##### 



Exhibit 10.1
 EXECUTION COPY
 Date: 29 October 2007




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##### 



Agreed terms
    
    
    71 Interpretation
    
    
    71.1 Definitions
    
    
    71.2 Construction
    
    
    121.3 Headings
    
    
    132 Action Taken after Effective Date
    
    
    133 License
    
    
    133.1 Grant of License
    
    
    133.2 LifeScan rights
    
    
    134 Joint Steering Committee
    
    
    134.1 Establishment
    
    
    134.2 Composition
    
    
    144.3 Decision making
    
    
    145 Supply of Products
    
    
    145.1 Supply of Initial Products
    
    
    145.2 Supply of Other Products
    
    
    156 Purchase Price of Initial Products
    
    
    156.1 Interim Costing Period
    
    
    156.2 Post-Interim Costing Period
    
    
    167 Orders, Inventory and Delivery
    
    
    187.1 Forecasts and orders
    
    
    187.2 Inventory
    
    
    197.3 Lead Time
    
    
    197.4 Past Due Orders
    
    
    197.5 Delivery
    
    
    197.6 Sub-Tier Component Supply Chain
    
    
    197.7 Packaging for Shipment
    
    
    207.8 Quarterly Business Reviews
    
    
    207.9 Capacity
    
    
    207.10 Supply Risk
    
    
    208 Defective Products
    
    
    208.1 Disposition of defective Products
    
    
    208.2 Independent testing
    
    
    218.3 Corrective action
    
    
    229 Inspection
    
    
    229.1 Rights of Inspection
    
    
    229.2 Obligations to rectify
    
    
    229.3 Acknowledgment
    
    
    22
 page 2




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10 Provision of Services
    
    
    2310.1 Supply of Initial Services
    
    
    2310.2 Supply of other Services
    
    
    2310.3 Manner of performing the Services
    
    
    2311 Fees
    
    
    2411.1 Quarterly Service Fee
    
    
    2411.2 Milestones
    
    
    2511.3 Lump Sum Service Fee
    
    
    2511.4 Audit Rights
    
    
    2612 Manufacturing Process Information and Other Intellectual Property
    
    
    2613 Sundry Obligations of UBS
    
    
    2713.1 Records
    
    
    2713.2 Reports
    
    
    2713.3 Equipment
    
    
    2713.4 Insurance
    
    
    2814 Restrictions on UBS and UBI activities
    
    
    2815 Representations and warranties
    
    
    2815.1 UBS Warranties
    
    
    2815.2 Execution and performance of agreement
    
    
    2915.3 EXCLUSION OF OTHER WARRANTIES
    
    
    2916 Compliance
    
    
    3016.1 Compliance with certain laws
    
    
    3016.2 Compliance with Policy on the Employment of Young Persons
    
    
    3016.3 Standards for Responsible External Manufacturing
    
    
    3016.4 Files and Work papers
    
    
    3116.5 Compliance with Environment, Safety And Industrial Hygiene
    
    
    3117 Quality Agreement
    
    
    3218 Indemnities
    
    
    3218.1 UBS indemnity
    
    
    3218.2 Indemnification by LifeScan
    
    
    3218.3 Indemnification procedures
    
    
    3318.4 Other Product Liability Claims
    
    
    3318.5 Limitation of Liability
    
    
    3319 Term and Termination
    
    
    3419.1 Term
    
    
    3419.2 Termination for breach
    
    
    3419.3 Termination for insolvency and bankruptcy
    
    
    3419.4 Termination for change of control
    
    
    3419.5 Regulatory termination
    
    
    3419.6 Additional LifeScan termination rights
    
    
    3419.7 Additional UBS termination rights
    
    
    3519.8 Consequences of termination
    
    
    35
 page 3




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20 Dispute Resolution
    
    
    3620.1 Mediation
    
    
    3620.2 Arbitration
    
    
    3721 Confidentiality and public announcements
    
    
    4021.1 Non-disclosure
    
    
    4021.2 Exceptions
    
    
    4021.3 Public Announcements
    
    
    4022 Notices
    
    
    4122.1 General
    
    
    4122.2 How to give a communication
    
    
    4122.3 Particulars for delivery of notices
    
    
    4122.4 Communications by post or international courier
    
    
    4322.5 Communications by fax
    
    
    4322.6 After hours communications
    
    
    4322.7 Process service
    
    
    4323 Force Majeure
    
    
    4323.1 Force Majeure Event
    
    
