth
in Schedule 1.36, which may be modified from time to time as
determined by ARC.  Any change to the
number or location of NTLs shall be provided in writing by ARC to Chiron at
least ninety (90) days in advance of such change, wherever possible.

 

13.2                           Equal
Employment Opportunity.  Neither
ARC nor Chiron will discriminate, in terms and conditions of employment,
against employees or applicants because of age, race, color, religion, sex, national
origin, qualified disability or any other basis protected by applicable state
or local law.  ARC and Chiron agree to
abide by all federal, state and local employment and labor law notice posting
requirements.

 

13.3                           Assignment.  This Agreement shall not be directly or
indirectly assigned or otherwise transferred by the Parties, nor, except as
expressly provided hereunder, may any right or obligations of either of the
Parties hereunder 

 

32

 

be assigned or
transferred (whether voluntarily, by operation of law or otherwise) without the
prior written consent of the other Party. Either Party may assign and transfer
to an Affiliate, or any Third Party acquiring all or substantially all of the
business assets or liabilities necessary to transact business, as contemplated
hereunder, provided that (i) the assigning Party provides written notice of
such assignment at least forty-five (45) days prior to its intended
effectiveness and (ii) the assignee provides to the non-assigning Party
adequate assurances of its intent to perform under this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Parties hereto
and their respective successors and permitted assigns.

 

13.4                           Subcontracting.  Chiron’s obligations under this contract may
not be subcontracted without the prior written consent of ARC.  Any attempt to subcontract without such
consent will be null and void and of no effect.

 

Chiron must require that
all subcontractors approved by ARC be bound by the terms of this Agreement and
to assume toward Chiron all obligations and responsibilities which Chiron
assumes toward ARC.  Chiron must make
available to each approved subcontractor, prior to the execution of any
subcontract agreement, a copy of this Agreement to which the subcontractor will
be bound.  For purposes of any
subcontracts entered into pursuant to this Section 13.4, the term “Chiron”
as used in this Agreement, will include any and all ARC-approved
subcontractors.

 

Each subcontract agreement
must preserve and protect the rights of ARC with respect to the goods or
services provided by Chiron.  The
subcontractor must enter into similar agreements with all sub-subcontractors.  ARC retains the unrestricted right to review
all subcontract agreements, or other documents pertaining to the retention of
any subcontractor at any tier, for performance under this Agreement, prior to
the execution of such subcontract or other agreement.  Upon ARC approval, each subcontract agreement shall be assigned
by Chiron to ARC; provided, however that assignment shall only be effective in
the event Chiron terminates a subcontracting agreement with a subcontractor and
ARC accepts such assignment by notifying the subcontractor in writing.  Chiron must expressly provide for such
assignment in all of its subcontract agreements.

 

Chiron must require each
ARC-approved subcontractor, if any, to procure and maintain insurance of the
types and amounts required of Chiron in favor of ARC.  In addition, the subcontractors must assume indemnification
responsibilities identical to those provisions agreed to by Chiron and
contained in this Agreement, in favor of ARC.

 

33

 

Chiron agrees to include
in all subcontracts entered into under this Agreement a provision to the effect
that ARC and its authorized representatives will, until [***] after final payment
under the subcontract, or for any shorter period specified by law for
particular records, have access to and the right to examine any books,
documents, papers, or other records of the subcontractor relating to the
subcontract.

 

Nothing in this Agreement
will be deemed to entitle subcontractors, materialmen, or lower-tier
subcontractors rights as Third Party beneficiaries of this Agreement between
ARC and Chiron.  Notwithstanding any
statement to the contrary, Chiron will at all times be responsible for all acts
and/or omissions of its subcontractors.

 

13.5                           Notices.  Any Notice or request required or permitted
to be given in connection with this Agreement shall be deemed to have been
sufficiently given if sent by (i) pre-paid registered or certified mail, return
receipt requested, or (ii) hand-delivered by a nationally recognized courier,
to the address set forth below or to such other address as may have been
notified in writing.

 

	
  If to Chiron:

  	
   

  	
  Chiron Corporation

  
	
   

  	
   

  	
  Attention:  President, Blood Testing

  
	
   

  	
   

  	
  4560 Horton Street

  
	
   

  	
   

  	
  Emeryville,
  California  94608

  
	
   

  	
   

  	
  Phone: [***]

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  General Counsel

  
	
   

  	
   

  	
   

  
	
  If to ARC:

  	
   

  	
  American National Red
  Cross

  
	
   

  	
   

  	
  Attention: Vice
  President, NTRL

  
	
   

  	
   

  	
  13504 South Point
  Boulevard

  
	
   

  	
   

  	
  Charlotte, North
  Carolina 28273

  
	
   

  	
   

  	
  Phone: [***]

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  The American National
  Red Cross

  
	
  (which shall not

  	
   

  	
  Attention: Office of
  the General Counsel

  
	
  constitute notice)

  	
   

  	
  2025 E Street, NW

  
	
   

  	
   

  	
  Washington, DC
  20006-5009

  
	
   

  	
   

  	
  Phone:  [***]

  

 

A notice, consent,
approval or other communication takes effect from the time it is received
unless a later time is specified in it, and receipt shall be deemed to occur as
follows:

 

(a)                                  If
it is sent by mail, seven (7) calendar days after posting; and

 

34

 

(b)                                 If
it is sent by courier, on the date and at the time shown on the courier’s
standard written confirmation of receipt.

 

13.6                           Entire
Agreement.  This Agreement
constitutes the entire agreement between the Parties in respect of the subject
matter hereof.  This Agreement cancels
and supersedes any and all pre-existing agreements, either oral or in writing
between the Parties.  There are not and
shall not be any oral statements, representations, warranties, undertakings or
agreements between the Parties other than as provided by this Agreement and any
mutually accepted written amendments or letter agreements attached hereto.  This Agreement may not be amended, altered or
modified except by a written document executed by all of the Parties hereto.

 

13.7                           Order
of Precedence; Conflict Between Terms and Conditions.  In the event of a conflict between the terms
of this Agreement and any other document related hereto, the terms of this
Agreement shall govern.  Unless
otherwise explicitly stated in this Agreement, in the event of any conflict
between the terms of this Agreement and the terms of any of the Schedules or
Exhibits hereto, or the terms and conditions of this Agreement and any terms
and conditions that may be set forth in any order, invoice, verbal agreement or
otherwise, the terms and conditions of this Agreement shall control and govern
any interpretative efforts.

 

13.8                           Interpretation.  This Agreement shall be construed as if both
Parties drafted it jointly, and shall not be construed against either Party as
principal drafter.

 

13.9                           No
Waiver.  The failure on the part of
either Party hereto to exercise or enforce any right conferred upon it by this
Agreement shall not be a waiver of any such right nor shall any single or
partial exercise of any right or power hereunder or further exercise thereof
operate so as to bar the later exercise or enforcement thereof.

 

13.10                     Nature of
Relationship; Independent Contractor. 
Nothing herein contained shall be deemed to be or construed as
constituting either Party the agent or partner of the other Party.  The relationship between ARC and Chiron shall
be that of an independent contractor.  No Party shall have the right, title or authority to enter into
any contract, agreement or commitment on behalf of the other or to bind the
other Party in any manner whatsoever.

 

13.11                     Compliance
with Applicable Law.  In performing
this Agreement, the Parties shall comply with all applicable laws and
Regulations.  Nothing in this Agreement
shall be construed so as to require the violation of law, and wherever there is
any conflict between any provision of this Agreement and any rule of mandatory
law, the latter shall prevail, but in 

 

35

 

such event, the affected
provision of this Agreement shall be ineffective only to the extent necessary
to comply with the applicable law, the remainder of this Agreement shall remain
in full force and effect, and the Parties hereto undertake to replace the
invalid and/or unenforceable provision by a valid and/or enforceable provision,
the nature and scope of which will come as close as possible to the contractual
provision to be replaced, taking into account the economic intentions and
business purposes of the Parties.

 

13.12                     Publicity.
Neither Party shall permit or generate any publicity, advertising or promotion
concerning this Agreement without the prior written consent of the other
Party.  Each Party recognizes that the
name, logo and marks of the other Party represent valuable assets of that Party
and that substantial recognition and goodwill are associated with such assets.  Each Party hereby agrees that neither it nor
any of its Affiliates shall use the other Party’s name, logo or marks without
the prior written authorization from such other Party.

 

Each of the Parties
acknowledges that a violation of this Section 13.12 would cause
irreparable harm to the other Party for which no adequate remedy at law exists
and each Party therefore agrees that, in addition to any other remedies
available, and notwithstanding any other provision of this Agreement, the
aggrieved Party shall be entitled to injunctive relief to enforce the terms of
this Section 13.12.  To the extent
allowed by law, the prevailing Party shall be entitled to recover all costs and
expenses, including reasonable attorneys’ fees, incurred because of any legal
action arising in relation to this Section 13.12.

 

13.13                     Disclosure
of Agreements and Terms.  Subject to
mutual agreement as to form and substance, each of the Parties may issue a
press release disclosing the existence of this Agreement.  Each Party may disclose any of the terms of
this Agreement to any Affiliate; provided that the recipient of such disclosure
is obligated to confidentiality terms no less restrictive than those contained
in Section 6.8.  Each Party may
disclose any information contained in or regarding this Agreement to the extent
required in its respective reasonable judgment by applicable law, regulation or
order of any court or governmental agency. 
Further, each Party may determine in its respective discretion to file
this Agreement under the Securities and Exchange Act of 1934, even if that
filing may result in this Agreement becoming available to the public
generally.  The filing Party shall seek
confidential treatment for at least the essential financial terms hereof in
connection with any such filing, subject to applicable law and regulation, and
shall notify the other Party in advance of any such filing and consider such
suggestions as the other Party may make as to the terms herein as to which the
filing party should seek confidential treatment.

 

36

 

13.14                     Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original and each of
which shall constitute one and the same Agreement.

 

[Remainder of page intentionally left blank]

 

[Signature pages follow.]

 

37

 

IN WITNESS WHEREOF, the
Parties hereto, through their authorized representatives, have set their hands
as of the date first above  written, whereby they evidence their
intent to be legally bound to this Agreement.

 

	
  CHIRON CORPORATION

  	
  THE AMERICAN NATIONAL RED CROSS

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jack Goldstein

  	
   

  	
  By: 

  	
  /s/ Robert H. Kloak for

  
	
  Name:

  	
  Jack Goldstein

  	
  Name:

  	
  Richard Platte

  
	
  Title:

  	
  President, Chiron Blood Testing

  	
  Title:

  	
  Vice President, National Testing &

  
	
   

  	
   

  	
   

  	
  Reference Laboratories

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Philip Yenrick

  
	
   

  	
   

  	
  Name:

  	
  Phil Yenrick  10-14-03

  
	
   

  	
   

  	
  Title:

  	
  Director, National
  Contracting Office

  
							

 

38

 

Schedule 1.26

 

NTLs

 

1.                                       Charlotte

13500 South Point Blvd.

Charlotte, NC  28273

 

2.                                       Detroit

100 Eliot Street

Detroit, MI  48201

 

3.                                       Philadelphia

700 Spring Garden Street

Philadelphia, PA  19123

 

4.                                       St.
Louis

4050 Lindell Blvd.

St. Louis, MO  63108

 

5.                                       Southern
CA

8885 Rehco Road

San Diego, CA  92121

 

39

 

 

Schedule 2.0

 

WNV ASSAY

 

[Package Insert to
be attached]

 

40

 

Procleix®
WNV Assay

 

For
Investigational Use Only.

The
performance characteristics of this product have not 

been established.

5000
Test Kit

 

	
  TABLE OF CONTENTS

  	
   

  	
   

  	
   

  
	
  INTENDED
  USE

  	
   

  	
  1

  	
   

  
	
  SUMMARY AND
  EXPLANATION OF THE TEST

  	
   

  	
  1

  	
   

  
	
  PRINCIPLES OF THE PROCEDURE

  	
   

  	
  1

  	
   

  
	
  MATERIALS PROVIDED

  	
   

  	
  2

  	
   

  
	
  MATERIALS
  REQUIRED, SOLD SEPARATELY

  	
   

  	
  2

  	
   

  
	
  MATERIALS
  REQUIRED BUT NOT PROVIDED

  	
   

  	
  2

  	
   

  
	
  REAGENTS

  	
   

  	
  2

  	
   

  
	
  STORAGE INSTRUCTIONS

  	
   

  	
  3

  	
   

  
	
  PRECAUTIONS

  	
   

  	
  4

  	
   

  
	
  REAGENT PREPARATION

  	
   

  	
  4

  	
   

  
	
  SPECIMEN
  COLLECTION, STORAGE, AND HANDLING

  	
   

  	
  5

  	
   

  
	
  PROCEDURAL NOTES

  	
   

  	
  5

  	
   

  
	
  INSTRUCTIONS FOR USE

  	
   

  	
  7

  	
   

  
	
  Target Capture

  	
   

  	
  7

  	
   

  
	
  Amplification

  	
   

  	
  8

  	
   

  
	
  Hybridization
  Protection Assay (HPA)

  	
   

  	
  8

  	
   

  
	
  QUALITY CONTROL PROCEDURES

  	
   

  	
  9

  	
   

  
	
  Acceptance Criteria for the
  Procleix WNV Assay

  	
   

  	
  9

  	
   

  
	
  Acceptance
  Criteria for the Calibration and Calculation of Cutoff

  	
   

  	
  9

  	
   

  
	
  INTERPRETATION OF RESULTS

  	
   

  	
  10

  	
   

  
	
  LIMITATIONS OF THE
  PROCEDURE

  	
   

  	
  11

  	
   

  
	
  BIBLIOGRAPHY

  	
   

  	
  11

  	
   

  

 

 

INTENDED
USE

 

The Procleix®
WNV Assay* is a qualitative in vitro
nucleic acid amplification test for the detection of West Nile virus (WNV) RNA
in human plasma from volunteer donations of whole blood and blood components
for transfusion, and source plasma for further manufacturing, and from tissue
and organ donations.  The assay is
intended for use in screening individual donor samples or pools of human plasma
comprised of equal aliquots of not more than 16 individual donations.

 

SUMMARY AND EXPLANATION OF THE TEST

 

WNV is a mosquito-borne
flavivirus that is associated with human disease ranging from mild flu-like
symptoms to severe neurological disease(1),(2).  Most WNV infections are asymptomatic and approximately 20% lead
to a mild illness known as West Nile virus fever.  Less than 1% of infections are estimated to cause serious
neurological disease, with advanced age being the most significant risk
factor(3).  Prior to an outbreak in Queens
New York in 1999, the presence of the virus in North America had not been
documented.  Since the original New York
outbreak, the virus, which is carried predominantly by the Culex, sp. of mosquitoes, has continued to
expand westward and is now thought to be permanently established in North
America(4).  A large number of avian
species serve as a reservoir host for the virus, whereas humans and animals,
such as horses and other mammals, are believed to be incidental hosts(5).

 

As of January 2003,
the CDC reported nearly 4000 confirmed human WNV positive cases and 259 human
fatalities in the US.  The principal
route of human WNV infection is through the bite of an infected mosquito.  In 2002, new mechanisms of person-to-person
transmission were documented, including possible mother to infant infection
through breast milk, transplacental infection, and transmission through organ
donation and blood transfusion.  As of
January 2003, fourteen cases of transfusion associated transmission of WNV
were confirmed(6),(7).

 

In most human infections,
WNV multiplies to a relatively low level producing a transient viremia that can
be detected in whole blood and plasma. 
Nucleic acid testing (NAT) methods are capable of detecting infection
prior to the presence of antibodies during the viremic phase.  Immunoglobulin M (IgM) antibody can be
detected in serum or cerebrospinal fluid (CSF) collected within 8 days of
illness onset.  The IgM and the T memory
cells can remain in the body for years(3),(5). 
Current methods for the diagnosis of WNV are IgM enzyme immunoassay,
Plaque Reduction Neutralization assays, and NAT methods.  Because the serologically based assays
detect host immune response after the primary viremic phase, they may not be
appropriate for blood screening.

 

Screening of whole blood
donations with NAT has been in place in the United States since early 1999 and
licenses were granted for HIV-1 and HCV screening in 2002.  The Procleix WNV Assay, uses the same
technology as the Procleix HIV-1/HCV Assay to detect WNV RNA(8).

 

PRINCIPLES OF THE PROCEDURE

 

The Procleix®
WNV Assay involves three main steps which take place in a single tube:  sample preparation; WNV RNA target
amplification by Transcription-Mediated Amplification (TMA)(9); and detection
of the amplification products (amplicon) by the Hybridization Protection Assay
(HPA)(10).

 

During sample
preparation, RNA is isolated from plasma specimens via the use of target
capture.  Plasma is treated with a
detergent to solubilize the viral envelope, denature proteins and release viral
genomic RNA.  Oligonucleotides (“capture
oligonucleotides”) that are homologous to highly conserved regions of WNV, are
hybridized to the WNV RNA target, if present, in the test specimen.  The hybridized target is then captured onto
magnetic microparticles that are separated from plasma in a magnetic
field.  Wash steps are utilized to
remove extraneous plasma components from the reaction tube.  Magnetic separation and wash steps are
performed with the Chiron Procleix TCS.

 

Target amplification
occurs via TMA, which is a transcription-based nucleic acid amplification
method that utilizes two enzymes, MMLV reverse transcriptase and T7 RNA
polymerase.  The reverse transcriptase
is used to generate a DNA copy (containing a promoter sequence for T7 RNA
polymerase) of the target RNA sequence. 
T7 RNA polymerase produces multiple copies of RNA amplicon from the DNA
copy template.  The Procleix WNV Assay
utilizes the TMA method to amplify regions of WNV RNA.

 

Detection is achieved by
HPA using single-stranded nucleic acid probes with chemiluminescent labels that
are complementary to the amplicon.  The
labeled nucleic acid probes hybridize specifically to the amplicon.  The Selection Reagent differentiates between
hybridized and unhybridized probes by inactivating the label on unhybridized
probes.  During the

 

*Developed and
manufactured by Gen-Probe Incorporated; distributed by Chiron Corporation.

 

1

 

detection step, the
chemiluminescent signal produced by the hybridized probe is measured in a
luminometer and is reported as Relative Light Units (RLU).

 

Internal Control is added
to each test specimen, external quality control (if used), assay calibrator,
and blank tube via the Target Capture Reagent that contains the Internal
Control.  The Internal Control in this
reagent controls for specimen processing, amplification and detection
steps.  Internal Control signal in each
tube or assay reaction is discriminated from the WNV signal by the differential
kinetics of light emission from probes with different labels(11).  Internal Control-specific amplicon is
detected using a probe with rapid emission of light (flasher signal).  Amplicon specific to WNV is detected using
probes with relatively slower kinetics of light emission (glower signal).  The Dual Kinetic Assay (DKA) is a method
used to differentiate between the signals from flasher and glower
labels(11).  When used for the detection
of WNV, the Procleix WNV Assay differentiates between Internal Control and WNV
signals.

 

	
  MATERIALS PROVIDED

  	
   

  	
   

  
	
  Procleix®
  WNV Assay

  	
   

  	
  5000 Test Kit P/N
  301135

  
	
   

  	
   

  	
   

  
	
  Internal
  Control Reagent

  	
   

  	
   

  
	
  Target
  Capture Reagent

  	
   

  	
   

  
	
  Amplification
  Reagent

  	
   

  	
   

  
	
  Enzyme
  Reagent

  	
   

  	
   

  
	
  Probe
  Reagent

  	
   

  	
   

  
	
  Selection
  Reagent

  	
   

  	
   

  
	
  Negative
  Calibrator

  	
   

  	
   

  
	
  Positive
  Calibrator

  	
   

  	
   

  
	
  Blank

  	
   

  	
   

  

 

MATERIALS REQUIRED, SOLD SEPARATELY

 

	
  Procleix®
  Assay Fluids

  	
   

  	
  P/N 301027

  
	
  Wash
  Solution

  	
   

  	
   

  
	
  Oil

  	
   

  	
   

  
	
  Buffer
  for Deactivation Fluid

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Procleix®
  Auto Detect Reagents

  	
   

  	
  P/N 301121

  
	
  Auto
  Detect 1

  	
   

  	
   

  
	
  Auto
  Detect 2

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Disposables

  	
   

  	
   

  
	
  (Disposables
  are single use only, do not reuse. Use of other disposables is not
  recommended.)

