Contract between Xenogen & The National Inst. of Environmental Health Sciences



 Exhibit 10.1 
  

							
	2. AMENDMENT MODIFICATION NO.	  	3. EFFECTIVE DATE	  	4. REQUISITION/PURCHASE REG. NO.	  	5. PROJECT NO. (if applicable)
				
	4	  	See Item __C.	  	_XI80222	  	


							
			
	6. ISSUED BY	  	CODE	  	7. Illegible
		
	 National Institute of Environmental Health
 Sciences, Office of Acquisitions Branch, OM
 P.O. Box 12874
 Research Triangle Park, NC 27709
	  	 OMB No. 0990-0115
  
 James E. Patterson
 Contracting Officer, OAB, OM, NIEHS



							
			
	8. NAME AND ADDRESS OF CONTRACTOR (No, Street, city, country, State and Zip Code)	  	(ü)	  	9A. AMENDMENT OF SOLICITATION NO.
			
	 Xenogen Biosciences
 5 Cedar
Brook Drive
 Cranbury, NJ
08512                             (B2)
	  		  	9B. DATED (SEE ITEM 11)
	  	X	  	  
 10A. MODIFICATION CONTRACT/ORDER NO.

	  	  	273-03-C-0045 CR300045
	CODE	  	FACILITY CODE	  	  	10B. DATED (SEE ITEM 13)
		  		  	  	07/31/02

 11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS 
  ̈  The above numbered solicitation is amended as set
forth in item 14. The hour and date specified for receipt of Offers  ̈ is extended.  ̈ is not extended 
 Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following methods: 
 (a) By completing items 8 and 15, and returning _____ copies of the
amendment, (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED
AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or
letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified. 
 12. ACCOUNTING AND APPROPRIATION DATE (if required) 
 EIN: 1311122130A2
                    OC: 25.2Z
                    CAN: 6-8420819, OX160221
                    OBLIGATION: $348,000.00 
 13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS, 
 IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

  

					
	(ü)	 	A.	 	THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
			
		 	B.	 	THE ABOVE NUMBERED CONTRACT, ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE
AUTHORITY OF FAR 43.103(b).
			
		 	C.	 	THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
			
	X	 	D.	 	 OTHER (Specify type of modification and authority)
 FAR
1.602-1; FAR 82.217-9 Option to Extend the Term of Contract (MAR 2000): and FAR 52.212-4 (_) Contract Term and Commercial Items (FEB 2002)


 E. IMPORTANT: Contractor              ̈ is not.             x is required to sign this document and
return 1 copies to the issuing office. 
 14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by ____ section headings, including
solicitation/______ ______ matter where feasible.) 
  

			
		
	PURPOSE:	 	1) To exercise Option Year One of the contract; (2) to obligate funds for the option year period; (3) to revise the estimated quantity and unit costs as outlined in Section B. of the
contract; (4) to incorporate the revised to statement of work (Attachment no. 1) that reflects the reduction in the scope of work; (5) to re-establish the contract Period of Performance as identified in Contract Clauses, Addendum D.; and
(6) to summarize the impact on award, obligation, and expiration date.

 Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as ________
changed, remains unchanged and in full force and effect. 
  

											
	15A. NAME AND TITLE OF SIGNER (Type or print)	  	16A. NAME AND TITLE OF CONTRACTING OFFICER
	 Stephen J. McAndrew, Ph.D.
 Vice President, Business Development
	  		  	 James E. Patterson
 Contracting Officer
	  	
				
	15B. CONTRACTOR/OFFEROR	  	15C. DATE SIGNED	  	16B. UNITED STATES OF AMERICA	  	16C. DATE SIGNED
						
	BY	 	/s/ STEPHEN J. McANDREW, PH.D.	  	5/1/06	  	BY	  	JAMES E. PATTERSON	  	05/02/06
		 	(Signature of person authorized to sign)	  	  		  	(Signature of Contracting Officer)	  

 [*** CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS EXHIBIT] 








							
	 CONTINUATION SHEET
	  	REFERENCE NUMBER	  	Page	  	Of
		  	 Contract No. 273-03-C-0045
 Modification No.
4
	  	2	  	3

 NAME OF OFFEROR OR CONTRACTOR 
 Xenogen Biosciences 
  

	1.	The first option year of the Contract is hereby exercised to reflect a one-year period of performance for the period of September 25, 2005 through September 24, 2006.


