Document:

exv10w1

Exhibit
10.1

THORATEC CORPORATION

AMENDED AND RESTATED 2006 INCENTIVE STOCK PLAN

Approved
by the Shareholders on May 25, 2006

Amended and Restated by the Board on May 25, 2006 and April 7, 2008

Approved by the Shareholders on May 20, 2008

Amended and Restated by the Board on May 20, 2008

Termination Date: May 24, 2016

I. PURPOSES

     1.1 Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are
the Employees, Directors, and Consultants of the Company and its Affiliates.

     1.2 Available Stock Awards. The types of stock awards that may be granted under this
Plan shall be: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Restricted Stock
Bonuses, (iv) Restricted Stock Purchase Rights, (v) Stock Appreciation Rights, (vi) Phantom Stock
Units, (vii) Restricted Stock Units, (viii) Performance Share Bonuses, and (ix) Performance Share
Units.

     1.3 General Purpose. The Company, by means of this new Plan, which will serve as the
successor to the Company’s 1997 Stock Option Plan (“1997 Plan”), the Company’s 1996 Stock Option
Plan (“1996 Plan”), and the Company’s Nonemployee Directors Stock Option Plan (“Directors 1996
Plan”), seeks to create incentives for eligible Employees (including officers), Directors, and
Consultants of the Company, through their participation in the growth in value of the Common Stock
of the Company, to accept or continue their employment or other service relationship with the
Company, increase their interest in the Company’s welfare, and improve the operations and increase
the profits of the Company. The Plan will serve as a replacement for the 1997 Plan, the 1996 Plan,
and the Directors 1996 Plan. Stock awards granted under any of these plans shall continue to be
governed by the terms of the plan under which the stock award was granted that were in effect on
the date of grant of such award.

II. DEFINITIONS

     2.1 “Affiliate” means a parent or subsidiary of the Company, with “parent” meaning an entity
that controls the Company directly or indirectly, through one or more intermediaries, and
“subsidiary” meaning an entity that is controlled by the Company directly or indirectly, through
one or more intermediaries. Solely with respect to the granting of any Incentive Stock Options,
Affiliate means any parent corporation or subsidiary corporation of the Company, whether now or
hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the
Code.

     2.2 “Beneficial Owner” means the definition given in Rule 13d-3 promulgated under the Exchange
Act.

 

 

     2.3 “Board” means the Board of Directors of the Company.

     2.4 “Change of Control” means the occurrence of any of the following events:

          (i) Any person or group is or becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the total voting power of the voting stock of the Company, including by way of merger,
consolidation or otherwise;

          (ii) The sale, exchange, lease or other disposition of all or substantially all of the assets
of the Company to a person or group of related persons, as such terms are defined or described in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act;

          (iii) A merger or consolidation or similar transaction involving the Company;

          (iv) A change in the composition of the Board occurring within a two-year period, as a result
of which fewer than a majority of the Directors are Incumbent Directors; or

          (v) A dissolution or liquidation of the Company.

     2.5 “Code” means the Internal Revenue Code of 1986, as amended.

     2.6 “Committee” means a committee of one or more members of the Board (or officers who are not
members of the Board to the extent allowed by law) appointed by the Board in accordance with
Section 3.3 of the Plan.

     2.7 “Common Stock” means the common shares of the Company.

     2.8 “Company” means Thoratec Corporation, a California corporation.

     2.9 “Consultant” means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or
(ii) who is a member of the board of directors of an Affiliate. However, the term “Consultant”
shall not include either Directors who are not compensated by the Company for their services as a
Director or Directors who are compensated by the Company solely for their services as a Director.

     2.10 “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director, or Consultant is not interrupted or terminated. The
Participant’s Continuous Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant, or Director, or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participant’s Continuous
Service. For example, a change in status from an Employee of the Company to a Consultant of an
Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or the
chief executive officer of the Company, in that party’s sole discretion, may determine whether
Continuous Service shall be considered interrupted in the case of any leave of absence approved by
the Company or an Affiliate, including sick leave, military leave, or any other personal leave.

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     2.11 “Covered Employee” means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to
shareholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.

     2.12 “Director” means a member of the Board of Directors of the Company.

     2.13 “Disability” means the permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code for all Incentive Stock Options. For all other Stock Awards,
“Disability” means physical or mental incapacitation such that for a period of six (6) consecutive
months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period, a
person is unable to substantially perform his or her duties. Any question as to the existence of
that person’s physical or mental incapacitation as to which the person or person’s representative
and the Company cannot agree shall be determined in writing by a qualified independent physician
mutually acceptable to the person and the Company. If the person and the Company or an Affiliate
cannot agree as to a qualified independent physician, each shall appoint such a physician and those
two (2) physicians shall select a third (3rd) who shall make such determination in
writing. The determination of Disability made in writing to the Company or an Affiliate and the
person shall be final and conclusive for all purposes of the Stock Awards.

     2.14 “Eligible Director” means any Director who is not employed by the Company or an
Affiliate.

     2.15 “Employee” means any person employed by the Company or an Affiliate. Service as a
Director or compensation by the Company or an Affiliate solely for services as a Director shall not
be sufficient to constitute “employment” by the Company or an Affiliate.

     2.16 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     2.17 “Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:

          (i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no such sales were
reported) as quoted on such exchange or market (or the exchange or market with the greatest volume
of trading in the Common Stock) on the date of determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable;

          (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the day of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable; or

          (iii) In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.

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     2.18 “Full-Value Stock Award” shall mean any of a Restricted Stock Bonus, Restricted Stock
Units, Phantom Stock Units, Performance Share Bonus, or Performance Share Units.

     2.19 “Incentive Stock Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

     2.20 “Incumbent Directors” shall mean Directors who either (i) are Directors of the Company as
of the date the Plan first becomes effective pursuant to Article XVI hereof or (ii) are elected, or
nominated for election, to the Board with the affirmative votes of at least a majority of those
Directors whose election or nomination was not in connection with any transaction described in
subsections (i), (ii), or (iii) of Section 2.4, or in connection with an actual or threatened proxy
contest relating to the election of Directors to the Company.

     2.21 “Non-Employee Director” means a Director who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or
in any capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction as to which disclosure
would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship
as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise
considered a “non-employee director” for purposes of Rule 16b-3.

     2.22 “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock
Option.

     2.23 “Officer” means a person who is an officer of the Company within the meaning of Section
16 of the Exchange Act and the rules and regulations promulgated thereunder.

     2.24 “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant
to the Plan.

     2.25 “Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.

     2.26 “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.

     2.27 “Outside Director” means a Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” receiving compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an “affiliated corporation” at any time and is
not currently receiving direct or indirect remuneration from the Company or an “affiliated
corporation” for services in any capacity other than as a Director; or (ii) is otherwise considered
an “outside director” for purposes of Section 162(m) of the Code.

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     2.28 “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.

     2.29 “Performance Share Bonus” means a grant of shares of the Company’s Common Stock not
requiring a Participant to pay any amount of monetary consideration, and which grant is subject to
the provisions of Section 8.6 of the Plan.

     2.30 “Performance Share Unit” means the right to receive the value of one (1) share of the
Company’s Common Stock at the time the Performance Share Unit vests, with the further right to
elect to defer receipt of that value otherwise deliverable upon the vesting of an award of
Performance Share Units to the extent permitted in the Participant’s Stock Award Agreement. These
Performance Share Units are subject to the provisions of Section 8.7 of the Plan.

     2.31 “Phantom Stock Unit” means the right to receive the value of one (1) share of the
Company’s Common Stock, subject to the provisions of Section 8.4 of the Plan.

     2.32 “Plan” means this Thoratec Corporation 2006 Incentive Stock Plan.

     2.33 “Restricted Stock Bonus” means a grant of shares of the Company’s Common Stock not
requiring a Participant to pay any amount of monetary consideration, and which grant is subject to
the provisions of Section 8.1 of the Plan.

     2.34 “Restricted Stock Purchase Right” means the right to acquire shares of the Company’s
Common Stock upon the payment of the agreed-upon monetary consideration, subject to the provisions
of Section 8.2 of the Plan.

     2.35 “Restricted Stock Unit” means the right to receive the value of one (1) share of the
Company’s Common Stock at the time the Restricted Stock Unit vests, with the further right to elect
to defer receipt of that value otherwise deliverable upon the vesting of an award of restricted
stock to the extent permitted in the Participant’s agreement. These Restricted Stock Units are
subject to the provisions of Section 8.5 of the Plan.

     2.36 “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.

     2.37 “Securities Act” means the Securities Act of 1933, as amended.

     2.38 “Stock Appreciation Right” means the right to receive an amount equal to the Fair Market
Value of one (1) share of the Company’s Common Stock on the day the Stock Appreciation Right is
redeemed, reduced by the deemed exercise price or base price of such right, subject to the
provisions of Section 8.3 of the Plan.

     2.39 “Stock Award” means any Option award, Restricted Stock Bonus award, Restricted Stock
Purchase Right award, Stock Appreciation Right award, Phantom Stock Unit award, Restricted Stock
Unit award, Performance Share Bonus award, Performance Share Unit award, or other stock-based
award. These Awards may include, but are not limited to those listed in Section 1.2.

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     2.40 “Stock Award Agreement” means a written agreement, including an Option Agreement, between
the Company and a holder of a Stock Award setting forth the terms and conditions of an individual
Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the
Plan.

     2.41 “Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates.

III. ADMINISTRATION

     3.1 Administration by Board. The Board shall administer the Plan unless and until the
Board delegates administration to a Committee, as provided in Section 3.3.

     3.2 Powers of Board. The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:

          (i) To determine from time to time which of the persons eligible under the Plan shall be
granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of
types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not
be identical), including the time or times when a person shall be permitted to receive Common Stock
pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person.

          (ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.

          (iii) To amend the Plan or a Stock Award as provided in Section 14 of the Plan.

          (iv) Generally, to exercise such powers and to perform such acts as the Board deems necessary,
desirable, convenient or expedient to promote the best interests of the Company that are not in
conflict with the provisions of the Plan.

          (v) To adopt sub-plans and/or special provisions applicable to Stock Awards regulated by the
laws of a jurisdiction other than and outside of the United States. Such sub-plans and/or special
provisions may take precedence over other provisions of the Plan, with the exception of Section 4
of the Plan, but unless otherwise superseded by the terms of such sub-plans and/or special
provisions, the provisions of the Plan shall govern.

          (vi) To authorize any person to execute on behalf of the Company any instrument required to
effect the grant of a Stock Award previously granted by the Board.

          (vii) To determine whether Stock Awards will be settled in shares of Common Stock, cash or in
any combination thereof.

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          (viii) To determine whether Stock Awards will be adjusted for Dividend Equivalents, with
“Dividend Equivalents” meaning a credit, made at the discretion of the Board, to the account of a
Participant in an amount equal to the cash dividends paid on one share of Common Stock for each
share of Common Stock represented by a Stock Award held by such Participant.

          (ix) To establish a program whereby Participants designated by the Board can reduce
compensation otherwise payable in cash in exchange for Stock Awards under the Plan.

          (x) To impose such restrictions, conditions or limitations as it determines appropriate as to
the timing and manner of any resales by a Participant or other subsequent transfers by the
Participant of any shares of Common Stock issued as a result of or under a Stock Award, including,
without limitation, (A) restrictions under an insider trading policy and (B) restrictions as to the
use of a specified brokerage firm for such resales or other transfers.

          (xi) To provide, either at the time a Stock Award is granted or by subsequent action, that a
Stock Award shall contain as a term thereof, a right, either in tandem with the other rights under
the Stock Award or as an alternative thereto, of the Participant to receive, without payment to the
Company, a number of shares of Common Stock, cash or a combination thereof, the amount of which is
determined by reference to the value of the Stock Award.

     3.3 Delegation to Committee.

          (i) General. The Board may delegate administration of the Plan to a Committee or
Committees consisting of one or more members of the Board or one or more officers of the Company
who are not members of the Board (to the extent allowed by law), and the term “Committee” shall
apply to any person or persons to whom such authority has been delegated. If administration is
delegated to a Committee, the Committee also may exercise, in connection with the administration of
the Plan, any of the powers and authority granted to the Board under the Plan, and the Committee
may delegate to a subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the Committee or
subcommittee, as applicable), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.

          (ii) Committee Composition when Common Stock is Publicly Traded. At such time as the
Common Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of
two or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two
or more Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority,
the Board or the Committee may (1) delegate to a committee of one or more individuals who are not
Outside Directors the authority to grant Stock Awards to eligible persons who are either (a) not
then Covered Employees and are not expected to be Covered Employees at the time of recognition of
income resulting from such Stock Award or (b) not persons with respect to whom the Company wishes
to comply with Section 162(m) of the Code and/or (2) delegate to a committee of one or more
individuals who are not Non-Employee Directors the authority to grant Stock Awards to eligible
persons who are either (a) not then

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subject to Section 16 of the Exchange Act or (b) receiving a Stock Award as to which the Board
or Committee elects not to comply with Rule 16b-3 by having two or more Non-Employee Directors
grant such Stock Award.

     3.4 Effect of Board’s Decision. All determinations, interpretations and constructions
made by the Board in good faith shall not be subject to review by any person and shall be final,
binding and conclusive on all persons.

     3.5 Compliance with Section 16 of Exchange Act. With respect to persons subject to
Section 16 of the Exchange Act, transactions under this Plan are intended to comply with the
applicable conditions of Rule 16b-3, or any successor rule thereto. To the extent any provision of
this Plan or action by the Board fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Board. Notwithstanding the above, it shall be
the responsibility of such persons, not of the Company or the Board, to comply with the
requirements of Section 16 of the Exchange Act; and neither the Company nor the Board shall be
liable if this Plan or any transaction under this Plan fails to comply with the applicable
conditions of Rule 16b-3 or any successor rule thereto, or if any person incurs any liability under
Section 16 of the Exchange Act.

IV. SHARES SUBJECT TO THE PLAN

     4.1 Share Reserve. Subject to the provisions of Section 13 of the Plan relating to
adjustments upon changes in Common Stock, the maximum aggregate number of shares of Common Stock
that may be issued pursuant to Stock Awards shall not exceed Five Million Four Hundred Thousand
(5,400,000) shares of Common Stock (“Share Reserve”), provided that from and after May 20, 2008,
(i) each share of Common Stock issued pursuant to a Full-Value Stock Award shall reduce the Share
Reserve by one and seventy-four hundredths (1.74) shares and (ii) each share of Common Stock issued
pursuant to a Stock Award other than a Full-Value Stock Award shall reduce the Share Reserve by one
(1) share. To the extent that a distribution pursuant to a Stock Award is made in cash, the Share
Reserve shall be reduced by the number of shares of Common Stock subject to the redeemed or
exercised portion of the Stock Award. Notwithstanding any other provision of the Plan to the
contrary, the maximum aggregate number of shares of Common Stock that may be issued under the Plan
pursuant to Incentive Stock Options is Five Million Four Hundred Thousand (5,400,000) shares of
Common Stock (“ISO Limit”), subject to the adjustments provided for in Section 13 of the Plan. No
more than an aggregate of five percent (5%) of the initial Share Reserve at the time of the
adoption of this Plan and five percent (5%) of any increase in the Share Reserve as may be approved
by the shareholders of the Company from time to time may be granted under Accelerated Vesting
Restricted Stock Bonuses and Accelerated Vesting Restricted Stock Units (as defined in Sections
8.1(ii) and 8.5(ii), respectively).

     4.2 Reversion of Shares to the Share Reserve.

          (i) If any Stock Award granted under this Plan shall for any reason (A) expire, be cancelled
or otherwise terminate, in whole or in part, without having been exercised or redeemed in full, (B)
be reacquired by the Company prior to vesting, or (C) be repurchased at cost by the Company prior
to vesting, the shares of Common Stock not acquired by Participant

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under such Stock Award shall revert or be added to the Share Reserve and become available for
issuance under the Plan; provided, however, that shares of Common Stock shall not revert or be
added to the Share Reserve that are (a) tendered in payment of an Option, (b) withheld by the
Company to satisfy any tax withholding obligation, or (c) repurchased by the Company with Option
proceeds, and provided, further, that shares of Common Stock covered by a Stock Appreciation Right,
to the extent that it is exercised and settled in shares of Common Stock, and whether or not shares
of Common Stock are actually issued to the Participant upon exercise of the Stock Appreciation
Right, shall be considered issued or transferred pursuant to the Plan. For shares that revert or
are added to the Share Reserve as provided above, the Share Reserve shall be increased by (i) one
and seventy-four hundredths (1.74) shares for each share of Common Stock underlying a Full-Value
Stock Award and (ii) one (1) share for each share of Common Stock underlying a Stock Award other
than a Full-Value Stock Award.