  	
   

  	
   

  
	
  Ten-Tube
  Units (TTUs)

  	
   

  	
  P/N TU0040

  
	
  Ten
  Tip Cassettes

  	
   

  	
  P/N 104578

  
	
  Sealing
  Cards

  	
   

  	
  P/N 102085

  
	
   

  	
   

  	
   

  
	
  Procleix®
  WNV

  Assay Calibrators and Blank

  	
   

  	
  P/N 301151

  
	
   

  	
   

  	
   

  
	
  Positive
  Calibrator

  	
   

  	
   

  
	
  Negative
  Calibrator

  	
   

  	
   

  
	
  Blank

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Procleix®
  WNV

  Proficiency Panels

  	
   

  	
  P/N 301152

  
	
   

  	
   

  	
   

  
	
  Positive
  Panel Members

  	
   

  	
   

  
	
  Negative
  Panel Members

  	
   

  	
   

  

 

Chiron CPT (Correlated Pipetting Transfer) Pooling Software
(Only required for pooling)

 

The Chiron® CPT Pooling Software, used in
combination with the TECAN GENESIS RSP, performs sample scanning and pooling
operations that combine aliquots from individual samples into a single Master
Pool Tube, which may be used for further testing.

 

Equipment

 

Procleix® System (available from Chiron
Corporation)

 

Dedicated fixed or
adjustable repeat pipettor capable of delivering 400 μL of Target Capture
Reagent with a ± 5% accuracy and a precision of < 5% CV. (Only
required for manual sample pipetting method.)

 

Dedicated single channel
pipettor capable of delivering 500 μl of specimen with a ± 5% accuracy and a
precision of < 5% CV.(only required for manual sample pipetting
method.)

 

MATERIALS REQUIRED BUT NOT PROVIDED

 

Eppendorf COMBITIPS
repeat pipettor tips (12.5 mL, 5.0 mL, 1.25 mL) or equivalent

 

Disposable 1000 μL filter
tips in rack

 

Bleach

 

For use in final
concentration of 5% sodium hypochlorite and 0.5% sodium hypochlorite

 

Bleach alternative
(optional)

 

Contact Chiron Technical
Support for a list of bleach alternatives and instructions for use.

 

Sterile,
polypropylene conical tubes with sealing caps

 

Freestanding tubes are
recommended in two different sizes (5 mL to 10 mL tube and > 30 mL
tube).  The tubes must be able to
accommodate the diameter of an Eppendorf Repeat pipettor tip

 

TECAN GENESIS disposable
1000 μL conductive filter tips

 

TECAN 100 mL reagent
troughs

 

REAGENTS

 

Procleix®
WNV Assay Kit:

 

P/N
301135 – 5000 Test Kit

 

	
  CONTENTS

  	
   

  	
  Number of vials/

  Volume per vial

  
	
   

  	
   

  	
   

  
	
  Reagent Name

  	
   

  	
  5000 

  Test Kit

  
	
   

  	
   

  	
   

  
	
  Internal
  Control Reagent

  	
   

  	
  10
  X 5 mL

  
	
  A
  HEPES buffered solution containing detergent and an RNA transcript.

  	
   

  	
   

  
	
  Store
  unopened reagent at –15° to –35°C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Target
  Capture Reagent

  	
   

  	
  10
  X 280 mL

  
	
  A
  HEPES buffered solution containing detergent, capture oligonucleotides and
  magnetic microparticles.

  	
   

  	
   

  
	
  Store
  at 2° to 8°C.  (Do not
  freeze)

  Internal Control Reagent must be added to Target Capture Reagent
  before use in the assay.

  	
   

  	
   

  

 

INO135 Rev. 1

 

2

 

	
  Amplification
  Reagent

  	
   

  	
  15
  X 32 mL

  
	
  Primers,
  dNTPs, NTPs and co-factors in TRIS buffered solution containing PROCLIN 300
  as preservative.

  Store unopened reagent  at –15° to –35°C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Enzyme
  Reagent

  	
   

  	
  10
  X 18 mL

  
	
  MMLV
  Reverse Transcriptase and T7 RNA Polymerase in HEPES/TRIS buffered solution
  containing 0.05% sodium azide as preservative.

  Store unopened reagent at –15° to –35°C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Probe
  Reagent

  	
   

  	
  10
  X 75 mL

  
	
  Chemiluminescent
  oligonucleotide probes in succinate buffered solution containing detergent.

  Store unopened reagent at –15° to –35°C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Selection
  Reagent

  	
   

  	
  10
  X 180 mL

  
	
  Borate
  buffered solution containing surfactant.

  Store at 15° to 30°C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Negative
  Calibrator

  	
   

  	
  90
  X 2 mL

  
	
  A
  HEPES buffered solution containing detergent.

  Store at –15° to –35°C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Positive
  Calibrator

  	
   

  	
  90
  X 2 mL

  
	
  A
  HEPES buffered solution containing detergent and a WNV RNA transcript.

  Store at –15° to -35°C.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Blank

  	
   

  	
  90
  X 2 mL

  
	
  A
  HEPES buffered solution containing detergent.

  Store at –15° to –35°C.

  	
   

  	
   

  

 

STORAGE INSTRUCTIONS

 

A.                                   Room temperature is defined as 15°
to 30°C.

 

B.                                     [GRAPHIC]
The Probe Reagent is light sensitive. 
Protect this reagent from light during storage and preparation for use.

 

C.                                     Target
Capture Reagent (TCR) is stable when stored unopened at 2°
to 8°C.  If a
precipitate forms in the Target Capture Reagent during storage, see
instructions under REAGENT PREPARATION. 
DO NOT VORTEX. DO NOT FREEZE Target Capture Reagent.

 

NOTE:  If after removing the TCR from storage at 2°
to 8°C, the precipitate is allowed to settle to the
bottom of the container, the likelihood of the formation of a gelatinous
precipitate is increased substantially.

 

D.                                    Selection
Reagent is stable when stored unopened at room temperature.  Mix thoroughly
prior to use.

 

E.                                      The following reagents are stable when stored
unopened at room temperature until the expiration date.

Wash Solution

Oil

Auto Detect 1

Auto Detect 2

Buffer for Deactivation Fluid

 

Do
not use after the expiration date.

 

Note:  These are universal fluids and may be used
with all Procleix assays.

 

F.                                      Once opened, Wash Solution, Oil, Selection
Reagent, Buffer for Deactivation Fluid, Auto Detect 1 and Auto Detect 2 are
stable for 30 days when stored at room temperature.

 

G.                                     The following reagents are stable when stored
unopened at -15° to -35°C.

Internal
Control Reagent

Amplification
Reagent

Enzyme
Reagent

Probe
Reagent

Negative
Calibrator

Positive
Calibrator

Blank

 

H.                                    After
thawing, the Amplification Reagent, Enzyme Reagent, Probe Reagent, are stable
when stored at 2° to 8°C for 30 days.  Once completely thawed, these reagents may
be kept at room temperature up to 8 hours per 24-hour period while in use, not
to exceed 80 hours at room temperature. 
Do not refreeze Internal Control, Amplification, Enzyme, or Probe,
Reagents after the initial thaw.

 

I.                                         After
thawing, the Negative Calibrator, the Positive Calibrator, and the Blank may be
kept at room temperature up to 8 hours. 
These are single use vials and must be discarded after use.

 

J.                                        After
addition of Internal Control Reagent, the working Target Capture Reagent is
stable when stored at 2° to 8°C
for 30 days and may be kept at room temperature up to 8 hours per 24-hour
period while in use, not to exceed 80 hours at room temperature.

 

K.                                    If
precipitate forms in the Wash Solution, Amplification Reagent, Probe Reagent,
Negative Calibrator, Positive Calibrator or Blank warm to 15°
to 30°C and mix thoroughly prior to use.  See instructions under REAGENT
PREPARATION.

 

L.                                      If
precipitate forms in the Selection Reagent during storage, see instructions
under REAGENT PREPARATION.

 

M.                                 Changes
in the physical appearance of the reagent supplied may indicate instability or
deterioration of these materials.  If
changes in the physical appearance of the reagents are observed (e.g., obvious
changes in reagent color or cloudiness apparent with microbial contamination),
they should not be used.

 

N.                                    The
Blank is not master lot matched and may be used with any master lot of
reagents.

 

INO135 Rev. 1

 

3

 

PRECAUTIONS

 

A.                                    For
Investigational Use Only.  The
performance characteristics of this product have not been established.

 

B.                                     Specimens may be infectious.  Use Universal Precautions when performing
the assay(15).  Proper handling and
disposal methods should be established according to local, state and federal
regulations(12-14).  Only personnel
qualified as proficient in the use of the Procleix® WNV Assay, the
use of the TECAN GENESIS RSP and/or manual sample/TCR pipetting, and trained in
handling infectious materials should perform this procedure.

 

C.                                     Use routine laboratory precautions.  Do not pipette by mouth.  Do not eat, drink or smoke in designated
work areas.  Wear disposable gloves and
laboratory coats when handling specimens and kit reagents.  Wash hands thoroughly after handling
specimens and kit reagents.

 

D.                                    To reduce the risk of invalid results,
carefully read the entire package insert for the Procleix WNV Assay and the
operator’s manuals for the Procleix System prior to performing an assay run.

 

E.                                      Material Safety Data Sheets are available
upon request.

 

F.                                      Avoid contact of Auto Detect Reagents 1 and 2
with skin, eyes and mucous membranes. 
Wash with water if contact with these reagents occurs.  If spills of these reagents occur, dilute
with water before wiping dry and follow appropriate site procedures.

 

G.                                     Dispose of all materials that have come in
contact with specimens and reagents according to local, state and federal
regulations(12-13).  Thoroughly clean
and disinfect all work surfaces.

 

H.                                    Use only supplied or specified required
disposables.

 

I.                                         DO NOT interchange, mix, or combine reagents
from kits with different master lot numbers.

 

J.                                        Avoid microbial and ribonuclease
contamination of reagents.

 

K.                                    Store all assay reagents at specified
temperatures.  The performance of the
assay may be affected by use of improperly stored assay reagents.  See STORAGE INSTRUCTIONS and REAGENT
PREPARATION.

 

L.                                      Do not combine any assay reagents or fluids
without specific instruction.

 

REAGENT PREPARATION

 

This step should be performed
prior to beginning Target Capture in an area that is free of template and
amplicon.

 

Room temperature is defined as 15° to 30°C.

 

1.                                       Warm
all reagents to room temperature and mix thoroughly prior to use.  A dedicated waterbath at room temperature
may be used to aid this process.  Ensure
that precipitates are dissolved.  Do not
use a reagent if precipitate or cloudiness is present.  See step 6 for Target Capture Reagent
preparation.

 

2.                                       DO
NOT heat Probe Reagent, above 30°C.

 

3.                                       Thaw
reagents upright.

 

4.                                       If
necessary, thaw Amplification, Probe and Enzyme Reagents at room temperature or
at 2° to 8°C. Internal
Control, Amplification and Probe Reagents may be mixed by vortexing.  Enzyme Reagent should be mixed thoroughly by
gentle inversion taking care to avoid excessive foaming.  Once completely thawed, these reagents may
be kept at room temperature up to 8 hours per 24-hour period while in use.  These reagents are stable for 30 days when
stored at 2° to 8°C.  Record date of thaw (THAW DATE) for
Amplification, Probe and Enzyme Reagents in the space provided on the label.

 

5.                                       Precipitate
will form in the Probe Reagent when stored at 2°
to 8°C.  Probe
Reagent may be warmed in a water bath to facilitate dissolution of precipitate,
but temperature in the bath should not exceed 30°C.  The Probe Reagent may take up to 4 hours
with periodic mixing to allow complete dissolution of precipitate if thawing is
conducted on the lab bench.  Ensure that
precipitates in the Probe Reagent are dissolved.  Do not use if precipitate or cloudiness is present.

 

6.                                       Selection
Reagent is stored at room temperature. 
If Selection Reagent has been inadvertently stored at 2°
to 8°C or the temperature of the laboratory falls
below 15°C, precipitate may form.  If precipitate forms in the Selection
Reagent during storage, heat at 60° ± 1°
C for no more than 45 minutes, shaking the bottle frequently (every 5 to 10
minutes).  Once all precipitate has gone
back into solution, place the bottle in a room temperature water bath and allow
the bottle to equilibrate for at least 1 hour. 
Do not use the Selection Reagent until it has equilibrated.  The Selection Reagent must be at room
temperature before use.  Do not use if
precipitate or cloudiness is present.

 

7.                                       Prepare
working Target Capture Reagent: thaw one vial of Internal Control Reagent at
room temperature or 2° to 8°C.  Mix the Internal Control Reagent thoroughly
by inversion.  Remove Target Capture
Reagent (TCR)  from 2°
to 8°C storage. 
IMMEDIATELY upon removing from storage, mix vigorously (at least 10
inversions).  DO NOT VORTEX.  After mixing, place the TCR bottle at 22°
to 30°C. 
Approximately every 10 minutes shake the bottle until all precipitate
has disappeared.  TCR precipitate should
normally dissolve in about 30 minutes. 
If a gel is observed after performing this procedure, a new bottle must
be used according to the handling recommendations above.  Return the bottle with gel back to 2°
to 8°C storage for subsequent use.  When the Internal Control Reagent and TCR
have reached room temperature, mix TCR thoroughly by inversion.  Pour the entire vial of Internal Control
Reagent into the TCR bottle.  The total
time for each of these reagents at room temperature must not exceed 8 hours, in
the first 24-hour period.  This is now
the working Target Capture Reagent.  Mix
thoroughly.  Use the space indicated on
the TCR bottle to record the date Internal Control Reagent was added and lot
number used (IC LOT).  Record the date
of manufacture of the working TCR in the space provided on the label.

 

8.                                       Thaw
calibrators and Blank at room temperature. 
These are single use vials and must be thawed prior to each run.  Once thawed, use calibrators and blank
within 8 hours.  Mix thoroughly by
inversion.

 

9.                                       Wash
Solution is shipped at ambient temperature and stored at room temperature.  Precipitates may form in the Wash Solution
during shipment or during storage when temperatures fall below 15°C.  Wash Solution may be incubated in a warm
water bath to facilitate dissolution of precipitate.  Temperature in the bath should not exceed 30°C.  Ensure that precipitates in

 

INO135 Rev. 1

 

4

 

the Wash Solution are dissolved prior to use.  Do not use if precipitate or cloudiness is
present.

 

10.                                 Once opened, Wash Solution, Oil, Selection
Reagent, Buffer for Deactivation Fluid, Auto Detect 1 and Auto Detect 2 are
stable for 30 days when stored at room temperature.  Record the date the reagent was first opened (OPEN DATE) in the
space provided on the label.

 

11.                                 To prepare Deactivation Fluid, mix one part
Buffer for Deactivation Fluid with one part 5% sodium hypochlorite.  Deactivation Fluid is stable for 30 days when stored at room temperature.

 

SPECIMEN COLLECTION, STORAGE AND HANDLING

 

NOTE:  Handle all specimens as if they are potentially infectious
agents.

 

Take
care to avoid cross-contamination during the sample handling steps.  For example, discard used material without
passing over open tubes.

 

A.                                   Plasma collected in K2EDTA, K3EDTA,
heparin, or in Becton Dickinson EDTA Plasma Preparation Tubes (PPT) may be
used.  Follow sample tube manufacturer’s
instructions.  Specimen stability is
affected by elevated temperature.  Whole
blood or plasma from pooled or individual donor specimens may be stored for up
to 72 hours from time of draw at £ 25°C;
temperatures not to exceed 30°C are acceptable
for no more than 24 hours.  Specimens
may be stored an additional five days at 2°
to 8°C following centrifugation.  Plasma separated from the cells may be
stored for longer periods of time at £
-20°C before testing.

 

Do not freeze whole
blood.

 

	
  

  

 

*The 2-30°C
and 2-25°C periods indicated above may occur at any time.

 

B.                                     Additional
specimens taken from blood or plasma units collected in ACD or sodium citrate
according to the collection container manufacturer’s instructions may be
used.  ACD or sodium citrate whole blood
or plasma may be stored as in A. above.

 

C.                                     Additional
specimens may be taken from whole blood or plasma units containing CPD, CP2D,
or CPDA-1 anticoagulants collected according to the collection container
manufacturer’s instructions.  Whole
blood (not plasma units) collected in these anticoagulants may be stored for up
to 13 days at 2° to 8°C prior to
centrifugation.  At any time within this
13-day period, the whole blood unit may have been stored for up to one day at
30°C
and up to two days at 25°C.  Following centrifugation, the plasma may be
stored for an additional five days at 2°
to 8°C before testing. Plasma separated from the cells
may be stored for longer periods of time at £ -20°C before testing.

 

D.                                    No
adverse effect on assay performance was observed when plasma was subjected to
three freeze-thaw cycles.

 

E.                                      Mix
thawed plasma thoroughly and centrifuge for 10 minutes at 1000 to 3000 X g
before testing.  Centrifugation times
and speeds for thawed PPT tubes must be validated by the user.

 

F.                                      Other
collection and storage conditions should be validated by the user.  If specimens are to be shipped, they should
be packaged and labeled in compliance with applicable federal and international
regulations covering the transport of clinical specimens and etiologic
agents.(14)

 

G.                                     False
positive results may occur if cross contamination of specimens is not
adequately controlled during specimen handling and processing.

 

H.                                    Specimen
Pooling

 

The Chiron CPT Pooling
Software, used in combination with the TECAN GENESIS RSP, performs sample
scanning and pooling operations that combine aliquots from individual samples
into a single Master Pool Tube, which may be used for further testing.

 

PROCEDURAL
NOTES

 

A.                                   RUN
SIZE

 

When the average run size
is 55 tests or more, P/N 301135 should yield 5000 tests per kit.  Smaller run sizes will result in a lower
yield.  Each run of up to 100 tests must
contain 3 replicates each of the Negative Calibrator, the Positive Calibrator
and the Blank.

 

B.                                     EQUIPMENT
PREPARATION

 

1.                                       Three
dedicated circulating water baths must be used: one for target capture and
pre-amplification (60° ± 1°C),
one for amplification (41.5° ± 1°C)
and one for hybridization and selection (60°
± 1°C).  An
additional water bath is required to be maintained at 23°
± 4°C for the step preceding detection.

 

2.                                       Equilibrate
circulating water baths to 60° ± 1°C
for target capture and 41.5° ± 1°C
for amplification incubations.

 

3.                                       Prepare
the TECAN GENESIS RSP for use according to instructions in the Operator’s
Manual.

 

4.                                       Prepare
the Chiron® Procleix® TCS for use according to
instructions in the Operator’s Manual.

 

5.                                       Wipe
work surfaces and pipettors daily with diluted bleach (0.5% sodium hypochlorite
in water).  Allow bleach to contact
surfaces and pipettors for at least 15 minutes and then follow with a water
rinse.  A BLEACH ALTERNATIVE MAY BE
USED IN PRE-AMPLIFICATION AREAS ONLY. 
DO NOT USE BLEACH ALTERNATIVES IN AMPLIFICATION AREAS OR IN AREAS
SUSPECTED TO BE CONTAMINATED WITH AMPLIFICATION PRODUCTS.  DO NOT USE DEACTIVATION FLUID ON SURFACES.

 

6.                                       Equilibrate
a circulating water bath to 60° ± 1°C
for hybridization and selection incubations. 
Prepare an additional container of water at 23°
± 4°C for cool down prior to detection.

 

INO135 Rev. 1

 

5

 

7.                                       Setup
procedures for the Chiron Procleix HC+ Luminometer are given in the Operator’s
Manual.

 

C.                                     REAGENTS

 

1.                                       Add
all reagents using an Eppendorf repeat pipettor (or equivalent) capable of
delivering specified volume with ± 5% accuracy and a precision of <
5% CV.  Check pipettor functionality
monthly and calibrate regularly.

 

2.                                       To
minimize waste of Amplification, Oil, Enzyme, Probe, and Selection Reagents,
aliquot each reagent for a given run size. 
Aliquoting must be performed after reagent preparation using sterile,
polypropylene conical tubes with sealing caps in an area that is template and
amplicon free.  The aliquoting area must
be wiped down with diluted bleach (0.5% sodium hypochlorite in water) before
and after the aliquoting process.  A
BLEACH ALTERNATIVE MAY BE USED IN PRE-AMPLIFICATION AREAS ONLY.  DO NOT USE BLEACH ALTERNATIVES IN
AMPLIFICATION AREAS OR IN AREAS SUSPECTED TO BE CONTAMINATED WITH AMPLIFICATION
PRODUCTS.  The aliquoted reagents must
be used the same day the aliquoting was performed.  DO NOT store reagents in the aliquot conical tubes.

 

3.                                       A
color change will occur in the reaction tube after the addition of Amplification
Reagent, Enzyme Reagent, Probe Reagent, and Selection Reagent.

