Document:

Employment Agreement

		
	 	Exhibit 10.94 

 EMPLOYMENT AGREEMENT
          THIS AGREEMENT is made by and between Synbiotics Corporation, a California corporation (“EMPLOYER”) and Brian Kent Luther (“EMPLOYEE”) as of May 12,
2003.
 RECITALS
          WHEREAS, EMPLOYER and EMPLOYEE wish to set forth in this Agreement the
terms and conditions under which EMPLOYEE is to be employed by EMPLOYER.
          NOW, THEREFORE, EMPLOYER and EMPLOYEE, in consideration of the mutual promises
set forth herein, agree as follows:
 ARTICLE 1
          Term. The term of this Agreement
shall commence on the date first written above and shall continue until terminated pursuant to Article 6.
 ARTICLE 2
          Title/Responsibilities.   EMPLOYEE shall serve as an employee of EMPLOYER and hold the position of Vice President, Sales and Marketing of EMPLOYER,
having the powers and responsibilities consistent with such position and reporting to EMPLOYER’s President, all subject to ultimate direction and management of EMPLOYER’s Chief Executive Officer and Board of Directors. EMPLOYEE shall also
perform duties that from time to time are assigned to him by EMPLOYER’s President, Chief Executive Officer and/or Board of Directors, and shall provide the President, Chief Executive Officer and or Board of Directors with periodic reports upon
request. EMPLOYEE’s job location shall be San Diego, California.
          Full Time Attention.  EMPLOYEE shall perform his duties
hereunder in a diligent and professional manner and devote substantially all of his business time and attention, best efforts, energy and skills to EMPLOYER during the time he is employed hereunder as Vice President, Sales and Marketing of EMPLOYER.
During the term of this Agreement EMPLOYEE shall not without the express consent of EMPLOYER’s Board of Directors serve or act as a shareholder (except passive holdings less than 1 % of 
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  the stock), employee, agent, consultant, officer, director, partner, representative or owner of any other business entity, nor (if it would require more than an insubstantial amount of
business time or attention) of any non-profit entity.
          Compliance with Rules.  EMPLOYEE shall comply with all applicable governmental
laws, rules and regulations and with all of EMPLOYER’s policies, rules and/or regulations applicable to all employees of EMPLOYER.
 ARTICLE 3

 COMPENSATION

	 	 
	 	3.1         Base Salary. EMPLOYER shall pay EMPLOYEE seven thousand, seven hundred eight dollars and thirty three cents ($7,708.33) semi-monthly ($185,000 on an annualized
basis) until such time or times as it may discretionarily be raised (but not lowered) upon annual performance/salary review by EMPLOYER’s President (upon recommendation of its Compensation Committee).

 
          Additional Compensation (Stock Option).  In addition to the salary provided in Section 3.1, EMPLOYER may grant to EMPLOYEE as additional compensation for
EMPLOYEE’s services (but not for any capital-raising purposes or in connection with any capital-raising activities), non-qualified stock options to purchase shares of EMPLOYER Common Stock under any Stock Option/Stock Issuance Plan that may be
put in place in the future.
          Bonus.   In addition to the salary provided in Section 3.1, EMPLOYEE shall participate in an annual
executive incentive bonus plan, which EMPLOYER establishes at its discretion each year with a potential of 30% of salary based on achievement of corporate objectives.
 ARTICLE
4
 OTHER BENEFITS
          Fringe Benefits.  EMPLOYEE shall
be entitled during the term of his employment under this Agreement to all other fringe benefits made available from time to time by EMPLOYER to its executives generally and/or its employees generally, including without limitation participation in
EMPLOYER’s 401 (k) plan and group health insurance.
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                      Expenses.   EMPLOYER shall reimburse EMPLOYEE,
not less often than monthly, for reasonable out-of-pocket business expenses incurred by EMPLOYEE in the course of his duties hereunder upon submission by EMPLOYEE of appropriate expense account reports and substantiating receipts.

