CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION (*Denotes Omission)
EXHIBIT 10.2 (REDACTED)
AGREEMENT
THIS AGREEMENT is made effective as of the 1st day of January, 1999, between
IDEXX Laboratories, Inc., a Delaware corporation whose principal place of
business is at One IDEXX Drive, Westbrook, Maine, U.S.A. ("IDEXX") and Ortho-
Clinical Diagnostics, Inc., a New York corporation with offices at 100 Indigo
Creek Drive, Rochester, New York, U.S.A. ("OCD").
WHEREAS, OCD and IDEXX desire to enter into supply arrangements with respect to
VITROS slides for use on the VETTEST analyzer;
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 Europe Agreement.
"Applicable Percentage" The percentage obtained by dividing (i) the unit
volume of slide sales for a particular chemistry
in a given period, BY (ii) the unit volume of
slide sales for all chemistries listed on SCHEDULE
5 for such period (as such SCHEDULE 5 may from
time to time be revised). Applicable Percentages
of unit volume sales shall be determined based on
sales in the most recently completed fiscal
quarter, and the sum of the Applicable Percentages
shall always be 100%.
"Commencement Date" January 1, 1999.
"Corresponding Slide" Any VITROS slide which provides the same blood
chemistry measurement as a particular VETTEST
slide (e.g., a DT60 Glucose slide is a
Corresponding Slide for a VETTEST Glucose slide).
"DT60" The DT60 analyzer developed by OCD for human
biomedical purposes and using the VITROS slides.
"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
<PAGE> 2
calculation of the Effective Rebate Rate is
illustrated in SCHEDULE 6.
"Europe Agreement" The Agreement effective as of January 1, 1999
between OCD and IDEXX BV, as amended and from time
to time in effect.
"IDEXX BV" IDEXX Laboratories B.V., a Netherlands
corporation.
"PANELS/PROFILES" Packages of VETTEST slides 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.
"Term" The period from January 1, 1999 until December 31,
2010.
"VETTEST analyzer" The VETTEST VT 8008 analyzer developed by or on
behalf of VETTEST S.A., predecessor of IDEXX BV,
for veterinary purposes and using VITROS slides;
including (i) any updates or modifications to such
analyzer, or (ii) other chemistry testing
instrument which, in the case of clause (i) and
(ii), is designed by IDEXX BV to be the bridging
instrument to a next-generation veterinary
chemistry analyzer ***************
**********************************.
****************** ***************************************
**********************************
<PAGE> 3
"VETTEST slides" VITROS or other OCD chemistry slides specially bar
coded, labeled, and/or packaged for the VETTEST
analyzer in accordance with the terms of this
Agreement and supplied by OCD in accordance with
the terms and conditions of this Agreement.
"VETTEST tips" Metering tips manufactured by OCD for use with
VITROS 700 Analyzer specially packaged and
supplied to IDEXX in accordance with the terms of
this Agreement.
"VITROS slides" The slides developed by OCD for use in any VITROS
analyzer.
"Weighted Average List Price" The product obtained by multiplying (i) the
Applicable Percentage for each Corresponding Slide
or VETTEST slide, as the case may be, BY (ii) the
average price such Corresponding Slide is sold to
distributors by OCD, or the price then in effect
under this Agreement for a VETTEST slide, as the
case may be and THEN (iii) aggregating the total
of such multiplication calculations for all
chemistries listed on SCHEDULE 5 (as such SCHEDULE
5 may from time to time be revised).
All references to currency in this Agreement shall mean U.S. Dollars unless
otherwise specifically indicated.
2. EFFECT OF AGREEMENT
2.01 This Agreement shall become effective upon the Commencement Date.
3. OCD RIGHT OF FIRST REFUSAL
3.01 IDEXX shall not enter into any negotiations with any third party
concerning human biomedical applications of the VETTEST analyzer
without first offering to OCD the opportunity to negotiate marketing
rights for the human biomedical applications of the VETTEST analyzer.
<PAGE> 4
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 4.
5. FORECASTS, COMMITMENTS AND ORDERS
5.01 Attached hereto as SCHEDULE 4 are aggregate Purchase Commitments by
IDEXX and IDEXX BV for VETTEST slides for calendar years 1999 through
and including 2006. The Purchase Commitments constitute the aggregate
anticipated minimum aggregate purchase quantities by IDEXX and IDEXX
BV for single chemistry VETTEST slides and PANELS/PROFILES slides in
the indicated calendar years. For calendar years 2007 through and
including 2010, IDEXX shall advise, or shall cause IDEXX BV to
advise, OCD of the aggregate Purchase Commitment for IDEXX and IDEXX
BV for each such year not later than October 1 of the preceding year,
and upon receipt by OCD, such Purchase Commitments shall be deemed to
be incorporated into SCHEDULE 4. IDEXX's and IDEXX BV's aggregate
Purchase Commitment for the period 2007 through and including 2010
shall be not less than *********** slides.