 

D.                                    WORK
FLOW

 

1.                                       To
minimize the possibility of laboratory areas from becoming contaminated with
amplicon, the laboratory area should be arranged with a uni-directional
workflow.  Proceed from reagent
preparation to sample preparation to amplification and then to detection
areas.  Samples, equipment and reagents
should not be returned to the area where a previous step was performed.  Also, personnel may not move from the
dedicated HPA area back into previous work areas without proper
anti-contamination safeguards.

 

2.                                       Perform
reagent preparation in a template free area.

 

3.                                       Perform
Target Capture and Pre-Amplification steps in an amplicon-free area.

 

4.                                       Perform
Hybridization Protection Assay in an area separate from the reagent preparation
and amplification areas.

 

Note:      Upon
completion of pipetting specimens (individual samples or pools) into TTUs, the
TTUs are removed from the deck and loaded into a TTU rack.  If the operator needs to pipette the same
specimens (individual samples or pools) for a different Procleix assay, the
empty calibrator tubes and TCR trough must be discarded but the specimens may
be left on the deck.  The operator
should then change gloves after emptying the used empty calibrator tubes and
TCR trough.  Clean TTUs should then be
loaded into the TTU carriers on the deck. 
Proceed with step A.3, under INSTRUCTIONS FOR USE.

 

E.                                      TEMPERATURE

 

1.                                       The
Target Capture, Amplification, Hybridization and Selection reactions are
temperature dependent.  Therefore, it is
imperative that the water baths are maintained within the specified temperature
range.  Use a calibrated thermometer.

 

2.                                       Room
temperature is defined as 15° to 30°C.

 

3.                                       Detection
is sensitive to temperature.  The
laboratory temperature in the detection area must be 21°
to 27°C.

 

F.                                      TIME

 

1.                                       The
Target Capture, Amplification, and Hybridization Protection Assay steps are all
time dependent.  Adhere to specific
times outlined in INSTRUCTIONS FOR USE. Use a calibrated timer.

 

G.                                     VORTEXING

 

1.                                       Proper
vortexing is important to the successful performance of the Procleixâ
WNV Assay.  Vortex equipment speed
settings may vary.  Start the vortexor
at low speed and then adjust upward to allow reaction mixture to reach and
maintain a height within the upper half of all tubes.  The reaction mixture should never touch the sealing cards.  It is
critical to have a homogeneous mixture after the additions of the Probe Reagent
and Selection Reagent.

 

H.                                    PIPETTING

 

1.                                       All
the pipettes used in the Target Capture, Amplification and HPA steps must be
dedicated for these purposes only to avoid cross contamination.

 

2.                                       Take
care to deliver reagents, excluding working TCR, to each tube without inserting
pipette tip into the tube or touching the rim of the tube to minimize the
chance of carryover from one tube to another.

 

I.                                         MANUAL
SPECIMEN PIPETTING

 

1.                                       When
using the manual sample/TCR pipetting method, improper pipetting technique will
affect the results of the assay.  See PROCEDURAL
NOTES, Section H. In order to avoid the loss of Positive ID Tracking,
verification of correct sample ID by a second individual is recommended.

 

2.                                       Ensure
that the TTU is oriented in the rack with the pointed end on the left side and
the rounded end on the right side of the rack. 
Pipette the first calibrator into the first tube next to the pointed end
of the TTU.  Samples are pipetted from
left to right.

 

3.                                       Use
a new pipette tip for each sample and dispose of the tip in a biological waste
container after use.  Take care to avoid
cross-contamination by pipetting the specimens and discarding the used pipette
tips without passing over open tubes or touching laboratory surfaces or other
pieces of equipment.

 

4.                                       To
avoid the risk of contamination, clean and decontaminate manual sample
pipettors between assay runs.

 

5.                                       Ensure
proper sample placement into the correct TTU position as indicated on the
manual work list record.

 

J.                                        DECONTAMINATION

 

1.                                       The
extremely sensitive nature of the test makes it imperative to take all possible
precautions to avoid contamination. 
Laboratory bench surfaces, and pipettes must be decontaminated daily
with diluted bleach (0.5% sodium hypochlorite in water).  Allow bleach to contact surfaces for at
least 15 minutes and then follow with a water rinse.  Chlorine solutions may pit equipment and metal.  Thoroughly rinse bleached equipment to avoid
pitting.

 

2.                                       A
BLEACH ALTERNATIVE MAY BE USED IN PRE-AMPLIFICATION AREAS ONLY.  DO NOT USE BLEACH ALTERNATIVES IN
AMPLIFICATION AREAS OR IN AREAS SUSPECTED TO BE

 

INO135 Rev. 1

 

6

 

CONTAMINATED
WITH AMPLIFICATION PRODUCTS.

 

3.                                       Reactions
must be decontaminated with Deactivation Fluid as described in the detection
procedure.

 

K.                                    SEALING
CARDS

 

1.                                       When
applying sealing cards, cover the TTUs with the sealing card and press gently
to ensure complete contact with all of the tubes.  Always use a new sealing card. 
DO NOT re-use sealing cards.

 

2.                                       When
removing sealing cards, carefully lift and peel in one continuous motion to
avoid aerosols and cross contamination. 
Immediately dispose of card in appropriate waste container.

 

INSTRUCTIONS FOR USE:

 

PROCLEIXâ WNV ASSAY ON INDIVIDUAL DONOR PLASMA
SAMPLES OR ON POOLED PLASMA SAMPLES

 

All
specimens (individual donations or pooled samples) should be run in singlet in
the initial Procleixâ WNV Assay.

 

Procleixâ WNV Assay Calibrators are to be used with
the corresponding master lot of the Procleix WNV Assays.  The operator must check to ensure that the
Procleix WNV Assay Calibrators are used with the corresponding master lot of
kit reagents as indicated on the master lot sheet enclosed with each shipment
of Procleix WNV Assay Calibrators.

 

To run the Procleix WNV
Assay for the detection of WNV RNA, follow the steps below for Target Capture,
Amplification and Hybridization Protection Assay.

 

Note: Continuous Process
Flow:

 

All process steps
described below are intended to be completed in a continuous flow with a
minimal, if any, delay between steps.

 

A.                                    TARGET CAPTURE

 

The
Procleix WNV Assay has been verified using the TECAN GENESIS RSP.  The use of manual pipetting requires
additional operator training and demonstration of proficiency.  Repeat pipettors used in this step must be
dedicated for use only in the TARGET CAPTURE steps.

 

IF USING THE TECAN
GENESIS RSP PIPETTOR:

 

1.                                       Start
the Chironâ Procleixâ
Assay Software.  Refer to the Procleix
Assay Software Operator’s Manual for software operating instructions.

 

2.                                       Place
TTU Carriers on the TECAN GENESIS RSP deck according to the deck layout
indicated on the screen.  Load
sufficient Ten Tube Units (TTUs) for the run into TTU Carriers.

 

3.                                       Mix
working Target Capture Reagent thoroughly to resuspend microparticles.  This is important before putting into the
TECAN GENESIS RSP reagent trough.  Put
sufficient working Target Capture Reagent into the reagent trough and place on
the TECAN GENESIS RSP deck as indicated on the deck layout screen.  If pipetting can not be completed within 2
hours, remix prior to use.

 

4.                                       Place
calibrators, blank, and samples into TECAN 16-Tube Strip Racks.  Place TECAN 16-Tube Strip Racks on the TECAN
GENESIS RSP deck according to the deck layout indicated on the screen.

 

Note: Samples may already
be in strip racks, on the Tecan deck, from pipetting a prior Procleix assay.

 

5.                                       Reference
the Procleixâ Assay Software Operator’s Manual for
instructions on pipetting.  The TECAN
GENESIS RSP will read bar codes of all carriers, TTUs, calibrators, blanks, and
samples.  The TECAN GENESIS RSP will
pipette 400 mL of working TCR into each reaction tube and then
pipette 500 mL each of calibrators, blank, and test samples
into assigned reaction tubes.  An
electronic work list will be created.

 

6.                                       When
all samples have been pipetted, transfer the TTUs to a TTU rack.  Cover the TTUs with sealing cards.  See PROCEDURAL NOTES.

 

7.                                       Vortex
the rack of TTUs a minimum of 20 seconds and until magnetic microparticles are
resuspended.  See PROCEDURAL NOTES.

 

8.                                       Rack
may remain at room temperature up to 75 minutes prior to proceeding to the 60°C
± 1°C incubation.

 

9.                                       Incubate
the tubes in a water bath at 60° ± 1°C
for 20 minutes ± 1 minute.

 

10.                                 Remove
the rack of TTUs and transfer to target capture area.

 

11.                                 Incubate
the rack of TTUs on the lab bench at room temperature for 14 minutes to 20
minutes.

 

12.                                 Transfer
the rack of TTUs to the Chironâ Procleixâ
TCS separation bay for 9 to 20 minutes.

 

13.                                 Carefully
remove and dispose of the sealing cards. 
See PROCEDURAL NOTES.

 

14.                                 Aspirate
the solution from each tube according to the Procleixâ
TCS Operator’s Manual.

 

15.                                 Add
1 mL of Wash Solution to each tube. 
Cover the TTUs with sealing cards. 
See PROCEDURAL NOTES.  Remove
the rack of TTUs from the Chiron Procleix TCS separation bay and vortex to
resuspend the microparticle pellets. 
See PROCEDURAL NOTES.

 

16.                                 Place
the rack of TTUs on the Chiron Procleix TCS separation bay for  4 to 10 minutes.

 

17.                                 Carefully
remove and dispose of the sealing cards. 
See PROCEDURAL NOTES.

 

18.                                 Aspirate
the solution from each tube according to the Procleix TCS Operator’s Manual.

 

19.                                 Add
1 mL of Wash Solution to each tube. 
Cover the TTUs with sealing cards. 
Remove the rack of TTUs from the Target Capture System separation bay
and vortex to resuspend the microparticle pellets.  See PROCEDURAL NOTES.

 

20.                                 Place
the rack of TTUs on the Chiron Procleix TCS separation bay for 4 to 10 minutes.

 

21.                                 Carefully
remove and dispose of the sealing cards. 
See PROCEDURAL NOTES.

 

22.                                 Completely
aspirate the solution from each tube according to the Procleix TCS Operator’s
Manual.  Cover the TTUs with a sealing
card.

 

23.                                 Remove
the rack of TTUs from the Chiron Procleix TCS separation bay and proceed
directly to Amplification.

 

IF
USING THE MANUAL SAMPLE PIPETTING METHOD:

 

The
assay results within the run report will be marked “M” indicating that the
specimens were manually pipetted.

 

1.                                       For
sample tracking, an electronic worklist must be created using the Procleix
Worklist Editor software.  Refer to the
Worklist Editor Operator’s Manual for instructions.  Verification of correct sample ID on the 

 

INO135 Rev. 1

 

7

 

 

worklist with the
specimen tubes and with the detailed assay run report by a second individual is
recommended.

 

2.                                       Load
sufficient Ten Tube Units (TTUs) for the run into a TTU rack.

 

3.                                       Thoroughly
mix working TCR immediately before use to resuspend microparticles.

 

4.                                       Refer
to the worklist and carefully pipette 400 mL
of working TCR to each reaction tube that will contain a specimen.  To dispense, insert the tip approximately
one quarter of the way into the tube at an angle and pipette working TCR down
the side of the tube.  Always pipette
the working TCR first, followed by the specimen.

 

5.                                       Pipette
specimens.

a.                                       Refer
to the worklist to identify the TTU number with the corresponding calibrator
and test specimen identification numbers.

b.                                      Aspirate
500 mL of each calibrator, external quality control
(if used), blank, or test sample from its collection tube using a single
channel pipettor with corresponding filtered disposable tip.  Insert only the end of the pipette tip into
the specimen.  Do not disturb the
sediment, if any.

c.                                       To
dispense, insert the pipette tip halfway into the tube taking care not to touch
the sides of the upper half of the tube with the pipette tip.  At an angle, pipette the specimen down the
side of the bottom half of the tube. 
Hold down the plunger of the pipettor while removing it from the tube.  Take care to avoid touching the rim or the
side of the tube with the pipette tip when removing it from the tube.

 

6.                                       Replace
pipette tip with a new tip and repeat Step 5 until all specimens have been
pipetted.

 

7.                                       Visually
inspect tubes to ensure proper specimen volume and working TCR volume have been
dispensed.

 

8.                                       Cover
the TTUs with sealing cards.  See PROCEDURAL
NOTES. Proceed to Step 7 of section titled “If Using the TECAN GENESIS
RSP 150/8 Pipettor”, above.

 

B.                                    AMPLIFICATION

 

The
repeat pipettors used in this step must be dedicated for use only in
AMPLIFICATION steps.  DO NOT USE BLEACH ALTERNATIVES IN THIS AREA.

 

1.                                       Carefully
remove and dispose of the sealing cards. 
See PROCEDURAL NOTES.

 

2.                                       Deliver
75 mL of Amplification Reagent to the bottom of each
tube using the dedicated repeat pipettor. 
Take care to deliver the reagent to the bottom of each tube without
inserting the pipette tip into the tube or touching the rim of the tube.

 

3.                                       Add
200 mL of Oil to each reaction tube using the
dedicated repeat pipettor.  Angle the
pipette tip toward the sides of the tubes, not straight to the bottom, to avoid
splashback.

 

4.                                       Cover
the TTUs with sealing cards.  See PROCEDURAL
NOTES.

 

5.                                       Vortex
the rack of TTUs a minimum of 20 seconds and until all microparticles are
resuspended.  Ensure that magnetic
particles are no longer adhering to the walls of the tube, and are evenly
dispersed in the aqueous phase.

 

6.                                       Incubate
the TTUs in a water bath at 60° ± 1°C
for 10 minutes ± 1 minute, then at 41.5°
± 1°C for 9 to 20 minutes.

 

7.                                       Leaving
the rack of TTUs at 41.5° ± 1°C,
carefully remove and dispose of the sealing cards.  See PROCEDURAL NOTES.  
Proceed immediately to enzyme addition. 
Add 25 mL of the Enzyme Reagent into each tube using the
dedicated repeat pipettor.  Take care to
deliver the reagent to the bottom of each tube without inserting the pipette
tip into the tube or touching the rim of the tube.  Place new sealing cards over the TTUs.  See PROCEDURAL NOTES.   Remove the rack of TTUs from the water bath and shake to mix.  DO NOT VORTEX.  Minimize the time the tubes are out of the water bath.

 

8.                                       Incubate
the rack of TTUs in the water bath at 41.5°
± 1°C for 60 minutes ± 5 minutes.

 

9.                                       Remove
the rack of TTUs from the water bath and transfer it to the Hybridization
Protection Assay area.  Rack may remain
at room temperature for up to 30 minutes prior to the addition of Probe
Reagent.

 

C.                                    HYBRIDIZATION PROTECTION ASSAY (HPA)

 

The
repeat pipettor used in this step must be dedicated for use only in
HYBRIDIZATION PROTECTION ASSAY.

 

A separate, dedicated
location for the Hybridization Protection Assay (HPA) step is recommended to
minimize amplicon contamination in the assay. 
This dedicated area should be on a separate bench in a separate area
from the reagent and sample preparation and amplification areas.  DO NOT USE
BLEACH ALTERNATIVES IN THIS AREA.

 

1.                                       Hybridization

a.                                       Carefully
remove and dispose of the sealing cards. 
See PROCEDURAL NOTES.

b.                                      Add
100 mL of Probe Reagent into each tube using the
dedicated repeat pipettor.  Take care to deliver the reagent to the bottom of each
tube without inserting the pipette tip into the tube or touching the rim of the
tube.  Angle the pipette tip toward the
sides of the tubes, not straight to the bottom, to avoid splashback.

c.                                       Cover
the TTUs with sealing cards.  See PROCEDURAL
NOTES.

d.                                      Vortex
the rack of TTUs a minimum of 20 seconds and until a homogeneous solution is
achieved.  To avoid possible
contamination, do not allow reaction mixture to come in contact with the
sealing card.  See PROCEDURAL NOTES.

e.                                       Incubate
the rack of TTUs in a dedicated water bath at 60°
± 1°C for 15 minutes ± 1 minute.

 

2.                                       Selection

a.                                       Remove
the rack of TTUs from the 60° ± 1°C
water bath.  Carefully remove and
dispose of the sealing cards.  See PROCEDURAL
NOTES.

b.                                      Add
250 mL of Selection Reagent to each tube using a
repeat pipettor.  Take care to deliver
the reagent to the bottom of each tube without inserting the pipette tip into
the tube or touching the rim of the tube. 
Angle the pipette tip toward the sides of the tubes, not straight to the
bottom, to avoid splashback.

c.                                       Cover
the TTUs with sealing cards.  See PROCEDURAL
NOTES.  Vortex the rack of TTUs a
minimum of 20 seconds and until a homogeneous solution is achieved.  To avoid possible contamination, do not
allow reaction mixture to come in contact with the sealing card.  See PROCEDURAL NOTES.

 

INO135 Rev. 1

 

8

 

d.                                      Return
the rack of TTUs to the 60° ± 1°C
water bath for 10 minutes ± 1 minute.

e.                                       Remove
the rack of TTUs from the 60° ± 1°C
water bath.

f.                                         Cool
the rack of TTUs in a 23° + 4°C
container of water for a minimum of 10 minutes while preparing for Detection
(step 3a).

g.                                      Remove
the rack of TTUs from the 23° ± 4°C
container of water onto absorbent material.

 

3.                                       Detection

a.                                       Prepare
the Chiron Procleix HC+ Luminometer for operation as indicated in the
Operator’s Manual.  Ensure that there
are sufficient volumes of Auto Detect 1 and Auto Detect 2 to complete the
tests.

b.                                      Select
the “WNV” assay protocol from the Chiron Procleix WNV System Software menu.

c.                                       Carefully
remove and dispose of the sealing cards. 
See PROCEDURAL NOTES.

d.                                      Before
transferring TTUs to the luminometer, wipe the outside of the tubes using an
absorbent tissue dampened with deionized water.  This will ensure that no residue is present on the outside of the
tubes and will help reduce static electricity that may affect luminometer
readings.

e.                                       Transfer
TTUs to the luminometer according to the software instructions.  Note: Tube reading should be completed
within 75 minutes after completing the selection reaction (step 2e in Selection
procedure).

f.                                         When
the analysis is complete, remove the TTUs from the luminometer.

g.                                      After
removing the TTUs from the luminometer, add at least 1mL Deactivation Fluid to
each tube.  Allow to sit at room
temperature for at least 30 minutes before disposing the contents of the
tubes.  This will help to prevent
contamination of the laboratory environment with amplicon.

h.                                      TTU
racks should be decontaminated by complete immersion in diluted bleach (0.5%
sodium hypochlorite in water) for a minimum of 15 minutes.  The bleach should then be rinsed off with
water and the rack may be allowed to air dry or may be wiped dry.

 

QUALITY CONTROL PROCEDURES:

 

PROCLEIXâ WNV ASSAY ON INDIVIDUAL DONOR PLASMA
SAMPLES OR ON POOLED PLASMA SAMPLES

 

I.                                         ACCEPTANCE CRITERIA FOR THE PROCLEIXâ WNV ASSAY

 

Run
Validity Criteria

 

A.                                   A
run is valid if the minimum number of calibrators is valid and calibrators meet
acceptance criteria (see II below).

 

1.                                       In
a Procleixâ WNV Assay run, at least 4 of the 6
calibrator replicates must be valid.  At
least 2 of the 3 negative calibrator replicates and 2 of the 3 positive
calibrator replicates must be valid.

 

2.                                       The
Procleix System Software will automatically invalidate a run if less than the
minimum number of calibrators is valid. All specimens in an invalid run due to
calibrators must to be retested.

 

3.                                       Cutoff
values will be automatically calculated for Internal Control (flasher) and
Analyte (glower) in a valid run (see II.A. below).

 

4.                                       For
Positive Calibrators or samples which are Reactive for Analyte (glower signal),
an Internal Control signal below the cutoff is not used to invalidate the
result.

 

5.                                       The
Blank is not used to determine run validity. 
No results are reported for the Blank.

 

B.                                     Procleixâ 
WNV Assay. The Procleix WNV System Software will print an alert on
the run report when more than 10% of the calibrators and specimens in a run are
invalid (see the Procleix HC+ Luminometer Operator’s Manual for details).  Specimens that are invalid due to
insufficient sample or TCR are not included in the calculation of the 10%
invalid criterion.

 

C.                                     For
runs that exceed the 10% invalid rate, review of package insert procedures
should be performed to monitor for operator errors.  In addition, the run report should be reviewed using the criteria
described below.

 

1.                                       If
the invalid specimens are all from the same TTU, those specimens contributing
to the 10% invalid rate may have been inadequately washed, or erroneous reagent
addition may have occurred.  All
nonreactive and invalid specimens in the affected TTU should be repeated.

