exv10w1



 





Exhibit 10.1




EXECUTION COPY




Date: 29 October 2007




LifeScan, Inc.




Universal Biosensors Pty Ltd




Universal Biosensors, Inc.




Master Services and Supply Agreement




 









 





Table of Contents




	 	 	 	 	 
	Agreed terms
	 	 	7	 
	 
	 	 	 	 
	1 Interpretation
	 	 	7	 
	 
	 	 	 	 
	1.1 Definitions
	 	 	7	 
	1.2 Construction
	 	 	12	 
	1.3 Headings
	 	 	13	 
	 
	 	 	 	 
	2 Action Taken after Effective Date
	 	 	13	 
	 
	 	 	 	 
	3 License
	 	 	13	 
	 
	 	 	 	 
	3.1 Grant of License
	 	 	13	 
	3.2 LifeScan rights
	 	 	13	 
	 
	 	 	 	 
	4 Joint Steering Committee
	 	 	13	 
	 
	 	 	 	 
	4.1 Establishment
	 	 	13	 
	4.2 Composition
	 	 	14	 
	4.3 Decision making
	 	 	14	 
	 
	 	 	 	 
	5 Supply of Products
	 	 	14	 
	 
	 	 	 	 
	5.1 Supply of Initial Products
	 	 	14	 
	5.2 Supply of Other Products
	 	 	15	 
	 
	 	 	 	 
	6 Purchase Price of Initial Products
	 	 	15	 
	 
	 	 	 	 
	6.1 Interim Costing Period
	 	 	15	 
	6.2 Post-Interim Costing Period
	 	 	16	 
	 
	 	 	 	 
	7 Orders, Inventory and Delivery
	 	 	18	 
	 
	 	 	 	 
	7.1 Forecasts and orders
	 	 	18	 
	7.2 Inventory
	 	 	19	 
	7.3 Lead Time
	 	 	19	 
	7.4 Past Due Orders
	 	 	19	 
	7.5 Delivery
	 	 	19	 
	7.6 Sub-Tier Component Supply Chain
	 	 	19	 
	7.7 Packaging for Shipment
	 	 	20	 
	7.8 Quarterly Business Reviews
	 	 	20	 
	7.9 Capacity
	 	 	20	 
	7.10 Supply Risk
	 	 	20	 
	 
	 	 	 	 
	8 Defective Products
	 	 	20	 
	 
	 	 	 	 
	8.1 Disposition of defective Products
	 	 	20	 
	8.2 Independent testing
	 	 	21	 
	8.3 Corrective action
	 	 	22	 
	 
	 	 	 	 
	9 Inspection
	 	 	22	 
	 
	 	 	 	 
	9.1 Rights of Inspection
	 	 	22	 
	9.2 Obligations to rectify
	 	 	22	 
	9.3 Acknowledgment
	 	 	22	 






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	10 Provision of Services
	 	 	23	 
	 
	 	 	 	 
	10.1 Supply of Initial Services
	 	 	23	 
	10.2 Supply of other Services
	 	 	23	 
	10.3 Manner of performing the Services
	 	 	23	 
	 
	 	 	 	 
	11 Fees
	 	 	24	 
	 
	 	 	 	 
	11.1 Quarterly Service Fee
	 	 	24	 
	11.2 Milestones
	 	 	25	 
	11.3 Lump Sum Service Fee
	 	 	25	 
	11.4 Audit Rights
	 	 	26	 
	 
	 	 	 	 
	12 Manufacturing Process Information and Other Intellectual Property
	 	 	26	 
	 
	 	 	 	 
	13 Sundry Obligations of UBS
	 	 	27	 
	 
	 	 	 	 
	13.1 Records
	 	 	27	 
	13.2 Reports
	 	 	27	 
	13.3 Equipment
	 	 	27	 
	13.4 Insurance
	 	 	28	 
	 
	 	 	 	 
	14 Restrictions on UBS and UBI activities
	 	 	28	 
	 
	 	 	 	 
	15 Representations and warranties
	 	 	28	 
	 
	 	 	 	 
	15.1 UBS Warranties
	 	 	28	 
	15.2 Execution and performance of agreement
	 	 	29	 
	15.3 EXCLUSION OF OTHER WARRANTIES
	 	 	29	 
	 
	 	 	 	 
	16 Compliance
	 	 	30	 
	 
	 	 	 	 
	16.1 Compliance with certain laws
	 	 	30	 
	16.2 Compliance with Policy on the Employment of Young Persons
	 	 	30	 
	16.3 Standards for Responsible External Manufacturing
	 	 	30	 
	16.4 Files and Work papers
	 	 	31	 
	16.5 Compliance with Environment, Safety And Industrial Hygiene
	 	 	31	 
	 
	 	 	 	 
	17 Quality Agreement
	 	 	32	 
	 
	 	 	 	 
	18 Indemnities
	 	 	32	 
	 
	 	 	 	 
	18.1 UBS indemnity
	 	 	32	 
	18.2 Indemnification by LifeScan
	 	 	32	 
	18.3 Indemnification procedures
	 	 	33	 
	18.4 Other Product Liability Claims
	 	 	33	 
	18.5 Limitation of Liability
	 	 	33	 
	 
	 	 	 	 
	19 Term and Termination
	 	 	34	 
	 
	 	 	 	 
	19.1 Term
	 	 	34	 
	19.2 Termination for breach
	 	 	34	 
	19.3 Termination for insolvency and bankruptcy
	 	 	34	 
	19.4 Termination for change of control
	 	 	34	 
	19.5 Regulatory termination
	 	 	34	 
	19.6 Additional LifeScan termination rights
	 	 	34	 
	19.7 Additional UBS termination rights
	 	 	35	 
	19.8 Consequences of termination
	 	 	35	 






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	20 Dispute Resolution
	 	 	36	 
	 
	 	 	 	 
	20.1 Mediation
	 	 	36	 
	20.2 Arbitration
	 	 	37	 
	 
	 	 	 	 
	21 Confidentiality and public announcements
	 	 	40	 
	 
	 	 	 	 
	21.1 Non-disclosure
	 	 	40	 
	21.2 Exceptions
	 	 	40	 
	21.3 Public Announcements
	 	 	40	 
	 
	 	 	 	 
	22 Notices
	 	 	41	 
	 
	 	 	 	 
	22.1 General
	 	 	41	 
	22.2 How to give a communication
	 	 	41	 
	22.3 Particulars for delivery of notices
	 	 	41	 
	22.4 Communications by post or international courier
	 	 	43	 
	22.5 Communications by fax
	 	 	43	 
	22.6 After hours communications
	 	 	43	 
	22.7 Process service
	 	 	43	 
	 
	 	 	 	 
	23 Force Majeure
	 	 	43	 
	 
	 	 	 	 
	23.1 Force Majeure Event
	 	 	43	 
	23.2 Failure to supply
	 	 	44	 
	 
	 	 	 	 
	24 Guarantee
	 	 	44	 
	 
	 	 	 	 
	24.1 Guarantee and Indemnity
	 	 	44	 
	24.2 Survival
	 	 	45	 
	24.3 Continuing Guarantee
	 	 	45	 
	24.4 Remedy
	 	 	45	 
	24.5 Reinstatement
	 	 	46	 
	24.6 Warranties
	 	 	46	 
	 
	 	 	 	 
	25 GST
	 	 	46	 
	 
	 	 	 	 
	25.1 Construction
	 	 	46	 
	25.2 Consideration GST exclusive
	 	 	46	 
	25.3 Payment of GST
	 	 	46	 
	25.4 Timing of GST payment
	 	 	47	 
	25.5 Tax invoice
	 	 	47	 
	25.6 Adjustment event
	 	 	47	 
	25.7 Reimbursements
	 	 	47	 
	 
	 	 	 	 
	26 General
	 	 	47	 
	 
	 	 	 	 
	26.1 Duty
	 	 	47	 
	26.2 Legal costs
	 	 	48	 
	26.3 Amendment
	 	 	48	 
	26.4 Waiver and exercise of rights
	 	 	48	 
	26.5 Rights cumulative
	 	 	48	 
	26.6 Consents
	 	 	48	 
	26.7 Governing law and jurisdiction
	 	 	48	 
	26.8 Assignment
	 	 	48	 






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	26.9 Counterparts
	 	 	49	 
	26.10 Entire understanding
	 	 	49	 
	26.11 Severability
	 	 	49	 
	26.12 Survival
	 	 	49	 
	26.13 Relationship of parties
	 	 	49	 
	26.14 LifeScan Affiliates
	 	 	50	 
	 
	 	 	 	 
	Schedule 1 — Initial Product Addendum
	 	 	51	 
	 
	 	 	 	 
	Schedule 2 — Initial Services Addendum
	 	 	55	 
	 
	 	 	 	 
	Schedule 3 — LifeScan Relevant Patents
	 	 	58	 
	 
	 	 	 	 
	Appendix A — Form of Product Addendum
	 	 	60	 
	 
	 	 	 	 
	Appendix B — Form of Services Addendum
	 	 	62	 
	 
	 	 	 	 
	Appendix C — Initial Joint Steering Committee Members
	 	 	64	 
	 
	 	 	 	 
	Appendix D — Policy on the Employment of Young Persons
	 	 	65	 
	 
	 	 	 	 
	Appendix E — Quality Agreement
	 	 	66	 
	 
	 	 	 	 
	Appendix F — Financial Years
	 	 	78	 
	 
	 	 	 	 
	Appendix G — UBS’ Insurance Requirements
	 	 	89	 
	 
	 	 	 	 
	Appendix H — Termination Matters
	 	 	91	 
	 
	 	 	 	 
	Appendix I — Action Taken after Effective Date
	 	 	92	 
	 
	 	 	 	 
	Appendix J — Standards for Responsible External Manufacturing
	 	 	93	 






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Effective Date: 29 October 2007




Parties




LifeScan, Inc. a California corporation of 1000 Gibraltar Drive, Milpitas, CA 95035-6312,
USA (LifeScan)




Universal Biosensors Pty Ltd ACN 098 234 309, a company incorporated in Victoria,
Australia of 1 Corporate Avenue, Rowville, Victoria 3178, Australia (UBS)




Universal Biosensors, Inc., a Delaware corporation of having its registered office at c/o
Corporation Service Company 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808,
USA (UBI)




Background




A. LifeScan carries on the business of marketing and selling blood glucose monitoring
systems for home, clinic and hospital use.




B. UBS carries on the business of researching, developing, manufacturing and
commercialising a range of in vitro diagnostic tests for point of care use.




C. LifeScan holds certain patents and other intellectual property rights relating to
innovative blood glucose testing devices and wishes to distribute strips and meters as
part of a new range of its blood glucose monitoring systems.




D. LifeScan and UBI are parties to a Development Agreement, under which UBS has been
developing certain strips, meters and manufacturing methodology for LifeScan.




E. UBS has developed the capability and established a facility to manufacture and supply
such strips to LifeScan.




F. UBS further has the expertise and information to provide a range of services of
interest to LifeScan, including services relating to the development and testing of
strips, the development and establishment of manufacturing facilities for strips and the
development of variants and future generations of strips and meters.




G. The parties wish to enter into an agreement in relation to the provision by UBS to
LifeScan of Initial Product and Initial Services, and other Product and other Services
which LifeScan in the future may require from time to time.




H Whereas UBS is entitled to various payment streams under this Agreement which are
intended to enable UBS to recover its sunk costs and make a reasonable return.




I To facilitate an efficient and effective business and contractual relationship between
the parties, they have agreed to establish a Joint Steering Committee.



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J For these purposes the parties have agreed to enter into this Master Services and
Supply Agreement to regulate, on the terms and subject to the conditions set out in this
agreement, the relationship between the parties and the provision by UBS of all such
products and services to LifeScan.




K. UBI has agreed to guarantee UBS’ obligations under this Agreement.


In consideration of the mutual promises, covenants and agreements below, the parties agree as
follows:




Agreed terms





Part 1: Preliminary Provisions




	1	 	Interpretation
	 
	1.1	 	Definitions
	 
	 	 	In this Agreement:
	 
	 	 	Affiliate means any corporation, firm, limited liability company, partnership, or other
entity that directly or indirectly controls, or is controlled by, or is under common
control with a party to this agreement but only for so long as that control remains,
whereafter that entity shall cease to be an Affiliate. For the purpose of this
definition, control means ownership, directly or through one or more Affiliates, of fifty
percent (50%) or more of the shares of stock entitled to vote for the election of
directors in the case of a corporation, or fifty percent (50%) or more of the equity
interests in the case of any other type of legal entity, or status as a general partner
in any partnership, or any other arrangement whereby a party controls or has the right to
control the board of directors or equivalent governing body of a corporation or other
entity.
	 
	 	 	Agreed Standard Cost has the meaning given in clause 6.2(b)(i) of this Agreement.
	 
	 	 	Agreement Intellectual Property Rights has the meaning given in clause 12(c) of this
Agreement.
	 
	 	 	Bankruptcy Event means in respect of LifeScan or UBI: (i) it applies for or consents to
the appointment of, or the taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its property, (ii) it makes a
general assignment for the benefit of its creditors, or (iii) it takes any action to take
advantage of, or have any action taken against it under, any U.S. law relating to
bankruptcy, insolvency or reorganization.
	 
	 	 	Base Year has the meaning given in clause 6.2(a) of this agreement.
	 
	 	 	Base Year Standard Cost has the meaning given in the Initial Product Addendum.





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Business Day means a day which is not a Saturday, Sunday or bank or public holiday in New
York City, New York, U.S.A.




Change of Control means (a) the liquidation or dissolution of an entity or the sale or
other transfer by an entity (excluding transfers to Affiliates) of all or substantially
all of its assets; or (b) the occurrence of a tender offer, stock purchase, other stock
acquisition, merger, consolidation, recapitalization, reverse split, sale or transfer of
assets or other transaction, as a result of which any person, entity or group (other than
an Affiliate of such entity prior to such transaction) (i) becomes the beneficial owner,
directly or indirectly, of securities of an entity representing more than 50% of the
ordinary shares such entity or representing more than 50% of the combined voting power
with respect to the election of directors (or members of any other governing body) of
such entity’s then outstanding securities, (ii) obtains the ability to appoint a majority
of the Board of Directors (or other governing body) of the entity, or (iii) obtains the
ability to direct the operations or management of the entity or any successor to the
entity’s business.




Confidential Information means:




	 	(a)	 	the terms and existence of this Agreement; and
	 
	 	(b)	 	all confidential and proprietary information in whatever form or manner
presented which is disclosed pursuant to this Agreement or any Product Addendum or
Services Addendum and which relates to a disclosing party’s business or business
plans.






Corporations Act means the Corporations Act 2001 (Cth).




Cost Savings Amount has the meaning given in clause 6.2(b)(ii) of this Agreement.




Covered Product means any Product covered by at least one valid claim of the LifeScan
Relevant Patents.




Development Agreement means the development and research agreement between UBI and
LifeScan, effective as of April 1, 2002, and any and all amendments thereto.




Effective Date means the date on the first page of this Agreement.





Fee Conversion Reference Date means the end of the Quarter following the receipt by UBS
of an aggregate of 
*[REDACTED] in Quarterly Service Fees.




Financial Year means LifeScan’s fiscal year, as defined in Johnson & Johnson’s internal
accounting policies and procedures, which ends on the last Sunday of any given Calendar
Year. Appendix F sets forth the applicable Financial Years through 2013.



Force Majeure Event means any cause which is beyond the reasonable control of a party,
including fire, explosion, flood, or other acts of God; acts, regulations, or laws of any
government; war or civil commotion; strike, lock-out or labour disturbances, failure of
public utilities or common carriers.




 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.





page 8









 






Government Authority means any relevant federal, state, territory, municipality or other
political subdivision, administrative or judicial body, court, ministry, department,
commission, authority, instrumentality, tribunal or agency or other governmental,
quasi-governmental or regulatory authority or any self-regulatory organisation (including
any relevant tax administrator) of any applicable country and includes any person
deriving a power directly or indirectly from any other person or body referred to in this
definition.




Initial Meter means a blood glucose meter adapted to use the Initial Product and
conforming to the specifications set out in the Initial Product Addendum




Initial Product means a blood testing strip which conforms with the Product
Specifications set out in the Initial Product Addendum.




Initial Product Addendum means the Addendum set out in Schedule 1.




Initial Services means the services described in Schedule 2.




Initial System means the blood glucose monitoring system consisting of the Initial Meter,
Initial Product, control solution, lancets and all other applicable components.




Insolvency Event means in respect of UBS:




	 	(a)	 	it is (or states that it is) an insolvent under administration or
insolvent (each as defined in the Corporations Act);
	 
	 	(b)	 	it has had a controller (as defined in the Corporations Act) appointed or
is in liquidation, in provisional liquidation, under administration or wound up or
has had a receiver or a receiver and manager appointed to any part of its property;
	 
	 	(c)	 	it is subject to any arrangement, assignment, moratorium or composition,
protected from creditors under any statute or dissolved (in each case, other than to
carry out a reconstruction or amalgamation while solvent on terms approved by the
other parties to this Agreement);
	 
	 	(d)	 	an application or order has been made (and in the case of an application,
it is not stayed, withdrawn or dismissed within 30 days), resolution passed,
proposal put forward, or any other action taken, in each case in connection with
that person, which is preparatory to or could result in any of (a), (b) or (c)
above;
	 
	 	(e)	 	it is taken (under section 459F(1) of the Corporations Act) to have
failed to comply with a statutory demand;
	 
	 	(f)	 	it is the subject of an event described in section 459C(2)(b) or section
585 of the Corporations Act;
	 
	 	(g)	 	it is otherwise unable to pay its debts when they fall due; or
	 
	 	(h)	 	something having a substantially similar effect to (a) to (g) happens in
connection with UBS under the laws of Australia.





page 9









 







Interim Costing Period means the period beginning upon the commencement of manufacturing
following the submission of LifeScan’s first order for commercial launch of the Initial
Product until the earlier of (i) the beginning of the first Quarter in which LifeScan places an order in excess of fifty million
(50,000,000) Initial Products or (ii) the end of the Quarter during which the third
anniversary of the achievement of a Milestone occurs.




Joint Steering Committee has the meaning given in clause 4.1 of this Agreement.




Joint Steering Committee Member has the meaning given in clause 4.2 of this Agreement.




Labour and Overhead Costs means actual labour and overhead costs assignable to the
manufacturing of Initial Product.




License Agreement means the license agreement between UBS and LifeScan, effective as of 1
April 2002, and any and all amendments thereto.




Licensed Intellectual Property Rights means any and all LifeScan Intellectual Property
Rights required by, or reasonably necessary for, UBS to fulfil its obligations under this
Agreement.




LifeScan Files and Work Papers has the meaning given in clause 16.4 of this Agreement.




LifeScan Intellectual Property Rights means any and all intellectual property rights
throughout the world, including:




	 	(a)	 	any patent, copyright, trade secret, know-how, technology, trade mark or
domain name (whether registered or unregistered), software, design, circuit layout
right, trade, business or company name or other proprietary right or any right to
registration of such rights; and
	 
	 	(b)	 	all present and future rights in an invention, discovery, trade secret,
know-how, concept, idea, data or formula and rights in information, including any
serendipitous discoveries, granted by law or equity from time to time under the law
of any jurisdiction which LifeScan owns or is empowered to grant a license prior to
or during the Term of this Agreement. LifeScan Intellectual Property Rights shall
further include any foreign counterparts thereof, as well as all continuations,
continuation-in-part, divisions and renewals thereof, patent applications, all
patents which may be granted thereof, and all reissues, re-examinations and
extensions.






LifeScan Manufacturing Line Date means the date that LifeScan, a LifeScan Affiliate or a
contract manufacturer of LifeScan shall have qualified a manufacturing line that is
actually capable of producing the Initial Product in a place other than Rowville,
Victoria.




LifeScan Relevant Patents means those patents and patent applications identified on
Schedule 3, as well as any United States patent application, foreign counterpart,
division, continuation, continuation-in-part, reissue, renewal, and re-examination
thereof and patents issuing therefrom, patent extensions, certificates of invention and
applications for certificates of invention.



page 10









 






Losses means any losses, liabilities, damages, claims, costs, charges and expenses and
includes any taxes, duties, levies, legal fees (on a full indemnity basis) and other
related expenses.




Lump Sum Service Fee — A has the meaning given in clause 11.3(a) of this Agreement.




Lump Sum Services Fee — B has the meaning given in clause 11.3(c) of this Agreement.




Material Costs means the cost of material comprising the Initial Product that is consumed
during the manufacturing of the Initial Product (e.g. substrates and spacer), excluding
the cost of the vials and enzymes.




Maximum Transfer Price means the cost per Initial Product set forth in the Initial
Product Addendum.




Milestone means the grant to LifeScan or its nominated Affiliate of regulatory approval
to market the Initial System in (a) Canada; (b) the United States; and (c) Germany or
the first other European country where LifeScan chooses to market the Initial Product,
each such approval constituting a separate Milestone.




Milestone Amount has the meaning given in clause 11.2(a) of this Agreement.




Policy has the meaning given in clause 16.2 of this Agreement.




Process has the meaning given in clause 12 of this Agreement.




Product means a strip which conforms with the relevant Product Specification, and
includes the Initial Product and any additional products that the parties agree to
include in a Product Addendum.




Product Addendum means a document executed by the parties for Product to be manufactured
pursuant to the terms of this Agreement substantially in the form set out in Appendix A.




