Document:

EX-10.8 EUROPEAN SUPPLY AGREEMENT

 

Exhibit 10.8

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

AGREEMENT

THIS AGREEMENT is made effective as of
the 17th day of October, 2003, between
IDEXX Europe B.V., a corporation organized under the law of The Netherlands
whose principal place of business is at Koolhovenlaan 20, 1119 NE -
Schiphol-Rijk, The Netherlands (“IDEXX”) and Ortho-Clinical Diagnostics, Inc.,
a New York corporation with offices at 100 Indigo Creek Drive, Rochester, New
York, U.S.A. (“OCD”), and amends and restates the supply agreement effective as
of January 1, 1999 between IDEXX and OCD (the “Prior Europe Agreement”).

WHEREAS, OCD has been a supplier of analyzers for human applications and dry
slides, and IDEXX has been a supplier of analyzers for animal applications; and

WHEREAS, OCD and IDEXX Operations, Inc. (“IDEXX US”) have entered into an
agreement in the United States (the “US Agreement”) to (a) combine certain of
their respective skills and intellectual property and to invest significant
capital to create a New Analyzer (as defined below) and related panel holder
design for animal applications, which is expected to provide a superior
analyzer offering to customers, expand the sales of OCD dry slides and IDEXX
analyzers, and make IDEXX products more competitive and (b) ensure IDEXX US a
continuing supply of Dry Slides necessary for its continued sale of analyzers,
including the New Analyzer; and

WHEREAS, in the United States and in the Territory (as defined herein)
different market conditions as well as regulatory differences prevail, for
which reasons OCD and IDEXX desire to enter into a separate agreement for the
supply of Dry Slides in the European market and the other regions in the
Territory; and as is the case with the US Agreement, OCD and IDEXX desire to
reflect herein their mutual investments and exchange of know-how in connection
with the supply of Dry Slides as well as their desire to enter into new
arrangements for the supply of diagnostic slides and analyzers for Europe and
the other regions in the Territory, the terms and conditions of which are
documented herein;

NOW THEREFORE, the parties hereby agree as follows:

 

 

	1.	 	DEFINITIONS

In this Agreement the following expressions shall have the meaning set opposite
them.

	 	 	 
	“Agreements”	 	
This Agreement and the US Agreement.
	 	 	 
	“Analyzers”	 	
The VETTEST Analyzer and the New Analzyer.
	 	 	 
	“Commencement Date”	 	
October 17, 2003.
	 	 	 
	“Dry Slide”	 	
A chemical composition, comprising a
layered, coated dry film, specifically
formulated to analyze for a body
constituent, which composition is
immediately hydrated by any undiluted
bodily fluid, including without limitation
a VITROS slide. For avoidance of doubt,
the term “Dry Slide” shall not include any
assay based on immunomagnetic particle
technology or any assay for which the
analyte is DNA or RNA.
	 	 	 
	“Effective Rebate Rate”	 	
For any year, the weighted average
percentage reduction in the purchase price
of any slides purchased in such year that
IDEXX is entitled to receive pursuant to
Section 7.03 hereunder. The calculation of
the Effective Rebate Rate is illustrated in
Schedule 7.
	 	 	 
	“Exclusivity Territory”	 	
Austria, Belgium, France, Germany, Italy,
Netherlands, Portugal, Spain, Switzerland
and the United Kingdom.
	 	 	 
	“Existing Special [**] Slides”	 	
VETTEST slides that have been [**], as of
the date of this Agreement, pursuant to
Section 4 of the Operations Agreement.
	 	 	 
	“IDEXX Parent”	 	
IDEXX Laboratories, Inc., a Delaware, USA
corporation, the parent company of IDEXX.
	 	 	 
	“IDEXX US”	 	
IDEXX Operations, Inc., a Delaware, USA
corporation.
	 	 	 
	“New Analyzer”	 	
A new chemistry analyzer that uses OCD Dry
Slides for veterinary applications, as
contemplated by

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Article 3 of the US Agreement, and any
updates or modifications to such analyzer.
	 	 	 
	“New Chemistry Slides”	 	
As defined in Section 5.06.
	 	 	 
	“New Slide/Panel Design”	 	
A new slide format for VETTEST slides to be used
in conjunction with the New Analyzer, as well as
a panel holder for such slides, as contemplated
by Article 3 of the US Agreement, and any
updates or modifications to such design.
	 	 	 
	“New Slides”	 	
VETTEST slides that are formatted and packaged
in accordance with the New Slide/Panel Design,
as contemplated by Article 3 of the US
Agreement.
	 	 	 
	“New Special [**] Slides”	 	
VETTEST slides that have been [**] pursuant to
Section 7.04 of this Agreement.
	 	 	 
	“Operations Agreement”	 	
The Operations Agreement effective as of January
1, 1999 among OCD, IDEXX Parent and IDEXX.
	 	 	 
	“PANELS/PROFILES”	 	
Packages of VETTEST slides for VETTEST Analyzers
consisting of two or more sets of slides of
specified chemistries. The initial PANEL and
the initial PROFILES shall consist of the slides
set forth on Schedule 3 attached hereto, with
any changes or additional PANELS/PROFILES to be
mutually agreed upon by the parties as specified
in Schedule 3.
	 	 	 
	“Prime Rate”	 	
For any day in any calendar month, the prime
rate of interest as published in the Wall Street
Journal on the last business day of the
immediately preceding month.
	 	 	 
	“Proportionate Share”	 	
The percentage obtained by dividing (i) the
number of VETTEST slides purchased by IDEXX in a
given period, by (ii) the total number of
VETTEST slides purchased by IDEXX and its
affiliates during such period.
	 	 	 
	“Settlement Agreement”	 	
The Amendment, Release and Settlement Agreement
dated as of September 12, 2002 among OCD, IDEXX
Parent and IDEXX.

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	“Special [**] Slides”	 	
Existing Special [**] Slides and New Special
[**] Slides.
	 	 	 
	“Term” 	 	
As defined in Section 18.01.
	 	 	 
	“Territory”	 	
The European Union, Africa, and the countries
listed on Schedule 10 attached hereto.
	 	 	 
	“VETTEST Analyzer”	 	
The analyzer currently marketed as the VETTEST
VT 8008 analyzer and any updates or
modifications to such analyzer.
	 	 	 
	“VETTEST slides”	 	
Dry Slides currently manufactured by OCD,
specially designed, bar coded, labeled, and/or
packaged for one or more of the Analyzers in
accordance with the terms of this Agreement or
the US Agreement and supplied by OCD in
accordance with the terms and conditions of this
Agreement.
	 	 	 
	“VETTEST tips”	 	
Metering tips sourced by OCD for use with the
VETTEST Analyzer, specially packaged and
supplied to IDEXX in accordance with the terms
of this Agreement.
	 	 	 
	“VITROS slides”	 	
The Dry Slides currently manufactured by OCD for
use in any current VITROS analyzer, including
without limitation the DT60.

All references to currency in this Agreement shall mean U.S. Dollars unless
otherwise specifically indicated.

	2.	 	EFFECTIVE DATE OF AGREEMENT

	 	 	 
	2.01	 	
This Agreement shall become effective upon the Commencement
Date. This Agreement shall apply solely within the Territory.

	3.	 	NEW SLIDES AND THE NEW SLIDE/PANEL DESIGN

	 	 	 
	3.01	 	
Notwithstanding any other provision of this Agreement, OCD’s
obligations hereunder to supply, format or package New Slides
hereunder shall be conditioned upon the successful development of
the New Slides, the New Analyzer and the New Slide/Panel Design in
accordance with Article 3 of the US Agreement.

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	 	3.02 	 	If IDEXX US elects under Section 3.08 of the US Agreement to
perform the formatting and packaging of the New Slides independently
of OCD, then (1) in lieu of New Slides, OCD shall supply IDEXX with
VITROS slides in the format currently manufactured for the VITROS
mainframe analyzers and/or the VETTEST Analyzer (i.e., VITROS slides
packaged in 50-count cartridges, before further formatting and
packaging for VETTEST Analyzer requirements), as applicable for New
Slides, for the Term as provided in this Agreement, and all
references in this Agreement to New Slides or to VETTEST slides, to
the extent referring to OCD’s obligation to supply New Slides, shall
mean such VITROS slides packaged in 50-count cartridges and (2)
solely with respect to New Slides, the prices for Tiers 2 and 3 in
the table set forth in Section 7.02 shall be reduced by $[**] per
New Slide.

	4.	 	AGREEMENT TO SUPPLY

	 	4.01 	 	Subject to the terms and conditions of this Agreement, OCD
undertakes to manufacture for IDEXX and to supply to IDEXX VETTEST
slides, VETTEST tips and Vetrol controls. OCD shall supply VETTEST
slides in compliance with the VETTEST Slide Quality Assurance
Procedures set out in Schedule 1. All slides supplied to IDEXX
hereunder are supplied solely for sale within the Territory;
provided that IDEXX may make limited sales to IDEXX US solely for
purposes of adjusting inventory levels according to unanticipated
changes in regional demand. For the avoidance of doubt, nothing in
this Agreement shall obligate OCD, with respect to any particular
chemistry, to furnish IDEXX with slides for such chemistry in any
slit format that OCD does not currently manufacture for such
chemistry, or that would otherwise be uneconomical for OCD to supply
to IDEXX (other than the slit formats for such chemistry that OCD
then sells or has agreed in writing to sell to IDEXX).
	 
	 	4.02 	 	(a) Notwithstanding any other provision of this Agreement, if
after [**] the annual volume of VETTEST slides purchased by IDEXX
and IDEXX US is less than [**] slides, then OCD may in its sole
discretion elect to be released from any obligation to format and
package the New Slides and/or package other VETTEST slides, in which
event IDEXX’s sole options hereunder shall be either (x) to accept
an increase in slide prices for New Slides and/or other VETTEST
slides that is adequate to compensate OCD for any increase in its
costs due to such reduction in volume, or (y) with respect to slides
for which IDEXX does not accept a price increase under the preceding
clause (x), but which IDEXX US has elected to format and/or package
independently of OCD as provided in Section 4.02 of the US
Agreement, to obtain such slides from IDEXX US.

	 	 	 	(b) If IDEXX US elects under Section 4.02 of the US Agreement to
perform the formatting and packaging of New Slides, then (1) in
lieu of New Slides OCD shall supply IDEXX with VITROS slides in the
format currently manufactured for the VITROS mainframe analyzers
and/or the VETTEST Analyzer (i.e., VITROS

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	 	 	 	slides packaged in 50-count cartridges, before further formatting
and packaging for VETTEST Analyzer requirements), as applicable for
New Slides, for the Term as provided in this Agreement, and all
references in this Agreement to New Slides or to VETTEST slides, to
the extent referring to OCD’s obligation to supply New Slides,
shall mean such VITROS slides packaged in 50-count cartridges, and
(2) the prices for Tiers 2 and 3 in the table set forth in Section
7.02 shall be reduced by $[**] per New Slide.
	 
	 	 	 	(c) If IDEXX US elects under Section 4.02 of the US Agreement to
perform the packaging of VETTEST slides other than New Slides, then
(1) in lieu of such other VETTEST slides OCD shall supply IDEXX
with VITROS slides in the format currently manufactured for the
VETTEST Analyzer (i.e., VITROS slides packaged in 50-count
cartridges, before further formatting and packaging for VETTEST
Analyzer requirements) for the Term as provided in this Agreement,
and all references in this Agreement to VETTEST slides, to the
extent referring to OCD’s obligation to supply such slides (other
than New Slides), shall mean such VITROS slides packaged in
50-count cartridges, and (2) the prices for Tiers 1, 2 and 3 in the
table set forth in Section 7.02 shall be reduced by $[**]per slide
for VETTEST slides (other than New Slides).

	5.	 	FORECASTS, COMMITMENTS AND ORDERS

	 	5.01 	 	Attached hereto as Schedule 4 are aggregate Purchase
Commitments by IDEXX and IDEXX US for VETTEST slides for the VETTEST
Analyzer for calendar years 2003 through and including 2010. The
Purchase Commitments constitute the aggregate anticipated minimum
aggregate purchase quantities by IDEXX and IDEXX US for single
chemistry VETTEST slides and PANELS/PROFILES slides in the indicated
calendar years.
	 
	 	 	 	Existing Special [**] Slides, New Special [**] Slides and New
Chemistry Slides shall be excluded from the determination of
IDEXX’s and IDEXX US’s slide purchases for purposes of achieving
their aggregate Purchase Commitments under Section 5.01 of this
Agreement or the US Agreement, as the case may be.
	 
