RESTATED STRATEGIC ALLIANCE AGREEMENT

Exhibits

EXHIBIT 1.13

Financial Terms

EXHIBIT 1.22

Carveouts

EXHIBIT 1.62 (a)

NPCD – Development

EXHIBIT 1.62 (b)

NPCD – Feasibility

EXHIBIT 1.77

R&D Plan

EXHIBIT 1.95

Work Plan

EXHIBIT 2.2

Exceptions to Exclusivity

EXHIBIT 2.2(a)

Exceptions to Exhibit 2.2

EXHIBIT 2.6

OEM Alliance Products

EXHIBIT 4.1

Approved NPCDs

EXHIBIT 4.7(a)(i)

Initial R&D Plan

EXHIBIT 4.7(a)(ii)

Initial R&D Plan Budget

EXHIBIT 9.2

Cost and Revenue Statement

EXHIBIT 9.3

Net Investment Statement

EXHIBIT 17.7(c)

Post-Termination Royalties

EXHIBIT 19.12

Further Amendments to Amendment Nos. 2 and 2a

Article I   –   DEFINITIONS

1.1

“ Abbott Alliance Patent Rights ” means Alliance Patent Rights that claim inventions conceived solely by employees or agents of Abbott or any Abbott Affiliate.

1.2

“ Abbott Alliance Technology ” means the Alliance Technology Derived solely by employees or agents of Abbott or any Abbott Affiliate.

1.3

“ Abbott Independent Patent Rights ” means Independent Patent Rights owned or Controlled by Abbott or any Abbott Affiliate.

1.4

“ Abbott Independent Technology ” means Independent Technology owned or Controlled by Abbott or any Abbott Affiliate.

1.5

“ Abbott Existing Product(s) ” means the LCx instrument system and uniquely associated accessories and consumables (“ System ”) and the LCx HIV and HCV assays (collectively “ Viral Assays ”).

1.6

“ Affiliate(s) ” means, with respect to any person or entity, any other person or entity, which controls, is controlled by or is under common control with such person or entity. For purposes of this definition, a person or entity is in “control” of an entity if it owns or controls more than fifty percent (50%) of the equity securities of the subject entity entitled to vote in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority), or otherwise has the power to control the management and policies of such other entity. An entity only retains the rights and is subject to the obligations of an Affiliate for so long as such entity continues to satisfy the definition in this Section 1.6.

1.7

“ Alliance Accounting Policies ” means the accounting policies adopted by the JRB (as defined in Section 3.1) to be used in determining the net of sharing of Revenue less Allowable Expenses pursuant to Article IX.

1.8

“ Alliance Field ” means the manufacture, use or Commercialization of any product or service for the in vitro amplification, detection, quantification, extraction or sequencing of a nucleic acid in or from a human biological sample for the purpose of: (a)  diagnosing, detecting or monitoring any disease, state, condition, trait or characteristic of a human being for medical management; (b) exercising quality assurance and quality control testing of human blood or plasma from which biological therapeutic agents may be derived for resale; (c) [**********]; or (d) screening human organs, tissues or cells for transplantation. The Alliance Field does not include the research, development, manufacture, use or Commercialization of any Carveout; the internal research by either Party for therapeutic development, including clinical trials; or research, development, manufacture, use, Commercialization, or testing in Epidemiology or Biosecurity (as each such term is defined below).

1.9

“ Alliance Patent Rights ” means Patent Rights that claim any Alliance Technology.

1.10

“ Alliance Program ” means the collaborative research and Development, manufacturing, regulatory and Commercialization activities in the Exclusive Areas undertaken pursuant to a JRB-approved Work Plan conducted by the Parties in accordance with this Agreement or the Prior Alliance Agreement. The Alliance Program does not include such activities by a Party on Non-Alliance Products.

1.11

“ Alliance Product(s) ” means any product, including, without limitation, any Reagent, kit, consumable or Instrument described in Sections 8.4 and 8.5, or any combination or component thereof, that: (a) is Commercialized under the Alliance Program; or (b) is the subject of a JRB-approved Work Plan; or (c) otherwise becomes an Alliance Product pursuant to this Agreement. An Alliance Product will include software to the extent such software is distributed in connection with the Reagent or kit. Alliance Product does not include: (x) any Carveout; or (y) any Non-Alliance Product. For purposes of this Agreement, the term “ Alliance Product ” will also include any service that: (d) is Commercialized under the Alliance Program; (e) is the subject of a JRB-approved Work

Plan; or (f) is provided by or for a Party (i) through use of an Alliance Product or (ii) in support of a customer’s use of an Alliance Product.

1.12

“ Alliance Technology ” means Technology and/or Materials that are Derived by or for a Party during performance of the Alliance Program or a program approved by the JRB under the Prior Alliance Agreement and the Derivation of which is jointly funded by the Parties pursuant to this Agreement or pursuant to a program approved by the JRB under the Prior Alliance Agreement.

1.13

“ Allowable Expenses ” has the meaning defined in Exhibit 1.13 hereof.

1.14

“ Analyte Specific Reagents ” or “ ASR ” means nucleic acid sequences, and similar reagents which, through specific binding or chemical reactions with substances in a specimen, are intended for use in a diagnostic application for identification and/or quantification of an individual chemical substance in a biological specimen, as further defined in 21 CFR 864.4020(a), as may be amended or replaced from time to time, or in equivalent foreign regulations.

1.15

“ Applera Alliance Patent Rights ” means Alliance Patent Rights that claim inventions conceived solely by employees or agents of Applera or any Applera Affiliates.

1.16

“ Applera Alliance Technology ” means Alliance Technology Derived solely by employees or agents of Applera or any Applera Affiliates.

1.17

“ Applera Existing Products ” means: (a) ViroSeq HIV Genotyping Kit and associated software; (b) HLA Sequencing based typing Kits (HLA-DRB, Codon 86 for HLA-DRB, HLA-A, HLA-B) and associated software; and (c) Cystic Fibrosis mutation screening system available as Analyte Specific Reagents and General Purpose Reagents.

1.18

“ Applera Independent Patent Rights ” means Independent Patent Rights owned or Controlled by Applera or any Applera Affiliate.

1.19

“ Applera Independent Technology ” means Independent Technology owned or Controlled by Applera or any Applera Affiliate.

1.20

“ Biosecurity ” means the detection of biological or chemical agents, pathogens, microorganisms or other infectious agents in the environment, agriculture, food or water.

1.21

[**********].

1.22

“ Carveout(s) ” means, collectively and individually, the products described in Exhibit 1.22 hereto. For purposes of this Agreement, Carveouts are not in the Alliance Field.

1.23

“ Commencement Date ” means January 1, 2006 with respect to matters pertaining to budgets to be approved by the JRB.

1.24

“ Commercial Entity ” means any Third Party or its Affiliates that is engaged in the commercial sale of products in the In Vitro Diagnostics Field.

1.25

“ Commercialize ” and cognates thereof mean the sale, transfer or co-promotion of a product or service to a Third Party for commercial purposes. For example, an Alliance Product will be Commercialized when it or its use is provided to any Third Party for cash or other consideration.

1.26

“ Competing Product(s) ” means any product in the Alliance Field that (a) is, or is intended to be, Commercialized in the current or intended Customer Segment as, and (b) except as provided in Section 2.5(b), has or incorporates the same Clinical Intent as, an Alliance Product. A product in the Alliance Field may be a Competing Product despite differences in the marker used or the technology employed. “ Clinical Intent ” means providing the same clinical utility, intended use or the same clinical information. “ Customer Segment ” means distinct customer types on a country-by-country basis, for example, clinical diagnostic labs, blood/specimen screening labs and point of care customers. A product in the Alliance Field having the same Clinical Intent in the same Customer Segment as an Alliance Product will be a Competing Product despite differences in effectiveness, efficiency or price. In no event will a product Commercialized outside the Alliance Field be considered a Competing Product. For purposes of this Agreement, the term “Competing Product” will include any service in the Alliance Field that is, or is intended to be, Commercialized in the same Customer Segment as, and, except as provided in Section 2.5(b), has the same Clinical Intent as, a service that is an Alliance Product. As provided in Section 2.5(e), a product sold to purchasers before JRB-approval of an NPCD-Development for a competing Alliance Product will be a Competing Product only for sales to new customers, which sales occur after JRB approval of the NPCD-Development for the Alliance Product. Competing Products will not include primers and probes labeled “For Research Use Only” or other comparable label that are sold as reagents to an individual customer for testing with the same Clinical Intent as an Alliance Product unless they are used for testing in the Exclusive Areas as defined in Sections 1.39(a) – (d) or in the Exclusive Areas as defined in Sections 1.39(e) – (g) and they incorporate Alliance Technology. In such case the Party supplying the research use primers and probes as reagents to the individual customer may not Facilitate the sale of such primers and probes to additional customers.

1.27

“ Conditionally Exclusive Areas ” means any product or service in the Alliance Field that is [**********]. “Conditionally Exclusive Areas” specifically excludes [**********]unless they are Alliance Products.

