Unassociated Document


    Exhibit
      10.4

     

    INTERCOMPANY
      SERVICES AGREEMENT

     

    This
      Intercompany Services Agreement (this “Agreement”)
      is
      effective as of July 1, 2007 (the “Effective
      Date”)
      between Lumera Corporation, a Delaware corporation (“Lumera”),
      and
      Plexera Bioscience LLC, a Delaware limited liability company (“Plexera”).

     

    RECITALS

     

    
      	 	
              A.

            	
              Lumera
                owns the sole outstanding membership unit of
                Plexera.

            


    

     

    
      	 	
              B.

            	
              Lumera
                and Plexera have determined that it will be mutually beneficial for
                Lumera
                to provide the Services (as defined below) to Plexera, and for Plexera
                to
                obtain the Services from Lumera, in accordance with the terms and
                conditions set forth in this
                Agreement.

            


    

     

    
      	 	
              C.

            	
              Lumera
                has provided and Plexera has received services similar to those provided
                for in this Agreement since approximately April 2003.
                

            


    

     

    
      	 	
              D.

            	
              Plexera
                has incurred approximately $16,545,596 in indebtedness to Lumera
                in
                connection with services provided by Lumera to Plexera through June
                30,
                2007, which indebtedness is evidenced by a convertible promissory
                note
                dated July 1, 2007 (the “Contribution
                Note”).
                Interest will accrue on the Contribution Note at 8% per annum from
                the
                Effective Date.

            


    

    
       

      
        	 	E. 	Plexera has issued to Lumera a revolving promissory
                note
                dated July 1, 2007 (the “Services
                Note”)
                to evidence amounts owed for the Services rendered pursuant to this
                Agreement. Interest will accrue on the Services Note at 8% per
                annum.


      

       

    

    NOW,
      THEREFORE,
      in
      consideration of the agreements, promises and covenants set forth herein, Lumera
      and Plexera agree as follows:

     

    
      	
              1.

            	
              Services.
                Beginning July 1, 2007, Lumera shall provide those services, facilities
                and goods described in Schedule
                1
                hereto and incorporated herein by this reference (collectively, the
                “Services”),
                or shall cause, at Lumera’s option, third party vendors to provide the
                Services for the benefit of Plexera. Plexera shall pay the charges
                and
                fees for the Services described in Schedule
                2
                (the “Charges for Services”).

            


    

     

    
      	 	
              a)

            	
              Plexera
                shall provide all data and information required by Lumera at the
                time and
                in the manner that Lumera reasonably requests, to enable Lumera to
                perform
                its obligations hereunder.

            


    

     

    
      	 	
              b)

            	
              Lumera
                shall not be obligated to (i) hire, lease, or contract for any additional
                staff, (ii) maintain the employment of any specific employee, or
                (iii)
                purchase, lease, license, or otherwise acquire any assets in providing
                the
                Services.

            


    

     

    
      	 	
              c)

            	
              The
                Parties acknowledge the transitional nature of the Services and that
                Lumera may, at its sole discretion, make changes from time to time
                in the
                manner of providing the Services.

            


    

     

    
      	
              2.

            	
              Charges
                for Services.
                Plexera shall pay Lumera the Charges for Services as
                follows:

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
        10.4

    

     

    
      	 	
              a)

            	
              Intercompany
                Account.
                All Charges for Services shall be posted to an intercompany account
                or
                accounts maintained for purposes of documenting the provision of
                Services
                and the Charges for Services under this Agreement (the “Intercompany
                Accounts”).
                

            


    

     

    
      	 	
              b)

            	
              Invoices.
                Within 15 days following the last day of each month during the term
                of
                this Agreement, Lumera shall deliver to Plexera an invoice for all
                Charges
                for Services, in accordance with Schedule 2, due and payable by Plexera
                to
                Lumera on account of the provision of the Services during the monthly
                period ending on each such date. The invoice shall show the balance
                of the
                Intercompany Account as of each invoice date.


