Document:

exv10w63

 

Exhibit 10.63

ARA ALLIANCE, PURCHASE AND PRODUCTION AGREEMENT

BY AND BETWEEN

MARTEK BIOSCIENCES CORPORATION

AND

DSM FOOD SPECIALTIES B.V.

Dated as of April 19, 2004

* The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.

*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

 

ARA Alliance, Purchase and Production Agreement

TABLE OF
CONTENTS

	 	 	 	 	 
	1. INTRODUCTION
	 	 	1	 
	2. DEFINITIONS
	 	 	3	 
	3. SUPPLY, PRODUCTION AND ORDERS
	 	 	15	 
	3.1 Martek Requirements for ARA Products
	 	 	15	 
	3.2 Production
	 	 	15	 
	3.3 Martek Production
	 	 	17	 
	3.4 DSM Production
	 	 	18	 
	3.5 Martek Three Year Rolling Forecasts; Martek Firm Orders
	 	 	20	 
	3.6 DSM Three Year Rolling Forecasts; DSM Firm Orders
	 	 	21	 
	3.7 Delivery Instructions
	 	 	22	 
	3.8 Shipment
	 	 	22	 
	3.9 Order Fulfillment
	 	 	23	 
	3.10 Limitation on Breach
	 	 	23	 
	4. QUALITY AND VERIFICATION
	 	 	25	 
	4.1 Verification of Production
	 	 	25	 
	4.2 Certification of Analysis
	 	 	25	 
	4.3 Specification and Specification Variance Changes
	 	 	26	 
	4.4 Verification of Production when Specifications Change
	 	 	27	 
	4.5 Inspection
	 	 	27	 
	4.6 Manufacturing Changes
	 	 	27	 
	4.7 ARA Product Non-Conformity Procedure; Rework and Destruction
	 	 	28	 
	4.8 Compliance
	 	 	29	 
	4.9 Disclaimers
	 	 	29	 
	5. MARKETING
	 	 	31	 
	5.1 Expansion of Fields of Use
	 	 	31	 
	5.2 Customer Contracts
	 	 	31	 
	5.3 Priority of ARA Marketing
	 	 	32	 
	5.4 Special Arrangements with MFN Customers
	 	 	33	 
	5.5 Notification and Challenge Procedure
	 	 	33	 
	6. FINANCIAL MATTERS
	 	 	36	 
	6.1 Amounts Payable to DSM
	 	 	36	 
	6.2 Reduction of DSM Costs
	 	 	41	 
	6.3 Deviations from Budget
	 	 	42	 
	6.4 Unabsorbed Costs; Unabsorbed Depreciation Costs
	 	 	43	 
	6.5 Maximum Price to Martek; Equalization Reserve
	 	 	43	 
	6.6 Startup Costs
	 	 	44	 

ii

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission.

 

ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 
	6.7 Interest Charges for Inventory
	 	 	44	 
	6.8 DSM-Assisted IF Customer Fee
	 	 	45	 
	6.9 Martek Proprietary Technology Royalty
	 	 	45	 
	6.10 [Reserved]
	 	 	45	 
	6.11 Invoices and Payment
	 	 	45	 
	6.12 Margin Protection
	 	 	46	 
	6.13 Renegotiation of Pricing Arrangement
	 	 	47	 
	6.14 Reporting of Production Costs
	 	 	47	 
	6.15 Adjustment for Changes in Extraction and/or RBD Yields
	 	 	47	 
	6.16 Books and Records
	 	 	47	 
	6.17 Technology Transfer Fee
	 	 	48	 
	6.18 Break Up Fee
	 	 	48	 
	7. PRODUCT DEVELOPMENTS AND PATENTS
	 	 	49	 
	7.1 R&D Collaboration
	 	 	49	 
	7.2 Intellectual Property Rights
	 	 	52	 
	7.3 Prosecution, Maintenance and Enforcement
	 	 	55	 
	7.4 Intellectual Property Licenses
	 	 	59	 
	7.5 Technology Transfers
	 	 	61	 
	8. ORGANIZATION
	 	 	62	 
	8.1 Formation of the Committee
	 	 	62	 
	8.2 Meetings of the Committee
	 	 	62	 
	8.3 Status Reports of the Committee
	 	 	62	 
	8.4 Authority of the Committee
	 	 	62	 
	8.5 Deadlock Within a Committee
	 	 	63	 
	8.6 Deadlock Within the Committee Over Factual Matters
	 	 	63	 
	8.7 Deadlock Within the Committee Over Non-Factual Matters
	 	 	64	 
	8.8 External Communication
	 	 	64	 
	9. TERM; TERMINATION; DAMAGES
	 	 	65	 
	9.1 Term
	 	 	65	 
	9.2 Termination for Cause
	 	 	65	 
	9.3 Effect of Expiration and Termination on Intellectual Property Rights
	 	 	67	 
	9.4 Other Effects of Termination; Damages; Cap
	 	 	69	 
	9.5 Limitation of Liability
	 	 	72	 
	10. GENERAL
	 	 	73	 
	10.1 [Reserved]
	 	 	73	 
	10.2 Confidential Information
	 	 	73	 
	10.3 Survival
	 	 	73	 
	10.4 Trademarks
	 	 	74	 
	10.5 Disputes; Arbitration
	 	 	74	 

iii

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and
Exchange Commission.

 

ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 
	10.6 Regulatory Matters
	 	 	76	 
	10.7 Assignment; Delegation
	 	 	76	 
	10.8 Amendments and Waivers
	 	 	76	 
	10.9 Severability
	 	 	76	 
	10.10 Relationship of the Parties
	 	 	76	 
	10.11 Notices
	 	 	76	 
	10.12 Governing Law
	 	 	78	 
	10.13 Force Majeure
	 	 	78	 
	10.14 No Waivers
	 	 	78	 
	10.15 Entire Agreement
	 	 	78	 
	10.16 Counterparts
	 	 	78	 
	10.17 Guarantees
	 	 	78	 
	10.18 [Reserved]
	 	 	79	 
	10.19 Termination of Prior Alliance Agreement
	 	 	79	 
	10.20 Hierarchy of Documents
	 	 	79	 

	 
	SCHEDULES

	Schedule 2.12 ARA Assay Procedure

	Schedule 2.17 Biomass Specifications

	Schedule 2.28 Crude Oil Specifications

	Schedule 2.45 DSM Costs

	Schedule 2.50 DSM Patents

	Schedule 2.51 DSM Know-how

	Schedule 2.62 Excluded Subject Matter

	Schedule 2.67 Finished Oil Specifications

	Schedule 2.75 *

	Schedule 2.98 Martek Costs

	Schedule 2.101 Martek Patents

	Schedule 2.102 Martek Know-how

	Schedule 2.111 *

	Schedule 4.2(a) DSM Certificate of Analysis

	Schedule 4.2(b) Martek Certificate of Analysis

	Schedule 4.6 Manufacturing Changes

	Schedule 6.15 Yield Assumptions

	Schedule 7.2(a)(i) Martek Non-Challengeable Patents

	Schedule 7.2(b)(i) DSM Patent Oppositions

	Schedule 7.2(b)(ii) Martek Patent Oppositions

	Schedule 10.19 Termination Agreement

iv

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and
Exchange Commission.

 

ARA Alliance, Purchase and Production Agreement

MARTEK BIOSCIENCES CORPORATION

DSM FOOD SPECIALTIES BV

ARA ALLIANCE, PURCHASE AND PRODUCTION AGREEMENT

     This Agreement (the “Agreement”) is made and entered into this 19th day of
April, 2004 (the “Signing Date”), but with an effect as of and as though
entered into on January 1, 2004 (the “Effective Date”) by and between DSM Food
Specialties B.V., a Besloten Vennootschap organized under the laws of the
Netherlands with its principal place of business at A. Fleminglaan 1, 2613 AX
Delft, the Netherlands (“DSM”) and MARTEK BIOSCIENCES CORPORATION, a
corporation organized under the laws of the State of Delaware with its
principal place of business at 6480 Dobbin Road, Columbia, Maryland 21045
(“Martek”) who, intending to be legally bound, hereby agree as follows:

1. INTRODUCTION

     1.1 Martek and DSM have developed certain complementary (and, in some
cases, blocking) technology for the production, refining, and blending of
arachidonic acid for use in infant formula to meet the nutritional needs of
infants and as a potential nutritional supplement and/or food ingredient for
young children, pregnant and lactating women, and adults generally. Martek
owns technology related to the manufacture and use of arachidonic acid and has
certain issued patents and patents pending throughout the world, claiming (a)
certain processes for the manufacture of arachidonic acid, (b) certain
compounds and (c) certain uses; and DSM owns technology related to the
manufacture of arachidonic acid and has certain issued patents and pending
patent applications throughout the world, claiming (a) certain processes for
the manufacture of arachidonic acid, (b) certain formulations for that product,
(c) certain compounds and (d) certain applications. Martek has also obtained
certain governmental regulatory approvals for the use of arachidonic acid in
infant formula.

     1.2 Martek has limited access to capital and only a few product lines and,
consequently, does not have the financial or human resources or the physical
facilities for large, scale- and location-efficient production of fermented
fungal Biomass from which the Crude Oil form of arachidonic acid is extracted.
For a number of years, Martek has relied for such production upon a
fermentation facility in Capua, Italy, which is owned by an Affiliate of DSM.
That facility is no longer sufficient to meet projected demand. Nor, given the
demand from Martek’s customers whose end-users are located in North America and
other non-European locations, will it be cost-efficient or prudent, due to the
need for multiple production sites, to conduct fermentation only in Capua.

     1.3 In substantial part due to the scientific and entrepreneurial efforts
of Martek, the demand from infant formula manufacturers for refined and blended
arachidonic acid that meets the exacting specifications for such a potentially
significant contributor to infant health is growing. However, the full
dimensions and precise pace of that growing demand is not readily knowable and
may well be affected substantially by the development by other companies of

 
1

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

competing products and production technologies with respect to arachidonic
acid, other fatty acids, and other substances, and by changing trends in the
production and consumption of infant formula.

     1.4 Additionally, the possible uses and potential competing demands and
sources of supply for arachidonic acid outside the infant formula, young
children, and pregnant or lactating women fields are largely unexplored areas.
Such uses may include (i) nutritional supplements for adults generally and (ii)
products that are not for human consumption, including products for feeding or
otherwise provisioning nutrients to non-human animals.

     1.5 Because of Martek’s limited size and resources and the need to
concentrate its scientific and competitive efforts on the growing demand for
arachidonic acid in the infant formula field and related human consumption
fields, because Martek’s portfolio of intellectual property is generally
focused on those fields, and because Martek’s regulatory approvals and
commercial contracts with respect to arachidonic acid are essentially confined
to the human applications fields, Martek is not well-positioned and is not
likely to pursue other fields of use for arachidonic acid.

     1.6 By contrast, given DSM’s far larger size and resources, DSM’s existing
commercial relationships with prospective customers for non-human uses,
including animal and marine feed products, and DSM’s ability to take advantage
of potential marketing and sales synergies, DSM is positioned to undertake the
significant risks and expenses of developing possible arachidonic acid uses in
those fields.

     1.7 The production and sale of arachidonic acid as contemplated herein
implicates the technology and patent rights of both parties. As a result of
their analyses of each other’s technology portfolios and areas of expertise,
the parties have determined that the cross-licensing of the respective
technology and patent rights is necessary in order to promote critical
cooperation, increase the quality and quantity of output, and most efficiently
utilize the complementary resources of both companies in order to expand and
improve the production of arachidonic acid to meet the growing demand for its
use in infant formula and to satisfy other potential demand.

     1.8 Without the intellectual property cross-licensing and the other rights
and responsibilities provided for in this Agreement, and without the
cooperative information-sharing, the supply commitments, the rolling demand
forecasts, the joint research and development and other provisions herein, the
parties would not be able or willing to expand their production and sales
activities as contemplated herein.

     1.9 Without the intellectual property cross-licensing, the reciprocal
capacity expansion, purchase, and supply relationships, and the other
information-sharing and interdependencies contemplated by this Agreement, DSM
and Martek would not be able or willing to contribute their complementary
resources to cooperative marketing and joint research and development efforts
to expand the applications and fields of use for arachidonic acid.

2

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     1.10 The parties desire to enter into this Agreement and to set forth the
terms and conditions of the foregoing.

3

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

2. DEFINITIONS

     2.1. *

     2.2. *

     2.3. “Actual Consumption Cost” shall have the meaning set forth in Section
6.1(c)(i).

     2.4. “Actual Usage” shall mean that quantity of ARA Products contained in
a Martek Purchase Order for a quarter placed by Martek in accordance with
Section 3.5(c) and actually delivered by DSM to Martek in accordance herewith.

     2.5. *

     2.6. *

     2.7. “Affiliate” shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, such Person. A Person shall be deemed to “control” another Person if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of such other Person, whether through
ownership of voting securities, by contract or otherwise.

     2.8. “Agreement” shall have the meaning set forth in the preamble and
shall include the Schedules.

     2.9. “Approved Expansion Plans” shall have the meaning set forth in
Section 6.18(a).

     2.10. “ARA” shall mean the fatty acid called “arachidonic acid”.

     2.11. “ARA Applications for Adults” shall mean products containing ARA
Products that are specifically labeled and/or marketed for persons over twelve
(12) years of age, but shall not include any products containing ARA Products
that are specifically labeled for pregnant and/or lactating women.

     2.12. “ARA Assay Procedure” shall mean the method to determine the content
of ARA in any Biomass, Crude Oil or Finished Oil set forth in Schedule 2.12.

     2.13. “ARA Fields of Use” shall mean, with respect to Martek, the Martek
ARA Fields of Use and, with respect to DSM, the DSM ARA Fields of Use.

     2.14. “ARA Products” shall mean Biomass, Soaps, Crude Oil, Finished Oil,
Spent Biomass and ARA produced in any other form and/or made by any process
wherein the ARA content is * of total fatty acids.

4

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     2.15. “ARA Research Project” shall mean any research project that relates
to ARA.

     2.16. “Audited Party” shall have the meaning set forth in Section 6.16(a).

     2.17. “Biomass” shall mean fermentation product containing ARA conforming
to the Specifications set forth in Schedule 2.17.

     2.18. “Blended Product” shall mean a product containing an ARA Product and
one or more other long chain poly unsaturated fatty acids.

     2.19. “Breaching Party” shall have the meaning set forth in Section
9.2(b)(i)(A).

     2.20. “Break Up Fee Account” shall have the meaning set forth in Section
6.18(a).

     2.21. “Budgeted Consumption Cost” shall have the meaning set forth in
Section 6.1(c).

     2.22. “Cap Price” shall have the meaning set forth in Section 6.5.

     2.23. “Capacity Dispute” shall mean the disagreement of the parties as to
whether, pursuant to Section 3.3(c), a DSM Shortfall is projected based on the
Martek Three Year Rolling Forecast and the DSM Three Year Rolling Production
Forecast because Martek disagrees with DSM Three Year Rolling Production
Forecast or otherwise.

     2.24. “cGMPs” shall mean those current good manufacturing practices that
are appropriate for the manufacturer of an ingredient that is used in infant
formulas and foods, feeds and pharmaceuticals and shall specifically include
those FDA regulations pertaining to infant formulas and food ingredients
appearing in the Code of Federal Regulations, Title 21, Parts 106 and 110,
including FDA guidelines related thereto and other FDA interpretations thereof.

     2.25. “Claim” shall have the meaning set forth in Section 4.2(c).

     2.26. “Committee” shall have the meaning set forth in Section 8.1.

     2.27. “Confidential Information” shall have the meaning set forth in Section 10.2.

     2.28. “Crude Oil” shall mean an ARA Product that is collected after
Extraction and that conforms to the Specifications set forth in Schedule 2.28.

     2.29. *

     2.30. “Current Year” shall have the meaning set forth in Section 6.1(a).

     2.31. *

     2.32. “Decision Date” shall have the meaning set forth in Section 5.5(b).

5

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     2.33. “Declining Party” shall have the meaning set forth in Section 7.3(a)(iii).

     2.34. “DHA” shall mean the fatty acid called “docosahexanoic acid”
produced by fermentation or derived from plants.

     2.35. “Disputed Fact” shall have the meaning set forth in Section 8.5.

     2.36. “Disputed Issue” shall have the meaning set forth in Section 8.7.

     2.37. “Down Stream Processing”, or “DSP”, as performed by DSM, shall mean
the process of harvesting, recovery and drying of Biomass.

     2.38. “DSM” shall have the meaning set forth in the preamble.

     2.39. “DSM ARA Fields of Use” shall mean (i) any Feed Products and (ii)
other uses of ARA that are not for human oral consumption or for the purpose
of providing ARA as a nutrient for humans.

     2.40. “DSM ARA Field of Use Royalty” shall have the meaning set forth in
Section 6.9.

     2.41. “DSM-Assisted IF Customer Fee” shall have the meaning set forth in
Section 6.8.

     2.42. “DSM-Assisted Infant Formula Customers” shall have the meaning set
forth in Section 5.1(a).

     2.43. “DSM Budgeted Volume” shall mean the volume of ARA Products that (i)
DSM has forecasted, pursuant to Section 3.6(a), as of November 30 of a Current
Year, to require Martek Services on and (ii) Martek has forecasted to perform
Martek Services on and deliver to DSM in the Succeeding Year.

     2.44. “DSM Confirmation Letter” shall mean DSM’s written confirmation to
Martek of a Martek Purchase Order.

     2.45. “DSM Costs” shall mean, for each calendar year, those expenses of
DSM related to production of ARA Products for Martek and its Affiliates,
calculated in accordance with (i) the accounting principles set forth on
Schedule 2.45 and (ii) the process set forth in Article 6.

     2.46. “DSM Extraction Allocation” shall have the meaning set forth in
Section 3.4(a).

     2.47. “DSM Firm Order” shall have the meaning set forth in Section 3.6(a).

     2.48. “DSM Gross Profits” shall have the meaning set forth in Section 9.4(c).

6

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     2.49. “DSM Mark Up” shall have the meaning set forth in Section 6.1(a).

     2.50. “DSM Patents” shall mean (i) all the patents listed on Schedule 2.50
and all corresponding patents worldwide, including any corresponding
supplemental protection certificate, substitution, renewal, division, continuation,
continuation-in-part, inventors’ certificate, reissue, reexamination,
extension, patent of addition, and patent of incorporation, and all
counterparts thereof; and (ii) all patents which issue from applications listed
on Schedule 2.50 or which issue from any corresponding patent application
worldwide, including any regional or national phase application, regular or
provisional application, as well as any continuation, continuation-in-part,
division and renewal thereof.

     2.51. “DSM Proprietary Technology” shall mean, collectively, all (i) DSM
Patents and (ii) all Know-how necessary for or useful to the manufacture,
processing or use of ARA Products, including, but not limited to, the most
efficient and effective fungal strains, that are, (a) as of the Effective Date,
owned by DSM or any DSM Affiliate and set forth on Schedule 2.51 and (b)
disclosed or required to be disclosed to Martek pursuant to Section 7.4(d).

     2.52. “DSM Purchase Order” shall mean the purchase order issued every
quarter by DSM to Martek to confirm the amount indicated in a DSM Firm Order.

     2.53. “DSM R&D Patents” shall have the meaning set forth in Section
7.2(c)(i).

     2.54. “DSM RBD Services Allocation” shall have the meaning set forth in
Section 3.4(b).

     2.55. “DSM Shortfall” shall mean the difference between the amount of ARA
Products requested in a Martek Purchase Order and the amount of ARA Products
actually delivered by DSM to Martek within fifteen (15) days of the date on
which delivery is required hereunder in response to that purchase order; in
each case less the balance, if any, of the Martek Allocation.

     2.56. “DSM Three Year Rolling Forecast” shall have the meaning set forth
in Section 3.6(a).

     2.57. “DSM Three Year Rolling Production Forecast” shall have the meaning
set forth in Section 3.5(b).

     2.58. “Effective Date” shall have the meaning specified in the preamble.

     2.59. “Enforcing Party” shall have the meaning set forth in Section 7.3(b).

     2.60. “Equalization Reserve” shall have the meaning set forth in Section 6.5.

     2.61. “Excluded Costs” shall have the meaning set forth in Schedule 2.45
as applicable to DSM Costs and Schedule 2.98 as applicable to Martek Costs.

 
7

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     2.62. “Excluded Subject Matter” shall consist of the subject matter
covered by (i) all the patents listed on Schedule 2.62 and all corresponding
patents worldwide, including any corresponding supplemental protection
certificate, substitution, renewal, division, continuation,
continuation-in-part, inventors’ certificate, reissue, reexamination,
extension, patent of addition, and patent of incorporation, and all
counterparts thereof; and (ii) all patents which issue from applications listed
on Schedule 2.62 or which issue from any corresponding patent application worldwide, including any regional or national phase application, regular
or provisional application, as well as any continuation, continuation-in-part,
division and renewal thereof. “Excluded Subject Matter” shall also include all
improvements and know-how related to the patents set forth in (i) and (ii)
above

     2.63. “Extraction” shall mean the process of deriving Crude Oil from
Biomass or fermentation broth, whether concentrated or not.

     2.64. “FCA” shall have the meaning set forth in Incoterms 2000.

     2.65. “FDA” shall mean the US Food and Drug Administration.

     2.66. “Feed Products” shall mean any products (i) for the feeding, or
otherwise provisioning of nutrients, to non-human animals, including, but not
limited to, mammals, fish, and birds and (ii) not intended or marketed for the
purpose of providing ARA as a nutrient for humans.

     2.67. “Finished Oil” shall mean Crude Oil that has been refined, bleached
and deodorized and meets the Specifications set forth on Schedule 2.67.

     2.68. “Fixed Budget Price” shall be determined as specified in Section
6.1(a).

     2.69. “Fixed Costs” shall mean those costs that do not change directly in
proportion to changes in the number of Units of ARA produced and shall include,
but not be limited to, the fixed portions of labor, depreciation, project
costs, energy costs, insurance, local taxes, site service allocations such as
production staff, maintenance, purchasing, quality assurance, and security
services. Fixed Costs shall not include Variable Costs.

     2.70. “FMV” shall have the meaning set forth in Section 7.2(c)(iv)(A).

     2.71. “FOB” shall have the meaning set forth in Incoterms 2000.

     2.72. “Force Majeure Event” shall have the meaning set forth in Section 10.13.

     2.73. “Gross Profit” shall mean Net Sales less actual costs of goods of
the ARA Products sold.

     2.74. *

 
8

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     2.75. “Guaranty Agreement” shall mean an agreement in the form set forth
on Schedule 2.75.

     2.76. “IBA Rules” shall have the meaning set forth in Section 10.5(a).

     2.77. “ICC Rules” shall have the meaning set forth in Section 10.5(a).

     2.78. “IP Notice” shall have the meaning set forth in Section 5.5(a).

     2.79. “IP Notice Receipt Date” shall have the meaning set forth in Section 5.5(a).

     2.80. “Improvements” shall have the meaning set forth in Section 7.4(d).

     2.81. “Included ARA Products” shall have the meaning set forth in Section 5.5(a).

     2.82. “Infant Formula Product” shall mean a human breast milk substitute
formulated industrially in accordance with applicable Codex Alimentarius and/or
FDA standards or other applicable regulatory bodies (a) to satisfy the total
normal nutritional requirements of infants from birth up to between four (4)
and six (6) months of age and adapted to their physiological characteristics or
fed in addition to other foods to infants up to approximately one (1) year of
age and older or (b) to satisfy the total normal nutritional requirements of
infants born prematurely, as well as nutritional requirements of infants with
special dietary needs.

     2.83. “Infringed Party” shall have the meaning set forth in Section 9.2(a)(ii).

     2.84. “Infringing Party” shall have the meaning set forth in Section 9.2(a)(i)(B).

     2.85. “Joint Know-how” shall have the meaning set forth in Section 7.2(c)(ii).

     2.86. “Joint Patents” shall have the meaning set forth in Section 7.2(c)(ii).

     2.87. “Joint Proprietary Technology” shall mean, collectively, the Joint
Patents and the Joint Know-how.

     2.88. “Know-how” shall mean all know-how and technology (including, but
not limited to, manufacturing and production processes, formulations and
techniques, research and development information, methodology, drawings,
specifications, designs, plans, proposals and technical data) related to ARA.

     2.89. “Know-how Records” shall have the meaning set forth in Section 7.5(c).

     2.90. “Lead Party” shall have the meaning set forth in Section 7.3(a)(i).

     2.91. “Leader “ shall have the meaning set forth in Section 8.1.

     2.92. “Manufacturing Party” shall have the meaning set forth in Section 4.4.

9

*The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     2.93. “Martek” shall have the meaning set forth in the preamble.

     2.94. “Martek Allocation” shall have the meaning set forth in Section 3.1(b).

     2.95. “Martek ARA Fields of Use” shall mean all ARA fields of use other
than the DSM ARA Fields of Use.

     2.96. “Martek Budgeted Volume” shall mean the volume of ARA Products that
(i) Martek has forecasted, pursuant to Section 3.5(a), as of November 30 of a
Current Year, to purchase from DSM during the Succeeding Year and (ii) DSM has forecasted
to produce and deliver to Martek in such Succeeding Year.

     2.97. “Martek Confirmation Letter” shall mean Martek’s written
confirmation to DSM of a DSM Purchase Order.

     2.98. “Martek Costs” shall mean, for each calendar year, those expenses of
Martek related to providing Martek Services to DSM and its Affiliates
calculated in accordance with (i) the accounting principles set forth on
Schedule 2.98 and (ii) the process set forth in Article 6.

     2.99. “Martek Expansion” shall have the meaning set forth in Section
3.3(c).

     2.100. “Martek Firm Order” shall have the meaning set forth in Section
3.5(a).

     2.101. “Martek Patents” shall mean (i) all the patents listed on Schedule
2.101 and all corresponding patents worldwide, including any corresponding
supplemental protection certificate, substitution, renewal, division,
continuation, continuation-in-part, inventors’ certificate, reissue,
reexamination, extension, patent of addition, and patent of incorporation, and
all counterparts thereof; and (ii) all patents which issue from applications
listed on Schedule 2.101 or which issue from any corresponding patent
application worldwide, including any regional or national phase application,
regular or provisional application, as well as any continuation,
continuation-in-part, division and renewal thereof.

     2.102. “Martek Proprietary Technology” shall mean, collectively, (i) all
Martek Patents and (ii) all Know-how necessary for or useful to the
manufacture, processing or use of ARA Products that are, (a) as of the
Effective Date, owned by Martek or any Martek Affiliate and set forth on
Schedule 2.102, and (b) disclosed or required to be disclosed hereunder to DSM
pursuant to Section 7.4(d) including without limitation technology for the
Extraction and RBD processing steps contemplated in Section 3.

     2.103. “Martek Purchase Order” shall mean the purchase order issued every
quarter to confirm the amount indicated in a Martek Firm Order.

     2.104. “Martek R&D Patents” shall have the meaning set forth in Section
7.2(c)(i).

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in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
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ARA Alliance, Purchase and Production Agreement

     2.105. “Martek Services” shall mean Extraction and/or RBD services
performed hereunder by or for Martek for DSM, as requested by DSM in a DSM
Purchase Order.

     2.106. “Martek Shortfall” shall mean the difference between the amount of
Crude Oil or Finished Oil, as applicable, requested in a DSM Purchase Order
based on the yield assumptions set forth in Schedule 6.15 and the amount of
Crude Oil or Finished Oil, as applicable, actually delivered by Martek to DSM
within fifteen (15) days of the date on which delivery is required hereunder in
response to that purchase order; in each case less the balance, if any, of the
DSM RBD Services Allocation or DSM Extraction Allocation, as applicable.

     2.107. “Martek Three Year Rolling Forecast” shall have the meaning set
forth in Section 3.5(a).

     2.108. “Martek Three Year Rolling Services Forecast” shall have the
meaning set forth in Section 3.6(b).

     2.109. “Material Breach” shall have the meaning set forth in Section 9.2(b)(i)(A).

     2.110. “Material Failure” shall have the meaning set forth in Section 9.2(b)(i)(A).

     2.111. *

     2.112. *

     2.113. “Net Revenues” shall mean the gross monies received from
sublicensing the Joint Proprietary Technology to a non-affiliated third party
minus commissions, delivery costs, sales tax and credits for refunds and
returns directly related thereto.

     2.114. “Net Sales” shall mean gross monies including royalties (except the
Customer ARA Production Royalty) received from sales of ARA Products minus
commissions, delivery costs, sales tax and credits for refunds and returns
directly related to such sales.

     2.115. “New R&D Inventions” shall have the meaning set forth in Section
7.2(c).

     2.116. “Non-Breaching Party” shall have the meaning set forth in Section
9.2(b)(i)(B).

     2.117. “Notifying Party” shall have the meaning set forth in Section
5.5(a).

     2.118. “Other ARA Applications” shall mean ARA Products that are
ultimately sold for use in the Martek ARA Fields of Use, other than for Infant
Formula Products, Products for Babies and ARA Applications for Adults.

     2.119. “Out of Scope Customer” shall have the meaning set forth in Section
5.2.

     2.120. “Patent Expenses” shall have the meaning set forth in Section
7.3(a)(i).

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in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
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     2.121. “Patent Proponent Party” shall have the meaning set forth in
Section 7.3(a)(ii).

     2.122. “Patent Protection Process” shall have the meaning set forth in
Section 7.3(a)(i).

     2.123. “Performance Standards” shall have the meaning set forth in Section
6.1(b).

     2.124. “Person” shall mean any individual, partnership, limited liability
company, joint venture, firm, corporation, association, business, trust,
unincorporated organization or other enterprise or form of organization and any
governmental authority.

     2.125. “Phase I Belvidere Build-out” shall mean the production capacity
put in place by DSM at its Belvidere facility, consisting of * and the
related DSP and support capacity that together create the Practical Capacity
for the Belvidere facility for 2004 and 2005 as is set forth in Section 6.1(f).

     2.126. “PPI” shall mean the US Producer Price Index for code PC UOMFG as
published by the Bureau of Labor Statistics of the United States Department of
Labor.

     2.127. “Practical Capacity” shall mean, that portion of the Technical
Capacity that, as determined by the Committee, is reasonably available for the
production of ARA products, after taking into consideration the current
production resources and organizational structure available for ARA Products
that have been established by DSM and agreed to by both Martek and DSM. The
Practical Capacity is the basis upon which to calculate the Fixed Costs per
Unit of ARA. “Practical Capacity” shall not include any production capacity
for ARA Products established or used for the purpose of manufacturing ARA
Products for DSM for sales into DSM’s ARA Fields of Use.

     2.128. “Production Start-Up Costs” shall have the meaning set forth in
Section 6.6.

     2.129. “Production Technology” shall mean any New R&D Inventions necessary
for or useful to the manufacture of ARA in any biomass.

     2.130. “Products for Babies” shall mean any products specifically labeled
and/or marketed for babies, toddlers, infants and/or children up to three (3)
years of age, other than Infant Formula Products.

     2.131. *

     2.132. “Project Leader” shall have the meaning set forth in Section 7.1(c)(ii).

     2.133. “Project Plan” shall have the meaning set forth in Section 7.1(c)(ii).

     2.134. “Proponent Party” shall have the meaning set forth in Section 7.1(c)(i).

     2.135. “R&D” shall mean research and development.

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in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
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ARA Alliance, Purchase and Production Agreement

     2.136. “R&D Collaboration Goals” shall have the meaning set forth in
Section 7.1(a).

     2.137. “R&D Committee” shall have the meaning set forth in Section 7.1(b).

     2.138. “R&D Contribution” shall have the meaning set forth in Section 7.1(f).

     2.139. “R&D Leader” shall have the meaning set forth in Section 7.1(b).

     2.140. “RBD” shall mean the combined processes of refining, bleaching and
deodorizing Crude Oil.

     2.141. “Responding Party” shall have the meaning set forth in Section
5.5(a).

     2.142. “Returned Material” shall have the meaning set forth in Section
4.7(c).

     2.143. “Section 9.2(a) Material Breach” shall have the meaning set forth
in Section 9.2(a)(i)(B).

     2.144. “Signing Date” shall have the meaning specified in the preamble.

     2.145. “Soaps” shall mean all solid matter recovered immediately following
the alkali refining of Crude Oil.

     2.146. “Specifications” shall mean: (a) the product specifications for the
respective ARA Products, as set forth on Schedules 2.17, 2.28, and 2.67, as
applicable, which shall be deemed in all cases to require compliance with
cGMPs, and the requirements for kosher certification by the Orthodox Union and
for Halal certification by the Islamic Food and Nutrition Council of America or
any other organization agreed upon by the parties for all of a party’s
respective facilities and the facilities of any subcontractor that are used to
manufacture, produce and/or package any ARA Products; (b) quality control
methods and methods of analysis with respect to Biomass, Crude Oil and Finished
Oil; and (c) other requirements and specifications for ARA Products as set
forth in this Agreement, as amended from time to time by the Committee pursuant
to Section 8 or otherwise by mutual agreement of the parties.

     2.147. “Specification Variances” shall mean the variances from the
Specifications as set forth in the Specifications for the ARA Products, as
amended from time to time by the Committee pursuant to Section 8.4(b) or
otherwise by mutual agreement of the parties.

     2.148. “Spent Biomass” shall mean the material remaining after Extraction
(such as through the use of hexane) has been completed.

     2.149. “Spent Biomass Order” shall have the meaning set forth in Section
3.2(d).

     2.150. “Sublicensable Technology” shall have the meaning set forth in
Section 7.2(c)(iv).

13

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     2.151. “Sublicensing Notice” shall have the meaning set forth in Section
7.2(c)(iv).

     2.152. “Sublicensing Requester” shall have the meaning set forth in
Section 7.2(c)(iv).

     2.153. “Succeeding Year” shall have the meaning set forth in Section
6.1(a).

     2.154. “Technical Capacity” shall mean, DSM’s maximum calculated
production capacity of ARA Products as determined by the Committee after taking
into consideration the in-place production capacity potentially available for
production of ARA Products and the current technologies used by the parties for
the production of ARA Products. The Technical Capacity is the basis to
calculate the depreciation costs per Unit of ARA. Technical Capacity shall not
include any production capacity for ARA Products established or used for the
purpose of supplying ARA products to DSM for sales into DSM’s ARA Fields of
Use.

     2.155. “Termination Notice” shall have the meaning set forth in 5.5(c).

     2.156. “Testing Party” shall have the meaning set forth
in Section 4.4.

     2.157. “Third Party Toll Manufacturers” shall mean a third party toll
manufacturer whose business activity includes serving as a toll manufacturer
and (A) on behalf of DSM, (i) ferments ARA Products, (ii) performs RBD services
using Martek Proprietary Technology and/or Joint Proprietary Technology, or
(iii) performs Extraction services using Martek Proprietary Technology and/or
Joint Proprietary Technology and (iv) whose entire output of ARA Products
and/or ARA Products upon which RBD and/or Extraction services has been
performed is purchased by DSM, or (B) on behalf of Martek, (i) ferments ARA
Products using DSM Proprietary Technology and/or Joint Proprietary Technology,
or (ii) performs Extraction services using DSM Proprietary Technology and/or
Joint Proprietary Technology and (iii) whose entire output of ARA Products is
purchased by Martek.

     2.158. “Total Refundable Costs” shall have the meaning set forth in
Section 7.1(f).

     2.159. “Transfer Procedures” shall have the meaning set forth in Section
8.4(a).

     2.160. “Unabsorbed Costs” shall mean that part of the Fixed Costs per Unit
of ARA, including depreciation costs related to the Practical Capacity, that
are incurred by DSM but that are not recovered by DSM because the Actual Usage
is lower than the Practical Capacity.

     2.161. “Unabsorbed Depreciation Costs” shall mean that part of the
depreciation costs related to the Technical Capacity, that are incurred by DSM
but that are not recovered by DSM because the Practical Capacity is less than
the Technical Capacity.

     2.162. “Unit of ARA” shall mean that quantity of any ARA Product that
contains one (1) kilogram of pure ARA as determined by the applicable ARA Assay
Procedure set forth in Schedule 2.12.

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confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     2.163. “Unit of DHA” shall mean that quantity of any product that contains
one (1) kilogram of pure DHA as determined by AOCS Ce 1b-89 or as otherwise
mutually agreed by the parties.

     2.164. “Variable Costs” shall mean those costs that change directly in
proportion to changes in the number of Units of ARA produced, and shall
include, but not be limited to: raw and intermediate materials, packaging,
operations performed elsewhere, transportation, the variable portion of waste
and effluent disposal or treatment, and the variable portion of energy costs.
Variable Costs shall not include Fixed Costs.

     2.165. *

     2.166. “Cap” shall have the meaning set forth in Section 9.4(e).

     2.167. “Liable Party” shall have the meaning set forth in Section 9.4(e).

     2.168. “Losses” shall have the meaning set forth in Section 9.4(e).

15

*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

3. SUPPLY, PRODUCTION AND ORDERS

     3.1. Martek Requirements for ARA Products.

         (a) Martek and its Affiliates will have the right to produce an unlimited
amount of ARA Products directly or through one or more Third Party Toll
Manufacturers.

         (b) Except as otherwise expressly set forth in Section 3.3, Martek agrees
that neither it nor any of its Affiliates shall sell, directly or indirectly,
in any calendar year, a combined aggregate quantity of ARA Products that
contains more than forty thousand (40,000) Units of ARA, as adjusted pursuant
to Section 3.1(b)(i), that are not derived from ARA Products that Martek has
purchased from DSM pursuant to this Agreement (the “Martek Allocation”).

            (i) In the event of a DSM Shortfall during any calendar year,
the Martek Allocation for that calendar year will be increased,
during the calendar year in which such DSM Shortfall has occurred,
by the number of Units of ARA necessary to meet such DSM Shortfall,
and the Martek Allocation will automatically revert for the next
calendar year to ARA Products containing forty thousand (40,000)
Units of ARA that are not derived from ARA Products Martek has
purchased from DSM pursuant to this Agreement, except as otherwise
specified herein.

         (c) Except as otherwise expressly set forth in this Agreement, Martek
shall purchase all of its requirements for ARA Products from DSM.
Notwithstanding anything to the contrary contained in this Agreement, the
parties agree that where (i) Martek has developed an ARA Product wherein the
ARA content is greater than * and up to * of total fatty acids, (ii)
the primary product in such ARA Product is not ARA and (iii) the Martek
Allocation has been first fully used to sell such ARA Product, the parties will
agree to negotiate in good faith the terms on which to permit Martek to sell
such ARA Product; provided that such ARA Product shall only be sold by Martek
inside the Martek ARA Fields of Use and the sale of Units of ARA contained in
such ARA Product shall be subject to the Profit Sharing Fee set forth in
Section 6.1(i) herein and such other terms the parties may agree upon.

     3.2. Production.

         (a) The parties acknowledge that DSM currently has fermentation and Down
Stream Processing production facilities in Capua, Italy and that certain Third
Party Toll Manufacturers perform Extraction services in Europe on behalf of
DSM. It is understood and agreed that DSM will establish a fermentation and
DSP production facility as soon as commercially practicable following the
Signing Date in Belvidere, New Jersey. Martek agrees not to sell any of the
Martek Allocation through December 31, 2004, except in the event of a DSM
Shortfall and only to the extent of such DSM Shortfall provided that it is
purchasing from DSM on a quarterly basis ARA Products that represent the entire
output of the Capua facility * up to a maximum of ARA Products containing
* Units of ARA. Martek agrees not to sell any

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Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

of the Martek Allocation from January 1, 2005 through December 31, 2006,
unless it is purchasing from DSM on a quarterly basis ARA Products that
represent the entire output of the Capua facility * , up to a maximum of ARA
Products containing * Units of ARA per calendar year. Beginning on January
1, 2007, DSM shall use its commercially reasonable efforts to allocate
production between the Capua and US production facilities so as to provide
Martek with ARA Products at the lowest cost to Martek, taking into
consideration production costs, freight, foreign exchange rates, customs duties
and other relevant factors.

         (b) DSM agrees that it will provide fermentation and DSP for the ARA
Products produced by DSM in Europe and the United States. Subject to Section
3.3(a), Martek agrees that it will itself or through one or more subcontractors
perform RBD services for the ARA Products produced by DSM in Europe and in the
United States for both the Martek ARA Fields of Use and the DSM ARA Fields of
Use. At a time and subject to terms and conditions mutually agreed upon by the
parties, Martek will establish (at its own cost) one or more facilities in
Europe to perform RBD services for the ARA Products produced by DSM in Europe.
DSM agrees that, except as otherwise expressly set forth in Section 3.4(b),
neither it nor any of its Affiliates shall procure or accept any RBD services
from any Person other than Martek.