  

	2.	Fiscal Year 2006 (FY 06) funds in the amount of [***] for FY-06 are hereby obligated for the continuation of services of this Contract from September 25, 2005 through
September 24, 2006. 

  

	3.	Section B, of the contract is hereby revised to allow the Contractor to deliver item/service at the fixed monthly unit price for Mouse Lines as specified below.


 A. Section B, SCHEDULE OF SUPPLIES/SERVICES, IS hereby revised as follows: 
  

													
	 1)
	  	Option Year 1	  		  		  			 		
						
	  	  	 Item/Services
	  	Quantity	  	Unit	  	Unit
Price	 	Extended
Total
	 a.
	  	Mouse Lines	  	10	  	Ea.	  	 	[***]	 	 	[***]
	 b.
	  	Change Order Charges	  	1	  	Lot	  	 
$	NTE 52,000
	 	 
$	NTE 52,000

	 Total Amount for Option Year One:
	 	 	[***]
						
	 2)
	  	Option Year 2	  		  		  			 		
						
	  	  	 Item/Services
	  	Quantity	  	Unit	  	Unit
Price	 	Extended
Total
	 a.
	  	Mouse Lines	  	10	  	Ea.	  	 	[***]	 	 	[***]
	 b.
	  	Change Order Charges	  	1	  	Lot	  	 
$	NTE 54,080
	 	 
$	NTE 54,080

	 Total Amount for Option Year Two:
	 	 	[***]
						
	 3)
	  	Option Year 3	  		  		  			 		
						
	  	  	 Item/Services
	  	Quantity	  	Unit	  	Unit
Price	 	Extended
Total
	 a.
	  	Mouse Lines	  	10	  	Ea.	  	 	[***]	 	 	[***]
	 b.
	  	Change Order Charges	  	1	  	Lot	  	 
$	NTE 66,243
	 	 
$	NTE 56,243

	 Total Amount for Option Year Three:
	 	 	[***]











							
	 CONTINUATION SHEET
	  	REFERENCE NUMBER	  	Page	  	Of
		  	 Contract No. 273-03-C-0045
 Modification No.
4
	  	3	  	3

 NAME OF OFFEROR OR CONTRACT 
 Xenogen Biosciences 
  

	4.	Section C. of the Contract is hereby revised to incorporate the attached Statement of Work (Modified March 9, 2006), 4 pages, (Attachment no. 1) in to the contract in its
entirety. 

  

	5.	The contract Period of Performance as identified in Contract Clauses, Addendum D. is hereby revised to reflect a two-year base award performance period and three option renewal
periods. 

  

	6.	a.       The expiration date of September 24, 2005 is hereby changed to September 24, 2006 by reason of this Modification.


  

	 	b.	The Contract award amount of [***] as set forth in Modification no. 3, is hereby increased by [***] to [***] by reason of this Modification. 

  

	 	c.	The Contract obligated amount of [***] as set forth in Modification no. 3, is hereby increased by [***] to [***] by reason of this Modification. 

