Document:

Sublicense Agreement with GenPharm International, Inc.

 [CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN REDACTED AND SEPARATELY
FILED WITH THE COMMISSION.] 
  
 EXHIBIT 10.15 

 
 UNITED STATES PATENT APPLICATION NO. 07/397707 
 SUBLICENSE AGREEMENT REGARDING TRANSGENIC ANIMALS 
  
 This Agreement is made this 1st day of January, 1991, by and between GenPharm International, Inc., a company duly organized and existing under the laws of
the State of California, with its principal offices at 2375 Garcia Avenue, Mountain View, CA 94043 (hereinafter referred to as “Sublicensor”), and DNX, Inc., a company duly formed and existing under the laws of the State of Ohio, with its
principal offices at 303B College Road East, Princeton Forrestal Center, Princeton, New Jersey 08540 (hereinafter referred to as “Sublicensee”); 
  
 WITNESSETH: 
  
 WHEREAS, Sublicensor, pursuant to the terms of its License Agreement with the University of Utah, is an exclusive licensee, subject only to the reserved
research rights of the University of Utah and the statutory rights of the United States as per earlier contracts with the National Institutes of Health, of United States Patent Application Serial No. 07/397707 pertaining to a method of obtaining
non-human organisms containing pre-determined genomic modifications of the genetic material contained in such organisms, and has the full right to sublicense that patent application and any patent or patents which issue therefrom; 
  
 WHEREAS, Sublicensor desires to sublicense United States Patent Application
Serial No. 07/397707 to Sublicensee, 

  

 
and Sublicensee desires to accept such sublicense upon the terms and conditions set forth herein; and 
  
 WHEREAS, Sublicensor and Sublicensee are entering into a separate sublicense,
simultaneously herewith and in mutual consideration for Sublicensor and Sublicensee entering into this Agreement, which separate sublicense pertains to Sublicensee’s United States Letters Patent No. 4,873,191; 
  
 NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth the parties hereto hereby agree as follows: 
  
 1. DEFINITIONS. 
  
 (a) “Party” shall
mean Sublicensor or Sublicensee and when used in plural shall mean Sublicensor and Sublicensee. 
  
 (b) “Affiliate” or “Affiliates” shall mean, with respect to any entity, any entity that controls, is controlled by or is under common
control with such entity; and “control” for purposes of this definition shall mean the possession of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting stock, by
contract or otherwise. In the case of a corporation, “control” shall mean the direct or indirect ownership of equal to or more than fifty percent (50%) of the outstanding voting stock. 
  
 (c) The “707 Patent Rights” shall mean United States Patent
Application Serial No. 07/397707, filed August 22, 1989, and any and all continuation, continuation-in-part or divisional applications thereof; any parent applications thereof and any 

  

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applications which derive from any such parent applications; any patents which issue from any of the aforementioned applications; any foreign counterparts of
any of the aforementioned patents and patent applications; and any extensions or reissues of any of the above. 
  
 (d) “Patented Technology” shall mean any and all products, processes or methods which are covered by one or more pending or issued claims of the
‘707 Patent Rights that have not been held invalid by a court of competent jurisdiction, or that have not been fully and finally rejected in the Patent Office without right of further appeal. 
  
 (e) “Transgenic Animal” shall mean any non-human mammal developed
by, through or with the use of the Patented Technology, including, without limitation, any descendent of such mammal which has inherited genetic material which was originally transferred to an ancestor by use of the Patented Technology, and any
zygotes or embryos, or cells or tissues of or derived from such mammal or descendent. 
  
 (f) “Transgenic Bovine” shall mean Transgenic Animals of the bovine family. 
  
 (g) “Transgenic Product” shall mean Transgenic Animals and any products produced, recovered or derived from, through or with the use of
Transgenic Animals and shall include, for example, products produced or recovered from a transgenic production system. For purposes of this definition, “transgenic production system” shall mean a Transgenic Animal which is used to produce
at a commercial scale an economic product that is 

  

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recovered from the Transgenic Animal, or any cells, tissue, or fluid of or derived from the Transgenic Animal (including, without limitation, its milk,
mammary cells and tissue, urine, or hematopoetic cells, tissues, and fluids) whether or not recovery and use of the product in commerce involves or requires further processing, culturing, purification, manipulation, formulation, or other such steps.

  
 (h) “Transgenic Bovine Product” shall mean, in
addition to Transgenic Bovine, any Transgenic Product produced, recovered or derived from, through or with the use of Transgenic Bovine. 
  
 (i) “Transgenic Contract Service” shall mean use of the Patented Technology for or in connection with a contract research, development or
testing activity on a fee-for-service basis for third parties, such as, for example, use of the Patented Technology in a contract research service pursuant to which genes are inserted into mammalian cells for third parties and such cells are then
returned to such third parties, or use of a Transgenic Animal in a contract testing or screening service for third parties. 
  