          (ii) Shares of Common Stock that are not acquired by a holder of a stock award granted under
the 1997 Plan, the 1996 Plan, or the Directors 1996 Plan shall not revert or be added to the Share
Reserve or become available for issuance under the Plan.

     4.3 Source of Shares. The shares of Common Stock subject to the Plan may be unissued
shares or reacquired shares, bought on the market or otherwise.

V. ELIGIBILITY

     5.1 Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only
to Employees. Stock Awards other than Incentive Stock Options may be granted to Employees,
Directors, and Consultants.

     5.2 Ten Percent Shareholders. A Ten Percent Shareholder shall not be granted an
Incentive Stock Option unless the exercise price of such Option is at least one hundred ten percent
(110%) of the Fair Market Value of the Common Stock on the date of grant and the Option is not
exercisable after the expiration of five (5) years from the date of grant.

     5.3 Annual Section 162(m) Limitation. Subject to the provisions of Section 13 of the
Plan relating to adjustments upon changes in the shares of Common Stock, no Employee shall be
eligible to be granted Incentive Stock Options, Nonstatutory Stock Options, or Stock Appreciation
Rights covering more than Three Hundred Fifty Thousand (350,000) shares of Common Stock during any
fiscal year; provided that in connection with his or her initial service, an Employee may be
granted Incentive Stock Options, Nonstatutory Stock Options, or Stock Appreciation Rights covering
not more than an additional Two Hundred Fifty Thousand (250,000) shares of Common Stock, which
shall not count against the limit set forth in the preceding sentence.

     5.4. Consultants.

     (i) A Consultant shall not be eligible for the grant of a Stock Award if, at the time of
grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to
register either the offer or the sale of the Company’s securities to such Consultant because of the
nature of the services that the Consultant is providing to the Company, or because the Consultant
is not a natural person, or as otherwise provided by the rules governing the use of

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 Form S-8, unless the Company determines both (1) that such grant (A) shall be registered in
another manner under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does
not require registration under the Securities Act in order to comply with the requirements of the
Securities Act, if applicable, and (2) that such grant complies with the securities laws of all
other relevant jurisdictions.

          (ii) Form S-8 generally is available to consultants and advisors only if (A) they are natural
persons; (B) they provide bona fide services to the issuer, its parents, or its majority owned
subsidiaries; and (C) the services are not in connection with the offer or sale of securities in a
capital-raising transaction, and do not directly or indirectly promote or maintain a market for the
issuer’s securities.

VI. OPTION PROVISIONS

     Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates will be issued for shares of Common Stock purchased upon exercise of
each type of Option. The provisions of separate Options need not be identical, but each Option
shall include (through incorporation of provisions hereof by reference in the Option or otherwise)
the substance of each of the following provisions:

     6.1 Term. Subject to the provisions of Section 5.2 of the Plan regarding grants of
Incentive Stock Options to Ten Percent Shareholders, no Option shall be exercisable after the
expiration of ten (10) years from the date it was granted, and no Option granted to an Eligible
Director pursuant to Article VII shall be exercisable after the expiration of five (5) years from
the date it was granted.

     6.2 Exercise Price of an Incentive Stock Option. Subject to the provisions of Section
5.2 of the Plan regarding Ten Percent Shareholders, the exercise price of each Incentive Stock
Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common
Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an
Incentive Stock Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or substitution for another
option in a manner satisfying the provisions of Section 424(a) of the Code.

     6.3 Exercise Price of a Nonstatutory Stock Option. The exercise price of each
Nonstatutory Stock Option shall be not less than one hundred percent (100%) of the Fair Market
Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding
the foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that
set forth in the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section 424(a) of the
Code.

     6.4 Consideration. The purchase price of Common Stock acquired pursuant to an Option
shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in

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cash or by check at the time the Option is exercised or (ii) at the discretion of the Board at
the time of the grant of the Option (or subsequently in the case of a Nonstatutory Stock Option):
(1) by delivery to the Company of other Common Stock, (2) pursuant to a “same day sale” program to
the extent permitted by law, (3) reduction of the Company’s liability to the Optionholder, (4) a
reduction in the number of shares of Common Stock otherwise issuable upon the exercise of the
Option, (5) by any other form of consideration permitted by law, but in no event shall a promissory
note or other form of deferred payment constitute a permissible form of consideration for an Option
granted under the Plan, or (6) by some combination of the foregoing. In the absence of a provision
to the contrary in the individual Optionholder’s Option Agreement, payment for Common Stock
pursuant to an Option may only be made in the form of cash, check, or pursuant to a “same day sale”
program.

     6.5 Transferability of an Incentive Stock Option. An Incentive Stock Option shall not
be transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.

     6.6 Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option shall
be transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option
does not provide for transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.

     6.7 Vesting Generally. Options granted under the Plan shall be exercisable at such
time and upon such terms and conditions as may be determined by the Board. The vesting provisions
of individual Options may vary. If vesting is based on the Participant’s Continuous Service, such
Options shall not fully vest in less than three (3) years. If vesting is based on the achievement
of performance criteria, such Options shall not fully vest in less than one (1) year. The
provisions of this Section 6.7 are subject to any Option provisions governing the minimum number of
shares of Common Stock as to which an Option may be exercised. Notwithstanding the foregoing
provisions of this Section 6.7, Options granted in recognition of a Participant’s long-term
Continuous Service may vest fully in periods shorter than those described above or may be fully
vested upon grant.

     6.8 Termination of Continuous Service. In the event an Optionholder’s Continuous
Service terminates (other than upon the Optionholder’s death or Disability), the Optionholder may
exercise his or her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination) but only within such period of time as is specified in the
Option Agreement (and in no event later than the expiration of the term of such Option as set forth
in the Option Agreement). If, after termination, the Optionholder does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall terminate. In the
absence of a provision to the contrary in the individual Optionholder’s Option Agreement, the

11

 

Option shall remain exercisable for three (3) months following the termination of the
Optionholder’s Continuous Service.

     6.9 Extension of Termination Date. An Optionholder’s Option Agreement may also provide
that if the exercise of the Option following the termination of the Optionholder’s Continuous
Service (other than upon the Optionholder’s death or Disability) would be prohibited at any time
solely because the issuance of shares of Common Stock would violate the registration requirements
under the Securities Act or other applicable securities law, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in the Option Agreement or (ii)
the expiration of a period of three (3) months after the termination of the Optionholder’s
Continuous Service during which the exercise of the Option would not be in violation of such
registration requirements or other applicable securities law. The provisions of this Section 6.9
notwithstanding, in the event that a sale of the shares of Common Stock received upon exercise of
his or her Option would subject the Optionholder to liability under Section 16(b) of the Exchange
Act, then the Option will terminate on the earlier of (1) the fifteenth (15th) day after
the last date upon which such sale would result in liability, or (2) two hundred ten (210) days
following the date of termination of the Optionholder’s employment or other service to the Company
(and in no event later than the expiration of the term of the Option).

     6.10 Disability of Optionholder. In the event that an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his
or her Option to the extent that the Optionholder was entitled to exercise such Option as of the
date of termination, but only within such period of time as is specified in the Option Agreement
(and in no event later than the expiration of the term of such Option as set forth in the Option
Agreement). If, after termination, the Optionholder does not exercise his or her Option within the
time specified in the Option Agreement, the Option shall terminate. In the absence of a provision
to the contrary in the individual Optionholder’s Option Agreement, the Option shall remain
exercisable for twelve (12) months following such termination.

     6.11 Death of Optionholder. In the event (i) an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s death or (ii) the Optionholder dies within the period
(if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous
Service for a reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s
estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the Option upon the Optionholder’s death pursuant to Section 6.5 or
6.6 of the Plan, but only within such period of time as is specified in the Option Agreement (and
in no event later than the expiration of the term of such Option as set forth in the Option
Agreement). If, after death, the Option is not exercised within the time specified in the Option
Agreement, the Option shall terminate. In the absence of a provision to the contrary in the
individual Optionholder’s Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionholder’s death.

     6.12 Early Exercise Generally Not Permitted. The Company’s general policy is not to
allow the Optionholder to exercise the Option as to any part or all of the shares of Common Stock
subject to the Option prior to the vesting of the Option. If, however, an Option Agreement does
permit such early exercise, any unvested shares of Common Stock so purchased may be

12

 

subject to a repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate.

VII. NON-DISCRETIONARY STOCK AWARDS FOR ELIGIBLE DIRECTORS

     In addition to any other Stock Awards that Eligible Directors may be granted on a
discretionary basis under the Plan, which Stock Awards may only be granted by a Committee comprised
solely of Non-Employee Directors, each Eligible Director of the Company shall be automatically
granted without the necessity of action by the Board, the following Stock Awards.

     7.1 Initial Grant. On the date that a Director commences service on the Board and
satisfies the definition of an Eligible Director, an initial grant of restricted stock in the form
of a Restricted Stock Bonus award or an award of Restricted Stock Units shall automatically be made
to that Eligible Director (the “Initial Grant”). Unless expressly provided in this Article VII,
such Initial Grant shall be subject to the applicable provisions of Section 8.1 or Section 8.5, as
the case may be. In the absence of an affirmative decision by the Board to the contrary, the
Initial Grant shall be in the form of a Restricted Stock Bonus award. The number of shares subject
to this Initial Grant shall be Seven Thousand (7,000) shares; provided, however, that prior to the
date of grant the Board may, in its sole discretion, provide that a different number of shares
shall be subject to this Initial Grant. The other terms governing this Initial Grant shall be as
determined by the Board in its sole discretion. If at the time a Director commences service on the
Board, the Director does not satisfy the definition of an Eligible Director, such Director shall
not be entitled to an Initial Grant at any time, even if such Director subsequently becomes an
Eligible Director.

     7.2 Annual Grant. An annual grant of restricted stock in the form of a Restricted
Stock Bonus award or an award of Restricted Stock Units (the “Annual Grant”) shall automatically be
made to each Director who (1) is re-elected to the Board and (2) is an Eligible Director on the
relevant grant date. Unless expressly provided in this Article VII, such Annual Grant shall be
subject to the applicable provisions of Section 8.1 or Section 8.5, as the case may be. In the
absence of an affirmative decision by the Board to the contrary, the Annual Grant shall be in the
form of a Restricted Stock Bonus award. The number of shares subject to this Annual Grant shall be
Five Thousand (5,000) shares. The other terms governing this Annual Grant shall be as determined by
the Board in its sole discretion. The date of grant of an Annual Grant is the date of the first
meeting of the Board following the annual meeting of the Company’s shareholders (even if that Board
meeting is held on the same day as the annual meeting of the shareholders).

     7.3 Vesting. Initial Grants and Annual Grants granted pursuant to this Article shall
be subject to a share reacquisition right in favor of the Company. Such grants shall vest as to one
fourth (1/4) of the total award annually, such that the award is fully vested after four (4) years
of Continuous Service. In the event a Director’s Continuous Service terminates, the Company shall
automatically reacquire without cost any shares of Common Stock held by the Director that have not
vested as of the date of such termination and any unvested Restricted Stock Units shall
automatically expire as of the date of such termination.

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VIII. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS

     8.1 Restricted Stock Bonus Awards. Each Restricted Stock Bonus agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem appropriate.
Restricted Stock Bonuses shall be paid by the Company in shares of the Common Stock of the Company.
The terms and conditions of Restricted Stock Bonus agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Bonus agreements need not be identical, but each
Restricted Stock Bonus agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:

          (i) Consideration. A Restricted Stock Bonus may be awarded in consideration for past
services actually rendered to the Company or an Affiliate for its benefit; provided, however, that
in the case of a Restricted Stock Bonus to be made to a new Employee, Director, or Consultant who
has not performed prior services for the Company, the Restricted Stock Bonus will not be awarded
until the Board determines that such person has rendered services to the Company for a sufficient
period of time to ensure proper issuance of the shares in compliance with the California
Corporations Code.

          (ii) Vesting. Vesting shall generally be based on the Participant’s Continuous
Service. Shares of Common Stock awarded under the Restricted Stock Bonus agreement shall be subject
to a share reacquisition right in favor of the Company in accordance with a vesting schedule to be
determined by the Board. Absent a provision to the contrary in the Participant’s Restricted Stock
Bonus agreement, so long as the Participant remains in Continuous Service with the Company, a
Restricted Stock Bonus granted to the Participant shall vest as to one fourth (1/4) of the total
Restricted Stock Bonus award on each annual anniversary of the grant date, such that the Restricted
Stock Bonus is fully vested after four (4) years of Continuous Service from the grant date. If
vesting is based on the Participant’s Continuous Service, such Restricted Stock Bonus shall not
fully vest in less than three (3) years. If vesting is based on the achievement of performance
criteria, such Restricted Stock Bonus shall not fully vest in less than one (1) year.
Notwithstanding the foregoing provisions of this Section 8.1(ii), a Restricted Stock Bonus granted
in recognition of a Participant’s long-term Continuous Service may vest fully in periods shorter
than those described above or may be fully vested upon grant (“Accelerated Vesting Restricted Stock
Bonuses”), subject to provisions of the last sentence of Section 4.1.

          (iii) Termination of Participant’s Continuous Service. In the event a Participant’s
Continuous Service terminates, the Company shall automatically reacquire without cost any or all of
the shares of Common Stock held by the Participant that have not vested as of the date of
termination under the terms of the Restricted Stock Bonus agreement.

          (iv) Transferability. Rights to acquire shares of Common Stock under the Restricted
Stock Bonus agreement shall be transferable by the Participant only upon such terms and conditions
as are set forth in the Restricted Stock Bonus agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the Restricted Stock Bonus agreement remains
subject to the terms of the Restricted Stock Bonus agreement.

14

 

     8.2 Restricted Stock Purchase Awards. Each Restricted Stock Purchase Right agreement
shall be in such form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of the Restricted Stock Purchase Right agreements may change
from time to time, and the terms and conditions of separate Restricted Stock Purchase Right
agreements need not be identical, but each Restricted Stock Purchase Right agreement shall include
(through incorporation of provisions hereof by reference in the agreement or otherwise) the
substance of each of the following provisions:

          (i) Purchase Price. The purchase price under each Restricted Stock Purchase Right
agreement shall be such amount as the Board shall determine and designate in such Restricted Stock
Purchase Right agreement. The purchase price shall not be less than one hundred percent (100%) of
the Common Stock’s Fair Market Value on the date such award is made or at the time the purchase is
consummated.

          (ii) Consideration. The purchase price of Common Stock acquired pursuant to the
Restricted Stock Purchase Right agreement shall be paid either: (A) in cash or by check at the time
of purchase; or (B) at the discretion of the Board, according to a deferred payment or other
similar arrangement with the Participant to the extent permitted by law.

          (iii) Vesting. The Board shall determine the criteria under which shares of Common
Stock under the Restricted Stock Purchase Right agreement may vest; the criteria may or may not
include performance criteria or Continuous Service. Shares of Common Stock acquired under the
Restricted Stock Purchase Right agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be determined by the Board.

          (iv) Termination of Participant’s Continuous Service. In the event a Participant’s
Continuous Service terminates, the Company may repurchase any or all of the shares of Common Stock
held by the Participant that have not vested as of the date of termination under the terms of the
Restricted Stock Purchase Right agreement.

          (v) Transferability. Rights to acquire shares of Common Stock under the Restricted
Stock Purchase Right agreement shall be transferable by the Participant only upon such terms and
conditions as are set forth in the Restricted Stock Purchase Right agreement, as the Board shall
determine in its discretion, so long as Common Stock awarded under the Restricted Stock Purchase
Right agreement remains subject to the terms of the Restricted Stock Purchase Right agreement.

          (vi) Term. No Restricted Stock Purchase Right shall be exercisable after the
expiration of ten (10) years from the date it was granted.

