Document:

ex10-1.htm

	 	
EMPLOYMENT AGREEMENT

	
                                        Exhibit 10.1

THIS AGREEMENT (the “Agreement”) to be effective as of May 14, 2012(the “Effective Date”), between Health Discovery Corporation (the “Company”), and Stephen Barnhill (the “Executive”).

INTRODUCTION

The Company and the Executive are parties to an employment agreement dated September 15, 2008, which has expired, and now desire to enter into this Agreement to replace and supersede the existing employment agreement.

NOW, THEREFORE, the parties agree as follows:

1. Terms and Conditions of Employment.

 

(a) Employment. During the Term, Company will employ the Executive, and the Executive will serve as the Chief Executive Officer of the Company on a full-time basis and will have such responsibilities and authority as may from time to time be assigned to the Executive by the Board of Directors of the Company. Executive shall be responsible for: all medical, scientific research and development issues including without limitation, research projects, budgets with respect to such projects, hiring and firing of all employees, strategic direction and strategic alliance (in conjunction with the board of directors of Employer), patents, presentations and publications; all personnel; and all business operations of the Company. In this capacity, Executive will provide unique services to the Company and be privy to the Company’s Confidential Information and Trade Secrets. The Executive will report to the Board of Directors of the Company. Executive shall serve on the Board of Directors as Chairman without additional compensation beyond that set forth in this Agreement, and shall continue to so serve for so long as he is thereafter elected to such position by the Company’s stockholders. The Executive’s primary office will be at the Company’s headquarters in such geographic location within the United States as may be determined by the Company.

 

(b) Exclusivity. Throughout the Executive’s employment hereunder, the Executive shall devote substantially all of the Executive’s time, energy and skill during regular business hours to the performance of the duties of the Executive’s employment, shall faithfully and industriously perform such duties, and shall diligently follow and implement all management policies and decisions of the Company; provided, however, that this provision is not intended to prevent the Executive from fulfilling his obligation to Neogenomics Corporation as outlined in the agreement between Neogenomics Corporation and the company reached in December of 2011 or from managing his investments, so long as he gives his duties to the Company first priority and such investment activities do not interfere with his performance of duties for the Company. Notwithstanding the foregoing, other than with regard to the Executive’s duties to the Company, the Executive will not accept any other employment during the Term, perform any consulting services during the Term, or serve on the board of directors or governing body of any other healthcare businesses, except with the prior written consent of the Board of Directors. Further, the Executive has disclosed on Exhibit A hereto, all of his nonpublic company bio-discovery related investments, and agrees during the Term not to make any investments during the Term hereof except as a passive investor. The Executive agrees during the Term not to own directly or indirectly equity securities of any public healthcare related company (excluding the Company) that represents five percent (5%) or more of the value of voting power of the equity securities of such company.

2. Compensation.

 

(a) Base Salary. The Company shall pay the Executive base salary of $350,000.00 per annum (the “Annual Base Salary”). The base salary shall be payable in equal installments, no less frequently than twice per month, in accordance with the Company’s regular payroll practices. Such minimum annual base salary may be periodically reviewed and increased (but not decreased without the Executive’s express written consent) at the discretion of the Compensation Committee of the Board.

 

(b) Bonus.

 

(i) Retention Bonus. The Company shall grant Executive a one-time retention signing bonus of 1,000,000 shares of HDC stock to continue his employment as Chief Executive Officer for an additional three year term. The Retention Signing shares will be granted on the Effective Date.

 

(ii) Cash Bonus. During the Term, the Company shall pay Executive a cash bonus of $100,000.00 for each one cent per share in earnings as defined by GAAP , paid  quarterly no later than 30 days  after the quarter ends with a maximum cash bonus of $400,000.00 per year.

 

(c) Equity Compensation. The Executive shall receive a grant of 5,000,000 shares of the Company’s Common Stock  to be granted as follows:  First year a grant of 1,666,667 shares if the Company's market cap increases by $25,000,000.00 dollars  above the market cap on the day of execution of this contract.  In year two a grant of 1,666,667 shares will be made if the market cap of the company increases by 50% over the market cap on the one year anniversary of this contract.  In year three a grant of 1,666,666 shares if the market cap increases by 50% over the market cap on the second anniversary of this contract.

 

  

  

  

 

(d) Expenses. The Executive shall be entitled to be reimbursed in accordance with Company policy in effect for reasonable and necessary expenses incurred by the Executive in connection with the performance of the Executive’s duties of employment hereunder; provided, however, the Executive shall, as a condition of such reimbursement, submit verification of the nature and amount of such expenses in accordance with the reasonable reimbursement policies from time to time adopted by the Company. Any travel by Executive on behalf of the Company shall be at the Company’s expense and shall include, but not be limited to, all costs for the Executive’s transportation, lodging, meals, and with respect to air fare at full coach rates for domestic flights with a scheduled flight time of less than four hours and at full business class rates for all domestic flights with a scheduled flight time of four hours or more and for all international flights.

 

(e) Paid Time Off. Executive shall be entitled to 20 paid vacation days during the calendar year from January 1 to December 31. For employment periods of less than one calendar year, vacation days shall accrue at the rate of 0.83 days per month of employment. All vacation must be taken by December 31 in the calendar year in which such vacation is earned.

 

(f) Benefits.

 

(i) The Company shall at all times during the Term pay all premiums for health insurance benefits for Executive and his dependents with coverage and premiums no less favorable or more favorable to Executive as such coverage and premiums to which Executive is receiving immediately prior to the date of this Agreement; provided, however, Executive shall be responsible for all deductibles, co-payment requirements or similar obligations under such health insurance.

 

(ii) In addition to the benefits payable to the Executive specifically described herein, the Executive shall be entitled to such benefits as generally may be made available to all other executives of the Company from time to time; provided, however, that nothing contained herein shall require the establishment or continuation of any particular plan or program; provided, further, that Executive shall not be entitled to participate in any stock option or other equity plan otherwise made available to other executives of the Company.

 

(g) Director & Officer Insurance. The Company, at its expense, shall maintain director and officer insurance covering Executive at levels consistent with past practice with a reputable carrier. The Executive shall be entitled to indemnification, including advancement of expenses (if applicable), in accordance with and to the extent provided by the Company’s bylaws and articles of incorporation, and any separate indemnification agreement, if any.

 

(h) Reimbursement Conditions. Except as provided in Section 8(h) below, all expenses eligible for reimbursement under this Agreement must be incurred by the Executive during the Term of this Agreement to be eligible for reimbursement. Except as provided in Section 8(h) below, all reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the calendar year following the calendar year in which the expense was incurred, nor shall the amount of reimbursable expenses incurred in one taxable year affect the expenses eligible for reimbursement in any other taxable year.

 

(i)  Withholding. All payments pursuant to this Agreement shall be reduced for any applicable state, local, or federal tax withholding obligations.

 

3. Term, Termination and Termination Payments.

 

(a) Term. The term of this Agreement shall begin as of the Effective Date. It shall continue through the third anniversary of the date hereof or until sooner terminated earlier pursuant to Section 3(b) hereof (the “Term”).

 

(b) Termination. This Agreement and the employment of the Executive by the Company hereunder shall only be terminated: (i) by expiration of the original Term; (ii) by the Company without Cause; (iii) by the Executive for Good Reason; (iv) by the Company or the Executive due to the Disability of the Executive; (v) by the Company for Cause; (vi) by the Executive for other than Good Reason or Disability, upon at least ninety (90) days prior written notice to the Company; or (vii) upon the death of the Executive. Notice of termination by any party shall be given prior to termination in writing and shall specify the basis for termination and the effective date of termination. Further, notice of termination for Cause by the Company or Good Reason by the Executive shall specify the facts alleged to constitute termination for Cause or Good Reason, as applicable. Except as provided in Section 3(c), the Executive shall not be entitled to any payments or benefits after the effective date of the termination of this Agreement, except for base salary pursuant to Section 2(a) accrued up to the effective date of termination, any unpaid earned and accrued Cash Bonus, if any, pursuant to Section 2(b), pay for accrued but unused vacation that the Company is legally obligated to pay Executive, if any, and only if the Company is so obligated, as provided under the terms of any other employee benefit and compensation agreements or plans applicable to the Executive, expenses required to be reimbursed pursuant to Section 2(d), and any rights to payment the Executive has under Section 2(g).

 

  

  

  

 

(c) Termination by the Company without Cause or by the Executive for Good Reason.

 

(i) If the employment of the Executive is terminated by the Company without Cause or by the Executive for Good Reason and such termination constitutes a Termination of Employment, the Company will pay the Executive (A) his base salary pursuant to Section 2(a) hereof for the remainder of the Term, plus (B) an amount equal to the actual cost of ninety (90) days of the Executive’s COBRA premium payments, commencing with the COBRA payment next due after termination, should the Executive elect COBRA (the “Continuing Benefit”). Such amount shall be paid in arrears in substantially equal installments not less frequently than monthly over the remainder of the original Term commencing within thirty (30) days following the effective date of termination; provided, however, if the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code, as amended (the “Code”), at the date of his Termination of Employment, then such portion of the payments that would result in a tax under Code Section 409A if paid during the first six (6) months after Termination of Employment shall be withheld, starting with the payments latest in time during such six (6) month period, and paid to the Executive during the seventh month following the date of his Termination of Employment. Notwithstanding the foregoing, if the total payments to be paid to the Executive hereunder, along with any other payments to the Executive, would result in the Executive being subject to the excise tax imposed by Code Section 4999, the Company shall reduce the aggregate payments to the largest amount which can be paid to the Executive without triggering the excise tax, but only if and to the extent that such reduction would result in the Executive retaining larger aggregate after-tax payments. The determination of the excise tax and the aggregate after-tax payments to be received by the Executive will be made by the Company. If payments are to be reduced, the payments made latest in time will be reduced first.

 

(ii) If the Term is not extended or the Company or the Executive terminates the Executive’s employment upon or following expiration of the Term, such termination shall not be deemed to be a termination of the Executive’s employment by the Company without Cause or a resignation by Executive for Good Reason.

 

(iii) Notwithstanding any other provision hereof, as a condition to the payment of the amounts in this Section, the Executive shall be required to execute and not revoke within the revocation period provided therein, the Release.

 

(d) Survival. The covenants in this Section 3 hereof shall survive the termination of this Agreement and shall not be extinguished thereby.

 

(e) Change of Control. For purposes of this Agreement, “Change of Control” of the Company shall be deemed to have occurred if  any of the following occur: (1) the purchase by any third party (or third parties acting as a group) of 50% or more of the company’s stock; (2) an unsolicited change in the majority of the board of directors; (3) a merger or consolidation, after which the company’s prior shareholders no longer control the company; or (4) the sale of all or substantially all of the company’s assets or the liquidation of the company. If there is a “change of control” then the bonus shares described under Equity Compensation  in Section 2(c) of this document will immediately become due and payable as if they were actually earned under the terms of this contract.. In, addition,, The cash bonus for the year in which the "Change of Control" occurs will become due and payable as if earned under the terms of this agreement.

4. Ownership and Protection of Proprietary Information.

 

(a) Confidentiality. All Confidential Information and Trade Secrets and all physical embodiments thereof received or developed by the Executive while employed by the Company are confidential to and are and will remain the sole and exclusive property of the Company. Except to the extent necessary to perform the duties assigned by the Company hereunder, the Executive will hold such Confidential Information and Trade Secrets in trust and strictest confidence, and will not use, reproduce, distribute, disclose or otherwise disseminate the Confidential Information and Trade Secrets or any physical embodiments thereof and may in no event take any action causing or fail to take the action necessary in order to prevent, any Confidential Information and Trade Secrets disclosed to or developed by the Executive to lose its character or cease to qualify as Confidential Information or Trade Secrets.

 

(b) Return of Company Property. Upon request by the Company, and in any event upon termination of this Agreement for any reason, as a prior condition to receiving any final compensation hereunder (including any payments pursuant to Section 3 hereof), the Executive will promptly deliver to the Company all property belonging to the Company, including, without limitation, all Confidential Information and Trade Secrets (and all embodiments thereof) then in the Executive’s custody, control or possession.