 (j) “Net Sales” shall mean the gross receipts of Sublicensee and/or its Affiliates from any sale, license, sublicense, rental agreement, lease
or transfer of Transgenic Animals or other Transgenic Products, or Transgenic Contract Services, as well as all amounts received by Sublicensee and/or its Affiliates pursuant to any sublicenses of the Patented Technology (including any royalties,
fees or other revenues or 

  

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consideration thereby received), but shall not include the following: (i) Collaborative Research and Development Payments, (ii) receipts from intercompany
sales transactions as between or among Sublicensee and/or its Affiliates (the eventual, initial sale to a third party being used for purposes of determining the amount of Net Sales hereunder); (iii) any common carrier charge for transportation of
any Transgenic Animal or other Transgenic Product to the extent included in the invoice price as a separately stated charge; (iv) credit given or allowance made by Sublicensee and/or its Affiliates on account of returns, replacements, defects or the
renegotiation of the invoice price for the product or service sold; (v) any sales, excise, use or ad valorem taxes and any direct governmental charges assessed on the manufacture, sale or delivery of any Transgenic Animal, other Transgenic Product
or Transgenic Contract Service to the extent that such taxes and/or charges are included in such invoice as a separately stated charge; and (vi) any insurance, packing charges, rate discounts, normal customary and trade, cash and quantity discounts
actually allowed, or commissions paid to agents to the extent that they are separately stated in the invoice; provided, however, that the amount excluded from Net Sales under clauses (iii), (iv) and (vi) shall not exceed, in the
aggregate, 5% of the gross receipts from such sales. Transgenic Animals and other Transgenic Products are considered sold or leased hereunder when billed out or, if not billed out, when shipped or mailed or otherwise delivered, or when paid for if
not billed out but paid for before delivery. Transgenic 

  

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Services are considered sold hereunder when billed out or, if not billed out, when performed, or when paid for if not billed out but paid for before
performance. 
  
 (k) “Collaborative Research and Development
Payments” shall mean amounts paid by a third party to Sublicensee for Sublicensee to conduct (by itself or jointly) research and development to develop a Transgenic Animal or Transgenic Product pursuant to a joint venture with Sublicensee, or
pursuant to a written joint research or development agreement between Sublicensee and such third party. The term “Collaborative Research and Development Payments” shall not include any consideration included within the definition of Net
Sales that is received from such third party or joint venture for the Transgenic Animals or Transgenic Products so developed or for the use thereof or for rights in or a license thereto. Collabrative Research and Development Payments shall include,
for example, “up front” or option payments, provided that no Transgenic Animals or other Transgenic Products are transferred without further payment. In the event that an apparent conflict arises as to whether a payment by a third party
constitutes a Collaborative Research and Development Payment (as opposed to a Net Sale pursuant to provision of Transgenic Contract Services), the Parties shall use their best efforts to resolve any such apparent conflict amicably and shall
interpret the definition of “Collaborative Research and Development Payments” in a manner consistent with industry practice and custom for this type of payment. 
  

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 2. GRANT OF SUBLICENSE. 
  
 (a) The Grant. Subject to the fulfillment by Sublicensee of all the terms and conditions of this Agreement,
Sublicensor hereby grants to Sublicensee and Sublicensee hereby accepts a non-exclusive, non-transferable, worldwide sublicense under the ‘707 Patent Rights to make, have made, use and sell Transgenic Products, including Transgenic Animals,
other than Transgenic Bovine and Transgenic Bovine Products, without the right to grant further sublicenses except to Affiliates of Sublicensee and except as provided below in subpart (b). 
  
 (b) Further Sublicense. Sublicensor agrees that Sublicensee may
sublicense third parties to breed Transgenic Animals developed by Sublicensee pursuant to subpart (a) of this Section 2 and to use and sell Transgenic Animals so bred. Sublicensee may also sublicense third parties to use Transgenic Animals so bred
to make other Transgenic Products and to use and sell Transgenic Products so made. This provision shall not be construed as granting the right to sublicense third parties to use the methods and processes claimed in the ‘707 Patent Rights.

  
 3. AGREEMENT REGARDING ‘191 PATENT. 
  
 As mutual consideration for the parties entering into this Agreement, the
parties hereto agree to enter into the sublicense agreement attached hereto as Exhibit A, pertaining to Sublicensee’s United States Letters Patent No. 4,873,191 (the “ ‘191 Patent”). 
  
 4. FEES. 
  
 (a) Sublicense Issue Fee. On the effective date hereof, Sublicensee shall pay to Sublicensor a non-refundable,

  

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non-creditable sublicense issue fee of ***. Upon issuance of a valid United States patent based on and having substantially the same claims as
presently pending United States Patent Application Serial No. 07/397707, Sublicensee shall pay an additional, non-refundable, non-creditable sublicense issue fee of ***. 
  
 (b) Annual Fee. On or before each anniversary of the date of this Agreement during the life of this Agreement,
Sublicensee shall pay to Sublicensor an annual fee of ***. Upon issuance of a valid United States patent based on and having substantially the same claims as presently pending United States Patent Application Serial No. 07/397707, the annual fee due
on each anniversary of the date of this Agreement following the issue date of such patent during the life of this Agreement shall be ***. Each annual fee shall be creditable against any earned royalties which accrue at any time under this Agreement.

  
 (c) Prorated Annual Fee. The annual fee for the year
during which the ‘707 Patent Rights expire shall be prorated to exclude the portion of the annual fee which corresponds to the portion of the year following the date of expiration of the ‘707 Patent Rights. 
  