     8.3 Stock Appreciation Rights. Two types of Stock Appreciation Rights (“SARs”) shall
be authorized for issuance under the Plan: (1) stand-alone SARs and (2) stapled SARs.

          (i) Stand-Alone SARs. The following terms and conditions shall govern the grant and
redeemability of stand-alone SARs:

15

 

     (A) The stand-alone SAR shall cover a specified number of underlying shares of Common Stock
and shall be redeemable upon such terms and conditions as the Board may establish. Upon redemption
of the stand-alone SAR, the holder shall be entitled to receive a distribution from the Company in
an amount equal to the excess of (i) the aggregate Fair Market Value (on the redemption date) of
the shares of Common Stock underlying the redeemed right over (ii) the aggregate base price in
effect for those shares.

     (B) The number of shares of Common Stock underlying each stand-alone SAR and the base price in
effect for those shares shall be determined by the Board in its sole discretion at the time the
stand-alone SAR is granted. In no event, however, may the base price per share be less than one
hundred percent (100%) of the Fair Market Value per underlying share of Common Stock on the grant
date.

     (C) The distribution with respect to any redeemed stand-alone SAR may be made in shares of
Common Stock valued at Fair Market Value on the redemption date, in cash, or partly in shares and
partly in cash, as the Board shall in its sole discretion deem appropriate.

          (ii) Stapled SARs. The following terms and conditions shall govern the grant and
redemption of stapled SARs:

     (A) Stapled SARs may only be granted concurrently with an Option to acquire the same number of
shares of Common Stock as the number of such shares underlying the stapled SARs.

     (B) Stapled SARs shall be redeemable upon such terms and conditions as the Board may establish
and shall grant a holder the right to elect among (i) the exercise of the concurrently granted
Option for shares of Common Stock, whereupon the number of shares of Common Stock subject to the
stapled SARs shall be reduced by an equivalent number, (ii) the redemption of such stapled SARs in
exchange for a distribution from the Company in an amount equal to the excess of the Fair Market
Value (on the redemption date) of the number of vested shares which the holder redeems over the
aggregate base price for such vested shares, whereupon the number of shares of Common Stock subject
to the concurrently granted Option shall be reduced by any equivalent number, or (iii) a
combination of (i) and (ii).

     (C) The distribution to which the holder of stapled SARs shall become entitled under this
Section 8 upon the redemption of stapled SARs as described in Section 8.3(ii)(B) above may be made
in shares of Common Stock valued at Fair Market Value on the redemption date, in cash, or partly in
shares and partly in cash, as the Board shall in its sole discretion deem appropriate.

          (iii) Term. No SAR shall be exercisable after the expiration of ten (10) years from
the date it was granted.

     8.4 Phantom Stock Units. The following terms and conditions shall govern the grant and
redeemability of Phantom Stock Units:

          (i) Phantom Stock Unit awards shall be redeemable by the Participant upon such terms and
conditions as the Board may establish. The value of a single Phantom Stock Unit

16

 

shall be equal to the Fair Market Value of a share of Common Stock, unless the Board otherwise
provides in the terms of the Stock Award Agreement.

          (ii) The distribution with respect to any exercised Phantom Stock Unit award may be made in
shares of Common Stock valued at Fair Market Value on the redemption date, in cash, or partly in
shares and partly in cash, as the Board shall in its sole discretion deem appropriate.

     8.5 Restricted Stock Units. The following terms and conditions shall govern the grant
and redeemability of Restricted Stock Units:

     A Restricted Stock Unit is the right to receive the value of one (1) share of the Company’s
Common Stock at the time the Restricted Stock Unit vests. To the extent permitted by the Board in
the terms of his or her Restricted Stock Unit agreement, a Participant may elect to defer receipt
of the value of the shares of Common Stock otherwise deliverable upon the vesting of an award of
Restricted Stock Units, so long as such deferral election complies with applicable law, including
Section 409A of the Code and, to the extent applicable, the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”). An election to defer such delivery shall be irrevocable and shall be
made in writing on a form acceptable to the Company. The election form shall be filed prior to the
vesting date of such Restricted Stock Units in a manner determined by the Board. When the
Participant vests in such Restricted Stock Units, the Participant will be credited with a number of
Restricted Stock Units equal to the number of shares of Common Stock for which delivery is
deferred. Restricted Stock Units may be paid by the Company by delivery of shares of Common Stock,
in cash, or a combination thereof, as the Board shall in its sole discretion deem appropriate, in
accordance with the timing and manner of payment elected by the Participant on his or her election
form, or if no deferral election is made, as soon as administratively practicable following the
vesting of the Restricted Stock Unit.

     Each Restricted Stock Unit agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The terms and conditions of Restricted Stock Unit
agreements may change from time to time, and the terms and conditions of separate Restricted Stock
Unit agreements need not be identical, but each Restricted Stock Unit agreement shall include
(through incorporation of provisions hereof by reference in the agreement or otherwise) the
substance of each of the following provisions:

          (i) Consideration. A Restricted Stock Unit may be awarded in consideration for past
services actually rendered to the Company or an Affiliate for its benefit. The Board shall have the
discretion to provide that the Participant pay for such Restricted Stock Unit with cash or other
consideration permissible by law.

          (ii) Vesting. Vesting shall generally be based on the Participant’s Continuous
Service. If vesting is based on the Participant’s Continuous Service, such Restricted Stock Unit
award shall not fully vest in less than three (3) years. If vesting is based on the achievement of
performance criteria, such Restricted Stock Unit award shall not fully vest in less than one (1)
year. Notwithstanding the foregoing provisions of this Section 8.5(ii), a Restricted Stock Unit
granted in recognition of a Participant’s long-term Continuous Service may vest fully in periods

17

 

shorter than those described above (“Accelerated Vesting Restricted Stock Units”), subject to
provisions of the last sentence of Section 4.1.

          (iii) Termination of Participant’s Continuous Service. The unvested portion of the
Restricted Stock Unit award shall expire immediately upon the termination of Participant’s
Continuous Service.

          (iv) Transferability. Rights to acquire the value of shares of Common Stock under the
Restricted Stock Unit agreement shall be transferable by the Participant only upon such terms and
conditions as are set forth in the Restricted Stock Unit agreement, as the Board shall determine in
its discretion, so long as any Common Stock awarded under the Restricted Stock Unit agreement
remains subject to the terms of the Restricted Stock Unit agreement.

     8.6 Performance Share Bonus Awards. Each Performance Share Bonus agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem appropriate.
Performance Share Bonuses shall be paid by the Company in shares of the Common Stock of the
Company. The terms and conditions of Performance Share Bonus agreements may change from time to
time, and the terms and conditions of separate Performance Share Bonus agreements need not be
identical, but each Performance Share Bonus agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of each of the
following provisions:

          (i) Consideration. A Performance Share Bonus may be awarded in consideration for past
services actually rendered to the Company or an Affiliate for its benefit. In the event that a
Performance Share Bonus is granted to a new Employee, Director, or Consultant who has not performed
prior services for the Company, the Performance Share Bonus will not be awarded until the Board
determines that such person has rendered services to the Company for a sufficient period of time to
ensure proper issuance of the shares in compliance with the California Corporations Code.

          (ii) Vesting. Vesting shall be based on the achievement of certain performance
criteria, whether financial, transactional or otherwise, as determined by the Board. A Performance
Share Bonus shall not fully vest in less than one (1) year. Vesting shall be subject to the
Performance Share Bonus agreement. Upon failure to meet performance criteria, shares of Common
Stock awarded under the Performance Share Bonus agreement shall be subject to a share reacquisition
right in favor of the Company in accordance with a vesting schedule to be determined by the Board.

          (iii) Termination of Participant’s Continuous Service. In the event a Participant’s
Continuous Service terminates, the Company shall reacquire any or all of the shares of Common Stock
held by the Participant that have not vested as of the date of termination under the terms of the
Performance Share Bonus agreement.

          (iv) Transferability. Rights to acquire shares of Common Stock under the Performance
Share Bonus agreement shall be transferable by the Participant only upon such terms and conditions
as are set forth in the Performance Share Bonus agreement, as the Board

18

 

shall determine in its discretion, so long as Common Stock awarded under the Performance Share
Bonus agreement remains subject to the terms of the Performance Share Bonus agreement.

     8.7 Performance Share Units. The following terms and conditions shall govern the grant
and redeemability of Performance Share Units:

     A Performance Share Unit is the right to receive the value of one (1) share of the Company’s
Common Stock at the time the Performance Share Unit vests. To the extent permitted by the Board in
the terms of his or her Performance Share Unit agreement, a Participant may elect to defer receipt
of the value of shares of Common Stock otherwise deliverable upon the vesting of an award of
performance shares. An election to defer such delivery shall be irrevocable and shall be made in
writing on a form acceptable to the Company. The election form shall be filed prior to the vesting
date of such performance shares in a manner determined by the Board. When the Participant vests in
such performance shares, the Participant will be credited with a number of Performance Share Units
equal to the number of shares of Common Stock for which delivery is deferred. Performance Share
Units may be paid by the Company by delivery of shares of Common Stock, in cash, or a combination
thereof, as the Board shall in its sole discretion deem appropriate, in accordance with the timing
and manner of payment elected by the Participant on his or her election form, or if no deferral
election is made, as soon as administratively practicable following the vesting of the Performance
Share Unit.

     Each Performance Share Unit agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The terms and conditions of Performance Share Unit
agreements may change from time to time, and the terms and conditions of separate Performance Share
Unit agreements need not be identical, but each Performance Share Unit agreement shall include
(through incorporation of provisions hereof by reference in the agreement or otherwise) the
substance of each of the following provisions:

          (i) Consideration. A Performance Share Unit may be awarded in consideration for past
services actually rendered to the Company or an Affiliate for its benefit. The Board shall have the
discretion to provide that the Participant pay for such Performance Share Unit with cash or other
consideration permissible by law.

          (ii) Vesting. Vesting shall be based on the achievement of certain performance
criteria, whether financial, transactional or otherwise, as determined by the Board. Vesting shall
be subject to the Performance Share Unit agreement. The terms of the Performance Share Unit
agreement notwithstanding, a Performance Share Unit may not fully vest in less than one (1) year.

          (iii) Termination of Participant’ Continuous Service. The unvested portion of any
Performance Share Unit shall expire immediately upon the termination of Participant’s Continuous
Service.

          (iv) Transferability. Rights to acquire the value of shares of Common Stock under the
Performance Share Unit agreement shall be transferable by the Participant only upon such terms and
conditions as are set forth in the Performance Share Unit agreement, as the Board

19

 

shall determine in its discretion, so long as Common Stock awarded under the Performance Share
Unit agreement remains subject to the terms of the Performance Share Unit agreement.

IX. COVENANTS OF THE COMPANY

     9.1 Availability of Shares. During the term of the Stock Awards, the Company shall
keep available at all times the number of shares of Common Stock required to satisfy such Stock
Awards.

     9.2 Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise, redemption or satisfaction
of the Stock Awards; provided, however, that this undertaking shall not require the Company to
register under the Securities Act the Plan or any Stock Award or any Common Stock issued or
issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to
obtain from any such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall
be relieved from any liability for failure to issue and sell Common Stock related to such Stock
Awards unless and until such authority is obtained.

X. USE OF PROCEEDS FROM STOCK

     Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.

XI. NO REPRICING WITHOUT SHAREHOLDER APPROVAL

     11.1 Subject to approval by the Company’s shareholders, the Board shall have the authority to
effect, at any time and from time to time, (i) the repricing of any outstanding Options under the
Plan and/or (ii) with the consent of the affected Optionholders, the cancellation of any
outstanding Options under the Plan and the grant in substitution therefor of new Stock Awards under
the Plan, including new Options covering the same or different number of shares of Common Stock,
but having an exercise price per share not less than one hundred percent (100%) of the Fair Market
Value or, in the case of a Ten Percent Shareholder (as described in Section 5.2 of the Plan), not
less than one hundred ten percent (110%) of the Fair Market Value) per share of Common Stock on the
new grant date. Notwithstanding the foregoing, the Board may grant an Option with an exercise price
lower than that set forth above if such Option is granted as part of a transaction to which Section
424(a) of the Code applies.

     11.2 Shares subject to an Option cancelled under this Section 11 shall continue to be counted
against the maximum award of Options permitted to be granted pursuant to Section 5.3 of the Plan.
The repricing of an Option under this Section 11, resulting in a reduction of the exercise price,
shall be deemed to be a cancellation of the original Option and the grant of a substitute Option;
in the event of such repricing, both the original and the substituted Options shall be counted
against the maximum awards of Options permitted to be granted pursuant to Section 5.3 of the Plan.
The provisions of this Section 11.2 shall be applicable only to the extent required by Section
162(m) of the Code.

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XII. MISCELLANEOUS

     12.1 Acceleration of Exercisability and Vesting. The Board (or Committee, if so
authorized by the Board) shall have the power to accelerate exercisability and/or vesting of any
Stock Award granted pursuant to the Plan upon a Change of Control or upon the death, Disability or
termination of Continuous Service of the Participant. In furtherance of such power, the Board or
Committee may accelerate the time at which a Stock Award may first be exercised or the time during
which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding any
provisions in the Stock Award Agreement to the contrary.

     12.2 Shareholder Rights. No Participant shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares of Common Stock subject to a Stock
Award except to the extent that the Company has issued the shares of Common Stock relating to such
Stock Award.

     12.3 No Employment or Other Service Rights. Nothing in the Plan or any instrument
executed or Stock Award granted pursuant thereto shall confer upon any Participant any right to
continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award
was granted or shall affect the right of the Company or an Affiliate to terminate (i) the
employment of an Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate,
or (iii) the service of a Director pursuant to the Bylaws of the Company, and any applicable
provisions of the corporate law of the state or other jurisdiction in which the Company is
domiciled, as the case may be.

     12.4 Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair
Market Value (determined at the time of grant) of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by any Optionholder during any calendar year
(under all plans of the Company and its Affiliates) exceeds One Hundred Thousand dollars
($100,000), or such other limit as may be set by law, the Options or portions thereof which exceed
such limit (according to the order in which they were granted) shall be treated as Nonstatutory
Stock Options.

     12.5 Investment Assurances. The Company may require a Participant, as a condition of
exercising or redeeming a Stock Award or acquiring Common Stock under any Stock Award, (i) to give
written assurances satisfactory to the Company as to the Participant’s knowledge and experience in
financial and business matters and/or to employ a purchaser representative reasonably satisfactory
to the Company who is knowledgeable and experienced in financial and business matters and that he
or she is capable of evaluating, alone or together with the purchaser representative, the merits
and risks of acquiring the Common Stock; (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the
Participant’s own account and not with any present intention of selling or otherwise distributing
the Common Stock; and (iii) to give such other written assurances as the Company may determine are
reasonable in order to comply with applicable law. The foregoing requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act or

21

 

(2) as to any particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable securities laws,
and in either case otherwise complies with applicable law. The Company may, upon advice of counsel
to the Company, place legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable laws, including, but not limited to,
legends restricting the transfer of the Common Stock.

     12.6 Withholding Obligations. To the extent provided by the terms of a Stock Award
Agreement, the Participant may satisfy any federal, state, local, or foreign tax withholding
obligation relating to the exercise or redemption of a Stock Award or the acquisition, vesting,
distribution, or transfer of Common Stock under a Stock Award by any of the following means (in
addition to the Company’s right to withhold from any compensation or other amounts payable to the
Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of Common Stock
otherwise issuable to the Participant, provided, however, that no shares of Common Stock are
withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii)
delivering to the Company owned and unnumbered shares of Common Stock.

     12.7 Section 409A. Notwithstanding anything in the Plan to the contrary, it is the
intent of the Company that all Stock Awards granted under this Plan (including, but not limited to,
Restricted Stock Units, Phantom Stock Units, and Performance Share Units) shall not cause an
imposition of the additional taxes provided for in Section 409A(a)(1)(B) of the Code; furthermore,
it is the intent of the Company that the Plan shall be administered so that the additional taxes
provided for in Section 409A(a)(1)(B) of the Code are not imposed.