1.28

“ Confidential Information ” means non-public proprietary data, information, Materials, Technology or Instruments (and all tangible and intangible embodiments thereof), which is owned or Controlled by a Party, is disclosed by such Party (“ Disclosing Party ”) to the other Party (“ Receiving Party ”) pursuant to this Agreement, and is designated as Confidential Information by the Disclosing Party at the time of disclosure or pursuant to this Agreement. Confidential Information will not include data, information, Materials, Technology or Instruments which, and only to the extent, a Receiving Party can establish

by written documentation: (a) is part of the public domain prior to disclosure of such information by the Disclosing Party to the Receiving Party or becomes part of the public domain, without the fault of the Receiving Party, subsequent to disclosure of such information by the Disclosing Party to the Receiving Party; (b) has been received by the Receiving Party at any time from a source, other than the Disclosing Party, rightfully having possession of and the right to disclose such information free of confidentiality obligations; (c) has been otherwise known by the Receiving Party free of confidentiality obligations prior to disclosure of such information by the Disclosing Party to the Receiving Party; (d) has been independently developed by employees or others on behalf of the Receiving Party without access to or use of such information disclosed by the Disclosing Party to the Receiving Party. Specific aspects or details of Confidential Information will not be deemed to be within the public knowledge or in the prior possession of the Receiving Party merely because the aspects or details of the Confidential Information are embraced by general disclosures in the public domain. In addition, any combination of Confidential Information will not be considered in the public knowledge or in the prior possession of the Receiving Party merely because individual elements thereof are in the public domain or in the prior possession of the Receiving Party unless the combination and its principles are in the public knowledge or in the prior possession of the Receiving Party. With respect to Confidential Information which is jointly created, owned or Controlled by the Parties under this Agreement, exceptions (a) through (d) of this Section 1.28 will continue to apply; provided , however , that for application of exceptions (b) through (d) of this Section 1.28, a Party must establish that the exception applies by virtue of written documentation from a Third Party rather than the written documentation of the Receiving Party. Further, for avoidance of doubt, Confidential Information will include Confidential Information received by the Disclosing Party from a Third Party. Prior to disclosure of such Third Party Confidential Information to the Receiving Party the Disclosing Party will determine that it has the right to make such disclosure, advise the Receiving Party that the disclosure includes Third Party Confidential Information and provide the Receiving Party with the terms and conditions of any agreement between the Third Party and the Disclosing Party respecting such Third Party Confidential Information.

1.29

“ Contract Half Year ” means a consecutive and continuous six (6)-month period commencing on January 1, 2006 and on each subsequent July 1 and January 1 thereafter during the term of this Agreement.

1.30

“ Contract Year ” means a consecutive and continuous twelve (12)-month period commencing on January 1, 2006 and on each subsequent January 1 during the term of this Agreement.

1.31

“ Controls ” or “ Controlled ” and cognates thereof mean with respect to Technology, Patent Rights, Materials, and/or Confidential Information, the possession of the ability to grant licenses or sublicenses, to distribute Copyrighted Works or to otherwise disclose, without violating the terms of any agreement or other arrangement with, or the rights of, any Third Party.

1.32

“ Copyrighted Works ” means original works of authorship, including, without limitation, computer programs (in source code, object code or other form), notes, sketches, drawings and reports.

1.33

“ Deliverable Alliance Technology ” means that portion of Alliance Technology that is responsive to goals and deliverables specifically identified in NPCDs.

1.34

“ Derived ” and cognates thereof mean obtained, developed, acquired, made, invented, discovered, created, synthesized, designed, or resulting from, based upon or otherwise generated (whether directly or indirectly, or in whole or in part).

1.35

“ Development ” means actions or activities by a Party following proof of feasibility to validate the design of a product or service for eventual Commercialization.

1.36

“ Development Costs ” has the meaning defined in Exhibit 1.13 hereof.

1.37

“ Distributor ” means, with respect to an Alliance Product, the Party that Commercializes such Alliance Product in accordance with this Agreement.

1.38

“ Epidemiology ” means the screening or testing of groups of people or populations for the study of the patterns, causes, or control of disease in groups of people.

1.39

“ Exclusive Areas ” means the products and services that are used or distributed for use in the Alliance Field in:

(a)

detecting, classifying or quantifying nucleic acid sequences of any of the following[**********];

(b)

detecting, classifying or quantifying any human gene or genetic variation that causes or is linked to[**********];

(c)

detecting, classifying or quantifying any human gene or genetic variation that causes or is linked to[**********];

(d)

detecting, classifying or quantifying the combination of [**********]genes and genetic variations therein for predicting [**********], or any modifications thereof approved by the JRB;

(e)

detecting, classifying or quantifying human genes and expression products encoded by such genes for predicting [**********] as those products are defined in the JRB-approved Work Plans dated July 12, 2005, or any modifications thereof approved by the JRB;

(f)

detecting, classifying or quantifying any human gene or genetic variation for predicting [**********] as that product is defined in the JRB-approved Work Plan dated July 12, 2005, or any modifications thereof approved by the JRB; and

(g)

detecting, classifying or quantifying nucleic acid sequences of any other [**********] associated with a human medical condition expressly added to the Exclusive Areas by decision of the JRB pursuant to a JRB-approved Work Plan under this Agreement.

“Exclusive Areas” specifically excludes [**********] unless they are Alliance Products. The products and services specified in this definition are subject to the provisions of Section 2.4.

1.40

“ Existing Patent Rights ” means Patent Rights that are reasonably necessary for performance under this Agreement and that are owned or Controlled by a Party as of the effective date of the Prior Alliance Agreement.

1.41

“ Existing Products ” means Abbott Existing Products and Applera Existing Products.

1.42

“ Existing Technology ” means Technology and Materials that are reasonably necessary for performance under this Agreement and that are owned or Controlled by a Party as of the effective date of the Prior Alliance Agreement.

1.43

“ Exploit ” means: (a) with respect to a Patent Right, making, having made, using, selling, offering for sale or importing an invention claimed in such Patent Right or granting license rights under such Patent Right; (b) with respect to Technology, using or transferring the Technology or part thereof in conjunction with the making, having made, using, selling, offering for sale and importing of a product or method or granting license rights under such Technology; and (c) with respect to Copyrighted Works, copying, performing or distributing the Copyrighted Work or granting license rights under such Copyrighted Work.

1.44

“ FDA ” means the Food and Drug Administration of the United States, or a successor thereto and any foreign equivalent.

1.45

“ Facilitate ” and cognates thereof means to sell, distribute or promote a product or a service, or to partner with a Third Party to sell, distribute or promote a product or service, where such product or service is promoted as a Competing Product or distributed with knowledge of its use as a Competing Product. In the case of Instruments, “facilitating” is distributing or loading Instruments with software, or distributing, promoting or actively assisting in the development of software for the Instrument, that is specific to a Competing Product (i.e., software specific to a diagnostic application).

1.46

“ General Purpose Instrument ” means a device which, if introduced into the United States, is not or would not be subject to pre-market notification or approval under then-applicable FDA regulations.

1.47

“ General Purpose Reagent ” or “ GPR ” means chemical or biological reagents that (a) are not Analyte Specific Reagents and (b) have general laboratory application.

1.48

“ In Vitro Diagnostics Field ” means the products related to and services associated with in vitro measuring, observing and/or determining attributes, characteristics, diseases, traits or other conditions of a human being for medical management.

1.49

“ Incremental Net Sales ” means:

(a)

With respect to an Alliance Product Commercialized after rejection of the NPCD as described in Section 4.4 (a) (“ New Alliance Product ”), Incremental Net Sales means:

(i)

where the New Alliance Product, if sold outside the Alliance Program, would have been a Competing Product, all sales of such New Alliance Product less any Cannibalized Sales of Alliance Products which were being sold at the time such New Alliance Product was first sold. “ Cannibalized Sales ” for purposes of this Section 1.49(a)(i) means sales resulting solely from the switch by an existing customer from an existing Alliance Product to the New Alliance Product where both such Alliance Products have the same Clinical Intent, but does not include any increased sales resulting from price or volume increases attributable to the switch by an existing customer to the New Alliance Product; or

(ii)

where the New Alliance Product, if sold outside the Alliance Program, would not have been a Competing Product, all sales of such New Alliance Product.

(b)

With respect to an OEM Instrument or Alliance Instrument that is Commercialized after rejection as described in Section 8.7 (“ New Alliance Instrument ”), Incremental Net Sales means:

(i)

where the New Alliance Instrument, if sold outside the Alliance Program, would have been a Competing Product, all sales of such New Alliance Instruments, all service revenue associated with such New Alliance Instruments, and all sales of other Alliance Products which are for use on such New Alliance Instruments, less any Cannibalized Sales of other Alliance Products which were being sold at the time such New Alliance Instruments were first sold. “ Cannibalized Sales ” for purposes of this Section 1.49(b)(i) means sales resulting solely from the switch by an existing customer from an existing OEM Instrument or Alliance Instrument to the New Alliance Instrument, but does not include any increased sales resulting from price or volume increases attributable to the switch by an existing customer to the New Alliance Instrument; or

(ii)

where the New Alliance Instrument, if sold outside the Alliance Program, would not have been a Competing Product, all sales of such New Alliance Instruments, all service revenue associated with such New Alliance Instruments, and all sales of other Alliance Products which are for use on such New Alliance Instruments.

1.50

“ Independent Patent Rights ” means Existing Patent Rights and Post-Signature Patent Rights.

1.51

“ Independent Technology ” means Existing Technology and Post-Signature Technology.

1.52

[**********].

1.53

“ Initial Activities ” means NPCDs and Work Plans for Alliance Products that the Parties have proposed to be the focus of the first three (3) Contract Years, including the budget for each of the first three (3) Contract Years.

1.54

“ Instrument ” means any hardware, software, device, platform or any combination or component thereof, including any uniquely associated accessories and consumables, which is related to the automation of in vitro amplification, detection, quantification, or sequencing of a nucleic acid in or from a human biological sample for the purpose of: (i) diagnosing, detecting or monitoring any disease, state, condition, trait or characteristic of a human being for medical management; (ii) exercising quality assurance and quality control testing of human blood or plasma from which biological therapeutic agents may be derived for resale; (iii) [**********]; or (iv) screening human organs, tissues or cells for transplantation. The term “Instrument” excludes (a) Reagents and kits containing Reagents, (b) instruments for the preparation of human biological samples containing nucleic acids, (c) instruments which are the subject of supply arrangements existing as of the Effective Date between a Party and a Third Party, including modifications, amendments or extensions to such arrangements, provided such arrangements are not inconsistent with such Party’s obligations under this Agreement, and (d) instruments which are manufactured by Abbott as of the Effective Date and in any subsequent modified form, provided such instruments are not Competing Products.

1.55

“ Joint Alliance Patent Rights ” means Alliance Patent Rights that claim inventions jointly conceived by employees or agents of both Parties.

1.56

“ Joint Alliance Technology ” means Technology and Materials that are Derived jointly by or for both Parties during performance of the Alliance Program and the Derivation of which is jointly funded by the Parties pursuant to this Agreement or the Prior Alliance Agreement.