	 	 	 	Failure by IDEXX and IDEXX US to purchase, in the aggregate, at
least the indicated Purchase Commitment quantities of each type of
slides in any year may subject IDEXX to the requirement to make a
payment to OCD as set forth in Section 5.02 below, but such failure
shall in no event otherwise be deemed to be a breach of this
Agreement.
	 
	 	 	 	 
	 
	 	5.02 	 	If IDEXX and IDEXX US fail to purchase in the aggregate the
quantities of slides for the VETTEST Analyzer set forth as Purchase
Commitments on Schedule 4 in a particular calendar year, unless
there has been a Material Adverse Change (as defined in the
following paragraph), IDEXX shall pay, or shall cause IDEXX US to
pay, to OCD within 30 days after the end of such calendar year [**]%
of the

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	 	 	 	product of (i) the number of each type of slides (single or
PANELS/PROFILES) by which IDEXX and IDEXX US have in the aggregate
fallen short of the Purchase Commitment and (ii) the lowest
per-slide price for the applicable type of slides under either of
the Agreements.
	 
	 	 	 	For the purposes of this Section 5.02, “Material Adverse Changes”
shall mean material changes in the veterinary clinical chemistry
markets which result from (a) the commercial introduction into the
veterinary market, other than by IDEXX or its affiliates, of a
technology not previously available in the veterinary clinical
chemistry market, (b) the eradication of one or more diseases, or
the development of new disease therapies, treatments or
diagnostics, which significantly reduces demand for veterinary
clinical chemistry testing or (c) the inability or unwillingness of
OCD to supply VETTEST or VITROS slides in accordance with IDEXX’s
Annual Purchase Forecasts pursuant to Section 5.04 below. Whether
a Material Adverse Change has occurred will be determined by
reference to the effect of a change in the veterinary clinical
chemistry market on IDEXX and IDEXX US taken as a whole, and not on
either individually.
	 
	 	 	 	The parties shall discuss in good faith any assertion by IDEXX or
IDEXX US that a Material Adverse Change has occurred or is
continuing. If the parties agree that a Material Adverse Change
has occurred or is continuing, they shall negotiate in good faith
with respect to appropriate reductions in Purchase Commitments,
VETTEST slide prices (including single and PANELS/PROFILES slides)
and/or amounts which would otherwise be payable pursuant to the
first sentence of this Section 5.02 to appropriately allocate the
effects of such Material Adverse Change on the parties.
	 
	 	5.03 	 	Order and delivery of VETTEST slides (including
PANELS/PROFILES) shall be made in multiples of 100 boxes. Unless
otherwise agreed between the parties in any particular case, IDEXX
shall place orders for slides four times per calendar year, for
delivery in each calendar quarter of the year. Each order shall
specify a business day delivery date for each delivery, which shall
be not less than three months after the order date. Unless
otherwise agreed between the parties in any particular case the
number of deliveries shall be limited to four per year. IDEXX shall
order quantities for delivery in any quarter in accordance with its
good faith estimates of actual demand, with allowance for reasonable
inventory management requirements and consistent with IDEXX’s stated
desire to minimize its inventory levels.
	 
	 	 	 	Order and delivery of the VETTEST tips shall be made in multiples
of 10,000 tips (20 cartons each containing 500 tips). Unless
otherwise agreed between the parties in any particular case, the
number of orders and deliveries of the VETTEST tips and Vetrols
shall be limited to two in each year. OCD shall deliver the
VETTEST tips and Vetrols in the ordered quantities in each year.

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	 	5.04 	 	Not later than October 1 of each year, commencing October 1,
2003, IDEXX shall notify OCD of the aggregate forecasted
requirements of IDEXX for the subsequent calendar year for each of
the VETTEST slides (single slides and PANELS/PROFILES slides for the
VETTEST Analyzer and New Slides) (each such notification, an “Annual
Purchase Forecast”). The aggregate order quantities in the
subsequent year for each of the VETTEST slides shall be within ±25%
of such aggregate Annual Purchase Forecast unless the parties
otherwise agree. As long as slide orders do not exceed the
applicable Annual Purchase Forecast by more than 25%, OCD shall
deliver the slides in accordance with the orders. The Annual
Purchase Forecasts constitute non-binding forecasts for OCD’s
planning purposes and shall also be the basis for determining
estimated slide pricing pursuant to Section 7.02 below and the cash
rebate pursuant to Section 7.03 below.
	 
	 	 	 	In addition to the Annual Purchase Forecast, IDEXX shall furnish to
OCD updated quarterly forecasts of the aggregate requirements of
IDEXX for VETTEST slides in the four succeeding calendar quarters.
The parties understand that such forecasts are merely estimates to
assist OCD in production planning and are not to be considered
orders or binding in any way.
	 
	 	 	 	For production planning purposes, the parties shall further
coordinate with one another to keep OCD apprised of IDEXX’s current
and anticipated inventories of stock keeping units and relevant
conditions in the veterinary market. The provisions of this
paragraph shall terminate immediately upon any termination of the
corresponding provisions of Section 5.04 of the US Agreement.
	 
	 	5.05 	 	In the event that IDEXX in any year notifies OCD that it
wishes to order quantities which exceed the quantities mentioned in
Section 5.04 above by more than 25%, OCD will endeavor to supply the
excess quantities and notify IDEXX of the extent of its ability to
so supply.
	 
	 	5.06 	 	It is understood and agreed that orders for the VETTEST
slides shall include only those chemistries set forth in Schedule 5
hereto, as amended from time to time by agreement of the parties.
IDEXX may at any time request that the additional chemistries listed
on Schedule 8 hereof, in the form they are available at the
Commencement Date to the human market on VITROS slides, be added as
VETTEST slides to Schedule 5 (any VETTEST slides so added,
containing such additional chemistries, are referred to herein as
“New Chemistry Slides”). Prior to adding a New Chemistry Slide on
Schedule 5, the parties will negotiate in good faith to determine
the initial price for such slides in accordance with the immediately
following paragraph and shall set forth such price on Schedule 6.
IDEXX shall have the right, from time to time, to elect to remove
any New Chemistry Slides from Schedule 5, and Schedule 5 and
Schedule 6 shall be updated to reflect such removal. IDEXX
acknowledges that neither this nor any other provision of this
Agreement shall obligate OCD to supply IDEXX with any

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	 	 	 	slide or other product based on any technology that is not
incorporated in the VITROS slides or VETTEST slides that OCD sells
as of the date hereof.
	 
	 	 	 	Until [**], the price per slide for any New Chemistry Slides shall
be the greater of $[**] and [**] (as determined by OCD in good
faith and taking into account IDEXX’s and IDEXX US’s good faith
forecast for the quantity of the chemistry in question). For
orders placed for delivery during each calendar year beginning with
[**], if [**] of any New Chemistry Slide is determined to be
greater than $[**] (as determined by OCD in good faith and taking
into account IDEXX’s and IDEXX US’s good faith forecast for the
quantity of the chemistry in question), then the minimum price per
slide for such New Chemistry Slides shall be [**]; provided, that
so long as IDEXX and IDEXX US order [**] or more of such slides in
the aggregate in any calendar year, the minimum price per slide for
such New Chemistry Slides shall not exceed $[**]. OCD shall have
the right, from time to time and in good faith, to revise its
determination of [**] of any New Chemistry Slide that is priced on
Schedule 6 if IDEXX’s and IDEXX US’s aggregate actual annual orders
of such slide fall below [**], and Schedule 6 shall be updated to
reflect such revised [**].
	 
	 	 	 	In the event that a chemistry listed in Schedule 5 should become
known by OCD to be unavailable at any future date during the Term,
OCD will so notify IDEXX at the earliest practicable date, and the
parties shall cooperate to determine an appropriate course of
action.

	6.	 	DELIVERY

	 	6.01 	 	Following acknowledgement by OCD of each order placed by
IDEXX and on or before the delivery due date, OCD shall complete
delivery of the appropriate quantity of slides and tips within ±
10%. Deviations of delivery quantities from order quantities within
the ± 10% range may be compensated by IDEXX in the first subsequent
order placed, subject to Section 5. In the event of a price
increase for one or more of the VETTEST slides, such compensating
quantity of such slides shall be processed at the previous lower
price.
	 
	 	6.02 	 	Order and delivery for all purchases hereunder shall be
F.O.B. OCD’s facility in the U.S.A.
	 
	 	6.03 	 	Unless otherwise advised in writing by OCD to IDEXX, OCD
shall pack the VETTEST slides in accordance with OCD’s standard
shipping configuration which is known to IDEXX and which at the
Commencement Date contains approximately 60 cases per pallet, each
case containing 100 boxes of slides.
	 
	 	6.04 	 	The parties shall reasonably cooperate to identify and
implement potential savings for both parties, consistent with the
principles of lean manufacturing across the value chain, in all
processes in their relationship, including without limitation

9

 

	 	 	 	improvements relating to slide manufacturing, packaging, ordering,
build schedules, component purchasing, delivery schedules, quality
testing and calibration processes, and product distribution
processes (including direct shipment to IDEXX distributors and
end-users), and including without limitation, identifying and
implementing processes to reduce the number of slide lots supplied
to IDEXX and to reduce IDEXX calibration time; provided, that
neither party shall be obligated to implement a process change for
which its net costs exceed its net benefits.

	7.	 	PRICES

	 	7.01 	 	Subject to the provisions of Sections 3.02 and 4.02 that
contemplate OCD’s delivery of slides in 50-count cartridges if IDEXX
US elects to format and/or package slides independently, all
references to pricing for VETTEST slides in this agreement refer to
the completed and packaged product in form ready for delivery to an
end-user. The initial prices for each of the VETTEST slides
(including the PANELS/ PROFILES) shall be as set forth in Schedule 5
hereto.
	 
	 	7.02 	 	(a) The prices set forth in Schedule 5 shall remain in effect
for orders placed through December 31, [**].
	 
	 	 	 	(b) For orders placed for delivery during each calendar year
beginning with [**], the price for each VETTEST slide listed on
Schedule 5 (whether New Slides, single chemistry VETTEST slides for
the VETTEST Analyzer, or per slide in PANELS/PROFILES, and, for
avoidance of doubt, including New Chemistry Slides, subject to
Section 5.06), within the respective volume tiers set forth below
(aggregating for this purpose purchases by IDEXX and IDEXX US)
shall be as set forth for such volume tier; provided, that Existing
Special [**] Slides and New Special [**] Slides shall not be priced
by reference to the volume tiers but will be priced as otherwise
set forth below. For purposes of determining purchase volumes, up
to [**] Existing Special [**] Slides shall be included in the
determination, and all other Existing Special [**] Slides and New
Special [**] Slides shall be excluded from the determination. The
stated price shall apply only to slides purchased within the
corresponding volume tier, and only with respect to the quantities
within such tier.

	 	 	 	 	 
	Annual Volume Tier	 	Price per Slide
	
	 	

	Tier 1: Up to [**]
	 	$	[**]	 
	Tier 2: In excess of [**] but not exceeding [**]
	 	$	[**]	 
	Tier 3: In excess of [**]
	 	$	[**]	 

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	 	 	 	For all orders for Existing Special [**] Slides, the price per
slide shall be as agreed between the parties pursuant to Section 4
of the Operations Agreement.
	 
	 	 	 	For all orders for New Special [**] Slides, the price per slide
shall be as agreed between the parties pursuant to Section 7.04 of
this Agreement.
	 
	 	 	 	Notwithstanding the foregoing, the price per slide for any New
Chemistry Slide that is priced on Schedule 6 shall never be lower
than the greater of (a) the minimum price as determined in
accordance with Section 5.06 and identified on Schedule 6 as
amended from time to time and (b) the price that would otherwise
apply pursuant to the pricing tiers set forth above.
	 
	 	 	 	Promptly after IDEXX and IDEXX US provide their aggregate Annual
Purchase Forecast for a calendar year pursuant to Section 5.04 and
Section 5.04 of the US Agreement, the parties shall calculate the
weighted average price of slides included in such forecast (the
“First Estimated Blended Price”).
	 
	 	 	 	Upon determination of the First Estimated Blended Price applicable
to a calendar year, for each order placed by IDEXX for delivery
during the first three calendar quarters of such year, the amount
invoiced and paid per slide listed on Schedule 5 shall be the First
Estimated Blended Price.
	 