         (c) Subject to Section 3.3(a) Martek will itself or through a third party
perform Extraction for the Biomass produced by DSM in the United States and,
except as otherwise permitted in Section 3.4(a), DSM agrees that neither it nor
any of its Affiliates shall perform, or have performed for it (other than by
Martek and its Affiliates), directly or indirectly, Extraction on any Biomass
produced by DSM in the United States. The parties anticipate that Martek may
establish, in its sole discretion and at its own cost, one or more facilities
in Europe to perform Extraction of the Biomass produced by DSM in Europe,
subject to DSM’s existing agreements with Third Party Toll Manufacturers and
taking into consideration the applicable notice periods for termination of such
toll arrangements. The parties agree that, until such time that Martek is
capable of performing Extraction in Europe for the Biomass produced by DSM in
Europe, DSM and its Affiliates will have the right, either directly or through
one or more Third Party Toll Manufacturers to perform an unlimited amount of
Extraction on Biomass produced by DSM in Europe. Except as otherwise expressly
set forth in Section 3.4(a), DSM agrees that, after such time as Martek is
capable of performing Extraction in Europe for the Biomass produced by DSM in
Europe, neither it nor any of its Affiliates shall perform, or have performed
for it, directly or indirectly, in any calendar year, Extraction on Biomass
produced by DSM in Europe to sell (to Martek or for DSM ARA Fields of Use) a
quantity of Crude Oil that is greater than that permitted pursuant to the DSM
Extraction Allocation.

         (d) Two (2) weeks before the beginning of each calendar quarter, DSM may
place an order with Martek for the amount (by weight or percent of total) of
Spent Biomass (the “Spent Biomass Order”) produced during such calendar quarter
at Martek’s facilities and at Martek’s Third Party Toll Manufacturers that DSM
desires. For each calendar quarter for which Martek receives a Spent Biomass
Order from DSM, Martek shall transport to and store for DSM at Martek’s
production facilities an amount of Spent Biomass equal to the lesser of (i) the
amount specified in such Spent Biomass Order or (ii) the total aggregate amount
of Spent

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

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Biomass that
Martek and such Third Party Toll Manufacturers produce during such
quarter. DSM shall arrange for the Spent Biomass that is the subject of a
Spent Biomass Order to be removed from Martek’s premises no later than thirty
(30) days following the end of the related calendar quarter, otherwise Martek
shall have the right to dispose of such Spent Biomass. DSM shall pay all third
party costs and shall reimburse Martek within forty-five (45) days of receipt
of invoice from Martek for all of its direct costs in connection with the
storage at and transportation from Martek’s production facilities of Spent
Biomass that is the subject of a Spent Biomass Order including but not limited
to direct costs related to salvaging Spent Biomass, but otherwise DSM shall not
pay Martek or any Third Party Toll Manufacturer for such Spent Biomass; such
storage and transportation costs shall not be included as DSM Costs. It is
understood and agreed that Martek shall have the right to destroy or discard
any Spent Biomass that is not the subject of a Spent Biomass Order or that
Martek in its sole discretion determines is hazardous to store.

     3.3. Martek Production.

         (a) Subject to Martek’s rights under Section 5.5(d), Martek shall be
entitled to produce ARA Products at either its own facility or at a Third Party
Toll Manufacturer that shall be reasonably acceptable to DSM. Martek may
produce such ARA Products at a Third Party Toll Manufacturer using the DSM
Proprietary Technology and/or Production Technology, provided that such Third
Party Toll Manufacturer shall be reasonably acceptable to DSM taking into
consideration all the facts and circumstances, including without limitation
DSM’s proprietary interests in the DSM Proprietary Technology and/or Production
Technology. Martek will obtain written approval from DSM prior to using the
DSM Proprietary Technology and/or Production Technology at such Third Party
Toll Manufacturer for the production of such ARA Products. Upon DSM’s
acceptance of any such Third Party Toll Manufacturer, Martek shall take all
reasonable measures including but not limited to non-compete agreements
concerning ARA with such Third Party Toll Manufacturers to protect DSM’s
proprietary interests in the DSM Proprietary Technology and/or Production
Technology while such DSM Proprietary Technology and/or Production Technology
is being used by such Third Party Toll Manufacturer. Notwithstanding the
foregoing, Martek shall discontinue using the DSM Proprietary Technology and/or
Production Technology at such Third Party Toll Manufacturer if at any time
following discussions with DSM either Martek or DSM reasonably determines that
the continued use by such Third Party Toll Manufacturer of DSM Proprietary
Technology and/or Production Technology would be reasonably likely to pose a
threat to DSM’s proprietary interests in such DSM Proprietary Technology and/or
Production Technology; the party making such determination shall notify the
other party immediately upon making such determination and Martek shall give
DSM all reasonable assistance in connection with any efforts by DSM to protect
DSM’s proprietary interests in such DSM Proprietary Technology and/or
Production Technology. In the event that Martek manufactures such ARA Products
at its own facilities or at any Third Party Toll Manufacturer solely for
purposes of responding to a DSM Shortfall using the DSM Proprietary Technology
and/or Production Technology, DSM will assist Martek at Martek’s request by
providing reasonable ARA manufacturing assistance to Martek and Martek shall
reimburse DSM for DSM’s reasonable costs and expenses incurred in connection
with providing such assistance.

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Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

         (b) In the event DSM Shortfalls occur for * as a result of a Force
Majeure Event or otherwise or are projected for the * (based on DSM’s Three
Year Rolling Production Forecast under Section 3.5(b) and the Martek Three Year
Rolling Forecast), the Martek Allocation shall be increased accordingly *
following the date that DSM notifies Martek in good faith in writing that it is
able to meet Martek’s then current Three Year Rolling Forecast. Martek will use
its commercially reasonable efforts to shorten * period and purchase as much
ARA Products as commercially reasonable from DSM during such period.

         (c) In the event (i) DSM Shortfalls are projected (based on DSM’s Three
Year Rolling Production Forecast and the Martek Three Year Rolling Forecast) or
occur for * as a result of a Force Majeure Event or otherwise, (ii) Martek has
requested in writing that DSM expand its ARA production capacities by a
specified volume, (iii) Martek has offered to guarantee to DSM that DSM would
recoup its investment in so expanding its ARA production capacities by such
volume, through the DSM Mark Up received on purchase orders by Martek for ARA
Products * and (iv) DSM has not commenced construction to expand, * months
of Martek’s written request (or such longer period as the parties may agree),
its ARA production capacities by at least the specified volume or if DSM fails
to proceed with diligence in such expansion or fails to complete such expansion
* of such commencement, then Martek shall be entitled to expand its ARA
production capacity and/or subcontract production of ARA Products to one or
more third parties by the specified volume (the “Martek Expansion”), provided
that Martek provides DSM with written notice prior to commencing construction
and commences construction of such expansion or enters into a subcontracting
arrangement * of its written request as referred to under (ii) herein and, in
the case of expansion activities, pursues them to completion with diligence and
completes such expansion * months of such commencement.

         (d) Any Martek Expansion shall permanently add to the Martek Allocation
unless there is a Capacity Dispute related to such Martek Expansion. If a
Capacity Dispute occurs the parties shall attempt, in good faith, to agree upon
the amount of the DSM Shortfall expected pursuant to Section 3.3(c). If the
parties reach agreement upon the amount of such DSM Shortfall and Martek
proceeds with a Martek Expansion pursuant to Section 3.3(c), the then current
Martek Allocation shall be permanently increased by the amount of such DSM
Shortfall. If the parties cannot resolve the Capacity Dispute, the parties
shall proceed to arbitration pursuant to Section 10.5 and the arbitrators shall
determine whether, pursuant to Section 3.3(c), a DSM Shortfall is projected,
and the extent of such DSM Shortfall. In making such determination, the
arbitrators shall only consider the facilities dedicated to ARA production,
technology, processes, formulas, and expertise that were in existence at the
time the Capacity Dispute first arose and the technology, processes and
formulas that were reasonably contemplated and known by the Committee at the
time of the Capacity Dispute. The Martek Allocation shall be permanently
increased by the amount of the DSM Shortfall as so determined by the
arbitrators.

         (e) In the event that after such a Martek Expansion, Martek’s demand for
ARA Products decreases resulting in a decrease of required production capacity,
such decrease shall be shared pro rata by the parties.

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     3.4.
DSM Production.

         (a) The parties agree that, at and after such time that Martek is capable
of performing Extraction in Europe for the Biomass produced by DSM in Europe,
DSM and its Affiliates will have the right, either directly or through one or
more Third Party Toll Manufacturers, to continue to perform Extraction of
Biomass to produce an unlimited amount of Crude Oil. DSM agrees that neither it
nor any of its Affiliates shall sell, directly or indirectly, in any calendar
year, a combined aggregate quantity of ARA Products that contains more than the
greater of (i) forty thousand (40,000) Units of ARA or (ii) the Crude Oil
requirements for the DSM ARA Fields of Use (the “DSM Extraction Allocation”) as
adjusted pursuant to this Section 3.4(a), that are not derived from ARA
Products upon which Martek performed Extraction services pursuant to this
Agreement. In the event of a Martek Shortfall, related to Martek’s provision of
Extraction services to DSM, during any calendar year, the DSM Extraction
Allocation for that calendar year will be increased, during the calendar year
in which such Martek Shortfall has occurred, by the number of Units of ARA
necessary to meet such Martek Shortfall, and the DSM Extraction Allocation will
automatically revert for the next calendar year to an amount of Crude Oil equal
to the greater of (i) forty thousand (40,000) Units of ARA or (ii) the Crude
Oil requirements for the DSM ARA Fields of Use. In the event Martek Shortfalls,
related to Martek’s provision of Extraction services to DSM, occur for * as a
result of a Force Majeure Event or otherwise or are projected for the * based
on Martek’s Three Year Rolling Services Forecast under Section 3.6(b) and the
DSM Three Year Rolling Forecast for Extraction services under Section 3.6(a),
the DSM Extraction Allocation shall be increased accordingly until *
following the date that Martek notifies DSM in good faith in writing that it is
able to meet DSM’s then current Three Year Rolling Forecast for Extraction
services. DSM will use its commercially reasonable efforts to shorten * and
purchase as much extraction services as commercially reasonable from Martek
during such period. In the event of a Martek Shortfall and upon DSM’s written
request, Martek shall return to DSM the portion of ARA Products delivered by
DSM pursuant to Section 3.8(b) on which Martek has not yet performed Extraction
services.

         (b) DSM and its Affiliates will have the right, either directly or through
one or more Third Party Toll Manufacturers, to perform RBD services on an
unlimited amount of Crude Oil. Except as expressly set forth below, DSM agrees
that in any calendar year neither it nor its Affiliates shall sell a combined
aggregate quantity of Finished Oil into any DSM ARA Field of Use that contains
more than forty thousand (40,000) Units of ARA (the “DSM RBD Services
Allocation”) that are not derived from ARA Products that Martek performed RBD
services on pursuant to this Agreement. In the event of a Martek Shortfall,
related to Martek’s provision of RBD services to DSM, during any calendar year,
the DSM RBD Services Allocation for that calendar year will be increased,
during the calendar year in which such Martek Shortfall has occurred, by the
number of Units of ARA necessary to meet such Martek Shortfall, and the DSM RBD
Services Allocation will automatically revert for the next calendar year to an
amount of Finished Oil equal to forty thousand (40,000) Units of ARA except as
otherwise specified herein. In the event Martek Shortfalls, related to Martek’s
provision of RBD services to DSM, occur for * as a result of a Force Majeure
Event or otherwise or are projected for the * based on Martek’s Three Year
Rolling Services Forecast under Section 3.6(b) and the DSM Three Year

20

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

Rolling Forecast under Section 3.6(a) for RBD services, the DSM RBD
Services Allocation shall be increased accordingly * following the date that
Martek notifies DSM in good faith in writing that it is able to meet DSM’s then
current Three Year Rolling Forecast for RBD services. DSM will use its
commercially reasonable efforts to shorten * and purchase as much RBD
services as commercially reasonable from Martek during such period. In the
event of a Martek Shortfall and upon DSM’s written request, Martek shall return
to DSM the portion of ARA Products delivered by DSM pursuant to Section 3.8(b)
on which Martek has not yet performed RBD services.

         (c) Subject to DSM’s rights under Section 5.5(d), DSM shall be entitled to
perform such RBD Services at either its own facility or at a Third Party Toll
Manufacturer that shall be reasonably acceptable to Martek. DSM may perform
such services at a Third Party Toll Manufacturer using the Martek Proprietary
Technology and/or Production Technology, provided that such Third Party Toll
Manufacturer shall be reasonably acceptable to Martek taking into consideration
all the facts and circumstances, including without limitation Martek’s
proprietary interests in the Martek Proprietary Technology and/or Production
Technology. Upon Martek’s acceptance of any such Third Party Toll Manufacturer,
DSM shall take all reasonable measures to protect Martek’s proprietary
interests in the Martek Proprietary Technology and/or Production Technology
while such Martek Proprietary Technology and/or Production Technology is being
used by such Third Party Toll Manufacturer. Notwithstanding the foregoing, DSM
shall discontinue using the Martek Proprietary Technology and/or Production
Technology at such Third Party Toll Manufacturer if at any time following
discussions with Martek either Martek or DSM reasonably determines that the
continued use by such Third Party Toll Manufacturer of such Martek Proprietary
Technology and/or Production Technology would be reasonably likely to pose a
threat to Martek’s proprietary interests in such Martek Proprietary Technology
and/or Production Technology; the party making such determination shall notify
the other party immediately upon making such determination and DSM shall give
Martek all reasonable assistance in connection with any efforts by Martek to
protect Martek’s proprietary interests in such Martek Proprietary Technology
and/or Production Technology. In the event that DSM performs such RBD Services
at its own facilities, or at any Third Party Toll Manufacturer solely for
purposes of responding to a Martek Shortfall using the Martek Proprietary
Technology and/or Production Technology, Martek will assist DSM at DSM’s
request by providing reasonable ARA manufacturing assistance to DSM and DSM
shall reimburse Martek for Martek’s reasonable costs and expenses incurred in
connection with providing such assistance.

         (d) The parties agree that at any time during the term of this Agreement
DSM shall have the right to create and use a “DSM Expansion” in regard to RBD
Services and Extraction on terms and conditions substantially similar to those
that are set forth in Section 3.3(c) and (d) in respect of the Martek
Expansion.

     3.5. Martek Three Year Rolling Forecasts; Martek Firm Orders.

         (a) Two months prior to the first day of each calendar quarter, Martek
will submit to DSM a good faith forecast of Martek’s demand of ARA Products,
broken down by

21

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

ARA Product, for each of the following twelve (12) quarters (each, a
“Martek Three Year Rolling Forecast”), which shall include (i) a firm order by
Martek of ARA Products, broken down by ARA Product, for each month during the
first calendar quarter covered by such Martek Three Year Rolling Forecast (a
“Martek Firm Order”) and (ii) Martek’s good faith estimate of Martek’s demand
for ARA Products, broken down by ARA Product, for each of the following eleven
(11) quarters covered by such Martek Three Year Rolling Forecast.

         (b) One month prior to the first day of each calendar quarter, DSM will
submit to Martek a good faith forecast of DSM’s production capabilities of ARA
Products, broken down by ARA Product, for each of the following twelve (12)
quarters (“DSM Three Year Rolling Production Forecast”).

         (c) No later than two (2) weeks prior to the first day of each calendar
quarter, Martek shall issue a Martek Purchase Order to DSM for ARA Products for
that quarter that shall be no less than the amount indicated in the related
Martek Firm Order. Each Martek Purchase Order shall include delivery
instructions that satisfy the requirements of Section 3.7. No later than one
(1) week prior to the first day of each calendar quarter, DSM will issue a DSM
Confirmation Letter to Martek indicating the extent to which DSM accepts such
Martek Purchase Order.

         (d) DSM shall use its good faith efforts to deliver the amount of ARA
Products ordered in a Martek Purchase Order and shall be entitled to deliver up
to an additional ten percent (10%) of such amount so ordered, provided that the
amount delivered by DSM in the next succeeding calendar quarter pursuant to a
Martek Purchase Order for that quarter shall be reduced by such additional
amount, unless otherwise requested by Martek. In the event that Martek’s
demand for ARA Products substantially and persistently exceeds the Martek Three
Year Rolling Forecast the parties shall use their commercially reasonable
efforts to make arrangements to meet such extra demand.

         (e) It is understood and agreed that, in the event that Martek shall issue
a Martek Purchase Order for ARA Products in an amount greater than that set
forth in the related Martek Firm Order, DSM shall have the right, but not the
obligation, to accept such Martek Purchase Order to the extent of such greater
amount.

         (f) The parties acknowledge that Martek’s orders and forecasts for ARA
Products set forth in this Section 3.5 shall not include those ARA Products
upon which DSM requests Martek to perform Martek Services pursuant to Section
3.6.

     3.6. DSM Three Year Rolling Forecast; DSM Firm Orders.

         (a) Two months prior to the first day of each calendar quarter, DSM will
submit to Martek a good faith forecast of DSM’s demand for Martek Services,
broken down by Extraction and RBD Services, for each of the following twelve
(12) quarters (each, a “DSM Three Year Rolling Forecast”), which shall include
(i) a firm order by DSM for Martek Services,

22

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

broken down by Extraction and RBD Services, for each month during the
first calendar quarter covered by such DSM Three Year Rolling Forecast (a “DSM
Firm Order”) and (ii) DSM’s good faith estimate of DSM’s demand for Martek
Services, broken down by Extraction and RBD Services, for each of the following
eleven (11) quarters covered by such DSM Three Year Rolling Forecast.

         (b) One month prior to the first day of each calendar quarter, Martek will
submit to DSM a good faith forecast of Martek Services capabilities, broken
down by Extraction and RBD Services, for each of the following twelve (12)
quarters (“Martek Three Year Rolling Services Forecast”).

         (c) No later than two (2) weeks prior to the first day of each calendar
quarter, DSM shall issue a DSM Purchase Order to Martek for Martek Services,
broken down by Extraction and/or RBD Services, for that quarter that shall be
no less than the amount indicated in the related DSM Firm Order. Each DSM
Purchase Order shall include delivery instructions that satisfy the
requirements of Section 3.7. No later than one (1) week prior to the first day
of each calendar quarter, Martek will issue a Martek Confirmation Letter to DSM
indicating the extent to which Martek accepts such DSM Purchase Order.

         (d) Martek shall use its good faith efforts to perform the Martek Services
ordered in a DSM Purchase Order and to deliver the resulting ARA Products to
DSM no later than thirty (30) days after delivery by DSM to Martek of the ARA
Products upon which Martek will perform the Martek Services.

         (e) It is understood and agreed that, in the event that DSM shall issue a
DSM Purchase Order for Martek Services in an amount greater than that set forth
in the related DSM Firm Order, Martek shall have the right, but not the
obligation, to accept such DSM Purchase Order to the extent of such greater
amount.

     3.7. Delivery Instructions.

         (a) Martek shall submit delivery instructions to DSM for all quantities of
ARA Products subject to Martek Purchase Orders placed in accordance with
Section 3.5. Such delivery instructions shall be included in the Martek
Purchase Orders and shall identify (i) the quantity of ARA Products required,
(ii) the required delivery date, (iii) the address to which the shipment shall
be delivered, and (iv) any other applicable shipping instructions.

         (b) DSM shall submit delivery instructions to Martek for all quantities of
ARA Products that are to be produced through the Martek Services and subject to
a DSM Purchase Order placed in accordance with Section 3.6. Such delivery
instructions shall be included in the DSM Purchase Orders and shall identify
(i) the quantity of ARA Products to be produced through Martek Services based
on the yield assumptions as referred to in Schedule 6.15, (ii) the required
delivery date, (iii) the address to which the shipment shall be delivered, and
(iv) any other applicable shipping instructions.

23

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     3.8. Shipment.

         (a) Subject to the provisions of Sections 3.5(c) and 3.5(d), during a
month, DSM shall deliver quantities of ARA Products covered by the Martek
Purchase Order for the month on the later of (i) the last business day of the
month or (ii) ten (10) days after receipt of delivery instructions from Martek.
All such shipments shall be FOB or FCA, as applicable, DSM’s (or DSM’s Third
Party Toll Manufacturer’s) facility. For purposes hereof, each order shall be
deemed to have been “delivered”, and risk of loss with respect to each such
shipment shall pass from DSM to Martek, upon delivery of the shipment by DSM to
a carrier agreed upon by the Committee for transport to the location specified
in the Martek Purchase Order. DSM shall retain title to all shipments of ARA
Products covered by the Martek Purchase Order until payment is received,
whereupon title shall pass to Martek.

         (b) In addition, DSM shall deliver to Martek additional quantities of ARA
Products sufficient for Martek to perform the Martek Services requested by DSM
pursuant to a DSM Purchase Order and all such quantities delivered shall be
clearly identified by DSM and distinguished from ARA Products delivered
pursuant to Section 3.8(a). The roundtrip shipment cost of all such shipments
shall be borne by DSM. For purposes hereof, each order shall be deemed to have
been “delivered”, and risk of loss with respect to each such shipment shall
pass from DSM to Martek, upon delivery of the shipment by DSM to a carrier
agreed upon by the Committee for transport to the location specified in the DSM
Purchase Order and shall pass back to DSM upon delivery of the ARA Products to
such carrier following the performance by Martek of the Martek Services
thereon. DSM shall at all times retain title to all ARA Products that are
provided for purposes of Martek performing Martek Services.

         (c) Subject to the provisions of Sections 3.6(c) and 3.6(d), during a
month, Martek shall deliver quantities of ARA Products covered by the DSM
Purchase Order for the month on the later of (i) the last business day of the
month or (ii) ten (10) days after receipt of delivery instructions from DSM.
All orders shall be shipped FOB or FCA, as applicable, Martek’s (or Martek’s
Third Party Toll Manufacturer’s) facility. For purposes hereof, each order
shall be deemed to have been “delivered”, and risk of loss with respect to each
shipment shall pass from Martek to DSM, upon delivery of the shipment by Martek
to a carrier agreed upon by the Committee for transport to the location
specified in the DSM Purchase Order.

     3.9. Order Fulfillment.

         (a) DSM shall be responsible for, and shall retain the authority to
exercise its own discretion, in planning and arranging for supplies of ARA
Products from any subcontractors to fulfill DSM’s supply obligations to Martek
hereunder. In such cases where Production Technology is intended to be used by
a Third Party Toll Manufacturer, DSM will obtain Committee approval before
proceeding.

24

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

         (b) Subject to Section 3.3(a), Martek shall be responsible for, and shall
retain the authority to exercise its own discretion for, the performance of any
Martek Services by any subcontractors to fulfill Martek’s Service obligations
to DSM hereunder.

     3.10.
Limitation on Breach.

         (a) The parties understand and agree that, despite Martek’s commercially
reasonable efforts to provide accurate forecasts for its subsequent orders of
ARA Products and DSM’s commercially reasonable efforts to ensure that a
sufficient amount of ARA Products are produced based on such forecasts and
orders, it is likely that at times the demand by Martek for ARA Products from
DSM may exceed the ability of DSM to supply such ARA Products. Martek and DSM
hereby agree that DSM will not be in breach of this Agreement if, despite its
good faith efforts, DSM fails from time to time to deliver the quantity of ARA
Products ordered by Martek; provided that DSM is operating its facilities at a
capacity at such time that is at or near Practical Capacity and delivers to
Martek substantially all of the ARA Products that DSM produces at such time,
subject to the provisions of Section 5.3.

         (b) The parties understand and agree that, despite DSM’s commercially
reasonable efforts to provide accurate forecasts for its subsequent orders for
Martek Services and Martek’s commercially reasonable efforts to ensure that it
meets the demand for Martek Services based on such forecasts and orders, it is
likely that at times the demand by DSM for Martek Services may exceed the
ability of Martek to supply such Martek Services. Martek and DSM hereby agree
that Martek will not be in breach of this Agreement if, despite its good faith
efforts, Martek fails from time to time to perform the Martek Services ordered
by DSM; provided that Martek is operating its facilities at production capacity
or near production capacity at such time.

25

*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

4. QUALITY AND VERIFICATION

     4.1.
Verification of Production. The parties shall perform the
ringtesting procedures as agreed upon by the Committee to confirm the accuracy
of any relevant quality control assay procedure (including without limitation
the ARA Assay Procedure).

     4.2. Certification of Analysis.

         (a) For each DSM shipment of Crude Oil or Biomass ordered by Martek and
delivered by DSM pursuant to Section 3.8(a) or Section 3.8(b), DSM shall
furnish to Martek within fourteen (14) days after shipment a certificate of
analysis in the forms attached hereto as Schedule 4.2(a) and signed by DSM’s
relevant QA/QC officer, which certifies the actual content of those components
of the Crude Oil or Biomass that are identified in the Specifications, as
applicable.

            (i) If DSM does not furnish the signed certificate of analysis
within fourteen (14) days after shipment of ARA Products ordered by
Martek pursuant to a Martek Purchase Order, the amount of such
shipment for which no signed certificate of analysis was delivered
shall to the extent that such amount brings the total of the
shipment below what has been set forth in the Martek Purchase Order
be immediately deemed to be a DSM Shortfall for the calendar year
and the Martek Allocation shall be increased accordingly in
accordance with the provisions of Sections 3.1(b) and 3.3. If
Martek determines such shipment to be acceptable after such
fourteen (14) day period, the Martek Allocation shall be
automatically reduced by the lesser of (i) the amount by which the
Martek Allocation was increased in respect of such shipment or (ii)
the difference between the then current Martek Allocation for such
calendar year and the total number of Units of ARA that Martek and
its Affiliates have sold during such calendar year that were not
derived from ARA Products purchased from DSM. In the event DSM
provides Martek with a draft or unsigned version of a certificate
of analysis to facilitate Martek’s determination of whether or not
it will accept or reject the related shipment, Martek shall
promptly consult with DSM and make such determination.

            (ii) If DSM does not furnish the signed certificate of
analysis within fourteen (14) days after shipment of ARA Products
delivered by DSM pursuant to Section 3.8(b), Martek may delay its
performance of the Martek Services until the applicable certificate
of analysis is furnished.

         (b) For each Martek shipment of ARA Products produced by the Martek
Services, Martek shall furnish to DSM within fourteen (14) days after shipment
a certificate of analysis in the form attached hereto as Schedule 4.2(b) and
signed by Martek’s relevant QA/QC officer, which certifies the actual content
of those components of the ARA Products that are identified in the
Specifications, as applicable. If Martek does not furnish the signed
certificate of

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

analysis within fourteen (14) days after shipment of such ARA Products,
the amount of such shipment shall be immediately deemed to be a Martek
Shortfall for the calendar year and the DSM RBD Services Allocation and/or DSM
Extraction Allocation, as applicable, shall be increased accordingly in
accordance with the provisions of Section 3.4. If DSM determines such shipment
to be acceptable after such fourteen (14) day period, the DSM RBD Services
Allocation and/or DSM Extraction Allocation, as applicable, shall be
automatically reduced by the lesser of (i) the amount by which the DSM RBD
Services Allocation and/or DSM Extraction Allocation, as applicable, was
increased in respect of such shipment or (ii) the difference between the then
current DSM RBD Services Allocation and/or DSM Extraction Allocation, as
applicable, for such calendar year and the total number of Units of ARA that
are in ARA Products on which DSM and its Affiliates have performed RBD and/or
Extraction services, as applicable, during such calendar year. In the event
Martek provides DSM with a draft or unsigned version of a certificate of
analysis to facilitate DSM’s determination of whether or not it will accept or
reject the related shipment, DSM shall promptly consult with Martek and make
such determination.

         (c) DSM shall not be liable to Martek if Martek begins to process or
delivers to a customer any ARA Products before Martek has received a signed
certificate of analysis from DSM; provided however, notwithstanding Section
4.2(a) DSM shall be entitled to request Martek to perform Martek Services on
ARA Products prior to receipt by Martek of the related signed certificate of
analysis, in which event if Martek performs such Martek Services on such ARA
Products then DSM shall assume liability to the extent the ARA Products do not
conform to the related Specifications. DSM shall be under no obligation to
replace, or to refund to Martek the purchase price of, any ARA Products if
Martek has so processed or sold such ARA Product to a customer before Martek
has received a signed certificate of analysis from DSM. In addition, Martek
shall indemnify, defend and hold harmless DSM, its Affiliates and their
respective directors, officers, employees and agents from and against all
actions, proceedings, costs, damages and claims (each, a “Claim”), including
reasonable counsel fees, that may be asserted against or incurred or suffered
by any such Person arising out of or relating to any action taken by Martek
with respect to any ARA Products before Martek has received such a certificate
of analysis from DSM, including without limitation processing or delivery to a
customer of ARA Products, whether such Claim is based upon a theory of
negligence, strict liability or otherwise.

         (d) Martek shall not be liable to DSM if DSM delivers to a customer any
ARA Products upon which Martek performed Martek Services before DSM has
received a signed certificate of analysis from Martek. Martek shall be under
no obligation to replace, or to refund to DSM the cost of Martek Services
associated with the production of any ARA Products if DSM has so sold such ARA
Products to a customer before DSM has received a signed certificate of analysis
from Martek. In addition, DSM shall indemnify, defend and hold harmless
Martek, its Affiliates and their respective directors, officers, employees and
agents from and against all Claims, including reasonable counsel fees, that may
be asserted against or incurred or suffered by any such Person arising out of
or relating to any action taken by DSM with respect to any ARA Products upon
which Martek performed Martek Services before DSM has received such a
certificate of analysis from Martek, including without limitation delivery to a
customer of

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

such ARA Products, whether such Claim is based upon a theory of
negligence, strict liability or otherwise.

     4.3. Specification and Specification Variance Changes. The parties
acknowledge and agree that the Specifications and the Specification Variances
may be subject to change from time to time. Martek and DSM shall bring any
required or requested changes to the Specifications or the Specification
Variances to the attention of the Committee in writing as soon as reasonably
practicable. The Committee shall have the authority to approve or reject any
such changes, it being understood and agreed that all changes that are
reasonable in nature to make, taking into account all the facts and
circumstances, shall be approved by the Committee. Upon written approval by
the Committee of any such required or requested changes, the Committee shall
then determine the terms, including DSM Costs and/or the Martek Costs and
delivery dates applicable to ARA Products which will meet the proposed
Specification or Specification Variance changes. Each of Martek and DSM agrees
to use its commercially reasonable efforts to accommodate any requested changes
at reasonable costs. Upon agreement by the Committee on such terms Martek or
DSM, as the case may be, shall implement the necessary adjustments in
accordance therewith, and, in the case of a change in Specifications, the
parties shall follow the procedure set forth in Section 4.4 for verifying that
quantities of ARA Product produced satisfy such changed Specifications.

     4.4.
Verification of Production when Specifications Change. In the event
that the Committee approves a change to the Specifications pursuant to Section
4.3, the party whose ARA Product specifications have changed (the
“Manufacturing Party”) shall deliver to the other party (the “Testing Party”) a
quantity of ARA Product prepared to satisfy the changed Specifications. Such
delivery shall be made in accordance with a schedule and in quantities and on
terms determined by the Committee, which quantities shall be sufficient in all
cases to enable the Testing Party to verify that the quantities of ARA Product
provided satisfy the applicable changed Specifications. The Testing Party
shall thereupon subject the delivered quantities of ARA Product to the testing
and analysis procedures agreed upon by the Committee to verify that the
individual quantities satisfy the applicable changed Specifications. If any
quantity of ARA Product fails to satisfy the applicable changed Specifications,
the Testing Party shall so notify the Manufacturing Party. Any dispute between
the parties regarding the quality of any ARA Product thus supplied shall be
resolved by a binding determination of a third party testing facility as agreed
upon by the Committee. In case it is resolved that any quantity of ARA Product
thus supplied by the Manufacturing Party fails to satisfy the applicable
changed Specifications, the Manufacturing Party shall adjust its manufacturing
process or take other appropriate action and provide a replacement quantity of
ARA Product for testing and analysis by the Testing Party. The process shall
continue until the Testing Party determines that all quantities of ARA Product
provided by the Manufacturing Party satisfy the applicable changed
Specifications. The Testing Party shall be responsible for its own testing
costs which shall be considered Excluded Costs.

     4.5.
Inspection. Upon reasonable notice during regular working hours,
each of DSM and Martek and their respective customers may inspect the
manufacturing facilities of the other party and any subcontractor(s) in order
to inspect the manufacture of ARA Products,

28

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

examine samples of ARA Products and review quality control and
manufacturing procedures for the purpose of verifying the quality of ARA
Products.

     4.6.
Manufacturing Changes. DSM shall promptly notify the Committee of
any major change to any manufacturing procedure for ARA Products and, in the
case of proposed major changes, shall not apply such change to the manufacture
of ARA Products without the prior approval of the Committee. Martek shall
promptly notify the Committee of any major change to any Extraction or RBD
process and, in the case of proposed major changes, shall not apply such change
to the Extraction or RBD process without the prior approval of the Committee.
In the event of a major change of which the Committee had not been previously
notified, the Committee shall meet as promptly as possible after notification
thereof to determine what, if any, action is necessary or advisable in
connection therewith. Listed on Schedule 4.6 are certain changes that the
parties consider as of the Effective Date to be major changes for purposes of
this Section 4.6. The Committee shall have the authority to modify such
Schedule from time to time in its discretion and otherwise shall be the arbiter
of which changes constitute major changes for purposes of this Section 4.6.
Each party shall describe in writing to the Committee any change to any
manufacturing procedure (in the case of DSM) or any change in Extraction or RBD
Services (in the case of Martek), in each case other than major changes, upon
the request of the other party or otherwise at the next succeeding quarterly
meeting of the Committee.

     4.7.
ARA Product Non-Conformity Procedure; Rework and Destruction.

         (a) If either party determines or has reason to believe that any shipment
of ARA Products does not conform with the applicable Specifications, that party
will give prompt written notice thereof to the other party, which notice shall
include a description of the nonconformity. Any dispute between the parties
regarding whether or not a shipment conforms with the applicable Specifications
shall be resolved by a binding determination of a third party testing facility
as agreed upon by the Committee.

         (b) If any shipment of ARA Products does not conform to the applicable
Specifications but is within the applicable Specification Variances, the party
that ordered such shipped products shall consider in good faith, whether it
will accept such shipment as-is. If the ordering party agrees to accept such
shipment as-is, such ordering party shall notify the producing party of such
acceptance and shall pay such producing party the applicable invoice price (in
accordance with the terms of this Agreement) for the shipment.

         (c) If any shipment of ARA Products does not conform with the applicable
Specifications and is not accepted by the ordering party, such ordering party
shall return such shipment to the producing party at such producing party’s
request and expense (the “Returned Material”). If the ordering party
authorizes the producing party to rework such shipment, such producing party
shall be entitled to rework such shipment and such ordering party shall accept
such reworked shipment provided that it meets the applicable Specifications, in
which case only the costs and expenses related to the initial production, and
not the rework, of the Returned

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

Material, shall be included in DSM Costs or Martek Costs, as applicable,
or in the calculation by such producing party of its actual production costs.
If such reworked shipment continues to fail to meet the applicable
Specifications but is within the applicable Specification Variances, the
ordering party shall consider in good faith, whether it will accept such
shipment as-is. If such ordering party agrees to accept such shipment as-is,
such ordering party shall notify the producing party of such acceptance, in
which case the costs and expenses related to the rework of the Returned
Material shall be borne by the party doing such rework and such costs and
expense shall be considered Excluded Costs. The parties agree to work together
in good faith to co-develop rework procedures that allow rejected ARA Products
to be re-processed into ARA Products that meet the Specifications.

         (d) In the event that the ordering party does not authorize the producing
party to rework the Returned Material or if such producing party does not
exercise its right to provide a reworked shipment or is unable to provide a
reworked shipment that meets the Specifications within a reasonable time after
such producing party’s receipt of the notice of nonconformity, such ordering
party shall have no obligation to pay the producing party for the nonconforming
ARA Products or cost of Martek Services associated with the production of such
ARA Products (as applicable) and, if payment has already been made, such
ordering party shall be entitled to an immediate refund of the price of the
nonconforming shipment. In such event, the producing party shall use its
commercially reasonable efforts to replace the nonconforming ARA Products with
a substitute shipment that meets the Specifications and such producing party
shall be free to dispose of the Returned Material as it determines, consistent
with the terms of this Agreement, including by selling it (to the extent
permitted) in its respective ARA Field of Use or destroying it.

     4.8.
Compliance.

         (a) DSM represents and warrants that it shall obtain and maintain, and
shall ensure that its subcontractors obtain and maintain, all licenses,
permits, approvals, clearances and notifications that may be required by law in
connection with the manufacture and packaging of ARA Products for Martek. DSM
further represents and warrants that (i) the Specifications for ARA Products to
be produced as a result of Martek performing Martek Services for DSM shall
comply with all applicable laws, rules and regulations, (ii) all quantities of
ARA Products that DSM supplies to Martek hereunder shall be manufactured in
conformity with all applicable laws, rules and regulations and shall fully
satisfy the Specifications, provided that DSM shall have delivered to Martek a
signed certificate of analysis indicating that such quantities of ARA Products
meet the Specifications, and (iii) DSM shall exercise commercially reasonable
efforts to keep its facilities that are used in the manufacture of ARA Products
in good working order and available for the production of ARA Products pursuant
to this Agreement.

         (b) Martek represents and warrants that it shall obtain and maintain, and
shall ensure that its subcontractors obtain and maintain, all licenses,
permits, approvals, clearances and notifications that may be required by law in
connection with the Extraction, RBD, manufacturing, packaging, or production of
ARA Products for DSM. Martek further represents

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ARA Alliance, Purchase and Production Agreement

and warrants that (i) the Specifications for ARA Products to be produced
by DSM for Martek shall comply with all applicable laws, rules and regulations
and (ii) all Martek Services shall be performed in conformity with all
applicable laws, rules and regulations and the ARA Products delivered as a
result thereof shall fully satisfy the Specifications, provided that Martek
shall have delivered to DSM a signed certificate of analysis indicating that
such quantities of ARA Products meet the Specifications, and (iii) Martek shall
exercise commercially reasonable efforts to keep its facilities, that are used
in the manufacture of ARA Products in good working order and available for the
production of ARA Products pursuant to this Agreement.

     4.9. Disclaimers.

         (a) THE LIMITED WARRANTY SET FORTH HEREIN IS EXCLUSIVE AND IN LIEU OF, AND
DSM HEREBY DISCLAIMS, ALL OTHER WARRANTIES REGARDING THE PRODUCTS PRODUCED FOR
MARTEK HEREUNDER, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

         (b) THE LIMITED WARRANTY SET FORTH HEREIN IS EXCLUSIVE AND IN LIEU OF, AND
MARTEK HEREBY DISCLAIMS, ALL OTHER WARRANTIES REGARDING THE PRODUCTS PRODUCED
AND SERVICES PERFORMED FOR DSM HEREUNDER, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

(c) Patent Warranty Disclaimers. THE PARTIES ACKNOWLEDGE THAT NEITHER PARTY IS
GRANTED ANY RIGHTS UNDER ANY PATENTS OR PATENT APPLICATIONS FILED IN THE NAME
OF OR ON BEHALF OF THE OTHER PARTY OR ITS AFFILIATES EXCEPT THOSE SET FORTH IN
SECTION 7.4. EACH PARTY EXPRESSLY DISCLAIMS ANY WARRANTY TO THE OTHER PARTY OR
ANY THIRD PARTY AS TO THE SCOPE, VALIDITY OR ENFORCEABILITY OF ANY OF THE
INTELLECTUAL PROPERTY RIGHTS LICENSED HEREUNDER.

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ARA Alliance, Purchase and Production Agreement

5. MARKETING

     5.1. Expansion of Fields of Use.

         (a) DSM agrees to use its commercially reasonable efforts, including
marketing efforts, to assist Martek in entering into license agreements, on
terms acceptable to Martek in Martek’s sole discretion, with Infant Formula
Product customers in such territories as DSM and Martek may from time to time
agree upon in writing (the “DSM-Assisted Infant Formula Customers”). In order
to qualify as a DSM-Assisted Infant Formula Customer, (i) such customer must
either be identified by Martek or identified by DSM and approved by Martek and
(ii) Martek must approve in writing DSM’s pursuing of such potential customer
and (iii) the customer must either enter into a license agreement with Martek
or place its first order for Infant Formula Products within twenty-four (24)
months of Martek’s written approval to DSM to pursue such DSM-Assisted Infant
Formula Customer or such longer period to which Martek agrees in writing.

         (b) *

         (c) *

         (d) DSM and Martek agree to explore together new market opportunities for
additional uses of ARA including applications that may involve combining ARA
with DHA and/or other nutrients, but shall be under no obligation to continue
such explorations for any specific length of time nor shall the parties be
under any obligation to enter into any arrangement regarding any such new
market opportunities beyond the arrangements set forth herein. Martek shall use
commercially reasonable efforts to market products combining ARA and Martek’s
microbial DHA products developed pursuant to Article 7 of this Agreement where,
in Martek’s reasonable belief, such products are safe, efficacious, and have a
potential return on investment of * or greater.

