Document:

EXHIBIT
10.1

    

    Strategic
Supply Agreement

    

               This
Strategic Supply Agreement (this “Agreement”) is
entered into as of July 24, 2009 (the “Effective Date”) by
and between Abbott Molecular Inc., a Delaware corporation (“Abbott”), and
NeoGenomics Laboratories, Inc., a Florida corporation (“NeoGenomics”).

    

    Recitals

    

               A.           NeoGenomics
operates a genetic testing laboratory that offers a variety of diagnostic tests
for cancer and other diseases, including tests developed by NeoGenomics and
tests developed by others.

     

               B.           Abbott
manufactures and sells certain ASR probes that are useful for analyzing nucleic
acids through a process commonly known as FISH.

    

               C.           NeoGenomics
desires to develop and offer a FISH-based test for the diagnosis of melanoma,
and to potentially develop and offer diagnostic tests for other
cancers.

    

               D.           NeoGenomics
desires to purchase all of its requirements of Products from Abbott, and Abbott
desires to supply and sell all of
NeoGenomics’ requirements for such Products to NeoGenomics,
which NeoGenomics intends to incorporate into its diagnostic test, on the terms
and conditions set forth in this Agreement.

    

               Now,
Therefore, in consideration of the promises and the mutual covenants
contained herein, the parties agree as follows:

    

    Article
1

    Definitions

    

               “Abbott IVD” means an
In-Vitro Diagnostic test for melanoma developed by Abbott for aid in diagnosis
of malignant melanoma in skin biopsy specimens (excluding
subtyping).

    

               “Act” shall mean the
United States Food, Drug and Cosmetic Act and all regulations promulgated
thereunder.

    

    “Affiliate” shall mean
any entity which directly or indirectly controls, is controlled by, or is under
common control with, another entity. For purposes of this Agreement, an entity
shall be deemed to be in control of another entity if the former owns, or the
partners of the former own, directly or indirectly, more than fifty percent
(50%) of the outstanding voting equity (or other equity or ownership interest in
the event that such entity is other than a corporation) of the
latter.

    

               “Agreement” has the
meaning set forth in the introductory paragraph.

    

               “Annual Forecast” has
the meaning set forth in Section 3.4(a)(ii).

    

               “ASR” means analyte
specific reagent.

    

    “Base Price” has the
meaning set forth in Section 4.1(a).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

               “Calendar Quarter”
means each three (3) month period during the term of this Agreement which ends,
respectively, on March 31, June 30, September 30 and December 31 of each
Calendar Year, except for the initial Calendar Quarter of the first Calendar
Year, which will begin on the Effective Date and end on September 30,
2009.

    

               “Calendar Year” shall
mean each twelve (12) month period during the term of this Agreement which
begins on January 1, and ends on December 31, except for the first Calendar Year
which will begin on the Effective Date and end on December 31,
2009.

    

               “Change of Control”
means: (a) the sale of all or substantially all of NeoGenomics’ assets that are
used in designing, developing, validating, marketing, selling, performing or
billing for the Melanoma LDT to a Third Party in a single transaction or series
of related transactions; (b) any merger, consolidation, sale of stock or other
transaction that results in any “person” or “group” (each as defined in the
Securities Exchange Act of 1934, as amended) either becoming the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of NeoGenomics’ voting securities(or
securities converted into or exchangeable for such voting securities)
representing fifty percent (50%) or more of the combined voting power of all
of NeoGenomics’ voting securities(on a fully diluted basis); or (c) any other
event that results, by contract or otherwise, in such person or group obtaining
the ability, directly or indirectly, to elect a majority of the board of
directors of or otherwise direct the management and policies of
NeoGenomics.

    

               “Change of Control Base
Revenue Amount” has the meaning specified in Section 14.4.

    

    “Commencement Date”
has the meaning set forth in Section 9.5(b).

    

    “Confidential
Information” has the meaning set forth in Section 12.1.

    

               “Conversion Date” has
the meaning set forth in Section 3.4(d).

    

    “Decision Period” has
the meaning set forth in Section 9.5.

    

    “Effective Date” has
the meaning set forth in the introductory paragraph.

    

               “Escalated Negotiation
Period” has the meaning set forth in Section 9.5.

    

    “Estimated Premium
Price” has the meaning set forth in Exhibit E
hereto.

    

               “Evaluation Products”
has the meaning set forth in Section 2.1.

    

               “Exclusive Products”
means the ASRs, if any, described in Section 3.2 and identified in Exhibit A as
Exclusive Products.

    

               “Existing Customer
Election” has the meaning set forth in Section 3.4(d).

    

    “FDA” shall mean the
United States Food and Drug Administration and any successor agency
thereto.

    

               “FISH” means a
fluorescent in situ hybridization assay.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

               “Initial Annual
Forecast” has the meaning set forth in Section 3.4(a)(i).

    

    “Initial Negotiation
Period” has the meaning set forth in Section 9.5.

    

    “Intellectual
Property” means any and all: (a) methods, techniques, trade secrets,
designs, know-how, discoveries, inventions, data, information, documentation,
regulatory submissions, formulations, methodologies, processes, specifications,
trademarks, trade dress and other intellectual property of any kind (whether or
not protected under patent, trademark, copyright or similar law); and (b)
trademark registrations, copyrights, United States and foreign patents and
patent applications covering or claiming any of the foregoing.

    

               “IVD Agreement” has
the meaning set forth in Section 9.4(c).

    

               “IVD Opportunity” has
the meaning set forth in Section 9.4(b).

    

    “LDT” means a
laboratory developed test that is independently designed, developed and
validated by a clinical service laboratory.

    

    “Melanoma LDT” means a
specific LDT that is anticipated to be independently designed, developed and
validated by NeoGenomics using the Products for use as an aid in diagnosing
malignant melanoma in skin biopsy specimens (excluding subtyping).

    

    “Model Forecast” has
the meaning set forth in Section 3.4(a)(iii).

    

    “Negotiation Period”
means the Initial Negotiation Period and the Escalated Negotiation
Period.

    “Non-Conforming
Product” shall have the meaning set forth in Section 7.6.

    

    “Pre-Existing Customer” A
customer of NeoGenomics that purchases the Melanoma LDT prior to the Conversion
Date.

    

    “Premium Price” has
the meaning set forth in Section 4.1(b).

    

    “Products” shall mean
the analyte specific reagent probes identified by NeoGenomics and set forth on
Exhibit A,
including the Exclusive Products.

    

    “Purchase Price” for
each unit of Product shall mean the sum of the Base Price and Premium Price
applicable for such unit at any given time.

    

               “Quality Systems and GMP
Requirements” shall mean the current and any future quality system and
good manufacturing practices regulations under 21 C.F.R. Part 820 to the extent
that such regulations are applicable to the Product, as such regulations are
promulgated by the FDA. The applicable Quality Systems and GMP Requirements for
any lot of Product shall be those regulations in effect when such lot is
manufactured for NeoGenomics.

    

               “Quarterly Forecast”
has the meaning set forth in Exhibit
E.

    

               “Quarterly Report” has
the meaning set forth in Exhibit
E.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    “Quarterly Unit
Purchases” shall mean the number of units of Products ordered by
NeoGenomics and shipped by Abbott pursuant to such order in a given Calendar
Quarter, where one (1) unit of Product constitutes the amount of such Product
necessary for NeoGenomics to perform the Melanoma LDT for one (1) patient. For
purposes of this definition, “unit” refers to one
ASR probe at the concentration and volume to be used in the validated Melanoma
LDT, which information will be provided to Abbott by NeoGenomics in writing
promptly following validation of the Melanoma LDT or any modification of the
Melanoma LDT. For example, if NeoGenomics uses four (4) ASR probes designated as
Products under this Agreement to perform the Melanoma LDT then such four (4) ASR
probes would represent four (4) units of Products.

    

    “SEC” shall mean the
United States Securities and Exchange Commission and any successor agency
thereto.

    

    “Service Revenue”
means the revenue recognized by NeoGenomics related to performing the Melanoma
LDT for Third Parties, as calculated in accordance with generally accepted
accounting principles and reported by
NeoGenomics’ parent company in its financial statements, as filed
with the SEC.

    

    “Specifications” shall
mean Abbott’s internal manufacturing specifications as well as technical
specifications and test protocols relating to the characterization of the
Products identified in Exhibit A, which
Specifications will be included in Exhibit A when the
Products are identified pursuant to Section 2.2 and which may from time to time
be amended by written agreement of the parties including but not limited to
purchased standard control procedure (pscp) changes or an equivalent document
control process.

    

    “Subsequent Annual
Forecast” has the meaning set forth in Section 3.4(a).

    

    “Subsequent Development
Agreement” has the meaning set forth in Section 9.5(b).

    

    “Termination Date Revenue
Amount” has the meaning set forth in Section 14.4(b).

    

    “Threshold Amount” has
the meaning set forth in Section 3.4(a)(v).

    

    “Territory” shall mean
the United States and Puerto Rico.

    

    “Third
Party” shall mean a party other than Abbott or NeoGenomics, or their
respective Affiliates.

    

    “Unaudited Report” has
the meaning set forth in Section 3.4(a)(iv).

    

    “Unaudited Revenue” has the
meaning set forth in Section 3.4(a)(iv).

    

    Article
2

    Product
Identification

    

    2.1           Evaluation Products.
Abbott will supply NeoGenomics with Abbott’s ASRs that may be requested from
time to time by NeoGenomics for purposes of NeoGenomics’ evaluation and
determination as to which ASRs to include in its Melanoma LDT, and for design,
development and validation of the Melanoma LDT (“Evaluation
Products”). Abbott will supply NeoGenomics with Evaluation Products in
quantities that are reasonably sufficient for evaluating the ASRs and designing,
developing and validating the Melanoma LDT. NeoGenomics shall not use the
Evaluation Products for any other purposes. Unless otherwise directed by Abbott,
NeoGenomics will destroy any unused quantities of Evaluation Products.
NeoGenomics will not bill or seek reimbursement from any Third Party payor
for Evaluation Products.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.2           Product
Identification. As promptly as reasonably practicable, but within one
hundred twenty (120) days after the Effective Date, NeoGenomics will determine
which ASRs it desires to purchase under this Agreement for inclusion in its
Melanoma LDT. Once the ASRs are identified and agreed upon in writing by the
parties, Exhibit
A will be modified (without necessitating an amendment to this Agreement)
to include such ASRs and their Specifications, and such ASRs will thereafter
constitute the Products for purposes of this Agreement. Notwithstanding the
foregoing, if, during the term of this Agreement, Abbott develops new ASRs
utilizing in situ hybridization to a chromosomal target that Abbott reasonably
believes may be of interest to NeoGenomics for use with the Melanoma LDT or a
successor thereto, Abbott will notify NeoGenomics in writing of such new
products with a description of each such product and exclusively offer to
NeoGenomics the right to evaluate such products for a period of one hundred
eighty (180) days from the date of such written notice for possible inclusion in
the Melanoma LDT or a successor thereto. In the event that NeoGenomics decides
during such evaluation period that any such new product would be appropriate to
include in its Melanoma LDT or any successor thereto, and so notifies Abbott in
writing, then Exhibit
A will be further modified (without necessitating an amendment to this
Agreement) to include such new product and its specifications, and thereafter
such new product will be included in the definition of Exclusive Products for
the purposes of this Agreement. If NeoGenomics elects not to use the new product
in the Melanoma LDT or a successor thereto, it shall not constitute a Product
for purposes of this Agreement and NeoGenomics shall have no rights with respect
thereto.

    

    2.3           Non-Abbott ASRs. The
parties acknowledge and agree that NeoGenomics will be free to identify which
ASRs it desires to include in the Melanoma LDT, and that it may include ASRs
that are not currently manufactured by Abbott. If NeoGenomics elects to include
in its Melanoma LDT one or more ASRs that are not currently manufactured by
Abbott, it will so notify Abbott, and Abbott may elect to manufacture the ASR
and supply it to NeoGenomics as a Product under this Agreement. If Abbott
chooses not to manufacture the ASR, Abbott and NeoGenomics will negotiate in
good faith to determine whether: (a) Abbott will obtain the ASR from a Third
Party and supply it to NeoGenomics as a Product under this Agreement; or (b)
NeoGenomics will obtain the ASR directly from a Third Party that is reasonably
acceptable to Abbott and that has a valid license from Abbott to manufacture the
ASR, if applicable. If none of the ASRs selected by NeoGenomics are manufactured
by Abbott at the time of the initial selection of such ASRs for inclusion in the
Melanoma LDT by NeoGenomics, and Abbott elects not to manufacture any of such
ASRs selected by NeoGenomics so that no ASRs have been identified as Products
pursuant to Section
2.2 within the time periods permitted therein, and the parties are unable
to reach a mutually acceptable alternative arrangement, then Abbott may
terminate this Agreement upon thirty (30) days prior written notice to
NeoGenomics without further obligation or liability. Abbott represents and
warrants that, as of the Effective Date, it currently manufactures all of the
ASRs previously disclosed to NeoGenomics or listed in any Abbott product catalog
that is current as of the Effective Date.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Article
3

    Supply
Terms

    

    3.1           Supply. During the
term of this Agreement, and subject to the terms and conditions contained
herein, NeoGenomics shall purchase all of its requirements of the Products from
Abbott, and Abbott shall supply, or shall cause its Affiliates to supply, to
NeoGenomics such quantities of the Products as may be ordered by NeoGenomics
hereunder. Except for Abbott’s failure to
supply Products as described in Section
5.5, NeoGenomics will not obtain
from any Third Party, or manufacture for itself, any Products (or other ASRs
that are substantially similar to the Products).

    

    3.2           Exclusivity. If,
pursuant to Section 2.2, NeoGenomics identifies for inclusion in the Melanoma
LDT one or more ASRs that are not currently marketed or sold commercially by
Abbott as individual stand-alone products, each such ASR will be designated as
an “Exclusive
Product” and will be so identified on Exhibit A. Abbott
will supply the Exclusive Product(s) to NeoGenomics exclusively in the Territory
and, subject to Section 3.3(b) below, Abbott will not sell the Exclusive
Products to any Third Party in the Territory. Any Products that are not
expressly designated in Exhibit A as
Exclusive Products shall be supplied to NeoGenomics on a non-exclusive basis.
Abbott will use commercially reasonable efforts to ensure that any Products that
are sold by Abbott to customers outside the Territory will be subject to
restrictions prohibiting the further resale or distribution of such Products in
the Territory.  For the avoidance of doubt, once an ASR has been
identified as an “Exclusive Product” on Exhibit A it shall
not cease to be an Exclusive Product due to the marketing or sale of such ASR by
Abbott outside the Territory.

    

    3.3           Exclusivity
Exceptions.

    

    (a)           Abbott
may sell Exclusive Products to Third Parties outside the Territory; provided, that Abbott will
use commercially reasonable efforts to ensure that such Exclusive Products are
not resold or distributed in the Territory.

    

    (b)           Abbott
may supply Exclusive Products to the academic collaborators identified in Exhibit B in
quantities sufficient for the collaborators’ research and development purposes.
In addition, Abbott may supply the identified academic collaborators, in the
aggregate, with quantities of Exclusive Products sufficient to perform no more
than one thousand two hundred (1,200) patient tests per Calendar Year
(increasing six percent (6%) per Calendar Year).

    

    3.4           Maintenance of
Exclusivity.

    

    (a)           Annual Forecast and
Review.

    

    (i)           At
least ninety (90) days prior to the end of the 2010 Calendar Year, NeoGenomics
will provide to Abbott a written reasonable good faith forecast of the Service
Revenue it expects to realize in each of the following two (2) Calendar Years
from sales of the Melanoma LDT (the “Initial Annual
Forecast”). If Abbott does not object to the Initial Annual Forecast
within forty-five (45) days of its receipt of the Initial Annual Forecast, it
shall be deemed accepted by Abbott. If Abbott objects to the Initial Annual
Forecast within such forty-five (45) day period, the parties will negotiate in
good faith to develop an Initial Annual Forecast that is mutually acceptable to
both parties, subject to subparagraph (iii) below. If
the parties are unable to agree upon a mutually acceptable Initial Annual
Forecast within fifteen (15) days
after beginning negotiations, the matter will be escalated to the President of
NeoGenomics (currently Robert Gasparini) and the President of Abbott (currently
Stafford O’Kelly) for resolution, and if such individuals are unable to agree
upon a mutually acceptable Initial Annual Forecast within an additional fifteen (15) days, the
matter will be resolved in accordance with Section 15.11.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)          At
least ninety (90) days prior to the end of the 2012 Calendar Year and at least
ninety (90) days prior to the end of each third Calendar Year thereafter during
the term of this Agreement (i.e., 2015, 2018, etc.),
NeoGenomics will provide to Abbott a written reasonable good faith forecast of
the Service Revenue it expects to realize in each of the following three (3)
Calendar Years from sales of the Melanoma LDT (each, a “Subsequent Annual
Forecast” and together with the Initial Annual Forecast, the “Annual Forecast”). If
Abbott does not object to a Subsequent Annual Forecast within forty-five (45)
days of its receipt of such Subsequent Annual Forecast, it shall be deemed
accepted by Abbott. If Abbott objects to a Subsequent Annual Forecast within
such forty-five (45) day period, the parties will negotiate in good faith to
develop a Subsequent Annual Forecast that is mutually acceptable to both
parties, subject to subparagraph (iii) below;
provided
however, that unless otherwise mutually
agreed by the parties:

     

    
      	
               
      

            	
              (A)

            	
              if NeoGenomics’ maintains exclusivity pursuant to
      Section 3.4(b), then the Service Revenue projected in each Calendar Year forecast included within the
      applicable Subsequent Annual Forecast shall not be lower than the actual
      Service Revenue realized by NeoGenomics in the last Calendar Year of the
      immediately preceding forecast
      period; or

            

    

     

    
      	
               
      

            	
              (B)

            	
              if NeoGenomics does not maintain exclusivity
      pursuant to Section 3.4(b) and Abbott does not convert this Agreement to a
      non-exclusive agreement pursuant to Section 3.4(c), then the Service
      Revenue projected in each Calendar
      Year forecast included within the applicable Subsequent Annual Forecast
      shall not be lower than the actual Service Revenue realized by NeoGenomics
      in the last Calendar Year of the immediately preceding forecast period, divided
      by seventy-five one hundredths
(0.75).

            

    

     

    If the
parties are unable to agree upon a mutually acceptable Subsequent Annual
Forecast within fifteen (15) days after beginning negotiations, the matter will
be escalated to the President of
NeoGenomics (currently Robert Gasparini) and the President of Abbott (currently
Stafford O’Kelly) for resolution, and if such individuals are unable to agree
upon a mutually acceptable Subsequent Annual Forecast within an additional fifteen (15) days, the
matter will be resolved in accordance with Section 15.11.

     

    (iii)         Notwithstanding
anything in this Agreement to the contrary, unless otherwise expressly agreed by
both parties, neither the Initial Annual Forecast nor any Subsequent Annual
Forecast will be (A) higher than the model forecast for the corresponding
Calendar Year(s) as shown in the model forecast attached hereto as Exhibit C (the “Model Forecast”) or
(B) so long as Abbott has
not exercised its rights pursuant to Section 3.4(c) hereof to convert
NeoGenomics to a non-exclusive arrangement, lower than thirty-five percent (35%)
of the model forecast for the corresponding Calendar Year as shown in the Model
Forecast.

     

    (iv)        NeoGenomics
hereby agrees that it will hire the number of sales people, make the marketing
expenditures and otherwise make the commercial investments that NeoGenomics
reasonably believes are necessary to achieve each Annual Forecast. NeoGenomics
and Abbott agree to meet periodically to review and discuss NeoGenomics’ sales
and marketing activities with respect to the Melanoma LDT.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (v)          On
or before February 15, 2012, and thereafter as soon as figures are available,
but in no event more than forty-five (45) days, after the end of each Calendar
Year during the term of this Agreement, NeoGenomics will provide Abbott with a
written report showing NeoGenomics’ revenue related to performing the Melanoma
LDT for Third Parties, as calculated in accordance with generally accepted
accounting principles (the “Unaudited Revenue”),
during the previous Calendar Year, which the parties acknowledge shall be based
on unaudited financial information for such
Calendar Year (the “Unaudited Report”).
Within ninety (90) days after the end of such Calendar Year during the term of
this Agreement, NeoGenomics will provide Abbott with a written report showing
its Service Revenue during the previous Calendar Year (the “Audited Report”), but
only if the Service Revenue in the Audited Report would differ from NeoGenomics’
Unaudited Revenue as reported in the Unaudited Report. If the Unaudited Report
shows that NeoGenomics’ Unaudited Revenue during the previous Calendar Year was
less than ninety percent (90%) of the applicable Threshold Amount (as defined
below), then the Unaudited Revenue will constitute the Service Revenue for such
Calendar Year for purposes of determining whether Abbott may exercise its rights
under Section 3.4(c) or Section 3.4(d), as applicable. If the Unaudited Report
shows that NeoGenomics’ Unaudited Revenue during the previous Calendar Year is
equal to or greater than 90% of the applicable Threshold Amount, then the
parties will wait until the Audited Report is issued and the actual Service
Revenue, as reported in the Audited Report, will be used for purposes of
determining whether Abbott may exercise its rights under Section 3.4(c) or
Section 3.4(d), as applicable. As used in this paragraph: (A) If Abbott has not exercised its rights
pursuant to Section 3.4(c) or Section 3.4(d), the “Threshold Amount” is
the amount of Service Revenue that NeoGenomics must realize in a given Calendar
Year in order to maintain exclusivity pursuant to Section 3.4(b); or (B) if
Abbott has exercised
its rights pursuant to Section 3.4(c), the “Threshold Amount”
means the amount of Service Revenue that NeoGenomics must realize in a given
Calendar Year in order to avoid Abbott having the right to make the Existing
Customer Election pursuant to Section 3.4(d).