	 	 	 	Before IDEXX places its order for the fourth calendar quarter of
the year, the parties shall review IDEXX’s and IDEXX US’s
respective fourth-quarter orders and re-calculate the weighted
average price of slides based on IDEXX’s and IDEXX US’s aggregate
actual orders for the first three quarters and their orders for the
fourth quarter (the “Second Estimated Blended Price”). If the
Second Estimated Blended Price is different than the First
Estimated Blended Price, the amount invoiced and paid per slide
listed on Schedule 5 shall be the Second Estimated Blended Price.
In addition, either party may calculate the resulting adjustment
(up or down) for each slide delivered for the first three quarters
to reflect the difference between the First Estimated Blended Price
and the Second Estimated Blended Price, such that the amount paid
by IDEXX for all slides delivered during the first three calendar
quarters shall equal the Second Estimated Blended Price. If the
adjustment is an upwards adjustment, then IDEXX shall pay OCD the
aggregate amount of such adjustment, together with interest on such
amount (calculated as set forth below), within 30 days of OCD’s
request for such payment. If the adjustment is a downwards
adjustment, then OCD shall pay IDEXX the aggregate amount of such
adjustment, together with interest on such amount (calculated as
set forth below), within 30 days of IDEXX’s request for such
payment (or, at IDEXX’s option, apply such amount as a credit
against IDEXX’s third or fourth quarter invoice).
	 
	 	 	 	Within 30 days after the end of the year (or 30 days after IDEXX
and IDEXX US complete payment in full for all slides purchased
during the year, if later), the

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	 	 	 	parties shall perform a final calculation of the weighted average
price based on all slides ordered by IDEXX and IDEXX US and
delivered during the year (the “Final Blended Price”). If the
Final Blended Price is different than the Second Estimated Blended
Price, then IDEXX or OCD, as the case may be, shall make a final
payment to the other, so that the final amount paid by IDEXX per
slide for all slides ordered and delivered during the year shall
equal the Final Blended Price. The party obligated to make such
final payment shall do so within 30 days after the determination of
the Final Blended Price.
	 
	 	 	 	Any adjustment payments made pursuant to either of the immediately
preceding paragraphs, and any overdue payments by OCD or IDEXX of
any amounts owed to the other pursuant to this Section 7.02, shall
bear interest at a rate per annum equal to the Prime Rate. Such
interest shall be calculated based on a 365-day year and the actual
number of days elapsed since the due date for the applicable
payment to which it relates.
	 
	 	 	 	For avoidance of doubt, the blended price calculations of this
Section 7.02 shall apply only to chemistries listed on Schedule 5,
and only after calendar year [**].
	 
	 	 	 	(c) OCD may, at its option, increase all prices for slides ordered
for delivery (i) on or after January 1, [**] by an amount not to
exceed [**]% of the “PPI Increase” (as defined below), provided
that OCD may not increase prices under this clause (i) unless the
PPI Increase is greater than [**]%; and (ii) on or after January 1,
[**] by an amount (x) as provided in the preceding clause (i) or
(y) by an amount not to exceed [**]% of the PPI Increase, provided
that OCD may not increase prices under this subclause (y) unless
the PPI Increase is greater than [**]%. OCD may calculate the PPI
Increase each year beginning in [**], and any resulting price
increase shall be effective for orders placed for delivery during
the following calendar year and thereafter, unless and until
increased again in accordance with the procedures set forth in this
paragraph. For purposes of this Agreement, the “PPI Increase”
shall be calculated by dividing (x) the average monthly “PPI” level
for the most recent 12-month period ending with and including June
of the year in which the PPI Increase is being calculated (each
such period, a “Measurement Period”), by (y) the average monthly
PPI level for the 12-month period immediately preceding that
described in clause (x) (the “Baseline Period” with respect to such
Measurement Period), then subtracting 1 and converting the
remaining fraction into a percentage. All calculations shall be
based on the latest version of the PPI level published as of the
date the calculation is made. For purposes of this Agreement,
“PPI” means the United States Producer Price Index – [**] (not
seasonally adjusted), current series identification [**], as
published by the Bureau of Labor Statistics on its Web site
(www.bls.gov/ppi), or if not available from such Web site, then as
published by the Bureau of Labor Statistics in its monthly
periodical “Producer Price Indexes.” OCD shall give IDEXX written
notice of any price increase pursuant to this paragraph 7.02(c) at
least 120 days before the beginning of the calendar year for which
a price increase

12

 

	 	 	 	is to take effect; otherwise, the prices shall remain unaffected by
such increase for such year.
	 
	 	 	 	(d) With respect to slides ordered for delivery on or after
January 1, [**], if OCD’s aggregate cost of [**] (as defined below)
for the most recent Measurement Period has increased on a per
VETTEST slide basis as compared with the applicable Baseline Period
by an amount that exceeds the PPI Increase for such Measurement
Period as applied to the [**] for such Baseline Period, on a per
VETTEST slide basis, then OCD shall be permitted to increase the
price of each slide sold to IDEXX by the amount of such excess.
“[**]” means [**] that are [**]. Schedule 9 attached hereto
contains an example, for illustration purposes only, of the
calculations described in this paragraph 7.02(d) and in paragraph
7.02(e).
	 
	 	 	 	(e) With respect to slides ordered for delivery on or after January
1, [**], if IDEXX’s share of Special Event Costs (as defined below)
for the most recent Measurement Period has increased on a per
VETTEST slide basis as compared with the applicable Baseline Period
by an amount that exceeds [**] above the PPI Increase for such
Measurement Period as applied to IDEXX’s share of Special Event
Costs for such Baseline Period, on a per VETTEST slide basis, then
OCD shall be permitted to increase the price of each slide sold to
IDEXX by the amount of such excess. “Special Event Costs” means
the aggregate net amount of (i) [**] with respect to [**] on which
[**], (ii) [**] in the [**], and (iii) [**] as a result of [**].
“IDEXX’s share” of any of the foregoing shall mean the [**] that is
attributable to the [**].
	 
	 	 	 	(f) OCD shall give IDEXX written notice of any price increase
pursuant to paragraph 7.02(d) or 7.02(e) at least 120 days before
the beginning of the calendar year for which a price increase is to
take effect; otherwise, the prices shall remain unaffected by such
increase for such year. Any price increase pursuant to paragraph
7.02(d) or 7.02(e) shall be effective for orders placed for
delivery during the following calendar year and thereafter, unless
and until (i) increased again in accordance with the procedures set
forth in such paragraphs or (ii) there occurs a decrease in any of
the costs upon which the price increase was based (or any such cost
that was relevant in one measuring period is not relevant in
subsequent periods, for example, certain validation or other
one-time costs incurred for compliance purposes), in which event
IDEXX’s price per slide shall be reduced to the extent of such
decrease (or one-time cost). In addition, OCD agrees to consider
in good faith any request by IDEXX to reimburse OCD pursuant to
paragraph 7.02(e) by a process other than an increase in slide
prices, such as a lump sum payment or series of payments.
Furthermore, with respect to any one-time cost or other temporary
cost lasting no more than one year, IDEXX shall have the right to
make such reimbursement in equal periodic payments (no less
frequently than quarterly) over a period that is no longer than one
year.

13

 

	 	 	 	(g) OCD shall give IDEXX reasonable detail as to its incremental
[**] costs and incremental Special Event Costs on which it seeks to
base a price increase pursuant to paragraph 7.02(d) or 7.02(e) or
otherwise pass on to IDEXX pursuant to paragraph 7.02(f); provided,
however, that IDEXX shall not have any right to obtain any details
concerning OCD’s actual costs (other than such incremental cost
differences used in such calculation).
	 
	 	 	 	(h) At any time after OCD’s aggregate annual sales volume of VITROS
slides and VETTEST slides shall have declined more than [**]% from
[**], the parties shall, at OCD’s request, discuss appropriate
pricing of slides under this Agreement. Neither party shall be
obligated to agree to any price change under this Section 7.02(h).
	 
	 	 	 	(i) OCD agrees that IDEXX shall have the right, no more than once
per calendar year, to cause an internationally recognized
independent accounting firm to conduct an audit, on reasonable
advance notice and during normal business hours, of OCD’s books and
records to the extent reasonably necessary to confirm OCD’s price
increase calculations under this Section 7.02. Any report prepared
by such independent accounting firm shall contain such firm’s
conclusion concerning the validity of OCD’s price increase;
provided, however, that such report shall not contain, and IDEXX
shall not have any right to obtain, any details concerning OCD’s
actual costs (other than incremental cost differences used in the
calculation of OCD price increases).
	 
	 	 	 	(j) IDEXX agrees that OCD may audit IDEXX’s books and records
relating to orders of VETTEST slides to confirm the pricing
calculations under this Section 7.02.

	 	7.03	 	The provisions of this Section 7.03 shall apply only to
purchases of VETTEST slides for the VETTEST Analyzer during calendar
years [**]. IDEXX shall be entitled to receive its Proportionate
Share (based on sales during a calendar year) of a cash rebate in
the amount set forth below if the total aggregate slide purchases by
IDEXX and IDEXX US, in calendar year [**], exceed the aggregate
quantities set forth below:

	 	 	 
	 	 	Incremental Cash Rebate –
	Annual Slide Purchases	 	% Off Purchase Price
	0 [**]	 	
[**]%
	[**]	 	
[**]%
	[**]	 	
[**]%
	[**]	 	
[**]%
	[**]	 	
[**]%
	[**]	 	
[**]%
	[**] and above	 	
[**]%

14

 

	 	 	 	The rebate amounts set forth above constitute a percentage
reduction in the purchase price of any slides (including both
single slides and PANELS/PROFILES slides) purchased above the
corresponding quantity. The percentage amounts are incremental (as
opposed to cumulative) and relate only to the quantities set forth
opposite it. For example, if IDEXX and IDEXX US were to purchase,
in the aggregate, [**] slides in calendar year [**], they would not
be entitled to a [**]% price reduction on all slides that they
purchased in such year, rather, they would be entitled to receive
(i) [**] purchase price reduction on the first [**] slides
purchased, (ii) a [**]% purchase price reduction on all slides
purchased over [**], up to and including [**], (iii) an [**]%
purchase price reduction on all slides purchased over [**] up to
and including [**], and (iv) a [**]% purchase price reduction on
all slides purchased over [**] up to and including the [**] slides
that they purchased. The foregoing notwithstanding, it is
understood and agreed that if IDEXX and IDEXX US do not, in the
aggregate, achieve the aggregate Purchase Commitments set forth in
Section 5 in any calendar year, then they shall not be entitled to
receive a rebate for such year.
	 
	 	 	 	In the beginning of calendar year [**], OCD shall calculate an
estimated Effective Rebate Rate (the “Estimated Rebate Rate”) based
on the lesser of (i) IDEXX’s and IDEXX US’s aggregate Annual
Purchase Forecast for such year and (ii) [**]% of the total
aggregate number of slides that IDEXX and IDEXX US together
purchased in [**]. The Estimated Rebate Rate for calendar year
[**]shall be such that the average VETTEST slide price for [**],
after giving effect to the rebate, shall be $[**]. Not later than
thirty (30) days after the end of each of the first three calendar
quarters of [**] (or thirty days after IDEXX and IDEXX US complete
payment in full for slides purchased during such quarter, if
later), OCD shall pay to IDEXX its Proportionate Share (based on
purchases during the preceding quarter) of an amount equal to the
aggregate estimated rebate payment that IDEXX and IDEXX US would
together be entitled to receive in such quarter (the “Estimated
Rebate Payment”). The Estimated Rebate Payment for any such
quarter shall be calculated by (i) multiplying the Estimated Rebate
Rate in effect during such quarter by the total aggregate purchase
price for the VETTEST slides purchased by IDEXX and IDEXX US during
such quarter and (ii) subtracting from such amount an amount equal
to [**]% of the total calculated in clause (i) above. The
foregoing notwithstanding, if, in calendar year [**], (i) IDEXX’s
and IDEXX US’s total aggregate slide orders for the immediately
preceding calendar year were less than [**]% of their aggregate
Annual Purchase Forecast for such preceding calendar year or (ii)
OCD determines, in its reasonable discretion, at any time after the
end of the second calendar quarter of such calendar year, or IDEXX
indicates at any time, that IDEXX and IDEXX US are reasonably
unlikely to meet their aggregate Annual Purchase Forecast for such
year, then OCD shall have the right to recalculate the Estimated
Rebate Rate based on IDEXX’s and IDEXX US’s aggregate Purchase
Commitment for such year (such recalculated rate being hereinafter
referred to as the “New Estimated Rebate Rate”). If OCD elects to
recalculate the Estimated Rebate Rate pursuant to the immediately

15

 

	 	 	 	preceding sentence, (i) OCD shall notify IDEXX in writing which
notice shall set forth the New Estimated Rebate Rate, (ii) OCD
shall calculate all remaining quarterly Estimated Rebate Payments
(which may include the Estimated Rebate Payment for the second
calendar quarter) using the New Estimated Rebate Rate and (iii) all
such Estimated Rebate Payments shall be made in accordance with
this sub-clause 7.03, except that such Estimated Rebate Payments
shall be less the amount by which the aggregate Estimated Rebate
Payments received by IDEXX and IDEXX US during the then current
calendar year exceed the aggregate Estimated Rebate Payments they
would have received during such calendar year if the New Estimated
Rebate Rate were in effect from the first day of such calendar
year.
	 