During each of calendar years 2000 through and including 2002, IDEXX
and IDEXX BV shall purchase, in the aggregate, not less than
************* *********** single slides; during each of calendar years
2003 through and including 2006, IDEXX and IDEXX BV shall purchase, in
the aggregate, not less than ****************** single slides; and
during each of the calendar years 2007 through and including 2010,
IDEXX and IDEXX BV shall purchase, in the aggregate, a minimum number
of single slides equal to **** of the total Purchase Commitment for
such year.
Failure by IDEXX and IDEXX BV 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 sub-Clause 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 BV fail to purchase in the aggregate the quantities
of slides 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 BV to pay, to OCD within 30 days after the end of
such calendar year ***** of the product of (i) the number of each type
of slides (single or PANELS/PROFILES) by which IDEXX and IDEXX BV have
in the aggregate fallen short of the Purchase Commitment and (ii) the
<PAGE> 5
lowest per-slide price for the applicable type of slides under either
of the Agreements.
For the purposes of this sub-Clause 5.02, "MATERIAL ADVERSE CHANGES"
shall mean material changes in the veterinary clinical chemistry
markets which result from (a) non-invasive diagnostic testing other
than any such testing which is introduced by IDEXX or its affiliates,
(b) invasive diagnostic testing other than any such testing which is
introduced by IDEXX or its affiliates, (c) 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, (d) decreased commitment by or ability of
OCD to supply VETTEST or VITROS slides, and (e) the availability in
one or more significant markets of slides compatible with the VETTEST
analyzer from sources other than IDEXX or its affiliates, which
availability is not promptly enjoined or otherwise terminated by OCD.
Whether a Material Advance Change has occurred will be determined by
reference to the effect of a change in the veterinary clinical
chemistry market on IDEXX and IDEXX BV taken as a whole, and not on
either individually.
The parties shall discuss in good faith any assertion by IDEXX or
IDEXX BV 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 sub-
Clause 5.02 to appropriately allocate the effects of such Material
Adverse Change on the parties.
5.03 IDEXX shall place orders for slides at least three calendar months
prior to the required delivery date. Unless otherwise agreed between
the parties in any particular case, orders for slides shall be placed
by IDEXX three times per year and each order shall specify a business
day delivery date for each delivery.
5.04 Not later than October 1 of each calendar year commencing October 1,
1999, IDEXX shall notify, or shall cause IDEXX BV to notify, OCD of
the aggregate forecasted requirements of IDEXX and IDEXX BV for the
subsequent year for each of the VETTEST slides (single slides and
PANELS/PROFILES slides) (each such notification, a "PURCHASE
FORECAST"), and the aggregate order quantities in the subsequent year
for each of the VETTEST slides shall be within +/- 25% of such
aggregate Purchase Forecast unless the parties otherwise agree. As
long as slide orders are within the indicated range of +/- 25% of
the applicable Purchase Forecast, OCD shall deliver the slides in
accordance with the orders. The Purchase Forecasts constitute
non-binding forecasts which shall be the basis for determining
IDEXX's and IDEXX BV's aggregate quarterly cash rebate pursuant to
sub-Clause 7.03 below.
<PAGE> 6
5.05 In the event that IDEXX or IDEXX BV in any year notifies OCD that they
wish to order quantities which exceed the quantities mentioned in sub-
Clause 5.04 above by more than 25%, OCD will endeavor to supply the
excess quantities and notify IDEXX or IDEXX BV, as appropriate, 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. 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 will cooperate with
IDEXX to ameliorate the possible adverse effects upon IDEXX of such
unavailability.
5.07 Order and delivery of VETTEST slides (including PANELS/PROFILES) shall
be made in multiples of 100 boxes. The number of orders and
deliveries shall be limited to three in each year unless otherwise
agreed to in writing by the parties. Order and delivery of the
VETTEST tips shall be made in multiples of 10,000 tips (20 cartons
each containing 500 tips). 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.
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 Clause 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.
Rochester, New York, USA.
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.
7. PRICES
7.01 The initial prices for each of the VETTEST slides (including the
PANELS/ PROFILES) shall be as set forth in SCHEDULE 5 hereto. Such
prices are broken out to provide prices for each individual product
code for the following geographic region (additional regions may be
<PAGE> 7
added, and changes within regions may be agreed to, from time to time
in writing by the parties):
US--United States, Canada and all other countries not identified
in this sub-Clause 7.01;
Asian--Brunei, China, Hong Kong, Indonesia, Japan, Korea,
Malaysia, Philippines, Singapore, Taiwan, Thailand, Viet Nam.