XIII. ADJUSTMENTS UPON CHANGES IN STOCK

     13.1 Capitalization Adjustments. If any change is made in the Common Stock subject to
the Plan, or subject to any Stock Award, without the receipt of consideration by the Company
(through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend,
spinoff, dividend in property other than cash, stock split, liquidating dividend, extraordinary
dividends or distributions, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the Company), the Plan
shall be equitably adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to Section 4.1 above, the maximum number of securities subject to award to any person
pursuant to Section 5.3 above, and the number of securities subject to Initial Grants and Annual
Grants to Eligible Directors under Article VII of the Plan, and the outstanding Stock Awards shall
be equitably adjusted in the class(es) and number of securities or other property and price per
share of the securities or other property subject to such outstanding Stock Awards. The Board shall
determine the form of such adjustments in its sole discretion, and its determination shall be
final, binding and conclusive. (The conversion of any convertible securities of the Company shall
not be treated as a transaction “without receipt of consideration” by the Company.)

22

 

     13.2 Adjustments Upon a Change of Control.

          (i) In the event of a Change of Control as defined in Section 2.4(i) through 2.4(iv), such as
an asset sale, merger, or change in Board composition, then the Board or the board of directors of
any surviving entity or acquiring entity may provide or require that the surviving or acquiring
entity shall: (1) assume or continue all or any part of the Stock Awards outstanding under the Plan
or (2) substitute substantially equivalent stock or cash-based awards (including an award to
acquire substantially the same consideration paid to the shareholders in the transaction by which
the Change of Control occurs) for those outstanding under the Plan. In the event any surviving
entity or acquiring entity refuses to assume or continue such Stock Awards or to substitute similar
stock awards for those outstanding under the Plan, then with respect to Stock Awards held by
Participants whose Continuous Service has not terminated, the Board in its sole discretion and
without liability to any person may: (1) provide for the payment of a cash amount in exchange for
the cancellation of a Stock Award equal to the product of (x) the excess, if any, of the Fair
Market Value per share of Common Stock at such time over the exercise or redemption price, if any,
times (y) the total number of shares then subject to such Stock Award; (2) continue the
Stock Awards; or (3) notify Participants holding an Option, Stock Appreciation Right, Phantom Stock
Unit, Restricted Stock Unit or Performance Share Unit that they must exercise or redeem any portion
of such Stock Award (including, at the discretion of the Board, any unvested portion of such Stock
Award) at or prior to the closing of the transaction by which the Change of Control occurs and that
the Stock Awards shall terminate if not so exercised or redeemed at or prior to the closing of the
transaction by which the Change of Control occurs. With respect to any other Stock Awards
outstanding under the Plan, such Stock Awards shall terminate if not exercised or redeemed prior to
the closing of the transaction by which the Change of Control occurs. The Board shall not be
obligated to treat all Stock Awards, even those that are of the same type, in the same manner.

          (ii) In the event of a Change of Control as defined in Section 2.4(v), such as a dissolution
of the Company, all outstanding Stock Awards shall terminate immediately prior to such event.

XIV. AMENDMENT OF THE PLAN AND STOCK AWARDS

     14.1 Amendment of Plan. The Board at any time, and from time to time, may amend the
Plan. However, except as provided in Section 13 of the Plan relating to adjustments upon changes in
Common Stock, no amendment shall be effective unless approved by the shareholders of the Company to
the extent shareholder approval is necessary to satisfy the requirements of Section 422 of the
Code, any New York Stock Exchange, Nasdaq or other securities exchange listing requirements, or
other applicable law or regulation.

     14.2 Shareholder Approval. The Board may, in its sole discretion, submit any other
amendment to the Plan for shareholder approval, including, but not limited to, amendments to the
Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations
thereunder regarding the exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.

23

 

     14.3 Contemplated Amendments. It is expressly contemplated that the Board may amend
the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with
the maximum benefits provided or to be provided under the provisions of the Code and the
regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan
and/or Incentive Stock Options granted under it into compliance therewith.

     14.4 No Material Impairment of Rights. Rights under any Stock Award granted before
amendment of the Plan shall not be materially impaired by any amendment of the Plan unless (i) the
Company requests the consent of the Participant and (ii) the Participant consents in writing.

     14.5 Amendment of Stock Awards. The Board at any time, and from time to time, may
amend the terms of any one or more Stock Awards subject to and consistent with the terms of the
Plan, including Sections 14.1 and 14.2; provided, however, that the rights of the Participant under
any Stock Award shall not be materially impaired by any such amendment unless (i) the Company
requests the consent of the Participant and (ii) the Participant consents in writing.

XV. TERMINATION OR SUSPENSION OF THE PLAN

     15.1 Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of
the date that the Plan is approved by the shareholders of the Company, as the adoption of the Plan
by the Board is conditioned upon such shareholder approval. No Stock Awards may be granted under
the Plan while the Plan is suspended or after it is terminated.

     15.2 No Material Impairment of Rights. Suspension or termination of the Plan shall not
materially impair rights and obligations under any Stock Award granted while the Plan is in effect
except with the written consent of the Participant.

XVI. EFFECTIVE DATE OF PLAN

     The Plan shall become effective immediately following its approval by the shareholders of the
Company, which approval shall be within twelve (12) months before or after the date the Plan is
adopted by the Board. If the Plan is approved by the shareholders of the Company, the 1997 Plan,
the 1996 Plan, and the Directors 1996 Plan shall terminate on the effective date of the Plan. If
the Plan is not approved by the shareholders of the Company, the 1997 Plan, the 1996 Plan, and the
Directors 1996 Plan shall continue unaffected. No Stock Awards may be granted under the Plan prior
to the time that the shareholders have approved the Plan.

XVII. CHOICE OF LAW

     The law of the State of California shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

24exv10w21

Exhibit 10.21

EXECUTION VERSION

COLLABORATION AND SERVICES AGREEMENT

          THIS COLLABORATION AND SERVICES AGREEMENT (together with the attached Exhibits, this
“Agreement”), dated as of the date of the last party to sign below (the “Effective Date”), is by
and between BioTrove, Inc., a Delaware corporation, having offices at 12 Gill Street, Suite 4000,
Woburn, MA 01801 (together with its Affiliates, “BioTrove”), and OSI Pharmaceuticals, Inc., a
Delaware corporation, having executive offices at 41 Pinelawn Road, Melville, NY 11747 USA
(together with its Affiliates, “OSI”). BioTrove and OSI are sometimes referred to individually
herein as a “Party” and collectively as the “Parties.”

BACKGROUND

          WHEREAS, BioTrove has extensive expertise in assay development using its RapidFireTM technology
platform; and

          WHEREAS, OSI has extensive experience in high throughput screening (HTS) using its compound
library; and

          WHEREAS, BioTrove and OSI are seeking to capitalize on their respective expertise to offer
certain assay development and screening services on a fee-for service basis to third party clients.

          NOW THEREFORE, in consideration of the foregoing premises and the promises set forth below,
the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS.

1.1 General. Capitalized term used in this Agreement shall have the meanings indicated in
this Section 1 or elsewhere herein. All definitions below or elsewhere in this Agreement
apply to both their singular and plural forms, as the context may require. The terms
“herein,” “hereunder,” “hereof” and similar expressions refer to this Agreement generally.
“Section” and “Exhibit” refer to a Section herein or Exhibit attached hereto, respectively.
The word “including” and its variants means “including without limitation,” unless otherwise
stated. All references to “days” and “months” are to calendar days and months respectively,
unless otherwise specified. Any reference to one gender includes the other.

1.2 “Affiliate” means any corporation, company, partnership, joint venture and/or firm which
controls, is controlled by, or is under common control with, a Party. As used in this
definition, “control” means (a) in the case of corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the stock or shares having the right to vote for
the election of directors, and (b) in the case of non-corporate entities, the direct or
indirect power to manage, direct or cause the direction of the management and policies of the
non-corporate entity or the power to elect at least fifty percent (50%) of the members of the
governing body of such non-corporate entity.

1.3 “BioTrove Services” mean the Services, that may be provided by BioTrove to a Third Party
Client pursuant to a Project Agreement, as set for on Exhibit A-2.

1.4 “Confidential Information” shall have the meaning set forth in Section 6.1.

1.5 “Disclosing Party” shall have the meaning set forth in Section 6.1.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

1.6 “Dispute” shall have the meaning set forth in Section 11.1.

1.7 “Effective Date” shall have the meaning set forth in the Preamble.

1.8 “Final Report” shall have the meaning set forth in Exhibit A-2.

1.9 “Indemnitee” shall have the meaning set forth in Section 10.3.

1.10 “Indemnitor” shall have the meaning set forth in Section 10.3.

1.11 “Intellectual Property” shall have the meaning set forth in Section 7.1.

1.12 “Initial Term” shall have the meaning set forth in Section 8.1.

1.13 “Liabilities” shall have the meaning set forth in Section 10.1.

1.14 “Methodology Information” shall mean a Party’s proprietary high throughput screening,
analysis and assay development methodology, proprietary technology (including, without
limitation, testing methods, practices, procedures or other methodological innovations
involved with respect thereto), related testing facilities (including, without limitation,
test apparatus and equipment), and/or any modifications to such analytical methodologies or
testing facilities, in each case, whether developed before or after the Effective Date and
whether developed in the course of providing Services or otherwise; including, in each case,
any intellectual property rights in any of the foregoing.

1.15 “Optional Services Fee” shall have the meaning set forth in Section 4.1.

1.16 “OSI Payments” shall have the meaning set forth in Section 4.2.

1.17 “OSI Services” mean the Services, that may be provided by OSI to BioTrove on behalf of a
Third Party Client pursuant to a Project Agreement, as set forth on Exhibit A-3.

1.18 “Part(ies)” shall have the meaning set forth in the Preamble.

1.19 “Project” means the Services to be conducted under a particular Project Agreement.

1.20 “Project Agreement or Master Project Agreement” means an agreement between BioTrove and a
Third Party Client for Services, including all proposals and quotes, the form of which shall
be agreed upon by the parties and attached hereto as Exhibit B.

1.21 “Project Materials” means certain biochemical, biological or synthetic chemical materials
of such Party that are supplied to the other Party pursuant to providing Services related to a
Project, which may include materials from a customer under a Project Agreement, and that are
necessary or reasonably useful to the conduct of the Project, or as otherwise agreed by the
Project Team.

1.22 “Receiving Party” shall have the meaning set forth in Section 6.1.

1.23 “Renewal Term” shall have the meaning set forth in Section 8.1.

1.24 “Services” means the RapidFireTM-based assay development followed by high-throughput
screening services using OSI’s compound library performed by BioTrove and OSI

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

2

 

(“RapidFireTM Lead Discovery Services”) as set forth on Exhibits A-1, A-2 and A-3 which may be
provided to a Third Party pursuant to a Project Agreement.

1.25 “Standard Services Fee” shall have the meaning set forth in Section 4.1.

1.26 “Term” shall have the meaning set forth in Section 8.1.

1.27 “Third Party” means any entity other than BioTrove, OSI and their Affiliates.

1.28 “Third Party Client” means any Third Party interested in the Services or who enters into
a Project Agreement for the performance of such Services.

2. THIRD PARTY CLIENTS

2.1 Marketing. BioTrove shall be responsible for leading the sales and marketing efforts for
the Services to Third Party Clients. BioTrove, at its expense, shall be responsible for the
development of initial promotional and marketing materials for the Services (e.g., web
content, brochures, etc.), provided, however, that OSI agrees to provide BioTrove with
non-confidential collateral material, as applicable and in its possession, to assist BioTrove
in the development of such promotional and marketing materials. Such materials are subject to
review and approval by the Project Team pursuant to Section 3.2 prior to implementation and
use. Either Party may propose, at its own expense, additional materials for use in connection
with the Services, subject to review and approval by the Project Team.

2.2 Client Contact/Project Agreements. Subject to the terms herein, including, without
limitation, Section 3.2, BioTrove shall be responsible for initiating client contact and
negotiating and executing Project Agreements with Third Party Clients for the Services. For
the sake of clarity, the parties acknowledge that OSI may initiate and/or continue discussions
with such Third Party Clients for lead discovery services, and that if any such discussions
involve the Services, OSI shall inform BioTrove of such Third Party Client’s interest in the
Services . Such Project Agreements will contain the Services to be provided by OSI to
BioTrove. Upon BioTrove’s execution of an approved Project Agreement, BioTrove shall promptly,
but in no event more than five (5) business days after such execution, notify OSI in writing
of the execution of such Project Agreement and provide a copy of the executed agreement to
OSI. BioTrove and OSI shall then commence the BioTrove Services and OSI Services,
respectively, as required under the Project Agreement. OSI shall support such efforts by
BioTrove to negotiate and execute each Project Agreement as necessary by (i) providing [***]
relating to [***], (ii) participating in key teleconferences with BioTrove and Third Party
Clients, and (iii) on a limited basis, [***] or [***] at [***].

2.3 Client Exclusivity. Except as provided for in Section 5, each Party may provide
unrestricted lead discovery services outside of the Services to Third Parties.

2.4 Confidentiality and Material Transfer Agreements. If requested by a Third Party Client,
the Parties agree that they will negotiate and execute a three-way Confidentiality Agreement
and/or Material Transfer Agreement with such Third Party Client. The form of such
Confidentiality Agreement and Material Transfer Agreement shall be agreed upon by the Parties.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

3

 

3. PROJECT MANAGEMENT

3.1 Establishment of Project Team. The Parties hereby establish a Project Team to govern
Projects. The Project Team will be composed of one (1) or two (2) representatives of each
Party, who shall be appointed (and may be replaced at any time) by such Party upon written
notice to the other Party in accordance with this Agreement. Any member of the Project Team
may designate a substitute to attend and perform the functions of that member at any meeting
of the Project Team. In addition, each Party may utilize and bring to meetings other personnel
from such Party. The Project Team will meet and communicate as frequently as needed based on
the number and type of ongoing Projects. Notwithstanding the foregoing, the Project Team shall
meet via teleconference no less frequently than once per month while a Project is in effect.
The parties shall mutually determine the frequency and location of in-person meetings as
applicable, but in any event, such meetings shall not be required to exceed one (1) meeting
per quarter.

3.2 Project Team Responsibility. The Project Team shall consult with respect to the following
matters:

          (i) Project proposals

          (ii) Project requirements

          (iii) Project implementation and ongoing status, including the generation of reports

          (iv) Requested changes to the form of Project Agreement

          (v) Promotional and marketing materials

          (vi) Other matters as applicable

BioTrove will submit proposed Projects (including proposals and quotes) to the Project Team
for review and approval to proceed prior to BioTrove executing a Project Agreement with a
Third Party Client. To obtain approval of a proposed Project, the Project Team must
unanimously agree (i) that a proposed target under a Project is acceptable, (ii) upon the
nature of the Services to be provided by each Party for such Project, and (iii) to proceed
with such Project. Either Party, in its sole discretion, has the right to accept or reject a
Project or any of the Services such Party would provide under a Project. In addition, prior to
the execution of a Project Agreement by BioTrove and a Third Party Client, (i) the Project
Team shall have unanimously approved any changes to the form Project Agreement and (ii)
BioTrove shall have received OSI’s written notification of its acceptance of a Project.

3.3 Project Team Dispute Resolution. Subject to Section 3.2 and except as hereinafter
provided, all issues that come before the Project Team that require action, approval or
resolution for which the Project Team is unable to reach mutual agreement shall be resolved by
senior executives of the Parties. In addition, in connection with disputes regarding the
internal methodologies and procedures that a Party uses to provide its Services with respect
to which the senior executives of the Parties have been unable to resolve the dispute after a
period of ten (10) days, the Party providing such Services shall have the final
decision-making authority regarding its internal methodologies and procedures. For all other
disputes, if the senior executives of the Parties have been unable to resolve such dispute
after a period of ten (10) days, such disputes shall be resolved in accordance with Section
11.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

4

 

4. SERVICE FEES

     4.1 Third Party Clients.

	 	(i)	 	The proposed price to Third Party Clients for the standard Services set forth
on Exhibit A-1 (the “Standard Services Fee”) shall be determined by BioTrove on a
Project-by Project basis after consultation with and unanimous approval by the Project
Team. The Parties anticipate that the Standard Service Fee for a Project will range
between $[***] and $[***] US Dollars (assuming a single screen).  The Standard Services
Fee will be due from the Third Party Client as follows:  [***] of the Standard Services
Fee shall be due [***],[***] shall be due upon [***] to be used in the [***], and [***]
shall be due upon [***] of a [***] of the [***] to the [***].
	 