	 	 	 	Notwithstanding any provision in this Agreement to the contrary,
OCD shall not be required to pay to IDEXX its Proportionate Share
of any Estimated Rebate Payments in any calendar year if (A) any
amounts payable to OCD from IDEXX pursuant to this Agreement are
overdue, unless such amounts are being disputed in good faith by
IDEXX, or (B) OCD determines in its reasonable judgment that IDEXX
and IDEXX US are reasonably unlikely to meet their aggregate
Purchase Commitments for such year. In the case of clause (B)
above, OCD shall have the right to make such determination at any
time after the end of the second calendar quarter of calendar year
[**], as the case may be (or such earlier time as IDEXX or IDEXX US
indicates (through an Annual Purchase Forecast or otherwise) that
their aggregate slide purchases are reasonably likely to be less
than their aggregate Purchase Commitment for such year), provided
that OCD has consulted with IDEXX and given IDEXX an opportunity
(which opportunity shall be available for a period of not less than
5 business days nor more than 10 business days) to demonstrate its
and IDEXX US’s intent and ability to meet their aggregate Purchase
Commitments for such year. For the avoidance of doubt, OCD’s
obligation to make any Estimated Rebate Payments shall be suspended
during the period referred to in the immediately preceding sentence
and the days in such period shall not be counted when determining
the date by which the next scheduled Estimated Rebate Payment is
due and payable. If, after fulfilling the requirements set forth
in this paragraph, OCD makes the determination described in clause
(B) above, OCD (i) shall promptly notify IDEXX in writing of its
determination and (ii) shall thereafter have the right to cease
making Estimated Rebate Payments for the remainder of such calendar
year.
	 
	 	 	 	Not later than thirty (30) business days after the end of the last
calendar quarter of calendar year [**], as the case may be (or
thirty days after IDEXX and IDEXX US complete payment in full for
slides purchased during such quarter, if later), OCD shall pay to
IDEXX its Proportionate Share (based on purchases during such
calendar year) of the amount by which (i) the Effective Rebate Rate
multiplied by the total aggregate purchase price for VETTEST slides
purchased by IDEXX and IDEXX US during such calendar year exceeds
(ii) the total aggregate amount of the Estimated Rebate Payments
made by OCD to IDEXX and IDEXX US during

16

 

	 	 	 	such calendar year. If the amount in clause (ii) above exceeds the
amount in clause (i) above, OCD shall deliver to IDEXX a written
notice of such fact (a “Reimbursement Notice”) and IDEXX shall pay
to OCD, within thirty (30) days of receipt of such notice an amount
in cash equal to its Proportionate Share of the amount of such
excess.
	 
	 	 	 	Notwithstanding the foregoing, if IDEXX and IDEXX US do not achieve
their aggregate Purchase Commitment in calendar year [**], as the
case may be, then IDEXX shall return all Estimated Rebate Payments
received from OCD for such year no later than thirty (30) days
after the end of such calendar year.
	 
	 	 	 	An illustrative representation of the foregoing rebate calculation
methodology is attached hereto as Schedule 7.
	 
	 	 	 	Notwithstanding any other provision of this Section 7.03, if any
amounts payable to OCD from IDEXX pursuant to this Agreement are
overdue, other than amounts that are being disputed in good faith
by IDEXX, then OCD shall be entitled to withhold such overdue
amount (plus any accrued interest) from any rebate payments to
which IDEXX may be entitled. Any overdue payments by OCD or IDEXX
of any amounts owed to the other pursuant to this Section 7.03
shall bear interest at a rate per annum equal to the Prime Rate.
Such interest shall be payable at the same time as the payment to
which it relates and shall be calculated daily on the basis of a
year of 365 days and the actual number of days elapsed.
	 
	 	 	 	OCD shall prepare a remittance advice to accompany each rebate
payment (or Reimbursement Notice), which shall set forth the
reporting period for which the payment is made (or demanded) and a
summary sheet which shall detail OCD’s calculation of the rebate
(or reimbursement). If IDEXX disagrees with the rebate or
reimbursement calculation, IDEXX shall promptly notify OCD, and the
parties, together with IDEXX US if appropriate, shall review the
calculations together in good faith to agree on any appropriate
corrections or adjustments.
	 
	 	 	 	Any Special [**] Slides and any New Chemistry Slides shall be
excluded from the determination of any rebate entitlement under
Section 7.03 of this Agreement or the US Agreement, as the case may
be, and the rebates described in Section 7.03 shall not apply to
such slides.
	 
	 	7.04	 	If IDEXX provides OCD with specific documentation regarding
[**] that would require IDEXX and IDEXX US, collectively, to
purchase, in any calendar year, a number of slides over and above
their most recent aggregate Annual Purchase Forecast for such year,
[**] for slides, [**] for slides [**] by this Agreement, OCD agrees,
within two weeks of its receipt of all additional information that
OCD may reasonably request regarding such [**], to inform IDEXX as
to whether or not OCD [**] in respect of [**], the number of slides
[**] for such slides, and any other related terms and conditions
that OCD deems applicable. OCD shall

17

 

	 	 	 	consider such requests in good faith. OCD agrees that [**] IDEXX
or IDEXX US pursuant to [**] remain in effect with respect to [**]
until such time as [**] as the case may be.

	8.	 	INVOICES AND PAYMENT

	 	8.01 	 	OCD shall invoice IDEXX in respect of each order for the
VETTEST slides upon completion by OCD of the delivery of such order.
Each order shall be billed by OCD under one invoice in US dollars
and payment shall be made by IDEXX in US dollars not later than
thirty (30) days following the date of invoice.

	9.	 	EXCLUSIVITY

	 	9.01 	 	OCD undertakes not to sell or otherwise supply, and to cause
its affiliates not to sell or otherwise supply, any Dry Slides
(whether or not such slides are finished or complete) bar-coded for
use in any Analyzers to any person, firm or company other than IDEXX
or its affiliates. The provisions of this Section 9.01 shall survive
the termination of this Agreement unless all of the following shall
be true: (i) prior to such termination IDEXX (or its permitted
assignees) and its affiliates shall have ceased to market the
VETTEST slides, (ii) such cessation shall not have been a
consequence of action by OCD, and (iii) OCD shall have complied with
its obligations under this Agreement prior to such termination.
	 
	 	9.02 	 	IDEXX undertakes not to market, and to cause its affiliates
not to market, any Dry Slide for any chemistry identified on
Schedule 5, as amended from time to time, other than Dry Slides
obtained by such person directly from OCD, to the extent that the
desired chemistries are available from OCD; provided that, for
purposes of adjusting inventory levels according to unanticipated
changes in regional demand, IDEXX may purchase from IDEXX US VETTEST
slides that IDEXX US obtained directly from OCD. The provisions of
this Section 9.02 shall terminate [**] years after the Commencement
Date with respect to VETTEST slides for the VETTEST Analyzer, and
[**] years after the first commercial sale of the New Analyzer in
the Territory, with respect to New Slides. At the time of
termination (with respect to VETTEST slides for the VETTEST
Analyzer, or New Slides, as the case may be), the parties shall
negotiate whether they wish to renew the arrangements set out in
this Section 9.02 with respect to VETTEST slides for the VETTEST
Analyzer, or New Slides, as the case may be. Any renewal of these
arrangements shall be set forth in a written agreement entered into
by the parties.

	10.	 	MARKETING ARRANGEMENTS

	 	10.01 	 	IDEXX will be responsible for all marketing arrangements for
the Analyzers and the VETTEST slides. IDEXX may appoint any of
OCD’s medical/surgical dealers as distributors of or agents for the
Analyzers and the VETTEST slides but will not be obliged to do so.

18

 

	 	10.02 	 	IDEXX will be responsible for the establishment of dealer
performance criteria for all dealers including OCD’s
medical/surgical dealers (if any are appointed by IDEXX as
distributors of the Analyzers and the VETTEST slides).
	 
	 	10.03 	 	IDEXX will keep OCD informed of and consult with OCD as to
marketing arrangements for the Analyzers and the VETTEST slides but
will not be obligated to OCD beyond the terms of this Agreement in
connection with such marketing arrangements.
	 
	 	10.04 	 	OCD hereby grants to IDEXX the exclusive right to
distribute, to customers in the veterinary market, under the terms
set forth in this Section 10.04, VITROS slides and VITROS analyzers
that run solely VITROS slides. The parties also agree to use good
faith, commercially reasonable efforts to negotiate a definitive
distribution agreement not later than December 31, 2003.
Notwithstanding any other provision of this Section 10.04, OCD and
its affiliates shall continue to have the right to sell, directly or
through distributors, VITROS analyzers and VITROS slides to all
persons that are current VITROS end-user customers as of the
Commencement Date, and to renew or extend the term of any contracts
with such customers or, solely for the purpose of sales to such
customers, with such distributors.
	 
	 	 	 	The parties shall discuss terms for any sales opportunity in the
veterinary market in good faith, on a case-by-case basis. OCD
shall be responsible, at its sole expense, for providing warranty
and out-of-warranty service and support to any customers to whom
IDEXX sells a VITROS analyzer; provided that such analyzer is then
covered by a maintenance agreement between OCD and that customer.
IDEXX shall not modify or customize any VITROS product supplied
hereunder, or remove or alter any product labels or re-label any
products, packaging or related materials for VITROS product
supplied hereunder. OCD shall provide IDEXX, without charge, with
such training in the marketing and sale of VITROS products and with
such marketing and technical assistance and product information as
OCD may, in its discretion, consider necessary to assist with the
promotion and sale of the products; provided that OCD’s training
obligation shall be limited to training employees of IDEXX to
train other IDEXX employees and sales agents.
	 
	 	 	 	IDEXX shall defend and indemnify OCD from and against all damages,
liabilities, costs and expenses (including reasonable attorneys’
fees and costs) arising out of any claim resulting from (a) any
negligent act or omission or any willful misconduct by IDEXX in
connection with the VITROS products supplied by OCD under this
Section 10.04 or (b) any statement, representation or warranty made
by IDEXX or any of its agents with respect to a VITROS product that
is not contained in the labeling or package insert and is not
otherwise approved by OCD in writing or (c) any breach of IDEXX’s
covenants in the preceding paragraph. OCD

19

 

	 	 	 	shall defend and indemnify IDEXX from and against all damages,
liabilities, costs and expenses (including reasonable attorneys’
fees and costs) arising out of any claim (i) for injuries or death
to persons or animals or damage to or destruction of tangible
property arising out of the use of VITROS products sold under this
Section 10.04 (whether claimed by reason of breach of warranty,
negligence, product defect or other similar cause of action,
regardless of the form in which any such claim is made) or (ii)
that any VITROS product sold under this Section 10.04 infringes a
patent, copyright, trademark or trade secret of a third party;
provided that this clause (ii) shall not apply to any claim arising
out of the use of any product in conjunction with products not
supplied by OCD. The indemnity procedures set forth in Section
16.06 shall apply to this Section 10.04.
	 
	 	 	 	The provisions of this Section 10.04 shall apply only within the
Exclusivity Territory. Furthermore, the provisions of this Section
10.04 granting IDEXX exclusivity shall (a) automatically terminate
immediately upon the termination of Section 9.02 and (b) not apply
to any instruments weighing more than 200 pounds, or to any slides
sold for use on such instruments, unless and until the parties have
executed the distribution agreement contemplated by this Section
10.04.

	11.	 	SALES SUPPORT

	 	11.01 	 	IDEXX will be responsible for all necessary sales support
for the Analyzers and the VETTEST slides.
	 
	 	11.02 	 	OCD’s sole obligation in respect of sale support shall be at
its own expense to assist IDEXX in resolving specific problems
resulting from the failure of VETTEST slides to conform to
specifications.

	12.	 	TESTING

	 	12.01 	 	OCD shall disclose to IDEXX its quality assurance procedures
used in final evaluation of the VETTEST slides and full particulars
thereof as set out in the VETTEST Slide Quality Assurance Procedures
forming Schedule 1 to this Agreement. OCD shall operate such
quality assurance procedures in accordance with Schedule 1.
	 