 

2.                                       If
the invalid specimens are randomly located throughout the run, there were
calibrator failures, and no specific procedural error can be identified, the
nonreactive and invalid specimens must be repeated.

 

Note: Reactive specimens
in a manually invalidated run due to the 10% invalid alert criteria, must
become the test of record.  The
specimens should be resolved according to the resolution algorithm for reactive
specimens, as explained in the INTERPRETATION OF RESULTS section, step
4.

 

D.                                    An
assay run or an individual sample may also be invalidated by an operator if
specific technical/operator/instrument difficulties were observed and
documented.  If individual samples are
invalidated by an operator, then the percent invalid rate must be manually
recalculated.  The individual invalid
specimens must be repeated.

 

II.                                     ACCEPTANCE CRITERIA FOR THE CALIBRATION AND
CALCULATION OF CUTOFF

 

Procleixâ WNV Assay

Negative
Calibrator Acceptance Criteria

 

Each individual Negative
Calibrator (NC) must have an Internal Control (IC) value greater than or equal
to 75,000 RLU and less than or equal to 400,000 RLU.  Each individual Negative Calibrator must also have an Analyte
value less than or equal to 40,000 RLU and greater than or equal to 0 RLU.  If one of the Negative Calibrator values is
invalid due to an IC value or an Analyte value outside of these limits, the
Negative Calibrator mean (NCx) will be recalculated based upon the
two acceptable values.  The run is
invalid and must be repeated if two or more of the three Negative Calibrator
values have IC values or Analyte values that are outside of these limits.

 

INO135 Rev. 1

 

9

 

Determination of the mean
of the Negative Calibrator values (NCx) for Internal Control [NCx (Internal
Control)].

 

Example:

	
  Negative Calibrator

  	
   

  	
  Internal Control

  Relative Light Units

  
	
  1

  	
   

  	
  235,000

  
	
  2

  	
   

  	
  200,000

  
	
  3

  	
   

  	
  210,000

  
	
  Total Internal
  Control RLU =

  	
   

  	
  645,000

  

 

	
  NCx (Internal
  Control) =

  	
  Total Internal
  Control RLU

  	
   = 215,000

  
	
   

  	
  3

  	
   

  

 

Determination of the mean
of the Negative Calibrator values (NCx)  for Analyte [NCx
(Analyte)].

 

Example:

	
  Negative Calibrator

  	
   

  	
  Analyte

  Relative Light Units

  
	
  1

  	
   

  	
  14,000

  
	
  2

  	
   

  	
  16,000

  
	
  3

  	
   

  	
  15,000

  
	
  Total Analyte
  RLU =

  	
   

  	
  45,000

  

 

	
  NCx (Analyte) =

  	
  Total Analyte
  RLU

  	
  = 15,000

  
	
   

  	
  3

  	
   

  

 

Positive
Calibrator Acceptance Criteria

 

Individual Positive
Calibrator (PC) Analyte values must be less than or equal to 2,700,000 RLU and
greater than or equal to 400,000 RLU. 
If one of the Positive Calibrator values is outside these limits, the
Positive Calibrator mean (PCx) will be recalculated based upon the
two acceptable Positive Calibrator values. 
The run is invalid and must be repeated if two or more of the three
Positive Calibrator Analyte values are outside of these limits.  IC values may not exceed 500,000 RLU.

 

Determination of the mean
of the Positive Calibrator (PCx) values for Analyte [PCx (Analyte)].

 

Example:

	
  Positive Calibrator

  	
   

  	
  Analyte

  Relative Light Units

  
	
  1

  	
   

  	
  1,250,000

  
	
  2

  	
   

  	
  1,500,000

  
	
  3

  	
   

  	
  1,150,000

  
	
  Total Analyte
  RLU =

  	
   

  	
  3,900,000

  

 

	
  PCx (Analyte)
  =

  	
  Total Analyte
  RLU

  	
  = 1,300,000

  
	
   

  	
  3

  	
   

  

 

Calculation
of the Internal Control Cutoff Value

 

Internal Control Cutoff
Value = 0.5 X [NCx (Internal Control)]

 

Using values given in the
Negative Calibrator example above:

 

Internal Control Cutoff
Value = 0.5 X (215,000)

 

Internal Control Cutoff
Value = 107,500 RLU

 

Calculation
of the WNV Analyte Cutoff Value

 

Analyte Cutoff Value = NCx
(Analyte) + [0.03 X WNV PCx (Analyte)]

 

Using values given in the
Negative Calibrator and Positive Calibrator examples above:

 

Analyte Cutoff Value =
15,000 + (0.03 X 1,300,000)

 

Analyte Cutoff Value =
54,000 RLU

 

Summary of Acceptance Criteria for
Procleixâ
WNV Assay

 

Acceptance Criteria:

 

	
  Negative Calibrator

  	
   

  	
   

  
	
  Analyte

  	
   

  	
  >
  0 and < 40,000 RLU

  
	
  Internal Control

  	
   

  	
  >
  75,000 and < 400,000 RLU

  
	
   

  	
   

  	
   

  
	
  Positive Calibrator

  	
   

  	
   

  
	
  Analyte

  	
   

  	
  >
  400,000 and < 2,700,000 RLU

  
	
  Internal Control

  	
   

  	
  <
  500,000 RLU

  

 

Summary of Cutoff Calculations for
Procleixâ
WNV Assay

 

	
  Analyte Cutoff =

  	
   

  	
  NC Analyte Mean
  RLU

  
	
   

  	
   

  	
  + 0.03 X (PC
  Analyte Mean RLU)

  
	
   

  	
   

  	
   

  
	
  Internal Control Cutoff =

  	
   

  	
  0.5 X (Negative
  Calibrator IC Mean RLU)

  

 

INTERPRETATION OF RESULTS

 

All
calculations described above are performed by the Chironâ Procleixâ WNV System Software.  Two cutoffs are determined for the WNV
assay:  one for the Analyte signal
(glower signal) termed the Analyte Cutoff and one for the Internal Control
signal (flasher signal) termed the Internal Control Cutoff.  The calculation of these cutoffs is shown
above.  For each sample, an Analyte signal
RLU value and Internal Control signal RLU value is determined.  Analyte signal RLU divided by the Analyte
Cutoff is abbreviated as the Analyte Signal/Cutoff (S/CO) on the report.

 

For a sample with Analyte
signal less than the Analyte Cutoff (i.e., Analyte S/CO < 1), the Internal
Control (IC) signal must be greater than or equal to the Internal Control
Cutoff (IC Cutoff) for the result to be valid. 
In this case the Internal Control result will be reported as Valid and the sample is reported as Nonreactive.  For a sample with the Analyte signal less than the Analyte Cutoff
(i.e., Analyte S/CO < 1) and the Internal Control signal less than the
Internal Control Cutoff, the Internal Control Result will be reported as Invalid and the sample result is reported
as Invalid.  For all samples, the Internal Control signal
may not exceed 500,000 RLU.  The sample
will automatically be reported as Invalid
with the Chironâ Procleixâ
WNV System Software.

 

Summary
of Sample Validity:

 

	
  Sample

  Interpretation

  	
   

  	
  Internal Control

  Result

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nonreactive

  	
   

  	
  Valid

  	
   

  	
  Analyte S/CO
  < 1 and

  
	
   

  	
   

  	
   

  	
   

  	
  IC >
  IC Cutoff and

  
	
   

  	
   

  	
   

  	
   

  	
  IC <
  500,000 RLU

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reactive

  	
   

  	
  (Not used)

  	
   

  	
  Analyte S/CO >
  1and

  
	
   

  	
   

  	
   

  	
   

  	
  IC <
  500,000 RLU

  

 

INO135 Rev. 1

 

10

 

1.                                       Any
specimen with an invalid Procleixâ WNV Assay
result, must be retested in the same assay in singlet.

 

2.                                       If
at any point in the testing algorithm there is insufficient volume to complete
the testing then an alternate specimen from the index donation may be used as
long as the storage criteria in the package insert are met.

 

3.                                       Specimens
with a valid internal control and with an S/CO less than 1.00 in the Procleix
WNV Assay are considered Nonreactive for WNV RNA.

a.                                       IF
THE NONREACTIVE SPECIMEN IS A POOL, then each of the individual specimens
comprising the pool is considered Nonreactive and no further testing is
required.

b.                                      IF
THE NONREACTIVE SPECIMEN IS FROM AN INDIVIDUAL DONATION, then the individual
specimen is considered Nonreactive for WNV and no further testing is required.

 

4.                                       Specimens
with S/CO greater than or equal to 1.00 are considered Reactive.

a.                                       IF
THE REACTIVE SPECIMEN IS A POOL, then each of the individual specimens
comprising the pool is tested with the Procleix WNV Assay.

(1)                                  If
an individual specimen tests Nonreactive with the Procleix WNV Assay, then the
specimen is considered Nonreactive for WNV and no further testing is required.

 

(2)                                  If
an individual specimen tests Reactive with the Procleix WNV Assay, then the
individual specimen is considered Reactive for WNV.  Further clarification of the Reactive specimens may be obtained
by testing another sample from the index donation with the Procleix WNV Assay,
in an Alternate NAT and/or by follow-up testing.

b.                                      IF
THE REACTIVE SPECIMEN IS FROM AN INDIVIDUAL DONATION, then the individual
specimen is considered Reactive for WNV. 
Further clarification of the Reactive specimens may be obtained by
testing another sample from the index donation with the Procleix WNV Assay, an
Alternate NAT and/or by follow-up testing.

 

5.                                       Reactive
specimens in a manually invalidated run due to the 10% invalid alert criteria,
as explained in the ACCEPTANCE CRITERIA FOR THE PROCLEIX WNV ASSAY,
section C, must become the test of record.  Any reactive result (analyte signal/cutoff > 1) should
be resolved according to the resolution algorithm for reactive specimens, as
explained in the INTERPRETATION OF RESULTS section, step 4.

 

LIMITATIONS OF THE PROCEDURE

 

Assays must be performed,
and results interpreted according to the procedures provided.

 

Deviations from these
procedures may produce unreliable results. Adverse shipping, storage conditions
of outdated calibrators and/or reagents may produce erroneous results.

 

BIBLIOGRAPHY

 

1.                                       Campbell G. L., A. A. Marfin, R. S. Lanciotti, and D.
J. Gubler. 2002.  West Nile
virus.  Lancet infect Dis. 2:519-529.

2.                                       Petersen L. R., and A. A. Marfin. 2002.
West Nile Virus: A primer for the clinician. 
Ann Intern Med. 137:173-179.

3.                                       Centers for Disease Control.  January 24, 2002.  West Nile virus (WNV) infection: information
for clinicians.  Clinical features.  Website posting.

4.                                       Centers for Disease Control.  January 8, 2003.  West Nile virus: virus history and
distribution. Website posting.

5.                                       Centers for Disease Control.  December 23, 2002.  West Nile virus: questions and answers.  Website posting.

6.                                       Centers for Disease Control.  September 13, 2002.  Public health dispatch:  investigation of blood transfusion
recipients with West Nile virus infections. 
MMWR.  51:823.

7.                                       Centers for Disease Control.  2002. 
CDC Public health dispatch; possible West Nile virus transmission to an
infant through breast-feeding.  MMWR. 51: 877-878.

8.                                       Giachetti,  C., J. M. Linnen, D. P. Kolk, J. Dockter, et al.  2002. 
Highly sensitive multiplex assay for detection of human immunodeficiency
virus type 1 and hepatitis C virus RNA. J Clin Microbiol. 40:2408-2419.

9.                                       Kacian, D. L. and T. J. Fultz. 1995.  Nucleic acid sequence amplification
methods.  U.S.  Patent 5,399,491.

10.                                 Arnold, L. J., P. W. Hammond, W. A. Wiese, and N. C.
Nelson.  1989.  Assay formats involving
acridinium-ester-labeled DNA probes. 
Clin Chem 35:1588-1594.

11.                                 Nelson, N. C., A. Cheikh, E. Matsuda and M. Becker.  1996. 
Simultaneous detection of multiple nucleic acid targets in a homogeneous
format.  Biochem. 35:8429-8438.

12.                                 National Committee for Clinical Laboratory Standards.  1986. 
Clinical laboratory hazardous waste: 
proposed guidelines.  NCCLS
Document GP5-P.  Villanova, PA.

13.                                 U. S. Environmental Protection Agency.  EPA guide for infectious waste
management.  Washington,  DC; 
U.S. Environmental Protection Agency, Publication No. EPA/530-SW-86-014.
1986.

14.                                 Title 42, Code of Federal Regulations, Part
72. 1992.

15.                                 29 CFR Part 1910.1030.  Occupational exposure to bloodborne
pathogens; Final Rule,  Federal
Register/Vol. 56, No. 235/
December 6, 1991.

 

IN0135 Rev. 1

2003-02

 

Developed
and manufactured by:

Gen-Probe Incorporated

10210 Genetic Center
Drive

San Diego, CA 92121

(858) 410-8000

 

Distributed
in U.S. by:

Chiron Corporation

4560 Horton Street

Emeryville, CA 94608-2916

Telephone (in U.S.):
(800) CHIRON-8

(510) 655-8730

 

Distributed
in rest of world by:

Chiron Ireland, Limited

United Drug House

Belgard Road, Tallaght

Dublin 24, Ireland

353 (0) 1 404 1599

 

INO135 Rev. 1

 

11

 

Chiron
Blood Testing Technical Support:

(North America)

Telephone: (800) 452-6877

FAX: (800) 462-3938

 

(Europe, Middle East,
Latin America, Africa)

Hot Line: +800 CHIRON BT

or + 33 1 55 49 00 36

Telephone: +33 (1) 55 49
01 65

FAX: +33 (1) 55 49 01 69

 

(Asia/Pacific)

Telephone: +61 (0) 410 44
5810

FAX: +61 (0) 299 74 5411

 

Chiron, RIBA and Procleix
are trademarks of Chiron Corporation; TECAN, GENESIS (stylized), and RSP are
trademarks of Tecan AG: eppendorf (stylized) and COMBITIPS are trademarks of
Eppendorf-Netheler-Hinz GmbH; PROCLIN (stylized) is a trademark of Rohm and
Haas Company.

 

This product and its
intended use are covered by one or more of the following: U.S. patent no.
5,185,439; 5,283,174; 5,399,491; 5,437,990; 5,480,784; 5,585,481; 5,612,200;
5,639,604; 5,656,207; 5,656,744; 5,658,737; 5,696,251; 5,756,011; 5,756,709;
5,827,656; 5,840,873; 5,888,779; 5,948,899; 5,955,261; 6,004,745; 6,031,091;
6,090,591;                6,110,678;
6,245,519; 6,280,952; 6,410,276; 6,414,152; RE37,891; and international
counterparts.

 

Ó
2003 Gen-Probe Incorporated

 

INO135 Rev. 1

 

12

 

Schedule 2.9

 

PERFORMANCE
OBJECTIVES

 

	
  Performance Objectives

  	
   

  	
  Target

  
	
  [***]

  	
   

  	
  Assay shall detect the
  target virus in [***].

  
	
  [***]

  	
   

  	
  IUO -[***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

41

 

Schedule 4.0 

 

SERVICES

 

1.                                      Maintenance
& Troubleshooting.

 

1.1                                 ARC
shall store, handle and utilized the Products in accordance with the
Documentation, which may be amended from time to time.

 

1.2                                 In
the event that any NTL resolves a problem with a Product, such problem shall be
logged in writing, including a description of the problem and the steps taken
by ARC to resolve it.   ARC shall
maintain a log for the Products and make available all such logs to Chiron’s
respective employees, contractors, subcontractors, or agents whose
responsibilities are to provide Services to ARC (“Chiron Technical  Support”)
upon request.

 

1.3                                 If
a NTL is unable to resolve a problem it shall refer the problem to a Chiron
Technical Support representative for resolution in accordance with Paragraph 2
of this Schedule 4.0.

 

1.4                                 Except
for routine maintenance and troubleshooting activities of Technologists as
provided in this Schedule 4.0, or otherwise with the prior
permission of Chiron, during the Term of this Agreement only Chiron or Chiron’s
agents shall install, service, alter or replace the Products.

 

2.                                       Technical
Support and Service.

 

2.1                                 Installation.  Chiron Technical Support personnel will
provide installation and set up of all Software on the Blood Screening Systems,
including verification of the operation of the Software in conjunction with the
Blood Screening Systems.  At such time
as Chiron determines that such setup and installation has been completed, the
ARC shall acknowledge the completion of such setup and installation and its
acceptance of the Blood Screening Systems in writing.

 

2.2                                 Training.  For purposes of this Agreement, no
additional Trainers will be separately trained for purposes of the Products
acquired under this Agreement and the parties hereby agree that the number of
Trainers set forth in Section 2.2 of Schedule 4.0 of the 2002
Agreement shall, in addition to the training set forth in the 2002 Agreement,
also be trained for purposes of the Products acquired under this Agreement;
provided, however, that each of ARC and Chiron acknowledge and agree that the
training as provided 

 

42

 

hereunder will be subject
to each party’s scrutiny, and to the extent it is determined that the training
provided under the 2002 Agreement is inadequate for purposes of the Products
acquired under this Agreement, then one additional Trainer will be trained by
Chiron, at no additional cost to ARC, for each NTL.  Consistent with Section 2.2 of Schedule 4.0 of the 2002
Agreement, the Parties agree to meet and confer to develop a “Train the Trainer”
program for implementation by ARC. 
Except as set forth above, ARC shall be responsible for training of all
Technologists.  Additional training may
be requested by ARC from Chiron for an additional charge.

 

2.3                                 Data
& Materials.  ARC shall make
available to Chiron on a timely basis all data, information and other materials
which are reasonably necessary for Chiron to perform the Services.  Such data shall be treated as confidential
Data in accordance with Section 6.7 of the Agreement.  Chiron shall have no liability for any
failure to perform, or for the late performance, of any Services to the extent
such Services require data, information or materials possessed, prepared or
generated by the ARC, if the ARC fails to provide the same in accordance with
Chiron reasonable requests.

 

2.4                                 Support
and Service.

 

(a)                                  Chiron
Technical Support to ARC shall be available 24 hours a day, 7 days a week
including weekends and holidays via telephone. 
The ARC will refer problems to Chiron Technical Support through a central
toll-free telephone number ([***]). 
A Chiron Technical Support representative will be available at this
number to receive problem referrals and provide troubleshooting assistance from
7:30 a.m. to 5 p.m. PST, Monday through Friday, holidays excepted (“Normal
Support Hours”).  If a Chiron
Technical Support representative is not reached by the initial ARC call, a
Chiron Technical Support representative will return the call to acknowledge
receipt of the problem referral and engage in a determination of the Priority
Status within one (1) hour.  Messages
left outside Normal Support Hours (including weekends and holidays) will
automatically page the on-call Technical Support personnel.  A Chiron Technical Support representative
will return all calls to acknowledge receipt of problem referral and engage in
a determination of the Priority Status within one (1) hour.  Required message information left outside
Normal Support Hours should include a contact name, phone number and brief
description of the problem.  Telephone
support will be initiated within the “Priority/Response” timeframes set forth
below.  If a problem 

 

43

 

cannot be resolved
through telephone support within a reasonable amount of time, taking into
account its Priority status, the problem will be escalated to Chiron’s Product
Support Center, for analysis by Blood Screening System specialists and if
necessary, OEM support personnel.  If a
problem cannot be resolved following such escalation, Chiron Technical Support
will be dispatched to the NTL to provide service in accordance with the
Priority/Response Time Schedule set forth below.

 

	
  Priority

  	
   

  	
  Response*

  
	
  Priority
  1:       Products
  not operating and alternate or back-up equipment not available; screening
  cannot be performed

  	
   

  	
  •                  Immediate telephone support 

  •                  Decision to dispatch Support
  Technician within 4 hours

  •                  Support Technician on site ASAP but
  no later than 10 hours from initial problem referral

  •                  Resolution ASAP, but no later than
  24 hours (may be temporary workaround)

  
	
   

  	
   

  	
   

  
	
  Priority
  2:       Products
  operational but screening process (processing time) is affected

  	
   

  	
  •                  Telephone support within 2 hours 

  •                  Support Technician on site within
  24 hours, if needed 

  •                  Resolution within 48 hours

  
	
   

  	
   

  	
   

  
	
  Priority
  3: Products operational; no impact on screening process

  	
   

  	
  •                  Telephone support next business
  day  

  •                  Work commenced within 24 hours 

  •                  Resolution within 1 week

  

 

*           All timeframes are
approximate; actual response times may vary due to flight availability,
weather-related delays, nature of the problem, etc.

