Exhibit 10.86
 
ASSET PURCHASE AGREEMENT
 
ACQUISITION OF CERTAIN ASSETS OF
 
SYNBIOTICS CORPORATION
 
BY
 
DANAM ACQUISITION CORP.
 
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
 
DREW SCIENTIFIC GROUP PLC
 
DATED: AUGUST 30, 2002
 

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TABLE OF CONTENTS
 

         
Page

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ARTICLE 1.  DEFINITIONS
  
1
           
        1.1
  
Certain Defined Terms
  
1
        1.2
  
Other Definitions
  
4
           
ARTICLE 2.    PURCHASE AND SALE OF ASSETS
  
5
           
        2.1
  
Sale of Assets
  
5
        2.2
  
Assumption of Liabilities
  
7
        2.3
  
Purchase Consideration
  
8
        2.4
  
Time and Place of Closing
  
9
        2.5
  
Transfer of Subject Assets
  
9
        2.6
  
Delivery of Records and Contracts
  
9
        2.7
  
Further Assurances
  
9
        2.8
  
Other Closing Deliveries
  
10
        2.9
  
Allocation of Purchase Price
  
11
        2.10
  
Employees
  
11
        2.11
  
Correspondence, Seller Accounts Receivable, etc
  
11
        2.12
  
Public Announcements; Company Literature
  
11
           
ARTICLE 3.    REPRESENTATIONS AND WARRANTIES OF SELLER
  
12
           
        3.1
  
Organization, Authority and Qualification of Seller
  
12
        3.2
  
No Conflict
  
12
        3.3
  
Governmental Consents and Approvals
  
12
        3.4
  
Public Filings; Financial Statements
  
13
        3.5
  
No Undisclosed Liabilities
  
13
        3.6
  
Absence of Certain Changes or Events
  
13
        3.7
  
Conduct of the Business
  
14
        3.8
  
Litigation
  
14
        3.9
  
Compliance with Laws
  
14
        3.10
  
Environmental Matters
  
14
        3.11
  
Material Contracts
  
14
        3.12
  
Intellectual Property
  
15
        3.13
  
Title to Properties; Condition of Properties; Absence of Encumbrances
  
17
        3.14
  
Employee Benefit Matters; Labor Matters
  
17
        3.15
  
Brokers
  
18
        3.16
  
Taxes
  
18
           
ARTICLE 4.    REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER
  
18
           
        4.1
  
Organization and Authority of Parent and Buyer
  
18
        4.2
  
No Conflict
  
19

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        4.3
  
Ownership and Control of Buyer
  
19
        4.4
  
Governmental Consents and Approvals
  
19
        4.5
  
Litigation
  
19
        4.6
  
Brokers
  
20
           
ARTICLE 5.    CONDITIONS TO TRANSACTION
  
20
           
        5.1
  
Conditions to Each Party’s Obligation To Effect the Transaction
  
20
        5.2
  
Additional Conditions to Obligations of Parent and Buyer
  
20
        5.3
  
Additional Conditions to Obligations of Seller
  
20
           
ARTICLE 6.    INDEMNIFICATION
  
21
           
        6.1
  
Survival of Representations and Warranties
  
21
        6.2
  
Indemnification by Seller
  
21
        6.3
  
Indemnification by Parent and Buyer
  
21
        6.4
  
Claims for Indemnification
  
22
        6.5
  
Limits on Indemnification
  
23
           
ARTICLE 7.    GENERAL PROVISIONS
  
23
           
        7.1
  
Waiver
  
23
        7.2
  
Expenses
  
23
        7.3
  
Notices
  
23
        7.4
  
Headings
  
24
        7.5
  
Severability
  
25
        7.6
  
Entire Agreement
  
25
        7.7
  
Assignment
  
25
        7.8
  
No Third Party Beneficiaries
  
25
        7.9
  
Amendment
  
25
        7.10
  
Governing Law and Venue
  
25
        7.11
  
Counterparts
  
26
        7.12
  
Specific Performance
  
26
        7.13
  
Bulk Sales Law
  
26

 

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ASSET PURCHASE AGREEMENT
 
ASSET PURCHASE AGREEMENT entered into as of the 30th day of August, 2002 among
Drew Scientific Group PLC, a company organized under the laws of England and
Wales (“Parent”), Danam Acquisition Corp., a Delaware corporation and an
indirect, wholly owned subsidiary of Parent (“Buyer”) and Synbiotics
Corporation, a California corporation (“Seller”).
 
 
RECITAL
 
WHEREAS, the Buyer wishes to acquire certain of the properties and assets of
Seller relating to the development, manufacture and marketing of instruments and
reagents used by veterinarians to measure animal blood chemistry information,
operating under the names “ProChem” and “QVET” (together, the “Businesses”), and
Seller wishes to convey such assets to Buyer, subject to the terms and
conditions set forth in this Agreement (the “Transaction”).
 
WHEREAS, Seller is a party to that certain License Agreement dated February 25,
1998 with Microlab Systems, Inc., a Delaware corporation, a copy of which is
attached hereto as Exhibit A, whereby Seller granted to Microlab an exclusive
license in the human license field to certain of Seller’s patent and other
intellectual property rights (the “Microlab License”) and such Microlab License
comprises a portion of the properties and assets of Seller relating to the
Businesses which Seller wishes to assign to Buyer and Buyer wishes to assume.
 
NOW, THEREFORE, in consideration for the mutual agreements contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, in order to consummate said sale, the parties hereto
agree as follows:
 
 
ARTICLE 1.    DEFINITIONS
 
1.1  Certain Defined Terms.    As used in this Agreement, the following terms
shall have the following meanings:
 
“Action” means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
 
“Affiliate” means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.
 
“Agreement” or “this Agreement” means this Asset Purchase Agreement among
Parent, Buyer and Seller (including the Exhibits and Schedules hereto) and all
amendments hereto made in accordance with the provisions of Section 7.9 hereof.
 
“Basket Amount” means the sum of $15,000.
 
“Business Day” means any day that is not a Saturday, a Sunday or other day on
which banks are required or authorized by law to be closed in Wilmington,
Delaware.

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“Code” means the Internal Revenue Code of 1986, as amended through the date
hereof.
 
“Control” (including the terms “controlled by” and “under common control with”),
with respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, as trustee or executor, by contract
or otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
 
“Encumbrance” means any security interest, pledge, mortgage, lien (including,
without limitation, environmental and tax liens), charge, encumbrance or adverse
claim of any kind, including, without limitation, any restriction on the use,
voting, transfer, receipt of income or other exercise of any attributes of
ownership, but excluding Permitted Encumbrances.
 
“Governmental Authority” means any United States federal, state, local,
supranational or any foreign government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body.
 
“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
 
“Intellectual Property” means (i) United States, international and foreign
patents, patent registrations and applications and statutory invention
registrations, (ii) trademarks, service marks, trade dress, logos, symbols,
brand names, Internet domain names, trade names, d/b/a’s, assumed names and
other source identifiers, including registrations and applications for
registration thereof, (iii) published and unpublished works of authorship,
whether copyrightable or not (including without limitation databases and other
compilations of information), copyrights, and registrations and applications for
registration thereof, and all renewals, extensions, restorations and reversions
thereof, (iv) confidential and proprietary information, including trade secrets
and know-how, including processes, databases, schematics, formulae, drawings,
prototypes, models, designs and customer lists, (v) material computer software
developed by or on behalf of a Person, or manufactured, distributed, sold,
licensed or marketed by a Person, and (vi) all other intellectual or proprietary
rights of a Person.
 
“Intellectual Property Contracts” shall mean all agreements to which Seller is a
party entered into in connection with the conduct of the Businesses concerning
Intellectual Property (other than over-the-counter “shrink-wrap” licenses and
related agreements), including without limitation agreements granting Seller or
its Affiliates rights to use Intellectual Property in the conduct of the
Businesses, agreements granting rights to use Seller Intellectual Property,
confidentiality agreements, trademark coexistence agreements, trademark consent
agreements and nonassertion agreements to which Seller is a party and which
relate to the conduct of the Businesses.
 
“Knowledge of Seller” or “Known to Seller” shall mean, with respect to any
representation or warranty of Seller set forth in this Agreement, the actual or
constructive knowledge or awareness of any of the executive officers of Seller,
including, without limitation,

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Paul Rosinack and Michael Green, to the extent such knowledge would have been
obtained by due inquiry of the officers, directors or employees of Seller
charged with responsibility for the particular matter that is the subject of
such representation or warranty.
 
“Law” means any federal, state, local or foreign statute, law, ordinance,
regulation, rule, code, Governmental Order, other requirement or rule of law
that may be enforced by a Governmental Authority.
 
“Leased Real Property” means the real property located at 1721 Black River Road,
Rome, New York 13440 leased by Seller, as tenant, from 1721 Black River
Boulevard Corporation pursuant to an oral month-to-month lease and all other
leasehold interests therein.
 
“Liabilities” means any and all debts, liabilities and obligations, whether
accrued or fixed, absolute or contingent, matured or unmatured or determined or
determinable, including, without limitation, those arising under any Law
(including, without limitation, any Environmental Law), Action or Governmental
Order and those arising under any contract, agreement, arrangement, commitment
or undertaking, that relate to or affect the Subject Assets or the Businesses
 
“Material Adverse Effect” means any circumstance, change in, or effect on any
Person or its business that, individually or in the aggregate with any other
circumstances, changes in, or effects on, any Person or its business is, or
would be reasonably expected to be, materially adverse to such business or the
assets or the financial condition or results of operations of such Person.
 
“Permitted Encumbrances” means such of the following to the extent they affect
the Subject Assets or the Businesses and as to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced: (a) liens
for taxes, assessments and governmental charges or levies not yet due and
payable; (b) Encumbrances imposed by law, such as materialmen’s, mechanics’,
carriers’, workmen’s and repairmen’s liens and other similar liens arising in
the ordinary course of business securing obligations that (i) are not overdue
for a period of more than thirty (30) days and (ii) are not in excess of $25,000
in the case of a single property or $50,000 in the aggregate at any time; (c)
pledges or deposits to secure obligations under workers’ compensation laws or
similar legislation or to secure public or statutory obligations; (d) minor
survey exceptions, reciprocal easement agreements and other customary
encumbrances on title to real property that (i) were not incurred in connection
with any indebtedness, and (ii) do not, individually or in the aggregate,
materially adversely affect the value or use of such property for its current
and anticipated purposes and (e) Encumbrances arising out of or with respect to
equipment leases and other personal property leases to which Seller is a party
and pursuant to which any of the Subject Assets are bound.
 
“Person” means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity, as well as any syndicate or
group that would be deemed to be a person under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.

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“Registered” shall mean issued, registered, renewed or the subject of a pending
application.
 
“Seller Intellectual Property” means Intellectual Property owned by Seller and
used in connection with the operation of the Businesses.
 
“Seller Systems” shall mean all computer hardware, software, systems and
equipment of Seller material to or necessary to conduct the Businesses as they
are currently conducted and located in Rome, New York.
 
“Subsidiary” means, with respect to a party, any corporation or other
organization, whether incorporated or unincorporated, of which (i) such party or
any other Subsidiary of such party is a general partner (excluding partnerships,
the general partnership interests of which held by such party or any Subsidiary
of such party do not have a majority of the voting interest in such partnership)
or (ii) at least a majority of the securities or other interests having by their
terms ordinary voting power to elect a majority of the Board of Directors or
others performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries.
 
“U.S. GAAP” means United States generally accepted accounting principles.
 
1.2  Other Definitions.    The meanings of the following additional terms can be
found in the sections of this Agreement indicated below:
 
Term

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Section

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Assigned Contracts
  
Section 2.1
Assumed Liabilities
  
Section 2.2
Assumed Warranty Obligations
  
Section 2.2
Businesses
  
Preamble
Businesses’ Records
  
Section 2.1
Buyer
  
Preamble
Buyer Indemnified Parties
  
Section 6.2
Closing
  
Section 2.4
Closing Date
  
Section 2.4
Continuing Employees
  
Section 2.10
Dispute
  
Section 7.10
Environmental Law
  
Section 3.10
Environmental Permits
  
Section 3.10
ERISA
  
Section 3.14
Exchange Act
  
Section 3.3
Excluded Assets
  
Section 2.1
Indemnified Party
  
Section 6.4
Indemnifying Party
  
Section 6.4
Inventory
  
Section 2.1
IRS
  
Section 3.14

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Loss
  
Section 6.2
Material Contracts
  
Section 3.11
Parent
  
Preamble
Promissory Note
  
Section 2.3
Purchase Price
  
Section 2.3
Securities Act
  
Section 3.3
Security Agreements
  
Section 2.8(a)(iv)
Seller
  
Preamble
Seller Accounts Receivable
  
Section 2.1
Seller Benefit Plans
  
Section 3.14
Seller Indemnified Parties
  
Section 6.3
Seller SEC Reports
  
Section 3.4
Seller Statements of Revenues and Expenses
  
Section 3.4
Seller Third Party Intellectual Property
  
Section 3.12
Statement of Assets
  
Section 3.4
Subject Assets
  
Section 2.1
Suit
  
Section 3.12
Third Parties
  
Section 2.2
Third Party Claims
  
Section 6.4
Transaction
  
Preamble
Warranty Cap
  
Section 2.2

 
ARTICLE 2.    PURCHASE AND SALE OF ASSETS.
 
2.1  Sale of Assets.
 
(a)  Subject to the provisions of this Agreement and except as expressly
excluded in Section 2.1(b), Seller agrees to sell and Buyer agrees to purchase
at the Closing, all of the personal properties, assets and business of Seller
used in the operation of the Businesses, tangible and intangible, wherever
located, including, without limitation, the following:
 
(i)  All of the current equipment, furnishings, fixtures, supplies and other
personal property used in the operation of the Businesses, including, without
limitation, the items identified on Schedule 2.1(a)(i) attached hereto;
 
(ii)  Subject to the provisions of this Agreement, all of Seller’s right, title
and interest in and to all financial, accounting and other business records of
Seller relating to the Businesses or any of the Subject Assets (the “Businesses’
Records”);
 
(iii)  (A) All of Seller’s rights and interests in and to the Seller
Intellectual Property, including, without limitation, the Seller Intellectual
Property identified on Schedule 2.1(a)(iii)(A); (B) all of Seller’s rights to
use Seller Third Party Intellectual Property in Seller’s manufacture, sale or
distribution of any products of the Businesses, if any, all of which licenses or
other rights are identified on Schedule 2.1(a)(iii)(B); and (C) any Seller
Intellectual Property under research or development prior to or on the Closing
Date;
 
(iv)  All of the goodwill relating to the operation of the Businesses;

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(v)  All of Seller’s rights and interests in and to the contracts identified on
Schedule 2.1(a)(v) (“Assigned Contracts”);
 
(vi)  all inventory of products of the Businesses, including raw materials,
work-in-progress and finished goods with respect thereto (“Inventory”);
 
(vii)  copies of the Businesses’ customer lists, customer records, customer
files and histories, open customer invoices, lists of suppliers and vendors and
all records relating thereto, historical purchase and sale records, records with
respect to production, engineering, product development, costs, price lists,
advertising matters, catalogues, photographs, sales and marketing materials,
product materials, purchasing materials, camera-ready art, manufacturing and
quality control records and procedures, research and development, files and
data, media materials and plates and other records, in each case used in
connection with the Businesses;
 
(viii)  any and all claims, deposits, prepayments, prepaid assets, refunds,
causes of action, rights of recovery, rights of setoff and rights of recoupment
related to the Businesses or the Subject Assets;
 
(ix)  to the extent their transfer is permitted by law, all consents, approvals,
authorizations or other order of, action by, filing with or notification to any
Governmental Authority related to the Businesses or the Subject Assets; and
 
(x)  all guarantees, warranties, indemnities and similar rights in favor of
Seller with respect to the Businesses or any of the Subject Assets.
 
The assets, property and business of Seller to be sold to and purchased by Buyer
under this Agreement are hereinafter sometimes referred to as the “Subject
Assets.”
 
(b)  The following assets (the “Excluded Assets”) shall be excluded from the
Subject Assets:
 
(i)  Accounts receivable generated in connection with the Businesses prior to
and in existence as of the Closing Date (“Seller Accounts Receivable”);
 
(ii)  Inventory and supplies used in connection with the Businesses which are
disposed of in the ordinary course of business prior to the Closing;
 
(iii)  Seller’s corporate franchise, stock record books, corporate record books
containing minutes of meetings of directors and stockholders and such other
records as have to do exclusively with Seller’s organization or stock
capitalization not related primarily to the Businesses; and
 
(iv)  Any of Seller’s assets, whether tangible or intangible, not related to the
operation of the Businesses.

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2.2  Assumption of Liabilities.
 
(a)    Upon the sale and purchase of the Subject Assets, except as excluded in
Section 2.2(b) hereof, Buyer shall assume and agree to pay or discharge when due
the following:
 
(i)  All of the liabilities and obligations of Seller arising under leases
related to equipment and personal property of the Businesses and the Leased Real
Property, as identified on Schedule 2.2(a)(i);
 
(ii)  All of the liabilities and obligations of Seller arising under the
unfilled portions of those sales orders from customers of the Businesses, as
identified in Schedule 2.2(a)(ii), existing on the Closing Date;
 
(iii)  All of the liabilities and obligations of Seller arising under the
unfilled portions of those purchase orders to vendors of the Businesses, as
identified in Schedule 2.2(a)(iii), existing on the Closing Date;
 
(iv)  All of the liabilities and obligations of Seller arising under the
Assigned Contracts, solely to the extent such obligations and liabilities arise
and relate to events, acts or omissions occurring after the Closing Date and
become due and payable after the Closing Date; and
 
(v)  Liabilities and obligations of Seller not in excess of Fifteen Thousand
Dollars ($15,000) (the “Warranty Cap”), in the aggregate, arising under
outstanding warranty service agreements of Seller in effect prior to the Closing
and relating to, arising under or in respect of products of the Businesses sold
within the twelve (12) months prior to the Closing (“Assumed Warranty
Obligations”); provided, however, that the Warranty Cap shall not include, and
Buyer shall be deemed to have assumed, any and all liabilities and obligations
arising under outstanding warranty service agreements of Seller in effect prior
to the Closing if such liability or obligation arises in respect of products of
the Businesses for which Buyer (including any of Buyer’s employees, consultants
or contractors and any customers of the Businesses acting at Buyer’s direction)
has previously provided any service, upgrade or repair work of any kind.
 
The foregoing liabilities to be assumed by Buyer under this Agreement are
hereinafter sometimes referred to as the “Assumed Liabilities.”
 
(b)    Except to the extent expressly assumed pursuant to Section 2.2(a) above,
Buyer does not assume and shall not be liable for any debt, obligation,
responsibility or liability of Seller, or any Affiliate of Seller, or any claim
against any of the foregoing, whether known or unknown, contingent or absolute,
or otherwise. Without limiting the foregoing sentence, Buyer shall have no
responsibility with respect to the following, whether or not disclosed in a
schedule hereto:
 
(i)  accounts payable or any other Liabilities of or relating to the Businesses
arising prior to the Closing Date;

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(ii)  Liabilities of Seller not related to or arising in connection with the
Businesses;
 
(iii)  Liabilities for alleged infringement or other claimed violation or misuse
of any Intellectual Property, including, without limitation, patents, trade
secrets and other proprietary information, by Seller or any Affiliate of Seller
based upon or originating in events occurring prior to the Closing Date;
 
(iv)  Liabilities resulting from or arising in connection with any alleged
breach of contract based upon or originating in events occurring prior to the
Closing Date;
 
(v)  Liabilities for taxes of any kind arising prior to the Closing Date,
including taxes related to or arising from the transfers contemplated hereby;
 
(vi)  Liabilities to employees of Seller, whether for accident, disability or
worker’s compensation insurance or benefits, benefits under any Seller Benefit
Plans, back pay, accrued vacation or obligations related to or resulting from
severance of employment by Seller;
 
(vii)  Liabilities incurred by Seller in connection with this Agreement and the
transactions provided for herein, including counsel’s and accountant’s fees,
filing fees, transfer and other taxes, and expenses pertaining to its
liquidation or the performance by Seller of its obligations hereunder;
 
(viii)  Other than the Assumed Warranty Obligations, Liabilities arising out of
the sale to or use by customers or others of any product of the Businesses
manufactured, distributed or sold by Seller; and
 
(c)    The assumption of the Assumed Liabilities by Buyer hereunder shall be
treated as independent of Buyer’s and Parent’s existing business and shall not
enlarge any rights of third parties (“Third Parties”) under contracts or
arrangements with Parent, Buyer or Seller or any of their respective
Subsidiaries. Nothing herein shall prevent Buyer from contesting in good faith
with any Third Parties any of the Assumed Liabilities; provided, however, that
Buyer shall be solely responsible for any additional liabilities and obligations
resulting from any such contest, including, without limitation, any and all
fees, costs and expenses of its professional advisers and other agents and
representatives.
 
2.3  Purchase Consideration.    In consideration of the sale by Seller to Buyer
of the Subject Assets, Buyer agrees to assume the Assumed Liabilities and to
deliver, or cause Parent to deliver to the Seller at the Closing a five-year,
secured promissory note in the principal amount of Five Hundred Thousand Dollars
($500,000) and bearing interest at the rate of five percent (5%) per annum made
payable to Seller in substantially the form attached hereto as

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Exhibit B (the “Promissory Note”). In support of the Buyer’s obligations under
the Promissory Note, Parent shall also deliver to Seller at the Closing a
Guaranty in substantially the form attached hereto as Exhibit C (the “Guaranty”)
duly executed by Parent pursuant to which Parent shall guarantee the obligations
of Buyer under the Promissory Note. The Promissory Note shall be subject to the
provisions of this Agreement and shall permit Buyer to offset against the
outstanding principal amount thereof any indemnification obligations determined
to be payable by Seller to Buyer under Article 6 hereof. Simultaneously with the
Closing, Seller intends to assign the Promissory Note, the Security Agreements
and the Guaranty to Comerica Bank—California pursuant to an Assignment of Note
and Guaranty in substantially the form attached hereto as Exhibit D. The face
amount of the Assumed Liabilities and the Purchase Shares are referred to herein
collectively as the “Purchase Price”.
 
