Document:

Exhibit 10.7

 

LEASE

 

BETWEEN

 

WE 10 SOUTHGATE LLC

(“LANDLORD”)

 

AND

 

BINAX, INC. (“TENANT”)

 

dated as of August 26, 2004

 

 

TABLE OF CONTENTS

 

	
  1.

  	
   

  	
  Identifications.

  	
   

  	
   

  
	
  2.

  	
   

  	
  Lease; The Premises.

  	
   

  	
   

  
	
  3.

  	
   

  	
  Landlord’s Work.

  	
   

  	
   

  
	
  4.

  	
   

  	
  Term.

  	
   

  	
   

  
	
  5.

  	
   

  	
  Use of
  the Premises; Licenses and Permits.

  	
   

  	
   

  
	
  6.

  	
   

  	
  Basic Rent;
  Additional Rent.

  	
   

  	
   

  
	
  7.

  	
   

  	
  Taxes.

  	
   

  	
   

  
	
  8.

  	
   

  	
  Insurance;
  Waivers of Subrogation.

  	
   

  	
   

  
	
  9.

  	
   

  	
  Utilities.

  	
   

  	
   

  
	
  10.

  	
   

  	
  Repairs.

  	
   

  	
   

  
	
  11.

  	
   

  	
  Compliance
  with Laws and Regulations.

  	
   

  	
   

  
	
  12.

  	
   

  	
  Alterations by
  Tenant.

  	
   

  	
   

  
	
  13.

  	
   

  	
  Landlord’s Access.

  	
   

  	
   

  
	
  14.

  	
   

  	
  Indemnities
  and Liability.

  	
   

  	
   

  
	
  15.

  	
   

  	
  Casualty Damage.

  	
   

  	
   

  
	
  16.

  	
   

  	
  Condemnation.

  	
   

  	
   

  
	
  17.

  	
   

  	
  Landlord’s
  Covenant of Quiet Enjoyment.

  	
   

  	
   

  
	
  18.

  	
   

  	
  Tenant’s
  Obligation to Quit.

  	
   

  	
   

  
	
  19.

  	
   

  	
  Transfers
  of Tenant’s Interest.

  	
   

  	
   

  
	
  20.

  	
   

  	
  Transfers
  of Landlord’s Interest.

  	
   

  	
   

  
	
  21.

  	
   

  	
  Mortgagees’ Rights.

  	
   

  	
   

  
	
  22.

  	
   

  	
  Tenant’s Default;
  Landlord’s Remedies.

  	
   

  	
   

  
	
  23.

  	
   

  	
  Remedies
  Cumulative; Waivers.

  	
   

  	
   

  
	
  24.

  	
   

  	
  Brokers.

  	
   

  	
   

  
	
  25.

  	
   

  	
  Notices.

  	
   

  	
   

  
	
  26.

  	
   

  	
  Estoppel
  Certificates.

  	
   

  	
   

  
	
  27.

  	
   

  	
  Parking.

  	
   

  	
   

  
	
  28.

  	
   

  	
  Bind
  and Inure; Limited Liability of Landlord.

  	
   

  	
   

  
	
  29.

  	
   

  	
  Environmental
  Compliance.

  	
   

  	
   

  
	
  30.

  	
   

  	
  Redemption,
  Counterclaim and Jury Trial.

  	
   

  	
   

  
	
  31.

  	
   

  	
  Recording.

  	
   

  	
   

  
	
  32.

  	
   

  	
  Force Majeure.

  	
   

  	
   

  
	
  33.

  	
   

  	
  Captions.

  	
   

  	
   

  
	
  34.

  	
   

  	
  Integration.

  	
   

  	
   

  
	
  35.

  	
   

  	
  Severability;
  Choice of Law.

  	
   

  	
   

  
	
  36.

  	
   

  	
  Renewal.

  	
   

  	
   

  
	
  37.

  	
   

  	
  Landlord’s
  Base Building Work.

  	
   

  	
   

  
	
  38.

  	
   

  	
  Intentionally
  Omitted.

  	
   

  	
   

  
	
  39.

  	
   

  	
  Tenant’s
  Right of First Refusal.

  	
   

  	
   

  
	
  40.

  	
   

  	
  Purchase Option.

  	
   

  	
   

  
	
  41.

  	
   

  	
  Building
  Expansion.

  	
   

  	
   

  

 

 

LEASE

 

1.                                       Identifications.

 

This LEASE made as of August 26, 2004 by and between WE 10 SOUTHGATE LLC., a Delaware limited liability company
(the “Landlord”), having an address at c/o Winstanley Enterprises LLC, 150
Baker Avenue Extension, Suite 303, Concord, Massachusetts 01742 and BINAX, INC., a Delaware
corporation (the “Tenant”), having an address at 217 Read Street, Portland,
Maine 04103.

 

2.                                       Lease;
The Premises.

 

(a)                                  From
and after the Term Commencement Date (as defined below), in consideration of
the Basic Rent, Additional Rent, and other payments and covenants of the Tenant
hereinafter set forth, and upon the following terms and conditions, the
Landlord hereby leases to the Tenant and the Tenant hereby leases from the
Landlord approximately 64,158 rentable square feet of floor area located as
shown on the floor plan attached hereto as Exhibit A-1
(the “Premises”), in that certain building (the “Building”) situated on that
certain parcel of land (the “Property”) known as and numbered 10 Southgate
Road, Scarborough, Maine, as more particularly described in Exhibit A attached
hereto.  Included within the definition
of “Property” is the Building.  The
Premises are leased together with rights, in common with the Landlord and all
others (including any other tenant or tenants of the Building or the Property,
claiming under the Landlord or otherwise) from time to time lawfully entitled
thereto, to use the driveways, walkways, parking area and other common areas of
the Property for their intended purposes.

 

(b)                                 In
the event the Rentable Square Footage of the Premises is adjusted due to an
alteration or adjustment of the common areas, Tenant’s Percentage (as defined
below) and the amount of Basic Rent payable shall be adjusted on a
pro rata basis.  Promptly after such
adjustment, Landlord and Tenant shall enter into a memorandum that sets forth
the foregoing information and adjustments.

 

3.                                       Tenant
Improvement Work.

 

The Landlord shall complete certain work in the Premises as set forth
in Exhibit B attached hereto (“Tenant
Improvement Work”), the cost of which shall be borne as set forth in Exhibit B.

 

Tenant represents that Tenant has inspected the Premises and the
Building and is thoroughly acquainted with their condition and takes the
Premises “as is,” subject to the completion of Tenant Improvement Work and
Landlord’s Base Building Work (as defined in Section 37), and the taking
of possession of the Premises by Tenant shall be conclusive evidence that the
Premises and the Building were in satisfactory condition at the time possession
was taken by Tenant, subject, however, to the completion of Tenant Improvement
Work and Landlord’s Base Building Work. 
Neither Landlord nor Landlord’s agents have made any representations or
promises with respect to the condition of the Building, the Premises, the
Property, or any other matter or thing affecting or related to the Building or
the Premises, except as herein expressly set forth, and no rights, easements or
licenses are acquired by Tenant by implication or otherwise except as expressly
set forth in this Lease.

 

4.                                       Term.

 

The Term of this Lease shall commence on the date hereof (the “Term
Commencement Date”), and shall expire, unless earlier extended or terminated in
accordance with the terms hereof, at the last day of the seventh (7th)
Lease Year, unless the term is automatically extended for three additional
Lease Years in accordance with the provisions of Section 40 below.  The term Lease Year shall mean, for the first
Lease Year, the period from the Term Commencement Date through the date prior
to the Rent 

 

1

 

Commencement Date (as defined below) together with the period from the
Rent Commencement Date through the last day of the 12th full month
thereafter and each Lease Year thereafter shall mean each 12 calendar month
period immediately following the expiration of the preceding Lease Year.

 

5.                                       Use
of the Premises; Licenses and Permits.

 

The Tenant shall use the Premises only for research and development,
laboratory, manufacturing and office use to the extent now and hereafter from
time to time permitted under applicable laws, by-laws, ordinances, codes,
rules, regulations, orders and other lawful requirements of governmental bodies
having jurisdiction. The Tenant, its subtenants, licensees, invitees and any
other users of the Premises shall apply in their own names for and obtain at
their own expense any and all licenses, permits and other approvals which may
be required from such governmental bodies in connection with any particular use
of the Premises during the Term.

 

6.                                       Basic
Rent; Additional Rent.

 

Tenant’s obligation to pay Basic Rent shall commence on the date which
is the later to occur of (i) May 1, 2005 or (ii) the date which
is 30 days after Landlord Substantially Completes (as defined in Exhibit B) the Tenant
Improvement Work (the “Rent Commencement Date”).  Tenant shall pay Additional Rent (as defined
below) commencing on the Term Commencement Date.

 

The Tenant shall pay Basic Rent to the Landlord at an annual rate of:

 

 

	
  Period

  	
   

  	
  Rent Per RSF

  	
   

  	
  Annual Basic Rent

  	
   

  	
  Monthly Installment

  	
   

  
	
  Rent Commencement through Lease Year 4

  	
   

  	
  $

  	
  13.48

  	
   

  	
  $

  	
  864,849.84

  	
   

  	
  $

  	
  72,070.82

  	
   

  
	
  Lease Years 5 – 7

  	
   

  	
  $

  	
  14.23

  	
   

  	
  $

  	
  912,968.34

  	
   

  	
  $

  	
  76,080.70

  	
   

  

 

In the event the Term is automatically extended for another three Lease
Years, the Basic Rent shall be payable as set forth below:

 

	
  Period

  	
   

  	
  Rent Per RSF

  	
   

  	
  Annual Basic Rent

  	
   

  	
  Monthly Installment

  	
   

  
	
  Lease Years 4 – 7

  	
   

  	
  $

  	
  13.48

  	
   

  	
  $

  	
  864,849.84

  	
   

  	
  $

  	
  72,070.82

  	
   

  
	
  Lease Years 8 – 10

  	
   

  	
  $

  	
  8.25

  	
   

  	
  $

  	
  529,303.50

  	
   

  	
  $

  	
  44,108.63

  	
   

  

 

In the event Tenant utilizes less than all of Tenant’s Allowance (as
defined in Exhibit B), then the
Basic Rent shall be decreased in accordance with the provisions of Exhibit B.  Basic Rent shall be payable in advance on the
first day of each month in equal installments to the Landlord at the address
set forth above or such other address as the Landlord may thereafter specify by
notice to the Tenant, without counterclaim, deduction or defense and, except as
otherwise expressly provided herein, without set-off or abatement.

 

This Lease is intended by the parties hereto to be a so-called triple “net”
or pass-through lease and, to the end that the Basic Rent shall be received by
the Landlord net of all costs and expenses related to the Property, the
Building and the Premises, except as expressly set forth herein, the Tenant
agrees to pay, in addition to the Tenant’s obligations with respect to real
estate taxes, insurance premiums, management fees to the extent that such fees
do not exceed the costs of such fees rendered by qualified unaffiliated third
parties on a competitive basis, utilities costs, costs of repairs and
maintenance and other

 

2

 

costs which are and to the extent specifically set forth herein, to the
Landlord upon demand as Additional Rent, in the same manner as Basic Rent, any
and all charges, costs, expenses, and obligations of every kind and nature
whatever as the Landlord may from time to time actually incur in good faith
with regard to the Premises or the operation or maintenance thereof, except as
otherwise expressly agreed in this Lease, including, without limiting the
generality of the foregoing, reasonable attorneys’ fees incurred by the
Landlord in connection with any amendments to, consents under and subleases and
assignments of this Lease requested by the Tenant and in connection with the
enforcement of rights and pursuit of the remedies of the Landlord under this
Lease (whether during or after the expiration or termination of the Term of
this Lease) and 73.36% or such other percentage as the rentable square footage
of the Premises bears to the rentable square footage of the Building (currently
87,438 square feet) from time to time (“Tenant’s Percentage”) of Common
Expenses as hereinafter defined.  All
operating expenses shall be customary and reasonable and in no event shall
there be any duplication of costs.  “Common
Expenses” shall mean any and all charges, costs and expenses of every kind and
nature whatever, which the Landlord may from time to time actually incur and
the reasonable value, based on competitive rates, of any materials and services
which the Landlord may provide in good faith with respect to the ownership,
operation and maintenance of the Building and the Property, including, without
limitation, (i) making repairs to and undertaking maintenance of the
Building and the Property, including all alterations and improvements to the
common areas of the Property; (ii) providing utilities, including heat,
water, sewer, electricity, air conditioning and ventilation to the common areas
of the Property including taxes on such utilities; (iii) providing water
and sewer to the rentable areas of the Building; (iv) providing watering,
landscaping and lawn care for the Property; (v) sanding, plowing and
removal of snow and ice from driveways, walkways and parking areas; (vi) premiums
paid and deductibles assessed with respect to insurance carried with respect to
damage or loss to the Building or the Property, public liability and other
insurance that may be carried by Landlord and/or its affiliates to protect its
or their interests and legal liabilities in connection with the Building and/or
the Property, including, without limitation, business interruption, loss of
rents, environmental insurance; (vii) reasonable administrative and
management costs of the Landlord including management fees to the extent that
such fees do not exceed the costs of such fees rendered by qualified
unaffiliated third parties on a competitive basis; and (viii) except as
set forth below, the cost of any capital repairs or replacements made to the
Property or the Building and of any machinery or equipment installed in the
Building which are made or become operational, as the case may be, after the
Term Commencement Date to properly maintain the Building and the Property to a
standard equivalent to its current condition provided that such cost shall be
reasonably amortized over the useful life with interest on the unamortized
amount at a rate of interest reasonably determined by Landlord.  If the Building is not at least 95% occupied
during any calendar year or if Landlord is not supplying services to at least
95% of the total Rentable Square Footage of the Building at any time during a
calendar year, Common Expenses shall, at Landlord’s option, be determined as if
the Building has been 95% occupied and Landlord had been supplying service to
95% of the Rentable Square Footage of the Building during that calendar
year.  The only costs that shall be adjusted
in this manner shall be variable Common Expenses where the amount of such
expense is directly related to the level of occupancy or the square footage
area receiving a particular service.  (As
an example of a gross-up:  Assume (i) the
Property consists only of 4 equal tenant spaces, all occupied, each of which
then has a pro rata share of expenses of 25%; and (ii) the Landlord
has life safety inspections performed in each space at a cost of $100.00 per
space – for a total of $400.00 for all (it is a variable cost, not a fixed cost
for the building).  Assume then that 2
tenants vacate and Landlord then conducts life safety only in the 2 remaining
occupied spaces – still at $100.00 per space. 
Landlord’s cost is now $200.00. 
If one tenant paid its pro rata share of 25%, it would pay only
$50.00 and Landlord would be unable to recoup all of its cost.  Landlord shall then “gross up” the cost
to be $400.00 and the tenant will pay its 25%, which equates to the $100.00
cost Landlord actually incurs in delivering that service to the tenant’s
space.)  Landlord shall not utilize the
foregoing “gross-up” provision to recover fixed costs related to unleased
space.

 

3

 

Commencing on the date (the “Occupancy Date”) which is earlier to occur
of (i) April 1, 2005 or (ii) the date Tenant occupies the
Premises for any reason other than the performance of Tenant’s Pre-occupancy
Work (as defined in Exhibit B),
the Tenant shall prepay to the Landlord monthly as Additional Rent, in the same
manner as Basic Rent, one-twelfth (1/12) of the total of all such amounts as
the Landlord may from time to time reasonably estimate will be payable annually
by the Tenant under this Lease with respect to Common Expenses, which
prepayments the Landlord agrees shall be applied, without interest, to such
amounts as actually become payable.  As
soon as any such amounts so payable are actually determined but in no event
later than sixty (60) days after the end of each Lease Year, appropriate
adjustments of any overpayments and underpayments shall be made.  Landlord may make reasonable periodic
adjustments to the monthly installment amount of Additional Rent payable by
Tenant as set forth above.

 

If any payment of Basic Rent or Additional Rent is not paid to the
Landlord when due, then at the Landlord’s option, upon written notice to Tenant
and in addition to all other remedies hereunder, the Tenant shall pay upon
demand to the Landlord as Additional Rent interest thereon at an annual rate
equal to the “Prime Rate” as announced by The Wall Street Journal
from time to time in effect plus four percent (4%), such interest to be
computed from the date such Basic Rent or Additional Rent was originally due
through the date when paid in full.

 

Notwithstanding anything to the contrary set forth herein, in no event
shall Tenant be charged for the following expenses which shall be solely the
responsibility of Landlord:

 

1.                                       Costs (including, without
limitation, related permit, license and inspection fees) of any necessary
alterations, repairs and maintenance in the Property and Building and any
related facilities and equipment occasioned by a casualty or condemnation;

 

2.                                       Principal or interest
payments on any mortgages relating to the Premises;

 

3.                                       Costs of formation of
Landlord and the defense of its title to or interest in the Property and
Building;

 

4.                                       Expenses for which Landlord
has received or is entitled to any reimbursement by a third party, including,
without limitation, reimbursements from Tenant (such as reimbursement for
repairs) or pursuant to contractors’ or others’ warranties;

 

5.                                       Costs and expenses related
to (i) executive salaries or salaries of service personnel to the extent
that such personnel perform services not in connection with management,
operation, repair or maintenance of the Property and Building; and (ii) Landlord’s
general overhead expenses not related to the Property and Building;

 

6.                                       Costs, including marketing
costs, legal fees, space planners’ fees, advertising and promotional expenses,
and brokerage fees incurred in connection with the original construction or
development of the Building and costs, including permit, license and inspection
costs, incurred with respect to the installation of tenant improvements made
for new tenants in the Building or incurred in renovating or otherwise
improving, decorating, painting or redecorating vacant space for tenants or
other occupants of the Building (excluding, however, such costs relating to any
common areas of the building or parking facilities);

 

7.                                       Costs for which the Landlord
is reimbursed by any tenant or occupant of the Building or by insurance by its
carrier or any tenant’s carrier or by anyone else, and electric power costs for
which any tenant directly contracts with the local public service company;

 

4

 

8.                                       Any bad debt loss, rent or
reserves for bad debts or rent loss (except to the extent incurred in
connection with this Lease);

 

9.                                       Costs associated with the
operation of the business of the partnership or entity which constitutes the
Landlord, as the same are distinguished from the costs of operation of the
Property (which shall specifically include, but not be limited to, accounting
costs associated with the operation of the Property).  Costs associated with the operation of the
business of the entity which constitutes the Landlord including costs of
company accounting and legal matters, costs of defending any lawsuits with any
mortgagee (except as the actions of the Tenant may be in issue, costs of
selling, syndicating, financing, mortgaging or hypothecating any of the
Landlord’s interest in the Property, and costs incurred in connection with any
disputes between Landlord and its employees, between Landlord and Property
management, or between Landlord and other tenants or occupants, and Landlord’s
general corporate overhead and general and administrative expenses;

 

10.                                 The wages and benefits of
any employee who does not devote substantially all of his or her employed time
to the Property unless such wages and benefits are prorated to reflect time
spent on operating and managing the Property vis-à-vis time spent on matters
unrelated to operating and managing the Property; provided, that in no
event shall such expenses for purposes of this Lease include wages and/or
benefits attributable to personnel above the level of Building manager or
Building engineer;

 

11.                                 Except for a Property
management fee to the extent allowed above, overhead and profit increment paid
to the Landlord or to subsidiaries or affiliates of the Landlord for services
in the Building to the extent the same exceeds the costs of such services
rendered by qualified, first-class unaffiliated third parties on a competitive
basis;

 

12.                                 All items and services for
which Tenant or any other tenant in the Building reimburses Landlord or which
Landlord provides selectively to one or more tenants (other than Tenant)
without reimbursement;

 

13.                                 Costs other than those
incurred in ordinary maintenance and repair, for sculpture, paintings,
fountains or other objects of art;

 

14.                                 Any costs expressly excluded
elsewhere in this Lease;

 

15.                                 Rent for any office space
occupied by Property management personnel to the extent the size or rental rate
of such office space exceeds the size or fair market rental value of office
space occupied by management personnel of comparable Buildings in the vicinity
of the Building, with adjustment where appropriate for the size of the
applicable project;

 

16.                                 Costs arising from the
negligence or willful misconduct of Landlord or its agents, employees, vendors,
contractors, or providers of materials or services, except those engaged by
Tenant;

 

17.                                 Costs incurred to comply
with laws relating to the removal of Hazardous Material (as defined under
applicable law) which was in existence in the Building or on the Property prior
to the Commencement Date, and was of such a nature that a federal, state or
municipal governmental authority, if it had then had knowledge of the presence
of such Hazardous Material, in the state, and under the conditions that it then
existed in the Building or on the Property, would have then required the
removal of such Hazardous Material or other remedial or containment action with
respect thereto; costs incurred to remove, remedy, contain or treat Hazardous
Material, which Hazardous Material is brought into the Building or onto the
Property after the date hereof by Landlord or any other tenant of the Building
and is

 

5

 

of such a nature, at that time, that a federal,
state or municipal governmental authority, if it had then had knowledge of the
presence of such Hazardous Material, in the state, and under the conditions
that it then exists in the Building or on the Property, would have then
required the removal of such Hazardous Material or other remedial or
containment action with respect thereto; and costs incurred to remove, remedy,
contain or treat Hazardous Material which is present in the Premises as of the
date hereof but which is disturbed or released after the date hereof as a result
of any actions of Tenant, so long as Tenant has acted in compliance with the
requirements of this Lease with respect thereto (it being understood that any
such costs which are incurred as a result of Tenant’s actions which are not in
compliance with this Lease may be passed through to Tenant);

 

18.                                 Costs arising from Landlord’s
charitable or political contributions;

 

19.                                 Any gifts provided to any
entity whatsoever, including, but not limited to, Tenant, other tenants,
employees, vendors, contractors, prospective tenants and agents;

 

20.                                 The cost of any magazine,
newspaper, trade or other subscriptions;

 

21.                                 Amount, if any, paid as
ground rental for the Property by Landlord;

 

22.                                 Costs for items or services
of a nature which are provided to other tenants of the Building but which are
not provided to Tenant on account of Tenant’s separate purchase of such items
or services; and

 

23.                                 The
cost of any service provided to other tenants of the Building which are not
provided to Tenant including, without limitation, janitorial and related
services provided to tenants of office space located within the Building, so
long as such services are not being provided to Tenant.

 

24.                                 The
cost of (i) capital repairs and replacements of the roof, the driveways
and parking lots; (ii) performing repairs or making replacements of the
structural elements, structural walls and foundation of the Building; and (iii) the
cost of replacement of exterior windows to the extent replacement is
necessitated due to leaking or other defect.

 

7.                                       Taxes.

 

Commencing on the Occupancy Date, the Tenant shall prepay to the
Landlord monthly, as Additional Rent, in the same manner as Basic Rent,
one-twelfth (1/12) of Tenant’s Percentage of any and all real estate taxes,
betterment’s and special assessments or amounts in lieu or in the nature
thereof and any other taxes, levies, water rents, sewer use charges and other
excises, franchises, imposts and charges, general and special (and the entire
amount of any interest, penalties and costs solely attributable to delayed
payment of the Tenant’s portion thereof where such delay is the fault of the
Tenant) of whatever name and nature, and whether or not now within the
contemplation of the parties hereto, which may now or hereafter be levied,
assessed or imposed by the United States of America, the State of Maine, the
County of Cumberland, the Town of Scarborough or any other authority, or become
a lien, upon all or any part of the Property, the Building, the Premises, the
use or occupation thereof, or upon the Landlord and the Tenant in respect
thereof, or upon the basis of rentals thereof or therefrom (except for the
Landlord’s income, estate, gift or transfer taxes), or upon the estate hereby
created, or upon the Landlord by reason of ownership of the reversion
(collectively, “Taxes”).  Landlord agrees
that such prepayments shall be applied, without interest to such amounts as
actually become payable.  As soon as any
such amounts so payable are actually determined, appropriate adjustments of any
overpayments and underpayments shall be made.

 

6

 

Subject to the rights of any Mortgagees, the Landlord may, at the
request of the Tenant or any other tenant or tenants of the Building, use
reasonable efforts to obtain an abatement of or to contest or review by legal
proceedings or otherwise any such tax, levy, charge or assessment.  In such event the Tenant and such other
tenants shall pay such tax, levy, charge or assessment (under protest, if
necessary).  The Tenant shall pay as
Additional Rent the Tenant’s Percentage of (i) any such tax, levy, charge
or assessment that may be determined to be due and (ii) any and all costs
or expenses (including reasonable attorneys’ fees) the Landlord may incur in
connection with any such proceedings. 
The Tenant shall be entitled to share in any refund or abatement, net of
such costs and expenses, which may be made of any tax, levy, charge or
assessment in the same proportion that the same was paid by the Tenant or with
the Tenant’s funds.

 

8.                                       Insurance;
Waivers of Subrogation.

 

The Tenant shall, at its own cost and expense, obtain and throughout
the Term shall maintain, with companies qualified to do business in Maine and
acceptable to any Mortgagees and reasonably acceptable to the Landlord, for the
benefit as additional insureds of the Landlord and any Mortgagees as their
respective interests may appear, ISO Simplified Commercial General Liability
insurance (with contractual liability rider) for bodily injury or death and
property damage occurring to, upon or about the Premises.  The limits of such liability insurance shall
be not less than $3,000,000 per occurrence, Bodily Injury including death and
$3,000,000 per occurrence, Property Damage Liability of $3,000,000 combined
single limit for Bodily Injury and Property Damage Liability.  After the first Lease Year, Landlord may from
time to time require Tenant to adjust its insurance coverage to limit(s) that
are customary and reasonable for tenants in the market area in which the Building
is located.  The risk of loss to all
contents of, and personal property and trade fixtures located in, the Premises
is upon the Tenant, and the Landlord shall have no liability with respect
thereto.  Tenant agrees to deliver
certificates of such insurance to Landlord at the commencement of this Lease
and not less than thirty (30) days after Landlord’s request for a copy of the
same.

 

Landlord shall at all times during the Term of this Lease and at
Landlord’s sole cost and expense (but which may be passed through to Tenant as
a Common Expense), obtain and keep in force insurance against loss or damage to
the Property or Building by fire and all other risks of physical loss covered
by standard “special perils” policies in an amount not less then the full replacement
cost of the Building.  Landlord agrees to
deliver certificates of such insurance to Tenant at the commencement of this
Lease and thereafter not less than thirty (30) days after Tenant’s request for
a copy of the same.

 

The Landlord and the Tenant each hereby release the other from any
liability for any loss or damage to the Building, the Premises or other
property and for injury to or death of persons occurring on the Property or in
the Building or the Premises or in any manner growing out of or connected with
the Tenant’s use and occupation of the Premises, the Building or the Property
or the condition thereof, whether or not caused by the negligence or other
fault of the Landlord, the Tenant or their respective agents, employees,
subtenants, licensees, invitees or assignees; provided, however, that this
release (i) shall apply notwithstanding the indemnities set forth in Section 14,
but only to the extent that such loss or damage to the Building or other
property or injury to or death of persons is covered by insurance which
protects the Landlord or the Tenant or both of them as the case may be; (ii) shall
not be construed to impose any other or greater liability upon either the
Landlord or the Tenant than would have existed in the absence hereof; and (iii) shall
be in effect only to the extent and so long as the applicable insurance
policies provide that this release shall not affect the right of the insureds
to recover under such policies, which clauses shall be obtained by the parties
hereto whenever available.

 

7

 

9.                                       Utilities.

 

Commencing on the Occupancy Date, the Tenant shall be responsible for
the cost of all utilities, including without limitation for the electric,
water, sewer, and all utility costs incurred in connection with the operation
of the heating, ventilating and air conditioning units, which are delivered to
or consumed at the Premises.

 

If not separately metered, the electric and gas shall be sub-metered or
checkmetered and said costs shall be paid directly to the utility company
providing the same or if the cost is not directly payable to the utility
companies supplying utilities or services, then the actual costs incurred by
Landlord, net of all discounts and rebates received by Landlord in connection
therewith shall be billed to Tenant and payable by Tenant monthly to Landlord
together with Tenant’s payment of Basic Rent.

 

Tenant shall pay for, as part of Common Expenses, all water and sewer
consumed and utilized at the Premises and the common areas.  Tenant shall pay with respect to each
calendar year, or portion thereof, within the Term hereof, an annual amount
equal to the product of Tenant’s Percentage and the cost to Landlord of all
water consumed in and sewer usage charges for the Building during such calendar
year, or portion thereof; provided, however, that Tenant shall have no
obligation to pay for any such costs (i) to the extent they arise from the
use of any utility or service supplied by Landlord to any other occupant of the
Building, or (ii) associated with utilities and services of a type not
provided to Tenant.  Such annual amount
shall be payable in equal monthly installments as part of Common Expenses, in
advance, together with Tenant’s monthly payment of Basic Rent.  The cost to Landlord of all water and sewer
charges for the Building during any calendar year shall be determined on the
basis of the cost to Landlord in effect from time to time pursuant to which
Landlord shall then have purchased water and paid for sewer charges for the
entire Building.  The charges shall be
adjusted, if necessary, from time to time (but not more than one time in any
calendar year) to appropriately reflect the cost of such charges.  In implementation and not in limitation of
the foregoing, Tenant shall, together with its monthly payments of Basic Rent,
pay to Landlord as additional rent pro rata monthly installments on account of
projected water and sewer costs, as reasonably estimated by Landlord based upon
the most recent data available.  If the
total of Tenant’s monthly payments for any calendar year, or portion thereof,
is greater than Tenant’s Percentage of the actual cost to Landlord of all water
and sewer for such calendar year or portion thereof, Landlord shall refund the
difference within thirty (30) days.  If
the total of such monthly payments is less than Tenant’s Percentage of the
actual cost to Landlord of all water and sewer for such calendar year, or
portion thereof, Tenant shall pay the difference to Landlord within thirty (30)
days after receipt of a bill therefore, provided that such bill is delivered to
Tenant within 30 days of calendar year end.