     

    (b)           Maintenance of
Exclusivity. Beginning with Calendar Year 2011, if NeoGenomics’ Service
Revenue in a Calendar Year equals or exceeds seventy-five percent (75%) of the
Service Revenue forecasted in the Annual Forecast for such Calendar Year, then
NeoGenomics will retain the right to purchase the Exclusive Products from Abbott
on an exclusive basis pursuant to Section 3.2.

    

    (c)           Conversion to
Non-Exclusivity. Beginning with Calendar Year 2011, if NeoGenomics’
Service Revenue in a Calendar Year is less than seventy-five percent (75%) but
at least thirty-five percent (35%) of the Service Revenue forecasted in the
Annual Forecast for such Calendar Year, then Abbott may, in its discretion, upon
written notice to NeoGenomics within ninety (90) days following NeoGenomics’
submission of a written report showing the previous year’s Service Revenue to
Abbott, irrevocably discontinue selling the Exclusive Products to NeoGenomics on
an exclusive basis and begin selling them to NeoGenomics on a non-exclusive
basis. In such event, the Exclusive Products will cease being Exclusive Products
for purposes of this Agreement and Abbott will be free to sell any Products,
including the Exclusive Products, to one or more of its Affiliates or Third
Parties for any purpose; provided, however, that
before exercising its right to convert NeoGenomics to a non-exclusive
arrangement, Abbott will first consult with NeoGenomics regarding the reasons
for the Service Revenue shortfall and will consider in good faith a reasonable
modification to the Annual Forecast to permit NeoGenomics to maintain
exclusivity; provided,
further, that Abbott will have no obligation to agree to such a
modification. Abbott agrees that to the extent it does not exercise its rights
under this Section 3.4(c) within ninety (90) days of being notified of
NeoGenomics’ Service Revenue for the previous Calendar Year, then Abbott will be
deemed to have waived its right to convert this Agreement to a non-exclusive
agreement as a result of any shortfalls in Service Revenue for such Calendar
Year.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      (d)           Existing
Customer Election. If (i)
NeoGenomics’ Service Revenue in a Calendar Year is
less than thirty-five percent (35%) of the Service Revenue forecasted in the
Annual Forecast for such Calendar Year (if Abbott has not converted this Agreement to a
non-exclusive agreement
pursuant to Section 3.4(c)); or (ii) NeoGenomics’ Service Revenue in a Calendar Year is
less than forty-five percent (45%) of the Service Revenue forecasted in
the Annual Forecast for such Calendar Year (if Abbott has converted this Agreement to a non-exclusive agreement
pursuant to Section 3.4(c)); then, in either such event, Abbott may, in its
discretion, upon written notice to NeoGenomics within nine (9) months following NeoGenomics submission of
a written report showing the previous
Calendar Year’s Service Revenue to Abbott (the date
which is thirty (30 days
after
NeoGenomics’ receipt of such notice being the
“Conversion
Date”), elect to sell the Exclusive Products
to NeoGenomics only to the extent necessary for NeoGenomics to service
its Pre-Existing Customers
(the “Existing
Customer Election”); provided,
however, that before making
such election, Abbott will first consult with NeoGenomics regarding the reasons
for the Service Revenue shortfall and will consider in good faith a
reasonable modification to
the Annual Forecast to permit NeoGenomics to continue to purchase the Exclusive
Products on the non-excusive basis set forth under Section 3.4(c);
provided,
further, that Abbott will
have no obligation to agree to such a modification. From and after the Conversion Date,
NeoGenomics will have no right to purchase, and Abbott will have no obligation
to sell, Products in excess of the quantities necessary for NeoGenomics to
provide the Melanoma LDT to its Pre-Existing Customers (including increases in volume requested by
Pre-Existing Customers).
Upon reasonable prior written notice, Abbott’s independent third party accounting
firm, at Abbott’s expense, will have the right to audit
NeoGenomics’ books and records (but no more than
once every twelve (12)
months and only at
reasonable times and under reasonable conditions) to verify that Products sold to
NeoGenomics are being used solely to service Pre-Existing Customers. Prior to any such audit,
Abbott’s independent third party accounting
firm shall be required to
execute a separate confidentiality agreement with NeoGenomics, in form
and substance reasonably acceptable to NeoGenomics, that, among other
things, shall prohibit such
accounting firm from disclosing the identities of any of NeoGenomics’ customers to Abbott, any Affiliate of
Abbott or any Third Party. If NeoGenomics intentionally and materially
exceeds its rights under
this Section 3.4(d), Abbott shall have the right to terminate this Agreement
pursuant to Section 14.2. Abbott agrees that if it does not make the Existing Customer
Election within nine (9)
months of being notified of
NeoGenomics’ Service Revenue for the previous
Calendar Year, then Abbott will be deemed to have waived its right to make the
Existing Customer Election for such Calendar
Year.

    

    

    (e)           Lowest
Price.

    

    (i)           If
Abbott converts this Agreement to a non-exclusive agreement pursuant to Section 3.4(c), Abbott will
continue to sell the Products to NeoGenomics on the terms and conditions set
forth in this Agreement, except for terms related to exclusivity; provided, however, that if, following such conversion, Abbott sells
Products to any Third Party (other than academic collaborators) for a price that
is lower than the Purchase
Price payable by NeoGenomics hereunder,
then NeoGenomics will be entitled to such lower price for all quantities of such
Products delivered to it for as long as such lower price is effective for any
other buyer; provided, further, that, if the lower price payable by a Third Party is
based on tiered pricing or other volume discount, NeoGenomics will be required
to commit to at least the same purchase volume as the Third Party in order to be
entitled to the lower price.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)          If
Abbot makes the Existing Customer Election pursuant to Section 3.4(d), Abbott
will continue to sell the Products to NeoGenomics on the terms and conditions
set forth in this Agreement, except for terms related to exclusivity and subject
to the limitations set forth in Section 3.4(d); provided, however, that if,
following such election, Abbott sells Products to any Third Party (other than
academic collaborators) for a price that is lower than the Purchase Price
payable by NeoGenomics hereunder, then NeoGenomics will be entitled to purchase
the Products for a price that is one hundred ten
percent (110%) of such lower price for all quantities of such Products
delivered to it for so long as such lower
price is effective for any other buyer;
provided, further, that, if the lower price payable by a Third Party is
based on tiered pricing or other volume discount, NeoGenomics will be required
to commit to at least the same purchase volume as the Third Party in order to be
entitled to the lower price.

     

    (f)           Changes to Annual
Forecast. If (i) Abbott
converts this Agreement to a non-exclusive agreement pursuant to Section 3.4(c);
(ii) the average national reimbursement rate for automated FISH testing using
CPT Code 88367 declines by greater than five percent (5.0%) from one Calendar
Year to the next; (iii) a Third Party begins marketing an LDT incorporating any
of the Products that is reasonably anticipated to compete in a material way with
the Melanoma LDT; or (iv) Abbott is successful in developing and obtaining FDA
approval or clearance for the Abbott IVD; then Abbott and NeoGenomics will
negotiate in good faith to revise the Annual Forecast currently in effect
pursuant to Section 3.4(a) and/or the performance thresholds set forth in
Sections 3.4(b), 3.4(c) and 3.4(d) to reflect the anticipated impact of
such event on NeoGenomics’ Service Revenue. If Abbott makes the Existing
Customer Election, then NeoGenomics will no longer be required to provide Annual
Forecasts pursuant to this Section 3.4, but will still comply with the
forecasting and ordering procedures set forth in Article 5.

    

    (g)           Examples. Examples
illustrating the potential application of the provisions set forth in this
Section 3.4 under various scenarios are attached hereto as Exhibit D. Such
examples are provided for illustrative purposes only and are not binding on
either party.

    

    3.5           Sole Remedies. The
rights to convert this Agreement to a non-exclusive agreement, or to make the
Existing Customer Election, pursuant to Sections 3.4(c) and 3.4(d) above shall
constitute Abbott’s sole and exclusive remedies with respect to NeoGenomics’
failure to meet the Service Revenue levels forecasted in the Annual Forecast,
except to the extent such failure is due to NeoGenomics’ fraud or willful
misconduct.

    

    3.6           Compliance. Products
manufactured by Abbott for NeoGenomics under this Agreement shall be
manufactured and tested by Abbott in accordance with the Specifications, Quality
System and GMP Requirements, and all applicable national, state and local laws,
regulations and guidelines.

    

    3.7           Specifications. The
Specifications for the Products will be included in Exhibit A when the
Products are identified pursuant to Section 2.2. The parties may from time to
time amend said Specifications for any Product by mutual written
agreement; provided, that if Abbott is
required by applicable law, rule or regulation to modify the Products or the
Specifications, it will be free to do so, but will provide NeoGenomics with as
much advance notice of such modification as practicable under the circumstances.
In the event that an amendment to the Specifications for a Product affects the
price for such Product, the parties shall, prior to amending the Specifications,
agree in writing upon any price adjustments and ordering and delivery schedules
for such Product.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.8           Use of Products.
NeoGenomics will not: (a) resell or distribute any Evaluation Products or
Products obtained from Abbott under this Agreement to any Third Party; (b) use
any Evaluation Products or Products past their stated expiration date; (c) use
any Evaluation Products in any manner inconsistent with their intended use; or
(d) use any Evaluation Products or Products outside the Territory.

    

    3.9           Books and Records; Audit
Rights. NeoGenomics will keep books and records that accurately show
the Service
Revenue. Such books
and records shall be preserved for three (3) years from the last day of each
Calendar Year in which such Service Revenue was realized and shall be open to
audit by an independent accounting firm reasonably acceptable to NeoGenomics and
Abbott, no more frequently than once in any twelve (12) month period, at
reasonable times and under reasonable conditions and upon at least thirty (30)
days prior written notice to NeoGenomics. All information contained in
NeoGenomics’ books and records shall constitute Confidential Information for
purposes of Article 12 of this Agreement and the independent accounting firm
will be required to execute a separate confidentiality agreement reasonably
acceptable to NeoGenomics that, among other things, shall prohibit such
accounting firm from disclosing the identities of any of NeoGenomics’ customers
to Abbott, any Affiliate of Abbott or any Third Party. Abbott will use the
reports of the independent accounting firm only for the purpose of verifying
NeoGenomics’ Service Revenue for the applicable period. Once audited, the books
and record shall be closed for the applicable Calendar Year(s) and may not be
audited again pursuant to this Section 3.9. The costs of such an audit shall be
borne by Abbott; provided, however, that, if
such audit determines that the Service Revenue reported by NeoGenomics for the
audited Calendar Year(s) is at least ten percent (10%) more than the Service
Revenue determined by the auditor for such Calendar Year(s), then NeoGenomics
will promptly reimburse Abbott for the costs of such audit. Abbott’s right to
audit a specific Calendar Year will terminate three (3) years after the last day
of such Calendar Year.

    

    Article
4

    Purchase
Price And Terms

    

    4.1           Purchase Price. The
purchase price (“Purchase Price”) for
the Products shall consist of a base component and a premium
component.

    

    (a)           Base Purchase Price.
The base component of the Purchase Price (the “Base Price”) shall be
as set forth on Exhibit E
hereto.

    

    (b)           Premium Purchase Price. The
premium component of the Purchase Price (the “Premium Price”) shall
be as set forth on Exhibit E
hereto.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)           Books and Records; Audit
Rights. NeoGenomics will keep books and records that accurately show
the Quarterly Unit
Purchases. Such
books and records shall be preserved for three (3) years from the last day of
each Calendar Quarter in which such Quarterly Unit Purchases were made and shall
be open to audit by an independent accounting firm reasonably acceptable to
NeoGenomics and Abbott, no more frequently than once in any twelve (12) month
period, at reasonable times and under reasonable conditions and upon at least
thirty (30) days prior written notice to NeoGenomics. All information contained
in NeoGenomics’ books and records shall constitute Confidential Information for
purposes of Article 12 of this Agreement and the independent accounting firm
will be required to execute a separate confidentiality agreement reasonably
acceptable to NeoGenomics that, among other things, shall prohibit such
accounting firm from disclosing the identities of any of NeoGenomics’ customers
to Abbott, any Affiliate of Abbott or any Third Party. Abbott will use the
reports of the independent accounting firm only for the purpose of determining
the accuracy of the Quarterly Reports and ensuring proper payment of the Premium
Price. Once audited, the Quarterly Reports and the Premium Price payments shall
be closed for the applicable Calendar Quarter(s) and may not be audited again.
Except as provided below, within sixty (60) days after notice from Abbott
following completion of the independent accounting firm’s audit covering a given
Calendar Quarter, NeoGenomics will pay to Abbott the amount of any Premium Price
determined by such audit to be outstanding. The costs of such an audit shall be
borne by Abbott; provided,
however, that, if such audit determines that the aggregate Premium Price
paid by NeoGenomics for the audited Calendar Quarter(s) to be at least ten
percent (10%) less than the Premium Price determined by the auditor to be due
and payable, then NeoGenomics will promptly reimburse Abbott for the costs
of such audit. If such audit determines that NeoGenomics overpaid the
amount of Premium Price otherwise determined by the auditor to be due and
payable for the audited Calendar Quarter(s), then Abbott will credit the amount
of such overpayment to NeoGenomics against future amounts payable by NeoGenomics
under this Agreement. Abbott’s right to audit a specific Calendar Quarter or the
Premium Price payments owed with respect thereto, will terminate three (3) years
after Abbott’s receipt of the Quarterly Report relating to such Calendar
Quarter.

    

    4.2           Evaluation Products.
Abbott shall provide NeoGenomics with reasonable quantities of Evaluation
Products at no cost to NeoGenomics.

     

    Article
5

     

     Orders
And Forecasting

    

    5.1           Forecasting and
Ordering. Within thirty (30) days following identification of the
Products in Exhibit
A, NeoGenomics shall provide Abbott with a written good faith forecast
for quantities of Products required by NeoGenomics for the subsequent twelve
(12) month period. The forecast shall be a rolling annual forecast and it shall
be updated by NeoGenomics at least ten
(10) days before the end of each Calendar
Quarter and shall provide NeoGenomics’ forecasted requirements of Products for
the subsequent twelve (12) month period. The first three (3) months of each such
forecast shall constitute a firm purchase order for Products. The last nine (9)
months of each forecast shall not be binding on either party and shall be used
for planning purposes and safety stock building. In any Calendar Year,
NeoGenomics will not issue a forecast for, or order, a greater quantity of
Products than NeoGenomics reasonably believes will be necessary to fulfill its
anticipated needs for the Melanoma LDT during such Calendar Year. If Abbott
reasonably believes that NeoGenomics has ordered Products in excess of the
foregoing limitation, Abbott reserves the right to adjust the applicable
purchase order to withhold shipment of such excess quantities.

    

    5.2           Purchase Orders. Firm
purchase orders shall be placed at the end of each Calendar Quarter detailing
the exact quantities of Product which NeoGenomics requires to be delivered in
the following Calendar Quarter, consistent with the forecast provided pursuant
to Section 5.1. Orders shall be placed upon NeoGenomics’ purchase order forms,
specifying quantities of Products ordered and the initial requested delivery
dates, which will be no less than three (3) days after Abbott’s receipt of the
purchase order. NeoGenomics will not be required to specify all delivery dates
for the entire Calendar Quarter on each such advance purchase order, but rather
only those delivery dates reasonably anticipated to meet NeoGenomics’ needs for
the first thirty (30) days of such Calendar Quarter. For all other delivery
dates during the Calendar Quarter, NeoGenomics will give Abbott at least two (2)
days written notice before any such requested delivery date; provided, however, that
NeoGenomics will not specify such subsequent delivery dates more frequently than
two (2) times per month during the remainder of the Calendar Quarter. In all
other respects, the obligations and rights of the parties shall be governed by
the terms and conditions of this Agreement. None of the general terms and
conditions set forth in any purchase order form used by NeoGenomics or any
acknowledgement form used by Abbott shall be applicable. If, as of the last day
of any Calendar Quarter, NeoGenomics has not specified delivery dates for all of
the Products ordered pursuant to its firm purchase order for such Calendar
Quarter, as placed pursuant to this Section 5.2, then Abbott may ship the
remaining undelivered quantities of Products specified in such purchase order to
NeoGenomics during the fifteen (15) day period after such Calendar Quarter, and
Abbott may invoice NeoGenomics for such shipped Products pursuant to Section
6.2.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.3           Excess Quantities. If
NeoGenomics orders quantities of Product in any Calendar Quarter in excess of
one hundred ten percent (110%) of the
quantities set forth in the applicable forecast for such Calendar Quarter,
Abbott will first supply such excess quantities from the safety stock
established pursuant to Section 5.4 below. To the extent the excess quantities
ordered by NeoGenomics exceed the safety stock, Abbott will not be obligated to
supply the excess quantities, but Abbott will use commercially reasonable
efforts to supply such excess quantities within thirty (30) days after its
receipt of the applicable purchase order(s).

    

    5.4           Safety Stock. Within
sixty (60) days after the Effective Date, Abbott will establish and at all times
during the term of this Agreement maintain a safety stock of Products
exclusively available to NeoGenomics in quantities sufficient to satisfy
NeoGenomics’ requirements for Products for the succeeding sixty (60) days based
on NeoGenomics’ most recent Quarterly Forecast. Deliveries by Abbott to
NeoGenomics of Products may be taken from the safety stock. Abbott’s safety
stock shall be rotated with its regular inventory of Products to maintain shelf
life. Abbott shall keep NeoGenomics reasonably informed of the level of safety
stock. If the safety stock drops below a sixty (60) day supply, Abbott will use
commercially reasonable efforts to replenish the safety stock as quickly as
practicable. In the event that Abbott terminates this Agreement pursuant to
Section 14.2, Section 14.3 or Section 14.4, NeoGenomics will be obligated to
purchase the unsold portion of said safety stock from Abbott at the price in
effect as of the effective date of termination of this Agreement, provided such
safety stock Products comply with the then current Specifications.