1.57

“ Licensing Revenue ” means the aggregate cash or other consideration received by a Party in consideration for a license under Alliance Technology or Alliance Patent Rights (including, without limitation, royalties received by such Party based on sales by a Third Party of products or services incorporating Alliance Technology or covered by Alliance Patent Rights.) In the event consideration for license rights under Alliance Technology or Alliance Patent Rights is not monetary, the Parties will agree upon the monetary value of such consideration or a means for sharing the non-monetary consideration.

1.58

“ Major Market Country ” means the United States, the member countries of the European Patent Convention, Japan and Canada.

1.59

“ Materials ” means, individually and collectively, Reagents, formulations, nucleic acids including DNA, RNA and PNA, plasmids, microbiological cultures or strains, cell lines, peptides, compounds, compositions, and combinations or components thereof.

1.60

“ Net Investment ” means, with respect to the Alliance Program, the following net assets of a Party: (a) inventory; (b) receivables (including any receivables from the other Party in accordance with this Agreement); (c) equipment placed as part of a Reagent Rental Program net of depreciation; and (d) cumulative amounts paid to the other Party pursuant to Section 9.3(c); less (e) cumulative amounts received from the other Party pursuant to Section 9.3(c) and payables (including amounts payable by one Party to another in accordance with this Agreement) and other liabilities, if any. Net Investment will not include any amounts payable by one Party to another pursuant to Section 9.3.

1.61

“ Net Sales ” means:

(a)

the gross invoiced price of an Alliance Product or Alliance Products sold by a Party to a Third Party, less the following, to the extent charged as part of the invoiced price, separately stated on the invoice and paid by or credited to, as the case may be, the Third Party:

(i)

credits, allowances, discounts and rebates to, and charge backs from the account of, Third Parties for spoiled, damaged, out-dated, rejected or returned Alliance Products;

(ii)

actual freight, postage, transportation and insurance costs incurred in delivering Alliance Products;

(iii)

reasonable and customary cash, quantity and trade discounts actually given to Third Parties;

(iv)

sales, use, value-added and other direct taxes to the extent billed to and paid by the Third Party; and

(v)

customs duties, surcharges and other governmental charges incurred in connection with the exportation or importation of Alliance Products.

(b)

With respect to Combination Products, the gross invoiced price of such Combination Products billed to Third Parties by a Party, less: the allowances and adjustments referred to in Sections 1.61(a)(i)-(v), multiplied by the fraction A/A+B, where A is the gross selling price of the Alliance Product sold separately during the royalty period in question, and B is the gross selling price of the other diagnostic product(s) in the Combination Product having significant, independent utilities sold separately during the royalty period in question and that are not covered by Valid Claims of the non-selling Party’s Patent Rights or employing the non-selling Party’s Confidential Information. If there is no established current gross selling price for the Alliance Product A or for the other diagnostic product(s) B, then for the purposes of calculating Net Sales, the Parties agree to

discuss in good faith the relative values of Alliance Product A and the other diagnostic product(s) B so as to arrive at a fair gross invoiced price for Combination Products upon which to base the Net Sales thereof. For purposes of this Agreement, “ Combination Product ” means an Alliance Product that is sold together in combination with one (1) or more diagnostic products having significant independent diagnostic utility and not covered by a Valid Claim of the non-selling Party’s Patent Rights or employing the non-selling Party’s Confidential Information.

(c)

With respect to an Alliance Product for which the gross invoiced price includes an amount to compensate a Party for the amortized cost of instrumentation, services, and/or other equipment supplied without charge to a customer under a RAP or other successor or similar plan (collectively a “ RAP Product ”), the Net Sales of such RAP Product will first be calculated in accordance with the definition of Net Sales under paragraph (a) of this Section 1.61 and then will be reduced by the amount of the price increase reasonably and demonstrably attributable solely to the amortized cost of the instrumentation, equipment and service which is provided to customers free of charge, in accordance with the United States Generally Accepted Accounting Practices (“ GAAP ”) of such Party consistently applied.

(d)

Net Sales will not include Alliance Products used in clinical trials, for research or other non-commercial uses, or supplied as commercial samples or as charitable or humanitarian donations, so long as a Party receives no compensation in any form for such use/donation.

(e)

Net Sales for services will be the gross revenue received therefor.

(f)

Net Sales for products other than Alliance Products will be calculated in the same manner set forth in this Section 1.61 to the extent applicable.

1.62

“ New Product Concept Document ” or “ NPCD ” means

(a)

in the case of an “ NPCD – Development ”, a written description of a concept of interest to a Party for Development of a product or service in the Alliance Field that describes the proposed Alliance Product including the following information: (i) test or service type; (ii) intended diagnostic use or expected medical indications or disease state for such use; (iii) target customers; (iv) sampling requirements; (v) testing frequency; (vi) expected product or service pricing; (vii) peak unit sales and revenues; (viii) description of freedom to operate issues or special technologies necessary to develop the product, service or technology; (ix) competitive landscape issues, including market research; (x) each Party’s Independent Technology and Independent Patent Rights expected to be applicable to the proposed product or service and its manufacture or use and associated royalties and milestones owed to Third Parties; (xi) the specific proposed study design, including identification of each goal and deliverable of the proposed study; (xii) the proposed Supplier; (xiii) the proposed Distributor; (xiv) synergies

with other Alliance Products or Carveouts; and (xv) estimated pro-forma profit and loss statement. An NPCD – Development will generally be in the form attached hereto as Exhibit 1.62(a); and

(b)

in the case of an “ NPCD – Feasibility ”, a written description of a concept of interest to a Party for establishing feasibility of a product or service in the Alliance Field that describes the proposed Alliance Product including the following information: (i) test or service type; (ii) intended diagnostic use or expected medical indications or disease state for such use; (iii) testing frequency; (iv) description of freedom to operate issues or special technologies necessary to develop the product, service or technology; and (v) the details of a feasibility study including expected outcomes or feasibility objectives. An NPCD – Feasibility will generally be in the form attached hereto as Exhibit 1.62(b) and will be limited to a maximum of twelve (12) months of feasibility studies, unless extended by mutual agreement of the Parties.

(collectively, NPCD – Development and NPCD – Feasibility will be referred to in this Agreement as “NPCD”).

1.63

“ Non-Alliance Product ” means:

(a)

any [**********], the research or Development of which involves a collaboration between a Party and a Third Party [**********]; and

(b)

products and services in the Alliance Field which, except as provided in Section 4.5, are not Competing Products and which (i) have been rejected as an NPCD, or (ii) are in the Optional Areas and were never submitted to the JRB, and (iii) the research, Development or Commercialization of which is conducted by a Party outside the Alliance Program in accordance with Article IV.

1.64

“ Optional Areas ” means any product or service in the Alliance Field that is in neither the Exclusive Areas nor the Conditionally Exclusive Areas.

1.65

“ Partnership Tax Return ” means any return or report of Taxes due, any claims for refund of Taxes, any information return with respect to Taxes, or any other similar report, declaration or document, including any amendments related thereto, and supporting information.

1.66

“ Party ” means Abbott or Applera and its respective Affiliates, and “ Parties ” means Abbott and Applera and their respective Affiliates.

1.67

“ Passive Investor ” means any person or entity that holds securities other than for the purpose of changing or influencing the control or management of the issuer of the securities, and any person or entity that files a Schedule 13 G with the Securities and Exchange Commission (or any successor form thereto) with respect to any securities will be deemed a Passive Investor in those securities.

1.68

“ Patent Rights ” means rights conferred by: (a) patent applications filed in any country; (b) all patents including supplemental protection certificates that have issued or in the future issue from any of the foregoing, including, without limitation, utility models, design patents and certificates of invention; and (c) all divisionals, continuations, continuations-in-part, reissues, re-examination certificates, renewals, extensions or additions to any such patents and patent applications.

1.69

“ Permitted Affiliate ” means a Party’s Restructuring Successor and any entity that is Totally Controlled by a Party or its Restructuring Successor.

1.70

[**********].

1.71

“ Post-Signature Patent Rights ” means Patent Rights that are reasonably necessary for performance under this Agreement and that a Party acquires ownership or Control of at any time during the term of this Agreement and the Prior Alliance Agreement as a result of activities by the Party outside the Alliance Program.

1.72

“ Post-Signature Technology ” means Technology and Materials that are reasonably necessary for performance under this Agreement and that a Party acquires ownership or Control of at any time during the term of this Agreement and the Prior Alliance Agreement as a result of activities by the Party thereof outside the Alliance Program.

1.73

“ Post-Termination Acquired Product ” means any product or service in the Alliance Field that is first acquired by a Party from a Third Party after the Termination Date and any product or service under development by a Third Party which product or service is first acquired by a Party after the Termination Date through the purchase of controlling securities of the Third Party or through a purchase of assets from the Third Party.

1.74

“ Post-Termination Competing Product ” means any product or service in the Alliance Field that is first Commercialized by a Party after the Termination Date and is a Competing Product, excluding all Post-Termination Acquired Products.

1.75

“ Prior Alliance Agreement ” means the Strategic Alliance Agreement between the Parties dated June 24, 2002, and Amendments Nos. 1, 2, 2a and 3 to the Strategic Alliance Agreement dated December 20, 2002, January 22, 2003, January 28, 2005, and March 31, 2004, respectively.

1.76

“QSR Standard ” means the regulations set forth in 21 CFR Chapter 1, Part 820, et seq ., as such regulations may be amended or replaced from time to time, and any foreign law, statute or regulation relating to current good manufacturing practices.

1.77

“ R&D Plan ” means a written description which sets forth the plan for research and Development of products and services within the Exclusive Areas pursuant to JRB-approved NPCDs and Work Plans. In connection with each R&D Plan, the Parties will agree upon a budget (the “ R&D Plan Budget ”) in accordance with Section 4.7(a).

1.78

“ Reagent Rental Program ” or “ RAP ” means a program for the Commercialization of one or more Alliance Products in conjunction with an Instrument whereby the price for the Alliance Products includes the acquisition cost or leasing cost of the Instrument, the cost of servicing the Instrument and/or other items of cost recovery in connection with supply and support of the Instrument.