 

(c) Survival. The covenants of confidentiality set forth herein will apply on and after the date hereof to any Confidential Information and Trade Secrets disclosed by the Company or developed by the Executive while employed or engaged by the Company prior to or after the date hereof. The covenants restricting the use of Confidential Information will continue and be maintained by the Executive for a period of two years following the termination of this Agreement. The covenants restricting the use of Trade Secrets will continue and be maintained by the Executive following termination of this Agreement for so long as permitted by the governing law.

5. Non-Competition and Non-Solicitation Provisions.

 

(a) The Executive agrees that during the Applicable Period, the Executive will not (except on behalf of or with the prior written consent of the Company, which consent may be withheld in Company’s sole discretion), within the Area either directly or indirectly, on his own behalf, or in the service of or on behalf of others, provide managerial services or management consulting services substantially similar to those Executive provides for the Company to any Competing Business. The Executive acknowledges and agrees that the Business of the Company is conducted in the Area.

 

  

  

  

 

(b) The Executive agrees that during the Applicable Period, he will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others solicit any individual or entity which is an actual or, to his knowledge, actively sought prospective client of the Company or any of its Affiliates (determined as of date of termination of employment) with whom he had material contact while he was an Executive of the Company, for the purpose of offering services substantially similar to those offered by the Company.

 

(c) The Executive agrees that during the Applicable Period, he will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, solicit for employment with a Competing Business any person who is a management level employee of the Company or an Affiliate with whom Executive had contact during the last year of Executive’s employment with the Company. The Executive shall not be deemed to be in breach of this covenant solely because an employer for whom he may perform services may solicit, divert, or hire a management level employee of the Company or an Affiliate provided that Executive does not engage in the activity proscribed by the preceding sentence.

 

(d) The Executive agrees that during the Applicable Period, he will not make any statement (written or oral) that could reasonably be perceived as disparaging to the Company or any person or entity that he reasonably should know is an Affiliate of the Company.

 

(e) In the event that this Section 5 is determined by a court which has jurisdiction to be unenforceable in part or in whole, the court shall be deemed to have the authority to strike any unenforceable provision, or any part thereof or to revise any provision to the minimum extent necessary to be enforceable to the maximum extent permitted by law.

 

(f) The provisions of this Section 5 shall survive termination of this Agreement.

6. Remedies and Enforceability.

 

The Executive agrees that the covenants, agreements, and representations contained in Sections 4 and 5 hereof are of the essence of this Agreement; that each of such covenants are reasonable and necessary to protect and preserve the interests and properties of the Company; that irreparable loss and damage will be suffered by the Company should the Executive breach any of such covenants and agreements; that each of such covenants and agreements is separate, distinct and severable not only from the other of such covenants and agreements but also from the other and remaining provisions of this Agreement; that the unenforceability of any such covenant or agreement shall not affect the validity or enforceability of any other such covenant or agreements or any other provision or provisions of this Agreement; and that, in addition to other remedies available to it, including, without limitation, termination of the Executive’s employment for Cause, the Company shall be entitled to seek both temporary and permanent injunctions to prevent a breach or contemplated breach by the Executive of any of such covenants or agreements.

7. Notice.

 

All notices, requests, demands and other communications required hereunder shall be in writing and shall be deemed to have been duly given if delivered or if mailed, by United States certified or registered mail, prepaid to the party to which the same is directed at the following addresses (or at such other addresses as shall be given in writing by the parties to one another):

 

If to the Company:

2 East Bryan Street, Suite 1500

Savannah, GA 31401

If to the Executive:

2 Springfield Place

Savannah, GA 31411

Notices delivered in person shall be effective on the date of delivery. Notices delivered by mail as aforesaid shall be effective upon the fourth calendar day subsequent to the postmark date thereof.

8. Miscellaneous.

 

(a) Assignment. The rights and obligations of the Company under this Agreement shall inure to the benefit of the Company’s successors and assigns. This Agreement may be assigned by the Company to any legal successor to the Company’s business or to an entity that purchases all or substantially all of the assets of the Company, but not otherwise without the prior written consent of the Executive. In the event the Company assigns this Agreement as permitted by this Agreement and the Executive remains employed by the assignee, the “Company” as defined herein will refer to the assignee and the Executive will not be deemed to have terminated his employment hereunder until the Executive terminates his employment with the assignee. The Executive may not assign this Agreement.

 

(b) Waiver. The waiver of any breach of this Agreement by any party shall not be effective unless in writing, and no such waiver shall constitute the waiver of the same or another breach on a subsequent occasion.

 

(c) Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Georgia. The parties agree that any appropriate state or federal court located in Chatham County, Georgia shall have jurisdiction of any case or controversy arising under or in connection with this Agreement and shall be a proper forum in which to adjudicate such case or controversy. The parties consent to the jurisdiction of such courts.

 

  

  

  

 

(d) Entire Agreement. This Agreement embodies the entire agreement of the parties hereto relating to the subject matter hereof and supersedes all oral agreements, and to the extent inconsistent with the terms hereof, all other written agreements.

 

(e) Amendment. This Agreement may not be modified, amended, supplemented or terminated except by a written instrument executed by the parties hereto.

 

(f) Severability. Each of the covenants and agreements hereinabove contained shall be deemed separate, severable and independent covenants, and in the event that any covenant shall be declared invalid by any court of competent jurisdiction, such invalidity shall not in any manner affect or impair the validity or enforceability of any other part or provision of such covenant or of any other covenant contained herein.

 

(g) Captions and Section Headings. Except as set forth in Section 9 hereof, captions and section headings used herein are for convenience only and are not a part of this Agreement and shall not be used in construing it.

 

(h) Dispute Resolution. If a dispute arises between Company and Executive regarding the interpretation of this Agreement, the parties agree to negotiate in good faith regarding a resolution of the issues involved for at least thirty days. If the parties fail to resolve the dispute during this period of negotiation and either party initiates proceedings to enforce its rights no later than twelve months following any termination of this Agreement, Company will immediately escrow $50,000 from which Executive will be reimbursed for his reasonable litigation expenses monthly upon presentation to the escrow agent of reasonable proof of expenditure. Company will replenish this escrow fund with an additional $25,000 whenever the balance falls below $10,000. Executive shall, as a condition of any such reimbursement, submit proof of any expenditure within thirty days of incurring the expenditure. Any amounts payable to Executive under this Section shall include a tax gross up amount to cover any applicable income taxes based upon the Executive’s effective marginal federal and state tax rate for the calendar year immediately preceding the calendar year in which the reimbursement is made. Within sixty (60) days after a final determination (excluding any appeals) is made with respect to the proceedings, unless the parties agree otherwise, the losing party will reimburse the winning party’s reasonable attorney’s fees and costs incurred in the litigation, and if Executive shall be the losing party, Executive shall reimburse Company at the same time for all prior payments to him of his reasonable litigation expenses with appropriate interest calculated from the date(s) such prior payments were paid to him through the date the Executive reimburses the Company. For purposes of this Section, the appropriate interest rate means the “Prime Rate,” as reported by the Wall Street Journal, for the date of the final determination of the proceedings or, if that date is not a business day, for the first business day thereafter. ALL DISPUTES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR TO COMPANY’S EMPLOYMENT OF EXECUTIVE OR THE TERMINATION OF EXECUTIVE’S EMPLOYMENT SHALL BE SUBMITTED EXCLUSIVELY TO BINDING ARBITRATION IN SAVANNAH, GEORGIA, PURSUANT TO THE NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES OF THE AMERICAN ARBITRATION ASSOCIATION, provided however that Company shall be entitled to injunctive relief from any court of jurisdiction against Executive’s breach of any covenant in Articles 6 and 7, and further provided that this Agreement shall not require arbitration of any claim for workers’ compensation benefits or any claim for unemployment compensation. Executive understands that agreeing to arbitration waives the right to a jury trial. Arbitral awards shall be enforceable by any court of competent jurisdiction.

 

(i) No Mitigation/No Offset. In the event of any termination of employment, the Executive shall be under no obligation to seek other employment, and there shall be no offset against entitlements, amounts or benefits due him under this Agreement or otherwise on account of any remuneration attributable to any subsequent employer or claims asserted by the Company or any affiliate.

 

(j) The Company shall indemnify the Executive to the full extent permitted by law and the By-laws of the Company for all expenses, costs, liabilities and legal fees.

9. Definitions.

 

(a) “Affiliate” means any person, firm, corporation, partnership, association or entity that, directly or indirectly or through one or more intermediaries, controls, is controlled by or is under common control with the Company.

 

(b) “Applicable Period” means the period commencing as of the date of this Agreement and ending twelve months after the termination of the Executive’s employment with the Company or any of its Affiliates.

 

(c) “Area” means the United States.

 

(d) “Business of the Company” means any business that uses or provides consulting services related to support vector machines or fractal genomic modeling.

 

(e) “Cause” the occurrence of any of the following events:

 

(i) willful failure or refusal to perform the duties as set forth in Section 1(a) as determined by the Board of Directors or implement a directive from the Board of Directors which has been proven to have caused material harm to the Company, in each case remaining uncured for a period of fourteen (14) days after receipt of written notice from the Board of Directors specifying such failure or refusal;

 

(ii) intentional disclosure by the Executive to an unauthorized person of Confidential Information or Trade Secrets, which which has been proven to have caused material harm to the Company.;

 

(iii) any act by the Executive of fraud against, material misappropriation from, or significant dishonesty to either the Company or an Affiliate, or any other party, which has been proven to have caused material harm to the Company but in the latter case only if in the reasonable opinion of at least two-thirds of the members of the Board of Directors of the Company (excluding the Executive), such fraud, material misappropriation, or significant dishonesty has been proven to have caused material harm to the Company or its Affiliates;

 

  

  

  

 

(iv) conviction of, or plea of nolo contendere to, a felony which which has been proven to have caused material harm to the Company

 

(v) a material breach of this Agreement by the Executive, provided that the nature of such breach will have been proven to have caused material harm to the Company and shall be set forth with reasonable particularity in a written notice to the Executive who shall have ten (10) days following delivery of such notice to cure such alleged breach, provided that such breach is, in the reasonable discretion of the Board of Directors, susceptible to a cure.

 

(f) “Competing Business” means the entities listed below and any person, firm, corporation, joint venture, or other business that is engaged in the Business of the Company:

 

(g) “Confidential Information” means data and information relating to the Business of the Company or an Affiliate (which does not rise to the status of a Trade Secret) which is or has been disclosed to the Executive or of which the Executive became aware as a consequence of or through his relationship to the Company or an Affiliate and which has value to the Company or an Affiliate and is not generally known to its competitors. Confidential Information shall not include any data or information that has been voluntarily disclosed to the public by the Company or an Affiliate (except where such public disclosure has been made by the Executive without authorization) or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means without breach of any obligations of confidentiality owed to the Company or any of its Affiliates by the Executive.

 

(h) “Disability” means the inability of the Executive to perform the material duties of his position hereunder due to a physical, mental, or emotional impairment, for a ninety (90) consecutive day period or for aggregate of one hundred eighty (180) days during any three hundred sixty-five (365) day period.

 

(i) “Good Reason” means the occurrence of all of the events listed in either (i) or (ii) below:

 

(i) (A) the Company materially breaches this Agreement, including but not limited to, a material diminution of the Executive’s responsibilities as Chief Executive Officer, as reasonably modified by the Board of Directors from time to time hereafter, such that the Executive would no longer have responsibilities agreed to in this document which are substantially equivalent to those of other chief executive officers at companies with similar revenues and market capitalization;

 

(B) the Executive gives written notice to the Company of the facts and circumstances constituting the breach of the Agreement within ten (10) days following the occurrence of the breach;

 

(C) the Company fails to remedy the breach within ten (10) days following the Executive’s written notice of the breach; and

 

(D) the Executive terminates his employment within ten (10) days following the Company’s failure to remedy the breach; or

 

(ii) (A) the Company requires the Executive to relocate the Executive’s primary place of employment to a new location, that is more than fifty (50) miles (calculated using the most direct driving route) from its current location, without the Executive’s consent;

 

(B) the Executive gives written notice to the Company within ten (10) days following receipt of notice of relocation of his objection to the relocation;

 

(C) the Company fails to rescind the notice of relocation within ten (10) days following the Executive’s written notice; and

 

(D) the Executive terminates his employment within ten (10) days following the Company’s failure to rescind the notice.

