Document:

Exhitbit 10.43

 

*** Text omitted and filed separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80 (b) (4)

And 240.24b-2

 

DISTRIBUTION AGREEMENT

 

THIS DISTRIBUTION AGREEMENT (this “Agreement”)
effective as of January 1, 2004 (the “Effective Date”), is entered
into between BIOSITE INCORPORATED, a corporation under the laws of the State of
Delaware (“Biosite”), having a place of business at 11030 Roselle Street, Suite
D, San Diego, California 92121, and FISHER SCIENTIFIC COMPANY L.L.C., a Delaware
Limited Liability Company represented by its FISHER HEALTHCARE division,
(“FHC”), having a place of business at 9999 Veterans Memorial Drive, Houston,
Texas 77038.

 

WITNESSETH

 

WHEREAS, Biosite and FHC are parties to a Distribution
Agreement dated as of January 1, 2001 (the “2001 Distribution Agreement”),
which shall terminate on December 31, 2003.

 

WHEREAS Biosite and FHC now desire to enter into a new
agreement setting forth the terms of their business relationship effective as
of January 1, 2004, and applicable from January 1, 2004 until [***]
(“[***]”), and from [***] until [***] (“[***]”), subject to renewal of [***]
pursuant to Section 6(a).

 

NOW, THEREFORE, in consideration of the foregoing
premises and the respective covenants of the parties herein set forth, the
parties hereby agree as follows:

 

1.                                       Products.

 

(a)                                  For
purposes of this Agreement, the “Products” shall mean, collectively, the [***],
[***], [***], [***], [***] and [***].

 

(b)                                 For
purposes of this Agreement, the “[***]” shall mean, collectively, the [***],
[***] and [***].

 

(c)                                  For
purposes of this Agreement, the “[***]” shall mean, collectively, the [***],
[***] and [***].

 

(d)                                 For
purposes of this Agreement, the “[***]” shall mean the Biosite products
described in Schedule B.

 

(e)                                  For
purposes of this Agreement, the “[***]” shall mean the Biosite products
described in Schedule C.

 

(f)                                    For
purposes of this Agreement, the “[***]” shall mean the Biosite products
described in Schedule D.

 

(g)                                 For
purposes of this Agreement, the “[***]” shall mean the Biosite products
described in Schedule E-1 and Schedule E-2.

 

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(h)                                 For
purposes of this Agreement, the “New Products” shall mean the new [***]
products (other than the [***], [***], [***], [***] and [***]), (i) for
which Biosite or the applicable third party manufacturer has received all
applicable governmental approvals to sell and use in the Territory after the
date of this Agreement, (ii) which Biosite is not prohibited by law or
contract from selling to FHC hereunder, (iii) which Biosite offers for
sale, (iv) which FHC exercises its right under Section 1(k) to add to
this Agreement.  Subject to the foregoing,
Biosite agrees and acknowledges that nothing in its BNP Assay Development,
Manufacture and Supply Agreement dated [***], with [***] prohibits Biosite from
granting to FHC the right to distribute new Biosite immunoassay diagnostic
products [***] to such products under such written agreement with [***]  The New Products used in an automated
immunoassay instrument platform for BNP manufactured by a third party on behalf
of Biosite shall be referred to as “[***]”.

 

(i)                                     For
purposes of this Agreement, the “[***]” shall mean the new Biosite immunoassay
diagnostic products used with the instrument (other than the [***]) for the
[***], (i) for which Biosite has received all applicable governmental
approvals to sell and use in the Territory after the date of this Agreement,
(ii) which Biosite is not prohibited by law or contract from selling to
FHC hereunder, (iii) which Biosite offers for sale, and (iv) which
FHC exercises its right under Section 1(k) to add to this Agreement.  Subject to the foregoing, Biosite agrees and
acknowledges that nothing in its BNP Assay Development, Manufacture and Supply
Agreement dated [***], with [***] prohibits Biosite from granting to FHC the
right to distribute new Biosite immunoassay diagnostic products [***] to such
products under such written agreement with [***]

 

(j)                                     During
the term of this Agreement, Biosite shall make available to FHC any improved or
updated versions of the Products under the same terms and conditions (other
than price) as set forth herein.

 

(k)                                  If
Biosite desires to offer for sale in the Territory any new Biosite immunoassay
diagnostic product (other than the [***], [***], [***], [***] and [***]),
(i) for which Biosite or the applicable third party manufacturer has
received all applicable governmental approvals to sell and use in the Territory
after the date of this Agreement, and (ii) which Biosite is not prohibited
by law or contract from selling to FHC hereunder, then Biosite shall offer to
FHC in writing the opportunity to add such new Biosite product to this
Agreement.  If FHC gives Biosite express
written notice of FHC’s acceptance of such offer for such new Biosite product
within [***] after FHC receives Biosite’s written offer to add such new Biosite
product to this Agreement, then such new Biosite product shall be added to this
Agreement.  If FHC fails to give Biosite
express written notice of FHC’s acceptance of such offer for such new Biosite
product within [***] after FHC receives Biosite’s written offer to add such new
Biosite product to this Agreement, then FHC shall have no rights in or to such new
Biosite product (or to any improved or updated versions thereof) under this
Agreement or otherwise.

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(l)                                     Biosite
shall provide all required Material Safety Data Sheets, if any, for any Product
containing hazardous chemicals or otherwise as required by federal, state or
local law.

 

2.                                       Grant
of Distributorship.

 

(a)                                  Upon
the terms and subject to the conditions set forth in this Agreement, Biosite
hereby appoints FHC, and FHC accepts such appointment, as the [***] distributor
of the [***] in the Territory (as defined below) during [***] of this
Agreement.  FHC may distribute the [***]
hereunder only through FHC or its subdistributors existing as of the Effective
Date which are listed in Schedule G. 
FHC shall not appoint subdistributors hereunder, other than those listed
in Schedule G without Biosite’s prior express written consent, which shall
not be unreasonably withheld. 
Notwithstanding the foregoing, Biosite reserves the rights described in
Section 2(g).

 

(b)                                 Upon
the terms and subject to the conditions set forth in this Agreement, Biosite
hereby appoints FHC, and FHC accepts such appointment, as the [***] distributor
of the [***] in the Territory during [***] of this Agreement.  For purposes of this Agreement, during
[***], “[***]” shall mean, with respect to any [***], that Biosite (under the
terms and conditions of Section 2(g)) and FHC (on the terms and conditions
in this Agreement) and [***] other third party (to be determined by Biosite,
but which shall not be either [***], [***] or [***], or any of their respective
subsidiaries or affiliates, and which shall not use either [***], [***] or
[***], or any of their respective subsidiaries or affiliates, as a subdistributor),
shall have the right to promote, market, sell and distribute the [***] in each
segment of the Territory.  Biosite shall
inform FHC of any such appointment in writing not less than [***] prior to
initiating distribution with any such third party.  FHC may distribute the [***] hereunder only through FHC or its
subdistributors existing as of the Effective Date, which are listed in
Schedule G.  FHC shall not appoint
subdistributors hereunder, other than those listed in Schedule G without
Biosite’s prior express written consent, which shall not be unreasonably
withheld.  Notwithstanding the
foregoing, Biosite reserves the rights described in Section 2(g).

 

(c)                                  Upon
the terms and subject to the conditions set forth in this Agreement, Biosite
hereby appoints FHC, and FHC accepts such appointment, as the [***] distributor
of the [***] in the Territory during [***] of this Agreement.  For purposes of this Agreement, during
[***], “[***]” shall mean, with respect to any Product, that Biosite (under the
terms and conditions of Section 2(g)) and FHC (on the terms and conditions
in this Agreement) and [***] other third party (to be determined by Biosite,
but which shall not be either [***], [***] or [***], or any of their respective
subsidiaries or affiliates, and which shall not use either [***], [***] or
[***], or any of their respective subsidiaries or affiliates, as a
subdistributor), shall have the right to promote, market, sell and distribute
the Products in each segment of the Territory. 
Biosite shall inform FHC of any such appointment in writing not less
than [***] days prior to initiating distribution with any such third
party.  FHC may distribute the Products
hereunder only through FHC or its subdistributors existing as of the Effective
Date, which are listed in Schedule G. 
FHC shall not appoint subdistributors hereunder,

 

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other than those listed
in Schedule G without Biosite’s prior express written consent, which shall
not be unreasonably withheld. 
Notwithstanding the foregoing, Biosite reserves the rights described in
Section 2(g).

 

(d)                                 Notwithstanding
anything to the contrary set forth in this Agreement, upon the terms and
subject to the conditions set forth in this Agreement, Biosite hereby appoints
FHC, and FHC accepts such appointment, as the [***] distributor of the Products
in the [***] (as defined below) during this Agreement.  FHC may distribute the Products hereunder only
through FHC or its subdistributors existing as of the Effective Date, which are
listed in Schedule G.  FHC shall
not appoint subdistributors hereunder, other than those listed in
Schedule G without Biosite’s prior express written consent, which shall
not be unreasonably withheld.

 

(e)                                  The
“Territory” consists of [***] in the United States and its territories
(including without limitation, Puerto Rico): (1) the “[***]”, and (2) the
“[***].”  The [***] shall mean:  hospitals (including nonprofit,
religious, government, university, military and psychiatric hospitals),
reference laboratories, occupational health centers and clinics that are part
of a hospital facility; chest pain centers that are part of a hospital
facility; drug rehabilitation centers that are part of a hospital facility; and
planned parenthood centers.  The [***]
shall mean those physician group practices of [***] or more physicians that
have purchased from FHC any Product at any time from [***], through [***].  By no later than [***], FHC shall send
written notice to Biosite setting forth the physician group practices of [***]
or more physicians that have purchased from FHC any Product at any time from
[***], through [***]; upon request from Biosite, FHC shall also provide such
supporting documentation as reasonably requested by Biosite.  The [***] shall include only those physician
group practices of [***] or more physicians that are set forth on such notice
received by Biosite and which are not reasonably disputed by Biosite.  The Territory shall not include, and
FHC shall not be permitted to sell the Products in, any areas or to any market
segment not described in this Section 2(e) without the prior written
consent of Biosite, which consent may be withheld at Biosite’s sole
discretion.  FHC shall take reasonable
steps to limit the likelihood that FHC’s customers in the Territory purchase
Products for resale in the Reserved Market Segments (as defined below).

 

(f)                                    All
areas and market segments not included in the definition of the Territory shall
be hereinafter referred to as the “Reserved Market Segments.”  Biosite shall retain all rights to promote,
market, sell and distribute (either directly or through others) the Products in
the Reserved Market Segments.  Except as
otherwise set forth in this Agreement, Biosite shall not be permitted to sell
the Products in the Territory and shall take reasonable steps to limit the
likelihood that Biosite’s customers in the Reserved Market Segments purchase
Products for resale into the Territory. 
Included in the Reserved Market Segments, without limitation, are all
market segments in countries outside of the United States and its territories
(including without limitation, Puerto Rico) and the following customer groups
in the United States and its territories (including without limitation, Puerto
Rico): free-standing drug rehabilitation centers and chest pain centers not
part of a hospital facility; prisons and prison hospitals; physician practices
of less than [***]  physicians; physician group practices of [***] or more

 

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physicians other than the
[***]; probation and parole programs; public and private sector workplace
testing; non-hospital based occupational health centers or clinics; industrial
laboratories; non-hospital military on-site testing programs (i.e., ADCO,
recruiting centers); high school, college, university and professional sports
programs; government agencies; public carriers; and veterinary clinics and
animal testing.

 

(g)                                 Nothing
herein shall prohibit Biosite from:

 

(i)                                     promoting,
marketing, distributing and selling the [***] to [***] (or its affiliates)
without restriction;

 

(ii)                                  distributing
(but not selling) Products within the Territory only for purposes of pre-market
clinical testing or evaluation of Products or testing of Product improvements
or enhancements prior to market introduction;

 

(iii)                               promoting,
marketing, soliciting and receiving orders for the sale  by FHC, its subdistributors listed on
Schedule G (with FHC’s consent), and its [***] distributor of Products
within the Territory as allowed under the terms and conditions of this
Agreement;

 

(iv)                              promoting,
marketing, selling and distributing any Product directly to a customer,
(A) which states in writing to FHC (either directly or through Biosite but
that nevertheless is a writing on customer letterhead) that such customer will
only buy such Product directly from Biosite (or any other Biosite distributor
properly appointed under the terms and conditions of this Agreement), but only
after Biosite identifies the customer to FHC and specifies the reason such
customer refuses to buy from FHC; and  

 

(v)                                 promoting,
marketing, selling and distributing any Product in any territory or to any
market segment during the [***] (if applicable as described in
Section 6(a) of this Agreement) or in the event that FHC exercises the opt
out right described in Section 3(b).

 

(h)                                 Notwithstanding
any language to the contrary in this Agreement, the parties agree to exercise
due diligence and good faith for their mutual benefit in jointly negotiating
and entering into agreements with group purchasing organizations (integrated
delivery networks or similar entities) for Products.  Neither Biosite nor FHC shall negotiate or execute an agreement
with a group purchasing organization (integrated delivery network or similar
entity) for Products without the written consent of the other, which shall not
be unreasonably withheld.  Any request
for such consent shall be answered by the other party within thirty (30) days.  FHC shall pay any group purchasing
organization’s administrative fees applicable to FHC’s national contracts.  Biosite shall pay any group purchasing
organization’s administrative fees applicable to Biosite’s national
contracts.  Each of FHC and Biosite
shall pay [***] of the administrative fees imposed by [***] regarding the
purchase of the Products through FHC, provided that neither party can amend the
amount of administrative fee imposed by [***] without the other party’s prior
written consent.   The language
contained in this Section 2(h) shall control over any conflicting language
contained in this Agreement.