    

    5.5           Failure to Supply;
Resumption. In the event that Abbott fails or will fail, for any reason
(including an event of force majeure), to supply a Product in accordance with
the quantities and/or delivery dates specified by NeoGenomics in a firm purchase
order, and before exhausting the safety stock of such Product, Abbott will
promptly notify NeoGenomics and shall have a period of forty five (45) days to
cure such failure. During such forty-five (45) day cure period, if Abbott is
able to supply some but not all of its other customers’ demands and elects to do
so, then NeoGenomics may require Abbott to equitably allocate its manufacturing
capacity among NeoGenomics’ requirements for Products and all other customers’
demands (based on relative percentages of total sales for the three (3) months
immediately preceding the onset of Abbott’s failure). If Abbott’s failure to
timely supply continues, or is reasonably
expected to continue, for more than forty-five (45) days, NeoGenomics may, at
its discretion and upon written notice to Abbott: (a) continue to receive an
allocated portion of the quantities of Products; (b) require Abbott to supply
the undelivered Products at a future date agreed upon by the parties in writing;
or (c) obtain the quantity of Products that Abbott is unable to supply from a
Third Party mutually agreed upon by the parties and who has a valid license from
Abbott to manufacture the Products. If NeoGenomics chooses clause (c) and no
Third Party has such a license for the Products, Abbott agrees that it will use
its commercially reasonable efforts to negotiate such a license as expeditiously
as practicable and that it will not unreasonably withhold granting such a
license in order that NeoGenomics can continue to receive Products without
interruption. For avoidance of doubt, notwithstanding the foregoing, Abbott will
have no obligation to grant a license to a Third Party on commercially
unreasonable terms or if granting such a license would result in any material
adverse consequences to Abbott under any agreement between Abbott and any of its
licensors. NeoGenomics shall have the right to adjust the Annual Forecast under
Article 3 of this Agreement in the event Abbott is unable to
supply a Product in accordance with the quantities or delivery dates specified
by NeoGenomics in a firm purchase order. If NeoGenomics elects under
clause (c) above to obtain Products from a Third Party, and Abbott is thereafter
able to demonstrate, to NeoGenomics’ reasonable satisfaction, that Abbott is
again able to consistently supply such Products to NeoGenomics, then NeoGenomics
will resume purchasing the Products from Abbott for the remainder of the term of
this Agreement within ninety (90) days after Abbott’s demonstrated capabilities
to resume supply; provided, that such time
period will be extended to the extent of NeoGenomics’ pre-existing contractual
purchase commitments with the Third Party (if any), but not to exceed an
additional one hundred eighty (180) days.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Article
6

     Delivery
And Invoicing

    

    6.1           Delivery Terms.
Abbott will ship Products ordered by NeoGenomics, FCA (Incoterms 2000), Abbott’s
manufacturing facility, in accordance with the quantities, delivery dates, and
delivery and shipping instructions specified in NeoGenomics’ purchase orders. If
the carrier noted on the purchase order is not available, or if the purchase
order does not designate a carrier, then Abbott shall contact NeoGenomics for
instructions regarding the mode of shipment. Unless otherwise directed by
NeoGenomics, Abbott will obtain insurance for all shipments of Products, at
NeoGenomics’ expense. Abbott’s responsibility shall be to deposit the ordered
Products with the designated carrier within the shipping periods specified, and
Abbott shall not be liable for late delivery if so accomplished. Title and risk
of loss shall pass to NeoGenomics upon delivery to the designated carrier for
shipment. Abbott will inform the carrier of any temperature, pressure or other
special storage or handling instructions for the Products.

    

    6.2            Invoices and Payment.
Abbott shall invoice NeoGenomics for Products (and shipping and insurance costs)
upon shipment of the Products ordered by NeoGenomics. Such invoices shall be
paid in full within thirty (30) days of the date such invoice is received by
NeoGenomics. All payments hereunder shall be sent via check or wire transfer as
follows:

    

    If by
check:

    

    Abbott
Laboratories Inc.

    75
Remittance Drive Suite #6809

    Chicago,
IL 60675-6809

    

    If by
wire transfer:

    

    Northern
Trust Company

    Chicago,
Illinois

    ABA:
071000152

    Swift
Code: CNORUS44

    Acct
Name: Abbott Molecular Inc.

    Acct
Number: 31599333

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.3           Currency. All
invoices under this Agreement shall be stated and paid in United States
dollars.

    

    6.4           Taxation. The prices
quoted herein do not include the costs of any taxes, licenses, permits, fees or
tariffs which may be levied by any government or governmental agency on the sale
or transport of Products. Any such taxes, licenses, permits, fees or tariffs
which are paid by Abbott (excluding taxes on Abbott’s net income) shall be
included in the invoices issued to NeoGenomics.

    

    Article
7

     Manufacturing
And Quality Assurance

    

    7.1           Manufacture. Abbott
shall manufacture the Products in accordance with: (a) the Specifications; (b)
applicable Quality Systems and GMP Requirements; and (c) all pertinent rules and
regulations of the FDA, as the same may be amended from time to
time.

    

    7.2           Testing. Abbott shall
test or cause to be tested each lot of Product in accordance with standard
operating procedures to be set forth in Exhibit F upon
identification of the Products pursuant to Section 2.2 (“Release Testing”).

    

    7.3           Certificate of
Analysis. Abbott will deliver all Products with a certificate of analysis
(“CoA”)
verifying their compliance with the current Specifications. The CoA will be lot
specific and conform to the requirements in the Specifications. The CoA must
show a summary of the physical inspection, Release Testing, and performance
testing results, and have Abbott’s quality representative’s signature and date
of approval. Abbott will send a CoA to NeoGenomics with each delivery of
Products. NeoGenomics is entitled to rely on such CoA for all purposes of this
Agreement. Nothing in this Agreement shall be construed to require NeoGenomics
to perform any incoming testing, analytical or otherwise, on any Products
received from Abbott.

    

    7.4           Product Dating. Each
Product shall have at least twelve (12) months of remaining shelf life on the
date of delivery to NeoGenomics’ designated carrier.

    

    7.5           Manufacturing Site.
During the term of this Agreement, Abbott shall manufacture Product using
Abbott’s facilities located in Des Plaines, Illinois, or wherever Abbott may
relocate its manufacturing facilities; provided, however, Abbott
must give at least ninety (90) days prior written notice to NeoGenomics of any
such relocation. Abbott’s new facility shall be subject to one (1) additional
site inspection by NeoGenomics quality assurance personnel, in accordance with
Section 8.2, and Abbott shall use commercially reasonable efforts to have the
new manufacturing site become acceptable to NeoGenomics’ quality policies within
nine (9) months of relocating Product manufacture.

    

    7.6           Non-Conforming
Product. Within forty-five (45) days of NeoGenomics’ receipt thereof,
NeoGenomics may reject any Product supplied hereunder which does not conform to
the Specifications (“Non-Conforming Product”),
provided that such Non-Conforming Product has not become non-conforming due to
any failure by NeoGenomics or its agents or representatives to handle, maintain
or store such Product as required by the labeling or the Specifications.
NeoGenomics shall provide written notice to Abbott specifying the reason for
such rejection. If NeoGenomics does not reject any Product supplied hereunder
within forty-five (45) days of NeoGenomics’ receipt thereof, the
Product shall be considered accepted, and all claims with respect to Product not
conforming with Specifications shall be deemed waived by NeoGenomics, except as
to latent defects which are not reasonably discoverable within such forty-five (45) day period. At the request and expense of
Abbott, NeoGenomics shall return the defective Product, or a representative
sample thereof, to Abbott for testing. Should such test results reasonably
confirm the Product is a Non-Conforming Product, as promptly as practicable (but
in no event more than thirty (30) days) after such determination, Abbott
shall send conforming replacement Products to NeoGenomics at no cost to
NeoGenomics. At Abbott’s direction, NeoGenomics will either return all
Non-Conforming Products to Abbott’s facilities, at Abbott’s expense, or destroy
all Non-Conforming Products and certify such destruction in
writing.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.7           Product Retains.
Abbott will provide, at no additional charge, three (3) samples of each lot of
Products supplied to NeoGenomics under this Agreement, and NeoGenomics will
retain such samples for at least one (1) year beyond the expiration date of such
lot. In the event of a dispute regarding any Non-Conforming Product that Abbott
and NeoGenomics are unable to resolve in a timely manner, a sample of the
alleged Non-Conforming Product and two (2) of the retained samples from such lot
of such Product, along with a reference batch which has previously been accepted
by NeoGenomics as conforming to the Specifications, together with the testing
methodologies agreed upon by the parties, shall be submitted by NeoGenomics to
an independent laboratory reasonably acceptable to both parties for testing
against the Specifications. The laboratory’s determination of the Product’s
conformance or non-conformance to the Specifications shall be binding upon the
parties. If the laboratory determines that the Product is conforming,
NeoGenomics will pay all independent laboratory costs, as well as any shipping
costs incurred by Abbott in connection with the laboratory’s determination. If
the laboratory determines that the Product is non-conforming, Abbott will pay
all independent laboratory costs, as well as any shipping costs incurred by
NeoGenomics in connection with the laboratory’s determination.

    

    7.8           Quality System.
Abbott will maintain a quality system to ensure that the Products are
manufactured in accordance with: (a) applicable Quality Systems and GMP
Requirements; and (b) all pertinent rules and regulations of the FDA, as the
same may be amended from time to time.

    

    7.9           Product Safety. Each
party will be solely responsible for implementing and maintaining its own
environmental, health and safety procedures for the handling, storage and use of
the Products and any other materials or hazardous waste which may be used or may
arise in connection with the use of the Products. The parties will cooperate
reasonably and in good faith to ensure employee and public safety.

    

    Article
8

     Regulatory
Matters

    

    8.1           Notice of Regulatory Agency
Action. Each party shall, as promptly as practicable (but in any event
within ten (10) days) inform the other party of any formal or informal inquiry,
notice, warning or other communication from any regulatory authority relating to
any Products or the Melanoma LDT.

    

    8.2           Site Inspections.
Upon at least five (5) days prior notice, Abbott shall, from time to time during
the term of this Agreement, but no more frequently than once per Calendar Year,
allow representatives of NeoGenomics to tour and inspect all facilities utilized
by Abbott in manufacturing, testing, packaging and shipment of Products sold to
NeoGenomics under this Agreement for the purposes of verifying compliance with
quality control regulations. During such visits, Abbott shall provide reasonable
access to its manufacturing quality control documentation and shall
cooperate with such representatives in every reasonable manner. NeoGenomics
shall also have the right at any time, upon reasonable prior written notice to
Abbott (as dictated by applicable regulatory authorities’ requirements), to
conduct any audits that are specifically mandated by any regulatory
authority or that are reasonably required to permit NeoGenomics to respond to
specific questions from any regulatory authority.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8.3           Regulatory Agency
Compliance. Each party shall comply with any applicable laws and
regulations that require such party to: (a) allow representatives of the FDA or
any other regulatory authority with jurisdiction over the manufacture or
marketing the Products or the Melanoma LDT, as applicable, to tour and inspect
all facilities utilized by Abbott in the manufacture, testing, packaging,
storage and shipment of Products sold under this Agreement or by NeoGenomics in
the design, development, validation or performance of the Melanoma LDT; or (b)
respond to requests for information from the FDA or any other regulatory
authority having jurisdiction over the manufacture or marketing of the Products
or the Melanoma LDT. Each party shall notify the other party as promptly as
practicable (but in any event within ten (10) days) whenever such party receives
notice of a pending inspection by any United States regulatory agency of any
facility that is used in the manufacturing, packaging, storage or shipment of
Products, or the design, development, validation and performance of the
Melanoma LDT, as applicable.

    

    Article
9

    Melanoma
LDT, Abbott IVD,

    Other
Tests, Third Party Proposals

    

    9.1           Development of Melanoma
LDT. If NeoGenomics elects to develop the Melanoma LDT as contemplated,
it shall be solely responsible for designing, developing and validating the
Melanoma LDT in accordance with all applicable laws, including without
limitation the Act, the Clinical Laboratory Improvement Amendments (“CLIA”) and any rules,
regulations or guidance promulgated thereunder, and it shall use commercially
reasonable efforts to do so as quickly as possible. Without limiting the
foregoing, NeoGenomics will also be solely responsible for determining which
ASRs to include in the Melanoma LDT. Abbott will not participate or be involved
in any way with the design, development or validation of the Melanoma LDT, or
with determining which ASRs to include in the Melanoma LDT. Solely as may be
requested and directed by NeoGenomics, and as permitted by applicable law, rules
and regulations, Abbott may agree to optimize or customize existing ASRs, or to
develop new ASRs, for NeoGenomics’ use in connection with the Melanoma LDT;
provided, however, that
Abbott may do so only in accordance with NeoGenomics’ independently developed
technical requests or instructions. Such customized, optimized or new ASRs would
then constitute Evaluation Products, Products, and/or Exclusive Products for
purposes of this Agreement.

    

    9.2           Failure to Develop.
If NeoGenomics does not develop and launch the Melanoma LDT within six (6)
months after the date on which Abbott first supplies Products (as identified on
Exhibit A and
excluding Evaluation Products) to NeoGenomics under this Agreement, and if such
failure or delay is due to causes beyond NeoGenomics’ reasonable control or to
new or changed circumstances not anticipated by the parties, then Abbott will
consult with NeoGenomics regarding the reasons for such failure or delay and
will consider in good faith a reasonable extension of time for NeoGenomics to
complete development and launch of the Melanoma LDT; provided, however, that
Abbott will have no obligation to grant such an extension of time. If, after
fifteen (15) days of such consultation and good faith consideration, Abbott does
not agree to an extension of time, then it may, in its sole discretion, upon
written notice to NeoGenomics, either: (a) convert this Agreement to a
non-exclusive agreement pursuant to Section 3.4(c); or (b) terminate this
Agreement. Notwithstanding the foregoing, in the event that NeoGenomics, due to
factors beyond its reasonable control, encounters delays in receiving patient
samples with the appropriate patient consents beyond sixty (60) days from the
Effective Date, then the six (6) month deadline in the first sentence of this
Section 9.2 shall be extended day for day for up to an additional sixty (60)
days.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.3           Marketing of Melanoma
LDT. NeoGenomics will be solely responsible for marketing, promoting,
offering, selling, performing and billing customers and/or Third Party payors
for the Melanoma LDT in accordance with applicable law, rules and regulations.
Abbott and its Affiliates will not participate in any way, directly or
indirectly, in the foregoing activities and will not engage in any co-promotion
or other similar activities intended to promote or otherwise create demand
for the Melanoma LDT.

    

    9.4           Abbott
IVD.

    

    (a)           Right to Continue Developing
Abbott IVD. Nothing in this Agreement will prevent or restrict Abbott
from continuing to develop and seeking FDA approval or clearance for the Abbott
IVD, which may include ASRs that are similar or identical to the Products,
including the Exclusive Products. To the extent permitted by, and subject to,
all applicable laws and regulations, including those relating to data privacy,
if requested by Abbott, NeoGenomics will provide Abbott with data generated in
clinical studies conducted in connection with the Melanoma LDT for the purpose
of supporting Abbott’s regulatory submissions for the Abbott IVD; provided, that NeoGenomics
shall have no obligation to provide such data if Abbott has terminated this
Agreement for any reason.

    

    (b)           Co-Exclusive Rights.
If Abbott is successful in developing and obtaining FDA approval or clearance
for the Abbott IVD, Abbott will offer to NeoGenomics the co-exclusive right to
purchase the Abbott IVD and offer it as a service to its customers through its
laboratories (the “IVD
Opportunity”). Such right will be co-exclusive with Abbott, and Abbott
would agree not to sell the Abbott IVD, or sell or license the technology
underlying the Abbott IVD, to Third Party laboratories (other than academic
collaborators for research purposes) during the term of the IVD Agreement (as
defined below), so long as NeoGenomics maintains co-exclusivity in accordance
with subparagraph (d) below.

    

    (c)           IVD Agreement. Abbott and
NeoGenomics both acknowledge and agree that if Abbott is successful in
developing and obtaining FDA approval or clearance for the Abbott IVD and if
NeoGenomics elects to purchase and offer the Abbott IVD, the parties will use
their commercially reasonable best efforts and will negotiate in good faith to
enter into a separate written agreement (the “IVD Agreement”)
setting forth pricing and other terms and conditions substantially similar to the terms and conditions in this
Agreement, modified as appropriate to
reflect the different types of products, provided, that the effective price of the Abbott IVD will not
materially change from the aggregate
Purchase Price paid under this
Agreement by NeoGenomics for the Products used in its Melanoma LDT (calculated on
a per test basis). Notwithstanding the foregoing:

    

    
      	
               
      

            	
              (i)

            	
              if Abbott utilizes ASRs in the Abbott IVD which
      are different than the Products utilized in the Melanoma LDT and the ASRs
      used in the Abbott IVD are subject to licensing and/or royalty payments for the intellectual property
      underlying such ASRs that are higher in the aggregate than the licensing
      and/or royalty payments incurred for the Products used in the Melanoma
      LDT, then, after conferring with NeoGenomics and outlining the
      differences in royalties and licensing fees underlying
      the ASRs, Abbott shall have the right to pass through solely the effects
      of such incremental royalty/licensing costs to NeoGenomics in the
      effective pricing for the Abbott IVD;
      and/or

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (ii)

            	
              if the Abbott IVD includes a greater number of ASRs (i.e., probes) than NeoGenomics uses in its Melanoma
      LDT, the price for the Abbott IVD will be increased proportionately (but taking into account
      manufacturing costs for such additional ASR(s) used in the Abbott IVD to
      the extent such manufacturing costs
      are greater than the manufacturing costs for the Products used in the
      Melanoma LDT) to reflect such greater
      number of ASRs.

            

    

    

    In addition, in connection with entering into the IVD
Agreement, Abbott and NeoGenomics will use their commercially reasonable best efforts and negotiate
in good faith to agree upon new annual
forecasts pursuant to the IVD Agreement to
reflect the anticipated impact to NeoGenomics of the Abbott IVD which new annual forecasts will not be materially higher than the Annual Forecasts for the Melanoma LDT. At
least ninety (90) days prior to Abbott’s anticipated
submission of a Pre-Market Approval application (PMA) for the Abbott IVD,
Abbott will provide NeoGenomics with written notice offering it the IVD
Opportunity. If NeoGenomics elects to
commence negotiations relating to the IVD Opportunity, it will so notify Abbott
in writing within ten (10) days after its receipt of such notice. If
NeoGenomics does not elect to purchase and offer the Abbott IVD within ten (10)
days after its receipt of such notice, or if the parties are unable to reach
agreement as to the terms of the IVD Agreement within sixty (60) days of good
faith negotiations consistent with this paragraph (c) after NeoGenomics elects
to enter into negotiations with respect to the IVD Opportunity, the matter will
be escalated to the President of NeoGenomics (currently Robert Gasparini) and
the President of Abbott (currently Stafford O’Kelly) for
resolution.

    

    (d)           Maintenance of
Co-Exclusivity; Termination. Without
limiting the foregoing, the parties agree that the IVD Agreement will contain
provisions substantially similar to those set forth in Section 3.4 of this
Agreement requiring annual forecasts and annual reviews thereof with respect to
NeoGenomics’ sales of the Abbott IVD, and its maintenance of its co-exclusive
rights. The parties agree that the IVD Agreement will permit Abbott, in its sole
discretion to: (i) in a manner consistent with Section 3.4(c) of this Agreement,
convert the IVD Agreement to a non-exclusive agreement if NeoGenomics’ actual
sales of the Abbott IVD in a given Calendar Year are less than seventy-five
percent (75%) of the agreed upon annual sales forecast for such Calendar Year;
and (ii) in a manner consistent with Section 3.4(d) of this Agreement, limit
purchases of the Abbott IVD to pre-existing customers if NeoGenomics’ actual
sales of the Abbott IVD in a given Calendar Year are less than thirty-five
percent (35%) of the agreed upon annual sales forecast for such Calendar
Year.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.5           Other Tests. Abbott hereby grants to NeoGenomics a first right to
develop two (2) additional LDTs using Abbott ASRs, other Abbott products and/or
Abbott Intellectual Property relating to
the disease states identified in Exhibit G (each, an
“Additional Test”). NeoGenomics will
notify Abbott in writing within ninety (90) days after the Effective Date if it
elects to commence negotiations relating to the first Additional Test described in Exhibit G (the
“Initial Decision Period”). Abbott will notify NeoGenomics in writing when Abbott believes that
its products or intellectual property relating to other potential Additional Tests are ready to be
commercialized, which notice will describe the applicable products and/or
intellectual property in reasonable detail;
provided, that Abbott will not deliver such notice to
NeoGenomics prior to the earlier of June 30, 2010, or the date which is thirty
(30) days after the parties have executed a Subsequent Development Agreement (as
defined below) regarding the first
Additional Test described in Exhibit G. If NeoGenomics elects to commence negotiations
relating to an Additional Test other than
the first Additional Test described in Exhibit G, it will so notify Abbott in writing within thirty (30)
days after its receipt of notice from Abbott relating to such Additional Test
(the “Additional Decision Period” and together with
the Initial Decision Period, each a “Decision Period”). Subject to
the terms hereof, until the expiration of both the applicable Decision Period
and Negotiation Period with respect to an Additional Test, Abbott shall not
pursue negotiations with, nor negotiate with or furnish information regarding
such Additional Test to any Third Party (except academic collaborators for
research purposes). Each date on which NeoGenomics provides written notice of
its desire to commence negotiations regarding an Additional Test is referred to
herein as a “Commencement
Date.”
For a period of ninety (90) days following a Commencement
Date (an “Initial
Negotiation
Period”), the parties will
negotiate exclusively and in good faith to enter into a definitive agreement (a
“Subsequent
Development Agreement”) providing for the development and commercialization of
the applicable Additional Test; provided, however, that neither
party will be obligated to enter into such a Subsequent Development Agreement
except on mutually acceptable terms and conditions. The parties
intend and agree that each Subsequent Development Agreement shall be negotiated
in good faith based upon the same guiding
principles and economic models that were the basis for this Agreement, and each
Subsequent Development Agreement will, to the extent applicable in light of the
different products and intellectual property at issue, contain terms and
conditions that are similar to the terms and conditions in this
Agreement. If, for any reason, the parties do not execute a Subsequent
Development Agreement for a particular Additional Test, the parties rights and
obligations under this Section 9.5 shall continue with respect to
the other Additional Tests. If the parties
execute Subsequent Development Agreements relating to any two (2) of the
Additional Tests, the parties’ respective
rights and obligations under this Section 9.5 shall terminate with
respect to the other Additional Tests. If NeoGenomics does not notify Abbott of its election to
commence negotiations for an Additional Test within the above thirty (30) day
or ninety (90)  day period, as applicable, Abbott will be free to enter into one or more
agreements with one or more Third Parties
regarding the development and
commercialization of such Additional
Test. If the parties do not execute a Subsequent Development
Agreement within ninety (90) days after the Commencement Date for an Additional Test,
the matter will be escalated to the President of
NeoGenomics (currently Robert Gasparini) and the President of Abbott (currently
Stafford O’Kelly) for resolution, and such individuals shall have an additional
fifteen (15) days (the “Escalated Negotiation
Period”) in which to negotiate in good faith the terms of such Subsequent
Development Agreement. If such individuals are unable to agree upon the terms of
such Subsequent Development Agreement within such additional fifteen (15) day
period, Abbott will be free to enter into one or more agreements with one or more Third
Parties regarding the development and commercialization of the applicable Additional Test, and NeoGenomics will have no further
rights with respect thereto.