                    Vacation.   EMPLOYEE shall be entitled to four (4) weeks paid vacation per full
year of service, in accordance with and subject to EMPLOYER’s vacation accrual plan and policies. EMPLOYEE acknowledges the “cap” on vacation accruals set forth in such plans and policies.
                     Relocation.   EMPLOYER will pay EMPLOYEE’s relocation expenses. These expenses
include, but are not limited to, realtor’s commissions, closing costs & fees, moving company and travel expenses. Such expenses shall not exceed $70,000.
 ARTICLE
5
 FORMER EMPLOYMENT
                     5.1         No Conflict    EMPLOYEE represents and
warrants that the execution and delivery by him of this Agreement, his employment by EMPLOYER and his performance of duties under this Agreement will not conflict with and will not be constrained by any prior employment or consulting agreement or
relationship, or any other contractual obligation.
                     5.2
        No Use of Prior Confidential Information.   EMPLOYEE will not intentionally disclose to EMPLOYER or use on its behalf any confidential information belonging to any of his former employers,
but during his employment by EMPLOYER he will use in the performance of his duties all information (but only such information) which is generally known and used by persons with training and experience comparable to his own or is common knowledge in
the industry or otherwise legally in the public domain.
 ARTICLE 6
 TERMINATION
                     6.1         Term.   This Agreement (including
EMPLOYEE’S employment) shall continue until terminated by either EMPLOYER or EMPLOYEE. Such termination (including termination of EMPLOYEE’s employment) shall be effected by written notification and may be effected at any time, with or
without Cause, for any reason or no reason.
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                      6.2        
Severance.  If this Agreement and/or EMPLOYEE’s employment is terminated as a result of Cause, EMPLOYEE shall be entitled to no severance pay. If this Agreement and/or EMPLOYEE’s employment is terminated other than for Cause,
EMPLOYEE shall be entitled to six (6) months’ severance pay.
 Furthermore, if EMPLOYEE is terminated (other than for Cause) in connection with an acquisition of EMPLOYER, EMPLOYEE shall be entitled to
additional severance pay of six (6) months’ salary at EMPLOYEE’s then base salary rate (as well as the severance pay described in the previous paragraph) and all of EMPLOYEE’s then unvested EMPLOYER stock options shall immediately
become fully vested.
                     “Cause” shall be defined to mean:
                    (a) Death;
                    (b) Voluntary resignation (other than because of a material breach by EMPLOYER of its obligations under this
Agreement, or reassignment of EMPLOYEE to a location outside of San Diego County)
                    (c)
EMPLOYEE’s repudiation of this Agreement;
                    (d) Permanent disability (defined as
EMPLOYEE’s inability to perform, with or without reasonable accommodation, the essential functions of his position for any 50 business days -- exclusive of vacation days taken -- within any continuous period of 200 days by reason of physical or
mental illness or incapacity);
                    (e) EMPLOYEE being formally charged with the commission of a
felony, or being convicted of a misdemeanor involving moral turpitude;
                    (f) EMPLOYEE’s
demonstrable fraud or dishonesty;
                    (g) EMPLOYEE’s use of alcohol, drugs or any illegal
substance in such a manner as to interfere with the performance of his duties under this Agreement;
                    (h) EMPLOYEE’s intentional, reckless or grossly negligent action materially detrimental to the best
interest of the EMPLOYER, including any misappropriation or unauthorized use of EMPLOYER’s property or improper use or disclosure of confidential information (but excluding any good faith exercise of business judgment);
                    (i) EMPLOYEE’s intentional failure to perform material duties under this Agreement if such failure has
continued for 15 days after EMPLOYEE has been notified in writing by EMPLOYER of the nature of EMPLOYEE’s failure to perform;
                    (j) EMPLOYEE’s chronic absence from work for reasons other than illness or permitted vacation;

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                     (k) EMPLOYEE’s failure to satisfactorily perform assigned duties
as outlined in the Vice President, Sales & Marketing job description or satisfactorily achieve agreed annual performance objectives except as caused by outside or uncontrollable events as determined by the EMPLOYER’s President;
or,
                    (l) EMPLOYEE’s violation of policies in EMPLOYER’s official Employee Handbook,
as it may be amended from time to time.
                    Termination for Cause shall be without prejudice to
any other right or remedy to which EMPLOYER may be entitled at law, in equity, or under this Agreement.
 ARTICLE 7
   ARBITRATION
                     7.1
        Final and Binding Arbitration.  Any controversy, claim or dispute between (a) a party to this Agreement, on the one hand, and (b) the other party to this Agreement and/or such second
party’s parents, subsidiaries or affiliates and/or any of their directors, officers, employees, agents, successors, assigns, heirs, executors, administrators, or legal representatives, on the other hand, arising out of, in connection with, or
in relation to (c) the interpretation, validity, performance or breach of this Agreement, (d) EMPLOYEE’s stock options and the underlying shares, (e) EMPLOYEE’s employment by EMPLOYER, (f) any termination of such employment, (g) any
actions during or with respect to EMPLOYEE’s work for EMPLOYER, (h) any claims for breach of contract, tort, or breach of the covenant of good faith and fair dealing, or (i) any claims of discrimination or other claims under any federal, state
or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way the subject of EMPLOYEE’s employment with EMPLOYER or its termination, shall, at the request of either party, be resolved
to the exclusion of a court of law by binding arbitration in San Diego, California, in accordance with Exhibit A hereto. Each of EMPLOYEE and EMPLOYER understands and agrees that the arbitration shall be instead of any civil litigation and that the
arbitrator’s decision shall be final and binding to the fullest extent permitted by law and enforceable by any court having jurisdiction thereof. The only claims not covered by this Section 7.1 are claims for benefits under the workers’
compensation laws, claims for unemployment insurance benefits, and
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   matters within the jurisdiction of the California Labor Commissioner, which will be resolved pursuant to those laws.
 ARTICLE 8 
 GENERAL PROVISIONS
                     8.1         Governing Law.   This Agreement and the
rights of the parties thereunder shall be governed by and interpreted under California law.
                     8.2         Assignment.   EMPLOYEE may not delegate,
assign, pledge or encumber his rights or obligations under this Agreement or any part thereof.
                     8.3         Notice.  Any notice required or permitted
to be given under this Agreement shall be sufficient if it is in writing and is sent by registered or certified mail, postage prepaid, or personally delivered, to the following addresses, or to such other addresses as either party shall specify by
giving notice under this section:

		
	TO EMPLOYER:	President,
 Synbiotics Corporation 
11011 Via Frontera San 
Diego, CA 92127
	 	 
	Copy to:	Hayden J. Trubitt
 Brobeck, Phleger & Harrison LLP
 12390 El Camino Real
 San Diego, CA 92130
	 	 
	TO EMPLOYEE:	B. Kent Luther
 c/o Synbiotics Corporation
 11011 Via Frontera 
San Diego, CA 92127

