MODIFIED BLOOD SCREENING INSTRUMENT - eSAS 2 ADDENDUM AMENDING AGREEMENT ENTERED INTO AS OF JUNE 11, 1998

Exhibit 10.79

MODIFIED BLOOD SCREENING INSTRUMENT -
eSAS 2 ADDENDUM

AMENDING

AGREEMENT ENTERED INTO AS OF JUNE 11, 1998

BY AND BETWEEN

GEN-PROBE INCORPORATED, A DELAWARE CORPORATION

AND

CHIRON CORPORATION

effective as of January 1, 2002

TABLE OF CONTENTS

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TABLE OF CONTENTS
(continued)

MODIFIED BLOOD SCREENING INSTRUMENT -
eSAS 2 ADDENDUM

     This Modified Blood Screening Instrument — eSAS 2 Addendum (“eSAS 2 Addendum”) is entered into, effective as of January 1, 2002 (“Addendum Effective Date”) pursuant to and amending that certain Agreement entered into as of June 11, 1998 (“Agreement”) by and between Gen-Probe Incorporated, a Delaware corporation (“Gen-Probe”) with a principal place of business at 10210 Genetic Center Drive, San Diego CA 92121, and Chiron Corporation, a Delaware corporation (“Chiron;” Chiron and Gen-Probe each is individually referred to as “Party” and collectively are referred to as the “Parties”) with a place of business at 4560 Horton Street, Emeryville, CA 94608.

Recitals

     A. The Parties entered into the Agreement as of June 11, 1998. The Agreement was amended by the following: (i) June 11, 1998 Supplemental letter agreement, (ii) June 26, 1998 Addendum to Collaboration Agreement, (iii) June 30, 1998 Supplemental letter agreement, (iv) June 30, 1998 Consent, (v) December 7, 1999 Amendment to Collaboration Agreement, (vi) February 1, 2000 Amendment No. 2 to Collaboration Agreement, (vii) June 7, 2001 Supplemental agreement no. 1 (Customer training and Support), (viii) October 30, 2001 Confidentiality and Joint Interest Agreement, (ix) April 1, 2002 Amendment No. 3 (warehousing and shipping), (x) the Short Form Agreement dated November 16, 2001 and the Definitive Written Settlement Agreement dated December 5, 2001, (xi) the Future Blood Screening Assay — Ultrio Addendum dated as of January 1, 2002 (the “Ultrio Development Addendum”), (xii) March 5, 2003 Amendment No. 4 (Milestone for Ultrio on Tigris); (xiii) the Future Blood Screening Assay — WNV Addendum dated as of June 1, 2003 (the “Ultrio Development Addendum”) and (xiv) January 1, 2004 Amendment No. 5 (Applicable Purchase Price).

     B. In the Agreement, the Parties agreed to discuss, during the term thereof, the selection and establishment of one or more Development Programs for one or more Blood Screening Instruments.

     C. The Parties have discussed the proposed development of an eSAS 2 Instrument system, consisting of the following multiple modules: (i) a front end pipettor; (ii) an automated reagent addition station; (iii) an automated target capture bay; (iv) an automated incubation module; and (v) a data management to track sample and system interactions to meet customer demands of throughput and automation required for pooled donor screening by NAT.

     D. The Parties intend that the development of each module in the eSAS 2 Instrument system will provide improved automation or replacement of current aging or obsolete instrument components with newer technology, all without [...***...] the assay sensitivity or specificity; subject to all the terms and conditions of this eSAS 2 Addendum, the Parties will agree that each such module within the eSAS 2 Instrument system will be a modification to a “Blood Screening Instrument”, as provided in Section 3.3.7 of the Agreement.

     E. By this eSAS 2 Addendum, the Parties desire to provide for the development of the eSAS 2 Instrument by Chiron pursuant to the Agreement, as clarified and amended by the terms and conditions more particularly described in this eSAS 2 Addendum.

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Agreement

     NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth in this eSAS 2 Addendum, the Parties agree as follows:

1. Definitions . All capitalized terms used but not defined in this eSAS 2 Addendum shall have the meanings set forth in the Agreement.