Product Specifications means:




	 	(a)	 	in the case of the Initial Product, the specifications set out in
Schedule 1;
	 
	 	(b)	 	in the case of any other Product, the specifications set out in the
relevant Product Addendum.






QSR means the quality system regulations applicable to a Product.




Quality Agreement means the quality agreement attached as Appendix E of this Agreement.




Quarter means in respect of any Financial Year, the quarter end designated by a circle on
Appendix F for such Financial Year.




Quarterly Service Fee has the meaning given in clause 11.1(a)(i) of this Agreement.



page 11









 






	 	 	Raw Materials means the materials, components and packaging required to manufacture and
package the Products in accordance with the Product Specifications.
	 
	 	 	Restricted Purposes has the meaning given in clause 14(a) of this Agreement.
	 
	 	 	Services means the services described in Schedule 2 and any other services identified in
a Services Addendum.
	 
	 	 	Services Addendum means a document executed by the parties for services to be provided by
UBS to LifeScan pursuant to the terms of this Agreement, substantially in the form set
out in Appendix B.
	 
	 	 	Sold means the sale or other transfer of Product by LifeScan or any of its Affiliates to
an unaffiliated third party that generates direct sales revenue to LifeScan or any of its
Affiliates.
	 
	 	 	Standards has the meaning given in clause 16.3 of this Agreement.
	 
	 	 	Term has the meaning given in clause 19.1 of this Agreement.
	 
	 	 	Territory means the entire world.
	 
	 	 	UBS Capacity Limitation has the meaning given in clause 7.1(a).
	 
	1.2	 	Construction
	 
	 	 	Unless expressed to the contrary, in this Agreement:






	 	(a)	 	words in the singular include the plural and vice versa;
	 
	 	(b)	 	any gender includes the other genders;
	 
	 	(c)	 	if a word or phrase is defined its other grammatical forms have
corresponding meanings;
	 
	 	(d)	 	“includes” (and its variants, i.e., “include” and “including”) means
includes without limitation;
	 
	 	(e)	 	no rule of construction will apply to a clause to the disadvantage of a
party merely because that party put forward the clause or would otherwise benefit
from it; and
	 
	 	(f)	 	a reference to:






	 	(i)	 	a person includes a partnership, joint venture,
unincorporated association, corporation and a government or statutory body or
authority;
	 
	 	(ii)	 	a person includes the person’s legal personal
representatives, successors, assigns and persons substituted by novation;
	 
	 	(iii)	 	any legislation includes subordinate legislation under it
and includes that legislation and subordinate legislation as modified or
replaced; and





page 12









 







	 	(iv)	 	an obligation includes a warranty or representation and a
reference to a failure to comply with an obligation includes a breach of
warranty or representation.






	 	(g)	 	“$” or “dollar” means the lawful currency of the United States unless
otherwise expressly stated.






	1.3	 	Headings
	 
	 	 	Headings do not affect the interpretation of this Agreement.

	 
	2	 	Action Taken after Effective Date
	 
	 	 	After the Effective Date but on or before January 15, 2008, and in consideration of the
grant of rights in clause 12, LifeScan shall take the action prescribed in Appendix I.
	 
	3	 	License
	 
	3.1	 	Grant of License
	 
	 	 	LifeScan grants to UBS during the Term of this Agreement a worldwide, royalty free,
non-exclusive license to use Licensed Intellectual Property Rights for the sole purpose
of fulfilling its obligations under this Agreement.
	 
	3.2	 	LifeScan rights






	 	(a)	 	Nothing in this Agreement shall be construed to restrict the right of
LifeScan or LifeScan’s Affiliates to engage in any business activity, investment or
other opportunity anywhere in the world. UBS acknowledges LifeScan shall have sole
discretion where and how to market and sell the Products.
	 
	 	(b)	 	UBS acknowledges and agrees that LifeScan and its Affiliates are, and
will continue to be, actively involved in the design, development, acquisition,
marketing, manufacturing, promotion and sale of blood glucose monitoring products,
including products that directly and indirectly compete with the Products hereunder.






	4	 	Joint Steering Committee






	4.1	 	Establishment
	 
	 	 	Within 30 Business Days of the Effective Date, a joint committee (Joint Steering
Committee) shall be established to manage the relationship between the parties and the
operation of this Agreement. The Joint Steering Committee shall provide strategic
oversight of the performance of the parties’ obligations and the progress of the Products
and Services provided under this Agreement. The Joint Steering Committee shall have the
power to create and delegate responsibility to various working groups compromised of
members from the parties to carry out its obligations under this Agreement.




page 13









 












	4.2	 	Composition
	 
	 	 	The Joint Steering Committee shall consist of members (Joint Steering Committee Members)
from each of UBS and LifeScan. The Joint Steering Committee Members shall be comprised
of senior management from each party (and the initial Joint Steering Committee members
are set out in Appendix C). Each party may change their nominated Joint Steering
Committee Member by written notice to the other party. The Joint Steering Committee shall
convene on a quarterly basis, to review and approve work plans and progress.
Additionally, the Joint Steering Committee shall be available on a more frequent basis to
address key issues that may arise. All meetings of the Joint Steering Committee may be
by teleconference, videoconference or any other means of communication agreed to by the
parties.
	 
	4.3	 	Decision making






	 	(a)	 	Each of UBS and LifeScan shall have one vote on the Joint Steering
Committee. If more than one representative of a party is present at a meeting, such
representatives shall agree upon how that party’s vote shall be cast. If only one
representative is present, that party shall be deemed authorized to vote on the
matters raised at the meeting. All decisions of the Joint Steering Committee shall
be unanimous.
	 
	 	(b)	 	No decision may be made by the Joint Steering Committee unless a quorum
is present, such quorum constituted by at least one member present from each of
LifeScan and UBS.
	 
	 	(c)	 	If the Joint Steering Committee is unable to reach Agreement on any
significant matter, then within ten Business Days it shall be referred to the
Company Group Chairperson of LifeScan and the Chairperson of UBS and they shall
endeavour to resolve such matter in good faith within twenty Business Days of
notification by the Joint Steering Committee of the disagreement. If the
Chairpersons are unable to reach an Agreement on the matter: (i) with respect to any
matter involving the quality of the Products, regulatory affairs relating to the
Products or any matter that could require expenditures of funds by LifeScan in
addition to those already contemplated by this Agreement, LifeScan shall have the
right to make the decision; and (ii) with respect to all matters not covered by
clause (i), the matter shall be resolved pursuant to the provisions of clause 20 of
this Agreement.






	 	 	Part 2: Products
	 
	5	 	Supply of Products
	 
	5.1	 	Supply of Initial Products






	 	(a)	 	UBS will supply LifeScan or its designates with Initial Products in
accordance with and subject to the terms of this Agreement.




page 14









 












	 	(b)	 	Except for binding orders placed in accordance with clause 7.1(c),
LifeScan is not obligated to obtain supply of the Initial Products or any other
Products exclusively, or at all, from UBS. Further, LifeScan shall have the right
to obtain supply of the Initial Products or any other Products solely from its own
manufacturing facilities or from any Affiliate or third party supplier at any time.






	5.2	 	Supply of Other Products






	 	(a)	 	From time to time the parties may agree that UBS will develop and / or
manufacture and supply additional Products to LifeScan. For purposes of
clarification, the Joint Steering Committee would agree on additional products, cost
recovery and success fees based on milestones achieved. In each such event, the
parties shall enter into a Product Addendum.
	 
	 	(b)	 	Each Product Addendum, when executed will be attached to this Agreement
and form part of and be subject to the terms of this Agreement.
	 
	 	(c)	 	During the term of each Product Addendum, UBS will manufacture and supply
to LifeScan the Products specified in that Product Addendum in accordance with and
subject to the terms of this Agreement.
	 
	 	(d)	 	In the event of a conflict between the terms of this Agreement and the
terms of any Product Addendum, the terms of this Agreement will prevail, except to
the extent that the applicable Product Addendum expressly and specifically states an
intention to supersede this Agreement on a specific matter.
	 
	 	(e)	 	If a Product Addendum provides for the amendment of a term of this
Agreement, that amendment will be effective only in relation to that Product
Addendum and, unless expressly specified to the contrary in the Product Addendum,
will not otherwise amend this Agreement or operate in relation to any other Product
Addendum or Services Addendum.






	6	 	Purchase Price of Initial Products
	 
	6.1	 	Interim Costing Period
	 
	 	 	During the Interim Costing Period, LifeScan must pay to UBS in respect of each Initial
Product supplied by UBS to LifeScan or any of its designates:






	 	(a)	 	* [REDACTED]; and
	 
	 	(b)	 	*
[REDACTED]






	 	 	UBS shall use its best efforts to minimize the amount of *
[REDACTED] during the Interim
Costing Period. In no event shall the aggregate amount due under clause 6.1(a) above for
all Initial Products supplied in a given Quarter exceed 
*[REDACTED]. LifeScan
acknowledges and agrees that it has requested UBS to obtain raw materials components
known as enzymes and vials at its expense and they shall not be included in the above cap
and further provided that UBS is permitted to include the cost of any enzyme and vials consumed in the
manufacturing process in any invoice for Initial Product.






 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 15









 






	6.2	 	Post-Interim Costing Period






	 	(a)	 	From the period beginning upon the end of the Interim Costing Period
through the end of the then current Financial Year (Base Year), the standard cost of
manufacturing an Initial Product to LifeScan shall be equal to the Base Year
Standard Cost. For the avoidance of doubt, such Base Year Standard Cost excludes
the cost of the enzymes and vials.
	 
	 	(b)	 	In June of each year, commencing with the Base Year the parties will meet
and by July 1st  (provided, that if the Base Year commences after June,
then the parties shall meet as soon as reasonably possible):






	 	(i)	 	agree upon the standard cost of Initial Product to apply
for the following Financial Year (Agreed Standard Cost) taking into account:
(A) all relevant costing and manufacturing information, which shall be
supplied by UBS along with reasonable supporting data, (B) assuming a volume
of Initial Products equal to LifeScan’s forecasted volume for such Financial
Year; and (C) excluding the cost of the enzyme and vials; and
	 
	 	(ii)	 	compare the Agreed Standard Cost against the Base Year
Standard Cost for the purposes of determining whether the Agreed Standard
Cost is less than the Base Year Standard Cost, in which case the amount of
the relevant difference is the Cost Savings Amount.






	 	(c)	 	Subject to clauses 6.2(d) and 6.2(e), in respect of each Financial Year
commencing with the Base Year, LifeScan must pay to UBS in respect of each Initial
Product supplied by UBS to LifeScan an amount equal to:






	 	(i)	 	the standard cost applicable for that year as determined in
accordance with clause 6.2(a) or clause 6.2(b);
	 
	 	(ii)	 	plus an amount equal to *
[REDACTED] of the portion of the
standard cost of an Initial Product which is not attributable to the cost of
Material Costs; and
	 
	 	(iii)	 	plus *

[REDACTED] of the Cost Savings Amount if applicable.






	 	 	 	LifeScan shall in addition pay to UBS an amount for enzymes and vials in
accordance with clause 6.2(f).
	 
	 	(d)	 	The amount that LifeScan shall be obligated to pay UBS in aggregate for
each Initial Product shall in no event exceed the Maximum Transfer Price plus the
cost of enzyme and vials, provided, that if in any Quarter following the end of the
Interim Costing Period, LifeScan orders less than 50 million Initial Products from
UBS, clause 6.2(c) will not apply in respect of that Quarter and LifeScan will pay
UBS for the relevant Initial Products in accordance with the costing methodology set
out in clause 6.1.






 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 16









 












	 	(e)	 	If there are factors outside the reasonable control of UBS that adversely
affect UBS’ ability to provide the Initial Product at a total cost that does not
exceed the Maximum Transfer Price plus the cost of the enzyme and vials, the Joint
Steering Committee will meet to consider a suspension or ongoing change to the
Maximum Transfer Price. If the parties cannot reach Agreement then the provisions
of clause 6.2(d) will apply and UBS may terminate this Agreement in accordance with
clause 19.7(b) or such shorter period as may be agreed by the parties.
	 
	 	(f)	 	LifeScan acknowledges and agrees that it has requested UBS to obtain raw
materials components known as enzymes and vials at its expense and that UBS is
permitted to include the actual cost paid by UBS of any enzyme and vials consumed in
the manufacturing process in any invoice for Initial Product. Such costs shall be
excluded from the calculations of the Base Year Standard Cost, the Agreed Standard
Cost and the Cost Savings Amount.
	 
	 	(g)	 	UBS shall invoice LifeScan for all payments due under this clause 6 with
such frequency as is mutually acceptable to the parties. All payments under this
clause 6 shall be payable by LifeScan within 45 days of receipt of an undisputed
invoice in immediately available funds. LifeScan shall notify UBS promptly of any
portion of an invoice it disputes and, subject to the then current capability of the
Accounts Payable system of LifeScan, LifeScan shall pay the undisputed portion of
such invoice while the dispute is being resolved.
	 
	 	(h)	 	In order to support timely invoice processing UBS shall use commercially
reasonable efforts to ensure that: (i) the quantity of Products(s) shipped does not
exceed the quantity of Products ordered pursuant to the relevant purchase order,
(ii) the invoice sent by UBS to LifeScan reflects the correct LifeScan purchase
order number to which it relates, (iii) the unit pricing on the invoices matches the
unit pricing reflected on the purchase order to which it relates, and (iv) each
invoice shall reflect no more than one purchase order number.
	 
	 	(i)	 	During the term of this Agreement, the parties agree to make all
commercially reasonable efforts to achieve cost reductions in cooperation with one
another through the continuous improvement of either party’s production, procurement
and supply processes in addition to any other general improved efficiencies achieved
by such party such as those based on labor efficiencies and volume provided to the
extent LifeScan is utilizing the services of a third party vendor or contract
manufacturer and is prohibited from sharing those cost reductions with UBS, then it
shall not be required to do so. The foregoing notwithstanding, UBS shall in no
event modify or substitute any materials, components or processes used in the
production, procurement or supply of any Product without the prior written consent
of LifeScan, which shall not be unreasonably withheld. No such change shall in any
way affect the safety or quality of any Product, and all such changes
shall conform to a QSR compliant change control process mutually agreed to by UBS
and LifeScan.





page 17









 






	 	(j)	 	UBS shall keep complete and accurate records in sufficient detail to
evidence its costs and support for its invoices provided to LifeScan (the
“Financial Records”). For the sole purpose of verifying amounts owed under such
invoices, LifeScan (or its designated audit expert) shall have the right no more
than one time each calendar year, at its own expense, to review the Financial
Records for the preceding Quarters during the Term (other than those already
reviewed in a prior audit) at the location(s) where the Financial Records are
maintained by UBS upon thirty (30) days notice and during regular business hours.
Results of such review shall be made available to UBS. Further, if the review
reflects an overpayment to UBS, such overpayment shall be credited against the next
payment due UBS. If the overpayment is greater than five percent (5%) of the amount
that was otherwise due for a Quarter, UBS shall reimburse LifeScan for the costs of
such review. If no further payments are due to UBS (e.g. due to termination of this
Agreement), then UBS shall pay to LifeScan the amount of such overpayment within
forty-five (45) days of LifeScan’s provision to UBS of the results of LifeScan’s
review. If the review reflects an underpayment to UBS, such underpayment shall be
remitted by LifeScan to UBS within forty-five (45) days.






	7	 	Orders, Inventory and Delivery
	 
	7.1	 	Forecasts and orders






	 	(a)	 	On a monthly basis during the Term, LifeScan will provide UBS with a
rolling written forecast of LifeScan’s expected requirement for Products during the
following 12 months; provided, the first month of such forecast shall be deemed
binding on LifeScan and the balance of such written forecast shall be non binding.
On a quarterly basis, UBS will provide LifeScan with details of its capacity
limitations (the “UBS Capacity Limitation”). LifeScan agrees not to order
quantities of Product greater than the UBS Capacity Limitation. For clarification
purposes only, if there is a reduction in the UBS Capacity Limitation which LifeScan
considers arbitrary and capricious, it shall be referred to the Joint Steering
Committee for resolution.
	 
	 	(b)	 	LifeScan is permitted to change the second month of its next forecast by
plus or minus 25% and change the third and fourth month of such forecast by plus or
minus 50% subject to the UBS Capacity Limitation.
	 
	 	(c)	 	LifeScan will place any orders for the binding portion of any forecast
given in accordance with clause 7.1(a) by written or electronic purchase order (or
by such other means agreed to by the parties) to UBS, which will be placed in
accordance with the lead-time requirements set out in clause 7.3. UBS acknowledges
that LifeScan is not obligated to buy any specific amount of Products under this
Agreement.




page 18









 












	 	(d)	 	To the extent of any conflict or inconsistency between this Agreement and
any purchase order, purchase order release, confirmation, acceptance or any similar
document, the terms of this Agreement will prevail.






	7.2	 	Inventory






	 	(a)	 	UBS will maintain inventories of Raw Materials sufficient for one month
of LifeScan’s forecasted requirements. These quantities may be adjusted as agreed
to by the Joint Steering Committee.
	 
	 	(b)	 	UBS will maintain inventory of the Products on a first-in, first-out
basis.






	7.3	 	Lead Time
	 
	 	 	UBS shall develop a supply chain system (e.g. KanBan levels, efficient processes) in
cooperation with LifeScan and LifeScan authorized third parties that will allow, within
the UBS Capacity Limitation, for a 30 day lead-time from a binding order until delivery.






	7.4	 	Past Due Orders
	 
	 	 	UBS shall notify LifeScan immediately in the event that any delivery date with respect to
any Products shall not be met. In the event of any such delay in the delivery of
Products, UBS shall, at its own expense, use its commercially reasonable efforts to
expedite the delivery of any past due order, including but not limited to approving
overtime, premiums to component suppliers, the difference between regular freight and
premium freight or air freight and any other measures which may be necessary or useful in
timely fulfilling LifeScan’s orders for Products hereunder.
	 
	7.5	 	Delivery






	 	(a)	 	Delivery and shipping terms for the Products will be FCA (Rowville,
Victoria) (IncoTerms 2000), unless otherwise agreed to by the parties.
	 
	 	(b)	 	All shipments must be accompanied by a packing slip which describes the
articles, states the purchase order number and shows the shipment’s destination. As
required, UBS agrees to promptly forward the original bill of lading or other
shipping receipt for each shipment in accordance with LifeScan’s instructions.






	7.6	 	Sub-Tier Component Supply Chain
	 
	 	 	UBS shall be responsible for management of sub-tier suppliers for the Products and the
performance of their obligations.






	 	(a)	 	Additionally, UBS shall provide a supply continuity plan for the Products
manufactured by UBS to the Joint Steering Committee at least one hundred and eighty
(180) days prior to the commercial launch of the Products or as soon as practicable
prior to commercial launch.
	 
	 	(b)	 	Upon reasonable notice, UBS shall provide LifeScan with access to
supplier specifications, documentation, quality process audit records, supplier
contracts, scorecards and costing information.




page 19









 












	 	(c)	 	UBS shall work with the key sub-tier suppliers for the products to put in
place written supply agreements. Among other customary terms, UBS shall negotiate
to include in such supply agreements:






	 	(i)	 	No volume purchase commitments;
	 
	 	(ii)	 	Provisions to allow assignment of the supply Agreement and
all attendant rights to LifeScan or its designee without supplier’s consent;
	 
	 	(iii)	 	Not less than 45 day payment terms; and
	 
	 	(iv)	 	Rights to terminate the contract at UBS’ (or its
assignee’s) discretion upon no more than 6 months’ notice.






	 	 	 	In the event UBS is unable to obtain the Agreement of a sub-tier supplier to
(i)-(iv) above, then it shall notify LifeScan prior to signing the agreement with
such supplier in order to permit LifeScan the ability to obtain the agreement of
the supplier to such provision.






	7.7	 	Packaging for Shipment
	 
	 	 	UBS will pack all Products ordered under this Agreement in a manner agreed by LifeScan as
being suitable for shipment to the final destination and sufficient to enable the
Products to withstand the effects of shipping, including handling during loading and
unloading.
	 
	7.8	 	Quarterly Business Reviews
	 
	 	 	The operations teams of UBS and LifeScan will have Quarterly business reviews to discuss
quality performance, delivery performance, cost and other elements as needed.
	 
	7.9	 	Capacity
	 
	 	 	UBS shall endeavour to provide, qualify, maintain and allocate to LifeScan sufficient
capacity on a reasonable work and maintenance schedule to support at least 125% of
LifeScan’s forecasted requirements. UBS shall review capacity versus total demand on at
least a Quarterly basis and report findings to LifeScan’s management. UBS shall promptly
notify LifeScan at any time the forecasted volume during the succeeding twelve (12) month
period exceeds 75 percent of the manufacturing capacity.
	 
	7.10	 	Supply Risk
	 
	 	 	In consultation with LifeScan, UBS shall develop and execute a second sourcing strategy
for key raw materials.
	 