	 	12.02 	 	Upon prior written notice from IDEXX, OCD shall grant
authorized representatives of IDEXX access to that part of OCD
production facilities which conducts final evaluation of the VETTEST
slides for the purpose of enabling such representatives to monitor
the application by OCD of the VETTEST Slide Quality Assurance
Procedures set out in Schedule 1. Such access shall be granted by
OCD to IDEXX and IDEXX US no more than twice in any twelve-month
period. With respect to VETTEST slides for use in the New Analyzer,
IDEXX shall be permitted to monitor those stages of the production
process that are unique to

20

 

	 	 	 	VETTEST slides for the New Analyzer, but with respect to VETTEST
slides for the VETTEST Analyzer, such access shall be limited to
OCD’s final evaluation facilities. All information obtained as a
result of the audits contemplated by this Section 12.02 shall be
subject to the provisions of Schedule 2.

	13.	 	BAR CODING AND PACKAGING

	 	13.01 	 	The VETTEST slides shall be printed by OCD with special bar
coding for use in Analyzers.
	 
	 	13.02 	 	OCD shall package the VETTEST slides and tips for the
VETTEST Analyzer in the physical manner as used for the VITROS
slides and tips at the time of packaging of such VETTEST slides and
tips. In the event of a change in VITROS slide or tip packaging
which has an impact on such VETTEST slide or tip packaging, OCD
shall notify IDEXX as early as practicable of the relevant
particulars of such change.
	 
	 	13.03 	 	Except as authorized by Section 14.01 below, the label
content and art work associated with VETTEST slides and package
materials (including without limitation package materials for the
New Slides) shall not include any trademarks, trade names, or trade
dress of OCD. IDEXX shall furnish such label content and art work
to OCD on a timely basis, and such label content and art work shall
not be changed at any time during the Term without the prior
agreement of the parties.

	14.	 	TRADE MARKS AND TRADE NAMES

	 	14.01 	 	OCD expressly authorizes IDEXX to use the phrase
“manufactured by Ortho-Clinical Diagnostics, Inc. for IDEXX (IDEXX
ADDRESS)” on package materials for VETTEST slides (including without
limitation package materials for the New Slides). No other uses of
OCD’s trademarks, trade names or trade dress are authorized by this
Agreement.
	 
	 	14.02 	 	IDEXX shall neither acquire, nor claim any right, title or
interest in or to any of OCD’s trade marks or trade names by virtue
of this Agreement or through advertising and sale of the Analyzers
or the VETTEST slides or otherwise.

	15.	 	PATENT INDEMNITIES

	 	15.01 	 	OCD shall indemnify and hold IDEXX harmless for all loss,
damage, cost and expense whatsoever, including legal fees, patent
attorney’s fees and court costs that IDEXX may incur or become
liable for as a result of any action, suit or claim alleging
infringement of any patent held by a third party arising from the
use and/or sale of the VETTEST slides or tips to the extent that
such action, suit, or claim relates in a material way to the
specification for the VITROS slides or tips. If as a result of any
judgment or settlement it is determined that a claim or claims

21

 

	 	 	 	of a third party patent is infringed by the use and/or sale of the
VETTEST slides or tips as aforesaid and IDEXX is required to make
any payments to any third party as a result thereof, IDEXX may
off-set all such payments against any present and/or future
payments to be made to OCD hereunder.
	 
	 	15.02 	 	IDEXX shall indemnify and hold OCD harmless for all loss,
damage, cost and expense whatsoever, including legal fees, patent
attorney’s fees and court costs that OCD may incur or become liable
for as a result of any action, suit or claim alleging infringement
of any patent held by a third party arising from (a) the
manufacture, use or sale of the VETTEST slides or tips to the extent
that the VETTEST slides or tips differ from the VITROS slides or
tips, (b) the manufacture, use or sale of the New Slide/Panel
Design, or (c) the manufacture, use or sale of any Analyzer.
	 
	 	15.03 	 	All claims for indemnity under this Article 15 shall be
subject to the rights, obligations and procedures set forth in
Section 16.06 below.

	16.	 	WARRANTY, LIABILITY AND INDEMNIFICATION

	 	16.01 	 	OCD hereby warrants that:

	 	(a)	 	the VETTEST slides delivered to IDEXX shall be in
compliance with Schedule 1, and
	 
	 	(b)	 	OCD shall pack and ship products under this
Agreement in a manner consistent with OCD’s usual practices,
which shall be sufficient to protect the products from damage
during normal shipping and handling.

	 	16.02 	 	In the event of a breach on the part of OCD of Section 16.01
above, OCD’s liability shall be limited to the replacement of the
VETTEST slides or tips found to be defective, including shipping
costs for return of defective slides or tips and delivery of
replacement slides or tips.
	 
	 	16.03 	 	OCD’s liability as stated in Section 16.02 shall be subject
to the following conditions:

	 	(a)	 	IDEXX shall notify OCD promptly of any
noncompliance contrary to Section 16.01(a) or damage contrary
to Section 16.01(b).
	 
	 	(b)	 	IDEXX and its transferees shall not alter or
modify the VETTEST slides or packaging of the VETTEST slides
or tips without prior approval of OCD.

22

 

	 	16.04 	 	Except as provided in this Section 16 there are no other
warranties, express or implied, including warranties for fitness for
any particular use or of merchantability.
	 
	 	16.05 	 	Subject to Section 15, IDEXX shall indemnify and hold
harmless OCD from and against any claim, loss, damage, or expense
(including attorney’s fees) with respect to any physical injury to
persons, animals or property arising out of or in connection with
IDEXX’s use or sale of any Analyzer or the VETTEST slides, and any
claim of infringement of any trademark (except OCD’s own trademark),
trade dress, trade secret, or copyright. IDEXX shall notify OCD (a)
at the commencement of any action or suit based on any such claim
and (b) in the event of any injunction or other order prohibiting
the sale or use of any Analyzer or VETTEST slide.
	 
	 	16.06 	 	Any party claiming indemnification under this Agreement (the
“Indemnitee”) shall notify the party from which indemnification is
claimed (the “Indemnifying Party”) in writing promptly upon becoming
aware of any claim to which such indemnification may apply. Failure
to provide such notice shall constitute a waiver of the Indemnifying
Party’s indemnity obligations hereunder if, and only to the extent
that, the Indemnifying Party is materially damaged thereby. The
Indemnifying Party shall have the right to assume and control the
defense of the claim at its own expense. If the right to assume and
have sole control of the defense is exercised, the Indemnitee shall
have the right to participate in, but not to control, such defense
at its own expense. If the Indemnifying Party does not assume the
defense of the claim, the Indemnitee may defend the claim at the
Indemnifying Party’s expense. The Indemnitee will not settle or
compromise the claim without the prior written consent of the
Indemnifying Party. The Indemnifying Party will not, without the
consent of the Indemnitee (which consent will not be unreasonably
withheld), settle or compromise the claim in any manner which would
have an adverse effect on the Indemnitee, unless (x) prior to such
settlement or compromise the Indemnifying Party acknowledges in
writing its obligation to pay in full the amount of the settlement
or compromise and the Indemnitee is furnished with security
reasonably satisfactory to it that the Indemnifying Party can in
fact pay such amount, (y) such settlement or compromise includes a
full release of such claim against the Indemnitee and (z) such
settlement or compromise provides for no relief or remedy other than
money damages. The Indemnitee shall reasonably cooperate with the
Indemnifying Party and will make available to the Indemnifying Party
all pertinent information under the control of the Indemnitee.

	17.	 	SECRECY

	 	17.01 	 	Each of IDEXX, IDEXX Parent and OCD agrees to protect
confidential information disclosed to it upon terms set out in
Schedule 2 attached hereto.

23

 

	18.	 	PERIOD OF AGREEMENT

	 	18.01 	 	Subject to the terms and conditions set forth herein, the
term (the “Term”) of the Agreement shall be the period from the
Commencement Date until December 31, 2018.

	19.	 	TERMINATION

	 	19.01 	 	This Agreement may be terminated by either party in any of
the following events:

	 	(a)	 	If the other party is guilty of gross or
persistent breaches of the terms of this Agreement, which
breaches are not remedied to the satisfaction of the other
party after ninety (90) days notice in writing to do so. Any
such breach shall entitle the innocent party to terminate this
Agreement by notice in writing which notice shall be effective
at the end of ninety (90) days following the date of such
notice.
	 
	 	(b)	 	If the other party becomes insolvent or compounds
with its creditors or goes into liquidation (other than for
the purposes of corporate reorganization) then the innocent
party may terminate this Agreement by notice in writing which
shall have immediate effect.
	 
	 	(c)	 	If such party elects to cease marketing Dry Slide
diagnostic products, then it shall have the right, by notice
given at any time after January 1, [**], to terminate this
Agreement upon [**] years’ prior written notice.

	 	19.02 	 	Changes in the equity ownership or corporate reorganizations
of either party shall not be grounds for termination of this
Agreement, except that if more than [**]% of the outstanding capital
stock of IDEXX or IDEXX Parent is owned or controlled by a
competitor of OCD, OCD may in its discretion terminate the
provisions of Section 10.04 of this Agreement immediately upon
written notice to IDEXX.
	 
	 	19.03 	 	This Agreement shall terminate automatically upon any
termination of the US Agreement.
	 
	 	19.04 	 	The provisions of this Agreement dealing with rights and
obligations after termination of this Agreement, including without
limitation Sections 15, 16, 17, 21, 22, 23, 24, 25, 26, 28, 29 and
30, shall survive the expiration or termination of this Agreement
and continue to be enforceable to the extent necessary to achieve
the logical and intended purposes of such provisions.

24

 

20.     FORCE MAJEURE

	 	20.01 	 	Neither party shall be liable for any failure or delay in
performing any of its respective obligations under this Agreement
to the extent that such failure or delay is due to any cause beyond
its reasonable control (a “Force Majeure Event”). The
non-performing party shall give the other party prompt written
notice of such inability to perform and shall use commercially
reasonable efforts to resume performance as soon as reasonably
practicable. If as a result of a Force Majeure Event OCD is unable,
using commercially reasonable efforts, to meet its supply
obligations to IDEXX hereunder for a period exceeding twenty-four
months, or if IDEXX reasonably determines that it will not be
feasible for OCD through the use of commercially reasonable efforts
to resume the supply of VETTEST slides within twenty-four months,
then either party may terminate this Agreement immediately upon
written notice to the other party.

21.     GOVERNING LAW; JURISDICTION

	 	21.01 	 	The construction, validity and performance of this Agreement
shall be governed in all respects by the laws of the State of New
York, USA. Any legal actions relating to this Agreement must be
brought in the court of appropriate jurisdiction in the State of New
York, which shall have exclusive jurisdiction, and the parties
hereby waive any claim of lack of jurisdiction or inconvenient
forum. The prevailing party in any litigation under this Agreement
shall be entitled to an award of its costs, including reasonable
attorneys’ fees and expenses. Each party hereto waives its right to
trial of any issue by jury. Each party hereto waives any claim to
punitive, exemplary or multiplied damages from the other. Each
party hereto waives any claim of consequential damages from the
other.

22.     SEVERABILITY

	 	22.01 	 	Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. If
the final judgment of a court of competent jurisdiction declares
that any term or provision hereof is invalid or unenforceable, then
the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the
scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.

25

 

	23.	 	WAIVERS

	 	23.01 	 	Failure of either party to this Agreement to insist upon
strict observance or compliance with all its terms and conditions in
one or more instances shall not be deemed to be a waiver of its
right to insist upon such observance or compliance with such term or
condition or with any other terms or conditions hereof in the
future.

	24.	 	PRIOR AGREEMENTS; INTERPRETATION

	 	24.01 	 	As of the Commencement Date, this Agreement shall take
effect in substitution for the Prior Europe Agreement, the
Operations Agreement (except as otherwise provided in Section 7.04
of this Agreement), Section B (Amendments) of the Settlement
Agreement, and all or any other previous agreements relating to the
subject matter hereof whether the same are formal agreements or
agreements that would be inferred from the parties’ correspondence
or conduct, and all such substituted agreements shall be deemed to
have been terminated by mutual consent on the Commencement Date;
provided, however, that nothing contained herein shall be deemed to
modify or terminate the US Agreement, except that the Purchase
Commitments and Annual Purchase Forecasts referred to in Section 5
and in Schedule 4 of this Agreement and the US Agreement represent
the aggregate commitments and forecasts of IDEXX and IDEXX US and
not the individual commitments and forecasts of IDEXX US under the
US Agreement or IDEXX under this Agreement. For avoidance of doubt,
this Agreement (as it may be amended or restated from time to time)
is the “Europe Agreement” referred to in the US Agreement.

	25.	 	ENTIRE AGREEMENT

	 	25.01 	 	This Agreement, together with the US Agreement, the
Settlement Agreement (other than Section B thereof), and that
certain memorandum agreement dated September 12, 2003 regarding
slide packaging (as amended to date), constitutes the complete
agreement of the parties concerning the subject matter hereof and
thereof during the Term, and, with respect to all periods from and
after the Commencement Date, supersedes all prior agreements between
the parties regarding its subject matter.