    

    9.6           Third Party Proposal.
If at any time during the term of this Agreement, there is a Third Party
Proposal, then NeoGenomics will notify Abbott in writing of such Third Party
Proposal thirty (30) days prior to
acceptance of such Third Party Proposal, such notice to include a
reasonably detailed description of such Third Party Proposal including the
identity of the Third Party involved to the extent not precluded by a
confidentiality agreement with such Third Party and a description of the
relevant terms of such Third Party Proposal including the name of the Third
Party if such Third Party is one of the parties listed on Exhibit I. As used
herein, “Third Party
Proposal” means: any written offer with
respect to any: (i) merger, consolidation, other business combination or
similar transaction involving NeoGenomics or any of its subsidiaries; (ii) sale,
lease, license or other disposition, directly or indirectly, whether by merger,
consolidation, business combination, share exchange, joint venture or otherwise,
of assets of NeoGenomics (including equity interests of any of its subsidiaries)
or any subsidiary of NeoGenomics representing fifty percent (50%) or more of the consolidated assets, revenues
or net income of NeoGenomics and its subsidiaries; (iii) sale, lease, license or
other disposition, directly or indirectly, of all or substantially all of
NeoGenomics’ assets that are used in designing, developing, validating,
marketing, selling, performing or billing for the Melanoma LDT; (iv) issuance or
sale or other disposition (including by way of merger, consolidation, business
combination, share exchange, joint venture or similar transaction) of equity
interests representing fifty percent (50%) or more of the voting power of NeoGenomics;
(v) transaction or series of transactions in which any Third Party would acquire
beneficial ownership or the right to acquire beneficial ownership, or any group
(each as defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder) has been formed
which beneficially owns or has the right to acquire beneficial ownership, of
equity interests representing fifty percent
(50%) or more of the voting power of
NeoGenomics; or (vi) any combination of the foregoing.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Article
10

     Representations
And Warranties

    

    10.1         Abbott Representations and
Warranties. Abbott represents and warrants to NeoGenomics
that:

    

    (a)           it
has the full power and right to enter into this Agreement and it is not
currently a party to any other agreements that are inconsistent with the
provisions of this Agreement;

    

    (b)           the
Products will be manufactured in accordance with the Specifications, Quality
Systems and GMP Requirements, as required by the Act, all pertinent rules and
regulations of the FDA, and all other applicable national, state and local laws,
regulations, and guidelines;

    

    (c)           the
Products will not be adulterated or misbranded within the meaning of the
Act;

    

    (d)           Abbott
owns or has the exclusive right to grant licenses and sublicenses to the patents
and patent applications listed in Exhibit H;
and

    

    (e)           Abbott
has not granted any licenses or sublicenses to any Third Party under the patents
and patent applications listed in Part 2 of Exhibit H.

    

    10.2         NeoGenomics Representations
and Warranties. NeoGenomics represents and warrants to Abbott
that:

    

    (a)           it
has the full power and right to enter into this Agreement and it is not
currently a party to any other agreements that are inconsistent with the
provisions of this Agreement; and

    

    (b)           the
Melanoma LDT will be designed, developed, validated, marketed, sold, performed
and billed by NeoGenomics in strict compliance with all applicable laws and
regulations.

    

    10.3         Disclaimers.

    

    (a)           Abbott
makes no representation or warranty of any kind relating to the Melanoma LDT or
any analytical or clinical performance claims concerning the Products (including
the Evaluation Products), including without limitation any claim that the
Products (including the Evaluation Products) are appropriate or suitable for use
in the Melanoma LDT.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)            Except
as expressly set forth in this Agreement, Abbott makes no representations or
warranties of any kind, either express or implied, including, but not limited
to, implied warranties of merchantability, fitness for a particular purpose or
non-infringement.

    

    Article
11

     Intellectual
Property

    

    11.1         Abbott Intellectual
Property. Abbott (or its Affiliate) will be and remain the sole and
exclusive owner of all right, title and interest in and to any and all
Intellectual Property that is owned or developed by Abbott or its
Affiliates.

    

    11.2         NeoGenomics Intellectual
Property. NeoGenomics (or its Affiliate) will be and remain the sole and
exclusive owner of all right, title and interest in and to any and all
Intellectual Property that is: (a) owned or developed by NeoGenomics or its
Affiliates prior to the Effective Date; or (b) developed by NeoGenomics (or its
Affiliate) on or after the Effective Date and does not arise or result from use
or incorporation of the Products in any way.

    

    11.3         Joint Intellectual
Property. Any
Intellectual Property developed by NeoGenomics after the Effective Date that
arises or results from, or that uses or incorporates the Products in any way
(including the Melanoma LDT) shall be jointly owned by NeoGenomics and Abbott.
Neither party shall license such jointly owned Intellectual Property without the
prior written consent of the other party, which shall not be unreasonably
withheld.

    

    11.4         No New License
Grants. After the Effective Date, Abbott will not grant to any Third
Party any license or sublicense under the patents and patent applications listed
in Part 2 of Exhibit
H for practice in the Territory in the field of melanoma
diagnosis.

    

    Article
12

    Confidential
Information

    

    12.1         Confidential
Information. It is contemplated that in the course of the performance of
this Agreement each party may, from time to time, disclose certain trade secrets
and other non-public, proprietary and/or confidential information to the other
(“Confidential
Information”). Each party (the “Receiving Party”)
agrees that it will not disclose Confidential Information received from the
other party (the “Disclosing Party”)
and that it will not use Confidential Information disclosed to it by the
Disclosing Party for any purpose other than to fulfill its obligations under
this Agreement. Confidential Information includes, without limitation: (a)
information constituting trade secrets of either party; (b) information relating
to existing or contemplated products, services, technology, designs, processes,
formulae and research and development (in whatever stage) of either party; (c)
information relating to technology, patent rights or products of either party;
(d) information relating to business plans, methods of doing business, sales or
marketing methods, customer lists, customer usages or requirements of either
party; and (e) any other information disclosed hereunder that is either
identified as confidential or, from the nature of the information or the
circumstances surrounding its disclosure, should reasonably be considered
to be confidential.

    

    12.2         Exclusions.
Confidential Information does not include information that:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a)           was
already known to the Receiving Party, other than under an obligation of
confidentiality to the Disclosing Party, at the time of disclosure by the other
party;

    

    (b)           is
or becomes generally available to the public or otherwise part of the public
domain other than through the Receiving Party’s breach of this
Agreement;

    

    (c)           was
disclosed to the Receiving Party, other than under an obligation of
confidentiality, by a Third Party who, to the Receiving Party’s knowledge, had
no obligation to the Disclosing Party not to disclose such
information;

    

    (d)           was
developed by the Receiving Party independently and without reference to
Confidential Information received from the Disclosing Party as evidenced by the
Receiving Party’s own written records;

    

    (e)           was
disclosed to the Receiving Party pursuant to the last sentence of Section
9.4(a), solely to the extent used for the purposes described therein;
or

    

    (f)           was
disclosed to the Receiving Party for purposes of prosecuting Intellectual
Property rights arising under Section 11.3, solely to the extent used for the
purposes described therein.

    

    12.3         Term of Confidentiality;
Safeguarding. Except as otherwise agreed in writing, during the term of
this Agreement and for a period of five (5) years following the expiration or
termination of this Agreement for any reason, the Receiving Party shall take at
least the same measures to protect the confidentiality of the Disclosing Party’s
Confidential Information as it takes to protect its own proprietary and
confidential information of like kind and sensitivity, but in no event shall the
Receiving Party use less than reasonable care.

    

    12.4         Disclosure
Required by
Law. In the event that a Receiving Party is required by applicable
law, rule or regulation or by judicial or
administrative process to disclose the Disclosing Party’s Confidential
Information, the Receiving Party will notify the Disclosing Party as promptly as
practicable and allow the Disclosing Party to oppose such process and/or seek
protective order to limit exposure to and dissemination of said Confidential
Information. The Receiving Party will cooperate with the Disclosing Party (at
the Disclosing Party’s expenses) in opposing such process or seeking a
protective order. If the Disclosing Party is unsuccessful, the Receiving Party
may disclose the requested Confidential Information to the minimum extent
required by law.

    

    12.5         Publicity. Neither
party shall use the name or trademarks of the other party in any publicity,
advertising or in any written, verbal or any other form of public disclosure
without the express written consent of the other party. Notwithstanding the
foregoing, Abbott agrees that it will work in good faith with NeoGenomics to
develop a standard set of talking points about the nature of this Agreement that
NeoGenomics can use to answer investor questions related to its relationship
with Abbott and that once such talking points have been approved, NeoGenomics
will not be required to seek the written consent of Abbott to utilize such
talking points with investors. Abbott further agrees that it will work with
NeoGenomics to develop a mutually acceptable written description of this
Agreement and the relationship with Abbott contemplated by this Agreement which
can be utilized in NeoGenomics’ parent company’s periodic filings with the SEC,
and that once such written description has been approved by Abbott, NeoGenomics
will not need to obtain further approvals from Abbott to utilize such written
description in NeoGenomics’ parent company’s filings with the SEC, unless there
are material changes to such description.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    12.6         Existence of the
Agreement. The existence of and the relationship created under this
Agreement is confidential and shall be treated as Confidential Information
pursuant to the terms of this Agreement.

    

    12.7         Required Securities
Disclosure. Notwithstanding anything to the contrary in this Agreement,
if NeoGenomics is required to file a copy of this Agreement with the Securities
and Exchange Commission, it shall provide Abbott with as much notice as possible
and allow Abbott a reasonable opportunity to review and comment on any redacted
version of this Agreement before it is filed by NeoGenomics, provided that
NeoGenomics will bear the sole responsibility of ensuring its own compliance
with applicable securities laws.

    

    Article
13

     Indemnification
And Liability

    

    13.1         Indemnification by
Abbott. Abbott will indemnify, defend and hold harmless NeoGenomics and
its Affiliates, employees, officers, directors and agents (collectively, the
“NeoGenomics
Indemnitees”) from and against any suit, proceeding, claim, liability,
loss, damage, fines, penalties, costs or expense, including reasonable
attorneys’ fees (collectively, “Losses”) that any of
the NeoGenomics Indemnitees may hereinafter incur, suffer, or be required to pay
arising out of or resulting from: (a) any breach by Abbott of the terms of this
Agreement; or (b) Abbott’s negligence or willful misconduct. The foregoing
indemnity shall not apply to the extent that any Losses arise or result from the
negligence or willful misconduct of the NeoGenomics Indemnitees.

    

    13.2         Indemnification by
NeoGenomics. NeoGenomics will indemnify, defend and hold harmless Abbott
and its Affiliates, employees, officers, directors and agents (collectively, the
“Abbott
Indemnitees”) from and against any Losses that any of the Abbott
Indemnitees may hereinafter incur, suffer, or be required to pay arising out of
or resulting from: (a) the design, development, validation, marketing, sale,
performance or billing of the Melanoma LDT; (b) any breach by NeoGenomics of the
terms of this Agreement; or (c) NeoGenomics’ negligence or willful misconduct.
The foregoing indemnity shall not apply to the extent that any Losses arise or
result from the negligence or willful misconduct of the Abbott
Indemnitees.

    

    13.3         Cooperation and Notice
Requirements. With respect to any claim for which a party seeks
indemnification from the other hereunder, the party seeking indemnification
will: (a) provide prompt notice to the other of the claim for which
indemnification is sought and tender to it the defense of such claim; and (b)
provide reasonable cooperation and assistance to the indemnifying party in
the defense of such claim. Neither party will be bound by any settlement
agreement entered into without such party’s prior written consent, which shall
not be unreasonably withheld.

    

    13.4         Termination of
Indemnification Obligations. All
obligations for indemnification on the part of parties hereto shall expire three
(3) years from the date of termination of this Agreement, except with respect to
claims already notified to the other party prior to the end of such three (3)
year period.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    13.5         Insurance.

    

    (a)           NeoGenomics
will obtain and maintain during the term of the Agreement and for a period of
two (2) years after expiration or termination of this Agreement product
liability and general comprehensive liability insurance covering bodily injury
and property damage in an amount of not less than $1.0 million per occurrence
and $5.0 million in the aggregate.

    

    (b)           Abbott
represents that it is self-insured for product liability and general liability,
and that it has and will maintain such coverage for the term of this Agreement
and for a period of two (2) years after the expiration or termination of this
Agreement. Such self-insurance is in an amount which is reasonable and customary
in the global pharmaceutical and medical products industry for companies of
comparable size and activities.

    

    13.6         Limitation
of
Liability.
In no event shall either party be liable to the other party for any indirect,
incidental, punitive, special, exemplary or consequential damages, whether based
upon a claim or action of contract, warranty, negligence, strict liability or
other tort, a product claim, or otherwise that arises out of or is related to
this Agreement. In addition, except for liability arising from any intentional
breach of this Agreement, fraud, gross negligence or willful misconduct on the
part of Abbott, Abbott’s maximum liability to NeoGenomics under this Agreement
will not exceed FifteenMillion Dollars ($15,000,000). The forgoing
limitations will not apply: (a) to breaches of the parties’ confidentiality
obligations under Article 12; or (b) where such indirect, incidental, punitive,
special, exemplary or consequential damages are payable to a Third Party and
subject to indemnification pursuant to this Article 13. The allocations of
liability in this paragraph represent the agreed and bargained-for understanding
of the parties and the Purchase Price for the Products reflects such
allocations.

    

    Article
14

     Term
And Termination

    

    14.1         Term. This Agreement
shall become effective on the Effective Date, and unless sooner terminated in
accordance with the terms herein, this Agreement shall remain in effect until
December 31, 2019 (the “Initial Term”).
Thereafter this Agreement shall automatically renew and continue in effect for
successive renewal terms of two (2) years each (each a
“Renewal Term”)
unless twelve (12) months prior to the termination of the Initial Term of the
Agreement or any Renewal Term thereof, either party provides written notice to
the other party that it will not renew the Agreement at the end of said Initial
Term or Renewal Term. Notwithstanding the foregoing, Abbott agrees that if
NeoGenomics has continued to meet the threshold for exclusivity defined in
Section 3.4(b) for the Calendar Year immediately preceding the year in which the
Initial Term or any Renewal Term comes due, Abbott will renew this Agreement at
the end of the Initial Term or such Renewal Term, as the case may be, pursuant
to this Section 14.1; provided, however, nothing in
the section shall obligate Abbott beyond two (2) renewal terms of two (2) years
each.

    

    14.2         Breach. In the event
that either party commits a material breach or default of any of its obligations
hereunder (excluding NeoGenomics’ failure to meet
the Annual Forecast), the other party may give the breaching party
written notice of such material breach or default, and shall request that such
material breach or default be cured as soon as reasonably practicable. In the
event that the breach or default is not cured within ninety (90) days
after the date of the non-breaching party’s notice thereof, the
non-breaching party may terminate this Agreement immediately upon written notice
to the breaching party.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    14.3           Insolvency. Either
party may terminate this Agreement on the liquidation, bankruptcy or insolvency
of the other party or the appointment of a receiver or trustee for the property
of the other party, or if the other party makes an assignment for the benefit of
creditors, whether any of the aforesaid events are the outcome of a voluntary
act or otherwise. In the event that a party files for bankruptcy and such
party’s trustee rejects this Agreement, the other party may elect to retain its
rights under this Agreement upon appropriate written notification to said
trustee.

    

    14.4         Change of Control.

    

    (a)           Abbott
may terminate this Agreement upon ninety (90) days written notice to NeoGenomics
following a Change of Control involving NeoGenomics (or its permitted successors
or assigns) and any of the companies set forth in Exhibit I, or their
successors or assigns. Abbott’s right to terminate this Agreement pursuant to
this Section 14.4 will continue until the earlier of (i) five (5) years
following a Change of Control involving NeoGenomics (or its permitted successors
or assigns) and any of the companies set forth in Exhibit I, or their
successors or assigns and (ii) the date that is ninety (90) days after the
Abbott IVD is first available for commercial sale in the United
States.

    

    (b)           If
Abbott terminates this Agreement pursuant to this Section 14.4, as NeoGenomics’
sole and exclusive remedy for such termination, Abbott will pay to NeoGenomics
(or its successor) a termination payment equal to the greater of: (i) all of the
reasonable direct costs actually incurred by NeoGenomics (and subject to
verification and audit by Abbott or its independent accounting firm) in
designing, developing, validating, marketing, and performing the Melanoma LDT
through the date of termination, not to exceed Seven Million Five Hundred
Thousand Dollars ($7,500,000); or (ii) the sum of:

    

    
      	
               
      

            	
              (A)

            	
              two
      and three tenths (2.3) multiplied by the Unaudited Revenue realized by
      NeoGenomics for the twelve (12) month period immediately preceding the
      effective date of the Change of Control (the “Change of Control Base
      Revenue
      Amount”); plus

            

    

    

    
      	
               
      

            	
              (B)

            	
              one
      and five tenths (1.5) multiplied by an amount equal to: (1) the Unaudited
      Revenue realized by NeoGenomics and/or NeoGenomics’ successor or acquirer,
      as the case may be, for the twelve (12) month period immediately preceding
      the date on which Abbott elects to terminate this Agreement pursuant to
      this Section 14.4 (the “Termination Date
      Revenue Amount”), less (2) the Change of Control Base Revenue
      Amount.

            

    

    

    (c)           Notwithstanding
the foregoing, if the Termination Date Revenue Amount is less than the Change of
Control Base Revenue Amount, then the termination payment payable by Abbott
pursuant to this Section 14.4 shall be an amount equal to two and three tenths
(2.3) multiplied by the Termination Date Revenue Amount.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)           If
Abbott terminates this Agreement and pays the foregoing termination payment,
within thirty (30) days thereafter, NeoGenomics will transfer to Abbott all of
the dedicated equipment (i.e., greater than fifty
percent (50%) usage), supplies, customer lists, sales aids, marketing materials
and other relevant sales, marketing and promotional materials related to the
Melanoma LDT, and Abbott will have the right (but not the obligation) to hire
any of NeoGenomics’ salespeople who are dedicated (on a full time equivalent
basis) to promoting and selling the Melanoma LDT. If a Change of Control does
not involve any of the companies set forth in Exhibit I, then this
Agreement will continue in full force and effect and be binding upon Abbott and
NeoGenomics (or its successor in interest following the Change of Control) in
accordance with its terms. If a Change of Control involves any of the companies
set forth in Exhibit
I, but Abbott elects not to terminate this Agreement pursuant to this
Section 14.4, then this Agreement will continue in full force and effect and be
binding upon Abbott and NeoGenomics (or its successor in interest following the
Change of Control) in accordance with its terms; provided, however, that in
such event, NeoGenomics (or its successor) will no longer have the rights, and
Abbott will no longer have the obligations, set forth in Section 9.5, except to
the extent that NeoGenomics exercised such rights and Abbott’s obligations
accrued under such sections prior to termination pursuant to this Section
14.4.

    

    14.5         Change in Law. If, in the reasonable opinion of Abbott’s legal
counsel (taking into account all of Abbott’s and its Affiliates’ various
businesses and the legal and regulatory risks facing such businesses), there is
a change in applicable law (whether by statute, regulation, judicial or
administrative decision, informal policy guidance, warning letters or otherwise)
that prohibits the manufacture, marketing, promotion or sale of the Products or
the design, development, validation, marketing, performance or sale of the
Melanoma LDT or LDTs in general and NeoGenomics has received an opinion of
Abbott’s counsel that the manufacture, marketing, promotion or sale of the
Products or the design, development, validation, marketing, performance or sale
of the Melanoma LDT or LDTs are prohibited, then
Abbott and NeoGenomics will negotiate in good faith to amend this Agreement to
reflect the anticipated impact of such events; provided, however, that if
the parties are unable to reach agreement regarding such an amendment within
ninety (90) days of good faith negotiations, Abbott will have the right to
terminate this Agreement upon written notice to NeoGenomics.