            


    

     

    
      	 	
              c)

            	
              Notations
                on Services Note.
                Lumera shall make notations on the Services Note reflecting the amount
                and
                date of each invoice delivered to Plexera, for so long as the Services
                Note is in effect. Lumera’s failure to make any such notation shall not
                relieve either party of its obligations under this Agreement or the
                Services Note. 

            


    

     

    
      	 	
              d)

            	
              Payment.
                Prior to a Qualified Financing (as that term is defined in the Services
                Note), no payments shall be made to Lumera pursuant to invoices delivered,
                if the amounts of such invoices are added to the principal of the
                Services
                Note. Upon maturity, conversion or termination of the Services Note,
                all
                invoices shall be due and payable within 15 days of
                receipt.

            


    

     

    
      	 	
              e)

            	
              Adjustments
                for Taxes.
                In the event a taxing authority determines that any Charge for Services
                is
                not an arm’s-length payment, then the parties shall make corresponding
                adjustments to the Charges for Services in question for such period
                to the
                extent necessary to achieve arm’s-length pricing. Any adjustment made
                pursuant to this Section 2(e), at any time during the term of this
                Agreement or after termination hereof, shall be reflected in the
                parties’
                records, and the resulting underpayment or overpayment shall create,
                respectively, an obligation to be invoiced and paid in the manner
                specified in Sections 2(b), 2(c) and 2(d) of this Agreement. Any
                adjustments after termination of this Agreement shall be paid promptly
                following the final determination of the
                amount.

            


    

     

    
      	 	
              f)

            	
              Retention
                and Ownership of Original Records.
                All original receipts and original documents specifically relating
                to the
                Services shall be the property of and shall be retained by Lumera
                except
                that Plexera’s corporate records shall be retained by Plexera. Each party
                will maintain, in accordance with its standard document retention
                procedures, copies of the documentation supporting the information
                relevant to the Charges for Services described in Schedule
                2
                and will cooperate with the other party in making such information
                available as needed in the event of a tax or other
                audit.

            


    

     

    
      	 	
              g)

            	
              Application
                of Payment under Contribution and Services Notes.
                All payments by Plexera to Lumera shall be applied first to the payment
                of
                any currently outstanding invoices. If all amounts under outstanding
                invoices are paid, unless Lumera in its sole discretion elects otherwise,
                the payments shall be applied first to the outstanding principal
                and
                interest owing on the Services Note and then to any outstanding balance
                owing on the Contribution Note. 

            


    

     

    
      	
              3.

            	
              Terms
                and Terminations.
                This agreement shall continue in effect through December 31, 2008
                (the
                “Initial
                Term”)
                unless terminated earlier or renewed for further twelve month periods
                (each a “Renewal
                Term”
)
                in accordance with this Section 3.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
        10.4

    

     

    
      	 	
              a)

            	
              Not
                less than 60 days prior to the expiration of the Initial Term or
                any
                Renewal Term, Lumera and Plexera shall commence negotiations of the
                Services and the Charges of Services for the subsequent Renewal Term.
                If
                the parties cannot come to an agreement regarding the Services and
                the
                Charges of Services for the subsequent Renewal Term, then this Agreements
                shall terminate at the end of the then current term, unless extended
                in
                writing by the parties.

            


    

     

    
      	 	
              b)

            	
              Lumera
                may terminate this Agreement with respect to all or any one or more
                of the
                Services provided to Plexera at any time upon giving at least 45
                days
                prior written notice to Plexera.

            


    

     

    
      	 	
              c)

            	
              Plexera
                may terminate this Agreement with respect to all or any one or more
                of the
                Services provided to Plexera at any time upon giving at least 45
                days
                prior written notice to Lumera.

            


    

     

    
      	 	
              d)

            	
              Notwithstanding
                any termination of this Agreement, Plexera shall remain liable for
                all
                amounts owed by it to Lumera at the time of such termination, including
                amounts payable in respect of the month in which such termination
                occurs;
                provided however, that any amount payable in respect of such month
                shall
                be calculated on a prorated basis to reflect the date of termination,
                except to the extent that Lumera demonstrates that such proration
                would be
                commercially unreasonable.