2.4  Time and Place of Closing.    The closing of the purchase and sale
contemplated by in this Agreement (herein called the “Closing”) shall be
effective as of August 31, 2002 or such other date as the parties hereto shall
mutually agree (the “Closing Date”).
 
2.5  Transfer of Subject Assets.    At the Closing, Seller shall deliver or
cause to be delivered to Buyer good and sufficient instruments of transfer
transferring to Buyer title to all the Subject Assets, including bills of sale,
assignments of trademarks and patents, and such other instruments of transfer as
may be required. At the Closing, Buyer shall deliver or cause to be delivered to
Seller good and sufficient instruments of assumption evidencing the assumption
by Buyer of the Assumed Liabilities, and such other instruments of assumption as
may be required. Such instruments of transfer and assumption (a) shall be in
form and substance reasonably satisfactory to counsel for Buyer and Parent, and
(b) shall effectively vest in Buyer good and marketable title to all the Subject
Assets, free and clear of all Encumbrances, except for Permitted Encumbrances.
 
2.6  Delivery of Records and Contracts.    At the Closing, Seller shall deliver
or cause to be delivered to Buyer the Assigned Contracts, with such assignments
thereof and consents to assignments as are required pursuant to the terms of
such Assigned Contracts and are necessary to assure the full benefit thereof.
Seller shall also deliver to Buyer at the Closing all of the Businesses’ Records
and Seller shall take all requisite steps to put Buyer in actual possession and
operating control of the Subject Assets and the Businesses. After the Closing,
Buyer shall afford to Seller and its accountants, attorneys and other
representatives reasonable access to the Businesses’ Records and shall permit
Seller to make extracts and copies therefrom for the purpose of preparing such
tax returns, financial statements (including audited financial statements) and
other reports and filings of Seller as may be required after the Closing and for
other proper purposes approved by Buyer acting reasonably and in good faith.
 
2.7  Further Assurances.    Seller from time to time after the Closing at the
request of Buyer (acting reasonably and in good faith) and without further
consideration shall execute and deliver further instruments of transfer and
assignment (in addition to those delivered under Sections 2.5 and 2.6), and take
such other action as Buyer may reasonably require to more effectively transfer
and assign to, and vest in, Buyer each of the Subject Assets and to carry out
the purposes of this Agreement. Each of Buyer and Parent from time to time after
the Closing at the request of Seller (acting reasonably and in good faith) and
without further consideration shall execute and deliver further instruments of
assumption (in addition to those delivered under

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Section 2.6), and take such other action as Seller may reasonably require to
more effectively evidence the assumption by Buyer of the Assumed Liabilities and
to carry out the purposes of this Agreement. To the extent that the assignment
of any lease, contract, commitment or right shall require the consent of other
parties thereto, this Agreement shall not constitute an assignment thereof;
however, Seller shall use its commercially reasonable, good faith efforts before
and after the Closing to obtain any necessary consents or waivers required
pursuant to the terms of such leases, contracts, commitments or rights. Nothing
herein shall be deemed a waiver by Buyer of its right to receive at the Closing
an effective assignment of each of the leases, contracts, commitments or rights
of Seller which constitute a portion of the Subject Assets.
 
2.8  Other Closing Deliveries.
 
(a)  Seller Deliveries.    In addition to those other deliveries required
pursuant to this Article 2, Seller shall deliver to the Parent at the Closing:
 
(i)  a certificate of the Secretary of Seller, certifying that the board of
directors of Seller have duly adopted resolutions authorizing the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby;
 
(ii)  a copy of (a) the articles of incorporation, as amended, of Seller,
certified by the Secretary or Assistant Secretary of Seller and (b) the by-laws
of Seller, certified by the Secretary or Assistant Secretary of Seller;
 
(iii)  a good standing certificate for Seller from the Secretary of State of
California dated as of a date not earlier than ten (10) Business Days prior to
the Closing Date; and
 
(iv)  a Security Agreement and a Patent and Trademark Security Agreement between
Seller and Buyer substantially in the forms attached hereto as Exhibit E (the
“Security Agreements”).
 
(b)  Buyer and Parent Deliveries.    In addition to those other deliveries
required pursuant to this Article 2, Parent and/or Buyer, as the case may be,
shall deliver to Seller at the Closing:
 
(i)  a certificate of the Secretary or Assistant Secretary of Buyer and Parent,
respectively, certifying that the boards of directors of Buyer and Parent have
duly adopted resolutions authorizing the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby;
 
(ii)  a copy of (a) the certificate of incorporation, as amended, of Buyer,
certified by the Secretary or Assistant Secretary of Buyer and (b) the by-laws
of Buyer, certified by the Secretary or Assistant Secretary of Buyer;
 
(iii)  a good standing certificate for Buyer from the Secretary of State of
Delaware as of a date not earlier than ten (10) Business Days prior to such
Closing Date; and
 
(iv) the Security Agreements, executed by Buyer.

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2.9  Allocation of Purchase Price.    The Purchase Price shall represent payment
for the Subject Assets at the prices shown on a memorandum to be jointly
prepared and initialed by the parties and delivered at the Closing or as soon
thereafter as required information is made available. The prices reflected in
said memorandum shall represent fair market values of the Subject Assets at the
Closing, to the best of the knowledge and belief of the parties hereto, and the
parties hereto agree that they will not take a position inconsistent with such
allocation for Federal income tax purposes.
 
2.10  Employees.    As of the Closing Date, Buyer shall have the right to offer
employment to any of those persons actively employed as of the Closing Date by
Seller full time in the Businesses (the “Continuing Employees”) and as of the
Closing Date, Seller shall terminate all of the Continuing Employees.
 
2.11  Correspondence, Seller Accounts Receivable, etc.    Each of Buyer and
Parent agrees that, subsequent to the Closing, each of Buyer and Parent shall
deliver or cause to be delivered to Seller, promptly after the receipt thereof
and in the form received, all inquiries, correspondence and other items and
materials received by either Buyer or Parent from any Person with respect to any
of the Excluded Assets, including, without limitation, any and all Seller
Accounts Receivable or any liabilities and obligations that are not Assumed
Liabilities. Without limiting the generality of the foregoing, subsequent to the
Closing, each of Buyer and Parent covenants and agrees to deliver on a weekly
basis any notices, requests, invoices and the like with respect to accounts
payable or trade payable that do not constitute Assumed Liabilities and any
funds and any checks, notes, drafts and other instruments for the payment of
money, duly endorsed by Buyer and Parent, received by either Buyer or Parent
comprising payment of any accounts, notes or other Seller Accounts Receivable or
otherwise constituting part of the Excluded Assets.
 
2.12  Public Announcements; Company Literature.    None of Parent, Buyer or
Seller, or any officer, director, employee, representative or agent thereof,
shall issue any press release or otherwise make any public statements with
respect to the transactions contemplated by this Agreement, without the prior
consent of Parent and Buyer (in the case of Seller) or Seller (in the case of
Parent or Buyer), except as may be required by applicable law. If any party
determines, with the advice of counsel, that it is required by applicable law to
make this Agreement or any terms thereof public, it shall, consult with the
other parties regarding such disclosure and seek confidential treatment for such
terms or portions of this Agreement as may be requested by the other parties.
 
2.13  Certain Trademark Matters.    Buyer, Parent and Seller are each aware
that, according to the records of the United States Patent and Trademark Office
(the “USPTO”), the QVET Trademark (as hereinafter defined) was canceled
effective July 13, 2003. As of the date hereof Seller has made application to
refile the QVET Trademark with the USPTO and such application has been assigned
the following serial number by the USPTO: Serial No. 78/159,605 (the
“Application”). Seller covenants and agrees without further consideration to use
its commercially reasonable best efforts to cause the QVET Trademark to be
reinstated and to prosecute the Application. The drafting, filing and
prosecution of the Application and related documents shall be the responsibility
of Seller, subject to an obligation by Seller to keep Buyer and Parent informed
of all material developments with respect to the foregoing activities. For

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purposes hereof, the “QVET Trademark” means the “QVET” trademark, registration
no. 1902542, registered July 4, 1995.
 
ARTICLE 3.    REPRESENTATIONS AND WARRANTIES OF SELLER.
 
As an inducement to Parent and Buyer to enter into this Agreement, Seller hereby
represents and warrants to Parent and Buyer as of the date hereof as follows:
 
3.1  Organization, Authority and Qualification of Seller.    Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California, and Seller has all necessary corporate power and
corporate authority to enter into this Agreement and to carry out its
obligations hereunder and to consummate the transactions contemplated hereby.
The Seller is duly qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
the Businesses makes such qualification necessary except where failure to be so
qualified would not have a Material Adverse Effect on the Businesses. The
execution and delivery of this Agreement by Seller, the performance by Seller of
its obligations hereunder and the consummation by Seller of the transactions
contemplated hereby have been duly authorized by all requisite action on the
part of Seller. This Agreement has been duly executed and delivered by Seller,
and (assuming due authorization, execution and delivery by Buyer and Parent)
constitutes the legal, valid and binding obligation of Seller enforceable
against Seller in accordance with its terms. Seller is not in violation of any
of the provisions of its articles of incorporation or by-laws.
 
3.2  No Conflict.    Except as set forth on Schedule 3.2, assuming the making
and obtaining of all filings, notifications, consents, approvals, authorizations
and other actions referred to in Section 3.5 hereof, except as may result from
any facts or circumstances relating solely to Parent or Buyer, the execution,
delivery and performance of this Agreement by Seller does not and will not (a)
violate, conflict with or result in the breach of any provision of the articles
of incorporation or by-laws of Seller, (b) conflict with or violate any Law or
Governmental Order applicable to Seller in the conduct of the Businesses or the
Subject Assets (c) conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or both, would
become a default) under, require any consent under, or give to others any rights
of termination, amendment, acceleration, suspension, revocation or cancellation
of, or result in the creation of any Encumbrance on any of the Subject Assets
pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument, obligation or
arrangement to which Seller is a party or by which any of Subject Assets is
bound or affected, except, with respect to clauses (b) and (c), as would not,
individually or in the aggregate, have a Material Adverse Effect on the
Businesses.
 
3.3  Governmental Consents and Approvals.    The execution, delivery and
performance of this Agreement by Seller do not and will not require any consent,
approval, authorization or other order of, action by, filing with or
notification to any Governmental Authority, except for the applicable
requirements, if any, of the Securities Act of 1933, as amended (the “Securities
Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
filings, if any, under applicable trademark and patent laws, and except to the
extent that the failure to obtain any consent, approval, authorization or other
order of or

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action by, or make any filing with or notification to any Governmental Authority
would not, individually or in the aggregate, have a Material Adverse Effect on
the Businesses.
 
3.4  Public Filings; Financial Statements.
 
(a)    Since December 31, 1998, Seller has filed with the SEC all required
reports, schedules, forms, statements and other documents required under the
Securities Act and the Exchange Act, (together with all other required reports,
schedules, forms, statements and other such documents filed after the date
hereof (the “Seller SEC Reports”)). As of their respective dates, the Seller SEC
Reports complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Seller SEC
Reports, and, except to the extent that information contained in any Seller SEC
Report has been revised or superseded by a later filed Seller SEC Report, none
of the Seller SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
 
(b)    The financial statements of Seller included in the Seller SEC Reports,
comply as to form, as of their respective dates of filing with the SEC, in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with U.S. GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present in
all material respects the consolidated financial position of Seller and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal recurring year-end audit adjustments)
and are consistent in all material respects with the books and records of
Seller.
 
(c)  Seller has provided Buyer with (i) unaudited, internally prepared
statements of historical revenues and expenses of Seller related to the
Businesses as of December 31, 2001 for the twelve (12) month period then ended
(collectively, the “Seller Statement of Revenues and Expenses”) and (ii) an
unaudited, internally prepared statements of assets showing all assets of Seller
used in the conduct of the Businesses as of December 31, 2001 (the “Statement of
Assets”). The Seller Statements of Revenues and Expenses (i) fairly present in
all material respects the revenues and expenses of Seller related to the
Businesses as of the date thereof and for the period indicated, and (ii) are
consistent in all material respects with the books and records of the
Businesses. The Statement of Assets (i) fairly present in all material respects
the assets of Seller used in the conduct of the Businesses as of the date
thereof and (ii) are consistent in all material respects with the books and
records of the Businesses.
 
3.5  No Undisclosed Liabilities    There are no Liabilities of Seller related to
the Businesses which would constitute Assumed Liabilities hereunder, other than
the Assumed Liabilities described in Section 2.2 hereof.
 
3.6  Absence of Certain Changes or Events    Except as expressly contemplated by
this Agreement or as disclosed in Seller press releases, since December 31,
2001, there has not been (i) any change in the financial condition or results of
operations of the

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Businesses or the Subject Assets, that has had, or is reasonably likely to have,
a Material Adverse Effect on the Businesses; or (ii) any damage, destruction or
loss to any of the Subject Assets (whether or not covered by insurance) with
respect to Seller having a Material Adverse Effect on the Businesses.
 
3.7  Conduct of the Business    Since December 31, 2001, except as contemplated
by, or disclosed pursuant to, this Agreement, Seller has conducted the
Businesses only in the ordinary course and in a manner consistent with past
practices.
 
3.8  Litigation    There are no Actions by or against Seller and relating to the
Businesses, or affecting any of the Subject Assets of Seller, pending before any
Governmental Authority or, to the Knowledge of Seller threatened to be brought
by or before any Governmental Authority. Neither Seller, in connection with the
conduct of the Businesses, nor any of the Subject Assets, is subject to any
Governmental Order (nor, to the Knowledge of Seller, are there any such
Governmental Orders threatened to be imposed by any Governmental Authority)
which has or has had, individually or in the aggregate, a Material Adverse
Effect on the Businesses.
 
3.9  Compliance with Laws    Seller is not in default or violation of any Law or
Governmental Order (including, but not limited to, those of any
quasi-governmental regulatory agency and including Environmental Laws), except
for such defaults or violations that would not, individually or in the
aggregate, have a Material Adverse Effect on the Businesses.
 
3.10 Environmental Matters.    The use and operation by Seller of all facilities
and properties used in the Businesses are and at all times have been, in
compliance with all applicable federal, state, foreign and local laws, statutes,
rules, regulations and ordinances relating to environmental, human health and
safety from pollution or other environmental degradation (“Environmental Law”),
except for noncompliance which would not, individually or in the aggregate, have
a Material Adverse Effect on the Businesses, and no action, suit or proceeding
under any Environmental Law has been filed, commenced, or, to the Knowledge of
Seller, threatened with or against Seller alleging any failure to so comply.
Seller has received and currently has in effect all permits, approvals, licenses
or other authorizations required under any Environmental Law (“Environmental
Permits”) required to allow it to conduct the Businesses as currently conducted,
except where the failure to hold, receive or maintain in effect such
Environmental Permits does not have a Material Adverse Effect on the Businesses.
 
3.11  Material Contracts.
 
(a)  Except as set forth in Schedule 3.11 hereto, there are no Assigned
Contracts to which Seller is a party that are material to the Businesses of
Seller (“Material Contracts”).
 
(b)  Each Material Contract is valid and binding on Seller, as applicable, and
is in full force and effect. Seller is not in material breach of, or default
under, any Material Contract.
 
(c)  To the Knowledge of Seller, no other party to any Material Contract is in
breach thereof or default thereunder.

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3.12  Intellectual Property.
 
(a)  Schedule 3.12 hereto contains a complete list of (i) Registered or material
Seller Intellectual Property and (ii) Intellectual Property Contracts. Seller
owns or is licensed or otherwise possesses legally enforceable rights to use
Seller Intellectual Property, Seller Systems (and with respect to computer
software constituting Seller Systems in both source code and object code form)
that are used by Seller in the Businesses as currently conducted. Except as set
forth in Schedule 3.12, all such rights are free of all Encumbrances (other than
Permitted Encumbrances) and are fully assignable by Seller to Buyer, without
payment, consent of any Person or other condition or restriction. Seller is not
aware of any basis for invalidity or unenforceability of any Seller Intellectual
Property or Intellectual Property Contracts, including any licenses, sublicenses
and other agreements to which Seller is a party and pursuant to which Seller is
authorized to use and assign (i) any third party Intellectual Property (other
than over-the-counter “shrink-wrap” licenses and related agreements), including
software mask or works, which is incorporated in, or is used to form a part of,
any product of the Businesses, or (ii) any trade secret of a third party in or
as to any product of the Businesses (the “Seller Third Party Intellectual
Property”). To the Knowledge of Seller, all Seller Third Party Intellectual
Property has been properly and validly licensed to Seller by the licensor of
such property.
 
(b)  Seller is not, nor will it be as a result of the execution and delivery of
this Agreement or the performance of its obligations hereunder, in breach or
violation of any Intellectual Property Contract. Except as set forth in Schedule
3.12 hereto, no suit, action, reissue proceeding, reexamination proceeding,
opposition proceeding, cancellation, arbitration, mediation or other proceeding
(collectively, “Suit”) is pending, and no written claims or written demands have
been received by Seller or its officers or directors, or to the Knowledge of
Seller, its employees or agents, with respect to Seller Intellectual Property or
Seller Third Party Intellectual Property (to the extent arising out of any use,
reproduction or distribution of such Seller Third Party Intellectual by or
through Seller), and to the Knowledge of Seller, no such Suits or written claims
or written demands have been threatened or asserted other than those which have
been settled or otherwise fully resolved, as disclosed in Schedule 3.12 hereto.
No Suit is pending, no written claims or demands have been received by, or
threatened or asserted by or, to the Knowledge of Seller, against, Seller and
Seller has no Knowledge of any valid grounds for any bona fide claims: (i)
against Seller to the effect that Seller in the conduct of the Businesses
infringes on any Intellectual Property; (ii) against the use of any Seller
Intellectual Property or Seller Systems used in the Businesses as currently
conducted by Seller; (iii) challenging the ownership, validity, enforceability
or effectiveness of any Seller Intellectual Property; or (iv) challenging
Seller’s license or legally enforceable right to use, or, to the Knowledge of
Seller, the validity, enforceability or effectiveness of, Seller Third Party
Intellectual Property. To the Knowledge of Seller, Seller is not violating and
has not violated any Intellectual Property rights.
 
(c)  Except as set forth on Schedule 3.12, all Seller Intellectual Property is
valid, subsisting and enforceable and has been properly maintained and renewed
in accordance with all applicable laws and regulations in the U.S. and foreign
countries where applicable. To the Knowledge of Seller, there has been and is no
unauthorized use, disclosure, infringement, violation or misappropriation of any
of Seller Intellectual Property or Seller Third Party Intellectual Property.

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(d)  Except as set forth on Schedule 3.12, no Seller Intellectual Property has
been abandoned, canceled or adjudicated invalid (excepting any expirations in
the ordinary course), or is subject to any outstanding Governmental Order
restricting in any manner the use or licensing thereof by Seller or adversely
affecting Seller’s rights thereto. To the Knowledge of Seller, no Seller Third
Party Intellectual Property has been abandoned, canceled or adjudicated invalid
(excepting any expirations in the ordinary course), or is subject to any
outstanding Governmental Order restricting in any manner the licensed use
thereof by Seller or adversely affecting or reflecting Seller’s rights thereto.
Except for contracts licensing Seller’s products executed in the ordinary course
of business and in accordance with Seller’s past practices, Seller has not
entered into any agreement to indemnify any other person against any charge of
infringement of any Intellectual Property relating to the Businesses.
 
(e)  No Suit is pending concerning any claim or position that Seller or, to the
Knowledge of Seller, another Person has breached an Intellectual Property
Contract. There exists no event, condition or occurrence which, with the giving
of notice or lapse of time, or both, would constitute a breach or default by
Seller or, to the Knowledge of Seller, another Person under any Intellectual
Property Contract. No party to any Intellectual Property Contract has given
Seller written notice of its intention to cancel, terminate or fail to renew any
Intellectual Property Contract.
 
(f)  Except as set forth in Schedule 3.12 hereto, Seller has taken all
reasonable measures to protect and preserve the validity and enforceability of
Seller Intellectual Property. To the Knowledge of Seller, no trade secret or
confidential information material to the Businesses of Seller has been
misappropriated for the benefit of any person other than Seller or disclosed to
any Persons other than employees or contractors of Seller who use such trade
secret or confidential information in the ordinary course of employment or
contract performance and who executed appropriate confidentiality agreements.
Seller has no written or oral agreements with directors, officers, employees,
contractors, agents or consultants with respect to the ownership of inventions,
trade secrets or other works created by them as a result of which any such
director, officer, employee, contractor, agent or consultant may have
nonexclusive rights to the portions of Seller Intellectual Property so created
by such individual.
 
(g)  No director, officer, employee, contractor, agent or consultant of Seller
owns, directly or indirectly, in whole or in part, any Seller Intellectual
Property that Seller has used, is presently using, or the use of which is
reasonably necessary to its conduct of the Businesses as now conducted.
 
(h)  Seller has not deposited, nor is it obligated to deposit, any source code
relating to Seller Systems into any source code escrows or similar arrangements
and Seller is not under any contractual or other obligation to disclose the
source code or any other material proprietary information relating to the Seller
Systems or included in or related to the products of the Businesses to any third
party.
 
(i)  To the Knowledge of Seller, all copyrightable works of authorship
constituting Seller Intellectual Property were developed and authored as
original works of authorship either by full-time employees of Seller or its
stockholders within the normal scope of their employment as works for hire, or
by third persons as works for hire under an express

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written agreement so stating or under a written agreement expressly transferring
and assigning all rights to Seller.
 
3.13  Title to Properties; Condition of Properties; Absence of Encumbrances.
 
(a)  Set forth on Schedule 3.13 hereto is a complete list of (i) all Leased Real
Property of Seller, (ii) machinery, equipment and other personal property with a
fair market value in excess of Two Thousand Dollars ($2,000) used or owned by
Seller in connection with the Businesses as of the date hereof, and (iii) leases
under which Seller leases any personal property in connection with the
Businesses at the date hereof with annual rental payments in excess of Fifteen
Thousand Dollars ($15,000). Other than the Leased Real Property described on
Schedule 3.13 hereto, Seller has no ownership or leasehold interest in any real
property relating to the Businesses.
 
(b)  Except as set forth on Schedule 3.13, Seller has good and valid title to,
or, in the case of leased properties and assets, valid leasehold interests in,
all of the Subject Assets, free and clear of any Encumbrances, except for
Permitted Encumbrances.
 
