Bio-Rad Laboratories (BIO)

ARTICLE III.

POST-CLOSING MATTERS

3.1

Post-Closing Calculations.

(a)

As promptly as practicable after the Closing Date, Buyer will prepare in accordance with GAAP (as GAAP has been historically applied by the Subject Companies) and deliver to the Shareholders consolidated financial statements of the Subject Companies as of the close of business on the Closing Date (the “Closing Date Financial Statement”), including, without limitation, the related balance sheets (the “Closing Date Balance Sheet”) and the related income statements (the “Closing Date Income Statement”); provided that such Closing date Financial Statement, Closing Date Balance Sheet or Closing Date Income Statement shall be adjusted to delete the following liabilities or other obligations (i) amounts representing any Pre-May Applera Fees or the Post-April Applera Fees, (ii) any reserves or other entries representing any Applera Claims (it being understood that such adjustment shall not be made for accruals shown on the books of MJ Research for anticipated license fees from May 1, 2004 under the TCMA license agreement or the real time license agreement), (iii) amounts representing any Shareholder Loans listed on Schedule 7.12,  (iv) amounts relating to the Simson Litigation or the Senior Executive Dispute, if any, and (v) amounts to be paid by the Shareholders pursuant to this Agreement (including, without limitation, under their indemnification obligations pursuant to this Agreement) which represent items included on the Closing Date Financial Statements, (collectively, the “Adjustments”).  In the event that the Shareholders shall have delivered, within thirty (30) days after the date on which the Closing Date Financial Statements are delivered to the Shareholders, a written notice to Buyer requesting that such Closing Date Financial Statements be audited, Buyer shall deliver as promptly as commercially reasonable a report of Deloitte & Touche LLP, or such other nationally recognized firm of independent public accountants as may be chosen by Buyer (but not including Price Waterhouse Coopers or its successors and assigns) (“Buyer’s Accountants”), the cost of which shall be borne by Buyer, which report shall note any changes that need to be made to the Closing Date Financial

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Statements in order that such Closing Date Financial Statements present fairly in all material respects, in accordance with GAAP (as GAAP has been historically applied by the Subject Companies), the financial condition of such Subject Company as of the close of business on the Closing Date, as adjusted by the Adjustments.  The Shareholders and a firm of independent public accountants designated by the Shareholders (the “Shareholders’ Accountants”) will be entitled to reasonable access during normal business hours to the relevant records and working papers of the Subject Companies, Buyer and Buyer’s Accountants to aid in their review of the Closing Date Financial Statements.  The Closing Date Financial Statements shall be deemed to be accepted by each of the Shareholders and shall be conclusive for the purposes of the adjustment described in Section 3.1(b) hereof with respect to the Subject Companies except to the extent, if any, that the Shareholders’ Accountants shall have delivered, within thirty (30) days after the date on which the Closing Date Financial Statements are delivered to the Shareholders or, in the event that the Shareholders have requested that the Closing Date Financial Statements be accompanied by a report of Buyer’s Accountant, within thirty (30) days after the date on which such written report is delivered to the Shareholders, a written notice to Buyer stating each and every item to which the Shareholders take exception, specifying in detail the nature and extent of any such exception.  If a change proposed by the Shareholders is disputed by Buyer, then the Shareholders and Buyer shall negotiate in good faith to resolve such dispute.  If, after a period of thirty (30) days following the date on which the Shareholders give Buyer notice of any such proposed change, any such proposed change still remains disputed, then Buyer’s Accountants and Shareholders’ Accountants shall together choose an independent firm of public accountants of nationally recognized standing (the “Accounting Firm”) to resolve any remaining disputes.  The Accounting Firm shall act as an arbitrator to determine, based solely on presentations by the Shareholders and Buyer, and not by independent review, only those issues still in dispute.  The decision of the Accounting Firm shall be final and binding and shall be in accordance with the provisions of this Section 3.1(a).  The fees and expenses of the Accounting Firm, if any, shall be paid equally by Buyer and the Shareholders; provided, however, that, if the Accounting Firm determines that either party’s positions on all disputed issues are correct in all respects, then the other party shall pay the reasonable fees and expenses of the Accounting Firm in connection with the resolution of such disputes.  For purposes of the remainder of this Agreement, “Closing Date Financial Statements”, “Closing Date Balance Sheets” and “Closing Date Income Statements” shall mean the Closing Date Financial Statements, Closing Date Balance Sheets and Closing Date Income Statements as modified by agreement of the parties, whether or not with the assistance of the Buyer’s Accountants or the Shareholders’ Accountants or by the determinations of the Accounting Firm.