     5.2. *

     5.3.
Priority of ARA Marketing.

         (a) It is understood and agreed that the parties will first meet the
demands for ARA Products for Infant Formula Products before supplying ARA
Products to any other Martek ARA Field of Use or to any DSM ARA Field of Use,
until such time as the production of ARA Products reaches * Units of ARA
per month. Once the production of ARA Products reaches * Units of ARA per
month, the parties agree that they will supply ARA Products, first, in an
amount of * Units of ARA per year for use in connection with new product
and/or new ARA Field of Use development in accordance with this Agreement;
second, to meet the forecasted demands for ARA Products for Infant Formula
Products; and third, in accordance with the methodology for allocating any
surplus ARA Products which methodology shall be determined by the Committee on
or before the first anniversary of the Effective Date.

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ARA Alliance, Purchase and Production Agreement

         (b) Upon the request of either party, the number of Units of ARA in ARA
Products to be supplied per year for use in connection with new product and/or
new ARA Field of Use development shall be increased as follows as the
production capacity for ARA Products reaches the capacities set forth below, it
being understood and agreed that the Committee shall have the authority to
modify such amounts from time to time:

	 	 	 
	 	 	Units of ARA per Annum
	Monthly Production Capacity
	 	New ARA Product/Field of Use

	*

	 	*
	*

	 	*
	*

	 	*

         (c) Each party shall be entitled to fifty percent (50%) of the total
number of Units of ARA per year allocated for use in connection with new
product and/or new ARA Field of Use development, provided that each party shall
have the right to use all or a portion of such fifty percent (50%) in any
manner it deems fit within its own ARA Field of Use, whether for existing ARA
Products or new ARA Products.

     5.4.
*

         (a) *

         (b) *

         (c) *

     5.5.
*

         (a) *

         (b) *

               (i) *

               (ii) *

               (iii) *

         (c) *

         (d) *

               (i) *

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ARA Alliance, Purchase and Production Agreement

            (ii) *

            (iii) *

            (iv) *

            (v) *

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ARA Alliance, Purchase and Production Agreement

6. FINANCIAL MATTERS (COSTS, PAYMENTS, ROYALTIES)

     6.1.
Amounts Payable.

         (a) For each Unit of ARA that has been shipped pursuant to a Martek
Purchase Order to the address specified in the delivery instructions contained
in such Martek Purchase Order and that has been accepted by Martek, Martek
shall pay to DSM the Fixed Budget Price per Unit of ARA as determined below and
subject to the limitations and adjustments set forth herein. For the avoidance
of doubt, the parties acknowledge that Martek shall not be charged for ARA
Products delivered by DSM to Martek for purposes of Martek performing the
Martek Services for DSM.

         Except as otherwise set forth in Sections 6.1(e) and 6.1(f), prior to
November 30 of each then current year (the “Current Year”), the Committee shall
prepare, based on the Martek Budgeted Volume and the actual DSM cost
information reported by DSM to Martek pursuant to Section 6.14(b), an annual
budget for the next succeeding calendar year (the “Succeeding Year”) and shall
determine a “Fixed Budget Price” per Unit of ARA to be applicable during such
Succeeding Year. Such Fixed Budget Price per Unit of ARA shall equal the sum
of the DSM Costs per Unit of ARA for such Succeeding Year and the mark up per
Unit of ARA to be charged by DSM (the “DSM Mark Up”).

         For purposes of computing such Fixed Budget Price, such DSM Costs per Unit
of ARA and DSM Mark Up shall be determined as follows:

            (i) The DSM Costs per Unit of ARA for the Succeeding Year
shall be based on the actual DSM Costs per Unit of ARA for the
first nine months of the Current Year as adjusted for the Budgeted
Consumption Cost for the Succeeding Year pursuant to Section
6.1(c), the cost of DSM’s failure to meet the Performance Standards
for the Current Year pursuant to Section 6.1(b), and adjustments
pursuant to Section 6.15 and as further adjusted by the Martek
Budgeted Volume as well as the Practical Capacity for the
Succeeding Year, cost reductions pursuant to Section 6.2, and
changes anticipated by the Committee in Variable Costs and in Fixed
Costs, including but not limited to inflationary changes and salary
changes, for the Succeeding Year.

            (ii) The DSM Mark Up per Unit of ARA shall initially be
determined in accordance with Section 6.1(e) and Section 6.1(f) and
shall be thereafter adjusted annually in accordance with Section
6.1(d), Section 6.2 and, if applicable, Section 6.12 and/or Section
6.15.

*

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ARA Alliance, Purchase and Production Agreement

         (b) For each year during the term of this Agreement, the Committee shall
agree to certain standards for the production of ARA Products by DSM and the
performance of the Martek Services by Martek (“Performance Standards”). The
Performance Standards for DSM for 2004 shall be as set forth in Schedule 2.45.
The Performance Standards for Martek for 2004 shall be as set forth in Schedule
2.98. The Performance Standards shall include, but shall not be limited to,
standards for the level of fermentation productivity and the success rate of
fermentations. Any costs associated with failure by DSM to achieve the
Performance Standards during a calendar year shall not be considered in the DSM
Costs when the Committee calculates the Fixed Budget Price for the Succeeding
Year; provided, however, the Committee may explicitly decide otherwise. Any
costs associated with failure by Martek to achieve the Performance Standards
during a calendar year shall not be considered in the Martek Costs when the
Committee determines the Martek Costs for the Succeeding Year pursuant to
Section 6.1(k); provided, however, the Committee may explicitly decide
otherwise.

         (c) Notwithstanding the above, the parties agree that Martek shall be
responsible for one hundred percent (100%) of the actual costs for rate
adjustments billed by third parties to DSM for raw materials, utilities and
third party toll manufacturer services (other than services from Third Party
Toll Manufacturers), in connection with DSM’s production of ARA Products for
Martek shipped pursuant to a Martek Purchase Order. Prior to November 30 of
each calendar year, the parties shall prepare a budget setting forth an
estimate of the rates that DSM will be charged during the Succeeding Year for
raw materials, utilities and third party toll manufacturer services (other than
services from Third Party Toll Manufacturers) that DSM will use to make one (1)
Unit of ARA (the “Budgeted Consumption Cost”). At the end of each calendar
quarter during such Succeeding Year:

            (i) DSM shall determine the actual rates charged to DSM for
raw materials, utilities and third party toll manufacturer services
(other than services from Third Party Toll Manufacturers) used to
produce one (1) Unit of ARA (the “Actual Consumption Cost”) during
such quarter; and

            (ii) Within forty-five (45) days of the end of each such
calendar quarter, DSM shall provide a statement to Martek of the
difference, if any, between the Budgeted Consumption Cost and
Actual Consumption Cost for such calendar quarter. This difference
will then be multiplied by the actual number of Units of ARA
shipped and invoiced to Martek during the quarter and such amount
shall be paid to DSM (where the Actual Consumption Cost exceeds the
Budgeted Consumption Cost) or refunded to Martek (where the Actual
Consumption Cost is less than Budgeted Consumption Cost) by the end
of the following calendar quarter. Notwithstanding the foregoing,
Martek shall have the right to request that, for any calendar year
during the term of this Agreement, DSM lock-in a fixed price for
all or a portion of its raw material, utility and third party toll
manufacturer services (other than services from Third Party Toll
Manufacturers) costs to be incurred by DSM (if possible) in
connection with producing ARA

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Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

Products for Martek. DSM shall lock-in such fixed prices if
Martek and DSM agree on an amount for such prices.

         (d) *

               (i) *

               (ii) *

         (e) The Fixed Budget Price per Unit of ARA produced at DSM’s Capua
facility for 2004 is * consisting of a DSM Mark Up per Unit of ARA of *
and DSM Costs per Unit of ARA of * . This Fixed Budget Price for Capua
production for 2004 is based on the production by DSM and purchase by Martek of
ARA Products in the form of Crude Oil. For 2004, the Martek Budgeted Volume for
ARA Products purchased by Martek from DSM produced at the Capua facility is *
Units of ARA. For 2004, the Technical Capacity for DSM’s Capua facility is *
Units of ARA. For 2004, the Practical Capacity for DSM’s Capua facility is *
Units of ARA. The prices set forth in this Section 6.1(e) are based on the
yield assumptions set forth in Schedule 6.15. Should actual yields of Units of
ARA, from Crude Oil through Finished Oil, differ from such assumptions, on a
quarterly basis, within forty five (45) days of the end of each calendar
quarter, the Committee shall agree upon a final statement of the number of
actual Units of ARA (based on such actual yields) shipped to Martek during the
preceding quarter along with a reconciliation of this amount to the amount
actually billed to Martek during that quarter and shall, as applicable, (i)
issue an invoice to Martek for the number of Units of ARA shipped greater than
that billed multiplied by the applicable Fixed Budget Price per Unit of ARA or
(ii) issue a credit to Martek for the number of Units of ARA shipped less than
that billed multiplied by the applicable Fixed Budget Price per Unit of ARA. *

         (f) * comprising a DSM Mark Up per Unit of ARA of * and DSM Costs per
Unit of ARA of * . The Fixed Budget Price per Unit of ARA produced at DSM’s
Belvidere facility for 2005 is * comprising a DSM Mark Up per Unit of ARA
of * and DSM Costs per Unit of ARA of * For 2004 and 2005, the Martek
Budgeted Volume for ARA Products purchased by Martek from DSM produced at the
Belvidere facility is * Units of ARA and * Units of ARA, respectively. For
2004 and 2005, the Technical Capacity for DSM’s Belvidere facility is * Units
of ARA and * Units of ARA, respectively. For 2004 and 2005, the Practical
Capacity for DSM’s Belvidere facility is * Units of ARA and * Units of ARA,
respectively. Should the parties agree to an expansion for the Belvidere
facility beyond the Belvidere Phase I Build-out, then the foregoing numbers and
the Fixed Budget Price per Unit of ARA for 2005 will be adjusted to reflect the
additional capacity as agreed upon by the parties. The prices set forth in this
Section 6.1(f) are based on the yield assumptions set forth in Schedule 6.15.
Should actual yields of Units of ARA, from Biomass through Finished Oil, differ
from such assumptions, on a quarterly basis, within forty-five (45) days of the
end of each calendar quarter, the Committee shall agree upon a final statement
of the number of actual Units of ARA (based on such actual yields) shipped to
Martek during the preceding quarter along with a reconciliation of this amount
to the amount actually billed to Martek during that quarter and shall, as
applicable, (i) issue an

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Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

invoice to Martek for the number of Units of ARA shipped greater than that
billed multiplied by the applicable Fixed Budget Price per Unit of ARA or (ii)
issue a credit to Martek for the number of Units of ARA shipped less than that
billed multiplied by the applicable Fixed Budget Price per Unit of ARA.

         (g) *

         (h) In case DSM outsources production of ARA Products to a Third Party
Toll Manufacturer pursuant to the terms of this Agreement :

            (i) in such cases where limitations of the DSM production
facilities result in a lower output than the Technical Capacity
agreed upon by the Committee, notwithstanding any provision to the
contrary contained in this Agreement, unless the Committee decides
otherwise, Martek shall be charged no more per Unit of ARA produced
by such Third Party Toll Manufacturer than the Fixed Budget Price
per Unit of ARA produced at DSM’s own facilities.

            (ii) in such cases where increased volume demand by Martek
results in a total demand by Martek which is higher than the
Technical Capacity of DSM, and expansion by DSM is not considered
as a realistic option, notwithstanding any provision to the
contrary contained in this Agreement, if the Committee decides,
pursuant to this Agreement, that DSM shall supply the incremental
volume by outsourcing the production to a Third Party Toll
Manufacturer, then, unless the Committee decides otherwise, the
total mark-up per Unit of ARA charged to DSM by the Third Party
Toll Manufacturer plus the DSM Mark Up per Unit of ARA charged by
DSM to Martek shall not exceed the then current DSM Mark Up per
Unit of ARA for a Unit of ARA produced at DSM’s own facilities.

         (i) *

              (i) *

              (ii) *

              (iii) *

*

Such Profit Sharing Fee shall be paid to DSM on a quarterly basis within
forty-five (45) days following the end of the quarter in which such Adult
Applications Gross Profits or Gross Profits on Other ARA Applications, as
applicable, are received by Martek.

         (j) In case of new non-fermentation technology to produce ARA Products the
Parties will negotiate in good faith to the extent ARA Products are produced
with such new

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confidential portions have been submitted separately to the Securities and
Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

technology, a new economic arrangement that will maintain their relative
economic position as under the fermentation technology as reflected elsewhere
in this Agreement.

         (k) For each Unit of ARA upon which Martek has performed the Martek
Services and that has been shipped pursuant to a DSM Purchase Order to the
address specified in the delivery instructions contained in such DSM Purchase
Order and that has been accepted by DSM, DSM shall pay to Martek the Martek
Costs per Unit of ARA calculated in accordance with Schedule 2.98 plus a *
markup. Unless otherwise agreed to by the parties, the Martek Costs per Unit of
ARA for a Succeeding Year will be agreed to by the Committee by November 30 of
each Current Year and shall be based on the DSM Budgeted Volume for the
Succeeding Year and the actual Martek Costs per Unit of ARA for the first three
(3) calendar quarters of the Current Year. The Martek Costs for RBD Services
per Unit of ARA for 2004 and 2005 shall not exceed *

         (l) *

     6.2.
Reduction of DSM Costs.

         (a) Reductions in DSM Costs per Unit of ARA resulting from the efforts of
an ARA Research Project jointly funded by the parties, pursuant to Section
7.1(c), shall be shared equally by Martek and DSM from the date such savings
are achieved by reducing the then applicable DSM Costs per Unit of ARA by one
hundred percent (100%) of such reduction in DSM Costs per Unit of ARA and
increasing the DSM Mark Up by fifty percent (50%) of such reduction in DSM
Costs per Unit of ARA.

         (b) Reductions in DSM Costs per Unit of ARA resulting from an ARA Research
Project presented to, but not approved by, the Committee for joint funding by
the parties pursuant to Section 7.1(c) shall be applied one hundred percent
(100%) to the Proponent Party solely funding such ARA Research Project. If DSM
is such Proponent Party, resultant reductions in DSM Costs per Unit shall, from
the date such savings are achieved, reduce the then applicable DSM Costs per
Unit of ARA by one hundred percent (100%) of such reduction in DSM Costs per
Unit of ARA and increase the DSM Mark Up per Unit of ARA by one hundred percent
(100%) of such reduction in DSM Costs per Unit of ARA. If Martek is such
Proponent Party, resultant reductions in DSM Costs per Unit shall, from the
date such savings are achieved, reduce the then applicable DSM Costs per Unit
of ARA by one hundred percent (100%) of such reduction in DSM Costs per Unit of
ARA but shall not increase the DSM Mark Up per Unit of ARA.

         (c) Notwithstanding anything to the contrary contained herein, (i)
reasonable rate changes, as agreed to by the Committee, in Variable Costs and
Fixed Costs including but not limited to inflationary changes and salary
changes and (ii) reductions in DSM Costs per Unit of ARA due to volume
increases based upon agreed upon extensions of production facilities resulting
in increased capacity, shall not be taken into account when adjusting the DSM
Mark Up pursuant to this Section 6.2.

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Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

         (d) Reductions in DSM Costs per Unit of ARA resulting from other causes
shall not reduce DSM Costs per Unit of ARA in the calendar year such reduction
occurs, but, for subsequent calendar years, such cost reductions shall be
shared equally by Martek and DSM by reducing the then applicable DSM Costs per
Unit of ARA by one hundred percent (100%) of such reduction in DSM Costs per
Unit of ARA and increasing the DSM Mark Up by fifty percent (50%) of such
reduction in DSM Costs per Unit of ARA.

         (e) Any such cost reduction shall be computed separately for ARA Products
produced at DSM’s Capua facility and at DSM’s Belvidere facility. When
calculating the amount of cost reductions at each such facility, such
calculation should be based on the agreed Practical Capacity for such facility.

         (f) *

         (g) The parties acknowledge that it may be difficult to allocate
reductions in DSM Costs and agree that the Committee shall, in good faith,
determine the proper allocation of such cost reductions.

         (h) In the event that any reduction in the DSM Cost per Unit of ARA, that
has caused the DSM Mark Up per Unit of ARA to be increased, shall cease to be
realized in a future calendar year, then for the next succeeding calendar year,
the DSM Mark Up per Unit of ARA shall be reduced in accordance with the higher
DSM Costs per Unit of ARA.

     6.3.
Deviations from Budget.

         (a) If the volume of ARA Products actually ordered by Martek in Martek
Purchase Orders during a Current Year varies by * from the Martek Budgeted
Volume used in determining the Fixed Budget Price for such Current Year
pursuant to Section 6.1(a):

            (i) Where such variation exceeds the Martek Budgeted Volume
and if DSM decides to supply Martek any or all of such additional
volume of ARA Products, Martek shall pay the same Fixed Budget
Price it would pay for its orders of ARA Products that were within
the Martek Budgeted Volume; and

            (ii) Where such variation falls below the Martek Budgeted
Volume and DSM has been unable to cover such variation by (A)
selling an equivalent volume of ARA Products in DSM’s ARA Fields of
Use or (B) finding an alterative use for the unused Practical
Capacity caused by such variation, Martek shall pay the Unabsorbed
Costs to DSM in accordance with Section 6.4(a).

         (b) If the volume of ARA Products actually ordered by Martek in Martek
Purchase Orders during a Current Year varies * the Martek Budgeted Volume used
in determining the Fixed Budget Price for such Current Year pursuant to Section
6.1(a):

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ARA Alliance, Purchase and Production Agreement

            (i) Where such variation exceeds the Martek Budgeted Volume,
and if DSM decides to supply Martek any or all of such additional
volume of ARA Products, Martek shall have the benefit of the
dilution of the aggregate fixed costs, if any, on the incremental
volume ordered by Martek * and

            (ii) Where such variation falls below the Martek Budgeted
Volume and DSM has been unable to cover such variation by (A)
selling an equivalent volume of ARA Products in DSM’s ARA Fields of
Use or (B) finding an alternative use for the unused Practical
Capacity caused by such variation, Martek shall pay to DSM the
Unabsorbed Costs in accordance with Section 6.4(a).

         (c) In the case where, pursuant to Section 6.3(b)(i), Martek shall have
the benefit of the dilution of the aggregate fixed costs for the incremental
volume of ARA Products that exceeds the Martek Budgeted Volume by *, the
Committee shall, within sixty (60) days of the end of the applicable Current
Year, recalculate what the Fixed Budget Price per Unit of ARA for the Current
Year would have been, based on the increased volume of ARA Products actually
purchased by Martek that exceeds the Martek Budgeted Volume by * during such
Current Year. If such recalculated Fixed Budget Price per Unit of ARA is less
than the Fixed Budget Price per Unit of ARA charged to Martek during such
Current Year, DSM shall refund to Martek, within ninety (90) days of the end of
such Current Year, the difference between what Martek actually paid to DSM
during such Current Year for ARA Products and the amount it would have paid to
DSM at the recalculated Fixed Budget Price per Unit of ARA.

     6.4. Unabsorbed Costs; Unabsorbed Depreciation Costs.

         (a) For a period of up to * from DSM first incurring DSM Unabsorbed
Costs, Martek shall pay to DSM, on a quarterly basis, all of DSM’s Unabsorbed
Costs, provided that DSM shall be obligated to use its commercially reasonable
efforts to find an alternative use for its unused Practical Capacity or
otherwise mitigate such unabsorbed costs before calculating its Unabsorbed
Costs for such quarter. Martek shall not pay any DSM Mark Up on any Unabsorbed
Costs. If, during or after * DSM has reduced its Practical Capacity in
accordance with Martek’s Actual Usage and DSM subsequently * shall commence and
shall apply only to Unabsorbed Costs resulting from such further reductions in
Martek’s Actual Usage.

         (b) Martek shall pay to DSM, on a quarterly basis, DSM’s Unabsorbed
Depreciation Costs. Martek shall pay no DSM Mark Up on such Unabsorbed
Depreciation Costs.

         (c) DSM shall send Martek an invoice after the end of each quarter that
shall set forth any payments due from Martek for any Unabsorbed Costs and/or
Unabsorbed Depreciation in respect of such quarter and Martek shall pay each
such invoice within forty-five (45) days of its receipt thereof.

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Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     6.5.
Maximum Price to Martek; Equalization Reserve. Notwithstanding
anything to the contrary herein, in the event that the average Fixed Budget
Price per Unit of ARA and/or average cost to Martek per Unit of ARA in any
Current Year (such average cost per Unit of ARA shall equal the sum of (i) the
average Fixed Budget Price per Unit plus (ii) the total of any Unabsorbed Costs
and Unabsorbed Depreciation Costs divided by the number of Units of ARA
purchased by Martek during such year) exceeds at any time * (the “Cap Price”),
Martek shall only be required to pay to DSM the Cap Price per Unit of ARA, and
the remaining amount shall be recorded in a book entry account maintained by
DSM for the purpose of tracking all differences between the Cap Price and what
Martek would have paid to DSM absent the Cap Price (the “Equalization
Reserve”). For those portions of the Fixed Budget Price which are specified
herein to be paid in Euro’s, for purposes of calculating the Cap Price, such
Euros shall be converted to Dollars based upon the average exchange rate over
the preceding quarter. The Cap Price shall be adjusted as of the first day of
each calendar year by a percentage equal to the percentage change in the PPI
between such first day of the calendar year and the first day of the preceding
calendar year. For purposes of calculating such Cap Price adjustment, the
starting point for each year will be the adjusted Cap Price of the immediately
preceding year. In the event that the average Fixed Budget Price per Unit of
ARA and/or average cost to Martek per Unit of ARA (after taking into
consideration the cost to Martek of any Unabsorbed Costs and Unabsorbed
Depreciation Costs) in any subsequent calendar year is less than the then
current Cap Price and there is a positive balance in the Equalization Reserve,
then, within thirty (30) days of the end of such calendar year, Martek shall
pay to DSM the lesser of (i) the amount in the Equalization Reserve or (ii) an
amount equal to (A) the number of Units of ARA purchased in such subsequent
calendar year multiplied by (B) the difference between the then current Cap
Price and the average cost to Martek per Unit of ARA (after taking into
consideration the cost to Martek of any Unabsorbed Costs and Unabsorbed
Depreciation Costs) in such subsequent calendar year. Any such amount so paid
by Martek shall serve to reduce the Equalization Reserve. Notwithstanding the
above, where Martek is paying DSM the Cap Price on a Unit of ARA as a result of
declines in Martek’s volume demands for ARA Products, Martek will pay to DSM an
additional amount equal to one-half of Martek’s Gross Profit on the sale of
such Units of ARA to its customers. Any such additional amount shall reduce the
Equalization Reserve, but in no event shall Martek pay to DSM more that it
would per Unit of ARA pursuant to Section 6.12. Except as provided in Section
9.4(c), Martek shall have no obligation upon expiration or termination of this
Agreement to pay DSM any amount in the Equalization Reserve.

     6.6.
Startup Costs. The parties acknowledge and agree that DSM will be
likely to incur certain costs in connection with the commencement of operations
of expansions at DSM’s Belvidere facility as well as expansions of production
of ARA Products at new sites. These costs are likely to include costs that are
directly related to certain inefficiencies in producing ARA Products at a new
production facility (including, for example, batches of Biomass that do not
meet the relevant Specifications) and other costs (the “Production Startup
Costs”). The parties agree that during 2004 and 2005, DSM shall be responsible
for, and not charge to Martek, up to * of Production Startup Costs related to
the Phase 1 Belvidere Build-out and such costs shall be an Excluded Cost.
Martek shall reimburse DSM, in twelve (12) equal quarterly installments, the
amount that the actual Production Startup Costs incurred by DSM for the Phase 1
Belvidere

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Build-out exceed * but in no event shall the total amount to be reimbursed
by Martek pursuant hereto exceed one million US Dollars ($1,000,000.00). DSM
shall also be responsible for, and not charge to Martek, Production Startup
Costs related to the Phase 1 Belvidere Build-out that are in excess of * and
such costs shall be an Excluded Cost. Production Startup Costs for expansions
other than for the Phase I Belvidere Build-out that are agreed to and approved
by the Committee shall be billed separately to Martek in a manner agreed upon
by the Committee and any such Production Startup Costs shall be an Excluded
Cost.

     6.7.
Interest Charges for Inventory. Either party may request from time
to time that the other party maintain an inventory of ARA Products for the sole
purpose of fulfilling Martek Purchase Orders or DSM Purchase Orders, as
applicable. If a party agrees to maintain such inventory, then such party
shall charge the other party interest on the Fixed Budget Price or fees for
Martek Services as set forth in Section 6.1(k), as applicable, that would be
paid for such inventory for the period that such party maintains such inventory
at an annualized rate of interest equal to the average Euribor rate plus three
percent (3%) for such period.

     6.8. *

     6.9.
Martek Proprietary Technology Royalty. With respect to any ARA
Product sold by DSM or any DSM Affiliate to a third party that is not an
Affiliate of either DSM or Martek in the DSM ARA Field of Use after the Signing
Date, DSM will pay Martek a royalty of * on the Net Sales of such ARA Product
in the DSM ARA Field of Use during the first three (3) years following its
commercial introduction into the DSM ARA Field of Use, and thereafter, for the
term of this Agreement, shall pay Martek a * royalty on the Net Sales of such
ARA Product (the “DSM ARA Field of Use Royalty”); provided, however, that the
DSM ARA Field of Use Royalty shall not exceed * of DSM’s Gross Profit on such
sales. DSM shall pay Martek any DSM ARA Field of Use Royalties quarterly,
within forty-five (45) days following the end of the quarter. * In such
cases where DSM reduces the price of the products referred to in this Section
6.9 as an incentive for a DSM customer to purchase other DSM products, the DSM
ARA Field of Use Royalty shall be based on the non-reduced price.

     6.10 [Reserved]

     6.11.
Invoices and Payment.

         (a) DSM shall invoice Martek for each Martek Purchase Order no earlier
than the date on which such order is shipped, and Martek shall remit all
payments due to DSM within thirty (30) days following the later of (i) the
invoice date for such shipment and (ii) the receipt by Martek of a signed
certificate of analysis from DSM relating to such shipment, provided that the
total aggregate amount of unpaid invoices during any given month shall not at
any time exceed one-hundred fifty percent (150%) of the average monthly total
invoices sent by DSM to Martek during the three (3) months immediately
preceding such month.

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         (b) All ARA Products produced at DSM’s Capua facility will be billed and
paid for in Euros and all ARA Products produced at DSM’s Belvidere facility
will be billed and paid in US Dollars except that one-half of the DSM Mark Up
on ARA Products produced at DSM’s Belvidere facility will be billed and paid
for in Euros. DSM shall charge Martek interest (from the due date of the
payment until the date such payment is actually received by DSM) on payments
that are more than fifteen (15) days late at an annualized rate of interest
equal to the Euribor rate in effect as of the first day of such quarter plus
three percent (3%).

         (c) Martek shall invoice DSM for each DSM Purchase Order no earlier than
the date on which such order is shipped, and DSM shall remit all payments due
to Martek within thirty (30) days following the later of (i) the invoice date
for such shipment and (ii) the receipt by DSM of a signed certificate of
analysis from Martek relating to such shipment.

         (d) All ARA Products upon which Martek Services have been performed will
be billed and paid for in US Dollars. Martek shall charge DSM interest (from
the due date of the payment until the date such payment is actually received by
Martek) on payments that are more than fifteen (15) days late at an annualized
rate of interest for each quarter equal to the Euribor rate in effect as of the
first day of such quarter plus three percent (3%).

         (e) Amounts due from one party to the other pursuant to Section
7.2(c)(iv)(B) shall be paid within forty-five (45) days following the end of
each quarter.

         (f) Except as otherwise expressly provided herein, all amounts to be paid
by a party to the other under this Agreement shall be due and payable within
thirty (30) days of the invoice date in respect thereof. All amounts due and
payable and not paid within the applicable grace period shall bear interest for
each quarter or portion thereof at an annualized rate of interest equal to the
Euribor rate in effect as of the first day of such quarter plus three percent
(3%), calculated from the due date of the payment until the date such payment
is actually received by the receiving party.

     6.12.
Margin Protection.

         (a) Martek and DSM shall share data on Gross Profits on sales of ARA
Products and future expectations of declines in Gross Profit per Unit of ARA,
if applicable, in the quarterly meetings of the Committee. If the average Gross
Profit per Unit of ARA in US Dollars received by Martek and its Affiliates on
sales of a Unit of ARA falls below the DSM Mark Up per Unit of ARA for a period
of two (2) consecutive calendar quarters, Martek shall give DSM prompt written
notice thereof, whereupon the parties agree that the DSM Mark Up per Unit of
ARA shall be reduced as of the day of notification to an amount that would be
equal to the average Gross Profit in US Dollars received by Martek and its
Affiliates on sales of a Unit of ARA after the adjustment for such reduction in
the DSM Mark Up per Unit of ARA.

         (b) For the purposes of calculating Martek’s Gross Profit in this Section
6.12, (i) Martek agrees that it will not include in the calculation any ARA
Products sold by Martek to

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its customers at a reduced price as an incentive for the Martek customers to
purchase other Martek products and (ii) to the extent that the ARA Products are
Blended Products, then the Gross Profit per Unit of ARA in such ARA Products
will be determined by multiplying (A) the Gross Profit in US Dollars received
by Martek and its Affiliates on sales of the Blended Product by (B) a fraction
where the numerator is the number of Units of ARA in the Blended Product and
the denominator is the total number of units of fatty acids in the Blended
Product, but in no event shall such amount be less than the Gross Profit on ARA
Products where ARA Products are sold as single product.

     6.13. Renegotiation of Pricing Arrangement. Prior to August 31, 2014, the
parties will review the pricing and the DSM Mark Up for ARA Products and use
their good faith efforts to renegotiate such prices effective on August 31,
2014. If renegotiation is unsuccessful, pricing will be changed so that the
parties share equally in the Gross Profit per each Unit of ARA sold (from the
manufacture and delivery of ARA Products to its sale to a direct customer of
Martek or DSM) effective August 31, 2014.

     6.14. Reporting of Production Costs.

            (a) Within forty-five (45) days of the end of each calendar quarter during
the term of this Agreement, Martek shall provide DSM an accounting of the
actual Martek Costs per Unit of ARA for such calendar quarter.

            (b) Within forty-five (45) days of the end of each calendar quarter during
the term of this Agreement, DSM shall provide Martek an accounting of the
actual DSM Costs per Unit of ARA for such calendar quarter.

     6.15. Adjustment For Changes in Extraction and/or RBD Yields. The DSM
Costs per Unit of ARA and the DSM Mark Up per Unit of ARA are based on the
average standard extraction and RBD yields set forth in Schedule 6.15. The
Fixed Budget Price per Unit of ARA shall be adjusted by agreement of the
Committee to reflect changes in such yields due to changes in the Biomass or
Crude Oil.

     6.16. Books and Records.

            (a) Each party shall maintain complete and accurate records of its
production costs, income, sales of ARA products, capital costs, Production
Start-Up Costs and other information reasonably necessary to verify that such
party is complying with its obligations under this Agreement. The parties each
shall have the right, upon reasonable prior written notice, through an
independent public accounting firm reasonably acceptable to the other party, to
examine the other party’s books, records and accounts relating to the
performance of its obligations under this Agreement. Such audit right shall be
exercisable by a party, in regard to the books records and accounts related to
a calendar year, by delivery of written notice to the
other party (the “Audited Party”) within six (6) months after the end of
such calendar year of its desire to have such an audit conducted; provided,
however, that an Audited Party shall have the

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right, exercisable by delivery of
written notice to the other party, to postpone the commencement of the audit
until the Audited Party shall have completed its own internal accounting review
with respect to such calendar year.

            (b) A party’s books, records and accounts being examined pursuant to
Section 6.16(a) shall be deemed to be a complete and final statement of costs,
fees and prices for the year subject to audit upon delivery of such books,
records and accounts to the appointed independent public accounting firm and
may not be amended, revised or supplemented at any time following such date for
purposes of such audit except for changes, either favorable or unfavorable to
either party, as a result of findings or inquiries by the appointed independent
public accounting firm. All information regarding a party’s business received
in any such examination shall be held in confidence. The expenses of such
audits shall be borne by the party requesting such audit. Any overpayment or
underpayment by one party of the amounts that the other party was entitled to
receive under this Agreement shall be promptly refunded to or paid by such
other party, as the case may be, with annualized interest for such period at
the average Euribor rate plus three percent (3%) calculated from the date(s) of
the overpayment or underpayment until the date of refund or payment in
accordance herewith. If any such audit establishes an aggregate overbilling or
underpayment by one party during the period covered by the audit by five
percent (5%) or more of the amounts to which the other party was entitled, then
such overbilled or underpaid party shall be reimbursed by the other party for
the expenses of the audit. The parties each shall be prohibited from accessing
the other party’s books, records and accounts and any privileged documents
examined by the accountant, and may receive only an accounting report from the
auditor.

     6.17. Technology Transfer Fee. In consideration of the licenses granted
by DSM to Martek herein and the transfer of technologies pursuant to the
provisions of Section 7.5(b), Martek shall pay to DSM a one-time non refundable
fee of ten million US Dollars ($10,000,000.00), four million US Dollars
($4,000,000.00) of which shall be payable within five (5) days of the Signing
Date, four million US Dollars ($4,000,000.00) of which shall be payable on
November 2, 2004 and two million US Dollars ($2,000,000.00) of which shall be
payable on November 2, 2005.

     6.18. Break Up Fee.

            (a) In the event that DSM desires to expand its ARA production capacity,
it shall have the right to provide Martek with a detailed proposal of such
expansion plans for Martek’s review. If Martek provides its written approval
to DSM for such proposed expansion plans (“Approved Expansion Plans”), then
fifty percent (50%) of the actual capital costs of the Approved Expansion Plans
(provided they are not materially changed from those approved by Martek) shall
be added to a book entry account maintained by DSM for such purposes (the
“Break Up Fee Account”). DSM shall maintain a separate subaccount of the Break
Up Fee Account for each Approved Expansion Plan. The parties hereby agree that
the plans for the Phase 1 Belvidere Build-out constitute Approved Expansion Plans and that
the Phase 1 Belvidere

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Build-out subaccount of the Break Up Fee Account shall
reflect a balance in respect thereof of *

            (b) *.

            (c) Upon any expiration of this Agreement or a termination of this
Agreement by DSM for cause pursuant to Section 9.2 or 5.5 when Martek is the
Notifying Party, Martek shall pay to DSM the balance in each subaccount of the
Break Up Fee Account within forty-five (45) days of any such expiration or termination.

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7. PRODUCT DEVELOPMENTS AND PATENTS

     7.1. R&D Collaboration.

            (a) The R&D Collaboration Goals. Each Party acknowledges and agrees that
it shall endeavor in good faith to cooperate with the other party in accordance
with the terms set forth herein to jointly define and conduct research projects
that have a reasonable likelihood of developing (i) new or improved production
processes for ARA Products, (ii) new or improved ARA Product formulations,
(iii) new or improved ARA Product usages, and (iv) other ARA improvements or
new developments mutually agreed upon by the parties, which may include
clinical trials (the “R&D Collaboration Goals”). At the fifth (5th) anniversary
of the Signing Date each party will evaluate the R&D collaboration and the
parties will decide in their sole discretion whether and mutually how to
proceed with any future R&D collaboration

            (b) The R&D Committee. Promptly after the Signing Date, the Committee
shall form a committee which shall consist of four (4) members with appropriate
scientific and marketing knowledge and expertise in the area of ARA Product
production and applications and related technological areas: two (2) members
shall be appointed by Martek and two (2) members shall be appointed by DSM (the
“R&D Committee”). Each party shall identify one of the members that it
appoints to the R&D Committee as its “R&D Leader.” If either party decides at
any time to replace its designated R&D Leader or its other R&D Committee
members, it may do so by written notice to the other party’s R&D Leader. The
R&D Committee shall meet promptly upon its appointment by the Committee, and
thereafter at least quarterly, for the purpose of defining potential research
projects in furtherance of the R&D Collaboration Goals. The R&D Committee
shall meet at such place as it may reasonably select, in person or by
conference call as the R&D Committee decides.

            (c) Research Project Proposals.

            (i) Each party agrees that, prior to funding any ARA Research
Project, it shall submit such research project to the R&D Committee
for review. The respective parties may submit any proposed ARA
Research Project to the R&D Committee through its R&D Leader. (The
submitting party shall hereinafter be referred to as the “Proponent
Party”.) The R&D Committee shall consider each proposed ARA
Research Project in good faith in view of both parties’ commercial
interests and the R&D Collaboration Goals. All proposed ARA
Research Projects shall be put to a vote of the R&D Committee
members pursuant to the voting procedures for the Committee that
are described in Article 8 of this Agreement. In the event that
certain R&D Committee members request that certain changes or
amendments be made to the ARA Research Project as proposed by the
Proponent Party, the Proponent Party shall in good faith consider
and attempt to incorporate or address such requests.

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      (ii) If the R&D Committee members unanimously approve a
proposed ARA Research Project, the Proponent Party shall submit to
the Committee for approval a detailed description of the proposed
ARA Research Project and expected benefits, an estimate of the
projected cost of the project, a proposal regarding the parties’
respective responsibilities in conducting the research, a list of
potential subcontractors and consultants that may be used in
connection with the project (including an estimate of the proposed
scope of work and fees for each such subcontractor and consultant),
a person of appropriate skill to serve as the leader of the
approved ARA Research Project (the “Project Leader”) and any other
information relevant to an evaluation of the proposed ARA Research
Project (a “Project Plan”) with an indication that the R&D
Committee has approved the ARA Research Project. Notwithstanding
the approval of the R&D Committee, the Committee shall have final
approval authority over the proposed ARA Research Project including
but not limited to the budget for the ARA Research Project.

      (iii) If a proposed ARA Research Project is not unanimously
approved by the R&D Committee, the Proponent Party shall have the
option of submitting a Project Plan for such ARA Research Project
to the Committee, with an indication that the R&D Committee did not
approve the project. If a proposed ARA Research Project is not
approved unanimously by the Committee, the Proponent Party shall
have the option of resubmitting a Project Plan for such ARA
Research Project to the Committee, with an indication that the
Committee previously had rejected the project. The parties’
respective R&D Leaders shall then have an opportunity to present
their respective views on the merits or drawbacks of the proposed
project for consideration by the Committee as well as any proposed
modifications to the Project Plan that would render the rejected
plan acceptable. The Committee shall promptly (taking into
account, if appropriate, the time sensitive nature of the proposed
project) review each Project Plan submitted by the Proponent Party
and shall determine unanimously whether to proceed with the
proposed ARA Research Project, either as proposed or in a modified
format, in view of both parties’ commercial interests and the R&D
Collaboration Goals.

      (iv) Each party shall treat the Project Plan, and any
information relating to discussions of a proposed ARA Research
Project in connection with this Section 7.1(c), as Confidential
Information in accordance with Section 10.2 hereto.

      (d) Management of Approved Research Project. The Project Leader promptly
shall assemble a project team for the implementation of the ARA Research
Project. The Project Leader shall be responsible for managing the
implementation of the ARA Research Project as set out in the Project Plan as
approved by the Committee. The Project Leader shall also have authority and
responsibility for the following (without limitation):

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      (i) Managing and allocating the funds designated by the
Committee for the ARA Research Project in accordance with Section
7.1(f) hereto;

      (ii) Liaising with the Committee to provide regular updates,
at least quarterly, of the team’s progress;

      (iii) Requesting, if appropriate, additional funds from the
Committee; and

      (iv) Engaging subcontractors or consultants to assist with
the ARA Research Project, provided such subcontractors and
consultants were previously identified in the proposed Project Plan
and are engaged on terms that are consistent with the estimates set
forth in the proposed Project Plan. The Project Leader shall
ensure that any subcontractor or consultant engaged in connection
with the joint ARA Research Project shall agree in writing to
assign to both parties all intellectual property rights in any
inventions, improvements or technologies that such subcontractor or
consultants develop in connection thereto and comply with
confidentiality obligations that are no less restrictive than those
set forth herein.

      (e) Use of the Parties’ Employees, Facilities and Resources. Each party
shall provide the Project Leader with all reasonable cooperation necessary or
beneficial to each approved ARA Research Project, including without limitation,
providing reasonable access to facilities, providing employees of appropriate
skill level to serve on the project team, and otherwise assisting with the ARA
Research Project. Each party shall use its commercially reasonable efforts to
promptly disclose to the other party any technologies within its possession (to
the extent it has the right to do so), that are relevant or useful to an
approved Project Plan, and hereby grants, subject to any third party
restrictions then in effect, to the other party a royalty-free license
(sublicensable only to Affiliates and to subcontractors that have been approved
by the Committee in connection with approving the Project Plan) to use such
technologies, to the extent necessary to fulfill the goals of the Project Plan.
In employing each party’s facilities, employees, and resources, the Project
Leader shall endeavor to avoid any undue disruptions and intrusions in the
parties’ other independent research projects.