(c)  The Subject Assets include all assets necessary to operate the Businesses
in the same manner that the Businesses were operated by Seller prior to the
Closing Date. All tangible Subject Assets, except for certain sales
representative demonstration units and Inventory located in Lyon, France, are
located in the State of New York.
 
(d)  All buildings, machinery and equipment used or owned by Seller in
connection with the Businesses (i) are in operating condition, normal wear and
tear excepted, are adequate for the uses to which they are being put, and have
been adequately maintained, and (ii) to the Knowledge of Seller, conform in all
material respects with all applicable ordinances, regulations and zoning, safety
or other laws, and Seller does not know of any pending or threatened change of
any such ordinance, regulation or zoning, safety or other law, and there is no
pending or, to the Knowledge of Seller, threatened condemnation of, any such
property.
 
3.14  Employee Benefit Matters; Labor Matters.
 
(a)  For purposes of this Agreement, “Seller Benefit Plans” means the following
(but only to the extent they are applicable to or cover individuals employed by
Seller in connection with the Businesses) (i) all employee benefit plans (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”)) and all bonus, stock option, stock purchase, restricted
stock, incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, termination, severance or other contracts or
agreements, whether legally enforceable or not, to which Seller is a party, with
respect to which Seller has any obligation or which are maintained, contributed
to or sponsored by Seller for the benefit of any current or former employee,
officer or director of Seller, (ii) each employee benefit plan for which Seller
could incur liability under Section 4069 of ERISA in the event such plan has
been or was to be terminated, (iii) any plan in respect of which Seller could
incur liability under Section 4212(c) of ERISA and (iv) any contracts or
arrangements between Seller or any of its

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Affiliates and any employee of Seller including, without limitation, any
contracts or arrangements relating to a sale of Seller.
 
(b)  No Seller Benefit Plan provides health or life insurance benefits for
retirees and no retirees of Seller currently receive health or life insurance
benefits.
 
(c)  Each Seller Benefit Plan that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service (“IRS”) and each trust established in connection with
any Seller Benefit Plan which is intended to be exempt from federal income
taxation under Section 501(a) of the Code has received a determination letter
(or is reasonably expected to receive a determination letter) from the IRS that
it is so exempt.
 
(d)  No Seller Benefit Plan is a multiemployer pension plan (as defined in
Section 3(37) of ERISA) or other pension plan subject to Title IV of ERISA or
the minimum funding rules of ERISA or the Code and neither Seller, nor any other
trade or business (whether or not incorporated) that is or was under “common
control” with Seller (within the meaning of ERISA Section 4001) or with respect
to which Seller could otherwise incur liability under Title IV of ERISA has
sponsored or contributed to or been required to contribute to any such pension
plan.
 
3.15  Brokers.    Except as set forth on Schedule 3.15, No broker, finder or
investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Seller.
 
3.16  Taxes.    Seller has filed or has obtained presently effective extensions
with respect to all federal, state, county, local and foreign tax returns which
are required to be filed by it, such returns are true and correct and all taxes
shown thereon to be due and payable have been timely paid, other than those not
delinquent. Federal tax returns of Seller have not been audited by the IRS and
no controversy with respect to taxes of any type is pending or, to the Knowledge
of Seller, threatened. Seller has withheld or collected from each payment made
to its employees of the Businesses the amount of all taxes required to be
withheld or collected therefrom and has paid all such amounts to the appropriate
taxing authorities when due. Seller has not received any notice of deficiency or
assessment of additional taxes and is not a party to any action or proceeding by
any federal, state, local or foreign governmental authority for assessment or
collection of taxes, assessments or other governmental charges.
 
ARTICLE 4.    REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER
 
As an inducement to Seller to enter into this Agreement, Parent and Buyer
jointly and severally represent and warrant to Seller as of the date hereof as
follows:
 
4.1  Organization and Authority of Parent and Buyer.    Each of Parent and Buyer
is a corporation duly organized, validly existing and, to the extent such
concept applies, in good standing under the laws of the jurisdiction of its
incorporation, has all necessary corporate power and corporate authority to
enter into this Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery

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of this Agreement by Parent and Buyer, the performance by Parent and Buyer of
their respective obligations hereunder and the consummation by Parent and Buyer
of the transactions contemplated hereby have been duly authorized by all
requisite action on the part of Parent and Buyer. This Agreement has been duly
executed and delivered by Parent and Buyer, and (assuming due authorization,
execution and delivery by Seller) constitutes the legal, valid and binding
obligations of Parent and Buyer enforceable against Parent and Buyer in
accordance with its terms. Neither Buyer nor Parent is in violation of any of
the provisions of its respective organizational documents or certificate of
incorporation and by-laws.
 
4.2  No Conflict.    Assuming the making and obtaining of all filings,
notifications, consents, approvals, authorizations and other actions referred to
in Section 4.3 hereof, except as may result from any facts or circumstances
relating solely to Seller, the execution, delivery and performance of this
Agreement by Parent and Buyer does not and will not (a) violate, conflict with
or result in the breach of any provision of the organizational documents of
Parent or the certificate of incorporation or bylaws of Buyer, (b) conflict with
or violate any Law or Governmental Order applicable to Parent or Buyer or (c)
conflict with, or result in any breach of, constitute a default (or event which
with the giving of notice or lapse or time, or both, would become a default)
under, require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation, or cancellation of, or result
in the creation of any Encumbrance on any of the assets or properties of Parent
or Buyer pursuant to, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other instrument or
arrangement to which Parent or Buyer is a party or by which any of such assets
or properties are bound or affected which, with respect to clauses (b) and (c)
above, as would not, individually or in the aggregate, have a Material Adverse
Effect on the ability of Parent or Buyer to consummate the transactions
contemplated by this Agreement or to perform any of their respective obligations
hereunder, including, without limitation, Buyer’s obligations under the
Promissory Note and Security Agreements and Parent’s obligations under the
Guaranty.
 
4.3  Ownership and Control of Buyer.
 
Buyer is an indirect, wholly owned subsidiary of Parent.
 
4.4  Governmental Consents and Approvals.    The execution, delivery and
performance of this Agreement by Parent and Buyer do not and will not require
any consent, approval, authorization or other order of, action by, filing with,
or notification to, any Governmental Authority, except for filings with the U.S.
Department of Commerce, Bureau of Economic Analysis, and except to the extent
that the failure to obtain any consent, approval, authorization or other order
of or action by, or make any filing with or notification to any Governmental
Authority would not, individually or in the aggregate, have a Material Adverse
Effect on Parent or Buyer.
 
4.5  Litigation.    There are no Actions by or against Parent or Buyer pending
before any Governmental Authority or, to the knowledge of Parent or Buyer
threatened to be brought by or before any Governmental Authority, which seek to
restrain or enjoin (i) the consummation of the transactions contemplated hereby
or (ii) the performance by either Buyer or Parent of any of their respective
obligations hereunder, including, without limitation, Buyer’s

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obligations under the Promissory Note and Security Agreements and Parent’s
obligations under the Guaranty. Neither Buyer nor Parent is subject to any
Governmental Order (nor, to the knowledge of Buyer and Parent, are there any
such Governmental Orders threatened to be imposed by any Governmental Authority)
which has or has had, individually or in the aggregate, a Material Adverse
Effect on the on the ability of Parent or Buyer to consummate the transactions
contemplated by this Agreement or to perform any of their respective obligations
hereunder, including, without limitation, Buyer’s obligations under the
Promissory Note and Security Agreements and Parent’s obligations under the
Guaranty.
 
4.6  Brokers.    No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Buyer.
 
 
ARTICLE 5.    CONDITIONS TO TRANSACTION
 
5.1  Conditions to Each Party’s Obligation To Effect the Transaction.    The
respective obligations of each party to this Agreement to effect the Transaction
shall be subject to the satisfaction at or prior to the Closing of the condition
that each of the parties shall have obtained authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of waiting periods
imposed by, any Governmental Entity, the failure of which to file, obtain or
occur is reasonably likely to have a Material Adverse Effect on Parent.
 
5.2  Additional Conditions to Obligations of Parent and Buyer.    The
obligations of Parent and Buyer to effect the Transaction are subject to the
satisfaction at or prior to the Closing of each of the following conditions:
 
(a)  Consents.    Seller shall have obtained and delivered to Parent and Buyer
all material waivers, permits, consents, approvals or other authorizations
necessary to be obtained by it to consummate the Transaction, and effect all
material registrations, filings and notices necessary to be affected by it to
consummate the Transaction.
 
(b)  Due Diligence.    Parent shall have completed its business, accounting,
legal and environmental due diligence with respect to the Businesses and the
Subject Assets and the results thereof shall have been satisfactory to Parent,
in its sole and absolute discretion.
 
(c)  Other Deliveries.    Seller shall have executed and delivered the documents
required by it to be executed and delivered by Seller pursuant to Article 2
hereof.
 
5.3  Additional Conditions to Obligations of Seller.    The obligation of Seller
to effect the Transaction is subject to the satisfaction at or prior to the
Closing of each of the following conditions:
 
(a)  Consents.    Parent and Buyer shall have obtained and delivered to Seller
all material waivers, permits, consents, approvals or other authorizations
necessary to be obtained by them to consummate the Transaction, and effected all
material registrations, filings and notices necessary to be affected by them to
consummate the Transaction.

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(b)  Other Deliveries.    Buyer and Parent shall have executed and delivered the
documents required by them to be executed and delivered by Buyer and/or Parent
pursuant to Article 2 hereof.
 
 
ARTICLE 6.    INDEMNIFICATION
 
6.1  Survival of Representations and Warranties.    The representations and
warranties of the respective parties contained in this Agreement and all
statements contained in this Agreement, and all schedules hereto shall survive
until the date that is eighteen (18) months after the date hereof, except with
respect to the representations and warranties set forth in Section 3.10
(Environmental Matters) and Section 3.16 (Taxes), which shall survive the
Closing until expiration of the applicable statute of limitations. If written
notice of a claim has been given prior to the expiration of the applicable
representations and warranties by either party, then the relevant
representations and warranties of the other party shall survive as to such
claim, until such claim has been finally resolved.
 
6.2  Indemnification by Seller.
 
(a)  Subject to the limitations in Section 6.5 below, Seller shall defend,
indemnify and hold harmless each of Parent, Buyer, their Affiliates and their
successors and assigns and the officers, directors, employees and agents of
Parent, Buyer, their Affiliates and their successors and assigns (collectively,
the “Buyer Indemnified Parties”) from and against all liabilities, losses,
damages, claims, costs and expenses, interest, awards, judgments and penalties
(including, without limitation, reasonable attorneys’ fees and expenses)
actually suffered or incurred by any of them (including, without limitation, any
Action brought or otherwise initiated by any of them) (hereinafter a “Loss”):
 
(i)  resulting from any breach of any of the representations or warranties made
by Seller in or pursuant to this Agreement;
 
(ii)  resulting from any breach of any covenant or agreement made by Seller in
or pursuant to this Agreement; and
 
(iii)  in respect of any liability or obligation of Seller not included in the
Assumed Liabilities.
 
(b)  Any amount which is determined (either by mutual agreement of all of the
parties hereto or by final resolution of a Dispute in accordance with Section
7.10 hereof after following the procedures set forth in Section 6.4 hereof) to
be due and payable to any of the Buyer Indemnified Parties under Section 6.2(a)
shall first be paid or otherwise satisfied by offset against the outstanding
principal balance of the Promissory Note until the same has been exhausted. Any
claims in excess of the amount available by offset against the Promissory Note
may be covered by the Buyer Indemnified Parties from Seller by whatever remedy
is available at law or equity.
 
6.3  Indemnification by Parent and Buyer.    Subject to the limitations in
Section 6.5 below, Buyer and Parent shall jointly and severally indemnify and
hold harmless

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each of Seller and its successors, officers, directors, employees and agents
(collectively, the “Seller Indemnified Parties”) from and against all Losses
incurred by them:
 
(i)  resulting from any breach of any of the representations or warranties made
by Parent or Buyer in or pursuant to this Agreement;
 
(ii)  resulting from any breach of any covenant or agreement made by Parent or
Buyer in or pursuant to this Agreement; and
 
(iii)  in respect of any liability or obligation that is an Assumed Liability.
 
6.4  Claims for Indemnification    Whenever a claim shall arise for
indemnification under this Article 6 the party entitled to indemnification (the
“Indemnified Party”) shall give notice to the other party (the “Indemnifying
Party”) of any matter that the Indemnified Party has determined has given or
could give rise to a right of indemnification under this Agreement promptly, but
in no event later than thirty (30) days, except with respect to any claim
exceeding, or potential Loss reasonably likely to exceed, $50,000 (exclusive of
legal fees) in which cases such notice shall not be later than ten (10) days,
stating the amount of the Loss, if known, and method of computation thereof, and
containing a reference to the provisions of this Agreement in respect of which
such right of indemnification is claimed or arises. The obligations and
liabilities of the Indemnifying Party under this Article 6 with respect to
Losses arising from claims of any third party which are subject to the
indemnification provided for in this Article 6 (“Third Party Claims”) shall be
governed by and contingent upon the following additional terms and conditions:
if an Indemnified Party shall receive notice of any Third Party Claim, the
Indemnified Party shall give the Indemnifying Party notice of such Third Party
Claim following receipt by the Indemnified Party of such notice in the time
frame provided above; provided, however, that the failure to provide such notice
shall not release the Indemnifying Party from any of its obligations under this
Article 6 except to the extent the Indemnifying Party is materially prejudiced
by such failure and shall not relieve the Indemnifying Party from any other
obligation or Liability that it may have to any Indemnified Party otherwise than
under this Article 6. The Indemnifying Party shall be entitled to assume and
control the defense of such Third Party Claim at its expense and through counsel
of its choice that is reasonably acceptable to the Indemnified Party if the
Indemnifying Party gives notice of its intention to do so to the Indemnified
Party within ten (10) days of the receipt of such notice from the Indemnified
Party; provided, however, that if there exists or is reasonably likely to exist
a conflict of interest that would make it inappropriate in the judgment of the
Indemnified Party, in its reasonable discretion, for the same counsel to
represent both the Indemnified Party and the Indemnifying Party, then the
Indemnified Party shall be entitled to retain its own counsel at the expense of
the Indemnifying Party. In the event the Indemnifying Party exercises the right
to undertake any such defense against any such Third Party Claim as provided
above, the Indemnified Party shall cooperate with the Indemnifying Party in such
defense and make available to the Indemnifying Party, at the Indemnifying
Party’s expense, all witnesses, pertinent records, materials and information in
the Indemnified Party’s possession or under the Indemnified Party’s control
relating thereto as is reasonably required by the Indemnifying Party. Similarly,
in the event the Indemnified Party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the Indemnifying Party shall
cooperate with the Indemnified Party in such defense and

22

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make available to the Indemnified Party, at the Indemnifying Party’s expense,
all such witnesses, records, materials and information in the Indemnifying
Party’s possession or under the Indemnifying Party’s control relating thereto as
is reasonably required by the Indemnified Party. No such Third Party Claim may
be settled by the Indemnifying Party without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld or delayed.
 
6.5    Limits on Indemnification.
 
(a)  Notwithstanding anything to the contrary contained in this Agreement, the
maximum amount of indemnifiable Losses which may be recovered from an
Indemnifying Party arising out of or resulting from the causes enumerated in
Sections 6.2 and 6.3 shall be Five Hundred Thousand Dollars ($500,000); and no
Indemnifying Party shall be required to indemnify any Indemnified Party with
respect to any claim for indemnification hereunder unless and until the
aggregate amount of all claims against the Indemnifying Party hereunder exceeds
the Basket Amount, and then only to the extent such aggregate amount exceeds the
Basket Amount; provided, however, there shall be no application of the Basket
Amount with respect to any Losses suffered by any Seller Indemnified Parties as
a result of a claim for breach or declaration of an event of default or other
similar claim by Copelco Capital (or its successors or assigns) arising out of
or with respect to the matters set forth on Schedule 3.2 hereto.
 
(b)  Notwithstanding anything to the contrary elsewhere in this Agreement,
Losses shall not include, and no Indemnifying Party shall, in any event, be
liable to any other party for, any consequential, punitive or special damages
(including, but not limited to, damages for lost profits).
 
ARTICLE 7.    GENERAL PROVISIONS
 
7.1  Waiver.    Seller and Buyer may (a) extend the time for the performance of
any of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered by the other party pursuant hereto or (c)
waive compliance with any of the agreements of the other party contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party to be bound thereby. Any waiver of any term shall
not be construed as a waiver of any subsequent breach or a subsequent waiver of
the same term, or a waiver of any other term, of this Agreement. The failure of
any party to assert any of its rights hereunder shall not constitute a waiver of
any of such rights.
 
7.2  Expenses.    Except as otherwise specified in this Agreement, all costs and
expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.
 
7.3 Notices.    All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed duly delivered (i) five (5)
business days after they are sent by registered or certified mail, return
receipt requested, postage prepaid, (ii) two (2) business days via a reputable
international overnight courier service for next business day delivery, or (iii)
on the date of delivery if sent by hand or by facsimile, in each case to the

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following addresses and facsimile numbers (or at such other address or facsimile
number for a party as shall be specified in a notice given in accordance with
this Section 7.3):
 
(a)  if to Seller, to:
 
Synbiotics Corporation
11011 Via Frontera
San Diego, California 92127
Attention: Mr. Paul A. Rosinack
Telephone: 858-451-3771
Facsimile: 858-451-5719
 
with a copy to:
 
Brobeck, Phleger & Harrison LLP
12390 El Camino Real
San Diego, California 92130
Attention: Hayden J. Trubitt, Esq.
Telephone: 858-720-2750
Facsimile: 858-720-2555
 
(b)  if to Parent or Buyer:
 
Drew Scientific Group PLC
Park Road, Barrow In Furness
Cumbria LA14 4QR
United Kingdom
Attention: Michael J. Sipple-Asher
Telephone: 011 44 1229 432089
Facsimile: 011 44 1229 432096
 
with a copy to:
 
Brown Rudnick Berlack Israels
8 Clifford Street
London, W1S 2LQ
United Kingdom
Attention: Charles Crosthwaite, Esq.
Telephone: +44-20-7851-6000
Facsimile: +44-20-7851-6100
 
7.4  Headings.    The descriptive headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.

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7.5  Severability.    If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
 
7.6  Entire Agreement.    This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and thereof and
supersedes all prior agreements and undertakings, both written and oral, among
Seller, Parent and Buyer with respect to the subject matter hereof and thereof.
 
7.7  Assignment.    This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties; provided, however, no
party hereto shall assign or delegate any of the rights or obligations created
under this Agreement without the prior written consent of the other parties
hereto, including, without limitation, Buyer’s obligations under the Promissory
Note and Security Agreements and Parent’s obligations under the Guaranty, in
each case, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Seller shall have no obligation to seek or obtain
the consent of either Buyer or Parent (or any of their respective successors or
assigns) pursuant to this Section 7.7 in the event of (a) an assignment of this
Agreement to Comerica Bank—California or (b) any Seller Change of Control (as
hereinafter defined). For purposes hereof, a “Seller Change of Control” shall
mean: (i) a merger, consolidation, stock purchase or other transaction in which
securities possessing more than fifty percent (50%) of the total combined voting
power of Seller’s outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction, or (ii) the sale, transfer or other disposition of all or
substantially all of Seller’s assets.
 
7.8  No Third Party Beneficiaries.    Except for the provisions of Article 6
relating to Indemnified Parties, this Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and their permitted assigns and
nothing herein, express or implied, is intended to or shall confer upon any
other Person any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
 
7.9  Amendment.    This Agreement may not be amended or modified except (a) by
an instrument in writing signed by, or on behalf of, Seller and Parent or (b) by
a waiver in accordance with Section 7.1.
 
7.10  Governing Law and Venue.    THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN,
AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (OTHER THAN CHOICE OF LAW
PRINCIPLES THEREOF) APPLICABLE TO CONTRACTS TO BE PERFORMED WHOLLY IN SUCH
STATE. With respect to the interpretation and enforcement of the provisions of
this Agreement and in respect of the

25

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transactions contemplated hereby, and with respect to any and all claims,
disputes, actions or proceedings (each a “Dispute”) arising in connection with
this Agreement and the transactions contemplated hereby, the parties hereby (a)
irrevocably submit to the jurisdiction of the federal courts of the United
States of America located in Suffolk County, Massachusetts in the event of a
Dispute initiated by Seller, any Seller Indemnified Party or any of their
respective Affiliates; (b) irrevocably submit to the jurisdiction of the federal
courts of the United States of America located in San Diego County, California
in the event of a Dispute initiated by Buyer, Parent, any Buyer Indemnified
Party or any of their respective Affiliates and (c) waive, and agree not to
assert, as a defense in any action, suit or proceeding for the interpretation or
enforcement hereof, that it is not subject to such jurisdiction or that such
action, suit or proceeding may not be brought or is not maintainable in said
courts or that the venue thereof may not be appropriate or that this Agreement
may not be enforced in or by such courts, and the parties irrevocably agree that
all claims with respect to such action or proceeding shall be heard and
determined in such courts. The parties hereby consent to and grant any such
court’s jurisdiction over the person of such parties and over the subject matter
of such dispute and agree that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 7.3, or in
such other manner as may be permitted by law, shall be valid and sufficient
service thereof.
 
7.11  Counterparts.    This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, any
one or more of which may be a faxed copy, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
 
7.12  Specific Performance.    The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or equity.
 
7.13  Bulk Sales Law.    Buyer waives compliance by Seller with the obligations
imposed on vendors under the Bulk Sales Act, or the equivalent, as a result of
the transactions contemplated by this Agreement.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, Seller, Parent and Buyer have caused this Agreement to be
executed by their respective officers thereunto duly authorized, in each case as
of the date first written above.
 
 
SYNBIOTICS CORPORATION
 
By:
 
/s/    PAUL A. ROSINACK        

--------------------------------------------------------------------------------

   
Paul A. Rosinack
President & CEO

 
 
 
DANAM ACQUISITION CORP.
 