 (d) FDA Approval Fee. Sublicensee shall pay to Sublicensor an FDA
Approval Fee of *** for each Transgenic Product which constitutes, in whole or in part, a pharmaceutical and for which approval for commercial production is obtained from the Food and Drug Administration (the “FDA”). For each such
Transgenic Product, the FDA Approval Fee shall be due 
  
 *** Confidential
Treatment Requested 
  

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exactly one year from the date on which FDA approval is obtained for the Transgenic Product. FDA Approval Fees shall not be creditable against any other fees
or earned royalties. As used in this provision, the term “pharmaceutical” shall not be construed, in any event, as including food products or nutritional ingredients (such as human milk proteins) for which approval is obtained from the
FDA. 
  
 (e) Patent Fees and Costs. Sublicensor shall bear
responsibility for all costs and fees for the filing, prosecution and maintenance of the ‘707 Patent Rights. 
  
 5. ROYALTIES. 
  
 (a) Royalty Amounts. Sublicensee shall pay to Sublicensor earned royalties as follows: 
  

	 	(i)	a royalty of *** of the first *** of Net Sales for each calendar year under this Agreement; 

  

	 	(ii)	a royalty of *** of Net Sales over *** for each calendar year under this Agreement; 

  

	 	(iii)	a royalty of *** of Net Sales over *** for each calendar year under this Agreement; and 

  

	 	(iv)	a royalty of *** of Net Sales over *** for each calendar year under this Agreement. 

  
 The above-listed royalty rates shall be increased to *** respectively, upon issuance of a valid United States patent based on and having

  
 *** Confidential Treatment Requested 
  

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substantially the same claims as presently pending United States Patent Application Serial No. 07/397707, and such increased royalty rates shall be
applicable to royalty payments which accrue on or after the issue date of such patent. Royalty payments shall accrue under this Agreement when Transgenic Products or Transgenic Contract Services are sold or leased by Sublicensee (and/or any
Affiliates of Sublicensee) to a third party, or, if Transgenic Products or Transgenic Contract Services are not sold or leased but are the subject of a sublicense or other such agreement between Sublicensee (and/or any Affiliates of Sublicensee) and
a third party, when any royalties or other such revenues are received by Sublicensee or any of its Affiliates for such products. 
  
 (b) Payment Schedule. Sublicensee shall make royalty payments for all accrued royalties hereunder for each calendar quarter during the term of this
Agreement. Such royalty payments shall be made within thirty (30) days after the close of the calendar quarter to which the payment pertains. 
  
 (c) Statements. Sublicensee shall render to Sublicensor written statements setting forth the calculation of Net Sales for each Transgenic Animal,
other Transgenic Product or Transgenic Contract Service subject to royalties pursuant to this Agreement, and which also set forth the number, or quantity, and description of the Transgenic Animals, other Transgenic Products or Transgenic Contract
Services for which Net Sales are obtained and the calculation of any royalty payments due to Sublicensor. Such statements shall be rendered 

  

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quarterly, commencing with the first quarter in which any Net Sales are obtained for any Transgenic Animals, other Transgenic Products or Transgenic Contract
Services. Each statement shall be rendered within thirty (30) days after the close of the period to which the statement relates. 
  
 (d) Inspections. Sublicensor shall have the right to inspect and examine the books and records of Sublicensee, and the books and records of
Sublicensee’s Affiliates, relating to any Net Sales of Transgenic Animals, other Transgenic Products or Transgenic Contract Services. Inspections pursuant to this subpart (d) shall be made no more frequently than annually upon reasonable notice
to Sublicensee, shall be made during regular business hours and without undue interruption of the operations of Sublicensee or its Affiliates, and shall be performed only by an independent auditing firm of internationally recognized standing or
otherwise reasonably acceptable to Sublicensee. Inspection of the books and records relating to a statement shall be solely for the purpose of verifying the accuracy of such statement and the determination of Net Sales for Transgenic Animals, other
Transgenic Products or Transgenic Contract Services. The cost of such inspections shall be borne by Sublicensor; provided, however, that if the results of any inspection reveal that books and records were not kept according to this
Agreement, or that an underpayment of at least 5% in any quarterly period has occurred, all expenses for such inspection shall be borne by Sublicensee alone. Sublicensor shall obtain the written agreement of each person performing any such 

  

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inspection for Sublicensor not to disclose to Sublicensor or to any other persons or use any information contained in such books and records except for the
purposes of enabling Sublicensor to enforce its rights under this Agreement. Any person performing such inspection shall agree as a precondition to performing any audit hereunder to execute a confidentiality agreement containing terms reasonably
acceptable to Sublicensee. 
  
 6. LIABILITY AND
INDEMNIFICATION. 
  
 Sublicensee shall defend, indemnify and
hold Sublicensor harmless against any and all liability, damage, loss, cost or expense resulting from any claim, suit or other action arising out of or based on or resulting from Sublicensee’s (or any Affiliate’s) use of the Patented
Technology or use or sale of Transgenic Animals, other Transgenic Products or Transgenic Contract Services; provided, however, that upon the filing of any such claim or suit against Sublicensor, Sublicensor shall promptly notify
Sublicensee and permit Sublicensee, at Sublicensee’s cost, to handle and control such claim or suit and shall cooperate in the defense thereof. 
  