    4323.2 Failure to supply
    
    
    4424 Guarantee
    
    
    4424.1 Guarantee and Indemnity
    
    
    4424.2 Survival
    
    
    4524.3 Continuing Guarantee
    
    
    4524.4 Remedy
    
    
    4524.5 Reinstatement
    
    
    4624.6 Warranties
    
    
    4625 GST
    
    
    4625.1 Construction
    
    
    4625.2 Consideration GST exclusive
    
    
    4625.3 Payment of GST
    
    
    4625.4 Timing of GST payment
    
    
    4725.5 Tax invoice
    
    
    4725.6 Adjustment event
    
    
    4725.7 Reimbursements
    
    
    4726 General
    
    
    4726.1 Duty
    
    
    4726.2 Legal costs
    
    
    4826.3 Amendment
    
    
    4826.4 Waiver and exercise of rights
    
    
    4826.5 Rights cumulative
    
    
    4826.6 Consents
    
    
    4826.7 Governing law and jurisdiction
    
    
    4826.8 Assignment
    
    
    48
 page 4




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26.9 Counterparts
    
    
    4926.10 Entire understanding
    
    
    4926.11 Severability
    
    
    4926.12 Survival
    
    
    4926.13 Relationship of parties
    
    
    4926.14 LifeScan Affiliates
    
    
    50Schedule 1  Initial Product Addendum
    
    
    51Schedule 2  Initial Services Addendum
    
    
    55Schedule 3  LifeScan Relevant Patents
    
    
    58Appendix A  Form of Product Addendum
    
    
    60Appendix B  Form of Services Addendum
    
    
    62Appendix C  Initial Joint Steering Committee Members
    
    
    64Appendix D  Policy on the Employment of Young Persons
    
    
    65Appendix E  Quality Agreement
    
    
    66Appendix F  Financial Years
    
    
    78Appendix G  UBS Insurance Requirements
    
    
    89Appendix H  Termination Matters
    
    
    91Appendix I  Action Taken after Effective Date
    
    
    92Appendix J  Standards for Responsible External Manufacturing
    
    
    93
 page 5




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Effective Date: 29 October 2007
  LifeScan, Inc. LifeScan
 Universal Biosensors Pty Ltd UBS
 Universal Biosensors, Inc. UBI
           page 6




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1
    
    Interpretation1.1
    
    DefinitionsIn this Agreement:Affiliatemeans 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 Costhas the meaning given in clause 6.2(b)(i) of this Agreement.Agreement Intellectual Property Rightshas the meaning given in clause12(c) of this
Agreement.Bankruptcy Eventmeans 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 Yearhas the meaning given in clause 6.2(a) of this agreement.Base Year Standard Costhas the meaning given in the Initial Product Addendum.
 page 7




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Business Day
 Change of Control
 Confidential Information
 (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 Corporations Act 2001 (Cth)
 Cost Savings Amount clause 6. 2(b)(ii)
 Covered Product
 Development Agreement
 Effective Date
 Fee Conversion Reference Date
 Financial Year
 Force Majeure Event
 
 *
    
    Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment. page 8




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Government Authority
 Initial Meter
 Initial Product
 Initial Product Addendum Schedule 1
 Initial Services Schedule 2
 Initial System
 Insolvency Event
 (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




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Interim Costing Period
 Joint Steering Committee clause 4.1
 Joint Steering Committee Member clause 4.2
 Labour and Overhead Costs
 License Agreement
 Licensed Intellectual Property Rights
 LifeScan Files and Work Papers clause 16.4
 LifeScan Intellectual Property Rights
 (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
 LifeScan Relevant Patents Schedule 3
 page 10




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Losses
 Lump Sum Service Fee  A clause 11. 3(a)
 Lump Sum Services Fee  B clause 11. 3(c)
 Material Costs
 Maximum Transfer Price
 Milestone
 Milestone Amount clause 11. 2(a)
 Policy clause 16.2
 Process clause 12
 Product
 Product Addendum Appendix A
 Product Specifications
 (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
 Quality Agreement Appendix E
 Quarter
 Quarterly Service Fee clause 11. 1(a)(i)
 page 11