By:
 
/s/    MICHAEL J. S. ASHER         

--------------------------------------------------------------------------------

   
Michael J. S. Asher
CEO

 
 
DREW SCIENTIFIC GROUP PLC
 
By:
 
/s/    DAVID BLAIN        

--------------------------------------------------------------------------------

   
David Blain
Finance Director

27

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ASSET PURCHASE AGREEMENT
 
List of Schedules
 
Schedule 2.1(a)(i) Personal Property
 
Schedule 2.1(a)(iii)(A) Intellectual Property
 
Schedule 2.1(a)(iii)(B) Third Party Licenses
 
Schedule 2.1(a)(v) Assigned Contracts
 
Schedule 2.2(a)(i) Assumed Lease Liabilities
 
Schedule 2.2(a)(ii) Assumed Sales Orders
 
Schedule 2.2(a)(iii) Assumed Purchase Orders
 
Schedule 3.2 Conflicts
 
Schedule 3.11 Material Contracts
 
Schedule 3.12 Intellectual Property
 
Schedule 3.13 Title to Properties; Condition of Properties; Absence of
Encumbrances

28

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Exhibit A
 
LICENSE AGREEMENT
 
THIS AGREEMENT, effective as of February 25, 1998 (EFFECTIVE DATE) between
Prisma Acquisition Corp., a Delaware corporation, with headquarters offices at
1721 Black River Boulevard, Rome, New York 13440(“PAC”) and Microlab Systems,
Inc., a Delaware corporation having offices at 130 East Main Street, Rochester,
New York 14604 (“COMPANY”)
 
 
WITNESSETH
 
WHEREAS, under research programs funded by PAC, and by its predecessors in
interest PAC owns full right, title and interest in an invention, know-how,
trade secrets, copyrights and other intellectual property pertaining to the
human clinical and diagnostic uses and applications of its product, known and
sold as the ProChem system and components, parts, processes, and methods
incorporated therein (“LICENSED PRODUCT”);
 
WHEREAS, PAC holds issued U.S. Patents Numbers: No. 5,128,104, No. 4,857,735 and
No. 4,451,149 covering said invention together with its other intellectual
property, in which all of the inventors’ rights, title and interest have been
assigned to PAC’s predecessor and acquired by PAC;
 
WHEREAS, PAC represents to the best of its knowledge and belief that it is the
owner of all rights, title and interest in said patent and other intellectual
property and has the right and ability to grant the license hereinafter
described;
 
WHEREAS, PAC is interested in licensing the LICENSED PRODUCT and thus benefiting
the public and PAC by facilitating the dissemination of the results of its
research in the form of useful LICENSED PRODUCTS for the human clinical and
diagnostic markets only; and
 
WHEREAS, COMPANY desires to commercially develop, manufacture, use and
distribute such LICENSED PRODUCTs for the human clinical and diagnostic markets
throughout the world;
 
NOW THEREFORE, in consideration of the premises and of the faithful performance
of the covenants herein contained, the parties hereto agree as follows:
 
 
1.    DEFINITIONS
 
1.1  The term “ACCOUNTING PERIOD” shall mean each three month period ending
March 31, June 30, September 30 and December 31 of each year during the term
hereof.

A-1

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1.2  The term “AFFILIATE” shall mean any corporation or other legal entity other
than COMPANY in whatever country organized, controlling, controlled by or under
common control with COMPANY.
 
The term “control” means possession, direct or indirect, of the powers to direct
or cause the direction of the management and policies of an entity, whether
through the ownership of voting securities, by contract or otherwise.
 
1.3  The term “HUMAN LICENSE FIELD” shall mean the human clinical and diagnostic
markets worldwide, excluding entirely and absolutely any applications in the
animal or veterinary clinical and diagnostic or other animal or veterinary
applications as such terms shall be broadly defined.
 
1.4  The term “CO-EXCLUSIVE LICENSE FIELD shall mean all markets worldwide,
excluding the HUMAN LICENSE FIELD and excluding entirely and absolutely any
applications in the animal or veterinary clinical and diagnostic or other animal
or veterinary applications as such terms shall be broadly defined. “LICENSE
FIELDS” shall mean the HUMAN LICENSE FIELD and the CO-EXCLUSIVE LICENSE FIELD.
 
1.5  The term “FIRST COMMERCIAL SALE” shall mean in each country the first sale
of any LICENSED PRODUCT by COMPANY, its AFFILIATES or SUBLICENSEES, (a)
following approval, when such approval is necessary, of the marketing of such
LICENSED PRODUCT by the appropriate governmental agency for the country in which
the sale is to be made, or (b) when such government approval is not required in
a country, the first sale of such LICENSED PRODUCT in that country.
 
1.6  The term “SUBLICENSEE” shall mean any non-AFFILIATE third party licensed by
COMPANY or by an AFFILIATE to make, have made, use or sell any LICENSED PRODUCT.
 
1.7  The term “NET SALES PRICE” shall mean the GROSS SALES PRICE as defined in
(b)-(d) below received or deemed received by COMPANY or any of its AFFILIATES or
SUBLICENSEES (“SELLERS”) for the sale or distribution of any LICENSED PRODUCT,
less (to the extent appropriately documented) the following amounts actually
paid out by COMPANY, its AFFILIATE or SUBLICENSEE or credited against the
amounts received by them from the sale or distribution of LICENSED PRODUCT:
 
(a)  (i)  credits and allowances for price adjustment, rejection, or return of
LICENSED PRODUCTS previously sold;
 
(ii)  rebates and cash discounts to purchasers allowed and taken;
 
(iii)  amounts for transportation, insurance, handling or shipping charges paid
for the account of and invoiced to purchasers;

A-2

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(iv)  taxes, duties and other governmental charges levied on or measured by the
sale of LICENSED PRODUCTS, whether absorbed by COMPANY or paid by the purchaser
so long as COMPANY’S price is reduced thereby, but not franchise or income taxes
of any kind whatsoever;
 
(b)  For any bona fide sale to a bona fide customer by COMPANY or any of its
AFFILIATES or SUBLICENSEES, the GROSS SALES PRICE shall be the gross billing
price of the LICENSED PRODUCT.
 
(c)  If COMPANY or any of its AFFILIATES or SUBLICENSEES sell any LICENSED
PRODUCT in a bona fide sale as a component of a combination of active functional
elements, the GROSS SALES PRICE of the LICENSED PRODUCT shall be determined by
multiplying the GROSS SALES PRICE of the combination by the fraction A over A +
B, in which “A” is the GROSS SALES PRICE of the LICENSED PRODUCT portion of the
combination when sold separately during the ACCOUNTING PERIOD in the country in
which the sale was made, and “B” is the GROSS SALES PRICE of the other active
elements of the combination sold separately during said ACCOUNTING PERIOD in
said country. In the event that no separate sale of either such LICENSED PRODUCT
or active elements of the combination is made during said ACCOUNTING PERIOD in
said country, the GROSS SALES PRICE of the LICENSED PRODUCT shall be determined
by multiplying the GROSS SALES PRICE of such combination by the fraction C over
C + D, in which “C” is the standard fully-absorbed cost of the LICENSED PRODUCT
portion of such combination, and “D” is the sum of the standard fully-absorbed
costs of the other active elements component(s), such costs being arrived at
using the standard accounting procedures of COMPANY which will be in accord with
generally accepted accounting practices.
 
(d)  If a SELLER commercially uses or disposes of any LICENSED PRODUCT by itself
(as opposed to a use or disposition of the LICENSED PRODUCT as a component of a
combination of active functional elements) other than in a bona fide sale to a
bona fide customer, the GROSS SALES PRICE hereunder shall be the price which
would be then payable in an arm’s length transaction. If a SELLER commercially
uses or disposes of any LICENSED PRODUCT as a component of a combination of
active functional elements other than in a bona fide sale to a bona fide
customer, the GROSS SALES PRICE of the LICENSED PRODUCT shall be determined in
accordance with paragraph (c) above, using as the GROSS SALES PRICE of the
combination that price which would be then payable in an arm’s length
transaction.
 
(e)  Transfer of a LICENSED PRODUCT within COMPANY or between COMPANY and an
AFFILIATE for sale by the transferee shall not be considered a sale, commercial
use or disposition for the purpose of the foregoing paragraphs; in the case of
such transfer the GROSS SALES PRICE shall be based on sale of the LICENSED
PRODUCT by the transferee.
 
1.8  The term “PATENT RIGHT” shall mean the U.S. Patents numbers 5,128,104, No.
4,857,735 and No. 4,451,149, or the equivalent of such patent, including any
division, continuation or any foreign patent application or Letters Patent or
the equivalent thereof issuing thereon or reissue, reexamination or extension
thereof. PATENT RIGHTS shall also include

A-3

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those claims in any continuation-in-part of the aforementioned patent which
claim an invention described or claimed in-said patents.
 
1.9  The term “LICENSED PRODUCT” shall mean any article, device, composition,
method or service, the manufacture, use, or sale of which
 
(a)  absent the licenses granted herein, would infringe a VALID CLAIM of any
PATENT RIGHT, or
 
(b)  does not infringe a VALID CLAIM of any PATENT RIGHT licensed to COMPANY
hereunder but the discovery, development,—manufacture or use of which employs
TECHNOLOGICAL INFORMATION.
 
1.10  The term “TECHNOLOGICAL INFORMATION” shall mean any research data,
designs, formulas, process information, manufacturing information current vendor
lists, clinical data and other information pertaining to any invention or other
intellectual property claimed or utilized in the design, manufacture, use, or
operation of the LICENSED PRODUCT on the EFFECTIVE DATE.
 
1.11  The term “VALID CLAIM” shall mean any claim of any PATENT RIGHT that has
not been (i) finally rejected or (ii) declared invalid by a patent office or
court of competent jurisdiction in the applicable country in any unappealed and
unappealable decision.
 
 
2.    LICENSE
 
2.1  PAC hereby grants COMPANY:
 
(a)  an exclusive, worldwide, perpetual, royalty-bearing license in the HUMAN
LICENSE FIELD under PAC’s rights in PATENT RIGHTS to make, have made, make, have
made modifications, upgrades, and derivatives, use and sell and have sold
LICENSED PRODUCTS;
 
(b)  to the extent an exclusive license is not available to COMPANY in a
country, a non-exclusive, royalty-bearing license in the HUMAN LICENSE FIELD
under PATENT RIGHTS to make, have made, use and sell LICENSED PRODUCTS;
 
(c)  the right to sublicense PATENT RIGHTS exclusively and/or coexclusively
licensed to COMPANY in the HUMAN LICENSE FIELD and/or the CO-EXCLUSIVE LICENSE
FIELD(but not to persons who conduct, or whose Affiliates conduct, any animal or
veterinary clinical or diagnostic business without the express written consent
of PAC); and
 
(d)  a co-exclusive, worldwide, perpetual, royalty-bearing license in the
CO-EXCLUSIVE LICENSE FIELD under PAC’s rights in PATENT RIGHTS to make, have
made, make, have made modifications, upgrades, and derivatives, use and sell and
have sold LICENSED PRODUCTS.

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The above licenses to sell LICENSED PRODUCTS include the right to grant to the
purchaser of LICENSED PRODUCTs from COMPANY, its AFFILIATES, and SUBLICENSEES
the right to use such purchased LICENSED PRODUCTS in a method coming within the
scope of PATENT RIGHT.
 
2.2  The granting of any license hereunder is subject to PAC’s right to make and
to use and sell the subject matter described and claimed in PATENT RIGHT for all
purposes and applications in the animal or veterinary markets or applications
fields, which shall be broadly defined, and in the CO-EXCLUSIVE LICENSE FIELD.
 
2.3  Within three (3) months of EFFECTIVE DATE, upon request by COMPANY, PAC
shall disclose to COMPANY, in confidence, TECHNOLOGICAL INFORMATION which
COMPANY will be entitled to use to the extent such use does not infringe any
patent not licensed to COMPANY hereunder.
 
2.4  PAC shall have the right to license any PATENT RIGHT to any other party for
the purpose of manufacturing, using or selling of any LICENSED PRODUCT outside
of the LICENSE FIELDS.
 
2.5  It is understood that nothing herein shall be construed to grant COMPANY a
license express or implied under any patent owned solely or jointly by PAC other
than the PATENT RIGHTS expressly licensed hereunder.
 
 
3.    FILING, PROSECUTION AND MAINTENANCE OF PATENT RIGHT
 
3.1  PAC shall be responsible for the preparation, filing, prosecution and
maintenance of all patent applications and patents included in PATENT RIGHTS.
COMPANY shall reimburse PAC for all reasonable costs (“Costs”) incurred by PAC
for the preparation, filing, prosecution and maintenance of all PATENT RIGHTS
with specific applicability and/or relevance to the human clinical and
diagnostic markets as follows:
 
Subject to paragraph 3.2, for all Costs incurred by PAC from and after the
EFFECTIVE DATE, COMPANY shall reimburse PAC upon receipt of invoices from PAC;
 
3.2  With respect to any PATENT RIGHT, each document or a draft thereof
pertaining to the filing, prosecution, or maintenance of such PATENT RIGHT,
including but not limited to each patent application, office action, response to
office action, request for terminal disclaimer, and request for reissue or
reexamination of any patent issuing from such application shall be provided to
COMPANY as follows. Documents received from any patent office or counsel’s
analysis thereof shall be provided promptly after receipt. For a document to be
filed in any patent office, a draft of such document shall be provided
sufficiently prior to its filing, to allow for review and comment by the other
party. If as a result of the review of any such document, COMPANY shall elect
not to pay or continue to pay the Costs for such PATENT RIGHT, COMPANY shall so
notify PAC within thirty (30) days of COMPANY’s receipt of such document and
COMPANY shall thereafter be relieved of the obligation to pay any additional
Costs regarding such PATENT RIGHT incurred after the receipt of such notice by
PAC. Such

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U.S. or foreign patent application or patent shall thereupon cease to be a
PATENT RIGHT hereunder and PAC shall be free to license its rights to that
particular U.S. patent application or patent to any other party on any terms.
 
 
4.    ROYALTIES
 
4.1  Beginning with the FIRST COMMERCIAL SALE in any country, on all sales of
LICENSED PRODUCTS anywhere in the world by COMPANY, its AFFILIATES or
SUBLICENSEES, COMPANY shall pay PAC royalties in accordance with the following
schedule, such undertaking and schedule having been agreed to for the purpose of
reflecting and advancing the mutual convenience of the parties. For each
LICENSED PRODUCT sold by COMPANY or its AFFILIATES and SUBLICENSEES:
 
Two percent (2%) of the NET SALES PRICE.
 
4.2  Only one royalty under paragraph 4.1 shall be due and payable to PAC by
COMPANY for any LICENSED PRODUCT regardless of the number of PATENT RIGHTS
covering such LICENSED PRODUCT.
 
4.3  In addition to the royalties provided for above, COMPANY shall pay PAC two
percent ( 2 %) of any and all non-royalty income, including without limitation
license fees and milestone payments, received from its AFFILIATES and
sublicensees in consideration for the sublicensing of any right or license
granted to COMPANY hereunder.
 
4.4  The payments due under this Agreement shall, if overdue, bear interest
until payment at a per annum rate equal to one percent (1 %) above the Wall
Street Journal prime rate in effect on the due date, not to exceed the maximum
permitted by law. The payment of such interest shall not preclude PAC from
exercising any other rights it may have as a consequence of the lateness of any
payment.
 
 
5.    REPORTS AND PAYMENTS
 
5.1  COMPANY shall keep, and shall cause each of its AFFILIATES and
SUBLICENSEES, if any, to keep full and accurate books of accounts containing all
particulars that may be necessary for the purpose of calculating all royalties
payable to PAC. Such books of account shall be kept at their principal place of
business and, with all necessary supporting data shall, during all reasonable
times for the three (3) years next following the end of the calendar year to
which each shall pertain be open for inspection at reasonable times by PAC or
its designee at PAC’s expense for the purpose of verifying royalty statements or
compliance with this Agreement.
 
5.2  In each year the amount of royalty due shall be calculated annually as of
the end of each ACCOUNTING PERIOD and shall be paid annually within the ninety
(90) days next following such date, every such payment to be supported by the
accounting prescribed in paragraph 5.3 and to be made in United States currency.
Whenever conversion from any foreign currency shall be required, such conversion
shall be at the rate of exchange thereafter published

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in the Wall Street Journal for the business day closest to the end of the
applicable ACCOUNTING PERIOD.
 
5.3  With each annual payment, COMPANY shall deliver to PAC a full and accurate
accounting to include at least the following information:
 
(a)  Quantity of each LICENSED PRODUCT sold or leased (by country) by COMPANY,
and its AFFILIATES and SUBLICENSEES;
 
(b)  Total billings for each LICENSED PRODUCT (by country);
 
(c)  Quantities of each LICENSED PRODUCT used by COMPANY and its AFFILIATES and
SUBLICENSEES;
 
(d)  Names and addresses of all SUBLICENSEES of COMPANY; and
 
(e)  Total royalties payable to PAC.
 
 
6.    INFRINGEMENT
 
6.1  PAC will protect its PATENT RIGHTS from infringement and prosecute
infringers when, in its sole judgement, such action may be reasonably necessary,
proper and justified.
 
6.2  If COMPANY shall have supplied PAC with written evidence demonstrating to
PAC’s reasonable satisfaction prima facie infringement of a claim of a PATENT
RIGHT by a third party in the LICENSE FIELDs, COMPANY may by notice request PAC
to take steps to protect the PATENT RIGHT. PAC shall notify COMPANY within three
(3) months of the receipt of such notice whether PAC intends to prosecute the
alleged infringement. If PAC notifies COMPANY that it intends to so prosecute,
PAC shall, within three (three) months of its notice to COMPANY either (i) cause
infringement to terminate or (ii) initiate legal proceedings against the
infringer. In the event PAC notifies COMPANY that PAC does not intend to
prosecute said infringement COMPANY may, upon notice to PAC, initiate legal
proceedings against the infringer at COMPANY’s expense and in PAC’s name if so
required by law. No settlement, consent judgment or other voluntary final
disposition of the suit which invalidates or restricts the claims of such PATENT
RIGHTS may be entered into without the consent of PAC, which consent shall not
be unreasonable withheld. COMPANY shall indemnify PAC against any order for
payment that may be made against PAC in such proceedings.
 
6.3  In the event one party shall initiate or carry on legal proceedings to
enforce any PATENT RIGHT against any alleged infringer in the LICENSE FIELDS,
the other party shall fully cooperate with and supply all assistance reasonably
requested by the party initiating or carrying on such proceedings. The party
which institutes any suit to protect or enforce a PATENT RIGHT shall have sole
control of that suit and shall bear the reasonable expenses (excluding legal
fees) incurred by said other party in providing such assistance and cooperation
as is requested pursuant to this paragraph. The party initiating or carrying on
such legal

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proceedings shall keep the other party informed of the progress of such
proceedings and said other party shall be entitled to counsel in such
proceedings but at its own expense. Any award paid by third parties as the
result of such proceedings (whether by way of settlement or otherwise) shall
first be applied to reimbursement of the unreimbursed legal fees and expenses
incurred by either party and then the remainder shall be divided between the
parties as follows:
 
(a)  (i)  If the amount is based on lost profits, COMPANY shall receive an
amount equal to the damages the court determines COMPANY has suffered as a
result of the infringement less the amount of any royalties that would have been
due PAC on sales of LICENSED PRODUCT lost by COMPANY as a result of the
infringement had COMPANY made such sales; and
 
(ii)  PAC shall receive an amount equal to the royalties it would have received
if such sales had been made by COMPANY; or
 
(b)  As to awards other than those based on lost profits, sixty (60) percent to
the party initiating such proceedings and forty (40) percent to the other ply.
 
6.4  For the purpose of the proceedings referred to in this Article 6, PAC and
COMPANY shall permit the use of their names and shall execute such documents and
carry out such other acts as may be necessary. The party initiating or carrying
on such legal proceedings shall keep the other party informed of the progress of
such proceedings and said other party shall be entitled to counsel in such
proceedings but at its own expense, said expenses to be off-set against any
damages received by the party bringing suit in accordance with the foregoing
paragraph 6.3.
 
 
7.    INDEMNIFICATION
 
7.1  (a)  COMPANY shall indemnify, defend and hold harmless PAC and its
directors, shareholders, officers, medical and professional staff, employees,
and agents and their respective successors, heirs and assigns (the
“Indemnitees”), against any liability, damage, loss or expense (including
reasonable attorney’s fees and expenses of litigation) incurred by or imposed
upon the Indemnitees or any one of them in connection with any claims, suits,
actions, demands or judgments arising out of any theory of LICENSED PRODUCT
liability (including, but not limited to, actions in the form of tort, warranty,
or strict liability) concerning any LICENSED PRODUCT, process or service made,
used or sold pursuant to any right or license granted under this Agreement.
 
(b)  COMPANY’s indemnification under (a) above shall not apply to any liability,
damage, loss or expense to the extent that it is directly attributable to the
negligent activities, reckless misconduct or intentional misconduct of the
Indemnitees.
 
(c)  COMPANY agrees, at its own expense to provide attorneys reasonably
acceptable to PAC to defend against any actions brought or filed against any
party indemnified hereunder with respect to the subject of indemnity contained
herein, whether or not such actions are rightfully brought.

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(d)  This paragraph 7.1 shall survive expiration or termination of this
Agreement.
 
7.2  (a)  At such time as any LICENSED PRODUCT, process or service relating to,
or developed pursuant to, this Agreement is being commercially distributed or
sold (other than for the purpose of obtaining regulatory approvals) by COMPANY
or by a licensee, affiliate or agent of COMPANY, COMPANY shall, at its sole cost
and expense, procure and maintain comprehensive general liability insurance in
amounts not less than $2,000,000 per incident and $2,000,000 annual aggregate
and naming the Indemnitees as additional insureds. Such COMPANY liability
insurance shall provide (i) LICENSED PRODUCT liability coverage and (ii) broad
form contractual liability coverage for COMPANY’s indemnification under
paragraph 8.1 of this Agreement. If COMPANY elects to self-insure all or part of
the limits described above (including deductibles or retentions which are in
excess of $250,000 annual aggregate) such self-insurance program must be
acceptable to PAC. The minimum amounts of insurance coverage required under this
paragraph 7.2 shall not be construed to create a limit of COMPANY’s liability
with respect to its indemnification under paragraph 7.1 of this Agreement.
 