 

(j) “Release” means a comprehensive release, covenant not to sue, and non-disparagement agreement from the Executive in favor of the Company, its executives, officers, directors, Affiliates, and all related parties, in the form attached hereto as Exhibit B.

 

(k) “Term” has the meaning as set forth in Section 3(a) hereof.

 

(l) “Termination of Employment” means either that (a) the Executive has ceased to perform any services for the Company and all affiliated companies that, together with the Company, constitute the “service recipient” within the meaning of Section 409A of the Code and the regulations thereunder (collectively, the “Service Recipient”) or (b) the level of bona fide services the Executive performs for the Service Recipient after a given date (whether as an employee or as an independent contractor) permanently decreases (excluding a decrease as a result of military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Executive retains a right to reemployment with the Service Recipient under an applicable statute or by contract) to no more than twenty percent (20%) of the average level of bona fide services performed for the Service Recipient (whether as an employee or an independent contractor) over the immediately preceding 36-month period.

 

(m) “Trade Secrets” means data and information relating to the Business of the Company or an Affiliate including, but not limited to, technical or nontechnical data, formulae, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential customers or suppliers which (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

 

  

  

  

 

IN WITNESS WHEREOF, the Company and the Executive have each executed and delivered this Agreement as of the date first shown above.

 

	  	
COMPANY:

	  
	  	
Health Discovery Corporation

	  
	  	  	  	  
	  	
By:

	
/s/ Dr. Joe McKenzie

	  
	  	  	
Dr. Joe McKenzie, as an independent director

	  	  	  	  
	  	
THE EXECUTIVE:

	  	  	  	  
	 	By:	

/s/ Dr. Stephen Barnhill

	 
	 	 	

Dr. Stephen Barnhill

	 

 

  

  

  

 

EXHIBIT A

 

None

  

  

  

 

EXHIBIT B

RELEASE, AGREEMENT PURSUANT TO

EMPLOYMENT AGREEMENT

This Agreement (this “Agreement”) is made this ___ day of _____, 200_, by _______________ (the “Employer”) and ________________ (the “Employee”).

Introduction

Employee and the Employer entered into an Employment Agreement dated ________, 200_ (the “Employment Agreement”).

The Employment Agreement requires that as a condition to the Employer’s obligation to pay payments and benefits under Section 3(c) of the Employment Agreement (the “Severance Benefits”), Employee must provide a release and agree to certain other conditions as provided herein.

NOW, THEREFORE, the parties agree as follows:

	
1.

	
Employee has been offered twenty-one (21) days from receipt of this Agreement within which to consider this Agreement. The effective date of this Agreement shall be the date eight (8) days after the date on which Employee signs this Agreement (“the Effective Date”). For a period of seven (7) days following Employee’s execution of this Agreement, Employee may revoke this Agreement, and this Agreement shall not become effective or enforceable until such seven (7) day period has expired. Employee must communicate the desire to revoke this Agreement in writing. Employee understands that he or she may sign the Agreement at any time before the expiration of the twenty-one (21) day review period. To the degree Employee chooses not to wait twenty-one (21) days to execute this Agreement, it is because Employee freely and unilaterally chooses to execute this Agreement before that time. Employee’s signing of the Agreement triggers the commencement of the seven (7) day revocation period.

	  	  
	
2.

	
In exchange for Employee’s execution of this Agreement and in full and complete settlement of any claims as specifically provided in this Agreement, the Employer will provide Employee with the Severance Benefits.

	  	  
	
3.

	
Employee acknowledges and agrees that this Agreement is in compliance with the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act and that the releases set forth in this Agreement shall be applicable, without limitation, to any claims brought under these Acts.

	  	  
	  	
The release given by Employee in this Agreement is given solely in exchange for the consideration set forth in Section 2 of this Agreement and such consideration is in addition to anything of value that Employee was entitled to receive prior to entering into this Agreement.

	  	  
	  	
Employee has been advised to consult an attorney prior to entering into this Agreement and this provision of the Agreement satisfies the requirement of the Older Workers Benefit Protection Act that Employee be so advised in writing.

	  	  
	  	
By entering into this Agreement, Employee does not waive any rights or claims that may arise after the date this Agreement is executed.

	
4.

	
This Agreement shall in no way be construed as an admission by the Employer that it has acted wrongfully with respect to Employee or any other person or that Employee has any rights whatsoever against the Employer. The Employer specifically disclaims any liability to or wrongful acts against Employee or any other person on the part of itself, its employees or its agents.

 

  

  

  

 

	
5.

	
As a material inducement to the Employer to enter into this Agreement, Employee hereby irrevocably releases the Employer and each of the owners, stockholders, predecessors, successors, directors, officers, employees, representatives, attorneys, affiliates (and agents, directors, officers, employees, representatives and attorneys of such affiliates) of the Employer and all persons acting by, through, under or in concert with them (collectively, the “Releasees”), from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on the Employer’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race, color, religion, sex, and national origin discrimination); (2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981 (discrimination); (4) the Americans with Disabilities Act (disability discrimination); (5) the Equal Pay Act; (6) the Age Discrimination in Employment Act; (7) the Older Workers Benefit Protection Act; (6) Executive Order 11246 (race, color, religion, sex, and national origin discrimination); (7) Executive Order 11141 (age discrimination); (8) Section 503 of the Rehabilitation Act of 1973 (disability discrimination); (9) negligence; (10) negligent hiring and/or negligent retention; (11) intentional or negligent infliction of emotional distress or outrage; (12) defamation; (13) interference with employment; (14) wrongful discharge; (15) invasion of privacy; or (16) violation of any other legal or contractual duty arising under the laws of the State of Maryland or the laws of the United States (“Claim” or “Claims”), which Employee now has, or claims to have, or which Employee at any time heretofore had, or claimed to have, or which Employee at any time hereinafter may have, or claim to have, against each or any of the Releasees, in each case as to acts or omissions by each or any of the Releasees occurring up to and including the Effective Date.

	  	  
	
6.

	
The release in the preceding paragraph of this Agreement does not apply to (a) all benefits and awards (including without limitation cash and stock components) which pursuant to the terms of any compensation or benefit plans, programs, or agreements of the Employer are earned or become payable, but which have not yet been paid, and (b) pay for accrued but unused vacation that the Employer is legally obligated to pay Employee, if any, and only if the Employer is so obligated, (c) unreimbursed business expenses for which Employee is entitled to reimbursement under the Employer’s policies, and (d) any rights to indemnification that Employee has under any directors and officers or other insurance policy the Employer maintains or under the bylaws and articles of incorporation of the Company, and under any indemnification agreement, if any.

	  	  
	
7.

	
Employee promises that he will not make statements disparaging to any of the Releasees. Employee agrees not to make any statements about any of the Releasees to the press (including without limitation any newspaper, magazine, radio station or television station) without the prior written consent of the Employer. The obligations set forth in the two immediately preceding sentences will expire two years after the Effective Date. Employee will also cooperate with the Employer and its affiliates if the Employer requests Employee’s testimony. To the extent practicable and within the control of the Employer, the Employer will use reasonable efforts to schedule the timing of Employee’s participation in any such witness activities in a reasonable manner to take into account Employee’s then current employment, and will pay the reasonable documented out-of-pocket expenses that the Employer pre-approves and that Employee incurs for travel required by the Employer with respect to those activities.

	
9.

	
Except as set forth in this Section, Employee agrees not to disclose the existence or terms of this Agreement to anyone. However, Employee may disclose it to a member of his immediate family or legal or financial advisors if necessary and on the condition that the family member or advisor similarly does not disclose these terms to anyone. Employee understands that he will be responsible for any disclosure by a family member or advisor as if he had disclosed it himself. This restriction does not prohibit Employee’s disclosure of this Agreement or its terms to the extent necessary during a legal action to enforce this Agreement or to the extent Employee is legally compelled to make a disclosure. However, Employee will notify the Employer promptly upon becoming aware of that legal necessity and provide it with reasonable details of that legal necessity.

	  	  
	
10.

	
Employee has not filed or caused to be filed any lawsuit, complaint or charge with respect to any Claim he releases in this Agreement. Employee promises never to file or pursue a lawsuit, complaint or charge based on any Claim released by this Agreement, except that Employee may participate in an investigation or proceeding conducted by an agency of the United States Government or of any state. Employee also has not assigned or transferred any claim he is releasing, nor has he purported to do so.

	  	  
	
11.

	
The Employer and Employee agree that the terms of this Agreement shall be final and binding and that this Agreement shall be interpreted, enforced and governed under the laws of the State of Maryland. The provisions of this Agreement can be severed, and if any part of this Agreement is found to be unenforceable, the remainder of this Agreement will continue to be valid and effective.

	  	  
	
12.

	
This Agreement sets forth the entire agreement between the Employer and Employee and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Employer and Employee pertaining to the subject matter of this Agreement.

 

  

  

  

 

	
13.

	
Employee is solely responsible for the payment of any fees incurred as the result of an attorney reviewing this agreement on behalf of Employee. In any litigation concerning the validity or enforceability of this contract or in any litigation to enforce the provisions of this contract, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs, including court costs and expert witness fees and costs.

 

Employee’s signature below indicates Employee’s understanding and agreement with all of the terms in this Agreement.

 

Employee should take this Agreement home and carefully consider all of its provisions before signing it. Employee may take up to twenty-one (21) days to decide whether Employee wants to accept and sign this Agreement. Also, if Employee signs this Agreement, Employee will then have an additional seven (7) days in which to revoke Employee’s acceptance of this Agreement after Employee has signed it. This Agreement will not be effective or enforceable, nor will any consideration be paid, until after the seven (7) day revocation period has expired. Again, Employee is free and encouraged to discuss the contents and advisability of signing this Agreement with an attorney of Employee’s choosing.

Employee should read carefully. This agreement includes a release of all known and unknown claims through the effective date. Employee is strongly advised to consult with an attorney before executing this document.

 

IN WITNESS WHEREOF, Employee and the Employer have executed this agreement effective as of the date first written above.

	  	
EMPLOYEE

	  
	  	  	  	  
	  	  	  
	  	
Name

	  
	  	  	  	  
	  	  	  
	  	
Date Signed

	  
	  	  	  	  
	  	  	  	  
	  	
EMPLOYER:

	  
	 	 	 
	  	  	  	  
	  	  	  	  
	  	
By:

	  	  
	  	
Title:Research and Development Agreement

			
	Confidential Treatment Requested	  	Exhibit 10.26

 ***** CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS 

RESEARCH AND DEVELOPMENT AGREEMENT 
 This Research and Development Agreement (the “Agreement”), effective as of November 1, 2011 (the “Effective Date”), is by and between Dexcom, Inc., a Delaware
Corporation having its principal place of business at 6340 Sequence Drive, San Diego, California 92121 (“Dexcom”), and Roche Diagnostics Operations, Inc., a Delaware corporation having its principal place of business at 9115 Hague
Road, Indianapolis, Indiana 46250 (“Roche”). Roche and Dexcom are each referred to herein as a “Party” and collectively as the “Parties”. 