1.79

“ Reagents ” means oligonucleotides, including primers and probes, Analyte Specific Reagents, General Purpose Reagents, enzymes, proteins, controls, substrates, co-factors, buffers or any combination thereof.

1.80

“ Regulatory Approval ” means the technical, medical and scientific licenses, registrations, authorizations and approvals required for marketing or use of a product (including, without limitation, approvals of Pre-Market Approval Applications, Investigational Device Exemptions, Biologic License Applications, Investigational New Drug Applications, 510k notices, pre- and post- approvals, pricing and third party reimbursement approvals, and labeling approvals and any supplements and amendments to any of such approvals) of any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, necessary for the Development, manufacture, distribution, marketing, promotion, offer for sale, use, import, export or sale of Alliance Products in a regulatory jurisdiction.

1.81

“ Regulatory Authority ” means the FDA and/or any national, supra-national (e.g., the European Commission, the Council of the European Union, or the European Agency for the Evaluation of Medicinal Products), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity in each country or supra-national territory of the world having jurisdiction over granting a Regulatory Approval for an Alliance Product.

1.82

“ Regulatory Filings ” means a Pre-Market Approval Application, 510(k) notice, Biologic License Application, Investigational Device Exemption, and/or any other comparable filings as may be required by Regulatory Authorities to obtain Regulatory Approvals for a product in the Alliance Field.

1.83

“ Restructuring Successor ” means any entity formed by or on behalf of a Party for purposes of reincorporation in a new jurisdiction, formation of a new parent holding company, or otherwise, provided that the ownership of the new entity immediately after any such event is substantially the same as the ownership of the Party immediately prior to such event.

1.84

“ Revenue(s) ” means, with respect to each Alliance Product, the sum of the following, determined in accordance with Alliance Accounting Policies and GAAP, consistently applied: (a) Licensing Revenue; (b) Services Revenue; (c) Sales Revenue; and (d) any proceeds from the sale of capital assets included in Net Investments.

1.85

“ Sales Revenue ” means, with respect to the sale or other disposition of any Alliance Product in an arms-length transaction, the gross sales price, including all taxes, duties, freight, insurance and other charges actually billed by or for a Party to Third Parties or

the other Party, less the reasonable and customary deductions from such gross amounts to the extent actually paid by or charged to the account of the Party, including, without limitation:

(a)

reasonable and customary credits, allowances, discounts and rebates to, and chargebacks from customers for spoiled, damaged, out-dated and returned Alliance Product;

(b)

reasonable and customary cash, quantity and trade discounts, rebates and other price reductions for such Alliance Product given to such customers; and

(c)

sales, use, value-added and other direct taxes (but not income taxes of any kind) imposed upon the sale of such Alliance Product to such customers.

Sales Revenue will include, without any deductions, any amounts actually invoiced by a Party as reimbursement for costs associated with authorized distribution of Alliance Products prior to Regulatory Approval. Sales Revenue will not include any product furnished to Third Parties for which no payment is receivable, such as, experimental, test market, promotional or other free goods. On the other hand, Sales Revenue will include any product sold, whether or not such product is for commercial, research or other use.

Sale or transfer of an Alliance Product by or for a Party to an Affiliate of that Party for re-sale by such Affiliate will not be considered a sale for the purpose of this provision, but the resale by such Affiliate to a Third Party or to the other Party will be a sale for such purposes. Sale or transfer of an Alliance Product by or for a Party to an Affiliate of that Party for end-use by such Affiliate will be considered a sale for the purposes of this provision. The Sales Revenue for any such transfer between a Party and its Affiliate or between Affiliates of the same Party will be handled in accordance with the following procedure:

(x)

if the Supplier of an Alliance Product also uses the same Alliance Product for clinical studies of a therapeutic product run by (i) the Supplier or its Affiliates, or (ii) in the case of Applera only, a pharmaceutical company which Controls the therapeutic product that is the subject of a Collaboration, then the Supplier will transfer the Alliance Product at the Supplier’s cost; and

(y)

if the Supplier of an Alliance Product is different from the Party using the same Alliance Product for clinical studies of a therapeutic product run by (i) such other Party or its Affiliates, or (ii) in the case of Applera only, a pharmaceutical company which Controls the therapeutic product that is the subject of a Collaboration, then the Supplier will transfer the Alliance Product to the other Party at the Target Minimum Sales Price.

1.86

“ Services Revenue ” means, with respect to training, service and support of consumers using an Alliance Product and with respect to services rendered by a Party using an Alliance Product, all proceeds actually received by a Party for the gross sales price, including all taxes, duties, insurance and other charges actually billed by or for a Party to

Third Parties or the other Party, less the deductions from such gross amounts to the extent actually paid by or charged to the account of the Party, including, without limitation:

(a)

cash, quantity and trade discounts, rebates and other price reductions for such services given to such customers; and

(b)

sales, use, value-added and other direct taxes (but not income taxes of any kind) imposed upon the sale of such services to such customers.

1.87

“ Supplier ” means, with respect to an Alliance Product, the Party that manufactures such Alliance Product in final form intended for Commercialization in accordance with this Agreement.

1.88

“ Target Minimum Sales Price ” means a minimum unit price for an Alliance Product in each of the following geographic territories: North America, Japan, Europe (to the extent of the member countries of the European Union and Switzerland), and the rest of the world.

1.89

“ Tax(es) ” means any and all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, excise, lease, severance, stamp, occupation, premium, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and penalties thereto imposed by any governmental or other taxing authority.

1.90

“ Technology ” means conceptions, ideas, innovations, discoveries, inventions, processes, machines, biological materials, formulae, equipment, compositions of matter, improvements, enhancements, modifications, technological developments, know-how, show-how, methods, techniques, systems, designs, production systems and plans, software, documentation, data, programs and information (irrespective of whether in human or machine-readable form) and works of authorship, whether or not patentable, copyrightable, or susceptible to any other form of legal protection.

1.91

“ Termination Date ” means the date of expiration of this Agreement pursuant to Section 17.1 or the date of termination pursuant to any other provision of this Agreement.

1.92

“ Third Party ” means an individual, corporation or other entity other than the Parties or their Permitted Affiliates.

1.93

“ Total Control ” and cognates thereof mean direct or indirect ownership of one hundred percent (100%) of the voting equity (other than a nominal number of shares that may be owned by management or directors as directed by applicable law).

1.94

“ Valid Claim ” means a claim in any issued, active, unexpired patent which has not been withdrawn, cancelled, lapsed or disclaimed, or held unpatentable, invalid or generally unenforceable by a non-appealed or nonappealable final decision by a court or other appropriate body of competent jurisdiction.

1.95

“ Work Plan(s) ” means a written description which sets forth in reasonably specific detail the description and specification of the product to be developed pursuant to a JRB-approved NPCD; the plans for research, Development, clinical, regulatory, manufacturing and Commercialization activities, including use of any Third Party to perform material portions of such activities; the timeline, work plan budget, and expected distribution of responsibilities for such activities (including identification of the proposed Supplier and Distributor of the contemplated Alliance Product); the expected commercial return from such product or project; the estimated cost of the proposed Alliance Product; the estimated market size; and any information that may impact the ability of either Party to Commercialize the proposed Alliance Product, such as the availability or cost of raw materials or Third Party intellectual property, contract restrictions or royalty obligations. A Work Plan will generally be in the form attached hereto as Exhibit 1.95.

Article II   –   EXCLUSIVITY

2.1

Exclusivity Obligations . Except as otherwise provided in this Agreement, during the term of this Agreement, the Parties will work exclusively with each other in all activities pursuant to a JRB-approved NPCD – Feasibility, Development, submissions of Regulatory Filings, manufacturing, and Commercialization activities in the Exclusive Areas and with respect to the Alliance Products. In accordance with the terms of this Agreement, each Party (a) will use its experience and will exert commercially reasonable efforts to maximize sales of and profits from Alliance Products, (b) will share relevant information with respect to the Exclusive Areas; provided , however , that a Party will have no obligation, unless required by law, to share information about a product or service in the Exclusive Areas that such Party does not intend to Commercialize before termination or expiration of this Agreement pursuant to Section 17.1 or 17.6, and (c) will not exchange information, discuss any collaboration or work with a Third Party which is a Commercial Entity regarding products or services in the Exclusive Areas or regarding Alliance Products unless, prior to such exchange, discussion or activity, the Party has given notice to the other Party of termination pursuant to Section 17.6. The prohibition of Section 2.1(c) will not apply to [**********] unless they are Alliance Products or [**********] that solely perform [**********].

2.2

Exceptions to Exclusivity . Notwithstanding anything to the contrary in Section 2.1 above:

(a)

Each Party will have the right to continue to perform, outside the Alliance Program, its obligations under bona fide agreements with Third Parties in effect as of the effective date of the Prior Alliance Agreement, such obligations in the Alliance Field being listed in Exhibit 2.2 hereto (except for routine confidentiality agreements, material transfer agreements and other standard agreements executed by a Party in the ordinary course of business, which agreements have no material impact on the Parties’ ability to perform their obligations under this Agreement). Any material amendments or any extensions to such agreements after the Effective Date will be subject to prior written consent of the other Party, which consent will not be unreasonably withheld or delayed; provided , however , that

neither Party will be obligated to obtain the prior written consent of the other Party to amend or extend the agreements listed in Exhibit 2.2(a) if such amendment or extension does not include activity in the Exclusive Areas.

(b)

Each Party, without notice to or cooperation of the other Party, and solely at its own cost, may independently conduct research and development directed to products or services in the Exclusive Areas; provided, however , that any such product or service must be the subject of a NPCD-Development proposed to the JRB pursuant to Section 4.2 before any Development, Regulatory Filings, manufacturing or Commercialization activities. A Party may conduct any activities subject to this Section 2.2(b) without notice to the other Party or JRB approval of such activity after notice to the other Party of termination of this Agreement pursuant to Section 17.6.

(c)

Either Party will have the right to continue to develop, manufacture and Commercialize General Purpose Instruments or Instruments labeled for “Research Use Only” and General Purpose Reagents outside of the Alliance Program.