     1.1 Agreement means the Agreement (as defined in the Preamble of this eSAS 2 Addendum), as amended by the agreements referred to in Recital A of this eSAS 2 Addendum and as may be subsequently amended.

     1.2 Binder means that certain three-ring binder, with one or more volumes, entitled “eSAS 2 Development Program for the eSAS 2 Instrument (Gen-Probe/Chiron eSAS 2 Development Addendum, dated as of ___, 2004) Binder,” in which certain documents, materials or other items incorporated into this eSAS 2 Addendum by reference are kept. The original Binder and an additional volume of the Binder, labeled “Amendments to eSAS 2 Development Program” and reflecting any changes, modifications or amendments to the Binder, are maintained by and located at the premises of Chiron. A copy of the original Binder, and a copy of the additional volume of the Binder, each signed by both Parties, shall be maintained by and located at the premises of Gen-Probe.

     1.3 Budget means the budgeted eSAS 2 Development Costs of the eSAS 2 Development Program. The Budget shall include the estimated cost of the eSAS 2 Development Program on a monthly basis through the end of the eSAS 2 Development Program. A preliminary Budget is attached hereto as Schedule 1.3. The Budget may be amended from time to time in accordance with the provisions of Section 3 below.

     1.4 eSAS 2 Instrument is defined on Schedule 1.4 .

     1.5 eSAS 2 Development Costs means, with respect to this eSAS 2 Addendum only, the development costs defined in Section 5 hereof.

     1.6 eSAS 2 Development Program means the development program for the development of the eSAS 2 Instrument system under the terms of this eSAS 2 Addendum, an outline of which is set forth in Schedule 1.6 hereto and as such development program for each module of the eSAS 2 Instrument system is described in the Binder, and consisting of (i) the Product Requirements Documents, (ii) the Software Requirements Specifications, (iii) the Technical Plan, (iv) the Resource Plan included within the Technical Plan, and (v) the Budget.

     1.7 eSAS 2 Addendum Term is defined in Section 8.1.

     1.8 FTE Labor Rate is defined in Section 5.2.1.

     1.9 Fully Burdened Manufacturing Costs is defined in Section 6.1.1.

     1.10 Material Modification means a change or amendment to the eSAS 2 Development Program that materially affects the requirements set forth in the then-current Product Requirements Document, Software Requirement Specifications, Technical Plan, Resource Plan or Budget, including without limitation any modification that could significantly degrade the assay sensitivity or specificity all as further defined in Section 3.3.

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     1.11 Non-material Modification means a change or amendment to the eSAS 2 Development Program other than a Material Modification. Agreement among the Project Management that a modification is a “Non-material Modification” hereunder as described in Section 3.2 below shall be conclusive.

     1.12 Product Requirements Document (or “PRD”) means the specifications for each module within the eSAS 2 Instrument system, each of which includes as a component thereof the applicable Software Requirements Specifications. The initial Product Requirements Document for two of the five (5) modules described in Schedule 1.4 are attached hereto as Schedule 1.12-A and Schedule 1.12-B. The PRD for each of the remaining three (3) modules described in Schedule 1.4 will be developed, and each PRD after agreement between the parties may be amended from time to time in accordance with the provisions of Section 3 below. Each PRD, as it may be developed and/or amended from time to time, shall be retained in the Binder under the heading “Product Requirements Document (PRD, Revision ___, dated xx/xx/xx).”

     1.13 Resource Plan means the description of (i) a Party’s personnel to be allocated to the eSAS 2 Development Program, including the name of the specific personnel or the qualification or grade of unidentified personnel, and dedicated amount of time and periods for the commitment of such personnel required for the eSAS 2 Development Program, and (ii) equipment, tools, software, or other special items, the purchase, license or leasing of which is specifically required for use by such personnel to support the eSAS 2 Development Program. The initial Resource Plan is attached hereto as Schedule 1.13. The Resource Plan may be amended from time to time in accordance with the provisions of Section 3 below. The Resource Plan, as it may be amended from time to time, shall be retained in the Binder under the heading “Resource Plan.”