 

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(i)                                     If
FHC in good faith enters into a written agreement (excluding a purchase order
or Multi-product Agreement (as defined below)) with a Contract Customer (as
defined below) relating to the purchase and sale of Products, such written
agreement shall be substantially in the form of Biosite’s then-current form
written agreement for the applicable transaction (the “Form Agreement”),
provided that FHC may (1) remove the Biosite logo and insert the FHC logo, (2)
delete “Biosite” as the signatory, (3) insert terms concerning shipment and
payment as exist between FHC and the Contract Customer, (4) expressly provide
that Biosite and not FHC shall be responsible for all warranty services (in
accordance with Biosite’s standard warranty terms and conditions), and product
liability issues and third party intellectual property claims to the extent
caused by Biosite’s negligence or intentional misconduct, and (5) insert terms
and conditions limiting FHC’s liability to the applicable customer to the
extent permitted by applicable law (provided that such terms and conditions
shall in no event provide that Biosite shall have additional obligations or
liability to the applicable customer). 
Subject to the immediately preceding sentence, FHC shall not revise the
terms or conditions of a Form Agreement without obtaining Biosite’s prior
written approval.  Subject to
Section 5(e) below, Biosite shall have the right to enter into written
agreements with Contract Customers of FHC for distribution of Products by FHC
to such Contract Customers, provided that Biosite shall not obligate FHC to;
(i) provide warranty services or indemnity to Contract Customers regarding the
Products (and each such written agreement shall contain language substantially
similar to the language set forth in paragraphs A and B of Schedule J
attached to this Agreement); or (ii) deliver the Products other than in
accordance with FHC’s standard delivery terms and conditions unless (a) FHC
fails to reject, within three (3) business days after delivery of a written
request by Biosite to FHC’s Controller, Biosite’s request to include in the
Contract Customer agreement delivery terms that are inconsistent with FHC’s
standard delivery terms or (b) Biosite agrees to be solely responsible for all
additional costs incurred by FHC to the extent resulting from the delivery terms
being inconsistent with FHC’s standard delivery terms.  Subject to the foregoing, the following
shall apply:  (1) Biosite shall use
reasonable efforts to include language substantially similar to the language
set forth in paragraphs A and B of Schedule J attached hereto in any
agreement with a Contract Customer as described in the preceding sentence; and
(2) Biosite shall provide written notice to FHC’s Legal Department in the event
that Biosite desires to enter into an agreement with a Contract Customer that
does not contain language substantially similar to the language set forth in
paragraph B of Schedule J and Biosite shall not enter into such an
agreement with such Contract Customer in the event that FHC’s Legal Department
provides, within three (3) business days after delivery of a written request by
Biosite, reasonable notice and reasons for rejecting such request by
Biosite.  The parties shall cooperate in
good faith to facilitate the execution by Contract Customers of such written
agreement based on the applicable Form Agreement and as provided in this
Section 5(i).  Provided that the
purpose of the agreement is not primarily for the distribution of Products by
FHC, FHC may in good faith enter into written agreements with FHC customers
relating to the distribution by FHC to such FHC customers of multiple products
including Products and multiple products of third party manufacturers (a
“Multi-product Agreement”), provided that FHC shall not obligate or give the
right to any FHC customer to purchase any Products beyond the term of this
Agreement.  “Contract Customer” shall
mean a FHC customer that purchases a Product from FHC under this Agreement;
provided, however, “Contract Customer” shall not include national purchasing
groups with which FHC has entered into its standard contracts as of the
Effective Date.

 

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(j)                                     Notwithstanding
anything to the contrary, upon [***] advance written notice to FHC (the “Event
Notice”), Biosite may, in its sole discretion, (i) discontinue the manufacture,
sale or supply of [***] into the general commercial market (but not to FHC
only), and (ii) sell or transfer its [***] of products (or such portion of
Biosite’s business that pertains to the [***]).  [***] after receipt of an Event Notice, (i) FHC shall no longer
have the right to distribute, and shall cease distributing, the [***] other
than such [***] that are already in FHC’s inventory, and (ii) this Agreement
shall terminate with respect to [***] only, subject to Section 6(c) and
other than for purposes of Sections 5(g) and 5(h).

 

3.                                       Conduct
of FHC.

 

(a)                                  FHC
shall use its good faith commercial efforts and facilities to promote, market,
distribute and sell the Products and to take no action which would interfere
with Biosite’s efforts to develop and maintain the reputation of and goodwill
with respect to the Products within the Territory during the term of this
Agreement.  FHC shall provide not less
than an aggregate of [***] full pages of advertising for available Products in
all of FHC’s General Catalogs.  With
respect to each [***], [***] and [***], FHC shall permit Biosite access to its
sales representatives for at least [***] per Product for the purpose of
providing training of FHC’s sales representatives in the demonstration and use
of the Products on such dates (which shall be not later than [***] following
the launch of such Product in the Territory) and in such locations as mutually
acceptable to the parties.  FHC shall
provide Biosite with samples of any such Product advertising and sales
literature prior to printing and distribution of same, and Biosite shall have
the right to approve the Product advertisement(s), which approval shall not be
unreasonably withheld or delayed.  FHC
shall use its good faith commercial efforts to inform customers and potential
customers of the availability and desirability of the Products; to handle
promptly all inquiries, quotations, correspondence and orders; and to assist
customers in the proper use of the Products and the referral of customers to
Biosite for the solution of technical application problems.

 

(b)                                 Except
as otherwise set forth in this Section 3(b), and except with respect to
the [***], provided that Biosite supplies sufficient Products to FHC to satisfy
FHC’s purchase of the Products from Biosite within FHC’s reasonable forecasted
amounts pursuant to Section 3(c), FHC shall not promote, market,
advertise, sell, or distribute any products in the Territory that are directly
competitive with the Products. 
Notwithstanding the foregoing, FHC shall have the right to distribute
and sell (i) products of a third party, competitive with the Products, which
third party products FHC sells or distributes as of the Effective Date, as
listed on Schedule H; (ii) any products of such third party which are
subsequently added by such third party to its line of products, which are
competitive with the Products, except those products in the same or equivalent
testing format of the Products that read visually or read on a point of care
instrument; and (iii) any instruments that may include competitive assays to
the Products which are instruments that are based on an automated random access
instrument platform (with the exception of those instruments manufactured by or
on behalf of [***], [***] [***], [***], [***] or [***] or their successors or
assigns and which have a [***]) with a broad based menu of analytes such as
chemistries, fertility, thyroid function, oncology, infectious disease, TDM,
DOA, allergy, etc.; provided that all of the

 

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products referred to in
Sections 3(b)(i)-(iii) have a [***]. 
Additionally, nothing contained in this Agreement shall restrict the
activities of FHC outside the Territory with respect to competing
products.  FHC may opt out of the
requirements of this Section 3(b) at any time during the Extended Term by
providing express written notice thereof to Biosite.

 

(c)                                  FHC
shall provide Biosite, on a monthly basis, with a written forecast of FHC’s
estimated purchase requirements for each month in the ensuing three-month
period for the  Products (other than [***]), and in the ensuing six month
period for [***].  Forecasted quantities
for Products for the first and second month of each forecast period shall be
binding, subject however to a variance of plus or minus [***] for the second
month of each forecast and provided that in the first [***] months following
the date of first Product shipment for any new Product, the second month forecast
shall be subject to a variance of plus or minus [***].  Biosite shall use its good faith commercial
efforts to sell such quantities to FHC.

 

(d)                                 FHC
may return, for full credit or replacement, any Product for which FHC is
required to give a customer a credit or replacement Product due to a claimed
defect or deficiency in the Product, provided that FHC first obtains from
Biosite a returned goods authorization which shall not be unreasonably withheld
or delayed by Biosite.

 

(e)                                  Biosite
shall review and advise FHC on compliance with all FDA requirements regarding
the Products contained in FHC’s advertising and sales literature.

 

(f)                                    FHC
hereby represents and warrants that neither FHC nor its agents or employees
will make any representations or claims with respect to the Products which are
not authorized in writing by Biosite. 
Subject to the provisions of Section 6(c) hereof, FHC agrees to and
shall indemnify Biosite against, and hold Biosite harmless from, all claims,
actions, costs, expenses and damages (including without limitation reasonable
attorneys’ fees and expenses) arising out of: (i) representations or
claims by FHC with respect to the Products which are not authorized by Biosite;
(ii) willful act or omission by or on behalf of FHC in connection with the
sale, marketing, promotion or distribution of the Products; (iii) failure
by FHC to comply in any material respect with governmental regulatory
requirements relating to the Products which are applicable to distributors of
products; or (iv) material breach of this Agreement by FHC.  Such indemnity shall be provided in
accordance with the procedures set forth in Section 4(l) of this
Agreement.

 

(g)                                 Each
shipment from Biosite shall contain numbers identifying the manufacturing lot
or lots for control purposes.  FHC shall
keep accurate records that will enable FHC to determine the Product lots
received by specific customers of the Product. 
FHC shall make such information available to Biosite in the event of a
Product recall or Product corrective action requested by Biosite or required by
any governmental agency within ten  (10)
days after such request by Biosite.  FHC
shall provide Biosite with information regarding the prior month’s sales
including the [***], and shall provide Biosite with such information in no
event later than the last day of the month, during the term of this Agreement
and during any time thereafter

 

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that FHC sells any
Product as permitted hereunder. 
Additionally, on the Effective Date, [***] the commencement of [***],
[***] before the commencement of the [***], and within [***] after termination
of this Agreement, FHC shall provide to Biosite [***].

 

(h)                                 FHC
shall comply with Biosite’s reasonable instructions regarding the storage and
handling of the Products, and except as otherwise provided in this Agreement,
FHC shall be solely responsible for the cost thereof.

 

(i)                                     At
Biosite’s request, FHC shall submit to Biosite such other reports as are customarily
provided by FHC to suppliers similarly situated with Biosite.

 

(j)                                     Both
parties shall keep accurate records sufficient to permit verification of sales
data for the Products.  Upon written
request and upon reasonable notice during regular business hours, each party
shall permit an independent certified public accountant reasonably acceptable
to the party being audited or other acceptable representative of the requesting
party reasonably acceptable to the party being audited to inspect such records in
order to verify any sales or recall information reasonably required by the
provisions of this Agreement, provided that only one such inspection annually
shall be permitted and the parties shall not be required to keep such records
for longer than five (5) years. 
All information received as a result of such inspections shall be
subject to Section 9 of this Agreement.

 

(k)                                  FHC
shall promptly advise Biosite of any changes in FHC’s organization or personnel
which may materially, adversely affect FHC’s ability to perform under this
Agreement, as well as any material changes affecting ownership or control of
FHC.

 

(l)                                     At
all times during the term of this Agreement, FHC shall maintain inventory of
each Product sufficient to satisfy not less than FHC’s requirements for its
reasonably forecasted sales of such Product for the immediately following
[***].

 

(m)                               Provided
that Biosite is not in default under the terms of this Agreement, at all times
during [***] of this Agreement, FHC shall treat the Products sold to customers
other than hospitals [***] as “[***],” or a [***] status for purposes of [***].

 

(n)                                 To the extent otherwise permitted under this
Agreement, if Biosite in good faith enters into a bona fide written agreement
(a “Biosite/GPO Agreement”) with a group purchasing organization, integrated
delivery network or similar entity (collectively, a “GPO”) pursuant to which
(i) the facilities in the Territory having the right to purchase products
under such GPO shall be obligated to purchase one or more Products at a
purchase price (the “GPO Price”) specified in, or calculated under, such
Biosite/GPO Agreement, the effective price to FHC, for Products sold to FHC for
resale under such Agreement hereunder solely for resale to such facilities,
shall be not greater than [***]. If
Fisher objects to such pricing then the parties shall exercise good faith
efforts to negotiate mutually agreeable pricing for a period of not less than
fifteen (15) days.  If the parties are
unable to reach agreement on other pricing arrangements, then during the

 

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term
of the GPO Agreement, Biosite shall have the right to promote, market,
sell and distribute such Products to such GPO under the GPO Agreement, if
Fisher refuses to sell the Products to the GPO member(s) at the GPO Price.

 

(o)                                 To the extent that Section 952 of the Omnibus Reconciliation Act of 1980 (the “Act”) and
the regulations promulgated thereunder are applicable to the distribution or
delivery of Products to a customer, during the term of any written agreement
with such customer and until the expiration of four (4) years after the last
sale of a Product by FHC pursuant to such customer agreement, FHC will make
available, to the same extent that Biosite is required to do so under the
customer agreement, upon written request of the Secretary of Health and Human
Services or the Comptroller General of the United States or any of their duly
authorized representatives, copies of any books, documents, records and other
data of FHC that are necessary to verify the nature and extent of the costs
incurred by the applicable customer in purchasing the Products.

 

4.                                       Conduct
of Biosite.

 

(a)                                  Biosite
shall ship promptly FHC’s orders for Products, but in any event not later than
sixty (60) days from receipt of each order for a Product, (other than
[***]).  Biosite shall use its
reasonable efforts to ship FHC’s orders for [***] not later than [***] from
receipt of each order for [***]. 
Subject to the provisions of Section 11 hereof, Biosite shall ship
FHC orders for Products f.o.b. Biosite’s facility in San Diego, California (at
which point title and risk of loss shall pass from Biosite to FHC), to FHC’s
warehouse or to such other FHC location(s) as FHC may designate, insurance
prepaid.  Biosite shall cooperate with
FHC in arranging drop shipments of Products to customers on a case by case
basis to include Products designated by Biosite as drop ship Products.  FHC shall pay all freight costs for shipping
Products by FHC’s customary means or by any other means specified by FHC in a
purchase order.  Biosite shall pay all
freight costs for shipping Products by any means other than FHC’s customary
means or the means specified by FHC in a purchase order.

 

(b)                                 Biosite
shall notify FHC immediately in writing should Biosite become aware of any
defect or condition which may render any Product in violation of any statute or
regulation, or which in any way materially alters the specifications or quality
of such Product.

 

(c)                                  Biosite
shall provide to FHC’s sales personnel, at FHC’s premises or such other
location as the parties may agree, at mutually convenient times, such training
in the demonstration and use of the Products as may be reasonably requested by
FHC.  During such training, Biosite
shall also address, in a reasonable manner, market information, strategies, and
tactics to assist FHC’s performance of its obligations under this
Agreement.  All training material,
instructors, demonstration/training products and other training costs and
expenses therefor shall be borne by Biosite; provided, however, that FHC shall,
at its expense, provide transportation and lodging for FHC personnel attending
such training.

 

(d)                                 Biosite
shall provide technical support to FHC’s sales personnel and customers and
promptly provide to FHC such additional technical information developed or
acquired by Biosite from time to time as may reasonably be expected to be of
assistance to FHC in fulfilling its obligations hereunder.  Biosite will provide, at its own expense, a
toll free long distance telephone service for technical support for FHC
customers and sales representatives.