 7. PATENT INFRINGEMENT. 
  
 (a) Notification of Infringement. Sublicensee shall notify Sublicensor of any infringement by third parties of the ‘707 Patent Rights and
shall provide Sublicensor with the available non-confidential evidence, if any, of such infringement. 
  
 (b) Enforcement of Licensed Patents. Sublicensor shall retain the sole right, at its sole discretion, to enforce the ‘707 Patent Rights
against third party infringers. 
  

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 (c) No Warranty of Non-Infringement. Nothing in this Agreement shall be construed as a
representation made or warranty given by Sublicensor that the practice by Sublicensee of the license granted hereunder will not infringe the patent rights of any third party. 
  
 8. TERM AND TERMINATION. 
  
 (a) Term. This Agreement shall come into full force and effect as of its effective date and, unless earlier terminated, shall continue in full
force and effect for the life of the ‘707 Patent Rights. 
  
 (b) Termination for Breach. Sublicensor shall have the right to terminate this Agreement and the sublicense granted hereunder upon thirty (30) days’ written notice to Sublicensee for Sublicensee’s material breach of this
Agreement if Sublicensee has failed to cure such breach within thirty (30) days of notice thereof. As used herein, the term “material breach” shall include, but is not limited to, any use or exploitation by Sublicensee of the Patented
Technology not in accordance with the sublicense Grant provided in Section 2 above. 
  
 (c) Termination at Sublicensee’s Option. At any time after the fifth anniversary of the date of this Agreement, Sublicensee, at its option, may terminate this Agreement and the sublicense granted
hereunder, by providing written notice to Sublicensor. In the alternative, Sublicensee may terminate this Agreement on the fifth anniversary of the date of this Agreement, or on the anniversary of the date of this Agreement in any subsequent year,
by declining to pay the annual fee on or 

  

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before the due date thereof, and, if so terminated, Sublicensee shall not be obligated to pay the annual fee which otherwise would have been due. 

 
 (d) Insolvency. If, at any time, either Party shall file in any
court pursuant to any statute of any individual state or country, a petition in bankruptcy, insolvency or for reorganization or for an agreement among creditors or for the appointment of a receiver or trustee of the Party or of its assets, or if
either Party proposes a written agreement of composition or extension of its debts, or if either Party shall be served with an involuntary petition against it filed in any insolvency proceeding, and such petition shall not be dismissed within sixty
(60) days after the filing thereof, or if either Party shall propose or be a Party to any dissolution or liquidation, or if either Party shall make an assignment for the benefit of creditors, then, in the event of any of the above, the other
Party shall have the right to terminate this Agreement. 
  
 (e)
Effect of Termination. Termination of this Agreement in whole or in part for any reason shall not relieve Sublicensee of its obligations to pay all fees and royalties that shall have accrued or become due hereunder prior to the effective date
of termination. 
  
 9. NO TRADEMARK OR TRADE NAME
SUBLICENSE. 
  
 Nothing contained herein shall be construed to
grant either Party the right to use, for advertising, publicity or other commercial purposes, the name or any trade name or trademark, or contraction, abbreviation or simulation thereof, 

  

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of the other Party. Notwithstanding the terms of this Section 9, the Parties shall be permitted to publicize this Agreement and to notify the public, by
press release or otherwise, of the fact that the Parties have entered into this Agreement and the terms hereof; provided, however, that the Party issuing the press release or otherwise shall provide a copy thereof to the other Party at least fifteen
(15) days prior to the intended date of publication and shall provide the other Party an opportunity to comment on the press release or otherwise. 
  
 10. LIMITATION ON ASSIGNMENT BY SUBLICENSEE. 
  
 Neither this Agreement nor any interests hereunder shall be assignable by Sublicensee without the written consent of Sublicensor; provided, however, that
Sublicensee may assign this Agreement to any corporation or entity with which it may merge or consolidate, or to which it may transfer substantially all of its assets or all of its assets to which this Agreement relates without obtaining the consent
of the Sublicensor. Prior to the execution of any assignment by Sublicensee pursuant to this paragraph, Sublicensee shall notify Sublicensor in writing of Sublicensee’s intent to enter into such assignment, and, upon execution thereof, shall
provide Sublicensor with a copy of such assignment. 
  
 11.
SUBLICENSOR’S RIGHT OF ASSIGNMENT. 
  
 Sublicensor
shall have the right and power to assign this Agreement to any Affiliates of Sublicensor or to any third parties, including the right and power to assign to the University of Utah all rights, title and interest of Sublicensor 

  

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in, to and under this Agreement. In the event of assignment by Sublicensor, the assignee of Sublicensor shall be subrogated to the rights and liabilities of
Sublicensor under this Agreement. 
  
 12. APPLICABLE LAW.

  
 This Agreement shall be deemed to have been entered into and
shall be construed and enforced in accordance with the laws of the state of California as applied to contracts made and to be performed entirely within California, and in accordance with the laws of the United States of America. 
  