IDEXX agrees that OCD may audit IDEXX's books and records to verify
sales of VETTEST slides in any region.
7.02 The prices set forth in SCHEDULE 5 shall remain in effect for orders
placed through December 31, 2000. Thereafter, the prices may be
adjusted upon 90 days written notice to IDEXX, subject to the next
sentence of this sub-Clause 7.02, effective as of January 1 of each
year for orders placed on or after that date by an amount not to
exceed *** of the annual change (increase or decrease) in the US
Consumer Price Index as reported by the United States Bureau of Labor
Statistics, for the calendar year since the immediately preceding
price adjustment. Notwithstanding the preceding sentence, if the
aggregate quantities of the single slide and PANELS/PROFILES slide
purchases of IDEXX and IDEXX BV exceed **** of the Purchase Forecasts
for a particular year as set forth on SCHEDULE 4, there shall be no
price increase for the immediately succeeding year.
7.03 Beginning with slide purchases made during calendar year 2000 (which,
for the avoidance of doubt, shall not include any slides shipped by
OCD in calendar year 2000 to fulfill IDEXX's and IDEXX BV's total
aggregate 1999 purchase order of ****************), 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 BV, in any calendar
year, exceed the aggregate quantities set forth below:
Annual Slide Purchases Incremental Cash Rebate -
% Off Purchase Price
************** **
*********************** ***
*********************** ***
*********************** ***
*********************** ***
*********************** ***
******************** ***
The rebate amounts set forth above constitute a percentage reduction
in the purchase price of any slides (including both single slides and
<PAGE> 8
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 BV were to purchase, in the aggregate, **********
slides in any one 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 ********** million 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 BV 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 each calendar year, beginning with calendar year
2000, OCD shall calculate an estimated Effective Rebate Rate (the
"ESTIMATED REBATE RATE") based on the lesser of (i) IDEXX's and IDEXX
BV's aggregate Purchase Forecast for such year and (ii) **** of the
total aggregate number of slides that IDEXX and IDEXX BV together
purchased in the immediately preceding calendar year. Not later than
thirty (30) days after the end of each of the first three calendar
quarters in any calendar year (or thirty days after IDEXX and IDEXX BV
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 BV would
together be entitled to receive in such quarter (the "ESTIMATED REBATE
PAYMENT"). The Estimated Rebate Payment for any 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 BV 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
any calendar year, (i) IDEXX's and IDEXX BV's total aggregate slide
orders for the immediately preceding calendar year were less than ***
of their aggregate Purchase Forecast for such preceding calendar year
or (ii) OCD determines, in its reasonable discretion, at anytime after
the end of the second calendar quarter of such calendar year, that
IDEXX and IDEXX BV are reasonably unlikely to meet their aggregate
Purchase Forecast for such year, then OCD shall have the right to
recalculate the Estimated Rebate Rate based on IDEXX's and IDEXX BV'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 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
<PAGE> 9
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 BV 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 BV 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 any calendar year (or at the beginning of such
calendar year if IDEXX's and IDEXX BV's aggregate Purchase Forecast
for such year is 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 BV'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 any calendar year (or thirty days after IDEXX and
IDEXX BV 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 BV
during such calendar year exceeds (ii) the total aggregate amount of
the Estimated Rebate Payments made by OCD to IDEXX and IDEXX BV during
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.
<PAGE> 10
Notwithstanding the foregoing, (i) 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 and (ii) if IDEXX and
IDEXX BV do not achieve their aggregate Purchase Commitment in any
given calendar year, 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.
Any overdue payments by OCD or IDEXX of any amounts owed to the other
pursuant to this sub-clause 7.03 shall bear interest at a rate per
annum equal to *** **********. 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 BV if
appropriate, shall review the calculations together in good faith to
agree on any appropriate corrections or adjustments.
An illustrative representation of the foregoing rebate calculation
methodology is attached hereto as SCHEDULE 6.
7.04 OCD agrees to provide to IDEXX on a regular basis during the Term the
current average price at which OCD sells each Corresponding Slide to
its distributors. At IDEXX's request, but not more often than once
per calendar year, OCD shall calculate the Weighted Average List Price
for all Corresponding Slides. If the Weighted Average List Price for
VETTEST SLIDES purchased by IDEXX and its affiliates exceeds the
Weighted Average List Price for Corresponding Slides by more than 10%,
then all of the VETTEST single and PANELS/PROFILES slide prices to
IDEXX shall be reduced by the percentage by which the Weighted Average
List Price for Corresponding Slides is less than the Weighted Average
List Price for VETTEST slides purchased by IDEXX and its affiliates.