(b)  COMPANY shall provide PAC with written evidence of such insurance upon
request of PAC. COMPANY shall provide PAC with written notice at least fifteen
(15) days prior to the cancellation, non-renewal or material change in such
insurance; if COMPANY does not obtain replacement insurance providing comparable
coverage prior to the expiration of such fifteen (15) day period, PAC shall have
the right to terminate this Agreement effective at the end of such fifteen (15)
day period without notice or any additional waiting periods.
 
(c)  This paragraph 7.2 shall survive expiration or termination of this
Agreement.
 
7.3  OTHER THAN WARRANTIES SET FORTH HEREIN, PAC MAKES NOT WARRANTY, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY
PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH PROPERTY,
INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO COMPANY OR TO ANY THIRD
PARTY HEREUNDER OR OTHERWISE AND HEREBY DISCLAIMS THE SAME.
 
 
8.    PRODUCT PURCHASE RIGHTS
 
8.1  COMPANY may from time to time request PAC to manufacture and sell to
COMPANY, on terms mutually acceptable to the Parties, LICENSED PRODUCTS,
including parts, subsystems, consumables, and components thereof. Upon any such
request, the Parties shall negotiate to determine whether they can agree on
terms for such manufacture and sale. Absent such agreement, PAC shall have no
obligation to manufacture and sell LICENSED PRODUCTS to COMPANY.
 
 
9.    TERMINATION

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9.1  If either party shall fail to faithfully perform any of its obligations
under this Agreement, the nondefaulting party may give written notice of the
default to the defaulting party. Unless such default is corrected within ninety
(90) days after such notice, the notifying party may terminate this Agreement
and the license hereunder upon thirty (30) days prior written notice, provided
that only one such ninety (90) day grace period shall be available in any twelve
(12) month period with respect to a default of any particular provision
hereunder. Thereafter notice of default of said provision shall constitute
termination.
 
9.2  In the event that any license granted to COMPANY under this Agreement is
terminated, any sublicense under such license granted prior to notice of default
under Section 9.1 shall remain in full force and effect, provided that:
 
(i)  the SUBLICENSEE is not then in breach of its sublicense agreement;
 
(ii)  the SUBLICENSEE agrees to be bound to PAC as the licensor under the terms
and conditions of this sublicense agreement, as modified by the provisions of
this paragraph 9.2;
 
(iii)  PAC shall have the right to receive the greater of (a) any payments
payable to COMPANY under such sublicense agreement to the extent they are
reasonably and equitably attributable to such SUBLICENSEE’s right under such
sublicense to use and exploit PATENT RIGHTS and/or TECHNOLOGICAL INFORMATION or
(b) the lowest royalty which is within the “Competitive” range as hereinafter
defined, at the time PAC’s license to COMPANY is terminated. A royalty rate
shall be regarded as “Competitive” if it is within the range of royalty rates
that PAC would charge in an arms length transaction with a licensee taking into
account the value of the licensed technology at the time PAC’s license to
COMPANY is terminated;
 
(iv)  PAC has the right to terminate such sublicense upon fifteen (15) days
prior written notice to COMPANY and such SUBLICENSEE in the event of any
material breach of the obligation to make the payments described in clause (iii)
of this paragraph 9.2, unless such breach is cured prior to the expiration of
such fifteen (15) day period;
 
(v)  PAC shall not assume, and shall not be responsible to such SUBLICENSEE for,
any representations, warranties or obligations of COMPANY to such SUBLICENSEE,
other than to permit such SUBLICENSEE to exercise any rights to PATENT RIGHTS
and TECHNOLOGICAL INFORMATION that are granted under such sublicense agreement
consistent with the terms of this AGREEMENT.
 
9.3  Upon termination of any license granted hereunder COMPANY shall pay PAC all
royalties due or accrued on (i) the sale of LICENSED PRODUCT up to and including
the date of termination and (ii) for six (6) months following the date of
termination, the sale of LICENSED PRODUCT manufactured prior to the termination
date. After such six (6) months, COMPANY may no longer sell any LICENSED
PRODUCTs.

A-10

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10.    MISCELLANEOUS
 
10.1  This Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof.
 
10.2  In order to facilitate implementation of this Agreement, PAC and COMPANY
are designating the following individuals to act on their behalf with respect to
this Agreement for the matter indicated below:
 
(a)  with respect to all royalty payments, any correspondence pertaining to any
PATENT RIGHT, or any notice of the use of PAC’s name, for PAC, the President and
Chief Executive Officer, and for COMPANY the President and Chief Executive
Officer, provided that correspondence relating to the billing of patent costs
shall be copied to, for PAC, the Chief Financial Officer, and for COMPANY, the
President and Chief Executive Officer.
 
(b)  any amendment of or waiver under this Agreement, any written notice
including progress reports or other communication pertaining to the Agreement:
for PAC, the President and Chief Executive Officer, and for COMPANY the
President and Chief Executive Officer.
 
(c)  the above designations may be superseded from time to time by alternative
designations made by: for PAC, the President, and for COMPANY, the President.
 
10.3  This Agreement may be amended and any of its terms or conditions may be
waived only by a written instrument executed by the parties or, in the case of a
waiver, by the party waiving compliance. The failure of either party at any time
or times to require performance of any provision hereof shall in no manner
affect its rights at a later time to enforce the same. No waiver by either party
of any condition shall be deemed as a further or continuing waiver of such
condition or term or of any other condition or term.
 
10.4  This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns.
 
10.5  Any delays in or failures of performance by either party under this
Agreement shall not be considered a breach of this Agreement if and to the
extent caused by occurrences beyond the reasonable control of the party
affected, including but not limited to: Acts of God; acts, regulations or laws
of any government; strikes or their concerted acts of worker; fires; floods;
explosions; riots; wars; rebellion; and sabotage. Any time for performance
hereunder shall be extended by the actual time of delay caused by such
occurrence.
 
10.6  Neither party shall use the name of the other party or of any officer,
employee, director, agent, or contractor of the other party or any adaptation
thereof in any advertising, promotional or sales literature, publicity or in any
document employed to obtain funds or financing without the prior written
approval of the party or individual whose name is to be used,

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except as required under the Securities Exchange Act reporting requirements or
the Securities Act registration requirements. For PAC, such approval shall be
obtained from the President.
 
10.7  This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
 
10.8  COMPANY may at its own discretion and without approval by PAC transfer its
interest or any part thereof under this Agreement to a wholly-owned subsidiary
or any assignee or purchaser or licensee of the portion of its business
associated with the manufacture and sale of LICENSED PRODUCT. In the event of
any such transfer, the transferee shall assume and be bound by the provisions of
this Agreement, and the transferor shall remain bound. Otherwise this Agreement
shall be assignable by COMPANY only with the consent in writing of PAC which
shall not unreasonably be withheld.
 
10.9  For any and all claims, disputes, or controversies arising under, out of,
or in connection with this Agreement, except issues relating to the validity,
construction or effect of any PATENT RIGHT, which the parties shall be unable to
resolve within sixty (60) days, the party raising such dispute shall promptly
advise the other party of such claim, dispute, or controversy in a writing which
describes in reasonable detail the nature of such dispute. By not later than
five (5) business days after the recipient has received such notice of dispute,
each party shall have selected for itself a representative who shall have the
authority to bind such party and shall additionally have advised the other party
in writing of the name and title of such representative. By not later than ten
(10) business days after the date of such notice of dispute, such
representatives shall agree upon a third party which is in the business of
providing Alternative Dispute Resolution (ADR) services (hereinafter, “ADR
Provider”) and shall schedule a date with such ADR Provider to engage in ADR.
Thereafter, the representatives of the parties shall engage in good faith in an
ADR process under the auspices of the selected ADR Provider. If within the
aforesaid thirty (30) business days after the date of the notice of dispute the
representatives of the parties have not been able to agree upon an ADR Provider
and schedule a date to engage in ADR, or if they have not been able to resolve
the dispute within thirty (30) business days after the termination of ADR, the
parties shall have the right to pursue any other remedies legally available to
resolve such dispute in either the Superior Court of San Diego County,
California or in the United States District Court for the Southern District of
California, to whose exclusive jurisdiction for such purposes PAC and COMPANY
hereby irrevocably consent and submit. Notwithstanding the foregoing, nothing in
this Paragraph 10.9 shall be construed to waive any rights or timely performance
of any obligations existing under this Agreement.
 
10.10  If any provision(s) of this Agreement are or become invalid, are ruled
illegal by any court of competent jurisdiction or are deemed unenforceable under
then current applicable law from time to time in effect during the term hereof,
it is the intention of the parties that the remainder of this agreement shall
not be effected thereby. It is further the intention of the parties that in lieu
of each such provision which is invalid, illegal or unenforceable, there be
substituted or added as part of this Agreement a provision which shall be as
similar as possible in economic and business objectives as intended by the
parties to such invalid, illegal or enforceable provision, but shall be valid,
legal and enforceable.

A-12

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THE PARTIES have duly executed this Agreement as of the date first shown above
written.
 
MICROLAB SYSTEMS, INC.
By:
 
/s/    ROBERT A. BEHRENS        

--------------------------------------------------------------------------------

   
President/CEO

 
DATE  3/5/98
 
PRISMA ACQUISITION CORP.
By:
 
/s/    ROBERT A. BEHRENS        

--------------------------------------------------------------------------------

   
President/CEO

 
DATE  3/5/98

A-13

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Exhibit B
 
PROMISSORY NOTE
 
Incorporated herein by reference to Exhibit 10.87 of this Quarterly Report on
Form 10-Q.

B-1

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Exhibit C
 
GUARANTY
 
Incorporated herein by reference to Exhibit 10.87.1 of this Quarterly Report on
Form 10-Q.

C-1

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Exhibit D
 
ASSIGNMENT OF NOTE AND GUARANTY
 
Incorporated herein by reference to Exhibit 10.87.2 of this Quarterly Report on
Form 10-Q.

D-1

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Exhibit E
 
SECURITY AGREEMENT
 
This Security Agreement (this “Agreement”), dated as of August 31, 2002, is made
by and between Danam Acquisition Corp., a Delaware corporation (“Debtor”) and
Synbiotics Corporation, a California corporation (the “Secured Party”), the
holder of a Secured Promissory Note in the original principal amount of
$500,000.00 (the “Note”).
 
RECITALS
 
A.  Debtor has executed and delivered the Note in the aggregate principal amount
of $500,000.00 and payable to the order of the Secured Party.
 
B.  In connection with the Note, Debtor desires to grant a security interest in
certain collateral to the Secured Party as set forth herein.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the above recitals and the mutual covenants
hereinafter set forth, the parties hereby agree as follows:
 
SECTION 1  Definitions; Interpretation.
 
(a)  All capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings assigned to them in the Note.
 
(b)  As used in this Agreement, the following terms shall have the following
meanings:
 
“Collateral” has the meaning set forth in Section 2.
 
“Documents” means this Agreement, the Note and all other certificates,
documents, agreements and instruments delivered to the Secured Party under the
Note or in connection with the Obligations, including, without limitation, the
Patent and Trademark Security Agreement of even date herewith between Debtor and
Secured Party (the “Patent and Trademark Security Agreement”).
 
“Event of Default” has the meaning set forth in Section 8.
 
“Lien” means any mortgage, deed of trust, pledge, security interest, assignment,
deposit arrangement, charge or encumbrance, lien, or other type of preferential
arrangement.

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“Note” has the meaning set forth in the preamble above, as it may be amended,
modified, renewed, extended or replaced from time to time.
 
“Obligations” means the indebtedness, liabilities and other obligations of
Debtor to the Secured Party under or in connection with the Note or any of the
other Documents, including, without limitation, all unpaid principal of the
Note, all interest accrued thereon, all fees and all other amounts payable by
Debtor to the Secured Party thereunder or in connection therewith, whether now
existing or hereafter arising, and whether due or to become due, absolute or
contingent, liquidated or unliquidated, determined or undetermined.
 
“Permitted Lien” means (i) Liens (A) upon or in any property (and proceeds
thereof) acquired or held by Debtor or any of its subsidiaries to secure the
purchase price of such property or indebtedness incurred solely for the purpose
of financing the acquisition of such property, or (B) existing on such property
at the time of its acquisition, provided that the Lien is confined solely to the
property (and proceeds thereof) so acquired and improvements thereon; (ii) Liens
on assets of Persons which become subsidiaries of Debtor after the date hereof,
provided that such Liens existed at the time the respective Persons became
subsidiaries of Debtor and were not created in anticipation thereof; and (iii)
other Liens which arise in the ordinary course of business and do not materially
impair Debtor’s ownership or use of the Collateral or the value thereof.
 
“Person” means an individual, corporation, partnership, joint venture, trust,
unincorporated organization, governmental agency or authority, or any other
entity of whatever nature.
 
“UCC” means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York.
 
(c)  Where applicable and except as otherwise defined herein, terms used in this
Agreement shall have the meanings assigned to them in the UCC.
 
(d)  In this Agreement, (i) the meaning of defined terms shall be equally
applicable to both the singular and plural forms of the terms defined; and (ii)
the captions and headings are for convenience of reference only and shall not
affect the construction of this Agreement.
 
SECTION 2  Security Interest.
 
(a)  As security for the payment and performance of the Obligations, Debtor
hereby grants to the Secured Party a security interest in all of Debtor’s right,
title and interest in, to and under all of its personal property, wherever
located and whether now existing or owned or hereafter acquired or arising,
including all accounts, chattel paper, commercial tort claims, deposit accounts,
documents, equipment (including all fixtures), general intangibles, instruments,
inventory, investment property, letter-of-credit rights, money and all products,
proceeds and supporting obligations of any and all of the foregoing
(collectively, the “Collateral”). Notwithstanding the foregoing, except for
fixtures (as provided in Section 9-102(a)(41) of the UCC), such grant of a
security interest shall not extend to, and the term “Collateral” shall not

E-2

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include, any asset which would be real property under the law of the
jurisdiction in which it is located
 
(b)  Anything herein to the contrary notwithstanding, (i) Debtor shall remain
liable under any contracts, agreements and other documents included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (ii) the exercise by the Secured Party of any of the rights hereunder
shall not release Debtor from any of its duties or obligations under such
contracts, agreements and other documents included in the Collateral, and (iii)
the Secured Party shall not have any obligation or liability under any
contracts, agreements and other documents included in the Collateral by reason
of this Agreement, nor shall the Secured Party be obligated to perform any of
the obligations or duties of Debtor thereunder or to take any action to collect
or enforce any such contract, agreement or other document included in the
Collateral hereunder.
 
(c)  This Agreement shall create a continuing security interest in the
Collateral which shall remain in effect until terminated in accordance with
Section 19 hereof.
 
SECTION 3  Financing Statements, Etc.    Debtor shall execute and deliver to the
Secured Party concurrently with the execution of this Agreement, and Debtor
hereby authorizes the Secured Party to file (with or without Debtor’s
signature), at any time and from time to time thereafter, all financing
statements, assignments, amendments, continuation financing statements,
termination statements, account control agreements, and other documents and
instruments, in form reasonably satisfactory to the Secured Party, and take all
other action, as the Secured Party may reasonably request, to perfect and
continue perfected, maintain the priority of or provide notice of the security
interest of the Secured Party in the Collateral and to accomplish the purposes
of this Agreement. Debtor will cooperate with the Secured Party in obtaining
control (as defined in the UCC) of Collateral consisting of deposit accounts,
investment property, letter of credit rights and electronic chatter paper.
Debtor will join with the Secured Party in notifying any third party who has
possession of any Collateral of the Secured Party’s security interest therein
and obtaining an acknowledgment from the third party that it is holding the
Collateral for the benefit of the Secured Party. Debtor will not create any
chattel paper without placing a legend on the chattel paper acceptable to the
Secured Party indicating that the Secured Party has a security interest in the
chattel paper.
 
SECTION
 
4  Representations and Warranties.    Debtor represents and warrants to the
Secured Party that:

 
(a)  Debtor is duly organized, validly existing and in good standing under the
law of the jurisdiction of its organization and has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement.
 
(b)  The execution, delivery and performance by Debtor of this Agreement have
been duly authorized by all necessary action of Debtor, and this Agreement
constitutes the legal, valid and binding obligation of Debtor, enforceable
against Debtor in accordance with its terms.

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(c)  No authorization, consent, approval, license, exemption of, or filing or
registration with, any governmental authority or agency, or approval or consent
of any other Person which has not been obtained, is required for the due
execution, delivery or performance by Debtor of this Agreement, except for any
filings necessary to perfect any Liens on any Collateral.
 
(d)  Debtor’s chief executive office and principal place of business (as of the
date of this Agreement) is located at the address set forth in Schedule 1;
Debtor’s jurisdiction of organization is set forth in Schedule 1; Debtor’s exact
legal name is as set forth in the first paragraph of this Agreement; and all
other locations where Debtor conducts business or Collateral is kept (as of the
date of this Agreement) are set forth in Schedule 1.
 
(e)  Debtor has rights in or the power to transfer the Collateral, and Debtor is
the sole and complete owner of the Collateral, free from any Lien other than
Permitted Liens.
 
(f)  No control agreements exist with respect to any Collateral.
 
SECTION 5  Covenants.    So long as any of the Obligations remain unsatisfied,
Debtor agrees that:
 
(a)  Debtor shall appear in and defend any action, suit or proceeding which may
affect to a material extent its title to, or right or interest in, or the
Secured Party’s right or interest in, the Collateral, and shall do and perform
all reasonable acts that may be necessary and appropriate to maintain, preserve
and protect the Collateral.
 
(b)  Debtor shall comply in all material respects with all laws, regulations and
ordinances, and all policies of insurance, relating in a material way to the
possession, operation, maintenance and control of the Collateral.
 
(c)  Debtor shall give prompt written notice to the Secured Party (and in any
event not later than 30 days following any change described below in this
subsection) of: (i) any change in the location of Debtor’s chief executive
office or principal place of business; (ii) any change in the locations set
forth in Schedule 1; (iii) any change in its name; (iv) any changes in its
identity or structure in any manner which might make any financing statement
filed hereunder incorrect or misleading; (v) any change in its registration as
an organization (or any new such registration); or (vi) any change in its
jurisdiction of organization; provided that Debtor shall not locate any
Collateral outside of the United States nor shall Debtor change its jurisdiction
of organization to a jurisdiction outside of the United States.
 
(d)  Debtor shall carry and maintain in full force and effect, at its own
expense and with financially sound and reputable insurance companies, insurance
with respect to the Collateral in such amounts, with such deductibles and
covering such risks as is customarily carried by companies engaged in the same
or similar businesses and owning similar properties in the localities where
Debtor operates. Upon the request of the Secured Party, Debtor shall furnish to
the Secured Party from time to time with full information as to the insurance
carried by it and, if so requested, copies of all such insurance policies.
Debtor shall also furnish to the Second Party from time to time upon the request
of Secured Party a certificate of Debtor’s insurance

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broker or other insurance specialist stating that all premiums then due on the
policies relating to insurance on the Collateral have been paid and that such
policies are in full force and effect.
 
(e)  Debtor shall keep separate, accurate and complete books and records with
respect to the Collateral, disclosing the Secured Party’s security interest
hereunder.
 
(f)  Debtor shall not surrender or lose possession of, sell, lease, rent, or
otherwise dispose of or transfer any of the Collateral (other than Collateral
subject to a Permitted Lien) or any right or interest therein, except in the
ordinary course of business or unless such Collateral is replaced by comparable
Collateral of similar value; provided that no such disposition or transfer of
Collateral consisting of investment property or instruments shall be permitted
while any Event of Default exists.
 
(g)  Debtor shall keep the Collateral free of all Liens except Permitted Liens.
 
(h)  Debtor shall pay and discharge all taxes, fees, assessments and
governmental charges or levies imposed upon it with respect to the Collateral
prior to the date on which penalties attach thereto, except to the extent such
taxes, fees, assessments or governmental charges or levies are being contested
in good faith by appropriate proceedings.
 
(i)  Debtor shall maintain and preserve its legal existence, its rights to
transact business and all other material rights, franchises and privileges
necessary or desirable in the normal course of its business and operations and
the ownership of the Collateral, except in connection with any transactions
expressly permitted by the Note or any other Document.
 
(j)  Upon the request of the Secured Party, Debtor shall (except with respect to
Collateral subject to a Permitted Lien) (i) immediately deliver to the Secured
Party, or an agent designated by it, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all documents and
instruments, all certificated securities with respect to any investment
property, all letters of credit and all accounts and other rights to payment at
any time evidenced by promissory notes, trade acceptances or other instruments,
(ii) cause any securities intermediaries to show on their books that the Secured
Party is the entitlement holder with respect to any investment property, and/or
obtain account control agreements in favor of the Secured Party from such
securities intermediaries, in form and substance satisfactory to the Secured
Party, with respect to any investment property, as requested by the Secured
Party, and (iii) provide such notice, obtain such acknowledgments and take all
such other action, with respect to any chattel paper, documents and letter-of
credit rights, as the Secured Party shall reasonably specify.
 
SECTION 6  Collection of Accounts.    Until the Secured Party exercise its
rights hereunder to collect the accounts and other rights to payment, Debtor
shall endeavor in the first instance diligently to collect all amounts due or to
become due on or with respect to the accounts and other rights to payment. At
the request of the Secured Party, upon the occurrence and during the continuance
of any Event of Default, all remittances received by Debtor (other than with
respect to Collateral subject to a Permitted Lien) shall be held in trust for
the Secured Party and, in accordance with the Secured Party’s instructions,
remitted to the Secured Party or deposited

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into account(s) of the Secured Party in the form received (with any necessary
endorsements or instruments of assignment or transfer). At the request of the
Secured Party, upon and after the occurrence of any Event of Default, the
Secured Party shall be entitled to (other than with respect to Collateral
subject to a Permitted Lien) receive all distributions and payments of any
nature with respect to any investment property or instruments, and all such
distributions or payments received by the Debtor shall be held in trust for the
Secured Party and, in accordance with the Secured Party’s instructions, remitted
to the Secured Party or deposited into account(s) with the Secured Party in the
form received (with any necessary endorsements or instruments of assignment or
transfer). Following the occurrence of an Event of Default any such
distributions and payments with respect to any investment property held in any
securities account (other than with respect to Collateral subject to a Permitted
Lien) shall be held and retained in such securities account, in each case as
part of the Collateral hereunder. Additionally, the Secured Party shall have the
right (other than with respect to Collateral subject to a Permitted Lien), upon
the occurrence of an Event of Default, following prior written notice to the
Debtor, to vote and to give consents, ratifications and waivers with respect to
any investment property and instruments, and to exercise all rights of
conversion, exchange, subscription or any other rights, privileges or options
pertaining thereto, as if the Secured Party were the absolute owner thereof;
provided that the Secured Party shall have no duty to exercise any of the
foregoing rights afforded to it and shall not be responsible to the Debtor or
any other Person for any failure to do so or delay in doing so.
 