 

(b)                                 Chiron
will maintain full records of all problem referrals and subsequent actions
pursuant to Regulations.

 

(c)                                  Chiron
will provide a list of all field service technical personnel by name, including
contact information and a description of all certifications.  Such list shall be updated and confirmed
annually for all additions and deletions.

 

3.                                       Warranty;
Limitation of Liability.

 

3.1                                 Chiron
warrants that the Services provided by Chiron, its agents, employees or
contractors pursuant to this Agreement will be rendered in a competent
workmanlike manner and in accordance with industry standards.

 

3.2                                 The
Services shall cover latent and hidden defects in design, material or
workmanship of the Products, and shall include 

 

44

 

coverage of all Upgrades,
but shall exclude (i) replacement of operating supplies, necessaries,
consumables or expendable parts; (ii) repairs required due to improper storage,
accident, neglect, misuse, electrical stress, air conditioning, humidity
control, transportation, and force majeure events, use of non-approved
accessories, consumables or supplies, or causes other than intended normal use;
(iii) service for Products that have been tampered with, disassembled, altered,
changed or modified, maintained by anyone other than Trainers or Technologists
or repaired (or attempts have been so made) by anyone other than Chiron
Technical Support personnel or BMIT-certified Technologists under the direction
of Chiron Technical Support; (iv) and (v) service for any other equipment not
manufactured or supplied by Chiron.

 

3.3                                 If
any applicable law implies a condition or warranty which cannot be excluded or
modified in this Agreement (a “Requirement”), then such Requirement is
deemed to be included in this Agreement.

 

45

 

Schedule 5.0

 

COMPENSATION

 

1.                                       The
ARC agrees to pay to Chiron the agreed compensation in monthly increments, such
increments to be equal to the number of Reportable Results achieved by the ARC
each month, multiplied by the applicable Per Reportable Result amount from the
chart set forth below:

 

	
  POOLED TESTING &

  OUTBREAK TESTING

  	
   

  	
  SINGLE UNIT TESTING

  
	
  Per Reportable
  Result

  
	
  [***]

  	
   

  	
  [***]

  

 

On or prior to the 5th business day
of each month during the Term, ARC shall provide Chiron with a report showing
the Reportable Results obtained through Pooled Testing, Single Unit Testing and
Outbreak Testing and Reagent Utilization Factor for the prior month for each
NTL.  On or prior to the 15th calendar
day of each month, Chiron shall prepare and deliver an invoice to ARC for each
NTL based on such report.  If ARC’s
report is not timely received by Chiron, Chiron will prepare an invoice that
reflects the then current Standing Order for the applicable month multiplied by
the applicable Per Reportable Result amount. 
The Parties shall “true-up” payments made to the actual Reportable
Results achieved on a quarterly basis, rectifying any under- or over-payment on
the next subsequent invoice, without application of interest.  ARC shall make payment on invoices in
accordance with Section 5.2 of the Agreement.

 

Chiron and the ARC agree
to monitor the Reagent Utilization Factor at each NTL during the Term.  If the Reagent Utilization Factor for any
NTL exceeds the [***] (the “Target RUF”) [***], Chiron and the ARC shall use their
best endeavors to identify and correct the cause of the excess.

 

The Reagent Utilization
Factor shall be calculated for the ARC promptly following each successive ARC
Fiscal Year aggregating all NTLs.  If
the Reagent Utilization Factor for the ARC for any ARC Fiscal Year scores above
the applicable Target RUF (or such other factor as determined in accordance
with subparagraph (c)), Chiron shall invoice the ARC on the next subsequent
monthly invoice, and the ARC agrees to pay, the additional fee set forth below.

 

46

 

For each [***]
increment by which the actual Reagent Utilization Factor during each ARC Fiscal
Year exceeds the Target RUF, the [***]; provided that no additional fee
shall be payable hereunder to the extent that the cause of the Reagent
Utilization Factor exceeding the Target RUF is attributable to (A) a failure of
the Products to achieve the Performance Objectives set forth in
Section 2.9 of the Agreement, or (B) the implementation of an Upgrade or
Enhancement required by Chiron.

 

2.                                       Termination
Reimbursement.  The Termination
Reimbursement shall be calculated as follows:

 

[***],

 

multiplied by

 

[***],

 

multiplied by

 

[***].

 

3.                                       Additional
Supplies.  The following additional
supplies are available from Chiron at the prices set forth below.  The fees for such additional supplies may be
increased [***]
by Chiron in the event of, and in the amount of, any price increases by the
manufacturers of such additional supplies.

 

	
  External Run Controls ([***])

  	
  [***]

  
	
  Ten-Tube Units (TTUs) ([***])

  	
  [***]

  
	
  Ten-Tube Cassettes
  (TTCs) ([***])

  	
  [***]

  
	
  Proficiency Panels ([***])

  	
  [***]

  

 

47Exhibit
10.326

 

	
  CONFIDENTIAL

  	
   

  	
  REDACTED
  VERSION

  

 

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

 

WNV Association Agreement

 

This WNV Association
Agreement (this “WNV Association Agreement”) is made effective as of July 1,
2003, between America’s Blood Centers (“ABC”), a charitable and non-profit
corporation, having its principal office at 725 15th Street, N.W.
Suite 700, Washington, D.C. 20005, and Chiron Corporation, a Delaware
corporation (“Chiron”) having its offices at 4560 Horton Street, Emeryville,
California 94608-2916.

 

Background

 

A.            WHEREAS, ABC is an association of
non-profit community-based
centers (each such blood center, a “Member”);

 

B             WHEREAS,
Members currently screen for themselves and for other blood banks in the United
States, human blood samples for viruses such as Human Immunodeficiency Virus
type-1 (“HIV-1”)
and Hepatitis C Virus (“HCV”) by performing screening using
amplified nucleic acid screening;

 

C.            WHEREAS, Chiron and ABC are parties to that certain
Association Agreement Regarding Sale and Servicing of Blood Screening Products
effective as of May 1, 2002 (the “2002
Association Agreement”), pursuant to which Chiron sells to
Participating Members, and Participating Members purchase from Chiron, certain
assays and blood screening instruments to conduct nucleic acid amplification
screening to detect the presence of certain viruses in blood, including HIV-1
and HCV;

 

D.            WHEREAS,
Chiron, together with its collaboration partner, Gen-Probe, Incorporated
(“Gen-Probe”)  is developing a WNV Assay which can be used
to conduct amplified nucleic acid tests to detect the West Nile Virus (“WNV”) in pooled and single donor blood
products (the “WNV Assay”);

 

E.             WHEREAS,
Further development and testing of the WNV Assay is necessary before
Chiron and Gen-Probe may seek to obtain FDA approval for the commercial
distribution and use of such WNV Assay;

 

F.             WHEREAS, The costs and efforts required for
such further development and testing far exceed those that Chiron and Gen-Probe
will undertake without assistance and collaboration from other entities, and
the absence or delay of such assistance and collaboration of those entities
would significantly delay the further development and testing, and, thus, the
availability to Members of the WNV Assay;

 

1

 

G.            WHEREAS, The
rapid development and availability of the WNV Assay for the testing of blood
donations is of critical importance to ensure the safety of blood products and
to the protection of the public health;

 

H.            WHEREAS,
ABC wishes to enable its Members to collaborate with and support Chiron
and Gen-Probe in the further development and testing of the WNV Assay necessary
for obtaining FDA approval or licensing for commercial distribution of the WNV
Assay, subject to the terms and conditions stated below:

 

NOW, THEREFORE, in consideration of the foregoing premises and
of the mutual covenants of the parties hereinafter contained, the parties
hereto hereby agree as follows:

 

ARTICLE 1 – DEFINITIONS

 

Capitalized terms not defined herein shall have the
meanings set forth in Schedule A hereto.

 

ARTICLE 2 – PROVISION OF WNV ASSAYS

 

Chiron agrees to supply Participating Members with WNV
Assays in accordance with the terms and conditions set forth in Schedule B
hereto.

 

ARTICLE 3 – BLOOD SCREENING SYSTEMS; SOFTWARE &
DOCUMENTATION

 

3.1           Blood Screening Systems.

 

(a)           General.  Participating Members shall
use the WNV Assay only on the Blood Screening Systems.  Chiron bears no responsibility with respect
to any use of the WNV Assays on instrument systems other than the Blood
Screening Systems.

 

(b)           Additional Components. 
Participating Members may elect to acquire additional equipment
components to supplement the Blood Screening Systems acquired and maintained
pursuant to the 2002 Agreement and applicable 2002 Member Supplement.  Chiron shall coordinate the installation of
such additional components with Participating Members to minimize the impact on
Participating Members’ existing screening activity.

 

3.2           Software and Documentation.  
Chiron agrees to provide to Participating Members, at [***],
the Software and Documentation to run the WNV Assays on the Blood Screening
Systems as contemplated by this Agreement, in accordance with the terms and
conditions set forth in Schedule C hereto.

 

2

 

ARTICLE 4 – SERVICES

 

Installation, training,
telephone support, and other servicing of any of the Products
(collectively, “Services”), shall be provided to each Participating Member by
Chiron in accordance with the terms and conditions set forth in Schedule D
hereto.

 

ARTICLE 5 – COMPENSATION,
PAYMENTS

 

5.1           Support.  Each Participating Member agrees to assist
with the costs related to the development and supply of the WNV Assay and other
costs incurred by Chiron and Gen-Probe under this Agreement by paying to Chiron
the amounts set forth in Schedule E hereto.

 

5.2           Payments. All
payments shall be made on a monthly basis by each Participating Member as set
forth in Schedule E.  All
payments due to Chiron hereunder shall be paid in full by each Participating
Member in U.S. Dollars  within thirty (30) days of the applicable
due date. In the event of late payment, interest shall be charged at the rate
of [***]
from the date such payment was due until the date of actual payment, such
interest to accrue daily and both before and after judgment.

 

5.3           Books & Records;
Audit.  Each Participating Member
shall keep reasonably detailed and accurate records and books of account,
including without limitation retaining all Data on donations tested, to enable
a determination of the amounts payable to Chiron hereunder.  Upon thirty (30) days written notice by
Chiron, not more frequently than once per calendar year, Chiron, at its cost
(except as otherwise provided below in this Section 5.3) may have the records
and books of account of a Participating Member examined during reasonable business
hours by an independent certified public accountant selected by Chiron for the
purpose of verifying the amounts due hereunder.  A copy of any final written report provided by the independent
accountant to Chiron shall be given concurrently to the Participating
Member.  Such examination shall not be
permitted unless [***] to which the books and records pertain. Where such
examination results in a finding that a Participating Member underpaid Chiron [***],
the Participating Member shall reimburse Chiron for its reasonable costs and
expenses in conducting such examination. 
The Participating Member and Chiron shall promptly rectify any
overpayments or underpayments by repaying such amounts together with interest
thereon at the rate set forth in Section 5.2 of this WNV Association
Agreement.  The parties shall endeavor
to resolve any dispute between a Participating Member and Chiron as to amounts
owing hereunder arising out of an audit pursuant to this Section 5.3 pursuant
to Article 11 of this WNV Association Agreement.

 

5.4           Taxes. Each
Participating Member is a non-profit, charitable corporation, exempt from the
payment of sales and use taxes and shall have no tax 

 

3

 

liability on Products
unless specifically legislated by a particular state.  Chiron is responsible for requesting and obtaining all tax
exemption numbers as required. 
Notwithstanding the above, if any federal, state, provincial, county or
municipal sales or use tax, excise or similar charge, or other tax assessment
(other than that assessed against income), is assessed or charged on the
procurement of the WNV Assays from Chiron pursuant to this Agreement, it shall
be paid by the applicable Participating Member.

 

ARTICLE 6 – CERTAIN AGREEMENTS

 

6.1           WNV Assay IND.  Chiron will collaborate with Gen-Probe on
the preparation and submission by Gen-Probe of an Investigational New Drug
Application, including clinical protocols (“IND”), to the FDA to permit the
Participating Members to conduct
nucleic acid amplification screening to detect the presence of the West Nile
Virus using the Products. 
Gen-Probe will submit such IND application to the FDA not later than May
23, 2003.

 

6.2           Use of WNV Assays Per IND. 
Participating Members shall not use the Products in a manner not
specifically described in the IND protocol at any time.

 

6.3           Facilities.  Each Participating Member
agrees to grant Chiron reasonable access during normal business hours to
inspect the facilities used for the conduct of nucleic acid amplification testing of blood donation samples.  Participating Members shall perform such
testing in accordance with all applicable laws and regulations and the
instructions received from Chiron.

 

6.4           Regulatory
Compliance.

 

(a)           The Participating
Members shall be solely responsible for compliance with all reporting and other
regulatory requirements imposed on them. 
Upon reasonable request of Chiron or any Participating Member, any
Participating Member or Chiron shall provide to the requesting party copies of regulatory
reports relating to the use of the WNV Assays or the Blood Screening Systems.

 

(b)           Chiron and Gen-Probe
shall be responsible for compliance with all reporting and other regulatory
requirements imposed on them.

 

(c)           Any party hereunder
agrees to make available to the requesting party (with authority to provide to
its Affiliates or any governmental regulatory agency) such records as may be
reasonably required for the requesting party to satisfy its regulatory
requirements.

 

(d)           Each party agrees to
provide access to their facilities and documents pertaining to this Agreement
without any prior or written 

 

4

 

notice to the FDA should
it require access in accordance with any FDA policy, communication, or
regulation.

 

6.5           Data.  Each Participating Member
shall provide to Chiron data generated in connection with the use of the WNV
Assays or Blood Screening Systems as required for proper submission of the IND
and otherwise as is sufficient to monitor the performance of the Products for
quality assurance and to perform their respective regulatory obligations in the
Territory (collectively the “Data”). 
The Data shall be deemed confidential information of the providing Participating
Members, and shall be subject to Section 6.6, except that the limitations of
Section 6.6 shall not apply to the uses of Data specifically authorized under
Section 6.5(b) of this WNV Association Agreement.

 

(a)           Chiron and to its
Affiliates shall have the right to use the Data in connection with other
regulatory applications, submissions and notifications, in any country, with
respect to WNV Assays, Blood Screening Systems or related products.  ABC and the Participating Members agree to
cooperate in providing to Chiron such information as either may reasonably
believe appropriate or necessary and in applying for any such government
approvals. At ABC’s or any Participating Member’s request, Chiron agrees to
seek from such governmental regulatory agencies confidential treatment of the Data,
to the extent such confidential treatment is available.

 

(b)           All parties acknowledge
the other parties’ interest in publishing, in oral or written form, certain
information related to Participating Members’ use of the Products to obtain
recognition within the scientific community, to advance the state of scientific
knowledge and for marketing purposes. 
All parties also recognize the other parties interest in preserving the
confidentiality of certain information. 
Therefore, none of Chiron, ABC nor any Member will publish any
information relating to use of the Products, including Data Participating
Members generate under IND or during clinical trials, without the express
written consent of the other parties, which consent shall not be unreasonably
withheld.  A party wishing to publish shall provide a copy of the draft publication
and provide the other parties not less than thirty (30) days to review and
comment prior to publication.  Any such
publication shall appropriately acknowledge the contributions of the other
parties.  At the request of any party,
the parties shall reasonably consider joint publications.

 

(c)           The parties acknowledge
and agree that nothing in this Agreement or otherwise will require ABC or any
Participating Member to disclose to Chiron patient-specific, or donor or
recipient identifying information (including information that could identify a
group of 

 

5

 

donors or recipients),
unless and to the extent that such information is required by any applicable
law, regulation or court order.  In such
event, (i) Chiron must provide notice to ABC and the applicable Participating
Member in writing immediately on becoming aware of such a requirement so that ABC
and the applicable Participating Member have an opportunity to seek a
protective order or other remedy; and (ii) ABC and the applicable Participating
Members shall provide the required identifying information to the extent it has
such information, subject to the terms of such protective order or other
remedy.

 

6.6           Confidentiality.  During the term of this Agreement and [***],
absent the consent of the other party, (i) ABC and the Participating Members
agree to keep in confidence and not to disclose to any Third Party other than
their Affiliates, agents or contractors who need to know in connection with ABC
and Participating Members activities under this Agreement, or use for any
purpose, except pursuant to, and in order to carry out, the terms and
objectives of this Agreement, any Confidential Information of Chiron, including
Confidential Information of Gen-Probe which is disclosed to ABC or
Participating Members by or through Chiron; and (ii) Chiron agrees to keep in
confidence and not to disclose to any Third Party other than Gen-Probe and their
respective Affiliates, agents or contractors who need to know in connection
with Chiron activities under this Agreement, or use for any purpose, except
pursuant to, and in order to carry out, the terms and objectives of this
Agreement, any Confidential Information of ABC and Participating Members.   Disclosures of Confidential Information to
Third Parties authorized hereunder shall be permitted only if the Third Party
is bound by confidentiality obligations not less restrictive than those set
forth herein.  Subject to this
Section 6.6 and except as required by a court order issued by a court
having appropriate jurisdiction, ABC and all Members agree not to disclose to
any Third Party any financial terms of this Agreement, or any terms of this
Agreement relating to the WNV Assays provided hereunder, without the prior
written consent of Chiron.  Chiron
agrees to not disclose to any Third Party any financial terms of this
Agreement, or any terms of this Agreement relating to the WNV Assays.  Notwithstanding the above, Chiron
acknowledges that any disclosure by a Participating Member in violation of this
Section 6.6 shall not be deemed a breach of this Agreement by ABC.

 

6.7           Intellectual
Property; Inventions. The provision by Chiron to the Participating Members
of the WNV Assays and Blood Screening Systems hereunder includes the implied
license or sublicense under Chiron and Gen-Probe intellectual property to use
the Products in the Territory as provided herein.  Except for such implied license, and except as specifically set
forth herein, nothing in this Agreement conveys to any party any rights or
licenses under any intellectual property of any other party.  The parties do not anticipate that use of
the Blood Screening Systems and WNV Assays as provided herein will result in
new inventions 

 

6

 

by Participating
Members.   However, in the event that
any such new invention is made solely by a Participating Member or persons
obligated to assign inventions to a Participating Member, arising from the use
of the Products, the Participating Member will own such invention.  If such invention is an improvement to the
WNV Assay or the related Software, the Participating Member will provide
written notice to Chiron of such invention, and the parties will commence
exclusive negotiations, [***], for Chiron to obtain a worldwide
license to such invention on commercially reasonable terms.  If the parties fail to reach agreement on
licensing terms, the Participating Member will be free to license the invention
to any Third Party.  If an invention is
made jointly by a Participating Member or persons obligated to assign
inventions to it, and Chiron or persons obligated to assign inventions to it,
such invention will be owned jointly by the parties.  All inventions made solely by Chiron or persons obligated to
assign inventions to it will be owned by Chiron.

 

6.8           Association Fee.  Chiron agrees to pay ABC for
management and service duties performed during the term of this WNV Association
Agreement in [***]. 
This amount shall be paid by Chiron to ABC quarterly within sixty (60)
days of the close of each quarter.

 

ARTICLE 7
– REPRESENTATIONS & WARRANTIES; WARRANTY DISCLAIMER; INDEMNIFICATION;
LIMITATION OF LIABILITY; INSURANCE

 

7.1           Chiron Representations
& Warranties. Chiron hereby represents and warrants that: (a) it is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it was organized; (b) this Agreement, when executed and
delivered by it, will be the legal, valid and binding obligation of Chiron,
enforceable against Chiron in accordance with its terms; (c) the execution,
delivery and performance of this Agreement by Chiron do not and will not (i)
conflict with, or constitute a breach or default under, its charter documents
or any material agreement, contract, commitment, or instrument to which Chiron
is a party or (ii) require the consent, approval or authorization of, or
notice, declaration, filing or registration with, any Third Party or any
governmental or regulatory authority; (d) Chiron has not previously granted and
will not grant any rights to any Third Party which are, nor contract with any
Third Party in any manner which is, inconsistent with the rights granted
herein.

 

7.2           ABC Representations
& Warranties. ABC hereby represents and warrants that: (a) it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it was organized; (b) this Agreement, when executed and
delivered by it, will be the legal, valid and binding obligation of ABC,
enforceable against ABC in accordance with its terms; (c) the execution,
delivery and performance of this Agreement by ABC do not and will not (i)
conflict with, or constitute a breach or default under, its charter documents
or any material agreement, contract, commitment, or instrument to which ABC is
a party or (ii) require the consent, approval or 

 

7

 

authorization of, or
notice, declaration, filing or registration with, any Third Party or any
governmental or regulatory authority; (d) ABC has not previously granted and
will not grant any rights to any Third Party which are, nor contract with any
Third Party in any manner which is, inconsistent with the rights granted
herein.