                     8.4         Amendment.   This Agreement may be waived,
amended or supplemented only by an express writing signed by both of the parties hereto. To be valid, EMPLOYER’s signature must be by a person specially authorized by EMPLOYER’s Board of Directors to sign such particular
document.
                     8.5        Waiver.   No
waiver of any provision of this Agreement shall be binding unless and until set forth expressly in writing and signed by the waiving party. To be valid, EMPLOYER’s signature must be by a person specially authorized by EMPLOYER’s Board of
Directors to sign such particular document. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach of the same or any other term or provision, or
a waiver of any
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  contemporaneous breach of any other term or provision, or a continuing waiver of the same or any other term or provision. No failure or delay by a party in exercising any right, power,
or privilege hereunder or other conduct by a party shall operate as a waiver thereof, in the particular case or in any past or future case, and no single or partial exercise thereof shall preclude the full exercise or further exercise of any right,
power, or privilege. No action taken pursuant to this Agreement shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein.
                     8.6         Severability.  All provisions contained
herein are severable and in the event that any of them shall be held to be to any extent invalid or otherwise unenforceable by any court of competent jurisdiction, such provision shall be construed as if It were written so as to effectuate to the
greatest possible extent the parties’ expressed intent; and in every case the remainder of this Agreement shall not be affected thereby and shall remain valid and enforceable, as if such affected provision were not contained herein.

                    8.7         Headings.  Article and section
headings are inserted herein for convenience of reference only and in no way are to be construed to define, limit or affect the construction or interpretation of the terms of this Agreement.
                     8.8         Drafting Party.  The provisions of this
Agreement have been prepared, examined, negotiated and revised by each party hereto, and no implication shall be drawn and no provision shall be construed against either party by virtue of the purported identity of the drafter of this Agreement, or
any portion thereof.
                     8.9         No Outside
Representations.  No representation, warranty, condition, promise, understanding or agreement of any kind with respect to the subject matter hereof has been made by either party, nor shall any such be relied upon by either party,
except those contained herein. There were no inducements to enter into this Agreement, except for what is expressly set forth in this Agreement.
                     8.10         Entire Agreement.  This Agreement,
together with EMPLOYER’s standard Proprietary Information and Inventions Agreement, constitutes the entire agreement between the parties pertaining to the subject matter hereof and completely supersedes all prior or contemporaneous agreements,
understandings, arrangements, commitments, negotiations and discussions of the parties, whether oral or written (all of which shall have no substantive significance or evidentiary effect). Each party acknowledges, represents and warrants that he or
it has not relied on any representation, agreement, understanding, arrangement or commitment which has not been expressly set forth in this Agreement. Each party
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  acknowledges, represents and warrants that this Agreement is fully integrated and not in need of parol evidence in order to reflect the intentions of the parties. The parties
specifically intend that the literal words of this Agreement shall, alone, conclusively determine all questions concerning the parties’ intent.
          IN
WITNESS WHEREOF, the parties have executed and delivered this Employment Agreement in San Diego, California as of the date first written above.

		
	  	SYNBIOTICS CORPORATION
	  	 
	  	 
	  	/s/ PAUL R. HAYS
	  	

	 	Paul R. Hays, President
	 	 
	 	 
	  	/s/ B. KENT LUTHER
	  	

	  	Brian Kent Luther

 Attachment: Exhibit A (Arbitration Procedures)
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  EXHIBIT A
 ARBITRATION PROCEDURES
          1.   Agreement to Arbitrate
          In the event that there is
any dispute relating to, regarding or arising in connection with EMPLOYEE’s employment with EMPLOYER which cannot be resolved through direct discussion or mediation, regardless of the kind or type of dispute (excluding claims for
workers’ compensation, unemployment insurance or any matters within the jurisdiction of the California Labor Commissioner), all such disputes shall be submitted exclusively to final and binding arbitration pursuant to the provisions of the
Federal Arbitration Act or, if inapplicable, the Uniform Arbitration Act (California Code of Civil Procedure § 1280 et seq.), upon request submitted in writing to the President within one year from the date the dispute first arose, or within
one year of the date of termination of employment, whichever occurs first. This procedure shall be the exclusive method for resolving all claims relating to the termination of EMPLOYEE’s employment, including but not limited to any alleged
violations of federal, state and/or local statutes; all claims based upon any purported breach of duty arising in contract or tort, including but not limited to breach of contract, breach of the covenant of good faith and fair dealing, or violation
of public policy; and any other alleged violation of an employee’s statutory, contractual or common law rights.
          Any failure to request arbitration
in accordance with the foregoing provisions shall constitute a waiver of all rights to raise or present any claims in any form, in any forum, arising out of any dispute that was subject to arbitration.
          2.   Selection of Arbitrator
          All disputes subject to
arbitration will be resolved by a single arbitrator selected from a list provided by the California Mediation and Conciliation Service from its Employment Arbitration Panel. The parties shall select the arbitrator by alternately striking names from
the list, and the last name remaining on the list shall be the arbitrator selected to resolve the dispute. The arbitrator must be selected within thirty (30) days of receipt of the written request for arbitration. The arbitration hearing shall be
held in San Diego, California, at a neutral location selected by the parties or, in the event the parties are unable to agree, at a location designated by the arbitrator.
 A-1