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Raw Materialsmeans the materials, components and packaging required to manufacture and
package the Products in accordance with the Product Specifications.Restricted Purposeshas the meaning given in clause14(a) of this Agreement.Servicesmeans the services described in Schedule 2and any other services identified in
a Services Addendum.Services Addendummeans 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.Soldmeans 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.Standardshas the meaning given in clause 16.3of this Agreement.Termhas the meaning given in clause 19.1of this Agreement.Territorymeans the entire world.UBS Capacity Limitationhas the meaning given in clause 7.1(a).1.2
    
    ConstructionUnless 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




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(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
    
    HeadingsHeadings do not affect the interpretation of this Agreement.2
    
    Action Taken after Effective DateAfter 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
    
    License3.1
    
    Grant of LicenseLifeScan 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
    
    EstablishmentWithin 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




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4.2
    
    CompositionThe 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 20of
this Agreement.
 Part 2: Products5
    
    Supply of Products5.1
    
    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




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(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 Products6.1
    
    Interim Costing PeriodDuring 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




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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




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(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 6with
such frequency as is mutually acceptable to the parties. All payments under this
clause 6shall 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




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(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 Delivery7.1
    
    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.
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(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 TimeUBS 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 OrdersUBS 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 ChainUBS 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.
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(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 ShipmentUBS 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 ReviewsThe 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
    
    CapacityUBS 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 RiskIn consultation with LifeScan, UBS shall develop and execute a second sourcing strategy
for key raw materials.8
    
    Defective Products8.1
    
    Disposition of defective ProductsLifeScan 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
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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.
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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
    
    Inspection9.1
    
    Rights of InspectionLifeScan 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 rectifyUBS 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 9.1or, 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
    
    AcknowledgmentUBS acknowledges that the provisions of this clause 9granting 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.
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Part 3: Services10
    
    Provision of Services10.1
    
    Supply of Initial ServicesUBS has been supplying the Initial Services. After the Effective Date, UBS will continue
to supply the Initial Services to LifeScan in accordance with Schedule  2and 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 ServicesUBS must provide the Services:
 (a)
    
    with due care and skill and in a timely manner;
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(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
    
    Fees11.1
    
    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
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(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




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(iv)
    
    *

[REDACTED];(v)
    
    *

[REDACTED];(vi)
    
    *

[REDACTED]; and(vii)
    
    *

[REDACTED].
 11.4
    
    Audit RightsFor 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 PropertyAs 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




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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 Provisions13
    
    Sundry Obligations of UBS13.1
    
    RecordsUBS 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
    
    ReportsThe 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




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(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
    
    InsuranceUBS 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 warranties15.1
    
    UBS WarrantiesUBS 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.
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(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 agreementUBS 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 WARRANTIESEXCEPT 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




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16
    
    Compliance16.1
    
    Compliance with certain lawsIn 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 HygieneWith 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
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(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 AgreementThe parties shall enter into the Quality Agreement attached hereto as Appendix E.18
    
    Indemnities18.1
    
    UBS indemnityUBS 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 18.1shall
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
18.3had already commenced.18.2
    
    Indemnification by LifeScanLifeScan 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;
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(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 proceduresEach 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 ClaimsIn 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 LiabilityNOTWITHSTANDING 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 Termination19.1
    
    TermThis Agreement commences on the Effective Date of signing and continues until terminated
in accordance with this clause 19.19.2
    
    Termination for breachEither 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 bankruptcyLifeScan 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 controlLifeScan 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 terminationLifeScan 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 rightsUBS 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 19.2UBS acknowledges and agrees LifeScan shall have the option to require
UBS to provide all the manufacturing assistance services listed in clause12(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 19.2or 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.
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(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 Resolution20.1
    
    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 20.2be 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.
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(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 announcements21.1
    
    Non-disclosureEach 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
    
    ExceptionsEach partys obligations under clause 21.1do 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 AnnouncementsThe 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
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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
    
    Notices22.1
    
    GeneralA 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 communicationIn 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:
 LifeScanAddress:
    
    1000 Gibraltar Drive, Milpitas, CA 95035-6312, USA
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Fax:
    
    1 408-942-3555Attention:
    