 13. JURISDICTION. 
  
 If any dispute arises in connection with the interpretation of and/or
performance under this Agreement; it is expressly understood and agreed by the Parties hereto that they do hereby submit to and shall be subject to the jurisdiction of the appropriate federal and/or state courts located in the State of California in
the United States of America. 
  
 14. RELATIONSHIP OF THE
PARTIES. 
  
 Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, agency, employer-employee, or joint venture relationship between the Parties. 
  
 15. FURTHER ACTS AND INSTRUMENTS. 
  
 Each Party hereto agrees to execute, acknowledge and deliver such further instruments and to do all such other acts as may be necessary or appropriate to
effect the purpose and intent of this Agreement. 
  
 16. ENTIRE
AGREEMENT. 
  
 This Agreement constitutes and contains the
entire agreement of the Parties and supersedes any and all prior 

  

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negotiations, correspondence, understandings and agreements between the Parties respecting the subject matter hereof. This Agreement may be amended or
modified or one or more provisions thereof waived only by a written instrument signed by the Parties. 
  
 17. SEVERABILITY. 
  
 In the event any one or more of the provisions of this Agreement should for any reason be held by any court or authority having jurisdiction over this
Agreement or any of the Parties hereto to be invalid, illegal or unenforceable, such provision or provisions shall be validly reformed to as nearly approximate the intent of the Parties as possible and if unreformable, the Parties shall meet to
discuss what steps should be taken to remedy the situation; elsewhere, this Agreement shall not be affected. 
  
 18. CAPTIONS. 
  
 The captions to this Agreement are for convenience only and are to be of no force or effect in construing and interpreting the provisions of this
Agreement. 
  
 19. DISCLAIMER OF WARRANTIES. 
  
 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE PARTIES EXPRESSLY DISCLAIM
ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR PATENT VALIDITY. 
  

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 20. CONFIDENTIALITY. 
  
 The terms of this Agreement are confidential, and, accordingly, the Parties shall maintain the terms of this Agreement in
confidence and shall not disclose such terms to third parties, except as provided in Section 9 above. To the extent that other confidential information or material is exchanged or disclosed by either Party pursuant to or in the course of this
Agreement, such exchange or disclosure shall be in writing (or promptly confirmed in writing if initially made by other means). The Party receiving such confidential information or material shall not disclose or deliver such information or material
to any third parties and shall use such information or material solely for purposes of conducting activities under this Agreement. For a period of five (5) years following termination of this Agreement, all such confidential information and material
shall remain subject to the obligation of confidentiality set forth herein and shall not be used by the Party receiving such confidential information. This confidentiality provision shall not be applicable to information or material which (a) is
already part of the public domain at the time of disclosure or exchange or thereafter becomes part of the public domain otherwise than by breach of this confidentiality obligation; (b) the receiving party can show by competent proof had already come
into its possession without violation of this confidentiality obligation at the time of disclosure or exchange; or (c) is communicated without binder of confidentiality by a third party which did not receive the same 

  

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directly or indirectly from either party or from any other party under binder of confidentiality. 
  
 21. NOTICES. 
  
 Any notice, request, approval or other document required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been sufficiently given when delivered in person, transmitted by telex, telecopier, telegraph or deposited in the mail, postage prepaid, for mailing by first class, certified
or registered mail, return receipt requested, addressed as follows: 
  
 If to Sublicensor, addressed to: 
  
 GenPharm
International, Inc. 
 2375 Garcia Avenue 
 Mountain View, California 94043 
  
 Attention: President

  
 If to Sublicensee, addressed to: 
  
 DNX, Inc. 
 303B College Road East 
 Princeton Forrestal
Center 
 Princeton, New Jersey 08540 
  
 Attention: Executive Vice President 
  
 or to such other address or addresses as may be specified from time to time in a written notice. 
  

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 IN WITNESS WHEREOF, Sublicensor and Sublicensee have caused this Agreement to be executed by their duly
authorized representatives. 
  

			
	GENPHARM INTERNATIONAL, INC.
		
	By:	 	/s/ Jonathan MacQuitty
	 	 	

	Name:	 	Jonathan J. MacQuitty
	Title:	 	President
	Date:	 	 

  

			
	DNX, INC.
		
	By:	 	/s/ Steven H. Holtzman
	 	 	

	Name:	 	Steven H. Holtzman
	Title:	 	Executive Vice President
	Date:	 	11/8/90

  

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 August 21, 1991 
  
 3368D 
  
 [GRAPHIC] 
  
 Jonathan J. MacQuitty, Ph.D. 
 President 
 GenPharm International, Inc. 
 2375 Garcia Avenue 
 Mountain View, California 94043 
  

	 	Re:	United States Patent No. 4,873,191 

 Sublicense Agreement
Regarding Transgenic Animals 
  
 and 

 
 United States Patent Application No. 07/397707 
 Sublicense Agreement Regarding Transgenic Animals 
  
 Dear Jonathan: 
  
 You and I have previously discussed the possibility of modifying the ‘191 Patent Sublicense Agreement. In particular, we have discussed the possibility of providing a second set of earned royalty rates, somewhat
lower than those presently recited in Section 5 of the Agreement, which would apply to Net Sales of Transgenic Animals, other Transgenic Products or Transgenic Contract Services that stem from use of the Patented Technology prior to the issuance of
United States Patent No. 4,873,191 on October 10, 1989. Under the present terms of the Agreement, the earned royalty rates set forth in Section 5 are to be applied without regard to whether the Net Sale is a consequence of a use of the Patented
Technology prior to the issuance of the ‘191 patent. 
  