	 	(ii)	 	The proposed price to Third Party Clients for the optional Services set forth
on Exhibit A-1 (the “Optional Services Fees” shall be negotiated for a Project by
BioTrove with Third Party Clients and approved by the Project Team. Optional Services
include the following:

a. Protein Production: [***].

b. Virtual Screen: $[***] US Dollars.

c. In Vitro ADMET Assays: $[***] US Dollars [***].

d. Inclusion of Third Party Client Compounds in
Screen: [***].

e. P450 Inhibition Assay: $[***] US Dollars [***]

f. Other Services: [***].

Optional Service Fees shall not exceed [***]% of the corresponding OSI Standard Fees set forth
in Section 4.2

4.2 OSI Fees. In consideration for the OSI Services rendered hereunder, for each Project
Agreement, BioTrove shall pay to OSI the following amounts (the “OSI Payments”):

	 	(i)	 	OSI Standard Services: [***] percent the Standard Services Fees [***] from a
[***].
	 
	 	(ii)	 	OSI Optional Services :

a. Protein Production: [***]

b. Virtual Screen: $[***] US Dollars

c. In Vitro ADMET Assays: $[***] US dollars [***].

d. Inclusion of Third Party Client Compounds in
Screen: [***].

e. Other Services: [***].

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

5

 

In each case solely to the extent such aforementioned OSI Optional Services
Fees are actually received from a Third Party Client. OSI shall not conduct
an agreed upon Optional Service until it has received the applicable
Optional Services Fee, unless otherwise agreed and set forth in a Project
Agreement.

4.3 Notwithstanding Sections 4.1 and 4.2, the Parties, through the Project Team, may discuss
[***] by a [***]. Any change to the [***] as set forth in Sections 4.1 and 4.2. respectively,
must be [***].

4.4 Payments. BioTrove will be responsible for invoicing and collecting payments from all
Third Party Clients. BioTrove shall use its commercially reasonable efforts to collect such
payments. All such payments shall be in US dollars. BioTrove will remit payments to OSI for
the OSI Standard Services and OSI Optional Services as set forth in Section 4.1(i) and
4.2(ii), respectively, within thirty (30) days of BioTrove’s receipt of any such corresponding
payments for Services received from a Third Party Client, according to the OSI Standard
Services fee schedule defined in Section 4.1(i). BioTrove shall remit to OSI the OSI Payments
in US dollars via wire transfer to:

[***] / OSI Pharmaceuticals, Inc.,

Concentration Account:

[***]

[***]

[***]

ABA #[***]

	 	 	 	 
	 	For further credit to:

	 	OSI Pharmaceuticals, Inc.
	 	 

	 	Concentration Account
	 	 

	 	Account # [***]

4.5 Late Payments. In the event that any OSI Payments due hereunder (other than amounts
subject to good faith dispute between the Parties) is not made when due (i.e., thirty (30)
days after receipt of the corresponding payment for Services received from a Third Party
Client, the payment shall accrue interest from the date due until paid at the short term
Applicable Federal Rate then in effect; provided, however, that in no event shall such rate
exceed the maximum legal annual interest rate. The payment of such interest shall not limit
OSI from exercising any other rights it may have with respect to demanding such payment from
BioTrove.

4.6 Taxes and Other Charges. Any use tax, sales tax, excise tax, duty, custom, inspection or
testing fee, or any other tax (except for taxes based on corporate income), fee or charge of
any nature whatsoever imposed by any governmental authority, on or measured by the Services
shall be [***] except to the extent [***] related to a party’s [***], and BioTrove shall [***]
from the [***], and [***] to the [***]. In such case, BioTrove shall provide [***] of the
[***] within thirty (30) days [***] of the [***].

          4.7 Reporting. BioTrove will provide OSI within ten (10) days after the end of each calendar
quarter a report listing all executed Project Agreements, the amounts billed by BioTrove under such
Project Agreements and the amounts that will be due to OSI under such Project Agreements.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

6

 

5. EXCLUSIVITY

5.1 Target Exclusivity. At the written request of a Third Party Client and set forth in a
Project Agreement, the protein target under a Project Agreement shall be exclusively used for
such Project Agreement, and shall not be used in connection with OSI Services to other Third
Parties, for the period from the effective date of the Project Agreement until [***] after
delivery to the Third Party Client of a draft of the Final Report. Target exclusivity may be
extended upon approval of the Project Team.

5.2 Compound Exclusivity. The compounds identified in the draft of the Final Report shall not
be used in connection with OSI Services to other Third Parties for the period of [***] from
the delivery of the draft of the Final Report. Compound exclusivity may be extended upon
approval of the Project Team.

6. CONFIDENTIAL INFORMATION, MATERIAL TRANSFER.

6.1 Definition. The term “Confidential Information” includes all non-public information that
a Party considers confidential or proprietary, whether in written, oral, electronic or other
form, including but not limited to, information and facts concerning business plans,
customers, future customers, suppliers, licensors, licensees, partners, investors, affiliates
or others, training methods and materials, financial information, sales prospects, client
lists, Methodology Information, inventions, or any other scientific, technical or trade
secrets of such Party or of any third party provided to such Party under a condition of
confidentiality. However, Confidential Information of a Party (the “Disclosing Party”) does
not include information that the other Party (the “Receiving Party”) can demonstrate by
written evidence (a) is known to the Receiving Party at the Effective Date and is not subject
to another confidentiality obligation to the Disclosing Party, (b) is publicly known at the
Effective Date or later becomes publicly known under circumstances involving no breach of this
Agreement by the Receiving Party, (c) is lawfully and in good faith disclosed to Receiving
Party by a third party who, to the Receiving Party’s knowledge, is not subject to a
confidentiality obligation to the Disclosing Party, or (d) is independently developed by the
Receiving Party.

6.2 Confidentiality Obligation. The Receiving Party acknowledges that the Disclosing Party is
and will remain the sole owner of Confidential Information. During the term of this Agreement
and for a period of [***] thereafter, the Receiving Party will take all commercially
reasonable precautions to protect the confidentiality of Confidential Information, and will
not disclose or use any Confidential Information except with the Disclosing Party’s knowledge
and as necessary to perform the Services. However, a Party may disclose Confidential
Information of the other Party to its personnel who need to know such Confidential Information
in order to provide the Services and who are obligated to protect the confidentiality of such
Confidential Information under terms substantially no less stringent than those set forth in
this Section 6. A Party may disclose Confidential Information of the other Party to a Third
Party Client to the extent desirable or necessary to market and sell Services, and to provide
Services and deliverables resulting from such Services under a Project Agreement, provided
that the other Party consents to such disclosure. A Party may disclose Confidential
Information of the other Party to the extent and to the persons or entities required under
applicable governmental law, rule, regulation or order, provided that such Party, if
reasonable practicable, (i) first gives prompt notice of such disclosure requirement to the
other Party so as to enable the other Party to seek any limitations on or exemptions from such

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

7

 

disclosure requirement and (ii) reasonably cooperates at the other Party’s request and expense
in any such efforts by the other Party.

6.3 Return of Confidential Information. Upon expiration or termination of this Agreement, the
Receiving Party will return all copies of the Confidential Information to the Disclosing
Party.

6.4 Confidentiality of Project Agreements. Subject to Sections 2.1 and 12.3, except as
otherwise provided in this Section 6, the terms of this Agreement and all Project Agreements
shall not be disclosed by a Party without the prior written consent of the other Party, not to
be unreasonably withheld.

6.5 Press Releases. A Party may issue a press release regarding this Agreement, provided that
the other Party reviews and consents to such release prior to issuance, provided that neither
Party shall require the consent of the other Party to publish any information that has
previously been released in accordance with this Section 6.5.

6.6 Project Materials. Each Party grants to the other Party a non-exclusive, sublicensable
(as provided for herein) right during the term of each Project Agreement to use the Project
Materials associated with such Project Agreement solely for purposes of performing the
Services relating to such Project, each Party acknowledges and agrees that the Project
Materials of the other Party shall at all times remain the property of such other Party, or
such Third Party entrusting such Project Materials to such other Party, as the case may be,
and no rights are granted with respect to such Project Materials except as expressly provided
herein.

6.7 Use and Compliance of Project Materials. Each Party shall use the Project Materials of
the other Party in compliance with all applicable laws and regulations, including without
limitation those relating to animal testing, biotechnological research and the handling and
containment of biohazardous materials. Each Party acknowledges that the Project Materials are
experimental in nature and may have unknown characteristics and therefore agrees to use
prudence and reasonable care in the use, handling, storage, transportation, disposition, and
containment of the Project Materials. Except as expressly provided in this Agreement or the
Project Agreement, neither Party may (i) copy, sequence, reverse engineer or replicate the
Project Materials of the other Party, or (ii) alter or modify the Project Materials or combine
the Project Materials with any other materials.

6.8 Acceptance of Project Materials. Acceptance by one Party of the other Party’s Project
Materials will constitute acceptance by the receiving Party of liability for any damages or
injuries resulting from its possession or use of other Party’s Project Material, provided that
such other Party notifies the receiving Party prior to transferring such Project Material of
any dangerous or harmful properties of such Project Materials actually known by such other
Party.

6.9 Transfer of Project Materials to a Third Party. A Party may transfer the other Party’s
Project Materials to a Third Party without the other Party’s consent only:

	 	(i)	 	for use under a sublicense that the Party is entitled to grant under this
Agreement; or
	 
	 	(ii)	 	that is mutually approved in writing by the Parties through the Project Team to
provide services to support the Services;

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

8

 

	 	(iii)	 	and in each case, (i) and (ii), only pursuant to a written agreement pursuant
to which such Third Party agrees to the restrictions on use of such Project Materials
set forth herein.

6.10 Permission to Transfer to a Third Party; Return of Materials. Except as otherwise
provided herein, a Party may not transfer the other Party’s Project Materials to a Third Party
without the written permission of the other Party. This restriction will end [***] after the
end of the term of this Agreement. Unless otherwise provided herein, upon the expiration or
termination of each Project Agreement, each Party shall return to the other Party, or destroy
at the other Party’s request, any Project Materials of such other Party corresponding to such
Project Agreement, other than Project Materials that are meant as deliverables for the Third
Party Client.

7. INTELLECTUAL PROPERTY

7.1 Existing Intellectual Property. Except as the Parties may otherwise expressly agree in
writing after the Effective Date, each Party shall continue to own and be responsible for its
existing patents, trademarks, copyrights, trade secrets and other intellectual property,
without conferring any interests therein on the other Party. Without limiting the generality
of the preceding sentence, each Party shall retain all right, title and interest arising under
the United States Patent Act, the United States Trademark Act, the United States Copyright Act
and all other applicable laws, rules and regulations (whether foreign, international or
domestic) in and to (i) all its technologies, methods, trade secrets, proprietary know-how and
all intellectual property rights therein existing as of the Effective Date, and (ii) all
Methodology Information (collectively, “Intellectual Property”). Neither Party nor any Third
Party shall acquire any right, title or interest in the other Party’s Intellectual Property by
virtue of this Agreement or otherwise, except to the extent expressly provided herein.

7.2 New Intellectual Property. OSI shall own any and all improvements to and derivative works
of the Methodology Information that are made or conceived or reduced to practice by a Party in
the course of performance of OSI Services under this Agreement. BioTrove shall own any and all
improvements to and derivative works of the Methodology Information that are made or conceived
or reduced to practice by a Party in the course of performance of BioTrove Services under this
Agreement. All data generated by OSI as a result of the OSI Services in connection with a
Project Agreement shall be provided to BioTrove for the benefit of the Third Party Client,
provided that such data is subject to the terms, conditions and restrictions binding OSI with
respect to its compound library. If any such data is restricted, OSI will inform BioTrove of
the requirements that BioTrove and any Third Party Client would have to accept before the
receipt of such data. Any proteins produced by OSI in connection with the OSI Services shall
be transferred to BioTrove or at the direction of BioTrove for the Third Party Client. The
Parties acknowledge that the identity and nature of any data or chemical matter that may
result from the OSI Services are unknown as of the Effective Date, and that, notwithstanding
any other provision of this Agreement to the contrary, OSI makes no representation or warranty
as to whether any Third Party has or may have any right, title or interest in or to such data
(including patent rights, copyrights, trade secret rights, database rights and any other
intellectual property rights therein).

7.3 Disclaimer. Except as otherwise expressly provided herein, nothing contained in this
Agreement shall be construed or interpreted, either expressly or by implication, estoppel or
otherwise, as: (i) a grant, transfer or other conveyance by either party to the other of any
right, title, license or other interest of any kind in any inventions or other intellectual
property, (ii) creating an obligation on the part of either party to make any such grant,
transfer or other conveyance or (iii) requiring either party to participate with the other
party in any cooperative development program or

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

9

 

project of any kind or to continue with any such program or project, provided, however, that
Parties agree to reasonably cooperate with each other to the extent necessary for a Party to
obtain patent and other intellectual property protection for any improvements or derivative
works of the Methodology Information as provided for under Section 7.2 at the expense of such
Party.

8. TERM AND TERMINATION OF THIS AGREEMENT.

8.1 Term and Survival of this Agreement. The term of this Agreement shall begin on the
Effective Date and continue for a period of two (2) years (the “Initial Term”). This Agreement
may be renewed for additional one (1) year periods (each, a “Renewal Term,” and collectively
with the Initial Term, the “Term”) upon mutual agreement of the Parties. If a Party desires to
renew this Agreement, it should provide written notice to the other Party of its intent to
renew this Agreement at least sixty (60) days prior to the end of the then-current Initial
Term or Renewal Term. Any Project commenced prior to the expiration of this Agreement shall
be permitted to continue in accordance with the terms of this Agreement, and the date of
expiration of this Agreement shall be deemed to be the date upon which the last such Project
is completed. Notwithstanding the foregoing, either Party may earlier terminate this
Agreement as provided below.

8.2 Termination by BioTrove. BioTrove may terminate this Agreement or any Project Agreement:

	 	(i)	 	upon thirty (30) days’ prior written notice to OSI if OSI breaches this
Agreement or fails to provide the OSI Services in connection with a Project Agreement,
and fails to cure such breach during the 30-day notice period;
	 
	 	(ii)	 	upon thirty (30) days’ prior written notice if no Project Agreement has been
executed within any six-month period;
	 
	 	(iii)	 	At any time upon six-months prior written notice.

8.3 Termination by OSI. OSI may terminate this Agreement or the OSI Services provided in
connection with a Project Agreement:

	 	(i)	 	upon thirty (30) days’ prior written notice to BioTrove if BioTrove breaches
this Agreement or any Project Agreement, and fails to cure such breach during the
30-day notice period; provided that OSI may terminate this Agreement or the OSI
Services provided in connection with a Project Agreement upon ten (10) days’ prior
written notice if BioTrove fails to make an OSI Payment when due and fails to cure such
breach during such 10-day notice period;
	 
	 	(ii)	 	upon thirty (30) days’ prior written notice if no Project Agreement has been
executed within any six-month period;
	 
	 	(iii)	 	At any time upon six-months prior written notice.

8.4 Effect of Termination or Expiration. Subject to Section 8.1, upon termination or
expiration of this Agreement, neither OSI nor BioTrove will have any further obligations under
this Agreement (including the provision of Services under a Project Agreement), except that
(a) upon receipt of all payments due to OSI, OSI will deliver to BioTrove any deliverables
developed through termination or expiration, and (b) BioTrove will use commercially reasonable
efforts to

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

10

 

collect and pay OSI any monies due and owing OSI, up to the time of termination or expiration,
for OSI Services actually performed and all expenses and non-cancellable commitments actually
incurred. The following Sections will survive expiration or termination of this Agreement:
Sections 4.4, 4.5, 5, 6, 7, 8.4, 9.3, 10, 11 and 12.