            


    

     

    
      	
              4.

            	
              Liability
                and Limitation on Liability.
                

            


    

     

    
      	 	
              a)

            	
              Lumera
                shall provide the Services in good faith, in a commercially reasonable
                manner, and in accordance with the terms of this Agreement. To the
                fullest
                extent practicable, Lumera shall provide the Services with that degree
                of
                skill, attention and care that Lumera exercises in furnishing comparable
                services to itself. Notwithstanding the foregoing, Plexera acknowledges
                that Lumera is not in the business of providing the Services and
                that the
                Services are being provided as an accommodation to
                Plexera.

            


    

     

    
      	 	
              b)

            	
              Plexera
                agrees that, in connection with the provision of the Services, Lumera’s
                liability to Plexera shall be limited to (a) damages suffered by
                Plexera
                resulting from (i) the failure of Lumera to provide the Services
                in
                accordance with this Agreement or (ii) gross negligence or willful
                misconduct by Lumera in providing the Services; and (b) the correction
                of
                errors or omissions in the Services and reimbursement to Plexera
                for
                amounts actually paid thereby to third parties for correction of
                the
                Services. Lumera shall correct any errors or omissions by furnishing
                correct information or supplying the Services provided
                that Plexera must promptly advise Lumera of any such error or omission
                of
                which it becomes aware. In no event shall Lumera’s liability for damages
                under this Section 4(b) exceed, as to each category of services described
                on Schedule
                1,
                the charges for that same category of Services incurred by Plexera
                during
                the current term of the Agreement though the date or event giving
                rise to
                Plexera’s right to damages under this Section
                4(b).

            


    

     

    
      	 	
              c)

            	
              Lumera
                shall not be liable for any failure to perform or delay in performing
                under this Agreement if such failure or delay is due to any cause
                or
                condition beyond Lumera’s reasonable control, including, without
                limitation, any natural disaster, war, strike or failure of contractors,
                consultants, or other third parties to
                perform.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
        10.4

    

     

    
      	 	
              d)

            	
              IN
                NO EVENT SHALL LUMERA BE LIABLE TO PLEXERA FOR SPECIAL, INCIDENTAL,
                CONSEQUENTIAL OR PUNITIVE DAMAGES INCLUDING, WITHOUT LIMITATION,
                LOSS OF
                PROFIT OR DAMAGE TO OR LOSS OF USE OF ANY PROPERTY ARISING OUT OF
                OR
                RELATING TO THE PROVISION OF THE SERVICES PURSUANT TO THIS
                AGREEMENT.

            


    

     

    
      	
              5.

            	
              Confidentiality;
                Non-solicitation.
                

            


    

     

    
      	 	
              a)

            	
              Plexera
                shall hold, and shall cause its officers, directors, employees, agents,
                consultants and other representatives to hold confidential all documents
                and confidential or proprietary information or data (“Confidential
                Information”)
                furnished to it by Lumera or Lumera’s officers, directors, employees,
                agents, consultants or representatives in connection with its performance
                under this Agreement or provision of the Services (unless compelled
                to
                disclose such Confidential Information by judicial or administrative
                process provided that Plexera shall give Lumera sufficient notice
                to allow
                Lumera to seek a protective order). Information shall cease to be
                Confidential Information under this Section 5(a) if it subsequently
                enters
                the public domain through no fault of Plexera or its officers, directors,
                employees, agents, consultants or other representatives. The obligations
                of the parties pursuant to this Section 5(a) with respect to Confidential
                Information shall survive the termination of this Agreement for a
                period
                of two years.

            


    

     

    
      	 	
              b)

            	
              Plexera
                agrees that it will not, directly or indirectly, hire or in any manner
                solicit or seek to induce any person employed by Lumera to leave
                his or
                her employment with Lumera without Lumera’s prior written approval. The
                obligations of the parties pursuant to this Section 5(b) shall survive
                the
                termination of this Agreement for a period of one
                year.