 

Landlord shall not be liable for the reasonable interruption,
curtailment, stoppage or suspension of services and utilities when
necessary by reason of accident or emergency or suspension of utility services
or when necessary for repairs, alterations, replacements or improvements
desirable or necessary in the reasonable judgment of Landlord.  Except as set forth below, in the event of
any such reasonable interruption, curtailment, stoppage or suspension,
there shall be no diminution or abatement of rent, additional rent or other
charges due from Tenant to Landlord hereunder and Tenant’s obligations
hereunder shall not be affected or reduced, such interruption, curtailment,
stoppage or suspension shall not constitute a constructive eviction of the
Tenant, and the Landlord shall have no responsibility or liability for any such
interruption, curtailment, stoppage or suspension.  In the event that any such interruption,
curtailment, stoppage or suspension continues for a period in excess of
fourteen (14) consecutive days, and so long as the interruption curtailment,
stoppage or suspension has not been caused by Tenant’s negligent or willful
act or omission, Tenant’s obligations from and after the 14th day to
pay rent, additional rent or other charges and all other costs and expenses
herein shall be equitably abated based on Tenant’s loss of use of the Premises.

 

Electrical service to the Premises may be furnished by one or more
companies providing electrical generation, transmission and distribution
services, and the cost of electricity may consist of

 

8

 

several different components or separate charges for such services,
such as generation, distribution and stranded cost charges.  The Landlord shall have the exclusive right
to select any company providing electrical service to the Premises, to aggregate
the electrical service for the Property and the Premises with other buildings,
to purchase electricity through a broker and/or buyers group and to change the
providers and manner of purchasing electricity.

 

10.                                 Repairs.

 

From and after the Occupancy Date, and except as set forth in this
Lease, the Tenant shall, at its own cost and expense: (i) make interior
non-structural repairs, replacements and renewals necessary to keep the
Premises in as good condition, order and repair as the same are at the
commencement of the Term or thereafter may be put, reasonable wear and use and
damage by fire or other casualty only excepted (it being understood, however,
that the foregoing exception for reasonable wear and use shall not relieve the
Tenant from the obligation to keep the Premises in good order, repair and
condition), (ii) perform maintenance, repair and replacement of the
heating, ventilating and air conditioning units servicing the Premises (the “HVAC
Units”) and maintain a service contract for the HVAC Units exclusively serving
the Premises with a reputable HVAC service provider; (iii)  make all other
repairs, replacements and renewals which are required due to the negligence or
willful misconduct of the Tenant, and (iv) keep and maintain all portions
of the Premises in a clean and orderly condition, free of accumulation of dirt,
rubbish, and other debris.  The Tenant
shall provide customary cleaning and rubbish removal service to the Premises on
each business day as required.

 

From and after the commencement of and during the Term, the Landlord
shall (i) make all necessary repairs, replacements and renewals, interior
and exterior, structural and non-structural, to keep the roof of the Building
free of leaks and to maintain the foundation, pipes, conduits serving the
Premises, floor slabs and other structural supports of the Building in good and
sound condition; (ii) keep the Building and all electrical, mechanical,
plumbing and other building systems and the parking areas, sprinklers and other
improvements on the Property in as good condition, order and repair as the same
are at the commencement of the Term or thereafter may be put, as per paragraph
37, damage by fire or other casualty only excepted; and (iii) keep the
landscaping, sidewalks, common areas and corridors, stairways, elevators and
all other public portions of the Property and Building in good order, condition
and repair and in a safe and clean condition free from ice and snow.  Except as otherwise expressly set forth
herein, the costs and expenses of Landlord’s repairs, replacements and renewals
shall be considered Common Expenses, subject to the limitations contained
therein (including, without limitation, the requirement that certain expenses
be capitalized).

 

Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry
provided Landlord has notified Tenant in writing of all such load limits.

 

Landlord shall have no liability to Tenant nor shall Tenant’s covenants
and obligations under this Lease be reduced or abated in any manner whatsoever
by reason of any inconvenience, annoyance, interruption or injury to business
arising from Landlord’s making any repairs or changes which Landlord is
permitted to perform by this Lease, in or to any portion of the Premises, or
the Building and other improvements to the Premises so long as Landlord uses
commercially reasonable efforts to minimize any resulting disruption to Tenant’s
access to and use of the Premises and provided that any such interruption shall
not exceed a period of time in excess of fourteen days. If such interruption
exceeds a period of fourteen days, Tenant obligations to pay rents and fees
hereunder shall be equitably abated. 
Landlord shall provide Tenant with not less than 48 hours written notice
prior to Landlord’s entry into the Premises to perform any repairs or changes,
except in the event of an emergency in which case only such notice, if any, as
is appropriate shall be given to Tenant.

 

9

 

11.                                 Compliance
with Laws and Regulations.

 

Landlord covenants and agrees that, as of the Term Commencement Date,
the Premises and the Building shall be in compliance in material respects with
all laws effecting the Premises and the Building, including, without limitation,
the American’s with Disabilities Act of 1990 and the Occupational Safety and
Health Act of 1970, as the same may be amended from time to time (“OSHA”),
applicable laws, by-laws, ordinances, codes, rules, regulations, orders, and
other lawful requirements of the governmental bodies having jurisdiction over
the Premises, and the orders, rules and regulations of the Board of Fire
Underwriters where the Premises are situated. Landlord shall make all repairs,
alterations and additions which may be required by any present or future laws,
ordinances, orders or regulations of any public authority having jurisdiction
over the demised premises, but only insofar as and to the extent they affect
the portions of the Building which Landlord is required to repair under the
provisions of this Lease.  The
obligations of Landlord herein shall survive Tenant’s acceptance of the
Premises.

 

Tenant shall throughout the Term promptly comply or cause compliance
with or remove or cure any violation of any and all present or future laws
which relate to Tenant’s particular use of the Premises including without
limitation (“OSHA”), applicable laws, by-laws, ordinances, codes, rules,
regulations, orders, and other lawful requirements of the governmental bodies
having jurisdiction over the Premises, and the orders, rules and
regulations of the Board of Fire Underwriters where the Premises are situated
or any other body hereafter constituted exercising similar functions, which may
be applicable to the Premises, the fixtures and equipment therein or thereon or
the use thereof; and the requirements of all policies of public liability, fire
and all other types of insurance at any time in force with respect to the
Premises, the Building or the Property and the fixtures and equipment therein and
thereon.

 

Notwithstanding the foregoing, Tenant shall not be liable or
responsible for any repairs, alterations and additions that may be required (i) to
comply with laws in effect as of the Commencement Date and (ii) by any
applicable laws, by-laws, ordinances, codes, rules, regulations, orders, and
other lawful requirements of the governmental bodies having jurisdiction over
the Premises, Building or Property, but only insofar as and to the extent they
effect the portions of the same which Landlord is required to repair under the
provisions of this Lease.

 

12.                                 Alterations
by Tenant.

 

Except as otherwise set forth herein, Tenant shall erect no signs and
shall make no alterations, additions or improvements in or to any portion of
the Premises or any portion of the Building or the Property without the
Landlord’s prior written consent and without first providing the Landlord with
suitable assurance of the Tenant’s obligation to complete the same at no
expense to the Landlord and without any mechanics’ or materialmen’s lien upon
the Property.  The Landlord agrees that
its consent shall not be unreasonably withheld, conditioned or delayed for
interior, non-structural alterations, additions and improvements to the
Premises consistent with the use of the Premises as contemplated hereby; any
such consents to interior, non-structural alterations, additions and
improvements may, if the Landlord so advises the Tenant as part of or by notice
at the time of any such consent, be conditioned upon the Tenant’s being obligated
to remove the same at the expiration or termination of this Lease and to
restore the Premises to their condition prior to such alterations, additions
and improvements.

 

10

 

13.                                 Landlord’s
Access.

 

The Tenant agrees to permit the Landlord and any Mortgagees and their
authorized representatives to enter the Premises (i) at all reasonable
times and with at least 24 hours prior notice during usual business hours for
the purposes of inspecting the same, exercising such other rights as it or they
may have hereunder or under any mortgages and exhibiting the same to other
prospective tenants, purchasers or mortgagees and (ii) at any time in the
event of emergency.

 

14.                                 Indemnities
and Liability.

 

Except to the extent covered by insurance maintained by Landlord and
except to the extent caused by the negligence or intentional misconduct of
Landlord, its agents, employees or contractors (including contractors
undertaking the Tenant Improvement Work) Tenant agrees to protect, defend (with
counsel approved by the Landlord), indemnify and save the Landlord harmless
from and against any and all claims and liabilities including attorneys’ fees
arising:  (i) from the Tenant’s or
its employees, agents, invitees, assignees, subtenants or contractors, conduct
or management of or from any work or thing whatsoever done by Tenant, its
employees, agents, invitees, assignees, licensees, subtenants or contractors in
or about the Premises during the Term and from any condition existing, or any
injury to or death of persons or damage to property occurring or resulting from
Tenant’s occupancy of the Premises during the Term in or about the Premises;
and (ii) from any breach or default on the part of the Tenant in the
performance of any covenant or agreement on the part of the Tenant to be
performed pursuant to the terms of this Lease or from any negligent act or
omission on the part of the Tenant or any of its agents, employees, subtenants,
licensees, invitees or assignees.  The
Tenant further agrees to indemnify the Landlord from and against all costs,
expenses (including reasonable attorneys’ fees) and other liabilities incurred
in connection with any such indemnified claim or action or proceeding brought
thereon, any and all of which, if reasonably suffered, paid or incurred by the
Landlord, the Tenant shall pay promptly upon demand to the Landlord as
Additional Rent.  Notwithstanding
anything in this Lease to the contrary, this indemnity provision shall remain
in effect and may be enforced whether or not Landlord is made a party to any
litigation, and shall survive the expiration or earlier termination of the term
of this Lease.

 

Except to the extent covered by insurance maintained by Landlord and
except to the extent caused by the negligence or intentional misconduct of
Landlord, its agents, employees or contractors (including contractors
undertaking the Tenant Improvement Work) neither Landlord, nor any agent or
employee of Landlord, shall be liable for (a) loss of or damage to any
property of Tenant, or of any other person, entrusted to any of Landlord’s
agents or employees, (b) loss of or damage to any property of Tenant or of
any other person by theft or otherwise, (c) any injury or damage to any
person or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, dust, water or snow, or leaks from any part of the Building or
from the pipes, appliances or plumbing system, or from the roof, street or
subsurface or any other place or by dampness, or from any other cause
whatsoever, (d) any such damage caused by other occupants or persons in
the Building or by construction of any private, public or quasi-public work, or
(e) any latent defect in the Premises or the Building.

 

Except to the extent covered by insurance maintained by Landlord and
except to the extent caused by the negligence or intentional misconduct of
Tenant, its agents, employees or contractors, Landlord shall, during the term
of this Lease, indemnify and save harmless Tenant from and against any and all
claims and liabilities, including, without limitation, attorneys’ fees, caused
by:  (i) from the Landlord’s or its
employees, agents, invitees, assignees, subtenants or contractors, conduct or
management of or from any work or thing whatsoever done by Landlord, its
employees, agents, invitees, assignees, licensees, subtenants or contractors in
or about the Building or Property during the Term; and (ii) from any
breach or default on the part of the Landlord in the performance of any
covenant or agreement on the part of the Landlord to be performed pursuant to
the terms of this Lease or from any

 

11

 

negligent act or omission on the part of the Landlord or any of its
agents, employees, subtenants, licensees, invitees or assignees.  Notwithstanding anything in this Lease to the
contrary, this indemnity provision shall remain in effect and may be enforced
whether or not Tenant is made a party to any litigation, and shall survive the
expiration or earlier termination of the term of this Lease.

 

15.                                 Casualty
Damage.

 

Unless this Lease is terminated as provided below, in the event of
partial or total destruction of the Premises during the Term by fire or other
casualty, the Landlord shall, as promptly as practicable after receipt of any
insurance proceeds available as a result of such casualty, repair, reconstruct
or replace the portions of the Premises destroyed as nearly as possible to
their condition prior to such destruction, except that in no event shall the
Landlord be obligated to expend more for such repair, reconstruction or
replacement than the amounts of any such insurance proceeds actually
received.  Commencing on the date of such
casualty and during the period of such repair, reconstruction and replacement there
shall be an equitable abatement of Basic Rent hereunder in proportion to the
loss of usable floor area in the Premises, provided, however, in the event the
damage is to the manufacturing area of the Premises, then the Rent shall, in
lieu of being based on the proportion of lost floor area, be equitably abated
due to the loss of use of the facility. 
If it is not feasible for Tenant, in its reasonable business judgment,
to operate its business in the Premises during any period of repair or
restoration, Tenant may discontinue the conduct of its business in the Premises
during such period and all Rent payable by Tenant shall cease, from the date
that Tenant closes its premises until the Premises shall have been restored as
nearly as practicable to its pre-damage condition.

 

If all or substantially all of the Premises shall be destroyed by fire
or other casualty such that Tenant, in its reasonable judgment, deem the
Premises unfit for the feasible operation of Tenant’s business or if the
Building is so extensively destroyed by fire or other casualty that an
independent engineer or architect (the “Estimator”) certifies that the Premises
cannot reasonably be expected to be susceptible of repair, reconstruction or
replacement within a period of two hundred ten (210) days from the date of the
casualty, or if any damage results from causes or risks not required to be
insured against by the Landlord hereunder or if any Mortgagee refuses to make
such net proceeds available for such repair, reconstruction or replacement, the
Landlord or Tenant may terminate this Lease by giving written notice to the
other party within ninety (90) days after the date of such destruction.  Provided further, that if, despite diligent
efforts, the Landlord has been unable to restore the Premises to their
condition prior to such destruction within two hundred ten (210) days after the
date of the casualty, the Landlord or Tenant may terminate this Lease by
written notice to the other party.  In
the event of any such notice of termination, this Lease shall terminate as of,
and Basic Rent and Additional Rent shall be appropriately apportioned through
and abated from and after, the date of such notice of termination.

 

16.                                 Condemnation.

 

If more than twenty-five percent (25%) of the rentable square footage
of the Premises, or more than twenty percent (20%) of the rentable square
footage of the manufacturing area of the Premises, or more than twenty-five
percent (25%) of the parking area available for use by the Tenant at the
Property (which is not replaced by Landlord at a location proximate to the
Property and acceptable to the Tenant) shall be taken by eminent domain or
appropriated by public authority or if the Tenant shall be deprived of suitable
vehicular or pedestrian access to the Premises or the Property by virtue of
such a taking or appropriation, the Landlord or the Tenant may terminate this
Lease by giving written notice to the other within thirty (30) days after such
taking or appropriation.  In the event of
such a termination, this Lease shall terminate as of the date the Tenant must
surrender possession or, if later, the date the Tenant actually surrenders
possession, and the Basic Rent and Additional Rent reserved shall be
apportioned and paid to and as of such date.

 

12

 

If all or any part of the Premises is taken or appropriated by public
authority as aforesaid and this Lease is not terminated as set forth above, the
Landlord shall, subject to the rights of any Mortgagees, apply any such damages
and compensation awarded (net of the costs and expenses, including reasonable
attorneys’ fees, incurred by the Landlord in obtaining the same) to secure and
close so much of the Premises as remain and shall restore the Building to an
architectural whole and except that in no event shall the Landlord be obligated
to expend more for such replacement than the net amount of any such damages,
compensation or award which the Landlord may have received as damages in
respect of the Building and any other improvements situated on the Property as
they existed immediately prior to such taking or appropriation; in such event
there shall be an equitable abatement of Basic Rent in proportion to the loss
of usable floor area in the Premises after giving effect to such restoration,
from and after the date the Tenant must surrender possession or, if later, the
date the Tenant actually surrenders possession.

 

The Landlord hereby reserves, and the Tenant hereby assigns to the
Landlord, any and all interest in and claims to the entirety of any damages or
other compensation by way of damages which may be awarded in connection with
any such taking or appropriation, except so much of such damages or award as is
specifically and separately awarded to the Tenant and expressly attributable to
trade fixtures or moving expenses of the Tenant.

 

17.                                 Landlord’s
Covenant of Quiet Enjoyment.

 

The Landlord covenants that the Tenant, upon paying the Basic Rent and
Additional Rent provided for hereunder and performing and observing all of the
other covenants and provisions hereof, may peaceably and quietly hold and enjoy
the Premises for the Term as aforesaid without molestation or disturbance by or
from Landlord or anyone acting by, through or under Landlord, subject, however,
to all of the terms and provisions of this Lease and to the title matters of
record as listed on Exhibit D
attached hereto.

 

18.                                 Tenant’s
Obligation to Quit.

 

The Tenant shall, upon expiration of the Term or other termination of
this Lease, leave and peaceably and quietly surrender and deliver to the
Landlord the Premises and any replacements or renewals thereof broom clean and
in the order, condition and repair required by Section 10 hereof and the
other provisions of this Lease, except, however, that the Tenant shall first
remove any trade fixtures and equipment and any alterations, additions and
improvements which the Landlord has required be removed pursuant to the terms
of Section 12 hereof, restoring the Premises in each case to their
condition prior to the installation of such fixtures or the undertaking of such
alterations, additions or improvements, as the case may be.  If the Tenant shall fail timely to surrender
the Premises, Tenant shall pay, in addition to all costs and damages suffered
or incurred by Landlord, for use and occupancy an amount at a rate equal to two
(2) times the rate of Basic Rent in effect immediately prior thereto until
the Premises are surrendered by the Tenant and delivered to the Landlord in
accordance with this Section 18.

 

If the Tenant shall fail so to remove its fixtures, equipment,
alterations, additions and improvements, within ten business days after notice,
they shall be deemed abandoned by the Tenant and the Landlord may remove and
dispose of the same at the Tenant’s expense which shall be paid as Additional
Rent.  The provisions of this Section 18
shall expressly survive the termination or expiration of this Lease.

 

13

 

19.                                 Transfers
of Tenant’s Interest.

 

The Tenant shall not assign or sublease or otherwise encumber all or
any part of its interest in this Lease, the Premises, or the estate hereby
created, without in each case first obtaining the prior written consent of the
Landlord, such approval not to be unreasonably withheld, conditioned or
delayed.  In all events, the Landlord may
condition the consent to any sublease or assignment upon the Tenant’s agreeing
to pay to the Landlord fifty percent (50%) of the consideration received by the
Tenant for any such assignment and fifty percent (50%) of the amount by which
any rentals and other amounts from time to time payable to or for the Tenant
under any subleases exceed the Basic Rent and Additional Rent from time to time
payable hereunder and upon the sublessee’s or assignee’s agreement to obtain
the consent of the Landlord to any future or further sublease or assignment of
its interest under this Lease.  Any
attempted assignment without the consent of the Landlord as contemplated hereby
shall be void.  A change in ownership or
power to vote of a majority of the outstanding stock of the Tenant from the
owners of such stock or those controlling the power to vote of such stock shall
constitute an assignment for purposes of this Lease.

 

In all events the Tenant originally named herein and any guarantor of
the obligations of the Tenant under this Lease shall, except to the extent of
so much of the Premises as the Landlord elects to lease directly to any
proposed sublease or assignee as above provided, remain primarily and jointly
and severally liable for, and any sublessee or assignee shall in writing
assume, the obligations of the Tenant under this Lease.

 

The Tenant shall give the Landlord at least 30 days’ prior written
notice of its desire to assign or sublet, which notice shall include reliable
information indicating that the proposed assignee or subtenant is reputable,
financially responsible and the business in which the proposed assignee or
subtenant shall be engaged.

 

If Tenant shall give Landlord notice of a desire to assign this Lease,
or to sublet the entirety of the Premises, Landlord, provided that Tenant shall
be relieved of all obligations arising hereunder from and after the date of
recapture, may recapture the Premises or cancel this Lease on 30 days’ prior
written notice thereof, and this Lease shall terminate on the date in such
notice specified, with the same force and effect as is such date were the date
herein specified for the expiration hereof, and Basic Rent and Additional Rent
shall be apportioned and adjusted as of the effective date of such
cancellation.

 

Unless Landlord specifically consents in writing, Tenant shall not have
the right to assign the right as set forth in Section 41 below, to have
the Addition (as defined in Section 41) constructed nor the right to purchase
the Property and the Building as set forth in Section 40 below.

 

20.                                 Transfers
of Landlord’s Interest.

 

The Landlord shall have the right from time to time to sell or mortgage
its interest in the Property, the Building and the Premises, to assign its
interest in this Lease, or to assign from time to time the whole or any portion
of the Basic Rent, Additional Rent or other sums and charges at any time paid
or payable hereunder by the Tenant to the Landlord, to any Mortgagees or other
transferees designated by the Landlord in duly recorded instruments, and in any
such case the Tenant shall pay the Basic Rent, Additional Rent and such other
sums and charges so assigned, subject to the terms of the Lease, upon demand to
such Mortgagees and other transferees at the addresses mentioned in and in
accordance with the terms of such instruments, provided that in no event shall
Tenant be obligated to make duplicative payments of Rent.

 

14

 

21.                                 Mortgagees’
Rights.

 

The Tenant hereby agrees that this Lease is and shall be subject and
subordinate to any mortgage (and to any amendments, extensions, increases,
refinancings or restructurings thereof) of the Property, the Building or the
Premises, whether or not such mortgage is filed subsequent to the execution,
delivery or the recording of this Lease or any notice hereof (the holder from
time to time of any such mortgage being in this Lease sometimes called the “Mortgagee”).  The foregoing subordination shall be
self-operative and automatically effective as to any mortgage filed subsequent
to the execution and delivery hereof only if either the Mortgagee agrees in
writing or such mortgage provides that, for so long as there exists no default
under this Lease by the Tenant, the Mortgagee will not, in foreclosing against
or taking possession of the Premises or otherwise exercising its rights under
such mortgage, disturb the Tenant’s possession of the Premises hereunder, or
words of similar import.  The Tenant
hereby agrees to execute, acknowledge and deliver in recordable form such
instruments confirming and evidencing the foregoing subordination as the
Landlord or any such Mortgagee may from time to time reasonably require.

 

Provided that the Tenant has been provided with notice of such mortgage
and appropriate addresses to which notice should be sent, no notice from the
Tenant of any default by the Landlord in its obligations shall be valid, and
the Tenant shall not attempt to terminate this Lease, withhold Basic Rent or Additional
Rent or exercise any other remedy which may arise under law by reason of any
such default (it being understood that no such remedy exists, or is implied by
reason of this provision, under this Lease), unless the Tenant first gives such
notice to any Mortgagees and provides such Mortgagees with thirty (30) days
after such notice to cure such default, or if such default is not reasonably
susceptible of cure by Mortgagees (as in the case of the need to obtain
possession of or right of entry into or upon the Premises) in thirty (30) days,
with such longer period of time as is reasonably necessary to cure such
default, provided efforts to effectuate such cure are commenced within thirty
(30) days and thereafter prosecuted to completion with reasonable diligence.  The Tenant shall and does hereby agree, upon
default by the Landlord under any mortgage, to attorn to and recognize the
Mortgagee or anyone else claiming under such mortgage, including a purchaser at
a foreclosure sale, at its request as successor to the interest of the Landlord
under this Lease, to execute, acknowledge and deliver such evidence of this
attornment, which shall nevertheless be self-operative and automatically
effective, as the Mortgagee or such successor may request and to make payments
of Basic Rent and Additional Rent hereunder directly to the Mortgagee or any
such successor, as the case may be, upon request.  Any Mortgagee may, at any time, by giving
written notice to, and without any further consent from, the Tenant,
subordinate its mortgage to this Lease, and thereupon the interest of the
Tenant under this Lease shall automatically be deemed to be prior to the lien
of such mortgage without regard to the relative dates of execution, delivery or
filing thereof or otherwise.

 

22.                                 Default;
Remedies.

 

If the Tenant shall fail to pay within seven (7) days of the date
when due of any Basic Rent or Additional Rent, or if the Tenant shall default
in the timely performance or observance of any of the other covenants contained
in these presents and on the Tenant’s part to be performed or observed and fail
to cure the same within 30 days after notice is given by Landlord, or if the
estate hereby created shall be taken on execution, or by other process of law,
or if the Tenant shall be involved in financial difficulties as evidenced

 

(1)                                  by its commencement
of a voluntary case under Title 11 of the United States Code as from time to
time in effect, or by its authorizing, by appropriate proceedings of trustees
or other governing body the commencement of such a voluntary case,

 

(2)                                  by its filing an
answer or other pleading admitting or failing to deny the material allegations
of a petition filed against it commencing an involuntary case under said Title

 

15

 

11, or seeking, consenting to or acquiescing in the relief therein
provided, or by its failing to controvert timely the material allegations of
any such petition,

 

(3)                                  by the entry of an
order for relief in any involuntary case commenced under said Title 11,

 

(4)                                  by its seeking relief
as a debtor under any applicable law, other than said Title 11, of any
jurisdiction relating to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors, or by its consenting to
or acquiescing in such relief,

 

(5)                                  by the entry of an
order by a court of competent jurisdiction (i) finding it to be bankrupt
or insolvent, (ii) ordering or approving its liquidation, reorganization
or any modification or alteration of the rights of its creditors, or (iii) assuming
custody of, or appointing a receiver or other custodian for, all or a
substantial part of its property, or

 

(6)                                  by its making an
assignment for the benefit of, or entering into a composition with, its
creditors, or appointing or consenting to the appointment of a receiver or
other custodian for all or a substantial part of its property;

 

then and in any of said cases, the Landlord may, to the extent
permitted by law, immediately or at any time thereafter and without demand or
notice, terminate this Lease and enter into and upon the Premises, or any part
thereof in the name of the whole, and repossess the same as of the Landlord’s
former estate, and expel the Tenant and those claiming through or under the
Tenant and remove its effects without being deemed guilty of any manner of
trespass, and without prejudice to any remedies which might otherwise be used
for arrears of rent or preceding breach of covenant.

 

No termination or repossession provided for in this Section 22 shall
relieve the Tenant or any guarantor of the obligations of the Tenant under this
Lease of its liabilities and obligations under this Lease, all of which shall
survive any such termination or repossession. 
In the event of any such termination or repossession, the Tenant shall
pay to the Landlord either (i) in advance on the first day of each month,
for what would have been the entire balance of the Term, one-twelfth (1/12)
(and a pro rata portion thereof for any fraction of a month) of the annual
Basic Rent, Additional Rent and all other amounts for which the Tenant is
obligated hereunder, less, in each case, the actual net receipts by the
Landlord by reason of any reletting of the Premises after deducting the
Landlord’s reasonable expenses in connection with such reletting, including,
without limitation, removal, storage and repair costs and reasonable brokers’
and attorneys’ fees, or (ii) upon demand and at the option of the
Landlord, the present value (computed at a capitalization rate based upon the so-called
“Prime Rate” announced as such in The Wall Street Journal)
of the amount by which the payments of Basic Rent and Additional Rent
reasonably estimated to be payable for the balance of the Term after the date
of the exercise of said option would exceed the payments reasonably estimated
to be the fair rental value of the Premises on the terms and conditions of this
Lease over such period, determined as of such date, less reletting costs.

 

Without thereby affecting any other right or remedy of the Landlord
hereunder, the Landlord may, at its option, cure for the Tenant’s account any
default by the Tenant hereunder which remains uncured after said thirty (30)
days’ notice of default from the Landlord to the Tenant, and the cost to the
Landlord of such cure shall be paid to the Landlord by the Tenant within thirty
(30) days after receipt of an invoice.

 

If Landlord shall violate, neglect or fail to perform or observe any of
the covenants, provisions, or conditions contained in this Lease on its part to
be performed or observed, which default continues for a period of more than
thirty (30) days after receipt of written notice from Tenant specifying such
default, or if such default is of a nature to require more than thirty (30)
days for remedy and continues beyond the

 

16

 

time reasonably necessary to cure (provided Landlord must have
undertaken procedures to cure the default within such thirty (30) days period
and thereafter diligently pursue such efforts to cure to completion), Tenant
shall have available to it all rights and remedies available to Tenant at law,
in equity or hereunder.  Further, in the
event such failure of Landlord is causing material interference with the Tenant’s
conduct of business at the Premises and Landlord has failed within the
foregoing notice and cure period to commence to cure the alleged default, then
Tenant shall give to Landlord (by facsimile transmission to number 978-287-5050,
or to such other number as Landlord shall have given written notice to Tenant)
notice of Landlord’s failure and an additional 24 hours to commence to
cure.  If Landlord continues to fail to
commence to cure or fails thereafter to diligently proceed to cure, then,
Tenant may elect to incur any reasonable expense necessary to perform the
obligation of Landlord specified in such notice and bill Landlord for the costs
thereof.  Notwithstanding the foregoing,
if in Tenant’s reasonable judgment, an emergency situation shall exist, Tenant
may cure such default with only reasonable (under the circumstances as
determined by Tenant in the exercise of its commercially reasonable judgment)
notice to Landlord being required.

 

Notwithstanding the foregoing, so long as the named Tenant or its
affiliate is the Tenant, Tenant shall have, in certain circumstances, a right
to offset or deduct expenses incurred by Tenant in curing a Landlord default
from Additional Rent payable by Tenant under the Lease, provided that the
following conditions set forth below are satisfied.  In the event Landlord fails to commence to
cure any alleged default which is causing material interference with Tenant’s
conduct of business at the Premises after Tenant shall have given notice to
Landlord of such default, Tenant shall have the right, but not the obligation,
to remedy such alleged default.  If
Tenant cures the alleged default, it shall deliver to the Landlord notice that
it has done so and evidence of the out-of-pocket costs incurred by Tenant in
curing such default (the “Notice of Cure”). 
If Landlord has not disputed the default, then Landlord shall, within
sixty (60) days of receipt of a Notice to Cure, reimburse the Tenant for the
amount of the out-of-pocket costs of cure expended by Tenant.  If within the said sixty (60) day period,
Landlord either (A) fails to reimburse Tenant or (B) fails to
initiate expedited arbitration on its dispute concerning the default, then the
Tenant may offset against Additional Rent, the reasonable out-of-pocket costs
expended by Tenant to cure such default.