      (f) Funding of Approved Research Project. For each calendar year during
the first five (5) years of the Agreement, the parties will contribute equally,
in an amount up to * annually (* for each party) of the amount paid by Martek
to DSM for ARA Products in the previous calendar year, towards funding approved
Project Plans (the “R&D Contribution”). Unless otherwise agreed to by the
Committee, * of such amount shall be allocated to Project Plans approved for
the purpose of developing new or improved uses for ARA Products (which may
include products outside Infant Formula Products and Products for Babies, and
clinical trials). DSM’s share of the R&D Contribution will not be included in
DSM Costs, and Martek’s

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share of the R&D Contribution will not be included in Martek Costs. The
Committee shall determine, in its reasonable discretion, at the time of
approval of a specific Project Plan, the amount of funds to allocate to the
pursuit of each such project, provided, however, that in no event shall the
Committee approve, without the prior written consent of the parties hereto, any
Project Plan that will cause the total amount of funds allocated to all joint
ARA Research Projects undertaken by the parties in connection with this Section
7.1 in any given calendar year to exceed * of the total amount paid by Martek
to DSM for the supply of ARA Products during the immediately preceding calendar
year in accordance with Section 6.1 hereto.

           Within thirty (30) days of the end of each calendar quarter, the parties
shall submit to each other a statement (including all reasonable supporting
documentation necessary to establish the use of resources and expenses) of
their costs in providing employees, facilities or other resources in connection
with all joint ARA Research Projects undertaken in accordance with this Section
7.1(f) during the preceding calendar quarter. Unless the parties agree
otherwise in writing, each party’s costs for the use of their employees,
facilities or other resources shall be determined in accordance with the
Project Plan. In no event shall each party’s respective refundable costs
exceed the amounts that were approved in advance of the project unless such
extra amounts were previously approved by the Committee (the total approved
allocation for such ARA Research Project, the “Total Refundable Costs”).

           Each party shall be responsible for fifty percent (50%) of the Total
Refundable Costs and the parties shall meet quarterly and use their
commercially reasonable efforts to reach a final determination of the amount of
refundable costs incurred by each party. The party that incurred the lower
amount of refundable costs shall pay the other party fifty percent (50%) of the
difference between the relative refundable costs incurred by the respective
parties within thirty (30) days following the final determination of refundable
costs for the quarter. In the event a dispute arises between the parties
regarding their respective rights of payment and collection hereunder, the
parties shall use their commercially reasonable efforts to negotiate a
resolution through the Committee, and if a resolution cannot be reached by the
Committee within thirty (30) days, either party may elect to submit the issue
to a neutral mediator pursuant to Section 8.6 and, if such mediation fails to
resolve the issue, either party may submit the issue to binding arbitration
pursuant to Section 10.5.

           (g) R&D Intellectual Property Rights. The parties’ respective
intellectual property rights in any inventions, improvements, or technologies
invented or created as a result of any joint ARA Research Project are set forth
in Section 7.2(c) and Section 7.4(d) hereto.

     7.2. Intellectual Property Rights.

            (a) Validity of Certain Patents of the Parties. From the Effective Date
to the stated expiration date of this Agreement (regardless of any earlier
termination),

      (i) DSM acknowledges and agrees that (A) Martek’s patents
(including those of its Affiliates) listed on Schedule 7.2(a)(i)
and Schedule 2.62,

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(B) any patents which issue from the applications listed on
Schedule 7.2(a)(i) and Schedule 2.62, and (C) all related family
members of the patents listed on Schedule 7.2(a)(i) and Schedule
2.62, issued under the laws of any country, shall be presumed valid
and enforceable and, to the maximum extent permitted under
applicable law, DSM agrees not to, and shall cause each of its
Affiliates not to, challenge the validity or enforceability of such
patents, through any legal action or proceeding of any nature
whatsoever, including, but not limited to, any action in federal
district court seeking to declare the invalidity of such patents,
and

      (ii) Martek acknowledges and agrees that (A) DSM’s patents
(including those of its Affiliates) listed on Schedule 2.50, (B)
any patents which issue from the applications listed on Schedule
2.50, and (C) all related family members of the patents listed on
Schedule 2.50, issued under the laws of any country, shall be
presumed valid and enforceable and, to the maximum extent permitted
under applicable law, Martek agrees not to, and shall cause each of
its Affiliates not to, challenge the validity or enforceability of
such patents, through any legal action or proceeding of any nature
whatsoever, including, but not limited to, any action in federal
district court seeking to declare the invalidity of such patents.

It is understood and agreed that Schedule 7.2(a)(i), Schedule 2.62, and
Schedule 2.50 may be amended and updated from time to time after the Signing
Date with the written consent of the parties to include patents filed, acquired
or licensed by each of the parties or to delete patents that are no longer
valid. It is further understood and agreed that a Notifying Party that
challenges the scope of a Responding Party’s patents, but not their validity or
enforceability, pursuant to Section 5.5 will not be deemed to be in violation
of this Section.

      (b) Oppositions. Promptly after the Signing Date: (i) DSM shall, and shall
cause each of its Affiliates to withdraw or cancel the actions set forth on
Schedule 7.2(b)(i) opposing any patents owned by Martek or any of its
Affiliates that are useful or related to ARA to the extent that it acquired the
rights to such actions from Hoffman La-Roche Ltd. or otherwise has rights to
authorize such actions; and (ii) Martek shall, and shall cause each of its
Affiliates to, withdraw or cancel the actions set forth in Schedule 7.2(b)(ii)
opposing any patents owned by DSM or any of its Affiliates that are useful or
related to ARA to the extent that it has rights to directly or indirectly
authorize such actions.

      (c) R&D Intellectual Property Rights. Subject to the licenses granted in
Sections 7.4(a) and 7.4(b) hereto, intellectual property rights in any
inventions, improvements, or technologies conceived or reduced to practice
during the term of this Agreement pursuant to an approved Project Plan (“New
R&D Inventions”) shall be as follows:

      (i) Any patents that issue from a patent application filed by
a Patent Proponent Party (as defined below) in accordance with
Section 7.3(a)(iii) shall be

52

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

 

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owned solely by the Patent Proponent Party (“Martek R&D
Patents” or “DSM R&D Patents”, as the case may be).

      (ii) Subject to clause (i) above, the parties shall jointly
own any patents that may issue on any New R&D Inventions (each
party having an equal and undivided one half ownership interest
without a right of accounting, except as expressly provided herein)
(“Joint Patents”) and all other intellectual property rights in New
R&D Inventions regardless of which parties’ employees invented or
created such New R&D Invention (“Joint Know-how”). Each party
shall, and shall cause its employees, consultants, and contractors
to, execute any and all documents required in order that each party
shall own and, if applicable, shall be registered as the owner of
the New R&D Invention in accordance with Section 7.2(c). All
rights in and to the New R&D Inventions shall be subject to this
Agreement.

      (iii) For the avoidance of doubt, (A) each of Martek and its
Affiliates shall have (1) the exclusive right to use all Joint
Proprietary Technology within the Martek ARA Fields of Use, (2) the
non-exclusive right to use all Joint Proprietary Technology outside
of the DSM ARA Fields of Use subject to Section 7.2(c)(iv)(A), and
(3) no right to use, make or have made, offer to sell, sell,
import, or otherwise exploit, or permit others to use, make or have
made, offer to sell, sell, or otherwise exploit the Joint
Proprietary Technology in DSM’s ARA Fields of Use and (B) each of
DSM and its Affiliates shall have (1) the exclusive right to use
all Joint Proprietary Technology within the DSM ARA Fields of Use,
(2) the non-exclusive right to use all Joint Proprietary Technology
outside of the Martek ARA Fields of Use subject to Section
7.2(c)(iv)(A), and (3) no right to use, make or have made, offer to
sell, sell, import, or otherwise exploit, or permit others to use,
make or have made, offer to sell, sell, or otherwise exploit the
Joint Proprietary Technology in Martek’s ARA Field of Use.
Notwithstanding the foregoing, nothing contained in this Agreement
shall extend DSM’s rights to the Excluded Subject Matter outside
the DSM ARA Fields of Use. Moreover, unless expressly agreed upon
by the parties, subject to Section 10.4 hereto, nothing herein
shall be deemed to grant either party any rights in any trademarks
or previously existing copyrighted work of the other party,
notwithstanding the use of such materials in any approved Project
Plan. Notwithstanding the foregoing neither party shall sublicense
Production Technology without the other party’s prior written
consent except pursuant to Sections 3.3(a) and 5.5(d).

      (iv) If either party is in serious negotiations with a
non-Affiliate third party regarding the sublicensing of its rights
to the Joint Proprietary Technology in an area where it has
non-exclusive rights to such Joint Proprietary Technology in
accordance with Section 7.2(c)(iii)(A)(2) or 7.2(c)(iii)(B)(2)
(“Sublicensable Technology”), such party shall provide written
notice to the other party of such negotiations. If such party
decides to sublicense its rights pursuant to such

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
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Exchange Commission

 

 

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negotiations (such party to hereinafter be referred to as the
“Sublicensing Requester”), then the Sublicensing Requester must
provide the other party prior written notice summarizing the
proposed sublicensing arrangement for the Sublicensable Technology
(“Sublicensing Notice”).

         (A) The non-requesting party shall have the right to
prevent such sublicense by (1) within thirty (30) days of
receiving the Sublicensing Notice, notifying the Sublicensing
Requester of its disapproval of the sublicense and its desire
to have the exclusive right to sublicense the Joint
Proprietary Technology outside the DSM ARA Fields of Use and
the Martek ARA Fields of Use and (2) committing within thirty
(30) days of the determination of the fair-market value
(“FMV”) of such exclusive right to pay to the Sublicensing
Requester the FMV, which is to be determined pursuant to
agreement of the parties or pursuant to Section 8.6 if
agreement is not reached within ten (10) days.

         (B) If the non-requesting party does not notify the
Sublicensing Requester of its disapproval within thirty (30)
days from receiving the Sublicensing Notice or does not pay
the FMV of the sublicense to the Sublicensing Requester
within thirty (30) days from receiving the FMV amount, the
Sublicensing Requester shall have the right to proceed with
such sublicense on substantially the same terms and
conditions as set forth in the Sublicensing Notice and the
Sublicensing Requester shall pay the other party, as
applicable, (1) * of the Net Revenues the Sublicensing
Requester receives from the sublicensee which are not the
result of the Sublicensing Requester selling a product to the
sublicensee, and (2) * of the Net Sales the Sublicensing
Requester receives from the sublicensee which are the result
of the Sublicensing Requester selling a product to the
sublicensee, provided, however, that such total amount shall
not exceed * of the Sublicensing Requester’s Gross Profit on
such sales.

         (C) If the non-requesting party does not exercise its
right to obtain exclusive rights to the Sublicensable
Technology as set forth in Section 7.2(c)(iv)(A) and the
Sublicensing Requester proceeds with the sublicensing
arrangement for the Sublicensable Technology as set forth in
the Sublicensing Notice, the Sublicensing Requester does not
need to follow the procedures set forth in Section 7.2(c)(iv)
again if it desires to enter into another sublicensing
arrangement for the same Sublicensable Technology; however,
if the Sublicensing Requester does not proceed with the
sublicensing arrangement as set forth in the Sublicensing
Notice and then subsequently desires to sublicense the same
Sublicensable Technology to another potential sublicensee,
the Sublicensing Requester

54

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
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ARA Alliance, Purchase and Production Agreement

must follow the procedures set forth in Section
7.2(c)(iv) again, including issuing a new Sublicensing
Notice.

7.3. Prosecution, Maintenance and Enforcement.

            (a) Prosecution and Maintenance of New R&D Patents.

            (i) To the extent that a party desires to file an application
for a patent claiming or describing a New R&D Invention, the party
seeking to file the application shall inform the other party of its
desire to file for patent protection and submit a request to the
R&D Committee for permission to file the application for such
invention. If a majority of the R&D Committee members are unable
to agree on whether to pursue patent protection at all or in any
particular jurisdiction, the matter shall be referred to the
Committee, which shall make a final determination whether to file
the application. In the event that the R&D Committee or the
Committee, as the case may be, decides to pursue patent protection
for a particular invention in one or more jurisdictions, the R&D
Committee or the Committee, as the case may be, shall, designate
the party with the most knowledge of the New R&D Invention (as
determined by the unanimous agreement of the R&D Committee or the
Committee, as the case may be) as the lead party (“Lead Party”) who
will take primary responsibility for the preparation, filing,
prosecution, and maintenance of any patents related to such New R&D
Invention (“Patent Protection Process”). The non-lead party shall
provide all reasonable cooperation and assistance in connection
with the Patent Protection Process. The Lead Party will ensure
that the non-lead party is kept informed of the status of and has
an opportunity to review and comment on all aspects of the Patent
Protection Process, including, but not limited to, copying the
non-lead party on all patent related communications such as patent
applications, office actions, and responses and allowing the
non-lead party ten (10) business days to review and comment upon
the specifications, claims, and responses to office actions prior
to their submission to the appropriate patent office. The Lead
Party shall use all reasonable efforts to incorporate and address
the non-lead party’s comments. Notwithstanding the foregoing, final
decisions regarding the specification claims and responses to
office actions shall be made by the Lead Party. The applications
shall be prepared, filed and prosecuted, and maintenance fees paid
through an attorney or agent chosen by the Lead Party. Except as
set forth in Section 7.3(a)(iii) below, each party shall pay fifty
percent (50%) of all expenses incurred hereafter pursuant to the
Patent Protection Process (“Patent Expenses”) according to the
following procedure. On a quarterly basis the Lead Party will
provide the non-lead party with an invoice for Patent Expenses
reporting the amount of Patent Expenses incurred, the purpose of
incurring such Patent Expenses, and the amount of Patent Expenses
owed by the non-lead party. The non-lead party will reimburse on a
quarterly basis the Lead Party within thirty (30) days of receiving
an invoice for Patent Expenses from the Lead Party.

55

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
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If the Lead Party anticipates extraordinary expenses arising
from the Patent Protection Process, then the Lead Party will
provide the non-lead party with full details and together the
parties will determine a mutually acceptable course of action prior
to incurring such expenditures. Both parties recognize that one
party may incur certain legal expenses regarding the New R&D
Invention and/or patent rights relating to matters pertaining
solely to such party, and, in such circumstances, such expenses
will not be considered Patent Expenses, unless otherwise decided by
the Committee. The Lead Party will maintain adequate records
showing all Patent Expenses incurred, which will be made available
to the non-lead party upon reasonable notice.

      (ii) Notwithstanding Section 8.5 or Section 8.6, in the event
that the Committee is deadlocked on whether to file a patent
application for a particular invention in one or more jurisdictions
(i.e., where half of the Committee members are in favor of pursuing
patent protection and half the Committee members are opposed), the
party whose Committee members voted in favor of pursuing patent
protection (the “Patent Proponent Party”) shall have the right to
independently file a patent application covering such invention at
its own costs and expense, and the other party shall provide all
reasonable cooperation and assistance in connection therewith,
including without limitation, ensuring that any of its employees
who may be inventors under such patent application shall be joined
as inventors thereto, and shall cause such employees to assign in
writing their entire interest in such invention to the Patent
Proponent Party. In such event, the patent shall be treated as an
Improvement made by the Patent Proponent Party and shall be subject
to the license provisions of Section 7.4(d). Notwithstanding the
foregoing, any decisions by the Patent Proponent Party regarding
whether to pursue patent protection or the scope of the applicable
patent claims being sought shall take into consideration the legal
and commercial interests of the other party, including without
limitation the other party’s interest in avoiding disclosure of
confidential information or technology in connection with its
activities in their respective ARA Fields of Use.

      (iii) If, in one or more countries, (A) the Lead Party shall
at any time decide not to prepare, file, prosecute or maintain any
such patent application for any such New R&D Invention or (B)
either party does not pay its share of the expenses related to the
foregoing matters (in either situation, the “Declining Party”), the
other party may, at its own expense, prepare, file, prosecute or
maintain any such patent application in such country or countries.
In such event, the Declining Party hereby assigns its interest in
and to the New R&D Invention (but only with respect to such country
or countries as applicable) underlying such patent application, and
such application in such country or countries to the other party
and such party hereby grants the Declining Party a license to use
such patents in accordance with the parties’ respective rights in
Sections 7.4(a) and 7.4(b).

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      (b) Independent Enforcement. Notwithstanding anything to the contrary
herein, each party shall have the right at any time to independently enforce,
at its own cost and expense and in the manner as it chooses in its sole
discretion, any intellectual property rights that (i) it exclusively owns or
(ii) owns jointly with the other party with respect to infringements that are
occurring within its respective ARA Fields of Use (such party, the “Enforcing
Party”). The party that is not the Enforcing Party shall provide all
reasonable cooperation in connection with any actions taken by the Enforcing
Party in connection with pursuing a suspected infringer in the Enforcing
Party’s ARA Fields of Use, including without limitation allowing itself to be
joined as a party to any lawsuit brought by the Enforcing Party against such
infringer, provided that the Enforcing Party compensates the other party for
any costs reasonably associated therewith.

      (c) Joint Enforcement. Each party agrees to promptly notify the other
party of any suspected infringement of any patent or other intellectual
property right (other than trademark rights) of either party that relates to
ARA, including without limitation any patent covering any New R&D Inventions.
Promptly upon notification of a suspected infringement, the Committee shall
meet to evaluate whether to take any action against such third party infringer.
In evaluating whether to pursue a particular third party infringer, the
Committee shall consider both parties’ current and future commercial and legal
interests, including without limitation, the cost of pursuing the claim, the
likelihood that either party will become the subject of a counterclaim and the
relative likelihood of success of the claims to be asserted. In the event that
the Committee decides that a particular action, including without limitation
legal action against the third party, initiation of settlement discussions or
other action aimed at causing cessation of the infringement by the third party,
should be taken against the third party infringer, the parties shall cooperate
to promptly undertake such action. Unless the Committee agrees otherwise, the
party in whose ARA Field of Use the infringing activity is occurring shall be
responsible for all costs associated with any such action. In the event that
the infringement is occurring in both party’s ARA Fields of Use, the parties
shall share the costs of such action in proportion to the ARA related profits
derived by each party at or around the time of the infringement. In the event
that one of the parties wishes to settle the dispute with the suspected
infringer that would not involve the complete and unqualified cessation of the
infringing activity, the matter shall be referred to the Committee for
evaluation. Unless and until the Committee affirmatively decides to settle an
infringement action, neither party shall, without the prior consent of the
other party, grant any license to, or enter into a prospective settlement
agreement with, the infringing party.

      (d) Proceeds of Infringement Actions. The Enforcing Party shall be
entitled to all proceeds from any independent action taken by it in accordance
with Section 7.3(b) hereto. In the event an award of monetary damages is
granted in an action with respect to either party’s patents relating to the
manufacture, processing or use of ARA in connection with actions taken in
accordance with Section 7.3(c) hereto, the parties shall apply the award as
follows: Initially the award shall be used to reimburse the parties for their
actual out-of-pocket expenses (including attorneys fees) that have been
incurred by or in connection with such action, provided that if the award is
insufficient to reimburse both parties for all of their out of pocket expenses,
the award shall be distributed in proportion to each party’s relative expenses
in connection with the action. Once the parties have been reimbursed for their
respective out of pocket expenses, the remaining

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ARA Alliance, Purchase and Production Agreement

portions of the award shall be divided between the parties, within thirty
(30) days after collection of the award, in proportion to the lost profits of
each party resulting from the infringement in accordance with whichever of the
following formulas is appropriate under the circumstances:

	 	 	 	 	 
	

	 	(i)
	 	Proceeds from Infringement Actions in any Martek ARA Field
of Use.
	 
	 	 	 	 
	

	 	 	 	Martek’s share = A /(A + B) and DSM’s share = B /(A + B)
	 
	 	 	 	 
	

	 	 	 	where:
	 
	 	 	 	 
	

	 	 	 	(1) A = Martek’s lost Gross Profit on and unrecovered
fixed costs for sales for Units of ARA on the Units of
ARA sold by the infringer and, if applicable to the
infringing transactions, lost royalty income or license
income; and
	 
	 	 	 	 
	

	 	 	 	(2) B = DSM’s lost DSM Mark Up on and unrecovered fixed
costs for Units of ARA on the Units of ARA sold by the
infringer and, if applicable to the infringing
transactions, any lost DSM-Assisted IF Customer Fees,
Profit Sharing Fee and other royalties or license
income.
	 
	 	 	 	 
	

	 	(ii)
	 	Proceeds from Infringement Actions in any DSM ARA Field
of Use.
	 
	 	 	 	 
	

	 	 	 	Martek’s share = A/(A + B) and DSM’s share = B/(A + B)
	 
	 	 	 	 
	

	 	 	 	where:
	 
	 	 	 	 
	

	 	 	 	(1) A = Martek’s lost DSM ARA Field of Use Royalties or
any Martek Services margin, as applicable on sales of
Units of ARA by the infringer; and
	 
	 	 	 	 
	

	 	 	 	(2) B = DSM’s lost Gross Profit on and unrecovered
fixed costs for Units of ARA on the Units of ARA sold
by the infringer and, if applicable to the infringing
transactions, any lost DSM-Assisted IF Customer Fees,
Profit Sharing Fee and other royalties or license
income.

      It is the intent of the parties that the foregoing formulas will estimate
the lost profits suffered by each party by the infringing activity.

      (e) Defensive Patent Actions. Notwithstanding anything to the contrary
herein, in the event that either party to this Agreement becomes a defendant in
any lawsuit in any jurisdiction, the defendant party shall have the right, in
its entire and sole discretion, to bring a counter-claim or counter-suit based
on the infringement of any Joint Patent against any party to the extent that
such counter-claim or counter-suit is reasonably likely to cause or bring about
a

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
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ARA Alliance, Purchase and Production Agreement

settlement of the dispute to which the party to this Agreement has become
a defendant. The defendant party shall notify the other party in writing of
its intention to exercise its right under the immediately preceding sentence
and such other party shall provide all necessary cooperation and assistance, at
the requesting party’s cost and expense, associated with the defendant party’s
counterclaim or counter-suit.

     7.4. Intellectual Property Licenses.

            (a) License of Martek Proprietary Technology. Subject to the provisions
of Section 9.3, Martek hereby grants to DSM a perpetual, exclusive (including
as to Martek), worldwide, non-assignable, sublicensable (to the extent
permitted in Section 7.4(c) below) license under the Martek Proprietary
Technology, the Martek R&D Patents, the Excluded Subject Matter and any
amendments and updates thereof to make, use, have made, import, sell and offer
for sale ARA Products and ARA Products combined with other products in the
DSM ARA Fields of Use and to make ARA Products for delivery to Martek and to
perform Extraction and RBD processing, in each case only to the extent
permitted herein, * The foregoing license shall be royalty-bearing solely as
provided in Article 6 herein. DSM hereby guarantees that each of its
Affiliates and any Third Party Toll Manufacturer that shall become a
sublicensee of DSM pursuant to Section 7.4(c) of this Agreement with respect to
the Martek Proprietary Technology, Excluded Subject Matter, and/or Martek R&D
Patents and shall abide by the restrictions set forth in this Agreement in
respect of any such sublicensed Martek Proprietary Technology, Excluded Subject
Matter, and/or Martek R&D Patents.

            (b) License of DSM Proprietary Technology. Subject to the provisions of
Section 9.3, DSM hereby grants to Martek a perpetual, exclusive (including as
to DSM), worldwide, non-assignable, sublicensable (to the extent permitted in
7.4(c) below) license under the DSM Proprietary Technology and the DSM R&D
Patents to make, use, have made, import, sell and offer for sale ARA Products
in the Martek ARA Fields of Use and to perform Extraction and RBD services, in
each case only to the extent permitted herein. The foregoing license shall be
royalty-bearing solely as provided in Article 6 herein. Martek hereby
guarantees that each of its Affiliates and any Third Party Toll Manufacturer
that shall become a sublicensee of Martek pursuant to Section 7.4(c) of this
Agreement with respect to the DSM Proprietary Technology and/or DSM R&D Patents
and shall abide by the restrictions set forth in this Agreement in respect of
any such sublicensed DSM Proprietary Technology and/or DSM R&D Patents.

            (c) Toll Manufacturers and Affiliates. The licensed rights in Sections
7.4(a) and 7.4(b) above may be sublicensed by a party to its Affiliates but may
not be sublicensed by such party to any third party, including Third Party Toll
Manufacturers, without the prior written consent of the other party, provided,
however, (i) in the event of a DSM Shortfall, Martek shall be entitled to
sublicense the licensed rights granted in Section 7.4(b) to one or more Third
Party Toll Manufacturers in accordance with the requirements of Section 3.3(a)
for the sole purpose of responding, and only for so long as necessary to
respond, to such DSM Shortfall and (ii) in the event of a Martek Shortfall, DSM
shall be entitled to sublicense the licensed rights granted in Section 7.4(a)
to one or more Third Party Toll Manufacturers in accordance with the

59

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
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ARA Alliance, Purchase and Production Agreement

requirements of Section 3.4(c) for the sole purpose of responding, and
only for so long as necessary to respond, to such Martek Shortfall.

            (d) Improvements. To the extent that either party or any of its Affiliates
creates any improvements or enhancements to the DSM Proprietary Technology, the
Martek Proprietary Technology, the Excluded Subject Matter or any New R&D
Inventions, pursuant to an approved Project Plan or in the performance of any
of the parties’ respective obligations under this Agreement or any other
innovation, process or technique that improves the production, processing or
use of ARA Products, including without limitation the patents of a Proponent
Party referred to in Section 7.3(a)(iii) (“Improvements”) at any time during
the term of this Agreement, it promptly shall disclose and transfer pursuant to
Section 7.5 such improvements or enhancements to the other party. In addition,
with respect to all Improvements that are not New R&D Inventions, each party
hereby grants, or shall cause such Affiliate to grant, to the other party,
effective as of the date that such Improvement is created or developed, a
license to use such Improvements in accordance with the parties’ respective
rights in Sections 7.4(a) and 7.4(b) with respect to the underlying technology
or invention.

            (e) DHA License. DSM hereby grants to Martek a royalty free,
non-exclusive, non-assignable, non-sublicensable license under the DSM Patents,
as the same may be amended from time to time, to make, use, sell, offer for
sale and import products that include DHA and/or other microbial oils for the
term of this Agreement. Notwithstanding the provisions of Section 9.3(c) the
license granted herein shall become royalty bearing at fair market value in the
event DSM terminates the Agreement pursuant to Section 9.2(a) or 9.2(b).

     7.5. Technology Transfers.

            (a) Technology Transfer to DSM. Within thirty (30) days after the Signing
Date, Martek shall (i) commence with the transfer to DSM of documents and any
biological material relating to the Martek Proprietary Technology and shall
complete such transfer within one hundred eighty (180) days after the Signing
Date, (ii) use its commercially reasonable efforts to assist DSM to exploit the
Martek Proprietary Technology as soon as reasonably practicable, and (iii)
provide to DSM technology services, in the case of (ii) or (iii) in accordance
with the applicable Transfer Procedures, if any. Within thirty (30) days after
the discovery of any Improvement, the creating party shall transfer such
Improvement to the other party pursuant to the procedure described above.
Martek hereby represents and warrants to DSM that (i) the Martek Proprietary
Technology and such technology services constitute all of the intellectual
property and technology services of Martek reasonably necessary to enable DSM
to exercise its rights under the licenses granted to it in Section 7.4(a) and
(ii) Martek has the right to grant all licenses granted hereunder to DSM,
subject to the disclaimer in Section 4.9(c) and subject to the rights referred
to in Section 6.1(g) of certain of Martek’s Infant Formula Product customers to
produce or have produced ARA Products.

            (b) Technology Transfer to Martek. Within thirty (30) days after the
Signing Date, DSM shall (i) commence with the transfer to Martek of documents
and any biological

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ARA Alliance, Purchase and Production Agreement

material relating to the DSM Proprietary Technology and shall complete
such transfer within one hundred eighty (180) days after the Signing Date,
(ii) use its commercially reasonable efforts to assist Martek to exploit the
DSM Proprietary Technology as soon as reasonably practicable, and (iii)
provide to Martek technology services, in the case of (ii) or (iii) in
accordance with the applicable Transfer Procedures, if any. Within thirty (30)
days after the discovery of any Improvement, the creating party shall transfer
such Improvement to the other party pursuant to the procedure described above.
DSM hereby represents and warrants to Martek that (i) the DSM Proprietary
Technology and such technology services constitute all of the intellectual
property and technology services of DSM reasonably necessary to enable Martek
to exercise its rights under the licenses granted to it in Section 7.4(b) and
(ii) DSM has the right to grant all licenses granted hereunder to Martek,
subject to the disclaimer in Section 4.9(c).

            (c) Audit Rights. Both parties shall, during the course of this
Agreement, maintain complete and accurate records, files, books, accounts, and
other documents and sources of information related to the Know-how utilized in
the manufacture of ARA Products (“Know-how Records”), including, but not
limited to, records related to standard operating procedures, system
validation, and tests performed. Either party may, upon its request, during
reasonable business hours and after reasonable advance notice to the other
party, inspect the other party’s facilities for compliance with this Agreement,
and to inspect, copy, and audit the Know-how Records. The parties agree to
cooperate with such audits, including providing all reasonable assistance in
connection therewith, and promptly remedy any audit findings that relate to the
parties’ compliance with this Agreement.

61

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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission

 

 

ARA Alliance, Purchase and Production Agreement

8. ORGANIZATION (COMMUNICATION, COMMITTEES)

     8.1
Formation of the Committee. Not later than fifteen (15) days after
the Signing Date, the parties shall form a steering committee (the “Committee”)
which shall consist of four (4) members: two (2) appointed by Martek and two
(2) appointed by DSM. Each party shall identify one of the team members it has
appointed as its “Leader.” In addition to its four (4) members, each party may
send non-participating, nonvoting observers to each meeting of the Committee.
If either party decides at any time to replace its designated Leader or its
other Committee member, it may do so by written notice to the other party’s
Leader. The Committee shall have the authority to appoint other committees
charged with responsibility for the performance of certain functions under this
Agreement, including without limitation marketing, R&D, production and
logistics, and quality assurance/quality control. The Committee shall have
authority over any committee formed pursuant to this Section 8.1 and veto
rights over any committee decision, provided, however, that the Committee shall
not be required to review all committee decisions. Any such committee shall be
obligated to report to the Committee at the quarterly meeting of the Committee.
Any committee decision involving a financial matter shall require the unanimous
approval of the Committee.

     8.2
Meetings of the Committee. The Committee shall meet at such times and
places as it may select but, in any event, it shall meet at least once per
calendar quarter. Meetings of the Committee shall be in person, by conference
call, by proxy or a combination thereof, as the Committee decides. Each party
shall have one (1) vote in the Committee. Decisions of the Committee shall be
by a unanimous vote. The decisions and agreements of the Committee shall be
formalized in minutes which shall be signed by each party’s Leader at the next
meeting for confirmation.

     8.3
Status Reports of the Committee. The Leaders shall report to each
other quarterly, or as otherwise mutually agreed upon, regarding the status of
the parties’ respective obligations under this Agreement, any anticipated
problems (resolved or unresolved), and any indication of delay in fixed or
tentative schedules. The Leaders shall also report to each other as
circumstances require regarding any special issues, including production
problems or unexpected developments in each party’s ARA Fields of Use.

     8.4
Authority of the Committee.

            (a) The Committee shall be responsible for overseeing the collaboration
under this Agreement, for monitoring the parties’ adherence to the terms hereof
and for agreeing on or determining any matters that are to be agreed on or
determined by the Committee pursuant to this Agreement. In particular, the
Committee shall, in good faith, mutually address, among other things, the
following: (i) financial matters (including without limitation whether
reductions in DSM Costs per Unit of ARA should trigger a change in the DSM Mark
Up); (ii) production matters, including proposed or actual changes to either
party’s production processes, determination of the Technical Capacity and
Practical Capacity, modifications to the Performance Standards and review of
any forecast for purposes of capacity planning and

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determination of the Units of ARA per year for use in connection with new
product and/or new ARA Field of Use development in accordance with Section 5.3;
(iii) quality assurance and quality control matters, including discussion,
consideration and approval of the Specifications and the Specification
Variances and any changes proposed to either of the foregoing; (iv) the
procedures for transferring technology between the parties (the “Transfer
Procedures”); and (v) patent matters.

            (b) It is understood and agreed that the Committee shall have the
authority to determine the Specifications and Specification Variances
acceptable for new ARA Products. The Committee shall have the authority to
make appropriate changes that are reasonable in nature, taking into account all
the facts and circumstances, to the preparation and submission of any forecasts
and the procedures for shipment and order fulfillment set forth herein with
respect to any new ARA Products that are subject to the terms of this
Agreement.

            (c) Except as set forth in Sections 6.1(e) and (f), the Committee shall
determine the annual Technical Capacity and the Practical Capacity separately
for DSM’s Belvidere and Capua plants.

     8.5
Deadlock Within a Committee. In the event of a deadlock with respect
to any factual or scientific matter (a “Disputed Fact”) within any committee
formed by the Committee, including the R&D Committee, or any Disputed Issue the
committee shall take such Disputed Fact or Disputed Issue to the Committee for
resolution.

     8.6
Deadlock Within the Committee Over Factual Matters.

            (a) In the event of a deadlock within the Committee with respect to any
Disputed Fact, either Leader may deliver a written request to the other Leader
that the Disputed Fact be resolved by one or more third party experts. The
Leaders shall use their good faith commercially reasonable efforts to agree
upon a single third party expert to resolve the Disputed Fact within fifteen
(15) days of such written request. If a single third party expert is agreed
upon within such period, such expert shall have a period of no more than thirty
(30) days following his or her appointment during which to reach a conclusion
with respect to the Disputed Fact. The conclusion of the third party expert
with respect to the Disputed Fact shall be in writing and shall be final and
binding on the Committee and the parties.

            (b) If the Leaders have not reached agreement on a single third party
expert within such fifteen (15) day period, then each Leader shall have five
(5) days following the expiration of such fifteen (15) day period within which
to appoint one third party expert unaffiliated with either of the parties or
any of their respective Affiliates, and the two third party experts so
appointed shall, in turn, appoint a third, third party expert unaffiliated with
either of the parties or any of their respective Affiliates within twenty (20)
days of the later of them to be appointed. The conclusion of a majority of the
third party experts with respect to the Disputed Fact shall be in writing and
shall be final and binding on the Committee and the parties.

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            (c) It shall be a condition of the appointment of each third party expert
appointed in accordance with the provisions of this Section 8.6 that he or she
agree (i) to abide by the terms, including the time periods, in this Section
8.6 and (ii) to enter into a nondisclosure agreement acceptable to the parties
pursuant to which he or she agrees to treat all information that he or she
receives, reviews or otherwise is made aware of in connection with a proceeding
under this Section 8.6 in the strictest of confidence.

            (d) The parties shall share equally all costs associated with the
appointment of any third party expert pursuant to this Section 8.6.

     8.7
Deadlock Within the Committee Over Non-Factual Matters. In the event
of a deadlock within the Committee with respect to any matter other than a
factual or scientific matter (a “Disputed Issue”), either Leader may deliver a
written request to the other Leader that the Leaders attempt to resolve the
Disputed Issue with the assistance of a neutral mediator. The Leaders shall
use their good faith commercially reasonable efforts to agree upon a mediator
within fifteen (15) days of such written request. Such mediator shall, within
ten (10) days of the appointment, recommend in writing a procedure for
resolving the Disputed Issue. The members of the Committee shall use their
good faith efforts to resolve the Disputed Issue with the assistance of the
mediator. Notwithstanding the foregoing, any member of the Committee shall be
free to reject the recommendation, if any, of the mediator. Either party shall
be entitled to have any Disputed Issue resolved by arbitration pursuant to
Section 10.5.

     8.8
External Communication. Neither party shall release any communication
to the general public (including any press release or other publication)
without the consent of the other party (such consent not to be unreasonably
withheld) where it would be reasonably apparent to a third party recipient of
such communication that the communication makes reference to such other party,
whether by name or otherwise, or to any material term of this Agreement. The
party reviewing the communication shall have ten (10) days from the receipt of
the proposed communication to review and approve such communication; if the
reviewing party does not notify the other party within such ten (10) day period
of its disapproval of the communication, in whole or in part, the communication
shall be deemed approved in its entirety. Notwithstanding the foregoing, where
time is of the essence and it would not be practical or advisable to take the
time to attempt to obtain the consent of the other party, a party making such
communication shall not be required to obtain the consent of such other party
where outside legal counsel to the party making such communication reasonably
believes and has so advised such party that such communication is necessary in
the carrying out of its disclosure obligations under applicable law or the
listing standards of any stock exchange or listing service on which the
communicating party’s securities are quoted. The final version of the
communication as well as the confirmation of such outside legal advice will be
promptly provided to the other party for information.

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9. TERM; TERMINATION; DAMAGES

     9.1
Term. The term of this Agreement shall commence upon the Effective
Date and shall remain in effect until and expire upon the fifteenth (15th)
anniversary of the Effective Date unless otherwise terminated in accordance
with Section 5.5 or this Article 9. Martek and DSM shall use reasonable
commercial efforts to negotiate in good faith an extension of the Agreement, as
amended, in a form acceptable to both parties prior to the end of the tenth
(10th) anniversary of the Effective Date. Notwithstanding anything to the
contrary contained herein, neither party shall be obligated to enter into any
such extension of the Agreement, as amended.

     9.2
Termination for Cause.

            (a) In the event that:

            (i) It shall be determined, (A) whether by arbitration
pursuant to Section 10.5 or by admission of fault in writing with
reference to this Section 9.2(a), (1) that DSM is deemed pursuant
to the third sentence of Section 5.2 to have breached the
provisions of Section 5.2 where the Out Of Scope Customer is
selling ARA Products for use in or using ARA Products for Infant
Formula Product applications or (2) that DSM or any of its
Affiliates has breached this Agreement by selling ARA Products
containing in excess of two hundred (200) Units of ARA for use in
Infant Formula Product applications except as authorized by Section
5.5, or (B) whether by arbitration pursuant to Section 10.5 or by
admission of fault in writing with reference to this Section
9.2(a), (1) that Martek is deemed pursuant to the third sentence of
Section 5.2 to have breached the provisions of Section 5.2 where
the Out Of Scope Customer is selling ARA Products for use in or
using ARA Products for Feed Products or (2) that Martek or any of
its Affiliates has breached this Agreement by selling ARA Products
containing in excess of two hundred (200) Units of ARA for use in
Feed Products except as authorized by Section 5.5 (any of which, a
“Section 9.2(a) Material Breach” and the party determined to have
committed such Section 9.2(a) Material Breach, the “Infringing
Party”); and

      (ii) The other party (the “Infringed Party”) delivers written
notice to the Infringing Party stating that if the Infringing Party
again commits the same Section 9.2(a) Material Breach a second time
that the Infringed Party might exercise its right to terminate this
Agreement pursuant to this Section 9.2(a) (which shall not be a
binding commitment on the part of the Infringed Party); and

      (iii) It shall be determined, whether by arbitration pursuant
to Section 10.5 or by admission of fault in writing with reference
to this Section 9.2(a), that the Infringing Party has committed the
same Section 9.2(a) Material Breach a second time at any time
following the date ninety (90) days after the date of delivery of
the notice described in Section 9.2(a)(ii) but prior to the date
three (3)

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years after the determination by arbitration or by admission
of fault described in Section 9.2(a)(i);

then the Infringed Party shall have the right to terminate this Agreement
effective on delivery of written notice to the Infringing Party within one
hundred twenty (120) days following the date on which such second determination
shall have been made.

If the Infringing Party continues to engage in the activity or inactivity that
constitutes a Section 9.2(a) Material Breach for more than thirty (30) days (or
such longer period as the parties may agree in writing) after the date on which
it shall be determined by arbitration or admission of fault pursuant to Section
9.2(a)(i) that such activity or inactivity constituted a Section 9.2(a)
Material Breach, such continued activity or inactivity shall constitute a
second breach of this Agreement by the Infringing Party for the purposes of
Section 9.2(a)(iii). For the avoidance of doubt, the failure by the Infringing
Party to cure a Section 9.2(a) Material Breach that, by its very nature, cannot
be cured shall not in and of itself constitute a second breach of this
Agreement for purposes of this Section 9.2(a).

