Preview | Manufacturing and Supply Agreement |

Section 3.	Consideration for Manufacturing Rights	4
3.1	MANUFACTURER Payments	4
Section 4.	Product Processes; Changes; New Products	5
4.1	Product Processes and Specifications	5
4.2	Changes	6
4.3	Changes Initiated by Company	6
4.4	Implementation	6
4.5	New Products	7

Section 5.	Ownership and IPR	7
5.1	MANUFACTURER-Furnished Items	7
5.2	Products	7
5.3	Product Processes	8
5.4	Names, Trade Names and Trademarks	8
5.5	Implementation	8
Section 6.	Protection of Confidential Information	8
6.1	General	8
6.2	Exceptions	9
Section 7.	Term and Termination	9
7.1	General	9
7.2	Optional Termination	9
7.3	Termination for Material Breach or Default	9
7.4	Termination for Act of Insolvency	10
7.5	End of the Term	10
Section 8.	Indemnification	10
8.1	By Company	10
8.2	By MANUFACTURER	11
8.3	Notice and Cooperation	11
8.4	Waiver of Certain Immunities, Defenses and Protections Relating to Employee Injuries	11
Section 9.	Miscellaneous	11
9.1	Independent Contractor	11
9.2	Notices	12

9.3	Compliance With Laws	12
9.4	Rights and Remedies Cumulative	12
9.5	Publicity	12
9.6	Nonwaiver	13
9.7	Assignment	13
9.8	No Third Party Beneficiaries	13
9.9	Severability	13
9.10	Attorneys Fees	14
9.11	Applicable Law	14
9.12	Amendments	14
9.13	Entire Agreement	14

This Agreement, dated as of 01 July 2006 is made and entered into by and between: Combimatrix Corporation, a Delaware corporation (Company); and Furuno Electric Company, Ltd, a Japanese corporation (MANUFACTURER). The definitions of certain terms used in this Agreement are set forth in the Glossary attached as Exhibit A.

C. Company desires to engage MANUFACTURER, and MANUFACTURER desires to be engaged by Company, to exclusively manufacture and supply a certain Synthesizer instrument developed under the Development Agreement dated 09 August 2004 (BTS) to Company subject to and in accordance with the terms and conditions of this Agreement.

MANUFACTURER shall make and deliver to Company or its designee such Products as Company may from time to time order from MANUFACTURER under this Section 1. Each of Companys orders under this Section 1 shall specify: (a) the name and part number of each Product being ordered; (b) the quantity of each Product being ordered; (c) the purchase price of each Product being ordered; (d) the dates upon which the Products are to be shipped by MANUFACTURER, (e) the destination to which the Products are to be shipped by MANUFACTURER; (f) the purchase order number and billing instructions; and (g) any additional shipping instructions (including, without limitation, specification of any particular carrier, insurance, means of shipment or packaging required by Company), provided however that unless otherwise approved by MANUFACTURER, Company shall not specify any date for delivery of any Product less than four (4) months after the date that Company submits the order to MANUFACTURER.

Prior to shipment, MANUFACTURER shall inspect each Product to ensure compliance with the warranty set forth in paragraph 1.5 and compliance with performance specifications, which specifications are to be agreed to by the parties. MANUFACTURER shall properly package the Products in accordance with the Specifications, any instructions set forth in Companys order and as otherwise required for protection against any damage or deterioration during shipment. MANUFACTURER shall ship all Products ordered by Company pursuant to paragraph 1.1 in accordance with all shipping instructions set forth in Companys order. Unless otherwise specified in the applicable order, MANUFACTURER shall ship all Products FOB the MANUFACTURER Facility to the shipping destination specified in the applicable order. Company shall pay or reimburse all shipping costs reasonably incurred by MANUFACTURER to ship any Products in accordance with the shipping instructions set forth in Companys order, including duties and customs costs. Title of the Products shall pass to Company upon MANUFACTURERs receipt of the payment for the said Products. Risk of loss with respect to any Product shall pass to Company upon loading of the Product at Manufacturer to the carrier in accordance with Companys order.

Section 1.	Purchase and Sale of Products	1
1.1	Orders	1
1.2	Delivery	1
1.3	Rejection of Noncomplying Products	2
1.4	Schedule; Delay	2
1.5	Warranty	2
1.6	Location of Manufacture	2
1.7	Product Records	3
Section 2.	Compensation	3
2.1	Purchase Price of Products	3
2.2	Invoice and Payment	3
2.3	Review and Adjustment of Formula Price and Price Cap	3
2.4	Taxes	4

List of Exhibits
Exhibit	Description	Reference
A	Glossary	Preamble
B	Product Description and Specifications	Glossary