 

If Landlord has initiated arbitration, it shall be an expedited process
to determine any or all of the following: 
whether (x) a default existed; (y) remedy of the default was necessary
at the time and in the manner conducted by Tenant; and (z) the reasonableness
of the costs so expended.  The
arbitration shall proceed in Portland, Maine according to the expedited rules of
the American Arbitration Association. 
The arbitration shall be conducted by a single arbitrator who shall be
experienced, independent and unbiased and there shall be no more than two (2) full
days of hearings.  Each party shall bear
its own expenses and counsel fees and each party will pay an equal portion of
the arbitration costs and fees.  If the
arbitrator finds in favor of Tenant, Landlord shall have thirty (30) days after
the award is issued to pay the award to Tenant. 
If Landlord fails to reimburse Tenant within thirty (30) days after
Tenant receives an award in its favor, then Tenant may offset against
Additional Rent the amount of such award.

 

23.                                 Remedies
Cumulative; Waivers.

 

The specific remedies to which the Landlord may resort under the terms
of this Lease are cumulative and are not intended to be exclusive of any other
remedies or means of redress to which the Landlord may be lawfully entitled in
any provision of this Lease or otherwise. 
The failure of the Landlord or the Tenant to insist in any one or more
cases upon the strict performance of any of the covenants of this Lease, or to
exercise any option herein contained, shall not be construed as a waiver or
relinquishment for the future of such covenant or option.  A receipt by the Landlord, or payment by the
Tenant, of Basic Rent or Additional Rent with knowledge of the breach of any
covenant hereof shall not be deemed a waiver of such breach, and no waiver,
change, modification or discharge by the Landlord or

 

17

 

Tenant of any provision in this Lease shall be deemed to have been made
or shall be effective unless expressed in writing and signed by an authorized
representative of the Landlord or the Tenant as appropriate.  In addition to the other remedies in this
Lease provided, the Landlord shall be entitled to the restraint by injunction of
the covenants, conditions or provisions of this Lease, or to a decree
compelling performance of or compliance with any of such covenants, conditions
or provisions.

 

24.                                 Brokers.

 

The Tenant warrants and represents that it has not dealt with any
broker in connection with the Premises or this Lease except Roxanne Cole
(RamHarnden Commercial Real Estate) and Gregory Boulos (CBRE/The Boulos
Company) as the sole brokers in this transaction.  All commission payments will be the
responsibility of the Landlord.  The
Tenant hereby indemnifies and holds the Landlord harmless from and against any
liability for commissions due any other broker or finder whom the Tenant has
dealt in connection with this Lease. The brokerage commission schedule from
CBRE/The Boulos Company is attached hereto as Exhibit E.  Ram Harnden shall be paid separately from the
commission schedule.

 

25.                                 Notices.

 

Any notices, approvals, specifications, or consents required or
permitted hereunder shall be in writing and mailed, postage prepaid, by
registered or certified mail, return receipt requested, if to the Landlord or
the Tenant at the addresses set forth herein, and if to any Mortgagee at such
address as it may specify by such notice to the Landlord and the Tenant, or at
such other address as any of them may from time to time specify by like notice
to the others.  Any such notice shall be
deemed given when mailed, except that if any time period commences hereunder
with notice, such time period shall be deemed to commence when such notice is
delivered or, if earlier, when postal records indicate delivery was first
attempted.

 

26.                                 Estoppel
Certificates.

 

The Landlord and the Tenant hereby agree from time to time, after prior
written notice from the other or any Mortgagee, to execute, acknowledge and
deliver, within 10 business days, without charge, to the other party, the
Mortgagee or any other person designated by the other party, a statement in
writing certifying: that this Lease is unmodified and in full force and effect
(or if there have been modifications, identifying the same by the date thereof
and specifying the nature thereof); that to the knowledge of such party there
exist no defaults (or if there be any defaults, specifying the same); the
amount of the Basic Rent, the dates to which Basic Rent, Additional Rent and
other sums and charges payable hereunder have been paid; and that such party to
its knowledge has no claims against the other party hereunder except for the
continuing obligations under this Lease (or if such party has any such claims,
specifying the same).

 

27.                                 Parking.

 

Tenant shall have the right to use its proportionate share of the on-site
parking spaces on an unreserved basis; currently 411 parking spaces are
available at the Property; provided, however, that Tenant shall have a minimum
of 411 parking spaces at all times during the Term.

 

The use by Tenant, its employees and invitees, of the parking
facilities of the Building shall be on the terms and conditions of such rules and
regulations set by Landlord as may hereinafter be established or changed from
time to time.  Landlord shall have the
right to change the parking system from time to time.  Tenant shall not permit to allow any vehicles
that belong to or are controlled by Tenant or Tenant’s employees, suppliers,
shippers, customers or invitees to be loaded, unloaded or parked in areas other
than those designated by Landlord for such activities.  If Tenant permits or allows any such
prohibited

 

18

 

activities, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable upon demand by Landlord as additional rent.

 

28.                                 Bind
and Inure; Limited Liability of Landlord.

 

All of the covenants, agreements, stipulations, provisions, conditions
and obligations herein expressed and set forth shall be considered as running
with the land and shall extend to, bind and inure to the benefit of the
Landlord and the Tenant, which terms as used in this Lease shall include their
respective successors and assigns where the context hereof so admits.

 

The Landlord shall not have any individual or personal liability for
the fulfillment of the covenants, agreements and obligations of the Landlord
hereunder, the Tenant’s recourse and the Landlord’s liability hereunder being
limited to the Property and the Building. 
The term “Landlord” as used in this Lease shall refer only to the owner
or owners from time to time of the Property or the Building, it being
understood that no such owner shall have any liability hereunder for matters
arising from and after the date such owner ceases to have any interest in the
Property or the Building provided that any funds in the hands of Landlord or
the then grantor at the time of such transfer, in which the Tenant is known by
Landlord to have an interest, shall be delivered to the grantee.

 

In no event shall the Landlord be liable to the Tenant for any special,
consequential or indirect damages suffered by the Tenant or any other person or
entity by reason of a default by the Landlord under any provisions of this
Lease.

 

29.                                 Environmental
Compliance.

 

(a)                                  Landlord
hereby covenants with Tenant that Landlord shall comply with all environmental
Laws applicable with respect to the Property and the common areas of the
Building and obtain all necessary permits and approvals applicable to the
discharge, generation, manufacturing, removal, transportation, treatment,
storage, disposal and handling of Hazardous Materials or Wastes (as hereinafter
defined) as apply to the activities of Landlord, its directors, officers,
employees, agents, contractors, subcontractors, licensees, invitees, successors
and assigns at the property.  Landlord
shall immediately forward to Tenant copies of any and all notices,
correspondence, warnings, guidance, or other written materials received from,
or given to, any governmental authority in connection with Hazardous Materials
or Wastes and their relationship to the Premises, Building or Property.

 

(b)                                 Prior
to the execution of this Lease, Landlord, has provided to Tenant copies of the
following identified environmental site assessments and report (collectively, “ESA”):

 

(A)                              Phase
I/Phase II Environmental Site Assessment 10 Southgate Road, Scarborough, ME
dated October 9, 2003 prepared by Rizzo Associates.

 

(c)                                  Landlord
represents to Tenant, to the best of Landlord’s knowledge, that the Building,
the Premises and the Property do not contain Hazardous Materials or Wastes
other than (i) those described in the ESA, (ii) diminimus quantities
of those used in connection with the operation, maintenance and repair of the
Property or Building and in compliance with laws, and (iii) those used by
other tenants in the Building.  The
current operations at the Property, to Landlord’s best knowledge, comply with
applicable environmental Laws and will not result in an imposition of liability
or obligations on Tenant or damage to, or disturbances to Tenant’s use and
occupancy of, the Premises or which could otherwise affect Tenant’s quiet
enjoyment of the Premises.  Landlord (i) shall
continue at all times during the term of this Lease to handle, use, store,
treat, transport and dispose of any Hazardous Materials and Wastes which

 

19

 

pose a hazard to the health and safety of the occupants of the Building
in accordance with applicable environmental Laws relating to the same; and (ii) covenant
to comply with all environmental Laws applicable to Landlord activities at the
Building and the Property.

 

(d)                                 Tenant
hereby covenants to Landlord that Tenant shall: 
(a) (i) comply with all Laws applicable to the discharge,
generation, manufacturing, removal, transportation, treatment, storage,
disposal and handling of Hazardous Materials or Wastes as apply to the
activities of the Tenant, its directors, officers, employees, agents,
contractors, subcontractors, licensees, invitees, successors and assigns at the
Property, without limiting the generality of the foregoing, and prior to the
expiration or termination of this Lease, the closure of any hazardous waste
storage area and/or any Nuclear Regulatory Commission (“NRC”) regulated
facilities in accordance with all applicable Environmental Laws and NRC
requirements, (ii) remove any Hazardous Materials or Wastes from the
Premises arising from Tenant’s use of the premises immediately upon discovery
of same in accordance with all applicable Laws and orders of governmental
authorities having jurisdiction, (iii) pay or cause to be paid all costs
associated with such removal including remediation and restoration of the
Premises, and (iv) indemnify Landlord from and against all losses, claims
and costs arising out of the migration of Hazardous Materials or Wastes from or
through the Premises into or onto or under other portions of the Building or
the Property or other properties arising from Tenant’s use of the Premises; (b) keep
the Property free of any lien imposed pursuant to any applicable Law in
connection with the existence of Hazardous Materials or Wastes in or on the
Premises; (c) not install or permit to be installed or to exist in the
Premises except in conformance with all applicable Laws and regulations any
asbestos, asbestos-containing materials, urea formaldehyde insulation or any
other chemical or substance which has been determined to be a hazard to health
and environment; (d) except in conformance with all applicable Laws and
regulations not cause or permit to exist, as a result of an intentional or
unintentional act or omission on the part of Tenant or any occupant of the
Premises, a releasing, spilling, leaking, pumping, emitting, pouring,
discharging, emptying or dumping of any Hazardous Materials or Wastes onto the
Premises; (e) identify on Exhibit C
all Hazardous Materials or Wastes currently used by Tenant and shall notify
Landlord of any changes or addition to the Hazardous Materials or Wastes so
used; (f) give all notifications and prepare all reports required by Laws
or any other law with respect to Hazardous Materials or Wastes existing on,
released from or emitted from the Premises (and shall give copies of all such
notifications and reports to Landlord) arising from Tenant’s use of the
Premises; (g) promptly notify Landlord in writing of any release, spill,
leak, emittance, pouring, discharging, emptying or dumping of Hazardous
Materials or Wastes in or on the Premises caused by Tenant; (h) in the
event Landlord has a reasonable belief that Tenant has discharged or released
Hazardous Materials or Wastes at the Property, pay for periodic environmental
monitoring by Landlord of Tenant’s space as well as subsurface testing paid as
additional rent; (i) promptly notify Landlord in writing of any summons,
citation, directive, notice, letter or other communication, written or oral,
from any local, state or federal governmental agency, or of any claim or threat
of claim known to Tenant, made by any third party relating to the presence or
releasing, spilling, leaking, pumping, emitting, pouring, discharging, emptying
or dumping of any Hazardous Materials or Wastes onto the Premises; and
(j) if a closure is required due to acts of the Tenant under the
provisions of the Resource Conservation and Recovery Act, 42 U.S.C. Subsection 6901,
et seq. (“RCRA”) or other applicable Environmental Laws, provide
evidence reasonably satisfactory to Landlord at or prior to the termination of
the Lease that such closure has been completed in accordance with all
applicable RCRA and Environmental Law requirements.

 

(e)                                  The
term “Hazardous Materials or Wastes” shall mean any hazardous or toxic
materials, pollutants, chemicals, or contaminants, including without limitation
asbestos, asbestos-containing materials, urea formaldehyde foam insulation,
polychlorinated biphenyls (“PCBs”) and petroleum products as defined,
determined or identified as such in any Laws, as hereinafter defined.  The term “Laws” means any federal, state,
county, municipal or local laws, rules or regulations (whether now
existing or hereinafter enacted or promulgated) including, without limitation,
the Clean Water Act,

 

20

 

33 U.S.C. Section 1251 et seq. (1972), the Clean
Air Act, 42 U.S.C. Section 7401 et seq. (1970), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Subsection 1802, and The Resource Conservation
and Recovery Act, 42 U.S.C. Subsection 6901 et seq., any
similar state laws, as well as any judicial or administrative interpretation
thereof, including any judicial or administrative orders or judgments.

 

(f)                                    Tenant
further covenants and agrees that (x) all waste water discharged from the
Premises, including from all laboratory space within the Premises, shall be
suitable for discharge into the Building’s collection facility and into the
sanitary sewer system; (y) it shall collect all chemicals, biological waste and
Hazardous Materials and Wastes into appropriate hazardous waste storage
receptacles and discard the same in accordance with and as required by applicable
Environmental Laws and shall not dispose of the same through the Building’s
plumbing system; and (z) comply with all Environmental Laws and with Tenant’s
internal guidelines, protocols and procedures governing the operation of the
microbiological and/or biomedical laboratories within the Premises.

 

(g)                                 Except
to the extent of liability arising out of or resulting from the acts or
negligence of Landlord or its successors or assigns or their agents, employees,
contractors, licensees, invitees or employees on or about the Premises or in
connection with the existence of Hazardous Materials or Waste existing on the
Premises as of the date of this Lease, Tenant hereby agrees to defend,
indemnify and hold harmless Landlord, its employees, agents, contractors,
subcontractors, licensees, invitees, successors and assigns from and against
any and all claims, losses, damages, liabilities, judgments, costs and expenses
(including, without limitation, attorneys’ fees and costs incurred in the
investigation, defense and settlement of claims or remediation of
contamination) incurred by such indemnified parties as a result of or in
connection with the presence at or removal of Hazardous Materials or Wastes
from the Premises arising from Tenant’s use of the Premises.  Tenant shall bear, pay and discharge, as and
when the same become due and payable, any and all such judgments or claims for
damages, penalties or otherwise against such indemnified parties, shall hold
such indemnified parties harmless against all claims, losses, damages,
liabilities, costs and expenses, and shall assume the burden and expense of
defending all suits, administrative proceedings, and negotiations of any
description with any and all persons, political subdivisions or government
agencies arising out of any of the occurrences set forth in this Section 29.  The provisions of this Section shall
survive termination of this Lease.

 

(h)                                 Notwithstanding
anything herein to the contrary, Tenant shall have no liability, obligation or
responsibility whatsoever for any Hazardous Materials or Wastes existing on the
Premises as of the date of this Lease or which are hereafter introduced to the
Premises as a result of the acts or omission of Landlord, any other tenant of
the Property, or any third party (except third parties who are agents or
contractors of Tenant.  Except to the
extent caused by Tenant or Tenants agents, employees, contractors or invitees,
Landlord shall indemnify and hold Tenant harmless from and against any and all
claims, losses, damages, liabilities, judgments, costs and expenses (including,
without limitation, attorney’s fees and costs incurred in the investigation,
defense and settlement of claims or remediation of contamination) incurred by
Tenant as a result of the existence of Hazardous Materials and Waste on the
Premises as of the date of this Lease (other than in conformance with all
Laws).  Landlord further agrees to
indemnify and hold Tenant harmless for any and all claims, losses, damages,
liabilities, judgments, costs and expenses (including, without limitation,
attorney’s fees) arising out of the introduction by other Tenants (including
their agents, employees, invitees and contractors) to the Property of Hazardous
Materials and Wastes if such Tenants were permitted under their Leases to use
any portion of the Property for the manufacture, storage, generation,
treatment, handling or disposal of such Hazardous Materials or Wastes.

 

21

 

30.                                 Redemption,
Counterclaim and Jury Trial.

 

Tenant, for itself and for all persons claiming through or under it,
hereby acknowledges that this Lease constitutes a commercial transaction, and
hereby expressly waives any and all rights which are or may be conferred upon
Tenant by any present or future law to redeem the Premises, or to any new trial
in any action or ejection under any provisions of law, after reentry thereupon,
or upon any part thereof, by Landlord, or after any warrant to dispossess or
judgment in ejection.  If Landlord shall
acquire possession of the Premises by summary proceedings, or in any other
lawful manner without judicial proceedings, it shall be deemed a reentry within
the meaning of that word as used in this Lease. 
In the event that Landlord commences any summary proceedings or action
for nonpayment of rent or other charges provided for in this Lease, Tenant
shall not interpose any non-compulsory counterclaim of any nature or
description in any such proceeding or action. 
Tenant and Landlord both waive a trial by jury of any or all issues
arising in any action or proceeding between the parties hereto or their
successors, under or connected with this Lease, or any of its provisions.

 

31.                                 Recording.

 

Tenant shall not record this Lease but will, at the request of
Landlord, execute a memorandum or notice thereof in recordable form
satisfactory to both Landlord and Tenant specifying the date of commencement
and expiration of the term of this Lease and other information required by
statute.  Either Landlord or Tenant may
then record said memorandum or notice of lease.

 

32.                                 Force
Majeure.

 

Landlord and Tenant shall be excused for the period of any delay in the
performance of any obligations hereunder, when prevented from so doing by cause
or causes beyond such party’s control which shall include, without limitation,
all labor disputes, civil common, war, war-like operations, invasion,
rebellion, hostilities, military or usurped power, sabotage, governmental
regulations or controls, fire or other casualty, inability to obtain any
material, services or financing or through Acts of God.  provided:

 

(a)                                  Except
as provided herein, nothing in this Lease shall be deemed to excuse or permit
any delay in the payment of any sums of money required hereunder, or any delay
in the cure of any default which may be cured by the payment of money;

 

(b)                                 No
reliance by Landlord or Tenant upon this Section shall limit or restrict
in any way the other party’s  right of
self-help as provided in this Lease; and

 

(c)                                  Notwithstanding
anything to the contrary herein, Tenant’s basic rent shall be equitably abated
if Tenant is prevented from operating its business at the Premises due to any
event set forth above for a period in excess of forty-five (45) days.

 

Neither Landlord nor Tenant shall be entitled to rely upon this Section unless
such party shall advise the other in writing, of the existence of any force
majeure preventing the performance of an obligation within five (5) days
after the commencement of the force majeure.

 

33.                                 Captions.

 

The captions for the numbered Sections of this Lease are provided for
reference only and they do not constitute a part of this agreement or any
indication of the intentions of the parties hereto.

 

22

 

34.                                 Integration.

 

The parties acknowledge that all prior written and oral agreements
between them and all prior representations made by either party to the other
have been incorporated in this instrument or otherwise satisfied prior to the
execution hereof.

 

35.                                 Severability;
Choice of Law.

 

If any provision of this Lease shall be declared to be void or
unenforceable either by law or by a court of competent jurisdiction, the
validity or enforceability of remaining provisions shall not thereby be
affected.

 

This Lease is made under, and shall be construed in accordance with,
the laws of the State of Maine.

 

36.                                 Renewal.

 

(a)                                  Provided
that Tenant is not in default under the Lease beyond the expiration of
applicable notice and cure periods on the date Tenant delivers Tenant’s Renewal
Notice (as hereinafter defined) or at any time thereafter through the
commencement date of a Renewal Term (as hereinafter defined), Tenant shall have
two options (each a “Renewal Option”) to renew the Lease for seven year terms
(each such seven year term a “ Renewal Term”) at the rent and upon the other
terms set forth below by delivering notice to Landlord (“Tenant’s Renewal
Notice”) exercising the Renewal Option within 180 days prior to the scheduled
expiration of this Lease.  Time shall be
of the essence with respect to Tenant’s exercise of the Renewal Option and
delivery of Tenant’s Renewal Notice. 
Landlord shall deliver a notice to Tenant (“Landlord’s Reminder”) no
earlier than 5 months, and no later than 4 months prior to the date by which
Tenant must deliver Tenant’s Renewal Notice, provided that Landlord shall have
no liability for failure to deliver Landlord’s Reminder beyond allowing Tenant
to exercise Tenant’s Renewal Notice within forty-five (45) days following
delivery of Landlord’s Reminder notwithstanding that such period may be less
than 180 days prior to the scheduled expiration of this Lease.  In the event that Tenant shall fail to
deliver Tenant’s Renewal Notice in accordance with the provisions hereof,
Tenant shall be deemed to have forever waived its right to exercise the Renewal
Options, and Tenant shall have no further right to renew or extend the term of
the Lease.  Promptly after delivery of
Tenant’s Renewal Notice, or failure by Tenant to deliver Tenant’s Renewal
Notice, Landlord and Tenant shall execute and deliver an instrument reasonably
satisfactory to both parties stating that Tenant has or has not exercised a
Renewal Option.

 

(b)                                 Upon
Landlord’s receipt of Tenant’s Renewal Notice in accordance with the
requirements of this Section, the Lease, subject to the provisions of this
Section, shall be automatically extended for the Renewal Term with the same
force and effect as if the Renewal Term had been originally included in the
term of the Lease, except that the Basic Rent under the Lease shall be equal to
the following:

 

	
  Period

  	
   

  	
  Rent Per RSF

  	
   

  	
  Annual Basic Rent

  	
   

  	
  Monthly Installment

  	
   

  
	
  Lease Years 11 – 17

  	
   

  	
  $

  	
  9.00

  	
   

  	
  $

  	
  577,422.00

  	
   

  	
  $

  	
  48,118.50

  	
   

  
	
  Lease Years 18 – 24

  	
   

  	
  $

  	
  10.00

  	
   

  	
  $

  	
  641,580.00

  	
   

  	
  $

  	
  53,465.00

  	
   

  

 

There shall be no rent concessions or obligation of Landlord to perform
or pay for any work during the Renewal Term.

 

23

 

(c)                                  The
Renewal Options shall automatically terminate and become null, void and of no
force and effect upon the earlier to occur of (1) the expiration or
earlier termination of the Lease pursuant to law or the express terms of this
Lease, or (2) the failure of Tenant to timely and properly exercise a
Renewal Option.

 

37.                                 Landlord’s
Base Building Work.

 

Landlord shall, at Landlord’s expense, complete the following base
building improvements (“Landlord’s Base Building Work”):

 

(1)                                  Repaving,
resealing and striping of the parking areas;

(2)                                  Improved
common lighting;

(3)                                  New
landscaping and building sign structure;

(4)                                  Improved
utility metering (including a separate meter or checkmeter for gas and
electric);

(5)                                  Repainting
of the Building;

(6)                                  Repair
or replacement of the roof;

(7)                                  Installation
of an addressable fire alarm system;

(8)                                  Common
area code compliance work;

(9)                                  New
building façade consistent with elevation.

(10)                            Underground
sprinklers along the front of the Building;

(11)                            New
concrete pavers at entryway walks;

(12)                            Sheetrock
and insulated walls on the interior of the demising walls within the Building.

 

Landlord shall, in Landlord’s commercially reasonable judgment, elect
whether repair or replacement of a component of the Building shall be
performed.  Landlord shall perform
Landlord’s Base Building Work in a good and workmanlike manner pursuant to
plans and specifications approved by Landlord. 
Tenant shall have the right to review and approve (such approval not
unreasonably withheld) the repaving and resealing of the parking areas.  In addition, Tenant shall have the right to
install (at Tenant’s cost and expense) its sign in the dominant position on the
new building sign structure, which shall include, at Tenant’s option, reference
to the Building as the “Binax Building.”

 

38.                                 Intentionally
Omitted.

 

39.                                 Tenant’s
Right of First Refusal.

 

If at any time and from time to time during the Term of the Lease all
or a portion of the 17,024 rentable square feet of vacant space in the Building
which is adjacent to the Premises and more particularly described on Exhibit F attached hereto
(hereafter, the “Right of First Refusal Space”), and Tenant is not in default
under the Lease beyond the expiration of applicable notice and cure period at
such time, Landlord shall first notify Tenant, in writing, (“Landlord’s Notice”)
of such available space (the “Right of First Offer”), which shall be made available
to Tenant at the same rent and upon all of the other terms and conditions of
this Lease (including, without limitation, renewal rights) together with an
allowance of up to $30.00 per rentable square foot (which shall be repaid as
set forth below) and shall be for a term which is co-terminus with the lease
Term described herein.  Tenant may,
within thirty (30) days of the receipt of the notice, decline or accept such
offer, in writing, and within thirty (30) days thereafter enter into an
amendment to this Lease that adjusts the rentable square feet of the Premises,
Basic Rent, Tenant’s Percentage and other applicable terms herein to reflect
the incorporation of such Right of First Refusal Space into the Lease,
effective as of the date of such amendment. 
To the extent Tenant avails itself of all or part of the available
allowance, Tenant shall repay the allowance by amortizing the amount so
utilized at a 10% per annum interest rate over a term equal to the remaining
Term of the Lease,

 

24

 

provided if less than 7 years remain in the then existing Term, Tenant
may exercise a Renewal Option (if one remains available) in which event the
amortization shall be over a 7 year period.

 

Should Tenant fail to accept the Right of First Refusal Space in
writing within thirty (30) days of receipt of the Landlord’s Notice, then
Landlord shall be free to solicit offers from third parties to lease such
available space.  In the event that
Landlord receives from a third party a bona fide written offer to lease (the “Third
Party Offer”) all or a portion of the Right of First Refusal Space and Tenant
is not then in default under the Lease beyond the expiration of applicable
notice and cure period, then Landlord shall give Tenant written notice of such
Third Party Offer, which notice shall contain all terms and conditions set
forth in the Third Party Offer.  Tenant
shall have a right of first refusal exercisable within fifteen (15) days following
receipt by Tenant of the terms of the Third Party Offer to elect to lease the
Right of First Refusal Space upon the same rent and upon all of the other terms
and conditions of this Lease (including without limitation renewal rights)
together with an allowance of up to $30.00 per rentable square foot (which
shall be repaid as set forth below) and shall be for a term which is
co-terminus with the lease Term described herein.  To the extent Tenant avails itself of all or
part of the available allowance, Tenant shall repay the allowance by amortizing
the amount so utilized at a 10% per annum interest rate over a term equal to
the remaining Term of the Lease, provided if less than 7 years remain in the
then existing Term, Tenant may exercise a Renewal Option (if one remains
available) in which event the amortization shall be over a 7 year period.  Tenant shall exercise such right of first
refusal if it elects to do so by providing written notice to Landlord within
said fifteen (15) day period outlined above. 
If Tenant fails to exercise such right within said fifteen (15) day
period, Landlord may lease the Right of First Refusal Space to the third party
upon terms no more favorable than those set forth in the Third Party
Offer.  If Landlord fails to execute a Lease
of the Right of First Refusal Space based on the Third Party Offer within
ninety (90) days following receipt by Tenant of the Third Party Offer, Landlord
shall be required to again comply with the requirements of this Section.

 

The Right of First Offer shall automatically terminate upon the earlier
to occur of (1) the expiration or earlier termination of this Lease, or (2) the
failure of Tenant to timely exercise any right to lease space under its Right
of First Offer Space.

 

Notwithstanding anything herein to the contrary, Tenant acknowledges
and agrees that Maine Molecular Quality Controls, Inc. (“Maine Molecular)
has a right of first offer on the eastern 3,384 rentable square feet of the
Right of First Offer Space (the “Maine Molecular Offer Space”) that is superior
to the Right of First Offer granted to Tenant herein, and that Tenant’s Right
of First Offer on the Maine Molecular Offer Space shall arise only following
offer and rejection by Maine Molecular of the Maine Molecular Offer Space.

 

40.                                 Purchase
Option.

 

(a)                                  (i)                                     Provided
Tenant is not in default under the Lease beyond the expiration of applicable
notice and cure period at such time, Tenant shall have the option, following
the 1st Lease Year, the 3rd Lease Year and  the 7th Lease Year, to purchase
the Property (“Purchase Option”) which Purchase Option shall be exercised by
Tenant by delivery of a notice, in writing, (“Purchase Notice”) within 30 days
following the end of any of the 1st, 3rd and 7th
Lease Year, as applicable.  If Tenant
shall give Landlord the Purchase Notice in a timely fashion, Landlord shall
thereupon be bound to sell and Tenant shall be bound to purchase from Landlord
the Property on the terms and conditions set forth herein.  The closing of title (the “Closing”) shall
take place by escrow utilizing Tenant’s title insurance company or other third
party reasonably acceptable to Landlord and Tenant on or before the date which
is 90 days following the end of the Lease Year after which the Purchase Option
was exercised.

 

25

 

(ii)                                  If
Tenant does not exercise its Purchase Option prior to the date which is thirty
(30) days after the expiration of the third Lease Year, the Term of the Lease
shall be automatically extended for three additional Lease Years and the Term
shall then expire on the last day of the 10th Lease Year.  The automatic extension is not the exercise
of the first Renewal Option and Tenant may, in accordance with the provisions
of Section 36, exercise the Renewal Options under this Lease.

 

(b)                                 In
the event Tenant anticipates exercising its Purchase Option, Tenant may give
notice to Landlord of the same prior to exercising its Purchase Option without
any obligation to thereafter exercise its Purchase Option, and the parties
shall proceed to determine the purchase price. 
The base purchase price shall be equal to the amount set forth on Exhibit G attached hereto,
provided, however, as noted on Exhibit G,
the purchase price assumes that no tenant improvement dollars have been
expended by Landlord on the Right of First Refusal Space.  In the event such funds are expended, the
purchase price will be increased to include the unamortized tenant improvement
dollars (with amortization being over the remaining initial Term with interest
at 10% per annum).  The purchase price
has been calculated to equal the value determined by application of a 9.5%
capitalization rate on the net operating income of the Property for the prior
12 month period based upon an assumed fully leased building based on leases in
place and assuming Tenant has, after the first Lease Year, expanded into the “Furniture
Showcase” space plus the amount of the unamortized tenant improvement
costs.  In the event Landlord constructs
the expansion of the Building pursuant to the provisions of Section 41
below, the Purchase Price shall be increased by an amount determined by
applying the formula set forth above and if the Building has not been fully
leased for the 12 month period prior to the date of determination, a rent of
$7.50 per square foot, triple-net, will be assumed for the rentable square
footage of the Building not subject to a commercially reasonable lease based on
arms length negotiations with a party unaffiliated with Landlord.