     1.14 Software Requirements Specifications (or “SRS”) means the specifications for the software component of the eSAS 2 Development Program. The initial Software Requirements Specifications for two of the five (5) modules described in Schedule 1.4 are attached hereto as Schedule 1.14-A and Schedule 1.14-B. The SRS for each of the remaining three (3) modules described in Schedule 1.4 will be developed, and each SRS after agreement between the parties may be amended from time to time in accordance with the provisions of Section 3 below. The SRS, as it may be developed and/or amended from time to time, shall be retained in the Binder under the heading “Software Requirements Specifications (SRS, Revision ___, dated xx/xx/xx).”

     1.15 Technical Plan means the statement of work prepared for the development of the eSAS 2 Instrument, including the responsibilities to be performed by each Party, the responsibilities to be performed jointly, the schedule for performance of those responsibilities, an overall development timeline and a Resource Plan. The initial Technical Plan is attached hereto as Schedule 1.15. The Technical Plan may be amended from time to time in accordance with the provisions of Section 3 below. The Technical Plan, as it may be amended from time to time, shall be retained in the Binder under the heading “Technical Plan, Revision ___, dated xx/xx/xx.”

     1.16 Third Party OEM means any third party original equipment manufacturer supplying any component of the eSAS 2 Instrument, including without limitation pipettors, automated reagent addition stations, automated target capture bays or automated incubation modules.

     1.17 Timeline means the overall development timeline included within the Technical Plan.

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2. eSAS 2 Development Program .

     2.1 Objective . Subject to the terms of the Agreement, as amended by this eSAS 2 Addendum, the Parties each shall conduct their respective obligations under the eSAS 2 Development Program as established in accordance with the terms hereof, and shall apply for and endeavor to obtain such regulatory approvals as necessary or appropriate to make and sell the eSAS 2 Instrument in the Territory for use in the Blood Screening Field.

     2.2 General Conduct of Development . The Parties, using Commercially Reasonable Efforts, shall conduct their respective obligations under the eSAS 2 Development Program in compliance in all material respects with all requirements of applicable laws and regulations and all applicable good laboratory, clinical and manufacturing practices. In addition, the Parties each shall proceed diligently with their respective obligations under the eSAS 2 Development Program and shall use their respective Commercially Reasonable Efforts to achieve the objectives of the eSAS 2 Development Program efficiently and expeditiously. The Parties each shall allocate such personnel, equipment, facilities and other resources to the eSAS 2 Development Program to carry out their respective obligations and to accomplish the objectives thereof, all as is more particularly described in the eSAS 2 Development Program, as amended from time to time during the term of this eSAS 2 Addendum, in accordance with the provisions of Section 3. Each Party shall have the right to consult with the other Party regarding the eSAS 2 Development Program and the obligation to reasonably consider the other Party’s advice.

     2.3 No Liability if Commercially Reasonable Efforts Are Expended . Neither Party will be in breach of its obligations to the other hereunder and such Party shall be deemed to have exercised Commercially Reasonable Efforts, so long as such Party shall have committed the resources described in the eSAS 2 Development Program. The payment of eSAS 2 Development Costs between the Parties shall be due and payable without respect to the achievement of any particular deliverable specified in the eSAS 2 Development Program.