Such reduction shall be effective from the later of (i) twelve months
prior to the date on which IDEXX requests OCD to calculate the
Weighted Average List Price for Corresponding Slides or (ii) the date
on which the average price at which OCD sells each Corresponding
Slides to its distributors resulted in the Weighted Average List Price
for VETTEST Slides exceeding the Weighted Average List Price for
Corresponding Slides by more than 10%.
<PAGE> 11
Either party may request that an accounting firm of international
reputation, other than the principal accounting firm of either party,
audit the other's books and records to verify the Weighted Average
List Price and actual unit volume sales of Corresponding Slides or
VETTEST slides, as the case may be. Such auditor shall report to the
parties only (a) the Weighted Average List Price and (b) the
Applicable Percentage for each Corresponding Slide or VETTEST slide,
as the case may be. The prices and percentages contained in such
auditor's report shall be deemed to be the Weighted Average List Price
and Applicable Percentages for Corresponding Slides or VETTEST slides,
as the case may be, respectively, hereunder until modified in
accordance with this sub-Clause 7.04. The fees and expenses of such
auditor shall be borne equally by the parties.
7.05 If OCD is entitled to a price increase pursuant to sub-Clause 7.02 and
IDEXX is entitled to a price decrease pursuant to sub-Clause 7.04, the
net percentage increase or decrease in price shall be used to
calculate slide prices for the next calendar year.
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 during the Term not to sell or otherwise supply the
VETTEST slides, or any VITROS slides bar-coded for use in the VETTEST
Analyzer (whether or not finished or complete) to any person, firm or
company other than IDEXX or its affiliates. The provisions of this
Clause 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 during the Term to purchase slides for use in the
VETTEST analyzer only from OCD or IDEXX BV, to the extent that the
desired chemistries are available from OCD.
9.03 IDEXX shall use its best endeavors to ensure that the VETTEST slides
are sold to end users for use in the veterinary market and not in the
human biomedical market.
<PAGE> 12
9.04 This Agreement shall not restrict OCD from selling VITROS slides to
the veterinarian market.
9.05 This Agreement shall not restrict OCD from developing an analyzer
other than the DT60 for sale by OCD to the veterinarian market for use
with VITROS slides.
9.06 This Agreement shall not restrict OCD from selling VITROS slides to
other manufacturers wishing to develop and market an analyzer for use
with VITROS slides for applications outside the veterinarian market.
9.07 OCD shall use all commercially reasonable efforts to (i) ensure that
neither VITROS slides (including without limitation VITROS slides to
which bar coding for use in the VETTEST analyzer has been added) nor
any other product manufactured by or for Johnson & Johnson or its
affiliates is supplied, marketed, distributed or sold for use in the
VETTEST analyzer and (ii) promptly enjoin or otherwise terminate any
such supplying, marketing, distribution or sale. The commercial
reasonableness of OCD's efforts shall be determined solely with regard
to the relationship between the parties set forth in this Agreement,
and not with regard to OCD's or Johnson & Johnson's business as a
whole. Notwithstanding the foregoing, OCD's obligation to use
commercially reasonable efforts for the purposes of this sub-Clause
9.07 shall not include any obligation to reduce non-VETTEST VITROS
slide prices.
OCD shall include a provision in future supply and distributor
contracts that if a customer opens a mainframe slide cartridge and
uses the slides individually, or otherwise repackages or modifies OCD
slides for a use other than for which the slides are sold by OCD, such
activity, if not ceased upon notice, shall give OCD the right to
terminate such contract. OCD will exercise such right where the
customer does not cease such activity after due notice. OCD and IDEXX
shall also reasonably cooperate in efforts to stop any such
unauthorized slide repackaging or modification, where the modified or
repackaged slides are supplied, marketed or sold for use in VETTEST
analyzer. The failure of OCD to exert commercially reasonable efforts
as contemplated by this sub-Clause 9.07 shall in no event be deemed to
be a breach of this Agreement by OCD but shall give IDEXX the right,
as its exclusive remedy for such failure, to terminate any obligations
it may have pursuant to sub-Clause 5.01, the first two of paragraphs
of sub-Clause 5.02 and Schedule 4 [7] of this Agreement, effective
immediately upon written notice to OCD.
<PAGE> 13
10. MARKETING ARRANGEMENTS
10.01 IDEXX will be responsible for all marketing arrangements for the
VETTEST analyzer and the VETTEST slides. IDEXX may appoint any of
OCD's medical/surgical dealers as distributors of or agents for the
VETTEST analyzer and the VETTEST slides but will not be obliged to do
so.
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 VETTEST analyzer and
the VETTEST slides).