 

(c)                                  Tenant
may, during the period commencing 90 days prior to and up until the date of
exercise of its Purchase Option, upon notice to Landlord, elect to conduct, at
Tenant’s expense, a due diligence investigation of the Property, including but
not limited to, title review, environmental inspections, surveying, structural
building inspections and other due diligence customarily conducted by a
purchaser of commercial real estate. 
Landlord shall provide Tenant with copies of leases, service contracts,
inspections, environmental reports and investigations, surveys and other property
documents requested by Tenant, together with access to its books and records
relating to the Property.

 

(d)                                 In
the event Landlord obtains a loan from a mortgage lender, Landlord covenants
that (i) during the first three Lease Years the mortgage will be a
flexible bank product with no prohibition on prepayment; (ii) after the
third Lease Year the financing will permit on at least one occasion during the
life thereof assumption of the loan and the mortgage securing the same on
commercially reasonable terms in the event the loan cannot be prepaid and
Landlord shall use its best efforts to negotiate for a two time transfer right
and such financing shall be a commercially standard permanent loan with such
reasonable flexibility with respect to terms and prepayment rights as Landlord
can reasonably negotiate.  If the
Property is encumbered by a mortgage that cannot be prepaid by Landlord and
that permits assumption of the indebtedness secured thereby, Tenant shall,
during its due diligence period or after exercise of its Purchase Option, make
diligent efforts to have its assumption of such mortgage be approved by the
holder thereof.  Landlord shall cooperate
with Tenant in this regard.  In the event
the mortgagee imposes a transfer or assumption fee, Tenant shall pay the same
in an amount up to 1% of the then outstanding principal balance of the same.

 

(e)                                  At
the closing, Landlord shall convey the Property to Tenant by a quit claim deed
duly executed and acknowledged by Landlord, in a manner proper for recordation,
free from liens and encumbrances except those listed on Exhibit D
attached hereto, “AS IS,” without representation or warranty as to the
condition of the Property.  Landlord
shall assign its interest in all leases in effect to Tenant.  Tenant shall bear the costs incurred in
connection with the closing, including title insurance, the

 

26

 

survey, and recording fees; provided, however, that Landlord shall bear
the cost of its own attorney’s fees and 1⁄2 of state and local conveyance
taxes.  The title so conveyed shall be
good marketable and insurable fee simple title subject to leases in place and
to the liens and encumbrances listed on Exhibit D.

 

(f)                                    If
the Purchase Option is exercised, then the terms and conditions of this Lease
shall remain in full force and effect until the sale and purchase is closed.

 

(g)                                 If,
after the Purchase Option is exercised, Tenant, without fault on the part of
Landlord, fails to pay the purchase price, execute and deliver all documents
and take any other actions that may be necessary in order to consummate its
purchase (referred to below in this Section as the “failed closing date”)
in accordance with the terms of the Purchase Option for any reason other than
the failure by Tenant to be permitted by the applicable mortgage to assume any
financing which cannot be prepaid at the time of transfer of the Property to
Tenant or the failure of Landlord to convey good and marketable and insurable
title in fee simple to Tenant or any default or breach of Landlord’s
obligations hereunder, then Tenant shall reimburse Landlord in an amount equal
to one hundred percent (100%) of all reasonable out-of-pocket costs and
expenses incurred by Landlord, including without limitation reasonable attorney’s
fees, in connection with the Tenant’s exercise of the Purchase Option. If
without fault of Tenant, Landlord fails to close on the transfer of the
Property, Landlord shall reimburse Tenant in an amount equal to one hundred
percent (100%) of all reasonable out-of-pocket costs and expenses incurred by
Tenant, including without limitation reasonable attorney’s fees, in connection
with the Tenant’s exercise of the Purchase Option.

 

(h)                                 The
Purchase Option shall automatically terminate and become null, void and of no
force and effect upon the earlier to occur of (1) the expiration or
termination of the Lease by Landlord or pursuant to law, (2) the
assignment of this Lease by Tenant, or (3) the failure of Tenant to timely
and properly exercise this Purchase Option.

 

41.                                 Building
Expansion.

 

In addition to the right of first offer set forth above, Tenant may, so
long as Tenant is not in default under this Lease beyond the expiration of
applicable grace periods, on the terms and conditions set forth below, exercise
its right to expand the Premises in the area shown as “Expansion J” on Exhibit A-1, in which event
Landlord shall promptly commence and thereafter diligently prosecute to
completion the construction of an addition of approximately 13,640 rentable
square feet (the “Addition”) to the Building:

 

(i)                                     Landlord
shall construct the Addition in a good and workmanlike manner using building
standard materials, pursuant to plans and specifications prepared by Landlord
and approved by Tenant, which approval shall not be unreasonably withheld (the
approval terms and mechanism to be the same as set forth for approval of the
Tenant Improvement Plans as described in Exhibit B).

 

(ii)                                  From
and after the date Landlord reasonably anticipates Substantial Completion of
the Addition, there shall remain at least seven (7) Lease Years of the
Term and if there are less than seven (7) Lease Years remaining, then the
term of the Lease shall be automatically extended to provide that there shall
be a seven (7) Lease Year term from and after the date of substantial
completion of the Addition.  Basic Rent
shall be paid for such period at the rates provided in the Renewal Option section of
this Lease, Section 36, for the corresponding periods.

 

(iii)                               Assuming
Landlord delivers a shell building addition to Tenant, the Basic Rent for the
area of the Addition shall be an amount equal to, on a per rentable square foot
basis, the Basic Rent per rentable square foot payable under the terms of this
Lease for the corresponding periods. 
Landlord shall make available to Tenant an allowance of not more than
$30.00 per rentable square foot to

 

27

 

be applied to leasehold improvements and $5.00 per rentable square foot
for heating, ventilating and air conditioning systems.  To the extent Tenant utilizes any portion of
the allowance, the Basic Rent shall be increased by an amount per rentable
square foot equal to the amortized cost of the amount of such allowance
utilized over a seven (7) year period with interest at ten percent (10%)
per annum.  In connection with the
construction of the Addition, Landlord shall enter into a gross maximum price
contract with a contractor selected by Landlord (and approved by Tenant, such approval
not to be unreasonably withheld) after receiving not less than 2 competitive
bids;

 

(iv)                              The
area of the Addition shall be deemed a part of the Premises from and after
Substantial Completion (which shall have the meaning ascribed to it in Exhibit B) as the same may be
accelerated by reason of Tenant Delay (as defined in Exhibit B)
of the Addition.  Upon Substantial
Completion, the Basic Rent, Tenant’s Pro Rata Share and provisions
regarding Additional Rent shall be appropriately adjusted.

 

(v)                                 Upon
exercise by Tenant of the right above set forth, Landlord and Tenant shall
enter into an amendment of the Lease to incorporate the foregoing provisions
and others as deemed necessary.  If
Landlord and Tenant do not enter into a fully executed amendment to this Lease
within 30 days after Tenant gives notice to Landlord of the exercise of its
aforesaid right, then this right shall lapse and be of no further effect;

 

(vi)                              The
right to have the Addition constructed shall automatically terminate and become
null, void and of no force and effect upon the earlier to occur of (1) the
expiration or termination of the Lease by Landlord or pursuant to law, or (2) the
termination or surrender of Tenant’s right to possession of the Premises.

 

[Signature page to follow]

 

28

 

IN WITNESS WHEREOF,
the parties hereto have caused this instrument to be executed in quadruplicate
under seal as of the date first above written.

 

	
  Signed, Sealed, and Delivered

  	
   

  
	
  in the Presence of:

  	
  Landlord:

  
	
   

  	
   

  
	
   

  	
  WE 10 SOUTHGATE LLC

  
	
   

  	
  By:

  	
  Winstanley Enterprises LLC

  
	
   

  	
   

  	
  Its Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Denise Dende

  	
   

  	
   

  	
  By:

  	
  /s/ Adam D. Winstanley

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its Manager

  
	
  Denise Dende

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Tenant:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BINAX, INC.

  
	
   

  	
   

  
	
    /s/ Andrew C. Wilkinson

  	
   

  	
   

  	
  By:

  	
  /s/ Roger N. Piasio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its President/CEO

  
	
  Controller

  	
   

  	
   

  
									

 

29

 

Exhibit A

 

Legal Description of Premises

 

 

EXHIBIT A – PROPERTY DESCRIPTION

 

Parcel 1:

 

A certain lot or parcel of land, situated northerly and easterly of
Southgate Road, so called in the Town of Scarborough, County of Cumberland,
State of Maine, being shown as Parcel 1 on a plan entitled “ALTA/ACSM Land
Title Survey of the Enterprise Center Lot, 10 Southgate Road, Scarborough,
Maine” for WE 10 Southgate, LLC, Concord, Massachusetts, dated October 6,
2003 by Sebago Technics, Inc. Westbrook, Maine, STI File NO 03361,
hereinafter referred as “the plan”;  said
Parcel being more particularly bounded and described as follows:

 

BEGINNING at a found 5/8 inch rear in the northerly sideline of
Southgate Road at the southwesterly corner of land now or formerly of Fair
Terminal Corp. as described in a deed recorded in the Cumberland County
Registry of Deeds in Book 11533, Page 107;

 

Thence N 80° 49’ 56” W, by and along the northerly sideline of
Southgate Road, a distance of 135.84 feet to a found concrete monument as shown
on said plan;

 

Thence N 70° 52’ 26” W, continuing by and along the northerly sideline
of Southgate Road, a distance of 119.09 feet to a found iron pipe;

 

Thence N 70° 52’ 26” W, by and along the northerly sideline of
Southgate Road, a distance of 246.26 feet to a point;

 

Thence N 28° 45’ 43” W, by and along the northerly sideline of
Southgate Road, a distance of 154.61 feet to a found concrete monument in the
easterly sideline of Southgate Road as shown on the plan;

 

Thence N 18° 01’ 44” E, by and along the easterly sideline of Southgate
Road, a distance of 292.58 feet to a point;

 

Thence N 71° 26’ 47” E, by and along the easterly sideline of Southgate
Rod, a distance of 76.7 feet to a point at the southwesterly corner of land now
or formerly of James Reed Revocable Trust by a deed recorded in Book 12777, Page 40;

 

Thence N 71° 26’ 47” E, by and along the southerly line of said James
Reed, a distance of 369.02 feet to a found iron pipe as shown on the plan of
the southeasterly corner of said Reed and the southwesterly corner of said Fair
Terminal Corp.;

 

Thence S 72° 08’ 21” E, by and along the southerly line of Fair
Terminal Corp., a distance of 151.29 feet to a found granite monument as shown
on the plan;

 

Thence S 09° 02’ 00” W, by and along the westerly line of Fair Terminal
Corp. a distance of 658.69 feet to the point of beginning.

 

 

Exhibit A-1

 

Floor Plan of Premises

 

[Omitted]

 

 

Exhibit B

 

Work Letter For Landlord’s Work

 

I.                                         ALTERATIONS AND ALLOWANCE.

 

A.                                   Upon
the full and final execution of this Lease, Landlord shall commence and
thereafter diligently prosecute to completion in a good and workmanlike manner
certain alterations and improvements to the Premises (the “Tenant Improvement
Work”).  Notwithstanding the foregoing,
the Tenant Improvement Work may not be commenced and performed in the Premises
unless and until Landlord and Tenant approve the final plans for the same.  Simultaneous with the execution of the Lease,
Landlord shall, at Tenant’s expense, retain an architect and engineer to
prepare complete construction drawings, plans and specifications for the Tenant
Improvement Work, in form and substance suitable and adequate for submission,
if necessary, to the appropriate government authority(ies) for approval and in
a form reasonably satisfactory to the Tenant and Landlord.  The architect and Tenant shall be responsible
for elements of the design relating to functionality of design, the configuration
of the Premises, coordination and installation of Tenant security systems,
telecommunications wiring and cable, and the placement of Tenant’s furniture,
appliances and equipment. 
Notwithstanding the delineation of the architect’s scope of work,
Landlord is not required to perform work beyond that shown on the Tenant
Improvement Plans.  The architect
preparing the plans shall be responsible for the structural integrity of the
design and compliance with law.  The
architect shall cause the plans and drawings to be submitted to Landlord and
Tenant for approval.  Landlord’s approval
of Tenant’s plans and specifications shall in no event relieve Tenant and
architect of the responsibility for such design.  All plans and specifications shall be
prepared in accordance with the capacities of the Building allocated to the
Premises and not exceed those capacities. 
The completed construction drawings, plans and specifications, as
approved by Landlord and Tenant, are sometimes referred to herein as the Tenant
Improvement Plans.  Landlord and Tenant
shall use commercially reasonable efforts to finalize the Tenant Improvement
Plans as soon as possible and not later than October 1, 2004.  In the event the Tenant Improvement Plans are
not completed by October 1, 2004, then for each day of delay, the March 1
and May 1 dates set forth below shall be pushed back on a day for day
basis.  Landlord and Tenant specifically
acknowledge and agree that the architect shall act as Tenant’s representative
with respect to work performed by any and all contractors and subcontractors
retained by Landlord in connection with the Tenant Improvement Plans; provided
however that (i) any notice given to the architect is simultaneously given
to Tenant and (ii) Tenant shall have the right to attend all meetings and
participate in all decisions to be made by Tenant.

 

Plans and specifications required to be approved by Landlord or Tenant
shall be approved or returned with comments by Landlord or Tenant within five (5) business
days of delivery by the architect of such plans and specifications; the failure
by the party owing a response within such period shall be deemed approval.  Landlord’s approval of plans and
specifications will not be unreasonably conditioned or withheld.

 

B.                                     Landlord
shall permit Tenant to deviate from the Building Standards (defined herein) of
the Building for the Tenant Improvement Work; provided that (a) the
deviations shall not be of a lesser quality than the standards; (b) the
deviations conform to applicable governmental regulations; (c) the
deviations do not require base Building services or systems to deviate from any
specifications of the Building provided by Landlord nor beyond the level
normally provided to other tenants in the Building and do not overload the
floors; (d) Landlord has determined in its reasonable discretion that the
deviations are of a nature and quality that are consistent with the overall
objectives of the Landlord for the Building;

 

 

and (e) Tenant pays all costs associated with or arising from the
deviation from Building Standards (as defined below).

 

C.                                     (i)                                     Landlord,
at Tenant’s sole cost and expense, shall, if necessary, submit the Tenant
Improvement Plans to the appropriate governmental authority(ies) for approval
and the issuance of necessary building and other permits (the “Permits”).  Landlord, with Tenant’s cooperation, shall
cause to be made any changes in the plans and specifications necessary to
obtain the Permits.  After the final
approval of the Tenant Improvement Plans by the appropriate governmental
authorities, no further changes to the Tenant Improvement Plans may be made
without the prior written approval from both Landlord and Tenant.

 

(ii)                                  Notwithstanding
the foregoing, Landlord shall not be expected nor required to obtain any
permits or approvals relating to any back-up generator or Tenant’s permitted
use of the Premises.  Tenant shall be
solely responsible for obtaining, at its sole cost and expense, all permits and
approvals necessary or appropriate for the conduct of its business, operation
of its property and equipment and use of the Premises.  Landlord shall be responsible, at its sole
cost and expense, for obtaining the necessary building permit(s) for the
construction of the Tenant Improvement Work and any temporary and/or permanent
certificate(s) of occupancy issued upon completion of the Tenant Improvement
Work.  The cost of such permits and
certificates shall be paid from the Allowance or by Tenant.  Tenant agrees to cooperate with and assist
Landlord in obtaining the building permit(s) and Certificates of Occupancy.

 

II.                                     CONSTRUCTION OF INITIAL ALTERATIONS.

 

A.                                   Upon
completion of the Improvement Plans, Landlord shall enter into a gross maximum
price construction contract with a contractor approved by Landlord and Tenant
(such approval not to be unreasonably withheld or delayed) as the construction
manager and contractor for the construction of the Tenant Improvement
Work.  Landlord shall obtain at least 3
bids from contractors and shall include Tenant in the review of bids.  Landlord shall also ask for Tenant’s input in
the selection of bidders.  Landlord shall
use its best efforts to cause the construction contract to provide for
penalties in the event the contractor fails to complete construction of the
Tenant Improvement Work by March 1, 2005 for reasons other than events of
force majeure and subject to adjustment based on approved change orders.  Landlord shall supervise the completion of
the Tenant Improvement Work and shall use due diligence to secure Substantial
Completion (as defined below) of the Tenant Improvement Work by March 1,
2005.  Landlord and the contractor shall
notify the architect and Tenant of all construction meetings and shall permit
the architect and Tenant to attend and participate in construction meetings.  Landlord shall not be liable for any direct
or indirect costs, expenses or damages as a result of delays in construction
caused by Tenant Delays (as defined below) or due to event(s) of Force Majeure.

 

B.                                     Landlord
shall cause the Tenant Improvement Work to be performed using building standard
materials, quantities and procedures then in use by Landlord in the Building (“Building
Standard”), except as may be stated or shown otherwise in the Tenant
Improvement Plans.

 

III.                                 PAYMENT OF COST OF THE INITIAL ALTERATIONS.

 

12.                                 Landlord shall
contribute a fixed allowance of $5.00 per rentable square foot to be applied to
the HVAC Work to be done as part of the Tenant Improvement Work.  In addition, Landlord agrees to contribute,
at Tenant’s discretion, the sum of up to $30.00 per rentable square foot toward
the cost of the Tenant Improvement Work (the “Allowance”).  In the event the cost of the Tenant
Improvement Work and the fees of the architect and engineer exceeds the
Allowance or if Tenant elects not to utilize all or any

 

 

part of the Allowance, Tenant shall fund such costs (the “Tenant
Construction Cost”) to complete the Tenant Improvement Work.  Tenant shall pay the amount of the Tenant
Construction Cost in the following manner: 
Landlord shall submit to Tenant, from time to time, but not more often
than once a month, the following:  an
application for payment, which shall be signed by general contractor and
approved by the architect as Tenant’s representative.  Landlord shall also submit a copy of a
receipted invoice or other evidence reasonably satisfactory to Tenant of the
payment by Landlord (to the extent paid by Tenant) of the prior month’s
application for payment.  To the extent
that Tenant wishes to have an architect other than the architect retained by
Tenant as hereinabove provided, or other representative of Tenant, inspect and
review the work performed by Landlord, then Tenant shall be permitted to do
so.  In the event Tenant’s architect or
representative does not approve of the work performed, then Tenant may dispute
a portion of the request for the disbursement, as set forth below.  Tenant agrees that it will pay the undisputed
amount of the requisition within 7 days.

 

Tenant acknowledges that the amount of the Allowance funded by Landlord
under this Work Letter has been amortized over the initial Term of this Lease
(with interest at 10% and included in the Basic Rent set forth above).  If Tenant utilizes less than the entirety of
the Allowance, the Basic Rent for the initial Term shall be decreased by an
amount determined by amortizing the difference between the available Allowance
amount of $30.00 per rentable square foot and the amount of the Allowance
expended by Landlord over the initial Term (including interest at the rate of
10% per annum).  Landlord and Tenant
shall execute an amendment to evidence such decrease.

 

If Tenant fails to deliver the requisitioned amount within said 7 day
period, and if the Tenant has not given Landlord written notice that it
disputes any portion of the request for disbursement, then the Landlord shall
give written notice to Tenant of such failure. 
If Tenant continues to fail to pay any undisputed portion of the same or
give notice that the full requisitioned amount is in dispute within 3 business
days after receipt of such notice, Tenant shall be in default of its
obligations under this Lease and, without limiting Landlord’s remedies
hereunder, Landlord may cease performance of the Tenant Improvement Work,
unless all pending requisitions (to the extent not in dispute) are paid.  In the event Tenant disputes any portion of
the request for disbursement, the Tenant shall disburse the amount of the
request not in dispute.  Landlord and
Tenant shall endeavor, in good faith, to resolve any dispute with regard to any
request for disbursement and the performance of the work.  To the extent that Landlord and Tenant are
unable to resolve the dispute, Landlord and Tenant shall proceed to final
binding arbitration.  The arbitration
shall proceed in Portland, Maine, according to the construction industry arbitration
rules of the American Arbitration Association.  The costs of arbitration shall be borne
equally by Landlord and Tenant except that each shall bear their own attorney’s
fees.

 

B.                                     In
connection with the construction of the Tenant Improvement Work.  Landlord and Tenant shall each bear the costs
and expenses, if any, resulting from Landlord or Tenant Delays,
respectively.  All such costs shall be
paid by the responsible party within ten (10) Business Days of delivery of
an invoice herefore, together with back-up documentation setting forth such
Landlord or Tenant Delay, as the case may be, in reasonable detail.  Either party’s failure to deliver such amount
within such ten (10) day period shall constitute a default under this
Lease.

 

C.                                     Except
as otherwise set forth herein or as otherwise caused directly or indirectly by
the negligent acts or omissions of Landlord, Tenant shall be solely responsible
for and in no event shall the Landlord be responsible for security of the
Premises after completion of the Tenant Improvement Work or be require to pay
for the installation of telephone systems and data cabling or purchase of
equipment, furniture or other items of personal property of Tenant.

 

 

IV.                                 COMPLETION.

 

A.                                   The
occurrence of any one or more of the following shall constitute a “Tenant
Delay:”  (i) any delay by anyone
performing services on behalf of Tenant, other than the contractor retained by
Landlord and its employees, agents and subcontractors in connection with the
Tenant Improvement Work, that causes a delay in the construction schedule or
in the anticipated date of Substantial Completion; or (ii) Tenant’s
changes in the Tenant Improvement Plans after approval by Landlord that causes
a delay in the construction schedule or in the anticipated date of
Substantial Completion to the extent that the changes are not a result of
Landlord Delay.  There shall be no Tenant
Delay unless at least two (2) days have elapsed after notice of the Tenant
Delay has been given by Landlord.  The
occurrence of any one or more of the following shall constitute a “Landlord
Delay”:  any delay by the contractor or
anyone performing services for Landlord in connection with the Tenant
Improvement Work that causes a delay in the construction schedule or in
the anticipated date of Substantial Completion, to the extent that the changes
are not as a result of a Tenant Delay. 
There shall be no Landlord Delay unless at least two (2) days have
elapsed after notice of the Landlord Delay has been given by Tenant.

 

B.                                     Substantial
Completion of the Tenant Improvement Work shall be the later to occur of (i) the
date when the work set forth on the Tenant Improvement Plans has been
substantially completed as evidenced by a signed and sealed certification
provided by the architect of record responsible for design of the Tenant
Improvement Work and the Premises can be used for Tenant’s intended use, or (ii) if
applicable, the date when the building department or other appropriate
governmental authority having jurisdiction issues either a Certificate of
Occupancy or a Temporary Certificate of Occupancy.  The date of Substantial Completion shall not
be delayed in the event minor details of construction, mechanical adjustments
or decorations which Tenant, in its reasonable business discretion, believes
will not materially interfere with Tenant’s use and enjoyment of the Premises
remain to be performed (items normally referred to as “Punch List” items).  Landlord shall promptly complete completion
of the Punch List items within thirty (30) days subject to availability of
materials.  In the event Landlord is
entitled to a penalty from the contractor due to late delivery, Landlord shall
promptly enforce its rights to receive the penalty and Landlord shall promptly
deliver the penalty to Tenant.  In the
event the Tenant Improvement Work is not completed by May 1, 2005 for
reasons other than Tenant Delay or events of force majeure that actually cause
a delay in construction, then Tenant shall receive, in addition to any penalty
payable by the contractor, a day for day abatement of Rent for each day from
and after May 1, 2005 until the date Substantial Completion is
achieved.  The abatement shall commence
to run from the Rent Commencement Date. 
Landlord shall be responsible for all repairs and replacements to the
Premises caused by items of incomplete, defective or faulty installation or
construction of the Tenant Improvement Work occurring within twelve (12) months
after Substantial Completion or during any longer period than Landlord has the
benefit of builder’s guarantees therefore. 
Notwithstanding the foregoing, in the event of the occurrence of one or
more instances of Tenant Delay, then the date of Substantial Completion shall
be accelerated by the aggregate number of days occasioned by such instances of
Tenant Delay.  Tenant’s taking possession
of the Premises shall not relieve Landlord of its obligation to fully complete
the Tenant Improvement Work in a good and workmanlike manner and in accordance
with the Tenant Improvement Plans as the same may have been modified as set
forth herein.

 

V.                                     TENANT ACCESS.

 

Tenant shall have the right, without obligation to pay Basic Rent, to
have access to the Premises prior to the date designated in the Lease for the
Rent Commencement Date of the term of the Lease to allow Tenant to do other
work required by Tenant to make the Premises ready for Tenant’s use and

 

 

occupancy (the “Tenant’s Pre-Occupancy Work”).  It shall be a condition to the grant by
Landlord and continued effectiveness of such license that prior to entry:

 

(a)                                  Tenant
shall give to Landlord in writing in form and substance reasonably acceptable
to Landlord:  (i) a detailed
description of and schedule for Tenant’s Pre-Occupancy Work; (ii) the
names and addresses of all contractors, subcontractors and material suppliers
and all other representatives of Tenant who or which will be entering the
Premises on behalf of Tenant to perform Tenant’s Pre-Occupancy Work or will be
supplying materials for such work; (iii) copies of all contracts,
subcontracts and material purchase orders pertaining to Tenant’s Pre-Occupancy
Work; (iv) copies of all plans and specifications pertaining to Tenant’s
Pre-Occupancy Work; (v) copies of all licenses and permits required in
connection with the performance of Tenant’s Pre-Occupancy Work; (vi) certificates
of insurance (in amounts reasonably satisfactory to Landlord and with the
parties identified in, or required by, the Lease named as additional insureds,
except that worker’s compensation coverage shall name Landlord as certificate
holder) and instruments of indemnification against all claims, costs, expenses,
damages and liabilities which may arise in connection with Tenant’s Pre-Occupancy
Work.

 

(b)                                 Tenant’s
employees, agents, contractors, workmen, mechanics, suppliers and invitees
shall work in harmony and not interfere with Landlord or Landlord’s agents in
performing Tenant Improvement  Work and
any additional work in the Premises, Landlord’s work in other parts of the
Building and in common areas of the Building, or the general operation of the
Building.  If at any time any such person
representing Tenant shall cause or threaten to cause such disharmony or
interference, including labor disharmony, and Tenant fails to immediately institute
and maintain such corrective actions within seven (7) days as reasonably
directed by Landlord, then Landlord may withdraw such license upon twenty-four
(24) hours’ prior written notice to Tenant.

 

12.                                 Any such entry into
and occupancy of the Premises for Tenant’s Pre-Occupancy Work by Tenant or any
person or entity working for or on behalf of Tenant shall be deemed to be
subject to all of the terms, covenants, conditions and provisions of the Lease,
specifically including the provisions of Section 12 thereof (regarding
Tenant’s improvements and alterations to the Premises), and excluding only the
covenant to pay Rent.  Landlord shall not
be liable for any injury, loss or damage which may occur to any of Tenant’s Pre-Occupancy
Work made in or about the Premises or to property placed therein prior to the
commencement of the term of the Lease, the same being as Tenant’s sole risk and
liability, unless such damage is caused by the willful acts or negligence of
Landlord or Landlord’s agents, employees, contractors, workmen, suppliers,
consultants or representatives.  Tenant
shall be liable to Landlord for any damage to the Premises or to any portion of
the Tenant Improvement Work caused by Tenant or any of Tenant’s employees,
agents, contractors, workmen or suppliers, unless such damage is caused by the
willful acts or negligence of Landlord or Landlord’s agents, employees,
contractors, workmen, suppliers, consultants or representatives.  In the event that the performance of Tenant’s
Pre-Occupancy Work causes extra costs to Landlord, Tenant shall reimburse
Landlord for such extra cost, provided Landlord submits reasonable back-up
documentation to Tenant detailing such costs.

 

 

Exhibit C

 

Tenant’s Hazardous Materials and Wastes

 

To be provided by Tenant

 

 

Exhibit D

 

Title Matters

 

1.                                       Rights
or claims of persons in possession under leases for premises other than the
Premises.

 

2.                                       Easements or
claims of easements not shown by the public records, boundary-line disputes,
overlaps, encroachments, title to filled lands (if any) and any matters not of
record which would be disclosed by an accurate survey and inspection of the
premises.

 

3.                                       Taxes and
assessments which are not yet due and payable, and taxes for subsequent years.

 

4.                                       Waterline
easement granted to Portland Water District in an instrument dated April 29,
1960 and recorded in Book 2535, Page 431.

 

5.                                       Flowage easement
granted to the State of Maine in an instrument dated October 30, 1962 and
recorded in Book 2719, Page 331.

 

6.                                       Slope and
drainage easements set forth in deed from SLM Realty, Inc. to Scarborough
Industrial Corp. dated June 16, 1970 and recorded in Book 3139, Page 135,
and to the Town of Scarborough dated June 15, 1970, recorded in
Book 3139, Page 129.

 

7.                                       Slope easements
granted to the Town of Scarborough in an instrument dated June 30, 1970
and recorded in Book 3139, Page 132. 
Only slope easement No. 2 affects the premises.

 

8.                                       Rights and
easements granted to New England Telephone and Telegraph and Central Maine
Power Company in an instrument dated September 1, 1987 and recorded in Book 8352,
Page 317, and dated December 17, 1993, recorded in Book 11214, Page 169.