            


    

     

    
      	
              6.

            	
              Indemnification.
                Plexera shall defend, indemnify and hold Lumera, its officers, directors,
                employees, and agents harmless from and against any and all liabilities,
                losses, damages, obligations, claims, causes of action, judgments,
                costs,
                and expenses (including reasonable attorneys’ fees) of any kind or
                character attributable to or arising out of any claims by, or liabilities
                or obligations to, any third party arising out of, in connection
                with or
                resulting from the Services performed by Lumera hereunder for Plexera,
                except to the extent resulting from the gross negligence or willful
                misconduct of Lumera or any subcontractors engaged by Lumera to provide
                the Services (except for any such subcontractors engaged at Plexera’s
                instruction.)

            


    

     

    
      	
              7.

            	
              Taxes.
                If
                any sales, use or other tax (excluding Lumera’s income tax and business
                and occupation tax) arising from this Agreement or the provision
                of the
                Services under this Agreement is due, regardless of the authority
                levying
                such tax, Plexera shall promptly pay it or, if Lumera pays it, promptly
                reimburse Lumera in full. However, if Plexera wishes to contest any
                such
                tax, it may do so at its own expense if it first agrees in writing
                to hold
                Lumera harmless from such tax and all costs and effects of contesting
                such
                tax. Plexera shall be solely responsible for contesting any such
                tax.
                Lumera shall not include in any Charges for Services any amounts
                for
                federal income tax unless otherwise agreed to in
                writing.

            


    

     

    
      	
              8.

            	
              Successors
                and Assigns.
                This Agreement shall be binding upon and inure to the benefit of
                both
                Lumera and Plexera and their respective successors and permitted
                assigns.
                This Agreement may not be assigned by Plexera without the prior written
                consent of Lumera. Nothing herein shall restrict Lumera's ability
                to use
                third parties to deliver the Services as provided for under this
                Agreement.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
        10.4

    

     

    
      	
              9.

            	
              Notices.
                Any notices, requests, instruction or other communication at any
                time
                required or permitted to be given or furnished by either party to
                the
                other under this Agreement shall be deemed to be given or furnished
                if in
                writing and actually delivered to the party to be notified or deposited
                in
                the United States Mail in first class registered or certified mail,
                with
                return receipt requested, postage paid and addressed to the party
                to be
                notified. The addresses of the parties hereto for the foregoing purposes
                are set forth below:

            


    

    

      
        	
                To
                  Lumera

              	
                Lumera
                  Corporation

              
	 	
                19910
                  North Creek Parkway, Suite 100

              
	 	
                Bothell,
                  WA 98011

              
	 	
                Attention:
                  CFO

              
	 	 
	 	 
	
                To
                  Plexera

              	
                Plexera
                  Bioscience LLC

              
	 	
                19910
                  North Creek Parkway, Suite 100

              
	 	
                Bothell,
                  WA 98011

              
	 	
                Attention:
                  CEO

              


      

    

    
    

     

    Either
      party may change the address set forth by written notice to the other as
      specified herein.

     

    
      	
              10.

            	
              Cooperation;
                Further Assurances.
                The parties will use good faith efforts to cooperate with each other
                in
                all matters relating to the provision and receipt of the Services.
                Such
                cooperation shall include exchanging information, performing
                reconciliations and adjustments, and obtaining all third party consents,
                licenses, sublicenses or approvals necessary to permit each party
                to
                perform its obligations hereunder (including, without limitation,
                rights
                to use third party software needed to provide the Services.) The
                costs of
                obtaining such third party consents, licenses, sublicenses or approvals
                in
                connection with the performance of the Services for Plexera shall
                be borne
                by Plexera. Each party hereto shall make, do or cause to be done
                such
                further acts and execute, acknowledge and deliver such instruments
                and
                documents as the other party may reasonably request or require to
                effectuate fully the purposes and intent if this
                Agreement.