	8	 	Defective Products
	 
	8.1	 	Disposition of defective Products
	 
	 	 	LifeScan shall within a reasonable time upon receipt of Product undertake a visual
inspection for evidence of any damage to any shipping containers, vials or Product caused
during transportation. Without prejudice to any other




page 20









 












	 	 	remedy which LifeScan may have, UBS will replace at its own cost and expense, including
reimbursement of freight and disposition costs incurred by LifeScan, the Products that
fail to comply with the Products Specifications at the time of delivery FCA Rowville or
have any defects that were in existence at the time of delivery FCA Rowville. LifeScan
will notify UBS of the existence and nature of any non-compliance or defect within a
reasonable time and UBS (or its nominee) will have a reasonable opportunity, not to
exceed 10 Business Days from receipt of notification, to inspect such defective Products
and provide LifeScan with detailed written instructions to return or dispose of such
defective Products. The Joint Steering Committee shall agree on a returned goods
authorization process. LifeScan shall have no obligation to pay for any of the Products
that are subject to such a claim of non-compliance or defect provided if there is any
dispute regarding the claim it shall be handled in accordance with Section 8.2. If UBS
fails to so inspect and instructs LifeScan as to the disposition of such defective
Products, LifeScan may dispose of such defective Products as it sees fit and UBS shall:






	 	(a)	 	reimburse LifeScan for all direct, out-of-pocket costs incurred by
LifeScan in such disposition; and
	 
	 	(b)	 	replace such defective Products at its own cost and expense,






	 	 	within 45 days of any disposal of Product or resolution of a LifeScan claim.
	 
	8.2	 	Independent testing






	 	(a)	 	If the parties disagree as to the Products’ conformance to the Products
Specifications or whether the Products have such a defect, either party may deliver
the Products to an independent third-party laboratory, mutually and reasonably
acceptable to both parties, for analytical testing to determine whether the Products
fail to comply with the Products Specifications at the time of delivery FCA Rowville
or have any defects that were in existence at the time of delivery FCA Rowville.
The parties agree to accept the results of such independent testing.
	 
	 	(b)	 	All costs associated with such third-party testing shall be at LifeScan’s
expense unless the tested Products are deemed by such third-party to fail to comply
with the Products Specifications at the time of delivery FCA Rowville or have any
defects that were in existence at the time of delivery FCA Rowville, in which case
all such costs, including reimbursement of freight and disposition costs, shall be
promptly paid by UBS.
	 
	 	(c)	 	No inspection or testing of or payment for the Products by LifeScan or
any third-party agent of LifeScan shall constitute acceptance by LifeScan thereof,
nor shall any such inspection or testing be in lieu or substitution of any
obligation of UBS for testing, inspection and quality control as provided in the
Products Specifications or under applicable local, state, or federal laws, rules,
regulations, standards, codes or statutes.





page 21









 






	8.3	 	Corrective action






	 	(a)	 	In the event any Governmental Authority having jurisdiction shall request
or order, or if LifeScan shall determine that it is required to undertake, any
corrective action with respect to any of the Products, including any recall,
corrective action or field action, and the cause or basis of such recall or action
to the extent it is attributable to:






	 	(i)	 	a breach by UBS of any of its warranties, representations,
obligations or covenants contained in this Agreement; or
	 
	 	(ii)	 	the negligence or wilful misconduct of UBS,






	 	 	 	then UBS shall be liable, and will reimburse LifeScan for the reasonable costs of
such action.
	 
	 	(b)	 	For the avoidance of doubt, the costs of such recall or action payable by
UBS shall only include the reasonable direct costs actually expended by LifeScan in
connection with such recall or action of Products manufactured by UBS and shall not
include any consequential, punitive, exemplary, or multiplied damages. To the
extent more than one party is manufacturing Product and it is difficult to identify
the specific Product manufactured by UBS, then UBS shall only be responsible for the
proportion of Product it manufactured out of the total amount of Product Sold by
LifeScan in the prior Financial Year.






	9	 	Inspection
	 
	9.1	 	Rights of Inspection
	 
	 	 	LifeScan will have the right (directly or through an agent), upon reasonable notice to
UBS and during regular business hours, to inspect and audit the facilities being used by
UBS for production and storage of the Products to assure compliance by UBS (and will use
reasonable efforts to cause its suppliers) with all applicable rules and regulations and
with other provisions of this Agreement.
	 
	9.2	 	Obligations to rectify
	 
	 	 	UBS will within 30 days remedy or cause the remedy of any deficiencies which may be noted
in any such audit of UBS by LifeScan under clause 9.1 or, if any such deficiencies can
not reasonably be remedied within such 30 day period, present to LifeScan a written plan
to remedy such deficiencies as soon as possible. The failure by UBS to remedy or cause
the remedy of any such deficiencies within such 30 day period or to present such a plan
within such 30 day period and then use its best efforts to remedy or cause the remedy of
such deficiencies in accordance with such written plan, as the case may be, shall be
deemed a material breach of this Agreement.
	 
	9.3	 	Acknowledgment
	 
	 	 	UBS acknowledges that the provisions of this clause 9 granting LifeScan certain audit
rights shall in no way relieve UBS of any of its obligations under
this Agreement, nor shall such provisions require LifeScan to conduct any such audits.





page 22









 






	 	 	Part 3: Services
	 
	10	 	Provision of Services
	 
	10.1	 	Supply of Initial Services
	 
	 	 	UBS has been supplying the Initial Services. After the Effective Date, UBS will continue
to supply the Initial Services to LifeScan in accordance with Schedule  2 and in
accordance with and subject to the terms of this Agreement.
	 
	10.2	 	Supply of other Services






	 	(a)	 	From time to time the parties may agree that UBS will provide Services to
LifeScan. For purposes of clarification, the Joint Steering Committee would agree
on other Services, cost recovery and success fees based on milestones achieved. An
example of further Services would be a request from LifeScan to create an additional
manufacturing line in a LifeScan Manufacturing facility including payment of the
reasonable costs of UBS and a reasonable success fee for qualification of the line.
In each such event, the parties shall enter into a Services Addendum.
	 
	 	(b)	 	During the term of each Services Addendum, UBS will supply the Services
specified in the applicable Services Addendum to LifeScan.
	 
	 	(c)	 	Each Services Addendum, when executed will be attached to this Agreement
and form part of and be subject to the terms of this Agreement.
	 
	 	(d)	 	In the event of a conflict between the terms of this Agreement and the
terms of any Services Addendum, the terms of this Agreement will prevail, except to
the extent that the applicable Services Addendum expressly and specifically states
an intention to supersede this Agreement on a specific matter.
	 
	 	(e)	 	If a Services Addendum provides for the amendment of a term of this
Agreement, that amendment will be effective only in relation to that Services
Addendum and, unless expressly specified to the contrary in the Services Addendum,
will not otherwise amend this Agreement or operate in relation to any other Services
Addendum or Product Addendum.






	10.3	 	Manner of performing the Services
	 
	 	 	UBS must provide the Services:






	 	(a)	 	with due care and skill and in a timely manner;






page 23











 






	 	(b)	 	in a proper and efficient manner using that standard of skill, diligence,
and prudence that would reasonably be expected from a prudent and experienced
provider of services similar to the Services;
	 
	 	(c)	 	in compliance with all laws, regulations and standards with which UBS is
legally required to comply; and
	 
	 	(d)	 	in compliance with all policies of LifeScan applicable to its business
partners, of which it has been advised ahead of time in this Agreement or the
Services Addendum.






	11	 	Fees
	 
	11.1	 	Quarterly Service Fee






	 	(a)	 	In consideration of the provision by UBS of Initial Services, LifeScan or
its designee will pay to UBS:






	 	(i)	 	a service fee each Quarter (the “Quarterly Service Fee”)
calculated in accordance with the remainder of this clause 11.1; and
	 
	 	(ii)	 	upon achievement of a Milestone described in clause 11.2,
the corresponding Milestone Amount.






	 	(b)	 	The Quarterly Service Fee will be calculated as follows:






	 	(i)	 	for the first *
[REDACTED] Covered Products Sold by LifeScan
or its Affiliates to third parties during any Financial Year: *
[REDACTED] per
Covered Product;
	 
	 	(ii)	 	for any Covered Products Sold by LifeScan and its
Affiliates to third parties in excess of *

[REDACTED] per Covered Product.






	 	 	 	For the avoidance of doubt, it is acknowledged the value of the initial service to
LifeScan is not easily quantifiable and will fluctuate during the Term and the
parties consider it best handled by a Quarterly Services Fee. Therefore, the
Quarterly Service Fee will be payable regardless of who manufactures the Covered
Products provided any Covered Products that have been provided to third parties as
free samples or for testing purposes (including clinical trials) shall not be
counted as “Sold” for purposes of calculating the Quarterly Service Fee.
	 
	 	 	 	For the further avoidance of doubt, the calculation of the amount of Covered
Products Sold shall begin at zero each Financial Year. The Quarterly Service Fee
shall apply during the Interim Costing Period.
	 
	 	(c)	 	Within 30 Business Days, of the end of each Quarter (or such lesser time
subject to the then current capabilities of LifeScan), LifeScan will deliver to UBS
a written statement setting forth:






	 	(i)	 	the number of Covered Products Sold during the previous
Quarter; and






 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 24









 






	 	(ii)	 	the calculation of the Quarterly Service Fee owed in
respect of such Quarter.






	 	(d)	 	Following receipt of the written statement from LifeScan pursuant to
clause 11.1(c), UBS will provide to LifeScan an invoice for the Quarterly Service
Fee amount reflected on LifeScan’s statement. LifeScan shall pay such invoice
within forty-five (45) days of receipt.






	11.2	 	Milestones






	 	(a)	 	LifeScan shall pay to UBS an amount corresponding to the relevant
Milestone below (the “Milestone Amount”) within 45 days of the relevant Milestone
being achieved in each of the following countries:






	 	(i)	 	*

[REDACTED];
	 
	 	(ii)	 	*

[REDACTED]; and
	 
	 	(iii)	 	*

[REDACTED].






	 	 	 	Each Milestone Amount shall only be paid once.






	11.3	 	Lump Sum Service Fee






	 	(a)	 	At any time before the Fee Conversion Reference Date, if LifeScan has not
Sold Covered Products within two years from the Effective Date or ceases selling all
Covered Products for eighteen months, LifeScan may, at its option, give notice of
conversion of the Quarterly Service Fee to a one time lump sum fee of *

[REDACTED]
(Lump Sum Service Fee — A).
	 
	 	(b)	 	If such Notice is given pursuant to clause 11.3(a):






	 	(i)	 	LifeScan’s obligations to pay Quarterly Service Fees will
permanently cease at the end of the Quarter in which such notice was given;
and
	 
	 	(ii)	 	the Lump Sum Service Fee — A must be paid by LifeScan
within thirty (30) days of the end of the Quarter in which such notice was
given.






	 	(c)	 	At any time after the Fee Conversion Reference Date, LifeScan may, at its
option, give notice of conversion of the Quarterly Service Fee to UBS. After
delivery of the notice of conversion to UBS, LifeScan shall only be required to pay
the Quarterly Service Fee for the remainder of the Financial Year in which the
notice of conversion was delivered to UBS. Promptly after the end of that Financial
Year, LifeScan will calculate and pay within forty-five (45) days a one time lump
sum fee (Lump Sum Service Fee — B) to be calculated by multiplying the total of the
Quarterly Service Fee for the relevant Financial Year in which notice of conversion
is given by the multiplier for such Financial Year as identified below:






	 	(i)	 	*

[REDACTED];
	 
	 	(ii)	 	*

[REDACTED];
	 
	 	(iii)	 	*

[REDACTED];






 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 25









 






	 	(iv)	 	*

[REDACTED];
	 
	 	(v)	 	*

[REDACTED];
	 
	 	(vi)	 	*

[REDACTED]; and
	 
	 	(vii)	 	*

[REDACTED].






	11.4	 	Audit Rights
	 
	 	 	For the sole purpose of verifying amounts owed under this clause 11, UBS (or its
designated audit expert) shall have the right no more than one time each Financial Year,
at its own expense, to review the Financial Records for the preceding Quarters during the
Term (other than those already reviewed in a prior audit) at the location(s) where the
Financial Records are maintained by LifeScan upon thirty (30) days notice and during
regular business hours. Results of such review shall be made available to LifeScan.
Further, if the review reflects an overpayment to UBS, such overpayment shall be deducted
from the next payment due to UBS. If the review reflects an underpayment to UBS, such
underpayment shall be remitted by LifeScan to UBS within forty-five (45) days. If the
underpayment is greater than five percent (5%) of the amount that was otherwise due for a
Quarter, LifeScan shall reimburse UBS for the costs of such review. If no further
payments are due to UBS (e.g. due to termination of this Agreement), then LifeScan shall
pay to UBS the amount of such underpayment within forty-five (45) days of UBS’ provision
to LifeScan of the results of UBS’ review.






	12	 	Manufacturing Process Information and Other Intellectual Property
	 
	 	 	As part of the Services to be provided by UBS to LifeScan, UBS undertakes to comply with
the following provisions:






	 	(a)	 	Upon LifeScan’s request, UBS will provide LifeScan with a detailed
written description of UBS’ process for the manufacture of the Products, including
all underlying know-how relevant to the process and improvements thereto
(collectively the Process), in sufficiently clear and detailed terms in a format
mutually agreed by the parties so it can be readily followed to make the Products in
the manner UBS considers most efficient.
	 
	 	(b)	 	If UBS alters, modifies or changes the Process, UBS will promptly amend
the description to include such alteration, modification or change.
	 
	 	(c)	 	In addition to all the rights and licenses granted under the Development
Agreement and License Agreement, UBS acknowledges and agrees that all rights to all
inventions, improvements, discovery, trade secret, know-how, concept, idea and
copyrightable works (including derivatives of UBS’ pre-existing copyrighted works)
and the like created by UBS, its Affiliates or their officers, employers, and agents
in and to the Process, Products, Initial Meters and improvements thereto (Agreement
Intellectual Property Rights) will be owned by LifeScan and, if created






 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 26









 






	 	 	 	under this Agreement, will vest in LifeScan immediately upon creation. UBS will,
and will procure that its Affiliates, officers, employees and agents who have
created any Agreement Intellectual Property Rights, execute an assignment in
favour of LifeScan and any other documents reasonably requested by LifeScan.
LifeScan hereby grants to UBS a non-revocable, worldwide, royalty-free, exclusive
license, with the right to sub-license to make, have made, use and sell under and
exploit in any way all rights in and to the Agreement Intellectual Property
Rights outside LifeScan’s Field (as defined in the License Agreement).
	 
	 	(d)	 	UBS will allow LifeScan (or its designee) access to UBS’ premises to
observe and understand the Process.
	 
	 	(e)	 	At LifeScan’s request, UBS agrees to assist LifeScan in the
implementation of manufacturing capacity at a location of LifeScan’s choosing by
entering into a Services Addendum. Assistance may include but not be limited to:
procurement and commissioning of manufacturing equipment and processes, training for
engineers, operators and other production support personnel and other activities
required to produce Product. LifeScan agrees to pay UBS for its reasonable costs
(approved in advance by LifeScan) incurred in connection with the implementation of
this capacity and may include a success fee payable upon an agreed milestone.






	 	 	Part 4: Further Provisions
	 
	13	 	Sundry Obligations of UBS
	 
	13.1	 	Records
	 
	 	 	UBS will keep and maintain proper records of the Products and Services provided to
LifeScan. LifeScan may, upon reasonable prior notice, inspect such records at any time.
	 
	13.2	 	Reports
	 
	 	 	The Joint Steering Committee will agree on any reports and the format they should be in.
For example only, such reports may include monthly report setting out details of:






	 	(a)	 	all Products and Services supplied during the preceding month; and
	 
	 	(b)	 	all Raw Materials, work-in-progress and finished goods held by UBS.






	13.3	 	Equipment






	 	(a)	 	UBS will provide equipment for the manufacture of strips to go into vials
with a minimum capacity of * [REDACTED] strips per year (the “Original Line”) in
Rowville, Victoria.






 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 27









 







	 	(b)	 	The Joint Steering Committee will determine whether additional equipment
is required for the Original Line or for additional lines and which party is
responsible for paying for such equipment.






	13.4	 	Insurance
	 
	 	 	UBS must use reasonable commercial efforts to obtain and maintain for the duration of
this Agreement the insurances set forth in Appendix G:
	 
	14	 	Restrictions on UBS and UBI activities






	 	(a)	 	During the Term of this Agreement, neither UBS nor UBI will, directly or
indirectly, provide consultancy, advisory or other services to any third party in
relation to:






	 	(i)	 	the measurement of analytes for purposes of diagnosing,
managing, monitoring, prognosticating, treating or curing diabetes;
	 
	 	(ii)	 	the collection and/or analysis of data for the purpose of
diabetes management; or
	 
	 	(iii)	 	the delivery of one or more therapeutic agents for the
purpose of treating or managing abnormal glucose metabolism, including,
without limitation, the delivery of insulin, insulin analogs, Glucagon-like
proteins/peptides (GLPs), analogs of GLPs or GLP like hormones; or
	 
	 	(iv)	 	the measurement of glucose in humans for any purpose,
including, without limitation, tight glycemic control, (clauses (i)-(iv)
being collectively, Restricted Purposes).






	 	(b)	 	UBS and UBI acknowledge and agree that, other than the licenses expressly
granted under this Agreement, the Development Agreement and the License Agreement,
neither UBS nor UBI has any rights in any intellectual property owned by LifeScan or
its Affiliates, including, without limitation, any intellectual property assigned to
LifeScan under this Agreement, the Development Agreement or the License Agreement.






	15	 	Representations and warranties
	 
	15.1	 	UBS Warranties
	 
	 	 	UBS represents, warrants and covenants to LifeScan that:






	 	(a)	 	all Products supplied in connection with this Agreement will be:






	 	(i)	 	of merchantable quality;
	 
	 	(ii)	 	fit for the purpose intended by this Agreement;
	 
	 	(iii)	 	free from defects in material and workmanship; and
	 
	 	(iv)	 	manufactured and provided in accordance with the relevant
Product Specifications and in compliance with this Agreement;




Notwithstanding the above, UBS shall not be responsible for any breach of these
warranties arising as a result of acts or omissions after delivery FCA Rowville.




page 28









 












	 	(b)	 	it will comply with all applicable present and future laws, statutes,
ordinances and regulations and requirements of any applicable Government Authority
relating to:






	 	(i)	 	the design, manufacture and supply of the Products provided
under this Agreement; and
	 
	 	(ii)	 	the Services provided under this Agreement;






	 	(c)	 	the provision of the Products and Services to LifeScan by UBS will not
involve the misappropriation of confidential information or trade secrets of any
third party by UBS or its agents; and
	 
	 	(d)	 	it and its Affiliates and each of their respective directors, officers,
employees, agents and contractors who will provide the Products and or the Services
have the requisite skill, knowledge and expertise to provide the Products and the
Services in accordance with the provisions of this Agreement.






	15.2	 	Execution and performance of agreement
	 
	 	 	UBS and LifeScan each represents and warrants to the other that:






	 	(a)	 	it is a corporation or company duly organised, validly existing and
registered under the laws of its place of incorporation;
	 
	 	(b)	 	it has full right, power and authority to enter into and perform its
obligations under this Agreement; and
	 
	 	(c)	 	the performance of its obligations under this Agreement will not result
in a violation or breach of, and will not conflict with or constitute a default
under any agreement, contract, commitment or obligation to which such party or any
of its Affiliates is a party or by which it is bound.






	15.3	 	EXCLUSION OF OTHER WARRANTIES
	 
	 	 	EXCEPT AS SET FORTH ABOVE, THE PARTIES TO THIS AGREEMENT MAKE NO OTHER REPRESENTATIONS
AND WARRANTIES, WHETHER EXPRESSED OR IMPLIED, WRITTEN OR ORAL, STATUTORY OR OTHERWISE,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE IN
RESPECT OF THE PRODUCTS OR ANY WARRANTIES ARISING FROM COUSE OF DEALING OR USAGE OF TRADE
AND THE PARTIES FURTHER AGREE THAT TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS,
ANY CONDITIONS OR WARRANTIES IMPOSED BY LEGISLATION OR STATUTE ARE HEREBY EXCLUDED.




page 29









 






	16	 	Compliance
	 
	16.1	 	Compliance with certain laws
	 
	 	 	In the performance of its obligations under this Agreement, UBS agrees to comply with,
and to cause its officers, employees, agents and contractors to comply with, the
applicable provisions of all applicable laws, rules and regulations in force from time
to time including all such legal requirements:






	 	(a)	 	prohibiting discrimination against any employee or applicant for
employment because of race, colour, religion, sex or national origin;
	 
	 	(b)	 	prohibiting discrimination against any employee or applicant for
employment because of physical or mental handicap;
	 
	 	(c)	 	establishing fair or minimum standards for workers; and
	 
	 	(d)	 	the Trade Practices Act (Cth) 1974, the Therapeutic Goods Act (Cth) 1989,
the Therapeutic Goods (Charges) Act 1989 and the Therapeutic Goods Amendment
(Medical Devices) Act (Cth) 2002.






	16.2	 	Compliance with Policy on the Employment of Young Persons






	 	(a)	 	UBS warrants that it and each of its officers have read and understand
the Johnson & Johnson Policy on the Employment of Young Persons attached hereto as
Appendix D (Policy).
	 
	 	(b)	 	In the manufacture and supply of all the Products hereunder, UBS will
employ young persons only as permitted by the Policy.
	 
	 	(c)	 	UBS will permit representatives of LifeScan to enter UBS’ premises at any
reasonable time, and UBS will ensure that representatives of LifeScan will be
permitted to enter the premises of any subcontractor involved in the manufacture or
supply of any of the Products at any reasonable time, in order to inspect relevant
employment, health and safety records and to observe the manufacturing process.
	 