 

9.                                       Such state of
facts as shown or depicted on unrecorded plan entitled ALTA/ACSM Land Title
Survey of the Enterprise Center Lot for WE 10 Southgate, LLC by Daniel R.
Laflin, PLS #2188, Sebago Technics, dated October 6, 2003 revised
through November 13, 2003, including, but not limited to, apparent
encroachment of building located on Parcel No. 1 into slope easement area;
apparent encroachment of over head utility line over land of northerly abutter,
Reed; and apparent encroachment onto the insured premises Parcel No. 1 by
paved and gravel parking area belonging to easterly abutter, Fair Terminal
Corp.

 

10.                                 Mortgages, assignments
of leases and rentals and financing statements (to the extent being assumed by
Tenant for purposes of Section 40).

 

11.                                 Easements granted for
utilities serving the Property.

 

12.                                 Other encumbrances
approved by Landlord and Tenant.

 

 

Exhibit E

 

Brokerage Commission Schedule from
CBRE/The Boulos Company

 

[Omitted]

 

 

Exhibit F

 

Location of Right of First Offer Space

 

[Omitted]

 

 

Exhibit G

 

Purchase Price Schedule

 

	
  Purchase
  Price Schedule

  	
   

  	
   

  	
   

  	
   

  
	
  10
  Southgate Road

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Project
  SF:  87,414

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  NOI

  	
   

  	
   

  
	
  Years
  1 & 3 Purchase

  	
   

  	
   

  	
   

  	
   

  
	
  Binax
  (81,158 SF X $7.50 NNN)

  	
   

  	
  $

  	
  608,685

  	
   

  	
   

  
	
  Miane
  Molecular (6,256 SF X $6.00 NNN)

  	
  $

  	
  37,536

  	
   

  	
   

  
	
  Yrs
  1-3 NOI

  	
   

  	
   

  	
  $

  	
  646,221

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NOI
  $646,221/9.5% Cap Value =

  	
  $

  	
  6,802,326

  	
   

  	
   

  

 

	
  *At
  the end of year (1) we have assumed

  	
   

  	
   

  	
   

  
	
  than
  Binax has absorbed the Furniture

  	
   

  	
   

  	
   

  
	
  Showplace
  space (the Right of First Refusal Space per Section 39 of the lease)

  	
   

  

 

	
  Year
  7 Purchase

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Binax
  (81,158 SF X $8.25 NNN)

  	
   

  	
  $

  	
  669,554

  	
   

  	
   

  
	
  Maine
  Molecular (6,256 SF X $6.75 NNN)

  	
  $

  	
  42,228

  	
   

  	
   

  
	
  Year
  7 NOI

  	
   

  	
   

  	
  $

  	
  711,782

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NOI
  $711,782/9.5% Cap Value =

  	
  $

  	
  7,492,437

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Scenario
  1:  Based on 64,158

  sf

  	
   

  	
   

  	
   

  	
  Unamoritzed Tenant

  Improvements

  	
   

  	
  Total Purchase

  Price

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year
  1 Value

  	
   

  	
   

  	
  $

  	
  6,802,326

  	
   

  	
  $

  	
  1,724,778

  	
   

  	
  $

  	
  8,527,105

  	
   

  	
   

  
	
  Year
  3 Value

  	
   

  	
   

  	
  $

  	
  6,802,326

  	
   

  	
  $

  	
  1,259,847

  	
   

  	
  $

  	
  8,062,173

  	
   

  	
   

  
	
  Year
  7 Value

  	
   

  	
   

  	
  $

  	
  7,492,437

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  7,492,437

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note:  This analysis does not reflect any
  amortized tenant improvement dollars 

  	
   

  	
   

  	
   

  	
   

  
	
  on
  the Furniture Showplace space (appox 17,000sf) — the Right of First Refusal
  Space.Exhibit
10.8

 

CONFIDENTIAL TREATMENT
REQUESTED AS TO CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT 10.8 AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

MANUFACTURING SUPPORT SERVICES AGREEMENT

 

dated as of June 30, 2005

 

by and among

 

ABBOTT JAPAN CO., LTD.

 

(“Abbott Japan”);

 

ABBOTT LABORATORIES

 

(“Abbott Laboratories”);

 

INVERNESS MEDICAL INNOVATIONS, INC.

 

(“Parent”);

 

INVERNESS MEDICAL SWITZERLAND GmbH

 

(“Inverness Switzerland”);

 

and

 

INVERNESS MEDICAL JAPAN, LTD.

 

(“Inverness Japan”)

 

 

TABLE OF CONTENTS

 

	
  Article 1

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Performance of
  Obligations by Affiliates

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 2

  	
  MANUFACTURING

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Manufacturing
  of Products

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Manufacturing
  Services

  	
   

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Raw Materials

  	
   

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Import of Raw
  Materials

  	
   

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Testing

  	
   

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Storage

  	
   

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  Product
  Changes

  	
   

  
	
   

  	
   

  	
   

  
	
  2.8

  	
  Expiration
  Dating

  	
   

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  Certificate of
  Conformance

  	
   

  
	
   

  	
   

  	
   

  
	
  2.10

  	
  Product
  Branding

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 3

  	
  OCCUPANCY FEE AND OTHER CHARGES

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Occupancy Fee

  	
   

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Reimbursement
  of Variances

  	
   

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Payment of
  Material Cost Component of Inventory

  	
   

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  No Security
  Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  Reasonable
  Access and Dispute Procedures

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 4

  	
  TRANSITION SERVICES

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Transition
  Services

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 5

  	
  HUMANITARIAN PROGRAM

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Supply of
  Products for the Humanitarian Program

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Ordering
  Procedure

  	
   

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Forecasts

  	
   

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Reporting

  	
   

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Purchase Price

  	
   

  

 

 

	
  5.6

  	
  Failure to
  Provide

  	
   

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Right of First
  Negotiation and Right of First Refusal

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 6

  	
  REGULATORY COMPLIANCE AND MEDICAL
  COMPLAINTS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Representatives

  	
   

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Regulatory
  Compliance

  	
   

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Quality
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  Procedure for
  Adverse Information

  	
   

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  Reagents

  	
   

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  Transfer
  Program

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 7

  	
  PRODUCT ACTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Product
  Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Administration
  of Product Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 8

  	
  PATENTS AND TRADEMARKS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Buyer
  Trademarks

  	
   

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Seller
  Trademarks

  	
   

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Patent
  Infringement Defense

  	
   

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  Cooperation

  	
   

  
	
   

  	
   

  	
   

  
	
  8.5

  	
  Covenant to
  Use Commercially Reasonable Efforts to Secure Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 9

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Product
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Product Replacement

  	
   

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  General
  Representation and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  Limitation of
  Representation and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 10

  	
  GENERAL INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Inverness
  Japan’s Indemnification of Abbott Japan

  	
   

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Abbott Japan Indemnification of Inverness
  Japan

  	
   

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Indemnification Procedures

  	
   

  
	
   

  	
   

  	
   

  
	
  10.4

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  10.5

  	
  Limitation of Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  10.6

  	
  Sunset Provision

  	
   

  

 

ii

 

	
  Article 11

  	
  TERM AND TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Term

  	
   

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  Early Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  Termination for Cause

  	
   

  
	
   

  	
   

  	
   

  
	
  11.4

  	
  Accrued Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  11.5

  	
  Additional Remedies for Breach

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 12

  	
  CONSEQUENCES OF TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Confidential Information Return

  	
   

  
	
   

  	
   

  	
   

  
	
  12.2

  	
  Transfer of Raw Materials and Products

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 13

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Guarantee of Performance

  	
   

  
	
   

  	
   

  	
   

  
	
  13.2

  	
  Force Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  13.3

  	
  Relationship of the Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  13.4

  	
  Assignment

  	
   

  
	
   

  	
   

  	
   

  
	
  13.5

  	
  Public Disclosure; Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  13.6

  	
  Binding Effect

  	
   

  
	
   

  	
   

  	
   

  
	
  13.7

  	
  Entire Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  13.8

  	
  Compliance with Applicable Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  13.9

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  13.10

  	
  Dispute Resolution

  	
   

  
	
   

  	
   

  	
   

  
	
  13.11

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  13.12

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  13.13

  	
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  13.14

  	
  Waiver or Modification of Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  13.15

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  13.16

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  13.17

  	
  Mutual Drafting

  	
   

  
	
   

  	
   

  	
   

  
	
  13.18

  	
  Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  13.19

  	
  No Third Party Beneficiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  13.20

  	
  Conflicts

  	
   

  
	
   

  	
   

  	
   

  
	
  13.21

  	
  Headings

  	
   

  

 

iii

 

Exhibits and Schedules

 

	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  A

  	
  –

  	
  Activities
  of Buyer

  
	
  Exhibit
  B

  	
   

  	
  Manufacturing
  Support Services

  
	
  Exhibit C

  	
  –

  	
  Transition
  Services

  
	
  Exhibit D

  	
  –

  	
  Standard
  Labor and Overhead Cost and Standard Material Cost

  
	
  Exhibit E

  	
  –

  	
  Quality Agreement

  
	
  Exhibit F

  	
  –

  	
  Final Transition Services

  
	
   

  	
   

  	
   

  
	
  Schedules

  
	
   

  
	
  Schedule 1.1(a)

  	
   

  	
  –

  	
  Adjusted Price per Unit

  
	
  Schedule 1.1(b)

  	
   

  	
  –

  	
  Product Specifications

  

 

 

MANUFACTURING SUPPORT SERVICES AGREEMENT

 

THIS MANUFACTURING SUPPORT SERVICES AGREEMENT
(this “Agreement”) is made this 30th day of June 2005 (the “Effective
Date”), by and among Abbott Japan Co., Ltd., a Japanese corporation (“Abbott
Japan”); and Abbott Laboratories, an Illinois corporation (“Abbott
Laboratories” and together with Abbott Japan, “Seller”), on the one
hand, and Inverness Medical Innovations, Inc., a Delaware corporation (“Parent”);
Inverness Medical Switzerland GmbH, an entity organized under the laws of
Switzerland (“Inverness Switzerland”) and Inverness Medical Japan, Ltd.,
an entity organized under the laws of Japan (“Inverness Japan” and,
together with Parent and Inverness Switzerland, “Buyer”), on the other
hand.

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS,
Seller, Abbott Cardiovascular and Buyer have executed an asset purchase
agreement, pursuant to which Seller shall sell and assign to Buyer, and Buyer
shall purchase and assume from Seller, certain assets and liabilities relating
to the design, development, manufacturing, registration, marketing,
distribution and sale of the Product Line (the “Asset Purchase Agreement”);

 

WHEREAS, in
accordance with the Asset Purchase Agreement, at the Closing Abbott Japan shall
transfer the Japanese Employees dedicated to the manufacturing of the Product
Line and the Equipment to Inverness Japan;

 

WHEREAS, due
to the requirements of the regulatory Laws of Japan and for other commercial reasons,
Inverness Japan cannot be the responsible legal entity for the manufacturing of
the Product Line as of the Closing Date; and

 

WHEREAS, in
order to facilitate a smooth transition of the manufacturing of the Products at
a different manufacturing location within a reasonable time period, Abbott
Japan is willing to continue to be the responsible entity under the terms of
the Manufacturing Site License and to perform certain manufacturing support
services and transition services for Inverness Japan.

 

NOW THEREFORE,
in consideration of the mutual covenants and agreements contained herein, and
upon the terms and subject to the conditions set forth below, Seller and Buyer
hereby agree as follows:

 

 

ARTICLE
1

DEFINITIONS

 

1.1           Definitions.  All capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the Asset Purchase
Agreement.  The following words and
phrases, when used herein with initial capital letters, shall have the meanings
set forth or referenced below:

 

“Additional
Term” has the meaning set forth in Section 11.1.

 

“Adjusted
Price per Unit” means the price per unit set forth in Schedule 1.1(a)
as adjusted annually by the CPI.

 

“Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
such Person; provided, however, that for the avoidance of doubt
and subject to the following sentence, the term “Affiliate” shall exclude, with
respect to Abbott Japan, TAP Pharmaceuticals Inc., a Delaware corporation, TAP
Finance Inc., a Delaware corporation and TAP Pharmaceuticals Products Inc., a
Delaware corporation and, with respect to Buyer, PBM-Selfcare LLC, a Delaware
limited liability company.  For purposes
of this definition, a Person shall be deemed to control another Person if it
owns or controls more than 50% of the voting equity of the other Person (or
other comparable ownership if the Person is not a corporation).

 

“Alternative
Product” means the design, development, manufacturing, registration,
marketing, distribution and sale of single use disposable test strips to test
for Additional Assay Capabilities.

 

“Applicable
Law” means each provision of any currently existing federal, state, local
or foreign, civil and criminal law, statute, ordinance, order, code, rule,
regulation or common law, promulgated or issued by any Governmental Authority,
as well as any judgments, decrees, injunctions or agreements issued or entered
into by any Governmental Authority.

 

“Business
Day” means any day other than a day, which is Saturday or Sunday, or other
day on which commercial banks in Tokyo, Japan are authorized or required to
remain closed.

 

“Buyer
Intellectual Property Rights” means all Intellectual Property Rights and
other information used to conduct the manufacturing of the Products and the
Distribution Activities which are owned or licensed by, or to which Buyer
otherwise has rights, as well as all know-how and trade secrets relating to the
use, sale or importation of the Products.

 

3

 

“Buyer
Trademarks” means Buyer’s trademarks, trade names, service marks and logos
and all derivations of the foregoing, including Buyer’s proprietary
designations for the Products.

 

“cGMP”
means the manufacture of the Products in accordance with the quality systems
and good manufacturing practices for medical devices required by the Regulatory
Authority in which the Manufacturing Facility is located.

 

“Claims”
has the meaning set forth in Section 10.1.

 

“CPI”
means the yearly average Consumer Price Index (CPI) published by the Ministry
of Internal Affairs and Communications of Japan in December of each calendar
year.

 

“Defective
Products” has the meaning set forth in Section 9.2.

 

“Field
Correction”  has the meaning set
forth in Section 7.1.

 

“HIV
Alternative Product” means the design, development, manufacturing,
registration, marketing, distribution and sale of single use disposable test
strips that test for HIV 1-2 along with new strains of HIV not tested by the
Products as of the Closing Date.

 

“Humanitarian
Program” means (i) a sale or donation of Determine® HIV 1-2 or,
subject to the provisions of Sections 2.9 and 2.10 of the Supply of Products
for the Humanitarian Program Agreement and Sections 5.6 and 5.7, any
similar test products that operate in a Rapid Manner for the detection of any
infectious diseases (including HIV and hepatitis) in any of the Least Developed
Countries for humanitarian purposes by Seller and its Affiliates provided
that such product is not bundled with other products of Seller and its
Affiliates other than for humanitarian purposes or sold as a loss leader or as
an inducement to purchase other products of Seller and its Affiliates, or (ii)
any research and development conducted by Seller, an Affiliate of Seller or any
other Person relating to the operation of test products that operate in a Rapid
Manner for the detection of infectious diseases (including HIV and hepatitis)
for use in any of the Least Developed Countries, in each case as part of the
Global Care Initiatives and HIV surveillance programs of Seller and its
Affiliates.  Notwithstanding the
foregoing, for the period from the Closing Date through the 5th anniversary of
the Closing Date (or, if not enforceable in any country for such period or for
any other reason, for the period or otherwise to the maximum extent as shall be
enforceable in such country), Seller and its Affiliates shall not engage in any
filing or submission necessary or appropriate to obtain any technical, medical,
scientific, labeling or similar license, registration, authorization, permit or
approval for the Products outside the Least Developed Countries under the
Humanitarian Program.

 

4

 

“Initial
Term” has the meaning set forth in Section 11.1.

 

“Intellectual Property Rights” means
all US and foreign invention disclosures, patents, pending patent applications,
including all continuations, continuations-in-part, divisions, reissues,
reexaminations, additions, substitutions, extensions, whether US or foreign,
including all registrations, pending applications or common law rights, whether
US or foreign equivalents, all trademarks, all trade names and trade dress, and
all copyrights, all works of authorship, all trade secrets and all know-how
whether or not registered and all inventions.

 

“Line 2
Equipment” means that equipment on any second line of manufacture which
Inverness Japan adds to its manufacturing plant dedicated to the manufacture of
the Products following the Closing Date.

 

“Manufacturing
Facility” means the approximately 19,250 square feet of primary space
located in Abbott Japan’s MP II manufacturing facility in Matsudo.

 

“Manufacturing
Support Services”  has the meaning
set forth in Section 2.2.

 

“Material
Cost Component of Inventory” means the value of units of inventory on-hand,
used in production or sold, multiplied by the standard cost of its component
raw materials, labels and packaging materials valued at the standard as per the
BPCS system in Matsudo, Japan as of December 1, 2004; provided, however,
that during the Term, Seller and its Affiliates shall supply Reagents at a
price equal to the **** Costs per unit plus ****%.

 

“Occupancy
Fee” has the meaning set forth in Section 3.1.

 

“Party”
means Abbott Laboratories, Abbott Japan, Parent, Inverness Switzerland or
Inverness Japan; and “Parties” means Abbott Laboratories, Abbott Japan,
Parent, Inverness Switzerland and Inverness Japan.

 

“Product
Action” has the meaning set forth in Section 7.1.

 

“Products”
means those products identified on Schedule 1.1(p) of the Asset Purchase
Agreement (and for the avoidance of doubt does not mean specific units
thereof).

 

“Product
Specifications” means those product, labeling and performance specifications
for the Products set forth on Schedule 1.1(b), as they may be
amended from time to time (i) by the written agreement of the Parties or (ii)
as required by the Regulatory Authorities.

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

5

 

“Prohibited
Goods” has the meaning set forth in Section 6.5(a).

 

“Purchase
Price” has the meaning set forth in Section 5.5.

 

“Quality
Agreement” has the meaning set forth in Section 6.3.

 

“Reagent”
has the meaning set forth in the Reagent Supply Agreement.

 

“Recall”
has the meaning set forth in Section 7.1.

 

“Regulatory
Approval” means the applicable Regulatory Authority’s approvals,
submissions and recordings of the Products and Product registrations required
to sell such Product in such place.

 

“Regulatory
Authority” means any Governmental Authority that is responsible for issuing
any technical, medical, and scientific licenses, registrations, authorizations
and/or approval that are required for the manufacture, assembly, labeling,
packaging, handling, quality control and storing of the Products in accordance
with Applicable Laws.

 

“Report”
has the meaning set forth in Section 5.4.

 

“Right of
First Negotiation” means the obligation of Abbott Laboratories to enter
into good faith negotiations with Parent with respect to Buyer’s manufacture of
the Alternative Product or HIV Alternative Product upon terms and conditions
reasonably acceptable to both parties.

 

“**** Cost”
means the portion of Products that consists of the **** cost valued at the
standard per the BPCS system in Matsudo, Japan as of December 1, 2004 as listed
in Exhibit D.

 

“**** Cost”
means the portion of Products that consists of the ****costs valued at the
standard per the BPCS system in Matsudo, Japan as of December 1, 2004 as listed
in Exhibit D.

 

“Term”
has the meaning set forth in Section 11.1.

 

“Transition
Services” has the meaning set forth in Section 4.1.

 

“Variances”
means variances, which may be positive or negative, related to the Material
Cost Component of Inventory used in production or sold, including purchase
price variances,

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

6

 

yield variances and material
usage variances generated from the purchase of inventory or during the
production for each month of the Term and inventory loss due to obsolescence,
damage, loss or theft at the Manufacturing Facility, unless such loss is due to
Abbott Japan’s gross negligence, recklessness or willful misconduct.

 

“Warranty
Period” has the meaning set forth in Section 9.1(b).

 

1.2           Performance
of Obligations by Affiliates.  Any
obligation of Abbott Japan under or pursuant to this Agreement may be
satisfied, met or fulfilled, in whole or in part, at Abbott Japan’s sole and
exclusive option, either by Abbott Japan directly or by any Affiliate or
designee of Abbott Japan that Abbott Japan causes to satisfy, meet or fulfill
such obligation, in whole or in part. 
The obligations of any Buyer under or pursuant to this Agreement may be satisfied,
met or fulfilled, in whole or in part, at Buyer’s sole and exclusive option,
either by Buyer directly or by any Affiliate or designee of Buyer that Buyer
causes to satisfy, meet or fulfill such obligation, in whole or in part.  With respect to any particular action, the
use of the words “Abbott Japan shall” also means “Abbott Japan shall cause” the
particular action to be performed, and the use of the words “Buyer shall” also
means “Buyer shall cause” the particular action to be performed.  Each of the Parties guarantees the
performance of all actions, agreements and obligations to be performed by any
Affiliates of such Party under the terms and conditions of this Agreement.

 

ARTICLE 2

MANUFACTURING

 

2.1           Manufacturing
of Products.  During the Term,
subject to the provisions of Section 6.2, Inverness Japan shall be
responsible for (i) the manufacture, safety testing, quality, packaging and
labeling of the Products, (ii) any product liability arising from the
manufacture of the Products, and (iii) all other activities identified in Exhibit
A.  The Products shall be
manufactured at the Manufacturing Facility using the Equipment owned by Buyer
and the services of the Japanese Employees in accordance with the provisions of
the Master Secondment Agreement.  The
Products shall be manufactured at all times in full compliance with Applicable
Laws, cGMPs, Product Specifications and any other applicable requirements of
the Regulatory Authorities and shall maintain all records as are necessary and
appropriate to demonstrate full compliance with the foregoing.

 

2.2           Manufacturing
Services.  During the Term, in
accordance with the reasonable instructions of Inverness Japan, Abbott Japan
shall provide to Inverness Japan the manufacturing support services identified
in Exhibit B hereto (the “Manufacturing Support Services”).  Abbott Japan shall exercise commercially
reasonable efforts in providing the Manufacturing Support

 

7

 

Services in a
professional and workmanlike manner at a level of quality and commitment at
least equal to that employed by Abbott Japan in performing such Manufacturing
Support Services before the Closing Date.

 

2.3           Raw
Materials.  The Products shall be
manufactured at the Manufacturing Facility using raw materials (including
Reagents), packaging and labels owned and ordered by Abbott Japan from third
parties and/or its Affiliates on behalf of and as directed by Inverness Japan; provided,
however, that Inverness Japan shall only direct Abbott Japan to order
such raw materials, packing and labels to be used for the purpose of
manufacturing the Products and provided, further, unless
Inverness Japan agrees to advance Abbott Japan the amounts required to fund
such orders, Abbott Japan shall only be required to order and own such
quantities of raw materials, packaging and labels that are reasonably required
to support production of the Products in the Ordinary Course of Business.  For the avoidance of doubt, Inverness Japan
shall have the sole responsibility for determining the amount and timing of
ordering raw materials, packaging and labels. 
Any such raw materials, packaging and labels shall comply with the
quality standards for such raw materials, packaging and labels as specified by
Inverness Japan.

 

2.4           Import
of Raw Materials.  Abbott Japan shall
obtain any and all import certificates or similar permits required to import
any raw materials (including Reagents), packaging and labels used by Buyer in
providing the Products.  Abbott Japan
shall act as the representative of Buyer for the completion and filing of the
documentation relating to such importation with the appropriate administrative
agencies and warehousing firms.  Abbott
Japan shall pay any Taxes and other governmental charges (including, without limitation,
Taxes, customs duties, customs brokerage fees, and similar charges) applicable
to the import of such raw materials, and Inverness Japan shall promptly
reimburse Abbott Japan for such charges; provided, however, that
no such charges which are reimbursed in accordance with this sentence shall be
included in any additional cost (e.g.,
cost of materials incurred) paid by or charged to Inverness Japan.

 

2.5           Testing.  At any time during the Term, Abbott Japan may
inspect and test, or cause to be inspected and tested, any of the lots of
Products for conformity to the Product Specifications and in accordance with
Abbott Japan’s normal quality assurance procedures.

 

2.6           Storage.  Abbott Japan shall provide warehousing space
for the raw materials, packaging, labels and the finished Products ordered by
Abbott Japan on behalf of, and as directed by Inverness Japan, in accordance
with this Agreement.

 

8

 

2.7           Product
Changes.  Inverness Japan shall
notify Abbott Japan in writing of any proposed changes in the Product
Specifications (including final product performance specifications),
manufacturing process or quality procedures to any Products (including Products
which shall be sold or donated by Seller for purposes of the Humanitarian
Program) that:  (a) would materially
affect the fit, form, function or clinical performance; (b) would require
changes to or an additional Japan Product Marketing Approval or Marketing
Registrations; or (c) changes in the raw materials, packaging or labels or in
the third party suppliers of such raw materials, packaging or labels.  Upon such notice of any proposed change,
except for changes that are required by any Regulatory Authority or by Applicable
Laws, Abbott Japan may evaluate and communicate to Inverness Japan its approval
or disapproval of such proposed change within 30 days of receipt of the notice,
provided, however, that Abbott Japan shall not unreasonably
withhold or delay its approval or disapproval of any such proposed change.  Inverness Japan may only incorporate such
proposed changes upon notice of written approval from Abbott Japan.

 

2.8           Expiration
Dating.  Each unit of Product
provided to Seller and its Affiliates under this Agreement for purposes of the
Humanitarian Program shall have a shelf life at the time of delivery to Seller
and its Affiliates of at least ****% of the maximum shelf life for that unit of
Product, as determined at the time of the assignment of its expiration date.

 

2.9           Certificate
of Conformance.  All Products
provided under this Agreement shall be delivered with a document that certifies
that the specified lot(s) of Products delivered to Seller and its Affiliates,
regardless of whether such lot(s) shall be used by Seller and its Affiliates
for purposes of the Humanitarian Program or for commercial distribution to
third parties, conform with the applicable Product Specifications and labeling
claims.  Full batch documentation,
including batch production records and manufacturing and analytical records
shall be available for review by Seller upon reasonable notice from Seller.

 

2.10         Product
Branding.  During the Term, Inverness
Japan cannot use any hybrid packaging materials and labels bearing the
trademarks or trade names of both Seller and Inverness Japan without the prior
written consent of Seller.  Seller and
Inverness Japan shall discuss and mutually agree upon any changes to the
packaging artwork, labeling artwork, packaging and labeling specifications for
the Products during the Term.  Inverness
Japan shall be solely responsible for all costs and expenses associated with
implementing any such changes, including disposing of old packaging, materials,
labels, cartons or any other applicable items.

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

9

 

ARTICLE 3

OCCUPANCY FEE AND OTHER CHARGES

 

3.1           Occupancy
Fee.  During the Term, Inverness
Japan shall pay to Abbott Japan as compensation for all the Manufacturing
Support Services performed by Abbott Japan pursuant to this Agreement a monthly
fixed-fee in the amount of (i) $59,000 plus any applicable Japanese Taxes, if
any, during the first 26 months of the Term, and (ii) $89,000 plus any
applicable Japanese Taxes, if any, during the remaining months of the Term (the
“Occupancy Fee”).

 

3.2           Payment.  Within 7 Business Days following the end of
each calendar month during the Term, Abbott Japan shall prepare and submit to
Inverness Japan an invoice for the Occupancy Fee for the prior calendar
month.  Inverness Japan shall pay the
Occupancy Fee so invoiced no later than 30 days after the date of such invoice.  For the avoidance of doubt, and solely for
illustrative purposes, the invoice required to be delivered within 7 Business
Days following the end of the month of August shall be for the Occupancy Fee
with respect to July, the prior calendar month.

 

3.3           Reimbursement
of Variances.  Inverness Japan shall
reimburse Abbott Japan for all Variances. 
Within 30 days following the end of each calendar month during the Term,
Abbott Japan shall prepare and submit to Inverness Japan an invoice in Dollars
for the Variances for the prior calendar month, which shall be subject to
Inverness Japan’s rights set forth in Section 3.6.  Inverness Japan shall pay the Variances so
invoiced no later than 30 days after the date of such invoice.  The Variances shall be calculated initially
using Japanese Yen and shall be converted into Dollars using the Monthly
Average Exchange Rate in effect during the respective calendar month.

 

3.4           Payment
of Material Cost Component of Inventory. 
If the Term extends beyond the termination of the Distribution Period,
immediately following each shipment of finished Products from the Manufacturing
Facility after the termination of the Distribution Period, Abbott Japan shall
prepare and submit an invoice in Dollars to Inverness Japan for an amount equal
to the Material Cost Component of Inventory sold during such prior calendar
month, plus the amount of any applicable Japanese Taxes, inbound freight and
handling costs, import duties, clearing costs and inbound quality assurance
costs attributed to the sub-components of the finished Products other than
those manufactured for the Humanitarian Program, which shall be subject to
Inverness Japan’s rights set forth in Section 3.6.  Inverness Japan shall pay the amount so
invoiced no later than 30 days after the date of such invoice.  The amounts of any Material Cost Component of
Inventory shall be calculated on a monthly basis initially using Japanese Yen

 

10

 

and shall be
converted into Dollars using the Monthly Average Exchange Rate in effect for
each respective calendar month.

 

3.5           No
Security Interest.  Nothing in this
Agreement or in the relationship between the Parties shall create in or for the
benefit of Abbott Japan any kind of Encumbrance or other right in any finished
Products or any property provided or made available by Inverness Japan to
Abbott Japan hereunder in connection with Abbott Japan’s provision of the
Manufacturing Support Services.  Abbott
Japan shall not have or be entitled to have any financial interest in respect
of the sale of any Products or any property provided or made available by
Inverness Japan to Abbott Japan hereunder beyond the Occupancy Fee, the
Material Cost Component of Inventory and the Variances.