	26.	 	ALTERATION OR MODIFICATION

	 	26.01 	 	No alteration, amendment or modification to this Agreement
or the attached Schedules shall be of any force or effect unless in
writing and signed by both parties. No modification shall be
effected by the acknowledgement or acceptance of purchase order
forms or order confirmations or invoices or other documents
containing different conditions.

26

 

	27.	 	ASSIGNMENT

	 	27.01 	 	This Agreement shall not be capable of assignment by either
party to a company of which it owns less than a majority or which
owns less than a majority of the party save in the case of (i) an
assignment at OCD’s sole discretion to an acquiror of OCD’s dry
slide business or (ii) an assignment at IDEXX’s sole discretion to
an acquiror of IDEXX’s VETTEST and New Analyzer business; provided
that no assignment shall release the assigning party from any
obligations hereunder. In the case of an assignment under the
preceding clause (ii) to an entity which is a competitor of OCD’s
diagnostics business, OCD may in its discretion terminate the
provisions of Section 10.04 granting IDEXX exclusivity or
restricting sales or marketing by or on behalf of OCD immediately
upon written notice to IDEXX.
	 
	 	 	 	This Agreement shall be binding on and inure to the benefit of the
parties hereto and their permitted successors and assigns.

	28.	 	GOVERNING LANGUAGE

	 	28.01	 	This Agreement is drafted in English. If this Agreement is
translated into a language other than English, then the original
English version of this Agreement shall control all questions of
interpretation with respect thereto. Any other documents delivered
or given pursuant to this Agreement, including notices, shall be in
English.

	29.	 	NOTICES

	 	29.01	 	Any notice, statement or other communication to be given by
one party to the other hereunder may be given by registered mail,
airmail, internationally recognized courier, facsimile or telex to
the party concerned at the addresses set out below:
	 
	 	 	 	Ortho-Clinical Diagnostics, Inc.

1001 US Highway 202

Raritan, New Jersey 08869, USA

For the attention of: Vice President and General Manager, Americas
	 
	 	 	 	With a copy to:

Johnson & Johnson

One Johnson & Johnson Plaza

New Brunswick, New Jersey 08933, USA

For the attention of: Office of General Counsel

27

 

	 	 	 	IDEXX Europe B.V.

Koolhovenlaan 20

1119 NE — Schiphol-Rijk

The Netherlands

For the attention of: Director of European Finance and Administration
	 
	 	 	 	With a copy to:

IDEXX Laboratories, Inc.

One IDEXX Drive

Westbrook, Maine 04092, USA

For the attention of: Office of General Counsel
	 
	 	29.02	 	Any notice, payment or communication so given or made shall
be deemed to have been received at the time when in the ordinary
course of transmission the same should have reached its destination.
Either party may change its address for the purpose of this
Agreement by giving notice of such change to the other party
pursuant to the provisions of this Section. For purposes of this
Section 29, notice given by OCD to IDEXX US under the US Agreement
shall be deemed given to IDEXX.

	30.	 	GUARANTY

	 	30.01	 	IDEXX Parent hereby guarantees to OCD the due performance
and observance by IDEXX of all of the provisions of the Agreement to
be performed and observed by it under this Agreement, for which
IDEXX Parent shall be jointly and severally liable, without
requiring any notice of non-payment, non-performance or
non-observance, or proof of notice or demand, all of which IDEXX
Parent hereby waives. OCD may proceed against IDEXX Parent
separately or jointly, before, after or simultaneously with
proceeding against IDEXX for default. This guaranty shall not be
terminated, affected or impaired in any way by reason of (i) the
assertion by OCD against IDEXX of any of the rights or remedies
reserved to OCD under this Agreement, (ii) the commencement by OCD
of any proceedings against IDEXX, (iii) the granting by OCD of any
extensions of time or indulgence to IDEXX, (iv) any change in or
amendment to this Agreement, or (v) any payment or performance being
invalid in connection with any bankruptcy, insolvency,
reorganization or similar proceedings in respect to IDEXX. This
guaranty is absolute and unconditional and shall continue in full
force and effect as to any renewal, extension, amendment, addition,
assignment or transfer or other modification of this Agreement,
whether or not IDEXX Parent shall have been notified of or consented
to any such action, and regardless of bankruptcy or insolvency of
IDEXX or the actual or purported rejection by a trustee in such
bankruptcy of this Agreement or any limitation on any claim in such
bankruptcy for damages resulting from the actual or purported
termination of this Agreement

28

 

	 	 	 	or the enforceability in such bankruptcy of this Agreement. IDEXX
Parent hereby agrees that this guaranty shall continue to be
effective or shall be reinstated, as the case may be, if at any
time payment of any sum hereby guaranteed is rescinded or must be
otherwise restored or returned by OCD upon the insolvency,
bankruptcy or reorganization of IDEXX, or otherwise, all as though
such payment had not been made.

     IN WITNESS WHEREOF and intending to be legally bound, the parties hereto
have caused this Agreement to be duly executed in duplicate by their respective
authorized representatives the day and year first written above.

	 	 	 	 	 	 	 
	ORTHO-CLINICAL

DIAGNOSTICS, INC.	 	IDEXX EUROPE B.V.
	 	 	 	 	 	 	 
	By:	 	
/s/Tony Zezzo
	 	By:
	 	/s/Conan R. Deady
	 	 	

	 	 	 	

	 	 	
Tony Zezzo,
	 	 	 	Conan R. Deady,
	 	 	
Vice President and General Manager,
	 	 	 	Director
	 	 	
Americas	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Solely as to Sections 17 and 30

IDEXX LABORATORIES, INC.
	 	 	 	 	 	 	 
	 	 	 	 	By:
	 	/s/Jonathan W. Ayers
	 	 	 	 	 	 	

	 	 	 	 	 	 	Jonathan W. Ayers,
	 	 	 	 	 	 	President and Chief Executive Officer

29

 

Schedule 1 – VetTest® Slide Quality Assurance Procedures

VETTEST Slides for the VETTEST Analyzer:

Introduction

The following procedure constitutes a generic overview of the quality assurance
provisions for finishing of VITROS slides and applies in like manner to product
release for the VETTEST slides.

VETTEST Slide Quality Assurance

VETTEST slides will be produced to the same quality standards as VITROS and DT
60 slides for OCD’s human market unless otherwise agreed to by IDEXX.

Bar Coding

Bar code printing on the VETTEST slides will render the VETTEST slides
incompatible with use in VITROS analyzers. OCD will reserve certain number
sequences for generation of the bar code patterns on the VETTEST slides.

New Slides:

Specifications to be determined by IDEXX US as part of the Development Program
contemplated in the US Agreement and, together with quality assurance
procedures, reasonably agreed in writing by OCD and IDEXX US for purposes of
this Schedule 1.

30

 

Schedule 2

     Section 1. Obligation to Keep Information Confidential. Each party
agrees to hold, and to cause its respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence
the terms of the Agreements, and all documents and information concerning the
other party, whether oral or written, furnished or made known to such party in
connection with either of the Agreements or any project or discussion under, or
related to, either of the Agreements; provided that no party shall be required
to keep any information confidential (i) if such party is compelled to disclose
such information by judicial or administrative process or by other requirements
of law (including without limitation the Securities Act of 1933, as amended,
and the Securities Exchange Act of 1934, as amended) and such party has
provided prior written notice to the other party and given such other party
reasonable opportunity to contest disclosure or (ii) to the extent such
information can be shown to have been (A) previously known to such party on a
nonconfidential basis, (B) in the public domain through no fault of such party,
(C) later lawfully acquired from a third party source or (D) independently
developed by such party without reference to confidential information. The
foregoing notwithstanding, any party may disclose information concerning the
other party or the Agreements to its and its affiliates’ officers, directors,
employees, accountants, counsel, consultants, advisors and agents in connection
with its performance of this Agreement so long as such persons are informed by
such party of the confidential nature of such information and are directed by
such party to treat such information confidentially, it being understood and
agreed that such party shall be responsible for any failure to treat such
information confidentially by such persons. The obligation of each party to
hold any information in confidence shall be satisfied if it exercises the same
care with respect to such information as it would to preserve the
confidentiality of its own similar information. The confidentiality provisions
of this Schedule 2 shall remain in effect for so long as this Agreement is in
effect and for a period of three (3) years thereafter.

     Section 2. Public Announcements. No party to this Agreement shall
originate any news release or other public announcement, written or oral,
relating to this Agreement or the US Agreement, without the prior written
consent of the other party, except to the extent such news release or other
public announcement is required by law; provided that in the event an
announcement is required by law, the party issuing same shall still be required
to use its commercially reasonable efforts to consult with the other party or
parties named or referred to in such announcement prior to its release as the
circumstances reasonably permit, in order to allow such other party or parties
to comment on the use of their names or the references to them and, after its
release, shall provide such other party or parties with a copy thereof. If a
party has previously reviewed and approved a public announcement, its further
approval shall not be required with respect to those provisions of subsequent
announcements that are substantially similar in scope and substance to
provisions that have been previously approved. In no event shall IDEXX or
IDEXX Parent use the name “Johnson & Johnson” or “J&J” in any publicity
relating to this Agreement or the US Agreement, whether written or oral, other
than to state that OCD is “a Johnson & Johnson company” or a (wholly-owned)
subsidiary of Johnson & Johnson.

31

 

     Section 3. Governing Law. The construction, validity and performance of
this Schedule 2 shall be governed in all respects by the laws of the State of
New York, USA.

     Section 4. Notices. Any notices required to be given under this Schedule
2 shall be given in the manner specified by Section 29 of the Agreement.

32

 

Schedule 3 - Panels/Profiles

(Applicable only to VETTEST Analyzer)

The initial PANEL shall be the “Pre-Anesthetic Panel” consisting of four sets
of the following six VETTEST slides:

	 	 	 
	BUN	 	
Urea Nitrogen
	ALT	 	
Alanine aminotransferase
	GLU	 	
Glucose
	TP	 	
Total protein
	CREA	 	
Creatinine
	ALKP	 	
Alkaline phosphatase

[**]The initial PROFILES shall be the “General Health Profile” and the “Large
Animal Profile”, each consisting of two sets of 12 VETTEST slides as follows:

	 	 	 	 	 	 	 
	General Health Profile	 	 	 	Large Animal Profile	 	 
	 
	ALB	 	
Albumin
	 	ALB
	 	Albumin
	ALKP	 	
Alkaline phosphatase
	 	ALKP
	 	Alkaline phosphatase
	ALT(SGPT)	 	
Alanine aminotransferase
	 	AST
	 	AST
	AMYL	 	
Amylase
	 	Ca2+
	 	Calcium
	Ca2+	 	
Calcium
	 	CK
	 	CK
	CHOL	 	
Cholesterol
	 	GGT
	 	Gamma GT
	CREA	 	
Creatinine
	 	GLU
	 	Glucose
	GLU	 	
Glucose
	 	PHOS
	 	Inorganic phosphate
	PHOS	 	
Inorganic phosphate
	 	LDH
	 	LDH
	TBIL	 	
Total bilirubin
	 	MG
	 	Magnesium
	TP	 	
Total protein
	 	TP
	 	Total Protein
	BUN	 	
Urea Nitrogen
	 	BUN
	 	Urea Nitrogen

Packaging for the Pre-Anesthetic Panels, the General Health Profiles and the
Large Animal Profiles for the VETTEST Analyzer has been previously agreed upon
by the parties, and any changes to the slide composition or packaging of the
initial PANEL or the initial PROFILES shall be negotiated in good faith and
mutually agreed upon by OCD and IDEXX. The slide composition, packaging and
initial pricing of any additional PANELS/PROFILES shall be mutually agreed upon
by OCD and IDEXX. Unless otherwise agreed by the parties in writing with
respect to one or more specific PANELS or PROFILES, all purchases by IDEXX or
IDEXX US of VETTEST slides packaged as PANELS/PROFILES shall be credited
against the Annual Purchase Forecasts and Purchase Commitments for such slides
under this Agreement and the US Agreement.

New Slide/Panel Design for the New Analyzer shall be as developed by IDEXX US
under Article 3 of the US Agreement.