     2.4 Project Management .

          2.4.1 Principles of Project Management . The Parties agree that in the process of exercising their responsibilities, the Project Management (consisting of the Project Manager and Project Leaders, as set forth herein) should have routine access to such information needed to assess progress under and costs of the eSAS 2 Development Program. Specifically, the Parties agree that the Project Leaders shall be invited to participate in all team meetings, and will have access to team meeting minutes, timecards and other expense records, except to the extent the Project Leader for the Party assigned principal responsibility under Section 2.5.3 of this eSAS 2 Addendum for an activity determines in its reasonable discretion that any such meetings or minutes contain confidential, proprietary information of the responsible Party. In such cases, the Project Manager shall (i) determine whether the Project Leader for the Party not having primary responsibility for the activity can attend all or a portion of such meeting, (ii) provide a copy of the meeting minutes to the Project Leader not having primary responsibility for the activity with such confidential, proprietary information redacted, and (iii) to the extent that such minutes had proprietary or confidential information redacted, inform the Project Leader not having primary responsibility of the general nature of any decisions made at such meeting which affect the PRD, SRS, Timeline or Budget; provided, however that the Project Manager may only redact information comprising Chiron intellectual property and know how or confidential business issues. Project Leaders will have access to non-confidential and non-proprietary information of the other Party necessary to perform their responsibilities under the eSAS 2 Development Program, including those listed under 2.4.4. Project Leaders will inform and coordinate all activities, including meetings with

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personnel involved in the performance of the eSAS 2 Development Program, with the Project Manager. The primary point of contact for the eSAS 2 Development Program at Chiron will be Chiron’s Project Manager, the primary point of contact at Gen-Probe will be Gen-Probe’s Project Leader. In order to maintain an efficient and orderly development the Parties will communicate through the primary points of contact as much as possible when requesting information concerning the progress of the eSAS 2 Development Program. Confidentiality will be maintained in accordance with Section 8.1 of the Agreement, and disclosure of any information under this Section 2.4.1 shall be governed by that certain Confidentiality and Joint Interest Agreement, by and between the Parties, dated as of October 30, 2001.

          2.4.2 Project Manager . The project associated with development and commercial sale of the eSAS 2 Instrument will be managed under a Project Manager, the responsibilities of which are described in Section 2.4.3. A Project Manager appointed by Chiron will manage the eSAS 2 Development Program. As of the Addendum Effective Date, the Project Manager shall be [...***...]. Any change by Chiron of the Project Manager must be approved by the Supervisory Board, which approval shall not be unreasonably withheld.

          2.4.3 Project Manager’s Responsibilities . The Project Manager shall be responsible for the following activities, together with such other activities as the Parties may agree:

               (a) Managing all matters relating to the eSAS 2 Development Program under this eSAS 2 Addendum, including each Party’s respective responsibilities and contributions and receiving reports from the Project Leaders;

               (b) Providing written progress reports monthly to the Parties and presenting status reports to the Supervisory Board in accordance with Section 2.4.6 below;

               (c) Submitting and receiving the reports, materials and documents required to be delivered under this eSAS 2 Addendum;

               (d) Overseeing the process of proposing, and submitting to the Parties, any proposed modifications to the Product Requirements Document, Software Requirement Specifications, Technical Plan, Resource Plan or Budget, and in the event the Parties cannot agree, presenting the same to the Supervisory Board in an objective and neutral manner;

               (e) Arranging any meetings to be held between the Parties and participating, to the extent the Project Manager deems appropriate, in meetings of the Project Leaders;

               (f) Maintaining, for record keeping purposes, a log book or notes containing summaries and dates of all material communications and deliveries between the Parties of which the Project Manager is aware, consistent with the Parties’ protocol for such sharing of confidential information set forth in that certain Confidentiality and Joint Interest Agreement, by and between the Parties, dated as of October 30, 2001;

               (g) Implementing appropriate practices and procedures to manage the progress under this eSAS 2 Addendum;

               (h) Fostering good communication between the Parties. It is intended by the Parties that both Parties share, through reports from the Project Leaders to the Project Manager, in the information concerning the progress made in the eSAS 2 Development Program and the cause of any delays. It is expected that the Project Leaders will make recommendations to the Project Manager for

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preferred paths when substantial delays are identified and multiple paths forward are identified. Understanding that it takes time for information to flow up the chain of command, the Project Manager will inform Gen-Probe of delays and progress on resolution as soon as it becomes available to him; and

               (i) It is understood that both companies hold proprietary trade secret know-how and processes regarding their respective technologies that are not necessarily shared as part of this Agreement. On occasion it may occur that a full understanding of difficulties in the progress of development may require a detailed understanding of this proprietary know-how and processes. Each Party will endeavor to appraise the other of the outcomes and consequences of these difficulties, while protecting the confidentiality of the information.