10.03 IDEXX will keep OCD informed of and consult with OCD as to marketing
arrangements for the VETTEST analyzer and the VETTEST slides but will
not be obligated to OCD beyond the terms of this Agreement in
connection with such marketing arrangements.
11. SALES SUPPORT
11.01 IDEXX will be responsible for all necessary sales support for the
VETTEST analyzer 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 exhibited by
the VETTEST slides.
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 4 to this Agreement. OCD shall operate such quality
assurance procedures in accordance with SCHEDULE 4.
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 4. Such access shall be granted by OCD to IDEXX
and IDEXX BV no more than twice in any twelve-month period, and shall
be limited to such final evaluation facilities.
13. BAR CODING AND PACKAGING
13.01 The VETTEST slides shall be printed by OCD with special bar coding for
use in the VETTEST analyzer.
<PAGE> 14
13.02 OCD shall package the VETTEST slides and tips in the physical manner
as used for the VITROS slides and tips at the time of packaging of the
VETTEST slides and tips. In the event of a change in VITROS slide or
tip packaging which has an impact on the VETTEST slide or tip
packaging, OCD shall notify IDEXX as early as practicable of the
relevant particulars of such change.
13.03 OCD shall furnish on a timely basis to IDEXX drawings and information
describing the geometry and the materials of labels for the VETTEST
slide wrap, the slide and tip cartons, and the case for the purpose of
developing the label content and art work for such packaging. IDEXX
shall be responsible for developing all such label content and art
work, which shall require the approval of OCD. The parties shall
cooperate to settle the form and appearance of label content and art
work which, save as authorized by sub-Clause 14.01 below, 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.
13.04 OCD shall be responsible for incorporating the art work described in
sub-Clause 13.03 above into the packaging of the VETTEST slides and
tips.
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
packaging of the VETTEST 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 VETTEST analyzer or
the VETTEST slides or otherwise.
15. PATENT INDEMNITIES
15.01 OCD shall 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 form 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 or to
any OCD patent. If as a result of any judgment or settlement it is
determined that a claim or claims of a third party patent is infringed
by the use and/or sale of the VETTEST slides or tips as aforesaid and
<PAGE> 15
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 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 either 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 or the manufacture use or sale
of the VETTEST analyzer.
16. WARRANTY, LIABILITY AND INDEMNIFICATION
16.01 OCD hereby warrants that:
(a) the VETTEST slides delivered to IDEXX shall be in compliance with
SCHEDULE 4, and
(b) the packaging of the VETTEST slides and tips shall be undamaged
at delivery.
16.02 In the event of a breach on the part of OCD of sub-Clause 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 sub-Clause 16.02 shall be subject to the
following conditions:
(a) IDEXX shall notify OCD promptly of any noncompliance contrary to
sub-Clause 16.01(a) or damage contrary to sub-Clause 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.
16.04 Except as provided in this Clause 16 there are no other warranties,
express or implied, including warranties for fitness for any
particular use of merchantability.
16.05 Subject to Clause 15, IDEXX hereby indemnifies and holds harmless OCD
from any 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 the VETTEST analyzer or the VETTEST slides, including any
claimed infringement of any trademark (except OCD's own trademark),
trade dress, trade secret, or copyright, and IDEXX shall assume the
<PAGE> 16
defense of any action or suit brought against OCD and the disposition
of such action or suit. IDEXX shall notify OCD at the commencement of
any such action or suit and in the event of any adverse judgment which
prevents the sale or use of the VETTEST analyzer or the VETTEST
slides. In addition, IDEXX shall obtain advance written approval of
OCD prior to entering into any settlement of any such action or suit
which limits OCD's rights under this Agreement.
17. SECRECY
17.01 Each of IDEXX and OCD agrees to protect confidential information
disclosed to it upon terms set out in SCHEDULE 2 attached hereto.
18. PERIOD OF AGREEMENT
18.01 This Agreement shall commence on the Commencement Date and, subject to
satisfaction of the quantity requirements set out in Clause 5 above,
shall continue throughout the Term.
18.02 Between twelve (12) and six (6) calendar months prior to the end of
the Term, the parties shall meet to extend this Agreement. Such
extension is to be for a term of five (5) years and include provision
for further extension.
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.
19.02 Changes in the equity ownership or corporate reorganizations of either
party shall not be grounds for termination of this Agreement, except
that OCD may terminate this Agreement at its sole discretion in the
event that more than 40% of the outstanding capital stock of IDEXX is
transferred to a competitor of the diagnostic division of OCD.
<PAGE> 17
19.03 OCD shall have the right to terminate this Agreement upon five years'
prior written notice to IDEXX in the event OCD elects to cease the
manufacture and sale of dry slide diagnostic products. The minimum
purchase obligations of IDEXX shall terminate upon delivery of such a
notice of termination.