9. REPRESENTATIONS AND WARRANTIES.

9.1 Representations and Warranties of OSI. OSI represents and warrants that: (a) OSI has the
legal right, authority and power to enter into this Agreement and perform the obligations set
forth herein; (b) the entering into and performance of this Agreement by OSI does not conflict
with any agreement or understanding between OSI and any Third Party; and (c) the Services
shall be carried out in a professional and workmanlike manner in accordance with all
applicable federal, state and local laws and regulations. Notwithstanding any other provision
of this Agreement to the contrary, the parties acknowledge and agree that OSI does not warrant
or represent that the data, results or deliverables hereunder will be acceptable to any
regulatory governmental agency to which they are presented nor that the data, results or
deliverables hereunder will prove useful for further commercialization. In the event of a
material error by OSI in the performance of any OSI Services hereunder, OSI shall, at
BioTrove’s option and, subject to Section 8.2, as BioTrove’s SOLE REMEDY, (i) repeat those
particular OSI Services at OSI’s own expense and (ii) pay any additional BioTrove costs
actually incurred by any additional work BioTrove must perform as a result of such OSI
material error.

9.2 Representations and Warranties of BioTrove. BioTrove represents and warrants that: (a)
BioTrove has the legal right, authority and power to enter into this Agreement and perform the
obligations set forth herein; (b) the entering into and performance of this Agreement by
BioTrove does not conflict with any agreement or understanding between BioTrove and any Third
Party; and (c) the BioTrove Services shall be carried out in a professional and workmanlike
manner in accordance with all applicable federal, state and local laws and regulations. In the
event of a material error by BioTrove in supplying materials/information to OSI as required to
provide the OSI Services hereunder, BioTrove shall, as OSI’s SOLE REMEDY, subject to Section
8.3, (i) resupply such materials to OSI at BioTrove’s expense in order for OSI to re-perform
the OSI Services, and (ii) reimburse OSI for OSI’s costs actually incurred in repeating such
OSI Services (in addition to the OSI Payments).

9.3 Limitations on Representations and Warranties. EXCEPT AS EXPRESSLY PROVIDED HEREIN,
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY
OPERATION OF LAW, BY STATUTE OR OTHERWISE AND EACH PARTY TO THIS AGREEMENT SPECIFICALLY
DISCLAIMS ANY IMPLIED WARRANTY OF TITLE, VALIDITY, ENFORCEABILITY, NON-INFRINGEMENT,
EXCLUSIVITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

10. INDEMNIFICATION AND INSURANCE.

10.1 OSI Indemnity. OSI shall indemnify, defend, and hold harmless BioTrove, its Affiliates,
and their respective directors, officers, employees and agents from and against all losses,
damages, liabilities, settlements, penalties, fines, costs and expenses (including reasonable
attorneys’ fees and expenses (collectively, “Liabilities”) to the extent such Liabilities
arise out of or result from any claim, lawsuit or other action or threat by a Third Party
arising out of (a) OSI’s

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

11

 

gross negligence, or reckless or willful misconduct or breach of this Agreement or (b) any
claim that the services provided by OSI or the Compound Library infringes any third party
intellectual property rights, except to the extent BioTrove is obligated to indemnify OSI with
respect to such Liabilities under Section 10.2.

10.2 BioTrove Indemnity. BioTrove shall indemnify, defend, and hold harmless OSI, and its
directors, officers, employees and agents from and against all Liabilities to the extent such
Liabilities arise out of or result from any claim, lawsuit or other action or threat by a
Third Party arising out of (a) BioTrove’s gross negligence, or reckless or willful misconduct
or breach of this Agreement or (b) any claim that the services provided by Biotrove infringes
any third party intellectual property rights, except to the extent OSI is obligated to
indemnify BioTrove with respect to such Liabilities under Section 10.1.

10.3 Indemnification Procedure. An entity seeking indemnification (“Indemnitee”) shall
promptly notify the other Party (“Indemnitor”) in writing of any claim, lawsuit or other
action in respect of which it intends to claim such indemnification. The Indemnitee shall
permit the Indemnitor to obtain control of the defense and settlement of such claim, lawsuit
or other action; provided, however, that any settlement may not adversely affect the
Indemnitee’s rights under this Agreement or impose any obligations on the Indemnitee in
addition to those set forth herein without the Indemnitee’s prior written consent. The
Indemnitee shall cooperate fully with the Indemnitor, at the reasonable expense of the
Indemnitor. The Indemnitee shall have the right, but not the obligation, to be represented by
counsel of its own selection and expense.

10.4 Insurance. Each Party shall carry, with financially sound and reputable insurers,
insurance coverage (including professional liability, comprehensive liability coverage,
workmen’s compensation and product liability) with respect to the conduct of its business
against loss from such risks and in such amounts as are adequate and customary for
well-insured companies engaged in similar businesses. At a Party’s request, the other Party
will provide the requesting Party with copies of the certificates of insurance evidencing such
coverage.

10.5 Limitation on Liability. EXCEPT WTH RESPECT TO (i) A THIRD PARTY CLAIM BROUGHT
INDEMNIFIED UNDER SECTION 10.1 OR 10.2, AND (ii) A PARTY’S BREACH OF ITS OBLIGATIONS UNDER
SECTIONS 6 AND/OR 7, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL,
INDIRECT OR CONSEQUENTIAL DAMAGES TO THE OTHER PARTY ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

11. DISPUTE RESOLUTION

11.1 Disputes. If there is any dispute, controversy or claim arising out of, relating to, or
in connection with this Agreement or for the breach, termination or validity thereof (a
“Dispute”), except for matters involving the validity, infringement or enforceability of any
intellectual property rights, or matters which shall be determined in accordance with Section
3.3, then upon the written request of either party, the matter shall be referred to the Chief
Executive Officer of OSI (or his designee) and the Chief Executive Officer of BioTrove (or his
designee), who shall meet in a good faith effort to resolve the dispute within thirty (30)
days. If the Parties’ respective Chief Executive Officers (or designees) cannot agree on a
resolution of the Dispute within such thirty (30) day period, then such Dispute shall be
submitted to the exclusive jurisdiction of the U.S. federal or New

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

12

 

York state courts within the New York counties of New York, Nassau, or Suffolk, and the
Parties hereby submit to, and waive any objection to, personal jurisdiction and venue in such
courts for such purpose

12. GENERAL PROVISIONS.

12.1 Governing Law. This Agreement shall be interpreted and construed in accordance with the
laws of the State of New York and the federal laws of the United States, without regard to any
conflicts of laws provisions; provided, however, that the scope and validity of any patent or
patent application shall be governed by the applicable laws of the country of the patent or
patent application.

12.2 Equitable Relief. Each Party agrees that any breach of its obligations under Sections 6
or 7 of this Agreement will cause irreparable harm to the other Party and that the other Party
shall have, in addition to any remedies available at law, the right to obtain equitable relief
to enforce this Agreement without having to prove irreparable harm or post a bond.

12.3 Use of Names. No Party shall use the name, trademark, trade name, acronym or logo of the
other Party, or the names of any of its employees, in any publicity, promotion, news release
or disclosure relating to this Agreement or its subject matter, without the prior express
written permission of the other Party, except (i) as may be required by law or the
requirements of any national securities exchange, (ii) in connection with approved marketing
materials under Section 2.1, or (iii) in connection with the negotiation of a Project with a
Third Party Client.

12.4 Independent Contractor. All Services will be rendered by OSI as an independent
contractor and this Agreement does not create an employer-employee relationship between
BioTrove and OSI. OSI shall not in any way represent itself to be a partner or joint venturer
of or with BioTrove.

12.5 Assignment. Neither this Agreement nor any rights or obligations hereunder may be
assigned by either Party without the prior written consent of the other Party; provided,
however, that either Party may assign this Agreement and its rights and obligations hereunder
without the other Party’s consent in connection with the transfer or sale of all or
substantially all of such Party’s business to which this Agreement relates to a third party,
whether by merger, sale of stock, sale of assets or otherwise, or to an Affiliate. Any
purported assignment that violates this Section shall be void. The rights and obligations of
the Parties under this Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the Parties.

12.6 Entire Agreement. This Agreement constitutes the sole and entire agreement between the
Parties relating to the subject matter hereof, and all prior negotiations, representations,
agreements and understandings, whether written or oral, are superseded by this Agreement.

12.7 Notices. Any notice or other communication required or permitted under this Agreement
will be in writing and will be deemed given as of the date of such notice if (a) hand
delivered, (b) mailed, postage prepaid, first class, certified mail, return receipt requested,
or (c) sent, shipping prepaid, receipt requested by national courier service, to the Party at
the address listed below or at such other addresses numbers as may be given from time to time
in accordance with the terms of this notice provision.

          If to BioTrove:

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

13

 

At the address set forth above.

Telephone: [***]

Attn: [***]

_________________

If to OSI:

At the address set forth above.

Telephone: [***]Attn: [***]

  With a copy to:

  At the address set forth above.

  Attn: [***]

12.8 Force Majeure. Neither Party shall lose any rights hereunder or be liable to the other
Party for damages or losses (except for payment obligations) on account of failure of
performance by the defaulting Party if the failure is occasioned by war, strike, acts of
terrorism, fire, Act of God, earthquake, or any other reason where failure to perform is
beyond the reasonable control and not caused by the negligence, intentional conduct or
misconduct of the nonperforming Party and the nonperforming Party has exerted all reasonable
efforts to avoid or remedy such force majeure.

12.9 Amendment. No amendment of this Agreement will be effective unless agreed to in writing
and signed by a duly authorized representative of each of the Parties.

12.10 Waiver. No waiver of any rights will be effective unless assented to in writing by the
Party to be charged and the waiver of any breach or default will not constitute a waiver of
any other right hereunder or any subsequent breach or default.

12.11 Headings. The section headings are intended for convenience of reference only and are
not intended to be a part of or to affect the meaning or interpretation of this Agreement.

12.12 Severability. Should any provision of this Agreement be held by a competent authority
to be invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it
shall, in the country or countries subject to such holding, be considered severed from this
Agreement. All other provisions, rights and obligations shall continue without regard to the
severed provisions.

12.13 Construction. The Parties have participated equally in the formation of this Agreement
and the language of this Agreement will not be presumptively construed against either Party.

12.14 Counterparts. This Agreement may be executed in counterparts, each of which will be
deemed an original, but all of which together will constitute one agreement. Facsimile
signatures shall have the same effect as their originals.

[Remainder of page intentionally left blank.]

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

14

 

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in duplicate originals to
take effect on the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	BIOTROVE, INC.	 	 	 	OSI PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Can Ozbal
	 	 	 	By:
	 	/s/ David Epstein	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Print Name:

	 	Can Ozbal
	 	 	 	Print Name:
	 	David Epstein	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	VP and GM, RapidFire
	 	 	 	Title:
	 	SVP, Oncology Research	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	April 1, 2008
	 	 	 	Date:
	 	3/28/2008	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

15

 

EXHIBIT A-1

RAPIDFIRETM LEAD DISCOVERY SERVICES

GENERAL

(Services Workflow chart)

ATTACHED

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

     

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

Standard and Optional RapidFireTM Lead Discovery Services

The Services offered to Third Party Clients shall consist of a standard package and additional
optional services. See accompanying Services Workflow chart.

BioTrove shall provide the BioTrove Services as set forth on Exhibit A-2 [***] and OSI shall
provide the OSI Services as set forth on Exhibit A-3 [***]. The Services will be completed upon
[***] of a [***] BioTrove, as set forth in Exhibit A-2.

The Services are subject to the satisfaction of certain conditions which are based upon the
successful completion of certain preceding steps. Such conditions are outlined in the accompanying
Services Workflow chart and Exhibits A-2 and A-3. If applicable, any deliverable from a step shall
be provided to the Party responsible for the subsequent step [***].

Additional Services

Additional services beyond the standard and optional Services set forth above that may be requested
by a Third Party Client shall be brought before the Project Team for review and approval. If
approved, BioTrove [***] of such [***] with the [***] by the [***], before a [***]. Such additional
services shall [***] to the [***] on an [***], or as otherwise [***] by the [***].

OSI [***] for any [***] BioTrove [***] this Agreement, any [***] or in [***] BioTrove [***] of this
Agreement.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

EXHIBIT A-2

RAPIDFIRETM LEAD DISCOVERY SERVICES

BIOTROVE SERVICES

BioTrove Standard Services

Assay Development and Validation:

	1)	 	BIOTROVE will [***] of the [***] for [***] and [***]. [***] may be provided by the [***]
from a [***] ([***] OSI [***]) or a [***]. If not provided by the [***] will be [***] to the
[***].

	2)	 	BIOTROVE will [***] of the [***], and a [***]. [***] will be used for [***] the RapidFire
system, while the [***] will be used as a [***]. [***] may be provided by the [***] from a
[***], or may be [***] OSI or a [***]. If not provided by the [***] will be [***] to the
[***].

	3)	 	BIOTROVE will [***] in which the [***] the RapidFire System. BIOTROVE will [***] of the
[***] in these [***]. In cases where the [***] does not [***] may be [***] to the [***] after
the [***] of the [***]. [***] will be used to [***] or the [***].

	4)	 	BIOTROVE will [***] (if an [***]). BIOTROVE will also [***] by which the [***] can be [***]
will also be [***].

	5)	 	[***], detailing the [***] will be [***] BIOTROVE. The [***] OSI [***] will be [***] OSI.
OSI will [***] BIOTROVE [***] RapidFireTM to ensure that the [***] Exhibit A-3, “Assay
Validation for High Throughput Screening.”

	6)	 	BIOTROVE will [***] to assure that a [***] has been [***]. [***] OSI will [***] BIOTROVE
will [***] the RapidFireTM platform. See Exhibit A-3, “Assay Validation for High Throughput
Screening.” If available, [***] into these [***]. [***] will also be [***] or at [***] of the
[***].

[***]

[***]. [***] will be [***] OSI [***] BIOTROVE [***]. BIOTROVE will [***] the RapidFire systems
[***] OSI [***] that is [***] OSI’s [***]. [***] will include [***] that the [***].

[***]:

[***] OSI and BIOTROVE [***].

[***] of the [***] shall be [***] will be [***] OSI [***]. [***] will be [***].

[***]:

[***]

[***] will be [***] OSI. OSI will [***] BIOTROVE [***] the RapidFire system. [***] that are [***]
will be [***]. OSI will [***] for the [***] in the [***]. [***] will be [***] BIOTROVE [***]
RapidFire [***]. See Exhibit A-3, “Assay
Validation for High Throughput Screening.”

[***] will be [***] of a [***] BioTrove to be [***] for up to the [***]. OSI will [***] OSI [***]
BioTrove [***] in the [***], as well as [***] OSI’s [***].

BioTrove Optional Services

[***]:

At the request of the customer BIOTROVE will [***] will be [***]. [***] against [***] will be
[***] will be [***] in each [***] that the [***]. The work will be [***]. BIOTROVE will [***].

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

EXHIBIT A-3

RAPIDFIRETM LEAD DISCOVERY SERVICES

OSI SERVICES

All OSI Services are subject to the terms, conditions and restrictions binding OSI with respect to its

compound library

OSI Standard Services

Assay Validation for High Throughput Screening

[***] BioTrove. [***] in the [***] will be to [***] OSI [***] BioTrove. In order to [***], with the
[***] to be [***] will be [***] OSI [***] OSI [***] and/or [***] from each [***] and/or [***] will
be [***] BioTrove [***] of the [***] will be [***], and will [***] of the [***] at this [***] if
the [***] OSI [***] BioTrove.

[***]

[***] will be [***] OSI [***] any [***], such as [***] as a [***] will initially be [***] in a
[***], and at an [***] will be [***] BioTrove’s [***] will be [***] OSI [***] that the [***] to the
[***]. [***] will be [***] BioTrove [***] will be [***] of the [***]. As part of the [***], in
order to [***] may be [***] to a [***].

[***]

[***] BioTrove, OSI will [***] as those [***] with an [***] by at [***] of all [***]. All of the
[***] each of these [***] will then be [***] will be [***] to those [***] BioTrove. [***] BioTrove,
OSI will [***] of any [***] in the [***] from the [***], for the [***] will be [***] to those [***]
BioTrove.

Final Report: [***] Biotrove [***]. The Services will be completed upon [***] BioTrove [***]. OSI
will [***] OSI [***] BioTrove [***] OSI’s [***].

OSI Optional Services

[***]:

[***] and the [***] of the [***] of the [***] and/ or a [***]. If a [***] by the [***] to, the
[***] OSI’s [***] will be [***] would be [***] to the [***] from at least [***] OSI, and [***]
would be [***] OSI for [***] to the [***]. OSI would [***] for any [***] from the [***] of the
[***]. [***] of all [***] from the [***] will be [***] to the [***] with the [***] by the [***],
OSI will [***] for such [***] for the [***] as a result of the [***] will [***] OSI’s [***] at the
[***] of the [***].