SECTION 7  Authorization; Secured Party Appointed Attorney-in-Fact.    The
Secured Party shall have the right to, in the name of Debtor, or in the name of
the Secured Party or otherwise, upon notice to but without the requirement of
assent by Debtor, and Debtor hereby constitutes and appoints the Secured Party
(and any of the Secured Party’s officers, employees or agents designated by the
Secured Party) as Debtor’s true and lawful attorney-in-fact, with full power and
authority to: (i) sign and file any of the financing statements and other
documents and instruments which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the Secured Party’s
security interest in the Collateral (including any notices to or agreements with
any securities intermediary); (ii) assert, adjust, sue for, compromise or
release any claims under any policies of insurance; (iii) give notices of
control, default or exclusivity (or similar notices) under any account control
agreement or similar agreement with respect to exercising control over deposit
accounts or securities accounts; and (iv) execute any and all such other
documents and instruments, and do any and all acts and things for and on behalf
of Debtor, which the Secured Party may deem reasonably necessary or advisable to
maintain, protect, realize upon and preserve the Collateral and the Secured
Party’s security interest therein and to accomplish the purposes of this
Agreement. The Secured Party agrees that, except upon and during the continuance
of an Event of Default, it shall not exercise the power of attorney, or any
rights granted to the Secured Party, pursuant to clauses (ii), (iii) and (iv).
The foregoing power of attorney is coupled with an interest and irrevocable so
long as the Obligations have not been paid and performed in full. Debtor hereby
ratifies, to the extent permitted by law, all that the Secured Party shall
lawfully and in good faith do or cause to be done by virtue of and in compliance
with this Section 7.
 
SECTION 8  Events of Default.    Any of the following events which shall occur
and be continuing shall constitute an “Event of Default”:

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(a)  Debtor shall fail to pay when due any amount of principal of or interest on
the Note or other amount payable hereunder or under the Note or any other
Document or in respect of the Obligations.
 
(b)  Any representation or warranty by Debtor in this Agreement shall prove to
have been incorrect in any material respect when made or deemed made.
 
(c)  Debtor shall fail to perform or observe in any material respect any other
term, covenant or agreement contained in this Agreement, the Note or any other
Document on its part to be performed or observed and any such failure shall
remain unremedied for a period of 45 days from the occurrence thereof.
 
(d)  An order of relief under any bankruptcy, reorganization or insolvency laws
has been entered against Debtor by a court having jurisdiction or Debtor admits
in writing its inability to pay its debts generally as they become due, files a
petition for relief under any bankruptcy, reorganization or insolvency laws,
consents to the filing of a bankruptcy proceeding against it or the appointment
of a receiver for itself or for all or substantially all of its property, or a
petition in bankruptcy is filed against it or it makes an assignment for the
benefit of its creditors.
 
(e)  Debtor shall (i) liquidate, wind up or dissolve (or suffer any liquidation,
wind-up or dissolution), except to the extent expressly permitted by the Note,
(ii) suspend its operations other than in the ordinary course of business, or
(iii) take any action to authorize any of the actions or events set forth above
in this subsection (e).
 
(f)  Any levy upon, seizure or attachment of any of the Collateral which shall
not have been rescinded or withdrawn within five (5) business days after notice
of such seizure or attachment.
 
(g)  Any loss, theft or substantial damage to, or destruction of, any material
portion of the Collateral (unless within 30 days after the occurrence of any
such event, Debtor furnishes to the Secured Party evidence reasonably
satisfactory to the Secured Party that the amount of any such loss, theft,
damage to or destruction of the Collateral is fully insured under policies
naming the Secured Party (or with respect to Collateral subject to a Permitted
Lien, the lienholder thereof) as an additional named insured or loss payee).
 
SECTION 9  Remedies.
 
(a)  Upon the occurrence and continuance of any Event of Default, the Secured
Party may declare any of the Obligations to be immediately due and payable and
shall have, in addition to all other rights and remedies granted to it in this
Agreement, the Note or any other Document, all rights and remedies of the
Secured Party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, (i) the Secured Party may peaceably and without
notice enter any premises of Debtor, take possession of any the Collateral,
remove or dispose of all or part of the Collateral on any premises of the Debtor
or elsewhere, or, in the case of equipment, render it nonfunctional, and
otherwise collect, receive, appropriate and realize upon all or any part of the
Collateral, and demand, give receipt for, settle, renew, extend,

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exchange, compromise, adjust, or sue for all or any part of the Collateral, as
the Secured Party may determine; (ii) the Secured Party may require the Debtor
to assemble all or any part of the Collateral and make it available to the
Secured Party at any place and time designated by the Secured Party; (iii) the
Secured Party may secure the appointment of a receiver of the Collateral or any
part thereof (to the extent and in the manner provided by applicable law); (iv)
the Secured Party may sell, resell, lease, use, assign, license, sublicense,
transfer or otherwise dispose of any or all of the Collateral in its then
condition or following any commercially reasonable preparation or processing
(utilizing in connection therewith any of Debtor’s assets, without charge or
liability to the Secured Party therefor) at public or private sale, by one or
more contracts, in one or more parcels, at the same or different times, for cash
or credit, or for future delivery without assumption of any credit risk, all as
the Secured Party deems advisable; provided, however, that Debtor shall be
credited with the net proceeds of sale only when such proceeds are finally
collected by the Secured Party. The Secured Party shall have the right upon any
such public sale, and, to the extent permitted by law, upon any such private
sale, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption, which right or equity of redemption Debtor hereby
releases, to the extent permitted by law. The Secured Party shall give Debtor
such notice of any private or public sales as may be required by the UCC or
other applicable law.
 
(b)  For the purpose of enabling the Secured Party to exercise its rights and
remedies under this Section 9 or otherwise in connection with this Agreement,
Debtor hereby grants to the Secured Party an irrevocable, non-exclusive and
assignable license (exercisable without payment or royalty or other compensation
to Debtor) to use, license or sublicense any intellectual property Collateral.
 
(c)  The Secured Party shall not have any obligation to clean up or otherwise
prepare the Collateral for sale. The Secured Party has not obligation to attempt
to satisfy the Obligations by collecting them from any other Person liable for
them, and the Secured Party may release, modify or waive any Collateral provided
by any other Person to secure any of the Obligations, all without affecting the
Secured Party’s rights against Debtor. Debtor waives any right it may have to
require the Secured Party to pursue any third Person for any of the Obligations.
The Secured Party may comply with any applicable state or federal law
requirements in connection with a disposition of the Collateral and compliance
will not be considered adversely to affect the commercial reasonableness of any
sale of the Collateral. The Secured Party may sell the Collateral without giving
any warranties as to the Collateral. The Secured Party may specifically disclaim
any warranties of title or the like. This procedure will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.
If the Secured Party sells any of the Collateral upon credit, Debtor will be
credited only with payments actually made by the purchaser, received by the
Secured Party and applied to the indebtedness of the purchaser. In the event the
purchaser fails to pay for the Collateral, the Secured Party may resell the
Collateral and Debtor shall be credited with the proceeds of the sale.
 
(d)  To the extent Debtor uses the proceeds of any of the Obligations to
purchase Collateral, Debtor’s repayment of the Obligations shall apply on a
“first-in, first-out” basis so

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that the portion of the Obligations used to purchase a particular item of
Collateral shall be paid in the chronological order the Debtor purchased the
Collateral.
 
(e)  The cash proceeds actually received from the sale or other disposition or
collection of Collateral, and any other amounts received in respect of the
Collateral the application of which is not otherwise provided for herein, shall
be applied first, to the payment of the reasonable costs and expenses of the
Secured Party in exercising or enforcing its rights hereunder and in collecting
or attempting to collect any of the Collateral, and to the payment of all other
amounts payable to the Secured Party pursuant to Section 13 hereof; and second,
to the payment of the Obligations. Any surplus thereof which exists after
payment and performance in full of the Obligations shall be promptly paid over
to Debtor or otherwise disposed of in accordance with the UCC or other
applicable law. Debtor shall remain liable to the Secured Party for any
deficiency which exists after any sale or other disposition or collection of
Collateral.
 
SECTION 10  Certain Waivers.    Debtor waives, to the fullest extent permitted
by law, (i) any right of redemption with respect to the Collateral, whether
before or after sale hereunder, and all rights, if any, of marshalling of the
Collateral or other collateral or security for the Obligations; (ii) any right
to require the Secured Party (A) to proceed against any Person, (B) to exhaust
any other collateral or security for any of the Obligations, or (C) to make or
give any presentments, demands for performance, notices of nonperformance,
protests, notices of protests or notices of dishonor in connection with any of
the Collateral; and (iii) all claims, damages, and demands against the Secured
Party arising out of the repossession, retention, sale or application of the
proceeds of any sale of the Collateral, other than claims for violations of law
and willful misconduct.
 
SECTION 11  Notices.    All notices or other communications hereunder shall be
in writing (including by facsimile transmission or by email) and mailed, sent or
delivered to the respective parties hereto at or to their respective addresses
or facsimile numbers set forth below their names on the signature pages hereof,
or at or to such other address or facsimile number as shall be designated by any
party in a written notice to the other parties hereto. All such notices and
other communications shall be deemed to be delivered when a record (within the
meaning of the UCC) has been (i) delivered by hand; (ii) sent by mail upon the
earlier of the date of receipt or five business days after deposit in the mail,
first class (or air mail as to communications sent to or from the United States)
or (iii) sent by facsimile transmission.
 
SECTION 12  No Waiver; Cumulative Remedies.    No failure on the part of the
Secured Party to exercise, and no delay in exercising, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to the Secured Party.
 
SECTION 13  Costs and Expenses.

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(a)  Debtor agrees to pay on demand. All reasonable costs and expenses of the
Secured Party, and the reasonable fees and disbursements of the Secured Party,
in connection with the enforcement or attempted enforcement of, and preservation
of any rights or interests under, this Agreement and the Note, including in any
out-of-court workout or other refinancing or restructuring or in any bankruptcy
case, and the protection, sale or collection of, or other realization upon, any
of the Collateral, including all expenses of taking, collecting, holding,
sorting, handling, preparing for sale, selling, or the like, and other such
expenses of sales and collections of Collateral, in addition to, and not limited
by, this subsection (a).
 
(b)  Any amounts payable to the Secured Party under this Section 13 or otherwise
under this Agreement if not paid upon demand shall bear interest from the date
of such demand until paid in full, at the rate of interest set forth in the
Note.
 
SECTION 14  Binding Effect.    This Agreement shall be binding upon, inure to
the benefit of and be enforceable by Debtor, the Secured Party and their
respective successors and assigns and shall bind any Person who becomes bound as
a debtor to this Agreement. Debtor may not assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder without
the prior express written consent of the Secured Party. Any such purported
assignment, transfer, hypothecation or other conveyance by Debtor without the
prior express written consent of the Secured Party shall be null and void and of
no force or effect. Debtor acknowledges and agrees that in connection with an
assignment of, or grant of a participation in, the Obligations the Secured Party
may assign, or grant participations in, all or a portion of its rights and
obligations hereunder. Upon any assignment of the Secured Party’s rights
hereunder, such assignee shall have, to the extent of such assignment, all
rights of the Secured Party hereunder. Debtor agrees that, upon any such
assignment, such assignee may enforce directly, without joinder of the Secured
Party, the rights of the Secured Party set forth in this Agreement. Any such
assignee shall be entitled to enforce the Secured Party’s rights and remedies
under this Agreement to the same extent as if it were the original secured party
named herein.
 
SECTION 15  Governing Law.    This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, except as required by
mandatory provisions of law and to the extent the validity or perfection of the
security interests hereunder, or the remedies hereunder, in respect of any
Collateral are governed by the law of a jurisdiction other than New York.
 
SECTION 16  Entire Agreement; Amendment.    This Agreement together with the
Note and the Patent and Trademark Security Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and shall not
be amended except by the written agreement of the parties.
 
SECTION 17  Rights Under Note.    This Agreement has been granted in conjunction
with the Note and the Patent and Trademark Security Agreement. The rights and
remedies of the Secured Party with respect to the security interests granted
herein are without prejudice to, and are in addition to those set forth in the
Note and/or the Patent and Trademark Security Agreement.

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SECTION 18  Severability.    Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If, however, any provision of this Agreement
shall be prohibited by or invalid under any such law or regulation in any
jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform
to the minimum requirements of such law or regulation, or, if for any reason it
is not deemed so modified, it shall be ineffective and invalid only to the
extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision
in any other jurisdiction.
 
SECTION 19  Counterparts.    This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
 
SECTION 20  Termination.    Upon payment and performance in full of all
Obligations, the security interest created under this Agreement shall terminate
and the Secured Party shall promptly execute and deliver to Debtor such
documents and instruments reasonably requested by Debtor as shall be necessary
to evidence termination of all security interests given by Debtor to the Secured
Party hereunder.
 
SECTION 21  Conflicts.    In the event of any conflict or inconsistency between
this Agreement or the Note, the terms of this Agreement shall control.
 
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of
the date first above written.
 
 
DEBTOR:
 
DANAM ACQUISITION CORP.
By:
 
/s/    MICHAEL J. S. ASHER        

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CEO
 
c/o Drew Scientific Group PLC
Park Road, Barrow In Furness
Cumbria LA14 4QR
United Kingdom
Attn: Michael J. Sipple-Asher
Fax: 011 44 1229 432096

 
SECURED PARTY:
 
SYNBIOTICS CORPORATION
By:
 
/s/    PAUL A. ROSINACK         

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President & CEO
 
11011 Via Frontera
San Diego, CA 92127
Attn: Michael K. Green
Fax: (858) 451-5719

 
[SIGNATURE PAGE TO SECURITY AGREEMENT]

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SCHEDULE 1
to the Security Agreement
 
1.    Jurisdiction of Organization
 
Delaware
 
2.    Chief Executive Office and Principal Place of Business
 
4230 Shirling Way
Dallas, TX 75237
 
3.    Other locations where Debtor conducts business or Collateral is kept
 
178 Christian Street
Oxford, Connecticut 06478
 
1721 Black River Road
Rome, NY 13440
 
 
 
Schedule 1-1

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PATENT AND TRADEMARK SECURITY AGREEMENT
 
This PATENT AND TRADEMARK SECURITY AGREEMENT (this “Agreement”), dated as of
August 31, 2002, is entered into between Danam Acquisition Corp., a Delaware
corporation (“Grantor”) and Synbiotics Corporation, a California corporation
(“Lender.
 
RECITALS
 
A.  Grantor is contemporaneously herewith, executing to the order of Lender that
certain secured promissory note (as amended from time to time, the “Note”) in
the original principal amount of $500,000 (the “Principal Amount”) pursuant to
which Lender shall make advances to Grantor from time to time in accordance with
the terms of the Note which shall not at any time exceed the Principal Amount;
and
 
B.  Grantor is the owner of certain intellectual property, identified below, in
which Grantor is granting a security interest to Lender.
 
NOW THEREFORE, the parties hereto mutually agree as follows:
 
SECTION 22  GRANT OF SECURITY INTEREST.
 
To secure the complete and timely payment and performance of all obligations
under the Note and this Agreement and any other document executed in connection
with or pursuant to either of them, including without limitation the Security
Agreement dated as of the date hereof (the “Security Agreement”) between Grantor
and Lender (collectively, the “Obligations”), and without limiting any other
security interest Grantor has granted to Lender, Grantor hereby grants, assigns,
and conveys to Lender a security interest in Grantor’s entire right, title, and
interest in and to the following, whether now owned or hereafter acquired (the
“Collateral”):
 
(i)  Each of the trademarks and rights and interest which are capable of being
protected as trademarks (including trademarks, service marks, designs, logos,
indicia, tradenames, corporate names, company names, business names, fictitious
business names, trade styles, and other source or business identifiers, and
applications pertaining thereto), which are presently, or in the future may be,
owned, created, acquired, or used (whether pursuant to a license or otherwise)
by Grantor, in whole or in part, and all trademark rights with respect thereto
throughout the world, including all proceeds thereof (including license
royalties and proceeds of infringement suits), and rights to renew and extend
such trademarks and trademark rights;
 
(ii)  Each of the patents and patent applications which are presently, or in the
future may be, owned, issued, acquired, or used (whether pursuant to a license
or otherwise) by Grantor, in whole or in part, and all patent rights with
respect thereto throughout the world, including all proceeds thereof (including
license royalties and proceeds of infringement suits), foreign filing rights,
and rights to extend such patents and patent rights;
 
(iii)  All of Grantor’s right to the trademarks and trademark registrations
listed on Exhibit A attached hereto, as the same may be updated hereafter from
time to time;

E-14

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(iv)  All of Grantor’s right, title, and interest, in and to the patents and
patent applications listed on Exhibit B attached hereto, as the same may be
updated hereafter from time to time;
 
(vi)  All of Grantor’s right, title, and interest in all patentable inventions,
and to file applications for patent under federal patent law or regulation of
any foreign country, and to request reexamination and/or reissue of the patents,
the right (without obligation) to sue or bring interference proceedings in the
name of Grantor or in the name of Lender for past, present, and future
infringements of the patents, and all rights (but not obligations) corresponding
thereto in the United States and any foreign country;
 
(vii)  the entire goodwill of or associated with the businesses now or hereafter
conducted by Grantor connected with and symbolized by any of the aforementioned
properties and assets;
 
(viii)  All general intangibles relating to the foregoing and all other
intangible intellectual or other similar property of the Grantor of any kind or
nature, associated with or arising out of any of the aforementioned properties
and assets and not otherwise described above; and
 
(ix)  All products and proceeds of any and all of the foregoing (including,
without limitation, license royalties and proceeds of infringement suits) and,
to the extent not otherwise included, all payment intangibles, payments under
insurance, or any payments under any indemnity, warranty, or guaranty payable by
reason of loss or damage to or otherwise with respect to the Collateral.
 
SECTION 23  AFTER-ACQUIRED PATENT OR TRADEMARK RIGHTS.
 
If Grantor shall obtain rights to any new trademarks, any new patentable
inventions or become entitled to the benefit of any patent application or patent
for any reissue, division, or continuation, of any patent, or if Grantor shall
notify or Lender shall discover that Grantor has rights in other patents or
trademarks, then, in any such event, the provisions of this Agreement shall
automatically apply thereto. Grantor shall give prompt notice in writing to
Lender with respect to any such new trademarks or patents, or renewal or
extension of any trademark registration. Without limiting Grantor’s obligation
under this Section 2, Grantor authorizes Lender to modify this Agreement by
amending Exhibits A or B to include any such new patent or trademark rights.
Notwithstanding the foregoing, no failure to so modify this Agreement or amend
Exhibits A or B shall in any way affect, invalidate or detract from Lender’s
continuing security interest in all Collateral, whether or not listed on Exhibit
A or B.

E-15

--------------------------------------------------------------------------------

 
SECTION 24  GENERAL PROVISIONS.
 
(a)  Rights Under Note.    This Agreement has been granted in conjunction with
the Note and the Security Agreement. The rights and remedies of Lender with
respect to the security interests granted herein are without prejudice to, and
are in addition to those set forth in the Note and/or the Security Agreement.
 
(b)  Successors.    The benefits and burdens of this Agreement shall inure to
the benefit of and be binding upon the respective successors and permitted
assigns of the parties; provided that Grantor may not transfer any of the
Collateral or any rights hereunder, without the prior written consent of Lender,
except as specifically permitted hereby.
 
(c)  Amendment; No Conflict.    This Agreement is subject to modification only
by a writing signed by the parties, except as provided in Section 2 of this
Agreement. To the extent that any provision of this Agreement conflicts with any
provision of the Note or the Copyright Security Agreement, the provision giving
Lender greater rights or remedies shall govern, it being understood that the
purpose of this Agreement is to add to, and not detract from, the rights granted
to Lender under those documents.
 
(d)  Governing Law.    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
 
SYNBIOTICS CORPORATION:
     
DANAM ACQUISITION CORP.:
By:
 
/s/    PAUL A. ROSINACK        

--------------------------------------------------------------------------------

     
By:
 
/s/    MICHAEL J. S. ASHER        

--------------------------------------------------------------------------------

   
President & CEO
         
CEO

E-16

--------------------------------------------------------------------------------

 
Exhibit “A”
 
REGISTERED TRADEMARKS
 
Trademark/Serial No.

--------------------------------------------------------------------------------

 
Date

--------------------------------------------------------------------------------

PROCHEM, Reg. No. 2299123
 
Registered:  December 14, 1999
QVET, Reg. No. 1902542
 
Registered:  July 4, 1995

E-17

--------------------------------------------------------------------------------

 
Exhibit “B”
 
PATENTS
 
Patent/Application No.

--------------------------------------------------------------------------------

 
Date

--------------------------------------------------------------------------------

U.S. Patent No. 5,128,104 (CUEVETTE FOR AUTOMATED TESTING MACHINE)
 
Issued:  July 7, 1992
CANADA Patent Application No. 2137672 (CUEVETTE FOR AUTOMATED TESTING MACHINE)
 
Filed:    June 9, 1992

E-18

--------------------------------------------------------------------------------

 
Schedule 2.1 (a)(i)
 
PERSONAL PROPERTY
 
Please see Exhibit 2.1(a)(i) attached hereto.