19.04 IDEXX shall have the right to terminate any obligations it may have
pursuant to sub-Clauses 5.01 and 5.02 and SCHEDULE 4 [7] of this
Agreement upon prior written notice to OCD of either (a) two full
calendar years, if IDEXX commits to OCD that it shall not supply
competing clinical chemistry diagnostic products to the veterinarian's
office market, or (b) four full calendar years. Upon the commencement
of the first full calendar year of a notice period pursuant to the
preceding sentence, sub-Clauses 7.03, 7.04 and 7.05 and the last
sentence of sub-Clause 7.02 shall be terminated, except for any
previously accrued obligation of OCD to provide a credit rebate
pursuant to sub-Clause 7.03 for the immediately preceding calendar
year.
19.05 This Agreement shall terminate automatically upon any termination of
the Europe Agreement.
20. FORCE MAJEURE
20.01 In the event of force majeure, OCD shall be entitled to extend the
time of delivery for any outstanding order by the period during which
such force majeure prevails, plus a reasonable start-up period. Force
majeure shall include any circumstances beyond OCD's control.
20.02 Upon the cessation of the force majeure event, then without prejudice
to any lawful reduction in the obligations of OCD by reason of the
occurrence of such force majeure, OCD shall use its best endeavors to
make up any lost time.
21. GOVERNING LAW
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.
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,
<PAGE> 18
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.
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 This Agreement shall take effect in substitution for all or any
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 or any such 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 Europe Agreement, except
that the Purchase Commitments and Purchase Forecasts referred to in
Clause 5 and in SCHEDULE 4 of this Agreement and the Europe Agreement
represent the aggregate commitments and forecasts of IDEXX and IDEXX
BV and not the individual commitments and forecasts of IDEXX BV under
the Europe Agreement or IDEXX under this Agreement.
25. ENTIRE AGREEMENT
25.01 This Agreement, together with the Europe Agreement and that certain
Operations Agreement of even date among the parties and IDEXX BV,
constitutes the complete agreement of the parties concerning the
arrangements between the parties and supersedes all prior agreements
between the parties, including without limitation that certain Supply
Agreement dated January 15, 1992 and all amendments thereto; and the
parties shall not be liable for or bound in any manner by any
representations, guarantees or commitments except as expressly
provided herein.
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, except that during the Term of this
Agreement, SCHEDULES 3, 4 and 5 may from time to time be amended by
written agreement signed by IDEXX and IDEXX BV and the OCD Clinical
<PAGE> 19
Products' representative designated in Clause 29 of the Agreement. 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.
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 as a result of OCD's divestiture of its VITROS
business or (ii) a sale by IDEXX and IDEXX BV of all or substantially
all of their assets to an entity which is not a competitor of the
diagnostic division of OCD.
28. GOVERNING LANGUAGE
28.01 [Reserved]
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 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, Sales & Marketing
With a copy to:
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933, USA
For the attention of: Office of General Counsel
IDEXX Laboratories, Inc.
One IDEXX Drive
Westbrook, Maine 04092, USA
For the attention of: President and Office of General Counsel
It is understood that by written notice to IDEXX signed by OCD, OCD
may from time to time during the Term of this Agreement change its
representative designated (i) to receive notice hereunder and (ii) to
amend certain Schedules hereto as set forth in Clause 26 of this
Agreement.
<PAGE> 20
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 Clause. For purposes of this Clause 29.02, notice
given by OCD to IDEXX BV under the Europe Agreement shall be deemed
given to IDEXX.
30. DISPUTES
Any and all disputes, controversies or differences between the parties
hereto arising out of or in relation to or in connection with this
Agreement, or the breach hereof, which cannot be settled amicably
through negotiations between the parties hereto, shall be submitted to
and settled by arbitration. Such arbitration shall be conducted in
New York, New York in accordance with the rules then obtaining of the
American Arbitration Association ("AAA") by a panel of three
arbitrators selected from the National Panel of Arbitrators of the
AAA. If the parties cannot agree on three arbitrators, the AAA shall
select one or more arbitrators as necessary to complete the panel.
Reasonable discovery shall be permitted in connection with the
arbitration proceeding, and the arbitrators shall apply the
substantive laws of the State of New York except that the
interpretation and enforcement of this arbitration provision shall be
governed by the Federal Arbitration Act. Any award rendered in any
such arbitration shall be final and binding upon both parties hereto
and judgment upon the award rendered by the panel of arbitrators may
be entered in any court having jurisdiction over the party against
whom the award is to be enforced. Each party shall bear its own costs
in connection with any such arbitration, and any costs of the
arbitrators or the AAA shall be borne equally by the parties. The
arbitrators shall have no authority to assess or award punitive,
incidental or consequential damages, and each party hereby waives its
rights to any such damages.