	 	(d)	 	UBS will maintain the records necessary to demonstrate compliance with
the Policy and will provide to LifeScan, upon LifeScan’s request, a written
certification of such compliance annually during the term of this Agreement.
	 
	 	(e)	 	If UBS fails to comply with this clause 16.2, then it shall be deemed a
material breach of this Agreement by UBS.






	16.3	 	Standards for Responsible External Manufacturing






	 	(a)	 	UBS and its officers have read and understand the Johnson & Johnson
Standards for Responsible External Manufacturing (Standards) in effect as of the
Effective Date and set out in Appendix J.
	 
	 	(b)	 	LifeScan will have the right to audit UBS to determine compliance with
the Standards in accordance with the provisions of clause 9.
	 
	 	(c)	 	UBS will maintain the records necessary to demonstrate compliance with
the Standards and shall provide to LifeScan, upon LifeScan’s request, a
written certification of such compliance annually during the Term of this
Agreement.




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	 	(d)	 	If UBS fails to comply with this clause 16.3, then it shall be deemed a
material breach of this Agreement by UBS.






	16.4	 	Files and Work papers






	 	(a)	 	All papers or electronic records, files, documents, work papers and other
information in any form, whether marked “confidential” or not, provided by LifeScan,
its employees, agents or affiliates pursuant to this Agreement (LifeScan Files and
Work Papers) will remain the exclusive property of LifeScan.
	 
	 	(b)	 	UBS and its subcontractors and agents will use LifeScan Files and Work
Papers only for purposes of performing UBS’ obligations under this Agreement.
	 
	 	(c)	 	LifeScan Files and Work Papers must be maintained in a manner that
prevents their intentional or accidental disclosure to other clients of UBS.
	 
	 	(d)	 	LifeScan Files and Work Papers will be kept in UBS’ possession only so
long as it serves a necessary business purpose, the Services are ongoing and, in no
case, longer than 30 days after the termination of this Agreement, unless otherwise
agreed to in writing by an authorised agent of LifeScan.
	 
	 	(e)	 	Upon 30 days after the termination of this Agreement, all LifeScan Files
and Work Papers in the possession, custody or control of UBS, or its subcontractors
and agents, will be returned to LifeScan unless directed otherwise by LifeScan.
Thereafter, no copies are to be made or retained by UBS.
	 
	 	(f)	 	UBS must promptly notify LifeScan prior to the production of subpoenaed
LifeScan Files and Work Papers.
	 
	 	(g)	 	Notwithstanding the above requirements, UBS may maintain records to the
extent required by applicable statute, regulation or other law and UBS’ counsel may
retain one copy of LifeScan Files and Work Papers for its records.






	16.5	 	Compliance with Environment, Safety And Industrial Hygiene
	 
	 	 	With respect to all environmental, safety and industrial hygiene matters related to UBS’
activities under this Agreement, UBS will:






	 	(a)	 	inform LifeScan promptly of any significant adverse event (e.g., fires,
explosions, accidental discharges);
	 
	 	(b)	 	inform LifeScan promptly of any allegations or findings of violations of
applicable laws or regulations;
	 
	 	(c)	 	allow LifeScan to inspect UBS’ facilities, such inspections to be at
reasonable times and upon reasonable notice; and




page 31









 






	 	(d)	 	implement promptly any corrective action which may be reasonably
requested by LifeScan, including (without limitation) adhering to reasonable and
significant elements of the environmental, safety and industrial hygiene program
adhered to by LifeScan in its own operations.






	17	 	Quality Agreement
	 
	 	 	The parties shall enter into the Quality Agreement attached hereto as Appendix E.
	 
	18	 	Indemnities
	 
	18.1	 	UBS indemnity
	 
	 	 	UBS shall indemnify and hold harmless LifeScan, its Affiliates and each of their
respective officers, directors, employees and agents from and against any and all Losses
that may be sustained, suffered or incurred by such indemnified parties in connection
with a third party claim arising from or related to:






	 	(a)	 	a material breach by UBS or UBI of any warranty, representation, covenant
or agreement made by UBS or UBI in this Agreement;
	 
	 	(b)	 	the failure of any Product supplied by UBS to comply with the relevant
Product Specifications;
	 
	 	(c)	 	the negligence or wilful misconduct of UBS, UBI or their Affiliates
pursuant to this Agreement; or
	 
	 	(d)	 	the: (i) design; (ii) validation; or (iii) manufacture of the Products by
UBS, including the presence of any defects or hidden defects in the Products except
where UBS was acting at the express written direction of LifeScan;






	 	 	provided that UBS will not be liable for any Losses to the extent that they arise from
(i) the negligence or wilful misconduct of LifeScan or its Affiliates or (ii) any breach
by LifeScan of any warranty, representation, covenant or agreement made by LifeScan in
this Agreement; and further provided notwithstanding any other provision of this
Agreement, the obligation of UBS to indemnify LifeScan under this clause 18.1 shall
terminate immediately upon termination of this Agreement other than with respect to
matters where prior to the date of termination the indemnification procedures in clause
18.3 had already commenced.
	 
	18.2	 	Indemnification by LifeScan
	 
	 	 	LifeScan shall indemnify and hold harmless UBS and its Affiliates and each of their
respective officers, directors, employees and agents from and against any and all Losses
that may be sustained, suffered or incurred by such indemnified parties in connection
with a third party claim arising from or related to:






	 	(a)	 	a material breach by LifeScan of any warranty, representation, covenant
or agreement made by LifeScan in this Agreement;




page 32









 






	 	(b)	 	the negligence or wilful misconduct of LifeScan or its Affiliates
pursuant to the Agreement;
	 
	 	(c)	 	the (i) design of any meter (ii) validation of any meter (iii)
manufacture of any meter or (iv) sale of any meter, including any defects or hidden
defects resulting therefrom; or
	 
	 	(d)	 	any claims that the Products and/or meter infringes or violates the
intellectual property rights of any third party in the Territory;






	 	 	provided, that LifeScan will not be liable for any Losses to the extent that they arise
from (i) the negligence or wilful misconduct of UBS or its Affiliates or (ii) any breach
by UBS or UBI of any warranty, representation, covenant or agreement made by UBS or UBI
in this agreement.
	 
	18.3	 	Indemnification procedures
	 
	 	 	Each indemnified party agrees to give the indemnifying party prompt written notice of any
matter upon which such indemnified party intends to base a claim for indemnification (an
Indemnity Claim) under this clause 18. With respect to any Indemnity Claim relating
solely to the payment of money damages and which could not result in the indemnified
party becoming subject to injunctive or other equitable relief or otherwise adversely
affect the business of the indemnified party in any manner, and as to which the
indemnifying party shall have acknowledged in writing the obligation to indemnify the
indemnified party hereunder, the indemnifying party shall have the right to control the
defense of such claim, subject to the indemnified party’s ability to participate in the
defense at its own expense with its own counsel or to control the proceedings if the
indemnifying party is unable or unwilling to do so. The indemnifying party shall not
have the right to settle any claim without the indemnified party’s written consent;
provided, that the indemnifying party shall have the right to settle such a claim without
consent if (i) the settlement involves only the payment of money damages and does not
involve any equitable relief or any conditions that could adversely affect the business
of the indemnified party in any manner and (ii) the settlement includes a complete
release of the indemnified party from such claim.
	 
	18.4	 	Other Product Liability Claims
	 
	 	 	In the case of any claim received by UBS from a third party for Losses related to
personal injury or damage to property due to the use of any Product that is not subject
to an indemnification obligation by UBS under clause 18.1, then UBS shall promptly notify
LifeScan. LifeScan shall have the right to control the defense of such claim and have
the right to settle any claim without UBS’ written consent.
	 
	18.5	 	Limitation of Liability
	 
	 	 	NOTWITHSTANDING ANY OTHER TERM OF THIS AGREEMENT, THE PARTIES AGREE THAT TO THE MAXIMUM
EXTENT PERMITTED BY APPLICABLE LAW, NO PARTY WILL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING
IN CONNECTION WITH THIS AGREEMENT OR IN RESPECT OF ANY OF THE APPLICABLE PRODUCTS OR
SERVICES.




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	19	 	Term and Termination
	 
	19.1	 	Term
	 
	 	 	This Agreement commences on the Effective Date of signing and continues until terminated
in accordance with this clause 19.
	 
	19.2	 	Termination for breach
	 
	 	 	Either party may terminate this Agreement (without payment of any penalty or fee) with
immediate effect by written notice to the other party if the other party is in material
breach of a term of this Agreement and the material breach is not remedied within 90 days
of written notice requiring it to do so.
	 
	19.3	 	Termination for insolvency and bankruptcy
	 
	 	 	LifeScan may terminate this Agreement (without payment of any penalty or fee) with
immediate effect by written notice to UBS if UBS undergoes an Insolvency Event or UBI
undergoes a Bankruptcy Event. UBS may terminate this Agreement (without payment of any
penalty or fee) with immediate effect by written notice to LifeScan if LifeScan undergoes
a Bankruptcy Event.
	 
	19.4	 	Termination for change of control
	 
	 	 	LifeScan may terminate this Agreement (without payment of any penalty or fee) upon thirty
(30) days prior written notice if UBS or UBI undergoes a Change of Control.
Notwithstanding the above, LifeScan shall not have a right to terminate this Agreement in
accordance with the preceding sentence if (i) the LifeScan Manufacturing Line Date has
occurred and (ii) UBS or UBI, as the case may be, are not being acquired by a third party
that makes products that compete with the Initial Product.
	 
	19.5	 	Regulatory termination
	 
	 	 	LifeScan may terminate this Agreement (without payment of any penalty or fee) on thirty
(30) days prior written notice if LifeScan is prohibited from selling all Covered
Products by a competent regulatory authority or is otherwise unable to sell Product(s)
due to regulatory or legal constraints in the major markets in the Territory.
	 
	19.6	 	Additional LifeScan termination rights






	 	(a)	 	LifeScan may terminate this Agreement (without payment of any penalty or
fee) upon thirty (30) days prior written notice of its reasonable determination that
the Initial Product is not an approvable product.
	 
	 	(b)	 	Prior to the Fee Conversion Reference Date, LifeScan may terminate this
Agreement without cause upon prior written notice after payment of Lump Sum Service
Fee — A to UBS in accordance with clause
11.3(a).
	 
	 	(c)	 	After the Fee Conversion Reference Date, LifeScan may terminate this
Agreement without cause upon 12 months prior written notice to UBS
and in addition pay the Lump Sum Service Fee — B to UBS in accordance with clause
11.3(c).




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	19.7	 	Additional UBS termination rights
	 
	 	 	UBS may terminate this Agreement by providing two years prior written notice to LifeScan
(or such other period as may be agreed between the parties) if:






	 	(a)	 	the Lump Sum Services Fee — A or the Lump Sum Services Fee — B has been
paid to UBS in which case LifeScan and UBS will negotiate a new transfer price for
the relevant Covered Products provided any failure to reach agreement will be
handled in accordance with clause 20; or
	 
	 	(b)	 	the parties fail to reach agreement in relation to any suspension or
change to the Maximum Transfer Price as contemplated by clause 6.2(e).






	 	 	For the avoidance of doubt, UBS agrees that during the pendency of such two-year notice
period prior to termination, it shall fully perform its obligations under this Agreement.
	 
	19.8	 	Consequences of termination






	 	(a)	 	If LifeScan terminates this Agreement under clause 19.6(b) or (c), it
will pay the amount specified in Appendix H:
	 
	 	(b)	 	In the event of termination of this Agreement due to UBS’ breach pursuant
to clause 19.2 UBS acknowledges and agrees LifeScan shall have the option to require
UBS to provide all the manufacturing assistance services listed in clause 12(e) to
enable LifeScan promptly to put in place LifeScan’s own qualified manufacturing line
it being understood (i) LifeScan shall at its expense acquire any equipment it
requires for such line and (ii) such assistance shall be at the reasonable expense
of UBS.
	 
	 	(c)	 	In the event of termination of this Agreement by LifeScan (other than for
UBS’ breach pursuant to clause 19.2), LifeScan shall purchase at book value all
inventory of Products or components of Products, in each case relating solely to
Products that have been ordered by LifeScan and solely to the extent that such
inventory is saleable and in compliance with the applicable Product Specifications
(Qualified Inventory); provided that, LifeScan shall not be obligated to pay for
more than a six month supply (determined on the basis of orders submitted by
LifeScan in the course of the six months preceding termination) of such inventory
and components.
	 
	 	(d)	 	In the event of termination of this Agreement by LifeScan for UBS’ breach
pursuant to clause 19.2 or termination of this Agreement by UBS, LifeScan shall have
the option to purchase at book value all or any portion of the Qualified Inventory.
	 
	 	(e)	 	Termination of this Agreement for any reason shall not release either
party hereto from any liability which at such time has already accrued or which
thereafter accrues from a breach or default prior to such expiration
or termination, nor affect in any way the survival of any other right, duty or
obligation of either party hereto which is expressly stated elsewhere in this
Agreement to survive such termination.




page 35









 






	 	(f)	 	Upon termination of this Agreement, UBS shall transfer to LifeScan in an
orderly and prompt fashion all records and data relating to the Products, including
the device master record, device history record, design history file and all product
inquiry records, and such records and data shall be the property of LifeScan. UBS
shall also cooperate with LifeScan to achieve an orderly transition of the
manufacturing operations for the Products to LifeScan or its designee.






	20	 	Dispute Resolution
	 
	20.1	 	Mediation






	 	(a)	 	Any dispute, controversy or claim arising out of or related to this
Agreement, or the interpretation, application, breach, termination or validity
thereof, including any claim of inducement by fraud or otherwise, shall, before
submission to mediation or arbitration, first be submitted for resolution to the
Joint Steering Committee in accordance with clause 4.3(c). If the dispute is not
resolved in accordance with that clause, it will then be mediated through
non-binding mediation in accordance with The CPR Mediation Procedure then in effect
of the International Institute for Conflict Prevention and Resolution (CPR)
available at www.cpradr.org/m_proced.htm, except where that procedure conflicts with
these provisions, in which case these provisions control. The mediation shall be
conducted in New York City, Borough of Manhattan and shall be attended by a senior
executive with authority to resolve the dispute from each of the parties.
	 
	 	(b)	 	The mediator shall be neutral, independent, disinterested and shall be
selected from a professional mediation firm such as JAMS or CPR.
	 
	 	(c)	 	The parties shall promptly confer in an effort to select a mediator by
agreement. In the absence of such an agreement within 10 days of initiation of the
mediation, the mediator shall be selected by CPR as follows: CPR shall provide the
parties with a list of at least 15 names from the CPR Panels of Distinguished
Neutrals. Each party shall exercise challenges for cause, two peremptory challenges,
and rank the remaining candidates within 5 working days of receiving the CPR list.
The parties may together interview the three top-ranked candidates for no more than
one hour each and, after the interviews, may each exercise one peremptory challenge.
The mediator shall be the remaining candidate with the highest aggregate ranking.
	 
	 	(d)	 	The mediator shall confer with the parties to design procedures to
conclude the mediation within no more than 45 days after initiation. Under no
circumstances may the commencement of arbitration under
clause 20.2 be delayed more than 45 days by the mediation process specified herein
absent contrary agreement of the parties.




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	 	(e)	 	Each party agrees not to use the period or pendency of the mediation to
disadvantage the other party procedurally or otherwise. No statements made by
either side during the mediation may be used by the other or referred to during any
subsequent proceedings.
	 
	 	(f)	 	Each party has the right to pursue provisional relief from any court,
such as attachment, preliminary injunction, replevin, etc., to avoid irreparable
harm, maintain the status quo, or preserve the subject matter of the arbitration,
even though mediation has not been commenced or completed.






	20.2	 	Arbitration






	 	(a)	 	Any dispute, claim or controversy not resolved in accordance with Clause
20.1, will be submitted for resolution to arbitration pursuant to the rules then
pertaining of the International Institute for Conflict Prevention and Resolution for
Non-Administered Arbitration (available at
http://www.cpradr.org/arb-intro.asp?M=9.3), or successor (CPR), except where those
rules conflict with these provisions, in which case these provisions control. The
arbitration will be held in New York City, Borough of Manhattan.
	 
	 	(b)	 	The panel shall consist of three arbitrators chosen from the CPR Panels
of Distinguished Neutrals (or, by agreement, from another provider of arbitrators)
each of whom is a lawyer with at least 15 years experience with a law firm or
corporate law department of over 25 lawyers or who was a judge of a court of general
jurisdiction. In the event the aggregate damages sought by the claimant are stated
to be less than $5 million, and the aggregate damages sought by the counterclaimant
are stated to be less than $5 million, and neither side seeks equitable relief, then
a single arbitrator shall be chosen, having the same qualifications and experience
specified above. Each arbitrator shall be impartial and independent of the parties
and shall abide by the Code of Ethics for Arbitrators in Commercial Disputes
(available at http://www.adr.org/EthicsAndStandards).
	 
	 	(c)	 	The parties agree to cooperate (1) to attempt to select the arbitrator(s)
by agreement within 45 days of initiation of the arbitration, including jointly
interviewing the final candidates, (2) to meet with the arbitrator(s) within 45 days
of selection and (3) to agree at that meeting or before upon procedures for
discovery and as to the conduct of the hearing which will result in the hearing
being concluded within no more than nine (9) months after selection of the
arbitrator(s) and in the award being rendered within 60 days of the conclusion of
the hearings, or of any post-hearing briefing, which briefing will be completed by
both sides within 45 days after the conclusion of the hearings.




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	 	(d)	 	In the event the parties cannot agree upon selection of the
arbitrator(s), the CPR will select arbitrator(s) as follows: CPR shall provide the
parties
with a list of no less than 25 proposed arbitrators (15 if a single arbitrator is
to be selected) having the credentials referenced above. Within 25 days of
receiving such list, the parties shall rank at least 65% of the proposed
arbitrators on the initial CPR list, after exercising cause challenges. The
parties may then interview the five candidates (three if a single arbitrator is to
be selected) with the highest combined rankings for no more than one hour each
and, following the interviews, may exercise one peremptory challenge each. The
panel will consist of the remaining three candidates (or one, if one arbitrator is
to be selected) with the highest combined rankings. In the event these procedures
fail to result in selection of the required number of arbitrators, CPR shall
select the appropriate number of arbitrators from among the members of the various
CPR Panels of Distinguished Neutrals, allowing each side challenges for cause and
three peremptory challenges each.
	 
	 	(e)	 	In the event the parties cannot agree upon procedures for discovery and
conduct of the hearing meeting the schedule set forth in paragraph c above, then the
arbitrator(s) shall set dates for the hearing, any post-hearing briefing, and the
issuance of the award in accord with the paragraph c schedule. The arbitrator(s)
shall provide for discovery according to those time limits, giving recognition to
the understanding of the parties that they contemplate reasonable discovery,
including document demands and depositions, but that such discovery be limited so
that the paragraph c schedule may be met without difficulty. In no event will the
arbitrator(s), absent agreement of the parties, allow more than a total of ten days
for the hearing or permit either side to obtain more than a total of 40 hours of
deposition testimony from all witnesses, including both fact and expert witnesses,
or serve more than 20 individual requests for documents, including subparts, or 20
individual requests for admission or interrogatories, including subparts. Multiple
hearing days will be scheduled consecutively to the greatest extent possible.
	 
	 	(f)	 	The arbitrator(s) must render their award by application of the
substantive law of the State of New York and are not free to apply “amiable
compositeur” or “natural justice and equity.” The arbitrator(s) shall render a
written opinion setting forth findings of fact and conclusions of law with the
reasons therefor stated. A transcript of the evidence adduced at the hearing shall
be made and shall, upon request, be made available to either party. The
arbitrator(s) shall have power to exclude evidence on grounds of hearsay, prejudice
beyond its probative value, redundancy, or irrelevance and no award shall be
overturned by reason of such ruling on evidence. To the extent possible, the
arbitration hearings and award will be maintained in confidence.
	 
	 	(g)	 	In the event the panel’s award exceeds $5 million in monetary damages or
includes or consists of equitable relief, or rejects a claim in excess of that
amount or for that relief, then the losing party may obtain review of the
arbitrators’ award or decision by a single appellate arbitrator (the Appeal
Arbitrator) selected from the CPR Panels of Distinguished
Neutrals by agreement or, failing agreement within seven working days, pursuant to
the selection procedures specified in paragraph d above. If CPR cannot provide
such services, the parties will together select another provider of arbitration
services that can. No Appeal Arbitrator shall be selected unless he or she can
commit to rendering a decision within forty-five days following oral argument as
provided in paragraph h. Any such review must be initiated within thirty (30)
days following the rendering of the award referenced in f above.




page 38









 






	 	(h)	 	The Appeal Arbitrator will make the same review of the arbitration
panel’s ruling and its bases that the U.S. Court of Appeals of the Circuit where the
arbitration hearings are held would make of findings of fact and conclusions of law
rendered by a district court after a bench trial and then modify, vacate or affirm
the arbitration panel’s award or decision accordingly, or remand to the panel for
further proceedings. The Appeal Arbitrator will consider only the arbitration
panel’s findings of fact and conclusions of law, pertinent portions of the hearing
transcript and evidentiary record as submitted by the parties, opening and reply
briefs of the party pursuing the review, and the answering brief of the opposing
party, plus a total of no more than four (4) hours of oral argument evenly divided
between the parties. The party seeking review must submit its opening brief and any
reply brief within seventy-five (75) and one hundred thirty (130) days,
respectively, following the date of the award under review, whereas the opposing
party must submit its responsive brief within one hundred ten (110) days of that
date. Oral argument shall take place within five (5) months after the date of the
award under review, and the Appeal Arbitrator shall render a decision within
forty-five (45) days following oral argument. That decision will be final and not
subject to further review, except pursuant to the Federal Arbitration Act.
	 