 

* Confidential Treatment
Requested

 

10

 

(e)                                  Biosite
shall provide at its expense reasonable quantities of such instruction manuals
and point of sale literature as may from time to time be requested by FHC for
use in connection with the distribution of the Products.  Subject to FHC’s and Biosite’s prior written
approval, the FHC name will be incorporated in Biosite’s advertising and
literature intended for distribution in the Territory by FHC sales
representatives, at FHC’s expense.  If
requested to do so by FHC, Biosite shall furnish FHC with suitable copy and
photographs and other materials which the parties reasonably agree for use by
FHC in cataloging the Products.

 

(f)                                    During
the term of this Agreement, Biosite shall provide FHC, upon request, with up to
the number of Samples (as defined below) of each Product set forth on
Schedule F, at the reduced pricing set forth in Schedule F, to be
used by FHC solely in connection with the promotion and marketing of such
Product.  A “Sample” shall mean, with
respect to a Product, a sample unit of such Product sold by Biosite to FHC solely
for the purpose of marketing and promoting such Product, and not for the
purpose of commercial resale.  Such
Samples may not be sold by FHC and shall be marked by Biosite with the
following legend:  “FOR EVALUATION
PURPOSES ONLY - NOT FOR RESALE.”

 

(g)                                 Any
Products owned by FHC and rendered unsalable, in FHC’s reasonable commercial
judgment, due to a change in any Product specification, discontinuation or
elimination by Biosite of any Product from its product offering, release by
Biosite of any materially improved or updated version of any Product, or any
other material change in the Product outside of FHC’s control shall be
repurchased from FHC by Biosite within thirty (30) days following FHC’s
request therefor at the price paid for such Product(s) by FHC.  Biosite shall additionally pay for return
freight and related transportation and insurance charges for all such
Products.  Biosite’s release of a
Product which has a longer shelf life shall not be deemed a material
improvement under this Section 4(g).

 

(h)                                 Biosite
shall promptly provide FHC with leads concerning prospective purchasers of the
Products within the Territory in a format to be mutually agreed upon between
the parties.

 

(i)                                     Biosite
shall provide full and accurate written instructions on the Bill of Lading
regarding the storage and handling of the Products.

 

(j)                                     Biosite
shall ship the Products so that at least [***] of the shelf life of the
Products will be remaining at the time of receipt at FHC’s facility, or at
FHC’s customer’s facility, if drop shipped. 
Biosite shall take back for full credit plus shipping charges any dated
Products shipped contrary to this provision, unless shipment of such
short-dated Products was pre-approved in writing by FHC.

 

(k)                                  Biosite
shall indemnify and hold FHC harmless from and against all losses, liabilities,
damages and expenses (including reasonable attorneys’ fees and costs) resulting
from all claims, demands, actions and other proceedings to the extent resulting
from (i) representations or claims by or on behalf of Biosite with respect
to the Products that are untrue or materially misleading when made; (ii) 
willful act or omission by or on behalf of Biosite in the sale, marketing,
promotion or distribution of the Products hereunder; (iii) failure by
Biosite to comply in any material respect with governmental regulatory
requirements relating to the Products;

 

* Confidential Treatment
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11

 

(iv) infringement of
any of the Products on any intellectual property rights of third parties; or
(v) material breach of this Agreement by Biosite.

 

(l)                                     A
party (the “Indemnitee”) that intends to claim indemnification under  Section 3(f) or Section 4(k) shall
promptly notify the other party (the “Indemnitor”) of any claim, demand, action
or other proceeding for which the Indemnitee intends to claim such
indemnification.  The Indemnitor shall
have the right to participate in, and to the extent the Indemnitor so desires
jointly with any other indemnitor similarly noticed, to assume the defense
thereof with counsel selected by the Indemnitor; provided, however, that the
Indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by the Indemnitor, if representation of the Indemnitee by
the counsel retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between the Indemnitee and any other party
represented by such counsel in such proceedings.  The indemnity obligations under Section 3(f) and Section 4(k)
shall not apply to amounts paid in settlement of any claim, demand, action or
other proceeding if such settlement is effected without the prior express
written consent of the Indemnitor, which consent shall not be unreasonably
withheld or delayed.  The Indemnitor may
not settle or otherwise consent to an adverse judgment in any such claim,
demand, action or other proceeding, that diminishes the rights or interests of
the Indemnitee without the prior express written consent of the Indemnitee, which
consent shall not be unreasonably withheld or delayed.  The Indemnitee, its employees and agents,
shall reasonably cooperate with the Indemnitor and its legal representatives in
the investigation of any claim, demand, action or other proceeding covered by
Section 3(f) or Section 4(k), as applicable.

 

5.                                       Price
and Payment Terms.

 

(a)                                  Biosite
shall charge FHC a Transfer Price for each Sample equal to the Sample Price (as
defined below) for such Sample in effect on the date of FHC’s purchase order
therefor.

 

(b)                                 Subject
to Sections 5(k) and 5(l), Biosite shall charge FHC a Transfer Price per unit
for each Product (other than Samples), equal to the List Price, as defined
below in Section 5(f) for such Product, less the following discount:

 

	
  (i)

  	
   

  	
  [***] for [***] sales.

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  [***] for [***] sales.

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  [***] for [***] sales.

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  [***] for [***] set
  forth on Schedule E-1, [***] and [***] sales.

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  [***] for [***] set
  forth on Schedule E-2.

  

 

The parties shall
meet yearly and attempt to reach mutually acceptable agreement on any necessary
revisions to the applicable discounts from List Price per Product category to
reflect an

 

* Confidential
Treatment Requested

 

12

 

attempt to
minimize additional payments from FHC to Biosite and/or rebates from Biosite to
FHC.

 

(c)                                  Biosite
shall have the right to amend the Sample Prices and the List Prices set forth
on Schedules B, C, D, E-1 and E-2 from time to time in its sole
discretion; provided, however, that Biosite shall give at least [***] prior
written notice of any such Biosite amendment. 
Biosite shall honor FHC’s existing purchase orders at the transfer
prices in effect immediately prior to the effective date of each amendment.

 

(d)                                 FHC’s
shall pay for Samples and Products purchased pursuant to this Agreement [***]
after the date of Biosite’s invoice.

 

(e)                                  FHC
shall be entitled to resell the Products on such terms as it may, in its sole
discretion, determine, including, without limitation, price, returns, credit,
discounts, and promotions.

 

(f)                                    For
purposes of this Section 5, the following definitions shall apply:

 

“Actual Selling Margin” shall mean Actual Selling
Price - Transfer Price.

 

“Actual Selling Margin Rate” or “ASMR” shall mean:

 

[Actual Selling
Price - Transfer Price]

Actual Selling
Price

 

“Actual Selling Price” shall mean, with respect to any
Product (other than Samples), the invoiced sales price, net of any discounts
actually taken, which FHC or its affiliate charges to an unaffiliated customer
for purchase of such Product.

 

“Guaranteed Selling Margin Rate” or “GSMR” shall mean,
with respect to any Product (other than Samples), the margin rate that is set
forth below for such Product.

 

“List Price” shall mean Biosite’s then-current list price
for a Product, which list price may be adjusted only as provided in
Section 5(c) above.  The List Price
for each Product as of the Effective Date of this Agreement (but subject to
adjustment thereafter in accordance with Section 5(c)) is as set forth in
the applicable exhibit attached hereto, which shall be, notwithstanding
anything to the contrary herein, the List Price for each Product as defined in
the 2001 Distribution Agreement as of December 31, 2003.

 

“Sample Price” shall mean, with respect to any Sample,
the price therefor set forth on Schedule F, as amended from time to time
pursuant to Section 5(c).

 

“Transfer Price” shall mean, with respect to any
Product (other than Samples), the price calculated pursuant to
Section 5(b) above which FHC is obligated to pay to Biosite for purchase
of such Product.

 

Subject to the provisions of Section 5(i) below,
FHC shall receive the “Guaranteed Selling Margin Rate” on Products as set forth
below.

 

 

* Confidential Treatment
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13

 

	
  During [***], all
  customers (other than hospitals with [***])

  	
   

  	
  [***] for [***]

  
	
   

  	
   

  	
   

  
	
  During [***], hospitals
  with [***]

  	
   

  	
  [***] for [***]

  
	
   

  	
   

  	
   

  
	
  During [***]

  	
   

  	
  [***] for [***]

  

 

For the purpose of
determining the applicable Guaranteed Selling Margin Rate as set forth
immediately above, a “hospital” shall mean a building or real estate
improvement and not a group of affiliated entities.

 

Notwithstanding the
foregoing, with respect to [***] and [***] sold during [***], (i) if the
aggregate dollar volume of sales of such Products by FHC is greater than [***],
but not greater than [***], of the aggregate dollar volume of sales of such
Products by FHC in the prior calendar year, then the GSMR for those sales of
such Products in such calendar year that are greater than [***], but not
greater than [***], of the aggregate dollar volume of sales of such Products by
FHC in the prior calendar year shall be increased by [***] percentage points
(i.e., to [***]% and [***]% respectively, during [***]); and (ii) if the
aggregate dollar volume of sales of such Products by FHC is greater than [***]
of the aggregate dollar volume of sales of such Products by FHC in the prior
calendar year, then the GSMR for those sales of such Products in such calendar year
that are greater than [***] of the aggregate dollar volume of sales of such
Products by FHC in the prior calendar year shall be increased by [***]
percentage points (i.e., to [***]% and [***]% respectively, during [***]).

 

Notwithstanding the
foregoing, with respect to [***] sold during [***], (i) if the aggregate
dollar volume of sales of such Products by FHC is greater than [***], but not
greater than [***], of the aggregate dollar volume of sales of such Products by
FHC in the prior calendar year, then the GSMR for those sales of such Products
in such calendar year that are greater than [***], but not greater than [***],
of the aggregate dollar volume of sales of such Products by FHC in the prior
calendar year shall be increased by [***] percentage points (i.e., to [***]%
and [***]% respectively, during [***]); and (ii) if the aggregate dollar
volume of sales of such Products by FHC is greater than [***] of the aggregate
dollar volume of sales of such Products by FHC in the prior calendar year, then
the GSMR for those sales of such Products in such calendar year that are
greater than [***] of the aggregate dollar volume of sales of such Products by
FHC in the prior calendar year shall be increased by [***] percentage points
(i.e., to [***]% and [***]% respectively, during [***]).

 

 

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Notwithstanding the
foregoing, with respect to [***] sold to hospitals [***] during [***],
(i) if the aggregate dollar volume of such sales of such Products by FHC
is greater than [***] of the aggregate dollar volume of such sales of such
Products by FHC in the prior calendar year, then the GSMR for such sales of
such Products in such calendar year that are greater than [***] of the aggregate
dollar volume of such sales of such Products by FHC in the prior calendar year
shall be increased by [***] percentage points (i.e., to [***]% during [***]);
(ii) if the aggregate dollar volume of such sales of such Products by FHC
is greater than [***] of the aggregate dollar volume of such sales of such
Products by FHC in the prior calendar year, then the GSMR for such sales of
such Products in such calendar year that are greater than [***] of the
aggregate dollar volume of such sales of such Products by FHC in the prior
calendar year shall be increased by an additional [***] percentage points
(i.e., to [***]% during [***]); and (iii) if the aggregate dollar volume
of such sales of such Products by FHC is greater than [***] of the aggregate
dollar volume of such sales of such Products by FHC in the prior calendar year,
then the GSMR for such sales of such Products in such calendar year that are
greater than [***] of the aggregate dollar volume of such sales of such
Products by FHC in the prior calendar year shall be increased by an additional
[***] percentage points (i.e., to [***]% during [***]).

 

(g)                                 In
accordance with the payment terms set forth in Section 5(d) above, Biosite
shall receive payment of the Transfer Price for Products shipped to FHC.  Subject to the provisions of
Section 5(i) below, should the Actual Selling Margin Rate be less than the
GSMR for a Product unit, FHC is entitled to a rebate from Biosite for such
Product unit.  The rebate is calculated
as follows:

 

[***]

 

(h)                                 Subject
to the provisions of Section 5(i) below, should the ASMR exceed the GSMR
for a Product unit, FHC will make an additional payment to Biosite for such
Product unit.  The additional payment is
calculated as follows:

 

[***]

 

(i)                                     Within
[***] after the end of each calendar month, FHC shall prepare and provide
Biosite with a reasonably detailed written sales report which shall
(i) set forth on a Product-by-Product basis the sales of Products by FHC
and its affiliates to unaffiliated customers, and (ii) calculate on a Product-by-Product
basis the Actual Selling Price, the ASMR and the GSMR therefor, and the net
amount (if any) of the additional payments from FHC to Biosite and/or the
rebates from Biosite to FHC owing under Section 5(g) for such calendar
month.  Such sales reports are, and
shall remain the property of FHC, and shall be subject to Section 9 of
this Agreement, but may be used by Biosite solely for the purposes of
performance of its obligations and the exercise of its rights under this
Agreement.  Such report shall be based
on sales by FHC and its affiliates, as reflected on FHC’s Key Supplier Report,
on each Product during each calendar month. 
FHC shall pay to Biosite any such additional payment, and Biosite shall
pay to FHC any such rebate, owing under Section 5(g) for each calendar
month on or before the later of the fifteenth (15th) day of the following
calendar month or ten (10) days after

 

 

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Biosite’s receipt of the
applicable sales report for such calendar month.  Biosite and its agents shall have the right, through an
independent auditor chosen by Biosite and reasonably acceptable to FHC, on
reasonable notice and not more than twice in each calendar year, to inspect and
audit the relevant books and records of FHC and any of its relevant affiliates
to verify the accuracy of such sales reports. 
Biosite shall pay the fees and expenses of such audit.

 

(j)                                     Except
as set forth below in this Section 5(j) or as the parties otherwise
mutually agree, if the Actual Selling Price of any Product unit is less than
the List Price of such Product [***], then for purposes of calculating ASMR and
GSMR, and the amount of any rebate or additional payments under Section 
5(g), the Actual Selling Price of such Product unit shall be deemed to be List
Price of such Product [***].  The
foregoing limitation on the calculation of Actual Sales Price shall not apply
to (i) to continuation of the discount rate or net price to existing
customers during the term of this Agreement, (ii) any sales made pursuant
to binding agreements between FHC and unaffiliated customers entered into prior
to the Effective Date, (iii) to discounts beyond such levels approved by
Biosite, or (iv) any sales made pursuant to Section 3(n).