    

    14.6         Force Majeure. Either
party may terminate this Agreement upon written notice to the other party if the
other party’s performance of its obligations hereunder is prevented for more
than one hundred eighty (180) days due to a force majeure condition, as further
described in Section 15.1.

    

    14.7         IVD Agreement. This
Agreement will terminate automatically on the date that the IVD Agreement is
executed between the parties.

    

    14.8         Other Provisions. In
addition to the termination provisions set forth in this Article 14, this
Agreement may be terminated in accordance with any other provision hereof that
expressly gives either party a right to terminate.

    

    14.9         Post Termination.
Following the expiration or termination of this Agreement according to its terms
(unless terminated automatically pursuant to Section 14.7 or by Abbott pursuant
to Section 14.2, 14.3 or 14.4), Abbott and NeoGenomics agree to use commercially
reasonable efforts to ensure that NeoGenomics can continue to meet its
customers’ requirements for the Melanoma LDT.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    14.10       Survival. Termination
of this Agreement shall not relieve either party of any obligations accrued
prior to termination. Articles 1, 10, 11, 12, 13, 14 and 15, and Sections 3.5,
7.6 (subject to the time periods contained therein), 7.7, 8.1, 8.3 and 9.3 shall
survive termination or expiration of this Agreement for any reason.

    

    Article
15

    Miscellaneous

    

    15.1         Force Majeure.
Neither party shall be liable to the other party for damages or losses on
account of failure of performance (other than a failure to make payments when
due) if such failure is occasioned by government action, war, terrorism, fire,
explosion, flood, epidemic, strike, lockout, embargo, shortage of materials or
utilities, vendor failure to supply, act of God or any other cause beyond the
affected party’s reasonable control, provided that the affected party uses
commercially reasonable efforts to avoid the force majeure condition and to
remedy the condition as quickly as possible. The affected party will give the
other party prompt written notice of the occurrence of any force majeure
condition, the nature thereof, and the extent to which the affected party
will be unable to perform its obligations under this Agreement. Such excuse will
continue as long as the force majeure condition continues. Upon cessation of
such condition, the affected party will promptly resume performance under this
Agreement.

    

    15.2         Assignment. This
Agreement shall inure to the benefit of and be binding upon and enforceable by
the parties and their successors and permitted assigns. However, neither party
may assign or delegate any of its rights or obligations under this Agreement
without the prior written consent of the other party, which will not be
unreasonably withheld. Notwithstanding the foregoing, without the other party’s
consent: (a) either party may assign or delegate its rights or obligations, in
whole or in part, to one or more Affiliates of such party, provided that such
assignment will not relieve the assigning party of any obligations under this
Agreement; and (b) either party may assign or delegate its rights or
obligations, in whole but not in part, under this Agreement to a Third Party in
connection with a Change of Control, subject to Section 14.4.

    

    15.3         Waiver. Any waiver by
either party of a breach or a default of any provision of this Agreement by the
other party must be in writing and will not be construed as a waiver of any
succeeding breach of the same or any other provision, nor shall any delay or
omission on the part of either party to exercise or avail itself of any right,
power or privilege that it has or may have hereunder operate as a waiver of
any right, power or privilege by such party.

    

    15.4         Severability. If any
part of this Agreement is declared invalid or unenforceable by any court of
competent jurisdiction, such declaration shall not affect the remainder of the
Agreement and the invalidated provision shall be revised in a manner that will
render such provision valid while preserving the parties’ original intent to the
maximum extent possible.

    

    15.5         Independent
Contractors. The parties are independent contractors and nothing in this
Agreement is intended to, or shall be construed to, constitute a partnership,
joint venture or agency relationship between the parties. Neither party shall
have the authority to make any statements, representations or commitments of any
kind, or to take any action, which shall be binding on the other, without the
prior written consent of the other party. All persons employed by a party shall
be employees of such party and not of the other party and all costs and
obligations incurred by reason of any such employment shall be for the account
and expense of such party.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    15.6         Entire Agreement.
This Agreement, together with any exhibits hereto, constitutes the entire
agreement between the parties relating to the subject matter hereof and all
previous agreements or arrangements between the parties, written or oral,
relating to the subject matter hereof are superseded.

    

    15.7         Amendment. No
amendment, alteration or modification of any of the provisions of this Agreement
will be binding unless made in writing and signed by the parties.

    

    15.8         Compliance with Law.
In performing this Agreement, each party shall comply with all applicable laws,
rules and regulations and shall not be required to perform or omit to perform
any act required or permitted under this Agreement if such performance or
omission would violate the provisions of any such law, rule or
regulation.

    

    15.9         Counterparts. This
Agreement may be executed in two counterparts, each of which shall be deemed an
original but both of which together shall constitute one and the same
instrument.

    

    15.10       Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of
the State of
Illinois, without regard to its conflicts of laws principles.

    

    15.11       Alternative Dispute
Resolution. The parties agree
that any dispute that arises in connection with this Agreement shall be settled
by binding Alternative Dispute Resolution in the manner described in Exhibit
J.

    

    15.12       Notices. All notices
required or permitted under this Agreement must be in writing and sent to the
address or facsimile number identified below. Notices must be given: (a) by
personal delivery, with receipt acknowledged; (b) by facsimile followed by hard
copy delivered by the methods under (c) or (d); (c) by prepaid certified or
registered mail, return receipt requested; or (d) by prepaid reputable overnight
delivery service. Notices will be effective upon receipt. Either party may
change its notice address by providing the other party written notice of such
change. Notices shall be delivered as follows:

    

    
      
        
          
            
              
                	
                        If
      to Abbott:

                      	
                        Abbott
      Molecular Inc.

                      
	 
      	
                        Attention:
      Senior Director, Business Development & Licensing

                      
	 
      	
                        1300
      East Touhy Avenue

                      
	 
      	
                        Des
      Plaines, Illinois 60018-3315

                      
	 
      	
                        Fax:
      (224) 361-7054

                      
	 
      	 
      
	
                        with
      a copy to:

                      	
                        Abbott
      Laboratories

                      
	 
      	
                        Attention:
      DVP, Commercial Legal Operations

                      
	 
      	
                        100
      Abbott Park Road

                      
	 
      	
                        Dept.
      32MP, Bldg. AP6A-2

                      
	 
      	
                        Abbott
      Park, Illinois 60064-6049

                      
	 
      	
                        Fax:
      (847) 938-1206

                      
	 
      	 
      
	
                        If
      to NeoGenomics:

                      	
                        NeoGenomics
      Laboratories, Inc.

                      
	 
      	
                        Attention:
      Robert Gasparini, President

                      
	 
      	
                        12707
      Commonwealth Drive, Suite 9

                      
	 
      	
                        Fort
      Myers, Florida 33913

                      
	 
      	
                        Fax:
      (239)
768-0711

                      

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  copy
      to:

                	
                  K&L
      Gates LLP

                
	 
      	
                  Attention:
      Clayton E. Parker, Esq.

                
	 
      	
                  200
      South Biscayne Boulevard, Suite 3900

                
	 
      	
                  Miami,
      Florida 33131-2399

                
	 
      	
                  Fax:
      (305) 358-7095

                

        

      

    

    

    15.13       Expenses. All costs
and expenses incurred with connection with this Agreement and the transactions
contemplated hereby shall be paid by the party which shall have incurred the
same, and the other party shall no liability thereto.

    

    15.14       Headings. The titles
of the Articles and Sections contained in this Agreement are for convenience
only and shall not be considered in construing this Agreement.

    

    *     *     *

    

    Signature
page follows.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    In Witness
Whereof,
the parties have caused this Agreement to be executed as of the Effective
Date.

    

    
      
        	
                Abbott
      Molecular Inc.

              	 
      	 
      	
                NeoGenomics
      Laboratories, Inc.

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Stafford
      O’Kelly

              	 
      	
                By:

              	
                /s/Douglas M.
      VanOort

              
	 
      	
                Stafford
      O’Kelly

              	 
      	 
      	
                Douglas
      VanOort

              
	 
      	
                President

              	 
      	 
      	
                Chairman
      and Chief Executive
OfficerExhibit 10.1

    

    
      CONFIDENTIAL TREATMENT REQUESTED:  INFORMATION FOR WHICH CONFIDENTIAL
      TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH “[*].”  AN
      UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE
      SECURITIES AND EXCHANGE COMMISSION.

    

    
      ASSET PURCHASE AGREEMENT

Dated as of August 6, 2009

By
      and Between

NOVARTIS INSTITUTES FOR BIOMEDICAL
      RESEARCH, INC.
    

    
      and
    

    
      OPEXA THERAPEUTICS, INC.
    

    
      

      

      

      

      

      

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      ASSET PURCHASE AGREEMENT
    

    
      This ASSET PURCHASE AGREEMENT (this “Agreement”) is dated
      as of August 6, 2009 (the “Effective Date”), by and between
      Novartis Institutes for BioMedical Research, Inc., a Delaware
      corporation (“Novartis”) and Opexa Therapeutics, Inc., a
      Texas corporation (the “Company”).  
    

    
      RECITALS
    

    
      WHEREAS, the Company is engaged in the research and development
      of the MDSC Program (as defined below);
    

    
      WHEREAS, upon the terms and conditions set forth herein, Novartis
      desires to purchase, and the Company desires to assign to Novartis all
      of the Company Intellectual Property (as defined below);
    

    
      WHEREAS, the Company and the University of Chicago have entered
      into the Chicago License, whereby the University of Chicago has licensed
      to the Company certain exclusive rights as set forth in the Chicago
      License; and
    

    
      WHEREAS, the Company wishes to assign the Chicago License to
      Novartis, and Novartis wishes to assume the Chicago License from the
      Company, on the terms and conditions set forth herein;
    

    
      NOW, THEREFORE, in consideration of the foregoing and the
      respective representations, warranties, covenants and agreements set
      forth herein, and intending to be legally bound hereby, the parties
      hereto agree as follows:
    

    
      Article I 

DEFINITIONS
    

    
      1.1  Defined Terms.  Defined terms used in this
      Agreement shall have the meanings ascribed to them as follows:
    

    
      “Affiliate” shall mean, with respect to a party, any Person
      that controls, is controlled by, or is under common control with that
      party.  For the purpose of this definition, “control” shall mean, direct
      or indirect, ownership of fifty percent (50%) or more of the shares of
      stock entitled to vote for the election of directors, in the case of a
      corporation, or fifty percent (50%) or more of the equity interest in
      the case of any other type of legal entity, status as a general partner
      in any partnership, or any other arrangement whereby the entity or
      Person controls or has the right to control the board of directors or
      equivalent governing body of a corporation or other entity, or the
      ability to cause the direction of the management or policies of a
      corporation or other entity.  In the case of entities organized under
      the Laws of certain countries, the maximum percentage ownership
      permitted by Law for a foreign investor may be less than fifty percent
      (50%), and in such case such lower percentage shall be substituted in
      the preceding sentence, provided, that such foreign investor has the
      power to direct the management and policies of such entity. In the case
      of Novartis, “Affiliates” shall also expressly be deemed to include the
      Novartis Institute for Functional Genomics, Inc., the Friedrich Miescher
      Institute for Biomedical Research and their respective Affiliates.
    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    
      “Allogeneic Generation Process” shall mean an in
      vitro process to generate MDSCs from a person’s blood, multiplying
      such MDSCs in number ex vivo, and converting them to a
      therapeutic for transplantation into a different person.
    

    
      “Autologous Generation Process” shall mean an in
      vitro process to generate MDSCs from a person’s blood, multiplying
      such MDSCs in number ex vivo, and converting them to a
      therapeutic for transplantation back into the same person.
    

    
      “Calendar Quarter” shall mean the respective periods of
      three (3) consecutive calendar months ending on March 31, June 30,
      September 30 and December 31.
    

    
      “Calendar Year” shall mean each successive period of twelve
      (12) months commencing on January 1 and ending on December 31.
    

    
      “Change in Control” of the Company shall mean (i) the
      Company is involved in a merger, reorganization or consolidation in
      which its shareholders immediately prior to such transaction hold less
      than fifty percent (50%) of the voting securities or other voting
      interests representing the equity of the surviving entity immediately
      after such merger, reorganization or consolidation, where such surviving
      entity is or is an Affiliate of a Significant Pharmaceutical Company,
      (ii) there is a bona fide sale of all or substantially all of the
      Company’s assets or business relating to this Agreement to a Significant
      Pharmaceutical Company, or (iii) a Significant Pharmaceutical Company
      acquires effective control of the management and policies of the Company.
    

    
      “Chicago License” shall mean that certain Second Amended
      and Restated License Agreement, dated July 31, 2007, between the Company
      and the University of Chicago, as amended as of August 5, 2009, attached
      hereto as Exhibit A.
    

    
      “Company Intellectual Property” shall mean any Intellectual
      Property that is owned by or licensed to the Company in each case which
      is used in, held for use or intended for use in, or that arises out of
      or otherwise relates to the MDSC Program, excluding the Intellectual
      Property licensed to the Company under the Chicago License.  
    

    
      “Confidentiality Agreement” shall mean the Confidential
      Disclosure Agreement effective as of December 11, 2008, by and between
      the Company and Novartis International AG.
    

    
      “dollars” or “$” shall mean United
      States dollars.
    

    
      “EMEA” shall mean the European Medicines Evaluation Agency
      or any successor agency thereto.
    

    
      “EU Regulatory Approval” shall mean (a) marketing
      authorization approval from the EMEA and pricing and reimbursement
      approval in any three Major EU Countries or (b) national marketing
      authorization approval and pricing and reimbursement approval in any
      three Major EU Countries.
    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    
      CONFIDENTIAL TREATMENT REQUESTED
    

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

    
      “First Commercial Sale” shall mean the first sale of a
      Product or Method, by or under the authority of Novartis, an Affiliate
      of Novartis, or their licensees or sublicensees to a Third Party in a
      country following Regulatory Approval and reimbursement approval (if
      necessary) of such Product or Method in that country or, if no such
      Regulatory Approval or similar approval is required, the date upon which
      such Product or Method is first commercially launched in such country; provided
      that First Commercial Sale shall not include any distribution or other
      sale solely for so-called treatment investigational new drug sales,
      named patient sales, compassionate or emergency use sales or pre-license
      sales.
    

    
      “FPFV” shall mean, with respect to a Product or Method, the
      administration of the first dose of such Product or first administration
      of such Method to the first patient at his first visit in a Phase III
      Clinical Study, as applicable.
    

    
      “FTE” or “Full Time Equivalent” shall
      mean the equivalent of a full-time qualified employee’s work time
      (consisting of a total of [*] hours over a twelve-month period) for
      scientific work directly related to the technology transfer activities
      provided in the Technology Transfer Plan, excluding any managerial
      activities and travel time.
    

    
      “Generation Process” shall mean, collectively, the
      Autologous Generation Process and the Allogeneic Generation Process.
    

    
      “Governmental Authority” shall mean any federal, state,
      municipal, foreign or other governmental body, department, commission,
      board, bureau, agency, court or instrumentality, domestic or foreign, or
      other entity exercising any executive, legislative, judicial,
      quasi-judicial, regulatory or administrative function of government,
      including the FDA and all foreign equivalents thereof.
    

    
      “Intellectual Property” shall mean any or all rights in,
      arising out of, or associated therewith:  (a) all United States,
      international and foreign Patent Rights; (b) all Know-How; (c) all
      copyrights, copyright registrations and applications therefor, and all
      other rights corresponding thereto throughout the world; (d) all
      industrial designs and any registration and applications therefor
      throughout the world; (e) all trade names, brand names, model names and
      other source indicators, logos, domain names, URLs, common law
      trademarks and service marks, including all good will associated
      therewith, and all registration and applications therefor throughout the
      world; (f) all mask works and all applications, registrations, and
      renewals in connection therewith and (g) all databases and data
      collections and all rights therein throughout the world.
    

    
      “Invoice” shall mean an invoice substantially in the form
      attached as Exhibit D.
    

    
      “Know-How” shall mean all ideas, inventions (whether
      patentable or not), discoveries, concepts, formulae, practices,
      procedures, processes, methods, knowledge, know-how, trade secrets,
      technology, technical information, designs, drawings, computer programs,
      skill, experience, documents, apparatus, results, data, specifications
      and materials, including all clinical and regulatory strategies,
      regulatory filings (and copies thereof), biological, chemical,
      biochemical, pharmacological, physical, toxicological and clinical data,
      analytical, safety, efficacy and quality control data, test data,
      manufacturing data  and descriptions, patents and legal data, market
      data, financial data or descriptions, devices, assays, chemical
      formulations, specifications, compositions of matter, product samples
      and other samples, physical, chemical and biological materials and
      compounds, and the like, in written, electronic or other form.
    

    
      
        

        

      

      
        
          3
        

        
          

        

      

      
        

        

      

    

    
      “Law” shall mean any federal, state, local or foreign law,
      statute, common law, rule, regulation, code, directive, ordinance or
      other requirement of general application of any Governmental Authority.
    

    
      “Liabilities” shall mean any direct or indirect liability,
      indebtedness, claim, loss, damage, deficiency, obligation or
      responsibility, fixed or unfixed, liquidated or unliquidated, secured or
      unsecured, accrued, absolute or contingent.
    

    
      “Licensed Patents” shall have the meaning set forth in the
      Chicago License.
    

    
      “LICENSEE” shall have the meaning set forth in the Chicago
      License.
    

    
      “Lien” shall mean any lien, claim, charge, option,
      mortgage, pledge or security interest, rights of first refusal or rights
      of first offer, encumbrance or other similar right, whether arising by
      contract, operation of law or otherwise.
    

    
      “Losses” of any Person shall mean any and all demands,
      claims, suits, actions, causes of action, proceedings, assessments,
      losses, damages, Liabilities, Taxes, costs and expenses, incurred by
      such Person, including settlement costs, costs of collection, interest,
      penalties and attorneys’ fees, Third Party expert and consultant fees
      and expenses, fines, judgments and awards.
    

    
      “Major EU Country” shall mean France, Germany, Italy, Spain
      or the United Kingdom.
    

    
      “MDSC” shall mean a monocyte-derived stem cell.
    

    
      “MDSC Program” shall mean, in each instance as conducted by
      or on behalf of the Company up to and including the Effective Date: (i)
      the Generation Process; and (ii) any other use of MDSCs for any purpose.
    

    
      “Method” shall mean any method, procedure or process where
      use or practice of such is covered by the scope of any Valid Claim.
    

    
      “Net Sales” shall mean with respect to any Product or
      Method the gross amount invoiced by or on behalf of Novartis, its
      Affiliates and any licensees or sublicensees for that Product or Method
      sold to Third Parties, in bona fide, arm’s length transactions, less
      customary deductions, determined in accordance with Novartis’ usual and
      customary accounting methods, which are in accordance with International
      Financial Reporting Standards (IFRS) as consistently applied at
      Novartis, to the extent included in the gross invoiced sales price of
      any Product or Method or otherwise directly paid or incurred by
      Novartis, its Affiliates or licensees or sublicensees with respect to
      the sale of such Product or Method, such as:
    

    
      
        

        

      

      
        
          4
        

        
          

        

      

      
        

        

      

    

    
      CONFIDENTIAL TREATMENT REQUESTED
    

    

    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      •         [*];
    

    
      all as determined in accordance with Novartis’ usual and customary
      accounting methods, which are in accordance with International Financial
      Reporting Standards (IFRS) as consistently applied at Novartis.  Sales
      from Novartis to its Affiliates shall be disregarded for purposes of
      calculating Net Sales.  Any of the items set forth above that would
      otherwise be deducted from the invoice price in the calculation of Net
      Sales but which are separately charged to Third Parties shall not be
      deducted from the invoice price in the calculation of Net Sales.
    

    
      (a)       In the case of any sale or other disposal of a Product or
      Method between or among Novartis, its Affiliates and licensees and
      sublicensees, for resale, Net Sales shall be calculated as above only on
      the value charged or invoiced on the first arm’s length sale thereafter
      to a Third Party;
    

    
      (b)       In the case of any sale which is not invoiced or is delivered
      before invoice, Net Sales shall be calculated at the time of shipment or
      when the Product or Method is paid for, if paid for before shipment or
      invoice; and
    

    
      (c)       In the case of any sale or other disposal for value, such as
      barter or counter-trade, of any Product or Method, or part thereof,
      other than in an arm’s length transaction exclusively for money, Net
      Sales shall be calculated as above on the value of the non-cash
      consideration received or the fair market price (if higher) of the
      Product or Method in the country of sale or disposal.
    