2.3

Outside Exclusive Areas . Except as otherwise provided in this Article II and Article IV of this Agreement, each Party may work alone or with any Third Party outside the Exclusive Areas and each Party may research, develop, manufacture and/or Commercialize any product or service outside the Exclusive Areas; provided , however ,

(a)

a Proposing Party (as defined in Section 4.2) conducting research or Development for a product or service in the Conditionally Exclusive Areas must submit an NPCD-Development to the JRB for review pursuant to Section 4.2 before commencing any submission of Regulatory Filing, manufacturing or Commercialization activities, except for [**********] in which a Third Party [**********] is involved, in which case the Proposing Party must use reasonable efforts to have any [**********] that results from such collaboration distributed through the Alliance Program; and

(b)

if the product or service is in the Optional Areas, the Proposing Party may, but is not required to, submit an NPCD to the JRB for review pursuant to Section 4.2.

(c)

If the non-Proposing Party accepts the NPCD described in Section 2.3(a) or 2.3(b), the subject product or service becomes an Alliance Product and is added to the Exclusive Areas pursuant to Section 1.39(g).

(d)

If the non-Proposing Party rejects the NPCD described in Section 2.3(a) or 2.3(b), the Proposing Party may develop and/or Commercialize the product or service which is the subject of the rejected NPCD as a Non-Alliance Product on its own or with a Third Party pursuant to Section 4.4(b). The Proposing Party will not have any obligation to share revenues from the Commercialization of such Non-Alliance Product or any right to seek reimbursement from the non-Proposing Party for any expenses associated with such Non-Alliance Product; provided , however , the Proposing Party will pay royalties to the non-Proposing Party if the

Non-Alliance Product uses any Alliance Technology or Alliance Patent Rights; and further provided , the Proposing Party and its Affiliates will pay to the non-Proposing Party, in accordance with Section 10.14, a royalty on Net Sales of Non-Alliance Products at a rate not greater than [**********] percent ([**********]%).

(e)

If a Party wishes to Commercialize an Alliance Product outside the Alliance Field, it must obtain the prior written consent of the other Party, which consent will not be unreasonably withheld or delayed, except such written consent will not be required to the extent such Alliance Product is used in a bona fide clinical study with respect to a therapeutic product.

2.4

[**********] . Until June 30, 2007, the Parties will work exclusively with each other to consider whether products and services in the Alliance Field for [**********]. Unless otherwise agreed by the JRB pursuant to this Section 2.4, such products and services will be excluded from the Alliance Field as of July 1, 2007. The Parties will work together to complete an assessment of the strategy and costs to enter the [**********] in Europe and Japan, with such assessment to be completed by April 1, 2007. The JRB will review the assessment and determine by June 30, 2007 if the Alliance Program will fund the Development of products or services to enter such [**********] in the Alliance Field in Europe and Japan. If the JRB approves funding for the Development of such products or services, [**********] applications would continue to be part of the Alliance Field. If the JRB does not approve such funding, [**********] applications would be excluded from the Alliance Field as of July 1, 2007, and each Party would be free to pursue, outside the Alliance Field, the Development and Commercialization of [**********] products and services on its own or with a Third Party.

2.5

QSR Claims; Commercialization of Non-Alliance Products and Reagents for Research Use Only .

(a)

The Parties must Commercialize through the Alliance Program all Alliance Products which have been designed or manufactured under the QSR Standard through the Alliance Program.

(b)

Each Party may Commercialize directly or through a distributor any product in the Alliance Field that is outside the Exclusive Areas and Conditionally Exclusive Areas, provided that such product is a Non-Alliance Product. In addition, each Party may Commercialize directly or through a distributor any primers or probes outside the Alliance Field, provided that such primers or probes (i) are prominently labeled “For Research Use Only. Not For Use In Diagnostic Procedures” or any comparable label subsequently required by applicable Regulatory Authority, (ii) are not claimed by the Party that they were manufactured under the QSR Standard, except that they may be claimed to have been manufactured under a certified quality system with traceable documentation, and (iii) are not Commercialized by the Party in a manner that Facilitates use as a Competing Product. Further, each Party will use commercially reasonable efforts

to cause its distributors to label or promote such primers and probes in accordance with the terms of this Section 2.5(b).

(c)

Notwithstanding Section 2.5(b) to the contrary, if a member of the JRB of one Party learns or is given notice by the other Party that primers or probes distributed by or for the one Party and labeled “For Research Use Only” or any comparable label are being used by a Third Party purchaser “off label” as a Competing Product, the Parties will discuss an appropriate course of action for such alleged violation of Section 2.5(b), which may include (i) discontinuance of sales of the specific primers and probes to such Third Party purchasers or (ii) sharing with the other Party all profits derived from the sales of the primers and probes that were used as Competing Products. “For Research Use Only” primers and probes sold for use for the same Clinical Intent as an Alliance Product will not be a Competing Product except as provided in Section 1.26.

(d)

In the event the Parties cannot agree that a violation of Section 2.5(b) has occurred, or on an appropriate course of action to remedy the violation, or if the supplying Party fails to perform its obligations which are the agreed –upon remedies for the violation, the other Party, by invoking the binding alternative dispute resolution (“ ADR ”) proceeding in accordance with Article XVIII of this Agreement, may seek a determination as to whether the activities of the supplying Party or its Third Party purchasers are violations of Section 2.5(b) and an appropriate remedy for such violation, which remedy shall make, to the extent possible, the injured Party whole.

(e)

Section 2.5(c) will not apply where the primers or probes being used by Third Party purchasers as Competing Products were first distributed to such Third Party purchasers prior to the NPCD-Development directed to the Alliance Product being approved by the JRB. For the avoidance of doubt, Section 2.5(e) applies only to sales of such primers or probes to those Third Party purchasers who purchased such primers or probes prior to the JRB approval of the applicable NPCD-Development.

2.6

OEM Alliance Products . For current and replacement [**********] products (“ OEM Alliance Products ”) which are not within the[**********], which current OEM Alliance Products are set forth in Exhibit 2.6, Abbott will pay to Applera, in accordance with Section 10.14(b), a royalty of (a) [**********] percent ([**********]%) of Net Sales of all such [**********] OEM Alliance Products during the term of this Agreement; and (b) [**********] percent ([**********]%) of Net Sales of all such [**********] OEM Alliance Products sold during calendar year [**********] and [**********] percent ([**********]%) of Net Sales of all such [**********] OEM Alliance Products sold from [**********] through the remaining term of this Agreement. As consideration for such royalty payments, Applera will not sell or assist others in selling products in the Alliance Field which are Competing Products with the OEM Alliance Products. Abbott will bear all expenses associated with Development, manufacture, and Commercialization of OEM Alliance Products incurred after the Effective Date and Applera will not be charged for any such expenses. For the purposes of this Section 2.6,

a “replacement product” is any product that detects the same analyte and essentially functions in the same manner as a current OEM Alliance Product. For the avoidance of doubt, a non-sequencing based [**********] product is not a Competing Product with any OEM Alliance Product. Any products which are subject to the royalty payments pursuant to this Section 2.6 will not be Alliance Products for the purposes of this Agreement.

Article III   –   JOINT REVIEW BOARD

3.1

Composition . The Joint Review Board (the “ JRB ”) will comprise three (3) named representatives of Abbott and three (3) named representatives of Applera. Each Party will designate one (1) of its JRB representatives to serve as co-chair of the JRB. Each Party will notify the other Party in writing of its initial representatives to the JRB within ten (10) days after the Effective Date, and each Party may substitute one (1) or more representatives from time to time effective upon written notice to the other Party. The members of the JRB may establish subcommittees to oversee particular projects or activities from time to time, and such subcommittees will be constituted as the JRB agrees.

3.2

Responsibilities . The JRB will be responsible for:

(a)

reviewing NPCDs proposed by either Party for inclusion in the Alliance Program and determining whether such NPCDs and will become Alliance Products;

(b)

developing and implementing the Initial Activities and all subsequent Work Plans and, subject to Section 7.1, allocating responsibility for Alliance Program activities between the Parties, taking into consideration their relevant expertise and available resources;

(c)

monitoring and reviewing the progress of the Alliance Program and the results thereof;

(d)

recommending to the Parties any modifications to the Initial Activities and subsequent Work Plans;

(e)

facilitating an effective exchange of information between the Parties regarding the Alliance Program;

(f)

establishing procedures by which the Parties evaluate on an individual basis potential professional publications which may disclose Confidential Information of the other Party;

(g)

evaluating additional technologies, assets, products or other commercial opportunities that may be necessary or useful to the Alliance Program and recommending the acquisition or in-licensing of these opportunities to the Parties;

(h)

approving Alliance Accounting Policies and any subsequent changes thereto, budgets, allowed budget deviations and levels of expenditure by the Parties in the Alliance Program;

(i)

approving termination of Alliance Products and NPCDs pursuant to Section 17.2;

(j)

approving the disposition of an Alliance Product(s) to a Third Party, subject to agreement by the Parties as to allocation of compensation for their respective investment in such Alliance Product pursuant to Section 4.13;

(k)

approving Party proposals regarding Development, acquisition or distribution of Instruments pursuant to Article VIII;

(l)

managing preparation by the Parties of and approving the quarterly statements of Revenues and Allowable Expenses and of Net Investment, as set forth in Sections 9.1 and 9.2, respectively;

(m)

managing preparation by the Parties of and approving quarterly and annual combined statements of Revenues, Allowable Expenses and Net Investment of the Alliance Program;

(n)

overseeing the Commercialization activities of the Alliance Program;

(o)

determining a Target Minimum Sales Price and recommending the average selling price for each Alliance Product in each geographic area specified in Section 1.88;

(p)

managing preparation by the Parties of and annually approving a rolling three-year business plan that addresses each of the JRB responsibilities as set forth in this Section 3.2;

(q)

consistent with and subject to Articles XI, XII and XIII of this Agreement, overseeing intellectual property used, created by or impacting the Alliance Program, including, without limitation: (i) assigning responsibility for the preparation, filing, prosecution and maintenance of Joint Alliance Patent Rights; (ii) reviewing all invention disclosures arising under or relating to the Alliance Program for the purposes of making patent application filing recommendations to the Parties and for determining proper inventorship and ownership of such inventions; (iii) establishing policies for the filing of foreign patent applications arising from the Alliance Program; (iv) creating and approving, as necessary, a budget for management of intellectual property issues; (v) determining which Alliance Products should be marked with which Patent Right numbers; and (vi) addressing any other intellectual property issues referred to the JRB pursuant to the terms of this Agreement; and

(r)

reviewing the [**********] markets assessment set forth in Section 2.4 and determining by June 30, 2007 whether the Alliance Program will fund the

Development of products or services to enter such markets in the Alliance Field in Europe and Japan.