31. 1999 REBATE
If during calendar year 1999 IDEXX and IDEXX BV sell worldwide, in the
aggregate, any of the total slide volumes set forth below (counting
both single slides and PANELS/PROFILES slides), IDEXX shall be
entitled to a cash rebate in the amount of its Proportionate Share
(based on sales during 1999) of the amount set forth opposite such
sales volume:
1999 Worldwide Slide Sales Total Cash Rebate
*********** **
*********************** ************
*********************** ************
*********** ************
<PAGE> 21
The cash rebates above are not incremental or cumulative. For the
avoidance of doubt, the maximum rebate payment that IDEXX and IDEXX BV
could qualify for in the aggregate under this Clause 31 is
************. IDEXX shall provide OCD with aggregate estimated sales
volume information for calendar year 1999 not later than December 15,
1999. Not later than January 31, 2000, IDEXX shall provide OCD with
aggregate 1999 actual slide sales volume information and, at any time
that OCD may reasonably request, any other supporting information or
documentation that OCD may reasonably request. OCD shall calculate
IDEXX's rebate accordingly, and shall remit to IDEXX its Proportionate
Share of the total rebate amount not later than (i) February 15, 2000
or, if later, (ii) five (5) business days after receipt by OCD, to its
reasonable satisfaction, of all information which it requested
pursuant to the immediately preceding sentence. Any overdue payments
by OCD shall bear interest at a rate per annum equal to **********.
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.
<PAGE> 22
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 IDEXX LABORATORIES, INC.
DIAGNOSTICS, INC.
By: /s/ David A. Rowan By: /s/ Louis W. Pollock
---------------------------- -----------------------------
David A. Rowan, Louis W. Pollock,
Vice President, Corporate Accounts President,
Professional Office Diagnostics
Division
By: /s/ Catherine M. Burzik
----------------------------
Catherine M. Burzik
President, Americas
Ortho-Clinical Diagnostics, Inc.
<PAGE> 23
SCHEDULE 1 - VETTEST(R) SLIDE QUALITY ASSURANCE PROCEDURES
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.
<PAGE> 24
SCHEDULE 2
Section 1. OBLIGATION TO KEEP INFORMATION CONFIDENTIAL. Each party agrees
to hold, and will use its best efforts to cause its respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence all documents and information concerning the other party,
whether oral or written, furnished or made known to such party in connection
with the performance of the Agreement; 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 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)
indepedently developed by such party without reference to confidential
information. The foregoing notwithstanding, any party may disclose information
concerning the other party to its officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with its performance of
the 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.
Section 2. DURATION. The confidentiality provisions of this SCHEDULE 2
shall remain in effect for so long as the Agreement is in effect and for a
period of three (3) years thereafter.
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 sub-Clause 29 of the
Agreement.
<PAGE> 25
SCHEDULE 3 - PANELS/PROFILES
The initial PANEL shall be the "Young Presurgical Panel" consisting of four sets
of the following six VETTEST slides:
<TABLE>
<C> <C>
BUN Urea Nitrogen
ALT Alanine aminotransferase
GLU Glucose
TP Total protein
CREA Creatinine
ALKP Alkaline phosphatase
</TABLE>
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:
<TABLE>
General Health Profile Large Animal Profile
<S> <C> <C> <C>
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
</TABLE>
Packaging for the Young Presurgical Panels, the General Health Profiles and the
Large Animal Profiles 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 BV of VETTEST
slides packaged as PANELS/PROFILES shall be credited against the Purchase
Forecasts and Purchase Commitments for such slides under this Agreement and the
Europe Agreement.