          2.4.4 Project Leaders . Gen-Probe and Chiron will each appoint a project leader (each a “Project Leader”) who is responsible for (a) assembling project teams for his or her respective Party and (b) completing project responsibilities allocated to such Party in Section 2.5. For the purposes of completing the eSAS 2 Development Program, these Project Leaders will report to the Project Manager. The Project Leader employed by a Party shall be responsible for reporting to the employing Party whether he or she believes the other Party has proceeded diligently with its stated obligations under the eSAS 2 Development Program, has allocated sufficient personnel, equipment, facilities and other resources to achieve the objectives of the eSAS 2 Development Program and has exercised Commercially Reasonable Efforts to achieve its objectives efficiently and expeditiously.

          2.4.5 Reports . In addition to the records and reports required to be kept by the Parties under Section 3.5 of the Agreement, each Project Leader will provide to the Project Manager, in writing, a progress report delivered on or before the 15th day of each calendar month during the term of the eSAS 2 Development Program. These reports will cover technical progress as well as financial expenditures. The Project Manager may rely on any such reports for the purpose of making his or her progress report to the Supervisory Board described in Section 2.4.6 below.

          2.4.6 Meetings of the Supervisory Board . The Supervisory Board shall meet from time to time during the term of this eSAS 2 Addendum, but not less frequently than once each calendar quarter during the term hereof. Not less frequently than quarterly, a regular agenda item at the regularly scheduled Supervisory Board meeting shall be to receive a report from the Project Manager and conduct a review of the eSAS 2 Development Program to assess progress of the development and the potential for commercialization of the eSAS 2 Instrument.

     2.5 Development Responsibilities .

          2.5.1 Principal Responsibility; General Statement . The Parties’ intention is the smooth and efficient conduct of development, and the Parties desire by this Section 2.5 to provide guiding principles by which the responsible Party may make day-to-day decisions and by which the approval process more particularly described in Section 3 below shall be governed. The Parties intend that the eSAS 2 Instrument development will be conducted primarily and principally by [...***...] with consultation and discussion from [...***...], under the supervision of the Project Manager, as follows: (i) [...***...] will have principal responsibility under this eSAS 2 Addendum for the [...***...] of the eSAS 2 Instrument, [...***...] and [...***...] for [...***...] and [...***...],[...***...] with [...***...] for [...***...] and [...***...] of the eSAS 2 Instruments, [...***...] of [...***...] and [...***...] of [...***...], and [...***...] of [...***...] and [...***...], and (ii) [...***...] will assist in the development and approval of [...***...] of each instrument, provide [...***...] to its [...***...] (meaning [...***...] from the [...***...] and [...***...] as applicable) to facilitate development of a [...***...], provide [...***...] to its [...***...],

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provide [...***...] including [...***...] to [...***...] required for the development under the confidentiality terms of the Agreement, and will have principal responsibility under this eSAS 2 Addendum for the [...***...] of the [...***...] and [...***...], for the development of the [...***...] for [...***...] specifically related to the [...***...] and [...***...], and for the formulation of the [...***...] for [...***...] and for each [...***...] with [...***...] to the [...***...] for [...***...]. The Parties shall jointly agree upon all validation activities and software development per PRD and SRS. The Party to whom principal responsibility is allocated in this Section 2.5 has the power to make day-to-day decisions regarding matters within the area of such responsibility, consistent with the overall eSAS 2 Development Program. The Parties’ obligations with respect to certain warehousing and shipping are subject to Amendment No. 3.