           3.   Authority of Arbitrator
          The arbitrator shall only be authorized to exercise the powers specifically enumerated by this procedure and to decide the dispute in accordance with governing principles
of law and equity. The arbitrator shall have no authority to modify the powers granted by the terms of this procedure or to modify the terms of the employee handbook, except as required by law. The arbitrator shall have the authority to rule on
motions by the parties, to issue protective orders upon motion of any party or third party, and to determine only the disputes submitted by the parties based upon the grounds presented. Any dispute or argument not presented by the parties is outside
the scope of the arbitrator’s jurisdiction and any award invoking such disputes or arguments is subject to a motion to vacate; provided, however, the arbitrator shall have exclusive authority to resolve any dispute relating to the validity,
interpretation and enforcement of these arbitration procedures.
          4.   Discovery
          The arbitrator shall have the power, in addition to determining the merits of the dispute submitted, to permit discovery regarding the subject matter of arbitration and to
enforce the rights, remedies, procedures, duties, liabilities and obligations of discovery by the imposition of the same terms, conditions, consequences, liabilities, sanctions and penalties as may be imposed in like circumstances by a Superior
Court under the California Code of Civil Procedure. All discovery must be completed thirty (30) days prior to the date set for the arbitration hearing.
          5.   Hearing Procedure
          The issue(s) submitted to the
arbitrator must be set forth in the request for arbitration. The arbitrator shall have no authority to frame the statement of the issue(s). Unless otherwise agreed by the parties, the arbitration hearing shall be governed by the formal rules of
evidence contained in the California Evidence Code. The parties shall mutually agree on the number of days required for hearing. The hearing shall be recorded and transcribed verbatim by a certified shorthand reporter. Each party shall bear its own
costs with respect to a copy of the transcript of the hearing; however, the parties shall each be responsible for one-half the cost of the court reporter’s fee and the arbitrator’s copy of the hearing transcript.
 A-2

           6.   Post-Hearing Procedure
          Each party shall have the right to present closing argument at the conclusion of all sworn testimony and, in addition to or in lieu of closing argument, either party shall
have the right to submit post-hearing briefs. The due date and procedure for exchanging post-hearing briefs shall be mutually agreed upon by the parties or as directed by the arbitrator.
          7.   Opinion and Award
          The arbitrator shall issue a
written opinion and award within sixty (60) days of closing arguments or the receipt of post-hearing briefs, whichever is later. The arbitration award and opinion shall be signed and dated by the arbitrator and shall decide all issues submitted and
set forth the legal principles supporting each aspect of the opinion and award. The arbitrator shall only be permitted to award those remedies in law or equity which are requested by the parties and which are supported by the credible, relevant
evidence. The arbitrator shall have no authority to award punitive or exemplary damages under any circumstances or for any reason.
          8.  
Fees and Costs
          Each party shall be responsible for its own attorney’s fees, except as provided by law, and for all costs associated with
discovery unless otherwise ordered by the arbitrator. Each party shall also be responsible for one-half of the arbitrator’s fee and one-half of any costs associated with the facilities for the arbitration hearing.
          9.   Severability
          In the event that any provision of
this procedure is determined by the arbitrator or by a court of competent jurisdiction to be illegal, invalid, or unenforceable to any extent, such term or provision shall be enforced to the extent permissible under law and all remaining terms and
provisions hereof shall continue in full force and effect.
 A-3Contract Development and Manufacturing Agreeement

	 	Exhibit 10.95

 CONTRACT DEVELOPMENT and MANUFACTURING AGREEMENT
 This Agreement is made and entered into this 16th day of June, 2003, by and between Synbiotics Corporation, a California corporation, having its principal office at 11011 Via Frontera, San Diego, CA 92127
(“SYNBIOTICS”) and [*], having its principal office at [*] (“[*]”).
          WHEREAS, SYNBIOTICS manufactures, or causes to
have manufactured certain products as defined in Exhibit A and incorporated into this Agreement by attachment (hereinafter referred to as The Products); and,
          WHEREAS, [*] has experience in the development, production, manufacture, marketing and sale of products and/or the use of similar products to The Products;
and,
          WHEREAS, [*] desires to obtain and SYNBIOTICS wishes to grant exclusive rights to manufacture and supply The Products.
          NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, the Parties hereto agree as follows:
 1.   DEFINITIONS
          For purposes of this Agreement, the following words and phrases shall have the following
meanings.
          1.1.      “Affiliate” shall mean all entities at least fifty percent (50%) directly or indirectly
owned or controlled by a Party, an entity which directly or indirectly owns or controls more than fifty percent (50%) of the voting stock of a Party, and any entity, the control or majority ownership of which is directly or indirectly common to the
ownership of a Party.
          1.2.      “Calendar Year” shall mean, with respect to the first Calendar Year, the
period commencing on the Effective Date and ending on December 31 of the same year. All subsequent Calendar Years shall commence on January 1 and end on December 31 of each year thereafter.
          1.3.      “Calendar Quarter” shall mean a period of three (3) consecutive Calendar Months ending on March 31, June 30, September
30 and December 31 of any Calendar Year.
          1.4.      “Month(s)” shall mean each successive thirty day
period.
          1.5.      “Effective Date” means the date first noted above.
          1.6.      “Know-How” shall mean any proprietary information and Materials.
          1.7.      “Material” shall mean any components or derivatives used in the manufacture of The Products.
          1.8.      “Unit Sales” shall mean SYNBIOTICS’ actual gross units sold of The Products less the sum of the
following:

		
	 	           1.8.1.      actual or quantity discounts allowed, if any;

		
	 	           1.8.2.      units actually repaid or credited by reason of rejection or
return

 
          1.9.      “Party” or “Parties” shall mean SYNBIOTICS or
[*], or both, as the context indicates.
 [*] -Certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text (the “Mark”). This Exhibit has been filed
separately with the Secretary of the Securities and Exchange Commission without the Mark pursuant to an Application Requesting Confidential Treatment under Rule 12b-24 under the Securities Exchange Act of 1934.
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	 	1.10.    	 “Test” shall mean one (1) unit of product (e.g., one (1) lateral flow device, one flow-through device).

 

			
	 	1.11.    	 “USDA” shall mean United States Department of Agriculture.