	 	(i)	 	The parties consent to the jurisdiction of the Federal District Court for
the district in which the arbitration is held for the enforcement of these
provisions and the entry of judgment on any award rendered hereunder (including
after review by the Appeal Arbitrator where such an appeal is pursued). Should such
court for any reason lack jurisdiction, any court with jurisdiction shall act in the
same fashion.
	 
	 	(j)	 	Each party has the right before or, if the arbitrator(s) cannot hear the
matter within an acceptable period, during the arbitration to seek from the
appropriate court provisional remedies such as attachment, preliminary injunction,
replevin, etc. to avoid irreparable harm, maintain the status quo,
or preserve the subject matter of the arbitration.
	 
	 	(k)	 	Each party hereto waives its right to trial of any issue by jury.
	 
	 	(l)	 	Each party hereto waives any claim to punitive, exemplary or multiplied
damages from the other.
	 
	 	(m)	 	Each party hereto waives any claim of consequential damages from the
other.
	 
	 	(n)	 	Each party hereto waives any claim for attorneys’ fees and costs and
prejudgment interest from the other.




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	21	 	Confidentiality and public announcements
	 
	21.1	 	Non-disclosure
	 
	 	 	Each party must keep all Confidential Information of the other party confidential in the
same manner that it applies to its own confidential information and must not use that
Confidential Information except as necessary for the purposes of this Agreement or to
exercise rights and obligations under this Agreement, the License Agreement or the
Development Agreement. Confidential Information received by a party may also be
disclosed or revealed to employees of that party or employees of its Affiliates who are
under an obligation to keep confidential proprietary information, or to a party’s
contractors, suppliers, consultants, advisors or customers under a similar obligation of
confidentiality. Nothing herein is intended to prevent a party using confidential
Information for purposes of seeking a patent application, or seeking or maintaining
regulatory approvals of a Product or for regulatory compliance.
	 
	21.2	 	Exceptions
	 
	 	 	Each party’s obligations under clause 21.1 do not apply to any information which:






	 	(a)	 	is known to the receiving party prior to being received from the
disclosing party, as established by its written records;
	 
	 	(b)	 	is or, without fault of the receiving party becomes, publicly known;
	 
	 	(c)	 	is received by either party from a third party without an obligation of
confidence and having a right to disclose the same;
	 
	 	(d)	 	is developed by the receiving party independent of any disclosure of
Information hereunder, as established by its written records; or
	 
	 	(e)	 	is required to comply with a court or administrative subpoena or order,
provided the receiving party, where reasonably practicable, gives the other timely
notice of the contemplated disclosure and provides the disclosing party the
opportunity to intervene to preserve the confidentiality of the Confidential
Information.
	 
	 	(f)	 	is required to be disclosed by law or the listing rules of a recognized
stock exchange, provided the party using this exception shall have given, to the
extent reasonably possible, not less than two calendar days prior notice to the
other party to seek confidential treatment for any required disclosure.






	21.3	 	Public Announcements
	 
	 	 	The parties hereto covenant and agree that, except as provided for herein below,
each will not from and after the date hereof make, issue or release any public
announcement, press release, statement or acknowledgment of the existence of, or reveal
publicly the terms, conditions and status of, the




page 40









 






	 	 	transactions contemplated herein, without the prior written consent of the other party as
to the content and time of release of and the media in which such statement or
announcement is to be made; provided, however, that in the case of
announcements, statements, acknowledgments or revelations which either party is required
by law or the listing rules of a recognised stock exchange by which it is bound, to make,
issue or release, the making, issuing or releasing of any such announcement, statement,
acknowledgment or revelation by the party so required to do so by law shall not
constitute a breach of this Agreement if such party shall have given, to the extent
reasonably possible, not less than two (2) calendar days prior notice to the other party,
and shall have attempted, to the extent reasonably possible, to clear such announcement,
statement, acknowledgment or revelation with the other party. UBS shall not use the name
of LifeScan or the name of any of LifeScan’s Affiliates for advertising or promotional
purposes without the prior written consent of LifeScan. In furtherance of the foregoing,
UBS shall not originate any publicity or other announcement, written or oral, whether to
the public, the press, the trade, LifeScan’s or UBS’ customers or otherwise, relating to
this Agreement or the existence of an arrangement between the parties, without the prior
written approval of LifeScan. Notwithstanding the above, it is contemplated by the
parties that UBS may issue an announcement on or after the Effective Date and a redacted
form of the Agreement will be filed by UBI with the United States Securities and Exchange
Commission.
	 
	22	 	Notices
	 
	22.1	 	General
	 
	 	 	A notice, demand, certification, process or other communication relating to this
Agreement must be in writing in English and may be given by an agent of the sender.
	 
	22.2	 	How to give a communication
	 
	 	 	In addition to any other lawful means, a communication may be given by being:






	 	(a)	 	personally delivered;
	 
	 	(b)	 	left at the party’s current address for notices;
	 
	 	(c)	 	sent to the party’s current address for notices by pre-paid international
courier, ordinary mail or pre-paid airmail, as applicable; or
	 
	 	(d)	 	sent by fax to the party’s current fax number for notices.






	 	 	Notwithstanding the above, any written notice actually received by a party shall be
deemed sufficient for purposes of this clause.
	 
	22.3	 	Particulars for delivery of notices






	 	(a)	 	The particulars for delivery of notices are initially:





	 	 	 	 	 
	 

	 	LifeScan	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	1000 Gibraltar Drive, Milpitas, CA 95035-6312, USA






page 41









 






	 	 	 	 	 
	 

	 	Fax:
	 	1 408-942-3555
	 
	 	 	 	 
	 

	 	Attention:
	 	Worldwide Vice President, Business Development
	 
	 	 	 	 
	 

	 	With a copy to:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Johnson & Johnson,
	 

	 	 	 	One Johnson & Johnson Plaza, New Brunswick, NJ
 08933, USA
	 
	 	 	 	 
	 

	 	Fax:
	 	1 732-524-2788
	 
	 	 	 	 
	 

	 	Attention:
	 	Associate General Counsel, Medical Device & Diagnostics
	 
	 	 	 	 
	 

	 	UBI	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	1 Corporate Avenue,
	 

	 	 	 	Rowville, Victoria 3178
	 
	 	 	 	 
	 

	 	Fax:
	 	61 3 9213 9099
	 
	 	 	 	 
	 

	 	Attention:
	 	Chief Executive Officer
	 
	 	 	 	 
	 

	 	With a copy to:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Venable LLP,
	 

	 	 	 	8010 Towers Crescent Drive, Suite 300, Vienna, Virginia 
22182, USA
	 
	 	 	 	 
	 

	 	Fax:
	 	1 703-821-8949
	 
	 	 	 	 
	 

	 	Attention:
	 	Elizabeth Hughes, Esq.







	 	(b)	 	Each party may change its particulars for delivery of notices by notice
to each other party.





	 	 	 	 	 
	 

	 	UBS	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	1 Corporate Avenue,
	 

	 	 	 	Rowville, Victoria 3178
	 

	 	 	 	Australia
	 
	 	 	 	 
	 

	 	Fax:
	 	61 3 9213 9099
	 
	 	 	 	 
	 

	 	Attention:
	 	Chief Executive Officer
	 
	 	 	 	 
	 

	 	With a copy to:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	PFM Legal,
	 

	 	 	 	Level 12, 117 York Street,
	 

	 	 	 	Sydney NSW 2000
	 
	 	 	 	 
	 

	 	Fax:
	 	61 2 9267-8196
	 
	 	 	 	 
	 

	 	Attention:
	 	Cameron Billingsley






page 42









 







	 	(c)	 	Each party may change its particulars for delivery of notices by notice
to each other party.






	22.4	 	Communications by post or international courier
	 
	 	 	Subject to clause 22.6, a communication is given if posted or couriered:






	 	(a)	 	within Australia to an Australian address, three Business Days after
posting; or
	 
	 	(b)	 	in any other case using the post, ten Business Days after posting; or.
	 
	 	(c)	 	three business days after delivery to a recognized international courier.






	22.5	 	Communications by fax
	 
	 	 	Subject to clause 22.6, a communication is given if sent by fax, when the sender’s fax
machine produces a report that the fax was sent in full to the addressee. That report is
conclusive evidence that the addressee received the fax in full at the time indicated on
that report.
	 
	22.6	 	After hours communications
	 
	 	 	If a communication is given:






	 	(a)	 	after 5.00 pm in the place of receipt; or
	 
	 	(b)	 	on a day which is a Saturday, Sunday or bank or public holiday in the
place of receipt,






	 	 	it is taken as having been given at 9.00 am on the next day which is not a Saturday,
Sunday or bank or public holiday in that place.
	 
	22.7	 	Process service
	 
	 	 	Any process or other document relating to litigation, administrative or arbitral
proceedings relating to this Agreement may be served by any method contemplated by this
clause 22 or in accordance with any applicable law.
	 
	23	 	Force Majeure
	 
	23.1	 	Force Majeure Event






	 	(a)	 	If either party is prevented from performing any of its obligations under
this Agreement due to a Force Majeure Event, such non-performing party will not be
liable for breach of this Agreement with respect to such non-performance to the
extent any such non-performance is due to a Force Majeure Event.
	 
	 	(b)	 	Such non-performance will be excused for three months or as long as such
event shall be continuing (whichever occurs sooner), provided that the
non-performing party gives immediate written notice to the other party of the Force
Majeure Event.
	 
	 	(c)	 	Such non-performing party must use all reasonable endeavours to remedy
the Force Majeure Event and to resume performance of its affected obligations as
soon as practicable.




page 43









 












	23.2	 	Failure to supply






	 	(a)	 	Notwithstanding the provisions of clause 23.1, in the event that UBS is
unable or unwilling or fails to supply any of the Products in such quantities as
LifeScan requests and in compliance with the required delivery periods and subject
to the UBS Capacity Limitation (whether due to the occurrence of a Force Majeure
Event or otherwise), then:






	 	(i)	 	UBS will make available to LifeScan or its designee access
to any technical and proprietary materials, information and techniques
necessary or helpful for LifeScan to procure required raw materials or
produce or arrange an alternative supplier of the Products; and
	 
	 	(ii)	 	UBS will provide advice and consultation at its facilities
or the facilities of any alternate supplier of the Products.






	 	(b)	 	Notwithstanding anything to the contrary contained in this Agreement, in
the event that LifeScan shall make or have made the Products, pursuant to this
clause 23.2, LifeScan will be permitted to disclose to any third party any
Confidential Information as is reasonably necessary in connection with such
activities (subject to such third party agreeing in writing to be bound by the terms
of clause 21)
	 
	 	(c)	 	If LifeScan gives an order within the UBS Capacity Limitation and UBS has
an inability, unwillingness or failure to supply Product which conforms with the
applicable Product Specifications within the relevant delivery periods and this
occurs more than three times in any Quarter (unless due to a Force Majeure Event),
such inability, unwillingness or failure shall be deemed a material breach of this
Agreement.






	24	 	Guarantee
	 
	24.1	 	Guarantee and Indemnity
	 
	 	 	In consideration of LifeScan entering into this Agreement at the request of UBI (the
receipt and good value of which is acknowledged by UBI), UBI irrevocably and
unconditionally:






	 	(a)	 	guarantees to LifeScan the due and punctual observance and performance of
all the obligations of UBS under this Agreement (including any warranties, covenants
and indemnities given in favour of LifeScan); provided that in the event this
guarantee is enforced and UBI is obligated to performance such obligations, then in
such event LifeScan hereby grants to UBI all of the same rights granted to UBS under
this Agreement solely to enable UBI to perform its obligations in this Agreement;
	 
	 	(b)	 	without limiting clause 24.1(a), guarantees the due and punctual payment
to LifeScan of all money due or which becomes due from UBS under this Agreement or
arising out of breach by UBS of the terms, obligations, warranties and conditions
contained in or implied in this Agreement; and






page 44












 






	 	(c)	 	as a separate and independent principal obligation, indemnifies LifeScan
against any Losses incurred or suffered by LifeScan which arise from any default by
UBS in the performance of any obligations under this Agreement or from any express
or implied obligations of UBS in this Agreement being unenforceable.






	24.2	 	Survival
	 
	 	 	The liability of UBI under clause 24.1 will not be released or discharged (in whole or in
part) by:






	 	(a)	 	any time, concession, waiver or other indulgence being given by LifeScan
to UBS (or any surety) for or in relation to the observance or performance of UBS’
obligations under this Agreement provided UBI shall have the benefit of any time,
concession, waiver or other indulgence actually granted by LifeScan to UBS;
	 
	 	(b)	 	any other security or contractual obligations to secure the performance
of UBS’ obligations under this Agreement being or not being taken, held, renewed,
varied or enforced by LifeScan or such security being void, defective, informal or
unenforceable;
	 
	 	(c)	 	all or any of UBS’ obligations under this Agreement being discharged
otherwise than by their due performance or by this Agreement being terminated by
LifeScan by due exercise of its rights under this Agreement;
	 
	 	(d)	 	an Insolvency Event affecting UBS;
	 
	 	(e)	 	the sale or other disposal of some or all of the shares in UBS which are
owned by UBI; or
	 
	 	(f)	 	anything done or omitted to be done by LifeScan or by anything else
which, but for this clause 24.2, might operate to release wholly or partially or
discharge or otherwise exonerate UBI from its liability under this guarantee and
indemnity.






	24.3	 	Continuing Guarantee
	 
	 	 	The guarantee and indemnity given under this clause 24:






	 	(a)	 	is a continuing guarantee and indemnity and will remain in force until
the whole of the obligations of UBS have been duly performed and satisfied in full;
	 
	 	(b)	 	is irrevocable; and
	 
	 	(c)	 	constitutes a separate and independent obligation of UBI.






	24.4	 	Remedy
	 
	 	 	LifeScan may enforce the guarantee and indemnity given under this clause 24 without first
making any demand or taking any action or proceedings to enforce its rights or remedies
against UBS.





page 45




 









 









	24.5	 	Reinstatement
	 
	 	 	The obligations of UBI under this clause 24 will continue to be effective or will be
reinstated if, at any time any amount under this Agreement is avoided or any payment must
be replaced or restored, either in whole or in part, by UBS for any reason whatsoever and
the liability of UBI will extend to any such payment as if that payment had not been
made.
	 
	24.6	 	Warranties
	 
	 	 	UBI represents and warrants that:






	 	(a)	 	it has full power and authority to enter into this Agreement and has
taken all necessary action to authorise the execution, delivery and performance of
this Agreement in accordance with its terms;
	 
	 	(b)	 	this Agreement constitutes a legally valid and binding obligation of UBI
enforceable in accordance with its terms; and the execution, delivery and
performance of this Agreement by UBI will not violate any provision of:






	 	(i)	 	any law or any order or decree of any applicable Government
Authority;
	 
	 	(ii)	 	the certificate of incorporation or bylaws of UBI; or
	 
	 	(iii)	 	any encumbrance or other agreement which is binding on UBI.






	25	 	GST
	 
	25.1	 	Construction
	 
	 	 	In this clause 25:






	 	(a)	 	words and expressions which are not defined in this Agreement but which
have a defined meaning in GST Law have the same meaning as in the GST Law; and
	 
	 	(b)	 	GST Law has the same meaning given to that expression in the A New Tax
System (Goods and Services Tax) Act 1999.






	25.2	 	Consideration GST exclusive
	 
	 	 	Unless otherwise expressly stated, all prices or other sums payable or consideration to
be provided under this Agreement are exclusive of GST.
	 
	25.3	 	Payment of GST
	 
	 	 	If GST is payable by a supplier or by the representative member for a GST group of which
the supplier is a member, on any supply made under this Agreement, the recipient will pay
to the supplier an additional amount equal to the GST payable on the supply.
Notwithstanding the above, Section 38-185 of the GST Law provides a supply of goods
exported from Australia within 60 days of invoice or payment is not required to pay GST.
The parties will cooperate to export any Products within 60 days of invoice or payment
for such Products.





page 46









 









 












	25.4	 	Timing of GST payment
	 
	 	 	The recipient will pay the amount referred to in clause 25.3 in addition to and at the
same time that the consideration for the supply is to be provided under this Agreement.
	 
	25.5	 	Tax invoice
	 
	 	 	The supplier must deliver a tax invoice or an adjustment note to the recipient before the
supplier is entitled to payment of an amount under clause 25.3. The recipient can
withhold payment of the amount until the supplier provides a tax invoice or an adjustment
note, as appropriate.
	 
	25.6	 	Adjustment event
	 
	 	 	If an adjustment event arises in respect of a taxable supply made by a supplier under
this Agreement, the amount payable by the recipient under clause 25.3 will be
recalculated to reflect the adjustment event and a payment will be made by the recipient
to the supplier or by the supplier to the recipient as the case requires.
	 
	25.7	 	Reimbursements
	 
	 	 	Where a party is required under this Agreement to pay or reimburse an expense or outgoing
of another party, the amount to be paid or reimbursed by the first party will be the sum
of:






	 	(a)	 	the amount of the expense or outgoing less any input tax credits in
respect of the expense or outgoing to which the other party, or to which the
representative member for a GST group of which the other party is a member, is
entitled; and
	 
	 	(b)	 	if the payment or reimbursement is subject to GST, an amount equal to
that GST.






	26	 	General
	 
	26.1	 	Duty






	 	(a)	 	UBS as between the parties is liable for and must pay all Victorian stamp
duty (including any fine or penalty except where it arises from default by the other
party) on or relating to the execution of this Agreement, or any document executed
under it.
	 
	 	(b)	 	If a party other than UBS pays any Victorian duty (including any fine or
penalty) on or relating to the execution of this Agreement, or any document executed
under it, UBS must pay that amount to the paying party on demand.
	 
	 	(c)	 	It is acknowledged by the parties that none of the payments provided for
under this Agreement are intended to be or are in fact in the nature of royalties,
but rather are in the nature of payments for products and services.





page 47




 









 






	 	(d)	 	LifeScan shall be entitled to deduct or withhold taxes where required by
applicable law. UBS shall provide LifeScan as reasonably requested thereafter any
tax documentation required to reduce or eliminate such deduction or withholding.
LifeScan shall provide UBS with proof of payment of any taxes withheld or deducted
pursuant to this clause.






	26.2	 	Legal costs
	 
	 	 	Except as expressly stated otherwise in this Agreement, each party must pay its own legal
and other costs and expenses of negotiating, preparing, executing and performing its
obligations under this Agreement.
	 
	26.3	 	Amendment
	 
	 	 	No modification, change or amendment to this Agreement shall be effective unless in
writing signed by each of the parties hereto.
	 
	26.4	 	Waiver and exercise of rights






	 	(a)	 	A single or partial exercise or waiver by a party of a right relating to
this Agreement does not prevent any other exercise of that right or the exercise of
any other right.
	 
	 	(b)	 	A party is not liable for any loss, cost or expense of any other party
caused or contributed to by the waiver, exercise, attempted exercise, failure to
exercise or delay in the exercise of a right.






	26.5	 	Rights cumulative
	 
	 	 	Except as expressly stated otherwise in this Agreement, the rights of a party under this
Agreement are cumulative and are in addition to any other rights of that party.
	 
	26.6	 	Consents
	 
	 	 	Except as expressly stated otherwise in this Agreement, a party may conditionally or
unconditionally give or withhold any consent to be given under this Agreement and is not
obliged to give its reasons for doing so.
	 
	26.7	 	Governing law and jurisdiction
	 
	 	 	This Agreement is governed by and is to be construed in accordance with the laws
applicable in the State of New York, USA, without giving effect to any provisions thereof
that would cause the application of the laws of any other jurisdiction.
	 
	26.8	 	Assignment
	 
	 	 	This Agreement may not be assigned by LifeScan without the prior written consent of UBS,
except that LifeScan may with prior written notice to UBS assign all or a portion of its
rights and/or obligations hereunder to any of its Affiliates or to a successor, acquirer
or licensee to the portion of its business to which this Agreement pertains without
consent. UBS acknowledges that LifeScan has entered into this Agreement after
consideration of the unique talent, experience and particular attributes of UBS to supply
the Products. Therefore, this Agreement and all rights and obligations hereunder are




page 48









 






	 	 	personal to UBS and may not be assigned by UBS without the express written consent of
LifeScan, which consent may be withheld or given in LifeScan’s sole discretion. Any such
assignment or any attempted assignment in the absence of the prior written consent of
LifeScan, shall be void and without effect at the option of LifeScan. Subject to the
foregoing terms of this clause 26.8, this Agreement shall bind and inure to the benefit
of the parties hereto and their respective permitted successors and assigns.
	 
	26.9	 	Counterparts
	 
	 	 	This Agreement may consist of a number of counterparts and, if so, the counterparts can
be executed separately by each party but taken together shall constitute one document.
	 
	26.10	 	Entire understanding






	 	(a)	 	This Agreement contains the entire understanding between the parties as
to the subject matter of this Agreement.
	 