3.3

Meetings . Unless otherwise mutually agreed to by the co-chairs, the JRB will meet at least once following each calendar quarter during the term of this Agreement, on dates at least forty-five (45) days after the end of each calendar quarter and at such times as agreed to by the co-chairs of the JRB, alternating between Des Plaines, Illinois, and Alameda, California, or such other locations as the Parties mutually agree. Upon the mutual agreement of the co-chairs, any such meeting may be conducted by telephone or videoconference. At such meetings, the JRB will discuss the activities conducted under the Alliance Program and the results thereof and any matters referred to it within the scope of its responsibilities as set forth in Section 3.2. Each Party may permit such visitors to meetings of the JRB as the Parties mutually agree. Each Party will be responsible for its own costs in connection with the meetings of the JRB.

3.4

Decisions . The JRB will be deemed to have made a decision only following written agreement of the co-chairs. Any dispute or deadlock within the JRB will be finally resolved in the manner specified in Article XVIII. To the extent reasonably necessary to any decision, the JRB may retain appropriate expert assistance, the costs of which will be shared equally by the Parties.

3.5

Minutes . Within ten (10) business days following each JRB meeting, a representative to the JRB of the Party hosting such meeting (who was present at such meeting) will prepare and provide to each Party a copy of the minutes of such meeting which will summarize the decisions of the JRB. Such minutes will be final and enforceable under this Agreement only after being adopted by the written acceptance by the JRB co-chairs.

3.6

In-License Decisions .

(a)

In the event performance pursuant to the Alliance Program may require rights to intellectual property, Materials and/or Technology from a Third Party, and the JRB decides to pursue such rights, the JRB will decide what rights are reasonably necessary and which Party will negotiate for such rights. The JRB also will decide on allocation between the Parties of the costs associated with obtaining and maintaining such rights. Such rights so obtained will be considered Joint Alliance Technology or Joint Alliance Patent Rights, as appropriate.

(b)

In the event the JRB cannot agree whether the Parties should negotiate for or obtain such rights, then either Party may, upon written notice to the other Party, independently pursue such rights at its sole expense and such rights will be Independent Patent Rights and Independent Technology, as the case may be, of the acquiring Party. If, as a result, the acquiring Party is required to pay monetary consideration to the Third Party for the sale or use of an Alliance Product, the acquiring Party may seek to have such monetary consideration included as Allowable Expenses. If the other Party disputes the necessity of the license for the Alliance Product or the reasonableness of any part of the monetary consideration, the acquiring Party may submit the issues to ADR under Article

XVIII of this Agreement. Whatever monetary consideration is determined by the ADR to be reasonable and necessary to permit sale or use of the Alliance Product, up to the total payable by the acquiring Party to the Third Party for sale or use of the Alliance Product, will be Allowable Expenses. The acquiring Party will be solely responsible for any difference between the monetary consideration determined by ADR and the monetary consideration the acquiring Party agreed to pay the Third Party. In the event the other Party does not pay any monetary consideration to the acquiring Party during the Alliance Program for the license under this Section 3.6(b), then the other Party will not have any rights under such license after termination of this Agreement.

(c)

In the event a Party acquires or has the opportunity to acquire from a Third Party tissue or blood samples or other biological material that may be useful in performance of the Alliance Program, and such material is available in excess of material needed by the Party for Non-Alliance Products or products outside of the Alliance Field, the Party may offer such Material to the JRB. Any such offer must include a description of the material, a summary of its potential usefulness to the Alliance Program, the monetary costs associated with acquiring and using the offered material and a description of any contractual restrictions on or obligations associated with using the offered material in the Alliance Program. The JRB will decide to accept or reject the offer within sixty (60) days after the required information is submitted to the JRB. If the JRB accepts the offer, the monetary costs associated with acquiring and using the offered material will be Allowable Expenses. If the JRB rejects the offer, subject to the terms and conditions of this Agreement, the Party making the offer may use the material for its own benefit and at its own cost.

Article IV   –   ALLIANCE PROGRAM

4.1

Initial Program Efforts . At its first meeting after the Effective Date, the JRB will terminate all pending NPCDs outside the Exclusive Areas. Thereafter, each Party may bring NPCDs in any area within the Alliance Field to the other Party as set forth below. The NPCDs which were approved by the JRB as indicated in the minutes of the JRB for its meeting of September 1, 2005, as listed on Exhibit 4.1, will continue according to their existing Work Plans.

4.2

New Product Concept Documents: Feasibility and Development . During the term of this Agreement, each Party is entitled to propose NPCDs (the “ Proposing Party ”) to the JRB that will be subject to the following procedures:

(a)

Feasibility . The Proposing Party, at any time, may submit an NPCD – Feasibility to each member of the JRB. If rejected or not acted on by the non-Proposing Party within sixty (60) days after receipt, the Proposing Party may pursue the proposed product or service pursuant to Section 4.4. If accepted by the non-Proposing Party, the Proposing Party may explore the feasibility of such proposed product or service for a period of up to twelve (12) months, with joint funding

from the other Party for such evaluation in the NPCD – Feasibility. The outcome of such feasibility evaluation will result in one of the following activities: (i) the Proposing Party submits an NPCD – Development pursuant to Section 4.2(b) or (ii) the Parties mutually agree not to further pursue the proposed product or service; provided , however , the Proposing Party must submit an NPCD – Development if the feasibility evaluation has been completed under an NPCD – Feasibility with joint funding and the Proposing Party intends to develop the subject product or service in the Alliance Field.

(b)

Development. The Proposing Party, either after completion of the feasibility study described in an NPCD – Feasibility or without first submitting an NPCD – Feasibility, may submit an NPCD – Development to the JRB. The Proposing Party will submit to each member of the JRB an NPCD – Development and Work Plan for a proposed product or service. Within sixty (60) days after receipt of the NPCD – Development and Work Plan, the non-Proposing Party will make its final decision whether to designate the proposed product or service as an Alliance Product, and shall so notify the JRB in writing, whereupon the JRB immediately will determine that such proposed product or service has become an Alliance Product.

(c)

After the JRB has determined that a proposed product or service has become an Alliance Product and added such Alliance Product to the R&D Plan, such Alliance Product will be added to the Exclusive Areas unless or until the project is terminated by the JRB pursuant to Section 17.2.

(d)

The date on which the non-Proposing Party approves an NPCD in accordance with Section 4.2(a) or 4.2(b) will set the start date for calculating expenses incurred by the Proposing Party, for the purpose of calculating the [**********] share of Development Costs, including costs of a feasibility evaluation pursuant to the accepted NPCD-Feasibility where applicable, to be reimbursed to the Proposing Party. Any expenses incurred by the Proposing Party prior to approval by the non-Proposing Party of an NPCD in accordance with Section 4.2(a) or 4.2(b) will not be shared by the Parties, and will be borne solely by the Proposing Party.

(e)

The non-Proposing Party may reject an NPCD for any reason. Once a non-Proposing Party declines to include a proposed product or service as part of the Alliance Program, that Party cannot later include such proposed product or service in the Alliance Program. The non-Proposing Party which rejected the NPCD may not develop or Commercialize in the Exclusive Areas or Conditionally Exclusive Areas the product or service which was the subject of the rejected NPCD unless such rejecting Party submits its own NPCD to the JRB and such NPCD is accepted by the other Party. However, if the rejected NPCD is directed to a product or service in the Optional Areas, both the non-Proposing Party and the Proposing Party may independently develop and Commercialize such product or service as Non-Alliance Products in the Optional Areas.

(f)

If, after rejection of any NPCD – Development, the Proposing Party fails to diligently pursue Development of the Non-Alliance Product specified in the rejected NPCD – Development within one (1) year after its rejection, then such NPCD – Development will no longer be considered a rejected NPCD, and, except for products or services in the Optional Areas, either Party must resubmit the NPCD to the JRB for reconsideration before any rights pursuant to Section 4.4 may be available to the Parties.

4.3

Acquisition of Products or Companies in the Alliance Field. If, during the term of this Agreement, a Party acquires or plans to acquire from a Third Party, directly or as part of an acquisition of a Third Party, a product or service ( “Acquired Product” ) that is in the Exclusive Areas or is a Competing Product, the Party must either divest itself of such Acquired Product or reach agreement with the other Party on terms by which the Acquired Product would become an Alliance Product. If the Acquired Product is in the Conditionally Exclusive Areas, the acquiring Party must offer to make the Acquired Product an Alliance Product under terms and conditions to be negotiated with the other Party. In all events, whether the Acquired Product is in the Exclusive Areas or Conditionally Exclusive Areas or is a Competing Product, the acquiring Party will propose reasonable terms and conditions to the non-acquiring Party that do not place the non-acquiring Party in a less advantageous position as a result of the proposed acquisition of the Acquired Product. If the Parties do not agree on such terms and conditions, the matter will be resolved by binding ADR in accordance with Article XVIII. If the Acquired Product is in the Optional Areas, then the acquiring Party may, but is not obligated to, negotiate with the other Party to make the Acquired Product an Alliance Product. If the Acquired Product is a General Purpose Instrument or an Instrument labeled “For Research Only”, this Section 4.3 will not apply. If the Acquired Product is an Instrument registered with an applicable Regulatory Authority, the provisions of Section 8.8(b) will apply with respect to Instruments registered for use in the Exclusive Areas and the Conditionally Exclusive Areas.

4.4

Rejected NPCD .