RECITALS 

A. Dexcom is in the business of developing and commercializing continuous glucose monitoring systems, and is preparing to seek and obtain
regulatory approval and to commence marketing a next generation system; 
 B. Roche is currently developing its next generation
diabetes management system; 
 C. Roche and Dexcom desire to create an integrated system using each of the Party’s next
generation system; and 
 D. The Parties desire to enter into this Agreement in order to establish terms between the Parties to
further the development of an integrated system to be marketed in the United States of America. 
 WITNESSETH 

NOW THEREFORE, in consideration of the mutual covenants set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows: 
 DEFINITIONS 

In addition to other terms defined in this Agreement, capitalized terms used in this Agreement have the following meanings: 

(a) “Affiliate(s)” shall mean a) an organization, which directly or indirectly controls a Party of this Agreement; b) an
organization, which is directly or indirectly controlled by a Party to this Agreement; c) an organization, which is controlled, directly 

 ***** CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND THE NON-PUBLIC INFORMATION HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS 
  

 
or indirectly, by the ultimate parent company of a Party. Control as per a) to c) is defined as owning more than fifty percent of the voting stock of a company or having otherwise the power to
govern the financial and the operating policies to appoint the management or to appoint the management of an organization. With respect to Roche the term “Affiliate” shall not include Chugai Pharmaceutical Co. Ltd., 1-1-
Nihonbashi-Muromachi 2-chome, Chuo-ku Tokyo, 103-8324, Japan (“Chugai”), unless Roche opts for such inclusion of Chugai by giving written notice to Dexcom. 
 (b) “Accu-Chek System(s)” means Roche’s future generation insulin infusion pump system(s) components of which may include blood glucose monitoring system(s), handheld controller(s)
and other peripheral(s) including but not limited to software. 
 (c) “Applicable Laws” means any and all
applicable common law, statutes, ordinances, rules, regulations, codes, requirements, laws or orders of any agencies, commissions, officials, courts and other governmental and regulatory authorities and instrumentalities of the United States
governing: (i) marketing approval or clearance, testing, investigation, design, manufacture, packaging, labeling, handling, storage, distribution, installation, servicing, marketing, or sale, (ii) recordkeeping and reporting obligations,
(iii) recalls, or (iv) similar regulatory matters, with respect to the Services provided and/or the products to which the Services relate. Applicable Laws shall include, without limitation, (a) if the Services involve the design,
manufacture, packaging, labeling, storage, installation, or servicing of a medical device or accessory that is suitable for use or capable of functioning (whether or not it is packaged, labeled, or sterilized), current good manufacturing practices
as specified in the FDA’s Quality System Regulation at 21 CFR Part 820, including but not limited to the Design Controls requirements at 21 CFR Part 820, Subpart C, (b) the Clinical Laboratories Improvement Act and regulations promulgated
thereunder, 42 U.S.C. 263a and 42 CFR Part 493, and (c) any similar regulatory requirements, as such regulatory requirements are in effect at the time the Services are provided, and as such regulations and similar regulatory requirements are
interpreted at the time. 
 (d) “CGM Technologies” shall mean Dexcom’s continuous glucose monitoring
platform that senses and analyzes interstitial glucose levels, which includes the G5 System, and its predecessor and successor systems. 
 (e) “Claims” has the meaning set forth in Section 9.1.1 of this Agreement. 
 (f) “Confidential Information” means any and all of the following information of Roche and/or its Affiliates or Dexcom and/or its Affiliates (each, a “Disclosing Party”)
that may be hereafter disclosed in any form, whether in writing, orally (if orally or by observation, the Disclosing Party must memorialize such information in writing within thirty (30) days of disclosure to maintain its confidential nature),
electronically or otherwise and marked “Confidential” (the “Receiving Party”): a) all information that is a trade secret under applicable trade secret law or other legal requirement; b) all information concerning product
specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned manufacturing or distribution methods and processes, customer lists, health
care professional lists, current and anticipated 

  
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customer requirements, price lists, market studies, business plans, hardware and software; c) all information concerning the business and affairs of the Disclosing Party (and/or its Affiliates)
(which includes financial statements, financial projections and budgets, sales, strategic plans, marketing and advertising plans, publications, client and customer lists and files, contracts), and all information obtained from review of the
Disclosing Party’s documents or property or discussions with the Disclosing Party; and d) all notes, analyses, compilations, studies, summaries and other material prepared by the Receiving Party to the extent containing any information included
in the foregoing. Provided, however, that “Confidential Information” shall not include information that the Receiving Party can demonstrate by competent proof: (i) was generally available to the public at the time of receipt from the
Disclosing Party, or thereafter becomes generally available to the public other than through a breach of this Agreement by the Receiving Party; (ii) is or has been independently developed or conceived by the Receiving Party without use of the
Disclosing Party’s confidential information; (iii) is or has been made known or disclosed to the Receiving Party without breach of any obligation of confidentiality such third party may have to the Disclosing Party; or (iv) is known
to the Receiving Party prior to disclosure by the Disclosing Party and is not otherwise subject to any obligations of confidentiality. 
 (g) “Development Plan” has the meaning set forth in Section 13.4 of this Agreement. 
 (h) “Dexcom Indemnitees” has the meaning set forth in Section 9.1.2 of this Agreement. 
 (i) “Dexcom IP” shall mean any software or other Intellectual Property (i) owned or licensed by Dexcom or for which Dexcom has the right to use or otherwise exploit as of, or prior
to, the Effective Date (“Dexcom Background IP”), or (ii) independently made, conceived or developed solely by Dexcom, its employees, or persons acting on behalf of Dexcom, regardless of whether such activity is performed
outside of this Agreement (“Dexcom Solely Developed IP”). 
 (j) “Dexcom
Trademarks” shall mean DexCom® and such other Dexcom trademarks specifically related to the G5 System
as Dexcom may designate in writing to Roche from time to time. 
 (k) “Display Specifications” shall mean the
(i) wireless communication protocol (and any improvements thereto that are delivered by Dexcom to Roche during the Term) owned by, developed by or licensed to Dexcom and licensed to Roche hereunder, as well as, (ii) the User Interface (and
any improvements thereto that are delivered by Dexcom to Roche during the Term) owned and developed by Dexcom and licensed to Roche and to be set forth in an exhibit to the Development Plan. 

(l) “FDA” means the United States Food and Drug Administration. 

(m) “G5 System” means Dexcom’s next generation continuous glucose monitoring system and those future enhancements
or improvements thereto that does not require Dexcom to file a new PMA. 

  
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 (n) “Handheld” means the display device and controller that is part of
the Accu-Chek Systems and which contains the Display Specifications. 
 (o) “Indemnified Parties” has the
meaning set forth in Section 9.2 of this Agreement. 
 (p) “Indemnifying Party” has the meaning set forth
in Section 9.2 of this Agreement. 
 (q) “Initial Statement of Work” has the meaning set forth in
Section 1.1 of this Agreement. 
 (r) “Initial Term” has the meaning set forth in Section 8.1 of this
Agreement. 
 (s) “Integrated System” shall mean the Accu-Chek Systems that are also capable of receiving and
displaying continuous glucose monitoring data and to be marketed in the Territory. The Integrated System is comprised of: (1) an Accu-Chek System, (2) G5 System and (3) the Display Specifications. 

(t) “Integrated System Infringement Action” has the meaning set forth in Section 9.1.3 of this Agreement.

 (u) “Intellectual Property” means, collectively, patents, copyrights, trademarks, trade names, trade
secrets, and other proprietary and intellectual property rights. 
 (v) “Invention” means any idea, design,
concept, technique, process, invention, discovery or improvement, whether or not patentable and which is conceived and or made by one or more employees or other persons acting on behalf of either Party. 

(w) “Joint Invention” shall mean, all Inventions (including all jointly made derivations and improvements), whether or
not patented, that are conceived, reduced to practice, developed, made or produced jointly by Dexcom Personnel and Roche Personnel (as determined by US Patent Law) during the Term. 

(x) “Milestone Payments” has the meaning set forth in Section 2.1 of this Agreement. 

(y) “Personnel” means, with respect to each Party, such Party’s employees and independent contractors. 

(z) “PMA” means pre-market approval pursuant to 21 CFR Part 814. 

(aa) “Project Leader” has the meaning set forth in Section 3.1 of this Agreement. 

  
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 (bb) “Receipt Date” has the meaning set forth in Section 2.2 of
this Agreement. 
 (cc) “Requirements” has the meaning set forth in Section 13.1 of the Agreement.

 (dd) “Roche Indemnitees” has the meaning set forth in Section 9.1.1 of this Agreement. 

(ee) “Roche IP” shall mean any software or other Intellectual Property (i) owned or licensed by Roche or for which
Roche has the right to use or otherwise exploit as of, or prior to, the Effective Date (“Roche Background IP”), or (ii) independently made, conceived or developed solely by Roche, its employees, or persons acting on behalf of
Roche, regardless of whether such activity is performed outside of this Agreement (“Roche Solely Developed IP”). 
 (ff) “SCAR” has the meaning set forth in Section 4.2. 
 (gg)
“SCAR Response” has the meaning set forth in Section 4.2. 
 (hh) “Sensor” means a
disposable continuous glucose monitoring electrode sensor that is a component of the G5 System, and was designed, developed, and owned by Dexcom to (i) penetrate the patient’s skin to come into contact with the patient’s interstitial
fluid (ii) measure interstitial fluid glucose levels, and (iii) be connected to a Transmitter to communicate the interstitial fluid glucose value as measured by the Sensor to the Transmitter. 

(ii) “Service Fees” has the meaning set forth in Section 2.1 of this Agreement. 

(jj) “Services” has the meaning set forth in Section 1.1 of this Agreement. 

(kk) “Statement of Work” has the meaning set forth in Section 1.1 of this Agreement. 

(ll) “Steering Committee” has the meaning set forth in Section 3.7 of this Agreement. 

(mm) “Term” has the meaning set forth in Section 8.1 of this Agreement. 

(nn) “Territory” shall mean the United States of America and all of its territories. 

(oo) “Transmitter” means a radio frequency transmitter that is a component of the G5 System, and is located on or near
the skin surface and connected to the Sensor, which receives and transmits the representative glucose value measured by the Sensor to the Accu-Chek Systems. 
 (pp) “User Interface” shall mean any and all technology necessary to incorporate the graphical display and audio features of continuous glucose monitoring capabilities into the Accu-Chek
Systems including, but not be limited to, the graphical display of and audio features for use cases, alerts, alarms, error messages, battery management, etc.; provided, however, the term ‘User Interface” shall not include any algorithms,
source code or other technologies that process sensor data. 

  
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 (qq) “Work Product” means all Services prepared and delivered by Dexcom
or its Personnel pursuant to any Statement of Work. Work Product shall include but not be limited to the Development Plan and any deliverables thereunder, the Regulatory Plan and any deliverables thereunder and all validation, verification and
calibration data for the Integrated System. Work Product shall not include Dexcom IP, Roche IP, Joint Invention, the G5 System (including all specifications, designs, algorithms, data, clinical trial protocols and other materials generated by
Dexcom for the G5 System) the Display Specifications (including specifications and designs), and/or such other items as may be specifically excluded in any Statement of Work. 

 

	 	1.	Services 

 1.1
Statements of Work. Each Party during the Term of this Agreement shall provide those services required to be performed by it (the “Services”) as set forth in a written statement of work executed by Roche and Dexcom (a
“Statement of Work”) and in this Agreement; provided however that no Party shall have any obligation to perform, purchase, provide or accept any Services unless and until a Statement of Work is executed hereunder and a purchase
order is issued. Attached as Exhibit A to this Agreement is the initial Statement of Work for both Parties (the “Initial Statement of Work”). The Parties may amend any Statement of Work, including the Initial Statement of Work, at
any time by mutual written agreement. 
 1.2 Changes to Statements of Work. Changes to a Statement of Work may be
provided through recommendation(s) by the Steering Committee as described in Section 3.7. Upon receipt of such changes to the Statement of Work, the Parties shall execute an amendment to the applicable Statement of Work reflecting such changes.

 1.3 Facilities. Dexcom shall provide Services required to be performed by it at the facility or facilities identified
in the applicable Statement of Work. 
 1.4 Materials for Services. Subject to Roche’s obligation under
Section 2.1 of this Agreement to reimburse Dexcom for certain expenses, each Party shall provide the necessary materials, including but not limited to, prototypes, software, source codes, manuals, and documents, at its own expense to complete
such Services in the applicable Statement of Work. 
 1.5 Cooperation. The performance of all Services hereunder shall be
coordinated by the Project Leaders (as defined in Section 3.1). The Parties agree that the successful carrying out of any Services is largely dependent upon the cooperation and the regular exchange of information between the Parties. The
Parties shall facilitate the Services provided hereunder through the regular exchange of information. Each Party shall inform the other Party without undue delay about any delays in the Services or the achievement of any milestones under any
Statement of Work. 