  

					
	 Summary for Clarification Purposes:
	  		  	
	 	  	Awarded	  	Obligated
			
	 Prior to this Modification No. 4:
	  	[***]	  	[***]
	 Changed per this Modification:
	  	[***]	  	[***]
		  	 	  	 
	 Current/New Totals:
	  	[***]	  	[***]
		  	 	  	 

 END OF MODIFICATION 









 Attachment no. 1 
 Statement of Work (Modified March 9, 2006) 
 Introduction 
 The laboratory mouse is
a necessary research model organism because of the fact that all members of a given strain can possess nearly identical genes. This features makes interpretation of environmental influences (such as pesticides, toxins, heavy metals) more easily
detected and studied. The understanding of the genetic makeup of the mouse also allows for creation of specific mouse lines that lack specific genes, thereby allowing investigators to test for the role of those genes in a particular process or
biochemical pathway. Such gene-defective, customized mouse lines are known colloquially in the field as “knock-out mice” because through use of detailed recombinant DNA methods, any desired mouse gene can be systematically deleted (i.e.,
“knocked out”) from the chromosomes of that mouse and all of is progeny. 
 Because the knockout techniques involve inherited gene alteration,
traditional knockout lines have led to strains of mice in which the genes are congenitally deleted, that is, gone from the time of conception onward throughout life. This methodology, now over 15 years old, is a particularly powerful research tool
for studying human genetic defect diseases such as “inborn errors of metabolism.” But the method suffers from two principal drawbacks. First, extremely severe gene defects may not be compatible with sustaining of life, and hence no viable
mouse line can be developed bearing that gene defect. Secondly, because that gene is congenitally defective, the organism does not undergo normal development. Biochemical pathways and anatomical features of the normal adult may be absent or
aberrant, thereby making the strain less than desirable as a model organism for an adult condition. 
 Recent advances in molecular biology now allow for
creation of an elegant type of new mouse knockout, called “conditional knockouts”. These animals can bear a gene knockout that occurs only in specific tissues, and/or only at specific times in the animal’s life. This variant of the
original knockout technology involves use of two separate mouse lines, one in which the gene to be knocked out is has been altered to contain at its boundaries two foreign DNA sequences called “Lox P sites”. These sites define the points
in the gene at which a deletion (knockout) is desired. A gene that has been targeted with Lox P sites is said to be “Floxed.” 
 A second component
of this method requires the participation of a second mouse strain, one in which a foreign gene encoding an enzyme called “CRE Recombinase” has been introduced. This enzyme has the unique ability to digest Lox P elements in DNA, thereby
inactivating the Floxed gene. If the foreign CRE gene is expressed in only certain tissues in the mouse, or at only certain times of development, or only when a particular drug is given, the knocking-out of the Floxed gene can occur in a specific,
pre-ordained way. Mouse strains that have “floxed” genes are perfectly normal until the CRE acts. Thus, for instance, adult-disease models, or acute liver-damage models can be created. These animal models are critical for next-generation
genetic understanding of environmental influences upon human health. 
  

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 The Institute’s scientists in the Division of Intramural Research have identified a set of mouse genes for which
conditional knockout mouse lines will be especially valuable and critical to their carrying out the mission of the Institute. For this reason, the Scientific Director supports the initiative to obtain mouse lines bearing Floxed genes. Technology at
NIEHS does not provide for this methodology in-house. Rather, commercial sources are set up to carry out the necessary steps for molecular biology, mouse embryology, and animal husbandry. 
 Scope of Work 
 The Contractor shall
prepare mouse lines bearing Floxed genes. A prioritized list of 25 to 40 genes has been prepared, representing a broad opportunity for all Institute scientific groups to access this technology. 
 The Contractor shall initiate development of a minimum of one mouse line and a maximum of ten mouse lines in the first year. A sustained rate of delivery shall be
maintained throughout the contract period and extensions. The Contractors shall carry out the following steps: 
 1. Prepare all necessary DNA vectors needed
for Floxing specific mouse genes, in consultation with Institute scientists. 
 2. Lox P elements will be inserted into specific loci of mouse genes as
defined in consultation with Institute scientists. Following the contractor’s own protocols, founder male mice will be derived that provide founder animals demonstrating germline transmission of said Floxed genes. The chosen methodology shall
be of such a nature that no selection cassette is left behind. DNA vectors also may be constructed such that the gene of interest is inserted, i.e. knocked into the mouse line as directed in consultation with NIEHS investigators and the approval of
the Project Officer. 
 3. The Contractor shall also provide suitable hybridization probe descriptions and representative examples to allow the NIEHS users
to confirm satisfactory gene deletion following CRE recombinase activation in the offspring mice derived from breeding the founder males with females bearing CRE recombinase. 
 4. Finally, the founder animals shall be suitably free of pathogens to allow direct entry into the NIEHS Vivarium without need for re-derivation of the lines. Only mouse lines acceptable to NIEHS Vivarium shall be
considered as deliverables. Mouse lines shall be prepared in a constant genetic background, to be defined by the Project Director in consultation with the Contractor. 
 5. In the event that Contractor proposes to use mouse lines of a proprietary nature, or its own variant lines not available as wild-type animals from other commercial sources, then Contractor shall provide founder
lines of wild-type animals of the same genetic background to be used as gene-normal controls in subsequent experiments. 
 6. Institute scientists may, at
the option of the Project Officer, re-prioritize or substitute 