33

 

Schedule 4 - Purchase Commitments

	 	 	 
	 	 	Minimum Slide Purchase
	Year	 	Commitment ( [**] )
	
	 	

	2003	 	
[**]
	2004	 	
[**]
	2005	 	
[**]
	2006	 	
[**]
	2007	 	
[**]
	2008	 	
[**]
	2009	 	
[**]
	2010	 	
[**]

34

 

Schedule 5 - Products and Prices

(as of the Commencement Date)

Customer No.: 314 8251

	 	 	 	 	 	 	 	 	 
	Single Slides (Box of 25)	 	Catalog Number	 	Territory Pricing
	
	 	
	 	

	Albumin
	 	 	822 7134	 	 	$	[**]	 
	Alk Phos
	 	 	831 5459	 	 	$	[**]	 
	ALT
	 	 	808 3750	 	 	$	[**]	 
	Ammonia
	 	 	181 6842	 	 	$	[**]	 
	Amylase
	 	 	820 8191	 	 	$	[**]	 
	AST
	 	 	811 3979	 	 	$	[**]	 
	Calcium
	 	 	804 8191	 	 	$	[**]	 
	Cholesterol
	 	 	835 4888	 	 	$	[**]	 
	CK
	 	 	835 8582	 	 	$	[**]	 
	Creatinine
	 	 	818 3477	 	 	$	[**]	 
	ECO2
	 	 	853 8670	 	 	$	[**]	 
	Gamma GT
	 	 	826 1315	 	 	$	[**]	 
	Glucose
	 	 	813 0536	 	 	$	[**]	 
	LDH
	 	 	835 1082	 	 	$	[**]	 
	Lipase
	 	 	196 6191	 	 	$	[**]	 
	Magnesium
	 	 	108 0266	 	 	$	[**]	 
	Phosphorus
	 	 	807 0856	 	 	$	[**]	 
	Total Bilirubin
	 	 	838 0396	 	 	$	[**]	 
	Total Protein
	 	 	193 7093	 	 	$	[**]	 
	Triglycerides
	 	 	192 2285	 	 	$	[**]	 
	Urea Nitrogen
	 	 	150 7326	 	 	$	[**]	 
	Uric Acid
	 	 	100 0793	 	 	$	[**]	 

	 	 	 	 	 	 	 	 	 
	Profile Slides (Box of 24)	 	Catalog Number	 	Territory Pricing
	
	 	
	 	

	General Health Profile
	 	 	160 7175	 	 	$	[**]	 
	Pre-Anesthetic Panel
	 	 	801 5109	 	 	$	[**]	 
	Large Animal Profile
	 	 	680 0071	 	 	$	[**]	 

	 	 	 	 	 	 	 	 	 
	Other	 	Catalog Number	 	WW Pricing
	
	 	
	 	

	Vetrols
	 	 	869 9852	 	 	$	[**]	 
	Tips
	 	 	175 7384	 	 	$	 [**]	 

35

 

Schedule 6 – Minimum Prices for New Chemistries

36

 

Schedule 7 - Illustrative Rebate Calculations

The Estimated Rebate Payments will be calculated for each of the first three calendar quarters using the Effective Rebate Rate, as described more
fully in sub-clause 7.03 of the Agreement. Any required adjustments will be made at the end of the fourth calendar quarter, in accordance with
sub-clause 7.03 of the Agreement.

Example: The aggregate Annual Purchase Forecast for IDEXX and IDEXX US in a given year is [**] slides; pricing is $[**]/slide; blended rebate
percentage rate is [**]%, as follows:

	 	 	 	[**] slides * [**]% = [**] slides

[**] slides * [**]% = [**] slides

[**] slides * [**]% = [**] slides

[**] slides * [**]% = [**] slides

[**] slides * [**]% = [**] slides

Total Slides Eligible for Rebate = [**] slides

         
      Effective
Rebate = Total slides eligible for rebate / total purchases =
[**] = [**]%

Actual aggregate volume purchased by IDEXX and IDEXX US equals volume projected at the beginning of the year.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Actual Qtrly.	 	 	 	 	 	 	 	 	 	Calculated	 	[**]%	 	 	 	 
	 	 	Vol.	 	Purchases	 	Effective Rebate	 	Rebate Each Qtr.	 	Holdback	 	Rebate Paid
	 	 	([**])	 	($[**])	 	% [**] Vol.)	 	([**])	 	([**])	 	([**])
	 	 	
	 	
	 	
	 	
	 	
	 	

	1st Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	2nd Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	3rd Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	4th Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	 
	 	 	[**]	 	 	$	[**]	 	 	 	 	 	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	True-up:	 	$	[**]	 	 	 	 	 	 	$	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	Total:	 	$	[**]	 	 	 	 	 	 	$	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	 	 	 	 	 	
	 

Actual aggregate volume purchased by IDEXX and IDEXX US is greater than volume projected at the beginning of the year.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Actual Qtrly.	 	 	 	 	 	 	 	 	 	Calculated	 	[**]%	 	 	 	 
	 	 	Vol.	 	Purchases	 	Effective Rebate	 	Rebate Each Qtr.	 	Holdback	 	Rebate Paid
	 	 	([**])	 	($[**])	 	% 9[**] Vol.)	 	([**])	 	([**])	 	([**])
	 	 	
	 	
	 	
	 	
	 	
	 	

	1st Qtr
	 	 	[**]	 	 	$	 [**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	2nd Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	3rd Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	4th Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	 
	 	 	[**]	 	 	$	[**]	 	 	 	 	 	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	True-up:	 	$	[**]	 	 	 	 	 	 	$	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	Total:	 	$	[**]	 	 	 	 	 	 	$	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	 	 	 	 	 	
	 

37

 

Actual aggregate volume purchased by IDEXX and IDEXX US is lower than volume projected at the beginning of the year.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Actual Qtrly.	 	 	 	 	 	 	 	 	 	Calculated	 	[**]%	 	 	 	 
	 	 	Vol.	 	Purchases	 	Effective Rebate	 	Rebate Each Qtr.	 	Holdback	 	Rebate Paid
	 	 	([**])	 	($[**])	 	% [**] Vol.)	 	([**])	 	([**])	 	([**])
	 	 	
	 	
	 	
	 	
	 	
	 	

	1st Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	2nd Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	3rd Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	4th Qtr
	 	 	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	 
	 	 	[**]	 	 	$	[**]	 	 	 	 	 	 	$	[**]	 	 	$	[**]	 	 	$	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	True-up:	 	$	[**]	 	 	 	 	 	 	$	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	Total:	 	$	[**]	 	 	 	 	 	 	$	[**]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	 	 	 	 	 	
	 

Calculation of IDEXX’s Proportionate Share of rebate (assuming Actual aggregate
volume purchased by IDEXX and IDEXX US equals volume projected at the beginning
of the year):

Assumptions:

	•	 	Number of slides purchased by IDEXX: [**] slides
	 
	•	 	Total number of slides purchase by IDEXX and its affiliates: [**] slides
	 
	•	 	Total rebate earned: $[**]

Calculation:

IDEXX’s rebate equals: [**] slides / [**] slides * $[**], or $[**].

38

 

Schedule 8 – Eligible New Chemistry Slides

[**]

39

 

\
Schedule 9 – Example of Cost Adjustment Calculations

(Assumes PPI = [**]%)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Scenario 1	 	Scenario 2
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	

	 	 	 	 	 	 	% of
OCD’s	 	Year 1	 	% Change	 	Year 2	 	$ Change	 	% Change	 	Year 2	 	$ Change
	Costs	 	Usage	 	Cost	 	In Cost	 	Cost	 	in Cost	 	in Cost	 	Cost	 	in Cost
	
	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 	

	 
	 	 	[**]	 	 	 	[**]	%	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 
	 
	 	 	[**]	 	 	 	[**]	%	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	-$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 
	 
	 	 	[**]	 	 	 	[**]	%	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 
	 
	 	 	[**]	 	 	 	[**]	%	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 
	 
	 	 	[**]	 	 	 	 	 	 	$	[**]	 	 	 	[**]	 	 	$	[**]	 	 	$	[**]	 	 	 	[**]	 	 	$	[**]	 	 	$	[**]	 
	 
	 	 	 	 	 	Total	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 
	 
	 	 	 	 	 	Total (x[**])	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 	 	 	[**]	%	 	$	[**]	 	 	$	[**]	 

Scenario 1 Conclusion: [**]Cost Adjustment Required (Other Costs Increased by < [**]% over PPI)

	 	 	 	 	 
	Adjustment Calculation [**]:
	 	 	 	 
	Actual [**]
	 	$	[**]	 
	Less: PPI Change ([**]% of $[**])
	 	$	[**]	 
	Total Adjustment
	 	$	[**]	 

Scenario 2 Conclusion: [**] Costs Adjustments Required

	 	 	 	 	 	 
	 	Adjustment Calculation [**]
	 	 	 	 
	 	Same as above

	 	$	[**]	 
	 	Adjustment for [**] Costs:
	 	 	 	 
	 	Actual Cost Change
	 	$	[**]	 
	 	Less: “PPI Plus [**]%” Change ([**]% *$[**])
	 	$	[**]	 
	 	Adjustment
	 	$	[**]	 
	 	Total Adjustment
	 	$	[**]	 
	 
	 	 	
	 

* - [**] Costs - [**] $[**], or $[**]/slide @ [**] slides

40

 

Schedule 10 – Additional Countries in the Territory

	 	 	 
	Albania	 	
Liechtenstein
	Andorra	 	
Lithuania
	Armenia	 	
Macedonia
	Azerbaijan	 	
Malta
	Bahrain	 	
Monaco
	Belarus	 	
Norway
	Bosnia and Herzegovina	 	
Oman
	Bulgaria	 	
Pakistan
	Croatia	 	
Poland
	Cyprus	 	
Qatar
	Czech Republic	 	
Romania
	Estonia	 	
Russia
	Faroes Islands	 	
San Marino
	Georgia	 	
Saudi Arabia
	Hungary	 	
Slovakia
	Iceland	 	
Slovenia
	Iran	 	
Switzerland
	Iraq	 	
Syria
	Israel	 	
Tajikistan
	Jordan	 	
Turkey
	Kazakhstan	 	
Turkmenistan
	Kuwait	 	
Ukraine
	Kyrgyzstan	 	
United Arab Emirates
	Latvia	 	
Uzbekistan
	Lebanon	 	
Yemen

41EX-10.13 EXECUTIVE EMPLOYMENT AGREEMENT (WALLEN)

 

Exhibit 10.13

EXECUTIVE EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is made as of September 8, 2003, (this
“Agreement”), by and between IDEXX Laboratories, Inc., a Delaware corporation
(the “Company”) and William C. Wallen (the “Executive”).

     The Board of Directors of the Company (the “Board”) has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below)
of the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive’s full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1.     Certain Definitions.

          (a) The “Effective Date” shall mean the first date during the Change of
Control Period (as defined in Section 1(b)) on which a Change of Control (as
defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive’s
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with or anticipation of a Change of Control, then
for all purposes of this Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination of employment.

          (b) The “Change of Control Period” shall mean the period commencing on the
date hereof and ending on the second anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof shall be hereinafter referred to as the “Renewal Date”), unless
previously terminated, the Change of Control Period shall be automatically
extended so as to terminate three years from such Renewal Date, unless at least
120 days prior to the Renewal Date the Company shall give notice to the
Executive that the Change of Control Period shall not be so extended.

     2.     Change of Control. For the purpose of this Agreement, a “Change of
Control” shall mean:

 

 

          (a) The acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iv)
any acquisition by any corporation pursuant to a transaction which satisfies
the criteria set forth in clauses (i), (ii) and (iii) of subsection (c) of this
Section 2; or

          (b) Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequently to the date hereof whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or

          (c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, immediately following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 60% of, respectively, the then-outstanding shares of common stock and
the combined voting power of the then-outstanding voting securities entitled to
vote generally in the election of directors, of the corporation resulting from
such Business Combination (which as used in this Section 2(c) shall include,
without limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (ii) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination, or the combined voting power of the then-outstanding
voting securities of such corporation and (iii) at least half of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

2

 

          (d) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.

     3.     Employment Period. The Company hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the earlier of (i) the second
anniversary of such date or (ii) the termination of the Executive’s employment
pursuant to Section 5 hereof (the “Employment Period”). Except as provided in
Section 1(a), nothing in this Agreement shall, prior to the Effective Date,
impose upon the Company any obligation to retain the Executive as an employee.
In addition, nothing in this Agreement shall restrict the Executive from
terminating his employment with the Company, and no such termination by the
Executive shall be deemed a breach of this Agreement.

     4.     Terms of Employment.

          (a) Position and Duties.

               (i) During the Employment Period, (A) the Executive’s position (including
status, offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 120-day period immediately preceding the Effective Date and (B) the
Executive’s services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any office or location
less than 35 miles from such location.

               (ii) During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive agrees to
devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company or the terms of this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.

          (b) Compensation.