“Closing Adjusted Net Worth” shall mean, with respect to the Subject Companies taken as a whole, the amount by which the total assets exceed the total liabilities of the Subject Companies in the aggregate, as set forth on the Closing Date Balance Sheet.

In the event that the Closing Adjusted Net Worth is less than zero, the Shareholders shall pay to Buyer the amount by which the Closing Adjusted Net Worth is less than zero.

3.2

Closing Costs; Transfer Taxes.  The Shareholders shall be responsible for any stock transfer taxes and any sales, use or other taxes imposed by reason of the transfer of the capital stock of MJ GeneWorks to Buyer as provided hereunder and any deficiency, interest or penalty asserted with respect thereto.

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3.3

The Deferred Purchase Price.

(a)

From and after the Closing, Buyer shall properly account for and track the expenses and costs associated with the Applera Claims and the Post-April Applera Fees.  The Shareholders shall promptly send Buyer all invoices, receipts or other documents relating to the Applera Claims and the Post-April Applera Fees and otherwise cooperate with the reasonable requests of Buyer in accounting for and keeping track of such expenses and costs.

(b)

As promptly as practicable after the final resolution of the Applera Litigation and payment in full settlement of the Applera Claims and the Post-April Applera Fees, but in any event within the latter of (w) ninety (90) days after the execution of a settlement agreement relating to the Applera Litigation, (x) if the settlement is contingent upon an action to be taken by Applera, upon satisfaction of such contingency, (y) if the settlement is contingent upon an action to be taken by Bio-Rad, upon the passage of a commercially reasonable period of time for the taking of such action, and (z) if the settlement is contingent upon an action to be taken by any party other than Applera or Bio-Rad, upon the passage of a commercially reasonable period of time, Buyer shall prepare and deliver to the Shareholders a statement (the “Deferred Purchase Price Statement”) indicating:

(i)

The total amount paid to fully settle the Applera Claims;

(ii)

The total amount paid to fully settle the Post-April Applera Fees; and

(iii)

Buyer’s calculation of the Deferred Purchase Price pursuant to the formula set forth in Section 3.3(c) below.

(c)

The Deferred Purchase Price shall be calculated as follows:

(i)

if the sum of the Applera Claims and the Post-April Applera Fees in the aggregate (the “Aggregate Settlement Amount”) is equal to or less than $35 million, the Deferred Purchase Price shall be $15 million plus accrued interest on the Deferred Purchase Price from and after the Closing at the Applicable Federal Rate as defined in IRS Code Section 1274(d);

(ii)

if the Aggregate Settlement Amount is between $35 million and $50 million, the Deferred Purchase Price shall be an amount equal to the difference between $50 million and the Aggregate Settlement Amount, plus accrued interest on the Deferred Purchase Price from and after the Closing at the Applicable Federal Rate as defined in IRS Code Section 1274(d); and

(iii)

if the Aggregate Settlement Amount is equal to or greater than $50 Million, the Deferred Purchase Price shall be zero.

Promptly after the date of delivery of the Deferred Purchase Price Statement, Buyer shall deliver the Deferred Purchase Price, if any, to the Shareholders in cash by wire transfer of immediately available funds in the percentages set forth on Schedule 2.1(c) and to the accounts designated by the Shareholders set forth on Schedule 2.1(c).

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