      (b) In the event that:

      (i) It shall be determined, whether by arbitration pursuant to
Section 10.5 or by admission of fault in writing with reference to
this Section 9.2(b),

         (A) that a party (the “Breaching Party”) failed to
perform a material obligation or covenant of this Agreement
that results in the other party’s suffering material damages
(a “Material Failure”) or otherwise breached a material term
of this Agreement that results in the other party’s suffering
material damages (a “Material Breach”), other than a Section
9.2(a) Material Breach, and

         (B) that such Material Failure or Material Breach
continued without being ceased, cured, remedied or repaired
for a period of thirty (30) days after written notice thereof
had been given to the Breaching Party by the other party (the
“Non-Breaching Party”);

      (ii) Thereafter, the Non-Breaching Party delivers written
notice to the Breaching Party stating that if the Breaching Party
commits the same Material Failure or the same Material Breach a
second time within a period of three (3) years after the
determination by arbitration or by admission of fault described in
Section 9.2(b)(i), that the Non-Breaching Party might exercise its
right to terminate this Agreement pursuant to this Section 9.2(b)
(which shall not be a binding commitment on the part of the
Non-Breaching Party); and

      (iii) It shall be determined, whether by arbitration pursuant
to Section 10.5 or by admission of fault in writing with reference
to this Section 9.2(b), (A) that the Breaching Party committed the
same Material Failure or the same

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Material Breach a second time following the date of delivery
of the notice described in Section 9.2(a)(ii) but within the three
(3) year period set forth therein and (B) that such Material
Failure or Material Breach continued without being ceased, cured,
remedied or repaired for a period of thirty (30) days after written
notice thereof had been given to the Breaching Party by the
Non-Breaching party;

then the Non-Breaching Party shall have the right to terminate this Agreement
effective on delivery of written notice to the Breaching Party within one
hundred twenty (120) days following the date on which such second determination
shall have been made. It is understood and agreed that if the Breaching Party
continues to engage in the activity or inactivity that constitutes a Material
Failure or a Material Breach pursuant to Section 9.2(b)(i) for more than sixty
(60) days (or such longer period as the parties may agree in writing) after the
date on which it shall be determined by arbitration or admission of fault
pursuant to Section 9.2(b)(i) that such activity or inactivity constituted a
Material Failure or Material Breach, such continued activity or inactivity
shall be considered for the purposes of Section 9.2(b)(iii) as committing the
same Material Failure or Material Breach a second time. For the avoidance of
doubt, the failure by the Breaching Party to cure a Material Failure or
Material Breach that, by its very nature, cannot be cured shall not in and of
itself constitute a second breach of this Agreement for purposes of this
Section 9.2(b).

            (c) In addition, in the event that either party (i) generally does not pay
its debts as such debts become due, (ii) admits in writing its inability to pay
its debts generally, (iii) makes an assignment for the benefit of creditors,
(iv) commences a voluntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other federal, state or foreign bankruptcy,
insolvency or other similar law, (v) consents to the appointment of or taking
possession by a receiver, liquidator, trustee, custodian, or sequestrator (or
other similar official) of such party or of any substantial part of its
property, or (vi) takes board or shareholder action intended or likely to
result in any event described in clauses (i) through (vi) of this subsection,
or in the event there shall be entered in respect of either party a decree or
order for relief by a court having jurisdiction in the premises in an
involuntary case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal, state or foreign bankruptcy,
insolvency or other similar law, or appointing a receiver, liquidator, trustee,
custodian, or sequestrator (or other similar official) of such party or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order shall continue unstayed in effect for
a period of sixty (60) consecutive days, then the other party and the other
party only) shall have the right to terminate this Agreement.

     9.3
Effect of Expiration and Termination on Intellectual Property
Rights.

            (a) Upon the expiration of this Agreement, the licenses granted to each
party in accordance with Article 7 hereto shall survive in full force and
effect in perpetuity, provided that all licenses and all rights to Joint
Proprietary Technology granted thereunder shall become non-exclusive and
royalty free and the right to sublicense shall not require any consent pursuant

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to Section 7.4(c) and the right to sublicense Joint Proprietary Technology
shall not require any consent pursuant to Section 7.2(c)(iii).

      (b) Upon the termination of this Agreement by the Responding Party
pursuant to Section 5.5, the licenses granted to the Responding Party in
accordance with Article 7, hereto shall survive in full force and effect in
perpetuity, provided that all licenses and all rights to Joint Proprietary
Technology granted to Responding Party thereunder shall become royalty free and
effective as of the fifteenth (15th) anniversary of the Effective Date such
licenses and all rights to the Joint Proprietary Technology granted thereunder
shall become non-exclusive, the right of the Responding Party to sublicense
shall not require any consent pursuant to Section 7.4(c), and the right of the
Responding Party to sublicense Joint Proprietary Technology shall not require
any consent pursuant to Section 7.2(c)(iii). In addition , the licenses
granted to the Notifying Party in accordance with Article 7 shall terminate on
the effective date of termination of this Agreement provided that all rights to
Joint Proprietary Technology granted to Notifying Party thereunder shall become
royalty free and effective as of the fifteenth (15th) anniversary of the
Effective Date (a) all rights to the Joint Proprietary Technology granted
thereunder shall become non-exclusive and (b) the right of the Notifying Party
to sublicense Joint Proprietary Technology shall not require any consent
pursuant to Section 7.2(c)(iii).

      (c) Upon the termination of this Agreement for cause in accordance with
Section 9.2(a) or Section 9.2(b) hereof: (i) the licenses granted to each of
the parties in accordance with Article 7 hereto shall survive in full force and
effect in perpetuity, provided that such licenses granted thereunder shall
become royalty free (except as otherwise provided in Section 9.4(d)(iii) and
Section 7.4(e)), (ii) effective as of the fifteenth (15th) anniversary of the
Effective Date such licenses and all rights to Joint Proprietary Technology
granted thereunder shall become non-exclusive, (iii) the right of the parties
to sublicense shall not require any consent pursuant to Section 7.4(c), and
(iv) the right of the parties to sublicense Joint Proprietary Technology shall
not require any consent pursuant to Section 7.2(c)(iii).

      (d) Upon the termination of this Agreement for cause in accordance with
Section 9.2(c) hereof, the licenses granted to each party in accordance with
Article 7 hereto shall survive in full force and effect in perpetuity, provided
that all licenses and all rights to Joint Proprietary Technology granted
thereunder shall become non-exclusive and royalty free and the right to
sublicense shall not require any consent pursuant to Section 7.4(c) and the
right to sublicense Joint Proprietary Technology shall not require any consent
pursuant to Section 7.2(c)(iii).

      (e) Upon the expiration or termination of this Agreement pursuant to
Section 5.5, for cause pursuant to Section 9.2 or upon the cessation of the
parties’ joint research collaboration in accordance with Section 7.1(a), unless
the parties otherwise agree in writing, all ongoing research projects
undertaken in accordance with Section 7.1 hereto shall immediately terminate.
Each party shall cooperate with the other party to exchange information and
materials related to any ongoing research project, and shall fully inform the
other party of any results from such research project not already disclosed to
the R&D Committee.

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            (f) Notwithstanding anything to the contrary herein, (i) upon the
termination of this Agreement for any reason other than for cause in accordance
with Section 9.2(c), each party shall have (A) the exclusive right to enforce
any patents that it owns exclusively and (B) the exclusive right to enforce any
patents that it owns jointly with the other party in its respective ARA Field
of Use until the fifteenth (15th) anniversary of the Effective Date and (ii)
upon the expiration of this Agreement or the termination of this Agreement for
cause in accordance with Section 9.2(c), or after the fifteenth (15th)
anniversary of the Effective Date, each party shall have the exclusive right to
enforce any patents that it owns exclusively and the right to enforce any
patents that it owns jointly with the other party.

     9.4
*

            (a) *

            (b) *

            (c) *

           (i) *:

         (A) *

         (B) *

           (ii) *

            *

            *

            (d) *

            *

            (e) *

            • *

            • *

            • *

            *

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     (i) *

     *

     (ii) *

*

     9.5
Limitation of Liability. EXCEPT FOR THE LOST PROFITS PAYABLE BY
MARTEK PURSUANT TO SECTION 9.4(c), LOST PROFITS PAYABLE BY DSM PURSUANT TO
SECTION 9.4(d)(ii) AND ROYALTIES PAYABLE BY DSM PURSUANT TO SECTION
9.4(d)(iii), IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
LOSS OF PROFITS OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
INCURRED BY THE OTHER PARTY AND ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT FOR ANY CAUSE OF ACTION OF ANY KIND EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

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10. GENERAL

     10.1 [Reserved]

     10.2
Confidential Information. The parties acknowledge and agree that
each party will be disclosing confidential information to the other party and
that the parties will be developing confidential information jointly during the
term of this Agreement, including but not limited to, the Specifications,
know-how (including, without limitation, all Know-how), Know-how Records,
financial, marketing and business data (if any), and cost information, business
strategies, ideas, concepts, ARA Field of Use and marketing information,
financial information and Joint Proprietary Technology (the “Confidential
Information”). Each party agrees that it shall hold the Confidential
Information in strict confidence, shall not disclose it to others or use it in
any way, commercially or otherwise, except for purposes of performing its
obligations or exploiting its rights under this Agreement. Each party further
agrees to take all action necessary to protect the confidentiality of the
Confidential Information including, without limitation, (a) implementing and
enforcing operating procedures to minimize the possibility of unauthorized use
or copying of the Confidential Information, and (b) obligating each of its
subcontractors, by written agreement, to protect the Confidential Information.
Notwithstanding this Section 10.2, the term “Confidential Information” shall
not include any information which (x) is or becomes part of the public domain
through no fault of the receiving party, (y) is obtained by the receiving party
from any third party which is under no obligation to the disclosing party to
protect the confidentiality thereof, or (z) can be established by the receiving
party with reasonable documentary evidence to have been independently developed
by the receiving party without reliance on the Confidential Information.
Notwithstanding the foregoing, if a party or any of its employees or other
representatives becomes legally compelled (whether by subpoena, court order or
other legal process, by any governmental authority or by applicable law) to
disclose any of the Confidential Information or the fact that the Confidential
Information has been made available to the receiving party or such employees or
representatives, the receiving party shall, to the fullest extent permitted by
applicable law, give the disclosing party an adequate opportunity, at the
disclosing party’s expense, to interpose an objection and/or to seek a
protective order or such other remedy as the disclosing party may consider
appropriate in the circumstances. The receiving party shall, and shall assure
that each such employee or representative shall, disclose only that portion of
the Confidential Information that it is legally required to disclose.

     10.3
Survival. The following provisions shall survive termination or
expiration of this Agreement: Section 4.9 (Disclaimers); Section 6.9 (Martek
Proprietary Technology Royalty), but only in the event Martek shall be entitled
to receive the DSM ARA Field of Use Royalty pursuant to Section 9.4(d)(ii)
following the termination of this Agreement; Section 6.11(f) (Invoices and
Payments); Section 6.1(i) (Profit Sharing Fee), but only in the event DSM
terminates this Agreement pursuant to Section 9.2; Section 6.18(c) (Break-Up
Fee), but only upon expiration of this Agreement or in the event DSM terminates
this Agreement pursuant to Section 9.2 or Section 5.5 when Martek is the
Notifying Party; Section 7.2(a), but only through the fifteenth (15th)
anniversary of the Effective Date; Section 7.3, but only to the extent of any
pending matters at the time of termination or expiration; Section 9.3 (Effect
of Expiration or

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Termination on Intellectual Property Rights); Section 9.4 (Other Effects
of Termination; Damages; Cap); Section 9.5 (Limitation of Liability); Section
10.2 (Confidential Information); Section 10.5 (Disputes; Arbitration); Section
10.6 (Regulatory Matters); Section 10.9 (Severability); Section 10.10
(Relationship of the Parties); Section 10.11 (Notices); Section 10.12
(Governing Law); and Section 10.15 (Entire Agreement).

     10.4
Trademarks.

            (a) Use of Martek Trademarks. During the term of this Agreement, DSM
shall use Martek’s brand names and the Martek trade name, solely on Martek’s
behalf and for Martek’s benefit, on all shipments of ARA Products by DSM to
Martek or any Martek customer, pursuant to delivery or order instructions by
Martek to DSM, and DSM shall not attach any additional brand names, trademarks,
trade names, logos or designations to any such shipment. DSM’s use of Martek’s
brand names and the Martek trade name shall be in accordance with Martek’s
policies in effect from time to time, as communicated by Martek to DSM. DSM
shall not be authorized to use, and is expressly prohibited from using, any
Martek brand name or the Martek trade name on any shipment of ARA Products
other than a shipment subject to an order and delivery instructions submitted
to DSM by Martek.

            (b) Ownership of Martek Trademarks. DSM has paid no consideration for the
use of any Martek brand name or the Martek trade name, and nothing contained in
this Agreement will give DSM any right, title or interest in any of them. DSM
acknowledges that Martek owns and retains all rights in the Martek brand names
and the Martek trade name. DSM will not at any time during or after this
Agreement assert or claim any interest in any Martek brand name or the Martek
trade name. Upon expiration or termination of this Agreement, DSM will
immediately cease all use of the Martek brand names and the Martek trade name.

            (c) DSM Trademarks. In the event that Martek supplies any Crude Oil or
Finished Oil to DSM in accordance with Article 3 hereto, Sections 10.4(a) and
10.4(b) shall apply in all respects mutatis mutandis with respect to use and
ownership of DSM’s trademarks in the event that Martek uses DSM’s brand names
or trade names on shipments pursuant to delivery or order instructions from
DSM.

     10.5
Disputes; Arbitration.

            (a) Disputes Generally. The parties hereby undertake to use good faith
efforts to settle any dispute arising under this Agreement. Failing
settlement, all disputes, including without limitation all unresolved Disputed
Issues, claims of breach of contract, fraud in the inducement, negligence, and
any other claim of dispute related to this contract shall be finally settled in
accordance with the Rules of Conciliation and Arbitration of the International
Chamber of Commerce (the “ICC Rules”). In addition, the parties agree that the
arbitration shall be conducted according to the International Bar Association’s
Rules of Evidence (the “IBA Rules”). Where the ICC Rules and the IBA Rules are
inconsistent, the IBA Rules shall prevail, but solely with respect to the
presentation and receipt of evidence. The arbitration shall take place in and

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the seat of the arbitration shall be New York, New York, USA. There shall
be a panel of three (3) arbitrators for all disputes. The claimant party shall
appoint an arbitrator in the arbitration petition and the respondent party
shall appoint an arbitrator in response. If within thirty (30) days after the
arbitration petition, the respondent has not appointed an arbitrator, such
arbitrator shall be appointed by the ICC. Within thirty (30) days of their
confirmation, the two arbitrators shall appoint a third arbitrator who shall
preside over the arbitration panel. If the two arbitrators cannot agree on a
third arbitrator within such thirty (30) day period, the third arbitrator shall
be appointed by the ICC. The arbitrators shall, before accepting such
appointment, agree to render their decision to the parties in writing together
with the underlying reasoning, including separate statements of findings of
facts and conclusions of law, no later than sixty (60) days after completion of
hearings, but in no event later than one hundred eighty (180) days from the
date of appointment of the last of the arbitrators to be appointed. Any final
arbitration award shall be final and not subject to appeal.

            (b) Language; Transcript. English shall be the official language of the
arbitration proceedings. The arbitration shall be conducted in the English
language. Relevant documents in other languages shall be translated into
English if the arbitrators so direct. A written transcript in English of the
hearing will be made and furnished to the parties.

            (c) Decision of Arbitrators. The arbitrators will decide in accordance
with the terms of this Agreement and will take into account any appropriate
international trade usages applicable to the transaction. The award of the
arbitrators will be final and binding upon the parties. Judgment upon the
award may be entered in any court having jurisdiction in accordance with the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards of
June 10, 1958. An application may be made to any such court for judicial
acceptance of the award and an order of enforcement.

            (d) Expense of Arbitration. The arbitrators shall determine the allocation
between the parties of expenses incurred in connection with the arbitration,
including, but not limited to, reasonable attorneys’ fees and costs; provided
however in the event of arbitration pursuant to the provisions of Section 5.5
the arbitrators must award the prevailing party its attorneys fees and costs,
arbitration administrative fees, panel member fees and costs, and any other
costs associated with the arbitration.

            (e) Provisional Remedies Not Denied. Each party hereto acknowledges and
agrees that the provisions of this Agreement are of the essence and that any
violation by it of any provision contained in this Agreement shall cause the
other party irreparable injury not fully compensable by monetary damages and
for which the non-breaching party may not have an adequate remedy at law.
Accordingly, if a non-breaching party institutes an arbitration action or
proceeding to enforce this Agreement in accordance with the procedures set
forth above, then such non-breaching party shall be entitled to provisional
injunctive relief or other form of provisional remedy in aid of the arbitration
as may be necessary or appropriate to the fullest extent permissible under
applicable law, to enjoin, prevent or curtail any breach of this Agreement,
threatened or actual, without the posting of any bond or security, whether in

73

* The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

summary proceedings or on the merits. It is understood and agreed,
however, that the final determination of any alleged breach giving rise to any
provisional injunctive relief or other form of provisional remedy shall be made
solely by the arbitrators in accordance with the provisions set forth above.
In addition to the authority conferred upon the arbitration tribunal by the ICC
Rules, the tribunal, along with any court of competent jurisdiction, shall also
have the authority to grant provisional remedies, including injunctive relief.
Without limiting the generality of the foregoing, it is understood and agreed
that a party shall be entitled to injunctive relief in the event the other
party breaches any of the provisions of Section 5.5.

            (f) Federal Arbitration Act. Notwithstanding anything to the contrary
herein, the arbitration provisions set forth herein, and any arbitration
conducted thereunder, shall be governed exclusively by the Federal Arbitration
Act, Title 9, United States Code and the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards of June 10, 1958, to the exclusion of
any state or municipal law.

     10.6
Regulatory Matters. Each party shall provide the other party with all
information the other party may reasonably request in order to obtain or comply
with any necessary regulatory approvals, permits, licenses, clearances and
notifications required by it in connection with its performance under this
Agreement, including but not limited to all information concerning studies
performed by or on behalf of such party in the field of product identification,
characterization and analysis; pathogenicity, toxicity, mutagenicity and
clinical trials. Each party shall promptly notify the other of all
communications with the FDA and other regulatory agencies regarding ARA.

     10.7
Assignment; Delegation. Neither this Agreement nor any rights granted
hereby may be assigned by either party without the prior written consent of the
other party. Any attempt by either party to assign any rights, duties or
obligations without the requisite consent of the other party shall be void and
without force or effect. Notwithstanding the foregoing, either party shall
have the right to assign its rights and delegate its obligations under this
Agreement to an Affiliate, provided that such party shall guarantee the full
and timely performance of such obligations by such Affiliate.

     10.8 Amendments and Waivers. Except as expressly stated herein, neither
this Agreement nor any terms hereof may be amended, waived, discharged or
terminated unless such amendment, waiver, discharge or termination is in
writing signed by all parties or, in the case of a waiver, by the party waiving
compliance.

     10.9 Severability. If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. In the case of any such invalidity, illegality or
unenforceability, the parties agree to use their commercially reasonable
efforts to achieve the purpose of such provision by a new legally valid and
enforceable stipulation. In addition, the parties hereby authorize any court
or arbitrator having jurisdiction thereover to modify such provision to the
extent necessary to render such provision enforceable,

74

* The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

and the rights and obligations of the parties shall be construed and
enforced accordingly, preserving to the fullest permissible extent the intent
and the agreements of the parties.

     10.10 Relationship of the Parties. For purposes of this Agreement, DSM and
Martek will be and shall act as independent contractors, and neither party is
authorized to act as an agent or partner of, or joint venturer with, the other
party for any purpose. Neither party by virtue of this Agreement shall have
any right, power, or authority to act or create any obligation, express or
implied, on behalf of the other party.

     10.11
Notices. Except as otherwise expressly provided herein, all notices
required or permitted to be sent hereunder, including any requests and other
communications, to any party hereunder shall be in writing and sufficient if
delivered by recognized international express courier service or by facsimile
with telephone confirmation of receipt by the addressee, in each case addressed
as follows:

	 	 	 
	If to DSM:

	 	 
	 	 	DSM Food Specialties B.V.
	

	 	A. Fleminglaan 1
	

	 	2613 AX Delft
	

	 	The Netherlands
	

	 	Attention: Business Unit Director Nutritional Ingredients
	

	 	Phone: ** 31 15 279 2081
	

	 	Fax: ** 31 15 279 3480
	 
	 	 
	With a copy to:

	 	 
	 	 	DSM Food Specialties B.V.
	

	 	A. Fleminglaan 1
	

	 	2613 AX Delft
	

	 	The Netherlands
	

	 	Attention: Legal Counsel
	

	 	Phone: ** 31 15 279 2557
	

	 	Fax: ** 15 279 4170
	 
	 	 
	If to Martek:

	 	 
	 	 	Martek Biosciences Corporation
	

	 	6480 Dobbin Road
	

	 	Columbia, Maryland 21045
	

	 	Attention: President
	

	 	Phone: 410-740-0081
	

	 	Fax: 410-740-2985
	 
	 	 
	With a copy to:

	 	 
	 	 	Martek Biosciences Corporation
	

	 	6480 Dobbin Road
	

	 	Columbia, Maryland 21045
	

	 	Attention: General Counsel

75

* The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

	 	 	 
	

	 	Phone: 410-740-0081
	

	 	Fax: 410-740-2985
	 
	 	 
	

	 	Hogan & Hartson L.L.P.
	

	 	111 South Calvert Street
	

	 	Baltimore, Maryland 21202
	

	 	Attention: Michael J. Silver, Esq.
	

	 	Phone: 410-659-2741
	

	 	Fax: 410-539-6981

or to such other address as the party to whom notice is to be given may have
furnished to the other party, in writing in accordance herewith. Each such
notice shall be effective on the fifth (5th) business day following the date on
which such communication is sent when delivered by recognized international
express courier service and on the first (1st) business day following the date
on which such communication is sent by facsimile with telephone confirmation of
receipt by the addressee. This provision shall not apply to communications
between the parties in the ordinary course of business.

     10.12 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
contracts to be performed fully within the State of New York. The parties
hereby expressly exclude the applicability of the Convention on Contracts for
the International Sale of Goods and that body of law known as conflicts of
laws. Notwithstanding anything to the contrary herein, issues regarding the
scope or interpretation of any parties’ patents shall be determined in
accordance with the laws of the jurisdiction in which such patent has issued.

     10.13 Force Majeure. Each party shall be excused from the timely
performance, and neither party shall be liable for any damages or penalty for
any delay or failure in performance, of any obligation hereunder or for failure
to give the other party prior notice thereof when such delay or failure is due
to the elements, acts of God, delays in transportation, delays in delivery by
vendors or subcontractors or other causes beyond that party’s reasonable
control (each such event being a “Force Majeure Event”). Such excuse shall
continue for the duration of the Force Majeure Event and for a reasonable
period of time afterwards as then determined by the parties in good faith.

     10.14 No Waivers. No express or implied waiver by either party of any
event of default hereunder shall in any way be, or be construed as, a waiver of
any future or subsequent event of default.

     10.15 Entire Agreement. The parties acknowledge that this Agreement,
together with the Schedules hereto, which are hereby incorporated herein and
made a part hereof, sets forth the complete, exclusive and integrated
understanding of the parties and supersedes all proposals or prior agreements,
oral or written, and all other prior communications between the parties
relating

76

* The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

to the subject matter of this Agreement and, except as provided in Section
10.8, no other documents (including without limitation each party’s general
terms and conditions of purchase or sale) shall act to modify, amend or add to
this Agreement.

     10.16 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

     10.17 Guarantees.

            (a) *

            (b) DSM unconditionally and irrevocably guarantees to Martek compliance by
each of its Affiliates with the provisions of this Agreement, including but not
limited to Sections 5.5, 7.2, 7.4, and 9.4, and shall be liable to Martek for
any damages resulting from an Affiliate’s noncompliance with the provisions of
this Agreement. Martek shall, without any further action or formality being
required, have the right to institute arbitration to enforce this provision in
accordance with Section 10.5.

            (c) Martek unconditionally and irrevocably guarantees to DSM compliance by
each of its Affiliates with the provisions of this Agreement, including but not
limited to Sections 5.5, 7.2, 7.4, and 9.4, and shall be liable to DSM for any
damages resulting from an Affiliate’s noncompliance with the provisions of this
Agreement. DSM shall, without any further action or formality being required,
have the right to institute arbitration to enforce this provision in accordance
with Section 10.5.

     10.18 [Reserved]

     10.19
*

     10.20 Hierarchy of Documents. The body of the Agreement will prevail in
case of discrepancies with the Schedules.

77

* The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

ARA Alliance, Purchase and Production Agreement

     IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered as of the day and year first above written.

	 	 	 
	MARTEK BIOSCIENCES

	 	DSM FOOD SPECIALTIES B.V.
	CORPORATION
	 	 
	 
	 	 
	/s/ Steve Dubin

	 	/s/ R.W. van Leen

	By: Steve Dubin

	 	By: R.W. van Leen
	Title: President

	 	Title: Managing Director
	 
	 	 
	

	 	/s/ G.F.M. Mooren

	

	 	By: G.F.M. Mooren
	

	 	Title: Managing Director

78

* The asterisk denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange Commission

 

SCHEDULES

TO

ARA ALLIANCE, PURCHASE AND PRODUCTION AGREEMENT

BY AND BETWEEN

MARTEK BIOSCIENCES CORPORATION

AND

DSM FOOD SPECIALTIES B.V.

Dated as of April 19, 2004

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

LIST OF SCHEDULES

	 	 	 
	Schedule 2.12
	 	ARA Assay Procedure
	Schedule 2.17
	 	Biomass Specifications
	Schedule 2.28
	 	Crude Oil Specifications
	Schedule 2.45
	 	DSM Costs
	Schedule 2.50
	 	DSM Patents (pending patents)
	Schedule 2.51
	 	DSM Know-how
	Schedule 2.62
	 	Excluded Subject Matter
	Schedule 2.67
	 	Finished Oil Specifications
	Schedule 2.75
	 	*
	Schedule 2.98
	 	Martek Costs
	Schedule 2.101
	 	Martek Patents (pending patents)
	Schedule 2.102
	 	Martek Know-how
	Schedule 2.111
	 	*
	Schedule 4.2(a)
	 	DSM Certificate of Analysis
	Schedule 4.2(b)
	 	Martek Certificate of Analysis
	Schedule 4.6
	 	Manufacturing Changes
	Schedule 6.15
	 	Yield Assumptions
	Schedule 7.2(a)(i)
	 	Martek Non-Challengeable Patents (pending patents)
	Schedule 7.2(b)(i)
	 	DSM Patent Oppositions
	Schedule 7.2(b)(ii)
	 	Martek Patent Oppositions
	Schedule 10.19
	 	Termination Agreement

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.12

ARA ASSAY PROCEDURE

*

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.17

BIOMASS SPECIFICATIONS

*

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.28

CRUDE OIL SPECIFICATIONS

*

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.45

DSM COSTS

*

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.50

DSM PATENTS

	 	 	 	 	 
	Patent #
	 	Title
	 	Summary

	WO 97/36996

	 	Process for the preparation of
a granular microbial biomass
and isolation of valuable
compounds therefrom
	 	A process for the
isolation of desired
compound(s) from a
microbial biomass is
disclosed, wherein the
microbial biomass
(which, if necessary, is
pre-treated to give a
dry matter content of
from 25 to 80% is
granulated (e.g. by
extrusion) and then
dried to a dry matter
content of at least 80%.
The granulation of the
biomass to granules
significantly eases
subsequent drying of the
biomass (which can be
stored as dried
granules) and gives
higher yields on
extraction of the
compound(s).
	 
	 	 	 	 
	WO97/37032

	 	Fatty acid containing

Oil from pasteurized biomass
	 	In one aspect the
present invention
provides a process for
the isolation of one or
more compound(s) from a
microbial biomass, the
process comprising:
	 
	 	 	 	 
	

	 	 	 	a) culturing microorganisms in a

fermentation broth under

conditions whereby the

microorganisms produce

the compound
	 
	 	 	 	 
	

	 	 	 	b) pasteurizing either
the fermentation broth
or a microbial biomass
derived therefrom; and
	 
	 	 	 	 
	

	 	 	 	c) extracting, isolating

or recovering the

compound from the

microbial biomass
	 
	 	 	 	 
	WO9735487

	 	Solid water soluble

PUFA-carrying particles
	 	The present invention
relates to a process for
the preparation of a
polyunsaturated fatty
acid (PUFA)-containing
composition where a
PUFA-containing lipid is adsorbed onto a solid
carrier such as a
powder. This can be used
in a process for
preparing an infant
formula, such as where
the powdered
PUFA-containing lipid is
added after an emulsion
of oil and water phases
has been formed
	 
	 	 	 	 
	WO97/35488

	 	Late addition of PUFAs in
production of infant formula
	 	The present invention
relates to a process for
the preparation of a
polyunsaturated fatty
acid (PUFA)-containing
food, such as an infant
formula, where a
composition comprising a
PUFA is added at a late
stage of the infant
formula preparation
process in this way, the
PUFAs is minimally
exposed to conditions
during the process that
induce degradation of
the PUFAs.
	 
	 	 	 	 
	WO9743362

	 	Sterol extraction with polar

solvent
	 	The present invention
relates to a process of
treating an oil, the
process comprising
contacting the oil with
a polar solvent, and
then separating the
solvent containing the
compound from the so
treated oil. The oil is
microbially derived, and
extracted either form a
fermentation broth or a
filtrate thereof using
hexane. The compound to
be extracted is usually
a sterol or a
diglyceride. The solvent
is ethanol having up to
5% of water. The oil an
contain a polyunsaturated
fatty acid such as C28,
C20 or C22 w-e, or w-6
fatty acid, such as
arachidonic acid.
	 
	 	 	 	 
	WO9965327

	 	Microbial ARA for use in maine

feed
	 	A marine feed
composition is described
comprising microbially
derived arachidonic acid
(ARA) or ARA in the form
of a triglyceride. The
ARA is suitably produced
by a fungus, such as of
the genus Mortierella,
although the feed
composition itself is
free of microbial cells.
These forms of ARA have
been found to give
better growth and
pigmentation promotion
in marine organisms
(shrimps and fish) than
corresponding
phospholipid forms of
ARA from fish oil. The
ARA can be in the form
of an oil, e.g. an
oil-in-water emulsion or
may first be fed to
larvae, rotifers or
nauplii which are
themselves included in a
composition as “live”
feed for larger
organisms.

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 
	Patent #
	 	Title
	 	Summary

	WO 00/21524

	 	PUFA supplement /ARA for

pregnant women
	 	Edible formulations,
such as polyunsaturated
fatty acids (PUFAs) such
as pharmaceutical
compositions or
nutritional supplements,
are disclosed comprising
arachidonic acid (ARA).
They are adapted to
deliver from 150 mg to 1
g per day of ARA and may
contain other PUFAs, for
example docosahexaenoic
acid (DHA) at a ration
of ARA: DHA of 1:1 to
1:2 are also disclosed,
as are foodstuffs
comprising of 0.1 to 5%
of ARA. Such
formulations can be used
to increase ARA levels
in vivo, for example in
pregnant women or for
people who have diseases
or conditions associated
with low ARA levels.
	 
	 	 	 	 
	WO 02/10423

	 	Isolation of microbial oils
	 	The extraction of a
microbial or single cell
oil, for example
comprising one or more
polyunsaturated fatty
acids (PUFA’s), directly
form microbial cells is
disclosed which avoids
the need for solvents.
	 
	 	 	 	 
	WO02/10322

	 	Purifying crude PUFA oils
	 	A process for preparing
an oil mixture of an w-6
PUFA (such as ARA) with
w-3 PUFA (such as DHA
and/or EPA is described
which can be included
into edible formulations
such as foodstuffs, and
in particular infant
formulas.
	 
	 	 	 	 
	*

	 	*
	 	*
	 
	 	 	 	 
	*

	 	*
	 	*

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

2 of 2

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.51

DSM KNOW-HOW

*

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.62

EXCLUDED SUBJECT MATTER

	 	 	 	 	 	 	 	 	 	 	 
	SR No. / Hunton	 	 	 	 	 	 	 	 	 	 
	No. / Rothwell	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	0103 / 000106
	 	Australia	 	12392/92	 	1/22/92	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	661297	 	11/7/1995	 	 	 	 
	0290 / 000107
	 	Austria	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0291/000108
	 	Belgium	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0104 / 000110
	 	Canada	 	2,101,274	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	2,101,274	 	12/15/1998	 	 	 	 
	0294 / 000111
	 	Denmark	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	Published
	0029 / 000113
	 	Europe	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP568606	 	4/18/2001	 	 	 	 
	0305 / 000114
	 	France	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0107 / 000115
	 	French Africa (OPAI)	 	PV 60396	 	1/22/92	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	10348	 	12/29/1997	 	 	 	 
	0293 / 000116
	 	Germany	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0296 / 000117
	 	Greece	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0105 / 000118
	 	Indonesia	 	P001678	 	1/24/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	ID 0000174	 	6/20/1995	 	 	 	 
	0026 / 000119
	 	Israel	 	100733	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	100733	 	4/1/1996	 	 	 	 
	0083 / 000120
	 	Israel	 	114253	 	1/22/1992	 	Composition Including Blends of	 	Granted
	 
	 	 	 	114253	 	10/14/1997	 	Microbial Oils and Their Preparation	 	 
	0297 / 000121
	 	Italy	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0032 / 000122
	 	Japan	 	504606/92	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	2731035	 	12/19/1997	 	 	 	 
	0300 / 000123
	 	Luxembourg	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0090 / 000124
	 	Mexico	 	9200320	 	1/24/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	183638	 	1/6/1997	 	 	 	 
	0301 / 000125
	 	Monaco	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0303 / 000126
	 	Netherlands	 	EP92904388.3EP
	 	1/22/19924/18/	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	0568606	 	2001	 	 	 	 
	0106 / 000127
	 	New Zealand	 	241359	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	241359	 	2/16/1996	 	 	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

1 of 4

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. / Hunton	 	 	 	 	 	 	 	 	 	 
	No. / Rothwell	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	0108 / 000128
	 	PCT	 	PCT/US92/00522	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Entered Nat'l Phase
	 
	 	 	 	WO 92/ 12711	 	8/6/1992	 	 	 	Published
	0109 / 000129
	 	Philippines	 	1992-43812	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	43812	 	11/23/2001	 	 	 	 
	0066 / 000130
	 	Russia	 	930524210.13	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	2093996	 	10/27/1997	 	 	 	 
	0065 / 000131
	 	Singapore	 	9608986.7	 	4/13/1996	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	49307	 	1/10/2002	 	 	 	 
	0110 / 000132
	 	South Africa	 	92/0452	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	92/0452	 	10/28/1992	 	 	 	 
	0034 / 000133
	 	South Korea	 	1993-0702205	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	321543	 	1/9/2002	 	 	 	 
	0245 / 000134
	 	South Korea	 	2001-7003480	 	3/30/2000	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	292103	 	3/20/2001	 	 	 	 
	0278 / 000135
	 	South Korea	 	2001-7002283	 	2/22/2001	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	313987	 	10/25/2001	 	 	 	 
	0302 / 000136
	 	Spain	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0111 / 000137
	 	Sri Lanka	 	10526	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	10526	 	6/17/1994	 	 	 	 
	0304 / 000138
	 	Sweden	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0292 / 000139
	 	Switzer	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	land	 	EP0568606	 	4/18/2001	 	 	 	 
	0295 / 000140
	 	United Kingdom	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0102 / 000141
	 	USA	 	07/944,739	 	9/14/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	US 5,374,657	 	12/20/1994	 	 	 	 
	0059 / 000142
	 	USA	 	(07/944,739)	 	(9/14/1992)	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	08/358,474	 	12/19/1994	 	 	 	 
	 
	 	 	 	US 5,550,156	 	8/27/1996	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	PendingAnnuity Date
	 
	 	 	 	 	 	 	 	 	 	1-19-2004
	*
	 	*	 	 	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

2 of 4

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. / Hunton	 	 	 	 	 	 	 	 	 	 
	No. / Rothwell	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	2997-20-PUS
	 	US	 	10/181756	 	7/19/2002	 	Methods for Raising Rabbits	 	Issued; Annuity
	 
	 	 	 	6,568,351	 	5/27/2003	 	 	 	fees due
	 
	 	 	 	 	 	 	 	 	 	11/27/2006; 2010;
	 
	 	 	 	 	 	 	 	 	 	and 2014
	*
	 	*	 	*	 	*	 	*	 	Pending; Annuity
	 
	 	 	 	 	 	 	 	 	 	fee due 6/26/2006
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	fees due 6/26/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	 	 	 	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	2997-38-PCT
	 	PCT	 	US02/27134	 	8/26/2002	 	Products Containing Highly Unsaturated	 	Published
	 
	 	 	 	WO03/ 17945 A2	 	3/6/2003	 	Fatty Acids for Use by Women During Stages of Preconception, Pregnancy and Lactation	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0127 / 000176
	 	Australia	 	69635/94	 	6/2/1994	 	Methods and Pharmaceutical	 	Granted
	 
	 	 	 	693450	 	11/5/1998	 	Compositions Useful for Treating	 	 
	 
	 	 	 	 	 	 	 	Neurological Disorders	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

3 of 4

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. / Hunton	 	 	 	 	 	 	 	 	 	 
	No. / Rothwell	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	0031 / 000178
	 	Europe	 	94918217.4	 	6/2/1994	 	Methods and Pharmaceutical	 	Allowed
	 
	 	 	 	WO94/28913	 	 	 	Compositions Useful for Treating	 	 
	 
	 	 	 	 	 	 	 	Neurological Disorders	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	Published
	*
	 	*	 	*	 	*	 	*	 	Pending
	0118 / 000181
	 	PCT	 	PCT/US94/	 	6/2/1994	 	Methods and Pharmaceutical	 	Entered Nat'l Phase
	 
	 	 	 	06317	 		 	Compositions Useful for Treating	 	Published
	 
	 	 	 	W094/ 28913	 	12/22/1994	 	Neurological Disorders	 	 
	 
	 	 	 	EP0707487	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending(Published)
	0168 / 000185
	 	Israel	 	122405	 	6/3/1996	 	Methods for Controlling Highly	 	Granted
	 
	 	 	 	122405	 	4/10/2003	 	Unsaturated Fatty Acid Content in	 	 
	 
	 	 	 	 	 	Hunton has 7/11/2003	 	Various Tissues	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0067 / 000187
	 	PCT	 	WO 96/ 40106	 	6/3/1996	 	Methods for Controlling Highly	 	Entered Nat'l Phase
	 
	 	 	 	PCT/US96/0	 	12/19/1996	 	Unsaturated Fatty Acid Content in	 	Published
	 
	 	 	 	8649	 	 	 	Various Tissues	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

4 of 4

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.67

FINISHED OIL SPECIFICATIONS

*

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.75

GUARANTY AGREEMENT

*

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.98

MARTEK COSTS

     

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

SCHEDULE 2.101

MARTEK PATENTS

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	2997-4
	 	US	 	08/377766
5,583,019	 	1/24/1995
12/10/96	 	Method for Production of Arachidonic Acid	 	Issued; Maintenance Fees Due; 6/10/04; 6/10/08
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-AU
	 	Australia	 	37991/95
711967	 	11/20/1995
2/10/00	 	Method for Production of Arachidonic Acid	 	Issued; Annuity Due 11/20/03
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending; Annuity Due 11/20/03
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-EP
	 	Europe	 	96200072.5
EP0726 321 B1	 	1/16/96
6/12/2002	 	Method for Production of Arachidonic Acid	 	Issued; Annuity Due 1/16/04
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending. Annuity due 11/28/2003
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-EPDE
	 	West Germany	 	96200072.5
69621663.9-08	 	1/16/1996
6/12/2002	 	Method for Production of Arachidonic Acid	 	Issued; Renewal due 1/16/2004
	 
	 	 	 		 		 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-EPFR
	 	France	 	96200072.5
0726321	 	1/16/1996
6/12/2002	 	Method for Production of Arachidonic Acid	 	Issued; Renewal due 1/16/2004
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-EPGB
	 	United Kingdom	 	96200072.5
0726321	 	1/16/1996
6/12/2002	 	Method for Production of Arachidonic Acid	 	Issued; Renewal due 1/16/2004
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-EPIT
	 	Italy	 	96200072.5
0726321	 	1/16/1996
6/12/2002	 	Method for Production of Arachidonic Acid	 	Issued; Renewal due 1/16/2004
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-1
	 	US	 	08/763973
5,882,703	 	12/10/96
3/16/99	 	Product Containing Mortierella sect. Schmuckeri lipids	 	Issued; Maintenance Fees Due 9/16/06; 9/16/10
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-1-1
	 	US	 	09/270,294
6,245,365	 	3/15/99
6/12/01	 	Food Products Containing Mortierella sect. Schmuckeri	 	Issued; Maintenance fee due 12/12/2004; 12/12/2008 and 12/12/2012
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-1-1-1
	 	US	 	09/480,060
6,319,698	 	1/10/00
11/20/2001	 	A Method for Producing Arachidonic Acid (As Amended)	 	Issued 11/20/2001 Maintenance fee due 5/20/2005; 5/20/2009
and 5/20/2013
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	2997-4-1-2
	 	US	 	09/7890576,541,049	 	2/19/014/1/2003	 	Method for Production of Arachidonic Acid	 	Issued; Maintenance Fees due
10/1/2006; 2010 and 2014