 
 2.   GRANT
          2.1.      SYNBIOTICS hereby grants to [*] the exclusive worldwide right to make The Products, except that SYNBIOTICS reserves the sole right for
its Affiliate Synbiotics Europe, SA to develop and manufacture its own feline leukemia virus Test, during the term of this Agreement, unless this Agreement is terminated sooner as provided herein. This license cannot be assigned, or sublicensed
without SYNBIOTICS’ prior written consent. The license rights granted hereby are subject to the rights of the United States government, if any, as set forth in 35 USC Section 200, et seq. To the extent SYNBIOTICS provides or licenses to [*] any
Know-How, such licenses cannot be assigned or sublicensed without SYNBIOTICS’ prior written consent, and [*] shall protect the Know-How the same as it protects [*]’s proprietary and confidential information. Article 8 shall apply
thereto.
 3.   SUPPLY TERMS
          3.1.      [*] shall be the exclusive
supplier of The Products to SYNBIOTICS for the term of this Agreement, unless this Agreement is earlier terminated as provided in Article 11. Each Party shall use reasonable efforts to supply each other with all requirements of Material and Tests
for the development, commercialization, and ongoing sale of The Products.
          3.2.     [*] shall supply The Products to SYNBIOTICS
for a minimum of two years from the date of the first accepted order at a price of [*] (USD) per assembled and pouched Test upon SYNBIOTICS’ submission of a purchase order and [*]’s acceptance of such purchase order. [*] shall use its best
efforts to accept and perform all purchase orders that have a lead time of at least thirty (30) days. No confirmation form shall be effective to vary the terms set forth in this Agreement. Such a price rate assumes that each Test shipped is created
with Materials supplied by SYNBIOTICS as set forth in Exhibit B. Materials provided by SYNBIOTICS shall at all times remain the property of SYNBIOTICS and cannot be transferred by [*] to anyone else. All prices are exclusive of taxes, freight and
insurance, all of which shall be the obligation of SYNBIOTICS. [*] reserves the right, upon thirty (30) days prior written notice to [*], to raise prices to cover increased costs, but under no circumstances shall this exceed [*] annually. The
minimum size of a purchase order shall be [*] Tests. SYNBIOTICS shall pay [*] within thirty (30) days of receipt of an invoice from [*], provided the Tests have been shipped by [*] before the sending of the invoice and are satisfactory.

4.   DEVELOPMENT OF THE PRODUCTS
          4.1.      [*] shall use its best efforts to
develop The Products for commercial sale. Subject to Article 15, SYNBIOTICS and [*] mutually agree shall use their respective best efforts to develop and submit applications for USDA approval of the first three listed of The Products within six (6)
Months of the Effective Date.
 5.   ROYALTIES AND OTHER CONSIDERATION
          5.1.
     So long as [*] is complying with Section 4.1, SYNBIOTICS will pay to [*] a development fee in the amount of [*] per Month (as defined in Section 1.4) to maximum fee of [*]. The first Month’s fee is payable upon
execution of this Agreement, the rest are payable in arrears upon invoicing .
          5.2.      As additional incentive, SYNBIOTICS
will pay to [*] a performance bonus based upon submission time to the USDA of all three of the first three listed products listed in Exhibit A, providing that the USDA finds all three submissions acceptable. The performance bonus will be paid
according to the following scale and will be paid within 30 days after approval by USDA.

			
	  	5.2.1.	[*] for submission within 3 Months or less of execution of this Agreement
	 	 	[*] for submission between 3 and 4 Months after execution of this Agreement
	 	 	[*] for submission between 4 and 5 Months after execution of this Agreement

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	 	 	[*] for submission between 5 and 6 Months after execution of this Agreement

          5.3.      In the event that SYNBIOTICS shall terminate the Supply portion of this Agreement, SYNBIOTICS shall provide a 12 Months notice of its
intent to terminate, and upon such termination shall pay to [*] within 30 days following the end of each Calendar Quarter, a royalty of [*] per Test sold by SYNBIOTICS or its Affiliates for the unexpired term of this Agreement.
          5.4.      [*] grants to SYNBIOTICS a right of first offer to market and sell to its markets and customers any animal health products developed by
[*] during the term of this Agreement, unless [*] chooses to market and sell such Products directly, and not through another Party. The offer shall be in writing. SYNBIOTICS will have 45 days from the date of receipt of the offer to accept or reject
it. No response will be a rejection. After rejection, [*] shall have 180 days to enter into an Agreement with anyone else provided the terms and conditions of the Agreement can be no more favorable to the customer than what was offered to
SYNBIOTICS. After 180 days, [*] would have to go through a right of first offer procedure again.
 6.   REPORTS AND RECORDS
          6.1.      In the event that SYNBIOTICS shall have moved the manufacturing according to Section 11.2.2 of this Agreement, SYNBIOTICS shall deliver
to [*] true and accurate reports of the following information in a form reasonably acceptable to [*] to accompany royalty payments of Article 5.3 above:

			
	 	6.1.1.	Unit Sales for all of The Products sold by SYNBIOTICS and its Affiliates for the Calendar Quarter;
	 	6.1.2.	total royalties due.