<PAGE> 26
SCHEDULE 4 - PURCHASE COMMITMENTS
<TABLE>
<CAPTION>
Year Minimum Slide Purchase
Commitment (in millions)
<S> <C>
1999 **
2000 **
2001 **
2002 **
2003 **
2004 **
2005 **
2006 **
2007 See Agreement sub-Clause
2008 5.01
2009
2010
<PAGE> 27
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE 5 - PRODUCTS AND PRICES
(AS OF JANUARY 1, 1999)
Sales Region US Sales Asian Sales
------------ -------- -----------
Customer Number ******** ********
US Pricing
Single Slides (Bx 25) Catalog Number >1500 bxs* <1500 bxs* Asian Pricing
--------------------- -------------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
Albumin ******** ****** ****** ******
Alk Phos ******** ****** ****** ******
ALT ******** ****** ****** ******
Ammonia ******** ****** ****** ******
Amylase ******** ****** ****** ******
AST ******** ****** ****** ******
Calcium ******** ****** ****** ******
Cholesterol ******** ****** ****** ******
CK ******** ****** ****** ******
Creatinine ******** ****** ****** ******
ECO2 ******** ****** ****** ******
Gamma GT ******** ****** ****** ******
Glucose ******** ****** ****** ******
LDH ******** ****** ****** ******
Lipase ******** ****** ****** ******
Magnesium ******** ****** ****** ******
Phosphorus ******** ****** ****** ******
Total Bilirubin ******** ****** ****** ******
Total Protein ******** ****** ****** ******
Triglycerides ******** ****** ****** ******
Urea Nitrogen ******** ****** ****** ******
Uric Acid ******** ****** ****** ******
Profile Slides (Bx 24) Catalog Number US Pricing Asian Pricing
---------------------- -------------- ---------- -------------
General Health Profile ******** ****** ******
Young Presurgical Panel ******** ****** ******
Large Animal Profile ******** ****** ******
Other Catalog Number WW Pricing
----- -------------- ----------
Vetrols ******** ******
Tips ******** ******
</TABLE>
* per chemistry per order
<PAGE> 28
SCHEDULE 6 - 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 PURCHASE FORECAST FOR IDEXX AND IDEXX BV IN A GIVEN YEAR
IS ** MILLION SLIDES; PRICING IS *****/SLIDE; BLENDED REBATE PERCENTAGE RATE IS
****, AS FOLLOWS:
********************** million slides * *** = *** million slides
*********************** million slides * *** = *** million slides
*********************** million slides * *** = *** million slides
*********************** million slides * *** = *** million slides
************************ million slides * *** = ***** million slides
--------------------------------------------------------------------
Total Slides Eligible for Rebate = ***** million slides
EFFECTIVE REBATE = TOTAL SLIDES ELIGIBLE FOR REBATE / TOTAL PURCHASES =
**********.
ACTUAL AGGREGATE VOLUME PURCHASED BY IDEXX AND IDEXX BV EQUALS VOLUME PROJECTED
AT THE BEGINNING OF THE YEAR.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Actual Purchases Effective Calculated 20% Holdback Rebate Paid
Qtrly. ($MM) Rebate Rebate Each (millions) (millions)
Vol. %(80MM Vol.) Qtr. (millions)
(millions)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Qtr ** **** **** **** **** ****
2nd Qtr ** ***** **** **** **** ****
3rd Qtr ** ***** **** **** **** ****
4th Qtr ** ***** **** **** **** ****
-- ----- ---- ---- ----
** ***** **** **** ****
True-up: ***** ****
----- ----
Total: **** ****
=============== ===========
</TABLE>
ACTUAL AGGREGATE VOLUME PURCHASED BY IDEXX AND IDEXX BV IS GREATER THAN VOLUME
PROJECTED AT THE BEGINNING OF THE YEAR.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Actual Purchases Effective Calculated 20% Holdback Rebate Paid
Qtrly. ($MM) Rebate Rebate Each (millions) (millions)
Vol. %(80MM Vol.) Qtr. (millions)
(millions)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Qtr * **** **** **** **** ****
2nd Qtr ** ***** **** **** **** ****
3rd Qtr ** ***** **** **** **** ****
4th Qtr ** ***** **** **** **** ****
-- ----- ---- ---- ----
** ***** **** **** ****
True-up: **** ****
---- ----
Total: **** ****
======== ========
</TABLE>
<PAGE> 29
ACTUAL AGGREGATE VOLUME PURCHASED BY IDEXX AND IDEXX BV IS LOWER THAN VOLUME
PROJECTED AT THE BEGINNING OF THE YEAR.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Actual Purchases Effective Calculated 20% Holdback Rebate Paid
Qtrly. ($MM) Rebate Rebate Each (millions) (millions)
Vol. %(80MM Vol.) Qtr. (millions)
(millions)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Qtr ** **** **** **** **** ****
2nd Qtr ** ***** **** **** **** ****
3rd Qtr ** ***** **** **** **** ****
4th Qtr ** ***** **** **** **** ****
-- ----- ---- ---- ----
** ***** **** **** ****
True-up: ****** ****
------ ----
Total: **** ****
=============== =====
</TABLE>
CALCULATION OF IDEXX'S PROPORTIONATE SHARE OF REBATE (ASSUMING ACTUAL AGGREGATE
VOLUME PURCHASED BY IDEXX AND IDEXX BV EQUALS VOLUME PROJECTED AT THE BEGINNING
OF THE YEAR):
ASSUMPTIONS:
Number of slides purchased by IDEXX and its wholly-owned subsidiaries other
than IDEXX BV: ********** slides
Total number of slides purchase by IDEXX and its wholly-owned subsidiaries:
********** slides
Total rebate earned: ************
CALCULATION:
IDEXX's rebate equals:*********************************************************