 

(k)                                  Notwithstanding
anything to the contrary contained in this Agreement, but subject to
Section 5(l), in the case where the [***] described in Schedule D
(the “[***]”) is not purchased but is instead leased by a FHC or Biosite
customer over the term of the customer’s written agreement (a “Reagent Rental
Agreement”), the following shall apply: (1) the Transfer Price paid to Biosite
by FHC for the [***] shall at all times during the course of this Agreement be
[***]; (2) there shall be no GSMR with respect to such [***]; and (3) the
provisions of Sections 5(e) and 5(f) shall not apply.

 

(l)                                     Notwithstanding
anything to the contrary contained in this Agreement, in the case where the
[***] (as described in Schedule D) is not purchased but is instead leased
by a FHC or Biosite customer over the term of the customer’s written agreement
(a “Reagent Rental Agreement”), the following shall apply: (1) the Transfer
Price paid to Biosite by FHC for the [***] shall at all times during the course
of this Agreement be [***]; (2) there shall be no GSMR with respect to such
[***]; and (3) the provisions of Sections 5(e) and 5(f) shall not apply.

 

(m)                               Notwithstanding
anything to the contrary contained in this Agreement, upon the expiration or
termination of this Agreement, Biosite shall pay to FHC [***] for any [***] or
[***] under any and all Reagent Rental Agreements (as more particularly
described in Sections 5(k) and 5(l) above) obtained pursuant to this Agreement
or the 2001 Distribution Agreement.  For
example, if a [***] is amortized at a rate of [***] over a 24 month Reagent
Rental Agreement and the customer pays this amount monthly together with (or as
a part of) its purchase of reagents or controls, if the Agreement expires or is
terminated with 12 months remaining under the term of the Reagent Rental
Agreement, then Biosite shall pay to FHC [***].

 

(n)                                 The
parties contemplate that there will be instances where instruments manufactured
by a third party and used with the [***] (as defined in Section 1(h))
shall be distributed through Biosite into the Territory.  In such event, FHC shall reimburse

 

 

* Confidential Treatment
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Biosite the following
percentage of Biosite’s Acquisition Cost (as defined below) for each such
instrument during [***]:

 

	
  Hospitals with [***]

  	
   

  	
  [***] of Acquisition
  Cost

  
	
   

  	
   

  	
   

  
	
  Hospitals with [***]

  	
   

  	
  [***] of Acquisition
  Cost

  

 

For purposes of this
Section 5(n), “Acquisition Cost” shall mean the invoiced sales price for
the applicable third party instrument net of any discounts or rebates.  All such invoices paid by Biosite shall be
subject to Section 3(j).  With
respect to each instrument so distributed, FHC shall reimburse Biosite for such
Acquisition Cost on a monthly basis (payable prior to the last day of the month
after the date of Biosite’s invoice), with each monthly payment being the
result of the Acquisition Cost divided by the number of months in the term of
the customer agreement to which the instrument is subject.  Notwithstanding anything to the contrary
contained in this Section 5(n), in no event shall any such payment be due
after the expiration or termination of this Agreement.

 

(o)                                 As
of January 31, 2004, FHC shall determine the mix of Products (on a unit
basis) excluding [***] and [***] (as defined in Sections [***]) sold into
hospitals (as “hospitals” is defined for the purposes of GSMR) with less than
[***] beds (the “Small Hospital Market”) and [***] beds or more (the “Large
Hospital Market”).  The mix percentages
as calculated in the immediately preceding sentence shall be multiplied by each
of the GSMR under the 2001 Distribution Agreement, with such numbers then
aggregated (the “2001 Mix Percentage”) and under this Agreement, with such
numbers then aggregated (the “2004(A) Mix Percentage”).  The difference between the 2001 Mix
Percentage and the 2004(A) Mix Percentage shall be multiplied by the
January 2004 Customer Sales Amount (as defined below) and the resulting
amount shall be split evenly between the parties, and shall be paid by FHC to
Biosite in accordance with the payment terms outlined in
Section 5(i).  FHC shall determine
the January 2004 Customer Sales Amount for each Product by using the
following formula:

 

(Actual Selling
Price of each Product invoiced by FHC in January 2004/number of units
invoiced by FHC in January 2004) 
X  Number of units in FHC
inventory as of December 31, 2003

 

This calculation shall be
done for each Product category individually and such numbers shall be
aggregated to create the 2004 Customer Sales Amount.

 

For example, if
the mix of Products sold into the Small Hospital Market and the Large Hospital
Market is 60% and 40% respectively, as of January 31, 2004, the 2001 Mix
Percentage would be [***]% (determined as follows: ((60% [***] [***]%) + (40%
[***] [***]%)) and the 2004(A) Mix Percentage would be [***]% (determined as
follows ((60% [***] [***]%) + (40% [***] [***]%)).  The difference between the 2001 Mix Percentage and the 2004(A)
Mix Percentage is [***]%.  If the 2004 Customer
Sales Amount is $1,000,000.00, then the parties shall split [***].  These provisions shall be in addition to,
and not in lieu of, Sections 5(g) and 5(h).

 

 

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17

 

(p)                                 As
of January 31, 2005, FHC shall determine the mix of Products (on a unit
basis) excluding [***] and [***] sold into the Small Hospital Market and the
Large Hospital Market.  The mix
percentages as calculated in the immediately preceding sentence shall be
multiplied by each of the GSMR under [***] of this Agreement, with such numbers
then aggregated (the “[***] Mix Percentage”) and under [***] of this Agreement,
with such numbers then aggregated (the “[***] Mix Percentage”).  The difference between the [***] Mix
Percentage and the [***] Mix Percentage shall be multiplied by the [***]
Customer Sales Amount (as defined below) and the resulting amount shall be
split evenly between the parties, and shall be paid by FHC to Biosite in
accordance with the payment terms outlined in Section 5(i).  FHC shall determine the [***] Customer Sales
Amount for each Product by using the following formula:

 

(Actual Selling Price of each Product invoiced by FHC
in [***]/number of units invoiced by FHC in [***])  X Number of units in FHC inventory as of [***]

 

This calculation shall be
done for each Product category individually and such numbers shall be
aggregated to create the [***] Customer Sales Amount.

 

For example, if the mix
of Products sold into the Small Hospital Market and the Large Hospital Market
is 60% and 40% respectively, as of [***], the [***] Mix Percentage would be
[***]% (determined as follows: ((60% [***] [***]%) + (40% [***] [***]%)) and
the [***] Mix Percentage would be [***]% (determined as follows ((60% [***]
[***]%) + (40% [***] [***]%)).  The
difference between the [***] Mix Percentage and the [***] Mix Percentage is
[***]%.  If the [***] Customer Sales
Amount is $1,000,000.00, then the parties shall split $[***].  These provisions shall be in addition to,
and not in lieu of, Sections 5(g) and 5(h).

 

(o)                                 Biosite
shall provide FHC copies of each reagent rental agreement executed by Biosite
with a Contract Customer in accordance with the terms of Section 2(i) of
this Agreement as soon as practicable after execution by both Biosite and the
applicable Contract Customer.

 

6.                                       Term
and Termination.

 

(a)                                  This
Agreement shall commence on [***] and shall terminate on December 31,
2005; provided, however, that this Agreement automatically shall be renewed for
an additional period of [***], unless notice of non-renewal is given by one
party to the other by not later than [***] (the “Extended Term”).

 

(b)                                 This
Agreement may be terminated by a party, in the event the other party materially
breaches its obligations hereunder and should fail to remedy such material
breach within thirty (30) calendar days after receiving written notice of
such material breach.

 

(c)                                  The
rights and duties of each party under Sections 3(d), 3(f), 4(k), 6(c), 7,
8, 9, 10, 14, 15, 19, 24 and 25 of this Agreement and Biosite’s obligations
under the Continuing Guaranty as referred to in Section 10(a) hereof and
attached hereto as Schedule A, shall survive termination of this Agreement
and be enforceable in accordance with their terms.  Upon any

 

 

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18

 

termination of this
Agreement, the parties shall mutually agree upon a message (the “Message”) to
be conveyed to all third parties concerning such termination of this Agreement
and neither party shall make any statement (oral or written) relating to the
parties’ relationship under this Agreement or pertaining to the termination of
this Agreement inconsistent with such mutually agreed Message, except as
otherwise required by law, regulation or court order (provided that the party
making such statement shall give the other party reasonable notice of any such
required statement and shall give the other party an opportunity to object to
any such statement or to request confidential treatment therefore) or as
necessary to enforce its rights under this Agreement.  Additionally, FHC shall not make any statement regarding any
Product after the termination of this Agreement that is not expressly permitted
in the Message.  Notwithstanding the
preceding provisions of this Section 6(c), FHC shall at all times after
termination or expiration have the right to create marketing materials that
describe the attributes of the Products versus the attributes of third party
products (provided that such information regarding the Products shall be based
solely on publicly available information regarding the Products and not based
on information obtained by FHC, or based on the parties’ relationship, under
this Agreement or any prior written agreement between the parties).

 

(d)                                 IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY CONTINGENT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF THE OTHER PARTY, OR ANY LOSS OF PROFITS
OR REVENUE OF THE OTHER PARTY, WHETHER ARISING IN CONTRACT, TORT (INCLUDING
NEGLIGENCE), WARRANTY, STRICT LIABILITY OR OTHERWISE.

 

(e)                                  Subject
to the following sentence, in no event shall either party, directly or
indirectly, initiate or prosecute, or assist or induce any third party to
initiate or prosecute (other than as required under court order or legal
process such as a subpoena), any claim, demand, suit, action, cause of action
or other adversary proceeding relating to or arising out of this Agreement or
the subject matter of this Agreement, other than a claim, demand, suit, action,
cause of action or other adversary proceeding to the extent alleging (1) a
material breach of express contract under this Agreement (provided that if the
alleged material breach is curable, (i) the non-breaching party has given
written notice of such material breach and the breaching party has failed to
remedy such material breach within thirty (30) days and (ii) during such thirty
(30) day cure period, at the request of the party allegedly in breach, the
parties shall meet and confer in good faith to discuss the grounds of the
alleged breach), or (2) defamation through a statement made with
“knowledge that it was false or with reckless disregard of whether it was false
or not” by one party of the other. 
Nothing in this Section 6(e) shall in any way limit any claim,
demand, suit, action, cause of action or other proceeding (i) that a party
(“Asserting Party”) may have against the other party to the extent relating to
or arising as a result of a third party claim, demand, suit, action, cause of action
or other proceeding against the Asserting Party, provided that the Asserting
Party can provide written evidence of such claim, demand, suit, action, cause
of action or other proceeding by such third party or (ii) that a party may
have against a third party relating to a Product.

 

7.                                       Trademarks.

 

(a)                                  Subject
to the terms and conditions of this Agreement, Biosite hereby grants to FHC a
nonexclusive, nontransferable, license during the term of this Agreement,
without the

 

19

 

right to sublicense, to
use the trademarks (including, but not limited to the trademark “Triage”) and
tradenames (including, but not limited to “Biosite Incorporated” and “Biosite”)
relating to the Products (collectively, the “Biosite Marks”) solely for the
purpose of promoting, marketing, selling, and distributing the Products.

 

(b)                                 All
right, title, and interest in and to the Biosite Marks shall remain with
Biosite.  During the term of this
Agreement and thereafter, FHC will not contest Biosite’s exclusive right, title
and interest in and to, or the validity of, the Biosite Marks.  In addition, FHC will not in any manner
represent that it has any interest in the Biosite Marks, except for the limited
license provided herein.  Use of the
Biosite Marks by FHC shall inure to the sole benefit of and be on behalf of
Biosite.

 

(c)                                  All
Product units sold by Biosite to FHC will bear one or more of the Biosite
Marks, and FHC shall not alter, remove or modify the Biosite Marks, nor affix
any other trademark to the Product, without the prior express written consent
of Biosite.  FHC shall not utilize any
of the Biosite Marks in connection with any promotional brochures or
advertising materials relating to the Products without the prior express written
consent of Biosite, which consent shall not be unreasonably withheld, delayed
or conditioned.  Biosite’s consent to
the use of the Biosite Marks shall be conditioned upon such brochure or
advertising materials clearly indicating Biosite’s ownership of the Biosite
Marks.

 

(d)                                 All
Product units purchased by FHC hereunder shall be marketed by it in the
original packages under the original labels provided by Biosite, and FHC shall
make no modifications, or alterations to such Product units or labels; provided,
however, that FHC may affix labels or other indices which serve to identify FHC
as a distributor of the Product, so long as they do not cover and are not
inconsistent with any of Biosite’s Product labels or markings.

 

(e)                                  Nothing
in this Agreement shall be construed as granting FHC any ownership interest in
the Biosite Marks, and FHC acknowledges that it has been advised by Biosite of
Biosite’s claim of ownership of the Biosite Marks.  FHC agrees that it will do nothing inconsistent with such
ownership.  Specifically, FHC agrees
that: it will not challenge the validity of, or Biosite’s ownership of, any of
the Biosite Marks; it will not take any action that is inconsistent with, or
may impair, Biosite’s right, title and interest to the Biosite Marks; it will
not represent to any third party that it has any ownership interest in the
Biosite Marks; and it will execute and deliver to Biosite any and all documents
which Biosite may request to confirm in Biosite all right, title and interest
in the Biosite Marks.

 

(f)                                    FHC
shall make no statement to the press relating or referring to the Products
without the prior express written approval of Biosite, which shall not be
unreasonably withheld.

 

(g)                                 Either
party shall promptly notify the other in writing of any challenges to the
validity, infringement on or unauthorized use of any of the Biosite Marks,
actual or threatened, that may come to such party’s attention.  Biosite shall be responsible for and shall
assume all expenses of the enforcement of the Biosite Marks.