          6.2.      If no royalties shall
be due hereunder, SYNBIOTICS shall so advise [*] in writing within thirty (30) days after the end of any Calendar Quarter for which no royalties are due.
          6.3.      SYNBIOTICS shall keep full true and accurate books of account, in accordance with generally accepted accounting principles, containing
all information that may be necessary for the purpose of showing the amounts payable to [*] hereunder. Said books of account shall be kept at SYNBIOTICS’ principal place of business. Said books and the supporting data shall be open at all
reasonable times upon reasonable notice for two (2) years following the end of the Calendar Year to which they pertain, to the inspection at [*]’s expense of a certified public accountant reasonably acceptable to SYNBIOTICS for the purpose of
verifying SYNBIOTICS’ royalty statement or compliance in other respects with this Agreement; provided, however, if an audit correctly discloses that the royalties payable by SYNBIOTICS for any audited period are more than [*] of the royalties
actually payable for such period, then SYNBIOTICS shall pay the fees and expenses charged by the accountant. Such accountant will not disclose to [*] any information other than the accuracy of SYNBIOTICS reports and calculations.
          6.4.     [*] and SYNBIOTICS agree that copies of all records pertaining to Know-How for production of The Products including all manufacturing
SOP’s, Bills of Material, sources of product components, label records, and directions-for-use will be kept for safe keeping with [*]. These copies of all records shall remain the property of [*] until such time as this contract is terminated
as provided for in Section 11.2 herein, at which time, [*] will convey all such records to SYNBIOTICS.
 7.   REPRESENTATIONS / INDEMNIFICATION / LIMITATION OF LIABILITY
          7.1.      SYNBIOTICS represents and warrants to [*] that it has full right and authority to perform its obligations under this Agreement, and that
it has no relationship with any other entity that would preclude it from carrying out its obligations under this Agreement.
          7.2.
     The Parties each agree to hold the other Party, their trustees, directors, officers, employees, agents and Affiliates harmless from any and all claims and expenses, including legal expenses and reasonable attorney fees
arising from possible infringement upon the intellectual property or proprietary rights of any other Party resulting from the other Party’s performance of its obligations under this Agreement.
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           7.3.     [*] shall at all times during the term of this Agreement and thereafter, indemnify, defend and
hold SYNBIOTICS, their trustees, directors, officers, employees, agents and Affiliates, harmless against all claims and expenses, including legal expenses and reasonable attorney fees, arising out of the death of or injury to any person or persons
or out of any damage to property or the environment, and against any other claim, proceeding, demand, expense and liability of any kind whatsoever resulting from the production, manufacture, sale, use, lease, consumption or advertisement of The
Products or arising from any obligation of [*] hereunder.
          7.4.     [*] warrants to SYNBIOTICS that, for a period of 12 Months
after delivery of each respective unit of The Products to SYNBIOTICS that The Products shall be free from defects in Materials and workmanship (other than Materials provided by SYNBIOTICS) and shall be in compliance with all USDA licenses and with
the requirements of Exhibit A hereto. Except as otherwise expressly set forth in this Agreement, [*] makes no representations and extends no warranties of any kind, either express or implied, including but not limited to warranties of
merchantability, fitness for a particular purpose, and validity of patent rights claims, issued or pending.
 8.    CONFIDENTIALITY
          8.1.     Each Party agrees, both during the term of this Agreement and for a period of five (5) years thereafter, to hold all information given to
it by the other Party that is identified as confidential (the “Confidential Information”), in confidence, and not to make the Confidential Information available in any form to any third Party or to use the Confidential Information for any
purpose other than the purposes described in this Agreement. Each Party agrees to take all reasonable steps to ensure that Confidential Information is not disclosed or distributed by its employees or agents in violation of this Agreement, including
limiting disclosure to employees or other persons who have a need to know and who have signed appropriate Confidentiality Agreements. This restriction on disclosure shall not apply to the extent that any Confidential Information (a) is or becomes a
part of the public domain through no act or omission of the receiving Party; (b) was in the receiving Party’s lawful possession prior to the disclosure and had not been obtained by the receiving Party from the disclosing Party as evidenced by
written records; (c) is lawfully disclosed to the receiving Party by a third Party without restriction on disclosure; (d) is independently developed by the receiving Party by personnel not having access to the Confidential Information as evidenced
by written records; or (e) is required by a court order, law or government regulation to be disclosed, provided the receiving Party gives prompt written notice to the disclosing Party of such requirement and reasonably cooperates with the disclosing
Party in protecting the confidentiality of such information.
 9.   ASSIGNMENT
          9.1.     This Agreement is not assignable and the licenses hereunder are not sublicensable without the prior written consent of the other Party,
which consent may for any reason be withheld; provided, however, such consent shall not be required in the case of a sale or other transfer to a third Party of all or substantially all the assets relating to the subject matter of this
Agreement.
 10.    DISPUTE RESOLUTION
          10.1.      If one of the
Parties hereto declares that a dispute between the Parties has arisen related to or arising out of this Agreement, such dispute shall, in the first instance, be the subject of a meeting between the Parties to negotiate a resolution of such dispute.
The meeting shall be attended by individuals from each Party who have decision making authority with respect to the matter in question. Should the negotiations not lead to a settlement of the dispute within fifteen (15) days of the date of the
meeting, the Parties shall refer the dispute to a mutually agreeable mediation service to resolve the dispute. If the mediation does not lead to a settlement of the dispute within twenty-one (21) days of the date of that meeting, then the Parties
shall submit the issue to arbitration before a panel of arbitrators under the rules of the American Arbitration Association, or rules mutually agreeable to the Parties. The panel of arbitrators shall consist of three Parties: one selected by each
Party as well as a disinterested third Party that the two arbitrators shall name, such third arbitrator having experience in the business of animal health products. The arbitrators shall be given full power to decide the location of the hearing and
to hear and finally determine and dispose of all disputes between the Parties that may arise from or that are related to this Agreement and will make their ruling in writing no later than thirty (30) days after the hearing. The decision and/or award
rendered by the arbitrators shall be final and binding. No Party has the right to appeal the ruling, to any court or otherwise. Each Party shall pay its own attorney fees and all fees and expenses payable with respect to the mediation 
 4

  and arbitration proceeding, including reasonable attorney fees and expert witness fees. Arbitration association fees shall be shared by both Parties.
 11.    TERM AND TERMINATION
          11.1.      This Agreement shall be effective as of the
Effective Date and for a period of five (5) years from the Effective Date, unless this Agreement is earlier terminated as provided in Paragraph 11.2 or 11.3, and shall automatically renew for an additional two (2) year period unless either Party
provides written notification to the other Party of its intention not to renew at least one-hundred and eighty (180) days prior to the expiration of the initial five (5) year period.
          11.2.      SYNBIOTICS shall have the right to terminate this Agreement if:

	                       11.2.1.     [*] shall default in the performance of
any of the Material obligations herein contained and such default has not been cured within forty-five (45) days after receiving written notice thereof from SYNBIOTICS; or

 

	                       11.2.2.     [*] shall cease to carry out its
business, shall be adjudged bankrupt or insolvent, shall apply for or consent to the appointment of a trustee, receiver or liquidator of its assets or shall voluntarily seek relief under any law for the aid of debtors.

         11.3.      [*] may terminate this Agreement upon twelve (12) Months’ prior written notice to SYNBIOTICS.
          11.4.      Upon termination of this Agreement, neither Party shall be released from any obligation that matured prior to the Effective Date of such
termination. Upon termination, [*] shall immediately return to SYNBIOTICS all Materials and equipment owned or supplied by SYNBIOTICS.
          11.5.
     Articles 5.3, 7.2, 7.3, 8, 9 and 10 shall survive the termination or expiration of this Agreement. Upon the termination or expiration of this Agreement, the receiving Party of Confidential Information shall return all
such Confidential Information and any copies, extracts, reflections, analysis and derivatives thereof to the disclosing Party, except one copy of such Confidential Information may be retained in the legal files of the receiving Party for compliance
purposes.
 12.    TRANSFER RIGHTS AND OBLIGATIONS
          12.1.      If
SYNBIOTICS elects to move manufacturing of The Products to its own facility per paragraph 11.2.2, [*] will have a surviving obligation to provide reasonable efforts in affecting the transfer of Know-How, including providing up to five (5) man days
of direct assistance to SYNBIOTICS to facilitate the transfer of manufacturing activities and the supporting Know-How. At its option, SYNBIOTICS may purchase additional consulting time beyond the five days at the rate of [*] per day.

         12.2.      All raw Materials provided by SYNBIOTICS involved with the manufacture of the transferred product(s) are to be returned to
SYNBIOTICS at that time.
 13.   NOTICES
          13.1.      Any notice or
communication pursuant to this Agreement shall be sufficiently made or given if sent by certified, first-class mail, postage prepaid, addressed to the address below or as either Party shall designate by written notice to the other Party.

		
	 	 
	 	In the case of SYNBIOTICS:

 

		
	 	Synbiotics Corporation
	 	11011 Via Frontera,
	 	San Diego, CA 92127
	 	Attention: President

 5

		
	 	In the case of [*]:

 

		
	 	[*]

 14.    AMENDMENT, MODIFICATION
          14.1.      This Agreement may not be amended or modified except by the execution of a written instrument signed by the Parties hereto.

15.   GOVERNMENT APPROVALS AND RELATED DOCUMENTS
          15.1.      [*] shall be
responsible for obtaining at its own expense all government approvals required for sale of The Products. [*] shall be solely responsible for conducting any clinical trials needed for such approvals. In the event that government agency user fees are
imposed during this Agreement, or fees are required to obtain data from external sources, such fees will be the obligation of SYNBIOTICS.
          15.2.
     SYNBIOTICS shall, at its own expense, provide [*] any information in SYNBIOTICS’ possession that would be useful to [*] in government filings to initiate and complete government approval of The Products and labels
for The Products.
 16.   MISCELLANEOUS
          16.1.      This Agreement
shall be construed and interpreted in accordance with the laws of the State of California, but the scope and validity of any patent or patent application will be governed by the applicable laws of the country of the patent or patent
application.
          16.2.      The Parties acknowledge that this Agreement sets forth the entire understanding and Agreement of the
Parties hereto as to the subject matter hereof and supersedes all previous and contemporaneous understandings between the Parties, written or oral, regarding such subject matter.
          16.3.      The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
          16.4.      Nothing contained in this Agreement shall be construed as
conferring any right to use in advertising, publicity or other promotional activities any name, trade name, trademark, logo, or other designation (including any contraction, abbreviation, or simulation of any of the foregoing). Without the express
written approval of the other Party, neither Party shall use any designation of the other Party in any promotional activity associated with this Agreement or the The Products without the express written consent of the other Party. Neither Party
shall issue any press release or make any public statement in regard to this Agreement without the prior written approval of the other Party, except to the extent required by law.
          16.5.      If one or more of the provisions of this Agreement shall be held invalid, illegal or unenforceable, the remaining provisions shall not
in any way be affected or impaired thereby. In the event any provision is held illegal or unenforceable, the Parties shall use reasonable efforts to substitute a valid, legal and enforceable provision which, insofar as is practical, implements
purposes of the provision held invalid, illegal and unenforceable.
          16.6.      Failure at any time to require performance of any
of the provisions herein shall not waive or diminish a Party’s right thereafter to demand compliance therewith or with any other provision. Waiver of any default shall not waive any other default. A Party shall not be deemed to have waived any
rights hereunder unless such waiver is in writing and signed by a duly authorized officer of the Party making such waiver.
          16.7.
     Neither Party shall be held responsible for the failure or delay in performance herein when such failure or delay is due to any act of God or of the public enemy, war, fire, flood, epidemic, strikes and labor
interruption, accident, unusually severe weather or other causes similar to the foregoing beyond their reasonable control. Any Party whose performance is affected by such force majeure shall promptly give notice to the other Party of such force
majeure upon which such Party intends to rely to excuse its performance. And the time for
 6