(a)

In the event the non-Proposing Party rejects an NPCD in the Exclusive Areas, or the JRB fails to make a decision regarding an NPCD in the Exclusive Areas within the applicable time frame set forth in Section 4.2, then the Proposing Party either may (i) proceed at its own cost with the research and Development of the product or service specified in such rejected NPCD, so long as it is not a Competing Product, or (ii) abandon the product or service proposed in such NPCD. If the Proposing Party proceeds with the research and/or Development of such product or service and it is Commercialized, such product or service will become an Alliance Product as of the date of first Commercialization. The rejecting Party will pay to the Proposing Party, pursuant to Section 10.14(b)(vii) and (viii), [**********] percent ([**********]%) of Incremental Net Sales of such Alliance Product until the Proposing Party has recovered [**********] percent ([**********]%) of the Proposing Party’s Development Costs for such Alliance Product, including any feasibility costs where an NPCD-Feasibility was

rejected by the other Party. The date on which the NPCD is rejected by the other Party will set the start date for calculating the [**********] percent ([**********]%) share of the Development Costs to be reimbursed to the Proposing Party pursuant to this Section 4.4(a).

(b)

In the event the non-Proposing Party rejects an NPCD in the Conditionally Exclusive Areas or the Optional Areas, or the JRB fails to make a decision regarding an NPCD in the Conditionally Exclusive Areas or the Optional Areas within the applicable time frame set forth in Section 4.2, then, subject to Section 4.5, the Proposing Party may proceed with the research, Development, submission of Regulatory Filing, manufacturing and/or Commercialization activities with respect to any product or service specified in such NPCD as a Non-Alliance Product.

(c)

For the avoidance of doubt, a Party may conduct research, Development, submission of Regulatory Filing, manufacturing and/or Commercialization activities with respect to products and services in the Optional Areas, except where such product or service is a Competing Product, without first submitting to the JRB or obtaining a rejection of an NPCD.

(d)

In the event that the other Party rejects an NPCD-Feasibility in the Optional Areas or the Conditionally Exclusive Areas and subsequently accepts an NPCD – Development for the same product or service, the non-Proposing Party will pay to the Proposing Party [**********] percent ([**********]%) of Incremental Net Sales of such product or service in the same manner as set forth in Section 4.4(a) until the Proposing Party has recovered [**********] percent ([**********]%) of its costs of the applicable feasibility studies.

4.5

Non-Alliance Product .

(a)

The rejecting Party will not take any action intended to prevent or frustrate the Proposing Party’s ability to Commercialize a Non-Alliance Product. If a Non-Alliance Product requires use of Alliance Products for which the other Party is the Supplier, the other Party will continue to manufacture such Alliance Products for the Proposing Party under terms and conditions similar to those applicable to the sale of such Alliance Products to other customers, including providing service and support as required by Section 7.5. The other Party will not make a modification of its then-current Instruments or then-current Reagents which has or is likely to have the effect of rendering incompatible the Non-Alliance Product.

(b)

If, pursuant to Section 4.2, a Party rejects an NPCD and the Proposing Party wishes to Commercialize in the Conditionally Exclusive Areas such Non-Alliance Product for a different or additional Clinical Intent than was specifically identified in the rejected NPCD, then the Proposing Party must submit a new NPCD, but only to the extent of the different or additional Clinical Intent. This new NPCD will be subject to all of the terms and conditions regarding the review process and disposition of an NPCD.

4.6

Work Plans . In conjunction with its approval of an NPCD, the JRB will accept, modify or require the Proposing Party to modify the proposed Work Plan submitted by the Proposing Party. Once accepted by the JRB, a Work Plan may not be modified except as set forth in writing and duly authorized by the JRB.

4.7

R&D Plan.

(a)

Within thirty (30) days after the Effective Date, the Parties will have agreed on a detailed R&D Plan, including the Initial Activities to be pursued pursuant to the Alliance Program (the “ Initial R&D Plan ”), as set forth in Exhibit 4.7(a)(i) attached hereto. In addition, the Parties will have agreed on an initial budget for each of the first three (3) Contract Years directed to Development Costs associated with the Initial R&D Plan (the “ Initial R&D Plan Budget ”), as set forth on Exhibit 4.7(a)(ii). The Initial R&D Plan Budget will be binding on the Parties for the first Contract Year and will [**********] by the Parties, until the JRB approves NPCDs and reallocates such Development Costs. The Initial R&D Plan Budget for the second Contract Year will be [**********] percent ([**********]%) of the Initial R&D Plan Budget for the first Contract Year, and for the third Contract Year will be [**********] percent ([**********]%) of the Initial R&D Plan Budget for the first Contract Year; these percentages will be binding on the Parties unless otherwise modified by the JRB.

(b)

The Initial R&D Plan Budget will include maximum allowed spending in the Exclusive Areas by each Party during each Contract Half Year and Contract Year and will be allocated on an Alliance Product-by-Alliance Product basis..

(c)

Each Party is responsible for any Development Costs incurred that exceeds its maximum allowed levels during a Contract Half Year and Contract Year as set forth in the Initial R&D Plan Budget and any subsequent R&D Plan Budget. If a Party spends less than projected during a Contract Year, such reduced spending will accrue to the benefit of both Parties during such Contract Year; provided , however , if a Party spends less than projected in any Contract Half Year during a Contract Year, its unspent funds will be carried over to subsequent Contract Half Year within such Contract Year and will be added to that Party’s subsequent Contract Half Year’s allowance within such Contract Year. The Parties will exchange reports of actual Development Cost spending under the R&D Plan in each Contract Half Year within forty-five (45) days after the end of such Contract Half Year, and the Parties shall agree on a binding R&D Plan Budget for the subsequent Contract Half Year. Each Party will use its best efforts to support the R&D Plan in the Exclusive Areas.

(d)

The JRB will update the Initial R&D Plan by the first day of the second Contract Year, for the following three Contract Years, including the Initial R&D Plan Budgets by Contract Year and Contract Half Year. Thereafter, the JRB shall update the R&D Plan and the R&D Plan Budget directed to Development Costs at least annually by each subsequent January 1 during the term of this Agreement,

for the subsequent three (3)-Contract Years. The first Contract Year of each R&D Plan will include fixed Development Cost limits allocated to each Party and detailed responsibilities for each Party, and the second and third Contract Years of each R&D Plan will contain general responsibilities and maximum R&D Plan Budgets for such Contract Years.

(e)

Each Party may request reimbursement from the Alliance Program of any Development Costs incurred in excess of the amount allocated to that Party for a Contract Year by written request to the JRB. Any such request must be supported by appropriate evidence of such expenditures and the reasons therefor. The other Party, through the JRB, in its sole discretion may reject any such request.

4.8

Technical Assistance . Promptly following the designation of an Alliance Product, each Party will provide to the other Party, pursuant to the applicable Work Plan, and in accordance with the responsibilities of each Party, such Technology, including Confidential Information, as reasonably necessary to conduct the Work Plan. The cost of Materials provided by one Party to another pursuant to this Section 4.8 will be Allowable Expenses.

4.9

Conduct of the Alliance Program . During the term of this Agreement, each Party will conduct its obligations under the Alliance Program in accordance with the applicable Work Plan(s), and will use commercially reasonable efforts to accomplish the objectives thereof. Each Party will provide the personnel, Materials, equipment and other resources reasonably necessary to conduct its obligations under the Work Plan(s) for the Alliance Program. Subject to Section 2.3, each Party may employ Third Parties as contractors, agents or sublicensees to perform its responsibilities under a Work Plan; provided , however , if the Party proposes to disclose the other Party’s Confidential Information to such Third Party, the Party must first obtain the other Party’s approval in accordance with Articles X and XIV. Each Party will perform its obligations under the Alliance Program (whether itself, or with or through a contractor, agent or sublicensee) in accordance with high scientific and professional standards, and in compliance in all material respects with the requirements of applicable laws, regulations, current good laboratory practices and the QSR Standard.

4.10

Records . Each Party will maintain records, in sufficient detail and in a good scientific, professional and business-like manner, appropriate for patent, manufacturing, quality and Regulatory Approval purposes, which records must be complete and accurate and must fully and properly reflect its work done, results achieved and costs and expenses incurred in the performance of each Work Plan. Non-financial records related to the performance of a Party’s obligations, and financial records related to Revenues received and Allowable Expenses incurred within the Alliance Program through the most recently completed calendar quarter, will be made available to the other Party within forty-five (45) days of any reasonable written request by such other Party. Each Party will maintain such records and the information of the other Party contained therein in confidence in accordance with Article XIV.

4.11

Reports . Each Party will keep the other Party informed of the progress of its activities under each Work Plan. Within forty-five (45) days following the last day of each Contract Half Year during the term of this Agreement, and within thirty (30) days following termination of each Work Plan, each Party will prepare, and provide to each member of the JRB, a reasonably detailed written summary report which will describe its work done and results achieved in the performance of each Work Plan.

4.12

Commercialization of Alliance Products . Commercialization of an Alliance Product may not occur until the JRB agrees in writing that the Alliance Product is ready for Commercialization. The Supplier designated in the applicable Work Plan pursuant to Section 4.6 will provide written specifications and copies of the product labeling to each Party’s designee at a reasonable time prior to the decision on Commercialization and will propose to the JRB the Target Minimum Sales Price and an average selling price for the Alliance Product.

4.13

Disposition of Alliance Product . A Party may propose to the JRB the disposition of an Alliance Product or a line of Alliance Products to a Third Party. Any such proposal must include terms by which the other Party receives compensation for its investment in the Alliance Product(s) and for any Alliance Technology (to the extent it is Confidential Information) or Alliance Patent Rights solely-owned by the other Party that are required for Commercialization of the Alliance Product(s). The other Party, pursuant to its participation in the JRB, may approve the proposal or seek different terms. The other Party may also offer to acquire the Alliance Product(s) on terms that reflect the Third Party’s offer and the other Party’s investment in the Alliance Product(s). If the other Party acquires the Alliance Product or line of Alliance Products, it will thereafter be a Non-Alliance Product. If the Parties cannot agree on the disposition of the Alliance Product or line of Alliance Products, the JRB must reject the proposal. The JRB may elect to terminate the Alliance Product or line of Alliance Products pursuant to Section 17.2.