 

7.3           Participating Member
Representations & Warranties. 
Each Participating Member, by executing a WNV Member Supplement,
represents and warrants that:  (a) it is
duly organized, validly existing and in good standing under the laws of the jurisdiction
in which it was organized; (b) the WNV Member Supplement, when executed and
delivered by it, will be the legal, valid and binding obligation of it,
enforceable in accordance with its terms; (c) all Products shall be used in
accordance with the applicable manuals and instructions provided by Chiron and
with all applicable laws and regulations; (d) it has all authority and permits
required under applicable law and regulation to operate as a blood center and
use the Products; (e) it is not, and it will not use in providing Chiron with
any manner of service or work relating to this Agreement, a debarred person or
entity under the Generic Drug Enforcement Act, or otherwise prohibited from
providing such services or work, nor shall it use any investigator who has been
disqualified by the FDA.

 

7.4           Disclaimer of
Warranty.  Chiron is not the manufacturer of the WNV Assays provided to
Participating Members under this Agreement. 
Further, the WNV Assays are not licensed by the FDA or any other
regulatory body for use in the screening and release of blood, plasma or other
blood components and are development stage products, provided pursuant to an
IND submitted to the FDA.  EXCEPT
AS SET FORTH IN SECTION 7.1 OF THIS WNV ASSOCIATION AGREEMENT OR EXPRESSLY
PROVIDED IN SCHEDULES B, C, AND D HEREOF, CHIRON MAKES NO WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

7.5           Participating Member
Responsibility for Certain Damages. 
In no event shall Chiron (or any Affiliate thereof) be responsible for
any Damages suffered by ABC or a Participating Member arising out of a
Participating Member’s own negligence or willful acts or failure to act in
connection with the storage, handling, or use of the Products after transfer to
the Participating Member of risk of loss or damage thereto.

 

7.6           Indemnity by Chiron.  Chiron hereby indemnifies ABC and each
Participating Member, their respective officers, directors, agents, and
employees (the “ABC Indemnitees”) and agrees to hold them harmless from and
against all Third Party Damages arising out of bodily injury claims of Third
Parties, when such Third Party Damages arise from the negligence or willful
misconduct of Chiron, its officers, directors, agents, 

 

8

 

employees or affiliates
in the performance of Chiron’s obligations under this Agreement, except to the
extent arising from negligence or willful misconduct of any of the ABC
Indemnitees.

 

7.7           Indemnity by ABC.  ABC hereby indemnifies Chiron and its
respective officers, directors, agents and employees (the “Chiron Indemnitees”)
and agrees to hold them harmless from and against all Third Party Damages
arising out of bodily injury claims of Third Parties, when such Third Party
Damages arise from the negligence or willful misconduct of ABC, its officers,
directors, agents or employees in the performance of its obligations under this
Agreement, except to the extent arising from negligence or willful misconduct
of any of the Chiron Indemnitees.

 

7.8           Indemnity by
Participating Members.  Each
Participating Member, by executing a WNV Member Supplement, agrees to indemnify
Chiron and its respective officers, directors, agents and employees (the
“Chiron Indemnitees”) and agrees to hold them harmless from and against all
Third Party Damages arising out of bodily injury claims of Third Parties, when
such Third Party Damages arise from the negligence or willful misconduct of the
Participating Member, its officers, directors, agents or employees in the
performance of its obligations under this Agreement, except to the extent
arising from negligence or willful misconduct of any of the Chiron Indemnitees.

 

7.9           IP Infringement
Indemnity.  Chiron shall defend, at
its expense, any legal action brought against ABC or a Participating Member by
a Third Party to the extent that it is based on any claim that the use by a
Participating Member of any Products supplied by Chiron pursuant to this Agreement
constitute an infringement of any patent or intellectual property rights
claimed by such Third Party in the Territory. 
Chiron will pay all Damages finally awarded against ABC or a
Participating Member in such action that are attributable to such claim.  Notwithstanding the foregoing, Chiron shall
have no liability hereunder to the extent that the infringement (or allegation
of infringement) arises from or is attributable to (i) the use of the Products
in combination with other products or materials not supplied by Chiron
hereunder; (ii) part (or all) of the Products being used for a purpose other
than that indicated by this Agreement; or (iii) use of the Products other than
in accordance with the documentation provided by Chiron.  Chiron’s obligation to indemnify shall be
subject to ABC or a Participating Member promptly notifying Chiron in writing
of such claim and providing reasonable cooperation to Chiron in the defense of
such claim or proceeding.

 

7.10         Indemnification
Procedures.  Any party claiming
indemnification under Section 7.6, 7.7 or 7.8 of this WNV Association Agreement
(the “Indemnitee”) shall notify the party from which indemnification is claimed
(the “Indemnifying Party”) in writing promptly upon becoming aware of any claim
to which such indemnification may apply. 
Failure to provide such notice shall constitute a waiver of the
Indemnifying Party’s indemnity 

 

9

 

obligations hereunder if,
and only to the extent that, the Indemnifying Party is materially damaged
thereby.  The Indemnifying Party shall
have the right to assume and control the defense of the claim at its own
expense.  If the right to assume and have
sole control of the defense is exercised, the Indemnitee shall have the right
to participate in, but not to control, such defense at its own expense.  If the Indemnifying Party does not assume
the defense of the claim, the Indemnitee may defend the claim at the
Indemnifying Party’s expense.  The
Indemnitee will not settle or compromise the claim without the prior written
consent of the Indemnifying Party, and the Indemnifying Party will not settle
or compromise the claim in any manner which would have an adverse effect on the
Indemnitee without the consent of Indemnitee, which consent, in each case, will
not be unreasonably withheld.  The
Indemnitee shall reasonably cooperate with the Indemnifying Party and will make
available to the Indemnifying Party all pertinent information under the control
of the Indemnitee.

 

7.11         Exclusion of Consequential
Damages.  Excepting any obligation
to indemnify against Third Party Damages as provided in this Agreement, no
party to this Agreement shall be liable to any other party to this Agreement
with respect to the subject matter of this Agreement under breach of contract,
negligence, strict liability or any other cause of action for any Consequential
Damages.  Notwithstanding any provision herein to the contrary, in no event shall
Chiron nor any Affiliate thereof be liable to ABC or any Participating Member
with respect to the subject matter of this Agreement under breach of contract,
negligence, strict liability or any other cause of action in an aggregate that
exceeds [***], except to the
extent of liability to Third Parties for bodily injury as to which the Parties
are obligated to indemnify each other under Sections 7.6, 7.7 and 7.8.

 

7.12         Insurance.  Chiron and the Participating Members agree
to insure their potential liabilities resulting from this Agreement as follows:

 

(a)           Participating Members
shall obtain and maintain, at their sole cost, a policy or policies of
insurance with the coverages set forth in the applicable WNV Member Supplement.

 

(b)           Chiron shall obtain and
maintain at its sole cost, a policy or policies of insurance with the following
coverages, which shall be in full force and effect for the term of this
Agreement and thereafter through two years following the termination of the
Agreement: a) a Commercial General Liability policy including Products and
Completed Operations Liability in an amount of not less than [***]
combined single limit for each occurrence; and b) Workers’ Compensation
coverage with statutory limits for each jurisdiction where the work required of
such party under this Agreement is performed and c) an employers’ liability
policy with at least the following limits, [***] per accident, [***] per disease (policy
limit), and [***] disease (each employee).

 

10

 

(c)           Each party shall
provide the other with certificates of insurance evidencing the coverage
required herein upon execution of this Agreement, and renewal certificates on
request from the other party.  Each
party must notify the other within a reasonable time if there is a material
change to any of the insurance policies referred to in this Section 7.12.  Such certificates shall provide for thirty
(30) days prior written notice to the certificate holder in the event of
non-renewal of the policies, cancellation or material change in the coverage
provided.

 

ARTICLE 8 - TERM AND TERMINATION

 

8.1           Term.  This WNV Association Agreement shall enter
into force as of the Effective Date and shall continue to [***].  Each WNV Member Supplement will become
effective and terminate on its own terms; provided, however, that all WNV
Member Supplements shall terminate immediately upon the termination or
expiration of this WNV Association Agreement. 
Any termination of a WNV Member Supplement shall have no impact on the
continuing effectiveness of any other WNV Member Supplement or this WNV
Association Agreement.

 

8.2           Termination.  This
WNV Association Agreement may be terminated by written notice to the other
party at any time during  the term of this WNV Association Agreement, which
termination shall be effective, except as set forth specifically below, when
such termination notice is received in accordance with Section 12.6 of this WNV
Association Agreement, as follows:

 

(a)           by either ABC or Chiron
if the other party fails to observe, perform or otherwise breaches any of its
material covenants, agreements or obligations under this WNV Association
Agreement, provided such failure continues for a period of thirty (30) days
after receipt by the other party of an initial written notice thereof
specifying such failure; or

 

(b)           by
either ABC or Chiron if the other party files a petition in bankruptcy, becomes
bankrupt or insolvent or subject to the reorganization of its business for the
benefit of creditors under any law or regulation relating to bankruptcy, or a
receiver is appointed for all or substantially all of its property or assets,
or upon the making by such other party of a composition with its creditors, or
upon the taking by such other party of any act for the winding up of its
business, or upon any governmental authority exercising any power or authority
resulting in the expropriation or confiscation of all or substantially all of
its business and assets; or

 

(c)           by ABC
if the FDA rescinds in full its recommendation for the screening of human
blood, covered and voluntary source plasma, 

 

11

 

platelets
or other blood products intended for transfusion or other administration to
humans for the presence of the West Nile Virus; or

 

(d)           by
Chiron ninety (90) days after the FDA approval of the use of the WNV Assay for
the screening of human blood, recovered and voluntary source plasma, platelets
or other blood products intended for transfusion or other administration to
humans; or

 

(e)           by mutual agreement of
the parties at any time without penalty.

 

8.3.          Validation.  Chiron agrees to utilize commercially
reasonable efforts so that the WNV Assay will be validated at Participating
Member sites by July 1, 2003.  At any
time after September 1, 2003, a Participating Member may terminate its Member Supplement
with Chiron (without any liability under Schedule E, paragraph 2) if the WNV
Assay has not been validated at the Participating Member site by that
time.  If standards for validation are
provided by Chiron prior to the Effective Date of this Agreement, whether
validation has occurred will be determined by those standards.

 

8.4.          Performance Objectives. 
Chiron hereby acknowledges that the accuracy and operational efficiency
of blood screening tests is of critical importance to the ABC and its Members.  Accordingly, Chiron and ABC have agreed to
establish the certain performance objectives for the WNV Assay set forth on Schedule
F hereto (the “Performance Objectives”). 
Chiron and ABC acknowledge the Performance Objectives set forth on Schedule
F represent Chiron’s expectations regarding the WNV Assay based on results
obtained through the use of the WNV Assay during its development, including
limited testing in the field. 
Accordingly, Chiron does not represent or warrant that the WNV Assay
will be capable of achieving the Performance Objectives consistently, or at
all.  Notwithstanding the foregoing,
Chiron, together with Participating Members, will monitor the actual
performance of the WNV Assay as against the Performance Objectives during the [***]
(each period, a “Performance Measurement Period”).  [***] the WNV Assay to achieve such Performance
Objectives.  [***].

 

8.5           New Technology. 
Chiron hereby acknowledges that the rapid development and availability
of blood screening tests is of critical importance and that nothing in this
Agreement will restrict the right of Members to evaluate new developing
technologies provided by Third Parties, or to perform, in Member’s discretion,
any confirmatory and supplementary screening with such new technologies.  Either party may notify the other party of
its knowledge of the availability of new technology capable of screening
donated blood for one or more of the viruses then currently screened by the WNV
Assay (a “New
Technology Notice”). The parties hereby agree that if [***].

 

12

 

[***].

 

ARTICLE 9 – CONSEQUENCES OF THE
TERMINATION OF THE AGREEMENT

 

9.1           Payment Obligations
Unaffected.  The termination of this
WNV Association Agreement for any reason whatsoever shall not affect any
party’s obligations to pay any amount actually invoiced and due to Chiron prior
to such termination.  In the event that
termination occurs at a time prior to a Participating Member having made full
payment that is due and owing for any Products, the parties agree that Chiron
shall have all applicable ownership rights to such Products until such payment
has been made in full to Chiron.

 

9.2           Reimbursement upon Termination.  If
this Agreement is terminated other than by mutual agreement of the Parties or
for cause by ABC pursuant to Section 8.2(a), then each Participating Member shall be obligated to reimburse Chiron for
certain un-recovered costs and expenses related to the development of the
Products in an amount to be calculated in accordance with Schedule_E,
paragraph 2; provided, however, [***].

 

9.3           Survival
of Certain Provisions.  In addition, notwithstanding anything herein
to the contrary, the following provisions of this WNV Association Agreement
shall survive termination of this WNV Association Agreement: Sections 6.5, 6.6
and 7.4 through 7.12, and Articles 9, 10, 11 and 12.

 

9.4           Return of
Confidential Information.  Upon
termination of this Agreement for any reason whatsoever, unless required to
retain such information for regulatory purposes, the parties shall immediately
return to the other all confidential information in documentary, electronic or
printed form and any copies or extracts thereof and shall thereafter cease to
use such information but without prejudice to the then surviving
confidentiality obligations provided for in Section 6.5 of this WNV Association
Agreement.

 

9.5           No
Other Payment. No indemnity or
compensation in any form  whatsoever shall be paid by either party
to the other in connection with a termination in accordance with the terms
hereof (subject to any liability that may exist in respect of any material
breach prior to such termination).

 

ARTICLE 10 – APPLICABLE LAW

 

This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, without giving effect to any conflict of law rules and
regulations.

 

13

 

ARTICLE 11— DISPUTES

 

11.1         To the extent that there
are disputes with respect to performance under this Agreement, such disputes
(other than non-payment) are not cause for Chiron to stop performance under
this Agreement, but will be resolved in due course to the extent possible in
accordance with this Article.

 

11.2         The parties to this
Agreement will attempt to resolve any problem or dispute arising out of, or
related to, this Agreement through good faith consultation in the ordinary
course of business.  In the event that
any problem or dispute is not so resolved, either party may upon written notice
to the other request that the matter be referred to senior management officers
within each respective organization with express authority to resolve the
problem or issue and who are not immediately responsible for the matters
contemplated by this Agreement.  Such
senior management officers will meet or confer at least once in good faith to
negotiate a resolution.

 

11.3         If the senior management
officers are unable to resolve the problem or dispute within thirty (30) days,
either party may pursue the matter as set forth in Sections 11.4 through 11.6
below.  No party may institute a court
proceeding until the procedure has been completed unless, and to the extent
that, doing so is necessary to avoid irreparable harm.

 

11.4         If any problem or dispute
arising out of or related to this Agreement is not resolved by the parties in
the manner set forth in Sections 11.2 and 11.3 above, at the request of either
party, the matter will be submitted to mediation, or to such other form of
dispute resolution as the parties may then agree to.  A neutral person acceptable to both parties will conduct the
mediation, and unless other procedures are agreed to, it will be conducted in
accordance with the Center for Public Resources Model Procedure for Mediation
of Business Disputes.

 

11.5         Any controversy, claim or
dispute arising out of or relating to this Agreement, or the breach thereof,
which is not resolved through the procedures described in Sections 11.2 through
11.4 above shall be resolved by binding arbitration.  If arbitration is necessary pursuant to this paragraph, the
parties shall agree upon a single arbitrator. 
If the parties are unable to agree on an arbitrator, then they will
obtain nominations of three (3) potential arbitrators who are retired federal or
state judges and each party will have the right to strike one candidate’s name
from the list.

 

11.6         The prevailing party
shall be entitled to recover all costs and expenses, including reasonable
attorney’s fees, incurred because of any legal action arising in relation to
this Agreement.

 

14

 

ARTICLE 12 – MISCELLANEOUS

 

12.1         Force Majeure.  Each party shall be excused from any delay
in performance or from failure to perform in accordance with the terms of this
Agreement, to the extent that such delay or failure to perform results from a
Force Majeure Event. The provisions of this paragraph shall apply only if such
party shall have used its reasonable efforts to avoid such Force Majeure
Event.  Such party shall give notice to
the other promptly in writing upon learning of the Force Majeure Event.  The affected party’s time for performance
shall be extended for the period of the delay or inability to perform due to
such Force Majeure Event and notwithstanding any provision herein to the
contrary, the affected party shall not be liable for any Damages arising out of
such Force Majeure Event.

 

12.2         Exclusion of
Convention of Vienna for the International Sale of Goods.  The parties hereby expressly exclude the
application to this Agreement of the terms of the Convention of Vienna for the
International Sale of Goods.

 

12.3         Equal Employment
Opportunity.  None of the parties
will discriminate, in terms and conditions of employment, against employees or
applicants because of age, race, color, religion, sex, national origin,
qualified disability or any other basis protected by applicable state or local
law.  The parties agree to abide by all
federal, state and local employment and labor law notice posting requirements.

 

12.4         Assignment.  This Agreement shall not be directly or
indirectly assigned or otherwise transferred by ABC or, as to a WNV Member
Supplement, by any Participating Member, nor, except as expressly provided
hereunder, may any right or obligations of ABC or any Participating Member
hereunder be assigned or transferred (whether voluntarily, by operation of law
or otherwise) without the consent of Chiron. Chiron may assign and transfer to
an Affiliate (provided Chiron remains a guarantor of such Affiliate’s
obligations hereunder), or to a Third Party possessing sufficient
capitalization to satisfy its obligations under the Agreement that is acquiring
all or substantially all of the business of Chiron, the rights and obligations
of Chiron hereunder without further action by ABC or any Participating Member.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.

 

12.5         Subcontracting.  Chiron’s obligations under this Agreement
may not be subcontracted without the prior written consent of the effected
Participating Members.  Any attempt to
subcontract without such consent will be null and void and of no effect.  Chiron must require that all subcontractors
approved by the affected Participating Members be bound by the terms of this
Agreement and to assume toward Chiron all obligations and responsibilities
which Chiron assumes toward the affected Participating Members.  Chiron must make available to each approved 

 

15

 

subcontractor, prior to
the execution of any subcontract agreement, a copy of this Agreement to which
the subcontractor will be bound.  For
purposes of any subcontracts entered into pursuant to this Section 12.5, the
term “Chiron” as used in this Agreement, will include any and all
subcontractors.

 

12.6         Notices.  Any Notice or request required or permitted
to be given in connection with this Agreement shall be deemed to have been
sufficiently given if sent by pre-paid registered or certified mail, by courier
or by facsimile at the address set forth below or to such other address as may
have been notified in writing.

 

If to
Chiron:           Chiron
Corporation

Attention:  President, Blood Testing

4560 Horton Street

Emeryville, CA 94608

Telephone:  [***]

Fax:  [***]

cc:           General
Counsel

 

If to
ABC:              America’s
Blood Centers

Attention:  Jim MacPherson, Chief
Executive Officer

725 15th Street, N.W., Suite 700

Washington, DC 20005

Telephone:  [***]

Fax:  [***]

 

A notice, consent,
approval or other communication takes effect from the time it is received
unless a later time is specified in it, and receipt shall be deemed to occur as
follows:

 

(a)           if it is sent by mail,
seven (7) calendar days after posting;

 

(b)           if it is sent by
courier, on the date and at the time shown on the courier’s standard written
confirmation of receipt;

 

(c)           if it is sent by
facsimile, on the date and at the time shown on a successful transmission
report by the machine from which the facsimile was sent.

 

12.7         Entire
Agreement. This Agreement
constitutes the entire agreement between the parties in respect of the subject
matter hereof.  This Agreement cancels
and supersedes any and all pre-existing agreements, either oral or in writing
between the parties.  There are not and
shall not be any oral statements, representations, warranties, undertakings or
agreements between the parties other than as provided by this Agreement and any
mutually accepted written amendments hereto. 
For the avoidance of doubt nothing in this Agreement amends, modifies,
cancels 

 

16

 

or
supercedes the 2002 Association Agreement or any 2002 Member Supplement.

 

12.8         No
Waiver.  The failure on the part of either party
hereto to exercise or enforce any right conferred upon it by this Agreement
shall not be a waiver of any such right nor shall any single or partial
exercise of any right or power hereunder or further exercise thereof operate so
as to bar the later exercise or enforcement thereof.

 

12.9         Nature
of Relationship.  Nothing herein contained shall be deemed to
be or construed as constituting either party the agent or partner of the other
party.  The relationship between Chiron
and each Participating Member shall be that of an independent contractor.  No party shall have the right, title or
authority to enter into any contract, agreement or commitment on behalf of the
other or to bind the other party in any manner whatsoever.  In no event shall ABC have any
responsibility for the financial obligations of any Participating Member, nor
shall any Participating Member have any responsibility for the financial
obligations of any other Participating Member.