               (i) Base Salary. During the Employment Period, the Executive shall receive
an annual base salary (“Annual Base Salary”), which shall be paid at a monthly
rate, at least equal to twelve times the highest monthly base salary paid or
payable, including any base salary which has been earned but deferred, to the
Executive by the Company and its affiliated

3

 

companies in respect of the twelve-month period immediately preceding the
month in which the Effective Date occurs. During the Employment Period, the
Annual Base Salary shall be reviewed no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective Date and
thereafter at least annually. Any increase in Annual Base Salary shall not
serve to limit or reduce any other obligation to the Executive under this
Agreement. Annual Base Salary shall not be reduced after any such increase and
the term Annual Base Salary as utilized in this Agreement shall refer to Annual
Base Salary as so increased. As used in this Agreement, the term “affiliated
companies” shall include any company controlled by, controlling or under common
control with the Company.

               (ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall
be entitled to receive such annual bonus as may be determined by the Board of
Directors, but in no event less than the annual bonus paid or payable in
respect of the full fiscal year immediately preceding the Effective Date.

               (iii) Incentive Plans. During the Employment Period, the Executive shall
be entitled to participate in all incentive plans, practices, policies and
programs applicable generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices, policies and
programs provide the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices, policies and
programs in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.

               (iv) Welfare Benefit, Savings and Retirement Plans. During the Employment
Period, the Executive and/or the Executive’s family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit, savings and retirement plans, practices, policies and programs
provided by the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, employee life, group
life, split-dollar life, accidental death and travel accident insurance plans
and programs) to the extent applicable generally to other peer executives of
the Company, but in no event shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable, in the aggregate,
than the most favorable of such plans, practices, policies and programs in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other peer
executives of the Company and its affiliated companies.

               (v) Expenses. During the Employment Period, the Executive shall be
entitled to receive reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies, practices and procedures of the
Company in effect immediately prior to the Effective Date.

               (vi) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the plans, policies, programs and
practices of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and

4

 

programs provide the Executive with benefits which are less favorable, in
the aggregate, than the most favorable of such plans, practices, policies and
programs in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.

          (c) Options. Upon the occurrence of a Change of Control, all outstanding
options to purchase shares of Common Stock held by the Executive shall become
immediately exercisable in full.

     5.     Termination of Employment.

          (a) Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance
with Section 12(b) of this Agreement of its intention to terminate the
Executive’s employment. In such event, the Executive’s employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the “Disability Effective Date”), provided that, within the
30 days after such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of the Executive from the Executive’s
duties with the Company on a full-time basis for 180 consecutive business days
as a result of incapacity due to mental or physical illness which is determined
to be total and permanent by a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive’s legal
representative.

          (b) Cause. Subject to Section 5(d), the Company may terminate the
Executive’s employment during the Employment Period for Cause. For purposes of
this Agreement, “Cause” shall mean:

		
	 	     (i) the willful failure of the Executive to perform substantially
the Executive’s duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness), which
failure is not cured within 30 days after a written demand for
substantial performance is delivered to the Executive by the Board which
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive’s duties, or
	 
	 	     (ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company.

5

 

          (c) Good Reason. The Executive’s employment may be terminated by the
Executive with or without Good Reason. For purposes of this Agreement, “Good
Reason” shall mean:

		
	 	        (i) the assignment to the Executive of any duties inconsistent in
any respect with the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities
as contemplated by Section 4(a) of this Agreement, or any other action by
the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
the Executive;
	 
	 	        (ii) any failure by the Company to comply with any of the provisions
of Section 4(b) of this Agreement or any other provision hereof requiring
a payment or provision of a benefit to the Executive, other than an
isolated, insubstantial and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive;
	 
	 	        (iii) the Company’s requiring the Executive to be based at any
office or location other than as provided in Section 4(a)(i)(B) hereof or
the Company’s requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the
Effective Date;
	 
	 	        (iv) any purported termination by the Company of the Executive’s
employment otherwise than as expressly permitted by this Agreement; or
	 
	 	        (v) any failure by the Company to comply with and satisfy Section
11(c) of this Agreement.

     For purposes of this Section 5(c), any good faith determination of “Good
Reason” made by the Executive shall be conclusive.

     Anything in this Agreement to the contrary notwithstanding, a termination
by the Executive for any reason during the 30-day period immediately following
the first twelve (12) months after the Effective Date shall be deemed to be a
termination for Good Reason for all purposes of this Agreement.

          (d) Notice of Termination.

               (i) Any termination by the Company for Cause, or by the Executive for Good
Reason, shall be effected by Notice of Termination to the other party hereto
given in accordance with Section 12(b) of this Agreement. For purposes of this
Agreement, a “Notice of Termination” means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company to set

6

 

forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstances in
enforcing the Executive’s or the Company’s rights hereunder.

               (ii) Any Notice of Termination for Cause must be given within sixty (60)
days of the Board learning of the event(s) or circumstance(s) which the Board
believes constitute(s) Cause. Prior to any Notice of Termination for Cause
being given (and prior to any termination for Cause being effective), the
Executive shall be entitled to a hearing before the Board at which he may, at
his election, be represented by counsel and at which he shall have a reasonable
opportunity to be heard. Such hearing shall be held on not less than fifteen
days prior written notice to the Executive stating the Board’s intention to
terminate the Executive for Cause and stating in detail the particular event(s)
or circumstance(s) which the Board believes constitute(s) Cause for
termination.

          (e) Date of Termination. “Date of Termination” means (i) if the
Executive’s employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, subject, in the case of
termination by the Company, for Cause, to the Company’s compliance with Section
5(d)(ii); (ii) if the Executive’s employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the date on
which the Company notifies the Executive of such termination; and (iii) if the
Executive’s employment is terminated by reason of death or Disability, the Date
of Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.

     6.     Obligations of the Company Upon Termination.

          (a) Good Reason; Other Than for Cause, Death or Disability. If, during
the Employment Period, the Company shall terminate the Executive’s employment
other than for Cause, Death or Disability or the Executive shall terminate
employment for Good Reason:

               (i) the Company shall pay to the Executive in a lump sum in cash within 30
days after the Date of Termination the aggregate of the following amounts:

		
	 	               A. the sum of (1) the Executive’s Annual Base Salary through the
Date of Termination to the extent not theretofore paid, (2) the product
of (x) the higher of (I) the highest annual cash bonus paid to the
Executive with respect to the last three fiscal years prior to the
Effective Date and (II) the annual bonus paid or payable, including any
bonus or portion thereof which has been earned but deferred (and
annualized for any fiscal year consisting of less than twelve full months
or during which the Executive was employed for less than twelve full
months), for the most recently completed fiscal year during the
Employment Period, if any (such higher amount being referred to as the
“Highest Annual Bonus”) and (y) a fraction, the numerator of which is the
number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and (3) any compensation
previously deferred by the Executive (together with any accrued interest
or earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid (the sum of the amounts

7

 

		
	 	described in clauses (1), (2), and (3) shall be hereinafter referred
to as the “Accrued Obligations”); and

		
	 	               B. the amount equal to the product of (1) two and (2) the sum of (x)
the Executive’s Annual Base Salary and (y) the Highest Annual Bonus.

               (ii) for 24 months after the Executive’s Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and/or
the Executive’s family at least equal to those which would have been provided
to them in accordance with the plans, programs, practices and policies
described in Section 4(b)(iv) of this Agreement (excluding any savings and/or
retirement plans) if the Executive’s employment had not been terminated or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies and their families, provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or other
welfare benefits under another employer-provided plan, the medical and other
welfare benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility. For purposes of
determining eligibility (but not the time of commencement of benefits) of the
Executive for retiree benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained employed until 24
months after the Date of Termination and to have retired on the last day of
such period;

               (iii) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required
to be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and
its affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the “Other Benefits”); and

               (iv) the Company shall timely reimburse the Executive up to an aggregate
of $25,000 for expenses incurred in connection with outplacement services and
relocation costs incurred in connection with obtaining new employment outside
the State of Maine until the earlier of (i) 24 months following the termination
of Executive’s employment or (ii) the date the Executive secures full time
employment.

          (b) Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive’s legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive’s estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination.

          (c) Disability. If the Executive’s employment is terminated by reason of
the Executive’s Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination.

8

 

          (d) Cause; Other than for Good Reason. If the Executive’s employment shall
be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the
obligation to pay to the Executive (x) his Annual Base Salary through the Date
of Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid or not yet provided. If the Executive voluntarily terminates employment
during the Employment Period, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to the Executive, other
than for Accrued Obligations and the timely payment or provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination.

     7.     Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its affiliated companies
at or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.

     8.     Full Settlement. The Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive (under
this Agreement or otherwise) or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement and such amounts shall not be reduced whether or not the
Executive obtains other employment. The Company agrees to pay as incurred, to
the full extent permitted by law, all legal, accounting and other fees and
expenses (including, without limitation, of expert witnesses) which the
Executive may reasonably incur (i) as a result of any contest (regardless of
the outcome thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the “Code”), (ii) in connection with the negotiation and preparation
of this Agreement and (iii) in connection with the Executive’s performance of
his obligations under Section 9(c).

     9.     Certain Additional Payments by the Company.

          (a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, in the event it shall be determined that any payment,
benefit, or distribution by the Company to or for the benefit of the Executive
which constitutes a “parachute payment” within the meaning of Section 280G of
the Code (whether provided pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required

9

 

under this Section 9)(a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred
by the Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the “Excise Tax”), then the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after payment
by the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and excise tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the
foregoing provisions of this Section 9(a), if it shall be determined that the
Executive is entitled to a Gross-Up Payment, but that the Executive, after
taking into account the Payments and the Gross-Up Payment, would not receive a
net after-tax benefit of at least $50,000 (taking into account both income
taxes and any Excise Tax) as compared to the net after-tax proceeds to the
Executive resulting from an elimination of the Gross-Up Payment and a reduction
of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such
that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.

          (b) Subject to the provisions of Section 9(c), all determinations required
to be made under this Section 9, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by
PricewaterhouseCoopers LLP or such other certified public accounting firm as
may be designated by the Executive (the “Accounting Firm”) which shall provide
detailed supporting calculations both to the Company and the Executive within
15 business days of the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 9, shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firm’s determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.

          (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.

10

 

The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in writing
prior to the expiration of such period that it desires to contest such claim,
the Executive shall:

		
	 	               (i) give the Company any information reasonably requested by the
Company and available to the Executive relating to such claim,
	 
	 	               (ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company,
	 
	 	               (iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
	 
	 	               (iv) permit the Company to participate in any proceedings relating
to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or to contest
the claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or other taxing authority.

          (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the
Company’s complying with the

11

 

requirements of Section 9(c)) promptly pay to the Company the amount of
such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim
and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

     10.     Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the
Executive during the Executive’s employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive’s employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation of
the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts or benefits otherwise payable or to be provided to the
Executive under this Agreement.

     11.     Successors.

          (a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.

          (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

          (c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, “Company” shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid.

     12.     Miscellaneous.

          (a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.

12

 

          (b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

	 	 	 
	 	 	
If to the Executive:
	 
	 	 	
William C. Wallen
	 	 	
c/o IDEXX Laboratories, Inc.
	 	 	
One Idexx Drive
	 	 	
Westbrook, ME 04092
	 	 	 
	 	 	
If to the Company:
	 	 	 
	 	 	
IDEXX Laboratories, Inc.
	 	 	
One Idexx Drive
	 	 	
Westbrook, ME 04092
	 	 	
Attention: Chairman of Compensation Committee

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

          (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.

          (d) The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

          (e) The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c) of this Agreement, shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.

          (f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is “at will”
and, subject to Section 1(a) hereof, prior to the Effective Date, the
Executive’s employment and/or this Agreement may be terminated by either the
Executive or the Company, by written notice to the other, at any time prior to
the Effective Date, in which case the Executive shall have no further rights or
obligations under this Agreement. From and after the Effective Date this
Agreement shall supersede any other agreement between the parties with respect
to the subject matter hereof.

          (g) Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators in Portland, Maine, in accordance with the rules of the
American Arbitration

13

 

Association then in effect. Judgment may be entered on the arbitrator’s
award in any court of competent jurisdiction.

[Remainder of Page Intentionally Left Blank]

14

 

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

	 	 	 	 	 
	 	 	EXECUTIVE:
	 	 	 	 	 
	 	 	/s/William C. Wallen
	 	 	

	 	 	William C. Wallen
	 	 	 	 	 
	 	 	COMPANY:
	 	 	 	 	 
	 	 	IDEXX LABORATORIES, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/Jonathan W. Ayers
	 	 	 	 	

	 	 	Name: Jonathan W. Ayers
	 	 	Title: Chairman and CEO

15

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