	 	(b)	 	All previous negotiations, understandings, representations, warranties,
memoranda or commitments concerning the subject matter of this Agreement are merged
in and superseded by this Agreement and are of no effect. No party is liable to any
other party in respect of those matters.
	 
	 	(c)	 	No oral explanation or information provided by any party to another:






	 	(i)	 	affects the meaning or interpretation of this Agreement; or
	 
	 	(ii)	 	constitutes any collateral agreement, warranty or
understanding between any of the parties.






	26.11	 	Severability
	 
	 	 	In the event that any one or more of the provisions (or any part thereof) contained in
this Agreement or in any other instrument referred to herein, shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, then to the maximum extent
permitted by law, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument. Any term or provision of
this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, to
the extent the economic benefits conferred by this Agreement to both parties remain
substantially unimpaired, not affect the validity, legality or enforceability of any of
the terms or provisions of this Agreement in any other jurisdiction.
	 
	26.12	 	Survival
	 
	 	 	Clauses 9.1, 12, 13.4, 17, 18, 19, 20, 21, 22, 24, 25 and 26 shall survive the
termination of this Agreement in accordance with the respective terms thereof. In
addition, any other clauses of this Agreement that are expressly stated to survive by
their terms shall survive termination of this Agreement.
	 
	26.13	 	Relationship of parties
	 
	 	 	The relationship of LifeScan and UBS established by this Agreement is that of independent
contractors, and nothing contained herein shall be construed to




page 49









 












(a) give either party any right or authority to create or assume any obligation of any
kind on behalf of the other or (b) constitute the parties as partners, joint venturers,
co-owners or otherwise as participants in a joint or common undertaking.




	26.14	 	LifeScan Affiliates
	 
	 	 	LifeScan, its successors or assigns may delegate to any of its Affiliates the right to
exercise any rights or obligations of LifeScan under this Agreement in which case
LifeScan shall give prior notice to UBS, it being acknowledged and agreed that LifeScan,
its successors or assigns shall be the sole party looked to by UBS for all intents and
purposes under this Agreement.
	 
	 	 	[The remainder of this Page left blank]





page 50









 









 











Schedule 1 — Initial Product Addendum



This Product Addendum (Product Addendum) to the Master Services and Supply Agreement dated [insert
date of Master Agreement] between LifeScan, Inc., Universal Biosensors Pty Ltd and Universal
Biosensors, Inc (Master Agreement) is entered into by and between LifeScan, Inc., a Californian
corporation of 1000 Gibraltar Drive, Milpitas, CA 95035-6312, USA (LifeScan), Universal Biosensors
Pty Ltd ACN 098 234 309, a company incorporated in Victoria, Australia of 1 Corporate Avenue,
Rowville, Victoria 3178 Australia (UBS) and Universal Biosensors, Inc., a Delaware corporation of
having its registered office at c/o Corporation Service Company 2711 Centerville Road, Suite 400,
Wilmington, Delaware 19808 USA (UBI).



The parties agree that this Product Addendum is to be attached to, and form part of the Master
Agreement. In relation to the matters addressed in this Product Addendum, each of LifeScan and UBS
agrees to be bound by all of the terms and conditions of the Master Agreement and makes the
representations and warranties set forth in the Master Agreement expressed to be made by LifeScan
or UBS, as the case may be. All capitalised terms used in this Product Addendum and not otherwise
defined in this agreement shall have the meaning ascribed to such terms in the Master Agreement.



The parties further agree as follows:





	1.	 	Price






	 	(i)	 	Base Year Standard Cost = *

[REDACTED].
	 
	 	(ii)	 	Maximum Transfer Price = *

[REDACTED]






	2.	 	Specifications below






 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 51









 









 











Initial Product Specification




*

[REDACTED]




REFERENCE DOCUMENTS




CE low voltage directive (EU): 73/23/EEC OJ C 284 of 2005-11-16




Modification: Directive 93/68/EEC [CE Marking]




APPLICABLE STANDARDS / GUIDANCE



[1] ISO15197:2003 In vitro diagnostic test systems — Requirements for blood-glucose monitoring
systems for self-testing in managing diabetes mellitus.



[2] FDA 21 CFR §820.30 Design Control requirements.



[3] FDA Guidance for the Content of Pre-market Submissions for Software Contained in Medical
Devices. May 11, 2005: http://www.fda.gov/cdrh/ode/guidance/337.pdf



[4] General Principles of Software Validation; Final Guidance for Industry and FDA Staff:
http://www.fda.gov/cdrh/comp/guidance/938.pdf



[5] FDA Draft Guidance – Total Product Life Cycle for Portable Invasive Blood Glucose Monitoring
Systems. October 24, 2006: http://www.fda.gov/cdrh/oivd/guidance/1603.pdf



[6] IEC60601-1-8:2006. Medical Electrical Equipment – Part 1-8: General requirements for basic
safety and essential performance – Collateral Standard: General requirements, tests and guidance
for alarm systems in medical electrical equipment and medical electrical systems.



[7] IEC 60068-2-64:1993, Environmental testing — Part 2: Test methods — Test Fh: Vibration,
broad-band random (digital control) and guidance



[8] IEC 60068-2-27:1987, Basic Environmental Testing Procedures — Part 2: Test Methods — Test Ea
and guidance: Shock.



[9] IEC 60721-3-7:2002, Classification of Environmental Conditions — Part 3-7: Classification of
Groups of Environmental Parameters and Their Severities — Portable and Non-stationary Use.



[10] IEC 61010-1:2001, Safety requirements for electrical equipment for measurement, control, and
laboratory use — Part 1: General requirements




 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 52




 









 








Initial System Specification




*

[REDACTED]





 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 53




 









 





Executed as an Addendum to the Agreement by the duly authorized representative of each Party as of
the date first above written.




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Executed by LifeScan, Inc.

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title	 	 






	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Executed by Universal Biosensors 
Pty Ltd

	 	 	)
)	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Company Secretary/Director

	 	 	 	 	 	Director	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name of Company Secretary/Director (print)

	 	 	 	 	 	Name of Director (print)	 	 






	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Executed by
Universal
Biosensors, Inc.

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title	 	 






page 54




 









 





Schedule 2 — Initial Services Addendum



For the purposes of regulatory approvals, LifeScan will be the legal manufacturer of the Initial
System. UBS will facilitate the regulatory approvals of the Initial System by providing the
following initial services to LifeScan. In addition, after approval of the Initial System, UBS
will provide certain ongoing services in connection with the Initial System as set out below (the
initial services and ongoing services for the Initial System shall be defined as the “Initial
Services” for purposes of this addendum).





	 	1.	 	Design verification testing of the Initial System in accordance with all regulatory
requirements necessary to market the Initial System in *

[REDACTED].
	 
	 	2.	 	Complete a Design History File for the Initial Product in accordance with all
regulatory requirements necessary to market the Initial System in *

[REDACTED]. LifeScan
will review the Design History File to satisfy themselves that it complies with LifeScan
internal pre-launch prerequisites.
	 
	 	3.	 	Assist in the preparation and completion of the Initial Meter Design History File in
conjunction with *[REDACTED] and LifeScan for the benefit of LifeScan. It is anticipated that
specific items to be included in the DHF will include Initial Meter Design Input, Design
Output (3-D mechanical drawings, Gerber files, firmware, and component specifications),
Design Verification on production units (or documented production equivalent), Design
Validation on production units (or documented production equivalent), and Design Transfer
Summary. Design verification to include documented test methods and sample rationale and
Design Transfer Summary to include documented rationale of meter design translated to
production specification.
	 
	 	4.	 	Assist in the preparation and completion of the Initial Control Solution Design
History File in conjunction with 
*[REDACTED] and LifeScan for the benefit of LifeScan . It
is anticipated that specific items to be included in the DHF will include Design Input,
Design Output, Design Verification and Design Validation.
	 
	 	5.	 	Work with LifeScan on a mutually agreed basis to provide documentation to assist
LifeScan to prepare and perform clinical trials and regulatory submissions.
	 
	 	6.	 	Work with LifeScan on a mutually agreed basis to provide documentation necessary to
assist LifeScan to prepare product labelling for the Initial System.
	 
	 	7.	 	Design and manage the procurement of the initial custom-designed process equipment.






 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 55




 









 






	 	8.	 	Work together with LifeScan to assess data from the field and use the data to decide
methods for adapting process and control methodology to improve product performance.
	 
	 	9.	 	Manage the specification(s) and all engineering change processes to Initial Product
production equipment at UBS’ facility.
	 
	 	10.	 	Specify and control Initial Product component performance and requirements. Manage
or assist in the qualification and approval of all changes to suppliers and materials for
the Initial Product.
	 
	 	11.	 	Support manufacturing to ensure all work instructions are appropriate.
	 
	 	12.	 	Evaluate the appropriate scope of manufacturing the Initial Product and help manage
any change in scope, i.e. outsource or bring in-house certain process steps.
	 
	 	13.	 	Identify, validate and implement cost reductions and process improvement in
manufacturing the Initial Product.
	 
	 	14.	 	Work with LFS on a mutually agreed basis so that LFS may enter into supply agreements
with suppliers of components comprising the Initial System.
	 
	 	15.	 	Investigate causes of customer complaints with the Initial Product referred to UBS by
LifeScan.
	 
	 	16.	 	Work with LFS on a mutually agreed basis to implement design changes to the Initial
Meter, Initial Control Solution, Initial System and Initial Product.
	 
	 	17.	 	*

[REDACTED]






 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




page 56




 









 







Executed as an Addendum to the Agreement by the duly authorized representative of each Party as of
the date first above written.




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Executed by LifeScan, Inc.

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title	 	 






	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Executed by Universal Biosensors Pty Ltd

	 	 	)
)	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Company Secretary/Director

	 	 	 	 	 	Director	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name of Company Secretary/Director (print)

	 	 	 	 	 	Name of Director (print)	 	 






	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Executed by Universal 

Biosensors, Inc

	 	)

)	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title	 	 






page 57




 









 








Schedule 3 — LifeScan Relevant Patents




*[REDACTED]



*Confidential
portions has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for confidential
treatment.





page 58









 






Executed as an agreement by the duly authorized representative of each Party as of the date first
above written.



	 	 	 	 	 	 	 	 	 
	Executed by LifeScan, Inc.

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Title
	 	 





	 	 	 	 	 	 	 	 	 
	Executed by Universal Biosensors

	 	 	)	 	 	 	 	 
	Pty Ltd

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	  

Company
Secretary/Director

	 	 	 	 	 	 
 

Director
	 	 
	 
	 	 	 	 	 	 	 	 
	  

Name
of Company Secretary/Director (print)

	 	 	 	 	 	  

Name
of Director (print)
	 	 





	 	 	 	 	 	 	 	 	 
	Executed by Universal Biosensors, Inc

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Title
	 	 





page 59









 






Appendix A — Form of Product Addendum




Date




This Product Addendum (Product Addendum) to the Master Services and Supply Agreement dated [insert
date of Master Agreement] October 2007 between LifeScan, Inc., Universal Biosensors Pty Ltd and
Universal Biosensors, Inc. (Master Agreement) is entered into by and between LifeScan, Inc., a
Californian corporation of 1000 Gibraltar Drive, Milpitas, CA 95035-6312, USA (LifeScan), Universal
Biosensors Pty Ltd ACN 098 234 309, a company incorporated in Victoria, Australia of 103 Ricketts
Road, Mount Waverley, Victoria 3149, Australia (UBS) and Universal Biosensors, Inc., a Delaware
corporation of having its registered office at c/o Corporation Service Company 2711 Centerville
Road, Suite 400, Wilmington, Delaware 19808 USA (UBI).



The parties agree that this Product Addendum is to be attached to, and form part of the Master
Agreement. In relation to the matters addressed in this Product Addendum, each of LifeScan, UBS
and UBI agree to be bound by all of the terms and conditions of the Master Agreement and makes the
representations and warranties set forth in the Master Agreement expressed to be made by LifeScan,
UBS or UBI, as the case may be. All capitalised terms used in this Product Addendum and not
otherwise defined in this agreement shall have the meaning ascribed to such terms in the Master
Agreement.



The parties further agree as follows:



3. [Products]



[insert Product description]



4. [Price]



[insert price and payment terms]



5. [Specifications]



6. [Minimum Shelf Life]



7. [Product Materials]



8. Term of Product Addendum




	1.	 	This Product Addendum shall commence on [insert date] and shall continue for a period of
[insert duration] from such date (Term).




page 60









 











	 	 	 	 	 	 	 	 	 
	Executed by LifeScan, Inc.

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Title
	 	 





	 	 	 	 	 	 	 	 	 
	Executed by Universal Biosensors

	 	 	)	 	 	 	 	 
	Pty Ltd

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	  

Company
Secretary/Director

	 	 	 	 	 	 
 

Director
	 	 
	 
	 	 	 	 	 	 	 	 
	  

Name
of Company Secretary/Director (print)

	 	 	 	 	 	  

Name
of Director (print)
	 	 





	 	 	 	 	 	 	 	 	 
	Executed by Universal Biosensors, Inc

	 	 	)	 	 	 	 	 
	 

	 	 	 )	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Title
	 	 





page 61









 






Appendix B — Form of Services Addendum




Date




This Services Addendum (Services Addendum) to the Master Services and Supply Agreement dated
[insert date of Master Agreement] October 2007 between LifeScan, Inc., Universal Biosensors Pty Ltd
and Universal Biosensors, Inc. (Master Agreement) is entered into by and between [LifeScan, Inc, a
Californian corporation of 1000 Gibraltar Drive, Milpitas, CA 95035-6312, USA (LifeScan)] and
[Universal Biosensors Pty Ltd ACN 098 234 309, a company incorporated in Victoria, Australia of 1
Corporate Avenue, Rowville, Victoria 3178, Australia (UBS) and Universal Biosensors, Inc., a
Delaware corporation of having its registered office at c/o Corporation Service Company 2711
Centerville Road, Suite 400, Wilmington, Delaware 19808 USA (UBI).



The parties agree that this Services Addendum is to be attached to, and form part of the Master
Agreement. In relation to the matters addressed in this Services Addendum, each of LifeScan, UBS
and UBI agree to be bound by all of the terms and conditions of the Master Agreement and makes the
representations and warranties set forth in the Master Agreement expressed to be made by LifeScan,
UBS or UBI, as the case may be. All capitalised terms used in this Product Addendum and not
otherwise defined in this agreement shall have the meaning ascribed to such terms in the Master
Agreement.



The parties further agree as follows:




	1.	 	Services





[insert description of Services]




	2.	 	Consideration
	 
	 	 	UBS acknowledges that it will be remunerated for the Services to be provided under this
Services Addendum by means of the fees to which it will be entitled pursuant to clause 11
of the Master Agreement.
	 
	3.	 	Term of Services Addendum
	 
	 	 	This Services Addendum shall commence on [insert date] and shall continue for a period of
[insert duration] from such date (Term).





	 	 	 	 	 	 	 	 	 
	Executed by LifeScan, Inc.

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Title
	 	 





page 62









 







	 	 	 	 	 	 	 	 	 
	Executed by Universal Biosensors

	 	 	)	 	 	 	 	 
	Pty Ltd

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	  

Company
Secretary/Director

	 	 	 	 	 	 
 

Director
	 	 
	 
	 	 	 	 	 	 	 	 
	  

Name
of Company Secretary/Director (print)

	 	 	 	 	 	  

Name
of Director (print)
	 	 





	 	 	 	 	 	 	 	 	 
	Executed by Universal Biosensors, Inc

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

Title
	 	 





page 63









 






Appendix C — Initial Joint Steering Committee Members




Universal Biosensors Pty Ltd:




     *[REDACTED] and



     *[REDACTED]



LifeScan, Inc.




     *[REDACTED] and



     *[REDACTED]



*Confidential
portions has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for confidential
treatment.



page 64









 






Appendix D — Policy on the Employment of Young Persons




Child Labor Employment Practices: In connection with the performance of its obligations under this
Agreement, UBS agrees to comply with the following LifeScan Corporate Policy relating to the
Employment of Child Labor:



(a) No person under the age of 16 shall be employed. No person between the ages of 16 and 18 shall
be employed unless such employment is in compliance with the health, safety and morals provisions
of the International Labor Organizations Convention 138 Concerning Minimum Age.



(b) No young person (under age 18) shall be required to work more than 48 regular hours and 12
hours overtime per week nor more than six (6) days per week.



(c) No young person (under age 18) shall be employed unless such employment is in compliance with
all applicable laws and regulations concerning, age, hours, compensation, health and safety.



page 65









 








Appendix E – Quality Agreement




     This Quality Agreement is made and entered into as of the effective date of the Master
Services and Supply Agreement (“the Agreement”) by and among LifeScan, Inc. (LifeScan), Universal
Biosensors Pty Ltd. (UBS) and Universal Biosensors, Inc. The terms of this Quality Agreement are
expressly incorporated into, and are a part of, the Agreement.



     Below are the primary site locations of LifeScan and UBS:



	 	 	 
	LifeScan, Inc.

	 	LifeScan
	 

	 	1000 Gibraltar Drive
	 

	 	Milpitas, CA 95035 USA
	 
	 	 
	Universal Biosensors Pty Ltd

	 	Universal Biosensors
	 

	 	1 Corporate Ave
	 

	 	Rowville, VIC 3178
	 

	 	Australia






WITNESSETH:




WHEREAS, LifeScan desires to engage UBS to manufacture and supply Product and perform Services (as
those terms are defined below as well as in the Agreement) on the terms and conditions set forth in
the Agreement and as set forth below, and



WHEREAS, UBS desires to manufacture and supply Product and perform Services for LifeScan on the
terms and conditions set forth in the Agreement and as set forth below:



NOW, THEREFORE, in consideration of the foregoing premises and of the mutual covenants of the
Parties hereinafter set forth, the Parties hereto agree as follows:



page 66









 








1.0 Definitions.




     Unless this Quality Agreement shall expressly provide to the contrary, the following terms
herein, whether used in the singular or plural, shall have the respective meanings set forth below:




	 	1.1.	 	“Applicable Law” means all applicable ordinances, rules, regulations,
laws, guidelines, guidance, requirements and court orders of any kind whatsoever of
any Authority as amended from time to time.
	 
	 	1.2.	 	“Authority” means any government regulatory authority responsible for
granting approvals for the performance of Services under this Quality Agreement or for
the Manufacturing, use, marketing, sale, pricing and/or other disposition of
Product(s).
	 
	 	1.3.	 	“Design History File (DHF)” means a compilation of records containing
the development history of the Product(s).
	 
	 	1.4.	 	“Device History Record (DHR)” means a compilation of records
containing the production history of the Product(s).
	 
	 	1.5.	 	“Device Master Record (DMR)” means a compilation of records
containing the procedures and specifications for the Product(s)
	 
	 	1.6.	 	“FDA” means the United States Food and Drug Administration, and any
successor agency having substantially the same functions.
	 
	 	1.7.	 	“FDCA” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C.
§§321 et seq., as amended from time to time.
	 
	 	1.8.	 	“ISO 13485” means the “ISO Quality Management Systems — Medical
Devices — System Requirements for Regulatory Purposes” standard.
	 
	 	1.9.	 	“Manufacture” and “Manufacturing” means all steps, processes and
activities necessary to produce Product(s), including without limitation, the design,
manufacturing, processing, quality control testing, release and storage of Product(s)
in accordance with the terms and conditions hereof.
	 
	 	1.10.	 	“Manufacturing Process” means any and all processes (or any step in
any process) used or planned to be used by UBS to Manufacture Product(s).
	 
	 	1.11.	 	“Parties” means UBS and LifeScan together, and “Party” means any of
them, as the context requires.
	 
	 	1.12.	 	“Product(s)” means the products, current and future, described in
the Agreement to which this Quality Agreement is attached and into which this Quality
Agreement is expressly incorporated by reference.




page 67









 






	 	1.13.	 	“Quality Audit” means a systematic independent examination of a
manufacturer’s quality system to ensure it complies with applicable law.
	 
	 	1.14.	 	“Quality Control Plan” means written descriptions of the systems for
controlling the manufacturing of parts and/or manufacturing processes. It provides a
written summary description of the system used in minimizing process and finished
device variation.
	 
	 	1.15.	 	“Quality Management System” means the regulatory requirements for
the methods used in, and the facilities and controls used for, the design,
manufacture, packing, labeling, storage, installation and servicing of finished
devices, as codified in 21C.F.R. Part 820 or embodied in ISO 13485.
	 
	 	1.16.	 	“Quality Plan” a written plan demonstrating how the requirements set
forth in this agreement will be fulfilled
	 
	 	1.17.	 	“Records” means written or electronic accounts, notes, data, record
of, and information and results obtained from performance of Services and all work
done under this Quality Agreement.
	 
	 	1.18.	 	“Services” means the Manufacturing and other services and activities
that UBS is engaged to provide to LifeScan under the Agreement.
	 
	 	1.19.	 	“Specifications” means the written specifications established for
the Manufacture of Product(s) approved by LifeScan, as amended or supplemented from
time to time by agreement in writing between the Parties.
	 
	 	1.20.	 	“Use As Is (UAI)” is associated with a nonconformance that does not
impact form, fit, or function of the product. It implies that the nonconformance will
not be remedied for that specific batch.




page 68









 











2.0. Compliance with Laws Generally.





	 	2.1.	 	Each Party shall comply in all material respects with all applicable
statutes, regulations, rules, and ordinances that relate to the performance of such
Party’s obligations under the Agreement and this Quality Agreement and, except as
provided for herein, shall bear their own cost and expense of complying therewith.
	 