 

12.10       Conflict
Between Terms and Conditions.  In the event of any conflict between the
terms and conditions of this WNV Association Agreement and any terms and
conditions that may be set forth in a WNV Member Supplement or on any invoice
or purchase order or other similar document relating to the Products, the terms
and conditions of this WNV Association Agreement govern.  For the avoidance of doubt no term or
condition contained in the 2002 Association Agreement or any 2002 Member
Supplement amends, modifies, cancels or supercedes the terms and conditions of
this Agreement with regard to the Products.

 

12.11       Compliance with
Applicable Law.  In performing this
Agreement, the parties shall comply with all applicable laws.  Nothing in this Agreement shall be construed
so as to require the violation of law, and wherever there is any conflict
between any provision of this Agreement and any rule of mandatory law, the
latter shall prevail, but in such event, the affected provision of this
Agreement shall be ineffective only to the extent necessary to comply with the
applicable law, and the parties hereto undertake to replace the invalid and/or
unenforceable provision by a valid and/or enforceable provision, the nature and
scope of which will come as close as possible to the contractual provision to
be replaced.

 

12.12       Counterparts.  This WNV Association Agreement and any WNV
Member Supplement may be executed in two or more counterparts, each of which
shall be deemed to be an original and each of which shall constitute one and
the same Agreement.

 

12.13       Severability.  In the event that any provision of this
Agreement is found to be invalid or  in
conflict with any applicable law or regulation, the affected provision of this
Agreement shall be limited or eliminated only to the extent 

 

17

 

necessary to comply with
such law or regulation, and the remainder of this Agreement shall remain in
full force and effect, provided that the remainder of this Agreement is
consistent with the economic intentions of the parties as evidenced by this
Agreement as a whole.

 

12.14       Publicity.  Neither Party shall permit or generate any publicity,
advertising or promotion concerning this Agreement without the prior written
consent of the other Party.  Each Party
recognizes that the name, logo and marks of the other Party represent valuable
assets of that Party and that substantial recognition and goodwill are
associated with such assets.  Each Party
hereby agrees that neither it nor any of its Affiliates shall use the other
Party’s name, logo or marks without the prior written authorization from such
other Party.  Notwithstanding any other provisions
of this paragraph, it is agreed that the parties may, without prior approval of
any other party, make factual, non-promotional statements (a) that WNV testing
will be and/or is being performed by Participating Members, (b) as to the
source of the WNV Assays, and (c) as to costs of WNV testing that will have to
be passed along, so long as the specific financial terms of this Agreement are
not discussed.

 

Each
of the Parties acknowledges that a violation of this Section 12.14 would cause
irreparable harm to the other Party for which no adequate remedy at law exists
and each Party therefore agrees that, in addition to any other remedies
available, and notwithstanding any other provision of this Agreement, the
aggrieved Party shall be entitled to injunctive relief to enforce the terms of
this Section 12.14.  To the extent
allowed by law, the prevailing Party shall be entitled to recover all costs and
expenses, including reasonable attorneys’ fees, incurred because of any legal
action arising in relation to this Section 12.14.

 

12.15       Disclosure of Agreements and Terms.  Subject to mutual agreement as
to form and substance, each of the Parties may issue a press release disclosing
the existence of this Agreement.  Each
Party may disclose any of the terms of this Agreement to any Affiliate;
provided that the recipient of such disclosure is obligated to confidentiality
terms no less restrictive than those contained in Section 6.7.  Each Party may disclose any information
contained in or regarding this Agreement to the extent required in its
respective reasonable judgment by applicable law, regulation or order of any
court or governmental agency.  Further,
each Party may determine in its respective discretion to file this Agreement
under the Securities and Exchange Act of 1934, even if that filing may result
in this Agreement becoming available to the public generally.  The filing Party shall seek confidential
treatment for at least the essential financial terms hereof in connection with
any such filing, subject to applicable law and regulation, and shall notify the
other Party in advance of any such filing and consider such suggestions as the
other Party may make as to the terms herein as to which the filing party should
seek confidential treatment.

 

18

 

12.16       [***].

 

[Signature Page Immediately Follows]

 

19

 

IN
WITNESS WHEREOF, the parties hereto, through their authorized representatives,
have set their hands as of the date first above  written, whereby they
evidence their intent to be legally bound.

 

 

	
  CHIRON CORPORATION

  	
  AMERICA’S BLOOD CENTERS

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jack Goldstein

  	
   

  	
  By:

  	
  /s/ Jim MacPherson

  	
   

  
	
  Name:  Jack Goldstein

  	
  Name:  Jim MacPherson

  
	
  Title:  President, CBT

  	
  Title:  CEO

  
						

 

20

 

SCHEDULE A

 

Definitions

 

Capitalized terms used
and not otherwise defined in this Agreement shall have the following meanings:

 

1.1           “2002 Association Agreement”
shall mean that certain Association Agreement Regarding the Sale and Servicing
of Blood Screening Products effective as of May 1, 2002, pursuant to which
Chiron sells to Participating Members, and Participating Members purchase from
Chiron, certain assays and blood screening instruments to conduct nucleic acid
amplification screening to detect the presence of certain viruses in blood,
including HIV-1 and HCV.

 

1.2           “2002 Member Supplement” shall
mean the agreement executed by and among Chiron and a Member and incorporating
by reference the terms and conditions of the 2002 Association Agreement.

 

1.3           “Affiliate” shall mean (i)
any corporation or business entity of which securities or other ownership
interests representing fifty percent (50%) or more of the equity or fifty
percent (50 %) or more of the ordinary voting power or fifty percent (50%) or
more of the general partnership interests are, at the time such determination
is being made, owned, Controlled (as hereinafter defined) or held, directly or
indirectly, by such corporation or business entity, or (ii) any other
corporation or business entity which, at the time such determination is being
made, is Controlling, Controlled by or under common Control with, such
corporation or business entity.  For
purposes of this definition, “Control”, whether used as a noun or verb, refers
to the possession, direct or indirect, of the power to direct, or cause the
direction of, the management or policies of any corporation or business entity,
whether through the ownership of voting securities, by contract or otherwise.

 

1.4           “Agreement” shall mean
collectively this WNV Association Agreement, including the Schedules hereto,
and all WNV Member Supplements, including the Exhibits thereto.

 

1.5           “Blood Screening Field” shall
mean the nucleic acid probe-based screening of (i) human blood, covered and
voluntary source plasma, platelets or other blood products intended for
transfusion or  other administration to
humans, including autologous donors, and (ii) recovered and voluntary source
plasma for further manufacture, but specifically excluding paid source plasma
intended for further manufacture.

 

1.6           “Blood Screening Systems”
shall mean the instrument(s) and related Software for DNA/RNA amplified assay
processing acquired and maintained
pursuant to the 2002 Agreement and the applicable 2002 

 

21

 

Member
Supplement, together with such additional equipment components acquired by a
Participating Member from Chiron in accordance with Section 3.1(b) of this WNV
Association Agreement.

 

1.7           “Confidential Information”
means any and all technical, business and other information and materials
disclosed by or on behalf of such party to the other party pursuant to this
Agreement or during discussions leading to this Agreement, except to the extent
that the receiving party can provide evidence that such information:

 

(a)           is known
to the receiving party prior to its disclosure by the disclosing party; or

 

(b)           is
obtained by the receiving party from a source other than the disclosing party
which source (i) did not require the receiving party to hold such information
in confidence; or (ii) did not limit or restrict the receiving party’s use
thereof, or

 

(c)           has
become public knowledge otherwise than through the fault of the receiving
party; or

 

(d)           has been
developed by the receiving party independently of the information received from
the disclosing party as shown by the receiving party’s written records; or

 

(e)           is
required to be disclosed by the receiving party by law or for the purpose of
complying with governmental regulations and/or the obligations of the receiving
party to a licensing or regulatory authority in connection with this Agreement.

 

1.8           “Consequential Damages” means consequential damages as defined by
California law, including loss of profit or loss of business opportunity, and
all Third Party Damages.

 

1.9           “Damages” means Direct Damages and Third Party Damages,
collectively.

 

1.10         “Direct Damages” means costs or expenses incurred by a party that
are not Consequential Damages, including without limitation, the incremental
additional costs of substitute products and costs or expenses of product
recall.

 

1.11         “Documentation” shall mean text material
that describes the design, functions, operation, or use of the Software and
that is delivered by Chiron to Participating Members.  Documentation for the Software shall be the same that is provided
to licensees of such Software generally.

 

1.12         “Effective Date” means the date set forth on the first page of
this Agreement.

 

22

 

1.13         “Enhancement” means an alteration or
addition to a Product [***], for
which a separate fee will be imposed.

 

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

 

1.15         “Force Majeure Event” shall mean a cause beyond the reasonable
control of a party, including without limitation, fires, floods, epidemics,
quarantine restrictions, strikes, war, earthquake, acts of God, labor
difficulties, riot, failure of public utilities, freight embargoes, unusually
severe weather conditions, delays in delivery of goods or services by suppliers
or subcontractors to such party, loss of goods in transit, and governmental or
court action.

 

1.16         “Gen-Probe” shall mean
Gen-Probe Incorporated, a Delaware corporation.

 

1.17         “HCV” means the Hepatitis C
virus.

 

1.18         “HIV-1” means Human
Immunodeficiency virus type 1.

 

1.19         “Member” shall have the
meaning set forth in the Recitals.

 

1.20         “Package Insert” shall mean
the draft package insert to be submitted to the FDA for approval for the
applicable WNV Assay, attached to this WNV Association Agreement as Attachment
B-1 as the same may be amended from time to time.

 

1.21         “Participating Member” shall
mean a Member electing to utilize the WNV Assays that memorializes its election
by execution of a WNV Member Supplement.

 

1.22         “Person” shall mean an
individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

1.23         “Pooled Testing” means the
conduct of testing on pools of samples from blood donations as follows.  For the purposes of this Agreement, Pooled
Testing consists of:

 

(a)           [***];

 

(b)           [***]

 

(c)           [***]

 

1.24         “Primary Operators” means the
employees of Participating Members trained by Chiron at Chiron’s facility.

 

23

 

1.25         “Products” shall mean WNV
Assays and Software.

 

1.26         “Reagent Utilization Factor”
means, with respect to a specified time period, the quantity of WNV Assay tests
consumed by an applicable Participating Member during such period divided by
the number of Reportable Results obtained by such Participating Member
during such period.

 

1.27         “Reportable Result” means a
result obtained through the use of a WNV Assay in Pooled Testing or Single Unit
Testing from which it is determined to release for use or hold and not use (a)
a blood donation intended for transfusion or for further processing for other
administration to humans or (b) a product derived from such donation.

 

1.28         “Single Unit Testing” means
testing of blood donations consisting of (i) testing a sample from each
individual blood donation using a WNV Assay, and (ii) follow up repeat or
confirmatory testing of positive results for HIV-1 or HCV.

 

1.29         “Software” means the
following software programs:

 

Procleix® WNV Assay
Software, Version 2.0.1.0

Procleix® WNV System Software, Version 5.0.1.0

 

1.30         “Territory” means the United States of
America, including Puerto Rico, Guam and all other protectorates.

 

1.31         “Testing Centers” mean the locations
identified on Exhibit 2 to the 2002 Member Supplements.

 

1.32         “Testing Month” means a calendar
month during which a Participating Member makes use of the Products to generate
Reportable Results for [***] of
the blood donations screened by such Participating Member during such [***] for HCV and HIV-1 under the 2002
Agreement

 

1.33         “Third Party” shall mean any Person other
than ABC, its Members, Gen-Probe, Chiron and their respective Affiliates.

 

1.34         “Third Party Damages” means any liability arising out of a Third Party’s
claim (whether arising out of fault, strict liability or otherwise) in the form
of an obligation, loss, fine, judgment for damages, arbitration award,
settlement amount, penalty or claim, and all reasonable costs and expenses
related thereto (including reasonable costs of investigation, fees and expenses
payable to outside counsel, independent accountants and similar professional
advisors or consultants, but not including any corporate allocation for use, of
similar in-house services or facilities).

 

1.35         “West Nile Virus” is a mosquito-borne flavivirus, classified
as a member of the Japanese encephalitis virus complex (which includes St.
Louis 

 

24

 

Encephalitis,
Kunjin, Japanese encephalitis and Murray Hill encephalitis viruses, among
others).  The virus primarily infects
birds, but has been found in several other animal species, including horses,
dogs, alligators and humans.  Humans are
a ‘dead-end’ host for the virus, hence the majority of infected humans (~80 %)
are asymptomatic.  Another ~20% of
infected individuals develop a mild fibrile disease, sometimes accompanied by
rash.  A final ~1% of all humans
infections result in severe and fatal encephalitis.  The virus has been shown to be transmissible by blood transfusion
or by transplant with infected organs.

 

1.36         “WNV Assays” shall mean the
nucleic acid probe assays under development by Chiron and Gen-Probe that are
provided to Participating Members hereunder, as more specifically described in
the Package Insert.

 

1.37         “WNV Member Supplement” shall
mean the agreement executed after the Effective Date of this WNV Association
Agreement by and among Chiron and a Member and incorporating by reference the
terms and conditions of this WNV Association Agreement.

 

25

 

SCHEDULE B

 

TERMS AND
CONDITIONS FOR PROVISION OF WNV ASSAY

 

1.             Supply, Handling and Storage Obligation. 
During the Term of this Agreement Chiron agrees to supply to
Participating Members the WNV Assays to permit each Participating Member to
conduct screening of blood donations in the Territory.  Participating Members agree to store and
handle all WNV Assays in accordance with the applicable Package Insert.  Any WNV Assays lost or damaged due to
failure to comply with such storage and handling instructions will be replaced
at the Participating Members’ expense.

 

2.             Packing and
Delivery of WNV Assays.  All WNV
Assays will be suitably packed and transported to ensure safe transport to the
Participating Members in accordance with the manufacturer’s instructions and
delivered Carriage and Insurance Paid to the Participating Member’s designated
Testing Centers, and each delivery will be accompanied by a packing slip
indicating the quantity delivered.  WNV
Assays will be delivered during normal business hours and accompanied by
storage instructions and arrive at the temperatures specified by the
manufacturer and set out in the Package Insert.  The WNV Assays will be delivered in kit form, with appropriate
distribution between screening tests, discriminatory tests and related
calibrators.

 

3.             Shipping.
Except as set forth below, all shipping and handling charges for the regular
monthly shipments of WNV Assays will be borne entirely by Chiron on shipments
to the Testing Centers.  All shipping
and handling charges for shipping requests other than to a Testing Center, and
all incremental shipping and handling charges for Modified Orders and Changed
Orders, will be borne by the requesting Participating Member.

 

4.             Forecasts and
Orders.

 

4.1           Each Participating
Member will provide Chiron with a written twelve month forecast of its
requirements of WNV Assays (each a “Product Requirements Forecast”) on an
annual basis, including requested delivery dates, which forecast shall
constitute such Participating Member’s standing firm purchase order for each
month contained therein.  Not less than
ninety (90) days prior to each anniversary of the effective date of the
applicable WNV Member Supplement, each Participating Member will provide such a
Product Requirements Forecast.  Participating
Members shall deliver any modifications to the standing firm purchase order for
WNV Assays for delivery during the next following month on or prior to the
first day of the immediately preceding calendar month (for example, a
Participating Member will provide requested modifications to the February
standing firm purchase order—for deliveries to be made during the month of
February—prior to January 1).  All
purchase order modification requests 

 

26

 

must be received at least
30 days prior to a requested delivery date. 
Except as otherwise agreed, Chiron agrees to accept modifications to
standing firm purchase orders which do not differ by more than [***]
from the quantities forecast for delivery in the applicable month in the
current Product Requirements Forecast. 
Participating Members may further adjust their Product Requirements
Forecast from time to time with the consent of Chiron, such consent to not be
unreasonably withheld.

 

4.2           If the variance between
the modification requested and the current Product Requirements Forecast
exceeds the [***] referenced in Section 4.1 of this Schedule B,
Chiron will notify the requesting Participating Member within five (5) business
days after receipt of the modification request as to whether it accepts such
modification request.  If a modification
request is accepted, Chiron agrees to deliver such amounts of WNV Assays on the
delivery date(s) stated.  If a
modification request is not accepted, the parties will use all reasonable
endeavors to agree on further modifications to the order and/or delivery date
(a “Modified Order”), subject to Chiron’s manufacturer’s accommodating Chiron’s
requests for changes in forecasted amounts.

 

5.             Changes to Orders.  If a Participating Member requests any
modifications to quantities of WNV Assays ordered or the delivery schedule or
locations reflected in such order within 30 days of a delivery date (a “Changed
Order”), Chiron will use reasonable commercial efforts to comply with such
request.

 

6.             IQA Procedures.  Prior to the initial delivery of WNV Assays,
Chiron, ABC and the Participating Members shall mutually agree upon procedures
for quality assurance testing of WNV Assays received by Participating Members
(“IQA Procedures”).  Chiron agrees to
replace WNV Assays which fail to conform to the specifications as set forth in
the Package Insert.  The IQA Procedures
shall include procedures for notice to Chiron and for implementing the return
of WNV Assays for replacement.  If
testing by Chiron or its supplier confirms the non-conformity of the WNV
Assays, Chiron will bear the shipping costs associated with replacement.  If Chiron’s testing provides reasonably
acceptable evidence to the applicable Participating Member that the WNV Assays
do conform to the specifications in question, the shipping costs will be borne
by the applicable Participating Member.

 

7.             Nature of Testing. 
Each Participating Member will determine, in its sole discretion,
whether to use the WNV Assays supplied by Chiron hereunder  to conduct Pooled Testing or Single Donor
Testing.  If a Participating Member
desires to change its testing from Pooled Testing to Single Unit Testing or any
other pool size, the Participating Member and Chiron shall enter into an
addendum to the applicable WNV Member Supplement reflecting any additional
instrumentation or any other amendments that may be applicable by reason of
such change.

 

27

 

SCHEDULE C

 

TERMS AND
CONDITIONS FOR USE OF SOFTWARE 

 

Chiron will provide the
Software and Documentation to Participating Members on the following terms and
conditions:

 

1              Title.

 

(a)           Chiron or the
applicable licensor shall own and retain title to the Software, including all
intellectual property rights embodied therein. 
Any copy which a Participating Member makes of the Software, in whole or
in part, is and shall remain the property of Chiron or the applicable licensor.

 

(b)           If ownership of the
Software or any work product does not result as provided in this Agreement or
by operation of law, then the parties each assign and shall cause their
respective employees, agents, and contractors to assign, without further
consideration, the ownership thereof, including all associated intellectual
property rights, as necessary to give effect to the ownership terms specified
in this Agreement.  Each party agrees to
perform, at the reasonable request of the other party, such further acts as may
be necessary or desirable to transfer ownership of, and to perfect and defend,
the Software or work product in order to give effect to such ownership terms.

 

2              Grant of Rights
and Restrictions on Use

 

(a)           Grant of Rights.  Chiron hereby grants, and each Participating
Member hereby accepts, subject to the terms and conditions of this Agreement
including this Schedule C, a nonexclusive, nontransferable and
nonassignable (except as permitted under Section 12.4 [Assignment] of this WNV
Association Agreement) object code license to use the Software at the Testing
Centers solely for Participating Member’s own use in connection with the
operation of the WNV Assays on the Blood Screening Systems during the term of
the applicable WNV Member Supplement, and to copy the Software solely for the
purposes expressly authorized under this Section 2 of this Schedule C.  In addition, Chiron hereby grants to each
Participating Member the right to use the Documentation in connection with its
use of the Software hereunder. 
Documentation may not be copied. 
Additional copies may be obtained from Chiron at Chiron’s charges then
in effect.  No right to use, copy,
display, or print the Software or Documentation, in whole or 

 

28

 

in part, is granted,
except as expressly provided in this Agreement.

 

(b)           Restrictions on Use.  The grant of rights stated in Section 2(a)
of this Schedule C is subject to the terms and conditions of this
Agreement as well as the following restrictions:

 

(i)            Use of the Software
may be subsequently transferred to other Testing Centers maintained by a
Participating Member, provided (A) the total number of Testing Centers at which
the Software is used by such Participating Member does not exceed the number of
Testing Centers specified in the applicable WNV Member Supplement and (B) such
Participating Member provides Chiron with written notice thirty (30) days
before such transfer.

 

(ii)           In the event that
disaster or other circumstances prevent Participating Member from using the
Software at the Testing Centers identified in the applicable WNV Member
Supplement, the effected Participating Member shall have the right to use the
Software at a disaster recovery facility without prior notice to Chiron, but
shall promptly notify Chiron as soon as circumstances permit.