  

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genes into the work queue, up to the point at which the Contractor’ work on that specific gene has begun. Such work initiation shall mean any designing
of primers, or subsequent laboratory steps. The compensation to the Contractor for this change is to be charged under the line item “Change Order Charges” at the set price negotiated with the contractor. 
 7. The Government Project Director may also require that work on a specific gene be terminated or re-prioritized after that gene’s project has begun. Such a
termination shall be charged at a time-and-amount basis to be negotiated but shall be less than the cost of a completed knockout line. The compensation to the Contractor for this change is to be charged under the line item “Change Order
Charges” at the set price negotiated with the contractor. 
 8. The Contractor may, at its option, request to retain commercial rights to sell founder
animals derived from the NIEHS gene targeting project. Agreement to grant these rights shall be a part of the contract process and is not explicitly nor implicitly granted. 
 9. The NIEHS will have complete freedom to utilize the knockout lines for any public scientific purpose, and will have complete freedom to publish findings based upon these animals without conditions. Similarly, NIEHS
will have complete freedom to distribute these mouse lines and/or any cells, tissues of other derivatives thereof, to any non-commercial scientific entity. 
 10. The Contractor shall initiate work on no less than one prioritized genes per year, staging the work in sequence such that up to ten genes shall have been initiated at the primer-construction stage by the end of the first year. Floxed
mouse lines shall be targeted for delivery within one year following start of that line. 
 11. A three year period of work will initiate from 1 to 10 mouse
lines per year, i.e., a minimum of three mouse lines to a maximum of thirty mouse lines shall be initiated during the three years. Payments upon completion of ongoing projects shall occur into a fourth year, but no new projects will be initiated
during that period. 
 Confidential Treatment of Sensitive Information 
 The Contractor shall guarantee strict confidentiality of the information/data that it is provided by the Government during the performance of the contract. The Government
has determined that the information/data that the Contractor will be provided during the performance of the contract is of a sensitive nature. 
 Disclosure
of the information/data, in whole or in part, by the Contractor can only be made after the Contractor receives prior written approval from the Contracting Officer. Whenever the Contractor is uncertain with regard to the proper handling of
information/data under the contract, the Contractor shall obtain a written determination from the Contracting Officer. 
  

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 Prioritization of Floxed Mouse Lines 
 All work requirements, i.e., prioritization of work, cancellation of work, re-prioritization of work, shall flow only from the Project Officer or in his absence from the
Alternate Project Officer to the Contractor personnel. 
 Delivery to NIEHS 
 The delivery address of the National Institute of Environmental Health Sciences is: 
 National Institute of Environmental Health Sciences 111 T.W. Alexander Drive Research Triangle Park, NC 27709. 
  

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