            


    

     

    
      	
              11.

            	
              Contacts.
                The contacts for the coordination of the Services to be provided
                pursuant
                to this Agreement shall initially be as follows and may be changed
                at any
                time upon notice to the party.

            


    

     

    Lumera:    Peter
      Biere

     

    Plexera:    Joseph
      Vallner

     

    
      	
              12.

            	
              Governing
                Law.
                This Agreement is made under and shall be governed by, and construed
                in
                accordance with, the laws of the State of Delaware, without regard
                to the
                conflicts of laws thereof.

            


    

     

    
      	
              13.

            	
              Severability.
                If any term or provision of this Agreement shall be held to be null,
                void
                or otherwise unenforceable, the unenforceability of such term or
                provision
                shall not affect the validity or enforceability of the rest of this
                Agreement.

            


    

     

    
      	
              14.

            	
              Amendment.
                No term or provision of this Agreement may be modified, waived or
                amended
                except by an agreement in writing, executed by each of the parties
                hereto.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
        10.4

    

     

    
      	
              15.

            	
              Survival.
                The obligation of the parties under this Agreement, other than Lumera’s
                obligation to provide the Services hereunder, shall survive termination
                hereof to the extent necessary to carry out the purposes of this
                Agreement, including without limitation Plexera’s payment obligations
                under Section 2, the indemnification obligations under Section 6,
                the
                obligations for taxes under Section 7 and the confidentiality and
                non-solicitation obligations under Section
                5.

            


    

     

    
      	
              16.

            	
              Independent
                Contractor.
                The relationship between the parties established under this Agreement
                is
                that of independent contractors and neither party shall be considered
                an
                employee, agent, partner, or joint venturer of or with the other.
                Plexera
                shall be solely responsible for any employment-related taxes, insurance
                premiums or other employment benefits for any employees of Lumera
                providing the services to Plexera pursuant to the terms of this Agreement.
                Plexera agrees to grant Lumera personnel access to documents, personnel,
                facilities, systems and information (subject to the provision of
                confidentiality in Section 5 hereof) as necessary for Lumera, in
                its sole
                determination, to perform its obligations
                hereunder.

            


    

     

    
      	
              17.

            	
              Entire
                Agreement.
                This Agreement, including the schedules, the Contribution Note and
                Services Note referred to herein, constitutes the entire understanding
                between the parties hereto and supersedes any prior understandings
                or
                written or oral agreements between them respecting the subject matter
                of
                this Agreement.

            


    

     

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      of this page intentionally left blank]

     

    


    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    
      Exhibit
        10.4

    

     

    IN
      WITNESS WHEREOF, Plexera and Lumera have duly executed this Agreement as of
      the
      date first written above.

     

    
      	LUMERA CORPORATION	 	 	 
	 	 	 	 
	By	 	 	 
	
              
                

              

            	 	 	
            
	Its	 	 	 
	
              
                

              

            	 	 	 


    

     

    
      
        	
                PLEXERA
                  BIOSCIENCE LLC

              	 	 	 
	 	 	 	 
	By	 	 	 
	
                
                  

                

              	 	 	
              
	Its	 	 	 
	
                
                  

                

              	 	 	 


      

       

    

    


    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

     

    
      Exhibit
        10.4



    SCHEDULE
      1

     

    SERVICES
      TO BE PROVIDED BY LUMERA

     

    Services
      to be provided by Lumera shall include:

     

    
      	 	
              a)

            	
              assistance
                by Lumera executives in recruiting executive management and developing
                strategy and operating plans;

            


    

     

    
      	 	
              b)

            	
              financial
                and accounting services;

            


    

     

    
      	 	
              c)

            	
              legal
                services;

            


    

     

    
      	 	
              d)

            	
              human
                resources services, including administration of compensation and
                benefits
                programs and assistance with respect to general personnel
                matters;

            


    

     

    
      	 	
              e)

            	
              information
                systems equipment and advice and assistance;


            


    

     

    
      	 	
              f)

            	
              facilities
                and certain management and administration of the facilities
                provided;

            


    

     

    
      	 	
              g)

            	
              such
                other services as may be requested by Plexera from time to time and
                agreed
                to by Lumera; and

            


    

     

    
      	 	
              h)

            	
              such
                other services provided by Lumera for the benefit of Plexera from
                time to
                time as determined by Lumera in its reasonable discretion (together
                with
                the services provided in (g), the “Additional
                Services”).