          2.5.2 Regulatory/Licensure . Gen-Probe and Chiron have entered into that certain Definitive Written Settlement Agreement, dated December 5, 2001. Section 2(a) of the Definitive Written Settlement Agreement incorporates by reference the provisions of the Short Form Agreement (attached as Exhibit A to the Definitive Written Settlement Agreement). The Parties hereby expressly incorporate the provisions of Section F.6 of the Short Form Agreement between the Parties, dated November 16, 2001, into this eSAS 2 Addendum, as amended by the memorandum from [...***...] to [...***...] setting forth the parties’ agreed upon regulatory strategy, attached hereto as Schedule 2.5.2. Pursuant and subject to Section F.6 of the Short Form Agreement, as amended by Schedule 2.5.2, Gen-Probe agrees to use its best efforts to (i) regularly review blood screening regulatory/licensure strategy and management of regulatory submissions with Chiron, (ii) provide draft copies of all written regulatory submissions to Chiron at least five working days prior to the proposed date of their submission, (iii) make available the appropriate personnel for a discussion of any advice or recommendations of Chiron on any regulatory submissions and (iv) reasonably consider such advice or recommendations, but Gen-Probe is not required to accept such advice and recommendations; in each case as reasonably attainable by Gen-Probe. All disagreements on regulatory/licensure issues shall be addressed by the Supervisory Board and, if necessary, by implementation of the escalation procedure described in Article 13 of the Agreement, excluding arbitration. For issues that cannot be resolved through such procedures, Gen-Probe’s Chief Executive Officer shall have the right to make a final decision. Gen-Probe shall have no obligation under this eSAS 2 Addendum to apply for or endeavor to obtain regulatory approval for any eSAS 2 Instrument (or any module within the eSAS 2 Instrument system) that fails to meets the criteria set forth in the applicable PRD and SRS. Costs of all regulatory and licensing activities (including Gen-Probe internal eSAS 2 Development Costs) will be included in the eSAS 2 Development Costs and paid for by Chiron.

          2.5.3 Project Leader Disagreements . It is recognized that the Project Leaders may disagree on approaches. Even though one Party has the principal responsibility for development in the functional area described in Section 2.5, disagreements that cannot be resolved by Project Management may be brought to the Supervisory Board. However, work will proceed in accordance with the choice of the principally responsible Party, while being discussed at the Supervisory Board. In the event that the Parties do not agree at the Supervisory Board level, the Party with principal responsibility may continue to proceed per their best judgment. If a disagreement arises in a functional area for which responsibility is shared and resolution cannot be achieved at the Supervisory Board, except as to Regulatory/Licensure Strategy that shall be governed by Section 2.5.2 above, work shall be suspended in such functional area until a resolution is reached through Article 13 of the Agreement, including arbitration.

3. Modifications .

     3.1 eSAS 2 Development Program Definition .

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          3.1.1 [...***...] Modules . The Parties have prepared and agreed upon an eSAS 2 Development Program, as described in the Binder, for [...***...] modules in the eSAS2 Instrument system, and will need to prepare and agree upon an eSAS 2 Development Program for the remaining [...***...] modules in the eSAS2 Instrument system. The eSAS 2 Development Program, as described in the Binder with respect to [...***...] modules and as prepared and agreed upon with respect to the remaining [...***...] modules, will govern the rights and responsibilities of the Parties until changed in accordance with the provisions hereof. The Parties recognize and anticipate that additional clarification and refinement of the eSAS 2 Development Program, including changes, if any, necessary to reflect accepted delays in, or increases in costs of, development, will be required as development proceeds. The Parties intend that this eSAS 2 Addendum establish a process by which the Parties will amend the eSAS 2 Development Program, in accordance with the terms described in this Section 3.

          3.1.2 [...***...] Modules . Either Party may propose an eSAS 2 Development Program for each of the remaining [...***...] modules in the eSAS2 Instrument system. Each such proposal shall describe (i) the Product Requirements Documents, (ii) the Software Requirements Specifications, (iii) the Technical Plan, (iv) the Resource Plan included within the Technical Plan, and (v) the Budget for the development of one module in the eSAS 2 Instrument system. The Project Manager, and under his or her supervision, the Project Leaders and their respective teams, will review each such proposed eSAS 2 Development Program. Upon agreement between the Project Leaders, then such approved eSAS 2 Development Program shall be included within the Binder. If the Project Leaders are unable to agree upon a proposed eSAS 2 Development Program, then the Supervisory Board shall review the proposed eSAS 2 Development Program and make a determination with respect to whether such proposed eSAS 2 Development Program shall be approved by the parties. If the Supervisory Board has met and consulted without resolution, then the parties shall implement the escalation procedure described in Article 13 of the Agreement to resolve such impasse.