	 	2.2.	 	The termination or expiration of this Quality Agreement shall not relieve
either Party of its responsibility to comply in all material respects with any
statutory or regulatory requirements associated with the Product(s).





3.0. Compliance with Applicable Quality Management System Requirements.





	 	3.1.	 	Generally. UBS shall develop and manufacture the Product(s) in
accordance with the approved specifications set forth in the Agreement and in
substantial compliance with relevant Quality Management System requirements including
21 CFR PART 820, ISO 13485 and any other applicable laws appropriate to the geography
in which the product will be manufactured, whether or not specifically identified in
this Quality Agreement. Where there are other regulatory requirements not
specifically required by the Quality Management System requirements, LifeScan will
expect compliance. Without limiting the generality of the foregoing:






	 	3.1.1.	 	Quality Management System Requirements. Each Party shall establish
and maintain a quality system that is appropriate for the activities for
which the Party is responsible under this Quality Agreement and that is in
substantial compliance with Quality Management System requirements.
	 
	 	3.1.2.	 	Quality Plan. UBS shall establish a Quality Plan being a controlled
document defining Quality System Requirements set-forth in this agreement and
the details of how UBS shall fulfill these requirements. This shall be
accomplished in the form of references to the procedures, documents, or other
controls in place to ensure the requirements are consistently met. LifeScan
shall review this document as a part of their audit and inspection process
(refer to section 10.)




page 69









 






	 	3.1.3	 	Quality Control Plan. For the production lines, UBS shall
establish quality control plans. These control plans shall be controlled
documents located at the manufacturing facility. These plans shall ensure
that there is a consistent, validated process used to manufacture the
Products. It may contain specific requirements and reference to UBS
procedures and methods to ensure these requirements are consistently met.
It shall also define how UBS verifies these activities, detects
deviations or non-conformances and reacts to those deviations or
non-conformances.






	 	3.2	 	Validation






	 	3.2.1	 	Validation responsibilities, consisting of a Validation
Master Plan, Validation protocols and their execution/testing, and completion
reports, will be created by UBS and available for review by LifeScan. UBS
shall provide copies of validation documents (for example, protocols,
completion reports) to LifeScan upon request.
	 
	 	3.2.2	 	All process validations must be completed prior to the
release of the product batches for commercial use. Equipment
qualification/validation shall be completed prior to the process validations.
Successful process validation batches may be considered as fit for release
with LifeScan approval.
	 
	 	3.2.3	 	Post validation changes such as described in Section 7.0
shall be communicated to LifeScan, prior to their implementation.






	 	3.3	 	Control of Nonconforming Product. UBS shall establish and maintain
procedures to control product that does not conform to specified requirements.
LifeScan is to be notified promptly in writing of any non-conformances that may
potentially affect product safety, efficacy, quality or stability should product have
been released from UBS. LifeScan must approve Use As Is (UAI) non-conformances and
their associated investigation/justification/impact analysis.
	 
	 	3.4.	 	Corrective and Preventive Actions. Both Parties shall establish and
maintain procedures for implementing corrective and preventive actions. The Parties
shall collaborate to determine the division of responsibility for implementation of
quality solutions depending upon the nature of the quality problem and the proposed
solution. Where necessary, LifeScan shall cooperate with UBS to determine the root
cause of quality problems, identifying corrective actions, and assuring their
implementation and effectiveness.




page 70









 






	 	3.5	 	Statistical Techniques. UBS shall, where appropriate, establish and
maintain procedures for identifying valid statistical techniques required for
establishing, controlling, and verifying the acceptability of validations, process
capability and product testing and other appropriate activities.
	 
	 	3.6	 	Finished Controls.






	 	3.6.1	 	UBS may be qualified to release product after a certain
number of batch records have been reviewed and approved by LifeScan. The
number and form of the records to be reviewed prior to UBS being qualified to
release product will be defined in the Quality Plan. The Quality Plan will
also define the turnaround time that LifeScan shall meet in reviewing and
approving/not approving the records.
	 
	 	3.6.2	 	The test methods deployed in qualifying product shall be
validated. Retained samples of the Product(s) will be held by UBS. Expiry
dating of Product(s) shall be determined from stability studies undertaken by
UBS and agreed upon by LifeScan.
	 
	 	3.6.3	 	UBS and its external contract manufacturers shall maintain
manufacturing DHRs of the Product(s) produced under the Agreement. Copies of
DHRs are to be available within 3 business days of a routine request by
LifeScan and within 24 hours of an urgent request by LifeScan.






	 	3.7	 	Labelling and Packaging. LifeScan shall be responsible for the
development of Labelling and Packaging. UBS shall provide the necessary documentation
required to support this development.





4.0. Complaint Handling and Adverse Event Reporting.





	 	4.1.	 	Each Party shall cooperate fully with the other party in dealing with
customer and third-party complaints concerning the Product(s) and shall take such
action to promptly resolve such complaints as may be reasonably requested by the other
party.
	 
	 	4.2.	 	UBS shall be responsible for investigating, in a timely manner, returned
Product(s), if any, and providing LifeScan with reports detailing the investigation
results.
	 
	 	4.3.	 	UBS shall be responsible for allocating the proper resources to investigate
post launch design and manufacturing issues that have resulted in interruptions of
supply or customer complaints.
	 
	 	4.4.	 	UBS shall be responsible for implementing appropriate effective corrective
actions with respect to Product(s) in order to prevent/reduce customer complaints.
Records of investigations and corrective actions
shall be maintained in connection with related complaints or notable trends.




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	 	4.5.	 	LifeScan shall be responsible for complying with all FDA and applicable
foreign regulatory requirements pertaining to the reporting of malfunctions, near
incidents and adverse events, including the Medical Device Reporting requirements,
codified at 21 C.F.R Part 803, MEDDEV and CMDCAS. UBS shall reasonably cooperate with
LifeScan to enable LifeScan to fulfill such requirements. Without limiting the
generality of the foregoing, LifeScan shall:






	 	4.5.1	 	Maintain a record of all customer and third-party
complaints received by LifeScan relating to the Product(s).
	 
	 	4.5.2	 	Make determinations as to whether the complaint
information about Product(s) is required to be reported to the FDA in a
Medical Device Report or to foreign governments in accordance with applicable
adverse event, malfunction or near incident reporting requirements.
	 
	 	4.5.3	 	Make all necessary correspondence with all applicable
regulatory authorities with respect to complaints about the Product(s).
	 
	 	4.5.4	 	Maintain files in accordance with FDA and international
adverse event reporting requirements.






	 	4.6.	 	Customer Service Scripts. Both parties shall provide input in order to
develop appropriate customer service call scripts specific to the Product(s) in order
to comply with reporting requirements.
	 
	 	4.7	 	LifeScan Complaint Management shall provide summaries of complaint statistics
to UBS, and this information will be an input to Management Reviews as outlined in
section 11.0.





5.0 Device Removals and Corrections.





	 	5.1.	 	Subject to compliance with applicable laws and regulations, either Party who
becomes aware of any serious defect, problem or adverse condition in any Product(s)
shall notify the other of such defect, problem or adverse condition as soon as is
practical and within five (5) business days.
	 
	 	5.2.	 	If it is determined that a field removal, correction or other action is
appropriate, LifeScan shall initiate such correction or removal and shall track the
Product(s) in accordance with applicable laws and regulation.
	 
	 	5.3.	 	LifeScan shall make any necessary reports of removals, corrections and other
actions to appropriate regulatory authorities. LifeScan and
UBS shall maintain records for the activities each performs related to all
removals, corrections and other actions conducted for Product(s) as required by
law.




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6.0. Product Clearances and Approvals.





	 	6.1	 	LifeScan shall obtain and maintain all necessary regulatory approvals and
clearances necessary for the manufacturing, marketing, sale and distribution of the
Product(s). UBS shall be responsible for providing LifeScan the necessary information
required for submission filing. LifeScan shall be responsible for filing and
obtaining any required approvals and/or clearances related to Product modifications
after initial regulatory approval/clearance.
	 
	 	6.2	 	UBS shall provide the required support activities to LifeScan in support of
LifeScan obtaining all necessary regulatory clearances / approvals. This includes but
is not limited to registering the UBS facility (ies) with regulatory authorities as
required (e.g., US FDA Establishment Registration, Japan Foreign Manufacturer
Authorization, etc.).
	 
	 	6.3	 	As part of this approval process, LifeScan shall perform the necessary
clinical trails with UBS’s collaboration.
	 
	 	6.4	 	The parties shall determine who will construct and maintain DHFs for the
Products and other components of the Initial System. LifeScan shall conduct a
compliance audit of UBS constructed DHFs, identify gaps, and have these gaps mitigated
prior to approval of product launch. LifeScan shall maintain current copies of all
DHFs.





7.0 Product Modifications.





	 	7.1.	 	Either party may propose a product design or manufacturing modification.
	 
	 	7.2.	 	UBS is not permitted to make any modification or manufacturing change that
affects the Product(s) without LifeScan’s approval. Examples of such changes but not
inclusive are:






	 	Ø	 	Changes that may impact regulatory clearances and approvals, such
as Intended Use
	 
	 	Ø	 	Product performance specifications
	 
	 	Ø	 	Design input requirements
	 
	 	Ø	 	Critical to Quality (CTQ) Process Parameters
	 
	 	Ø	 	Redesign of an existing Quality System




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8.0. Record Production and Retention.





	 	8.1.	 	The Parties shall comply with any regulatory record keeping requirements that
apply to the performance of such Party’s obligations under the Quality Agreement.
	 
	 	8.2	 	UBS shall create and maintain DHFs and DHRs that demonstrate that the
Product(s) was designed and manufactured in accordance with Quality Management System
requirements, the DMR, and meets the design specifications established by LifeScan.
These records shall be retained in accordance with LifeScan’s record retention
requirements.
	 
	 	8.3	 	Each party will be responsible for creating and maintaining their part of the
DMR.
	 
	 	8.4	 	Records and other documents required to be maintained pursuant to this
Quality Agreement shall be available at reasonable times for inspection, examination
and copying by or on behalf of LifeScan, or for inspection by third parties, including
FDA, for so long as any of them are in UBS’s possession.
	 
	 	8.5	 	Records and other documents pursuant to this Quality Agreement shall be
maintained at UBS or other location that is reasonably accessible. Such records shall
be stored to minimize deterioration and to prevent loss. Upon LifeScan’s request, UBS
shall promptly provide LifeScan with copies of these Records and other documents
maintained pursuant to this Quality Agreement.
	 
	 	8.6	 	Upon contract termination, UBS is required to continue to provide copies of
DHRs within 3 days of a request by LifeScan or transfer ownership of the DHR to
LifeScan, including the physical transfer of records to LifeScan.
	 
	 	8.7	 	Upon contract termination, UBS is required to transfer ownership of the
product DHFs, including the physical transfer of records to LifeScan.
	 
	 	8.8	 	UBS shall not transfer, deliver or otherwise provide to any third parties
original Records or other documents maintained pursuant to this Quality Agreement
without prior written consent of LifeScan except as required by Applicable Law. If
UBS is required by Applicable Law to provide to third parties copies of such Records
or other documents, UBS shall notify LifeScan within five (5) business days of any
such request.




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9.0 U.S. FDA Establishment Registration and Listing. 





	 	9.1	 	LifeScan shall be responsible for listing the Product(s) with U.S. FDA in
accordance with 21 C.F.R. Section 807.25.
	 
	 	9.2	 	If required by any international regulatory authority to support product
Clearances and Approvals:






	 	9.2.1	 	UBS shall be responsible for compliance with U.S. FDA’s
applicable establishment registration requirements set forth in 21 C.F.R.
Section 807.25.
	 
	 	9.2.2	 	UBS shall be responsible for listing the Product(s) with
U.S. FDA in accordance with 21 C.F.R. Section 807.25.





10.0. Regulatory Audits and Inspections.





	 	10.1	 	UBS shall provide LifeScan reasonable access upon prior notice to inspect,
review and audit DHFs, the manufacturing facilities of UBS and its suppliers and
contractors where the Product(s) is designed and developed, tested, handled, stored,
distributed, and/or manufactured to determine if the Product(s) is tested, handled,
stored, distributed and/or manufactured in accordance with Applicable Laws and any
Quality Agreement.
	 
	 	10.2	 	UBS shall, within fifteen (15) business days of receipt of the written audit
report, remedy any deficiencies which may be noted in any such audit or, if any such
deficiencies cannot reasonably be remedied within such fifteen (15) business day
period, present to LifeScan a written plan to remedy such deficiencies as soon as
possible.
	 
	 	10.3	 	LifeScan may conduct no more than one routine audits in any one three hundred
sixty-five (365) day period. Notwithstanding the immediately preceding sentence,
LifeScan shall have the right to conduct a compliance audit (a) in the event that
LifeScan reasonably believes that any such inspection or audit is necessary or prudent
with respect to ensuring the safety, efficacy and quality of the Product(s), or (b)
subsequent to identifying any safety, efficacy and quality deficiency in connection
with any audit(s) conducted.
	 
	 	10.4	 	All information of UBS (or its contractor’s) that LifeScan shall gain access
to through such an audit shall be governed by the terms of the Agreement.




page 75









 







	 	10.5	 	UBS shall promptly notify LifeScan when an Authority inspection of its
facilities (or an inspection by third parties in accordance with FDA regulations or
inspection by a Notified Body) pertaining to the Product(s) is expected and/or
underway, and shall promptly provide LifeScan with copies of all regulatory
correspondence, including without limitation Forms FDA 483 and Warning Letters and any
related correspondence with FDA or any other regulatory authority or notified body.





11.0 Management Quality Review.





	 	 	LifeScan and UBS shall conduct routine Quality Reviews. These reviews shall be prearranged
and have an agenda to address: CAPAs, reportable incidents, complaints, critical
manufacturing data, non-conformance reports, deviations, process trending, relevant changes
to Products, Processes, Quality Management System, and/or personnel and facilities or
similar topics.





[Remainder of this Page left Blank]




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     IN WITNESS WHEREOF, the Parties hereto have caused this Quality Agreement to be executed by
their duly authorized representatives as of the date first above written.



	 	 	 	 	 
	LIFESCAN, INC.	 	 
	 
	 	 	 	 
	By:

	 	 
 

	 	 
	Name:

	 	 
 

	 	 
	Title:

	 	 
 

	 	 
	 
	 	 	 	 
	UNIVERSAL BIOSENSORS PTY. LTD.	 	 
	 
	 	 	 	 
	By:

	 	 
 

	 	 
	Name:

	 	 
 

	 	 
	Title:

	 	 
 

	 	 






page 77









 








Appendix F – Financial Years




Circled dates indicate the designated end of Quarter.




2007 UNIVERSAL CALENDAR






	2007 UNIVERSAL CALENDAR
  M            T            W            T            F            S            S   M  
          T            W            T            F            S            S
- -—  -—  -—  -—  -—  -—  -—   —  -—  -—  -—  -—  -—  -—  —
JAN 1 2 3 4 5 6 7 JUL 2 3 4 5 6 7 8
(4 Weeks) 8 9 10 11 12 13 14 (4 Weeks) 9 10 11 12 13 14 15
  15 16 17 18 19 20 21   16 17 18 19 20 21 22
  22 23 24 25 26 27 28   23 24 25 26 27 28 29
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
FEB 29 30 31 AUG 30 31
(4 Weeks) 1 2 3 4 (4 Weeks) 1 2 3 4 5
5 6 7 8 9 10 11   6 7 8 9 10 11 12
  12 13 14 15 16 17 18   13 14 15 16 17 18 19
  19 20 21 22 23 24 25   20 21 22 23 24 25 26
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
MAR 26 27 28 SEP 27 28 29 30 31
(5 Weeks) 1 2 3 4 (5 Weeks) 1 2
5 6 7 8 9 10 11   3 4 5 6 7 8 9
  12 13 14 15 16 17 18   10 11 12 13 14 15 16
  19 20 21 22 23 24 25   17 18 19 20 21 22 23
  26 27 28 29 30 31   24 25 26 27 28 29 30
  1  
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
APR 2 3 4 5 6 7 8 OCT 1 2 3 4 5 6 7
(4 Weeks) 9 10 11 12 13 14 15 (4 Weeks) 8 9 10 11 12 13 14
  16 17 18 19 20 21 22   15 16 17 18 19 20 21
  23 24 25 26 27 28 29   22 23 24 25 26 27 28





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	-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
MAY 30 NOV 29 30 31
(4 Weeks) 1 2 3 4 5 6 (4 Weeks) 1 2 3 4
  7 8 9 10 11 12 13   5 6 7 8 9 10 11
  14 15 16 17 18 19 20   12 13 14 15 16 17 18
  21 22 23 24 25 26 27   19 20 21 22 23 24 25
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
JUN 28 29 30 31 DEC 26 27 28 29 30
(5 Weeks) 1 2 3 (5 Weeks) 1 2
  4 5 6 7 8 9 10   3 4 5 6 7 8 9
  11 12 13 14 15 16 17   10 11 12 13 14 15 16
  18 19 20 21 22 23 24   17 18 19 20 21 22 23
  25 26 27 28 29 30   24 25 26 27 28 29 30
  1  
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
2008 UNIVERSAL CALENDAR
  M            T            W            T            F            S            S   M   
         T            W            T            F            S            S
- -—  -—  -—  -—  -—  -—  -—   —  -—  -—  -—  -—  -—  -—  —
  31   30
JAN 1 2 3 4 5 6 JUL 1 2 3 4 5 6
(4 Weeks) 7 8 9 10 11 12 13 (4 Weeks) 7 8 9 10 11 12 13
  14 15 16 17 18 19 20   14 15 16 17 18 19 20
  21 22 23 24 25 26 27   21 22 23 24 25 26 27
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
FEB 28 29 30 31 AUG 28 29 30 31
(4 Weeks) 1 2 3 (4 Weeks) 1 2 3
  4 5 6 7 8 9 10   4 5 6 7 8 9 10
  11 12 13 14 15 16 17   11 12 13 14 15 16 17





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	  18 19 20 21 22 23 24   18 19 20 21 22 23 24
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
MAR 25 26 27 28 29 SEP 25 26 27 28 29 30 31
(5 Weeks) 1 2 (5 Weeks)
  3 4 5 6 7 8 9   1 2 3 4 5 6 7
  10 11 12 13 14 15 16   8 9 10 11 12 13 14
  17 18 19 20 21 22 23   15 16 17 18 19 20 21
  24 25 26 27 28 29 30   22 23 24 25 26 27 28
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
  31   29 30
APR 1 2 3 4 5 6 OCT 1 2 3 4 5
(4 Weeks) 7 8 9 10 11 12 13 (4 Weeks) 6 7 8 9 10 11 12
  14 15 16 17 18 19 20   13 14 15 16 17 18 19
  21 22 23 24 25 26 27   20 21 22 23 24 25 26
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
MAY 28 29 30 NOV 27 28 29 30 31
(4 Weeks) 1 2 3 4 (4 Weeks) 1 2
  5 6 7 8 9 10 11   3 4 5 6 7 8 9
  12 13 14 15 16 17 18   10 11 12 13 14 15 16
  19 20 21 22 23 24 25   17 18 19 20 21 22 23
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
JUN 26 27 28 29 30 31 DEC 24 25 26 27 28 29 30
(5 Weeks) 1 (5 Weeks)
2 3 4 5 6 7 8   1 2 3 4 5 6 7
  9 10 11 12 13 14 15   8 9 10 11 12 13 14
  16 17 18 19 20 21 22   15 16 17 18 19 20 21
  23 24 25 26 27 28 29   22 23 24 25 26 27 28
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -





page 80









 






2009 UNIVERSAL CALENDAR






	2009 UNIVERSAL CALENDAR
  M            T            W            T            F            S            S   M   
         T            W            T            F            S            S
- -—  -—  -—  -—  -—  -—  -—   —  -—  -—  -—  -—  -—  -—  —
  29 30 31   29 30
JAN 1 2 3 4 JUL 1 2 3 4 5
(4 Weeks) 5 6 7 8 9 10 11 (4 Weeks) 6 7 8 9 10 11 12
  12 13 14 15 16 17 18   13 14 15 16 17 18 19
  19 20 21 22 23 24 25   20 21 22 23 24 25 26
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
FEB 26 27 28 29 30 31 AUG 27 28 29 30 31
(4 Weeks) 1 (4 Weeks) 1 2
  2 3 4 5 6 7 8   3 4 5 6 7 8 9
  9 10 11 12 13 14 15   10 11 12 13 14 15 16
  16 17 18 19 20 21 22   17 18 19 20 21 22 23
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
MAR 23 24 25 26 27 28 SEP 24 25 26 27 28 29 30
(5 Weeks) 1 (5 Weeks) 31
  2 3 4 5 6 7 8   1 2 3 4 5 6
  9 10 11 12 13 14 15   7 8 9 10 11 12 13
  16 17 18 19 20 21 22   14 15 16 17 18 19 20
  23 24 25 26 27 28 29   21 22 23 24 25 26 27
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
  30 31   28 29 30
APR 1 2 3 4 5 OCT 1 2 3 4
(4 Weeks) 6 7 8 9 10 11 12 (4 Weeks) 5 6 7 8 9 10 11
  13 14 15 16 17 18 19   12 13 14 15 16 17 18
  20 21 22 23 24 25 26   19 20 21 22 23 24 25
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -




	   




page 81









 