[***]

[***] also has the [***] for up to the [***] for which [***] will be [***]. BioTrove will [***] and
OSI will [***] will be [***] and one other [***] by the [***] from a [***] to be [***] OSI) [***]
of the [***] of the [***] will be [***] and will [***] for up to the [***] in the [***] will be
[***] BioTrove for [***] in the [***].

[***]

[***] for the [***] OSI. In the [***] or other [***] is not [***], and cannot be [***] by the [***]
has the [***] OSI [***] will be [***] and will [***], in general terms the [***] is to [***] of the
[***] should be [***] if this [***], and as [***] with the [***]. If these [***] will be of [***],
and may [***] from the [***] to be [***] on the [***] will be [***] BioTrove for the [***].

[***]

[***] The Third Party Client [***] OSI’s [***]. OSI will [***] by the [***] to be [***] on a [***]
on the [***] in the [***] will be [***] in a [***] at a [***] to allow a [***] of the [***]. OSI
will not [***]. Any [***] for which the [***] to be [***] of a [***] will be [***] upon the [***]
OSI for it’s [***], the Client will [***] of any [***] BioTrove and will be [***] OSI [***] OSI
[***] and any [***] by the [***] will be [***] by the [***] of the [***] will be the [***] at a
[***] to allow [***] of the [***]. [***] may be [***] OSI will [***] from a [***] by the [***].
BioTrove will [***] for the [***] with the [***].
BioTrove shall not [***] OI [***] about the [***].

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

EXHIBIT B

FORM OF PROJECT AGREEMENT BETWEEN BIOTROVE AND THIRD PARTY CLIENTS

ATTACHED

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the
Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

MASTER PROJECT AGREEMENT

     This Master Project Agreement (“Agreement”), effective as of                     , 2008 (the “Effective Date”), is
between BIOTROVE INC. (“Contractor”), having its principal place of business at 12 Gill Street,
Suite 4000, Woburn, MA 01801, and [Client] and its Affiliates (collectively, “Client”), having its
principal place of business at                 
                      
                                          . Contractor and Client are sometimes referred to herein
individually as a “Party” and collectively as the “Parties.”

     WHEREAS, Contractor possesses expertise and proprietary rights relating to assay development
and high-throughput compound screening technologies that detect affinity interactions between
compounds and targets and resulting processes leading to the identity of potential new
pharmaceutical products;

     WHEREAS, Client possesses certain Targets (as defined below) and is interested in engaging
Contractor to help identify chemical entities that bind to such Targets;

     WHEREAS, Contractor has entered into an agreement with its subcontractor, OSI Pharmaceuticals,
Inc. (“OSI”), in which they agree to cooperate in providing high throughput screening services to
Contractor’s customers through access to OSI’s compound library;

     WHEREAS, Client wishes to engage Contractor to perform Services (as defined below), including,
assay development, assay validation for high throughput screening, high throughput compound
screening hit conformation and IC50 generation for such Targets utilizing Contractor’s proprietary
RapidFireTM HTMS System and the OSI compound library, and related services to be
provided by Contractor and OSI, and Contractor wishes to provide such Services to Client subject to
the terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:

1. DEFINITIONS.

     1.1 “Active Compound” means any Library Compound that (i) is found by Contractor or its
subcontractors during and in the course of performing the Services to have activity against the
Target as set forth in the relevant Project Proposal, and (ii) which may be disclosed to Client
pursuant to the terms of this Agreement.

     1.2 “Affiliate” means any corporation, company, partnership, joint venture and/or firm which
controls, is controlled by, or is under common control with, a Party. As used in this definition,
“control” means (a) possession, direct or indirect, of the power to direct or cause direction of
the management or policies of an entity (whether through ownership of securities or other ownership
interests, by contract or otherwise), or (b) beneficial ownership of at least 50% of the voting
securities or other ownership interest (whether directly or pursuant to any option, warrant or
other similar arrangement) or other comparable equity interests of an entity.

     1.3 “Compound Exclusivity Period” shall have the meaning set forth in Section 2.4.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

     1.4 “Contractor Compound Patent Rights” shall mean any and all Patent Rights owned or
controlled by Contractor or its subcontractors that claim or cover Contractor Compound Technology.

     1.5 “Contractor Compound Technology” shall mean any and all Technology owned or controlled by
Contractor or its subcontractors related to any Library Compound or Active Compound whether or not
arising as a result of performing the Project.

     1.6 “Contractor Platform Patent Rights” shall mean any and all Patent Rights owned or
controlled by Contractor or its subcontractors that claim or cover Contractor Platform Technology.

     1.7 “Contractor Platform Technology” shall mean any and all Methodology Information and
Technology owned or controlled by Contractor or its subcontractors related to Contractor’s
proprietary processes for performing the Project including, without limitation, assay development,
assay validation for high throughput screening, high throughput compound screening hit conformation
and IC50 generation for targets utilizing Contractor’s proprietary RapidFireTM HTMS
System.

     1.8 “Deliverables” means any data, reports or other materials relating to or arising from the
performance of Services pursuant to an approved Project Proposal.

     1.9 “Final Report” shall have the meaning set forth in Section 2.4.

     1.10 “Library” means any chemical compound library prepared by or on behalf of, or otherwise
owned or controlled by Contractor or its subcontractors, and used in the performance of Services
hereunder, provided that the inclusion or exclusion of any chemical compound in such chemical
compound library shall be solely at such Contractor’s or subcontractor’s discretion.

     1.11 “Library Compound” means any compound contained in a Library.

     1.12 “Methodology Information” shall mean Contractor’s or its subcontractor’s proprietary high
throughput screening analysis and assay development methodology, proprietary technology (including,
without limitation, testing methods, practices, procedures or other methodological innovations
involved with respect thereto), related testing facilities (including, without limitation, test
apparatus and equipment), and/or any modifications to such analytical methodologies or testing
facilities, in each case, whether developed before or after the Effective Date and whether
developed in the course of providing Services or otherwise; including, in each case, any
intellectual property rights in any of the foregoing.

     1.13 “Patent Rights” shall mean any and all patent applications, provisional patent
applications and any patents issuing therefrom worldwide, together with any extensions,
registrations, confirmations, reissues, continuations, divisions, continuations-in-part,
reexamination certificates, confirmations, registrations, revalidations, additions, supplementary
protection certificates, extensions, substitutions or renewals thereof and any patents anywhere in
the world, claiming the priority date of any of the foregoing.

     1.14 “Project” shall mean the Services performed by Contractor under this Agreement pursuant
to an approved Project Proposal.

     1.15 “Project Materials” means certain biochemical, biological or synthetic chemical materials
of such Party that are supplied to the other Party pursuant to providing Services related to a

Portions of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Company’s application
requesting confidential treatment under Rule 406 of the Securities Act.

 

 

Project, and that are necessary or reasonably useful to the conduct of the Project, or as otherwise
agreed by the Parties, including, materials associated with the Target (“Target Material”) (e.g.,
assay analytes, assay buffers etc.).

     1.16 “Project Proposal” shall mean a written document in the form set forth in Schedule
B hereto and made a part hereof submitted by Client to Contractor requesting the performance of
Services under this Agreement relating to a Project. Each Project Proposal is subject to review and
approval by Contractor at its sole discretion. Each approved Project Proposal shall be attached
hereto as an Exhibit and deemed a part hereof.

     1.17 “Quote” means a written price quote issued by Contractor in response to a Project
Proposal from Client, in the form set forth on Schedule C hereto and made a part hereof.

     1.18 “Services” shall mean the services performed by the Contractor, and or its subcontractors
in the performance of the Project pursuant to an approved Project Proposal under this Agreement,
and as more specifically set forth on Schedule A hereto and made a part hereof.

     1.19 “Target” shall mean the protein target as set forth in a Project Proposal.

     1.20 “Target Data Sheet” shall mean certain data on the Target as set forth on Attachment
1 hereto and made a part hereof.

     1.21 “Target Exclusivity Period” shall have the meaning set forth in Section 2.5.

     1.22 “Technology” shall mean any proprietary inventions, compositions of matter, compounds,
devices, methods, formulas, protocols, techniques, trade secrets, other proprietary capabilities,
copyrightable material, know-how, data, information, and other intellectual property of any kind,
but not including any Patent Rights.

     1.23 “Term” shall have the meaning set forth in Section 6.1.

2. PROJECT.

     2.1 Submission and Consideration of Project Proposal. All Services provided by Contractor to
Client under this Agreement are subject to and shall only be provided pursuant to a Project
Proposal approved and signed by Contractor in accordance with this Agreement. Client may submit a
Project Proposal for review and consideration by Contractor at any time during the Term of this
Agreement. Contractor shall review and consider each submitted Project Proposal, and shall notify
Client of its approval or disapproval of such Project Proposal within [forty-five (45)] days of
receipt by Contractor. Approval or disapproval of each submitted Project Proposal shall be solely
within the Contractor’s discretion. Client acknowledges that Contractor may disclose the Project
Proposal to and consult with one or more of its subcontractors in making its determination of
whether or not to approve a Project Proposal. For avoidance of doubt, Contractor shall have no
obligation to perform any Services under this Agreement unless and until Contractor has approved
and signed a Project Proposal covering such Services, and Client has approved and signed a Quote
offered by Contractor for such Services.

     2.2 Determination of Active Compounds. Based on the results of screening Services conducted
pursuant to a Project, Contractor in its sole discretion shall determine those Library Compounds
that have sufficient activity against the Target to be deemed an Active Compound.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

     2.3 Final Report. Upon completion of the Services related to a Project, and within the
timeframe set forth in the related Project Proposal, Contractor shall issue a final report (the
“Final Report”) to the Client, which shall set forth in reasonable detail the results of
Contractor’s screening activities performed under the Services, the identity of all Active
Compounds and provide Deliverables, all as specifically set forth in the related Project Proposal.
Subject to the scope of the license rights provided in Section 3.1 Client shall be free to use the
results and data included in the Final Report and Deliverables for any purpose, provided, however,
that Client shall not publish or publicly present the results, data or materials in the Final
Report or Deliverables without obtaining Contractor’s prior written approval.

     2.4 Active Compound Exclusivity. Contractor shall agree, and require its subcontractors to
agree, that the Active Compounds from the Library identified in the Final Report delivered to
Client shall not be used in connection with Contractor’s or subcontractor’s services (whether or
not similar to the Services hereunder) provided to any other third parties
for the period of [***] beginning upon the delivery of the
Final Report to Client (the “Compound Exclusivity Period”).
The Compound Exclusivity Period may be extended upon approval of the
Contractor in its sole discretion.

     2.5 Target Exclusivity. Contractor shall agree, and require its subcontractors to agree, that
the Target shall not be used in connection with Contractor’s or subcontractor’s services (whether
or not similar to the Services hereunder) provided to any other third parties
 for the period of [***] beginning upon the delivery of the
Final Report to Client (the “Target Exclusivity Period”).
The Target Exclusivity Period may be extended upon approval of the
Contractor in its sole discretion.

     2.6 Contractor Rights for Targets. Upon the expiration of the Target Exclusivity Period for a
given Target, Contractor and its subcontractors shall be free, with respect to any third party and
without obligation to Client, to screen the same targets as such Target, to identify compounds that
bind against such targets, and to make, have made, use, sell, offer for sale and import products;
provided, however, that (i) in no event shall Contractor or subcontractor use or disclose to any
third party any data generated in the performance of the Services utilizing the Target for Client,
including without limitation the data in the Final Report (unless independently generated); and
(ii) in no event shall this Section 2.6 be interpreted as an implied license of any kind by Client
to Contractor or its subcontractors with respect to any such Targets.

     2.7 Contractor Rights for Active Compounds. Upon the expiration of the Compound Exclusivity
Period for the Active Compounds set forth in the Final Report, Contractor and its subcontractors
shall be free, with respect to any third party and without obligation to Client, to screen targets
against such Library Compounds, to identify active compounds that bind against such screened
targets, and to make, have made, use, sell, offer for sale and import products; provided, however,
that (i) in no event shall Contractor or subcontractor use or disclose to any third party any data
generated in the performance of the Project that identify the Library Compounds as Active Compounds
against a Target, including without limitation the data in the Final Report (unless independently
generated); and (ii) in no event shall this Section 2.7 be interpreted as an implied license of any
kind by Client to Contractor or its subcontractors with respect to any such Library Compounds.

3. LICENSE GRANT; INTELLECTUAL PROPERTY RIGHTS.

     3.1 New Intellectual Property. Notwithstanding anything to the contrary contained herein, as
between Contractor and Client, Contractor shall own any and all improvements to and derivative
works of the Methodology Information that are made or conceived or reduced to practice by a Party
in the course of performance of Services under this Agreement. All data generated by Contractor or
its subcontractors as a result of performing the Services in connection with a Project shall be
provided to Client, provided, however, that Client must agree to any terms, conditions or
restrictions on the use of

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

such data as expressly set forth by Contractor, before the receipt of such data. The Parties
acknowledge that the identity and nature of any data or chemical matter that may result from the
performance of Services are unknown as of the Effective Date, and that, notwithstanding any other
provision of this Agreement to the contrary, Contractor and its subcontractors make no
representation or warranty as to whether any third party has or may have any right, title or
interest in or to such data (including patent rights, copyrights, trade secret rights, database
rights and any other intellectual property rights therein). Any use of the data or chemical matter
that may result for the performance of the Services may necessitate the procurement by Client of
separate licenses from third parties. In addition, Contractor does not represent or warrant that
such data or chemical matter will be acceptable to any regulatory governmental agency to which they
are presented nor that the results will prove useful for further commercialization

     3.2 Contractor Platform Patent Rights. As between Contractor and Client, Contractor shall
have sole ownership of all right, title and interest in any and all Contractor Platform Patent
Rights and Contractor Platform Technology. Contractor shall have sole responsibility for, and
control over, the management of the Contractor Platform Patent Rights, at Contractor’s expense.

     3.3 Ownership of Compounds and Contractor Compound Patent Rights. As between Contractor and
Client, Contractor shall have sole ownership of and all right, title and interest in all Contractor
Compound Patent Rights, the Contractor Compound Technology, all compounds and compound fragments
screened against the Target, all Active Compounds and all data generated by Contractor and its
subcontractors during the Project.

     3.4 No Other Rights. Except as otherwise expressly provided herein, nothing contained in this
Agreement shall be construed or interpreted, either expressly or by implication, estoppel or
otherwise, as: (i) a grant, transfer or other conveyance by either Party to the other of any right,
title, license or other interest of any kind in any inventions or other intellectual property, (ii)
creating an obligation on the part of either Party to make any such grant, transfer or other
conveyance or (iii) requiring either Party to participate with the other Party in any cooperative
development program or project of any kind, including any Project, or to continue with any such
program or project, provided, however, that Parties agree to reasonably cooperate with each other
to the extent necessary to obtain patent and other intellectual property protection for any
improvements or derivative works.

4 CONSIDERATION.

     4.1 Service Fees. In consideration of the performance of Services relating to a Project by
Contractor and its subcontractors, and the grant of rights to Client hereunder, Client shall pay to
Contractor all fees for Services in the amounts set forth in the Quote accepted by Client for such
Project.

     4.2 Invoices. Unless otherwise stated in the applicable Quote, Contractor will invoice Client
for Services performed by Contractor and its subcontractors on a monthly basis as such Services are
completed.

     4.3 Taxes. Except as otherwise provided in the applicable Quote, Client will pay to
Contractor any local sales tax imposed by a state or municipality, based on or measured by the sale
or use of Services.

     4.4 Payment. Client will pay any undisputed invoice within thirty (30) days of its receipt by
Client. All invoices shall reference the applicable Quote number and will be sent to the address
specified
in the applicable Quote. Any late payments shall accrue interest at the rate of 1.5% per month.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

     4.5 No Other Payments. The Parties acknowledge and agree that, other than the payments set
forth in this Article 4 and the Quote, no further payments of any kind, including without
limitation license fees, development or other milestone payments, or royalties, shall be due to
Contractor or its subcontractors for the further exploitation by Client of the Deliverables
delivered by Contractor under this Agreement.