  performance shall be extended day-for-day for the duration of the force majeure. If the force majeure delays performance for more than ninety (90) days, then the other Party may
terminate this Agreement immediately upon written notice.
          16.8.      The relationship between [*] and SYNBIOTICS under this
Agreement shall be that of independent contractors engaged in the operation of their own respective businesses. Nothing in this Agreement is intended or is to be construed to constitute SYNBIOTICS and [*] as partners, employer/employee, or
principal/agent, or the employees or agents of any Party hereto as employees or agents of the other Party. Neither Party has the express or implied right or authority to assume or create any obligations for or on behalf of the other Party, to bind
the other Party to any contract or undertaking with any third Party or to make any warranties or representations for or on behalf of the other Party and each agrees not to purport to do so.
 
 IN
WITNESS WHEREOF, the Parties have executed this Agreement by their respective and duly authorized officers.

			 		
	SYNBIOTICS CORPORATION	 	[*] 
	 		 		
	By:	/s/ PAUL R. HAYS	 	By:	/s/ [*]
	 	 
 	 	 	 
 
	 	 	 	 	 
	Name:   	Paul R. Hays	 	Name:   	[*]
	 	 	 	 	 
 
	Title:   	President & Chief Operating Officer	 	Title:   	President
	 	 	 	 	 
 
	Date:   	6/16/03	 	Date:   	6/16/03
	 	 
 	 	 	 
 

 
 
 7

  EXHIBIT A
  The Products
 List of The Products and
the performance criteria for final product:
 1.         CANINE HEARTWORM ANTIGEN TEST, in-clinic, assembled and pouched single-Test, using the lateral-flow
immunochromatographic format, all configured as near as may be to the ICT format utilized in the Witness® Tests manufactured for SYNBIOTICS by Agen in the first quarter of 2003, and with the same form factor and look, feel and appearance as the
Agen-manufactured products.
 Sensitivity and Specificity established based on using samples from necropsy confirmed heartworm infections or dogs experimentally infected with heartworm.
             [*]
 Fully functional canine heartworm antigen Test device pouched and packaged with desiccant. Pouch to be
video inkjet printed with canine heartworm description, lot number and expiration date, and SYNBIOTICS marks as identified by SYNBIOTICS from time to time.
 2.         
FELINE LEUKEMIA ANTIGEN TEST, in-clinic, assembled and pouched single-Test, using the lateral-flow immunochromatographic format, all configured as near as may be to the ICT format utilized in the Witness® Tests manufactured for SYNBIOTICS
by Agen in the first quarter of 2003, and with the same form factor and look, feel and appearance as the Agen-manufactured products.
 Previous work was performed by Agen and Rhone Merieux, Inc. on samples
characterized by either IFA or ELISA.
             [*]
 Fully functional feline leukemia virus antigen Test device pouched and packaged with
desiccant. Pouch to be video inkjet printed with FeLV description, lot number and expiration date, and SYNBIOTICS marks as identified by SYNBIOTICS from time to time.
 3.
        CANINE PARVOVIRUS ANTIGEN TEST, in-clinic, assembled and pouched single-Test, using the lateral-flow immunochromatographic format, all configured as near as may be to the ICT format utilized in the
Witness® Tests manufactured for SYNBIOTICS by Agen in the first quarter of 2003, and with the same form factor and look, feel and appearance as the Agen-manufactured products.
 Hemagglutination titers
of known positive fecal samples used to calculate product performance. 
            [*]
 Fully functional canine parvovirus antigen Test device
pouched and packaged with desiccant. Pouch to be video inkjet printed with the parvo description, lot number and expiration date, and SYNBIOTICS marks as identified by SYNBIOTICS from time to time.
 4.
         EHRLICHIA CANIS (not currently licensed)
             To constitute a Product only when the Parties mutually agree on sensitivity
and specificity requirements. 
Fully functional Ehrlichia canis antibody Test device pouched and packaged with desiccant. Pouch to be video inkjet printed with the Ehrlichia description, lot number and expiration date, and SYNBIOTICS marks as
identified by SYNBIOTICS from time to time.
 Performance criteria in Section 7 must be met for the canine heartworm, feline leukemia and Ehrlichia canis Tests using whole blood, plasma and serum. The
performance criterion for canine parvovirus is met by testing canine fecal samples.
 8

  EXHIBIT B
  SYNBIOTICS Biologicals and Packaging Components Supplied to [*]

Biologicals:

		
	1. 	    Canine Heartworm Antigen

		
	 	 
	 	Canine Heartworm Antisera (Polyclonal) – USDA product code E019.00 
 Canine Heartworm Monoclonal Antibody – USDA product code E118.00

 

		
	2. 	    Feline Leukemia Virus Antigen

		
	 	 
	 	Feline Leukemia Virus Antisera (Polyclonal) – USDA Code E028.01 
 Feline Leukemia Virus Monoclonal Antibody – USDA Code E028.00

		
	3. 	     Canine Parvovirus Antigen

		
	 	 
	 	Anti-Parvo Virus Antiserum (Polyclonal) – USDA registered product code E024.01 
 Anti-Parvo Virus Monoclonal Antibody – USDA registered product code
E024.01

 

		
	4. 	     Ehrlichia Canis Antigen Extract

		
	 	 
	 	For further manufacture license will proceed in conjunction with [*]’s product licensure.

 
 Components:
 1.      Cassette housing 
 2.      Cassette pouch 
3.      Pouch desiccant
 9

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