 A
version of a two-tiered structure for earned royalty rates is presently used in the ‘707 Patent Rights Sublicense Agreement, under which the earned royalty rates are set at a lower level until a patent based on the ‘707 patent application
is actually issued. However, after a patent based on the ‘707 patent application is issued, the higher-level royalty rates apply, even if the Transgenic Animals, other Transgenic Products or Transgenic Contract Services stem from the use of the
Patented Technology prior to issuance of a patent based on the ‘707 patent application. 
  

 Jonathan J. MacQuitty, Ph.D. 
 August 21, 1991 
 Page 2 
  
 DNX is agreeable to modifying the ‘191 Patent Sublicense Agreement in the manner discussed above so long as the ‘707 Patent Rights Sublicense
Agreement is also modified to provide that even after a patent based on the ‘707 patent application issues, the lower-level royalty rates shall apply when the Transgenic Animals, other Transgenic Products or Transgenic Contract Services are a
consequence of a use of the Patented Technology prior to issuance of a patent based on the ‘707 patent application. 
  
 Therefore, DNX proposes that the following provision be added to the ‘191 Patent Sublicense Agreement: 
  
 22. Modification of Earned Royalty Rates. If a
Transgenic Animal or other Transgenic Product that is the subject of a Net Sale hereunder is bred, produced, recovered, derived or descended from a Transgenic Animal that was made or developed prior to October 10, 1989 (and that has not been
modified or further developed by a use, after October 10, 1989, of any process or method claimed in the ‘191 Patent), or if a Transgenic Contract Service that is the subject of a Net Sale hereunder is performed using a Transgenic Animal that is
descended from a Transgenic Animal that was made or developed prior to October 10, 1989 (and that has not been modified or further developed by a use, after October 10, 1989, of any process or method claimed in the ‘191 Patent), the royalty
rates set forth in subpart (a) of Section 5 for such Net Sales shall be decreased to *** respectively. It is understood that, in any event, this Section 22 shall not be applicable to Net Sales of Transgenic Animals, other Transgenic Products or
Transgenic Contract Services that involve or are produced in whole or in part from the use, after October 10, 1989, of genetic transformation methods or processes claimed in the ‘191 Patent. 
  
 In conjunction with the foregoing amendment to the ‘191 Patent
Sublicense Agreement, and as consideration therefor, DNX proposes that the following provision be added to the ‘707 Patent Rights Sublicense Agreement: 
  
 22. Modification of Earned Royalty Rates. After issuance of a valid United States patent based on and having substantially the same
claims as presently pending United States Patent 
  
 *** Confidential Treatment
Requested 
  

 Jonathan J. MacQuitty, Ph.D. 
 August 21, 1991 
 Page 3 
  

 
Application Serial No. 07/397707 (hereinafter, such patent being referred to as the “ ‘707 patent”), if a Transgenic Animal or other
Transgenic Product that is the subject of a Net Sale hereunder is bred, produced, recovered, derived or descended from a Transgenic Animal that was made or developed prior to issuance of the ‘707 patent (and that has not been modified or
further developed by a use, after issuance of such patent, of any process or method claimed in the ‘707 patent), or if a Transgenic Contract Service that is the subject of a Net Sale hereunder is performed using a Transgenic Animal that is
descended from a Transgenic Animal that was made or developed prior to issuance of the ‘707 patent (and that has not been modified or further developed by a use, after issuance of such patent, of any process or method claimed in the ‘707
patent), the royalty rates of *** as set forth in subpart (a) of Section 5, shall be applied to such Net Sales. It is understood that, in any event, this Section 22 shall not be applicable to Net Sales of Transgenic Animals, other Transgenic
Products or Transgenic Contract Services that involve or are produced in whole or in part from the use, after issuance of the ‘707 patent, of genetic transformation methods or processes claimed in such patent. 
  
 Notwithstanding the foregoing amendments, the ‘191 Patent Sublicense Agreement and the
‘707 Patent Rights Sublicense Agreement remain in full force and effect and are modified only to the extent provided by the addition of the respective sections set forth above. 
  
 If these amendments are acceptable to GenPharm, please execute both copies of this letter agreement and return one executed
copy to DNX in the enclosed envelope. 
  
 If you have any
questions or desire further clarification with regard to this matter, please do not hesitate to contact me at (609) 520-0300. 
  

					
	 	 	 	 	Sincerely,
			
	 /s/ Jonathan MacQuitty
	 	 	 	 /s/ Steven H. Holtzman / by CTG as attorney-in-fact

	
	 	 	 	

	 Jonathan J. MacQuitty
 President
 GenPharm International, Inc.
	 	 	 	 Steven H. Holtzman
 Executive Vice
President
 DNX, Inc.

  
 *** Confidential Treatment
RequestedCCD Camera Manufacture and Supply Agreement

 [CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN REDACTED AND SEPARATELY FILE WITH THE
COMMISSION.] 
  