 

3.6           Reasonable
Access and Dispute Procedures. 
Seller agrees to provide Buyer or its designee or representative
reasonable access to the information (including internal schedules) from which
the calculations of amounts due under Sections 2.3, 3.3 and 3.4 hereof
are derived, as well as reasonable access to Seller’s personnel and
representative as is reasonably necessary in connection with Buyer’s review of,
and payment with respect to, any such amounts. 
If Buyer disagrees with the amount calculated by Seller under Section
2.3, 3.3 or 3.4, Buyer shall send a written notice to Seller stating the
specific reasons for its disagreement within 60 days of receiving the invoice
or similar request for payment with respect thereto.  If it fails to do so, the determinations made
by Seller in accordance with Section 2.3, 3.3 or 3.4 shall be final,
conclusive and binding on both Seller and Buyer.  If, however, Buyer makes such notification to
Seller, Seller and Buyer must attempt to reconcile their differences during the
3 weeks following such notification and if they are unable to do so, then,
Buyer shall have the right, during normal business hours and at Buyer’s
expense, to have an independent certified public accountant selected by Buyer
and reasonably acceptable to Seller, audit any amounts calculated pursuant to
said Sections 2.3, 3.3 or 3.4. 
The decision of the independent certified public accountant with respect
to the calculation of any such amounts shall be final and binding on Buyer and
Seller.  If, based upon the decision of
the independent certified public accountant, there has been an overstatement of
the amounts calculated by the Seller in Sections 2.3, 3.3 or 3.4, then
Seller shall (X) pay to Buyer the difference between the amount paid by Buyer
and the amount determined by the independent certified public accountant or (Y)
credit such difference against the amount owed by Buyer to Seller if the
amounts have not been previously paid, and (Z) if such overstatement is greater
than 10% of the original amount in Seller’s calculation under Sections 2.3,
3.3 or 3.4, Seller shall pay the fees of the independent public certified
accountant.  If, based upon the decision
of the independent certified public accountant, there has been an
understatement of the amounts calculated by the Seller in Sections 2.3, 3.3
or 3.4, then Buyer

 

11

 

shall pay to
Seller the difference between the amount determined by the independent
certified public accountant and the amounts calculated by Seller under Sections
2.3, 3.3 or 3.4

 

ARTICLE 4

TRANSITION SERVICES

 

4.1           Transition
Services.  During the Term, at
Inverness Japan’s request, Abbott Japan shall provide to Inverness Japan and
its Affiliates any or all of the services identified in Exhibit C (the “Transition
Services”) in a professional and workmanlike manner which shall be no less
than the level of quality and commitment employed by Abbott Japan for the
Product Line before the Closing Date. As soon as feasible following the
execution of the Asset Purchase Agreement (but on or before the Closing Date),
the Parties shall meet to discuss and determine (a) whether Abbott Japan shall
provide any or all of the Transition Services,
(b) the scope of any such Transition Services to be provided by
Abbott Japan, (c) the term during which Abbott Japan shall provide the
Transition Services, and (d) the compensation to be paid by Inverness Japan to
Abbott Japan for the provision of such Transition Services, which such
compensation shall be equal to Abbott Japan’s **** cost of providing the
Transition Services plus ****%, plus all applicable Japanese Taxes, if
any.  Immediately following such
determination, the Parties shall prepare a schedule (which shall be attached to
this Agreement as Exhibit F) which lists those services from the
Transition Services that the Parties agree Abbott Japan shall provide to
Inverness Japan, the time period during which such Transition Services shall be
provided, and the fully-burdened actual cost of such Transition Services.  From time to time, the Parties shall meet to
review the contents of, and determine if any modifications are necessary to, Exhibit
F.  For the avoidance of doubt, in no
event shall Abbott Japan be obligated to provide any Transition Services that
Abbott Japan was not providing to the Product Line prior to the Closing Date.

 

4.2           Payment.  Within 30 days following the end of each
calendar month during the Term, Abbott Japan shall prepare and submit to
Inverness Japan an invoice in Dollars for the Transition Services charges for
the prior calendar month.  Inverness Japan
shall pay the Transition Services charges so invoiced no later than 30 days
after receipt of such invoice.  The
Transition Services charges shall be calculated initially using Japanese Yen
and shall be converted into Dollars using the Monthly Average Exchange Rate in
effect during the respective calendar month.

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

12

 

ARTICLE 5

HUMANITARIAN PROGRAM

 

5.1           Supply
of Products for the Humanitarian Program. 
During the Term, subject to the terms and conditions set forth in this
Agreement, Seller shall obtain all of its requirements of Products for purposes
of the Humanitarian Program exclusively from Buyer and Buyer shall use
commercially reasonable efforts to provide such quantities of each Product as
may be ordered from time to time by Seller for purposes of the Humanitarian
Program.  Notwithstanding the foregoing,
nothing in this Agreement shall obligate Seller and its Affiliates to buy
during the Term any specific amount of Products for purposes of the
Humanitarian Program and Seller shall be obligated to purchase only those
quantities of Products included in the 4 binding
months of the rolling forecast then in effect. 
Buyer shall be solely responsible for any failure to provide to Seller
Products for purposes of the Humanitarian Program in accordance with Section
5.6.

 

5.2           Ordering
Procedure.  Seller shall place each
purchase order for the Products for purposes of the Humanitarian Program at
least 90 days prior to the delivery date specified in each respective purchase
order.  Each purchase order or any
acknowledgement thereof may be made electronically, in writing or verbally and
shall be governed by the terms of this Agreement and none of the provisions of
such purchase order or acknowledgment shall be applicable except for those
specifying quantity ordered, delivery dates, special shipping instructions and
invoice information.  Each purchase order
shall be deemed accepted upon receipt of such purchase order.  Inverness Japan shall use commercially
reasonable efforts to ensure 90-day delivery of Products for purposes of the
Humanitarian Program.

 

5.3           Forecasts.  Within 30 days following the Closing Date,
Seller shall issue to Buyer a written forecast of its anticipated monthly
requirements of Products for purposes of the Humanitarian Program during the
following 12 months.  Thereafter, Seller shall provide to Buyer monthly a rolling 12 month forecast of
requirements of Products for
purposes of the Humanitarian Program. 
The first 4 months of such forecast shall be binding on Seller and may not be cancelled or rescheduled
without the prior written agreement of Buyer. 
The remaining 8 months of such forecast shall be used by Buyer for
planning purposes only and shall not be considered firm orders.

 

5.4           Reporting.  Within 30 days following the end of each
calendar month during the Term, Seller shall deliver to Inverness Japan a
report (the “Report”) showing the actual units of Products sold or
donated for purposes of the Humanitarian Program for the prior calendar month.

 

13

 

5.5           Purchase
Price.  During the Term, the purchase
price of the Products sold by Seller for purposes of the Humanitarian Program
shall be for an amount equal to the sum of (i) the **** Cost plus ****%, and
(ii) ****% of the **** Cost of the Products included in the Report (which, for
purposes of this subsection (ii), shall include the **** Costs of Reagents)
(the “Purchase Price”).  For the
avoidance of doubt, Seller and its Affiliates shall supply Reagents and other
raw materials for the manufacture of Products for purposes of the Humanitarian
Program at no cost. Promptly following the receipt of each Report, Inverness
Japan shall prepare and submit an invoice to Seller for an amount equal to (1)
the **** Cost plus ****%, and (2) ****% of the **** Cost of such Products
included in the Report (which, for purposes of this subsection (2) shall
include the **** Costs of Reagents). 
Seller shall pay the amount so invoiced no later than 30 days after the
date of such invoice; provided, however, that if Seller disagrees
with the amounts set forth in such invoice, Seller shall send a written notice
to Inverness Japan stating the specific reasons for its disagreement within 20
days of receiving such invoice.  If
Seller makes such notification to Inverness Japan, Seller and Inverness Japan
must attempt to reconcile their differences during 2 weeks and if they are
unable to do so, then, Seller shall have the right, during normal business
hours and at Seller’s expense, to have an independent certified public
accountant selected by Seller and reasonably acceptable to Inverness Japan,
audit any amounts calculated pursuant to this Section 5.5.  The decision of the independent certified
public accountant with respect to the calculation of such amounts shall be
final and binding on Inverness Japan and Seller.  If, based upon the decision of the
independent certified public accountant, there has been an overstatement of the
amount calculated and such difference is greater than 10% of the original
amount, Inverness Japan shall reimburse Seller for all the fees of the audit
conducted by the independent certified public accountant.  If Seller pays an amount invoiced by
Inverness Japan pursuant to this Section 5.5 without notifying Inverness
Japan of Seller’s disagreement of such amount, but later reasonably believes
that the amount so invoiced and paid by Seller was overstated by more than 10%,
Seller shall have the right, during normal business hours and at Seller’s
expense, to have an independent certified public accountant selected by Seller
and reasonably acceptable to Inverness Japan, audit such amount paid by Seller
to Inverness Japan.  The decision of the
independent certified public accountant with respect to the calculation of such
amount shall be final and binding on Inverness Japan and Seller.  If the amount previously paid by Seller to
Inverness Japan exceeds the amount determined by the independent certified
public accountant, within 30 days of the decision of the independent certified
public accountant, (i) Inverness Japan shall reimburse Seller the difference
between the amount paid by Seller and the amount determined by the independent
certified public accountant, and (ii) if such difference is greater than 10% of
the amount previously paid

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

14

 

by Seller,
Inverness Japan shall reimburse Seller for all the fees of the audit conducted
by the independent certified public accountant. 
If the amount determined by the independent certified public accountant
exceeds the amount previously paid by Seller to Inverness Japan, within 30 days
of the decision of the independent certified public accountant, Seller shall
pay to Inverness Japan the difference between the amount determined by the
independent certified public accountant and the amount paid by Seller.  Failure to pay a disputed invoice shall not be
deemed a breach of this Agreement by Seller and shall not relieve Inverness
Japan from its commitment to continue to provide Products hereunder

 

5.6           Failure
to Provide.  If, for any reason,
conforming Products that were ordered by Seller for purposes of the
Humanitarian Program hereunder are not provided in compliance with a purchase
order and the forecasting process set forth in Sections 5.2 and 5.3 for
a period of 14 consecutive days or longer, immediately thereafter, Inverness
Japan and Seller shall meet to confer and develop a mutually acceptable
remedial plan outlining the actions to be taken by Inverness Japan to provide
the amount of conforming Products that were ordered by Seller for purposes of
the Humanitarian Program.  If Seller and
Inverness Japan fail to reach an agreement with respect to such remedial plan
within 14 days, or if Inverness Japan fails to comply with such remedial plan
within the timelines contemplated by such remedial plan, then Seller may elect
either of the following:  (i) that either
Inverness Japan (y) provides all quantities of the Products ordered by Seller
in order for Seller to fulfill all orders of Seller’s customers or distributors
prior to providing any Products ordered by any other customers or distributors
or (z) obtains a substitute rapid, point of care diagnostic test with a
comparable performance level to the Product from any supplier (which may
include an Affiliate of Inverness Japan) selected by Inverness Japan and
reasonably acceptable to Seller and provides such replacement product to Seller
at the same cost paid by Inverness Japan to the supplier, or (ii) that Seller
shall obtain a replacement product from one or more suppliers selected by
Seller and Inverness Switzerland must grant a license under the Patents and the
Know-How to Seller or its designee to make or have made the Products for
purposes of the Humanitarian Program, if so requested by Seller, such license
to expire, in the case of a license to Seller, upon Inverness Japan’s ability
to supply Products in accordance with this Agreement and, in the case of a
license to a designee of Seller, upon the later to occur of (a) expiration
of the term of any agreement entered into with such designee, or
(b) Inverness Japan’s ability to supply Products in accordance with this
Agreement.

 

5.7           Right
of First Negotiation and Right of First Refusal.  (a)  If
at any time during the Term, Seller intends to distribute any Alternative
Product or HIV Alternative Product for purposes of the Humanitarian Program
within the Territory, Seller shall provide a Right of First Negotiation to
Parent to manufacture such Alternative Product or HIV Alternative Product by

 

15

 

sending a written
notice to Parent not less than 18 months before Seller’s intended commencement
of such project.  During the 3-month
period following Parent’s receipt of such written notice, Seller and Parent
shall negotiate in good faith regarding Parent’s manufacture of such
Alternative Product or HIV Alternative Product (including the terms of a
license with respect to any patents owned, held or licensed (with the right to
sublicense) held by Seller or its Affiliates which are required for the
manufacture of such Alternative Product or HIV Alternative Product, which such
license shall be ****); provided, however, that Parent provides
reasonable evidence to Seller of its ability to commence manufacturing such
Alternative Product or HIV Alternative Product no later than 18 months after
receipt of such notice at both a performance level and price comparable to any
other potential third-party manufacturer. 
In the event Parent and Seller reach a definitive agreement for the
manufacture of such Alternative Product or HIV Alternative Product , within 6
months of Parent’s receipt of the foregoing notice, Parent shall obtain any
license from third parties required to manufacture such Alternative Product or
HIV Alternative Product.  Seller shall
cooperate and assist Parent to obtain any license from any third party required
for the manufacture of the Alternative Product or HIV Alternative Product.  If Parent and Seller fail to negotiate terms
acceptable to both Parties for the manufacture of such Alternative Product or
HIV Alternative Product within 3 months after Parent’s receipt of such written
notice or Parent’s failure to obtain the third party license within such
6-month period, Seller shall be free to offer the manufacture of such
Alternative Product or HIV Alternative Product to any potential third-party
manufacturer; provided, however, that solely in the case of an
HIV Alternative Product (but not in the case of an Alternative Product), Seller
shall promptly pay to Parent the pro rata amount (up to a maximum of
$2,500,000) of the net book value of the Line 2 Equipment (based on 5 year
depreciation schedule, which such depreciation beginning when the first lot of
Product is manufactured for any purposes) attributable to the manufacturing of
Determine® HIV 1-2 for purposes of the Humanitarian Program of
Seller and its Affiliates, provided further, such pro rata amount shall
be calculated on the basis of a fraction, the numerator of which is the average
daily hours that Line 2 Equipment was used for the manufacturing of Determine®
HIV 1-2 for purposes of the Humanitarian Program during the entire period that
Line 2 Equipment was commissioned and the denominator of which is the average
daily hours that Line 2 Equipment was in use for the manufacturing of all
Products (regardless whether or not such Products were for commercial purposes
or for purposes of the Humanitarian Program) plus the average daily hours that
Line 2 Equipment was idle during the entire period that Line 2 Equipment was
commissioned, and provided further, that upon the receipt of such
amount, Inverness Japan shall

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

16

 

(i) decommission
the Line 2 Equipment to the extent used, and only to the extent used, for the
production of Determine® HIV 1-2 for purposes of the Humanitarian
Program, and (ii) deliver prompt written notice to Seller or an Affiliate
nominated by Seller, certified by the manager of the manufacturing facility or
an officer responsible therefore, that affirms that the portion of the Line 2
Equipment capacity used for the production of Determine® HIV 1-2 for
purposes of the Humanitarian Program shall no longer be utilized in the
production of any products manufactured at the plant.  Parent shall (a) deliver to Seller, within 15
Business Days of the end of each calendar month a written statement that the
capacity has been decommissioned to the extent used for Determine®
HIV 1-2 for purposes of the Humanitarian Program, and (b) grant Seller the
right to review the books and records of Parent with respect to the
manufacturing output of the Line 2 Equipment to verify that such capacity has
been decommissioned.  If, at any time
following the decommission of Line 2 Equipment as described above, Parent
desires to initiate production using the capacity of the Line 2 Equipment
attributable to Determine® HIV 1-2 for purposes of the Humanitarian
Program, whether or not such products will be sold to Seller or an Affiliate
thereof, Seller and Inverness Japan shall negotiate in good faith to compensate
Seller or its Affiliate, at the fair market value at the time, for the right of
Inverness Japan to utilize capacity of the Line 2 Equipment attributable to
Determine® HIV 1-2 for purposes of the Humanitarian Program.

 

(b)           If,
at any time during the Term, Seller receives a written proposal from a third
party to supply to Seller for purposes of the Humanitarian Program one or more
products similar to the Products at a price per unit that, as of the date of
such written proposal, is (i) ****% or more lower than the Adjusted Price per
Unit and (ii) the Purchase Price exceeds the Adjusted Price per Unit, Seller
shall provide a right of first refusal to Parent to match such price reduction
by sending a written notice to Parent. 
Within 45 days of Parent’s receipt of such written notice, Parent shall
notify Seller if it wishes to match such improved terms and provide Seller with
a binding offer corresponding thereto. 
If Parent fails to respond to such notice from Seller within 45 days of
Parent’s receipt thereof or declines to match such improved terms, then Seller
shall be required to source no more than 50% of its requirements of the
Products from Buyer during the first 18 months thereafter, and following such
18-month period, shall be free to source all of its requirements of the
Products from any third-party supplier; provided, however, that,
if the product in question which will be supplied by the third party in
accordance with the provisions of this Section 5.7(b) is a product
similar to Determine® HIV 1-2 for purposes of the Humanitarian
Program, then Seller shall promptly pay to Parent the pro rata amount (up to a
maximum of $2,500,000) of the net book value of the Line 2 Equipment (based on
5 year depreciation schedule, which such depreciation beginning when the first
lot of Product is manufactured for

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

17

 

any purposes)
attributable to the manufacturing of Determine® HIV 1-2 for purposes
of the Humanitarian Program of Seller and its Affiliates, provided further,
such pro rata amount shall be calculated on the basis of a fraction, the
numerator of which is the average daily hours that Line 2 Equipment was used
for the manufacturing of Determine® HIV 1-2 for purposes of the
Humanitarian Program during the entire period that Line 2 Equipment was
commissioned and the denominator of which is the average daily hours that Line
2 Equipment was in use for the manufacturing of all Products (regardless
whether or not such Products were for commercial purposes or for purposes of
the Humanitarian Program) plus the average daily hours that Line 2 Equipment
was idle during the entire period that Line 2 Equipment was commissioned, and provided
further, that upon the receipt of such amount, Inverness Japan shall (i)
decommission the Line 2 Equipment to the extent used, and only to the extent
used, for the production of Determine® HIV 1-2 for purposes of the
Humanitarian Program, and (ii) deliver prompt written notice to Seller or an
Affiliate nominated by Seller, certified by the manager of the manufacturing
facility or an officer responsible therefore, that affirms that the portion of
the Line 2 Equipment capacity used for the production of Determine®
HIV 1-2 for purposes of the Humanitarian Program shall no longer be utilized in
the production of any products manufactured at the plant.  Parent shall (a) deliver to Seller, within 15
Business Days of the end of each calendar month a written statement that the
capacity has been decommissioned to the extent used for Determine®
HIV 1-2 for purposes of the Humanitarian Program, and (b) grant Seller the
right to review the books and records of Parent with respect to the
manufacturing output of the Line 2 Equipment to verify that such capacity has
been decommissioned.  If, at any time
following the decommission of Line 2 Equipment as described above, Parent
desires to initiate production using the capacity of the Line 2 Equipment
attributable to Determine® HIV 1-2 for purposes of the Humanitarian
Program, whether or not such products will be sold to Seller or an Affiliate
thereof, Seller and Inverness Japan shall negotiate in good faith to compensate
Seller or its Affiliate, at the fair market value at the time, for the right of
Inverness Japan to utilize capacity of the Line 2 Equipment attributable to
Determine® HIV 1-2 for purposes of the Humanitarian Program.

 

(c)           If
during the Term, Parent or any of its Affiliates manufactures anywhere in the
world one or more immunoassay lateral flow products similar to the Products
(but expressly excluding nucleic acid testing products), Seller shall notify
Parent if it wishes to purchase from Parent or any of its Affiliates, for use
only in connection with the Humanitarian Program, such similar products at a
price equal to Parent’s **** cost plus ****% and its anticipated monthly
requirements of such similar products during the following 12 months.  In the event that Seller so requests to
purchase such products and Parent

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

18

 

does not then have the
necessary capacity to provide Seller with the amount of products that Seller
projects pursuant to rolling 12 month forecasts, Parent and Seller shall enter
into good faith negotiations in an effort to formulate a solution to the
capacity needs to produce the volume of products requested by Seller.  Any such agreement shall be set forth in a
subsequent supply agreement to be entered into between the Parties.

 

ARTICLE 6

REGULATORY COMPLIANCE AND MEDICAL COMPLAINTS

 

6.1           Representatives.  Within 30 days following the Closing Date,
each of Abbott Japan and Inverness Japan shall appoint a person within their
respective organizations whose responsibility shall be to facilitate an
effective exchange of information and cooperation in connection with the
activities of the Parties contemplated by this Agreement.

 

6.2           Regulatory
Compliance.  During the Term, Abbott
Japan shall be responsible for reporting any matters regarding the manufacture
of the Products to any Regulatory Authorities in the Territory in accordance
with Applicable Laws and for handling and responding to any such Regulatory
Authority’s inspections of the Manufacturing Facility and Inverness Japan shall
cooperate with and assist Abbott Japan to maintain the ISO certifications for
the Products.  During the Term, Inverness
Japan shall advise Abbott Japan without undue delay of any occurrences or
information arising out of Inverness Japan’s activities that have or could
reasonably be expected to have adverse regulatory compliance and all reporting
consequences concerning the Products. 
Inverness Japan shall provide to Abbott Japan all information requested
by any Regulatory Authority in the Territory with respect to the Products.  To the extent practicable in view of the
deadlines, Abbott Japan shall provide Inverness Japan with an opportunity to
review and provide comments on all regulatory submissions or communications
(including written responses to any Regulatory Authority’s questions regarding
the manufacture of the Products).  
Notwithstanding the foregoing, Abbott Japan shall determine the timing,
manner and content of any submission to or any communication with any
Regulatory Authority in the Territory. 
Abbott Japan shall provide Inverness Japan with copies of all written
communications between Abbott Japan and any Regulatory Authorities in the
Territory and any adverse finding or communication, oral or written, by any
such Regulatory Authorities in the Territory regarding the manufacture of the
Products to the extent that it has access to such information.  If the Manufacturing Facility is inspected by
any Regulatory Authority, Abbott Japan shall notify Inverness Japan without
undue delay, but in any event within a period not to exceed 24 hours, of any
written alleged violations or deficiencies relating to the Manufacturing
Facility and the corrective action to be taken. 
Inverness Japan shall as expeditiously as

 

19

 

practicable use
commercially reasonable efforts to take any such corrective action with respect
to the Manufacturing Facility; provided, however, Abbott Japan
shall be responsible for any reporting matters regarding the manufacture of the
Products to any Regulatory Authorities in the Territory.

 

6.3           Quality
Agreement.  Within 60 days following
the Closing Date, the Parties shall mutually agree upon a quality agreement
which appropriately addresses regulatory, operational and quality
responsibilities, traceability of lots of Products, retention of samples and
records, Product complaints, return of Products and other matters in a form
substantially similar to Exhibit E hereto (the “Quality Agreement”).

 

6.4           Procedure
for Adverse Information.  Each Party
shall keep the other Party informed of information in or coming into its
possession or control concerning side effects, injury, and incidents of
severity thereof associated with commercial and clinical uses, studies,
investigations or tests of each Product in the Territory, whether or not
determined to be attributable to the Products. 
Within 3 months of the Closing Date, the respective groups of Inverness
Japan and Abbott Japan shall complete a mutually agreed upon process covering
adverse event information exchange and event reporting relating to the
Products.

 

6.5           Reagents.  (a) 
Buyer hereby covenants that it and each of its Affiliates will not (a)
transfer to the United States or sell within the United States any (i) Products
or (ii) other goods that (1) contain or are derivate of cell lines subject to
paragraph 4 of the Consent Decree or (2) contain any Reagents supplied by
Seller and its Affiliates that have not been created within the United States or
(3) contain the Reagent 84165 S Pan-1; Hollow Fiber Harvest (“Prohibited
Goods”) and (b) will use best efforts to prevent its representatives,
agents, successors and assigns from transferring Prohibited Goods to or selling
Prohibited Goods in the United States (including by the immediate termination
or expiration of sales to distributors to the extent necessary to comply
herewith); provided, however, that solely in the case of Products or
other goods that contain any Reagents supplied by Seller and its Affiliates
that have been created within the United States (other than Reagent 84165 S
Pan-1; Hollow Fiber Harvest) this covenant shall not prohibit the transfer to
or sale of such Products or other goods if (A) the FDA has first provided
confirmation reasonably satisfactory to Seller that transfer or sale in the
United States is acceptable to the FDA or (B) the restrictions imposed upon
Seller with respect to a particular Prohibited Good under the Consent Decree
has expired, lapsed or otherwise terminated. 
Buyer further acknowledges that because a breach, or failure to comply
with, this Section 6.5(a) will cause irreparable injury to Seller for
which there is no adequate remedy by Law and the exact

 

20

 

amount of which
will be difficult to ascertain, if Buyer, or any Affiliate, representative,
agent successor or assign thereof, should in any way breach, or fail to comply
with, the terms of this Section 6.5(a), Seller shall be immediately
entitled to an injunction restraining such Person(s) from any such breach or
failure, without the necessity of proving injury or damages or engaging in the
alternative dispute resolution process set forth in the Asset Purchase
Agreement.  Resort of any such remedy
provided for by Law shall not preclude or bar the concurrent or subsequent
employment of any other appropriate remedy or remedies, or preclude the recover
by Seller of monetary damages and compensation.

 

(b)           Buyer
acknowledges and agrees that (i) those Reagents manufactured by Seller and its
Affiliates outside of the United States are not manufactured in accordance with
FDA standards and Seller and its Affiliates shall have no obligation to
modify their manufacturing processes in order for them to comply with FDA standards,
and (ii) Seller and its Affiliates have the right to move the manufacturing
location of the Reagents without obtaining Buyer’s consent.  If Seller or its Affiliates move the
manufacturing location of the Reagents, Seller and its Affiliates shall perform
and provide to Buyer, at Buyer’s request, internal equivalency studies which
evidence that such relocation does not impact the performance of the Products,
which Buyer agrees and acknowledges shall be Seller and its Affiliates’ sole
responsibility with respect to such relocation of the manufacturing of the
Reagents.  Seller acknowledges and agrees
that nothing in this Section 6.5 will limit Seller’s obligation to
supply the Reagents under this Agreement.

 

6.6           Transfer
Program.  Subject to the provisions
of Section 7.9(d) of the Asset Purchase Agreement, Abbott Japan covenants and
agrees that it shall use its commercially reasonable efforts to assist and
cooperate with Inverness Japan to establish its own manufacturing line for the
Product Line at a location other than the Manufacturing Facility prior to the
termination of this Agreement in order to enable Inverness Japan to obtain the
Manufacturing Site License to perform the entire manufacturing process for the
Products upon the termination of this Agreement.  The Parties shall negotiate in good faith and
agree on a transfer program for the transition of the manufacturing of the
Product Line from the Manufacturing Facility to another location by no later
than 1 year prior to the termination of this Agreement.

 

21

 

ARTICLE 7

PRODUCT ACTIONS

 

7.1           Product
Actions.  If any Party’s or any
governmental or court action relating to the Products in the Territory results
in: (a) the recall, destruction or withholding from the market of any of the
Products (“Recall”); or (b) the institution of a field correction of any
Products by Inverness Japan with input from Abbott Japan (“Field Correction”),
then Inverness Japan shall be responsible for, and shall bear all the costs and
expenses of and associated with, such Recall or Field Correction (collectively “Product
Action”) involving any of the Products distributed by Seller and its
Affiliates (including Products distributed as part of the Humanitarian
Program), except to the extent that such Product Action is the result of
(a) any negligence or willful misconduct on the part of Seller and its
Affiliates, or (b) any action of Seller or its Affiliates or its designee with
respect to the storage, shipment or distribution of Products under the
Humanitarian Program arising after such Products have been delivered by or on
behalf of Inverness Japan, in which case such costs thereof shall be borne by
Abbott Japan.  Inverness Japan shall use
commercially reasonable efforts to provide Abbott Japan with information
relevant to any Product Action in a timely manner and shall, to the extent
permitted by Applicable Laws and Inverness Japan’s quality control and other
manufacturing procedures, permit Abbott Japan to participate in the Product Action
resolution process.

 

7.2           Administration
of Product Actions.  Abbott Japan
shall be responsible for maintaining a list of customers to be notified by
Abbott Japan in the event of a Product Action relating to sales of Products
during the Distribution Period, and shall effect the return of such Products
from customers in accordance with all applicable Regulatory Authority’s
communications and requests regarding any such Product Actions.

 

ARTICLE 8

PATENTS AND TRADEMARKS

 

8.1           Buyer
Trademarks.  Inverness Switzerland hereby grants to Seller and its Affiliates a
non-exclusive license to use the Buyer Trademarks in the Territory with respect
to the Products Seller and its Affiliates distribute pursuant to the Asset
Purchase Agreement, and for no other purpose. 
Subject to applicable Law, the final decision on any use of Buyer
Trademarks shall be made by Inverness Switzerland in its sole reasonable
discretion.  Any use of a Buyer Trademark
by Seller and its Affiliate shall conform to Inverness Switzerland’s guidelines
and shall be subject to Inverness Switzerland’s review prior to use in
accordance with this Section 8.1. 
Inverness Switzerland shall notify Seller in writing with respect to the

 

22

 

particular proposed use of the Buyer Trademark is approved.  All rights based on Seller’s or its
Affiliates’ use of the Buyer Trademarks shall inure to the benefit of Inverness
Switzerland.  Seller or its Affiliates
shall immediately cease all use of the Buyer Trademarks upon the expiration or
termination of this Agreement, except to the extent necessary to sell its
remaining inventory of Products.  For the
avoidance of doubt, nothing in this Agreement shall prevent Inverness Switzerland
from licensing the Buyer Trademarks to any party which distributes any product
not constituting a Product.

 

8.1.1        Ownership
of and Restrictions on Uses of Buyer Trademarks.  Inverness Switzerland is the sole and exclusive owner of all right, title and interest in and to
the Buyer Trademarks.  All Buyer
Trademarks and the goodwill in the Buyer Trademarks are and shall remain the
property of Inverness Switzerland. 
Nothing contained in this Agreement shall be construed as an assignment
to Seller or its Affiliates of any right, title or interests relating to the
Buyer Trademarks, which rights are expressly reserved by Inverness Switzerland,
except as expressly granted hereunder. 
Seller and its Affiliates shall at all times before the expiration or
termination of this Agreement: (a) not raise or cause to be raised in any part
of the world any question concerning or any objection to the validity of any
Buyer Trademark or Inverness Switzerland’s ownership of the Buyer Trademarks,
nor directly or indirectly assist others to do so; or (b) not apply to register
any Buyer Trademark for any goods or services in any part of the world unless
requested to do so by Inverness Switzerland.