    
      
        

        

      

      
        
          5
        

        
          

        

      

      
        

        

      

    

    
      “Order” shall mean any order, writ, injunction, judgment,
      decree or ruling entered, issued, made or rendered by any court,
      administrative agency, arbitration tribunal or other Governmental
      Authority of competent jurisdiction.
    

    
      “Patent Rights” shall mean all patents and patent
      applications, and any patents issuing therefrom, worldwide, including
      all divisionals, continuations, substitutions, continuations-in-part,
      re-examinations, reissues, additions, renewals, extensions (including
      patent term extensions and supplementary protection certificates),
      registrations, and the like of any of the foregoing.
    

    
      “Permits” shall mean all licenses, permits, consents,
      applications, orders, waivers,  clearances, franchises, certificates,
      variances, approvals, filings, notifications and other authorizations of
      any Governmental Authorities under applicable Law.
    

    
      “Person” shall mean any individual, corporation,
      partnership, firm, limited liability company, joint venture,
      association, joint stock company, trust, unincorporated organization,
      Governmental Authority or other entity.
    

    
      “Phase III Clinical Study” shall mean a pivotal human
      clinical study in any country that is conducted in accordance with cGCPs
      and is intended to establish efficacy and safety of a product for the
      purpose of preparing and submitting a Regulatory Filing to the competent
      Governmental Authority in such particular country.
    

    
      “Proceeding” shall mean any action, suit, dispute,
      litigation, hearing, claim, grievance, arbitral action or other
      proceeding before any Governmental Authority, at law or in equity.
    

    
      “Product” shall mean any product that is covered by the
      scope of any Valid Claim or made by a process, method or technique
      covered by the scope of any Valid Claim, or where a method of using such
      product is covered by the scope of any Valid Claim.
    

    
      “Regulatory Approval” shall mean, with respect to a product
      in any country or jurisdiction, approval (including where required,
      pricing and reimbursement approvals), registration, license or
      authorization from a Governmental Authority in a country or other
      jurisdiction that is necessary to market and sell such product in such
      country or jurisdiction.
    

    
      “Regulatory Filing” shall mean, with respect to a product,
      any submission to a Governmental Authority of any appropriate regulatory
      application to conduct clinical trials or market a product, and shall
      include any submission to a regulatory advisory board, marketing
      authorization application, and any supplement or amendment thereto.  For
      the avoidance of doubt, Regulatory Filings shall include any
      Investigational New Drug Application, New Drug Application (“NDA”),
      Biologics License Application or the corresponding application in any
      other country or group of countries.
    

    
      “Representative” shall mean any attorney, accountant,
      financial advisor or other authorized representative of any Person. “Sales
      Report” shall mean a written report or reports showing [*] the
      royalties payable, in United States Dollars, which shall have accrued
      hereunder with respect to such Net Sales.
    

    
      
        

        

      

      
        
          6
        

        
          

        

      

      
        

        

      

    

    
      CONFIDENTIAL TREATMENT REQUESTED
    

    
      “SEC” shall mean the United States Securities and Exchange
      Commission.
    

    
      “Significant Pharmaceutical Company” shall mean a
      pharmaceutical company, biotechnology company, or group of such
      companies acting in concert which is a Third Party and with a market
      capitalization greater than [*] as of the effective date of a Change in
      Control.
    

    
      “Tax” or “Taxes” shall mean any taxes of
      any kind, including those measured on, measured by or referred to as,
      income, alternative or add-on minimum, gross receipts, escheat, capital,
      capital gains, sales, use, ad valorem, franchise, profits, license,
      privilege, transfer, withholding, payroll, employment, social, excise,
      severance, stamp, occupation, premium, value added, property,
      environmental or windfall profits taxes, customs, duties or similar
      fees, assessments or charges of any kind whatsoever, together with any
      interest and any penalties, additions to tax or additional amounts
      (including any interest thereon) imposed by any Governmental Authority.
    

    
      “Third Party” shall mean any Person other than a party to
      this Agreement or an Affiliate of such Party.
    

    
      “Valid Claim” shall mean:  (i) an issued claim of any
      unexpired patent within the Acquired Patents or Licensed Patents which
      has not been (x) held unenforceable, unpatentable or invalid by a
      decision of a court or governmental body of competent jurisdiction, in a
      ruling that is unappealable or unappealed within the time allowed for
      appeal; (y) rendered unenforceable through disclaimer or otherwise; or
      (z) lost through an interference proceeding or irrecoverable failure,
      prior to the Effective Date, to pay a maintenance fee; or (ii) a claim
      of any patent application within the Acquired Patents or Licensed
      Patents so long as such patent application has not been pending for more
      than [*] following the filing date for such application.
    

    
      1.2  Other Defined Terms.  The following capitalized
      terms are defined in this Agreement in the Section indicated below:
    

    

    

    
    	
           
        	
          
            Defined Term
          

        	
          
            Section
          

        
	

        	
          Acquired Patents
        	
          2.1(a)(i)
        
	

        	
          Agreement
        	
          Preamble
        
	

        	
          Assumed Liabilities
        	
          2.2
        
	

        	
          Claim
        	
          7.2(a)
        
	

        	
          Company
        	
          Preamble
        
	

        	
          Confidential Information
        	
          6.4
        
	

        	
          Direct Claim
        	
          7.2(b)
        
	

        	
          Effective Date
        	
          Preamble
        
	

        	
          Indemnification Claim Notice
        	
          7.2(a)
        
	

        	
          Indemnified Party
        	
          7.2(a)
        
	

        	
          Indemnifying Party
        	
          7.2(a)
        
	

        	
          MDIs
        	
          Schedule 2.1(a)(ii)
        
	

        	
          Milestone
        	
          3.2(a)
        

    

    
      
        

        

      

      
        
          7
        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          
            Defined Term
          

        	
          
            Section
          

        
	

        	
          Milestone Payment
        	
          3.2(a)
        
	

        	
          Negotiation Period
        	
          6.2
        
	

        	
          Novartis
        	
          Preamble
        
	

        	
          Personal Information
        	
          8.16
        
	

        	
          Retained Liabilities
        	
          2.2
        
	

        	
          Technology Transfer Plan
        	
          6.1(a)
        
	

        	
          Third Party Claim
        	
          7.2(a)(i)
        
	

        	
          Transaction Documents
        	
          5.1(b)
        
	

        	
          Violation
        	
          5.1(c)
        

    

    
      1.3  Rules of Construction.  References in this
      Agreement to gender include references to all genders, and references to
      the singular include references to the plural and vice versa.  The words
      “include,” “includes” and “including” when used in this Agreement shall
      be deemed to be followed by the phrase “without limitation.”  Unless the
      context otherwise requires, references in this Agreement to Articles,
      Sections, Exhibits and Schedules shall be deemed references to Articles
      and Sections of, and Exhibits and Schedules to, this Agreement.  Unless
      the context otherwise requires, the words “hereof,” “hereby” and
      “herein” and words of similar meaning when used in this Agreement refer
      to this Agreement in its entirety and not to any particular Article,
      Section or provision of this Agreement.  The table of contents and
      headings contained in this Agreement are for reference purposes only and
      shall not affect in any way the meaning or interpretation of this
      Agreement.
    

    
      Article II

PURCHASE AND SALE OF THE COMPANY INTELLECTUAL
      PROPERTY;
TRANSFER OF LICENSE
    

    

    

    
      2.1  Purchase and Sale of the Company Intellectual Property
    

    
       (a)  On the terms and conditions set forth in this Agreement, the
      Company shall (and shall cause its Affiliates to) and hereby does, as of
      the Effective Date, sell, transfer, convey, assign and deliver to
      Novartis, and Novartis shall and hereby does, as of the Effective Date,
      purchase and acquire all of the Company’s (and its Affiliates’) right,
      title and interest in, to and under all of the Company Intellectual
      Property, including but not limited to:
    

    
      (i)  the patent applications set forth on Schedule 2.1(a)(i) attached
      hereto and all Patent Rights therein (the “Acquired Patents”);
    

    
      (ii)  all data, results, research and development plans, experiments,
      laboratory notebooks, biological materials and other information
      relating to the research conducted by, or on behalf of, the Company
      and/or its Affiliates with respect to the MDSC Program, including those
      set forth on Schedule 2.1(a)(ii) attached hereto; and
    

    
      (iii)  all Know-How not specifically described above that is used, held
      for use or intended for use in, or that arose out of, or is otherwise
      related to, the MDSC Program.
    

    
      
        

        

      

      
        
          8
        

        
          

        

      

      
        

        

      

    

    
      As of the Effective Date, all right, title and interest to and risk of
      loss as to the Company Intellectual Property shall pass from the Company
      and its Affiliates to Novartis free and clear of all Liens.
    

    
      2.2  No Assumption of Liabilities.  Notwithstanding any
      other provision hereof, and except for Liabilities and obligations as
      LICENSEE under the Chicago License with respect to periods after the
      Effective Date (the “Assumed Liabilities”), Novartis and
      its Affiliates shall not assume or agree to, and shall not be obligated
      to pay, perform or discharge, any obligations, Liabilities, contracts,
      agreements or commitments of the Company or any of its Affiliates
      (including (i) any Liabilities, contracts, agreements or commitments
      relating to the MDSC Program or (ii) any Liabilities or obligations
      relating to the performance (or failure to perform) by the LICENSEE
      under the Chicago License on or prior to the Effective Date), all of
      which obligations, Liabilities, contracts, agreements and commitments
      shall remain the sole liability and responsibility of the Company and
      its Affiliates (the “Retained Liabilities”).    
    

    
      2.3  Chicago License.  The Company hereby agrees to
      assign to Novartis (as the LICENSEE thereunder), and Novartis hereby
      agrees to accept and assume (as the LICENSEE thereunder), the Chicago
      License, on the Effective Date pursuant to the Assignment and Amendment
      Agreement in the form attached hereto as Exhibit F.
    

    
      Article III

PAYMENTS
    

    
      3.1  Up-Front Payment.  Novartis shall pay to the
      Company $3,000,000 (THREE MILLION DOLLARS) within thirty (30) days of
      Novartis’ receipt of an Invoice for such amount.
    

    
      3.2  Additional Consideration.
    

    
      (a)  Milestone Payments.  As additional consideration,
      Novartis shall, upon the achievement of the development milestones and
      sales milestones set forth below (each a “Milestone”), pay
      in accordance with subsection (b) the following cash payments (each a “Milestone
      Payment” and collectively, the “Milestone Payments”):
    

    
      
        

        

      

      
        
          9
        

        
          

        

      

      
        

        

      

    

    
      CONFIDENTIAL TREATMENT REQUESTED
    

    
       (i)  Development Milestones
    

    
    	
           
        	
          
            Development Milestone
          

        	
          
            Milestone Payment
          

        
	

        	
          
            FPFV in the first Phase III
          

          
            Clinical Study for a Product or
          

          
            Method
          

        	
          [*]
        
	

        	
          
            First Regulatory Filing seeking
          

          
            Regulatory Approval for a
          

          
            Product or Method
          

        	
          [*]
        
	

        	
          
            First receipt of Regulatory
          

          
            Approval in the United States for
          

          
            a Product or Method
          

        	
          [*]
        
	

        	
          
            First receipt of EU Regulatory
          

          
            Approval for a Product or
          

          
            Method
          

        	
          [*]
        

    

    
      (ii)  Sales Milestones
    

    
    	
           
        	
          
            Sales Milestone
          

        	
          
            Milestone Payment
          

        
	

        	
          
            First Calendar Year in which [*]
          

          
            annual Net Sales exceed [*]
          

        	
          [*]
        
	

        	
          
            First Calendar Year in which [*]
          

          
            annual Net Sales exceed [*]
          

        	
          [*]
        
	

        	
          
            First Calendar Year in which [*]
          

          
            annual Net Sales exceed [*]
          

        	
          [*]
        

    

    
      Each Milestone Payment shall be deemed earned as of the first
      achievement of the corresponding Milestone as reasonably determined by
      Novartis, and shall be notified by Novartis to the Company within thirty
      (30) days after achievement of the Milestone.  For the avoidance of
      doubt: (i) each Milestone Payment shall become payable only upon the
      first occurrence of the Milestone; (ii) none of the Milestone Payments
      shall be payable more than once and (iii) no additional Milestone
      Payments shall be due for Milestones completed for the development and
      commercialization of any or all of the Products and Methods for
      additional indications or otherwise.
    

    
      (iii)  Payment of Milestone Payments.  Novartis shall
      pay to the Company an amount equal to the Milestone Payment no later
      than sixty (60) days after receipt of an Invoice therefor, which Invoice
      shall be issued by the Company no earlier than the receipt by the
      Company of the notice sent by Novartis relating to the achievement of
      the applicable Milestone.
    

    
      (b)  RoyaltiesSubject to the terms and conditions of this Agreement,
      including but not limited to Section 3.3, as additional consideration
      Novartis shall pay to the Company a royalty of [*] percent ([*]%) on Net
      Sales of each Product and Method (on a Product-by-Product,
      Method-by-Method and country-by-country basis) by Novartis, its
      Affiliates and licensees and sublicensees.
    

    
      
        

        

      

      
        
          10
        

        
          

        

      

      
        

        

      

    

    
      CONFIDENTIAL TREATMENT REQUESTED
    

    
      (ii)  In the event that, with respect to Net Sales of Products and/or
      Methods, Novartis pays royalties to Third Parties for patent rights to
      make, use or sell Product(s) and/or Method(s), the royalties due and
      payable by Novartis to the Company hereunder shall be reduced by [*]
      percent ([*]%) of the amounts paid by Novartis to such Third Party for
      such patent rights; provided, however, that in no event shall any
      royalty payment due to the Company under this Agreement be reduced
      through this Section by more than [*] percent ([*]%).
    

    
      (iii)   Within sixty (60) days after each Calendar Quarter during the
      period of time during which a non-zero amount of royalties are payable
      under Section 3.2(b)(i) and following the First Commercial Sale of a
      Product or Method, until royalties are no longer payable under Section
      3.2(b)(i), Novartis will provide or cause to be provided to the Company
      a Sales Report.  The Company shall submit an Invoice to Novartis with
      respect to the royalty amount set forth on such Sales Report.  Novartis
      shall pay such royalty amount within sixty (60) days after receipt of
      such Invoice.   
    

    
      (c)  Technology Transfer Payment.  As additional
      consideration, upon the completion of the technology transfer activities
      set forth in the Technology Transfer Plan in accordance with Section
      6.1, Novartis shall pay to the Company the amounts set forth in Section
      6.1(c).
    

    
      3.3  Deductibility of Amounts Payable under the Chicago
      License.  Notwithstanding any provision herein to the contrary:  (i)
      Novartis may offset the amount of any Royalties (as defined in the
      Chicago License) paid by Novartis under the Chicago License (net of any
      deductions or credits as provided in the Chicago License) against the
      royalties otherwise payable to the Company pursuant to Section
      3.2(b)(i), but solely as to that portion of the royalties attributable
      to the Product(s) or Method(s) at issue and in respect of the
      country(ies) at issue; and (ii) Novartis may offset the amount of any
      milestone payments paid by Novartis under Section 4.C of the Chicago
      License (net of any deductions or credits as provided in the Chicago
      License) against the Milestone Payments otherwise payable to the Company
      pursuant to Section 3.2(a)(i).
    

    
      3.4  Currency; Payment.  All payments under this
      Agreement shall be payable in United States dollars.  When conversion of
      payments from any foreign currency is required to be undertaken by
      Novartis, the United States dollar equivalent shall be calculated using
      Novartis’ then-current standard exchange rate methodology as applied in
      its external reporting.  All payments by Novartis to the Company shall
      be made by wire transfer of immediately available funds to an account
      designated by the Company prior to the Effective Date, or as may be
      designated by the Company from time to time upon written notice to
      Novartis.
    

    
      3.5  Taxes.  The Company will pay any and all taxes
      levied on account of any payments made to it under this Agreement.  If
      any such taxes are required to be withheld by Novartis, Novartis will:
      (a) deduct such taxes from the payment made to the Company; (b) timely
      pay the taxes to the proper taxing authority; (c) send proof of payment
      to the Company; and (d) reasonably assist the Company in its efforts to
      obtain a credit for such tax payment.  Each party agrees to reasonably
      assist the other party in lawfully claiming exemptions from and/or
      minimizing such deductions or withholdings under double taxation Laws or
      similar circumstances.
    

    
      
        

        

      

      
        
          11
        

        
          

        

      

      
        

        

      

    

    
      CONFIDENTIAL TREATMENT REQUESTED
    

    
      3.6  Records and Audit Rights.
    

    
      (a)  Novartis shall (and shall cause any of its Affiliates, licensees or
      sublicensees to) keep complete, true and accurate books and records in
      accordance with IFRS in relation to this Agreement, including in
      relation to Net Sales and royalties.  Novartis will keep (or cause to be
      kept) such books and records for at least three (3) years following the
      Calendar Quarter to which they pertain.
    

    
      (b)  The Company shall have the right for a period of [*] after
      receiving any Sales Report to appoint an internationally-recognized
      independent accounting firm (which is reasonably acceptable to Novartis)
      (the “Auditor”) to inspect the relevant records of Novartis
      or its Affiliates to verify such reports, statements, records or books
      of accounts, as applicable.  Before beginning its audit, the Auditor
      shall execute an undertaking acceptable to Novartis by which the Auditor
      shall keep confidential all information reviewed during such audit.  The
      Auditor shall have the right to disclose to the Company its conclusions
      regarding any payments owed under this Agreement.
    

    
      (c)  Novartis and its Affiliates shall make their records available for
      inspection by such Auditor during regular business hours at such place
      or places where such records are customarily kept, upon receipt of
      reasonable advance notice from the Company, solely to verify the
      accuracy of the Sales Reports.  Such inspection right shall not be
      exercised more frequently than once in any calendar year and not more
      than once with respect to records covering any specific period of
      time.  The Company agrees to hold in strict confidence all information
      received and all information learned in the course of any audit or
      inspection, except to the extent necessary to enforce its rights under
      this Agreement or if disclosure is required by law, regulation or
      judicial order.
    

    
      (d)  The Company shall pay for such audits, as well as its own expenses
      associated with enforcing its rights with respect to any payments
      hereunder, except that in the event there is any upward adjustment in
      aggregate amounts payable for any year shown by such audit of more than
      [*] percent ([*]%) of the amount paid, Novartis shall pay for such audit
      (as well as promptly paying to the Company the amount of any such
      adjustment).
    

    
      Article IV

Intellectual Property TRANSFER
    

    
      4.1  Transfer of Company Intellectual Property.  On the
      Effective Date, the Company shall deliver to Novartis patent assignments
      with respect to the Acquired Patents, in the form attached hereto as
      Exhibit B, and any other good and sufficient instruments of transfer,
      conveyance and assignment reasonably acceptable to Novartis, to effect a
      conveyance of the Company Intellectual Property to Novartis and to vest
      in Novartis good and marketable title to the Company Intellectual
      Property, free and clear of all Liens.
    

    
      
        

        

      

      
        
          12
        

        
          

        

      

      
        

        

      

    

    
      Article V  

REPRESENTATIONS AND WARRANTIES
    

    
      5.1  Representations and Warranties of the Company.  The
      Company hereby makes the representations and warranties to Novartis as
      set forth in this Article V.  
    

    
      (a)  Due Organization.   The Company is a corporation
      duly organized, validly existing and, where applicable, in good standing
      under the Laws of the jurisdiction of its organization.  The Company has
      all requisite corporate power and authority to own, lease and operate
      all of its properties and assets and to carry on its business as it is
      now being conducted.
    

    
      (b)  Authorization and Validity of Agreement.  The
      Company has all requisite corporate power and authority to enter into
      this Agreement and the documents, certificates and instruments referred
      to herein or delivered pursuant hereto (collectively, the “Transaction
      Documents”) and to consummate the transactions contemplated hereby
      and thereby.  The execution, delivery and performance by the Company of
      this Agreement and the other Transaction Documents and the consummation
      by the Company of the transactions contemplated hereby and thereby have
      been duly and validly authorized by all necessary corporate action and
      no other corporate action or proceeding on the part of the Company is or
      will be necessary.  This Agreement and the other Transaction Documents
      have been duly and validly executed and delivered by the Company and,
      assuming the due authorization, execution and delivery hereof by
      Novartis, constitute legal, valid and binding obligations of the
      Company, enforceable against it in accordance with their terms, except
      as may be limited by bankruptcy, insolvency, reorganization, moratorium
      or other Laws relating to or affecting creditors’ rights generally and
      by general equity principles (whether considered in a proceeding in
      equity or at law).
    