  
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	 	2.	Fees and Payment Terms 

2.1 Fees. Subject to Section 2.2, Roche shall pay Dexcom the fees set forth in the applicable Statement of Work in accordance
with the terms set forth therein (the “Service Fees”) and the milestone payments set forth in the Initial Statement of Work in accordance with the terms set forth therein (the “Milestone Payments”). In addition to
the Service Fees, Roche may be required to reimburse Dexcom for those expenses set forth in the Statement of Work in accordance with the terms set forth therein. Roche shall not be obligated to reimburse Dexcom for any expenses not set forth in a
Statement of Work, unless such expenses are pre-approved by Roche. The Service Fees, Milestone Payments and any expenses reimbursed by Roche shall constitute Dexcom’s complete compensation for the performance of the Services required to be
performed by it and the licenses granted in Section 6.5. Dexcom shall have no obligation to compensate Roche for, or reimburse Roche for any expenses incurred in connection with, Roche’s performance of its obligations under this Agreement
or any Services required to be performed by it. The Service Fees shall not exceed $1,000,000 under this Agreement and all Statements of Work, collectively, unless the Parties otherwise agree in writing. 

2.2 Payment Terms. Unless otherwise specified in a particular Statement of Work, Dexcom shall issue within fifteen
(15) calendar days of the end of each calendar month during the Term of this Agreement, an invoice for the Services it performed in such month. Roche shall pay Dexcom all undisputed amounts for such Services within forty-five (45) calendar
days after Roche’s receipt of a complete invoice therefor (the “Receipt Date”). 
 2.3 Taxes. To
the extent that Services supplied hereunder are subject to any sales, use, value added or any other taxes, payment of said taxes, if any, is Dexcom’s responsibility and said taxes are included in the Service Fees. Dexcom shall be liable for any
and all taxes on any and all income it receives from Roche under any agreement and shall make appropriate filings with the taxing authorities for all taxes and payments for person(s) employed by Dexcom. 

 

	 	3.	Personnel 

 3.1
Project Leader. Roche and Dexcom shall each designate a “Project Leader” for each Statement of Work who shall be the principal point of contact for all matters relating to such Statement of Work. The Project Leader designated
by a Party for a Statement of Work may be changed by written notice to the other Party to such Statement of Work. 
 3.2
Employees; Independent Contractors. Each Party shall provide all of the Services through its Personnel. 
 3.3
Qualifications. Each Party shall ensure that all Personnel providing Services hereunder have the necessary and appropriate education, background, training, and experience to provide the Services requested and to perform such Services in
compliance with this Agreement, including any special training required pursuant to the applicable Statement of Work. 

  
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 3.4 Key Personnel. Each Statement of Work may designate certain individuals as
“Key Personnel” for the Services to be performed by each Party, and the Parties thereto subsequently may agree in writing that additional individuals are Key Personnel for the Services. 

3.5 Performance of Personnel. If Roche becomes dissatisfied with the performance of any Personnel providing Services, Roche may
notify Dexcom of the details of the unsatisfactory performance, and the Parties shall cooperate to remedy the problem as soon as reasonably possible. In the event any Personnel are replaced, the replacement Personnel’s rate shall be no higher
than the rate of the Personnel that was replaced, nor shall Roche be required to pay for time spent by replacement Personnel becoming familiar with the Services or training to perform the Services under this Agreement. 

3.6 Responsibility for Personnel. Each Party assumes full responsibility for the actions and omissions of all its Personnel
performing Services hereunder, either at Dexcom’s or Roche’s facility, and shall be solely responsible for their supervision, daily direction and control, payment of salary (including withholding of income taxes and social security),
workmen’s compensation and occupational insurance as required by law, comprehensive public liability insurance, compensation, disability benefits and the like. Under no circumstances will either Party’s Personnel be considered employees or
agents of the other Party. Each Party agrees that, while its Personnel are on the other Party’s premises, they will conform to all of the other Party’s work rules, safety regulations and its standard practices governing behavior of its own
employees. Each Party shall be liable for all acts and omissions of any independent contractors that perform Services to the same extent as if they were the acts and omissions of employees of that Party. 

3.7 Steering Committee. Roche and Dexcom will establish a steering committee (the “Steering Committee”) to
coordinate and oversee the overall implementation of this Agreement, the Development Plan and the Regulatory Plan (as defined in Section 13.4) and to approve the final specifications and designs of the Integrated System, which approval will not
be unreasonably withheld. The Steering Committee will consist of an equal number of representatives of each Party, and all decisions of the Steering Committee will be by unanimous consent. At a minimum, the Steering Committee shall be
comprised of senior R&D management from each Party. Each Project Leader shall provide regular reports and identify any issues to the Steering Committee. In the event the Steering Committee is unable to reach unanimous consent on any
material issue, the Steering Committee will not take action on such issue without the prior approval of the President of Dexcom and the Head of Diabetes Care at Roche. Notwithstanding the foregoing, the Parties shall further determine additional
roles, responsibilities and functions of the Steering Committee. 
  

	 	4.	Quality 

 4.1 Service
Quality; Warranty. Dexcom expressly warrants and covenants all Services furnished under this Agreement shall be provided in a workmanlike manner and in accordance with the generally accepted practices in the applicable Service industry and all
terms and conditions of this Agreement and the Statement of Work, including Section 13.1 hereof 

  
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 4.2 Dexcom Corrective Action Request. If, during the Term of this Agreement,
Roche reasonably identifies an issue that may affect the quality of the Services performed by Dexcom, Work Products or Dexcom’s quality control processes or procedures or compliance with this Agreement, Roche may at its sole discretion, issue
to Dexcom a Supplier Correction Action Request (each a “SCAR”). Within fifteen (15) calendar days after the issue date of the SCAR, Dexcom shall deliver to Roche a detailed response to the SCAR (a “SCAR
Response”). If final closure and verification on the issue or issues identified in the SCAR cannot be achieved within fifteen (15) calendar days of Dexcom’s receipt of the SCAR, as part of the SCAR Response, Dexcom shall submit to
Roche an action plan detailing its proposed plan to correct the issues identified in the SCAR. Roche shall have the right to review and propose revisions to any such action plans, and all such action plans are subject to Roche’s written
approval. Following Roche’s approval and Dexcom’s initial implementation of the corrective action plan, Dexcom shall provide bi-weekly status reports to Roche until final verification of the corrective action is accomplished and Roche
accepts the corrective action by written notice to Dexcom. In the event that Dexcom breaches its obligations under this Section 4.2, Roche’s sole remedy shall be to terminate this Agreement. 

4.3 License, Accreditation and Certifications. Each Party shall obtain and maintain, at its expense, all licenses, accreditations
and certifications necessary for it to provide Services. 
  

	 	5.	Delivery and Acceptance 

5.1 Delivery. Each Party shall perform the Services required to be performed by it upon the timeframes set forth in the applicable
Statement of Work. In the event that a Party cannot meet such schedule, and provided that such delay is beyond the reasonable control of that Party, the Parties will mutually agree on a revised schedule for the performance of such work. 

5.2 Prototypes. During the development of the Integrated System, Roche and Dexcom shall deliver prototypes of the Accu-Chek
Systems and the G5 System respectively, in accordance with the schedule specified in the Statement of Work, as required for testing and evaluation purposes. In the event that such prototypes fail to meet the mutually agreed upon criteria, the
responsible party shall modify such prototypes and deliver a new prototype that conforms to such criteria. If after Dexcom finalizes the specifications and design for the G5 System, Dexcom learns of or discovers any material defects that affect the
safety or efficacy of G5 System, it will notify Roche and use commercially reasonable efforts to remedy any such defects. If Dexcom learns of or discovers any material defects that affect the safety or efficacy of the Display Specifications, it will
notify Roche and use commercially reasonable efforts to remedy any such defects. If after Roche finalizes the specifications and design for the Accu-Chek Systems, Roche learns of or discovers any material defects that affect the safety or efficacy
of Accu-Chek Systems, it will notify Dexcom and use commercially reasonable efforts to remedy any such defects to the Accu-Chek System or improvements to the Display Specifications. If Roche notifies Dexcom that the Display Specifications affects
the safety or efficacy of the Accu-Chek System, the Parties shall use commercially reasonable efforts to remedy any such defects. 

  
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	 	6.	Ownership Rights and Licenses 

 6.1 Original Work. All Work Products shall be the original work of Dexcom and its Personnel, and all Work Product shall be owned by Roche. Neither Party shall disclose to the other Party or induce
the other Party to use the trade secrets of others. 
 6.2 Joint Inventions. 

(a) All Joint Inventions shall be owned [*****]; provided, that, it is the express intent of the Parties to avoid the development of any
Joint Inventions. [*****] agrees to assign, and hereby assigns, [*****] its successors and assigns, all Joint Inventions, including the right to seek patent protection and to claim all rights of priority thereunder. Joint Inventions shall become
[*****] property whether or not patent protection is sought. [*****] shall promptly communicate full information regarding any Joint Inventions to [*****]. [*****] agrees to execute all assignments and other instruments and documents, and to provide
all reasonable assistance in connection with the preparation and prosecution of any such patent applications, [*****] may reasonably consider necessary or appropriate to carry out the intent of this Section 6.2. 

(b) [*****] hereby grants to [*****] a perpetual, non-exclusive, worldwide, non-transferable, non-sublicensable, royalty-free license,
to use and otherwise exploit Joint Inventions, except that the license shall be transferable and sublicensable if the Joint Invention is or becomes embodied in [*****], provided, however, that no activity under this license shall interfere with or
prevent [*****] from exploiting the Joint Inventions [*****], including but not limited to the [*****]. 
 6.3 Works Made for
Hire. Dexcom agrees that all Work Products that are works of authorship shall be deemed “works made for hire” within the meaning of the copyright laws of the United States and Roche shall own all right, title and interest in and to
such Work Product, including the entire copyright in the Work Product. 
 6.4 Assignment of Rights. Subject to
Section 6.5, Dexcom further agrees that to the extent any Work Product or part thereof is not a “work made for hire,” Dexcom agrees to assign, and hereby assigns, to Roche ownership of all right, title and interest in and to such Work
Product or part thereof, and agrees that Roche shall be the sole and exclusive owner of all right, title and interest in and to such Work Product, including without limitation, all patent, copyright, trademark, trade secret and other proprietary
rights therein that may be secured in any place under any laws now or hereinafter in effect. Dexcom agrees to execute all assignments and other instruments and documents necessary for Roche to perfect its ownership of its rights in the Work Product.
Except as set forth in Section 6.2(b), no license in or to any Work Products is granted to Dexcom either expressly or by implication, estoppel or otherwise. 

  
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 6.5 Grant of Licenses to Roche. 

(a) During the term of this Agreement, and subject to the restrictions, limitations, reservations and conditions set forth in this
Agreement, Dexcom hereby grants to Roche, and Roche hereby accepts a royalty-free, non-transferable, non-sublicensable, non-exclusive worldwide license to the [*****]solely to perform internal research and development functions. During the term of
this Agreement, and subject to the restrictions, limitations, reservations and conditions set forth in this Agreement, Dexcom hereby grants to Roche, and Roche hereby accepts a royalty-free, non-transferable, non-sublicensable, non-exclusive
worldwide license to the [*****]solely to perform any Services required to be performed by it pursuant to a Statement of Work. 