	MAY 27 28 29 30 NOV 26 27 28 29 30 31
(4 Weeks) 1 2 3 (4 Weeks) 1
  4 5 6 7 8 9 10   2 3 4 5 6 7 8
  11 12 13 14 15 16 17   9 10 11 12 13 14 15
  18 19 20 21 22 23 24   16 17 18 19 20 21 22
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
JUN 25 26 27 28 29 30 31 DEC 23 24 25 26 27 28 29
(5 Weeks) (6 Weeks) 30
  1 2 3 4 5 6 7   1 2 3 4 5 6
  8 9 10 11 12 13 14   7 8 9 10 11 12 13
  15 16 17 18 19 20 21   14 15 16 17 18 19 20
  22 23 24 25 26 27 28   21 22 23 24 25 26 27
    28 29 30 31
                          1 2 3
-  —   —   —   —   —   —   —   —   —   —   —   —  -—  -—  —
2010 UNIVERSAL CALENDAR
  M            T            W            T            F            S            S   M    
        T            W            T            F            S            S
- -—  -—  -—  -—  -—  -—  -—   —  -—  -—  -—  -—  -—  -—  —
JAN 4 5 6 7 8 9 10 JUL 5 6 7 8 9 10 11
(4 Weeks) 11 12 13 14 15 16 17 (4 Weeks) 12 13 14 15 16 17 18
  18 19 20 21 22 23 24   19 20 21 22 23 24 25
  25 26 27 28 29 30 31   26 27 28 29 30 31
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  —
FEB            AUG
(4 Weeks) 1 2 3 4 5 6 7 (4 Weeks) 2 3 4 5 6 7 8
  8 9 10 11 12 13 14   9 10 11 12 13 14 15
  15 16 17 18 19 20 21   16 17 18 19 20 21 22
  22 23 24 25 26 27 28   23 24 25 26 27 28 29
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -





page 82









 














	MAR            SEP 30 31
(5 Weeks) 1 2 3 4 5 6 7 (5 Weeks) 1 2 3 4 5
  8 9 10 11 12 13 14   6 7 8 9 10 11 12
  15 16 17 18 19 20 21   13 14 15 16 17 18 19
  22 23 24 25 26 27 28   20 21 22 23 24 25 26
  29 30 31   27 28 29 30
  1 2 3 4   1 2 3
APR 5 6 7 8 9 10 11 OCT 4 5 6 7 8 9 10
(4 Weeks) 12 13 14 15 16 17 18 (4 Weeks) 11 12 13 14 15 16 17
  19 20 21 22 23 24 25   18 19 20 21 22 23 24
  26 27 28 29 30   25 26 27 28 29 30 31
            1 2                
-  —   —   —   —   —  -—  -—   —   —   —   —   —   —   —  -
MAY            NOV
(4 Weeks) 3 4 5 6 7 8 9 (4 Weeks) 1 2 3 4 5 6 7
  10 11 12 13 14 15 16   8 9 10 11 12 13 14
  17 18 19 20 21 22 23   15 16 17 18 19 20 21
  24 25 26 27 28 29 30   22 23 24 25 26 27 28
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
JUN 31 DEC 29 30
(5 Weeks) 1 2 3 4 5 6 (5 Weeks) 1 2 3 4 5
  7 8 9 10 11 12 13   6 7 8 9 10 11 12
  14 15 16 17 18 19 20   13 14 15 16 17 18 19
21 22 23 24 25 26 27   20 21 22 23 24 25 26
  28 29 30   27 28 29 30 31
  1 2 3 4   1 2
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -





page 83









 








2011 UNIVERSAL CALENDAR






	2011 UNIVERSAL CALENDAR
  M            T            W            T            F            S            S   M    
        T            W            T            F            S            S
- -—  -—  -—  -—  -—  -—  -—   —  -—  -—  -—  -—  -—  -—  —
  3 4 5 6 7 8 9   4 5 6 7 8 9 10
JAN 10 11 12 13 14 15 16 JUL 11 12 13 14 15 16 17
(4 Weeks) 17 18 19 20 21 22 23 (4 Weeks) 18 19 20 21 22 23 24
  24 25 26 27 28 29 30   25 26 27 28 29 30 31
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
FEB 31 AUG 1 2 3 4 5 6 7
(4 Weeks) 1 2 3 4 5 6 (4 Weeks) 8 9 10 11 12 13 14
  7 8 9 10 11 12 13   15 16 17 18 19 20 21
  14 15 16 17 18 19 20   22 23 24 25 26 27 28
  21 22 23 24 25 26 27  
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
MAR 28 SEP 29 30 31
(5 Weeks) 1 2 3 4 5 6 (5 Weeks) 1 2 3 4
  7 8 9 10 11 12 13   5 6 7 8 9 10 11
  14 15 16 17 18 19 20   12 13 14 15 16 17 18
  21 22 23 24 25 26 27   19 20 21 22 23 24 25
  28 29 30 31   26 27 28 29 30
          1 2 3             1 2
-  —   —   —   —  -—  -—  -—   —   —   —   —   —   —  -—  —
  4 5 6 7 8 9 10   3 4 5 6 7 8 9
APR 11 12 13 14 15 16 17 OCT 10 11 12 13 14 15 16
(4 Weeks) 18 19 20 21 22 23 24 (4 Weeks) 17 18 19 20 21 22 23
  25 26 27 28 29 30   24 25 26 27 28 29 30




	  1  
   




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	MAY 2 3 4 5 6 7 8 NOV 31
(4 Weeks) 9 10 11 12 13 14 15 (4 Weeks) 1 2 3 4 5 6
  16 17 18 19 20 21 22   7 8 9 10 11 12 13
  23 24 25 26 27 28 29   14 15 16 17 18 19 20
    21 22 23 24 25 26 27
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
JUN 30 31 DEC 28 29 30
(5 Weeks) 1 2 3 4 5 (5 Weeks) 1 2 3 4
  6 7 8 9 10 11 12   5 6 7 8 9 10 11
  13 14 15 16 17 18 19   12 13 14 15 16 17 18
  20 21 22 23 24 25 26   19 20 21 22 23 24 25
  27 28 29 30   26 27 28 29 30 31
  1 2 3   1
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
2012 UNIVERSAL CALENDAR
  M            T            W            T            F            S            S   M   
         T            W            T            F            S            S
- -—  -—  -—  -—  -—  -—  -—   —  -—  -—  -—  -—  -—  -—  —
  2 3 4 5 6 7 8   2 3 4 5 6 7 8
JAN 9 10 11 12 13 14 15 JUL 9 10 11 12 13 14 15
(4 Weeks) 16 17 18 19 20 21 22 (4 Weeks) 16 17 18 19 20 21 22
  23 24 25 26 27 28 29   23 24 25 26 27 28 29
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
FEB 30 31 AUG 30 31
(4 Weeks) 1 2 3 4 5 (4 Weeks) 1 2 3 4 5
  6 7 8 9 10 11 12   6 7 8 9 10 11 12
  13 14 15 16 17 18 19   13 14 15 16 17 18 19
  20 21 22 23 24 25 26   20 21 22 23 24 25 26





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MAR 27 28 29 SEP 27 28 29 30 31
(5 Weeks) 1 2 3 4 (5 Weeks) 1 2
  5 6 7 8 9 10 11   3 4 5 6 7 8 9
12 13 14 15 16 17 18   10 11 12 13 14 15 16
  19 20 21 22 23 24 25   17 18 19 20 21 22 23
  26 27 28 29 30 31   24 25 26 27 28 29 30
              1                
-  —   —   —   —   —   —  -—   —   —   —   —   —   —   —  -
  2 3 4 5 6 7 8   1 2 3 4 5 6 7
APR 9 10 11 12 13 14 15 OCT 8 9 10 11 12 13 14
(4 Weeks) 16 17 18 19 20 21 22 (4 Weeks) 15 16 17 18 19 20 21
  23 24 25 26 27 28 29   22 23 24 25 26 27 28
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
MAY 30 NOV 29 30 31
(4 Weeks) 1 2 3 4 5 6 (4 Weeks) 1 2 3 4
  7 8 9 10 11 12 13   5 6 7 8 9 10 11
  14 15 16 17 18 19 20   12 13 14 15 16 17 18
  21 22 23 24 25 26 27   19 20 21 22 23 24 25
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
JUN 28 29 30 31 DEC 26 27 28 29 30
(5 Weeks) 1 2 3 (5 Weeks) 1 2
  4 5 6 7 8 9 10   3 4 5 6 7 8 9
  11 12 13 14 15 16 17   10 11 12 13 14 15 16
  18 19 20 21 22 23 24   17 18 19 20 21 22 23
  25 26 27 28 29 30   24 25 26 27 28 29 30
  1  
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -






page 86









 







2013 UNIVERSAL CALENDAR








	2013 UNIVERSAL CALENDAR
  M            T            W            T            F            S            S   M    
        T            W            T            F            S            S
- -—  -—  -—  -—  -—  -—  -—   —  -—  -—  -—  -—  -—  -—  —
  31   1 2 3 4 5 6 7
JAN 1 2 3 4 5 6 JUL 8 9 10 11 12 13 14
(4 Weeks) 7 8 9 10 11 12 13 (4 Weeks) 15 16 17 18 19 20 21
  14 15 16 17 18 19 20   22 23 24 25 26 27 28
  21 22 23 24 25 26 27  
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
FEB 28 29 30 31 AUG 29 30 31
(4 Weeks) 1 2 3 (4 Weeks) 1 2 3 4
  4 5 6 7 8 9 10   5 6 7 8 9 10 11
  11 12 13 14 15 16 17   12 13 14 15 16 17 18
  18 19 20 21 22 23 24   19 20 21 22 23 24 25
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
MAR 25 26 27 28 SEP 26 27 28 29 30 31
(5 Weeks) 1 2 3 (5 Weeks) 1
  4 5 6 7 8 9 10   2 3 4 5 6 7 8
  11 12 13 14 15 16 17   9 10 11 12 13 14 15
  18 19 20 21 22 23 24   16 17 18 19 20 21 22
  25 26 27 28 29 30 31   23 24 25 26 27 28 29
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
  1 2 3 4 5 6 7   30
APR 8 9 10 11 12 13 14 OCT 1 2 3 4 5 6
(4 Weeks) 15 16 17 18 19 20 21 (4 Weeks) 7 8 9 10 11 12 13
  22 23 24 25 26 27 28   14 15 16 17 18 19 20
    21 22 23 24 25 26 27
                             
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -




	   




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	MAY 29 30 NOV 28 29 30 31
(4 Weeks) 1 2 3 4 5 (4 Weeks) 1 2 3
  6 7 8 9 10 11 12   4 5 6 7 8 9 10
  13 14 15 16 17 18 19   11 12 13 14 15 16 17
  20 21 22 23 24 25 26   18 19 20 21 22 23 24
-  —   —   —   —   —   —   —   —   —   —   —   —   —   —  -
JUN 27 28 29 30 31 DEC 25 26 27 28 29 30
(5 Weeks) 1 2 (5 Weeks) 1
  3 4 5 6 7 8 9   2 3 4 5 6 7 8
  10 11 12 13 14 15 16   9 10 11 12 13 14 15
  17 18 19 20 21 22 23   16 17 18 19 20 21 22
  24 25 26 27 28 29 30   23 24 25 26 27 28 29
   
- -






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Appendix G – UBS’ Insurance Requirements




1.0 Insurance Requirements





UBS shall use reasonable commercial efforts to procure and maintain, at all times, and at
its own expense, during the Term the types of insurance(s) specified below. For product
liability/completed operations, insurance and product recall insurance, coverage (or
appropriate run off insurance) will remain in effect for at least two (2) years after
termination of the Agreement.




A. Public Liability




Public Liability Occurrence Coverage Form with limits of not less than *[REDACTED]
each occurrence and *[REDACTED] annual aggregate. Such insurance shall include
worldwide coverage including coverage for USA and Canada jurisdiction claims and
occurrences. UBS’ policy shall specifically include LifeScan, its subsidiaries, and its
directors, officers and employees, as Additional Insureds. UBS’ policy shall also
specifically waive any rights of subrogation against LifeScan, its subsidiaries, and its
directors, officers and employees. UBS shall supply LifeScan with the above proof of
insurance and forms as required upon the signing of this Agreement, but LifeScan’s
failure to demand such proof or forms shall not waive LifeScan’s rights to such coverage
as specified herein.




B. Workers’ Compensation




Workers’ Compensation Form in accordance with local regulations.




C. All Risk Property Insurance/Industrial Special Risk Insurance




All Risk Property Insurance/ Industrial Special Risk Insurance in an amount not less than
the full replacement cost of UBS’ property.




D. Product Liability Insurance




Product Liability/Completed Operations Insurance on an occurrence form basis with limits
of not less than *[REDACTED] each occurrence and *[REDACTED] annual aggregate.
Such insurance shall include worldwide coverage including coverage for USA and Canada
jurisdiction claims and occurrences. UBS’ policy shall specifically include LifeScan,
its subsidiaries, and its directors, officers and employees, as Additional Insureds.
Such Additional Insured coverage is only to the extent of the distribution or sale of
Products manufactured by UBS or its agents. UBS’ policy shall also specifically waive
any rights of subrogation against LifeScan, its subsidiaries, and its directors, officers and employees. UBS shall supply LifeScan with the above
proof of insurance and forms as required upon the signing of this Agreement, but
LifeScan’s failure to demand such proof or forms shall not waive LifeScan’s rights to
such coverage as specified herein.




*Confidential
portions has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for confidential
treatment.



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E. Product Recall Insurance





Product Recall Insurance an occurrence form basis with limits of not less than *[REDACTED] each
occurrence and 
*[REDACTED] annual aggregate. Such insurance shall include
worldwide coverage including coverage for USA and Canada jurisdiction claims and
occurrences. UBS’ policy shall also specifically waive any rights of subrogation
against LifeScan, its subsidiaries, and its directors, officers and employees. UBS shall
supply LifeScan with the above proof of insurance and forms as required upon the signing
of this Agreement, but LifeScan’s failure to demand such proof or forms shall not waive
LifeScan’s rights to such coverage as specified herein.



2.0. Miscellaneous





A. Authorization to do Business; Rating Requirement




All insurance companies must be authorized to do business in the States where business is
being transacted covering all operations under this Agreement. All insurance companies
must be rated A or better with a financial rating of VII or better in the most recent A.
M. Best’s Rating Guide.




B. Prior Notice of Cancellation or Nonrenewal




All insurance policies shall provide for thirty days (30) days’ prior written notice to
LifeScan of cancellation or nonrenewal.




C. Certificates




Certificates of insurance for all required coverage shall be provided to LifeScan prior
to commencement of any work on the project. Copies of the required endorsements to the
policies shall also be provided to LifeScan at that time or when appropriate. Failure by
LifeScan to request such copies or documents shall not waive LifeScan’s rights to
coverage under this agreement.



*Confidential
portions has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for confidential
treatment.



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Appendix H – Termination Matters




*

[REDACTED]




 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




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Appendix I – Action Taken after Effective Date




LifeScan shall pay *

[REDACTED] to UBS in accordance with clause 2 of the Agreement.




 




			
	*	 	Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




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Appendix J – Standards for Responsible External Manufacturing




Guiding Principles



The Johnson & Johnson Family of Companies (J&J) holds itself to high standards of ethical behavior,
product quality and social responsibility. These standards reflect our internal values and the
expectations of external stakeholders, such as customers, regulators, investors and the public.
Furthermore, we find business relationships are more productive and effective when they are built
on trust, mutual respect and common values. As such, J&J seeks relationships with external
manufacturers of finished goods and active pharmaceutical ingredients (herein referred to as
external manufacturing partners) who share a common commitment to:





	 	1)	 	Comply with applicable legal requirements,
	 
	 	2)	 	Behave ethically and with integrity,
	 
	 	3)	 	Integrate quality into business processes,
	 
	 	4)	 	Treat people with dignity and respect,
	 
	 	5)	 	Promote the safety, health and well-being of employees,
	 
	 	6)	 	Operate in an environmentally responsible manner and,
	 
	 	7)	 	Implement management systems to ensure ongoing performance and continual
improvement.




We believe when these seven guiding principles are followed, business and communities realize
economic, social and environmental benefits. We developed the standards set out below to assist us
with selecting partners who operate in a manner consistent with these guiding principles and to
assist our external manufacturing partners with understanding our expectations. We developed these
standards mindful of the different legal and cultural environments in which our external
manufacturing partners operate and internationally recognized expectations for business ethics,
product quality, labor and employment, health and safety and the environment. J&J assesses
conformance to these standards and, when necessary, works with its external manufacturing partners
to identify agreed upon actions and schedules in order to achieve improvement. J&J considers
progress in meeting these standards and ongoing performance in its sourcing decisions.



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Standards




     1.) Legal Compliance





J&J’s external manufacturing partners are expected to operate in compliance with all applicable
legal requirements related to business conduct, product quality, labor and employment
practices, health and safety and environmental protection. They are expected to obtain all
applicable permits and to operate in accordance with permit limitations and requirements at all
times.




2.) Ethics & Business Conduct




J&J’s external manufacturing partners are expected to behave ethically and with integrity in
all business transactions. As such, they shall:




	 	Ø 	 	  Uphold standards for fair business practices including accurate and truthful
advertising, fair competition, and antitrust.
	 
	 	Ø 	 	Prohibit the exchange of privileges, waiver of penalties or fines, or special benefits
through payment of bribes, illegal political contributions, or other illicit payments or
methods.
	 
	 	Ø 	 	Safeguard against improper use and disclosure of confidential or sensitive information
including intellectual property, pricing, employee and patient information.
	 
	 	Ø 	 	Maintain an environment of transparency, collaboration and innovation.
	 
	 	Ø 	 	Treat any animals used in its activities in an ethical and humane manner and follow the
principles of replacement, refinement, and reduction of laboratory research animal
testing.






3.) Product Quality




J&J’s external manufacturing partners are expected to meet agreed upon quality requirements in
order to provide goods and services that consistently meet required specifications and
customers’ needs, perform as intended and are safe for their intended use. These requirements
shall be defined in a Quality Agreement and product specifications agreed to by J&J and its
external manufacturing partner.




4.) Labor & Employment




J&J’s external manufacturing partners are expected to treat people with dignity and respect.
As such, they shall:




	 	Ø 	 	Not use forced, bonded, indentured or involuntary prison labor.
	 
	 	Ø 	 	Not discriminate against or harass an individual on the basis of race, color, religion,
gender, pregnancy, HIV status, sexual orientation, national origin, age, disability,
veteran’s status, marital status, or political affiliation.




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	 	Ø 	 	Not treat or threaten to treat an individual harshly or inhumanely. Harsh or inhumane
treatment includes sexual harassment or abuse, corporal punishment, coercion or verbal
abuse.
	 
	 	Ø 	 	Avoid unsafe working conditions by providing sufficient rest periods during the workday
and honor agreed upon days off from work and maximum working hours.
	 
	 	Ø 	 	Pay wages for all hours worked and clearly communicate the wages that employees are to
be paid to them in advance of commencing work. Communicate to all employees if overtime
is required and the wages to be paid for such overtime.
	 
	 	Ø 	 	Comply with J&J’s Employment of Young Persons Policy and not employ anyone under the
age of 16 and not employ anyone under the age of 18 to perform hazardous work.
	 
	 	Ø 	 	Respect workers’ rights to make informed decisions free of coercion, threat of reprisal
or unlawful interference regarding their desire to join or not join organizations.
	 
	 	Ø 	 	Respect worker’s rights to bargain collectively without unlawful interference.





5.) Employee Health & Safety



J&J’s external manufacturing partners are expected to maintain the workplace and any living
quarters used to house employees in a clean, orderly and safe manner. As such they shall:





	 	Ø 	 	Implement programs to prevent employee exposures to workplace hazards including
chemical, biological, and physical hazards.
	 
	 	Ø 	 	Implement programs to manage processes safely and prevent catastrophic events.
	 
	 	Ø 	 	Identify potential emergency situations, implement preventative measures and be
prepared to execute emergency response procedures.





6.) Environmental Protection





J&J’s external manufacturing partners are expected to operate in an environmentally responsible
manner. As such, they shall:




	 	Ø 	 	Work to reduce the environmental impacts of their operations including natural resource
consumption, materials sourcing, waste generation, wastewater discharges and air
emissions.
	 
	 	Ø 	 	Prevent accidental releases of hazardous materials into the environment and adverse
environmental impacts on the local community.
	 
	 	Ø 	 	Implement programs to ensure products do not contain restricted or banned materials.










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7.) Management Systems




J&J’s external manufacturing partners are expected to manage their activities systematically in
order to meet the standards set forth in this document and to improve their operations
continually. As such, they shall:




	 	Ø 	 	Demonstrate top management commitment through policies, objectives, and formal
processes for management review.
	 
	 	Ø 	 	Implement processes to control documents and records.
	 
	 	Ø 	 	Provide resources, including competent personnel and appropriate infrastructure, to
ensure conformance to these standards.
	 
	 	Ø 	 	Implement processes to control the production of J&J products, manage change
effectively and ensure customer requirements are satisfied.
	 
	 	Ø 	 	Implement processes to manage nonconformity and emergency situations related to
products, processes and these standards, including the reporting of such events to
applicable regulatory authorities and J&J as appropriate.
	 
	 	Ø 	 	Identify and implement improvement actions, including effective complaint
investigation, internal audit and corrective action processes.






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