1. ZeptoMetrix Corporation

2. Export Compliance Program Design and Implementation  Business Review and Capability Assessments (Internal vs. External)  Mandated Requirements for Exporting Companies  Manual Design and Integration with Current Quality System, (ISO 13485 / QSR cGMP)  Define Employee Roles and Responsibilities  Employee Training and Review  Monitoring and Continual Improvement

3. ZeptoMetrix Corporation Business Review  ZMC is a fully integrated biotechnology company that services diagnostic and pharmaceutical companies worldwide  Company manufactures raw materials and diagnostic kit components used by scientists to develop testing kits and also products to maintain their quality control  Company ships biological materials, inactivated organisms, test kits and other related diagnostic products

4. United States Export Compliance Requirements  Appropriate Export Commodity Jurisdiction  Dept. of Commerce (BIS) v. Dept. of Defense (DTC)  Overlapping and intersecting export controls  Primary: Export Administrative Regulations (EAR), Dept. of Treasury (OFAC); Foreign Trade Regulations (FTR), Dept. of Defense through ITAR  Know your product/service---see where it fits in the export regulatory scheme  There is no substitute for reading and cross-referencing those regulations applicable to your product and industry to understand your export responsibilities.

5. Manual Design  Design Manual with focus on integration into Current Quality System  Manual should be written for hands on use, not as a show piece for auditors  Operations & Legal were the key drivers of the compliance development process.  Staff from various affected departments were consulted as needed  Delegate revision responsibilities; maintained one working draft  Research and determine which US regulations are appropriate to your business  Identify key positions within the company that will play a role in Export Compliance (organizational chart)  Develop process maps to include Export Compliance into current company activities

6. Export Compliance Manual Sections 1.Export Management System Summary  Policy Statement; Scope of EAR 2.Administrative Elements  Responsibilities; Record Keeping; Training 3.Order Processing System  Flowcharts for New Customer Set-up, Order Process, & Export Compliance Officer Decision Tree  Narrative indicates where to screen, “hold” an order, and instructions for resolving a “hold” 4.Export Licensing Requirements  Product Commodity Classification Process 5.Export Licensing Requirements  Restricted End-Uses and End-Users 6.Export Clearance 7.Appendices 1 – 19

7. ZMC Export Compliance Requirements  Dept of Commerce: BIS, subject to EAR (15 CFR 730 et seq)  ZMC products are intended for commercial use, some capable of military application: “Dual-Use”  “General Prohibitions” of EAR are applied to all ZMC Product Orders:  Restricted End-Users, End-Uses, Embargoed Countries  Red Flags and Anti-boycott Provisions  Identify those ZMC Products on the CCL that require export licenses  Special attention paid to those regulations dealing with Chemical and Biological Weapons

8. Organization Chart

9. Order Process Flowchart

10. New Customer Set-up Flowchart

11. Employee Roles and Responsibilities  Operations  Lead Export Compliance planning and design meetings  Process map new export requirements into current operations and optimize current system where appropriate  Legal  Conduct research and generate draft Export Compliance Manual applicable to ZMC business focus  Work with Operations to streamline processes : minimize workflow interruption while staying export compliant  Assists in implementing and updating export compliance program

12. Employee Roles and Responsibilities  Regulatory/Quality Assurance  Design new /modify existing standard operating procedures to integrate export compliance requirements  Implementation and training of new procedures  Monitoring and continual improvement  Act as on-site Export Compliance Officer  Scientists  Assess new ZMC Products against Commerce Control List (CCL) for ECCN  Update MRP /database system with code for each new product with ECCN; inform Export Compliance Officer  Prepare technical description of ZMC Products with ECCN for BIS license application

13. Employee Roles and Responsibilities  Sales  New Customer Approval and set-up in billing system  Screen initial ZMC product inquires for “Red Flags” and Anti-boycott compliance  Process Orders: screen for restricted users/uses and whether product requires BIS export license due to ECCN designation  Marketing  Update of company literature and website with Export Disclaimers

14. Employee Roles and Responsibilities  Distributors  Define processes for ZMC products with ECCN  Letter of commitment for following US Export Regulations  Shipping / Receiving  Screen each order against restricted uses/users, Red Flags and embargo lists –e.g. “Shipping Solutions” software  Apply for BIS licenses when required  Appropriate labeling and packaging  Maintain shipping records in accordance with applicable government regulations

15. Employee Training and Review  Identify Departments that require training (org chart)  Set up initial training sessions  Document compliance with written tests and keep on file with other employee training records  Troubleshoot system with various go, no-go situations  Monitor for continual improvement

16. Monitoring and Continual Improvement  Conduct annual training meeting for updates to export compliance  Export Compliance Officer and Legal are enrolled with BIS for regulatory updates via email  Annual Audits by Export Compliance Officer  New Customer Records, Outbound Shipment Records, Employee Training Records  Review/amend where necessary standard operating procedures that include export compliance components

17. Challenges  Complexity of Export Compliance: Resources  (1) BIS website: “Compliance Guideline: How to Develop an Effective Management and Compliance Program and Manual” http://www.bis.doc.gov/complianceandenforcement/emcp_ guidelines.pdf; see training modules, seminars, contacts http://www.bis.doc.gov/complianceandenforcement/emcp_ guidelines.pdf  (2) EAR and related export regulations on-line  (3) Professional Organizations: e.g. Tradewin, Association of Corporate Counsel, Law Libraries: white papers, forms, seminars, consulting  (4) Massachusetts Export Center: consult and assistance

18. Challenges  Streamlining Export Compliance  Understand export requirements well enough so that you can integrate compliance measures without strangling business efforts  Examples:  (1) Sell ZMC Products with ECCN directly, not through distributors— limit liability and processing time for license  (2) Only code/document those Products with ECCN—not all ZMC Products  (3) Export Screening Software; expedite Export Compliance Officer review of positive screenings  (4) Company policy: do not bother with applying for license where have verified positive screening for a restricted end-user, end-use, embargoed country  (5)Standardize forms: e.g. Product Commodity Classification, Customer Profile, Distributor Letters  New Export Compliance Regime Anticipated

19. ZeptoMetrix Corporation 878 Main Street Buffalo, NY 14202 (800) 274-5487 (716) 882-0920 (716) 882-0959 (FAX) Contact Information 25 Kenwood Circle Suite 6 Franklin, MA 02038 (866) 520-0588 (508) 553-5800 (508) 520-1525 www.zeptometrix.com Elise S. Nulton enulton@zeptometrix.com John Paul jpaul@zeptometrix.com