    Worldwide Vice President, Business DevelopmentWith a copy to:Address:
    
    Johnson & Johnson,One Johnson & Johnson Plaza, New Brunswick, NJ 08933, USAFax:
    
    1 732-524-2788Attention:
    
    Associate General Counsel, Medical Device & DiagnosticsUBIAddress:
    
    1 Corporate Avenue,Rowville, Victoria 3178Fax:
    
    61 3 9213 9099Attention:
    
    Chief Executive OfficerWith a copy to:Address:
    
    Venable LLP,8010 Towers Crescent Drive, Suite 300, Vienna, Virginia 22182, USAFax:
    
    1 703-821-8949Attention:
    
    Elizabeth Hughes, Esq.
 (b)
    
    Each party may change its particulars for delivery of notices by notice
to each other party.
 UBSAddress:
    
    1 Corporate Avenue,Rowville, Victoria 3178AustraliaFax:
    
    61 3 9213 9099Attention:
    
    Chief Executive OfficerWith a copy to:Address:
    
    PFM Legal,Level 12, 117 York Street,Sydney NSW 2000Fax:
    
    61 2 9267-8196Attention:
    
    Cameron Billingsley
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(c)
    
    Each party may change its particulars for delivery of notices by notice
to each other party.
 22.4
    
    Communications by post or international courierSubject 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 faxSubject 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 communicationsIf 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 serviceAny 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 22or in accordance with any applicable law.23
    
    Force Majeure23.1
    
    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.
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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
    
    Guarantee24.1
    
    Guarantee and IndemnityIn 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




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(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
    
    SurvivalThe liability of UBI under clause 24.1will 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 GuaranteeThe 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
    
    RemedyLifeScan may enforce the guarantee and indemnity given under this clause 24without first
making any demand or taking any action or proceedings to enforce its rights or remedies
against UBS.




---



##### 



24.5
    
    ReinstatementThe obligations of UBI under this clause 24will 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
    
    WarrantiesUBI 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
    
    GST25.1
    
    ConstructionIn 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 Lawhas the same meaning given to that expression in the A New Tax
System (Goods and Services Tax) Act 1999.
 25.2
    
    Consideration GST exclusiveUnless 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 GSTIf 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.




---



##### 



25.4
    
    Timing of GST paymentThe recipient will pay the amount referred to in clause 25.3in addition to and at the
same time that the consideration for the supply is to be provided under this Agreement.25.5
    
    Tax invoiceThe 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 eventIf 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 25.3will 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
    
    ReimbursementsWhere 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
    
    General26.1
    
    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.




---



##### 



(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 costsExcept 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
    
    AmendmentNo 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 cumulativeExcept 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
    
    ConsentsExcept 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 jurisdictionThis 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
    
    AssignmentThis 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
    
    CounterpartsThis 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
    
    SeverabilityIn 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
    
    SurvivalClauses 9.1, 12, 13.4, 17, 18, 19, 20, 21, 22, 24, 25 and 26shall 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 partiesThe relationship of LifeScan and UBS established by this Agreement is that of independent
contractors, and nothing contained herein shall be construed to
 page 49




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26.14
    
    LifeScan AffiliatesLifeScan, 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]




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Product Addendum insert
date of Master Agreement Master Agreement LifeScan UBS UBI
   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.




---



##### 



In vitro
  http://www.fda.gov/cdrh/ode/guidance/337.pdf
 http://www.fda.gov/cdrh/comp/guidance/938.pdf
 2006: http://www.fda.gov/cdrh/oivd/guidance/1603.pdf
      
 *
    
    Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment.




---



##### 



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




---



##### 



Executed
 Executedby LifeScan, Inc.
    
    
    )NameTitle
 Executedby Universal Biosensors Pty Ltd
    
    
    ))Company Secretary/Director
    
    
    
    
    
    DirectorName of Company Secretary/Director (print)
    
    
    
    
    
    Name of Director (print)
 Executedby
Universal
Biosensors, Inc.
    
    
    )NameTitle




---



##### 



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.




---



##### 



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.




---



##### 



Executed
 Executedby LifeScan, Inc.
    