 

(h)                                 Biosite
recognizes that FHC is the owner of the trademarks and trade names denoting FHC
or FHC products (collectively, the “FHC Marks”), which FHC may elect to use in

 

20

 

the promotion and sale of the Products, and that
Biosite has no right or interest in such FHC Marks; provided, however, that
except as otherwise set forth in Section 7(b) hereof, no FHC labels,
package inserts or other material shall accompany the Products without the
prior express written approval of Biosite.

 

(i)                                     Biosite
shall not utilize any FHC Marks in connection with any promotional brochures or
advertising materials relating to the Products, or otherwise, without the prior
express written consent of FHC.  FHC’s
consent to the use of the FHC Marks shall be conditioned upon such brochure or
advertising materials clearly indicating FHC’s ownership of the FHC Marks.  Nothing in this Agreement shall be construed
as granting Biosite any license or ownership or other interest in the FHC
Marks, and Biosite acknowledges that it has been advised by FHC of FHC’s claim
of ownership of FHC’s Marks.  Biosite
agrees that it will do nothing inconsistent with such ownership and that all
use of the FHC Marks will inure to the benefit of and be on behalf of FHC.  Specifically, Biosite agrees that: it will
not challenge the validity of, or FHC’s ownership of, any of the FHC Marks; it
will not take any action that is inconsistent with, or may impair, FHC’s right,
title and interest to the FHC Marks; it will not represent to any third party
that it has any ownership interest in the FHC Marks; and it will execute and
deliver to FHC any and all documents which FHC may request to confirm in FHC
all right, title and interest in the FHC Marks.

 

(j)                                     Upon
termination of this Agreement, FHC shall continue to be entitled to utilize the
Biosite Marks on the terms agreed to previously by the parties in connection
with FHC’s promotion, marketing, distribution and sale of units of Products
remaining in FHC’s inventory and not repurchased by Biosite.  Thereafter, except as herein provided, FHC
shall terminate all use of Biosite Marks, and shall at Biosite’s request and at
Biosite’s expense, destroy or return to Biosite all literature and other
advertising and promotional materials bearing only the Biosite Marks.  Notwithstanding the foregoing, FHC shall not
be required to destroy its inventory of catalogs and other materials that
include a reference to Biosite Products among other FHC distributed products
and FHC shall be allowed to use all such materials in its business until same
are depleted or revised.  In the event
of termination or expiration of this Agreement, FHC agrees to cooperate with
Biosite and to execute any and all documents requested by Biosite for the purpose
of canceling any registered user or other rights with respect to Biosite’s name
and the Biosite Marks that FHC may have acquired in operating hereunder, or, at
Biosite’s election, in transferring such rights to Biosite or its FHC designee.  FHC also agrees to cooperate with Biosite in
transferring any appropriate rights in connection with the Biosite Marks to
Biosite and/or Biosite’s designee, at Biosite’s sole cost and expense, if
Biosite desires to sell or have sold products in the Territory (other than the
Products) other than by FHC.

 

8.                                       Copyrights.

 

(a)                                  FHC
hereby acknowledges that Biosite may claim copyright protection with respect to
its package inserts and other supporting materials which it includes with each
of the Product units, and FHC further acknowledges the validity of Biosite’s
right to claim the copyright protection to such materials.  FHC further acknowledges that Biosite has
advised FHC that it has the sole and exclusive right to claim the copyright
protection with respect to all of its package inserts and other supporting
materials included with the Products, and FHC shall take no

 

21

 

action which is in any
way inconsistent with Biosite’s claim of copyright protection that it expects
to make with respect to such materials.

 

(b)                                 In
order to protect against infringement of Biosite’s copyright through
unauthorized reproduction or duplication of its copyrighted materials, such
materials included with the units of Products sold by Biosite to FHC shall bear
appropriate copyright markings.  Nothing
contained in this Section 8 shall prohibit FHC from copying and
distributing to its sales representatives Product advertising, literature and
other materials prepared by or on behalf of Biosite for the purpose of
fulfilling FHC’s obligations under this Agreement.

 

(c)                                  Either
party shall promptly notify the other in writing of any infringements, whether
within or without the Territory, of any of Biosite’s copyrights which come to
the attention of such party.   FHC
shall, at  the request of Biosite,
provide Biosite with all reasonable assistance in initiating and prosecuting
any legal action against any infringer of Biosite’s copyrights within the
Territory; provided, however, that all costs incurred in connection with any
such copyright infringement action shall be borne solely by Biosite.

 

9.                                       Trade
Secrets and Confidential Information.

 

(a)                                  FHC
may receive various trade secrets of Biosite and other information of Biosite
(and in each such instance, at the time of disclosure to FHC, Biosite shall
provide FHC with written notice that Biosite considers such information to be a
trade secret or otherwise confidential) of a confidential nature (including but
not limited to specific technical information concerning the Products).  FHC agrees that it will not disclose to
anyone, directly or indirectly, any of such confidential information, or use
such confidential information other than as reasonably required in the course of
its performance of its obligations and the exercise of its rights under this
Agreement.  Notwithstanding the
foregoing, FHC may disclose such confidential information to the extent
required by applicable law, regulation or court order, provided that FHC shall
give Biosite reasonable notice of any such required disclosure and shall give
Biosite an opportunity to object to any such disclosure or to request
confidential treatment thereof.  FHC
shall, at Biosite’s option, return such information to Biosite or destroy all
such data having physical form and all copies thereof.  The obligations set forth in this
Section 9(a) shall survive any termination of this Agreement for a period
of [***].

 

(b)                                 Biosite
may receive various trade secrets of FHC and other information of FHC of a
confidential nature.  Biosite agrees
that it will not disclose to anyone, directly or indirectly, any of such trade
secrets or other confidential information, or use such trade secrets or other
confidential information other than as reasonably required in the course of its
performance of its obligations and the exercise of its rights under this
Agreement.  Notwithstanding the
foregoing, Biosite may disclose such trade secrets or other confidential
information to the extent required by applicable law, regulation or court
order, provided that Biosite shall give FHC reasonable notice of any such
required disclosure and shall give FHC an opportunity to object to any such
disclosure or to request confidential treatment thereof.  Biosite shall, at FHC’s option, return such
information to FHC or destroy all such data having physical form and all copies
thereof.  The obligations set forth in
this Section 9(b) shall survive any termination of this Agreement for a
period of [***].

 

* Confidential Treatment
Requested

 

22

 

(c)                                  Notwithstanding
any provision set forth in this Section 9 to the contrary, the parties’
obligations under this Section 9 shall not apply to the extent that:
(i) the confidential information, or any relevant part of it, can be shown
to be in the public domain prior to the date of this Agreement; (ii) the
confidential information, or any relevant part of it, becomes part of the
public domain, other than by some unauthorized act or omission, after the date
hereof; (iii) the confidential information, or any relevant part of it, is
disclosed to such party by a third party who has the right to make such
disclosure; (iv) express written permission to disclose the confidential
information, or any relevant part of it, or to make use of same, is obtained
from the non-disclosing party by the disclosing party; or (v) the
information is developed independently of the confidential information by the
other party based on written records maintained in the ordinary course.

 

(d)                                 Notwithstanding
anything to the contrary, all customer and sales related information provided
to Biosite by FHC (whether under this Agreement or a prior agreement between
the parties), including but not limited to the information provided to Biosite
under Section 3(g), shall be jointly owned by both parties and shall not
be subject to the terms and conditions set forth in Sections 9(a) or 9(b).  Such customer and sales related information
may be used by either party for any lawful purpose, subject to the following
restrictions:  (i) Biosite shall
not disclose sales dollars, gross profit dollars or gross profit percent
information disclosed to Biosite by FHC under this Agreement (or calculated by
Biosite using information disclosed to Biosite by FHC under this Agreement) to
any third party (excluding Biosite’s attorneys, accountants, or as may be
required by applicable law, regulation or court order or as permitted under
clauses (i) through (v) under Section 9(c) above); and (ii) Biosite
shall not disclose any customer or sales information disclosed to Biosite by
FHC under this Agreement to [***], [***] or [***] (unless so required by
applicable law, regulation or court order or as permitted under clauses (i)
through (v) under Section 9(c) above). 
The terms and conditions of this Section 9(d) shall supercede any
inconsistent terms and conditions that may appear in a prior agreement between
the parties if the terms and conditions of any such prior agreement survive
termination of the such prior agreement.

 

10.                                 Biosite’s
Warranties:  Disclaimer of Warranties.

 

(a)                                  Biosite
agrees that it shall execute and warrants that it shall abide by the terms of
FHC’s Continuing Guaranty, a copy of which is attached hereto as
Schedule A and which guaranty is incorporated herein by reference.  The terms and provisions of the Continuing
Guaranty shall survive the termination of this Agreement.  Prior to the first shipment of Product to
FHC, Biosite shall provide FHC with certificates of insurance which meet the
requirements of paragraph D of the Continuing Guaranty.  Biosite’s insurance carriers shall at all
times during the term of this Agreement be rated by Best’s as B+ or
superior.  Biosite is not aware after due
inquiry of any circumstance which would prevent the issuance of such policy.

 

(b)                                 In
addition to the warranties of Biosite set forth in this Agreement and in the
Continuing Guaranty, Biosite warrants that each of the Products will conform to
the specifications set forth in Product literature prepared by or on behalf of
Biosite and that the Products will comply and be manufactured, packaged,
sterilized (if applicable), labeled and shipped in compliance with all
applicable federal, state and local laws, orders, regulations and

 

 

* Confidential Treatment
Requested

23

 

standards. 
Biosite further warrants that the Products do not infringe upon the
intellectual property rights of any third party.

 

(c)                                  Biosite
and FHC shall extend to customers only the Product Warranty embodied in
Schedule I hereto; provided that Biosite may modify such Product Warranty
with FHC’s consent, which consent shall not be unreasonably withheld.  Biosite shall not modify or amend the
warranty during the term of this Agreement without providing FHC with
sixty (60) days, prior written notice. 
Biosite warrants and represents that the Products will perform in
accordance with Biosite’s warranty.

 

(d)                                 Except
for the warranties described in Sections 10 (a)-(c) hereof, all of which
shall inure to the benefit of, and shall be enforceable by, FHC’s customers,
Biosite MAKES NO WARRANTIES TO CUSTOMERS AND FHC SHALL NOT MAKE ANY OTHER
WARRANTIES TO CUSTOMERS AS TO THE MERCHANTABILITY OR FITNESS OF THE PRODUCT FOR
A PARTICULAR USE.

 

11.                                 Force
Majeure.

 

The obligations of either
party to perform under this Agreement shall be excused during each period of
delay to the extent caused by such matters as strikes, shortages of power or
raw materials, government orders or acts of God, which are reasonably beyond
the control of the party obligated to perform. 
The affected party shall make all commercially reasonable efforts to
remedy the effects of such force majeure. 
Any force majeure event shall not excuse performance by the party but
shall delay performance, unless such force majeure continues for a period in
excess of ninety (90) days.  In
such event, the party seeking performance may cancel its obligations hereunder.

 

12.                                 Notices.

 

Any notice required by
this Agreement shall be in writing, and may be delivered in person, by
nationally recognized overnight delivery service or by any lawful means to the
party for whom intended at its address set forth below, and shall be effective
on receipt.

 

	
  If to Biosite:

  	
  Biosite
  Incorporated

  
	
   

  	
  11030 Roselle
  Street, Suite D

  
	
   

  	
  San Diego,
  California  92121

  
	
   

  	
  Telecopy:  (858) 445-4815

  
	
   

  	
  Attn:  Tom Watlington

  
	
   

  	
   

  
	
  with a copy to:

  	
  Gray Cary Ware & Freidenrich LLP

  
	
   

  	
  4365 Executive
  Drive, Suite 1100

  
	
   

  	
  San Diego,
  CA 92121-2189

  
	
   

  	
  Telecopy:  (858) 677-1477

  
	
   

  	
  Attn:  Mark R. Wicker, Esq.

  

 

24

 

	
  If to FHC:

  	
  Fisher  HealthCare

  
	
   

  	
  9999 Veterans
  Memorial Drive Houston, Texas  77038

  
	
   

  	
  Telecopy:  (281) 878-2293

  
	
   

  	
  Attn:   General Counsel

  
	
   

  	
   

  
	
  with a copy to:

  	
  Fisher
  Scientific International Inc.

  
	
   

  	
  Liberty Lane

  
	
   

  	
  Hampton, New Hampshire  03842

  
	
   

  	
  Telecopy:  (603) 929-2703

  
	
   

  	
  Attn:  General Counsel

  

 

or such other
address as provided in writing in the manner provided by this Section 12.

 

13.                                 Entire
Agreement.

 

This Agreement, including
Schedules and Exhibits, constitutes the entire agreement between the parties
relating to the subject matter hereof and supersedes all prior agreements,
understandings and representations, whether written or oral, between the
parties with respect to such subject matter. 
In ordering and delivery of the Products, the parties may employ their
standard forms, but nothing in those forms shall be construed to modify or
amend the terms of this Agreement.

 

14.                                 Attorneys’
Fees.

 

In the event any claim or
counterclaim is asserted or action is commenced to enforce any of the rights or
obligations of the parties under this Agreement, the prevailing party shall be
entitled to collect from the other party, as part of the judgment rendered with
respect to such claim or action, reasonable attorneys’ fees, expenses and court
costs.

 

15.                                 Governing
Law.

 

THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA WITHOUT REGARD TO CALIFORNIA CHOICE OF LAW PROVISIONS.

 

16.                                 Compliance
With Applicable Laws.

 

In connection with the
sale of the Products hereunder, Biosite and FHC shall comply with all
applicable laws, regulations and orders of governmental bodies having
jurisdiction in respect of activities contemplated by or covered under this
Agreement, including without limitation, obtaining all necessary permits,
licenses and regulations.  FHC shall
cooperate fully with Biosite, at Biosite’s sole cost and expense, in connection
with securing and maintaining any governmental registration or other
governmental permits required with respect to marketing the Products in the
Territory and FHC will notify Biosite of any local laws affecting the Products
which may come to its attention.