5. CONFIDENTIALITY AND MATERIALS TRANSFER.

     5.1 Definition. The term “Confidential Information” includes all non-public information that
a Party considers confidential or proprietary, whether in written, oral, electronic or other form,
including but not limited to, information and facts concerning business plans, customers, future
customers, suppliers, licensors, licensees, partners, investors, affiliates or others, training
methods and materials, financial information, sales prospects, client lists, Targets, Project
Proposals, Quotes, Methodology Information, inventions, or any other scientific, technical or trade
secrets of such Party or of any third party provided to such Party under a condition of
confidentiality. However, Confidential Information of a Party (the “Disclosing Party”) does not
include information that the other Party (the “Receiving Party”) can demonstrate by written
evidence (a) is known to the Receiving Party at the Effective Date and is not subject to another
confidentiality obligation to the Disclosing Party, (b) is publicly known at the Effective Date or
later becomes publicly known under circumstances involving no breach of this Agreement by the
Receiving Party, (c) is lawfully and in good faith disclosed to Receiving Party by a third party
who, to the Receiving Party’s knowledge, is not subject to a confidentiality obligation to the
Disclosing Party, or (d) is independently developed by the Receiving Party.

     5.2 Confidentiality Obligation. The Receiving Party acknowledges that the Disclosing Party is
and will remain the sole owner of Confidential Information. During the term of this Agreement and
for a period of [***] thereafter, the Receiving Party will take all commercially reasonable
precautions to protect the confidentiality of Confidential Information, and will not disclose or
use any Confidential Information except with the Disclosing Party’s knowledge and as necessary to
perform the Services.; However, a Party may disclose Confidential Information of the other Party to
its personnel and subcontractors who need to know such Confidential Information in order to provide
the Services and who are obligated to protect the confidentiality of such Confidential Information
under terms substantially no less stringent than those set forth in this Section 5. A Party may
disclose Confidential Information of the other Party to the extent and to the persons or entities
required under applicable governmental law, rule, regulation or order, provided that such Party, if
reasonable practicable, (1) first gives prompt notice of such disclosure requirement to the other
Party so as to enable the other Party to seek any limitations on or exemptions from such disclosure
requirement and (ii) reasonably cooperates at the other Party’s request and expense in any such
efforts by the other Party.

     5.3 Return of Confidential Information. Upon expiration or termination of this Agreement, the
Receiving Party will return all copies of the Confidential Information to the Disclosing Party.

     5.4 Confidentiality of Project Proposals. Except as otherwise provided in this Section 5, the
terms of this Agreement and all Project Proposals shall not be disclosed by a Party without the
prior written consent of the other Party, not to be unreasonably withheld.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the
Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

     5.5 Project Materials. Each Party grants to the other Party a non-exclusive, sublicensable
(as provided for herein) right during the term of each Project to use the Project Materials
associated with such Project solely for purposes of performing the Services relating to such
Project, and to grant a third party, including subcontractors, the right to use the Project
Materials solely for such purposes for or on behalf of Contractor to carry out the Services. Each
Party acknowledges and agrees that the Project Materials of the other Party shall at all times
remain the property of such other Party, or such third party entrusting such Project Materials to
such other Party, as the case may be, and no rights are granted with respect to such Project
Materials except as expressly provided herein.

     5.6 Use and Compliance of Project Materials. Each Party shall use the Project Materials of
the other Party in compliance with all applicable laws and regulations, including without
limitation those relating to animal testing, biotechnological research and the handling and
containment of biohazardous materials. Each Party acknowledges that the Project Materials are
experimental in nature and may have unknown characteristics and therefore agrees to use prudence
and reasonable care in the use, handling, storage, transportation, disposition, and containment of
the Project Materials. Except as expressly provided in this Agreement, neither Party may (i) copy,
sequence, reverse engineer or replicate the Project Materials of the other Party, or (ii) alter or
modify the Project Materials or combine the Project Materials with any other materials.

     5.7 Acceptance of Project Materials. Acceptance by one Party of the other Party’s Project
Materials will constitute acceptance by the receiving Party of liability for any damages or
injuries resulting from its possession or use of the other Party’s Project Material, provided that
such other Party notifies the receiving Party prior to transferring such Project Material of any
dangerous or harmful properties of such Project Materials actually known by such other Party.

     5.8 Transfer of Project Materials to a Third Party. Contractor may transfer Client’s Project
Materials to a third party without Client’s consent for the purpose of providing Services
hereunder. Client shall not transfer any of Contractor’s or its subcontractor’s Project Materials
to any third party without Contractor’s consent, except to the extent such Project Materials
constitute Deliverables for which Contractor has expressly granted Client a license to use under
this Agreement. Except as otherwise expressly provided herein, a Party may not transfer the other
Party’s Project Materials to a third party without the written permission of the other Party,
provided, however, that such restriction on transfer shall terminate [***] after the end of the
term of this Agreement.

     5.9 Return of Materials. Unless otherwise provided herein, upon the expiration or termination
of each Project, each Party shall return to the other Party, or destroy at the other Party’s
request, any Project Materials of such other Party corresponding to such Project, other than
Project Materials that constitute Deliverables for Client.

6.0 TERM AND TERMINATION.

     6.1 Term. Unless terminated earlier as provided in this Article 6, this Agreement shall
commence on the Effective Date and shall remain in effect for a period of two (2) years, or until
the completion or termination of the last Project commenced under the Agreement during such two (2)
year period (the “Term”).

     6.2 Termination.

          (a) For Material Breach. In the event that either Party commits a material breach of
any of its obligations under this Agreement, other than with respect to payment obligations, and
such

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant
to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

Party fails to remedy that breach within sixty (60) days after receiving written notice thereof
from the other Party, the other Party may immediately terminate this Agreement upon written notice
to the breaching Party. For breach of payment obligations, Client shall only have thirty (30) days
to remedy that breach.

          (b) By Client. Client may terminate this Agreement or any Project under this
Agreement without cause by giving Contractor thirty (30) days prior written notice of such
termination.

     6.3 Effect of Termination. Upon termination or expiration of this Agreement and/or a Project,
as the case may be, for any reason, neither Client nor Contractor will have any further obligations
under this Agreement and/or such Project, except that Client shall pay Contractor any monies due
and owing Contractor, up to the time of termination or expiration, for Services and all expenses
and non-cancelable commitments actually incurred at the rates set forth in any applicable Quote.
The following provisions shall survive the expiration or termination of this Agreement: Articles 3,
5, 6, 7, 8 and 9, Sections 2.6 and 2.7, and Sections 2.4 and 2.5 unless this Agreement was
terminated due to Client’s breach of its obligations under the Agreement.

7. REPRESENTATIONS AND WARRANTIES.

     7.1 By Contractor. Contractor hereby represents, warrants and covenants that:

          (a) any Services conducted hereunder will be carried out in compliance with an approved
Project Proposal;

          (b) it has the right and authority to enter into and perform its obligations under this
Agreement; and

          (c) it will perform all of its obligations under this Agreement in accordance with all
applicable governmental laws, rules and regulations.

     7.2 By Client. Client hereby represents, warrants and covenants that:

          (a) Contractor’s use of any procedures described in a Project Proposal and use of the Target
Material or any Project Materials will not infringe the intellectual property rights of any third
parties;

          (b) it has the right and authority to enter into and perform its obligations under this
Agreement, and

          (c) it will perform all of its obligations under this Agreement in accordance with all
applicable governmental laws, rules and regulations.

8. INDEMNIFICATION; DISCLAIMER OF WARRANTY; LIMITATION OF LIABILITY.

     8.1 Indemnification by Client. Client shall indemnify, defend, and hold harmless Contractor
and its Affiliates and subcontractors, and their respective directors, officers, employees, and
agents and their respective successors, heirs and assigns (the “Indemnitees”), against any
liability, damage, loss, or expense (including reasonable attorneys fees and expenses of
litigation) incurred by or imposed upon the Indemnitees or any one of them in connection with any
claims, suits, actions, demands,

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

or judgments arising out of any theory of product liability (including, but not limited to, actions
in the form of tort, warranty, or strict liability) concerning any product or any process or
service that is made, used, or sold by Client, or its Affiliates or (sub)licensees pursuant to any
right or license granted under this Agreement, or arising as a result of Client’s, or its
Affiliate’s or sublicensee’s use or commercialization of any Deliverables, Active Compounds, or
information or data contained in the Final Report, or arising out of any breach of this Agreement
by Client, its Affiliates or sublicensees; provided, however, that such indemnification right shall
not apply to any liability, damage, loss, or expense to the extent directly attributable to the
gross negligent activities, reckless misconduct, or intentional misconduct of the Indemnitees.

     8.2 Procedures. Any Indemnitee that intends to claim indemnification under Section 8.1 shall
promptly notify Client of any claim in respect of which the Indemnitee intends to claim such
indemnification, and Client shall assume the defense thereof with counsel selected by Client
(Client shall consult with Indemnitee with respect to a possible conflict of interest of such
counsel retained by Client); provided, however, that an Indemnitee shall have the right to retain
its own counsel at its cost. The indemnification in Section 8.1 shall not apply to amounts paid in
settlement of any loss, claim, liability or action if such settlement is effected without the
consent of Client, which consent shall not be withheld unreasonably. The failure to deliver notice
to Client within a reasonable time after the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve Client of any liability to the Indemnitee under
Section 8.1. Each Party and its Affiliates and their employees and agents shall cooperate fully
with the other Party and its legal representatives in the investigation of any action, claim or
liability covered by this indemnification.

     8.3 Disclaimer of Warranty. Without limiting the respective lights and obligations of the
Parties expressly set forth herein, Contractor specifically disclaims any guarantee that the
Project will be successful, in whole or in part. The failure of the Parties to successfully
identify an Active Compound will not, of itself, constitute a breach of this Agreement. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO
WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO SERVICES, CONTRACTOR PLATFORM
PATENT RIGHTS, CONTRACTOR PLATFORM TECHNOLOGY, LIBRARY COMPOUNDS, ACTIVE COMPOUNDS, TARGETS OR ANY
RESULTS OF THE PROJECT, INCLUDING WITHOUT LIMITATION WARRANTIES OF VALIDITY OR ENFORCEABILITY OF
ANY PATENT RIGHTS, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF ANY
THIRD PARTY PATENTS OR PROPRIETARY RIGHTS.

     8.4 LIMITATION OF LIABILITY. IN NO EVENT SHALL CLIENT OR CONTRACTOR AND ITS SUBCONTRACTORS BE
LIABLE, FOR ANY SPECIAL INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES TO THE OTHER PARTY ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT, OR THE SERVICES PROVIDED HEREUNDER, EVEN IF THE OTHER
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL CONTRACTOR BE LIABLE
TO CLIENT UNDER THIS AGREEMENT FOR ANY AMOUNTS IN EXCESS OF THE AMOUNTS RECEIVED UNDER THIS
AGREEMENT BY CONTRACTOR DURING THE 12-MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO THE
LIABILITY. IN NO EVENT SHALL CONTRACTOR’S SUBCONTRACIORS BE LIABLE TO CLIENT UNDER THIS AGREEMENT.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

9. MISCELLANEOUS.

     9.1 Relationship of Parties. Al Services will be rendered by Contractor as an independent
contractor and this Agreement does not create an employer-employee relationship between Contractor
or its subcontractors and Client. Neither Party shall in any way represent itself to be a partner
or joint venturer of or with the other Party. Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, agency, employer-employee or joint venture relationship between
the Parties. No Party shall incur any debts or make any commitments for the other, except to the
extent, if at all, specifically provided herein.

     9.2 Publicity. Neither Party shall reveal the terms of this Agreement in any publicity or
advertising without the prior written approval of the other Party, except that (i) either Party may
use the text of a written statement approved in advance by both Parties without further approval,
and (ii) either Party shall have the right to identify the other Party and to disclose the terms of
this Agreement as required by applicable securities laws or other applicable law or regulation.

     9.3 Governing Law. This Agreement shall be interpreted and construed in accordance with the
laws of the State of New York and the federal laws of the United States, without regard to any
conflicts of laws provisions; provided, however, that the scope and validity of any patent or
patent application shall be governed by the applicable laws of the country of the patent or patent
application.

     9.4 Equitable Relief. Each Party agrees that any breach of its obligations under Sections 3
or 5 of this Agreement will cause irreparable harm to the other Party and that the other Party
shall have, in addition to any remedies available at law, the right to obtain equitable relief to
enforce this Agreement without having to prove irreparable harm or post a bond.

     9.5 Use of Names. No Party shall use the name, trademark, trade name, acronym or logo of the
other Party, or the names of any of its employees, in any publicity, promotion, news release or
disclosure relating to this Agreement or its subject matter, without the prior express written
permission of the other Party, except as may be required by law or the requirements of any national
securities exchange.

     9.6 Assignment. Neither this Agreement nor any rights or obligations hereunder may be
assigned by either Party without the prior written consent of the other Party; provided, however,
that Contractor may assign this Agreement and its rights and obligations hereunder without Client’s
consent in connection with the transfer or sale of all or substantially all of Contractor’s
business to which this Agreement relates to a third party, whether by merger, sale of stock, sale
of assets or otherwise, or to an Affiliate. Any purported assignment that violates this Section
shall be void. The rights and obligations of the Parties under this Agreement shall be binding upon
and inure to the benefit of the successors and permitted assigns of the Parties.

     9.7 Entire Agreement. This Agreement and the associated approved Project Proposals and Quotes
constitute the sole and entire agreement between the Parties relating to the subject matter hereof,
and all prior negotiations, representations, agreements and understandings, whether written or
oral, are superseded by this Agreement.

     9.8 Notices. Any notice or other communication required or permitted under this Agreement
will be in writing and will be deemed given as of the date of such notice if (a) hand delivered,
(b) mailed, postage prepaid, first class, certified mail, return receipt requested, or (c) sent,
shipping prepaid, receipt requested by national courier service, to the Party at the address listed
below or at such other addresses numbers as may be given from time to time in accordance with the
terms of this notice provision.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

If to Contractor:

At the address set forth above.

Telephone:                                        

Attn:                                                 

If to Client:

At the address set forth above.

Telephone:                                        

Attn:                                                 

     9.9 Force Majeure. Neither Party shall lose any rights hereunder or be liable to the other
Party for damages or losses (except for payment obligations) on account of failure of performance
by the defaulting Party if the failure is occasioned by war, strike, acts of terrorism, fire, Act
of God, earthquake, or any other reason where failure to perform is beyond the reasonable control
and not caused by the negligence, intentional conduct or misconduct of the nonperforming Party and
the nonperforming Party has exerted all reasonable efforts to avoid or remedy such force majeure.

     9.10 Amendment. No amendment of this Agreement will be effective unless agreed to in writing
and signed by a duly authorized representative of each of the Parties.

     9.11 Waiver. No waiver of any rights will be effective unless assented to in writing by the
Party to be charged and the waiver of any breach or default will not constitute a waiver of any
other right hereunder or any subsequent breach or default.

     9.12 Headings. The section headings are intended for convenience of reference only and are
not intended to be a part of or to affect the meaning or interpretation of this Agreement.

     9.13 Severability. Should any provision of this Agreement be held by a competent authority to
be invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it shall, in the
country or countries subject to such holding, be considered severed from this Agreement. All other
provisions, rights and obligations shall continue without regard to the severed provisions.

     9.14 Construction. The Parties have participated equally in the formation of this Agreement
and the language of this Agreement will not be presumptively construed against either Party.

     9.15 Counterparts. This Agreement may be executed in counterparts, each of which will be
deemed an original, but all of which together will constitute one agreement. Facsimile signatures
shall have the same effect as their originals.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

     IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement as a
sealed instrument effective as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	BIOTROVE INC.

	 	 	 	CLIENT	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

SCHEDULE A

SERVICES

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

SCHEDULE B

PROJECT PROPOSAL

[Specifically references this Agreement detailing (where applicable and not limited to) the scope,
objectives, assumptions, procedural outline, timelines, forecasts, deliverables, specifications,
requirements, fee summary, and payment schedule for a specific Project.]

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

SCHEDULE C

QUOTE

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

 

 

ATTACHMENT 1

TARGET DATA SHEET

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the
Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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