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

1 of 7

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	*
	 	*	 	*	 	*	 	*	 	Pending;
	 
	 	 	 	 	 	 	 	 	 	Must File IDS
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2006
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending;
	 
	 	 	 	 	 	 	 	 	 	Annuity Fees due
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	Published
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending; Annuity
	 
	 	 	 	 	 	 	 	 	 	fee due 1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

2 of 7

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	2997-42-PCT
	 	PCT	 	US02/39930	 	12/12/2002	 	Extraction and Winterization of Lipids From Oilseed	 	Published
	 
	 	 	 	WO03/049832	 	June 19, 2003	 	and Microbial Sources Using Acetone or Analogous	 	 
	 
	 	 	 	 	 	 	 	Solvent	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	2997-45-PCT
	 	US	 	US03/14177	 	5/5/2002	 	High-Quality Lipids and Methods for Producing by	 	Published
	 
	 	 	 	WO03/14177	 	11/13/2003	 	Enzymatic Liberation from Biomass	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0114/ 0009
	 	Australia	 	AU92/12355	 	1/22/1992	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	AU 661674	 	11/21/1995	 	Use Thereof	 	 
	 
	 	 	 	WO92/13086	 	 	 	 	 	 
	264/00010
	 	Austria	 	EP92904428.7EP	 	1/22/19929/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation	 	Granted
	 
	 	 	 	0568608	 	 	 	and Composition Containing Said Oil	 	 
	265/ 00011
	 	Belgium	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for its Preparation	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	and Composition Containing Said Oil	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	115 / 00013
	 	Canada	 	2101273	 	1/22/1992	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	2101273	 	4/2/2002	 	Use Thereof	 	 
	268/ 000014
	 	Denmark	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for its Preparation	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	and Composition Containing Said Oil	 	 
	056 / 00015
	 	Europe	 	EP92904438.7	 	1/22/92	 	Fungal Oil Containing ARA, Method for its Preparation	 	Granted
	 
	 	 	 	EP0568608 B1	 	9/6/2000	 	and Composition Containing Said Oil	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

3 of 7

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	0270/ 000017
	 	France	 	EP92904428.7
EP0568608	 	1/22/1992
9/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	120 / 000018
	 	French Africa (OAPI)	 	PV 60397
09909	 	1/22/1992
9/15/1994	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0267 / 000019
	 	Germany	 	EP92904428.7
EP0568608	 	1/22/1992
9/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0272 / 000020
	 	Greece	 	EP92904428.7
EP0568608	 	1/22/1992
9/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0117 / 000021
	 	Indonesia	 	P-001679
ID 0000393	 	1/24/1992
12/22/1995	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0116 / 000022
	 	Israel	 	100732.0	 	10/1/1995	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0273 / 000023
	 	Italy	 	EP92904428.7
EP0568608	 	1/22/1992
9/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0203 / 000024
	 	Japan	 	240168/98
3229268	 	1/22/1992
9/7/2001	 	Arachidonic Acid Containing Fungal Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	274 / 000026
	 	Luxembourg	 	EP92904428.7EP
0568608	 	1/22/19929/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0119 / 000027
	 	Mexico	 	9200301
202940	 	1/24/1992
7/6/2001	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	275 / 000028
	 	Monaco	 	EP92904428.7
EP0568608	 	1/22/1992
9/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0276 / 000029
	 	Netherlands	 	EP92904428.7
EP0568608	 	1/22/1992
9/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0113 / 000030
	 	New Zealand	 	241358
NZ 241358	 	1/22/1992
2/8/1995	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0122 / 000031
	 	PCT	 	WO 92/ 13086
PCT/US92/00517	 	1/22/1992
8/6/1992	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Entered Nat’l Phase Published
	 
	 	 	 	 	 	 	 	 	 	 
	0121 / 000032
	 	Philippines	 	43811
1992-43811	 	1/22/1992
8/22/2002	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	087/ 000033
	 	Russia	 	93-054772
2120998	 	1/22/1992
1/29/1998	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0037 / 000034
	 	South Africa	 	92/0454
92/0454	 	1/22/1992
10/28/1992	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0085 / 000035
	 	South Korea	 	1993-702193
254300	 	1/22/1992
2/1/2000	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

4 of 7

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	0226 / 000036
	 	South Korea	 	10-1999-7008800	 	9/27/1999
6/29/2001	 	An Oil Composition Containing ARA	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0269 / 000037
	 	Spain (ES)	 	EP92904428.7
EP0568608	 	1/22/1992
9/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0027 / 000038
	 	Sri Lanka	 	10527
10527	 	1/22/1992
10/27/1993	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0277 / 000039
	 	Sweden	 	EP92904428.7
EP0568608	 	1/22/1992
9/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0266 / 000040
	 	Switzer
land	 	EP92904428.7
EP0568608	 	1/22/1992
9/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	0271 / 000041
	 	United Kingdom	 	EP92904428.7EP
0568608	 	1/22/19929/6/2000	 	Fungal Oil Containing ARA, Method for its Preparation and Composition Containing Said Oil	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	003 / 000043
	 	Australia	 	AU 96/48542	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	713567	 	12/2/1999	 	Use Thereof	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	005 / 000045
	 	Canada	 	—	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Issued
	 
	 	 	 	2,209,513	 	5/28/2002	 	Use Thereof	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	0287 / 000047
	 	Eurasia	 	1036.0	 	8/28/2000	 	Unmodified Fungal Oil Mortierella Sp., Method for Production Thereof, Method of Providing Arachidonic Acid to Infant Formula, Infant Formula Containing Arachidonic Acid, Method of Providing a Human with Supplemental Amount of Arachidonic Acid and Cosmetic Composition	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	007 / 000048
	 	Europe	 	96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Issued
	 
	 	 	 	0800584	 	5/2/03	 	Use Thereof	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	Published
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000261
	 	Portugal	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Use Thereof	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000262
	 	Sweden	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Use Thereof	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000263
	 	Monaco	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Use Thereof	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000264
	 	Nether	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	lands	 	EP0800584	 	5/2/03	 	Use Thereof	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000265
	 	Luxembourg	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Use Thereof	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

5 of 7

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	/ 000266
	 	Italy	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000267
	 	Ireland	 	EP96904435.3 EP
0800584	 	1/3/19965/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000268
	 	Greece	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000269
	 	United Kingdom	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000270
	 	France	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000271
	 	Germany	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000272
	 	Switzer
land	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000273
	 	Austria	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000274
	 	Belgium	 	EP96904435.3
EP0800584	 	1/3/1996
EP0800584	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000275
	 	Denmark	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	/ 000276
	 	Spain	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Granted
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	0062 / 000053
	 	PCT	 	US96/00182WO96/
21037	 	1/3/967/11/1996	 	Arachidonic Acid and Methods for the Production and Use Thereof	 	Entered Nat'l Phase
	 
	 	 	 	 	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

6 of 7

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Date Issued
	 	Title of Patent
	 	Status

	0173/ 000055
	 	Singapore	 	9703038.1	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	42669	 	3/30/1999	 	Use Thereof	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0025 / 000057
	 	USA	 	Appl. 08/367881	 	1/3/1995	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	US 5,658,767	 	8/19/1997	 	Use Thereof	 	 
	0014 / 000058
	 	Russia	 	EA-97/0090-US	 	1/3/1996	 	Arachidonic Acid and Methods for the Production and	 	Granted
	 
	 	 	 	1036	 	8/28/2000	 	Use Thereof	 	 
	0186 / 000105
	 	USA	 	09/210,598	 	12/15/1998	 	Two Phase Extraction of Oil from Biomass	 	Granted
	 
	 	 	 	US 6,166,231	 	12/26/2000	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

7 of 7

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.102

MARTEK KNOW-HOW

     

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 2.111

     

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 4.2(a)

DSM CERTIFICATE OF ANALYSIS

*

2 of 2

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 4.2(b)

MARTEK CERTIFICATE OF ANALYSIS

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 4.6

MANUFACTURING CHANGES

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 6.15

YIELD ASSUMPTIONS

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 7.2(a)(i)

MARTEK NON-CHALLENGEABLE PATENTS

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	2997-4	 	US	 	08/377766	 	1/24/1995	 	Method for Production of	 	Issued; Maintenance
	 
	 	 	 	5,583,019	 	12/10/96	 	Arachidonic Acid	 	Fees Due; 6/10/04;
	 
	 	 	 	 	 	 	 	 	 	6/10/08
	2997-4-AU	 	Australia	 	37991/95	 	11/20/1995	 	Method for Production of	 	Issued; Annuity Due
	 
	 	 	 	711967	 	2/10/00	 	Arachidonic Acid	 	11/20/03
	*
	 	*	 	*	 	*	 	*	 	Pending; Annuity
	 
	 	 	 	 	 	 	 	 	 	Due 11/20/03
	2997-4-EP
	 	Europe	 	96200072.5	 	1/16/96	 	Method for Production of	 	Issued; Annuity Due
	 
	 	 	 	EP0726 321 B1	 	6/12/2002	 	Arachidonic Acid	 	1/16/04
	*
	 	*	 	*	 	*	 	*	 	Pending. Annuity
	 
	 	 	 	 	 	 	 	 	 	due 11/28/2003
	*
	 	*	 	*	 	*	 	*	 	Pending
	2997-4-EPDE
	 	West Germany	 	96200072.5	 	1/16/1996	 	Method for Production of	 	Issued; Renewal due
	 
	 	 	 	69621663.9-08	 	6/12/2002	 	Arachidonic Acid	 	1/16/2004
	2997-4-EPFR
	 	France	 	96200072.5	 	1/16/1996	 	Method for Production of	 	Issued; Renewal due
	 
	 	 	 	0726321	 	6/12/2002	 	Arachidonic Acid	 	1/16/2004
	2997-4-EPGB
	 	United Kingdom	 	96200072.5	 	1/16/1996	 	Method for Production of	 	Issued; Renewal due
	 
	 	 	 	0726321	 	6/12/2002	 	Arachidonic Acid	 	1/16/2004
	2997-4-EPIT
	 	Italy	 	96200072.5	 	1/16/1996	 	Method for Production of	 	Issued; Renewal due
	 
	 	 	 	0726321	 	6/12/2002	 	Arachidonic Acid	 	1/16/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	2997-4-1
	 	US	 	08/763973	 	12/10/96	 	Product Containing Mortierella sect.	 	Issued; Maintenance
	 
	 	 	 	5,882,703	 	3/16/99	 	Schmuckeri lipids	 	Fees Due 9/16/06;
	 
	 	 	 	 	 	 	 	 	 	9/16/10
	2997-4-1-1
	 	US	 	09/270,294	 	3/15/99	 	Food Products Containing Mortierella	 	Issued; Maintenance
	 
	 	 	 	6,245,365	 	6/12/01	 	sect. Schmuckeri	 	fee due 12/12/2004;
	 
	 	 	 	 	 	 	 	 	 	12/12/2008 and
	 
	 	 	 	 	 	 	 	 	 	12/12/2012
	2997-4-1-1-1
	 	US	 	09/480,060	 	1/10/00	 	A Method for Producing	 	Issued 11/20/2001
	 
	 	 	 	6,319,698	 	11/20/2001	 	Arachidonic Acid (As Amended)	 	Maintenance fee due
	 
	 	 	 	 	 	 	 	 	 	5/20/2005;
	 
	 	 	 	 	 	 	 	 	 	5/20/2009 and
	 
	 	 	 	 	 	 	 	 	 	5/20/2013
	*
	 	*	 	*	 	*	 	*	 	Pending
	2997-4-1-2
	 	US	 	09/7890576,541,049	 	2/19/014/1/2003	 	Method for Production of	 	Issued Maintenance
	 
	 	 	 	 	 	 	 	Arachidonic Acid	 	Fees due 10/1/2006;
	 
	 	 	 	 	 	 	 	 	 	2010 and 2014

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

1 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	*
	 	*	 	*	 	*	 	*	 	Pending;
	 
	 	 	 	 	 	 	 	 	 	Must File IDS
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2006
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending;
	 
	 	 	 	 	 	 	 	 	 	Annuity Fees due
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	Published
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending; Annuity
	 
	 	 	 	 	 	 	 	 	 	fee due 1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

2 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	2997-42-PCT
	 	PCT	 	US02/39930	 	12/12/2002	 	Extraction and Winterization of Lipids	 	Published
	 
	 	 	 	WO03/049832	 	June 19, 2003	 	From Oilseed and Microbial Sources Using	 	 
	 
	 	 	 	 	 	 	 	Acetone or Analogous Solvent	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	2997-45-PCT
	 	US	 	US03/14177	 	5/5/2002	 	High-Quality Lipids and Methods for	 	Published
	 
	 	 	 	WO03/14177	 	11/13/2003	 	Producing by Enzymatic Liberation from	 	 
	 
	 	 	 	 	 	 	 	Biomass	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0114/ 0009
	 	Australia	 	AU92/12355	 	1/22/1992  11/21/1995	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	AU 661674	 	 	 	Production and Use Thereof	 	 
	 
	 	 	 	WO92/13086	 	 	 	 	 	 
	264/00010
	 	Austria	 	EP92904428.7EP	 	1/22/19929/6/2000	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	0568608	 	 	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	265/ 00011
	 	Belgium	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	115 / 00013
	 	Canada	 	2101273	 	1/22/1992	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	2101273	 	4/2/2002	 	Production and Use Thereof	 	 
	268/ 000014
	 	Denmark	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	056 / 00015
	 	Europe	 	EP92904438.7	 	1/22/92	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608 B1	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0270/ 000017
	 	France	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	120 / 000018
	 	French Africa (OAPI)	 	PV 60397
09909	 	1/22/1992
9/15/1994	 	Arachidonic Acid and Methods for the
Production and Use Thereof	 	Granted

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

3 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	0267 / 000019
	 	Germany	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	0272 / 000020
	 	Greece	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	0117 / 000021
	 	Indonesia	 	P-001679	 	1/24/1992	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	ID 0000393	 	12/22/1995	 	Production and Use Thereof	 	 
	0116 / 000022
	 	Israel	 	100732.0	 	10/1/1995	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	 	 	 	 	Production and Use Thereof	 	 
	0273 / 000023
	 	Italy	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	0203 / 000024
	 	Japan	 	240168/98	 	1/22/1992	 	Arachidonic Acid Containing Fungal Oil	 	Granted
	 
	 	 	 	3229268	 	9/7/2001	 	 	 	 
	274 / 000026
	 	Luxembourg	 	EP92904428.7EP	 	1/22/19929/6/2000	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	0568608	 	 	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	0119 / 000027
	 	Mexico	 	9200301	 	1/24/1992	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	202940	 	7/6/2001	 	Production and Use Thereof	 	 
	275 / 000028
	 	Monaco	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	0276 / 000029
	 	Netherlands	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	0113 / 000030
	 	New Zealand	 	241358	 	1/22/1992	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	NZ 241358	 	2/8/1995	 	Production and Use Thereof	 	 
	0122 / 000031
	 	PCT	 	WO 92/ 13086	 	1/22/1992	 	Arachidonic Acid and Methods for the	 	Entered Nat'l Phase
	 
	 	 	 	PCT/US92/00517	 	8/6/1992	 	Production and Use Thereof	 	Published
	0121 / 000032
	 	Philippines	 	43811	 	1/22/1992	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	1992-43811	 	8/22/2002	 	Production and Use Thereof	 	 
	087/ 000033
	 	Russia	 	93-054772	 	1/22/1992	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	2120998	 	1/29/1998	 	Production and Use Thereof	 	 
	0037 / 000034
	 	South Africa	 	92/0454	 	1/22/1992	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	92/0454	 	10/28/1992	 	Production and Use Thereof	 	 
	0085 / 000035
	 	South Korea	 	1993-702193	 	1/22/1992	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	254300	 	2/1/2000	 	Production and Use Thereof	 	 
	0226 / 000036
	 	South Korea	 	10-1999-7008800	 	9/27/1999	 	An Oil Composition Containing ARA	 	Granted
	 
	 	 	 	302036	 	6/29/2001	 	 	 	 
	0269 / 000037
	 	Spain (ES)	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	0027 / 000038
	 	Sri Lanka	 	10527	 	1/22/1992	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	10527	 	10/27/1993	 	Production and Use Thereof	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

4 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	0277 / 000039
	 	Sweden	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	 	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	0266 / 000040
	 	Switzer	 	EP92904428.7	 	1/22/1992	 	Fungal Oil Containing ARA, Method for	 	Granted
	 
	 	land	 	EP0568608	 	9/6/2000	 	its Preparation and Composition	 	 
	 
	 	 	 	 	 	 	 	Containing Said Oil	 	 
	0271 / 000041
	 	United Kingdom	 	EP92904428.7EP
0568608	 	1/22/19929/6/2000	 	Fungal Oil Containing ARA, Method for
its Preparation and Composition Containing Said Oil	 	Granted
	003 / 000043
	 	Australia	 	AU 96/48542	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	713567	 	12/2/1999	 	Production and Use Thereof	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	005 / 000045
	 	Canada	 	—	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Issued
	 
	 	 	 	2,209,513	 	5/28/2002	 	Production and Use Thereof	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0287 / 000047
	 	Eurasia	 	1036.0	 	8/28/2000	 	Unmodified Fungal Oil Mortierella Sp.,	 	Granted
	 
	 	 	 	 	 	 	 	Method for Production Thereof, Method	 	 
	 
	 	 	 	 	 	 	 	of Providing Arachidonic Acid to Infant	 	 
	 
	 	 	 	 	 	 	 	Formula, Infant Formula Containing	 	 
	 
	 	 	 	 	 	 	 	Arachidonic Acid, Method of Providing a	 	 
	 
	 	 	 	 	 	 	 	Human with Supplemental Amount of	 	 
	 
	 	 	 	 	 	 	 	Arachidonic Acid and Cosmetic	 	 
	 
	 	 	 	 	 	 	 	Composition	 	 
	007 / 000048
	 	Europe	 	96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Issued
	 
	 	 	 	0800584	 	5/2/03	 	Production and Use Thereof	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	Published
	/ 000261
	 	Portugal	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000262
	 	Sweden	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000263
	 	Monaco	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000264
	 	Nether	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	lands	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000265
	 	Luxembourg	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000266
	 	Italy	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000267
	 	Ireland	 	EP96904435.3 EP	 	1/3/19965/2/03	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	0800584	 	 	 	Production and Use Thereof	 	 
	/ 000268
	 	Greece	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

5 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	/ 000269
	 	United Kingdom	 	EP96904435.3
EP0800584	 	1/3/1996
5/2/03	 	Arachidonic Acid and Methods for the
Production and Use Thereof	 	Granted
	/ 000270
	 	France	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000271
	 	Germany	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000272
	 	Switzer	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	land	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000273
	 	Austria	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000274
	 	Belgium	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000275
	 	Denmark	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	/ 000276
	 	Spain	 	EP96904435.3	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	EP0800584	 	5/2/03	 	Production and Use Thereof	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	0062 / 000053
	 	PCT	 	US96/00182WO96/	 	1/3/967/11/1996	 	Arachidonic Acid and Methods for the	 	Entered Nat'l Phase
	 
	 	 	 	21037	 	 	 	Production and Use Thereof	 	Published
	*
	 	*	 	*	 	*	 	*	 	Pending
	0173/ 000055
	 	Singapore	 	9703038.1	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	42669	 	3/30/1999	 	Production and Use Thereof	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0025 / 000057
	 	USA	 	Appl. 08/367881	 	1/3/1995	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	US 5,658,767	 	8/19/1997	 	Production and Use Thereof	 	 
	0014 / 000058
	 	Russia	 	EA-97/0090-US	 	1/3/1996	 	Arachidonic Acid and Methods for the	 	Granted
	 
	 	 	 	1036	 	8/28/2000	 	Production and Use Thereof	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

6 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	0186 / 000105
	 	USA	 	09/210,598
US 6,166,231	 	12/15/1998
12/26/2000	 	Two Phase Extraction of Oil from Biomass	 	Granted
	0103 / 000106
	 	Australia	 	12392/92	 	1/22/92	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	661297	 	11/7/1995	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	0290 / 000107
	 	Austria	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0291/000108
	 	Belgium	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0104 / 000110
	 	Canada	 	2,101,274	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	2,101,274	 	12/15/1998	 	 	 	 
	0294 / 000111
	 	Denmark	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	Published
	0029 / 000113
	 	Europe	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP568606	 	4/18/2001	 	 	 	 
	0305 / 000114
	 	France	 	EP92904388.3EP	 	1/22/19924/18/2001	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	0568606	 	 	 	 	 	 
	0107 / 000115
	 	French Africa (OPAI)	 	PV 60396
10348	 	1/22/92
12/29/1997	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	0293 / 000116
	 	Germany	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

7 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	0296 / 000117
	 	Greece	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0105 / 000118
	 	Indonesia	 	P001678	 	1/24/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	ID 0000174	 	6/20/1995	 	 	 	 
	0026 / 000119
	 	Israel	 	100733	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	100733	 	4/1/1996	 	 	 	 
	0083 / 000120
	 	Israel	 	114253	 	1/22/1992	 	Composition Including Blends of	 	Granted
	 
	 	 	 	114253	 	10/14/1997	 	Microbial Oils and Their Preparation	 	 
	0297 / 000121
	 	Italy	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0032 / 000122
	 	Japan	 	504606/92	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	2731035	 	12/19/1997	 	 	 	 
	0300 / 000123
	 	Luxembourg	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0090 / 000124
	 	Mexico	 	9200320	 	1/24/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	183638	 	1/6/1997	 	 	 	 
	0301 / 000125
	 	Monaco	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0303 / 000126
	 	Netherlands	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0106 / 000127
	 	New Zealand	 	241359	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	241359	 	2/16/1996	 	 	 	 
	0108 / 000128
	 	PCT	 	PCT/US92/00522	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Entered Nat'l Phase
	 
	 	 	 	WO 92/ 12711	 	8/6/1992	 	 	 	Published
	0109 / 000129
	 	Philippines	 	1992-4381243812	 	1/22/199211/23/2001	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	0066 / 000130
	 	Russia	 	930524210.13	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	2093996	 	10/27/1997	 	 	 	 
	0065 / 000131
	 	Singapore	 	9608986.7	 	4/13/1996	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	49307	 	1/10/2002	 	 	 	 
	0110 / 000132
	 	South Africa	 	92/0452	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	92/0452	 	10/28/1992	 	 	 	 
	0034 / 000133
	 	South Korea	 	1993-0702205	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	321543	 	1/9/2002	 	 	 	 
	0245 / 000134
	 	South Korea	 	2001-7003480	 	3/30/2000	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	292103	 	3/20/2001	 	 	 	 
	0278 / 000135
	 	South Korea	 	2001-7002283	 	2/22/2001	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	313987	 	10/25/2001	 	 	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

8 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	0302 / 000136
	 	Spain	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0111 / 000137
	 	Sri Lanka	 	10526	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	10526	 	6/17/1994	 	 	 	 
	0304 / 000138
	 	Sweden	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0292 / 000139
	 	Switzer	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	land	 	EP0568606	 	4/18/2001	 	 	 	 
	0295 / 000140
	 	United Kingdom	 	EP92904388.3	 	1/22/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	EP0568606	 	4/18/2001	 	 	 	 
	0102 / 000141
	 	USA	 	07/944,739	 	9/14/1992	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	US 5,374,657	 	12/20/1994	 	 	 	 
	0059 / 000142
	 	USA	 	(07/944,739)	 	(9/14/1992)	 	Microbial Oil Mixtures and Uses Thereof	 	Granted
	 
	 	 	 	08/358,474	 	12/19/1994	 	 	 	 
	 
	 	 	 	US 5,550,156	 	8/27/1996	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	1/19/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	Annuity Date
	 
	 	 	 	 	 	 	 	 	 	1-19-2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	2997-20-PUS
	 	US	 	10/181756
6,568,351	 	7/19/2002
5/27/2003	 	Methods for Raising Rabbits	 	Issued; Annuity
fees due
	 
	 	 	 	 	 	 	 	 	 	11/27/2006; 2010;
	 
	 	 	 	 	 	 	 	 	 	and 2014
	*
	 	*	 	*	 	*	 	*	 	Pending; Annuity
	 
	 	 	 	 	 	 	 	 	 	fee due 6/26/2006
	*
	 	*	 	*	 	*	 	*	 	Pending; Renewal
	 
	 	 	 	 	 	 	 	 	 	fees due 6/26/2004
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

9 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	US	 	*	 	*	 	*	 	Pending
	2997-38-PCT
	 	PCT	 	US02/27134	 	8/26/2002	 	Products Containing Highly Unsaturated	 	Published
	 
	 	 	 	WO03/ 17945 A2	 	3/6/2003	 	Fatty Acids for Use by Women During	 	 
	 
	 	 	 	 	 	 	 	Stages of Preconception, Pregnancy and	 	 
	 
	 	 	 	 	 	 	 	Lactation	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0127 / 000176
	 	Australia	 	69635/94	 	6/2/1994	 	Methods and Pharmaceutical Compositions	 	Granted
	 
	 	 	 	693450	 	11/5/1998	 	Useful for Treating Neurological	 	 
	 
	 	 	 	 	 	 	 	Disorders	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0031 / 000178
	 	Europe	 	94918217.4	 	6/2/1994	 	Methods and Pharmaceutical Compositions	 	Allowed
	 
	 	 	 	WO94/28913	 	 	 	Useful for Treating Neurological	 	 
	 
	 	 	 	 	 	 	 	Disorders	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

10 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

	 	 	 	 	 	 	 	 	 	 	 
	SR No. /	 	 	 	Application or	 	Appl. Date or Date	 	 	 	 
	Hunton No.
	 	Country
	 	Patent Number
	 	Issued
	 	Title of Patent
	 	Status

	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	Published
	*
	 	*	 	*	 	*	 	*	 	Pending
	0118 / 000181
	 	PCT	 	PCT/US94/
06317	 	6/2/1994	 	Methods and Pharmaceutical Compositions Useful for Treating Neurological Disorders	 	Entered Nat'l Phase Published
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	W094/ 28913	 	12/22/1994	 		 	
	 
	 	 	 	EP0707487	 	 	 	 	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	*
	 	*	 	*	 	*	 	*	 	Pending
	 
	 	 	 	 	 	 	 	 	 	(Published)
	0168 / 000185
	 	Israel	 	122405	 	6/3/1996	 	Methods for Controlling Highly	 	Granted
	 
	 	 	 	122405	 	4/10/2003	 	Unsaturated Fatty Acid Content in	 	 
	 
	 	 	 	 	 	Hunton has 7/11/2003	 	Various Tissues	 	 
	*
	 	*	 	*	 	*	 	*	 	Pending
	0067 / 000187
	 	PCT	 	WO 96/ 40106	 	6/3/1996	 	Methods for Controlling Highly	 	Entered Nat'l Phase
	 
	 	 	 	PCT/US96/0	 	12/19/1996	 	Unsaturated Fatty Acid Content in	 	Published
	 
	 	 	 	8649	 	 	 	Various Tissues	 	 

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

11 of 11

 

 

Schedules to ARA Alliance, Purchase and Production Agreement

SCHEDULE 7.2(b)(i)

DSM PATENT OPPOSITIONS

     DSM Oppositions:

	 	•	 	EP0568608 (via their Hoffman La-Roche AG Subsidiary)
	 
	 	•	 	EP0568606 (via their Hoffman La-Roche AG Subsidiary)

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

1 of 1

 

 

SCHEDULE 7.2(b)(ii)

MARTEK PATENT OPPOSITIONS

     Martek Oppositions:

	 	•	 	WO97/43362; EP0904339 B1

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

1 of 1

 

 

SCHEDULE 10.19

TERMINATION AGREEMENT

* The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.exv10w64

 

Exhibit 10.64

SIXTH AMENDMENT OF LEASE

     THIS
SIXTH AMENDMENT OF LEASE (this “Amendment”) is made
as of this 13th day
of May, 2004 by and between M.O.R. CBC LLC, a Maryland limited liability company
(“Landlord”), and MARTEK BIOSCIENCES CORPORATION, a Delaware corporation
(“Tenant”).

RECITALS

     WHEREAS, Landlord and Tenant are the lessor and the lessee, respectively,
under the Existing Lease (herein defined), pursuant to which Landlord demises
to Tenant, and Tenant leases from Landlord, the Existing Premises (herein
defined) in that certain building known as 6480 Dobbin Road in Columbia,
Howard County, Maryland; and

     WHEREAS, Landlord and Tenant wish to enter into this Amendment to extend
the term of the Existing Lease, expand the size of the premises demised by
Landlord to Tenant pursuant to the Existing Lease, and modify certain of the
other terms and conditions of the Existing Lease, including, without
limitation, the terms and conditions of the Existing Lease governing the
payment of Minimum Monthly Rent (as such term is defined in the Existing Lease
and also sometimes referred to in the Existing Lease as “Basic Annual Rent”)
by Tenant to Landlord.

AGREEMENTS

     NOW, THEREFORE, WITNESSETH, that for and in consideration of the mutual
covenants and agreements herein contained and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant hereby agree as follows, intending their agreements to be
made under seal:

     Section 1.  Definitions.

     The following defined terms, when and as used in this Amendment, shall
have the meanings herein ascribed to them. To the extent a defined term is
used in this Amendment which is not defined in this Amendment, it shall have
the meaning in this Amendment which is ascribed to such defined term in the
Existing Lease, to the extent that a meaning for such defined term is set
forth in the Existing Lease.

     (a) “Additional Premises” means that certain space adjacent to the
Existing Premises, consisting of approximately 8,663 square feet, as more
particularly shown on Exhibit A attached to and hereby made a part of this
Amendment.

     (b) “Additional Premises Occupancy Date” means the date of this
Amendment.

     (c) “Building” means that certain building located in Columbia, Howard
County, Maryland known as 6480 Dobbin Road.

     (d) “Existing Lease” means that certain Lease (the “Original Lease”) dated
August 15, 1992 between Original Landlord, as lessor, and Tenant, as lessee,
with respect to the Existing Premises, together with all addenda, exhibits,
riders and supplements thereto and all amendments and modifications thereof
made prior to the date of this Amendment (including, without limitation, (i)
that certain Lease Modification Agreement dated October 14, 1993 made between
Original Landlord and Tenant (the “First Amendment”), (ii) that certain Second
Lease Modification Agreement dated September 27, 1994 made between Original
Landlord and Tenant (the “Second Amendment”), (iii) that certain Third
Amendment of Lease dated August 1, 1997 made between First Successor Landlord
and Tenant (the “Third Amendment”), (iv) that certain Fourth Amendment of Lease
dated August 5, 1998 made between First Successor Landlord and Tenant (the
“Fourth Amendment”), and (v) that certain Fifth Amendment of Lease dated as of
November 21, 2002 made between Landlord and Tenant (the “Fifth Amendment”)).
All of the right, title and interest of Original Landlord, as lessor under and
with respect to the Original Lease, as modified by the First Amendment and the
Second Amendment, was assigned and conveyed prior to the date of the Third
Amendment by Original Landlord to First Successor Landlord. Landlord is
successor-in-interest to First Successor Landlord as lessor under and with
respect to the Existing Lease.

     (e) “Existing Premises” means that certain space, as more particularly
described in the Existing Lease, located in the Building and consisting of
approximately 44,662 square feet.

     (f) “Expanded Premises” means, collectively, the Existing Premises and
Additional Premises. The Expanded Premises comprises, collectively, 53,325
square feet and all of the space within the Building.

1

 

     (g) “First Successor Landlord” means M.O.R. Columbia Limited Partnership,
a Maryland limited partnership.

     (h) “Force Majeure” means the occurrence of any of the following events,
as affecting the performance by Landlord of any of the obligations of Landlord
set forth in this Amendment (other than obligations relating thereto to make
payments or to pay money): (i) a strike; (ii) a lockout; (iii) labor disputes;
(iv) acts of God; (v) the ability to obtain labor or materials or reasonable
substitutes therefor; (vi) governmental restrictions, regulations, approvals
or controls; (vii) delays in the issuance of permits; (H) enemy, terrorist or
hostile governmental actions; (viii) civil commotions; (ix) fire or other
casualties; (x) adverse weather conditions; and/or (xi) any other causes
beyond the reasonable control of Landlord.

     (i) “Lease” means the Existing Lease, as amended by this Amendment.

     (j) “Original Landlord” means Aetna Life Insurance Company.

     Section 2. Extension of Original Term of Existing Lease.

     The original term of the Existing Lease (as previously extended and
expiring on November 30, 2004) is hereby further extended through 11:59 p.m.,
local time, on January 31, 2011. That portion of the original term of the
Existing Lease, as so further extended, commencing on December 1, 2004 and
ending on January 31, 2011 is hereinafter sometimes called the “Extended
Term”. That portion of the original term of the Existing Lease occurring prior
to December 1, 2004 is hereinafter sometimes referred to as the “Initial
Term”. From and after the date of this Amendment, the original term of the
Existing Lease shall be deemed to be comprised of the Initial Term and the
Extended Term, as the same may be extended or renewed in accordance with the
terms and conditions of this Amendment and/or any amendments to the Lease made
after the date of this Amendment between Landlord and Tenant.

     Section 3. Leasing of Additional Premises.

     Commencing on the Additional Premises Occupancy Date, Landlord shall
lease the Additional Premises to Tenant, and Tenant shall rent the Additional
Premises from Landlord, for the remainder of the Initial Term and for the
Extended Term (as the same may be extended or renewed in accordance with the
terms and conditions of this Amendment and/or any amendments to the Lease
made after the date of this Amendment between Landlord and Tenant), all in
accordance with the terms and conditions of the Lease. From and after the
Additional Premises Occupancy Date, the defined term “Premises”, as such
defined term is defined and used in the Lease, for all intents and purposes
of the Lease, shall mean and refer to the Expanded Premises. For all intents
and purposes of the Lease, as the context shall require, the defined term
“Premises”, as such defined term is defined and used in the Lease with
respect to all portions of the original term of the Lease occurring prior to
the Additional Premises Occupancy Date, shall refer only to the Existing
Premises.

     Section 4. Minimum Monthly Rent Payable for Expanded Premises With Respect to Certain Portion of Initial Term and Extended Term.

     Notwithstanding anything to the contrary set forth in the Existing
Lease, the Minimum Monthly Rent (as such defined term is defined and used in
the Lease) payable by Tenant to Landlord for the Expanded Premises with
respect to that portion of the Initial Term commencing on the Additional
Premises Occupancy Date and ending on November 30, 2004 and the Extended
Term shall be the following:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Annual	 	Monthly Installment of	 	Annual Minimum
	Period of Time During Certain Portion of	 	Minimum	 	Minimum Monthly	 	Monthly Rent Per
	Initial Term and Extended Term
	 	Monthly Rent
	 	Rent
	 	Square Foot

	Additional Premises Occupancy
Date to November 30, 2004	 	$	613,237.50	 	 	$	51,103.13	 	 	$	11.50	 
	December 1, 2004 to January 31, 2005
	 	$	613,237.50	 	 	$	51,103.13	 	 	$	11.50	 
	February 1, 2005 to January 31, 2006
	 	$	628,568.44	 	 	$	52,380.70	 	 	$	11.79	 
	February 1, 2006 to January 31, 2007
	 	$	644,282.65	 	 	$	53,690.22	 	 	$	12.08	 
	February 1, 2007 to January 31, 2008
	 	$	660,389.72	 	 	$	55,032.48	 	 	$	12.38	 
	February 1, 2008 to January 31, 2009
	 	$	676,899.46	 	 	$	56,408.29	 	 	$	12.69	 
	February 1, 2009 to January 31, 2010
	 	$	693,821.95	 	 	$	57,818.50	 	 	$	13.01	 

2

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Annual	 	Monthly Installment of	 	Annual Minimum
	Period of Time During Certain Portion of	 	Minimum	 	Minimum Monthly	 	Monthly Rent Per
	Initial Term and Extended Term
	 	Monthly Rent
	 	Rent
	 	Square Foot

	February 1, 2010 to January 31, 2011

	 	$	711,167.50	 	 	$	59,263.96	 	 	$	13.34	 

     Section 5. Additional Rent.

     (a) Effective as of the Additional Premises Occupancy Date, the defined
terms “Pro Rata Percentage”, “pro rata share”, and “proportionate share”, as
pertaining to the Premises (and as such defined terms are used in the Existing
Lease), shall be increased to 100.0%. Notwithstanding the foregoing, for all
intents and purposes of the Lease with respect to those portions of the term of
the Lease occurring prior to the Additional Premises Occupancy Date, the
defined terms “Pro Rata Percentage”, “pro rata share”, and “proportionate
share”, as such defined terms are used with respect to the Premises, shall
continue to have the meaning and the values ascribed to such defined term in
the Existing Lease, as the context shall require.

     (b) Subject to the terms and conditions of Section 5(a) of this Amendment,
all of the terms and conditions of the Existing Lease governing the payment by
Tenant to Landlord of “additional rent” (including, without limitation,
payments by Tenant in regard to “Real Property Taxes”, “Taxes”, “Common Area
Expenses” and for Landlord’s insurance costs) for the Existing Premises with
respect to the Initial Term shall also be applicable, as the context shall
require, with respect to the leasing by Landlord to Tenant of the Additional
Premises with respect to that portion of Initial Term commencing on the
Additional Premises Occupancy Date.

     (c) Subject to the terms and conditions of Section 5(a) of this Amendment,
all of the terms and conditions of the Existing Lease governing the payment by
Tenant to Landlord of “additional rent” (including, without limitation,
payments by Tenant in regard to “Real Property Taxes”, “Taxes”, “Common Area
Expenses” and for Landlord’s insurance costs) for the Expanded Premises with
respect to the Initial Term shall remain applicable, as the context shall
require, with respect to the leasing by Landlord to Tenant of the Expanded
Premises with respect to the Extended Term.

     Section 6. Tenant Improvements.

     (a) For purposes of this Amendment, “Tenant Repair HVAC Units” means,
collectively, the heating, ventilating and air conditioning units serving the
Expanded Premises that are as of the date of this Amendment located on the roof
of the Building, as more particularly described in
Exhibit B attached to and
hereby made a part of this Amendment. For purposes of this Amendment, “Tenant HVAC
Improvements” means, collectively, the alterations and improvements to the
heating, ventilating and air conditioning systems serving the Expanded Premises
that are to be constructed and/or installed by Tenant at the Expanded Premises
in accordance with the terms and conditions of Section 6 of this Amendment,
including, without limitation, the installation of new rooftop heating,
ventilating and air conditioning units to serve the Expanded Premises in lieu
of the Tenant Repair HVAC Units. For purposes of this Amendment, “Cost of
Tenant HVAC Improvements” means, collectively, the following, if and as
actually and reasonably incurred and paid by Tenant in connection with the
construction and/or installation by Tenant of the Tenant HVAC Improvements: (i)
all hard or direct costs; (ii) all costs of architectural, engineering and
planning services; and (iii) all costs of building permits and other necessary
governmental approvals. For purposes of this Amendment, “Tenant HVAC
Improvements Allowance” means the sum of $300,219.75.

     (b) For purposes of this Amendment, “Other Tenant Improvements” means,
collectively, (i) certain alterations and improvements other than the Tenant
HVAC Improvements to be constructed and/or installed in the Expanded Premises
by Tenant in accordance with the terms and conditions of Section 6 of this
Amendment, and (ii) certain furniture, furnishings and trade fixtures,
unrelated to the Tenant HVAC Improvements, to be installed, and/or used at the
Expanded Premises by Tenant in accordance with the terms and conditions of
Section 6 of this Amendment. For purposes of this Amendment, “Cost of Other
Tenant Improvements” means, collectively, the following, if and as actually and
reasonably incurred and paid by Tenant in connection with the construction
and/or installation by Tenant of the Other Tenant Improvements: (A) all hard
or direct costs; (B) all costs of architectural, engineering and planning
services; and (C) all costs of building permits and other necessary
governmental approvals. For purposes of this Amendment, “Other Tenant
Improvements Allowance” means the sum of $799,875.00. For purposes of this
Amendment, the Tenant HVAC Improvements and the Other Tenant Improvements are
sometimes referred to, collectively, as the “Tenant Improvements”.