 EXHIBIT 10.16 
  
 CCD CAMERA MANUFACTURE AND SUPPLY AGREEMENT. 
  
 This agreement is made on April 9th, 2003 (the “Effective Date”), between Spectral Instruments, Inc., an Arizona corporation with offices located at 420 N Bonita Avenue, Tucson,
Arizona 85745 (the “Seller”), and Xenogen Corporation, a Delaware corporation, with offices located at 860 Atlantic Avenue, Alameda, CA 94501 (the “Buyer”) (each a “Party,” and collectively, the “Parties”).

  
 Recitals 
  
 Seller is a corporation engaged, among other things, in the manufacture and
sale of CCD cameras, and it is able and willing to manufacture the products described on Schedule A attached to this Agreement (the “Products”); and 
  

Buyer, in order to assure a steady and reliable source of supply of the Products, desires to purchase from Seller, and Seller is willing to supply to
Buyer, the Products on the terms and conditions described in this Agreement. 
  
 Now, therefore, in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are here acknowledged, the Parties
agree as follows: 
  
 Substantive Provisions

  
 1. Definitions. As used in this Agreement, the following
definitions will apply: 
  
 (a) “Products” shall
mean the CCD camera and other products particularized in Schedule A, attached to and made a part of this Agreement, to be manufactured by Seller for Buyer in accordance with the terms of this Agreement. Products shall also include any and all
improvements, changes and modifications that the Parties may make by mutual agreement evidenced in writing during the term of this Agreement, as well as any other CCD Camera manufactured by Seller with similar size and architecture that the Parties
agree in writing is a successor product to the Product(s) specified in Schedule A. 
  
 (b) “Specifications” shall mean the physical and functional specifications for the Products, as agreed to by Buyer and Seller and stated in Schedule B, attached to, and made a part of, this Agreement.
Seller shall not deviate in any way whatever from these specifications without the prior express written consent of Buyer. 
  

 Page 1 of 16 

 (c) “Confidential Information” means any proprietary technical or business information
or data related to, or generated in connection with, the performance of this Agreement and which is provided by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) pursuant to this Agreement.
Confidential Information, if disclosed in written form must be marked as “Confidential” at the time of disclosure, or if disclosed orally, must be expressly identified as “Confidential” at the time of oral disclosure, and be
confirmed as “Confidential” in a written form that is delivered to the Receiving Party within thirty (30) days of oral disclosure. 
  
 2. Agreement to Manufacture. Seller agrees to manufacture in its own factories and sell to Buyer the Products in accordance with the Specifications, and
incorporating such changes and improvements in the Products as the Parties mutually determine and agree upon from time to time. The Parties agree that final assembly, testing, inspection and packaging of the Products will at all times be conducted
by Seller in its own manufacturing facilities. 
  
 3. Exclusivity. Seller
shall not enter into any agreement with any third party whereby Seller agrees to sell the Products in Schedule A to a third party on an exclusive basis. In consideration of Buyer’s disclosure hereunder of certain Confidential Information
regarding its own product designs and specifications incorporating the Product, as well as the market therefore, Seller agrees not to manufacture or sell to a third party an imaging product that includes a CCD camera, dark box and analysis software
intended for imaging/observation of bioluminescent or fluorescent light sources from within living mammals. 
  
 4. Purchase Price and Terms. 
  
 4.1 Purchases. Seller agrees to manufacture, package, deliver and supply the Products to Buyer in conformance with standard industry manufacturing and business practices, the Specifications, any other tests and specifications
agreed-to in writing by Buyer and Seller and in such quantities as ordered by Buyer pursuant to a purchase order submitted to Seller on the Effective Date and each anniversary thereof during the term of this Agreement. Each such purchase order will
cover an eighteen (18) month period, specify the specific Product ordered (if more than one Product is listed in Schedule A), desired quantity, delivery dates and addresses (each, a “Purchase Order”). Buyer agrees that Products will not be
used for medical diagnostic or therapeutic purposes such that Seller becomes subject to approval of the U.S. Food and Drug Administration, without Seller’s prior consent. 
  

 Page 2 of 16 

 4.2 Delivery Dates. The requested date for the first delivery under a Purchase Order will not be
less than twelve (12) weeks from the date on which the Purchase Order is submitted. Deliveries of Product quantities thereafter will require only an eight (8) week lead time. Within seven (7) days of receipt of each Purchase Order, Seller shall
acknowledge its receipt and shall confirm Product delivery dates to Buyer in writing (whether by e-mail, facsimile or other written form). Seller will promptly advise Buyer of any possible variances from such confirmed delivery dates, and, if such
variances exceed four (4) weeks, Buyer and Seller will work cooperatively to reduce such variances, although Buyer may cancel that portion of the Purchase Order without penalty or affect on Product prices. 
  
 4.3 Shipping. Seller will pack all Products ordered by Buyer for
shipment and storage in accordance with Seller’s standard commercial practice and will include all necessary Product documentation. Special packaging requirements will be disclosed by Buyer and agreed to by Seller, at Buyers additional expense,
taking into consideration any environmental, economic or other constraints and influences. Risk of loss will pass to Buyer upon delivery to the carrier. 
  