--------------------------------------------------------------------------------

 
Exhibit 2.1(a)(i)
 
Tag

--------------------------------------------------------------------------------

 
Description

--------------------------------------------------------------------------------

 
Acquire

--------------------------------------------------------------------------------

 
End

--------------------------------------------------------------------------------

 
Cost

--------------------------------------------------------------------------------

 
Method

--------------------------------------------------------------------------------

  
Percentage

--------------------------------------------------------------------------------

   
Depreciation

--------------------------------------------------------------------------------

 
NBV

--------------------------------------------------------------------------------

971
 
NETFRAME 3100 w/ Landesk
 
10/1/1998
 
9/30/2003
 
7,206.19
 
Straight-Line
  
20.00
%
 
3,362.89
 
0.00
972
 
Millennia 400 MAX
 
10/1/1998
 
9/30/2003
 
3,993.34
 
Straight-Line
  
20.00
%
 
1,863.57
 
0.00
973
 
Millennia 400 MAX
 
10/1/1998
 
9/30/2003
 
3,993.35
 
Straight-Line
  
20.00
%
 
1,863.57
 
0.00
974
 
Millennia 350 Microtower,15.9”
 
10/1/1998
 
9/30/2003
 
2,458.35
 
Straight-Line
  
20.00
%
 
1,147.23
 
0.00
975
 
Millennia 350 Microtower,15.9”
 
10/1/1998
 
9/30/2003
 
2,458.35
 
Straight-Line
  
20.00
%
 
1,147.23
 
0.00
976
 
Millennia 350 Microtower,15.9”
 
10/1/1998
 
9/30/2003
 
2,458.35
 
Straight-Line
  
20.00
%
 
1,147.23
 
0.00
977
 
Millennia 350 Microtower,15.9”
 
10/1/1998
 
9/30/2003
 
2,458.35
 
Straight-Line
  
20.00
%
 
1,147.23
 
0.00
978
 
Millennia 350 Microtower,15.9”
 
10/1/1998
 
9/30/2003
 
2,458.39
 
Straight-Line
  
20.00
%
 
1,147.25
 
0.00
990
 
21 Series Printer
 
1/1/1999
 
12/31/2003
 
5,676.12
 
Straight-Line
  
20.00
%
 
2,365.04
 
0.00
1008
 
Motion Analysis Camera System
 
3/1/1999
 
2/28/2007
 
14,559.82
 
Straight-Line
  
12.50
%
 
3,488.28
 
0.00
1017
 
Lambda Spectrometer
 
4/1/1999
 
3/31/2007
 
27,561.74
 
Straight-Line
  
12.50
%
 
6,316.22
 
0.00
1019
 
Paint Masking Fixture
 
4/1/1999
 
3/31/2007
 
5,103.99
 
Straight-Line
  
12.50
%
 
1,169.67
 
0.00
1023
 
Software
 
6/1/1999
 
5/31/2004
 
567.10
 
Straight-Line
  
20.00
%
 
189.03
 
0.00
1025
 
Prototype Silicone Plug Gasket
 
9/1/1999
 
8/31/2007
 
2,100.00
 
Straight-Line
  
12.50
%
 
371.88
 
0.00
1029
 
4 Cavity Mold—QVET top
 
10/1/1999
 
10/1/2007
 
207,500.00
 
Straight-Line
  
12.50
%
 
4,322.92
 
0.00
1030
 
Husky 900 Series 6 Zone Cntrl
 
10/1/1999
 
10/1/2007
 
7,785.00
 
Straight-Line
  
12.50
%
 
162.18
 
0.00
1031
 
Computer P8-P2-35-64
 
10/1/1999
 
10/1/2004
 
2,629.39
 
Straight-Line
  
20.00
%
 
701.17
 
0.00
1032
 
Computer P8-CEL-300BX
 
10/1/1999
 
10/1/2004
 
1,228.64
 
Straight-Line
  
20.00
%
 
327.64
 
0.00
1037
 
Test Eq.S/N00995(25KV ESD GUN)
 
11/1/1999
 
11/1/2007
 
5,407.09
 
Straight-Line
  
12.50
%
 
844.86
 
0.00
1051
 
Differential leak tester
 
3/1/2000
 
2/29/2008
 
9,118.20
 
Straight-Line
  
12.50
%
 
1,044.79
 
0.00
1054
 
Computer—D. Hartman
 
4/1/2000
 
3/31/2005
 
1,613.90
 
Straight-Line
  
20.00
%
 
268.99
 
0.00
1058
 
Network Printer
 
4/1/2000
 
3/31/2005
 
1,035.29
 
Straight-Line
  
20.00
%
 
172.54
 
0.00
1073
 
1515 (2) assembly machines
 
8/1/2000
 
7/31/2008
 
20,082.39
 
Straight-Line
  
12.50
%
 
1,255.15
 
0.00
1074
 
Ultra-com thruster system
 
8/1/2000
 
7/31/2008
 
17,523.01
 
Straight-Line
  
12.50
%
 
1,095.19
 
0.00
1075
 
Indexing Conveyor
 
8/1/2000
 
7/31/2008
 
33,286.88
 
Straight-Line
  
12.50
%
 
2,080.43
 
0.00
1076
 
Controller/pump/actuator mod
 
8/1/2000
 
7/31/2008
 
7,398.90
 
Straight-Line
  
12.50
%
 
462.43
 
0.00
1077
 
Four cavity mold for Qvet prod
 
8/1/2000
 
7/31/2008
 
230,000.00
 
Straight-Line
  
12.50
%
 
14,375.00
 
0.00
1078
 
Husky 900 Series 6 Zone Contr
 
8/1/2000
 
7/31/2008
 
7,785.00
 
Straight-Line
  
12.50
%
 
486.56
 
0.00
1096
 
Air Compressor
 
9/1/2000
 
8/31/2008
 
6,944.66
 
Straight-Line
  
12.50
%
 
361.70
 
0.00
1097
 
Tope Plate 1.5 steel welded
 
10/1/2000
 
9/30/2008
 
4,400.00
 
Straight-Line
  
12.50
%
 
183.33
 
0.00
PRISMA1
 
ACQUIRED PRISMA MFG EQUIPMENT
 
3/1/1998
 
2/28/2006
 
27,647.50
 
Straight-Line
  
12.50
%
 
10,079.82
 
0.00
PRISMA 2
 
ACQUIRED PRISMA TOOLING
 
3/1/1998
 
2/28/2006
 
394,048.29
 
Straight-Line
  
12.50
%
 
143,663.44
 
0.00

 

--------------------------------------------------------------------------------

Schedule 2.1(a)(iii)(A)
 
INTELLECTUAL PROPERTY
 
Patent/Application No.

--------------------------------------------------------------------------------

 
Date

--------------------------------------------------------------------------------

U.S. Patent No. 5,128,104
(CUEVETTE FOR AUTOMATED TESTING MACHINE)
 
Issued: July 7, 1992
CANADA Patent Application No. 2137672
(CUEVETTE FOR AUTOMATED TESTING MACHINE)
 
Filed June 9, 1992
Trademark/Serial No.

--------------------------------------------------------------------------------

 
Date

--------------------------------------------------------------------------------

PROCHEM, Reg. No. 2299123
 
Registered: December 14, 1999
QVET, Reg. No. 1902542
 
Registered: July 4, 1995

 
Unregistered Trademarks and Tradenames
 
PrismaSystems
ProChem Plus
ProChem V
ProCal
ProCheq
HemaCount
Prompt

--------------------------------------------------------------------------------

Schedule 2.1(a)(iii)(B)
 
THIRD PARTY LICENSES
 
None.

--------------------------------------------------------------------------------

Schedule 2.1(a)(v)
 
ASSIGNED CONTRACTS
 
1.    Master Lease Agreement No. 200021859 between Seller and Copelco Capital.
 
2.    Oral month-to-month lease agreement between 1721 Black River Boulevard
Corporation and Synbiotics Corporation.
 
3.    Oral distribution relationships with respect to the Business with the
distributors listed on Exhibit 2.1(a)(v)-3 attached hereto.
 