    
      (c)  No Conflict.  The execution and delivery by the
      Company of this Agreement does not, and the execution and delivery by
      the Company of each other Transaction Document will not, and the
      consummation of the transactions contemplated hereby and thereby will
      not, (i)  conflict with or result in a default under or violation of
      (any such conflict, default or violation, a “Violation”)
      any provision of the certificate of incorporation, by-laws or similar
      organizational documents of the Company or any of its Affiliates, (ii)
      result in any Violation of any material contractual obligations
      (including the Chicago License) of the Company or any of its Affiliates,
      or (iii) result in any Violation of any applicable Laws.
    

    
      (d)  Consents.  No material consent, approval,
      authorization, filing, notification or other Permit of any Governmental
      Authority or of, with or from any other Person, is required in
      connection with the execution and delivery of this Agreement or any of
      the other Transaction Documents by the Company or the consummation by
      the Company of the transactions contemplated hereby or thereby.
    

    
      (e)  Title; Sufficiency of the Assets.
    

    
      (i)  The Company has good, valid and marketable title, of record and
      beneficially, to all of the Company Intellectual Property and, subject
      to the terms of the Chicago License, rights under the Chicago License,
      and will transfer and deliver to Novartis legal and valid title to the
      Company Intellectual Property and rights under the Chicago License as
      contemplated by this Agreement, free and clear of all Liens.  Without
      limiting the foregoing, all Liens on Company Intellectual Property and
      the Company's rights under the Chicago License pursuant to the Note
      Security Agreements have been fully released pursuant to that certain
      Second Amendment to Security Agreements effective as of July 31, 2009
      between the Company and the Investors and such release is in full force
      and effect and enforceable against the Investors.  For purposes hereof,
      “Note Security Agreements” means (i) that certain Security Agreement
      dated as of April 14, 2009 between the Company and certain investors
      named therein and (ii) that certain Security Agreement dated as of May
      14, 2009 between the Company and certain investors named therein (such
      investors, collectively with the investors party to the Security
      Agreement dated as of April 14, 2009, the “Investors”).
    

    
      
        

        

      

      
        
          13
        

        
          

        

      

      
        

        

      

    

    
      (ii)  The Company Intellectual Property and the Company’s rights under
      the Chicago License comprise all the Intellectual Property assets owned
      or licensed by the Company and employed or used by the Company in
      connection with the MDSC Program.  The Company Intellectual Property,
      the rights under the Chicago License and the rights of Novartis under
      this Agreement and the other Transaction Documents are sufficient, with
      respect to Intellectual Property assets, for Novartis to use or
      otherwise exploit the MDSC Program immediately following the Effective
      Date in substantially the same manner as currently conducted by the
      Company and its Affiliates.
    

    
       (f)  Legal Proceedings.  Except for the ongoing
      prosecutions with various Governmental Authorities of patent
      applications included within the Company Intellectual Property or
      representing the subject of the rights under the Chicago License, there
      are no, and there have not been any, Proceedings pending or, to the
      knowledge of the Company, threatened in writing against, affecting or
      involving any of the Company Intellectual Property or the Chicago
      License.
    

    
      (g)  Compliance with Laws.
    

    
      (i)  The Company has made on a timely basis all required filings,
      applications and registrations with Governmental Authorities required in
      relation to the Company Intellectual Property , the rights under the
      Chicago License and the MDSC Program (including all authorizations
      required by the regulations of the FDA and all foreign equivalents
      thereof).
    

    
      (ii)  The Company is, and at all times has been, in compliance in all
      material respects with all Laws applicable to the ownership or use of
      the Company Intellectual Property, the rights under the Chicago License
      or the MDSC Program, and the Company has not received any written notice
      alleging facts which, if true, would constitute a failure to comply with
      this subsection (g)(ii).
    

    
      (iii)  The Company has filed with the FDA all material required notices,
      supplemental applications and annual or other reports in connection with
      the use of the Company Intellectual Property, the rights under the
      Chicago License or the MDSC Program.
    

    
      
        

        

      

      
        
          14
        

        
          

        

      

      
        

        

      

    

    
      (h)  Brokers, Finders, etc.  No agent, broker,
      investment banker, financial advisor or other firm or Person is or will
      be entitled to any broker’s or finder’s fee or any other similar
      commission or fee in connection with any of the transactions
      contemplated by this Agreement or the other Transaction Documents.
    

    
      (i)  Intellectual Property.
    

    
      (i)  Except for the ongoing prosecutions with various Governmental
      Authorities of patent applications included within the Company
      Intellectual Property or representing the subject of the rights under
      the Chicago License:  (x) there are no Proceedings before any
      Governmental Authority (including the United States Patent and Trademark
      Office or equivalent authority anywhere in the world) related to any
      Company Intellectual Property or the rights under the Chicago License;
      and (y) no Company Intellectual Property or the rights under the Chicago
      License is the subject of any Proceeding, Order, agreement, or
      stipulation binding on the Company or any of its Affiliates restricting
      in any material respect the use, transfer, or licensing thereof by the
      Company or its Affiliates, or which could reasonably be expected to
      adversely affect the validity, use or enforceability of Company
      Intellectual Property.  
    

    
      (ii)  With respect to each item of Company Intellectual Property,
      necessary registration, maintenance, annuities and renewal fees in
      connection with such Company Intellectual Property have been made and
      all necessary documents and certificates in connection with such Company
      Intellectual Property have been filed with the relevant patent
      authorities in the United States and other countries of the world for
      the purposes of maintaining such Company Intellectual Property.
    

    
      (iii)  The Company owns and has good and exclusive title to, in each
      case free and clear of any Liens, all Company Intellectual Property and
      the rights under the Chicago License.
    

    
      (iv)  Neither the Company nor any of its Affiliates has transferred
      ownership of, or granted any license with respect to any Company
      Intellectual Property or the rights under the Chicago License to any
      Third Party or any Affiliate of Company.
    

    
      (v)  To the knowledge of the Company:  (i) no person has infringed or
      misappropriated or is infringing or misappropriating any Company
      Intellectual Property or the rights under the Chicago License; and (ii)
      excepting herefrom any Intellectual Property referenced in the files
      before the applicable Governmental Authorities for the various patent
      applications included within the Company Intellectual Property or
      representing the subject of the rights under the Chicago License or any
      validity, infringement or freedom-to-operate opinions provided to
      Novartis by the Company, neither the Company nor any of its Affiliates
      has infringed or misappropriated or is infringing or misappropriating,
      in connection with the use, exploitation or license of the Company
      Intellectual Property or the rights under the Chicago License for the
      MDSC Program, the Intellectual Property of any Person.
    

    
      (vi)  All employees, officers, contractors and consultants of the
      Company and its Affiliates have executed agreements requiring assignment
      to the Company or its Affiliates, as the case may be, of all inventions
      relating to the Company Intellectual Property, the rights under the
      Chicago License or the MDSC Program made during the course of and as a
      result of their association with it and obligating the individual to
      maintain as confidential the confidential information of the Company or
      its Affiliates, as the case may be, relating to the Company Intellectual
      Property, the rights under the Chicago License or the MDSC Program.
    

    
      
        

        

      

      
        
          15
        

        
          

        

      

      
        

        

      

    

    
      (vii)  To the knowledge of the Company, and except as set forth in the
      files before the applicable Governmental Authorities for the various
      patent applications included within the Company Intellectual Property or
      representing the subject of the rights under the Chicago License or any
      validity, infringement or freedom-to-operate opinions provided to
      Novartis by the Company: (x) the Company Intellectual Property and the
      rights under the Chicago License are valid and enforceable; and (y)
      there are no matters which could reasonably be expected to affect the
      validity of the Company Intellectual Property or the rights under the
      Chicago License.
    

    
      (viii)  The Company has provided Novartis with a copy of all validity,
      infringement or freedom-to-operate opinions that are or were prepared by
      or on behalf of the Company or its Affiliates pertaining to Company
      Intellectual Property, the rights under the Chicago License or the MDSC
      Program.
    

    
      (j)  Chicago License.  The Chicago License is valid and
      in full force and effect.  The Company has complied in all material
      respects with its obligations required to be complied with by it to date
      under the Chicago License and it is not (with or without the lapse of
      time or the giving of notice, or both) in breach or default in any
      respect thereunder and, to the Company’s knowledge, no other party to
      the Chicago License is (with or without the lapse of time or the giving
      of notice, or both) in breach or default in any respect
      thereunder.  Following the Effective Date, Novartis will be permitted to
      exercise all rights of the LICENSEE under the Chicago License.  The
      Company has delivered to Novartis a complete and correct copy of the
      Chicago License, together with all modifications and amendments thereto,
      which is attached as Exhibit A.
    

    
      (k)  Solvency.  The Company is not now insolvent and
      will not be rendered insolvent by consummating the transactions
      contemplated by this Agreement and the other Transaction Documents.  As
      used in this section, “insolvent” means that the sum of the debts and
      other probable Liabilities of the Company exceeds the present fair
      saleable value of the Company’s assets.  Immediately after giving effect
      to the transactions contemplated by this Agreement and the Transaction
      Documents:  (i) the Company will be able to pay its Liabilities as they
      become due in the usual course of its business; (ii) the Company will
      not have unreasonably small capital with which to conduct its present or
      proposed business; (iii) the Company will have assets (calculated at
      fair market value) that exceed its Liabilities; and (iv) taking into
      account all pending and threatened litigation, final judgments against
      the Company in actions for money damages are not reasonably anticipated
      to be rendered at a time when, or in amounts such that, the Company will
      be unable to satisfy any such judgments promptly in accordance with
      their terms (taking into account the maximum probable amount of such
      judgments in any such actions and the earliest reasonable time at which
      such judgments might be rendered) as well as all other obligations of
      the Company.  The cash available to the Company, after taking into
      account all other anticipated uses of the cash, will be sufficient to
      pay all such debts and judgments promptly in accordance with their terms.
    

    
      
        

        

      

      
        
          16
        

        
          

        

      

      
        

        

      

    

    
      (l)  Regulatory Status.  The Company has not received
      any written notice that any filing with any Governmental Authority in
      relation to the Company Intellectual Property is not currently in good
      standing.  The Company has filed with the FDA all required notices,
      supplemental applications and annual or other reports, relating to the
      Company Intellectual Property.  The Company has delivered to Novartis
      copies of all material (i) reports of inspection observations, (ii)
      establishment inspection reports, and (iii) warning letters, as well as
      any other material documents received by the Company from the FDA or any
      other Governmental Authority relating to the Company Intellectual
      Property or MDSC Program that assert ongoing material lack of compliance
      with any Laws (including regulations promulgated by the FDA and any
      other Governmental Authority) by the Company.
    

    
      5.2  Representations and Warranties of Novartis.  Novartis
      hereby makes the representations and warranties to Company as set forth
      in this Article V.
    

    
      (a)  Due Organization.  Novartis is a corporation duly
      incorporated or otherwise organized, validly existing and in good
      standing under the Laws of its jurisdiction of incorporation or
      organization.
    

    
       (b)  Authorization and Validity of Agreement.  Novartis
      has all requisite corporate power and authority to enter into this
      Agreement and the other Transaction Documents and to consummate the
      transactions contemplated hereby and thereby.  The execution, delivery
      and performance by Novartis of this Agreement and the other Transaction
      Documents and the consummation by Novartis of the transactions
      contemplated hereby and thereby have been duly and validly authorized by
      all necessary corporate action of Novartis and no other corporate action
      or proceeding on the part of Novartis is or will be necessary for the
      execution, delivery and performance by Novartis of this Agreement or the
      other Transaction Documents and the consummation by Novartis of the
      transactions contemplated hereby or thereby.  This Agreement and the
      other Transaction Documents have been duly and validly executed and
      delivered by Novartis and, assuming the due authorization, execution and
      delivery hereof by the Company, constitute legal, valid and binding
      obligations of Novartis, enforceable against Novartis in accordance with
      its terms, except as may be limited by bankruptcy, insolvency,
      reorganization, moratorium or other Laws relating to or affecting
      creditors’ rights generally and by general equity principles (whether
      considered in a proceeding in equity or at law).
    

    
      (c)  No Conflict.  The execution and delivery by
      Novartis of this Agreement or any of the other Transaction Documents
      does not, and the consummation of the transactions contemplated hereby
      and thereby will not, (i) result in any Violation of any provision of
      the articles or certificate of incorporation, by-laws or similar
      organizational documents of Novartis or any of its Affiliates, (ii)
      result in any Violation of any material contractual obligations of
      Novartis or any of its Affiliates or (iii) result in any Violation of
      any applicable Laws.
    

    
      (d)  Consents.  No material consent, approval,
      authorization, filing, notification or other Permit of any Governmental
      Authority or of, with or from any other Person, is required in
      connection with the execution and delivery of this Agreement or any of
      the other Transaction Documents by Novartis or the consummation by
      Novartis of the transactions contemplated hereby or thereby.
    

    
      
        

        

      

      
        
          17
        

        
          

        

      

      
        

        

      

    

    
      (e)  Brokers, Finders, etc.  None of Novartis nor any
      of its Affiliates has employed any agent, broker, investment banker,
      financial advisor or other firm or Person in connection with the
      transactions contemplated by this Agreement, who is entitled to a fee or
      commission in connection with such transactions.
    

    
      Article VI

COVENANTS
    

    
      6.1  Technology Transfer.
    

    
      (a)  The Company shall perform the activities set forth in the
      technology transfer plan attached hereto as Exhibit C (the “Technology
      Transfer Plan”) in a diligent, efficient and timely manner.  The
      Company shall, for the relevant periods contemplated by the Technology
      Transfer Plan (but not extending beyond the first (1st) anniversary of
      the Effective Date), appoint two (2) FTEs who have sufficient expertise
      and knowledge with the Company Intellectual Property, the rights under
      the Chicago License and the MDSC Program to perform the activities
      required of the Company as set forth in the Technology Transfer
      Plan.  In addition, all Intellectual Property generated by said FTEs
      with respect to and while carrying out the Technology Transfer Plan
      shall be the sole property of Novartis.
    

    
      (b)  The Company shall at all times bear all of the costs of its FTEs
      involved in the technology transfer activities contemplated in the
      Technology Transfer Plan.
    

    
      (c)  The parties anticipate that all of the technology transfer
      activities set forth in the Technology Transfer Plan, including both the
      activities relating to the transfer of Know-How and other information to
      Novartis or its designated Affiliate and the training activities, shall
      be completed within one (1) year after the Effective Date.  Upon
      successful transfer to Novartis of all of the materials set forth on
      Schedule 2.1(a)(ii) (the “Transfer Date”), Novartis shall
      pay to the Company Five Hundred Thousand Dollars ($500,000).  Provided
      that the criteria for the preceding payment have been met, Novartis
      shall pay to the Company another Five Hundred Thousand Dollars
      ($500,000) upon the earlier of the following: (i) such time as the
      training and qualification experiment milestones set forth in Stage 1,
      Phase 2 of the Technology Transfer Plan have been met; or (ii) six (6)
      months after the Transfer Date so long as the accomplishment of the
      training and qualification experiment milestones referenced above have
      not been materially impeded by the Company during such six (6) month
      period.  Novartis shall pay each such amount no later than thirty (30)
      days after receipt of an Invoice for such amount which shall be issued
      by the Company no earlier than the completion of the event or time frame
      set forth above.
    

    
      
        

        

      

      
        
          18
        

        
          

        

      

      
        

        

      

    

    
      CONFIDENTIAL TREATMENT REQUESTED
    

    
      6.2  [*]
    

    
      6.3  Public Announcements.  No party to this Agreement
      shall originate any publicity, news release or other public
      announcement, written or oral, whether relating to this Agreement, the
      terms of this Agreement or the existence of any arrangement between the
      parties, without the prior written consent of the Company (in the case
      of origination by Novartis) or Novartis (in the case of origination by
      the Company), whether named in such publicity, news release or other
      public announcement or not, except where such publicity, news release or
      other public announcement is required by Law; provided, however,
      in such event, the party issuing such publicity, news release or other
      public announcement shall still be required to consult with the Company
      or Novartis, as applicable, whether named in such publicity, news
      release or public announcement or not, a reasonable time but no less
      than 72 hours prior to its release to allow the Company or Novartis, as
      applicable, to comment thereon and, after its release, shall provide the
      other party with a copy thereof.  If any party, based on the advice of
      its counsel, determines that this Agreement, or any of the other
      documents executed in connection herewith, must be filed with the SEC,
      then such party, prior to making any such filing, shall provide the
      Company or Novartis, as applicable, and its counsel with a redacted
      version of this Agreement (or any Transaction Documents or other related
      documents) which it intends to file and will give due consideration to
      any comments provided by the Company or Novartis, as applicable, or its
      counsel and use reasonable efforts to ensure the confidential treatment
      by the SEC of those sections specified by the Company or Novartis, as
      applicable, or its counsel.
    

    
      6.4  Confidentiality.  The Company shall, and shall
      cause its Affiliates to, hold in confidence all proprietary, secret or
      confidential information of Novartis and its Affiliates disclosed to the
      Company and its Affiliates in the course of this Agreement, and,
      following the Effective Date, all information relating to the Company
      Intellectual Property, the rights under the Chicago License and the MDSC
      Program (collectively, “Confidential Information”).  The
      Company shall not disclose or use such Confidential Information, except
      to the extent such Confidential Information (a) is (at the time of
      disclosure) or becomes (after the time of disclosure) known to the
      public or part of the public domain through no breach of this Agreement
      by the Company or its Affiliates; (b) was known to, or was otherwise in
      the possession of, the Company or its Affiliates prior to the time of
      disclosure by Novartis or any of its Affiliates; (c) is disclosed to the
      Company or an Affiliate on a non-confidential basis by a Third Party who
      is entitled to disclose it without breaching any confidentiality
      obligation to Novartis or any of its Affiliates; or (d) is independently
      developed by or on behalf of the Company or its Affiliates, as evidenced
      by its written records, without reference to the Confidential
      Information disclosed by Novartis or its Affiliates under this
      Agreement.  In the event the Company or its Affiliates is required to
      disclose Confidential Information of Novartis and/or its Affiliates by
      Law or in connection with bona fide legal process, such disclosure shall
      not be a breach of this Agreement; provided, that the Company (i)
      informs Novartis as soon as reasonably practicable of the required
      disclosure; (ii) limits the disclosure to the required purpose; and
      (iii) at Novartis’ request and expense, assists in good faith in an
      attempt to object to or limit the required disclosure.
    

    
      
        

        

      

      
        
          19
        

        
          

        

      

      
        

        

      

    

    
      CONFIDENTIAL TREATMENT REQUESTED
    

    
      6.5  Non-Competition.
    

    
      (a)  For a period of [*] after the Effective Date, neither the Company
      nor any of its Affiliates shall, anywhere in the world, directly or
      indirectly, research, develop, manufacture or commercialize any product
      using or derived from MDSCs (or license or collaborate with a Third
      Party or an Affiliate of the Company to do any of the foregoing), provided
      that (i) if the Company is acquired by or merges with a Third Party, and
      such Third Party (or its affiliates prior to such acquisition or merger)
      has a bona-fide MDSC program prior to the date of execution of the
      definitive agreement for such acquisition or merger, such Third Party
      (and its affiliates other than the Company and any of its Affiliates
      existing prior to such acquisition or merger) shall not be bound by this
      Section 6.5(a), and (ii) if the Company is acquired by or merges with a
      Third Party more than [*] after the Effective Date, such Third Party
      (and its affiliates other than the Company and any of its Affiliates
      existing prior to such acquisition or merger) shall not be bound by this
      Section 6.5(a).  Notwithstanding the foregoing, the Company and its
      Affiliates (existing prior to such acquisition or merger) shall not
      disclose any of their Know-How related to the MDSC Program which is not
      otherwise excepted from Section 6.4 pursuant to Section 6.4(a), (c) or
      (d) to such Third Party or its affiliates and such Third Party and its
      affiliates shall be barred from using such Know-How which is not
      otherwise excepted from Section 6.4 pursuant to Section 6.4(a), (c) or
      (d) (including such clauses as applied to such Third Party and its
      affiliates as though they were, for purposes of such clauses, the
      Company and its Affiliates) in their MDSC program.
    

    
      (b)  If any court or other Governmental Authority determines that the
      scope or terms of Section 6.5(a), or any part thereof, is unenforceable
      because of the duration of such provision or the area covered thereby,
      such court or other Governmental Authority shall have the power to
      reduce the duration or area of such provision and, in its reduced form,
      such provision shall then be enforceable and binding on the Company.
    