            


    

     

    


    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    
       

      Exhibit
        10.4



    SCHEDULE
      2

     

    CHARGES
      FOR SERVICES AND INTEREST

     

    
      	 	
              1.

            	
              Charges
                for Services.
                Plexera shall compensate Lumera for the following
                costs:

            


    

     

    
      	 	
              a.

            	
              Direct
                Costs.
                Plexera will pay the following costs (“Direct
                Costs”):

            


    

     

    
      	
            	(1)	
              the
                actual cost paid to third parties on behalf of Plexera, provided
                that, in
                selecting and negotiating with such third parties, Lumera shall use
                the
                degree of care normally exercised by it in connection with its own
                affairs; and 

            


    

     

    
      	
            	(2)	
              costs
                of Additional Services that are outside of and in addition to the
                services
                contemplated and assumed when the parties determined the Budgeted
                Monthly
                Fee as set forth below, which shall be based on the actual costs
                associated with such Services without mark-up (which, for the sake
                of
                clarity, may include, wage and benefit costs associated with employees
                providing Services).

            


    

    
       

      
        	 	 	Benefits, as used above, shall mean those benefits
                regularly provided by Lumera to its employees, such as vacation,
                social
                security, workers' compensation, health care, disability, incentives
                and
                stock plan.


      

       

    

    
      	 	
              b.

            	
              Allocated
                Costs.
                The proportionate cost of providing shared services, including, but
                not
                limited to, facilities (including, but not limited to, the sublease
                of
                facilities from Lumera and related maintenance costs), insurance
                costs,
                environmental, information systems and control systems support
                (“Allocated
                Costs”).
                The proportionate cost shall be determined on either a space, personnel
                or
                other basis as determined by the parties negotiating in good
                faith.

            


    

     

    
      	 	
              c.

            	
              Overhead
                Costs.
                The monthly general overhead costs for services provided to Plexera
                by
                Lumera employees, including, but not limited to, accounting, legal,
                human
                resources and management ("Overhead
                Costs").
                The Overhead Costs shall be calculated as provided below.
                

            


    

     

    2. Budgeted
      Monthly Fee.
      Plexera
      shall pay a monthly fee to Lumera for providing Services to Plexera under this
      Agreement related to Overhead Costs (the “Budgeted
      Monthly Fee”),
      which
      shall be determined by a monthly budget that is the parties good faith estimate
      of the average monthly Overhead Costs associated with such Services. To the
      extent the Budgeted Monthly Fee varies from the actual Overhead Costs incurred
      in any given month, Plexera will be invoiced to the extent the actual Overhead
      Costs incurred exceed the Budgeted Monthly Fee, and Plexera shall be credited
      to
      the extent the actual Overhead Costs incurred are less than the Budgeted Monthly
      Fee. The Budgeted Monthly Fee shall be determined at the beginning of each
      calendar quarter as approved by both parties in good faith. The Budgeted Monthly
      Fee for the quarter beginning July 1, 2007 shall be $233,043. The Budgeted
      Monthly Fee shall not include Direct Costs and Allocated Costs, which shall
      be
      invoiced separately and shall not affect the amount of the Budgeted Monthly
      Fee
      that is due.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        10.4

       

    

    3. Interest.
      Following the termination of the Services Note, Plexera will pay interest on
      balances not paid within 15 days upon invoice at a rate of 8% per
      annum.

     

    
      
        
        

      

      
        10