    
    ))NameTitle
 Executedby Universal Biosensors Pty Ltd
    
    
    ))Company Secretary/Director
    
    
    
    
    
    DirectorName of Company Secretary/Director (print)
    
    
    
    
    
    Name of Director (print)
 Executedby Universal 
Biosensors, Inc
    
    )
)NameTitle




---



##### 



page 58




---



##### 



Executed
 Executedby LifeScan, Inc.
    
    
    ))NameTitle
 Executedby Universal Biosensors
    
    
    )Pty Ltd
    
    
    )Company
Secretary/Director
    
    
    
    
    
    DirectorName
of Company Secretary/Director (print)
    
    
    
    
    
    Name
of Director (print)
 Executed by Universal Biosensors, Inc
    
    
    ))NameTitle
 page 59




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##### 



Product Addendum insert
date of Master Agreement Master Agreement LifeScan UBS UBI
    [ insert Product description ]
  [ insert price and payment terms ]
     1.
    
    This Product Addendum shall commence on [insert date] and shall continue for a period of
[insert duration] from such date (Term).
 page 60




---



##### 



Executedby LifeScan, Inc.
    
    
    )NameTitle
 Executedby Universal Biosensors
    
    
    )Pty Ltd
    
    
    )Company
Secretary/Director
    
    
    
    
    
    DirectorName
of Company Secretary/Director (print)
    
    
    
    
    
    Name
of Director (print)
 Executed by Universal Biosensors, Inc
    
    
    ))NameTitle
 page 61




---



##### 



Services Addendum insert date of Master Agreement Master Agreement LifeScan UBS UBI
   1.
    
    Services
 [ insert description of Services ]
 2.
    
    ConsiderationUBS 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 AddendumThis Services Addendum shall commence on [insert date] and shall continue for a period of
[insert duration] from such date (Term).
 Executedby LifeScan, Inc.
    
    
    )NameTitle
 page 62




---



##### 



Executedby Universal Biosensors
    
    
    )Pty Ltd
    
    
    )Company
Secretary/Director
    
    
    
    
    
    DirectorName
of Company Secretary/Director (print)
    
    
    
    
    
    Name
of Director (print)
 Executed by Universal Biosensors, Inc
    
    
    ))NameTitle
 page 63




---



##### 



page 64




---



##### 



page 65




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##### 



LifeScan, Inc.
    
    LifeScan1000 Gibraltar DriveMilpitas, CA 95035 USAUniversal Biosensors Pty Ltd
    
    Universal Biosensors1 Corporate AveRowville, VIC 3178Australia
 WITNESSETH:
    page 66




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##### 



Definitions.
  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




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##### 



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 fulfilled1.17.
    
    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




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##### 



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




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##### 



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




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##### 



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.
 page 71




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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.
 page 72




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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 UseØ
    
    Product performance specificationsØ
    
    Design input requirementsØ
    
    Critical to Quality (CTQ) Process ParametersØ
    
    Redesign of an existing Quality System
 page 73




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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.
 page 74




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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




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##### 



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.
  page 76




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##### 



LIFESCAN, INC.By:Name:Title:UNIVERSAL BIOSENSORS PTY. LTD.By:Name:Title:
 page 77




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##### 



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 page 78




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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 page 79




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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




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##### 



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




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##### 



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




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##### 



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




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##### 



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 page 84




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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 page 85




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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




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##### 



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
                             
-                                           -  page 87




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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
   
- - page 88




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1.0 Insurance Requirements
  A. Public Liability
  B. Workers Compensation
  C All Risk Property Insurance/Industrial Special Risk Insurance
  D. Product Liability Insurance
   page 89




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E. Product Recall Insurance
 
 2.0. Miscellaneous
 A. Authorization to do Business; Rating Requirement
 A.
M. Bests Rating Guide.
 B. Prior Notice of Cancellation or Nonrenewal
  C. Certificates
   page 90




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*
    
    Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment. page 91




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clause 2
 
 *
    
    Confidential
portion has been omitted and has been filed separately with the
Securities Exchange Commission pursuant to a request for
confidential treatment. page 92




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##### 



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.
  page 93




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##### 



1.) Legal Compliance
  2.) Ethics & Business Conduct
  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
  4.) Labor & Employment
  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.
 page 94




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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
  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
  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.
 
 page 95




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7.) Management Systems
  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.
 page 96