 

(iii)          Participating Members
shall not use (or cause to be used) the Software for rental, in the operation
of a service bureau, or for any similar purpose; nor shall Participating
Members allow access to the Software through terminals located outside
Participating Member’s business premises by persons who are not Participating
Member’s employees or authorized agents, contractors or representatives.

 

(iv)          Participating Members
shall not distribute the Software, in whole or in any part, to any Third Party
or parties, nor permit its sublicensing, leasing, or other transfer, except as
permitted under Section 12.4 [Assignment] of this WNV Association Agreement.

 

(v)           Participating Members
shall not, either directly, or through a Third Party, reverse engineer,
disassemble or decompile the Software, or make any attempt in any fashion
except as specifically provided in this Agreement to obtain the source code to
any Software.

 

29

 

(vi)          Any use of the Software
not in accordance with this Agreement, or any modification or alteration of the
Software not expressly authorized in writing by Chiron, shall void all
representations and warranties with regard to the Software and shall be deemed
a breach of this Agreement.

 

(vii)         Upon expiration or termination
of a WNV Member Supplement, the applicable Participating Member shall (A) cease
all use of the Software and the Documentation; (B) return to Chiron the
Software and the Documentation and any copies thereof (unless required to
retain such material for regulatory purposes); and (C) erase from memory all
copies of the Software (unless required to retain such material for regulatory
purposes).  The applicable Participating
Member shall certify in writing to Chiron that it has not retained the Software
and Documentation or any copies thereof (unless required to retain such
material for regulatory purposes).

 

3              Warranties;
Limitation of Liability.

 

(a)           Anti-Virus.  Chiron warrants that to the best of its
knowledge after employing reasonable technical means to detect computer
viruses, the Software at the time of delivery will not contain any virus or
computer software code, routines or devices (other than as set forth in the
Documentation) designed to disable, damage, impair, or erase the Software or
other software or data.  For failure to
comply with this warranty, Chiron shall, at Chiron’s expense, immediately
replace all copies of the affected Software in the possession of a
Participating Member.

 

(c)           Right to License.  Chiron warrants that it has, and on the
effective date of each WNV Member Supplement of the Software will have, full
rights and authority to license the Software to Participating Members and
otherwise as needed for it to perform its obligations hereunder, or has the
authority to do so without infringing the rights of any Third Party.

 

(d)           Limitation of
Liability. Chiron disclaims all other warranties and further limits its
liability in accordance with Sections 7.4 and 7.11 of this WNV Association
Agreement.

 

30

 

SCHEDULE D 

 

SERVICES

 

1.             Maintenance &
Troubleshooting.

 

1.1           The Participating
Member shall store, handle and utilize the Products in accordance with the
Package Insert and Documentation, which may be amended from time to time.

 

1.2           In the event that any
Testing Center resolves a problem with a Product, such problem shall be logged
in writing, including a description of the problem and the steps taken by the
Participating Member to resolve it.  The
Participating Member shall maintain a log for the Products and make available
all such logs to Chiron’s respective
employees, contractors, subcontractors, or agents whose responsibilities are to
provide Services to Participating Members (“Chiron
Technical  Support”) upon
request.

 

1.3           If a Testing Center is
unable to resolve a problem, the Testing Center shall refer the problem to
Chiron Technical Support for resolution in accordance with Section 2 of this Schedule
D.

 

1.4           Except for routine
maintenance and troubleshooting activities of Primary Operators as provided in
this Schedule D, or otherwise with the prior permission of Chiron,
during the term of this Agreement only Chiron or Chiron’s agents shall install,
service, alter or replace the Products.

 

2.             Technical
Support and Service.

 

2.1           Installation.
Chiron support personnel will provide installation and set up of all Software
on the Blood Screening Systems, including verification of the operation of the
Software in conjunction with the Blood Screening Systems.  At such time as Chiron determines that such
setup and installation has been completed, the Participating Member shall
acknowledge the completion of such setup and installation and its acceptance of
the Software in writing.

 

2.2           Project Management.  Chiron will provide reasonable project management
support to assist the Participating Member project manager in coordinating the
activities of Chiron and the Participating Member in connection with testing
blood using the Products.

 

2.3           Data &
Materials.  The Participating Member
shall make available to Chiron on a timely basis all data, information and
other materials which are reasonably necessary for Chiron to perform the
Services.  

 

31

 

Such data shall be
treated as confidential Data in accordance with Section 6.5 of this WNV
Association Agreement.  Chiron shall
have no liability for any failure to perform, or for the late performance, of
any Services to the extent such Services require data, information or materials
possessed, prepared or generated by the Participating Member, if the
Participating Member fails to provide the same in accordance with Chiron
reasonable requests.

 

2.4           Support and Service.

 

(a)           Chiron Technical
Support is available 24 hours a day, 7 days a week including weekends and
holidays via telephone.  The
Participating Member will refer problems to Chiron Technical Support through a
central toll-free telephone number ([***]). 
A service representative will be available at this number to receive
problem referrals and provide troubleshooting assistance, from 7:30 a.m. to 5
p.m. PST, Monday through Friday, holidays excepted (“Normal Support
Hours”).  Messages left outside Normal
Support Hours (including weekends and holidays) will automatically page the
on-call Technical Support personnel. 
Required message information left outside Normal Support Hours should
include a contact name, phone number and brief description of the problem.  Telephone support will be initiated within
the Priority/Response timeframes set forth below.  If a problem cannot be resolved through telephone support within
a reasonable amount of time, taking into account its Priority status, the
problem will be escalated to Chiron’s Product Support Center, for analysis by
Blood Screening System specialists and if necessary, OEM support
personnel.  If a problem cannot be
resolved following such escalation, Chiron Technical Support will be dispatched
to the Testing Center to provide service in accordance with the Priority/Response
Time Schedule set forth below.

 

	
  Priority

  	
   

  	
  Response*

  
	
  Priority
  1:  Products not operating and alternate
  or back-up equipment not available; tests cannot be performed

  	
   

  	
  •      Immediate
  telephone support

  •      Support
  Technician on site ASAP but no later than next morning

  •      Resolution
  within 24 hours (may be temporary workaround)

  
	
   

  	
   

  	
   

  
	
  Priority
  2:  Products operational but testing
  process (processing time) is affected

  	
   

  	
  •      Telephone
  support within 2 hours

  •      Support
  Technician on site within 24 hours

  •      Resolution
  within 48 hours

  
	
   

  	
   

  	
   

  
	
  Priority
  3   Products are operational; no impact
  on testing process

  	
   

  	
  •      Telephone
  support next business day

  •      Work
  commenced within 24 hours

  •      Resolution
  within 1 week

  

 

32

 

*      All timeframes are
approximate; actual response times may vary due to flight availability,
weather-related delays, nature of the problem, etc.

 

(b)           Chiron will maintain
full records of all problem referrals and subsequent actions pursuant to FDA
regulation.

 

3.             Warranty;
Limitation of Liability.

 

3.1           Chiron warrants that
the Services provided by Chiron, its agents, employees or contractors pursuant
to this Agreement will be rendered in a competent workmanlike manner and in
accordance with industry standards.

 

3.2           The Services shall
cover wear and tear and defects in design, material or workmanship of the
Products, and shall include version updates to all Software for which Chiron
has the right to license or sublicense, but shall exclude (i) replacement of
operating supplies, necessaries, consumables or expendable parts; (ii) repairs
required due to improper storage, accident, neglect, misuse, electrical stress,
air conditioning, humidity control, transportation, and Force Majeure Events,
use of non-approved accessories, consumables or supplies, or causes other than intended
normal use; (iii) service for Products that have been tampered with,
disassembled, altered, changed or modified, maintained by anyone other than
Primary Operators, or repaired (or attempts have been so made) by anyone other
than Chiron-authorized personnel; and (v) service for any other equipment not
manufactured or supplied by Chiron.

 

3.3           Chiron disclaims all
other warranties and further limits its liability in accordance with Sections
7.4 and 7.11 of this WNV Association Agreement, respectively.

 

3.4           If any applicable law
implies a condition or warranty which cannot be excluded or modified in this
Agreement (a “Requirement”), then such Requirement is deemed to be included in
this Agreement.

 

33

 

SCHEDULE E

 

COMPENSATION

 

1.             Each Participating Member agrees to pay to
Chiron the agreed compensation in monthly increments, such increments to be
equal to the number of Reportable Results achieved by the Participating Member
each month, multiplied by the applicable Per Reportable Result amount from the
chart set forth below:

 

	
  POOLED TESTING

  	
   

  	
  SINGLE
  DONOR TESTING

  
	
  Per Reportable Result

  
	
  [***]

  	
   

  	
  [***]

  

 

On
or prior to the 5th business day of each month during the Term, each
Participating Member shall provide Chiron with a report showing the Reportable
Results and Reagent Utilization Factor for the prior month.  On or prior to the 15th calendar
day of each month, Chiron shall prepare and deliver an invoice to each
Participating Member based on such report. 
If a Participating Member’s report is not timely received by Chiron,
Chiron will prepare an invoice that reflects the then current standing order
for the applicable month multiplied by the applicable Per Reportable Result
amount.  The Parties shall “true-up” payments
made to the actual Reportable Results achieved on a quarterly basis, rectifying
any under- or over-payment on the next subsequent invoice, without application
of interest.  Each Participating Member
shall make payment on invoices in accordance with Section 5.2 of the Agreement.

 

2.             Termination Reimbursement. 
The Termination Reimbursement shall be calculated as follows:

 

	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

34

 

3.             Reagent
Utilization Factor.

 

3.1           Chiron and each
Participating Member agree to monitor the Reagent Utilization Factor at each
Testing Center during the term of this Agreement.  If the Reagent Utilization Factor for any Testing Center set
forth on the report provided by a Participating Member pursuant to Section 1 of
this Schedule E exceeds that Participating Member’s target Reagent
Utilization Factor, set forth in the applicable WNV Member Supplement (the
“Target RUF”), [***], Chiron and each Participating Member shall use their
best endeavors to identify and correct the cause of the excess.

 

3.2           The Reagent Utilization
Factor shall be calculated for each Participating Member promptly following
each successive 52 week period commencing on the Effective Date of the
applicable WNV Member Supplement (each, an “Annual RUF Measuring Period”).  If the Reagent Utilization Factor for a
Participating Member for any Annual RUF Measuring Period exceeds the applicable
Target RUF, Chiron shall invoice the Participating Member on the next subsequent
monthly invoice, and the Participating Member agrees to pay, the additional fee
set forth in their WNV Member Supplement.

 

4.             Additional
Supplies.  The following additional
supplies are available from Chiron at the prices set forth below.  Chiron reserves the right to increase or
decrease these prices at any time, without notice to each Participating Member:

 

	
  External Run Controls
  by Acrometrix [***]

  	
   

  	
  [***]

  
	
  Ten-Tube Units (TTUs) [***]

  	
   

  	
  [***]

  
	
  Ten-Tube Cassettes
  (TTCs) [***]

  	
   

  	
  [***]

  

 

35

 

SCHEDULE F

 

PERFORMANCE OBJECTIVES

 

	
  Performance Objectives

  	
   

  	
  Target

  
	
  [***]

  	
   

  	
  Assay shall detect the target virus in [***].

  
	
  [***]

  	
   

  	
  Assay will be used to detect WNV in [***]. 
  

  
	
  [***]

  	
   

  	
  At [***].

  
	
  [***]

  	
   

  	
  [***];and as defined in the Specimen
  Collection, Storage and Handling section of the Procleixâ WNV Assay package insert.

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
   

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
   

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
  [***]

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
   

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
   

  	
   

  	
   

  	
  [***]

  	
  [***]

  

 

36

 

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

 

WNV MEMBER SUPPLEMENT

 

This WNV Member Supplement (this “WNV Member
Supplement”), dated as of July 1, 2003 (the “Effective Date”), is by and
between Chiron Corporation, a Delaware corporation (“Chiron”), and
                       ,
a
                       
(“WNV MEMBER”).

 

RECITALS

 

A.                                   Chiron
and America’s Blood Centers, an association of non-profit community-based blood
centers (“ABC”), have entered into that certain WNV Association Agreement dated
as of July 1, 2003 (the “WNV Association Agreement”);

 

B.                                     Pursuant
to and in accordance with the terms of the WNV Association Agreement, Chiron has
agreed to provide to ABC Members WNV Assays, for use to conduct nucleic acid
amplification tests to detect the presence of certain viruses in blood donation
samples;

 

C.                                     WNV
MEMBER, an ABC Member, wishes to acquire WNV Assays to conduct nucleic acid amplification
tests to detect the presence of certain viruses in blood donation samples, in
accordance with the terms of the WNV Association Agreement, subject to the
following additional terms and conditions.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Definitions.  All capitalized terms used but not otherwise
defined in this Member Supplement shall have the meanings set forth in the WNV
Association Agreement.

 

2.                                       WNV
Association Agreement.  The terms
and conditions of the WNV Association Agreement, attached as Exhibit 1
to this WNV Member Supplement, are adopted by the parties hereto and
incorporated by reference.  For the
purpose of the WNV Association Agreement and this WNV Member Supplement, WNV
MEMBER shall be deemed to be a Participating Member.  In the event of any conflict between the terms and conditions of
this WNV Member Supplement and the terms and conditions of the WNV Association
Agreement, the terms and conditions of the WNV Association Agreement govern.

 

1

 

3.                                       WNV
Assays.  In accordance with Schedule
B of the WNV Association Agreement, Chiron shall supply WNV MEMBER with its
requirements of WNV Assays to permit WNV MEMBER to conduct Pooled Testing or
Single Unit Testing of blood donations in the Territory.  WNV MEMBER’s initial Product Requirement
Forecast is attached as Exhibit 2 to this WNV Member Supplement.

 

4.                                       Compensation.  WNV MEMBER agrees to compensate Chiron,
calculated and paid in accordance with Schedule E of the WNV Association
Agreement.

 

5.                                       Reporting
Obligation; Nature of Testing.  WNV
MEMBER will determine, in its sole discretion, whether to use the WNV Assays
supplied by Chiron hereunder to conduct Pooled Testing, Single Donor Testing or
a blend thereof.  WNV MEMBER shall
report all Reportable Results, in accordance with Section 1 of Schedule E
of the WNV Association Agreement, indicating the portion of such Reportable
Results obtained through Pooled Testing and the portion obtained through Single
Donor Testing.  If WNV MEMBER desires to
change its blend of testing between Pooled Testing and Single Unit Testing or
to modify the pool size, WNV MEMBER and Chiron shall enter into an addendum to
the applicable WNV Member Supplement reflecting any additional instrumentation
or any other amendments that may be applicable by reason of such change,
including without limitation, appropriate adjustment to the Reagent Utilization
Factor.

 

6.                                       Reagent
Utilization Factor.  In accordance
with Schedule E to the WNV Association Agreement, for each [***] increment by which the actual Reagent
Utilization Factor during each Annual RUF Measuring Period exceeds WNV MEMBER’s
Target RUF of [***], WNV MEMBER agrees to pay an
additional amount [***].

 

7.                                       Training.  Chiron agrees to provide the
following training program for WNV MEMBER personnel.

 

7.1                                           On-Site
WNV Assay Training.  Chiron shall
provide, at Chiron’s sole expense, one day, on-site WNV Assay training to
     existing Primary Operators from WNV MEMBER.  Training will include WNV Assay training on
the Blood Screening System.  Upon successful
completion of training, individuals will be certified to perform the WNV Assay.

 

7.2                                           New
Primary Operator Training. Primary Operator training of up to
     WNV MEMBER personnel will be performed by Chiron
support personnel.  Training will
include WNV Assay training on the Blood Screening System and Pooled Training,
if applicable.  Training will include
theory, practical training and operation/maintenance on all required equipment.  Each new Primary Operator will be required
to pass proficiency certification prior to reporting results.

 

2

 

8.             Insurance.

 

8.1                                           WNV
MEMBER shall obtain and maintain at its sole cost, a policy or policies of
insurance with the following coverages, which shall be in full force and effect
for the term of this Agreement and thereafter through two years following the
termination of the Agreement: a) a Commercial General Liability policy  including Products and Completed Operations
Liability in an amount of not less than [***] combined
single limit for each occurrence; b) Workers’ Compensation coverage with
statutory limits for each jurisdiction where the work required of such party
under this Agreement is performed and an employers’ liability policy with at
least the following limits, [***] per
accident, [***] per disease (policy limit), and [***] disease (each employee); and c) Professional
Liability (Errors & Omissions) Insurance in an amount not less than [***] each claim specifically insuring claims
arising from obligations of WNV MEMBER.

 

8.2                                           WNV
MEMBER shall provide Chiron with certificates of insurance evidencing the
coverage required herein upon execution of this Agreement, and renewal
certificates on request from Chiron. 
WNV MEMBER must notify Chiron within a reasonable time if there is a
material change to any of the insurance policies referred to in this
Section.  Such certificates shall
provide for thirty (30) days prior written notice to the certificate holder in
the event of non-renewal of the policies, cancellation or material change in
the coverage provided.

 

9.                                       Term and Termination. 
This WNV Member Supplement shall become effective on the Effective Date
of this WNV Member Supplement, and shall terminate on the earlier to occur of
(i) the last calendar day within the [***] Testing Month, or (ii) the
termination or expiration of the WNV Association Agreement.  This WNV
Member Supplement may be terminated by written notice to the other party at any
time during  the
term, which termination shall be effective when such termination notice is
received in accordance with Section 11 of this WNV Member Supplement, as
follows:

 

(a)                                  by Chiron if WNV MEMBER fails to observe,
perform or otherwise breaches any of its material covenants, agreements
or obligations under this WNV Member Supplement, provided such failure
continues for a period of thirty (30) days after receipt by WNV MEMBER of an
initial written notice thereof specifying such failure; or

 

(b)                                 by either WNV MEMBER or Chiron if the other party
files a petition in bankruptcy, becomes bankrupt or insolvent or subject to the
reorganization of its business for the benefit of creditors under any law or
regulation relating to bankruptcy, or a receiver is appointed for all or
substantially all of its property or assets, or upon the making by such other
party of a composition with its creditors, or upon the taking by such other
party of any act for the winding up of its business, or upon any 

 

3

 

governmental authority
exercising any power or authority resulting in the expropriation or
confiscation of all or substantially all of its business and assets; or

 

(c)                                  by WNV MEMBER if the FDA rescinds in full its
recommendation for the screening of human blood, covered and voluntary source
plasma, platelets or other blood products intended for transfusion or other
administration to humans for the presence of the West Nile Virus; or

 

(d)                                 by Chiron ninety (90) days after the FDA approval
of the use of the WNV Assay for the screening of human blood, covered and
voluntary source plasma, platelets or other blood products intended for
transfusion or other administration to humans; or

 

(e)                                  by WNV MEMBER pursuant to, and in accordance
with, Section 8.4 of the WNV Association Agreement; or

 

(f)                                    by WNV MEMBER pursuant to and in accordance with,
Section 8.5 of the WNV Association Agreement; or

 

(g)                                 by
mutual agreement of the parties at any time without penalty.

 

10.           Reimbursement upon Termination.  If
this WNV Member Supplement is terminated [***], other than in accordance with
Section 9(e) or (g) above, then WNV MEMBER shall be obligated to reimburse
Chiron for certain un-recovered costs and expenses related to the development
of the Products in an amount to be calculated in accordance with Section 2 of Schedule E,
of the WNV Association Agreement; provided, however, [***].

 

11.                                 Notices.  Notices, requests, waivers and other
communications made pursuant to this WNV Member Supplement or the WNV
Association Agreement shall be made in accordance with Section 12.6 of the WNV
Association Agreement and, if to WNV MEMBER, shall be addressed to WNV MEMBER
as set forth below:

 

                If to WNV MEMBER:                             WNV
MEMBER

                                                                                                                                                                Attention:
                  ,
                      

                                                                                                                                                                                                                            

                                                                                                                                                                                                ,
            
            

                                                                                                                                                                Telephone:
(      )
                  

 

12.                                 Survivability.  Sections 2, 8 and 10 of this WNV Member
Supplement shall survive any expiration or termination of this WNV Member Supplement.

 

 

[SIGNATURE PAGE FOLLOWS]

 

4

 

IN WITNESS WHEREOF, the parties hereto, acting through
their duly authorized officers, have executed this Agreement as of the date
first set forth above.

 

	
   

  	
  CHIRON
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jack Goldstein

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WNV
  MEMBER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  

 

5

 

EXHIBITS

 

1              WNV Association
Agreement

 

2.             Products
Requirements Forecast

 

6

 

EXHIBIT 2

PRODUCT REQUIREMENTS FORECAST

 

7

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