4.    Warranty Service Agreements with customers listed on Exhibit 2.1(a)(v)-4
attached hereto.
 
5.    The Microlab License.

--------------------------------------------------------------------------------

 
Schedule 2.1(a)(v)-3
 
PROCHEM DISTRIBUTEURS EUROPE
 
DATE

--------------------------------------------------------------------------------

  
SERIE

--------------------------------------------------------------------------------

  
SUEDE

--------------------------------------------------------------------------------

29/02/00
  
3001
  
SWEVET-PIAB A SJOBO
08/03/00
  
3013
  
SWEVET-PIAB A SJOBO
28/04/00
  
3031
  
SWEVET-PIAB A SJOBO
03/05/00
  
3036
  
SWEVET-PIAB A SJOBO
10/05/00
  
3043
  
SWEVET-PIAB A SJOBO
08/08/00
  
3104
  
SWEVET-PIAB A SJOBO
08/08/00
  
3106
  
SWEVET-PIAB A SJOBO
02/10/00
  
3132
  
SWEVET-PIAB A SJOBO
15/11/00
  
3125
  
SWEVET-PIAB A SJOBO (PAS PRESENT DANS DOSSIER ADV)
27/11/00
  
3177
  
SWEVET-PIAB A SJOBO
28/11/00
  
3144
  
SWEVET-PIAB A SJOBO
28/11/00
  
3153
  
SWEVET-PIAB A SJOBO
DATE

--------------------------------------------------------------------------------

  
SERIE

--------------------------------------------------------------------------------

  
DANEMARK

--------------------------------------------------------------------------------

29/02/00
  
3005
  
E-Vet HADERSLEV
29/02/00
  
3007
  
E-Vet HADERSLEV
08/03/00
  
3011
  
E-Vet HADERSLEV
08/03/00
  
3012
  
E-Vet HADERSLEV
12/04/00
  
3022
  
E-Vet HADERSLEV
12/04/00
  
3023
  
E-Vet HADERSLEV
04/05/00
  
3040
  
E-Vet HADERSLEV
05/06/00
  
3053
  
E-Vet HADERSLEV
05/06/00
  
3059
  
E-Vet HADERSLEV
14/06/00
  
3069
  
E-Vet HADERSLEV
14/06/00
  
3070
  
E-Vet HADERSLEV
14/06/00
  
3051
  
E-Vet HADERSLEV
25/09/00
  
3124
  
E-Vet HADERSLEV
25/09/00
  
3126
  
E-Vet HADERSLEV
25/09/00
  
3128
  
E-Vet HADERSLEV
25/09/00
  
3129
  
E-Vet HADERSLEV
25/09/00
  
3130
  
E-Vet HADERSLEV
11/12/00
  
3174
  
E-Vet HADERSLEV
11/12/00
  
3178
  
E-Vet HADERSLEV
DATE

--------------------------------------------------------------------------------

  
SERIE

--------------------------------------------------------------------------------

  
Portugal

--------------------------------------------------------------------------------

04/05/00
  
3037
  
MERIAL Portugal RIO DE MOURO
04/05/00
  
3038
  
MERIAL Portugal RIO DE MOURO
24/05/00
  
3058
  
MERIAL Portugal RIO DE MOURO

--------------------------------------------------------------------------------

 
DATE

--------------------------------------------------------------------------------

  
SERIE

--------------------------------------------------------------------------------

  
Portugal

--------------------------------------------------------------------------------

06/06/00
  
3060
  
MERIAL Portugal RIO DE MOURO
06/06/00
  
3061
  
MERIAL Portugal RIO DE MOURO
08/08/00
  
3103
  
MERIAL Portugal RIO DE MOURO
10/10/00
  
3132
  
MERIAL Portugal RIO DE MOURO
18/12/00
  
3188
  
MERIAL Portugal RIO DE MOURO
28/12/00
  
3201
  
MERIAL Portugal RIO DE MOURO
DATE

--------------------------------------------------------------------------------

  
SERIE

--------------------------------------------------------------------------------

  
UK

--------------------------------------------------------------------------------

27/03/00
  
3009
  
LAB PACK LIMITED COVENTRY
DATE

--------------------------------------------------------------------------------

  
SERIE

--------------------------------------------------------------------------------

  
GRECE

--------------------------------------------------------------------------------

29/06/00
  
3080
  
GEROLYMATOS KRYONERI ATTIKA
29/06/00
  
3081
  
GEROLYMATOS KRYONERI ATTIKA
09/09/00
  
3123
  
GEROLYMATOS KRYONERI ATTIKA
20/09/00
  
3127
  
GEROLYMATOS KRYONERI ATTIKA
24/10/00
  
3152
  
GEROLYMATOS KRYONERI ATTIKA
04/11/00
  
3149
  
GEROLYMATOS KRYONERI ATTIKA
03/04/01
  
3213
  
GEROLYMATOS KRYONERI ATTIKA

 
CLIENTS PROCHEM-V FRANCE
 
CP

--------------------------------------------------------------------------------

  
VILLE

--------------------------------------------------------------------------------

  
NOM

--------------------------------------------------------------------------------

  
N° BAAN

--------------------------------------------------------------------------------

  
Telephone

--------------------------------------------------------------------------------

  
Adresse

--------------------------------------------------------------------------------

  
date achat

--------------------------------------------------------------------------------

  
SERIE

--------------------------------------------------------------------------------

94460
  
VALENTON
  
NISOLE Georges
  
FV9401
  
01 43 82 53 38
  
21 bis rue du Colonel Fabien
  
29/02/00
  
3002
90000
  
BELFORT
  
GUILHOT&CHRETIEN
  
FV9001
  
03 84 28 57 64
  
13, rue de Mulhouse
  
01/03/00
  
3010
91160
  
LONGJUMEAU
  
DROUET & DEBOVE
  
FV9101
  
01 64 48 81 39
  
14, avenue du général De Gaulle
  
08/03/00
  
3004
13012
  
MARSEILLE
  
COULON& Ste CROIX
  
FV1307
  
04 91 49 60 11
  
47, rue de Montaigne
  
14/03/00
  
3014
13011
  
MARSEILLE
  
LAURENT Christine
  
FV1308
  
04 91 43 03 43
  
18, montée d’Eoures
  
28/03/00
  
3016
77100
  
NANTEUIL les Meaux
  
HARMAND
  
FV7701
  
01 64 33 49 26
  
11, rue de Melun
  
12/04/00
  
3003
78800
  
HOUILLES
  
MALOISEL HALLIER
  
FV7802
  
01 39 57 49 90
  
3, rue de la République
  
17/04/00
  
3019
95270
  
VIARMES
  
LEGLAIVE
  
FV9501
  
01 30 35 88 88
  
19a, avenue de royaumont
  
18/04/00
  
3169
92330
  
SCEAUX
  
LACOSTE Régis
  
FV9202
  
01 47 02 59 58
  
2, rue de la Marne
  
19/04/00
  
3025
81000
  
ALBI
  
FABRE François
  
FV8102
  
05 63 47 64 47
  
155, avenue Dembourg
  
27/04/00
  
3029
81500
  
LAVAUR
  
MASURE&PINTCHMAN
  
FV8103
  
05 63 58 39 70
  
1, place du pont St Roch
  
27/04/00
  
3030
69680
  
CHASSIEU
  
MOTIN & VULLIERME
  
FV6902
  
04 72 47 04 04
  
44, rue de la République
  
02/05/00
  
3035
57100
  
THIONVILLE
  
HAUFMAN Pierre
  
FV5701
  
03 82 34 4973
  
23, rue Ste Elisabeth
  
04/05/00
  
3039
34300
  
AGDE
  
SCHIRRER André
  
FV3401
  
04 67 21 17 49
  
1, rue des Phalènes
  
10/05/00
  
3045
60280
  
VENETTE
  
CATTEAU Frédéric
  
FV6001
  
03 44 36 30 50
  
2, rue des Méliers
  
10/05/00
  
3044
81200
  
MAZAMET
  
BIENES&GERARD
  
FV8104
  
05 63 61 41 35
  
10, rue Frédéric Mistral
  
15/05/00
  
3046
68600
  
NEUF BRISACH
  
ROBERT
  
FV6802
  
03 89 72 50 89
  
13, rue de l’Hôtel de Ville
  
24/05/00
  
3057
16250
  
ST LEGER
  
DUVAL Raoul
  
FV1601
  
05 45 64 11 08
  
route de Brossac
  
05/06/00
  
3052
26170
  
BUIS LES Baronnies
  
COUPON PICQUART
  
FV2602
  
04 75 28 12 05
  
Z,A la Palun
  
15/06/00
  
3074
59000
  
LILLE
  
SEPIETER Bernard
  
FV5902
  
03 20 30 75 11
  
92, rue Léon Gambetta
  
15/06/00
  
3073
60300
  
SENLIS
  
RIGA
  
FV6002
  
03 44 53 20 16
  
12-14, place des Arènes
  
15/06/00
  
3075
59510
  
HEM
  
DELFORGE Philippe
  
FV5905
  
03 20 82 85 45
  
59, rue du Dr Coubronne
  
19/06/00
  
3076
84120
  
PERTUIS
  
MARY & LECERF
  
FV8405
  
04 90 09 68 26
  
312, rue de la Tour
  
22/06/00
  
3077

--------------------------------------------------------------------------------

 
CP

--------------------------------------------------------------------------------

  
VILLE

--------------------------------------------------------------------------------

  
NOM

--------------------------------------------------------------------------------

  
N° BAAN

--------------------------------------------------------------------------------

  
Telephone

--------------------------------------------------------------------------------

  
Adresse

--------------------------------------------------------------------------------

  
date achat

--------------------------------------------------------------------------------

  
SERIE

--------------------------------------------------------------------------------

59650
  
VILLENEUVE…
  
TIERNY Dominique
  
FV5906
  
03 20 64 94 19
  
14, avenue Paul Langevin
  
28/06/00
  
3082
59243
  
QUAROUBLE
  
PELGRIM Patrick
  
FV5903
  
03 27 34 69 40
  
35, rue Roger Salengro
  
30/06/00
  
3054
01500
  
AMBERIEU EN B…
  
BOISSIERAS&MONNIER
  
FV0102
  
04 74 38 09 08
  
avenue léon Blum
  
30/06/00
  
3078
59243
  
QUAROUBLE
  
PELGRIM Patrick
  
FV5903
  
03 27 34 69 40
  
35, rue Roger Salengro
  
30/06/00
  
3054
76190
  
YVETOT
  
ADRIANSEN
  
FV7603
  
02 35 56 97 10
  
24, rue Carnot
  
30/06/00
  
3079
60160
  
MONTATAIRE
  
DELAHAYE Gérard
  
FV6003
  
03 44 27 51 46
  
52, rue voltaire
  
04/07/00
  
3083
89700
  
TONNERRE
  
FICHOT & POITRAT
  
FV8901
  
03 86 55 12 48
  
12, chemin des jumériaux
  
04/07/00
  
3084
78600
  
MAISONS LAFFITE
  
TRAIN EVAIN
  
FV7803
  
01 39 12 00 40
  
1 Avenue Malesherbes
  
06/07/00
  
3085
06200
  
NICE
  
POLLET
  
FV0603
  
04 93 71 21 41
  
3, rue Maurice Mignon
  
21/07/00
  
3095
06310
  
BEAULIEU SUR MER
  
POLLET et PHILIPPON
  
FV0603
  
04 93 01 02 14
  
16, boulevard du Maréchal joffre
  
02/08/00
  
3068
33420
  
RAUZAN
  
laurence ARMAND
  
FV3303
  
05 56 23 61 20
  
12, rue de l’hôpital
  
31/08/00
  
3109
91460
  
MARCOUSSIS
  
Eric MORET
  
FV9102
  
01 64 49 00 91
  
2, rue de la Croix de Bellejame
  
31/08/00
  
3108
95870
  
BEZONS
  
AUCLIN
  
FV9502
  
01 30 76 72 79
  
109bis, rue Edouard Vaillant
  
18/09/00
  
3122
03110
  
NERIS LES BAINS
  
GIRAUD-AUGER
  
FV0303
  
04 70 03 22 65
  
Chemin de Cheberne
  
03/10/00
  
3138
69100
  
VILLEURBANNE
  
Maubant-Dunoguiez
  
FV6903
  
04 78 84 46 80
  
148 cours Emile Zola
  
03/10/00
  
3135
45220
  
CHÂTEAU RENARD
  
Daniel DUPLAY
  
FV4502
  
02 38 95 20 27
  
974 route de Châtillon Colligny
  
04/10/00
  
3140
13006
  
MARSEILLE
  
CABASSU jean pierre
  
FV1312
  
04 91 37 16 30
  
12 avenue du prado
  
09/10/00
  
3145
83400
  
HYERES
  
FENECH
  
FV8304
  
04 94 38 46 00
  
20, avenue Paul Bourget
  
11/10/00
  
3147
84440
  
ROBION
  
FRELY & VIALATTE
  
FV8406
  
04 90 76 66 99
  
Route des Alpes
  
24/10/00
  
3151
02130
  
FERE-EN-TARDENOIS
  
CHAMPION—MARTINI
  
FV0202
  
03 23 82 66 88
  
5 place de la République
  
30/10/00
  
3160
02130
  
FERE-EN-TARDENOIS
  
CHAMPION—MARTINI
  
FV0202
  
03 23 82 66 88
  
5 place de la République
  
30/10/00
  
3155
57000
  
METZ
  
MALLER
  
FV5702
  
03 87 55 10 22
  
63 rue aux Arènes
  
06/11/00
  
3158
69280
  
MARCY L’ETOILE
  
Ecole Véto de Lyon
  
FU6903
  
04 78 87 26 50
  
1 avenue Bourgelat
  
09/11/00
  
3137
57370
  
PHALSBOURG
  
GUILLEMOT
  
FV5703
  
03 87 24 49 87
  
1 rue du 23 Novembre
  
27/11/00
  
3176
03130
  
LE DONJON
  
NAVETAT
  
FV0304
  
04 70 99 50 17
  
11 rue Général de Gaulle
  
29/11/00
  
3165
67500
  
HAGUENAU
  
FISCHER
  
FV5704
  
03 88 93 25 75
  
1 allée Gustave Huffel
  
30/11/00
  
3168
52220
  
MONTIER EN DER
  
Bourgois et Parcollet
  
FV5201
  
03 25 04 20 77
  
17 place Notre Dame
  
11/12/00
  
3179
27140
  
GISORS
  
Dr LA MARLE
  
FV2707
  
02 32 55 25 50
  
138, rue de la libération
  
21/12/00
  
3163
59128
  
FLERS EN ESCREBIEUX
  
Xavier MASSIN
  
FV5907
  
03 27 64 85 54
  
1, rue du terril
  
14/12/00
  
3176
02300
  
CHAUNY
  
CAPELLE
  
FV0203
  
03 23 52 02 35
  
83, rue André Ternynck
  
18/12/00
  
3187
54490
  
PIENNES
  
Vintache et Delaitre
  
FV5402
  
03 82 21 92 16
  
14, rue de Tharandt
  
18/12/00
  
3161
56860
  
SENE
  
DOUSSET
  
FV5601
  
02 97 47 60 60
  
11, rue d’Irlande
  
21/12/00
  
3189
77820
  
LE CHATELET EN BRIE
  
CHAUVIN-LETAILLEUR
  
FV7706
  
01 60 66 64 24
  
7, rue de l’Hôtel de Ville
  
27/12/00
  
3101
22500
  
PAIMPOL
  
JESTIN
  
FV2201
  
02 96 22 07 09
  
7 bis, place Gambetta
  
28/12/00
  
3192
75016
  
PARIS
  
SCHMIDT
  
FV7504
  
01 45 27 23 85
  
35, rue Leconte de Lisle
  
28/12/00
  
3196
77510
  
REBAIS
  
CHEBAUT
  
FV7705
  
01 64 65 42 62
  
30, rue du Feaubourg St Nicolas
  
28/12/00
  
3195
54000
  
NANCY
  
GAREAUX
  
FV5403
  
03 83 27 13 10
  
155 rue Jeanne D’Arc
  
16/01/01
  
3209
93160
  
NOISY LE GRAND
  
Foumenteze Timmerman
  
FV9302
  
01 45 92 33 33
  
188, avenue Emile Cossonneau
  
16/01/01
  
3220

 
PROCHEM ITALIE
 
CP

--------------------------------------------------------------------------------

  
VILLE

--------------------------------------------------------------------------------

  
NOM

--------------------------------------------------------------------------------

  
N°BAAN

--------------------------------------------------------------------------------

  
ADRESSE

--------------------------------------------------------------------------------

  
date achat

--------------------------------------------------------------------------------

  
série

--------------------------------------------------------------------------------

41100
  
MODENA
  
GAMBIGLIANI
  
IV0014
  
medico Veterinario Via bellaria n°346
  
30/03/00
  
3017
73100
  
LECCE
  
Antonio CONGEDO
  
IV0015
  
Ambulatorio Vetrinario Vergara Corso de Giorgi 12
  
30/03/00
  
3018
28040
  
DORMELLETTO
  
Drssa FERRARI
  
IV0016
  
Clinica Veterinaria Lago Maggiore via Gavour 3
  
22/05/00
  
3055
20143
  
MILANO
  
Dr DELLA CROCE
  
IV0017
  
Clinica Veterinaria Ca Bianca via Parenzo 2
  
22/05/00
  
3056

--------------------------------------------------------------------------------

 
CP

--------------------------------------------------------------------------------

  
VILLE

--------------------------------------------------------------------------------

  
NOM

--------------------------------------------------------------------------------

  
N°BAAN

--------------------------------------------------------------------------------

  
ADRESSE

--------------------------------------------------------------------------------

  
date achat

--------------------------------------------------------------------------------

  
serie

--------------------------------------------------------------------------------

48011
  
ALFONSINE
  
Carlo DEL ZINGARO
  
IV0008
  
STUDIO VETERINARIO via Reale 124
  
05/06/00
  
3062
12100
  
CUENO
  
PELLEGRINO/MALERBA
  
IV0020
  
Ambulatorio Veterinario Associato, via Ettore Rosa, 6
  
15/06/00
  
3093
16167
  
GENOVA NERVI
  
Paolo MINGARDI
  
IV0022
  
STUDIO VETERINARIO via del commercio 8 Pr
  
15/06/00
  
3065
25080
  
BRESCIA
  
BERTAZZOLI
  
IV0024
  
Clinica Veterinaria Croce Blu, v le S, Eufemia, 52/e
  
24/06/00
  
3072
46035
  
OSTAGLIA
  
PICCININI
  
IV0026
  
Ambulatorio Veterinario via Montegrappa 21
  
27/07/00
  
3094
00052
  
CERVERETI
  
Adriano ARPITI
  
IV0029
  
CENTRO VETERINARIO = COVEL ITALIA
  
07/08/00
  
3097
12050
  
GUARENE ( CUENO )
  
Anna Maria NOE
  
IV0031
  
MEDICO VETERINARIO Localita Sotteri n °1
  
07/08/00
  
3099
22023
  
CERRO MAGGIORE
  
Patrizio DONATI
  
IV0032
  
Ambulatorio Veterinario Via A da Giussano, 26
  
07/08/00
  
3100
41026
  
PAVULLO
  
DEBBIA
  
IV0033
  
Ambulatorio Veterinario via Serra Di Porto n°22
  
09/08/00
  
3102
48100
  
RAVENNA
  
Santarine e Urbanich
  
IV0030
  
STUDIO VETERINARIO via Beltramy 14
  
19/08/00
  
3101
41028
  
SERRAMAZZONI
  
Angela RICCI
  
IV0034
  
AMBULATORIO VETRINARIO via XXIV-MAGGIO 272
  
19/08/00
  
3105
26020
  
SAN BASSANO
  
BAZZA
  
IV0037
  
Ambulatorio Veterinario Plazza Kennedy 8
  
31/08/00
  
3107
15066
  
GAVI
  
Eleonora ANFOSSO
  
IV0035
  
MEDICO VETERINARIO via Serravalle 3
  
23/09/00
  
3116
41100
  
MODENA
  
PAGANI
  
IV0036
  
Clinica Veterinaria Privata Wiligelmo Via Allegri 213
  
23/09/00
  
3173
25038
  
PALAZZOLO SULI
  
Sergio MAFFI
  
IV0038
  
MEDICO VETERINARIO Piazza V rosa 10
  
23/09/00
  
3120
37057
  
SAN GIOVANNI
  
FANINI
  
IV0041
  
Ambulatorio Veterinario Piazza Umberto 132
  
23/09/00
  
3121
19033
  
MOLICCIARA-CASTELNOV
  
CARLI E CHIODO
  
IV0025
  
Centro Veterinario Pisani G via Borgolo 15
  
23/10/00
  
3087
00015
  
MONTEROTONDO
  
BELLI—LISI
  
IV0044
  
Ambulatorio Vetrinario via S Martino 10
  
31/10/00
  
3111
38074
  
CENIGA DRO
  
Ettore ZUCCHELI
  
IV0043
  
Ambulatorio Veterinario Via Arco 26/a
  
03/11/00
  
3157
36100
  
VICENZA
  
Roberto De BIASIO
  
IV0046
  
AMBULATORIO VETERINARIO via Legione Antonini 141
  
17/11/00
  
3112
17100
  
SANOVA
  
M.S GUERRERO
  
IV0040
  
CLINICA VETERINARIA via Leoncavallo 17
  
24/11/00
  
3148
48020
  
SAN PIETRO IN Campiano
  
Federico GARNUM
  
IV0047
  
via del Sale 108
  
25/11/00
  
3041
40012
  
SAN MARTINO IN PEDRIOLO
  
Monica ALBERTI
  
IV0049
  
MEDICO VETERINARIO Via Fagnona 10
  
29/11/00
  
3162
20052
  
MONZA
  
VATTA
  
IV0048
  
Ambulatorio Veterinario via Borgazzi Gerolama 38
  
30/11/00
  
3171
88100
  
CATANZARO
  
salvatore ROTELLE
  
IV0050
  
Ambulatorio Veterinario via Martiri di gerace,17
  
18/12/00
  
3185
43039
  
SALSOMAGGIORE
  
VALLA-SIRELLI
  
IV0051
  
Studio veterinario Assiociato via A Garibaldi 5
  
18/12/00
  
3186
38068
  
ROVERETO
  
HOLZHAUSER e Di CRISTINA
  
IV0052
  
AMBULATORIO ASSOCIATO via pasubio 53
  
20/12/00
  
3166
40026
  
IMOLA
  
Balducci e Cornazzani
  
IV0055
  
Ambulatorio Associata Valsanterno via Montanara 252/c
  
23/01/01
  
3223
70010
  
LOCORONTODO
  
IGNISCI Vitantonio
  
IV0056
  
Ambulatorio Veterinario via Monfalcone 13
  
23/01/01
  
3224
10056
  
OULX
  
BERNARD Pierfranco V
  
lease Covel Studio Medico Veterinario Corso Ortigara 5
  
23/01/01
  
3221

 

--------------------------------------------------------------------------------

 
Exhibit 2.1(a)(v)-4
 
SERVICE AGREEMENT REPORT
 
MAS90 Customer
Number:
  
Customer
Names:
  
Serial
Number:
  
Date of
Purchase:
  
Date
Expires:
  
Purchase
Price:

--------------------------------------------------------------------------------

0001557
  
VCA Westboro Veterinary Hospital
  
2144
  
10/30/01
  
10/30/02
  
$
695.00
0001581
  
Baycrest Animal Clinic
  
2114
  
06/04/02
  
02/04/03
  
$
0.00
0001265
  
Bedford Oaks Animal Clinic
  
2005
  
02/06/02
  
02/06/03
  
$
695.00
0001530
  
Blackwall Mobile Veterinary Service
  
2112
  
01/07/02
  
01/07/03
  
$
695.00
0001090
  
Delta Veterinary Clinic
  
2027
  
02/27/01
  
02/27/03
  
$
1,200.00
0001230
  
Town & Country Animal Hospital
  
2082
  
02/05/02
  
02/05/03
  
$
695.00
0001325
  
Village Animal Clinic
  
2042
  
04/01/01
  
04/01/03
  
$
1,200.00
0001543
  
Roper Mountain Animal Hospital
  
2136
  
01/10/02
  
01/10/03
  
$
695.00
0001548
  
All About Pets
  
2130
  
02/22/02
  
02/22/03
  
$
695.00
0001549
  
Richland Vet Service
  
2140
  
02/25/01
  
02/25/03
  
$
1,200.00
0001601
  
South Trail Animal Hospital
  
2177
  
02/05/02
  
02/05/03
  
$
695.00
0001611
  
Ulrich Vet Clinic
  
2185
  
04/04/01
  
04/04/03
  
$
1,200.00
0001614
  
Oak Park Animal Hospital
  
2189
  
01/30/02
  
01/30/04
  
$
1,200.00
0001621
  
Pet Vet Animal Hospital
  
2198
  
07/31/01
  
07/31/03
  
$
1,200.00
0001626
  
Mount Sinai Medical Center
  
2212
  
04/01/01
  
04/01/03
  
$
1,200.00
0001674
  
CDC-Center for Disease Control Prevention
  
2238
  
05/28/02
  
05/28/03
  
$
695.00
0001664
  
Montrose Vet Clinic
  
2243
  
03/12/02
  
03/12/03
  
$
695.00
                            

--------------------------------------------------------------------------------

       

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

       
Total Agreements
            17
            
Invoiced Total for Agreements Sold
$14,655.00

--------------------------------------------------------------------------------

       

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Schedule 2.2(a)(i)
 
ASSUMED LEASE LIABILITIES
 
1.  Master Lease Agreement No. 200021859 between Seller and Copelco Capital.
 
2.  Oral month-to-month lease agreement between 1721 Black River Boulevard
Corporation and Synbiotics Corporation.

--------------------------------------------------------------------------------

Schedule 2.2(a)(ii)
 
ASSUMED SALES ORDERS
 
None.

--------------------------------------------------------------------------------

Schedule 2.2(a)(iii)
 
ASSUMED PURCHASE ORDERS
 
See Exhibit 2.2(a)(iii) attached hereto.

--------------------------------------------------------------------------------

 
Exhibit 2.2(a)(iii)
 

              
Quantity

--------------------------------------------------------------------------------

  
Delivery
Date
         
Order
  
Line
  
Item
  
Ordered
    
Delivered
    
Back Ordered
     
Price
  
Extended

--------------------------------------------------------------------------------

Supplier : COR53 CORNELL UNIVERSITY/DIAGNOSTIC LAB
                     
200781
                                                
30
  
CR-005
  
50
    
49
    
1
  
7/12/2002
  
8.00
  
8.00
                                           

--------------------------------------------------------------------------------

                                      
Order Total
  
8.00
                                           

--------------------------------------------------------------------------------

                                      
Supplier Total
  
8.00
                                           

--------------------------------------------------------------------------------

Supplier : MED54 MEDICAL ANALYSIS SYSTEMS INC
                            
200784
                                                
10
  
CR-005
  
2
    
0
    
0
  
6/25/2002
  
571.65
  
1,143.30
                                           

--------------------------------------------------------------------------------

                                      
Order Total
  
1,143.30
                                           

--------------------------------------------------------------------------------

                                      
Supplier Total
  
1,143.30
                                           

--------------------------------------------------------------------------------

Supplier : MIC46 MICROGENICS CORPORATION
                            
200799
                                                
10
  
CR-005
  
500
    
0
    
0
  
7/23/2002
  
4.10
  
2,050.00
    
20
  
CR-005
  
2,875
    
0
    
0
  
7/23/2002
  
0.62
  
1,782.50
                                           

--------------------------------------------------------------------------------

                                      
Order Total
  
3,832.50
                                           

--------------------------------------------------------------------------------

200804
                                                
20
  
CR-005
  
1
    
0
    
0
  
7/23/2002
  
50.00
  
50.00
                                           

--------------------------------------------------------------------------------

                                      
Order Total
  
50.00
                                           

--------------------------------------------------------------------------------

                                      
Supplier Total
  
3,882.50
                                           

--------------------------------------------------------------------------------

Supplier : OME01 OMEGA ENGINEERING, INC.
                                 
200788
                                                
20
  
CL-005
  
1
    
0
    
0
  
6/28/2002
  
87.50
  
87.50
                                           

--------------------------------------------------------------------------------

                                      
Order Total
  
87.50
                                           

--------------------------------------------------------------------------------

                                      
Supplier Total
  
87.50
                                           

--------------------------------------------------------------------------------

Supplier : WEB71 WEBER MARKING SYSTEMS, INC.
                            
200805
                                                
10
  
CL-005
  
6
    
0
    
0
  
8/30/2002
  
91.96
  
551.76
                                           

--------------------------------------------------------------------------------

                                      
Order Total
  
551.76
                                           

--------------------------------------------------------------------------------

                                      
Supplier Total
  
551.76
                                           

--------------------------------------------------------------------------------

Supplier : WES13 WESTPLEX INDUSTRIES CORP.
                     
200806
                                                
10
  
CR-001
  
100,000
    
0
    
0
  
9/6/2002
  
0.05
  
5,000.00
    
20
  
CR-001
  
100,000
    
0
    
0
  
9/6/2002
  
0.05
  
5,000.00
    
30
  
CR-001
  
15,000
    
0
    
0
  
9/6/2002
  
0.16
  
2,400.00
                                           

--------------------------------------------------------------------------------

                                      
Order Total
  
12,400.00
                                           

--------------------------------------------------------------------------------

                                      
Supplier Total
  
12,400.00
                                           

--------------------------------------------------------------------------------

                                      
Report Total
  
18,073.06
                                           

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 
 
SCHEDULES WITH RESPECT TO REPRESENTATIONS AND WARRANTIES
OF SYNBIOTICS CORPORATION
 
This attached schedules (the “Disclosure Schedules”) are being furnished by
Synbiotics Corporation, (“Seller”) to Danam Acquisition Corp., (“Buyer”) and
Drew Scientific Group PLC, (“Parent”) in connection with the execution and
delivery of that certain Asset Purchase Agreement (the “Agreement”) dated as of
August 30, 2002 by and among the Buyer, Seller and Parent and contains certain
specific information as required by the Agreement and exceptions to the
representations and warranties of Seller in the Agreement. Unless the context
otherwise requires, all capitalized terms used in this Disclosure Schedule shall
have the respective meanings assigned to them in the Agreement. The word “None”
when used herein denotes that no exception is taken to the particular
representation or warranty.
 
The bold-faced headings contained in the Disclosure Schedules are included for
convenience only, and are not intended to limit the effect of the disclosures
contained in the Disclosure Schedules or to expand the scope of the information
required to be disclosed in the Disclosure Schedules.
 
Where terms of an agreement, contract or other document have been described or
summarized, such description or summary is not a complete statement of the
material terms of the agreement, contract or other document.
 

80

--------------------------------------------------------------------------------

 
Schedule 3.2
 
NO CONFLICT
 
6.  Section 14 of the Master Lease Agreement No. 200021859 between Seller and
Copelco Capital requires the consent of Copelco Capital to assign such Master
Lease Agreement. In lieu of granting its consent to assignment, Copelco Capital
has requested that Buyer complete a credit application and become an approved
lessee.
 
7.  The consent of Comerica Bank—California, successor by merger to Imperial
Bank, including, the release of security interests and termination or partial
release of UCC financing statements in or with respect to the Subject Assets, is
required in order to consummate the transactions contemplated by the Agreement
 

81

--------------------------------------------------------------------------------

Schedule 3.11
 
MATERIAL CONTRACTS
 
1.  Seller leases the premises located at 1721 Black River Blvd., Rome, New York
from 1721 Black River Boulevard Corporation pursuant to an oral month-to-month
lease.
 
2.  Equipment lease referenced in item 1 of Schedule 3.2.
 
3.  Seller has oral distribution relationships with respect to the Business with
the distributors listed on Attachment 3.11-3 hereto (incorporated herein by
reference to Exhibit 2.1(a)(v)-3 to Schedule 2.1(a)(v) of Exhibit 10.86 of this
Quarterly Report on Form 10-Q).
 
4.  The Microlab License.
 

82

--------------------------------------------------------------------------------

Schedule 3.12 (a)
 
INTELLECTUAL PROPERTY
 
(i)    Registered Seller Intellectual Property:
 
Patent/Application No.

--------------------------------------------------------------------------------

  
Date

--------------------------------------------------------------------------------

U.S. Patent No. 5,128,104
(CUEVETTE FOR AUTOMATED TESTING MACHINE)
  
Issued: July 7, 1992
CANADA Patent Application No. 2137672
(CUEVETTE FOR AUTOMATED TESTING MACHINE)
  
Filed June 9, 1992
Trademark/Serial No.

--------------------------------------------------------------------------------

  
Date

--------------------------------------------------------------------------------

PROCHEM, Reg. No. 2299123
  
Registered: December 14, 1999
QVET, Reg. No. 1902542
  
Registered: July 4, 1995

 
Unregistered Trademarks and Tradenames
 
PrismaSystems
ProChem Plus
ProChem V
ProCal
ProCheq
HemaCount
Prompt
 
(ii)    Intellectual Property Contracts
 
1)  Assignment of Intellectual Property between PrismaSystems Corporation, as
assignor and Prisma Acquisition Corp., as assignee, dated as of May 9, 1997
(regarding Patent Nos. 5,128,104, 4,857,735 and 4,451,149). Patent Nos.
4,857,735 and 4,451,149 do not constitute a part of the Subject Assets.
 
2)  Assignment of Trademark and Trade Names by PrismaSystems Corporation, as
assignor to Prisma Acquisition Corp., as assignee (regarding the marks
PrismaSystems, ProChem, Prochem Plus, ProChem V, Qvet, ProCal, ProCheq,
HemaCount, Prompt and ProCount). The mark ProCount, does not constitute a part
of the Subject Assets.
 
3)  Employees of the Business have signed Seller’s standard form of
non-disclosure agreement.
 
4)  The Microlab License.

--------------------------------------------------------------------------------

 
The Business’ products contain components that contain certain embedded
Intellectual Property of Seller’s vendors and suppliers.
 
See Schedule 3.13 hereto.
 
The U.S. PTO requires the payment of certain fees in connection with the
recordation of assignments.
 
See Schedule 3.12(d) hereto.
 

--------------------------------------------------------------------------------

 
Schedule 3.12 (c)
 
1.  See Schedule 3.12(d).
 

--------------------------------------------------------------------------------

Schedule 3.12 (d)
 
The following Intellectual Property was, at one time the subject of pending
applications filed by PrismaSystems Corp., the predecessor in interest to Prisma
Acquisition Corp. which was acquired by Seller in 1998. Seller never utilized or
preserved such pending applications. As a result, they have been abandoned.
 
Patents:
 
Patent/Application No.

--------------------------------------------------------------------------------

  
Date

--------------------------------------------------------------------------------

Argentine Patent No. 244.886
Application No. 322.662
  
Granted: November 30, [year not specified in letter]
Filed: June 30, 1992
India Application. No. 364/MAS/92
  
Filed: June 15, 1992
Israel Application. No. 102,253
  
Filed: June 18, 1992
Mexico Application No. 922885
  
Filed: June 15, 1992
European Patent Application No. 92914088.7
  
June 9, 1992
Brazilian Patent Application No. 9207140-6
  
June 9, 1992
Pakistan Patent No. 133259
Application No. 0289/92
  
Accepted March 20, 1994
Filed: June 21, 1992
Taiwan Patent No. NI-60358
Application No. 81105145
  
Granted: January 11, 1993
Filed: June 30, 1992
Venezuela Application No. 1875/92
  
Filed: November 30, 1993
Japanese Patent Application
International Application No. PCT/US92/0488
  
Filed: June 9, 1992
Australian Patent Application
International Application No. PCT/US92/0488
  
Filed: June 9, 1992
Chinese Patent Application No. 92105281.2
    
Trademarks

--------------------------------------------------------------------------------

  
Date

--------------------------------------------------------------------------------

PRISMASYSTEMS LOGO, Serial No. 74153474
  
Filed: June 9, 1994

 
The following trademark was cancelled effective July 13, 2002:
 
QVET, Reg. No. 1902542

--------------------------------------------------------------------------------

Schedule 3.12 (f)
 
 
See Schedule 3.12(d).

--------------------------------------------------------------------------------

Schedule 3.13
 
TITLE TO PROPERTIES; CONDITION OF PROPERTIES; ABSENCE OF ENCUMBRANCES
 
3.13(a):
 
(i):  Seller leases the premises located at 1721 Black River Blvd., Rome, New
York from 1721 Black River Boulevard Corporation pursuant to an oral
month-to-month lease.
 
(ii):  See Attachment 3.13(a)(ii) hereto (incorporated herein by reference to
Exhibit 2.1(a)(i) to Schedule 2.1(a)(i) of Exhibit 10.86 of this Quarterly
Report on Form 10-Q).
 
(iii):  None.
 
3.13(b):
 
None.

--------------------------------------------------------------------------------

Schedule 3.15
 
BROKERS
 
None.