(b) Upon the termination or expiration of this Agreement and if Roche does not commercialize the Integrated System, Dexcom shall grant
to Roche [*****]. 
 (c) Except as expressly set forth in this Article 6 or any Statement of Work, Roche shall not have any
right, title, interest or license in or to Dexcom IP. 
 (d) Subject to the restrictions, limitations, reservations and
conditions set forth in this Agreement, Dexcom hereby grants to Roche, and Roche hereby accepts a non-exclusive license to the [*****]to use, import, make, have made, offer, sell and have sold Accu-Chek Systems which include the [*****]. For the
avoidance of doubt, the license granted in this Section 6.5(d) shall extend during the Term of this Agreement and shall survive any termination of this Agreement on a non-exclusive basis until such time as (i) Roche decides, in its sole discretion,
to discontinue marketing and sales of the Accu-Chek Systems and (ii) Roche fulfills all customer service and warranty obligations with respect to the Accu-Chek Systems. 
 (e) Subject to the restrictions, limitations, reservations and conditions set forth in this Agreement, Dexcom hereby grants to Roche, and Roche hereby accepts a royalty-free, non-exclusive license in the
Territory to utilize the Dexcom Trademarks in the manner to be described in the commercialization agreement and solely in connection with the promotion, advertising, distribution and sale of the Accu-Chek Systems and the Integrated System as
contemplated by the commercialization agreement. For the avoidance of doubt, the license granted in this Section 6.5(e) shall survive any termination of this Agreement on a non-exclusive basis until such time as the term of the commercialization
agreement expires. 
 (f) In consideration of the licenses granted by this Section 6.5, Roche shall only pay to Dexcom
(A) the Milestone Payments described in Section 2.1 hereof for access to the Display Specifications and (B) a payment of $100 for each sale of the Accu-Chek System which has been approved by the FDA with the G5 System, which such
payment shall be set out in the commercialization agreement contemplated hereby. 
 (g) Dexcom hereby grants Roche [*****].
Roche may [*****]the Parties will restrict their efforts under the Agreement to the development of an Integrated System [*****]. [*****] 

  
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 (h) Dexcom hereby grants Roche [*****]. Dexcom shall notify Roche of [*****]. With
respect to [*****], Roche shall have a period of [*****] after receipt of notice of such [*****]. If Roche [*****]. 
 6.6
Roche Intellectual Property. Subject to Section 6.2(b), and unless specifically granted otherwise in a Statement of Work, nothing contained in this Agreement shall be construed to grant Dexcom a license to or in any way give
ownership to any Roche IP, except that Dexcom shall have access to and the right to use such Roche IP during the Term as required for Dexcom to fulfill, and solely for the purpose of fulfilling, its contractual obligations herein.

6.7 Prosecution and Maintenance of Patents: 
 (a) Roche IP and Joint Inventions: With regard to all Roche IP and any Joint Inventions, Roche shall control, at its sole discretion and expense, the preparation, prosecution and maintenance of all
patents and patent applications. 
 (b) Dexcom IP: With regard to all Dexcom IP, Dexcom shall control, at its sole discretion
and expense, the preparation, prosecution and maintenance of all patents and patent applications. 
 6.8 Enforcement. If
either Party has knowledge of any infringement claim or other claim relating to any Work Products, Joint Inventions, the G5 System, Display Specifications, the Accu-Chek Systems, such Party shall promptly inform the other Party in writing of such
claim. 
  

	 	7.	Additional Representation and Warranties. 

 7.1 Authorization. Both Parties have the requisite corporate power and authority (a) to execute and deliver this Agreement, (b) to perform its obligations hereunder, and (c) to grant
the rights described in this Agreement. This Agreement has been duly authorized, executed, and delivered by both Parties and constitutes the legal, valid and binding obligation of each Party 

  
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enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other similar laws relating to or affecting generally the enforcement of
creditors rights or by general equitable principles. 
 7.2 No Conflict. The execution and delivery of this Agreement and
the incurrence of the obligations and consummation of the transactions herein contemplated will not conflict with, or constitute a breach of or default under, the certificate of incorporation or by-laws of either Party or any material contract,
indenture, mortgage, loan agreement, or lease to which either Party is party or by which it may be bound, or any law, administrative regulations, or court decree. 
 7.3 Consents. No consent, approval, authorization, order, registration, or qualification of or with any person, entity, court or any regulatory authority or other governmental agency or body is
required for the execution and delivery of this Agreement by either Party or for the legality, validity or enforceability of the transactions contemplated by this Agreement. 
 7.4 Infringement and Adverse Action. Dexcom represents and warrants, to the best of its knowledge, that as of the date of this Agreement, Roche’s use of the prototype components of the G5
System supplied by Dexcom to Roche, the Display Specifications, and the Work Product, each as used solely for the development of the Integrated System, does not infringe any patent, copyright, trade secret, or other proprietary right of any third
party. Roche represents and warrants, to the best of its knowledge, that as of the date of this Agreement, use of the Accu-Chek System, as used solely for the development of the Integrated System, does not infringe any patent, copyright, trade
secret, or other proprietary right of any third party. 
 7.5 Invention Rights. Each Party represents and warrants that
all of its Personnel have assigned, or will assign, all of their respective rights in or to any Inventions to such Party and that it has, or will have, sufficient rights and title to grant the rights and licenses to the other Party specifically
contemplated by this Agreement. 
  

	 	8.	Term and Termination 

8.1 Term of Agreement. The “Initial Term” of this Agreement shall begin on the Effective Date and shall, unless
earlier terminated pursuant to Section 8.3 below, continue in full force and effect through December 31, 2014. Subsequent to the Initial Term, this Agreement shall be automatically renewed thereafter for consecutive one-year periods unless
a Party (a) provides the other Party written notice of its intent not to renew the Agreement ninety (90) days prior to the expiration of the then current Term, or (b) otherwise terminates the Agreement in accordance with
Section 8.3. For purposes of this Agreement, the Initial Term and any renewal periods thereafter shall be referred to herein as the “Term.” 
 8.2 Term of Statements of Work. The term of each Statement of Work shall commence on the date set forth in the Statement of Work and, unless earlier terminated pursuant to Section 8.3 below,
continue in full force and effect for the term set forth therein. 

  
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 8.3 Termination. 

8.3.1 Termination for Cause. 
 8.3.1.1 Material Breach. Either Party shall have the right to terminate this Agreement and/or any affected Statement(s) of Work upon immediate written notice if the other Party is in material
breach or material default of any of its representations, warranties, covenants, or other obligations set forth in this Agreement or such Statement of Work and such Party fails to cure such breach or default within thirty (30) calendar days
following receipt of written notice of such breach. Except as otherwise provided in this Agreement, in the event of such termination, the non-breaching Party shall be entitled to seek all available remedies at law or in equity in addition to
exercising its right to terminate. 
 8.3.1.2 Insolvency. Either Party may, at its sole option, immediately terminate
this Agreement and/or any Statement(s) of Work upon written notice, but without prior advance notice, to the other Party in the event that (A) the other Party is or becomes insolvent or is declared bankrupt by a court of competent jurisdiction;
(B) a voluntary petition of bankruptcy is filed in any court of competent jurisdiction by such other Party; (C) an involuntary petition for bankruptcy is filed in any court of competent jurisdiction against such other Party; (D) a
receiver or trustee is appointed for such other Party; or (E) this Agreement is assigned by such other Party for the benefit of creditors. For purposes of this Agreement, a Party shall be deemed to be “insolvent” when such Party has
ceased to pay its debts in the ordinary course of business, cannot pay its debts as they become due, or is insolvent within the meaning of the federal bankruptcy law. 
 8.3.2 Termination Without Cause. Roche may terminate this Agreement or any Statement(s) of Work for any reason or no reason upon written notice to Dexcom at least thirty (30) calendar days in
advance of the effective date of the termination. 
 8.4 Effect of Termination. Upon the expiration or termination of a
Statement of Work, each Party shall cease providing Services under that Statement of Work and Dexcom shall promptly deliver to Roche all Work Products, whether completed or work in progress. Provided the Statement of Work was not terminated as the
result of a breach by Dexcom, Dexcom may invoice Roche, and in such event Roche shall pay Dexcom in accordance with Section 2.2, for any Services satisfactorily performed and expenses properly incurred prior to notice of termination.
Notwithstanding the foregoing, if Roche elects to terminate this Agreement pursuant to Section 8.3.2, or if Dexcom elects to terminate this Agreement pursuant to Sections 8.3.1.1 or 8.3.1.2, then Dexcom shall have no obligation to repay any
Milestone Payments previously paid to it by Roche as of the date of expiration or termination. The termination of one Statement of Work shall not affect this Agreement or any other Statement of Work and notwithstanding, the termination or expiration
of this Agreement, the terms and conditions of this Agreement shall continue in effect with respect to each Statement of Work until the expiration or termination of such Statement of Work. In case of termination of this Agreement, the Steering
Committee shall determine whether Statement of Works that have been signed prior to this termination date shall be performed in full, also after termination of this Agreement. If the Steering Committee determines so, said Statement of Works to
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rules and stipulations under the then terminated Agreement. In case of a termination of this Agreement any payments by Roche are only due for such works rendered by Dexcom until the moment of
termination, except for works carried out under Statement of Works to be continued according to the Steering Committee’s decision. 
 8.5 Survivability. The rights and obligations of Sections 4.1, 6.1, 6.2, 6.3, 6.4, 6.5(b), 6.5(c), 6.5 (d), 6.6, 6.7, 8.4, 8.5, 15.1, 15.2 (only with respect to Dexcom’s obligation to
maintain Records under such Section) and 15.3 and Articles 9, 12 and 16 shall survive any termination of this Agreement and shall bind the Parties and their legal representatives, successors, and assigns. 

 

	 	9.	Indemnification 

 9.1
Infringement Indemnification. 
 9.1.1 By Dexcom. Dexcom shall defend, indemnify and hold harmless Roche and its
Affiliates, and each of their respective directors, officers, employees, and agents, and their respective successors and permitted assigns (collectively, the “Roche Indemnitees”) from and against any and all claims, actions, causes
of action, liabilities, losses, costs, expenses, or damages, including reasonable attorneys’ fees (collectively, “Claims”) against any of (a) the Display Specifications, (b) G5 System, (c) any Work Product or the
exploitation or use of such Work Product by the Roche Indemnitees, or (d) any process created or utilized by Dexcom in connection with the performance of Services by Dexcom, for infringement or misappropriation of any patent, copyright, trade
secret or other intellectual property or proprietary right of another person or entity. 
 9.1.2 By Roche. Roche shall defend,
indemnify and hold harmless Dexcom and its Affiliates, and each of their respective directors, officers, employees, and agents, and their respective successors and permitted assigns (collectively, the “Dexcom Indemnitees”) from and
against any and all Claims against either of (a) the Accu-Chek System or (b) any process created or utilized by Roche in connection with the performance of Services by Roche, or the exploitation or use thereof by the Dexcom Indemnitees,
for infringement or misappropriation of any patent, copyright, trade secret or other intellectual property or proprietary right of another person or entity. 
 9.1.3 If the development, manufacture, import, sale or use of the Integrated System results in a Claim against Roche and/or Dexcom alleging infringement of a claim of a patent or alleges infringement or
misappropriation of some other intellectual property right of a third party and neither of Dexcom or Roche is entitled to indemnification pursuant to Sections 9.1.1 and 9.1.2 (“Integrated System Infringement Action”), such Party
will promptly notify the other Party in writing. The Parties will cooperate and share equally costs related to the defense of any Integrated System Infringement Action. The Parties will consult prior to entering any settlement agreement concerning
any Integrated System Infringement Action and, in the event a Party desires that the other Party not accept a proposed settlement agreement, the Parties will negotiate in good faith regarding alternatives to accepting the proposed settlement
agreement. 

  
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 9.2 General Indemnification. Each Party (the “Indemnifying
Party”) shall protect, defend, indemnify, and hold the other Party, its Affiliates and each of their respective directors, officers, employees, and agents, and their respective successors and permitted assigns (collectively, the
“Indemnified Parties”) harmless from and against any and all claims, actions, causes of action, liabilities, losses, costs, expenses, or damages, including reasonable attorneys’ fees, incurred by the Indemnified Parties which
directly or indirectly arise out of or relate to (i) the breach by the Indemnifying Party of any of its representations, warranties, covenants, agreements, or obligations set forth in this Agreement or any Statement of Work, (ii) physical
injury (including death) and/or property damage actually or allegedly caused by the Indemnifying Party’s products, parts, or services and that is not the result of the other Party’s products, parts or services, or (iii) the
negligence, recklessness, or willful misconduct of the Indemnifying Party in connection with its performance of its obligations set forth in this Agreement or any Statement of Work. 