3

 

     (c) Tenant has heretofore advised Landlord that on or before that date
which is eighteen (18) months after the date of this Amendment, Tenant wishes
to construct and/or install the Tenant Improvements in the Expanded Premises.
The Tenant Improvements shall be identified by Tenant and approved by Landlord
(such approval of Landlord not to be unreasonably withheld, conditioned or
delayed) after the date of this Amendment and in accordance with and subject to
the terms and conditions of Section 6 of this Amendment. Landlord hereby
consents to the construction and/or installation by Tenant of the Tenant
Improvements in accordance with the terms and conditions of Section 6 of this
Amendment; provided, however, that Tenant shall not commence the construction
and/or installation of any of the Tenant Improvements unless and until all of
the following shall have occurred: (i) Landlord shall have approved in writing
in all respects (such approval of Landlord not to be unreasonably withheld,
conditioned or delayed), the final scope of the Tenant Improvements and the
final construction drawings, plans and specifications describing the Tenant
Improvements (such final construction drawings, plans and specifications
describing the Tenant Improvements, as approved by Landlord and Tenant, being
sometimes hereinafter referred to, collectively, as the “Tenant Improvements
Plans”); (ii) Landlord shall have approved in writing (such approval of
Landlord not to be unreasonably withheld, conditioned or delayed) the general
contractor to be employed by Tenant in connection with the construction and/or
installation of the Tenant Improvements (the “Tenant Improvements Contractor”)
and the terms and conditions of the construction contract to be entered into
between Tenant and the Tenant Improvements Contractor in connection with the
construction and/or installation of the Tenant Improvements; (iii) Tenant shall
have delivered to Landlord certificates of insurance or other evidence of
insurance satisfactory to Landlord, in Landlord’s reasonable discretion,
showing that Tenant, the Tenant Improvements Contractor and all subcontractors
and materialsmen involved in connection with the construction and/or
installation of the Tenant Improvements shall have in full force and effect
such builder’s risk, commercial general liability and other insurance coverages
as shall be required by Landlord; and (iv) Tenant shall have obtained all
building permits and all other federal, state and/or local governmental
consents, permits and/or approvals, if any, required to be obtained in
connection with the construction and/or installation of the Tenant
Improvements. Landlord hereby approves The Heiserman Group of Bethesda,
Maryland as the architect to be employed by Tenant in connection with the
design, construction and installation of the Tenant Improvements (the “Tenant
Improvements Architect”).

     (d) The Tenant Improvements shall be constructed and/or installed by
Tenant at Tenant’s sole risk and in a first class manner, using new materials
reasonably acceptable to Landlord. Tenant shall not take any action or fail to
take any action, or permit any action to be taken or fail to be taken, as a
result of which a lien shall be filed against or encumber the Expanded Premises
and any such lien filed against or encumbering the Expanded Premises shall be
discharged by Tenant, at Tenant’s sole cost and expense, not later than thirty
(30) days after such filing or encumbrance. Tenant shall indemnify, defend,
protect and hold harmless Landlord from and against any and all liabilities,
losses, damages, costs and expenses (including, without limitation, reasonable
attorneys’ fees) which may be suffered or incurred by Landlord in connection
with, or in any way relating to, the construction and/or installation of the
Tenant Improvements; provided, however, that the indemnification obligations of
Tenant set forth in the preceding portions of this sentence shall not apply to
any liabilities, losses, damages, costs or expenses suffered or incurred by
Landlord, to the extent directly the result of gross negligence or willful
misconduct on the part of Landlord or any of the agents, employees or
contractors of Landlord. For purposes of this Amendment, “Tenant Improvements
Completion Date” means that date as of which Tenant shall have completed the
construction and/or installation of the Tenant Improvements. Tenant shall
give prompt notice to Landlord of the occurrence of the Tenant Improvement
Completion Date. Furthermore, not later than thirty (30) days after the Tenant
Improvements Completion Date, Tenant shall deliver to Landlord, in form and
substance reasonably satisfactory to Landlord in all respects, the following
(collectively, the “Tenant Improvements Completion Items”): (i) a certificate,
signed by the Tenant Improvements Architect and/or the Tenant Improvements
Contractor, certifying to Landlord and Tenant that (A) the Tenant Improvements
have been completed in all material respects in accordance with the Tenant
Improvements Plans and (B) the Tenant Improvements, as so completed, comply in
all respects with all applicable federal, state and local laws, ordinances,
rules and regulations pertaining thereto (including, without limitation, the
Americans With Disabilities Act of 1990 and all regulations promulgated
thereunder and all applicable zoning, planning and building laws, ordinances,
codes, rules and regulations); (ii) a true and complete copy of the temporary
or final certificate of occupancy issued with respect to the Tenant
Improvements by the local governmental authority having jurisdiction with
respect thereto or evidence that such local governmental authority shall have
otherwise evidenced its approval of the Tenant Improvements in a manner
reasonably satisfactory to Landlord; and (iii) true and complete final waivers
and releases of liens with respect to the Tenant Improvements executed and
delivered by the Tenant Improvements Contractor and all subcontractors and
materialmen involved in connection therewith

4

 

stating, among other things, that all monies due and owing to the Tenant
Improvements Contractor or, as applicable, any such subcontractor or
materialmen, in regard to the Tenant Improvements have been paid in full.
Notwithstanding the foregoing, Tenant shall promptly supply to Landlord any
final certificate of occupancy issued with respect to the Tenant Improvements
by the local governmental authority having jurisdiction with respect thereto
if a temporary certificate of occupancy shall have been provided by Tenant to
Landlord in accordance with the preceding sentence of this paragraph as part
of the Tenant Improvements Completion Items.

     (e) (i) Tenant shall pay for all costs and expenses whatsoever
incurred by Tenant in connection
with the construction and/or installation of the Tenant Improvements,
including, without limitation, all of the items includable as parts of the Cost
of Tenant HVAC Improvements and the Cost of Other Tenant Improvements;
provided, however, Landlord shall reimburse Tenant (A) for items includable in
the Cost of Tenant HVAC Improvements, but only in an amount not to exceed the
amount of the Tenant HVAC Improvements Allowance, and (B) for items includable
in the Cost of Other Tenant Improvements, but only in an amount not to exceed
the amount of the Other Tenant Improvements Allowance. From time to time during
the construction and/or installation of the Tenant Improvements (but not more
frequently than once in any calendar month), Tenant shall have the right, at
Tenant’s option, subject to the terms, conditions and limitations set forth in
the preceding provision of Section 6(e)(i) and elsewhere in this Amendment and
provided Tenant shall not be in default with respect to any of the agreements,
covenants, obligations or undertakings of Tenant set forth in the Lease (which
default on the part of Tenant shall have continued after the giving of all
required notices by Landlord to Tenant and the expiration of all applicable
grace periods), to request that Landlord reimburse Tenant (I) for costs and
expenses includable in the Cost of Tenant HVAC Improvements that have actually
been incurred and paid by Tenant in connection with the construction and/or
installation of the Tenant HVAC Improvements, and/or (II) for costs and
expenses includable in the Cost of Other Tenant Improvements that have actually
been incurred and paid by Tenant in connection with the construction and/or
installation of the Other Tenant Improvements.

          (ii) Any request made by Tenant for reimbursement in accordance with the
terms and conditions of Section 6(e) of this Amendment shall be made pursuant
to a written requisition (in the form of an AIA G703 Requisition or another
form of requisition reasonably acceptable to Landlord) signed by Tenant, the
Tenant Improvements Contractor and/or the Tenant Improvements Architect,
certifying, in form and substance satisfactory to Landlord, in Landlord’s
reasonable discretion, that (A) all of the work described in or covered by
such requisition has been performed in accordance with the Tenant Improvements
Plans and all applicable laws, ordinances, statutes, rules and regulations,
(B) all prior advances of the Tenant HVAC Improvements Allowance and the Other
Tenant Improvements Allowance have been used and applied for the purposes
stated in prior requisitions, and (C) all materials covered by such
requisition have been incorporated into the Tenant Improvements or adequately
stored and insured at the Expanded Premises.

          (iii) Any request made by Tenant for reimbursement in accordance with the
terms and conditions of Section 6(e) of this Amendment shall also include a
certification by Tenant to Landlord, in form and substance satisfactory to
Landlord, in Landlord’s reasonable discretion, that: (A) the amount requested
for reimbursement by Tenant with respect to items includable in the Cost of
Tenant HVAC Improvements, plus those amounts (if any) previously disbursed by
Landlord for amounts includable in the Cost of Tenant HVAC Improvements, does
not, as a percentage of the total of funds available to Tenant for payment of
costs and expenses relating to the Tenant HVAC Improvements, exceed the
percentage of completion of the Tenant HVAC Improvements as of the date of
such requisition; (B) the undisbursed portion of the Tenant HVAC Improvements
Allowance, plus such additional funds being made available by Tenant with
respect to the construction and/or installation of the Tenant HVAC
Improvements, is sufficient to achieve final completion of the Tenant HVAC
Improvements in accordance with the Tenant Improvements Plans and the schedule
for completion of the Tenant HVAC Improvements approved by Landlord and
Tenant; (C) the amount requested for reimbursement by Tenant with respect to
items includable in the Cost of Other Tenant Improvements, plus those amounts
(if any) previously disbursed by Landlord for amounts includable in the Cost
of Other Tenant Improvements, does not, as a percentage of the total of funds
available to Tenant for payment of costs and expenses relating to the Other
Tenant Improvements, exceed the percentage of completion of the Other Tenant
Improvements as of the date of such requisition; (D) the undisbursed portion
of the Other Tenant Improvements Allowance, plus such additional funds being
made available by Tenant with respect to the construction and/or installation
of the Other Tenant Improvements, is sufficient to achieve final completion of
the Other Tenant Improvements in accordance with the Tenant Improvements Plans
and the schedule for completion of the Other Tenant Improvements approved by
Landlord and Tenant; and (E) the work and materials for which payment is
requested has been physically

5

 

incorporated into the Expanded Premises free and clear of any security
interests, liens or encumbrances. In the event that a requisition for
reimbursement made by Tenant in accordance with the terms and conditions of
Section 6(e) of this Amendment is submitted in a form complying with the terms
and conditions of Section 6(e) of this Amendment and all of the conditions
precedent to Landlord’s obligation to fund any such reimbursement have been
fulfilled, then and in any such event, Landlord shall fund such requisition
not later than thirty (30) days after the date such requisition and all
related materials shall have been submitted by Tenant to Landlord.

          (iv) Each requisition for reimbursement submitted by Tenant to Landlord
in accordance with the terms and conditions of Section 6(e) of this Amendment
shall be accompanied by: (A) such invoices, contracts, bills, vouchers, change
orders and other statements and information as may be reasonably requested by
Landlord; and (B) lien waivers from the Tenant Improvements Contractor and all
subcontractors and suppliers receiving payments from prior advances of the
Tenant HVAC Improvements Allowance and/or the Other Tenant Improvements
Allowance. The aggregate of all advances made by Landlord from the Tenant HVAC
Improvements Allowance at any time shall not exceed, in the opinion of
Landlord, in its reasonable judgment, the value of the work done to and/or
materials physically incorporated into the Expanded Premises as part of the
construction and/or installation of the Tenant HVAC Improvements. The
aggregate of all advances made by Landlord from the Other Tenant Improvements
Allowance at any time shall not exceed, in the opinion of Landlord, in its
reasonable judgment, the value of the work done to and/or materials physically
incorporated into the Expanded Premises as part of the construction and/or
installation of the Other Tenant Improvements.

          (v) Landlord shall have the right, at any time or times, to inspect the
Tenant Improvements or any portions thereof, whether before or after making
any advance of the Tenant HVAC Improvements Allowance and/or the Other Tenant
Improvements Allowance, and shall have the right to condition funding of any
requisition therefor requested by Tenant upon a satisfactory inspection and/or
examination of the Tenant Improvements (or any portion thereof) by Landlord or
an agent or representative of Landlord. Any such inspection and/or examination
by Landlord or any of the agents or representatives of Landlord shall be for
the sole benefit of Landlord and for ensuring that the Tenant Improvements are
proceeding satisfactorily. In no event shall such inspection and/or
examination be construed as (A) participation by Landlord in the construction
and/or installation of the Tenant Improvements, (B) approval by Landlord of
the quality of the Tenant Improvements, or (C) a warranty by Landlord that the
Tenant Improvements comply with any applicable laws, ordinances, rules or
regulations or the Tenant Improvements Plans.

          (vi) Following substantial completion of the Tenant Improvements, Tenant
shall have the right to submit a “final requisition” to Landlord for funding
with respect to the then remaining balances (if any) of the Tenant HVAC
Improvements Allowance and/or the Other Tenant Improvements Allowance so long
as such requisition shall meet all of the requirements for requisitions
specified in the preceding terms and conditions of Section 6(e) of this
Amendment, and provided further, as a condition to the obligation of Landlord
to fund such final requisition, Tenant shall also supply to Landlord, in form
and substance satisfactory to Landlord in all respects, in Landlord’s
reasonable discretion, the Tenant Improvements Completion Items.

          (vii) If following completion of the Tenant Improvements and the
determination by Landlord of the actual, final amounts of the Cost of Tenant
HVAC Improvements and the Cost of Other Tenant Improvements, the actual, final
Cost of Other Tenant Improvements shall be less than the amount of the Other
Tenant Improvements Allowance (any such remainder of the Other Tenant
Improvements Allowance being sometimes in this Amendment referred to as the
“Other Tenant Improvements Allowance Remainder”), then and in such event, not
later than ten (10) days after written demand shall be made therefor by Tenant
of Landlord, Landlord shall reimburse Tenant, in an amount not to exceed the
amount of the Other Tenant Improvements Allowance Remainder, for costs
includable as part of the actual, final Cost of Tenant HVAC Improvements, if
any, that exceeded the amount of the Tenant HVAC Improvements Allowance.
Notwithstanding anything to the contrary set forth elsewhere in this
Amendment, Landlord shall have no obligation whatsoever to disburse any funds
from the Tenant HVAC Improvements Allowance and/or the Other Tenant
Improvements Allowance with respect to any requisition submitted by Tenant to
Landlord for reimbursement from the same if such requisition shall not have
been submitted by Tenant to Landlord in a form complying with the requirements
of Section 6(e) of this Amendment on or before that date which is the second
(2nd) anniversary of the date of this Amendment.

6

 

     (f) Notwithstanding anything to the contrary set forth elsewhere in this
Amendment, Landlord shall have the right, at Landlord’s sole option and at
Landlord’s sole cost and expense, to employ a construction management
supervisor in connection with the construction and/or installation by
Tenant of the Tenant Improvements. Tenant hereby acknowledges that the
construction management supervisor employed by Landlord pursuant to the terms
and conditions of this paragraph may be an affiliate of Landlord. Tenant shall
cooperate, fully and in all reasonable respects, and shall cause its agents,
employees and contractors to cooperate, fully and in all respects, with the
work of any such construction management supervisor employed by Landlord.

     (g) For purposes of this Amendment, “To Be Removed Tenant Improvements”
means those portions, items or aspects of the Tenant Improvements that Tenant
shall be required to remove from the Expanded Premises in accordance with the
terms and conditions of Section 6(g) of this Amendment on or before the
expiration date of the term of the Lease or any earlier date as of which the
term of the Lease shall terminate. Notwithstanding anything to the contrary set
forth elsewhere in this Amendment, at the time that Landlord shall give its
written consent to Tenant regarding the scope of the Tenant Improvements and
the Tenant Improvements Plans, as more particularly described in Section
6(c)(i) of this Amendment, Landlord and Tenant shall also agree in writing as
to any To Be Removed Tenant Improvements. Except for the To Be Removed
Tenant Improvements, Tenant shall have no right whatsoever pursuant to this
Amendment to remove any of the Tenant Improvements on or before the expiration
date of the term of the Lease or any earlier date as of which the term of the
Lease shall terminate. Effective as of 12:01 a.m., local time, on the day after
the expiration date of the term of this Lease or any earlier date as of which
the term of the Lease shall terminate, all of the Tenant Improvements other
than the To Be Removed Tenant Improvements shall become the property of
Landlord and title thereto shall vest in Landlord fully and in all respects.
Notwithstanding the foregoing, however, on or before the expiration date of the
term of the Lease or any earlier date as of which the term of the Lease shall
terminate, at Tenant’s sole cost and expense, (i) Tenant shall remove from the
Expanded Premises all of the To Be Removed Tenant Improvements, and (ii)
following such removal, Tenant shall restore the Expanded Premises to its
condition as existing prior to the construction and/or installation of such To
Be Removed Tenant Improvements, reasonable wear and tear and damage caused by
casualty excepted. In the event that Tenant shall fail to fulfill any of the
agreements or obligations of Tenant set forth in the preceding terms and
conditions of this paragraph, Landlord shall have the right, at Landlord’s
option, (A) to treat any of the To Be Removed Tenant Improvements not so
removed by Tenant as having been abandoned by Tenant, and/or (B) to remove and
dispose of the same at Tenant’s sole cost and expense, whereupon Tenant shall
reimburse Landlord, not later than ten (10) days after written demand shall be
made therefor by Landlord of Tenant, for all costs and expenses actually and
reasonably incurred by Landlord in connection with any such removal and/or
disposal. All of the agreements, covenants and undertakings of Tenant set forth
in Section 6(g) of this Amendment shall survive the expiration date of the term
of the Lease or any earlier date as of which the Lease shall be terminated.

     (h) Tenant hereby acknowledges and agrees that (i) Landlord has made no
representations or warranties whatsoever to Tenant with respect to the
Additional Premises, the condition of the Additional Premises, or the
condition or suitability for use by Tenant of the Expanded Premises in
connection with the business operations of Tenant during that portion of the
Initial Term commencing on the Additional Premises Occupancy Date or the
Extended Term, and (ii) Landlord has no obligation to Tenant whatsoever,
pursuant to this Amendment or otherwise, with respect to the obtaining or
maintaining during or prior to the Extended Term of any governmental
approvals, consents, licenses, permits or certificates of use or occupancy
(collectively, the “Governmental Authorizations”) other than the Landlord’s
Work Governmental Authorizations (herein defined) that shall or may be a
condition of, required or necessary for, or desired by Tenant in connection
with, the use or occupancy of the Expanded Premises by Tenant pursuant to this
Amendment and that all Governmental Authorizations other than the Landlord’s
Work Governmental Authorizations that shall or may be such a condition of or
so required, necessary or desired in connection with the use or occupancy of
the Expanded Premises by Tenant pursuant to this Amendment shall be obtained
and/or maintained by Tenant, at Tenant’s sole cost and expense. For purposes
of this Amendment, “Landlord’s Work Governmental Authorizations” means all
building permits and any other governmental approvals or certificates that
shall be required by applicable law to be obtained in connection with the
construction and/or installation of the Landlord’s Roof Work (as defined in
Section 7 of this Amendment), the Additional Landlord Work (as defined in
Section 8 of this Amendment), and the Other Work (as defined in Section 9 of
this Amendment). The obtaining of any Governmental Authorizations shall not be
a condition precedent to the commencement on the Additional Premises Occupancy
Date of the leasing of the Additional Premises by Landlord to Tenant pursuant
to this Amendment, the commencement of the Extended Term on December 1, 2004,
or the effectiveness of any of the agreements, covenants or obligations of
Tenant that pursuant to the terms and conditions of this Amendment commence on
or after the Additional Premises Occupancy Date or on or after the first (1st)
day

7

 

of the Extended Term (including, without limitation, the covenants and
obligations of Tenant set forth in this Amendment with respect to the payment
of rent), as applicable. Tenant hereby acknowledges and agrees that (A) the
Additional Premises are being leased to Tenant by Landlord in their “as is,
where is and with all defects” condition as of the Additional Premises
Occupancy Date, (B) the Existing Premises are being leased to Tenant by
Landlord in their “as is, where is and with all defects” condition as of the
first (1st) day of the Extended Term, and (C) subject to the terms and
conditions of Section 7 of this Amendment (entitled “Landlord’s Roof Work”),
Section 8 of this Amendment (entitled “Additional Landlord Work”), and Section
9 of this Amendment (entitled “Other Work”), Landlord shall have no obligation
whatsoever, pursuant to this Amendment or otherwise, to make any alterations
or improvements to or with respect to the Expanded Premises or any portion
thereof.

     Section 7. Landlord’s Roof Work.

     (a) For purposes of this Amendment, “Landlord’s Roof Work” means the
replacement of the entirety of the roof of the Building by Landlord in
accordance with the terms and conditions of Section 7 of this Amendment.
Subject to the occurrence of any event(s) of Force Majeure or any delay caused
by Tenant, Landlord shall “Substantially Complete” the Landlord’s Roof Work not
later than that date (the “Landlord’s Roof Work Substantial Completion Target
Date”) which is one hundred eighty (180) Good Weather Days (herein defined)
after the later to occur of: (i) the date of this Amendment; and (ii) the date
(the “Tenant Roof Improvements Completion Date”) as of which Tenant shall deem
all of the Tenant Improvements affecting the roof of the Building to have been
completed in all respects by Tenant in accordance with the terms and conditions
of this Amendment. For purposes of this Amendment, a “Good Weather Day” means
any day other than a day occurring during the months of January, February or
December. Tenant shall give prompt notice to Landlord of the occurrence of
the Tenant Roof Improvements Completion Date. Landlord shall commence the
construction and/or installation of the Landlord’s Roof Work as soon as
practicable (weather permitting) after receiving notice from Tenant of the
Tenant Roof Improvements Completion Date and shall thereafter diligently
prosecute the completion of the Landlord’s Roof Work (including, without
limitation, to the extent deemed practical and feasible by Landlord, in
Landlord’s reasonable judgment, on days other than Good Weather Days). For
purposes of this Amendment, the Landlord’s Roof Work shall be deemed to be
“Substantially Complete” as of the date on which the general contractor or the
architect employed by Landlord with respect to the construction and/or
installation of the Landlord’s Roof Work shall certify in writing to Landlord
that: (A) the Landlord’s Roof Work has been substantially completed in all
material respects in accordance with the approved plans and specifications
therefor; and (B) a temporary or permanent certificate of occupancy has been
issued by the governmental authority having jurisdiction with respect to the
Landlord’s Roof Work or the governmental authority having jurisdiction with
respect to the Landlord’s Roof Work has otherwise evidenced its approval of the
Landlord’s Roof Work. Landlord shall have no liability to Tenant whatsoever for
any damages that Tenant may suffer as a result thereof or in connection
therewith in the event that Landlord shall fail for any reason whatsoever to
Substantially Complete the Landlord’s Roof Work on or before the Landlord’s
Roof Work Substantial Completion Target Date other than (I) as set forth in
Section 26 of this Amendment and (II) for such damages as Tenant shall suffer
to the extent directly a result of the willful misconduct or negligence of
Landlord; provided, however, in such event, Landlord shall Substantially
Complete the Landlord’s Roof Work as soon as possible thereafter. Landlord
shall complete any portions or aspects of the Landlord’s Roof Work which shall
be incomplete as of the date of Substantial Completion of the Landlord’s Roof
Work as soon as possible thereafter. Notwithstanding anything to the contrary
set forth elsewhere in this Amendment, neither the completion nor the
Substantial Completion of the Landlord’s Roof Work or any portion thereof shall
be deemed to be a condition precedent to the commencement of the Extended Term
on the date for the same set forth in Section 2 of this Amendment, the leasing
of the Additional Premises by Landlord to Tenant commencing on and as of the
Additional Premises Occupancy Date, or to any of the agreements, covenants and
obligations of Tenant set forth in this Amendment that commence, respectively,
on or after the Additional Premises Occupancy Date or on or after the first
(1st) day of the Extended Term (including, without limitation, all such
agreements, covenants and obligations regarding the payment of rent).

     (b) The Landlord’s Roof Work shall be constructed and/or installed by
Landlord using contractors (and subcontractors, if deemed necessary by
Landlord) selected by Landlord, in Landlord’s reasonable discretion, as having
experience in connection with the construction and/or installation of
alterations and improvements similar in nature to the Landlord’s Roof Work.
The Landlord’s Roof Work shall be constructed in accordance with all applicable
federal, state and local laws, ordinances, rules and regulations. The
Landlord’s Roof Work shall be constructed and/or installed by Landlord at
Landlord’s sole risk and in a first class manner, using new materials, and
otherwise upon such terms and conditions, and in such manner, as Landlord, in
Landlord’s reasonable discretion, shall deem necessary and appropriate. All
costs and expenses incurred by Landlord in connection with the

8

 

construction and/or installation of the Landlord’s Roof Work shall be paid by
Landlord, at Landlord’s sole cost and expense.

     Section 8. Additional Landlord Work.

     (a) For purposes of this Amendment, “Additional Landlord Work” means,
collectively, the alterations and improvements to the exterior of the Expanded
Premises to be constructed and/or installed by Landlord in accordance with the
terms and conditions of Section 8 of this Amendment, as more particularly
described in Exhibit C attached to and hereby made a part of this Amendment.
Subject to the occurrence of any event(s) of Force Majeure and any delay caused
by Tenant, Landlord shall “Substantially Complete” the Additional Landlord Work
not later than that date (the “Additional Landlord Work Substantial Completion
Target Date”) which is the later to occur of: (i) that date which is the first
(1st) anniversary of the date of this Amendment; and (ii) that date which is
one hundred eighty (180) days after the Tenant Improvements Completion Date.
Tenant shall give prompt notice of the Tenant Improvements Completion Date to
Landlord. For purposes of this Amendment, the Additional Landlord Work shall be
deemed to be “Substantially Complete” as of the date on which the general
contractor or the architect employed by Landlord with respect to the
construction and/or installation of the Additional Landlord Work shall
reasonably certify in writing to Landlord that: (A) the Additional Landlord
Work has been substantially completed in all material respects and in
accordance with all approved plans and specifications therefor (if any); and
(B) a temporary or permanent certificate of occupancy has been issued by the
governmental authority having jurisdiction with respect to the Additional
Landlord Work or the governmental authority having jurisdiction with respect to
the Additional Landlord Work has otherwise evidenced its approval of the
Additional Landlord Work. Landlord shall have no liability to Tenant whatsoever
for any damages that Tenant may suffer as a result thereof or in connection
therewith in the event that Landlord shall fail for any reason whatsoever to
Substantially Complete the Additional Landlord Work on or before the Additional
Landlord Work Substantial Completion Target Date other than (I) as set forth in
Section 26 of this Amendment and (II) for such damages as Tenant shall suffer
to the extent directly as a result of the willful misconduct or negligence of
Landlord; provided, however, in such event, Landlord shall Substantially
Complete the Additional Landlord Work as soon as possible thereafter. Landlord
shall complete any portions or aspects of the Additional Landlord Work which
shall be incomplete as of the date of Substantial Completion of the Additional
Landlord’s Work as soon as possible thereafter. Notwithstanding anything to
the contrary set forth elsewhere in this Amendment, neither the completion nor
the Substantial Completion of the Additional Landlord Work or any portion
thereof shall be deemed to be a condition precedent to the commencement of the
Extended Term on the date for the same set forth in Section 2 of this
Amendment, the leasing of the Additional Premises by Tenant to Landlord
commencing on and as of the Additional Premises Occupancy Date, or to any of
the agreements, covenants and obligations of Tenant set forth in this Amendment
that commence, respectively, on or after the Additional Premises Occupancy Date
or on or after the first (1st) day of the Extended Term (including, without
limitation, all such agreements, covenants and obligations regarding the
payment of rent).

     (b) The Additional Landlord Work shall be constructed and/or installed by
Landlord using contractors (and subcontractors, if deemed necessary by
Landlord) selected by Landlord, in Landlord’s reasonable discretion, as having
experience in connection with the construction and/or instillation of
alterations and improvements similar in nature to the Additional Landlord Work.
The Additional Landlord Work shall be constructed and/or installed in
accordance with all applicable federal, state and local laws, ordinances, rules
and regulations. The Additional Landlord Work shall be constructed and/or
installed by Landlord at Landlord’s sole risk, in a first class manner, using
new materials, and otherwise upon such terms and conditions, and in such
manner, as Landlord, in Landlord’s reasonable discretion, shall deem necessary
and appropriate. All costs and expenses incurred by Landlord in connection
with the construction and/or installation of the Additional Landlord Work shall
be paid by Landlord, at Landlord’s sole cost and expense.

     (c) Landlord and Tenant hereby acknowledge that some of the Additional
Landlord Work and/or the Other Work (as defined in Section 9 of this Amendment)
may be performed by Landlord within the Expanded Premises at times during which
Tenant shall be in occupancy of the Expanded Premises. Accordingly, Tenant
hereby agrees that subject to Tenant’s Security Requirements (as defined in
Section 8(d) of this Amendment), Landlord and the agents, employees and
contractors of Landlord shall have the right to enter upon the Expanded
Premises at any reasonable time or times (which may include, without
limitation, weekends and hours other than the normal business hours of Tenant),
upon reasonable prior oral or written notice for the purposes of performing the
construction and/or installation of the Additional Landlord Work and/or the
Other Work. In such regard, Landlord shall have no liability whatsoever to
Tenant for any damages Tenant may suffer as a result of such entry and the
performance of the Additional Landlord Work and/or the Other Work by Landlord
or any of its agents, employees or

9

 

contractors or for any interference with, or disruption to, the normal business
operations of Tenant resulting therefrom other than any such damages that
Tenant may suffer to the extent directly due to the negligence or willful
misconduct of Landlord or any of the agents, employees or contractors of
Landlord. Notwithstanding the preceding sentence, Landlord shall cooperate, and
shall cause its agents, employees and contractors, to cooperate with Tenant in
all reasonable respects so as to minimize any interference with or disruption
to the normal business operations of Tenant being conducted at the Expanded
Premises as a result of the construction and/or installation of the Additional
Landlord Work and/or the Other Work within the Expanded Premises. Tenant shall
cooperate, fully and in all respects, and shall cause its agents, employees and
contractors to cooperate, fully and in all respects, with Landlord and the
agents, employees and contractors of Landlord in the Expanded Premises from to
time in order to complete the construction and/or installation of the
Additional Landlord Work and/or the Other Work. In furtherance of the
foregoing, at Tenant’s sole cost and expense, upon reasonable request made by
Landlord or any of the agents, employees or contractors of Landlord at any time
or times so as to facilitate the timely completion by Landlord of the
Additional Landlord Work and/or the Other Work, Tenant shall move, remove or
relocate, or cause to be moved, removed or relocated, to, from or within the
Expanded Premises, any of Tenant’s equipment machinery, furniture, furnishings,
inventory or other personal property that Landlord or any agent, employee or
contractor of Landlord may seek to have so moved, removed or relocated.
Notwithstanding anything to the contrary set forth elsewhere in this Amendment,
in connection with the performance and completion by Landlord and the agents,
employees and contractors of Landlord of the Additional Landlord Work and/or
the Other Work, (i) Landlord, any construction management supervisor of
Landlord, and the employees of Landlord shall comply at all times with all
applicable Tenant’s Security Requirements and (ii) Landlord shall use
commercially reasonable efforts to cause its agents and contractors to comply
at all times with all applicable Tenant’s Security Requirements.

     (d) For purposes of this Amendment, “Tenant’s Security Requirements”
means, collectively, the conditions that shall be imposed upon Landlord and
the agents, employees and contractors of Landlord in the Expanded Premises for
the purposes of performing the Additional Landlord Work and/or the Other Work
so as to address security concerns of Tenant, as approved in writing by
Landlord and Tenant in accordance with the terms and conditions of this
Amendment. Not later than that date which is thirty (30) days after the date
of this Amendment, Landlord and Tenant shall meet with the architect to be
employed by Landlord in connection with the design of the Additional Landlord
Work and/or the Other Work to discuss those conditions which Tenant believes
Tenant will need to impose upon Landlord and the agents, employees, and
contractors of Landlord in the Expanded Premises for the purposes of
performing portions of the Additional Landlord Work and the Other Work that
affect the interior of the Expanded Premises so as to address security
concerns of Tenant. Landlord and Tenant shall use commercially reasonable
efforts, in good faith, to agree in writing in all respects not later than
that date which is sixty (60) days after the date of this Amendment upon the
scope and specifications of the Tenant’s Security Requirements.
Notwithstanding the foregoing, the scope and specifications of the Tenant’s
Security Requirements shall be subject to the prior written approval of
Landlord in all respects (which prior written approval of Landlord shall not
be unreasonably withheld, conditioned or delayed by Landlord). Notwithstanding
anything to the contrary set forth elsewhere in this Amendment: (i) Landlord
shall have no obligation whatsoever to commence the construction and/or
installation of any of the Additional Landlord Work or any of the Other Work
in accordance with the terms and conditions of this Amendment until such time
as Landlord and Tenant shall have agreed, in all respects, upon the final
scope and specifications of the Tenant’s Security Requirements; and (ii) if,
notwithstanding the commercially reasonable efforts of Landlord and Tenant in
such regard, Landlord and Tenant shall fail to agree upon the final scope and
specifications of the Tenant’s Security Requirements on or before that date
which is sixty (60) days after the date of this Amendment, then and in such
event, each of the Additional Landlord’s Work Substantial Completion Target
Date, the Windows/Doors Work Substantial Completion Target Date and the last
date by which Landlord is to complete the installation of the New HVAC Unit in
accordance with the terms and conditions of Section 9(b) of this Amendment
shall be extended by the number of days in that period of time commencing on
that date which is sixty (60) days after the date of this Amendment and ending
on the day before the date as of which Landlord and Tenant shall agree upon
the final scope and specifications of the Tenant’s Security Requirements.
Furthermore, notwithstanding anything to the contrary set forth elsewhere in
this Amendment and the commercially reasonable efforts of Landlord and Tenant
in such regard, in the event that for any reason whatsoever on or before that
date which is the second (2nd) anniversary of the date of this Amendment
Landlord and Tenant shall fail to agree upon the final scope and
specifications of the Tenant’s Security Requirements, then and in such event,
Landlord shall have no further obligation whatsoever pursuant to this
Amendment to construct and/or install the Additional Landlord Work or the
Other Work.

10

 

     Section 9. Other Work.

     (a) For purposes of this Amendment, “Windows/Doors Work” means,
collectively, the alterations and improvements to the Expanded Premises to be
constructed and/or installed by Landlord in accordance with the terms and
conditions of Section 9(a) of this Amendment, as more particularly described in
Exhibit D attached to and hereby made a part of this Amendment. Subject to the
occurrence of any event(s) of Force Majeure and any delay caused by Tenant,
Landlord shall “Substantially Complete” the Windows/Doors Work not later than
that date (the “Windows/Doors Work Substantial Completion Target Date”) which
is the later to occur of (i) that date which is one hundred eighty (180) days
after the date of this Amendment and (ii) the date as of which Landlord and
Tenant shall agree in writing upon the scope and specifications of the Tenant’s
Security Requirements. For purposes of this Amendment, the Windows/Doors Work
shall be deemed to be “Substantially Complete” as of the date on which the
general contractor or the architect employed by Landlord with respect to the
construction and/or installation of the Windows/Doors Work shall certify in
writing to Landlord that: (A) the Windows/Doors Work has been substantially
completed in all material respects in accordance with the approved plans and
specifications therefor, if any; and (B) a temporary or permanent certificate
of occupancy has been issued by the governmental authority having jurisdiction
with respect to the Windows/Doors Work or the governmental authority having
jurisdiction with respect to the Windows/Doors Work has otherwise evidenced its
approval of the Windows/Doors Work. Landlord shall have no liability to Tenant
whatsoever for any damages that Tenant may suffer as a result thereof or in
connection therewith in the event that Landlord shall fail for any reason
whatsoever to Substantially Complete the Windows/Doors Work on or before the
Windows/Doors Work Substantial Completion Target Date other than (I) as set
forth in Section 26 of this Amendment and (II) for such damages as Tenant shall
suffer to the extent directly a result of the willful misconduct or negligence
of Landlord; provided, however, in such event, Landlord shall Substantially
Complete the Windows/Doors Work as soon as possible thereafter. Landlord
shall complete any portions or aspects of the Windows/Doors Work which shall be
incomplete as of the date of Substantial Completion of the Windows/Doors Work
as soon as possible thereafter. The Windows/Doors Work shall be constructed
and/or installed by Landlord using contractors (and subcontractors, if deemed
necessary by Landlord) selected by Landlord, in Landlord’s reasonable
discretion, as having experience in connection with the construction and/or
installation of alterations and improvements similar in nature to the
Windows/Doors Work. The Windows/Doors Work shall be constructed and/or
installed by Landlord, at Landlord’s sole risk, in a first class manner, using
new materials, and otherwise upon such terms and conditions, and in such
manner, as Landlord, in Landlord’s reasonable discretion, shall deem necessary
and appropriate. The Windows/Doors Work shall be constructed and/or
installed in accordance with all applicable federal, state and local laws,
ordinances, rules and regulations. All costs and expenses incurred by
Landlord in connection with the construction and/or installation of the
Windows/Doors Work shall be paid by Landlord, at Landlord’s sole cost and
expense.

     (b) For purposes of this Amendment, “Designated HVAC Unit” means
that certain heating, ventilating and air conditioning unit located within the
Expanded Premises as of the date of this Amendment manufactured by Carrier,
having a model number of 50QD008610QC and a serial number of 3886G89111. For
purposes of this Amendment, “New HVAC Unit” means the new heating, ventilating
and air conditioning unit of comparable quality and capacity to the Designated
HVAC Unit that in accordance with the terms and conditions of Section 9(b) of
this Amendment is purchased by Landlord and installed in the Expanded Premises
to replace the Designated HVAC Unit. Not later than that date which is sixty
(60) days after the date of this Amendment, at Landlord’s sole cost and
expense, Landlord shall purchase a New HVAC Unit and install the same within
the Expanded Premises so as to replace the Designated HVAC Unit.

     (c) For purposes of this Amendment, “Other Work” means, collectively, the
Windows/Doors Work and the replacement of the Designated HVAC Unit with the New
HVAC Unit that is described in Section 9(b) of this Amendment.
Notwithstanding anything to the contrary set forth elsewhere in this Amendment,
neither the completion nor the Substantial Completion of the Other Work or any
portion thereof shall be deemed to be a condition precedent to the commencement
of the Extended Term on the date for the same set forth in Section 2 of this
Amendment, the leasing of the Additional Premises by Landlord to Tenant
commencing on and as of the Additional Premises Occupancy Date, or any of the
agreements, covenants and obligations of Tenant set forth in this Amendment
that commence, respectively, on or after the Additional Premises Occupancy Date
and on or after the first (1st) day of the Extended Term (including, without
limitation, all such agreements, covenants and obligations regarding the
payment of rent).

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     Section 10. Landlord Repair HVAC Units.

     (a) For purposes of this Amendment, “Landlord Repair HVAC Units” means,
collectively, the heating, ventilating and air conditioning units serving the
Expanded Premises located on the roof of the Building that are described in
Exhibit E attached to and hereby made a part of this Amendment. For purposes
of this Amendment, “Landlord Repair HVAC Unit” means, as the context shall
require, one of the Landlord Repair HVAC Units. For purposes of this
Amendment, “Major HVAC Unit Repair” means the repair or replacement, as
applicable, of any of the following components or associated materials
contained in, or being a part of, any Landlord Repair HVAC Unit: (i)
plumbing; (ii) piping (other than refrigerant piping); (iii) switches; (iv)
non-moving parts; (v) structural parts; (vi) insulation; (vii) compressors;
(viii) heat exchangers; (ix) coils; (x) unit housing; (xi) internal framing;
(xii) metal fabrications; (xiii) disconnect switches; and (xiv) circuit
breakers. For purposes of this Amendment, “Landlord Repair HVAC Units
Period” means that period of time commencing on the Additional Premises
Occupancy Date and ending on the last day of the Extended Term.