     3.2 Modifications .

          3.2.1 Request for Modifications .

               (a) Either party may propose either Material or Non-material Modifications to any part of the eSAS 2 Development Program, including the Product Requirements Document (and the Software Requirements Specifications that form part thereof), the Resource Plan (and the Technical Plan that forms part thereof), and the Budget, and including without limitation a request for a change to the FTE Labor Rate, as defined in Section 5.2.1, from time to time, as follows:

                    (i) Chiron may propose and implement such Modifications from time to time in its sole discretion. However, unless Gen-Probe shall have approved a Material Modification using the process more particularly set forth in this Section 3, Chiron shall have no right to reimbursement of Development Costs for such Material Modification and Gen-Probe shall have no obligation to pursue regulatory approval or otherwise pursue development efforts with respect thereto.

                    (ii) Gen-Probe may propose such Modifications from time to time. The process applicable to approval and implementation of any such proposed modifications shall be as described in this Section 3.

               (b) Changes, modifications or improvements to the eSAS 2 Instrument, after the Completion Date, are governed by the provisions of Section 4 below.

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               (c) The Project Manager, and under his or her supervision, the Project Leaders and their respective teams, will review any proposed modification to the eSAS 2 Development Program; if the two Project Leaders mutually agree that a particular modification is a Material Modification or is a Non-material Modification, then such determination shall be conclusive. If the Project Leaders are unable to agree whether a particular requested modification is a Material or Non-material Modification, then the Supervisory Board shall review the requested change and make a determination with respect to whether such requested modification is a Material or Non-material Modification. If the Supervisory Board has met and consulted without resolution, then either Party may, in its discretion, determine that the Parties have reached an impasse with respect thereto and implement the escalation procedure described in Article 13 of the Agreement to resolve such impasse.

               (d) If the two Project Leaders mutually agree that a particular modification is a Non-material Modification and both Project Leaders mutually agree to implement such Non-material Modification, no additional approval shall be needed from the parties to implement such Non-material Modification.

          3.2.2 Monthly Progress Reports . Unless changes to the specifications described in Section 3.2.1 constitute a Material Modification, any Non-Material Modifications shall be reported in the monthly summary progress reports pursuant to Section 2.4.4 and shall not be subject to the approval process described in Section 3.3.

     3.3 Material Modifications .

          3.3.1 Request for Material Modifications . In the event that one Party desires to request a Material Modification to the eSAS 2 Development Program from time to time during the term hereof, such Party (the “requesting party”) shall submit to the other Party such request in writing, in sufficient detail to enable the other Party (the “receiving party”) to evaluate the request. Without limiting the foregoing, the requesting party shall prepare a revised draft version of the Budget, reflecting any changes necessary to fully implement the requested Material Modification to the eSAS 2 Development Program.

          3.3.2 Initial Analysis of Impact of Proposed Material Modification . Promptly upon receipt of such request, but in any event not more than [...***...] thereafter, the Parties shall conduct a preliminary analysis of the impact that the requested Material Modification would have, including without limitation the impact any such proposed Material Modification would have on the Budget and/or the PRD and/or SRS, and shall meet and conduct an analysis of the impact of such Material Modification on the economics of marketing and sale of the eSAS 2 Instrument. Should either Party conclude, in its reasonable discretion, that the potential for [...***...] is [...***...] and [...***...] by any proposed change to the eSAS 2 Development Program requested in accordance with this Section 3.3, the Party shall notify the other of such determination in writing. In such event, Chiron may elect among one of the following three choices: (i) to terminate participation in the eSAS 2 Development Program under the provisions of Section 8.3, (ii) to implement the Material Modification without Gen-Probe’s approval under this Section 3, in which event Chiron shall have n