9.3 Notice of Claims. Any Indemnified Party claiming indemnification hereunder shall give to the Indemnifying Party
(i) prompt written notice of any third-party claim(s) made against the Indemnified Party for which the Indemnified Party knows or reasonably should know that the Indemnifying Party may be liable hereunder, and (ii) the opportunity to
defend, negotiate, and settle such third-party claim(s). The Indemnified Party shall provide the Indemnifying Party with all information in its possession reasonably related to such third-party claim, all authority, and all assistance necessary to
enable the Indemnifying Party to carry on the defense of such suit; provided, however, the Indemnified Party reserves the right to retain its own counsel to defend itself in such suit. Notwithstanding the foregoing, the Indemnified
Party shall not be bound by any settlement made without its prior written consent. 
 9.4 Right of Off-Set. To the extent
Roche has incurred expenses in connection with a Claim for which it is entitled to indemnification pursuant to Section 9.1.1 or 9.2 of this Agreement and/or the Co-Promotion and Distribution Agreement between Dexcom, Inc. and Roche Insulin
Delivery Systems, Inc., effective as of September 22, 2011, and Dexcom has not reimbursed such expenses, Roche shall have the right to immediately stop paying any Service Fees and Milestone Payments due to Dexcom under this Agreement or an
applicable Statement of Work until Dexcom has fully indemnified the Roche Indemnitees. 
 9.5 LIMITATION OF LIABILITIES.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT EXCEPT WITH RESPECT TO INFRINGEMENT CLAIMS REQUIRED TO BE INDEMNIFIED PURSUANT TO SECTION 9.1 AND THIRD PARTY CLAIMS REQUIRED TO BE INDEMNIFIED PURSUANT TO SECTION 9.2 ABOVE,
OR ANY CLAIM ARISING OUT OF A BREACH OF CONFIDENTIALITY, NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES WHETHER ARISING OUT OF SAID PARTY’S PERFORMANCE OR NON-PERFORMANCE OF THIS
AGREEMENT, TORT (INCLUDING NEGLIGENCE), WARRANTY, OR OTHERWISE, EVEN IF THE EXCLUSIVE REMEDIES PROVIDED HEREIN FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN IF A PARTY IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

  
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	 	10.	Risk Management 

 10.1
Insurance Requirements. 
 10.1.1 Amounts and Types. During the Term of this Agreement, each Party shall maintain
in full force and effect, at its own expense, insurance coverage by reputable insurers, as set forth below: 
 10.1.1.1
Worker’s Compensation. Worker’s compensation insurance as required by law or regulation. Where permitted by law, such policies shall contain waivers of the insurer’s subrogation rights against the other Party. 

10.1.1.2 Employer’s Liability Insurance. Employer’s liability insurance in amounts not less than $100,000 per accident
for bodily injury by accident, $500,000 policy limit by disease, and $100,000 per employee for bodily injury by disease. 

10.1.1.3 Commercial General Liability. Commercial General Liability insurance with minimum combined per occurrence limits for
bodily injury and property damage of $1,000,000. Commercial General Liability coverage shall also include contractual liability with a minimum of $2,000,000. Each Party is to be named as an additional insured on the other Party’s General
Liability policy. 
 10.1.2 Liability. Nothing contained in this Section 10.1 shall be deemed in any way to either
limit or increase the liability of either Party or their insurers under this Agreement. Notwithstanding anything to the contrary contained herein, each Party’s and its insurers’ liability and obligations to the other shall be limited to
coverage for claims for which it is liable pursuant to this Agreement. 
  

	 	11.	[INTENTIONALLY OMITTED] 

  

	 	12.	Confidentiality 

 12.1
Disclosure; Standard of Care. Both Dexcom and Roche shall retain in confidence all Confidential Information received from the other prior to or during the term of this Agreement and will not, at any time during the term of this Agreement or
after termination hereof, in any fashion, form or manner, either directly or indirectly, copy, reproduce, sell, assign, license, market, transfer, give, or otherwise disclose, divulge, release, or use for any purpose (other than in furtherance of
the respective obligations and covenants contained in this Agreement) any Confidential Information received from the other Party or an Affiliate of the other Party. Each Party and its Affiliates will protect the other Party’s and its
Affiliates’ Confidential Information from unauthorized dissemination and use with the same degree of care that each such Party uses to protect and safeguard its own like information, but not less than the degree of care that would be exercised
by a prudent person given the sensitivity and strategic value of such Confidential Information. Each Party furthermore agrees to not use any Confidential Information disclosed by the other Party or generated hereunder for any purpose other than the
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such of its employees as are entrusted to carry out such activities. Such information may, however, be disclosed to the extent required to under applicable laws or regulations or an order by a
court or other regulatory body having competent jurisdiction; provided, however, that except where legally impermissible, the Party required to disclose the Confidential Information shall give the other Party reasonable advance notice of such
disclosure requirement (which shall include a copy of any applicable subpoena or order) and shall afford such Party a reasonable opportunity to oppose, limit or secure confidential treatment for such required disclosure. In the event of any such
required disclosure, the Party obligated to disclose shall only disclose that portion of the Confidential Information of the other Party that it is legally required to disclose. 

12.2 Return of Confidential Information. Each Party agrees not to make any copies in whole or part of Confidential Information of
the other Party for any purpose other than the purposes set forth and agreed to by the Parties hereunder. At the termination or expiration of this Agreement, each Party, upon request by the disclosing Party, shall return all Confidential Information
received from the disclosing Party except as provided in Section 6.5, including any copies thereof, and provide the disclosing Party with a certification that all Confidential Information has either been returned or destroyed; provided,
however, that subject to the terms and conditions of this Agreement, including without limitation, this Article 12, the receiving Party may retain one (1) copy of each item of Confidential Information in its legal department (or with its
outside legal counsel in the case of Dexcom) for use only in monitoring its compliance with obligations here undertaken. 
 12.3
Trade Secret Laws. The confidentiality provisions of this Agreement are in addition to and not in lieu of any protection that either Party may have under applicable trade secret laws relating to the protection of Intellectual Property.

 12.4 Press Releases. Except as may be required by any rules and regulations promulgated by the Securities and Exchange
Commission, or any national securities exchange on which either Party’s securities are traded, Roche and Dexcom shall not issue any press release or public announcement with respect to this Agreement without the prior, written consent of the
other Party as to the form and content of such release. 
  

	 	13.	Regulatory and Related Matters. 

 13.1 Compliance with Laws and Related Requirements. 
 13.1.1
Compliance. Dexcom and Roche shall ensure that all Services are provided by it in accordance with, and shall conform to, (i) all Applicable Laws, (ii) any additional regulatory provisions, operating procedures, quality requirements
and other standards set forth in the applicable Statement of Work, regardless of whether such requirements are mandatory under Applicable Laws, and (iii) both Parties’ internal standard operating procedures and quality requirements
(collectively, the “Requirements”), and shall document the same. Each Party shall notify the other Party promptly if it becomes aware of any non-compliance by it with any of the Requirements and shall take all appropriate action
necessary to promptly correct such non-compliance and fully comply with all of the Requirements. Dexcom and Roche shall document all non-compliance and any steps Dexcom and Roche takes to correct such non-compliance. 

  
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 13.2 Government Audits and Notification of Findings. If, during the Term of this
Agreement, Roche or Dexcom receives correspondence, notification or inspectional findings, from the FDA or other US governmental or regulatory authority regarding Dexcom’s Services, Records, Dexcom’s quality system, and/or possible audit
or any other matter relating to this Agreement, the Receiving Party shall notify the other Party and provide copies of such correspondence, notification or inspectional findings within forty-eight (48) hours following receipt of such
correspondence, notification or inspectional findings. Dexcom shall permit a representative designated by Roche to be present during any inspection or audit by a governmental or regulatory authority if the inspection or audit is reasonably expected
to relate to the Services. Roche shall have the right to review and participate in drafting any response to any such inspection or audit, or any other request for information from a governmental or regulatory authority pertaining to the Dexcom
Services or any activities under this Agreement, prior to submission of such response to the governmental or regulatory authority. Dexcom shall provide to Roche copies of all information bearing on the Services received from any governmental or
regulatory authority prior to, during, or following any audit or inspection, within two (2) calendar days of receipt. 

13.3 Federal Contractor Status. Roche is a federal contractor with obligations from various federal laws, rules, regulations, and
executive orders, including without limitation, Equal Employment Opportunity and the utilization of small, disadvantaged, woman-owned, veteran and HUB zone businesses. Dexcom agrees to perform the Services required to be performed by it in
compliance with Applicable Laws. Dexcom agrees to provide, at Roche’s request, any and all documentation required to substantiate such compliance. 
 13.4 Development and Regulatory Plan. Roche and Dexcom will collaborate in good faith to create a development plan for the Integrated System (the “Development Plan”). Roche and
Dexcom will collaborate in good faith to create a regulatory plan to seek and maintain regulatory approval to market the Integrated System (the “Regulatory Plan”). The Regulatory Plan shall describe the responsibilities of the
Parties in seeking and maintaining regulatory approval of the Integrated System. Upon mutual agreement of the Parties, the Parties will update the Development Plan and Regulatory Plan detailing each Party’s roles and responsibilities, major
milestones and measurable events required to develop the Integrated System and obtain regulatory approval of the Integrated System and such plans will be incorporated into this Agreement as Exhibits to the applicable Statement of Work. The Parties
shall use good faith efforts to negotiate and execute amendments to this Agreement, to the extent necessary to include any additional terms and conditions required to implement the Development Plan, Regulatory Plan or any amendments to the
Development Plan or Regulatory Plan, including without limitation, those regulatory and quality provisions deemed reasonably necessary by the Party submitting any applications required by Applicable Law. 

 

	 	14.	[INTENTIONALLY OMITTED] 

  
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	 	15.	Records and Audits 

 15.1
Records. In compliance with Applicable Laws and its own internal quality systems, Dexcom shall maintain reproducible records of all information and data relating to its performance under this Agreement (the “Records”)
including, without limitation, information described or requested in the applicable Statement of Works, Work Products, accounting records, time sheets, written policies and procedures, correspondence, and any other documentation until the later of
five years after the expiration or earlier termination of this Agreement and the period required by any Applicable Laws. Dexcom’s internal quality systems respecting the creation and maintenance of records shall comply with 21 CFR 820, as
applicable and 21 CFR part 11 regarding electronic records and signatures. 
 15.2 Audit of Dexcom. Within forty eight
(48) hours after a request is made by Roche, Dexcom’s facilities and any work in progress or Work Products produced hereunder shall be open to audit, inspection, examination and evaluation, during normal working hours and at reasonable
intervals, by Roche or its authorized representatives to the extent reasonably necessary to evaluate Dexcom’s compliance with, and the conformance of the Work Products to, Applicable Laws, quality assurance requirements, regulatory requirements
and other requirements of this Agreement in connection with its performance under this Agreement Without limiting the generality of the foregoing, Dexcom shall permit Roche or its authorized representatives, to enter the Dexcom’s facilities to
inspect and audit and to make copies of any Records (including without limitation Records relating to quality assurance and regulatory compliance). For the purpose of such audits, inspections, examinations, and evaluations, Roche or its authorized
representatives shall have access to such Records beginning on the Effective Date and continuing until five (5) years after the later of (i) the termination or expiration of the Agreement or (ii) the satisfaction of Dexcom’s
obligations under this Agreement. Dexcom shall cooperate and facilitate such inspection, including without limitation by making Personnel that provided Services under this Agreement available for questioning and demonstrations. In addition, Dexcom
shall provide adequate and appropriate workspace for Roche or its authorized representatives to conduct such audits, inspections, examinations and evaluations. 
 15.3 Ownership and Maintenance of Records. Dexcom shall notify Roche in writing at the expiration of the time period specified for access to the Records set forth in Section 15.2 or at any
time thereafter, if it does not intend to maintain the Records. Roche shall have sixty (60) calendar days thereafter to respond to such notice. If Roche determines that it requires such Records, Roche shall notify Dexcom and such Records shall
be shipped to Roche within a reasonable period of time, but in no event later than sixty (60) calendar days after such notification from Roche. Roche agrees to pay for reasonable retrieval and shipping costs associated with such Records.

  

	 	16.	Miscellaneous 

 16.1
Assignability. Neither this Agreement nor any interest hereunder shall be assigned by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld. This Agreement shall be binding upon
and inure to the benefit of the legal successors to the parties hereto. 