     (b) If at any time during the Landlord Repair HVAC Units Period Tenant
shall determine that (i) any Landlord Repair HVAC Unit shall require
replacement, in its entirety, or (ii) a Major HVAC Unit Repair shall be
required to be made with respect to any Landlord Repair HVAC Unit, then and in
either of such events, Tenant shall have the right, at Tenant’s option, to give
notice thereof to Landlord (a “Major Repair/Replacement Notice”).
Notwithstanding anything to the contrary set forth elsewhere in this Amendment
or in the Existing Lease (but subject to the terms and conditions of Section 10
of this Amendment), if at any time during the Landlord Repair HVAC Units Period
Landlord shall receive a Major Repair/Replacement Notice and Landlord and
Tenant shall determine, pursuant to mutual written agreement in good faith (or,
if Landlord and Tenant are unable to so agree within thirty (30) days after the
date of Landlord’s receipt of such Major Repair/Replacement Notice, Corporate
Cooling & Controls, LLC or another heating, ventilating and air conditioning
contractor mutually agreeable to Landlord and Tenant shall determine) that (A)
any Landlord Repair HVAC Unit shall require replacement, in its entirety, or
(B) a Major HVAC Unit Repair shall be required to be made with respect to any
Landlord Repair HVAC Unit, then and in any such event, not later than sixty
(60) days after such determination shall have been made, Landlord shall, as
applicable, (I) purchase a new heating, ventilating and air conditioning unit
of comparable quality and capacity to the Landlord Repair HVAC Unit that is to
be replaced and install the same (together with, if and as determined to be
necessary or applicable, new ductwork to serve such Landlord Repair HVAC Unit)
so as to provide service to the Expanded Premises, or (II) promptly undertake,
perform and complete such Major HVAC Unit Repair at Landlord’s sole risk and in
a first class manner consistent with industry standards. Subject to the
penultimate and last sentences of this paragraph, all costs and expenses
incurred by Landlord in connection with the replacement of any Landlord Repair
HVAC Unit or the performance of a Major HVAC Unit Repair in accordance with the
terms and conditions of Section 10 of this Amendment shall be paid by Landlord,
at Landlord’s sole cost and expense. Notwithstanding anything to the contrary
set forth in the preceding terms and conditions of Section 10 of this
Amendment: (1) No repair or replacement made by Landlord with respect to any
Landlord Repair HVAC Unit shall be deemed to be a “Major HVAC Unit Repair” for
purposes of this paragraph unless made by Landlord subsequent to a Major
Repair/Replacement Notice and pursuant to the mutual written agreement of
Landlord and Tenant (or, as provided in the preceding terms and conditions of
this paragraph, the determination of Corporate Cooling & Controls, LLC or
another contractor) that such work is necessary; (2) The terms and conditions
of Section 10 of this Amendment shall obligate Landlord to make only one (1)
Major HVAC Unit Repair or one (1) replacement to each of the Landlord Repair
HVAC Units during the Landlord Repair HVAC Units Period and, in the event that
any Landlord Repair HVAC Unit shall require one or more additional Major HVAC
Unit Repairs or replacements subsequent to the completion by Landlord, with
respect to such Landlord Repair HVAC Unit, of a Major HVAC Unit Repair or a
replacement, all such additional repairs or replacements with respect to the
Landlord Repair HVAC Unit in question shall be governed by the terms and
conditions of the Existing Lease as if the terms and conditions of Section 10
of this Amendment had never been incorporated and made a part of this
Amendment; and (3) The terms and conditions of Section 10 of this Amendment
shall be applicable only during the Landlord Repair HVAC Units Period and shall
not apply to any renewal terms or extension periods of the term of the Lease
occurring after the last day of the Landlord Repair HVAC Units Period.
Notwithstanding the foregoing terms and conditions of this paragraph, in the
event that in accordance with the terms and conditions of this paragraph
Landlord shall become obligated to replace any Landlord Repair HVAC Unit in its
entirety, Tenant shall have the right, at Tenant’s option (to be exercised by
giving notice thereof to Landlord as part of the applicable Major
Repair/Replacement Notice), to require Landlord to purchase and install the new
heating, ventilating and air conditioning unit specified by Tenant in such
notice to be of superior quality and capacity to the Landlord Repair HVAC Unit
that is to be replaced. In the event that in accordance with the terms and
conditions of the preceding sentence Tenant shall require Landlord to

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purchase and install any new heating, ventilating and air conditioning unit of
superior quality and/or capacity, then and in any such event, not later than
ten (10) days after written demand shall be made therefor by Landlord of
Tenant, Tenant shall reimburse Landlord for that portion of the cost of
purchase and installation of such new heating, ventilating and air conditioning
unit as shall exceed the cost that would have been incurred by Landlord in
connection with the purchase and installation of a new heating, ventilating and
air conditioning unit of comparable quality and capacity to the Landlord Repair
HVAC Unit that was replaced.

     Section 11. Additional Security Deposit Funds.

     Not later than that date which is ten (10) days after the date of this
Amendment, Tenant shall deposit with Landlord, in cash, as additional monies
intended to be a part of the Security Deposit (as such term is defined in the
Existing Lease) the sum of $12,144.00.

     Section 12. Reserved Parking.

     Notwithstanding anything to the contrary set forth elsewhere in the
Lease, Tenant shall have the exclusive right to use the two (2) parking spaces
shown on Exhibit F attached to and hereby made a part of this Amendment for
the parking of automobiles owned or leased by visitors to the Premises.

     Section 13. Right of First Offer.

     (a) For purposes of this Amendment, “Buildings” means, collectively, all
of the following buildings located in Columbia, Howard County, Maryland that
are as of the date of this Amendment owned by Landlord — 6410 Dobbin Road, 6420
Dobbin Road, 6430 Dobbin Road, 6440 Dobbin Road, 6450 Dobbin Road, 6460 Dobbin
Road and 6470 Dobbin Road. For purposes of this Amendment, “AV Imports Space”
means all of that space located in the Building known as 6450 Dobbin Road,
comprised of approximately 12,700 square feet of space, in the aggregate, that
is as of the date of this Amendment subject to a pre-existing lease pursuant to
which such space is leased by Landlord to AV Imports, Inc., a Maryland
corporation. For purposes of this Amendment, “Signs by Tomorrow Space” means
all of the space at the Building known as 6460 Dobbin Road, comprising
approximately 7,297 square feet of space, that is as of the date of this
Amendment subject to a pre-existing lease pursuant to which Landlord leases
such space to Signs by Tomorrow, Inc., a Maryland corporation. For purposes of
this Amendment, “Monumental Life Space” means all of that space located in the
Building known as 6460 Dobbin Road, comprising approximately 3,250 square feet
of space, that is as of the date of this Amendment subject to a pre-existing
lease pursuant to which Landlord leases such space to Monumental Life Insurance
Company, a Maryland corporation. For purposes of this Amendment, “Right of
First Offer Period” means that period of time commencing on the date of this
Amendment and ending on January 31, 2008.

     (b) During the Right of First Offer Period, but subject to and in
accordance with, the terms and conditions of Section 13 of this Amendment,
Tenant shall have a continuing right of first offer as to all of the Offer
Space (herein defined). If at any time during the Right of First Offer Period
Landlord shall become aware of the availability, or impending availability, for
lease of space in any of the Buildings (any such space being sometimes
hereinafter referred to as “Offer Space”), Landlord shall notify Tenant thereof
(a “Landlord Notice”).

     (c) The Landlord Notice shall describe such Offer Space, the date as of
which such Offer Space shall be available for lease, and the terms and
conditions under which Landlord is willing to lease such Offer Space to Tenant
for a term (the “Offer Space Lease Term”) expiring on the last day of the
Extended Term; provided, however, but subject to the right of Tenant to have
the Minimum Monthly Rent (and annual escalations thereof) determined in
accordance with the terms and conditions of Section 13(d) of this Amendment,
the Minimum Monthly Rent to be paid by Tenant to Landlord for such Offer Space
with respect to the Offer Space Lease Term shall be paid at the rate
(including, without limitation, annual escalations thereof) determined by
Landlord, in Landlord’s reasonable discretion, to be the “market” Minimum
Monthly Rent paid by tenants similar to Tenant to landlords similar to Landlord
for space similar to such Offer Space in buildings similar to the Buildings in
markets similar to the market in which the Buildings are located and otherwise
on terms and conditions (including, without limitation, terms and conditions as
pertaining to any allowances typically extended by landlords for the
construction of alterations and improvements by tenants of the premises demised
to them) similar to the terms and conditions described in the Landlord Notice.
In the event that Tenant shall desire to lease such Offer Space from Landlord
for the Offer Space Lease Term upon the terms and conditions of set forth in
the Landlord Notice, then and in such event (i) Tenant shall have five (5)
business days from the date of the Landlord Notice to give notice (the “Tenant
Notice”) to Landlord of Tenant’s intention in such regard, and (ii) not later
than twenty (20) days after delivery by Landlord to Tenant of a draft of an
amendment to the Lease (or at the option of Landlord, a new lease pertaining

13

 

only to such Offer Space) pursuant to which, if executed and delivered by
Landlord and Tenant, Tenant would lease such Offer Space from Landlord for the
Offer Space Lease Term upon the terms and conditions set forth in the Landlord
Notice (subject, if applicable, to the determination of the Minimum Monthly
Rent in accordance with the terms and conditions of Section 13(d) of this
Amendment), Tenant shall enter into such amendment to the Lease or such new
lease with Landlord so as to lease such Offer Space from Landlord upon such
terms and conditions. If Tenant shall fail to give a Tenant Notice to Landlord
within such period of five (5) business days or Tenant shall fail to enter into
such an amendment to the Lease or new lease with Landlord within such period of
twenty (20) days, then and in either of such events, the rights granted by
Landlord to Tenant pursuant to Section 13 of this Lease with respect to such
Offer Space shall expire and Landlord shall have the right to enter into a
lease with any third party with regard to such Offer Space on any terms and
conditions upon which Landlord and such third party shall agree (including,
without limitation, any terms and conditions that are similar or dissimilar to
the terms and conditions set forth in the Landlord Notice).

     (d) Subject to, and in accordance with, the terms and conditions of
Section 13(d) of this Amendment, Tenant shall have the right, at Tenant’s
option, to be exercised by giving notice thereof to Landlord as a part of the
Tenant Notice, to have the Minimum Monthly Rent (and all annual escalations
thereof) to be paid by Tenant to Landlord with respect to any such Offer Space
determined by appraisal in the manner set forth in the succeeding terms and
conditions of Section 13(d) of this Amendment if Tenant, in good faith, shall
not agree with the determination of Landlord as to such Minimum Monthly Rent
set forth in the Landlord Notice. If Tenant shall elect to have the Minimum
Monthly Rent (and annual escalations thereof) with respect to such Offer Space
determined by appraisal, then and in such event, during that period of five
(5) days commencing on the date of the Tenant Notice, Landlord and Tenant
shall negotiate in good faith to determine the Minimum Monthly Rent (and all
annual escalations thereof) to be paid by Tenant to Landlord with regard to
such Offer Space. If agreement cannot be reached within such period of five
(5) days, then and no later than ten (10) days after the date of the Tenant
Notice, Tenant shall make a reasonable determination of the monthly fair
market rental for such Offer Space with regard to the period of time in
question (including applicable annual escalations) and shall submit such
determination, in writing, to arbitration (together with the determination of
Landlord in such regard set forth in the Landlord Notice) in accordance with
the following provisions:

          (i) No later than that date which is twelve (12) days after the date of
the Tenant Notice, Landlord and Tenant shall each select an office/flex space
leasing broker to act as an arbitrator and the two arbitrators so appointed
shall no later than fifteen (15) days after the date of the Tenant Notice,
select a third mutually acceptable office/flex space leasing broker to act as
a third arbitrator;

          (ii) The three arbitrators, acting by a majority, shall no later than
twenty-five (25) days after the date of the Tenant Notice, determine the actual
monthly fair market rental for such Offer Space (and all annual escalations
thereof). The decision of a majority of the arbitrators shall be binding on
Landlord and Tenant. Subject to the terms and conditions of the last paragraph
of Section 13(d) of this Amendment, the monthly fair market rental
determination of Landlord (as set forth in the Landlord Notice) or Tenant (as
set forth in the written submission of Tenant described in the preceding terms
and conditions of Section 13(d) of this Amendment) which is closest to the
monthly fair market rental as determined by the arbitrators shall be the
Minimum Monthly Rent with respect to such Offer Space;

          (iii) If either of Landlord or Tenant fails to appoint an arbitrator
within the period of time required in Section 13(d) of this Amendment, then
and in such event (but subject to the terms and conditions of the last
paragraph of Section 13(d) of this Amendment), the arbitrator timely appointed
shall determine the Minimum Monthly Rent with respect to such Offer Space; and

          (iv) The entire cost of such arbitration shall be paid by the party to
this Amendment whose monthly fair market rental submission is not selected.

Notwithstanding anything to the contrary set forth in the preceding terms and
conditions of Section 13(d) of this Amendment, under no circumstances shall
the Minimum Monthly Rent required to be paid Tenant to Landlord from time to
time with respect to any such Offer Space, expressed on a per square foot per
annum basis, be less than the Minimum Monthly Rent required to be paid by
Tenant to Landlord with respect to the Expanded Premises pursuant to this
Lease for corresponding time periods, expressed on a per square foot per annum
basis.

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     (e) Notwithstanding the terms and conditions of Section 13(c) of this
Amendment, in the event that the Offer Space shall be the AV Imports Space,
the Signs by Tomorrow Space, and/or the Monumental Life Space, then and in any
such event:

          (i) The terms and conditions pursuant to which Landlord shall be willing to
lease such Offer
Space to Tenant shall include an offer by Landlord to Tenant to make available
to Tenant an allowance for the making by Tenant of alterations and/or
improvements to such space in that amount equal to the product of (A) the
Applicable AV/Signs/Monumental Allowance Rate (herein defined) and (B) the
number of square feet comprising the Offer Space in question. For purposes of
this Amendment, “Applicable AV/Signs/Monumental Allowance Rate means: (I)
$15.00 per square foot if the Offer Space Lease Term shall be five (5) years
or longer in duration; (II) $12.00 per square foot if the Offer Space Lease
Term shall be four (4) years or longer in duration but less than five (5)
years in duration; (III) $9.00 per square foot if the Offer Space Lease Term
shall be three (3) years or longer in duration but less than four (4) years in
duration; and (IV) $0.00 per square foot if the Offer Space Lease Term shall
be less than three (3) years in duration.

          (ii) The payments of Minimum Monthly Rent that shall be required to be
paid by Tenant to Landlord for each of the AV Imports Space, the Signs by
Tomorrow Space, and/or the Monumental Life Space, as applicable, with respect
to the first (1st) year of the applicable Offer Space Lease Term shall be
equal to 1/12 of the product of (A) the number of square feet comprising such
Offer Space and (B) the rate set forth in the chart below that applies to the
period of time during which the first (1st) day of the applicable Offer Space
Lease Term shall occur.

	 	 	 	 	 
	 	 	Monthly Minimum Rent Per Square
	 	 	Foot Per Annum Payable With Respect
	Period of Time During Which First (1st) Day of	 	to First (1st) Year of Applicable Offer
	Applicable Offer Space Lease Term Occurs
	 	Space Lease Term

	That period of time commencing on
the date of this Amendment and
ending on March 31, 2005
	 	$	12.70	 
	That period of time commencing on
April 1, 2005 and ending on January
31, 2006
	 	$	13.07	 
	That period of time commencing on
February 1, 2006 and ending on
January 31, 2007
	 	$	13.40	 
	That period of time commencing on
February 1, 2007 and ending on
January 31, 2008
	 	$	13.80	 
	That period of time commencing on
February 1, 2008 and ending on
January 31, 2009
	 	$	14.15	 
	That period of time commencing on
February 1, 2009 and ending on
January 31, 2010
	 	$	14.50	 
	That period of time commencing on
February 1, 2010 and ending on
January 31, 2011
	 	$	14.86	 

          (iii) The payments of Minimum Monthly Rent that shall be required to be
paid by Tenant to Landlord for each of the AV Imports Space, the Signs by
Tomorrow Space and/or the Monumental Life Space, as applicable, with respect
to the second (2nd) and each succeeding year of the applicable Offer Space
Lease Term shall be equal to l/12th of the product of (A) the number of square
feet comprising such Offer Space and (B) that rate equal to the product of (I)
1.025 and (II) the Minimum Monthly Rent required to have been paid by Tenant
to Landlord for such Offer Space with respect to the immediately preceding
year of the applicable Offer Space Lease Term, expressed on a per square foot
per annum basis.

          (iv) Except to the extent specified to the contrary in the preceding terms
and conditions of Section 13(e) of this Amendment, all of the terms and
conditions of Section 13 of this Amendment governing the leasing by Landlord to
Tenant of Offer Space shall apply to the leasing by Landlord to Tenant of the
AV Imports Space, the Signs by Tomorrow Space and/or the Monument Life Space in
accordance with this Amendment.

     (f) The rights extended in Section 13 of this Amendment to Tenant by
Landlord are exclusively
granted by Landlord to the original Tenant named under the Lease, Martek
Biosciences Corporation, and shall not

15

 

inure to the benefit of or be exercisable by any assignee of the original
Tenant named under the Lease or any other party. Notwithstanding the foregoing,
Tenant’s rights under Section 13 of this Amendment shall: (i) terminate
automatically as of the date of a default (which continues after the giving of
any required notice and the expiration of any applicable cure period) by Tenant
with respect to any of Tenant’s obligations under the Lease; (ii) be subject
and subordinate, in all respects and at all times, to any and all Preferential
Rights (herein defined) applicable to such Offer Space or any portion thereof,
or to any other space in the Building of which such Offer Space or any portion
thereof shall be a part, extended by Landlord (or any predecessor-in-interest
to Landlord) prior to the date of this Lease for the benefit of any existing or
future tenant or occupant of such Building; and (iii) shall not be effective
following the last day of the Right of First Offer Period and shall not apply
to the Additional Term (as defined in Section 3 of the Third Amendment). For
purposes of Section 13 of this Amendment, “Preferential Rights” means all
rights of renewal, rights of first refusal, rights of first offer, rights to
expansion space or any other rights or agreements similar or dissimilar to the
foregoing concerning the future or potential leasing of Offer Space or any
portion thereof or any other space in the Building of which Offer Space or any
portion thereof shall be a part.

     Section 14. Amendment to Section 51 of Existing Lease Concerning Renewal
Option.

     (a) Effective as of the date of this Amendment, Section 51 of the Existing
Lease (entitled “Renewal Option”), as set forth in Section 3 of the Third
Amendment, is hereby modified as follows: (i) The Additional Term (as therein
defined) shall commence on February 1, 2011 and shall end on January 31, 2016;
(ii) The words “ninety- five percent (95%) of” in clause (ii) are hereby deleted
in their entireties; and (iii) The first (1st) sentence of the second (2nd)
full paragraph is hereby deleted in its entirety and the following shall be
inserted in lieu thereof: “Tenant shall be deemed to have waived the right to
exercise this renewal option unless Tenant shall have notified Landlord in
writing of Tenant’s election to renew (the “Renewal Notice”) on or before July
31, 2010.”

     (b) Subject to the terms and conditions of Section 14(a) of this
Amendment, Landlord and Tenant hereby acknowledge and agree that Section 51 of
the Existing Lease (entitled “Renewal Option”), as reflected in Section 3 of
the Third Amendment, remains in full force and effect in all respects.

     Section 15. Deletion of Certain Terms and Conditions of Existing Lease.

     Effective as of the date of this Amendment, the following terms and
conditions of the Existing Lease are hereby deleted in their entireties and
shall be of no further force or effect whatsoever:

     (a) Section 49 of the Existing Lease (entitled “Expansion Option”), as set
forth in Section 3 of the Third Amendment; and

     (b) Section 50 of the Existing Lease (entitled “Right of First Offer”), as
set forth in Section 3 of the Third Amendment.

Tenant hereby represents and warrants to Landlord that at no time on or before
the date of this Amendment did Tenant exercise any of the rights granted by
Landlord to Tenant pursuant to Section 49 of the Existing Lease (entitled
“Expansion Option”) or Section 50 of the Existing Lease (entitled “Right of
First Offer”).

     Section 16. Inapplicability to Certain Portion of Initial Term and to
Extended Term of Certain Terms and Conditions of Existing Lease.

     The following terms and conditions of the Existing Lease shall be
inapplicable to the leasing by Landlord to Tenant of the Existing Premises with
respect to the Extended Term and of the Additional Premises with respect to
that portion of the Initial Term commencing on the Additional Premises
Occupancy Date and the Extended Term, even though such terms and conditions
shall remain applicable, as the context shall require, to the leasing by
Landlord to Tenant of the Existing Premises pursuant to the Existing Lease with
respect to the Initial Term:

     (a) Sections 5B and 5C of the Original Lease;

     (b) Article 45 of the Original Lease;

     (c) Exhibit C of the Original Lease;

     (d) Section 7 of the First Amendment;

     (e) Section 8 of the Second Amendment;

     (f) Section 8 of the Third Amendment; and

     (g) Sections 2 and 8 of the Fourth Amendment.

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     Section 17. Representations and Warranties of Tenant.

     Tenant hereby represents and warrants to Landlord that on and as of the
date of this Amendment: (a) Tenant is a corporation duly formed and validly
existing, in good standing, under the laws of the State of Delaware; (b) Tenant
is registered and duly authorized to do business in the State of Maryland as a
foreign corporation; (c) The officer of Tenant executing and delivering this
Amendment on behalf of Tenant is authorized to execute and deliver this
Amendment on behalf of Tenant, and when so executed and delivered by such
officer, this Amendment shall be binding upon and enforceable against Tenant in
all respects; (d) Tenant is not in default with respect to any of the
obligations of Tenant set forth in the Existing Lease; (e) To Tenant’s
knowledge, Landlord has fulfilled all of the obligations of Landlord to Tenant
set forth in the Existing Lease that were required to be fulfilled by Landlord
prior to the date of this Amendment; and (f) To Tenant’s knowledge, Landlord is
not in default with respect to any of the obligations of Landlord set forth in
the Existing Lease. Nothing set forth in the preceding terms and conditions of
Section 17 of this Amendment shall be construed so as to relieve Landlord of
any of the agreements, covenants or obligations of Landlord set forth in this
Amendment.

     Section 18. Brokers.

     Landlord hereby represents and warrants to Tenant that it has dealt with
no real estate agents or brokers in connection with the negotiation, execution
and delivery of this Amendment other than Manekin, LLC (the “Broker”) and that
no brokerage fees or commissions are payable to any real estate agent or
broker in connection with the negotiation, execution and delivery of this
Amendment other than to the Broker. Tenant hereby represents and warrants to
Landlord that it has dealt with no real estate agents or brokers in connection
with the negotiation, execution and delivery of this Amendment other than the
Broker and that no brokerage fees or commissions are payable to any real
estate agent or broker in connection with the negotiation, execution and
delivery of this Amendment other than to the Broker. Tenant shall indemnify
and hold Landlord harmless from and against any and all claims, demands,
losses, liabilities, costs or expenses (including, without limitation,
reasonable attorneys’ fees) that Landlord may incur or suffer in connection
with, or in any way relating to, the inaccuracy of any representation or
warranty made by Tenant in this paragraph. Landlord shall indemnify and hold
Tenant harmless from and against any and all claims, demands, losses,
liabilities, costs or expenses (including, without limitation, reasonable
attorneys’ fees) that Tenant may incur or suffer in connection with, or in any
way relating to, the inaccuracy of any representation or warranty made by
Landlord in this paragraph. Landlord shall pay all brokerage fees and/or
commissions due and payable to the Broker in connection with the negotiation,
execution and delivery of this Amendment pursuant to a separate written
agreement entered into prior to the date of this Amendment between Landlord
and the Broker.

     Section 19. Time of Essence.

     Time shall be of the essence with respect to each and every of the
obligations of Tenant and Landlord set forth in this Amendment.

     Section 20. Ratification; Conflicting Provisions.

     Except as and only to the extent explicitly modified by the terms and
provisions of this Amendment, all of the terms and provisions of the Existing
Lease and the exhibits thereto are ratified and confirmed in all respects,
remain in full force and effect. In the event that any of the terms, conditions
or provisions of this Amendment shall conflict with any of the terms,
conditions or provisions of the Existing Lease, then and in any such event, the
terms, conditions and provisions of this Amendment shall be controlling.

     Section 21. Entire Agreement; Amendments.

     This Amendment contains the entire understanding of the parties to this
Amendment with respect to the subject matters covered in this Amendment and no
prior agreements or understandings between the parties to this Amendment, or
in any way relating to the subject matter covered in this Amendment, shall be
effective after the execution of this Amendment, whether or not such
agreements or understandings are similar, broader in scope, more narrow in
scope or in any other way different from the terms and conditions of this
Amendment. This Amendment may be modified only by a written instrument signed
by the parties to this Amendment.

     Section 22. Effectiveness.

     The furnishing to Tenant of the form of this Amendment shall not
constitute an offer by Landlord and this Amendment shall become effective in
accordance with its terms upon and only upon its execution by and delivery by
the parties to this Amendment.

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     Section 23. Recitals; Headings.

     The recitals set forth at the beginning of this Amendment shall be deemed
to be a part of this Amendment. The headings set forth at the beginning of each
of the sections of this Amendment are inserted for convenience of reference
only and shall not be deemed to have any legal significance or meaning
whatsoever.

     Section 24. Governing Law.

     This Amendment and the terms and provisions hereof shall be governed by
and construed in accordance with the laws of the State of Maryland.

     Section 25. Successors and Assigns.

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

     Section 26. Tenant’s Right to Cure.

     Notwithstanding anything to the contrary set forth elsewhere in this
Amendment, in the event that for any reason other than (a) the occurrence of an
event of Force Majeure, (b) any delay or hindrance on the part of Tenant, or
(c) any default by Tenant with respect to any of the agreements, covenants or
obligations of Tenant set forth in the Lease, (i) Landlord shall fail to
Substantially Complete the Landlord’s Roof Work on or before the Landlord’s
Roof Work Substantial Completion Target Date, (ii) Landlord shall fail to
Substantially Complete the Additional Landlord Work on or before the Additional
Landlord Work Substantial Completion Target Date, and/or (iii) Landlord shall
fail to Substantially Complete the Windows/Doors Work on or before the
Windows/Doors Work Substantial Completion Target Date, then and in any such
event (but subject to the terms and conditions of Article 44 of the Original
Lease), Tenant shall have the right (but not the obligation) to complete such
obligation on the part of Landlord in a commercially reasonable manner. If in
accordance with the preceding terms and conditions of Section 26 of this
Amendment, Tenant shall complete any such obligation of Landlord, all
reasonable costs and expenses actually incurred and paid by Tenant in such
regard shall be reimbursed to Tenant by Landlord not later than thirty (30)
days after written demand shall be made therefor by Tenant of Landlord (which
written demand shall be accompanied by copies of invoices or other evidence
reasonably satisfactory to Landlord showing Tenant to have actually incurred
and paid the costs and expenses in question).

     Section 27. Mortgagee Consent

     (a) For purposes of this Amendment, “Mortgagee” means Allstate Life
Insurance Company. For purposes of this Amendment, “Mortgage” means that
certain Indemnity Deed of Trust, Assignment of Leases, Rents and Contracts,
Security Agreement and Fixture Filing dated as of December 21, 1995 made by
Original Landlord to John D. Hagner and Stuart A. Kruger, Trustees, acting on
behalf of Mortgagee, as beneficiary, together with all addenda, exhibits,
riders and supplements thereto and any and all amendments (if any) thereto in
effect as of the date of this Amendment, as recorded prior to the date of this
Amendment among the Land Records of Howard County, Maryland. For purposes of
this Amendment, “Non-Disturbance Agreement” means that certain Agreement of
Subordination, Non-Disturbance and Attornment dated December 21, 1995 made by
Mortgagee in favor of Tenant with respect to the Lease and the Mortgage.

     (b) Notwithstanding anything to the contrary set forth elsewhere in this
Amendment, each and every of the agreements, covenants and obligations of
Landlord and Tenant set forth in this Amendment are expressly contingent upon
the obtaining by Landlord on or before that date which is thirty (30) days
after the date of this Amendment of the written consent of Mortgagee, given
with respect to the Mortgage and the Non-Disturbance Agreement, to the terms
and conditions of (i) this Amendment, (ii) the Fourth Amendment, and (iii) the
Fifth Amendment. Landlord shall use commercially reasonable efforts to obtain
such written consent of Mortgagee as soon as possible after the date of this
Amendment. Landlord represents and warrants to Tenant that as of the date of
this Amendment Landlord has no knowledge, information or belief that Mortgagee
will refuse to give such written consent on or before that date which is thirty
(30) days after the date of this Amendment. In the event that for any reason
whatsoever Mortgagee shall not give such written consent for such purposes with
respect to the terms and conditions of this Amendment, the Fourth Amendment
and/or the Fifth Amendment on or before that date which is thirty (30) days
after the date of this Amendment, then and in any such event, this Amendment
shall terminate automatically as of that date which is thirty (30) days after
the date of this Amendment, without any obligation on the part of any party to
this Amendment to give notice thereof to the other party to this Amendment,
whereupon the Existing Lease shall continue in full force and effect as if this
Amendment had never been executed and delivered by Landlord and Tenant, and
thereupon neither of the parties to this Amendment shall have any further
rights, liabilities

18

 

or obligations to the other party to this Amendment pursuant to this Amendment
except for those rights, liabilities and obligations set forth in this
Amendment which in accordance with the terms and conditions of this Amendment
expressly survive any such termination of this Amendment.

     (c) For purposes of this Amendment, “Early Start Tenant Improvements”
means the alterations and improvements to the Expanded Premises that are more
particularly described in Exhibit G attached to and hereby made a part of this
Amendment. For purposes of this Amendment, “Early Start Tenant Improvements
Costs” means, collectively, the costs and expenses actually and reasonably
incurred by Tenant in connection with the construction and/or installation of
the Early Start Tenant Improvements. Tenant has heretofore advised Landlord
that, at Tenant’s sole option and risk and though not yet approved by Landlord
in accordance with the terms and conditions of Section 6 of this Amendment
(but, as to the Additional Premises only, in accordance with the terms of that
certain indemnity letter dated February 12, 2004 sent by Manekin, LLC, agent of
Landlord, to Tenant (as amended by that certain letter dated May 6, 2004 sent
by Manekin, LLC, agent of Landlord, to Tenant)), Tenant has on or before the
date of this Amendment commenced the construction and/or installation of the
Early Start Tenant Improvements, intending, ultimately, that the Early Start
Tenant Improvements comprise a portion of the Other Tenant Improvements. In the
event that in accordance with the terms and conditions of Section 27(b) of this
Amendment this Amendment shall terminate, then and in such event, not later
than thirty (30) days after written demand shall be made therefor by Tenant of
Landlord, Landlord shall reimburse Tenant, in an amount not to exceed
$325,000.00, in the aggregate, for Early Start Tenant Improvements Costs
actually incurred and paid by Tenant with respect to Early Start Tenant
Improvements that are approved by Landlord as part of the Other Tenant
Improvements in accordance with the terms and conditions of Section 6 of this
Amendment. Nothing set forth in Section 27(c) of this Amendment shall be
construed to be the consent of Landlord to, or the approval by Landlord of, any
of the Early Start Tenant Improvements, it being acknowledged and agreed by
Landlord and Tenant that such consent and/or approval of Landlord shall be
governed by the terms and conditions of Section 6 of this Amendment. Any demand
made by Tenant of Landlord for reimbursement in accordance with the terms and
conditions of Section 27(c) of this Amendment shall be accompanied by copies of
invoices or other evidence reasonably satisfactory to Landlord showing Tenant
to have actually incurred and paid the costs and expenses in question.
Immediately upon any reimbursement made by Landlord to Tenant for Early Start
Tenant Improvements Costs in accordance with the terms and conditions of
Section 27(c) of this Amendment, the Early Start Tenant Improvements shall
become the property of Landlord. Following termination of this Amendment in
accordance with the terms of Section 27(c) of this Amendment, Tenant shall use
commercially reasonable efforts to mitigate the amount of any reimbursement
that Landlord may otherwise become obligated to make to Tenant in accordance
with the terms and conditions of Section 27(c) of this Amendment. In
furtherance of the preceding sentence, if any of the items intended by Tenant
to comprise a portion of the Early Start Tenant Improvements shall not have
been delivered to the Expanded Premises as of the date of termination of this
Amendment, though subject to purchase agreements under which Tenant shall be
the contract purchaser, then and in such event and after consultation in regard
thereto with Landlord, to the extent possible and in order to minimize the
reimbursement obligations of Landlord to Tenant pursuant to Section 27(c) of
this Amendment in connection therewith, Tenant shall promptly cancel all such
purchase agreements that Tenant may cancel (i) without penalty and (ii) upon
payment of a penalty (including, without limitation, the forfeiture of any
prepaid deposit) so long as Landlord shall approve in writing of such penalty.
If, in accordance with the terms and conditions of the preceding sentence of
this paragraph and with the approval of Landlord, Tenant shall incur a penalty
in connection with the cancellation of any purchase agreement, the amount of
such penalty shall be deemed to be includable as part of the Early Start Tenant
Improvements Costs. The obligations of Landlord and Tenant set forth in Section
27(c) of this Amendment shall survive any termination of this Amendment in
accordance with the terms and conditions of Section 27(b) of this Amendment.

     Section 28. Counterparts.

     This Amendment may be executed in counterparts, each of which shall be
deemed to be an original of this Amendment, but all of which, together, shall
constitute one and the same instrument.

19

 

     IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Amendment under seal on and as of the date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 
	WITNESS:	 	M.O.R. CBC LLC,
	 	 	a Maryland limited liability limited company
	 	 	By:	 	AMB Property, L.P., a Delaware limited
	 	 	 	 	partnership, its Managing Member
	 	 	 	 	By:	 	AMB Property Corporation, a Maryland
	 	 	 	 	 	 	corporation, its General Partner
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:
	 	/s/ David G. King	 	(SEAL)
	

	 	 	 	 	 	 	 	
	 	 
	

	 	 	 	 	 	 	 	David G. King, Vice President	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Date of Execution:
May 13, 2004
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	TENANT:
	 
	 	 	 	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	MARTEK BIOSCIENCES CORPORATION
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	By:
	 	/s/ George P. Barker	 	(SEAL)
	
	 	 	 	
	 	 
	 	 	 	 	George Barker, Senior Vice President
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Date of Execution:
May 13, 2004

20

 

EXHIBIT A

PLAT SHOWING THE EXPANDED PREMISES

(INCLUDING THE ADDITIONAL PREMISES)

A-1

 

EXHIBIT B

LIST OF TENANT REPAIR HVAC UNITS

The Tenant Repair HVAC Units shall consist solely of the following:

	 
	RTU-6 (12 ton) Carrier Model #50PQ014600, Serial #Z883992

	RTU-7 (12 ton) Carrier Model #50DP014600, Serial #Y884258

	RTU-8 (10 ton) Carrier Model #50DP012600, Serial #W884355

	RTU-11 (3 ton) Carrier Model #50QD006520, Serial #2686G43135

	RTU-14 (7.5 ton) Carrier Model #50QD008610DA, Serial #1788G32253

	RTU-15 (7.5 ton) Carrier Model #50QD008610, Serial #3486G73434

	RTU-16 (7.5 ton) Carrier Model #50QD008610, Serial #3486G73433

B-1

 

EXHIBIT C

DESCRIPTION OF THE ADDITIONAL LANDLORD WORK

     The Additional Landlord Work shall consist solely of the following:

     (a) The replacement of those doors to the exterior of the Expanded
Premises that exist as of the date of this Amendment, but are to be rendered
inactive by Tenant following the completion of the Tenant Improvements, with
windows of similar size (the “Door Replacement Work”). The Door Replacement
Work is more particularly described in Exhibit C-l attached to and hereby made
a part of this Exhibit C.

     (b) The repair of any damaged tiling that as of the date of this Amendment
surrounds any of the exterior doors serving the Expanded Premises.

     (c) The striping or restriping, as applicable, of that portion (the
“Additional Parking Area”) of the rear parking lot serving the Building that is
more particularly shown on Exhibit F, in a commercially reasonable manner
complying with all applicable laws, ordinances, rules and regulations so as to
maximize the number of additional parking spaces for automobiles that may be
located thereon.

     (d) The installation of additional lighting serving the exterior and
parking areas of the Building in a manner and to specifications that are, in
the reasonable opinions of Landlord and Tenant, commercially reasonable.

     (e) The repair of the sidewalks that serve the Expanded Premises as of the
date of this Amendment, as more particularly described on
Exhibit C-2 attached
to and hereby made a part of this Exhibit C (the “Sidewalk Repair Work”).

     (f) The removal of those sidewalks that as of the date of this Amendment
serve the Expanded Premises that Tenant and Landlord agree in writing shall no
longer be necessary following completion of the redesign by Tenant of the
interior of the Expanded Premises and the re-landscaping, in a commercially
reasonable manner, of those areas of the exterior of the Building where such
removed sidewalks were located.

C-1

 

EXHIBIT C-l

DRAWINGS AND/OR SPECIFICATIONS MORE PARTICULARLY DESCRIBING

THE DOOR REPLACEMENT WORK

     The Door Replacement Work shall consist solely of the following:

     (a) Five (5) exterior front doors designated to be inactive by Tenant are
to be replaced with windows of similar size. The color of the glass is to match
the current windows.

     (b) Replacement of doors and frames of the remaining three (3) doors that
are to remain active, including: (i) the current main entrance of the Existing
Premises; (ii) the current employee entrance of the Existing Premises; and
(iii) the current entrance of the Additional Premises. The color of the glass
on these doors is to match the current windows and the doors are to include
like hardware. Tenant reserves the right to have the hardware upgraded at
Tenant’s cost.

     (c) The replacement of nine (9) of the eighteen (18) rear metal doors
(including like hardware). This is to include repair or replacement of the
frames as mutually agreed upon by Landlord and Tenant.

     (d) The remaining nine (9) doors and all bay doors are to be painted to
match the new doors.

     (e) New signage will be added after painting and/or replacement (to be
specified by Tenant at a later date).

C-2

 

EXHIBIT C-2

DESCRIPTION OF THE SIDEWALK REPAIR WORK

     The Sidewalk Repair Work shall consist solely of the following:

     (a) The removal of three (3) sidewalks, entrance pads and connecting
walkways leading to exterior doors of the Expanded Premises that have been
designated by Tenant to be rendered inactive and which doors shall be replaced
with windows of similar size by Landlord (see Exhibit C-l); and

     (b) The repair and/or replacement of uneven remaining sidewalks and
entrance pads.

C-3

 

EXHIBIT D

DESCRIPTION OF THE WINDOWS/DOORS WORK

     The Windows/Doors Work shall consist solely of the following:

     (a) The replacement of all of the green glass panels that as of the date
of this Amendment are part of the windows at the exterior of the Building;

     (b) The application of pre-formed extruded silicon tape boot over all of
the joints between head receptors and head receptor removable stops, as
applicable, at all windows and doors along the exterior of the Building;

     (c) The application of pre-formed extruded silicon tape boot over all of
the head receptors and subsill flashing/joints, as applicable, at all windows
and doors of the exterior of the Building;

     (d) The opening of all sealed weep holes in all of the window sill
assemblies along the exterior of the Building; and

     (e) Satisfactory installation of all installed Windows/Doors Work with
performance confirmed by field hose testing at (i) the start of such work, (ii)
20% completion, (iii) 50% completion, (iv) 75% completion, and (v) 100%
completion.

D-1

 

EXHIBIT E

LIST OF LANDLORD REPAIR HVAC UNITS

The Landlord Repair HVAC Units shall consist solely of the following:

	 
	RTU-1 (7.5 ton) Carrier Model #50D008610DA, Serial #3987G40988 (Existing Premises)

	RTU-2 (5 ton) Carrier Model #50D006620DA, Serial #0688G95216(Existing Premises)

	RTU-3 (3 ton) Carrier Model #50DJ06600, Serial #4588G06263 (Existing Premises)

	RTU-4 (5 ton) Carrier Model#50QJ006600GA, Serial #0489G21159 (Existing Premises)

	RTU-5 (20 ton) York Model #D2CE240E05446ECA, Serial #NCBM015179 (Existing Premises)

	RTU-9 (15 ton) Carrier Model #50TJ016681AA, Serial #N/A (Existing Premises)

	RTU-10 (7.5 ton) Carrier Model #50QD008610, Serial #2188G44864 (Existing Premises)

	RTU-12 (15 ton) York Model #D3CE150A46JSA, Serial #NBBM012744 (Existing Premises)

	RTU-13 (20 ton) York Model #D2CE240E07246ECA, Serial #NCBM014896 (Existing Premises)

	RTU-17 (7.5 ton) Carrier Model #50QD008610, Serial #3486G73430 (Existing Premises)

	RTU-18 (5 ton) Carrier Model #50LJQ06610, Serial #4991G47758 (Existing Premises)

	RTU-19 (5 ton) Carrier Model #50QD006600-20A, Serial #4586G19868 (Existing Premises)

	RTU-20 (5 ton) Carrier Model #50QD006600-20A, Serial #0387G50336 (Existing Premises)

	RTU-1 (7.5 ton) Carrier Model #50TJQ008-601GA, Serial #3598G30553 (Additional Premises)

	RTU-2 (5 ton) York Model #B3CH060A46C, Serial #NDFM038983 (Additional Premises)

E-1

 

EXHIBIT F

PLAT SHOWING RESERVED

PARKING SPACES AND ADDITIONAL PARKING AREA

F-1

 

EXHIBIT G

DESCRIPTION OF THE EARLY START TENANT IMPROVEMENTS

     The Early Start Tenant Improvements shall consist solely of the
following:

     (a) An alarm system serving the Expanded Premises;

     (b) The fit out of a molecular laboratory within the Expanded Premises;

     (c) Carpeting, painting, construction, IT and wiring of Suite A of the
Expanded Premises; and

     (d) Carpeting for that portion of the Expanded Premises other than Suite
A.

F-2

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