 

25

 

17.                                 Assignment.

 

(a)                                  Subject
to Sections 2(j) and 17(b), neither party shall assign or transfer this
Agreement, by operation of law or otherwise, in whole or in part without the
prior written consent of the other party in each and every instance, which
consent may not be unreasonably withheld. 
If either party wishes to assign or otherwise transfer this Agreement,
as aforesaid, in each instance the party seeking to assign or otherwise
transfer this Agreement shall submit to the other party for such party’s review
and approval as soon as practicable such information as the other party may
reasonably request concerning the assignee or transferee and the party from
which consent is sought shall have thirty (30) days following receipt of the
fully responsive materials in which to review the same and approve or reject
the assignment or transfer.  In any
event in which the party from which consent is sought reasonably rejects the
assignment or transfer, this Agreement shall terminate [***] days following the
date on which the rejection is received by the party seeking to assign or
transfer.  The parties shall make best
efforts to promptly and amicably wind up all outstanding matters concerning the
subject matter of this Agreement.

 

(b)                                 Notwithstanding
Section 17(a) above: (i) a merger, reorganization, recapitalization, sale
or transfer of all or substantially all of the assets, change of control, or
similar transaction of a party shall not be deemed an assignment or transfer of
this Agreement subject to the provisions of Section 17(a) above, and (ii)
FHC shall be entitled to assign this Agreement to an entity with which it is
affiliated (by reason of greater than fifty percent (50%) ownership of the
voting securities thereof), without the prior written consent of Biosite, but
upon prior written notice to Biosite.

 

18.                                 Amendments.

 

No amendment or
modification of the terms of this Agreement shall be binding on either party
unless reduced to writing and signed by an authorized officer of the party to
be bound.

 

19.                                 Existing
Obligations.

 

Each party represents and
warrants that the terms of this Agreement do not violate any existing
obligations or contracts of it.  Each
party shall defend, indemnify and hold harmless the other party from and
against any and all claims, demands, liabilities and causes of action that are
hereafter made or brought against the other party that allege any such
violation.

 

20.                                 Relationship
of the Parties.

 

(a)                                  For
the purposes of this Agreement, FHC and Biosite are deemed to be independent
contractors and not the agent or employee of the other.  Neither FHC nor Biosite shall have the
authority to make any statements, representations or commitments of any kind,
or take any action, which shall be binding on the other, except as provided for
herein or authorized in writing by the party to be bound.

 

(b)                                 This
Agreement does not grant any license from Biosite to FHC or from FHC to Biosite
except as expressly provided herein.

 

* Confidential Treatment
Requested

 

26

 

21.                                 Successors
and Assigns.

 

This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.

 

22.                                 Counterparts.

 

This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
for all purposes.

 

23.                                 Approvals
and Consents.

 

Each of the parties
represents to the other that all necessary approvals of any third persons, the
granting of which are necessary for the consummation of the transactions
contemplated hereby, or for preventing the termination of any right, privilege,
license or agreement or any right granted hereunder have been received by both
parties to this Agreement.

 

24.                                 Miscellaneous.

 

Any payment obligation
under this Agreement which shall be due from Biosite to FHC and for which no
date of payment is specified in this Agreement shall be payable on the
thirtieth (30th) day following the day on which the event occurs which
triggers Biosite’s obligation to make any such payment.

 

25.                                 Further
Assurances.

 

Biosite and FHC each shall
perform any and all further acts and execute and deliver any and all further
documents and instruments that may be reasonably necessary to carry out the
provisions of this Agreement.

 

IN WITNESS WHEREOF, the parties have, by their duly
authorized officers, executed this Agreement on the date first set forth above.

 

	
  BIOSITE
  INCORPORATED

  	
  FISHER
  SCIENTIFIC COMPANY L.L.C.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Thomas M.
  Watlington

  	
   

  	
  By:

  	
  /s/ Patrick Balthrop

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Senior V.P. Commercial
  Operations

  	
   

  	
  Title:

  	
  President, Fisher Healthcare

  	
   

  
									

 

27

 

SCHEDULE A

 

CONTINUING GUARANTY

 

A.                                   Biosite
Incorporated (hereinafter referred to as “Seller”), having its principal office
and place of business at 11030 Roselle, Ste. D, San Diego, California  92121, hereby guarantees that all Products
(including their packaging, labeling and shipping) comprising each shipment or
other delivery hereinafter made by Seller (hereinafter referred to as
“Products”) to or on the order of Fisher Scientific Company L.L.C., a
Delaware limited liability company, having its principal place of business at
2000 Park Lane, Pittsburgh, Pennsylvania 15275, or to any of its
branches, divisions, subsidiaries, affiliates, or any of their customers
(hereinafter collectively referred to as “Fisher”), pursuant to that certain
Distribution Agreement effective as of January 1, 2004 (the “Distribution
Agreement”), between Seller and Fisher Scientific Company L.L.C., a
Delaware limited liability company represented by its Fisher HealthCare
division, are, as of the date of such shipment or delivery, in compliance with
applicable federal, state and local laws, and any regulations, rules,
declarations, interpretations and orders issued thereunder, including, without
limitation, the Federal Food, Drug and Cosmetic Act, as amended, and conform to
representations and warranties made by Seller in its advertising, product
labeling and literature.

 

B.                                     Further,
with respect to any Product that is privately labeled for Fisher, if any,
Seller agrees to make no change in such Products or the Fisher artwork on the
labeling or packaging relating thereto without first obtaining the written
consent of Fisher.  Seller recognizes
that Fisher is the owner of the trademarks and trade names connoting Fisher
which it may elect to use in the promotion and sale of such private label
Products and that Seller has no right or interest in such trademarks or trade
names.  Seller shall periodically
analyze and review packaging and labeling for any Products which are private
labeled for Fisher to ensure conformity with the provisions of paragraph A
hereof and the adequacy of Product warnings and instructions.

 

C.                                     Seller
hereby agrees that it will reimburse Fisher Scientific Company L.L.C., a
Delaware limited liability company, for all reasonable out-of-pocket costs and
expenses incurred in connection with any product corrective action or recall
relating to the Products which is requested by Seller or required by any
governmental entity.

 

D.                                    Seller
agrees to procure and maintain product liability insurance with respect to the
Products and contractual liability coverage relating to this Guaranty, with
insurer(s) having Best’s rating(s) of A- or better, naming Fisher as an
additional insured (Broad Form Vendors Endorsement), with minimum limits in
each case of [***].  Seller shall
promptly furnish to Fisher Scientific Company L.L.C., a Delaware limited
liability company, a certificate of insurance and renewal certificates of
insurance evidencing the foregoing coverages and limits.  The insurance shall not be canceled, reduced
or otherwise changed without providing Fisher with at least
ten (10) days prior written notice.

 

E.                                      Subject
to the provisions of Section 4(l) of the Distribution Agreement, Seller
agrees to and shall protect, defend, indemnify and hold harmless Fisher
Scientific Company L.L.C., a Delaware limited liability company, (and with
respect to Subparagraph E.(i) below, the customers of Fisher Scientific
Company L.L.C., a Delaware limited liability company) from any and all
claims, actions, costs, expenses and damages, including reasonable attorney’s
fees and expenses arising out of: (i) any actual or alleged patent,
trademark or copyright infringement in the design, composition, use, sale,
advertising or packaging of the Products; (ii) any breach of the
representations or warranties set forth in this Guaranty; (iii) the sale or use
of the Products where such liability results from the act or omission of Seller
(whether for breach of warranty, strict liability in tort, negligence or
otherwise).  In each such case, Fisher
shall give Seller prompt written notice of any such claim, shall permit Seller
to assume sole control of the defense thereof and shall provide all reasonable
assistance in connection with the defense of such claim.  Fisher shall have the right to retain its
own counsel and to participate in such defense, with the fees and expenses of
such counsel to be paid by Seller, if representation of Fisher by counsel
retained by Seller would be inappropriate due to actual differing interests
between Fisher and any other party represented by such counsel in such
proceeding.

 

* Confidential Treatment
Requested

 

28

 

F.                                      Seller
agrees to and shall provide to Fisher Material Safety Data Sheets and other
information concerning any Product as required by then applicable federal,
state or local law.

 

G.                                     Seller
agrees to and shall accept, at its facility, all of Fisher’s unsold or expired
Products containing hazardous chemicals, materials or substances for disposal,
recycling or use.  Fisher shall be
responsible for packing and transportation costs to Seller.  Seller shall be responsible for all other costs,
including, without limitation, any costs associated with Seller’s disposal,
recycling or use.

 

H.                                    If
the Products to be furnished by Seller are to be used in the performance of a
U.S. government contract or subcontract, those clauses of the applicable U.S.
Government procurement regulation which are mandatorily required by Federal
Statute to be included in U.S. Government subcontracts shall be incorporated
herein by reference including, without limitation, the Fair Labor Standards Act
of 1938, as amended.

 

I.                                         The
representations and obligations set forth herein shall be continuing and shall
be binding upon the Seller and his or its heirs, executors, administrators,
successors and/or assigns, whichever the case may be, and shall inure to the
benefit of Fisher Scientific Company L.L.C., a Delaware limited liability
company, its successors and assigns and to the benefit of its officers,
directors, agents and employees and their heirs, executors, administrators, and
assigns.

 

J.                                        The
agreements and obligations of Seller set forth in this Guaranty are in
consideration of purchases made by Fisher from Seller and said obligations are
in addition to (and supersede to the extent of any conflict) any obligations of
Seller to Fisher or Fisher to Seller. 
This Guaranty shall be effective upon the first sale to Fisher of any
Product by Seller, and the obligations of Seller under this Guaranty shall
survive and be enforceable in accordance with its terms.

 

	
  SELLER

  	
   

  
	
   

  	
   

  
	
  BIOSITE INCORPORATED

  	
   

  
	
  Name Under Which
  Seller’s Business is Conducted

  	
   

  
	
   

  	
   

  
	
  /s/ Thomas M. Watlington

  	
   

  
	
  Signature of Authorized
  Representative

  	
   

  
	
   

  	
   

  
	
  Senior V.P. Commercial
  Operations

  	
   

  	
   

  
	
  Title

  	
   

  
	
   

  	
   

  
	
  July 1, 2003

  	
   

  	
   

  
	
  Date

  	
   

  
	
   

  	
   

  
	
  FISHER SCIENTIFIC
  COMPANY L.L.C.,   a

  	
   

  
	
  Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  /s/ Patrick Balthrop

  	
   

  	
   

  
	
  Signature of Authorized
  Representative

  	
   

  
	
   

  	
   

  
	
  President, Fisher Healthcare

  	
   

  
	
  Title

  	
   

  
	
   

  	
   

  
	
  July 1, 2003

  	
   

  	
   

  
	
  Date

  	
   

  
					

 

29

 

SCHEDULE B

 

[***]

 

 

	
  Catalog

  Number

  	
   

  	
  Product

  	
   

  	
  Size

  	
   

  	
  List Price

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 tests

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 tests

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 tests

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 tests

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 tests

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 tests

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 test

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  6x5 mL vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  6x5 mL vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  6x5 mL vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  2 x 2 vials

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 each

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25/pkg

  	
   

  	
  [***]

  

 

* Confidential Treatment
Requested

 

30

 

SCHEDULE C

 

[***]

 

	
  Catalog

  Number

  	
   

  	
  Product

  	
   

  	
  Size

  	
   

  	
  List Price

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  20 tests

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  20 tests

  	
   

  	
  [***]

  

 

 

* Confidential
Treatment Requested

31

 

SCHEDULE D

 

[***]

 

	
  Catalog

  Number

  	
   

  	
  Product

  	
   

  	
  Size

  	
   

  	
  List Price

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 test

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  2 x 2 vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  3 vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 tests

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  2  x 2 vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  3 vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 Test

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  2 x 2 vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  3 vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  1 unit

  	
   

  	
    [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
    [***]

  

 

 

* Confidential
Treatment Requested

32

 

SCHEDULE E-1

 

[***]

 

 

	
  Catalog

  Number

  	
   

  	
  Product

  	
   

  	
  Size

  	
   

  	
  List Price

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  25 tests

  	
   

  	
  [***]

  

 

 

* Confidential
Treatment Requested

33

 

SCHEDULE E-2

 

[***]]

 

 

	
  [***]

  	
   

  	
  [***]

  	
   

  	
  2  x 2 vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  3 vials

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
  [***]

  

 

 

* Confidential
Treatment Requested

34

 

SCHEDULE F

 

SAMPLE QUANTITIES AND PRICES

 

	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year

  	
   

  	
  Monthly

  Maximum No.

  of Samples

  	
   

  	
  Annual

  Maximum No.

  of Samples

  	
   

  	
  Sample Price/Unit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

 

	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year

  	
   

  	
  Monthly

  Maximum No.

  of Samples

  	
   

  	
  Annual

  Maximum No.

  of Samples

  	
   

  	
  Sample Price/Unit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

 

	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year

  	
   

  	
  Monthly

  Maximum No.

  of Samples

  	
   

  	
  Annual

  Maximum No.

  of Samples

  	
   

  	
  Sample Price/Unit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

 

	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year

  	
   

  	
  Monthly

  Maximum No.

  of Samples

  	
   

  	
  Annual

  Maximum No.

  of Samples

  	
   

  	
  Sample Price/Unit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

 

	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

* Confidential
Treatment Requested

35

 

	
  Year

  	
   

  	
  Monthly

  Maximum No.

  of Samples

  	
   

  	
  Annual

  Maximum No.

  of Samples

  	
   

  	
  Sample Price/Unit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]Products

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year

  	
   

  	
  Monthly

  Maximum No.

  of Samples

  	
   

  	
  Annual

  Maximum No.

  of Samples

  	
   

  	
  Sample Price/Unit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

 

* Confidential
Treatment Requested

36

 

SCHEDULE G

 

FHC SUBDISTRIBUTORS

 

 

	
  No

  	
   

  	
  Cust Billto Name 1

  	
   

  	
  Customer Bill-To Addr 1

  	
   

  	
  Customer Bill-To City

  	
   

  	
  State

  	
   

  	
  Zip

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
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  [***]

  
	
  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

 

* Confidential Treatment
Requested

37

 

	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
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* Confidential Treatment
Requested

38

 

	
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* Confidential Treatment
Requested

39

 

	
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* Confidential Treatment
Requested

40

 

	
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* Confidential Treatment
Requested

41

 

	
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* Confidential
Treatment Requested

42

 

SCHEDULE H

 

[***]

 

 

	
  [***]

  	
   

  	
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* Confidential
Treatment Requested

43

 

SCHEDULE I

 

PRODUCT WARRANTY

 

Biosite’s express
and implied warranties (including implied warranties of merchantability and
fitness) are conditioned upon observance of Biosite’s published directions with
respect to the use of Biosite’s diagnostic products.  Remedies against Biosite for breach of warranty or other duty are
limited solely to replacement or return of the purchase price of the affected
products.  Any such claim against
Biosite must be made in writing and promptly pursued within one year from the
date of delivery of goods.  UNDER NO
CIRCUMSTANCES WHATSOEVER SHALL BIOSITE BE LIABLE FOR ANY INDIRECT OR
CONSEQUENTIAL DAMAGES.