 

8.1.2        Additional
Restrictions on Use of Buyer Trademarks. 
During the Term, Seller and its Affiliates shall use reasonable
commercial efforts to preserve the value and validity of the Buyer Trademarks.

 

8.2           Seller
Trademarks.  Subject to the terms and
conditions of the Trademark License Agreement, Abbott Japan hereby grants to
Inverness Switzerland and its Affiliates the right to use the Product Licensed
Marks (as such term is defined in the Trademark License Agreement) and the
Inventory Packaging Materials (as such term is defined in the Trademark License
Agreement) with respect to the Products to market, promote, distribute and sell
the Products in the Territory during the Transition Period (as such term is
defined in the Trademark License Agreement).

 

8.3           Patent
Infringement Defense.  If any
allegation or claim be made that the manufacture, importation, use, sale or
offering for sale of the Products in the Territory infringes the Intellectual
Property Rights of any third party, then the following Subsections 8.3.1
and 8.3.2 shall apply.

 

23

 

8.3.1        Notice.  The Party against whom such allegation or
claim shall have been made shall notify the other Party and provide all
necessary details relating thereto within 10 days after receipt of such
allegation or claim.  Inverness Japan
shall assume all responsibility and expense for defense of such claim.

 

8.3.2        Control
of Defense.  If Abbott Japan or one
of its Affiliates is named in the claim, Inverness Japan shall consult with
Abbott Japan in all significant matters concerning the defense, including
issues of strategy and settlement, and shall act in accordance with any
reasonable requests of Abbott Japan or one of its Affiliates.  If Abbott Japan or its Affiliates are named
in the claim, Abbott Japan, at its option, may join in such action with counsel
and at its expense.  If Abbott Japan or
its Affiliates are named in the claim, Inverness Japan shall not seek to settle
or compromise such claim without the written consent of Abbott Japan.

 

8.4           Cooperation.  The Parties shall consult with each other and
work together to resolve any allegation or claim of infringement made against
either Party relating to the Products.

 

8.5           Covenant
to Use Commercially Reasonable Efforts to Secure Rights.  In
the event that either (a) any Reagent is claimed or held to infringe any
intellectual property right of any Person, (b) any Reagent or the use thereof
is claimed or held to constitute or involve a misappropriation of any trade
secret of any Person and, in connection with the settlement of the applicable
claim or as a result of the applicable judgment or finding, Seller obtains a license, a covenant not to sue or
otherwise secures the right to make, use sell, offer for sale and/or import the
applicable Reagent or (c) Seller
otherwise concludes that it is reasonable or appropriate to acquire a license,
a covenant not to sue or other right to make, use, sell, offer for sale and/or
import the applicable Reagent and obtains such a license, covenant not to sue
or other right, then, during the Term, Seller will exercise commercially reasonable efforts with the applicable
licensor or Person to assist Buyer in obtaining for Buyer’s own behalf a license, a covenant not to sue or other
means to secure the right of Buyer to make, use sell, offer for sale and/or
import the applicable Reagent.

 

ARTICLE 9

REPRESENTATIONS AND WARRANTIES

 

9.1           Product
Representations and Warranties. 
Inverness Japan represents and warrants that each of the Products
delivered to Abbott Japan hereunder shall be:

 

24

 

(a)           manufactured
in accordance with Applicable Laws, cGMPs, Product Specifications and any other
applicable requirements of Regulatory Authorities;

 

(b)           free
from defects in material and workmanship until the expiration of its shelf
life  as indicated on the packaging (the “Warranty
Period”); and

 

(c)           free
and clear of any third party Encumbrance.

 

9.2           Product
Replacement.  Inverness Japan shall
replace the Products returned during the Warranty Period that fail to meet any
warranty set forth in Section 9.1 (“Defective Products”).   This Section 9.2 sets forth Abbott
Japan’s sole remedy, and Inverness Japan’s sole obligation, with respect to any
breach of warranty in Section 9.1. 
For the avoidance of doubt, the Parties agree that the provisions of
this Section 9.2 shall not limit in any manner the right of Abbott Japan
and its Affiliates and their respective officers, directors and employees to be
indemnified by Buyer from any Claims pursuant to the provisions of Section
10.1 with respect to Products sold or donated by Seller and its Affiliates
after the Closing Date (regardless of whether or not such sale or donation of
the Products was made for the purposes of the Humanitarian Program or for
commercial purposes).

 

9.3           General
Representation and Warranties.  Each
Party represents and warrants to the other Party as of the Effective Date that:

 

(a)           It
is a corporation duly organized and validly existing under the laws of its
state or country of incorporation;

 

(b)           It
has the power and authority to execute and deliver this Agreement and to perform
its obligations thereunder; and

 

(c)           The
execution, delivery and performance by it of this Agreement and its compliance
with the terms and provisions thereof does not and shall not conflict with or
result in a breach of any other agreement or relationship.

 

9.4           Limitation
of Representation and Warranties. 
BUYER MAKES NO REPRESENTATIONS OR WARRANTIES REGARDING THE PRODUCTS
OTHER THAN THE EXPRESS REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT AND
THERE SHALL BE NO IMPLIED OR STATUTORY REPRESENTATIONS OR WARRANTIES,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

 

25

 

ARTICLE 10

GENERAL INDEMNIFICATION

 

10.1         Inverness
Japan’s Indemnification of Abbott Japan. 
Parent and Inverness Japan shall indemnify, defend and hold harmless
Abbott Japan and its Affiliates and their respective officers, directors and
employees from and against any and all claims, causes of action, suits, proceedings,
losses, damages, demands, fees, expenses, fines, penalties and costs (including
reasonable attorney’s fees) (hereinafter, “Claims”) to the extent that
such arise out of, are related to or in connection with: (a) products
liability, Product Actions (except as expressly stated in Section 7.1)
and government regulatory actions; (b) the breach of Inverness Japan’s
warranties, representations and covenants set forth in Article 9; (c)
the negligence or willful misconduct on the part of Inverness Japan’s employees,
agents or representatives; or (d) the alleged infringement of third party
Intellectual Property Rights by the Products. 
Notwithstanding the foregoing, Parent and Inverness Japan shall not be
obligated under this Agreement to indemnify any Person for any Excluded
Liabilities, as such term is defined in the Asset Purchase Agreement.

 

10.2         Abbott
Japan Indemnification of Inverness Japan. 
Abbott Japan shall indemnify, defend and hold harmless Parent and
Inverness Japan and its Affiliates and their officers, directors and employees
from and against any and all Claims to the extent that such arise out of, are
related to, or in connection with:  (a)
the breach of Abbott Japan’s warranties, representations and covenants set
forth in Article 9; (b) any breach of Section 8.1 above; (c) the
Distribution Activities subject to Section 4.6(b) of the Asset Purchase
Agreement; and (d) negligence or willful misconduct on the part of Abbott Japan’s
employees, agents or representatives.

 

10.3         Indemnification
Procedures.  Each Party’s obligation
to indemnify the other Party shall be subject to the indemnified party (a)
promptly notifying the other Party of any claim or potential claim covered by
the indemnification provisions of this Article 10, including sufficient information
to enable the indemnifying Party to assess the facts, (b) providing all
reasonable assistance to the indemnifying Party in the defense of all such
claims, and (c) not settling or compromising any such claim without the
indemnifying Party’s prior written consent, which consent shall not be
unreasonably withheld or delayed.

 

10.4         Insurance.  Inverness Japan shall procure and maintain
during the Term comprehensive general, products liability and errors and
omissions liability insurance with an aggregate annual limit of at least $****.  Inverness Japan shall cause Abbott Japan to
be named as an additional insured on such policies.  Inverness Japan shall provide Abbott Japan

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

26

 

with not less than
30 days’ prior written notice of any cancellation or modification of coverage
under such policies.  During the Term, in
no event shall Inverness Japan’s insurance coverage be less than $****.

 

10.5         Limitation
of Liability.  NEITHER PARTY SHALL BE
LIABLE FOR CONSEQUENTIAL DAMAGES OR INDIRECT LOSS OF WHATEVER NATURE HEREUNDER
(OTHER THAN FOR LOST PROFITS TO THE EXTENT THEY ARE DIRECT RATHER THAN
CONSEQUENTIAL; PROVIDED; HOWEVER; THAT SUCH LIABILITY SHALL NOT
EXCEED $****), UNLESS SUCH DAMAGE WAS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE BREACHING PARTY OR OTHERS FOR WHOM THAT PARTY IS RESPONSIBLE.

 

10.6         Sunset
Provision.  The indemnity obligations
of the Parties under this Article 10 shall survive the termination,
expiration or completion of this Agreement for a period of 2 years.

 

ARTICLE 11

TERM AND TERMINATION

 

11.1         Term.  Subject to early termination as set forth in
this Article 11, this Agreement shall commence on the Effective Date and
shall continue until the end of the last day of the 30th month following the
Effective Date (such period, the “Initial Term”).  This Agreement may be renewed at the sole
election of Inverness Japan for up to 2 additional terms of 12 months each
(each, an “Additional Term”), provided that Inverness Japan
provides written notice of renewal to Abbott Japan at least 9 months prior to
the expiration of the Initial Term or the prior Additional Term (together, the
Initial Term and the Additional Term, the “Term”).

 

11.2         Early
Termination.  Notwithstanding
anything to the contrary in this Agreement, Inverness Japan may terminate this
Agreement at any time, subject to a 6 month advance written notification to
Abbott Japan.

 

11.3         Termination
for Cause.  Either Party may
terminate this Agreement for cause upon written notice to the other Party if
the other Party:  (a) appoints a
receiver, executes an assignment for the benefit of creditors or files or
otherwise becomes subject to bankruptcy or insolvency proceedings; or (b)
materially breaches this Agreement and fails to cure such breach within 60 days
after receipt of written notice of breach from the non-breaching Party.

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

27

 

11.4         Accrued
Obligations.  Termination,
expiration, cancellation or abandonment of this Agreement through any means and
for any reason shall not relieve the Parties of any obligation accruing prior
thereto and shall be without prejudice to the rights and remedies of either
Party with respect to any antecedent breach of any of the provisions of this
Agreement.

 

11.5         Additional
Remedies for Breach.  Notwithstanding
the terms and conditions of Section 11.3, neither Party shall be
obligated to terminate this Agreement if the other Party materially breaches
this Agreement.

 

ARTICLE 12

CONSEQUENCES OF TERMINATION

 

12.1         Confidential
Information Return.  Within 60 days
of the date of expiration or early termination by any Party in accordance with Article
11, each Party shall, except as otherwise provided in this Agreement,
return or destroy (and certify to such destruction of), all Confidential
Information of any other Party; provided,
however, that the receiving Party may maintain one copy of the disclosing
Party’s Confidential Information for archival purposes solely to confirm
compliance with Section 13.5.

 

12.2         Transfer
of Raw Materials and Products.  In
the event of the termination or expiration of this Agreement, Abbott Japan
shall sell to Inverness Japan the raw materials (including labels and package
inserts), work-in-process and finished Products held by Abbott Japan at a price
equal to the Material Cost Component of Inventory on-hand.

 

ARTICLE 13

MISCELLANEOUS

 

13.1         Guarantee
of Performance.  Seller hereby
unconditionally guarantees to Buyer the prompt and complete performance of any
and all of the obligations of Abbott Japan under or related to this
Agreement.  Parent hereby unconditionally
guarantees to Seller the prompt and complete performance of any and all of the
obligations of Inverness Japan under or related to this Agreement.  Each guaranty is an absolute, present and
continuing guaranty of performance, and shall remain in full force and effect
until the termination of this Agreement.

 

13.2         Force
Majeure.  Neither Party shall be held
in breach of this Agreement for failure to perform any of its obligations
hereunder (except the payment of money) and the time required for performance
shall be extended for a period equal to the period of such delay; provided,
that such delay has been caused by or is a result of circumstances beyond the
reasonable control of

 

28

 

the Party so
affected, including without limitation, any acts of God; acts of the public
enemy; civil strife; wars declared or undeclared; actual acts of terrorism;
embargoes; labor disputes, including strikes, lockouts, job actions or
boycotts; fires; explosions; floods; and national shortages of material or
energy. The Party so affected shall: (a) give prompt written notice to the
other Party of the nature and date of commencement of the force majeure event
and its expected duration; and (b) use commercially reasonable efforts to
relieve the effect of such cause as rapidly as possible.

 

13.3         Relationship
of the Parties.  The relationship of
the Parties under this Agreement is that of independent contractors.  Nothing contained in this Agreement shall be
construed so as to constitute the Parties as partners, joint venturers or
agents of the other.  Neither Party or
its Affiliates has any express or implied right or authority under this
Agreement to assume or create any obligations or make any representations or
warranties on behalf of or in the name of the other Party or its Affiliates.

 

13.4         Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors and
assigns; provided, however, that neither this Agreement, nor any
rights or obligations hereunder, may be assigned without the prior written
consent of the other Party; provided, further, however,
that (a) either Party may assign its rights and obligations under this
Agreement to an Affiliate of such Party; and (b) may assign its rights and
obligations in conjunction with the sale of substantially all of the assets
related to this Agreement; further provided, if Inverness Japan and its
Affiliates sell substantially all of its assets related to Products hereunder,
Inverness Japan must assign its rights and obligations hereunder (and provide
Abbott Japan with notice thereof) and, in such case, within 60 days of such
notice, Abbott Japan may terminate this Agreement upon 30 days’ written notice.
No assignment under this Section 13.4 shall relieve the Party to this
Agreement from its obligations under this Agreement.

 

13.5         Public
Disclosure; Confidentiality.  The public disclosure provisions set forth in
Section 11.2 of the Asset Purchase Agreement and the confidentiality provisions
set forth in Section 11.3 of the Asset Purchase Agreement are each incorporated
herein by reference.

 

13.6         Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of each Party and its successors and
permitted assigns.

 

13.7         Entire
Agreement.  This Agreement including
the Schedules, which are incorporated herein by reference, together with the
Asset Purchase Agreement, the Other Agreements and the Confidentiality
Agreement executed by Seller and Parent and all documents

 

29

 

delivered in
connection therewith, set forth the entire understanding of the Parties
concerning the subject matter hereof and supersedes all written or oral prior
agreements or understandings with respect thereto.

 

13.8         Compliance
with Applicable Laws.  In performing
this Agreement, each Party shall comply with all Applicable Laws and shall not
be required to perform or omit to perform any act required or permitted under
this Agreement if such performance or omission would violate the provisions of
any Applicable Laws.

 

13.9         Governing
Law.  This Agreement and the legal
relations between the Parties hereunder shall be construed, interpreted and
governed by the law of the State of Illinois, United States of America, without
regard to its conflict of laws principles.

 

13.10       Dispute
Resolution.  Any controversy or claim
arising out of or relating to this Agreement, or the breach of thereof, but
excluding any dispute relating to the validity or infringement of any Buyer
patent or patent application, shall be resolved through the binding alternate
dispute resolution procedure described in Exhibit K of the Asset Purchase
Agreement. Notwithstanding the foregoing, either Party may seek interim
injunctive relief for alleged breaches of confidentiality pursuant to Section
12.1 from any court of competent jurisdiction.

 

13.11       Notices.  All communications, notices and consents
provided for herein shall be in writing and be given in person or by means of
telex, facsimile or other means of wire transmission (with request for
assurance of receipt in a manner typical with respect to communications of that
type), by overnight courier or by mail, and shall become effective: (a) on
delivery if given in person; (b) on the date of transmission if sent by telex,
facsimile or other means of wire transmission; (c) 1 Business Day after
delivery to the overnight service; or (d) 4 Business Days after being deposited
in the United States mails, with proper postage and documentation, for
first-class registered or certified mail, prepaid.

 

Notices shall
be addressed as follows:

 

If to any Buyer entity, to:

 

Inverness Medical Innovations, Inc.

51 Sawyer Road, Suite 200

Waltham, MA 02453

Attention: General Counsel

Facsimile Number:  (781) 647-3939

 

30

 

with copies (which shall not constitute notice) to:

 

Goodwin Procter LLP

Exchange Place

Boston, MA 02109

Attention:  Scott F. Duggan

Facsimile Number:  (617) 523-1231

 

If to Abbott Japan, to:

 

Abbott Laboratories

100 Abbott Park Road

Building AP6C, Department 0392

Abbott Park, Illinois 60064-6020

Attn:  President, Abbott Diagnostics
Division

Facsimile Number: (847) 938-6277

 

with copies (which shall not constitute notice) to:

 

Abbott Laboratories

100 Abbott Park Road

Building AP6D, Department 322

Abbott Park, Illinois 60064-6020

Attn:  Divisional Vice President,
International Legal Operations

Facsimile Number: (847) 938-1342

 

provided, however,
that if any Party shall have designated a different address by notice to the
others, then to the last address so designated.

 

13.12       Severability.  If any provision of this Agreement for any
reason shall be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision hereof, and this Agreement shall be interpreted and construed as if
such term or provision, to the extent the same shall have been held to be
invalid, illegal or unenforceable, had never been contained herein.

 

13.13       Interpretation.  When a reference is made in this Agreement to
Sections or Schedules, such references shall be to a Section or Schedule to
this Agreement unless otherwise indicated. 
The words “include,” “includes” and “including” when used herein shall
be deemed in each case to be followed by the words “without limitation.”  Any table of contents and headings contained
in this Agreement have been inserted for convenience of reference only and
shall not be relied upon in construing this Agreement.  Use of any gender herein to refer to any
Person shall be deemed to comprehend masculine, feminine and neuter unless the
context clearly

 

31

 

requires
otherwise.  Use of the singular includes
the plural vice versa, unless the content clearly indicates otherwise.

 

13.14       Waiver
or Modification of Agreement.  No waiver
or modification of any of the terms of this Agreement shall be valid unless in
writing and signed by authorized representatives of both Parties.  Failure by either Party to enforce any of its
rights under this Agreement shall not be construed as a waiver of such rights
nor shall a waiver by either Party in one or more instances be construed as
constituting a continuing waiver or as a waiver in other instances.

 

13.15       Survival.  Expiration or early termination of this
Agreement shall not relieve either Party of its obligations incurred prior to
such expiration or early termination. 
The following provisions shall survive expiration or early termination
of this Agreement: Article 3, Section 6.4, Article 7, Section
8.1, Section 8.2, Section 9.1, Section 9.2, Section
9.4, Section 10.1, Section 10.2, Section 10.3, Section
10.5, Section 11.4, Article 12; Section 13.7; Section
13.9, Section 13.10, Section
13.11; Section 13.12
and this Section 13.15.

 

13.16       Counterparts.  This Agreement may be executed in any number
of original counterparts, each of which shall be deemed an original, but both
of which together shall constitute on and the same instrument.

 

13.17       Mutual
Drafting.  This Agreement is the
joint product of the Parties, and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of the Parties and their
respective legal counsel and advisers and any rule of construction that a
document shall be interpreted or construed against the drafting Party shall not
be applicable.

 

13.18       Expenses.  Except as otherwise expressly provided
herein, each Party shall bear its own expenses with respect to the transactions
contemplated by this Agreement.

 

13.19       No
Third Party Beneficiaries.  This
Agreement is solely for the benefit of the Parties and, to the extent set forth
herein, their respective Affiliates and the other Indemnified Parties and no
provision of this Agreement shall be deemed to otherwise confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.

 

13.20       Conflicts.  In the case of a conflict between the
provisions of this Agreement and the provisions of the Quality Agreement, the
provisions of this Agreement shall prevail.

 

32

 

13.21       Headings.  The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.

 

[Signature Page
Follows]

 

33

 

IN WITNESS WHEREOF, each Party has caused
this Agreement to be executed by its duly authorized officer on the date below
written.

 

	
   

  	
  INVERNESS MEDICAL INNOVATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Paul T. Hempel

  	
   

  
	
   

  	
  Name:

  	
  Paul T. Hempel

  
	
   

  	
  Title:

  	
  Secretary and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  INVERNESS MEDICAL JAPAN, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Paul T. Hempel

  	
   

  
	
   

  	
  Name:

  	
  Paul T. Hempel

  
	
   

  	
  Title:

  	
  Representative Director

  
	
   

  	
   

  	
   

  
	
   

  	
  INVERNESS MEDICAL SWITZERLAND GmbH

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Paul T. Hempel

  	
   

  
	
   

  	
  Name:

  	
  Paul T. Hempel

  
	
   

  	
  Title:

  	
  Geschaeftsfuehrer

  
	
   

  	
   

  	
   

  
	
   

  	
  ABBOTT JAPAN CO., LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Isao Ikeda

  	
   

  
	
   

  	
  Name:

  	
  Isao Ikeda

  
	
   

  	
  Title:

  	
  Representative Director and Chairman of

  
	
   

  	
   

  	
  the Board and President

  
	
   

  	
   

  	
   

  
	
   

  	
  ABBOTT LABORATORIES

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Sean Murphy

  	
   

  
	
   

  	
  Name:

  	
  Sean Murphy

  
	
   

  	
  Title:

  	
  Vice President, Global Licensing/New

  
	
   

  	
   

  	
  Business Development

  
						

 

 

Exhibit
A

 

Activities of Buyer

 

Manufacturing personnel

Finishing Equipment

Product Manufacturing

mQA

Supervisory personnel

Payroll and Employee Benefits

HR related matters

Communication of Product Changes (to Abbott Japan to communicate to
regulatory body since we hold the product license).

Intellectual Property

Clinical Programs

New product development

Ongoing Post-Market
Surveillance

Communication with Regulatory
Authorities on New Product Development

IQA for incoming materials

 

2

 

Exhibit
B

 

Manufacturing Support Services

 

Water/HVAC Services

Other Building Services
(Cafeteria, Parking, Rest Rooms, Maintenance/Housekeeping, Easements)

Environmental Safety and Health

Security

Medical/Nursing Services

Emergency Control Force

Manufacturing floorspace,
including  Staging/Quarantine areas

Warehouse floorspace

Manufacturing Site License

Information Technology system
related to costs accounting and quality

Solutions Prep Equipment

 

3

 

Exhibit
C

 

Transition Services

 

1. During the entire Term

 

Glassware Service

Regulatory Support

Cost Accounting Personnel – Matsudo

Processing of Purchase Orders

Receiving

Warehousing

Inventory control (cycle counting, disposing, etc.)

 

2. During the first 6 months of the Term

 

Planning

Manufacturing Support Personnel

 

4

 

Exhibit
D

 

Standard Labor and Overhead Cost and Standard
Material Cost

 

	
   

  	
   

  	
   

  	
   

  	
  Material

  	
   

  	
  Labor

  	
   

  	
  Overhead

  	
   

  	
  Total Labor

  & Overhead

  	
   

  	
  Total Cost

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2312

  	
   

  	
  DETERMINE
  HIV-1/2 20TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2313

  	
   

  	
  DETERMINE
  HIV-1/2 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2318

  	
   

  	
  DETERMINE
  HIV-CHA 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2323

  	
   

  	
  Dainascreen HIV-1/2
  100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2326

  	
   

  	
  DETERMINE
  HIV-1/2 CE 20T/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2327

  	
   

  	
  DETERMINE
  HIV-1/2 CE 100T/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2513

  	
   

  	
  DETERMINE
  HBSAG 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2523

  	
   

  	
  Dainascreen HBSAG
  2 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2413

  	
   

  	
  DETERMINE
  SYPHILIS 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2423

  	
   

  	
  Dainascreen
  TPAB100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2211

  	
   

  	
  CHASE BUFFER
  100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2291

  	
   

  	
  Dainascreen
  TPAB Diluent 15ML/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1B7501

  	
   

  	
  Dainascreen
  HEMO 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  1B7502

  	
   

  	
  Dainascreen
  HEMO 1000TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED
SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

5

 

	
  1B7401

  	
   

  	
  Dainascreen
  AUSAB 96TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1B7450

  	
   

  	
  Dainascreen
  Ausab Diluent 15ML/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  007D22-021

  	
   

  	
  DETERMINE
  CAP TUB

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  007D22-031

  	
   

  	
  DETERMINE
  LANCETS

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  007D22-051

  	
   

  	
  DETERMINE
  PIPETTE

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  007D22-061

  	
   

  	
  DETERMINE
  PIPET T

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B73070

  	
   

  	
  SPX
  U-PLATE 10

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B73071

  	
   

  	
  SPX
  U-PLATE 100

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B74030

  	
   

  	
  SPX
  AUSAB DROPPER

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75051

  	
   

  	
  SAMPLING
  BOTTLE 100T

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75052

  	
   

  	
  SAMPLING
  BOTTLE 1000T

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75053

  	
   

  	
  SAMPLE
  BOTTLE ID1

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75054

  	
   

  	
  SAMPLE
  BOTTLE ID2

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75055

  	
   

  	
  SAMPLING
  BOTTLE 1000T Y

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75059

  	
   

  	
  SPX
  FOBT SMPL SHEET (1)

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  001B75060

  	
   

  	
  SPX
  FOBT SMPL SHEET (2)

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  

 

**** REPRESENTS TEXT OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED
SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

6

 

Exhibit E

 

Quality
Agreement

 

See attached

 

7

 

	
  Abbott
  Diagnostics Division (ADD)

  	
  Operating Procedure

  	
   

  

 

	
  Document
  No:

  	
  DFP06.OEM001

  	
  Issue Date:

  	
  18 Feb 2004

  	
  Supersedes Date:

  	
  01 Aug 2003

  
	
  Effective Date:

  	
  01 Apr 2004

  	
  Edition No:

  	
  002

  	
   

  	
   

  
	
  Name:

  	
  OEM QUALITY AGREEMENT TEMPLATE

  
							

 

OEM
Quality Agreements

 

Purpose

 

A Quality Agreement
defines the roles and responsibilities between a supplier and Abbott
Laboratories in addressing the Quality Assurance requirements for the
outsourced activity.

 

This document describes
Original Equipment Manufacturer (OEM) Quality Agreements, which are Division
Function Procedures (DFPs) that document agreement between Abbott Diagnostics
Division (ADD) and a specified OEM, in order to

 

•      delineate
quality responsibilities

•      assure product
meets ADD specifications, and

•      assure product
meets applicable government regulations and standards.

 

This document provides a
template for OEM Quality Agreements.  As
appropriate, the responsible parties

 

•      extract the
template portion of this DFP

•      populate it
with the required information, and

•      rename it per
specifications below.

 

Requirements

 

All OEM suppliers shall
have a Quality Agreement with Abbott Laboratories.

 

Exceptions:  Excluded, but optional, are

 

•      distributors

•      suppliers of
services that support manufacturing activities, and

•      suppliers of
products included as part of the final/finished Abbott product, such as

 

•         raw
materials

•         commodities

•         components,
or

•         off-the-shelf
products.

 

# - Indicates latest
revision

 

Production

 

1

 

Implementation
Plan #

 

A divisional plan,
approved by Quality Assurance, will address the implementation of quality
agreements for existing OEM suppliers.

 

Scope #

 

This document applies to
OEM Quality Agreements only.

 

It applies to all ADD
sites and Division functions with OEM suppliers.

 

Security
caveat

 

This DFP may be shared
with the OEM, or potential OEM, with whom the Quality Agreement is being
written.  Information in a draft or
completed OEM Quality Agreement is confidential and may only be shared with the
specific OEM company.

 

Responsibility

 

ADD Division Quality
Assurance is the owner of this document (DFP06.OEM001).  Other functional areas required to be trained
on this document, at a minimum, include:

 

•      Supplier
Quality/Purchased Materials Quality Assurance (PMQA)

•      Product Quality
Assurance (PQA)

•      Research and
Development Quality Assurance (R&D QA), and

•      Original
Equipment Manufacturer (OEM) Operations.

 

Completed OEM Quality
Agreement documents, DFP06.OEM002 and higher, are owned by the functional group
or individual who compiles the Agreement in conjunction with the OEM.

 

Supporting
documents #

 

The following documents
support this procedure.

 

•      CRQS Policy A4-01  Quality Assurance Program
for Contract Manufacturers and Packagers

•      DFP05.002  Creating and Revising a
Division QSM; Policy; Process; or OP

•      Form 04055  OEM Evaluation Checklist

•      Q06  Purchasing Policy

•      Q06.01  Supplier Evaluation
Process

•      Q06.03  Original Equipment
Manufacturer (OEM) Contract Review

•      Q06.04  Process for Commercializing
Products Manufactured for or Distributed by Abbott Diagnostics Division

•      Q06.04.001  OEM and Distribution
Product Project Plan Procedure

 

2

 

Content #

 

The table below lists the
topics in this document.

 

	
  Topic

  	
   

  	
  See Page

  	
   

  
	
  OEM Quality Agreements

  	
   

  	
  1

  	
   

  
	
  OEM Quality Agreements Template

  	
   

  	
  6

  	
   

  

 

General
Ownership Items #

 

Below is
a list of General Ownership Items to be addressed, where applicable, in the
OEM-specific DFP.  If an item is not
applicable, the section should appear in the Agreement identified as “not
applicable.”