Article V   –   REGULATORY APPROVALS

5.1

Regulatory Approvals . The Supplier of an Alliance Product will be responsible for the preparation, filing, presentation and maintenance of all Regulatory Filings and for obtaining Regulatory Approval for such Alliance Product, unless otherwise agreed to by the JRB. Notwithstanding the foregoing, the Parties will consult with each other to develop a regulatory strategy for each Alliance Product and the Supplier will in good faith consider recommendations of the other Party regarding regulatory strategy for such Alliance Product.

5.2

Regulatory Communications . To the extent practical in view of deadlines, the Supplier will provide the other Party (if requested in writing by the other Party) with an opportunity, in advance of submission to a Regulatory Authority, to review and comment on all Regulatory Filings (including written responses to any Regulatory Authority questions) regarding each Alliance Product. The Supplier will provide to the other Party copies of all material written communications from the Supplier to applicable Regulatory

Authorities (in advance of filing if possible), copies of all material written communications received by the Supplier from such Regulatory Authorities promptly after receipt, and any adverse finding or communication, oral or written, by such Regulatory Authority regarding each Alliance Product.

5.3

Product Inserts and Labeling . Unless otherwise agreed to by the JRB, the Supplier of an Alliance Product will be responsible for the text and regulatory compliance of all package labels, product inserts, operator manuals and end-user training materials used in connection with the Commercialization of such Alliance Product. All labels and labeling will prominently identify the Supplier as the manufacturer of such Alliance Product and the Distributor for each Alliance Product. If the Supplier and Distributor are the same Party, the JRB will determine how the other Party will be identified on all labels and labeling. To the extent a Party is subject to contractual obligations or restrictions as of the Effective Date that may have an impact on the obligations set forth in this Section 5.3, that Party will generally describe such obligations and restrictions to the JRB prior to a JRB decision on Commercialization of an affected Alliance Product.

5.4

Inspection and Audit of Supplier . The Supplier of an Alliance Product will allow representatives of the other Party to inspect and audit each facility at which the Supplier manufactures such Alliance Product, but only to the extent related to Alliance Products, upon reasonable notice during normal business hours, not more than once in any twelve (12) month period. The Supplier will use its commercially reasonable efforts to notify the other Party within three (3) business days after any Regulatory Authority notifies it of any impending inspection or audit of any such facility. The Supplier will notify the other Party in writing of the results of such inspection or audit promptly after such inspection or audit has occurred. The Supplier will provide the other Party with copies of any documentation of action resulting therefrom, and all correspondence relating thereto.

5.5

Inspection and Audit of Distributor . In the event a Regulatory Authority notifies the Distributor of an impending audit and such audit involves any Alliance Product being distributed by the Distributor, regardless of which Party is the Supplier for such Alliance Product, the Distributor will notify the other Party promptly after receipt of such notice. The Distributor will notify the other Party in writing of the results of such inspection or audit promptly after such inspection or audit has occurred. The Distributor will provide the other Party with copies of any documentation of action resulting therefrom, and all correspondence relating thereto.

5.6

Localization . The Supplier of an Alliance Product will provide translations in all languages as agreed to by the JRB and implement such translations by modifying the documentation and labeling of such Alliance Products and translating all screens and displays into such languages so that they comply with the local regulatory requirements for sale and clinical use in such countries. The Supplier of an Alliance Product also will translate all such Alliance Product’s required technical product literature, including, without limitation, operator manuals, service manuals, training manuals and labeling into

such languages as approved by the JRB. Additional languages will be subject to mutual agreement of the Parties.

5.7

Regulatory Compliance And Related Matters . Within ninety (90) days after the Effective Date, quality/regulatory representatives from both Parties will meet to define and document processes for exchange of customer complaints, trends or other information concerning Alliance Products necessary to be shared between the Parties to ensure compliance with the Quality System Regulation provisions of the applicable Regulatory Authorities or other international agencies for conformity to QSR Standard, ISO and other applicable regulatory requirements. The document prepared pursuant to this Section 5.7 and subject to Section 5.8, also will define how notices, corrective actions or recall of Alliance Products will be handled. The recommendations of the quality/regulatory representatives will become effective when approved by the JRB. These processes may be modified from time to time in writing by the JRB.

5.8

Field Actions .

(a)

Any Field Action with respect to an Alliance Product identified in Section 4.1 as having been an Existing Product will be the sole responsibility and at the sole cost of the Party that provided the Existing Product to the Alliance Program for the entire duration in which such product is an Alliance Product; provided , however , in the event the Parties determine that such Field Action is as a result of the gross negligence of the other Party, then in such case, the other Party will be solely responsible for any Field Action resulting from such gross negligence and at such Party’s sole cost. For purposes of this Agreement, “ Field Action ” means any product quality related communication to a customer or recall of the Alliance Product. In each instance, the Party responsible for the Field Action will consult with the other Party in as much in advance of the Field Action as is commercially reasonable.

(b)

Any Field Action with respect to an Alliance Product that was not converted from an Existing Product will be determined by the JRB and all associated costs will be considered Allowable Expenses; provided , however , in the event the Parties determine that a Field Action is as a result of the gross negligence of one Party, then in such case, such Party will be solely responsible for any Field Actions resulting from such gross negligence and at such Party’s sole cost, which cost will not be considered Allowable Expense.

(c)

With respect to Field Actions described in Section 5.8(b), in the event the JRB fails within a timely manner (depending on the regulatory requirements and breadth and scope of the issue, as early as twenty-four (24) hours) to approve an appropriate action plan to address a Field Action, either Party may initiate a Field Action unilaterally, with the understanding that the initiating Party will be responsible to pay all costs associated with such Field Action, subject to possible modifications pursuant to this Section 5.8. If the initiating Party determines that the costs for such Field Action should be either an Allowable Expense or an

expense of the other Party as a result of such Party’s gross negligence, then the initiating Party may request the JRB to appoint a neutral medical expert in the relevant area associated with the alleged cause of such Field Action. The appointed neutral medical expert will assess whether a Field Action was necessary and will determine as follows:

(i)

If the Field Action was necessary, then the costs paid by the initiating Party should be considered Allowable Expenses; or

(ii)

If the Field Action was not necessary, then the initiating Party must bear its own costs and such costs will not be considered Allowable Expenses.

The determination of necessity by the neutral medical expert is a binding and non-appealable decision.

(d)

In the event either Party believes that the cause of the Field Action was as a result of the gross negligence of the other Party, then a Party may take only the issue of allocation of costs to ADR for a neutral to decide pursuant to Article XVIII.

5.9

Existing Products . The Parties recognize that some of the provisions of this Article V may not apply to some Alliance Products that are identified in Section 4.1 as having been Existing Products. The Parties acknowledge and agree that any regulatory issues and liability resulting from such regulatory issues associated with such Alliance Products, which issues and liabilities arise from activities prior to such Existing Product’s conversion to an Alliance Product, will be the sole responsibility of the Party contributing such Existing Product.

Article VI   –   MANUFACTURING RIGHTS

6.1

Manufacturing . During the term of this Agreement, the JRB, in conjunction with acceptance of a Work Plan, will determine which Party will manufacture (or have manufactured) each Alliance Product or components thereof, taking into consideration the demonstrated expertise and cost to manufacture of each Party in the manufacture of similar products and any technology rights necessary to manufacture the Alliance Products.

6.2

Manufacturing Practices .

(a)

The Supplier of an Alliance Product will manufacture (or have manufactured) such Alliance Product in conformity with its written specifications and in accordance with all applicable laws and regulations. If a Supplier is unable to supply pursuant to the terms of this Agreement an FDA-approved or FDA-cleared Alliance Product due to non-compliance with FDA regulations, such event, subject to Sections 6.2(b) and (c), will be deemed a material breach of this Agreement and the other Party may terminate this Agreement pursuant to Section 17.4 or 17.5, as the case may be.

(b)

For purposes of this Section 6.2, such inability to supply will only be deemed material if: (i) the duration of the inability to supply is at least[**********]; and either (ii) the Sales Revenue generated by the affected Alliance Product is greater than [**********] percent ([**********]%) of the total Sales Revenue of all Alliance Products, both as measured during the [**********] period immediately preceding the inability to supply; or (iii) the affected Alliance Product provided at least [**********] in Margin (as defined below) to the Alliance Program during the [**********] period immediately preceding the inability to supply. For purposes of this Section 6.2, “ Margin ” means Distribution Margin (as defined below) of the affected Alliance Product, less: (A) Marketing and Advertising Expenses; (B) Selling and Promotion Expenses; and (C) General and Administrative Expenses. For further purposes of this Agreement, “ Distribution Margin ” means Sales Revenue and Service Revenue less Cost of Goods Sold.

(c)

As a condition to asserting material breach pursuant to this Section 6.2, the Party asserting material breach must have first in good faith provided the other Party with assistance as reasonably requested by such other Party to attempt to relocate the manufacturing of the affected Alliance Product to either: (i) a manufacturing location of the Party asserting the material breach; or (ii) a manufacturing location of a Third Party.

(d)

For purposes of this Section 6.2, a Party wishing to exercise its right to terminate pursuant to this Section 6.2, must provide the other Party with written notice of termination within sixty (60) days after the date such right accrued. Failure to provide written notice of termination within such sixty (60)-day period precludes such Party from asserting material breach thereafter for the same facts and circumstances giving rise to such right to terminate. Further, the sixty (60) day cure period set forth in Sections 17.4 and 17.5, as the case may be, will not be applicable to this Section 6.2.

6.3

Manufacturing Records . Upon the reasonable request of the other Party, the Supplier of an Alliance Product will provide the other Party with copies of, or access to, manufacturing information, including batch records, process flows, analytical performance data, quality assurance documents agreed to by the Parties pursuant to Sections 5.7 and 5.8 and other documentation, requested by the other Party regarding manufacture and quality control of an Alliance Product. The requesting Party will treat all such information disclosed as Confident