 

44

 

SCHEDULE J

 

CONTRACT CUSTOMER INSERT

 

A.                                   “The terms and conditions contained in any
invoice, sales acknowledgment, bill of lading, or other document supplied by
Distributor to Customer shall (a) govern the relationship between Distributor
and the Customer and (b) supercede any inconsistent terms and conditions of
this Agreement and any exhibits attached hereto with respect to the terms of
shipment and payment terms for Products delivered to Customer by the
Distributor (which terms include, without limitation, acceptance, damage or
loss in transit, credit terms, payment terms, and shipping terms, but exclude
any warranty terms (which warranty terms shall be solely as expressly set forth
in this Agreement)).”

 

B.                                     “Notwithstanding anything to the contrary
contained in this Agreement, Customer acknowledges and agrees that it shall
look only to Biosite (in accordance with the terms of this Agreement) and not
to Distributor with respect to (i) warranty issues associated with the
Products, (ii) product liability issues associated with the Products (unless to
the extent caused by Distributor’s negligence or willful misconduct), (iii)
third party intellectual property claims related to the Products, and (iv)
indemnity obligations of Biosite set forth in this Agreement.”

 

Biosite and FHC agree that clause (iv) set forth in paragraph (B) above
shall only be included in Contract Customer contracts in the event that Biosite
has agreed to provide indemnity to the applicable Contract Customer.

 

45Exhibit 10.19

 

VIASYS HEALTHCARE INC.

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, is made and entered into as of
November 1, 2003, by and among VIASYS Healthcare Inc., a Delaware corporation
(together with its successors and assigns permitted under this Agreement, the
“Company”) and Lori Cross (the “Executive”).

 

W I T N E S S E T H :

 

WHEREAS, the Company and the Executive desire to enter
into an employment agreement as set forth herein to embody the terms and
provisions of the Executive’s employment (the “Agreement”);

 

NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is mutually acknowledged,
the Company and the Executive hereby agree as follows:

 

1.             DEFINITIONS.

 

(a)           “Affiliate”
means a person or other entity that directly or indirectly controls, is
controlled by, or is under common control with the person or other entity
specified.

 

(b)           “Base
Salary” means the salary provided for in Section 4 or any increased salary
granted to the Executive pursuant thereto.

 

(c)           “Board”
means the Board of Directors of the Company.

 

(d)           “Cause”
means the occurrence of any one or more of the following events:

 

(i)            the
Executive’s repeated failure to comply with the reasonable directives of the
relevant senior officers;

 

(ii)           the
Executive’s conviction of committing a felony which is materially and
demonstrably injurious to the Company; or

 

(iii)          the
Executive’s continued gross neglect of her duties with the Company (other than
any such occurrence resulting from incapacity due to physical or mental
illness).

 

(e)           “Change
in Control” means an event or occurrence set forth in any one or more of
subsections (i) through (vi) below (including an event or occurrence that
constitutes a Change in Control under one of such subsections but is
specifically exempted from another such subsection):

 

 

(i)            the
acquisition by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of
the Company if, after such acquisition, such Person beneficially owns (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of
either (i) the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”), or (ii) the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change in Control:

 

(A)          any
acquisition by the Company,

 

(B)           any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or

 

(C)           any
acquisition by any corporation pursuant to a transaction that complies with
clauses (A) and (B) of subsection (V) of this Section,

 

(ii)           the
Continuing Directors (as defined below) do not constitute a majority of the
Board (or, if applicable, the Board of Directors of a successor corporation to
the Company), where the term “Continuing Director” means at any date a member
of the Board (A) who was a member of the Board on the date of the execution of
this Agreement or (B) who was nominated or elected subsequent to such date by
at least a majority of the directors who were Continuing Directors at the time
of such nomination or election or whose election to the Board was recommended
or endorsed by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election; provided, however, that
there shall be excluded from this clause (B) any individual whose initial
assumption of office occurred as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents, by or on behalf of a person other
than the Board;

 

(iii)          the
consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving the Company or a sale or other disposition
of all or substantially all of the assets of the Company in one or a series of
transactions (a “Business Combination”), unless, immediately following such
Business Combination the beneficial owners of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of
the then-outstanding shares of common stock and the combined voting power of
the then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
the Company’s assets either directly or through one or

 

2

 

more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”); or

 

(iv)          approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company.

 

(f)            “Code”
means the Internal Revenue Code of 1986, as amended.

 

(g)           “Disability”
or “disabled” means a disability which results in the Executive’s entitlement
to long-term disability benefits under the Company’s applicable long-term
disability plan

 

(h)           “Effective
Date” means November 1, 2003.

 

(i)            
“Notice of Termination” means a written notice from one party to the other
party hereto given in accordance with Section 24, terminating the Executive’s
employment hereunder.  Any Notice of
Termination shall (i) indicate the specific termination provision hereunder
relied on by the party giving such notice and (ii) to the extent applicable,
set forth in reasonable detail the facts and circumstances providing a basis
for termination of the Executive’s employment under the provision so
indicated.  The failure by the Company
to set forth any fact or circumstance that contributes to a showing of Cause
shall not waive any right of the Company hereunder or preclude the Company from
asserting any such fact or circumstance in enforcing its rights hereunder.

 

(j)            “Stock”
means the common stock, $0.01 par value per share, of the Company.

 

(k)           “Termination
Date” means, with respect to any termination of the Executive’s employment
hereunder, the effective date of such termination pursuant to Section 10.

 

2.             TERM
OF EMPLOYMENT.

 

This Agreement, and all rights and obligations of the
parties hereunder, shall take effect upon the Effective Date and shall continue
until the date that is two years from the Effective Date (the “Term”).  If the Company elects not to extend the Term
of the Agreement on terms and conditions substantially similar to those set
forth in this Agreement, the Company shall provide the Executive with written
notice at least six months prior to the end of the then current term.

 

3.             POSITION,
DUTIES AND RESPONSIBILITIES.

 

(a)           Commencing on the
Effective Date, the Executive is, and shall be, employed as Group President,
NeuroCare of the Company and the Executive has been assigned and shall be
assigned such duties and responsibilities as are reasonably consistent with
such positions and such other duties and responsibilities as the CEO or the
Executive’s direct supervisor from time to time deem appropriate.

 

(b)           During
the Term of Employment, the Executive shall devote her entire business time,
attention and energies to the business and interest of the Company in
performing her duties

 

3

 

and responsibilities under this Agreement, and to that end, the Executive
shall not serve on the board of directors of other corporations or entities
without the prior approval of the Board.

 

(c)           Notwithstanding
anything contained in Section 3(b) to the contrary, nothing herein shall
preclude the Executive from (i) serving on the boards of directors of a
reasonable number of trade associations and/or charitable organizations, (ii)
engaging in charitable activities and community affairs, and (iii) managing her
personal investments and affairs, provided, that such activities do not
materially interfere with the proper performance of her duties and
responsibilities as set forth in this Section 3.

 

4.             BASE
SALARY; INITIAL STOCK OPTION GRANT.

 

The Executive shall be paid an annualized base salary,
payable in accordance with the regular payroll practices of the Company, of
$265,000, which amount may be increased from time to time in the discretion of
the Board.  In addition, the Executive
shall be granted 120,000 options on the Company’s Stock, with an exercise price
equal to the current fair market value of the Stock on the Effective Date (the
“Initial Stock Option Award”), subject to the terms and conditions set forth in
the relevant Company equity compensation plan and grant instrument.

 

5.             ANNUAL
CASH INCENTIVE AWARD.

 

(a)           In General. 
During the Employment Term, the Executive shall participate in (a) the
VIASYS Healthcare Inc. Management Incentive Plan (the “MIP”) with a target
bonus of 50%, or such other amount as may be determined by Board or the
appropriate committee or individual and (b) any other incentive programs
established by the Company for its senior level executives generally; provided,
however, that for the 2003 fiscal year, the bonus payable to the Executive
shall not be less than $45,000.

 

(b)           Stipend. 
The Executive shall also be paid a $100,000 stipend as additional
compensation as of (a) the first anniversary of the Effective Date, and (b) the
second anniversary of the Effective Date, subject as to each payment to the
requirement that the Executive must be in the continuous active employ of the
Company as of such anniversary date in order to obtain such payment
amount.  Further, such payment amount,
if due, shall be fully subject to federal, state and local tax withholding and
shall not be deemed benefit-bearing for purposes of any Company employee
benefit plan or Company compensation arrangement.

 

6.             EMPLOYEE
BENEFIT PROGRAMS.

 

During the Employment Term, the Executive shall be
entitled to participate in all employee pension and welfare benefit plans and
programs made available to the Company’s senior level executives.

 

4

 

7.             PERQUISITES.

 

During the Term of Employment, the Executive shall be
entitled to participate in all of the Company’s executive perquisites in accordance
with the terms and conditions of such arrangements as are in effect from time
to time for the Company’s senior-level executives.

 

8.             REIMBURSEMENT
OF BUSINESS AND OTHER EXPENSES.

 

The Executive is authorized to incur reasonable
expenses in carrying out her duties and responsibilities under this Agreement
and the Company shall promptly reimburse her for such expenses, subject to
documentation in accordance with the Company’s policy.

 

9.             TERMINATION
OF EMPLOYMENT.

 

The Executive’s employment hereunder shall terminate
effective immediately upon the earlier to occur of the following events:

 

(a)           death
of the Executive;

 

(b)           receipt
by either party of a Notice of Termination for Disability from the other party,
but in any event not until the Executive is determined to be disabled in
accordance with Section 1(g);

 

(c)           the
day the Executive receives a Notice of Termination for Cause from the Company.

 

(d)           the
30th day following  receipt by the
Executive of a Notice of Termination Without Cause from the Company; and

 

(e)           the
31st day following receipt by the Company of a Notice of Termination of
Employment from the Executive.

 

10.           RIGHTS
AND REMEDIES UPON TERMINATION OF EMPLOYMENT.

 

(a)           TERMINATION
DUE TO DEATH.  In the event that the
Executive’s employment is terminated due to her death, her estate or her
beneficiaries, as the case may be, shall be entitled to the following benefits:

 

(i)            The
Executive’s then current Base Salary through the Termination Date, which shall
be payable in a lump sum within thirty (30) days of the Termination Date;

 

(ii)           An
annual cash incentive bonus award for the year in which the termination occurs,
pro-rated through the Termination Date, determined in accordance with the
provisions of Section 5 (the “Pro-Rated Annual Bonus”), which shall be payable
when incentive awards are normally paid to comparable executives; and

 

(iii)          Each
outstanding option granted under an equity compensation plan maintained by the
Company to purchase shares of stock of the Company shall become immediately
exercisable, and thereafter, shall remain exercisable until the first
anniversary of Termination Date.

 

5

 

(b)           TERMINATION
DUE TO DISABILITY.  In the event that
the Executive’s employment is terminated by either party due to her Disability,
she shall be entitled to the following benefits:

 

(i)            Disability
benefits in accordance with the long-term disability (“LTD”) program then in
effect for comparable executives of the Company;

 

(ii)           The
Executive’s then current Base Salary through the end of the LTD elimination
period, which shall be payable in a lump sum within thirty (30) days of the
Termination Date;

 

(iii)          The
Pro-Rated Annual Bonus, payable when incentive awards are normally paid to
comparable executives; and

 

(iv)          Each
outstanding option granted under an equity compensation plan maintained by the
Company to purchase shares of stock of the Company shall become immediately
exercisable, and thereafter, shall remain exercisable until the first
anniversary of Termination Date.

 

(c)           TERMINATION
BY THE COMPANY FOR CAUSE.  In the event
that the Company terminates the Executive’s employment for Cause:

 

(i)            The
Executive shall be entitled to receive her current Base Salary through the
Termination Date, which shall be payable in a lump sum within thirty (30) days
of the Termination Date;

 

(ii)           The
Executive shall not be entitled to any benefits, severance or other
compensation; and

 

(iii)          Any
portion of an outstanding option granted under an equity compensation plan
maintained by the Company to purchase shares of stock of the Company that has
previously become exercisable shall remain exercisable for a period of 90 days
after the Termination Date.  Any portion
of an outstanding option granted under an equity compensation plan maintained
by the Company that is not exercisable as of the Termination Date shall
immediately terminate.

 

(d)           TERMINATION
BY THE EXECUTIVE.  In the event of a
termination of employment by the Executive on her own initiative, other than
due to (A) death, (B) Disability, (C) the expiration of the then current Term
of Employment, or (D) a notice from one party to the other of its intent not to
extend the Employment Term

 

(i)            The
Executive shall be entitled to receive her current Base Salary through the
Termination Date, which shall be payable in a lump sum within thirty (30) days
of the Termination Date;

 

(ii)           The
Executive shall not be entitled to any benefits, severance or other
compensation; and

 

6

 

(iii)          Any
portion of an outstanding option granted under an equity compensation plan
maintained by the Company to purchase shares of stock of the Company that has
previously become exercisable shall remain exercisable for a period of 90 days
after the Termination Date.  Any portion
of an outstanding option granted under an equity compensation plan maintained
by the Company that is not exercisable as of the Termination Date shall
immediately terminate.

 

(e)           TERMINATION
WITHOUT CAUSE.  In the event of a termination
of the Executive’s employment by the Company, other than due to (A) death, (B)
Disability, (C) Cause, (D) a notice from one party to the other of its intent
not to extend the Employment Term, the Executive shall be entitled to the
following benefits:

 

(i)            The
Executive’s then current Base Salary through the Termination Date, which shall
be payable in a lump sum within thirty (30) days of the Termination Date;

 

(ii)           The
Pro-Rated Annual Bonus, payable when incentive awards are normally paid to comparable
executives;

 

(iii)          An
amount equal to the sum of (A) the Executive’s then current Base Salary and (B)
the most recent cash incentive paid or the target bonus available under the
VIASYS Management Incentive Plan then in existence, whichever is higher,
payable in a lump sum within ninety (90) days of the Termination Date; and

 

(iv)          Any
portion of an outstanding option granted under an equity compensation plan
maintained by the Company to purchase shares of stock of the Company that has
previously become exercisable shall remain exercisable for a period of 90 days
after the Termination Date. Any portion of an outstanding option granted under
an equity compensation plan maintained by the Company that is not exercisable
as of the Termination Date shall immediately terminate.