  
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 16.2 Entire Agreement. This Agreement, including any Statements of Work issued
hereunder embodies the entire understanding and agreement among the Parties and supersedes all previous negotiations, representations, writings and agreements, written, or oral, with respect to the subject matter herein. Any additional terms or
conflicting terms or conditions contained in any other document pursuant to the subject matter herein, including any purchase order or invoice, are hereby superseded. Dexcom and Roche agree that this Agreement shall not be altered, amended or
modified, except in writing that is signed by an authorized representative of both Roche and Dexcom. In the event of any conflict between a Statement of Work and this Agreement, the terms and conditions of this Agreement shall govern. 

16.3 Enforceability. This Agreement, when executed and delivered by Dexcom and Roche shall be a legal, valid and binding
obligation, enforceable against such Parties in accordance with the terms of this Agreement. Any Statements of Work issued hereunder when executed and delivered by Dexcom and Roche, shall be a legal, valid and binding obligation, enforceable against
Dexcom and Roche. 
 16.4 Non-Waiver. No term or provision hereof shall be deemed waived and no breach excused unless
such waiver or consent shall be in writing and signed by a duly authorized representative of the Party claimed to have waived or consented. 
 16.5 Cumulative Remedies. Any rights of cancellation, termination, liquidated damages, or other remedies provided in this Agreement or any Statement of Work are cumulative and are not intended to
be exclusive of any other remedies to which the injured Party may be entitled at law or equity (including but not limited to the remedies of specific performance and cover). The use of one or more available remedies shall not bar the use of any
other remedy for the purpose of enforcing the provisions of this Agreement; provided, however, that a Party shall not be entitled to retain the benefit of inconsistent remedies. 

16.6 Severability. If any provision of this Agreement is invalid or unenforceable under any statute or rule or law, the provision
is to that extent to be deemed omitted, and the remaining provisions shall not be affected in any way. 
 16.7 Independent
Relationship of the Parties. Dexcom and Roche intend that an independent contractor relationship shall be created by this Agreement, and nothing herein shall be construed as creating an employer/employee relationship, partnership, joint venture,
or concerted action. 
 16.8 Notices. All notices, consents, waivers and other communications required or permitted by
this Agreement shall be in writing and shall be deemed given to a Party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile or e-mail with
confirmation of transmission by the transmitting equipment; or (c) received or rejected by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses, facsimile numbers or e-mail addresses and
marked to the attention of the person (by name or title) designated below (or to such other address, facsimile number, e-mail address or person as a Party may designate by notice to the other Parties): 

  
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	            if to Roche to:	  	Roche Diagnostics Operations, Inc.
		  	9115 Hague Road
		  	Indianapolis, Indiana 46250
		  	Attn: Purchasing Manager
		  	Fax No.: (317) 521-4287
		
	            with a copy to:	  	Roche Diagnostics Operations, Inc.
		  	9115 Hague Road
		  	Indianapolis, Indiana 46250
		  	Attn: Law Department
		  	Fax No.: (317) 521-2840
		
	            if to Dexcom to:	  	Dexcom, Inc.
		  	6340 Sequence Drive
		  	San Diego, CA 92121
		  	Attn: President
		  	Fax No.: (858) 200-9563
		
	            with a copy to:	  	Dexcom, Inc.
		  	6340 Sequence Drive
		  	San Diego, CA 92121
		  	Attn: Legal
		  	Fax No.: (858) 875-5324

 16.9 Publicity. Except as may be required by any rules and regulations promulgated by the
Securities and Exchange Commission, or any national securities exchange on which either Party’s securities are traded, neither Party shall use the other Party’s name or trademarks, or refer to or disclose the existence of this Agreement or
the obligations performed hereunder, directly or indirectly, without the prior written consent of such Party. 
 16.10
Governing Law; Venue. The Agreement shall be governed by the laws of the United States and the laws of the state of Delaware, without regard to the conflicts of law principles thereof. Both Parties agree to use reasonable efforts in a good
faith attempt to settle as promptly as possible any and all disputes arising from this Agreement or a transaction conducted pursuant to this Agreement. 
 [signature page follows] 
  

 
  

  
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 IN WITNESS WHEREOF, Roche and Dexcom
hereto have caused this Agreement to be executed by their duly authorized representatives. 
  

									
	DEXCOM,
INC.                            	 		 	ROCHE DIAGNOSTICS OPERATIONS,
INC.                    
					
	By:	 	 /s/ Steven R. Pacelli
	 		 	By:	 	 /s/ Brian Heald

		 	 Steven R. Pacelli
	 		 		 	 Brian Heald

		 	             (printed)	 		 		 	             (printed)
	Title:	 	 COO
	 		 	Title:	 	Vice President, DC Development & Mfg
	Date:	 	11/1/11                            
                                         
   	 		 	Date:	 	11/1/11                           
                                         
                

  
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 EXHIBIT A 
 STATEMENT OF WORK 
 This Statement of Work (“SOW”) is entered into by the Roche
Diagnostics Operations, Inc. (“Roche” or “Purchaser”) and Dexcom, Inc. (“Dexcom” or “Developer”) pursuant to the Research and Development Agreement by and between Roche and Developer dated November 1,2011
(the “Agreement”). All terms and conditions of the Agreement apply to this SOW and all capitalized terms used but not otherwise defined in this SOW have the meaning set forth in the Agreement. 

    General Information 
  

			
	Statement of Work Effective Date    	 	

  

			
	 Developer:

 
 Name: Dexcom, Inc
 Address: 6340 Sequence Drive
 San Diego, CA 92121

 
	 	
Purchaser:
  
 Name: Roche Diagnostics Operations, Inc.
 Address: 9115 Hague Road

Indianapolis, IN 46250
  

     Scope of Work & Performance Requirements 

 

	
	
1.      Background:

 
 A.     Dexcom and
Roche intend to create an Integrated System.
  
 B.    
Roche and Dexcom will collaborate in good faith on the design and product specifications of the Integrated System, in order to connect the G5 System and the Accu-Chek Systems, which specifications, when developed, shall be incorporated into this
Statement of Work and attached as Exhibit B, hereto.
  
 2.      Each Party shall be responsible for the following Services:
  

[*****]
  
                                   
                      e.
  

 

  

	
	
3.      The Development Services shall be provided at the following
facilities:
 [*****]

  

	
	
4.      Project Leaders:

[*****]

  
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 5.      The Services set forth in this SOW shall be rendered by each Party during the Term. This SOW will become effective as of the Effective Date set forth above and shall
remain effective until completion of all obligations set forth in this SOW. The initial estimated timelines for each Party’s deliverables are set forth in Sections 6 and 7 below. [*****]

 

  

	
	  
 6.      The Services shall be provided in accordance with the following estimated schedule, for which the below dates may change as part of finalizing the Development Plan
and Regulatory Plan: [*****]
  

  

	
	 The Services performed by Dexcom shall include the delivery of the
following reports, results, analysis, and other deliverables[*****]
  
 The
list of deliverables set forth above must specify all Developer-generated reports or documents that Roche needs for purposes of compliance with the design control requirements of FDA’s Quality System Regulation, 21 CFR Part 820, Subpart C.
Developer shall only be responsible for creating and delivering these records only when applicable and only to the extent that it is specifically required by FDA’s Quality System Regulation, 21 CFR Part 820, Subpart C. [*****] These documents
may include, but not be limited to, records relating to the following design control steps, to the extent applicable:
  

 ̈      Design and development
planning, 21 CFR § 820.30(b)
  

 ̈      Design input, 21 CFR §
820.30(c)
  
  ̈      Design output, 21 CFR § 820.30(d)
  

 ̈      Design review, 21 CFR §
820.30(e)
  
  ̈      Design verification, 21 CFR § 820.30(f)
  

 ̈      Design validation, 21 CFR
§ 820.30(g)
  
  ̈      Design transfer, 21 CFR § 820.30(h)
  

 ̈      Design changes, 21 CFR
§ 820.30(i)
  
 In addition, where applicable, Deliverables should
include documentation of compliance with:
  
  ̈      Good Laboratory Practices, 21 CFR Part 58

 

 ̈      Investigational Device
Exemptions, 21 CFR Part 812
  
  ̈      Good Tissue Practices, 21 CFR Part 1271
  

 ̈      The Clinical Laboratories
Improvement Act, codified at 42 U.S.C. 263a, and regulations promulgated thereunder, 42 CFR Part 493, and
  

 ̈      Any similar regulatory
requirements of any applicable regulatory authority.
  

  
  

 

	
	  
 7.      The following are Key Personnel for Dexcom:
 [*****]
  

  
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 8.      The following are Key Personnel for Roche:
                         [*****]

 

  

	
	  
 9.      The Steering Committee will review the Development Services rendered. Such reviews will be made as outlined below: [*****]

 

  

	
	  
 10.    The Development Services shall meet the following specifications and performance requirements: [*****]
  

     Fees and Payment 

 

													
	 1.      Fees and Payment. The Parties
have agreed to the Fees set forth below for the Development Services set forth in this SOW:
  

 

	Section 1	 	 	  	 Developer shall invoice Purchaser
in accordance with the Agreement and based on the rates set forth in each of the Development and Regulatory Plans.
  
 Roche will pay Dexcom for Services provided by Dexcom in connection with for the Integrated System. Dexcom shall invoice Roche in accordance with the Agreement and based on the rates set forth below,
which may be subject to adjustment based on the mutual agreement of the parties[*****]. All Services shall be provided by Dexcom at a total cost that is estimated to be between $800,000 and not to exceed $1,000,000, subject to adjustment
[*****].
  

	 	 	  	Title	  	Annualized Cost	  	Allocation of EE Time to
Project	  	Annual Charge to
Partner	  	Total Cost
Estimate
	 		  	 [*****]
	  	[*****]	  	[*****]	  	[*****]	  	[*****]
	 		  	 [*****]
	  	[*****]	  	[*****]	  	[*****]	  	[*****]
	 		  	 [*****]
	  	[*****]	  	[*****]	  	[*****]	  	[*****]
	 		  	 [*****]
	  	[*****]	  	[*****]	  		  	[*****]
	 	 		  	 [*****]
	  	[*****]	  	[*****]	  	 	  	[*****]
	 	 		  		  		  	 Total
	  	 	  	[*****]
	 		
	 	 	 	  	 NOTE: The table above assumes that [*****] resources are assigned at the
corresponding allocation for up to [*****]. The V&V resources are [*****] costs.
  
 In addition:
  
 •    Dexcom shall provide [*****].
  

•    Dexcom estimates the [*****].

 
 •    Dexcom
estimates [*****].
  

  
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	Section 2    	  	 Upon
execution of the Agreement, Roche shall receive the licenses set forth in Article 6 of the Agreement.
  
 Dexcom shall invoice Roche after accomplishing the following milestones
  
 Milestone Description and Portion in USD
  
 [*****]
  
 The total
consideration of this entire Section 2 is not to exceed USD $3,000,0000.

	 	  	 

  

	
	  
 2.      Travel Expenses. [*****]
  

  

	
	  
 3.      Other Expense. Any other potential fees by Dexcom must be quoted to Roche and approved by Roche via Purchase Order before they can be
rendered.
  

 IN WITNESS WHEREOF, Purchaser and Developer have caused this SOW to
be executed by their duly authorized representatives. 
  

									
	DEXCOM, INC.                	 		 	ROCHE DIAGNOSTICS OPERATIONS,
INC.            
					
	By:	 	  
	 		 	By:	 	  

		 	  
	 		 		 	 Brian Heald

		 	(printed)	 		 		 	(printed)
	Title:	 	  
	 		 	Title:	 	 Vice President, DC Development & Mfg

	Date:	 	                             
                                         
                                	 		 	Date:	 	                             
                                         
                                

  
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 EXHIBIT B 
 INTEGRATED SYSTEM SPECIFICATIONS 
 TO BE UPDATED AND AGREED TO AT A LATER
DATE BY THE PARTIES 

  
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 EXHIBIT C 
 DEVELOPMENT PLAN  
 TO BE UPDATED AND AGREED TO AT A LATER DATE BY THE
PARTIES 

  
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 Exhibit D 
 REGULATORY PLAN 
 TO BE UPDATED AND AGREED TO AT A LATER DATE BY THE
PARTIES 

  
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