    
      6.6  Availability of Records.  Subject to Section 6.4,
      after the Effective Date, the Company, on the one hand, and Novartis, on
      the other hand, shall make available to each other party and its
      Affiliates and Representatives during normal business hours when
      reasonably requested, all information, records and documents related to
      the Company Intellectual Property, rights under the Chicago License or
      MDSC Program in its possession and shall (to the extent not transferred
      to the other party) preserve all such information, records and documents
      until the later of:  (i) six (6) years after the Effective Date; or (ii)
      the required retention period under any applicable Laws for all such
      information, records or documents.  Novartis and the Company shall also
      make available to each other during normal business hours, when
      reasonably requested, personnel responsible for preparing or maintaining
      information, records and documents, in connection with Regulatory
      Filings, litigation or potential litigation, each as it relates to the
      Company Intellectual Property, rights under the Chicago License or MDSC
      Program prior to the Effective Date (with respect to the Company) or
      from and after the Effective Date (with respect to Novartis).
    

    
      6.7  Prosecution of Patent Applications.  Novartis
      shall exercise commercially reasonable efforts (i) to obtain (or to
      cause to be obtained) the broadest patent protection reasonably
      available from each patent application within the Acquired Patents on or
      before the date that is [*] following the respective filing date for
      such application; and (ii) maintain in force the patents and patent
      applications of the Acquired Patents.  For purposes of this Section
      6.7, any assessment of whether or not pursuit and maintenance of
      patent protection is commercially reasonable shall exclude any
      consideration of whether any other Intellectual Property is available to
      Novartis.
    

    
      
        

        

      

      
        
          20
        

        
          

        

      

      
        

        

      

    

    
      CONFIDENTIAL TREATMENT REQUESTED
    

    
      6.8  Transferees.  Without limiting the provisions of
      Section 8.7, Novartis shall not transfer any Company Intellectual
      Property or any rights under the Chicago License without causing any
      transferee to assume (and any successor to any Company Intellectual
      Property or any rights under the Chicago License shall take subject to)
      the obligations of Novartis under this Agreement (as though any such
      party were Novartis), including without limitation the obligation to
      cause any successive transferee(s) (or successor(s)) to be subject to
      this Section 6.8.
    

    
      Article VII 

INDEMNIFICATION
    

    
      7.1  Indemnification by the Company.  (a) From and
      after the Effective Date, the Company shall indemnify Novartis and its
      Affiliates and each of their respective officers, directors, employees,
      stockholders, agents and representatives against, and hold them harmless
      from and against, any and all Losses, as incurred (payable promptly upon
      written request), arising from, in connection with or otherwise with
      respect to:
    

    
      (i)  any breach of any representation or warranty of the Company
      contained in this Agreement or in any document delivered in connection
      herewith;
    

    
      (ii)  the failure by the Company to perform any covenant, agreement,
      obligation or undertaking contained in this Agreement or in any document
      delivered in connection herewith;
    

    
      (iii)  all Retained Liabilities; and
    

    
      (iv)  the failure to comply with statutory provisions relating to bulk
      sales and transfers, if applicable, with respect to the transactions
      contemplated by this Agreement.
    

    
      (b)  Indemnification by Novartis.  From and after the
      Effective Date, Novartis shall indemnify the Company and its Affiliates
      and each of their respective officers, directors, employees,
      stockholders, agents and representatives against, and hold them harmless
      from and against, any and all Losses, as incurred (payable promptly upon
      written request), arising from, in connection with or otherwise with
      respect to:  any breach of any representation or warranty of Novartis
      contained in this Agreement or in any document delivered in connection
      herewith;
    

    
      (ii)  the failure by Novartis to perform any covenant, agreement,
      obligation or undertaking contained in this Agreement or in any document
      delivered in connection herewith;
    

    
      
        

        

      

      
        
          21
        

        
          

        

      

      
        

        

      

    

    
      (iii)  the Assumed Liabilities; and
    

    
      (iv)  any claim or other Liability relating to, or any adverse event
      arising in connection with,  the development, manufacture, use, sale,
      licensing or other disposition of any Product or Method (whether such
      claim is based on contract, tort, negligence, strict liability or any
      other theory of liability), by Novartis, an Affiliate of Novartis, or
      their licensees or sublicensees.
    

    
      7.2  Indemnification Procedure.  
    

    
      (a)  A party seeking indemnification hereunder (the “Indemnified
      Party”) shall notify the other party (the “Indemnifying
      Party”) in writing (each, an “Indemnification Claim
      Notice”) reasonably promptly after the assertion against the
      Indemnified Party of any claim or fact in respect of which the
      Indemnified Party intends to base a claim for indemnification hereunder
      (“Claim”), but the failure or delay to so notify the
      Indemnifying Party shall not relieve the Indemnifying Party of any
      obligation or liability that it may have to the Indemnified Party,
      except to the extent that the Indemnifying Party demonstrates that its
      ability to defend or resolve such Claim is adversely affected
      thereby.  The Indemnification Claim Notice shall contain a description
      of the Claim and the nature and amount of the Claim (to the extent that
      the nature and amount of such Claim is known at such time).  Upon the
      request of the Indemnifying Party, the Indemnified Party shall furnish
      promptly to the Indemnifying Party copies of all correspondence,
      communications and official documents (including court documents)
      received or sent in respect of such Claim.
    

    
      (b)  Subject to the provisions of subsections (c) and (d) below, the
      Indemnifying Party shall have the right, upon written notice given to
      the Indemnified Party within thirty (30) days after receipt of the
      Indemnification Claim Notice to assume the defense and handling of such
      Claim, at the Indemnifying Party’s sole expense, in which case the
      provisions of subsection (c) below shall govern.  The assumption of the
      defense of a Claim by the Indemnifying Party shall not be construed as
      acknowledgement that the Indemnifying Party is liable to indemnify any
      indemnitee in respect of the Claim, nor shall it constitute a waiver by
      the Indemnifying Party of any defenses it may assert against any
      Indemnified Party’s claim for indemnification.  In the event that it is
      ultimately decided that the Indemnifying Party is not obligated to
      indemnify or hold an indemnitee harmless from and against the Claim, the
      Indemnified Party shall reimburse the Indemnifying Party for any and all
      reasonable costs and expenses (including reasonable attorneys’ fees and
      costs of suit) and any losses reasonably incurred by the Indemnifying
      Party in its defense of the Claim.  If the Indemnifying Party does not
      give written notice to the Indemnified Party, within thirty (30) days
      after receipt of the Indemnification Claim Notice, of the Indemnifying
      Party’s election to assume the defense and handling of such Claim, the
      provisions of subsection (d) below shall govern.
    

    
      (c)  Upon assumption of the defense of a Claim by the Indemnifying
      Party: (i) the Indemnifying Party shall have the right to and shall
      assume sole control and responsibility for dealing with the Claim; (ii)
      the Indemnifying Party may, at its own cost, appoint as counsel in
      connection with conducting the defense and handling of such Claim any
      law firm or counsel reasonably selected by the Indemnifying Party; (iii)
      the Indemnifying Party shall keep the Indemnified Party informed of the
      status of such Claim; and (iv) the Indemnifying Party shall have the
      right to settle the Claim on any terms the Indemnifying Party chooses;
      provided, however, that it shall not, without the prior written consent
      of the Indemnified Party (which shall not be unreasonably withheld,
      delayed or conditioned), agree to a settlement of any Claim which could
      lead to liability or create any financial or other obligation on the
      part of the Indemnified Party for which the Indemnified Party will not
      be indemnified hereunder or which admits any wrongdoing or
      responsibility for the Claim on behalf of the Indemnified Party.  The
      Indemnified Party shall cooperate with the Indemnifying Party and shall
      be entitled to participate in, but not control, the defense of such
      Claim with its own counsel and at its own expense.  In particular, the
      Indemnified Party shall furnish such records, information and testimony,
      provide witnesses and attend such conferences, discovery proceedings,
      hearings, trials and appeals as may be reasonably requested in
      connection therewith.  Such cooperation shall include access during
      normal business hours by the Indemnifying Party to, and reasonable
      retention by the Indemnified Party of, records and information that are
      reasonably relevant to such Claim, and making the Indemnified Party, its
      indemnitees and its and their employees and agents available on a
      mutually convenient basis to provide additional information and
      explanation of any records or information provided.  
    

    
      
        

        

      

      
        
          22
        

        
          

        

      

      
        

        

      

    

    
      (d)  If the Indemnifying Party does not give written notice to the
      Indemnified Party as set forth in subsection (b) or fails to conduct the
      defense and handling of any Claim in good faith after having assumed
      such, the Indemnified Party may, at the Indemnifying Party’s expense,
      select counsel reasonably acceptable to the Indemnifying Party in
      connection with conducting the defense and handling of such Claim and
      defend or handle such Claim in such manner as it may deem
      appropriate.  In such event, the Indemnified Party shall keep the
      Indemnifying Party timely apprised of the status of such Claim and shall
      not settle such Claim without the prior written consent of the
      Indemnifying Party, which consent shall not be unreasonably withheld,
      delayed or conditioned.  If the Indemnified Party defends or handles
      such Claim, the Indemnifying Party shall cooperate with the Indemnified
      Party, at the Indemnified Party’s request but at no expense to the
      Indemnified Party, and shall be entitled to participate in the defense
      and handling of such Claim with its own counsel and at its own expense.
    

    
      7.3  Special, Indirect and Other Losses.  NEITHER PARTY
      NOR ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE,
      BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL, INDIRECT,
      INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OR FOR ANY ECONOMIC LOSS
      OR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE EXTENT ANY
      SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM
      FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS ARTICLE VII.
    

    
      Article VIII  

MISCELLANEOUS
    

    
      8.1  Notices.  All notices and other communications
      hereunder shall be in writing and shall be deemed duly given (a) on the
      date of delivery if delivered personally, or by telecopy or facsimile,
      upon confirmation of receipt, (b) on the date of confirmed receipt if
      delivered by a recognized next-day courier service or (c) on the date of
      confirmed receipt if delivered by registered or certified mail return
      receipt requested, postage prepaid.  All notices hereunder shall be
      delivered as set forth below, or pursuant to such other instructions as
      may be designated in writing by the party to receive such notice:
    

    
      
        

        

      

      
        
          23
        

        
          

        

      

      
        

        

      

    

    

    

    
    	
          (i)
        	
          if to the Company:
        
	

        	
           
        
	

        	
          Opexa Therapeutics, Inc.
        
	

        	
          2635 N. Crescent Ridge Drive
        
	

        	
          The Woodlands, TX 77381
        
	

        	
          Attention: Chief Financial Officer
        
	

        	
          Facsimile: (281) 872-8585
        
	

        	
           
        
	
          (ii)
        	
          if to Novartis:
        
	

        	
           
        
	

        	
          Novartis Institutes for BioMedical Research, Inc.
        
	

        	
          250 Massachusetts Avenue
        
	

        	
          Cambridge, MA 02139
        
	

        	
          Attention: General Counsel
        
	

        	
          Facsimile: (617) 871-3349
        

    

    

    

    
      8.2  Counterparts; Facsimile Signature.  This Agreement
      may be executed in any number of counterparts, each of which shall be
      considered one and the same agreement and shall become effective when
      all counterparts have been signed by each of the parties and delivered
      to the other party, it being understood that the parties need not sign
      the same counterpart.  Any party may execute this Agreement by facsimile
      or scanned signature, and the other parties will be entitled to rely on
      such facsimile or scanned signature as conclusive evidence that this
      Agreement has been duly executed by such party.
    

    
      8.3  Bulk Sales.  The parties hereto agree to waive
      compliance with the provisions of the Laws of any jurisdiction relating
      to a bulk sale or transfer of assets that may be applicable to the
      transactions contemplated by this Agreement; provided, however,
      that to the extent Novartis is required to make any payments with
      respect to any provisions of the Laws of any jurisdiction relating to a
      bulk sale or transfer of assets that may be applicable to the
      transactions contemplated by this Agreement, the Company shall fully
      indemnify Novartis for such payments pursuant to Section 7.1(a)(iv).
    

    
      8.4  Further Assurances.  From time to time after the
      Effective Date and without further consideration, the parties hereto
      shall, and shall cause their respective Affiliates to, execute,
      acknowledge and deliver such documents and instruments of conveyance,
      assignment, assumption, transfer and delivery and take or cause to be
      taken such other actions as Novartis or the Company, as applicable, may
      reasonably request in order to carry out the purpose and intention of
      this Agreement, including, without limitation, to consummate more
      effectively the purchase, sale, conveyance, assignment, assumption,
      transfer and delivery of the Company Intellectual Property as
      contemplated by this Agreement, to vest in Novartis title to the Company
      Intellectual Property, to assign the Chicago License to Novartis or as
      otherwise appropriate to consummate the transactions contemplated by
      this Agreement.
    

    
      
        

        

      

      
        
          24
        

        
          

        

      

      
        

        

      

    

    
      8.5  Entire Agreement.  This Agreement and the other
      Transaction Documents constitute the entire agreement among the parties
      hereto with respect to the subject matter hereof and terminate and
      supersede all prior agreements and understandings, including the
      Confidentiality Agreement, oral and written, among the parties hereto
      with respect to the subject matter hereof and thereof.
    

    
      8.6  No Third-Party Beneficiaries.  This Agreement
      shall inure to the benefit of and be binding upon the parties hereto and
      their respective successors and assigns.  Except as provided in Article
      7 with respect to the indemnification of various non-parties, nothing in
      this Agreement, expressed or implied, is intended to or shall confer on
      any Person other than the parties hereto or their respective successors
      and assigns, any rights, remedies or Liabilities under or by reason of
      this Agreement.
    

    
      8.7  Assignment.  Neither this Agreement nor any of the
      rights, interests or obligations hereunder shall be assigned by any of
      the parties hereto, in whole or in part (whether by operation of law or
      otherwise), without the prior written consent of the other party (which
      consent shall not be unreasonably withheld, delayed or conditioned), and
      any attempt to make any such assignment without such consent shall be
      null and void; provided, however, that (i) Novartis may
      assign in writing its rights and obligations, in whole or in part, to
      one or more of its Affiliates, and (ii) Novartis may assign in writing
      all of its rights and obligations to a Third Party in connection with a
      sale or assignment of all or substantially all of the assets to which
      this Agreement relates.
    

    
      8.8  Amendment and Modification; Waiver.  This
      Agreement may not be amended, modified or supplemented, except by an
      instrument in writing signed on behalf of each of the parties
      hereto.  The failure of any party to assert a right hereunder or to
      insist upon compliance with any term or condition of this Agreement
      shall not constitute a waiver of that right or excuse a similar
      subsequent failure to perform any such term or condition by the other
      party.  No waiver shall be effective unless it has been given in writing
      and signed by the party giving such waiver.
    

    
      8.9  Enforcement; Jurisdiction.  The parties agree that
      irreparable damage would occur in the event that any of the provisions
      of this Agreement were not performed in accordance with their specific
      terms or were otherwise breached.  It is accordingly agreed that the
      parties shall be entitled to an injunction or injunctions to prevent
      breaches of this Agreement and to enforce specifically the terms and
      provisions of this Agreement in any federal court or state court sitting
      in the State of New York, this being in addition to any other remedy to
      which they are entitled at law or in equity subject to the terms
      hereof.  In addition, each of the parties hereto (a) hereby irrevocably
      agrees that any legal action or proceeding with respect to this
      Agreement or for recognition and enforcement of any judgment in respect
      hereof brought by another party hereto or its successors or assigns may
      be brought and determined in the federal courts located in the State of
      New York, and each party hereto hereby irrevocably submits with regard
      to any such action or proceeding for itself and in respect of its
      property, generally and unconditionally, to the exclusive jurisdiction
      of the aforesaid courts, and (b) irrevocably waives, and agrees not to
      assert, by way of motion, as a defense, counterclaim or otherwise, in
      any action or proceeding with respect to this Agreement, (i) any claim
      that it is not personally subject to the jurisdiction of the above-named
      courts for any reason other than the failure to lawfully serve process,
      (ii) that it or its property is exempt or immune from jurisdiction of
      any such court or from any legal process commenced in such courts
      (whether through service of notice, attachment prior to judgment,
      attachment in aid of execution of judgment, execution of judgment or
      otherwise), and (iii) to the fullest extent permitted by applicable Law,
      that (A) the suit, action or proceeding in any such court is brought in
      an inconvenient forum, (B) the venue of such suit, action or proceeding
      is improper and (C) this Agreement, or the subject matter hereof, may
      not be enforced in or by such courts.
    

    
      
        

        

      

      
        
          25
        

        
          

        

      

      
        

        

      

    

    
      8.10  Waiver of Jury Trial.  EACH OF THE PARTIES TO
      THIS AGREEMENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
      PERMITTED BY LAW, ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION,
      PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
      OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
      TRANSACTIONS CONTEMPLATED HEREBY.
    

    
      8.11  Costs and Expenses.  Regardless of whether the
      transactions contemplated by this Agreement are consummated and except
      as otherwise expressly provided in this Agreement, the Company, on the
      one hand, and Novartis, on the other hand, shall each bear their own
      costs and expenses (including, without limitation, attorneys’ fees and
      costs) incurred in connection with this Agreement and the transactions
      contemplated by this Agreement.
    

    
      8.12  Mutual Drafting.  The parties hereto have been
      represented by counsel who have carefully negotiated the provisions
      hereof.  As a consequence, the parties do not intend that the
      presumptions of any Laws or rules relating to the interpretation of
      contracts against the drafter of any particular clause should be applied
      to this Agreement and therefore waive their effects.  The provisions of
      this Agreement shall be interpreted in a reasonable manner to effect the
      intent of the parties.
    

    
      8.13  Governing Law.  This Agreement shall be governed
      by, and construed and interpreted in accordance with, the laws of the
      State of New York, without giving effect to the principles of conflict
      of laws thereof.
    

    
      8.14  Severability.  Any term or provision of this
      Agreement which is invalid or unenforceable in any jurisdiction shall,
      as to that jurisdiction, be ineffective to the extent of such invalidity
      or unenforceability and shall not render invalid or unenforceable the
      remaining terms and provisions of this Agreement or affect the validity
      or enforceability of any of the terms or provisions of this Agreement in
      any other jurisdiction.  If any provision of this Agreement is so broad
      as to be unenforceable, the provision shall be interpreted to be only so
      broad as is enforceable.
    

    
      8.15  Corporate Citizenship.  Novartis gives preference
      to Third Parties who share Novartis’ societal and environmental values,
      as set forth in the Novartis Policy on Corporate Citizenship and
      Novartis Corporate Citizenship Guideline #5, both of which are attached
      as Exhibit E and incorporated herein by reference.  Accordingly, Company
      represents and warrants that this Agreement will be performed in
      material compliance with all applicable Laws and regulations, including,
      without limitation, Laws and regulations relating to health, safety and
      the environment, fair labor practices and unlawful discrimination.
    

    
      
        

        

      

      
        
          26
        

        
          

        

      

      
        

        

      

    

    
      8.17      Privacy Notice.  This
      Agreement contains information such as name, signature and contact
      information (the “Personal Information”) that identifies or
      describes one or more individuals.  This Agreement, and the Personal
      Information contained herein, from time to time may be transferred to,
      stored or otherwise processed in the United States or other countries
      that have privacy and data protection Laws that differ from, or are not
      as stringent as, those where the Agreement was executed or where the
      individual(s) resides.  The Personal Information disclosed in this
      Agreement will be used for the purposes of administration and
      enforcement of this Agreement and/or other actual or potential legal and
      business transactions involving the parties.  Storage or processing of
      Personal Information disclosed in this Agreement may be electronic
      and/or off line.  Execution and delivery of this Agreement constitutes
      the representation by each party that if required by the privacy Laws
      applicable to such individuals, the individuals identified herein by
      such party have been notified of and have consented to, the transfer,
      storage, and processing of such Personal Information, as described in
      this Section.

    

    
      

      

      [Remainder of page intentionally left blank.]

    

    
      
        

        

      

      
        
          27
        

        
          

        

      

      
        

        

      

    

    
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
      executed and delivered as of the date first above written.
    

    
    	
          
            OPEXA THERAPEUTICS, INC.
          

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	
          
            By:
          

        	
           
        	
          
            /s/ Neil K. Warma
          

        	

        
	

        	
          
            Name:
          

        	
          
            Neil K. Warma
          

        	

        
	

        	
          
            Title:
          

        	
          
            President and CEO
          

        	

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	
          
            NOVARTIS INSTITUTES FOR BIOMEDICAL RESEARCH, INC.
          

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	
          
            By:
          

        	
           
        	
          
            /s/ Mark C. Fishman, M.D.
          

        	

        
	

        	
          
            Name:
          

        	
          
            Mark C. Fishman, M.D.
          

        	

        
	

        	
          
            Title:
          

        	
          
            President and CEO
          

        	

        

    

    
      28

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]