 

(f)            
OTHER TERMINATION BENEFITS.  In the case
of any of the foregoing terminations, to the extent not previously paid or
provided or otherwise contrary to the terms and conditions of this Agreement,
the Executive or her estate or beneficiaries, as the case may be, shall also be
entitled to the balance of any incentive awards due the Executive but not yet
paid (including awards due for performance periods that have been completed,
but have not yet been paid), any expense reimbursements due the Executive, and
other benefits, if any, in accordance with applicable plans or programs of or
contracts or agreements of the Executive with the Company.  In addition, unless indicated otherwise in
this Agreement, the treatment of any options granted to the Executive in the
case of any of the foregoing terminations, shall be governed by the terms of
the VIASYS Equity Incentive Plan or other relevant equity compensation plan or
any associated stock option agreement.

 

(g)           TERMINATION
FOLLOWING A CHANGE IN CONTROL. 
Notwithstanding anything to the contrary in this Agreement, in the event
the Executive’s employment with the Company is terminated within twelve (12)
months following a Change in Control, the Executive shall be entitled to
benefits equal to (i) the benefits due and payable to her under the change of
control plan sponsored by the Company, if any, (the “Change of Control Plan”),
or (ii) the

 

7

 

benefits due and payable to her under Section 10 of this Employment
Agreement as a result of such termination. 
In furtherance thereof, it is the parties’ understanding that in the
event of a termination under such circumstances, the Executive shall only be
entitled to receive benefits payable under either the Change of Control Plan or
this Employment Agreement (but not both); provided, however, that any stock
options or other equity rights held by the Executive are to be subject to the
terms and conditions of the equity grant as set forth in the relevant equity
plan or grant agreement.

 

(h)           INITIAL
STOCK OPTION VALUATION GUARANTEE.  With
respect to the period beginning on the Effective Date and ending on the third
anniversary of that Date (the “Measurement Period”), in the event that the
Aggregate Intrinsic Value of the vested portion of the Initial Stock Option is
less than $425,000 (the “Threshold Amount”) on the Termination Date and the
Executive’s employment is terminated prior to the end of the Measurement Period
(a) by the Company without Cause; (b) by the Executive due to the Company’s
material breach of any of its obligations under this Agreement, provided that
the Company receives written notice of such claimed breach and a reasonable
opportunity to cure such breach, if feasible; or (c) as a result of the
Executive’s death or Disability, then the Company shall pay the Executive (or
the Executive’s estate) within ten (10) business days following the Termination
Date an amount equal to the Threshold Amount minus the Aggregate Intrinsic
Value of the vested portion of the Initial Stock Option, with each determined
as of the Termination Date (the “Valuation Guarantee Payment”); provided,
however, that (i) in the event that the Executive exercises any portion of the
Initial Stock Option prior to the Termination Date, any realized gain from such
exercise shall be added to the Aggregate Intrinsic Value of the vested portion
of the Initial Stock Option on the Termination Date and shall be counted
against the Threshold Amount; (ii) the value of any stock options, stock grants
or other forms of equity compensation granted to the Executive prior to the end
of the Measurement Period shall be added to the Aggregate Intrinsic Value
amount; and (iii) if the Aggregate Intrinsic Value, taking into account
subparagraph (ii), at any time during the Measurement Period equals or exceeds
the Threshold Amount, this Section 10(h) shall be of no further effect.  Notwithstanding any contrary provision of
this agreement, any Valuation Guarantee Payment amount shall (x) be determined
prior to the effect of any tax imposed upon such Payment but shall be fully
subject to applicable withholding taxes; and (y) not be treated as
benefit-bearing for purposes of any employee benefit or compensation plan
maintained by the Company.  For purposes
of this Section 10(h), the term “Aggregate Intrinsic Value” shall mean the
excess as of the relevant date of (i) the fair market value of the Stock; over
(ii) the exercise price of the Initial Stock Option; provided, however, that in
no event shall such amount be a negative number.  This Section 10(h) shall be applicable to any successor to the
Company (with such successor being treated as the Company for purposes of this
provision) and all value determinations shall be performed with reference to
any successor form of equity into which the Initial Stock Option is converted.

 

(i)            NATURE
OF PAYMENTS.  Any amounts due under this
Section 11 are in the nature of severance payments considered to be reasonable
by the Company and are not in the nature of a penalty.

 

(j)            NO
MITIGATION; NO OFFSET.  The Executive
shall not be required to mitigate the amount of any payment or benefit provided
in this Section 10 by seeking other employment or otherwise.  Further, except as provided in Section 10,
the amount of any payment

 

8

 

or benefits provided for in this Section 10 shall not be reduced by any
compensation earned by the Executive as a result of employment by another
employer.

 

11.           CONFIDENTIALITY &
ASSIGNMENT OF INVENTIONS.

 

(a)           The
Executive shall execute and deliver to the Company on the Effective Date the
Company’s standard employee Confidentiality and Assignment of Inventions
Agreement, substantially in the form attached hereto as EXHIBIT A.

 

(b)           Upon
the termination of the Executive’s employment, the Executive (or in the event
of her death, the Executive’s personal representative) shall promptly surrender
to the Company the original and all copies of any materials containing
confidential information of the Company which are then in the Executive’s
possession or control; provided, however, that the Executive shall not be
required to surrender her rolodexes, personal diaries and other items of a
personal nature.

 

12.           NON-COMPETITION;
NON-SOLICITATION.

 

(a)           The
Executive acknowledges (i) that in the course of her employment with the
Company she will become familiar with trade secrets and customer lists of,
and  other confidential information
concerning, the Company and its Affiliates, customers, and clients and (ii)
that her services will be of special, unique and extraordinary value to the
Company.

 

(b)           The
Executive agrees that during the Term of Employment and for a period of one
year following her termination of employment for any reason she shall not in
any manner, directly or indirectly, through any person, firm, corporation or
enterprise, alone or as a member of a partnership or as an officer, director,
stockholder, investor or employee of or advisor or consultant to any person,
firm, corporation or enterprise or otherwise, engage or be engaged, or assist
any other person, firm, corporation or enterprise in engaging or being engaged
(collectively, the “Restricted Activity”), in any Competitive Activity (as
defined below).  For the purposes of
this Section 12, a “Competitive Activity” shall mean, unless otherwise
determined by the Board, a business that (i) is being conducted by the Company
or any Affiliate at the time in question and (ii) was being conducted, or was
under active consideration to be conducted, by the Company or any Affiliate, at
the date of the termination of the Executive’s employment.  It is agreed and understood that the
prohibitions provided for in this Section 12(b) shall not restrict the
Executive from (x) engaging in Restricted Activity for any subsidiary, division
or Affiliate or unit of a company (collectively a “Related Entity”) if that
Related Entity is not engaged in a Competitive Activity, irrespective of
whether some other Related Entity of that company engages in what would
otherwise be considered to be a Competitive Activity (as long as Executive does
not engage in Restricted Activity for such other Related Entity); or (y)
providing services to a business that is engaged in a Competitive Activity
determined with respect to the Company generally but not with respect to the
NeuroCare division of the Company, as determined by the Company in its
reasonable discretion.

 

(c)           The
Executive further agrees that during the Non-Competition Period she shall not
(i) in any manner, directly or indirectly, hire or cause to be hired any
employee of or advisor or consultant to the Company or any of its Affiliates
for any purpose or in any capacity

 

9

 

whatsoever, or (ii) in connection with any business to which Section
12(b) applies, call on, service, solicit or otherwise do business with any
customer of the Company or any of its Affiliates; provided, however, that the
restriction contained in clause (i) of this Section 12(c) shall not apply to,
or interfere with, the proper performance by the Executive of her duties and
responsibilities under Section 3 of this Agreement.

 

(d)           Nothing
in this Section 12 shall prohibit the Executive from being a passive owner of
not more than two percent (2%) of the outstanding common stock, capital stock
and equity of any firm, corporation or enterprise so long as the Executive has
no active participation in the management or business of such firm, corporation
or enterprise.

 

(e)           If the
restrictions stated herein are found by a court to be unreasonable, the parties
hereto agree that the maximum period, scope or geographical area reasonable
under such circumstances shall be substituted for the stated period, scope or
area and that the court shall revise the restrictions contained herein to cover
the maximum period, scope and area permitted by law.

 

13.           REMEDIES.

 

Each of the parties to this Agreement shall be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including reasonable attorney’s fees) caused by any breach
of any provision of this Agreement and to exercise all other rights existing in
its favor.  The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach
of the provisions of this Agreement and that any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.  Nothing
in this Section 13 is intended to prevent the parties from raising any and all
defenses with respect to the necessity for, and scope of, such injunctive or
equitable relief.

 

14.           RESOLUTION
OF DISPUTES.

 

Subject to the provisions of Section 13 regarding
specific performance and/or injunctive relief, any disputes arising under or in
connection with this Agreement shall be resolved by binding arbitration, to be
held in Philadelphia, Pennsylvania, in each case in accordance with the rules
and procedures of the American Arbitration Association.  Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.

 

15.           EXPENSES.

 

(a)           Subject
to the provisions of Sections 13 and 14, in the event any party hereto (for the
purposes of this Section 15, the “Aggrieved Party”) seeks a judicial
adjudication of, or an award in arbitration to enforce, the Aggrieved Party’s
rights under, or to recover damages for the breach of, this Agreement, the
Aggrieved Party shall be entitled to recover from the other party or parties,
as the case may be, and shall be indemnified by the other party or parties, as
the case may be, against, any and all costs actually and reasonably incurred by
the Aggrieved Party in such judicial adjudication or arbitration, including,
without limitation, reasonable attorney’s fees, but only if the Aggrieved Party
prevails in such proceeding.

 

10

 

16.           ASSIGNABILITY; BINDING
NATURE.

 

This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, heirs (in the case of
the Executive) and assigns.  Rights or
obligations of the Company under this Agreement may be assigned or transferred
by the Company pursuant to a merger or consolidation in which the Company is
not the continuing entity, or the sale or liquidation of all or substantially
all of the assets of the Company, provided that the assignee or transferee is
the successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law.  The Company further agrees that,
in the event of a sale of assets or liquidation as described in the preceding
sentence, it shall take whatever action it reasonably can in order to cause
such assignee or transferee to expressly assume the liabilities, obligations
and duties of the Company hereunder.  No
rights or obligations of the Executive under this Agreement may be assigned or
transferred by the Executive other than her rights to compensation and
benefits, which may be transferred only by will or operation of law.

 

17.           REPRESENTATIONS
AND WARRANTIES.

 

(a)           The
Company represents and warrants that it has all requisite corporate power and
authority to enter into this Agreement and that the performance by the Company
of its obligations under this Agreement will not violate any agreement to which
it is a party.

 

(b)           The
Executive represents that the execution of this Agreement by the Executive and
the performance by her of her obligations hereunder will not violate any
agreement to which she is a party.

 

(c)           The
Executive hereby represent and warrants that she is not bound by the terms of
any agreement with any previous employer or other party to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party.  The Executive
further represents and warrants that Executive’s performance of all the terms
of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence proprietary information, knowledge
or data acquired by the Executive in confidence or in trust prior to
Executive’s employment with the Company. 
The Executive will not disclose to the Company or induce the Company to
use any confidential or proprietary information or material belonging to any previous
employer or others.  The Executive will
not hereafter grant anyone any rights inconsistent with the terms of this
Agreement.

 

18.           ENTIRE
AGREEMENT.

 

This Agreement and the Exhibit attached hereto and
incorporated herein by reference contain the entire understanding and agreement
between the parties concerning the subject matter hereof and thereof and
supersede all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect
thereto.  This is an integrated
document.

 

11

 

19.           AMENDMENT
OR WAIVER.

 

No provision in this Agreement may be amended unless
such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company, other than the Executive.  No waiver by either party of any breach by
the other party of any condition or provision contained in this Agreement to be
performed by such other party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or any prior or subsequent time.  Any such waiver must be in writing and
signed by the Executive or an authorized officer of the Company, other than the
Executive, as the case may be.

 

20.           SEVERABILITY.

 

In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law so as to achieve the purposes of this Agreement.

 

21.           SURVIVORSHIP.

 

Except as otherwise expressly set forth in this
Agreement, the respective rights and obligations of the parties hereunder shall
survive any termination of the Executive’s employment.  This Agreement itself (as distinguished from
the Executive’s employment) may not be terminated by either party without the
written consent of the other party.

 

22.           REFERENCES.

 

In the event of the Executive’s death or a judicial
determination of her incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to her beneficiary, estate or
other legal representative.

 

23.           GOVERNING
LAW/JURISDICTION.

 

This Agreement shall be governed in accordance with
the laws of the State of Delaware without reference to principles of conflict
of laws.

 

24.           NOTICES.

 

All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (a)
delivered personally, (b) sent by certified or registered mail, postage
prepaid, return receipt requested or (c) delivered by overnight courier
(provided that a written acknowledgment of receipt is obtained by the overnight
courier) to the party concerned at the address indicated below or to such
changed address as such party may subsequently give such notice of:

 

	
  If to the Company:

  	
   

  	
  VIASYS Healthcare Inc.

  227 Washington Street, Suite 200

  Conshohocken, PA 19428

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
   

  

 

12

 

	
  If to Executive:

  	
   

  	
  Lori Cross

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

25.           HEADINGS.

 

The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.

 

26.           COUNTERPARTS.

 

This Agreement may be executed in counterparts.

 

 

[Remainder of Page
Intentionally Left Blank]

 

13

 

IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the restatement set forth above.

 

	
   

  	
  VIASYS HEALTHCARE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:  Randy
  Thurman

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Lori Cross

  

 

14

 

EXHIBIT A

 

Confidentiality and
Assignment of Inventions Agreement

 

15

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