 

	
  Number

  	
   

  	
  Ownership Items - General

  
	
  1

  	
   

  	
  Quality
  Systems/GMP Attestation

  
	
  2

  	
   

  	
  Auditing and
  Monitoring

  
	
  3

  	
   

  	
  Third Party
  Inspection Notification

  
	
  4

  	
   

  	
  Product
  Requirements/ Specifications

  
	
  5

  	
   

  	
  Software
  detailed design specifications

  
	
  6

  	
   

  	
  Design History
  File (DHF)

  
	
  7

  	
   

  	
  Design Control/
  Design Control Changes

  
	
  8

  	
   

  	
  Verification and
  Validation

  
	
  9

  	
   

  	
  Submission

  
	
  10

  	
   

  	
  Regulatory
  issues for countries in which product is distributed

  
	
  11

  	
   

  	
  Lot Number
  Assignment

  
	
  12

  	
   

  	
  Device History
  Record (DHR) - includes record retention requirements

  
	
  13

  	
   

  	
  Device Master
  Record (DMR) - includes record retention requirements

  
	
  14

  	
   

  	
  Labeling
  (content, claims, translations, specifications, packaging, printing,
  inspection, etc. Includes promotional material)

  
	
  15

  	
   

  	
  Process and
  Material Control – Manufacturing Changes

  
	
  16

  	
   

  	
  Final product
  release, in-process, and raw material testing

  
	
  17

  	
   

  	
  Notification of
  nonconforming final product

  
	
  18

  	
   

  	
  Stability

  
	
  19

  	
   

  	
  Sample Retention

  
	
  20

  	
   

  	
  Storage and
  distribution

  
	
  21

  	
   

  	
  Shipping

  
	
  22

  	
   

  	
  Warranty

  
	
  23

  	
   

  	
  Customer
  certificate

  
	
  24

  	
   

  	
  Disposition of
  returned goods

  
	
  25

  	
   

  	
  Training

  
	
  26

  	
   

  	
  Adverse
  Experiences (Medical Device Reporting), Customer Support and Complaints

  
	
  27

  	
   

  	
  Customer
  Interventions- recalls

  
	
  28

  	
   

  	
  Other

  

 

3

 

In Vitro
Diagnostic Directive #

 

Below is
a listing of Ownership Items specific to the In Vitro Diagnostic Directive
(IVDD) to be addressed, where applicable, in the OEM-specific DFP.  If an item, or this section, is not
applicable, it should appear in the Agreement identified as “not applicable.”

 

	
  Number

  	
   

  	
  Ownership Items - IVDD

  
	
  1

  	
   

  	
  IVDD
  Certification

  
	
  2

  	
   

  	
  Labeling and
  language requirements per IVDD

  
	
  3

  	
   

  	
  Technical Files

  
	
  4

  	
   

  	
  Declaration of
  Conformity

  
	
  5

  	
   

  	
  Risk Analysis

  
	
  6

  	
   

  	
  Essential
  Requirements

  
	
  7

  	
   

  	
  Management of
  Notified Body review and approval

  
	
  8

  	
   

  	
  Legal
  Manufacturer Defined

  
	
  9

  	
   

  	
  Other

  

 

4

 

Changes
and Approvals

 

Initial approval and
changes to OEM Quality Agreements require approval of both companies.

 

Abbott and OEM approval
consists of, minimally

 

•      ADD Quality
Assurance and Regulatory Affairs management, and

•      authorized OEM
management representative(s).

 

It is recommended that a
Quality Assurance representative review completed OEM Quality Agreements
annually; however, the document may be updated as frequently as is necessary to
make certain that appropriate communication is maintained.  In all cases, the time between consecutive
reviews shall not exceed 3 years.

 

Changes to Appendix I of
the completed Quality Agreement require Document Owner approval only.

 

Completed OEM Quality
Agreements may change for reasons such as:

 

•      Required
Periodic Review by the Document Owner

•      New
Requirements, as expressed in amendments to the ADD master OEM Quality
Agreement DFP (DFP06.OEM001)

•      Contractual
Changes / Renewals

•      Product
Realization Milestones (such as Product Launch)

•      Third Party or
ADD Quality Audits

•      Quality History

•      Management
Review

•      Product Change
Control

•      Submission Updates

•      Project Plans
(see Q06.04.001)

 

Note:
Changes to items in this template could require changes
to Appendix I of Process Q06.03.

 

Template

 

The remainder of this
document is the required template for OEM Quality Agreements.

 

Completed OEM Quality Agreements
should be formatted in accordance with DFP05.002.

 

Important:  The DFP06.OEM002 through DFP06.OEM199 series
of documents are sequentially reserved for completed OEM Quality Agreements.

 

5

 

OEM Quality Agreements Template

 

Executive
Summary

 

[Input Executive Summary
here. It serves as a high level overview of the ADD-OEM partnership. The
typical source of this information is from the company press releases and/or
the OEM Project Plan.]

 

OEM
Approval Signature  #  name/title/date

 

Authorized signature
below indicates Approval of the [enter OEM name here]
Quality Agreement.

 

6

 

The
recommended Purpose section is listed below:

 

Purpose #

 

A Quality Agreement is a
document that defines the roles and responsibilities between a supplier and
Abbott Laboratories in addressing the Quality Assurance requirements for the
outsourced activity.

 

This document is the
Original Equipment Manufacturer (OEM) Quality Agreement between Abbott
Diagnostics Division (ADD) and [enter OEM name here].  It serves to

 

•      delineate
quality responsibilities

•      assure product
meets ADD specifications, and

•      assure product
meets applicable government regulations and standards.

 

Information in a draft or
completed OEM Quality Agreement is confidential and may only be shared with [enter OEM name here].

 

Caution:
This document

 

•      is not a
restatement nor a compilation of all of the applicable regulations, global
expectations and requirements; but is a listing of the responsibility for key
specific quality requirements outlined in the agreement between the two
companies.

•      does not
modify, amend, or thereby affect the terms and conditions set forth in the
approved contract.

 

The
recommended Scope section is listed below:

 

Scope

 

The scope of this
document is only for  [enter OEM name here] products under
contractual agreement with Abbott.

 

7

 

The
required Responsibility section is listed below:

 

Responsibility
#

 

The owner of this
document is [fill in appropriate Abbott functional group
or individual who compiles this agreement].

 

The
required Supporting documents section is listed below:

 

Supporting
documents  #

 

The following documents
support this procedure.

 

[list
the supporting documents (using bullet text) for the OEM-specific quality
agreement or “not applicable”, as appropriate.]

 

The
required Content section is listed below:

 

Content  #

 

The table below lists the
topics in this document. [* fill in page numbers
from OEM-specific DFP quality agreement]

 

	
  Topic

  	
   

  	
  See Page

  	
   

  
	
  Changes and Approval

  	
   

  	
  *

  	
   

  
	
  Quality Agreement Overview

  	
   

  	
  *

  	
   

  
	
  Ownership Items - General

  	
   

  	
  *

  	
   

  
	
  Ownership Items - In Vitro Diagnostic Directive
  (IVDD)

  	
   

  	
  *

  	
   

  
	
  Definitions

  	
   

  	
  *

  	
   

  
	
  Appendix I: Key Contacts Matrix

  	
   

  	
  *

  	
   

  

 

[Note:  An actual quality agreement document will
begin with an “Overview” (Infomapping “map title”), which will contain the
following sections (Infomapping “block titles”):

 

•      Executive
Summary

•      OEM Approval
Signature

•      Purpose

•      Scope

•      Responsibility

•      Supporting
documents

•      Content

•      General

•      In Vitro
Diagnostic Directive

 

Do
not repeat this Note in the  OEM-specific
DFP quality agreement.]

 

8

 

General #

 

Below is
a list of General Ownership Items to be addressed within the agreement.

 

	
  Number

  	
   

  	
  Ownership Items - General

  
	
  1

  	
   

  	
  Quality
  Systems/GMP Attestation

  
	
  2

  	
   

  	
  Auditing and
  Monitoring

  
	
  3

  	
   

  	
  Third Party
  Inspection Notification

  
	
  4

  	
   

  	
  Product
  Requirements/ Specifications

  
	
  5

  	
   

  	
  Software detailed
  design specifications

  
	
  6

  	
   

  	
  Design History
  File (DHF)

  
	
  7

  	
   

  	
  Design Control/
  Design Control Changes

  
	
  8

  	
   

  	
  Verification and
  Validation

  
	
  9

  	
   

  	
  Submission

  
	
  10

  	
   

  	
  Regulatory
  issues for countries in which product is distributed

  
	
  11

  	
   

  	
  Lot Number
  Assignment

  
	
  12

  	
   

  	
  Device History
  Record (DHR) - includes record retention requirements

  
	
  13

  	
   

  	
  Device Master
  Record (DMR) - includes record retention requirements

  
	
  14

  	
   

  	
  Labeling
  (content, claims, translations, specifications, packaging, printing,
  inspection, etc. Includes promotional material)

  
	
  15

  	
   

  	
  Process and
  Material Control – Manufacturing Changes

  
	
  16

  	
   

  	
  Final product
  release, in-process, and raw material testing

  
	
  17

  	
   

  	
  Notification of
  nonconforming final product

  
	
  18

  	
   

  	
  Stability

  
	
  19

  	
   

  	
  Sample Retention

  
	
  20

  	
   

  	
  Storage and
  distribution

  
	
  21

  	
   

  	
  Shipping

  
	
  22

  	
   

  	
  Warranty

  
	
  23

  	
   

  	
  Customer
  certificate

  
	
  24

  	
   

  	
  Disposition of
  returned goods

  
	
  25

  	
   

  	
  Training

  
	
  26

  	
   

  	
  Adverse
  Experiences (Medical Device Reporting), Customer Support and Complaints

  
	
  27

  	
   

  	
  Customer
  Interventions- recalls

  
	
  28

  	
   

  	
  Other

  

 

9

 

In Vitro
Diagnostic Directive #

 

Below is
a list of Ownership Items specific to the In Vitro Diagnostic Directive (IVDD)
to be addressed within the agreement.

 

	
  Number

  	
   

  	
  Ownership Items - IVDD

  
	
  1

  	
   

  	
  IVDD
  Certification

  
	
  2

  	
   

  	
  Labeling and
  language requirements per IVDD

  
	
  3

  	
   

  	
  Technical Files

  
	
  4

  	
   

  	
  Declaration of
  Conformity

  
	
  5

  	
   

  	
  Risk Analysis

  
	
  6

  	
   

  	
  Essential
  Requirements

  
	
  7

  	
   

  	
  Management of
  Notified Body review and approval

  
	
  8

  	
   

  	
  Legal
  Manufacturer Defined

  
	
  9

  	
   

  	
  Other

  

 

10

 

The
required Changes and Approval section is listed below:

 

Changes
and Approval  #

 

Initial approval and
changes to OEM Quality Agreements require approval of both companies.

 

Abbott and OEM approval
consists of, minimally

 

•      ADD Quality
Assurance and Regulatory Affairs management, and

•      authorized OEM
management representative(s).

 

Note:  Abbott approval is electronic.

 

11

 

The
required Quality Agreement Overview section is listed below:

 

Agreement
Type  #

 

[Briefly describe the the
agreement type and overview.  The typical
source of this information is the contract and/or the OEM Project Plan.

 

Topics for consideration
include:

 

•       Category of
agreement.  Examples include:

 

•         distribution-only

•         contract
manufacturing

•         co-development

 

•       Primary
complaint handling responsibility.

•       Legal
manufacturer and primary company name on the product(s).]

 

12

 

The
required Ownership Items - General section is listed below:

 

#

 

The following paragraphs
identify the owner of specific tasks, and provide a brief explanation of the
responsibility.

 

Quality
Systems/GMP Attestation

 

[Describe which company
shall be designated the FDA Approved Facility. 
Manufacturing shall be conducted in accordance with all applicable laws,
rules, regulations and regulatory approvals including Quality System
Regulations (QSR), utilizing a quality control program consistent with the QSR
and other governing laws or regulations, such as ISO-9001.

 

The owner of the Approved
Facility must notify the other company of any plans to relocate the Approved
Facility at least 60 days prior to relocation. 
This notification is to be followed with a confirming document issued on
the date of relocation.  Relocation may
be grounds for re-qualifying the OEM supplier.]

 

Auditing
and Monitoring

 

[Describe:

 

•      whether [enter OEM name here]shall obtain “Approved”,
or other ADD supplier status rating (Certified, Conditional, Restricted,
Inactive, or Disapproved).

•      if it is
specified that Abbott shall accept only product which was manufactured at a
facility that has passed an Abbott Supplier Quality audit.

•      if Abbott shall
be entitled to perform an annual audit or additional audits due to facility
relocation, compliance follow-up, or FDA request.  Explain that prior written notice is required
and that audits are performed during normal business hours.

•      if [enter OEM name here] can audit
Abbott facilities and define the scope.]

 

Third
Party Inspection Notification and Sharing of Findings

 

[Describe:

 

•      if [enter OEM name here]must
notify Abbott of any action by the FDA in regard to the products or facilities
covered in the agreement.

•      if [enter OEM name here] is audited or inspected by some
specified third party such as FDA or ISO, does Abbott want [enter OEM name here] to

•            send a
copy of the audit report/findings?

•            notify
Abbott if the audit/inspection causes follow-on actions?

•            notify
Abbott when such audits or inspections are taking place?]

 

13

 

Product
Requirements/ Specifications

 

[Describe which company
has responsibility.

 

Additional topics for
consideration:

 

•      Product,
testing, and manufacturing specification development

•      Document
issuance, distribution, approval, and retention

•      Change control,
including communication between companies]

 

Software
detailed design specifications (if applicable)

 

[Describe which company
has responsibility.

 

Additional topics for
consideration:

 

•      Specification
development and validation

•      Document
issuance, distribution, approval, and retention

•      Change control,
including communication between companies]

 

Design
History File (DHF)

 

[Describe which company
has responsibility.

 

Additional topics for
consideration:

 

•      Product,
testing, and manufacturing specification development

•      Document
issuance, distribution, approval, and retention

•      Change control,
including communication between companies]

 

Design
Control/ Design Control Changes

 

[Describe which company
has responsibility.

 

If OEM, describe
whether [enter OEM name here]
shall notify Abbott of changes as described in the Process and Material
Control-Manufacturing Changes section.

 

Additional topics for
consideration:

 

•      Product,
testing, and manufacturing specification development

•      Document
issuance, distribution, approval, and retention

•      Change control,
including communication between companies]

 

14

 

Verification
and Validation

 

[Describe which company
has responsibility for:

 

•      creating the
Validation Master Plan

•      determining how
it is to be approved, and

•      deciding where
copies of it are to be retained.

 

Additional topics for
consideration:

 

•      Process,
product, software, environmental monitoring, equipment, facility, and test
method

•      Change control,
including communication between companies]

 

Submission

 

[Describe which company
has responsibility and ownership of any licenses, clearances, patents, and
registrations.  Identify the company
responsible for any required filings (and fees) for licenses, clearances,
patents, and registrations.

 

Note:  It may be appropriate to reference the
contract and use this paragraph for any explicit clarifications.

 

Additional topics for
consideration:

 

•      Deficiency
letters and responses

•      Periodic
reviews and reports]

 

Regulatory
issues for countries in which product is distributed #

 

[Describe which company
has responsibility to comply with regulatory requirements of destination
countries.]

 

Additional topic for
consideration:

 

•      If product is
currently licensed in Canada or will be licensed in Canada, describe which
company is the legal manufacturer.

 

15

 

Lot
Number Assignment

 

[Describe which company
has responsibility.

 

Additional topics for
consideration:

 

•      Issuance,
distribution, and approval

•      Product list
number, lot number, and expiration date format

•      Retention of
on-line retrieval and traceability capability (e.g. how long is it kept, where
is it kept, turn-around time to retrieve data)

•       What happens
to lot number assignment data when it “ages” off the supplier’s management
information systems]

 

Device
History Record (DHR)

 

[Describe which company
has responsibility.

 

Additional topics for
consideration:

 

•      Content

•      Suitability of
electronic records - if electronic refer to applicable electronic recordkeeping
requirements

•      Review,
approval, retention]

 

Device
Master Record (DMR)

 

[Describe which company
has responsibility for the compilation of records containing the procedures and
specifications for a finished device.]

 

16

 

Labeling

 

[Labeling includes
content, claims, translations, specifications, printing, inspection, etc.
(including promotional material).

 

Describe:

•      if the outside
packaging labeling will have [enter OEM name here]
trade dress with “Distributed by Abbott” or other labeling.

•      if the outside
labeling is to include regulatory compliance labels, such as CE mark or
Nationally Recognized Test Laboratory (NRTL) designations.

•      on-the-device
label requirements. (per applicable FDA and other regulations)

•      approval and
retention process of all labeling.

•      the process for
promotional material review and approval.

•      that Abbott
must approve any and all label changes if the label responsibility is shared.

•       whether Abbott
ADD Labeling Control functional expertise will be utilized on behalf of the OEM
supplier.]

 

17

 

Process
and Material Control – Manufacturing Changes 
#

 

[Enter OEM name here] shall notify Abbott, in
advance, of any changes in its manufacturing process which could potentially
affect the safety or efficacy, or materially affect the fit, form or function
of the products. This includes any changes that affect

•      written quality
plans for production

•      written quality
procedures, as well as

•      changes outside
the validated level or procedure in manufacturing

•         procedures

•         component,
part, or raw material suppliers

•         manufacturing
sites, or

•         batch sizes.

 

Upon the request of
Abbott, [enter OEM name here] shall
provide to Abbott, representative samples of changed products in reasonable
quantities to analyze in advance.

 

[Identify the functional
group at Abbott to notify for planned changes. 
[Enter appropriate Abbott department/area.]  The change notification and any applicable
data will be stored by [enter appropriate Abbott
department/area.]

 

Important:  In addition to change notification, when the
OEM is a contract manufacturer for Abbott, the following may apply:

 

[Enter OEM name here] shall obtain a quality
approval from [enter appropriate Abbott quality
department/area here] when

 

•      a correction
involving rework of critical components or finished kits was used to ensure
conformity of the material/ product, or

•      a status of
accept-for-use (or similar use-as-is status) is assigned for nonconforming
deviating material/ product.

 

Additional topics for
consideration:

•      Reworking

•      Batch
adjustments

•      Calibration
monitoring and preventive maintenance

•      Supplier
evaluation

•      Environmental
monitoring and results]

 

18

 

Final
product release, in-process, and raw material testing  #

 

[Describe which company
performs which type of testing in accordance with its quality control program.]  Test data and/ or performance specifications
must exist in order to make an independent determination that products are safe
and effective for their intended use.

 

Shipment of products from
[enter OEM name here] to Abbott shall
be accompanied by a certificate of analysis or compliance from [enter OEM name here] Quality
Assurance department, indicating the final release values, acceptance ranges,
and that the products have passed all the quality control parameters developed
by [enter OEM name here].

 

[Enter
OEM name here] will inform Abbott Product Quality when new lots
of the OEM product is significantly different from the previous lot sent to the
customer.  Abbott Product Quality
determines if the new lot is different to the extent that customers may have to
recalibrate and/or re-establish assay control ranges and/ or change patient
ranges.  Abbott Product Quality reserves
the right to communicate this significant lot-to-lot difference to the
customer.

 

[Additional topics for
consideration:

 

•      Use of currrent
specifications

•      Sampling plans

•      Use of current
test methods

•      Laboratory
reference standards (assay standardization)

•      Out of
specification procedures

•      Test records
and document retention]

 

Notification
of nonconforming final product

 

[Describe the process for
product nonconformance notification in the following manner:]

1.     [Enter OEM name here] shall notify
Abbott of any material design or manufacturing problems.

2.     [Enter OEM name here] shall
notify Abbott as soon as practicable and no later than X business days after
the discovery of any batch failure that could result in [enter
OEM name here] inability to meet Abbott’s requested delivery
dates.

3.     [Enter OEM name here] shall notify
Abbott as soon as practicable and no later than X business days after the
discovery of any failure of a released batch of products distributed to Abbott.

 

19

 

Important:

•      The functional
group at Abbott to notify is the [enter appropriate Abbott department].

•      The change
notification and any applicable data will be stored by the [enter appropriate Abbott department/area].

 

Stability

 

[Describe:

•      the expected
shelf life as “at least _XX__ months from the date of shipment”.

•      which company
will have responsibility for performing additional real time stability studies
on production lots, and

•      who has
responsibility for conducting “on-market” stability testing yearly on
production lots following Standard Operating Procedures (SOPs) for on-market
stability.

 

Additional topics for
consideration:

•      Stability
procedure, protocol, and specifications

•      Stability trend
analysis

•      Out of
specification procedures]

 

Sample
retention

 

[Describe:

•      which company
shall retain a sufficient quantity of each batch of the products to allow
investigation of complaints and confirmation of product shelf life.

•      which company
shall maintain file samples of each batch of product in a suitable storage
facility beyond expiration date or as may be required by law, regulation, or
rule.

•      the amount of
time that samples must be retained.]

 

Storage
and distribution

 

[Describe:

•      which company
has the responsibility for establishing storage and shipping conditions.

•      if storage and
distribution of kits shall be shared by both companies.

•       if the supplier
may “drop ship” product or replacement parts directly to a final customer or to
downstream product distributors.

Example:  An example of a distribution-only agreement
would state: “For purposes of the agreement, [enter OEM name here] will distribute
product to Abbott while Abbott will distribute product to customers.”

 

Additional topic for consideration:  Packaging instructions]

 

20

 

Shipping

 

[Describe who has
responsibility for making sure that the products are suitably packed for
shipment in standard containers.]

 

Warranty

 

[Describe or reference
the warranty statement found in the signed contract].

 

Customer
certificate

 

[Describe which company
shall provide all certificates for products.]

 

Disposition
of returned goods

 

[Describe the terms and
conditions for returning nonconforming product.

 

Example:  If inspection results confirm that the
products do not conform with the warranty, and the nonconformance did not arise
from misuse, mishandling, improper storage, neglect, modification or unusual
chemical or physical stress after delivery to the carrier, Abbott shall return
the products to [enter OEM name here at] [enter OEM name here] expense.

 

Additional topics for
consideration:

 

•      Returned goods
procedure

•      Inspection,
redressing, and restocking

•      Destruction

•      Evaluation and
assessment for potential complaints or CAPA

•      Requirements
for trending and for notification of trend results

•       What to do if
the returned good may have been involved in an adverse event, such as MDR,
customer complaint, or recall]

 

Training

 

[Describe the
responsibilities for training internal personnel as well as customers.

 

Additional topic for
consideration:

 

•      Promotional
material]

 

21

 

Adverse
Experiences (Medical Device Reporting), Customer Support and Complaints  #

 

[Describe:

•      how any adverse
experience information obtained by either company shall be communicated and
reported.

•      which
functional group at Abbott is appropriate to notify.

•      in detail, the
overall process of customer complaint handling.

 

Important:  Include which company’s toll-free number is
the primary complaint handling number.

 

•      who is
responsible for which types of complaints.

•      which company
deals directly with customers or FDA over which types of complaints.

•      who has the
responsibilities for

•         complaint
files.

•         complaint
investigation and closure using structured problem solving techniques to obtain
root cause.

•         regulatory
agency reporting.

•         tracking and
trending.

 

•      whether the OEM shall provide Abbott reasonable access to customer
complaint evaluations for the products in the agreement.

 

Additional topic for
consideration:

 

•      Based on the
distribution plan, are there other standards that need to be referenced, such
as:

•            EU
Vigilance

•            Standards
of Japan

•            Standards
of Canada

•            Other
Standards]

 

22

 

Customer
Interventions- recalls

 

[Describe:

•      the
responsibilities to implement any required recall, field correction or field
report.

 

Important:  List the functional group at Abbott to
notify.

 

•      who will make
all contacts with the FDA.

•      who shall be
responsible for coordinating all activities in connection with the recall.

•       who is
responsible for maintaining a customer database sufficient to permit timely
notifications.]

 

Other

 

[In this section, include
any other quality, regulatory, or compliance items that did not fit in the
above categories.]

 

23

 

The
required Ownership Items - IVDD section is listed below:

 

IVDD
Certification #

 

[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]

 

Labeling
and language requirements per IVDD

 

[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]

 

Technical
Files

 

[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]

 

Declaration
of Conformity

 

[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]

 

Risk
Analysis

 

[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]

 

Essential
Requirements

 

[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]

 

Management
of Notified Body review and approval

 

[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]

 

Legal
Manufacturer Defined

 

[If applicable, describe
which company is responsible for this aspect of ISO certification for IVDD.]

 

24

 

The
required Definitions section is listed below:

 

Agreement  #

 

The contract between the
two companies.

 

In
Vitro Diagnostic Device (IVD)

 

Any medical device which
is a

 

•      reagent,

•      reagent
product,

•      calibrator,

•      control
material,

•      kit,

•      instrument,

•      apparatus,

•      equipment, or

•      system, whether
used alone or in combination, intended by the manufacturer to be used in vitro for the examination of specimens, including blood
and tissue donations, derived from the human body, solely or principally for
the purpose of providing information:

 

•      concerning a
physiological or pathological state,

•      concerning a
congenital abnormality,

•      to determine
the safety and compatibility with potential recipients, or

•      to monitor
therapeutic measures.

 

In
Vitro Diagnostic Directive (IVDD)

 

The European Community
legislation that establishes regulations of in vitro
diagnostic medical devices.

 

Original
Equipment Manufacturer (OEM)

 

Supplier which produces a
finished in vitro diagnostic device for distribution by ADD when ADD is the
legal manufacturer or when ADD appears on the device label.  OEM production requires the performance of
design, development and manufacture, either wholly or in part.

 

Exclusion:  An OEM does not include manufacturers of
components or accessories of in vitro devices

 

25

 

The
required Appendix I: Key Contacts Matrix section is listed below:

 

Note:  Only Document Owner
approval is required to change this Appendix.

 

Abbott
list numbers and commodity numbers

 

[Include
the applicable final product list numbers here.]

 

 

 

[Insert
the appropriate functional areas and names, phone numbers, and e-mail addresses
in the tables.]

 

KEY CONTACTS 
@  ABBOTT LABORATORIES

 

	
  Functional Area

  	
   

  	
  Name

  	
   

  	
  Phone Number

  	
   

  	
  E-mail Address

  	
   

  
	
  Purchased Materials Quality Assurance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Product Quality Assurance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OEM Operations

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Demand Management

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Corporate Purchasing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Division Quality

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

KEY CONTACTS 
@  [enter OEM
name here]

 

	
  Functional Area

  	
   

  	
  Name

  	
   

  	
  Phone Number

  	
   

  	
  E-mail Address

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

End of Document

 

26

 

Exhibit F

 

Final
Transition Services

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Yen)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Yen)

  	
   

  	
  (Yen)

  	
   

  	
  Monthly

  	
   

  
	
   

  	
   

  	
  Headcount

  	
   

  	
  Monthly

  	
   

  	
  Hourly

  	
   

  	
  Monthly

  	
   

  	
  Charge

  	
   

  
	
   

  	
   

  	
  Equivalents

  	
   

  	
  House

  	
   

  	
  Charge

  	
   

  	
  Charge

  	
   

  	
  w/Mark-up

  	
   

  
	
  Monthly Flat Fee:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cost Accounting Personnel – Matsudo

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Purchasing/Supply Chain Management

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Material Handling:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Receiving

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warehousing                                        }

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  Inventory control

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Complaint Handling

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Product Safety

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ****

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  

 

	
  As Used:

  	
   

  	
   

  
	
  Regulatory Support

  	
   

  	
   

  
	
  }

  	
   

  	
  Charged base don
  actual hours incurred at a rate of Yen **** plus The ****% mark-up.

  
	
  Chase Buffer Fill/Label

  	
   

  

 

General Description of
Services:

 

Cost
Accounting – General financial support as currently provided
for the product line. Activities include:

 

•      Monthly actual
closing

•      Monthly actual
reporting

•      Cycle counting
/ physical inventory

•      Ad hoc
financial support

•      Semi-annual
planning/budgeting

 

 

**** REPRESENTS TEXT
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED
SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

8

 

Purchasing/Supply
Chain Management – Planning and procuring material for manufacturing.
Activities include:

 

•      Inventory
planning to support manufacturing schedule

•      General
Purchasing Administration

•      Issuing
purchase orders

•      Receiving
Invoices and entering receipts into BPCS

•      Purchase
Specification/Contracting/Vendor Approval

•      Purchasing
management

 

•      Warehousing/Receiving

•      Material/Commodity
Receiving and inspection

•      BPCS
entry

 

Material
Handling  -

 

•      Key material
receiving

•      Inspection for
shipment damage/claim processing

•      Movement of
receipts into appropriate storage area

•      Logging
receipts into BPCS system

•      Raw material
labeling and general stock control

 

Complaint
Handling – reviewing world-wide level II complaint detail and
characterizing data for trending and analysis.

 

Product
Safety for MAH – Good Vigilance Practice primarily involving
post market surveillance for the Japanese market (external CAPA). Activities
include:

 

•      Data collection
and analysis

•      Approving
labeling and product inserts

•      Issuing
Customer Letters

•      Approving
promotional materials

•      Risk Evaluation

•      CAPA ORB –
Provide monthly statement

 

9

 

Schedule 1.1(a)

 

Adjusted
Price per Unit

 

Adjusted Price per Unit
is calculated as follows:

 

Amounts provided in
Columns “A” and “B” represent Seller’s standard cost per unit per the BPCS
System in Matsudo, Japan as of December 1, 2004

 

Column “C” is adjusted
annually for the CPI and becomes the Adjusted Price Per Unit then in effect

 

All Costs Are Per Test in
Yen

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  “B”

  	
   

  	
  “C”

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  “A”

  	
   

  	
  Rare

  	
   

  	
  Cost

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Total

  	
   

  	
  Reagent

  	
   

  	
  w/o Rare

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Cost

  	
   

  	
  Cost

  	
   

  	
  Reagent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7D2312

  	
   

  	
  DETERMINE HIV-1/2
  20TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2313

  	
   

  	
  DETERMINE HIV-1/2
  100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2318

  	
   

  	
  DETERMINE
  HIV-CHA 100TEST/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2323

  	
   

  	
  DAINASCREEN HIV-1/2
  100TEST//KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2326

  	
   

  	
  DETERMINE HIV-1/2
  CE 20T/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  
	
  7D2327

  	
   

  	
  DETERMINE HIV-1/2
  CE 100T/KIT

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  	
  ****

  	
   

  

 

 

**** REPRESENTS TEXT
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED
SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

10

 

Schedule 1.1(b)

 

Product
Specifications

 

****

 

 

**** REPRESENTS 24 PAGES
OF TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED
SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

 

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]