 4.4 Records. Seller shall maintain all technical, quality control, shipping and other appropriate documentation and records concerning the Products
manufactured, packaged and shipped by Seller pursuant to this Agreement and shall preserve same for a period of at least five (5) years from the date of delivery. Seller shall not destroy any such records without first giving Buyer thirty (30) days
prior written notice and an opportunity to take possession of such records. In any case, a copy of the appropriate documentation, as described above, will form part of each shipment of Product to Buyer. 
  
 4.5 Price. Seller’s invoice price for each Product purchased by
Buyer hereunder will be based upon the Product quantities purchased by Buyer during each eighteen (18) month period beginning with the Effective Date according to the following: 
  

			
	 Quantity

	  	 Prices

	 	  	(All prices in U.S. Dollars)
	*** 

  
 *** Confidential Treatment
Requested. 
  

 Page 3 of 16 

 The foregoing prices are net amounts to Buyer, as delivered to Buyer’s carrier at Seller’s manufacturing plant
in Tuscon, Arizona (delivery terms are FCA (Incoterms 2000), with Buyer responsible to contract with the carrier). A change in Specifications may incur additional cost, and Seller will notify Buyer if any such change will affect the foregoing
prices, and such changes (both to the Specifications and to the above prices) will be mutually agreed to by the Parties prior to implementation. Prices for additional Products that may be added to Schedule A after the Effective Date and for the
Products after the initial 18 month term will be determined by mutual agreement of the Parties and shall be set forth on an addendum hereto. 
  
 4.6 Delivery Delays. With at least three (3) months notice, Buyer may delay delivery for not more than: twenty-five percent (25%) of the Product
quantity ordered for delivery in the next calendar quarter. With at least six (6) months notice, Buyer may delay delivery for not more than fifty percent (50%) of the Product quantity ordered for delivery in that calendar quarter. Provided that the
foregoing delays do not affect the total quantity ordered by Buyer in the then governing Purchase Order and represent a delay of between three (3) and six (6) months, such delivery delays will not affect the prices to be paid by Buyer, but Seller
will charge Buyer a delay fee of *** per Product that is so delayed. Product quantities for which Buyer delays delivery for more than six (6) months will incur a delay fee of fifty percent (50%) of the price (pursuant to Section 4.5) for such
quantity. 
  
 4.7 Delivery Acceleration. Upon no less than
three (3) months written notice by Buyer, Seller will accelerate delivery of up to twenty-five percent (25%) of the total quantity ordered by Buyer in the then-governing Purchase Order without additional cost to Buyer. Upon no less than six (6)
months written notice by Buyer, Seller will accelerate delivery of up to fifty percent (50%) of the total quantity ordered by Buyer in the then-governing Purchase Order without additional cost to Buyer. 
  
 4.8 Cancellation/Addition. Buyer may cancel quantities of Product
ordered in the then-governing Purchase Order, but Buyer shall pay Seller a cancellation fee of fifty percent (50%) of the price (pursuant to Section 4.5) for such cancelled quantity. Buyer may order additional Product quantities from Seller through
a written purchase order, containing the same information as required in Section 4.1, submitted not less than twelve (12) weeks prior to the (first) requested delivery date. The provisions of Section 4 will apply to such additional orders.

  
 *** Confidential Treatment Requested. 
  

 Page 4 of 16 

 4.9 Payments. Twelve (12) weeks prior to each shipment of Products (in five (5) unit lots to the
extent possible), Seller shall invoice Buyer for thirty percent (30%) of the price (pursuant to Section 4.5) for such Product quantity and Buyer will pay such amount no later than eight (8) weeks prior to the scheduled delivery date. Eight (8) weeks
prior to each shipment of Products (in five (5) unit lots to the extent possible), Seller shall invoice Buyer for thirty percent (30%) of the price (pursuant to Section 4.5) for such Product quantity and Buyer will pay such amount no later than four
(4) weeks prior to the scheduled delivery date. Each of the foregoing invoices will be accompanied by a written certification, signed by an officer of Seller, stating that Seller is in the process of manufacturing such Products and that Buyer’s
pre-payments will be used only for costs associated with such Product units. Seller’s invoice for remaining amounts due for each such delivery will accompany the Products and will be due not later than thirty (30) days after delivery. All price
and payments in this Agreement are expressed in U.S. Dollars and will be made via checks drawn on an American bank or wire transfer to an account designated by Seller. 
  
 4.10 Delivery Discrepancies. All deliveries and all shipping and other charges shall be deemed correct unless Seller
receives from Buyer, no later than thirty (30) days after Buyer’s receipt of a given shipment of Products, a written notice specifying the shipment and the exact nature of the discrepancy between the Purchase Order quantity to be delivered on
that date and the quantity delivered or the exact nature of the discrepancy in the shipping or other charges, as applicable. Any Products supplied by Seller under this Agreement that fail to conform to the Specifications shall be subject to the
provisions of Section 4.11 below. 
  
 4.11 Product
Warranty. Seller hereby warrants that any Product delivered hereunder: (a) upon receipt by Buyer will meet the Specifications therefor; and (b) for a period of *** after delivery to Buyer will meet the Specifications therefore and perform in
accordance with such Specifications; except that vacuum hold time between customer serviceable refresh is only warranted for ***. Any claim regarding the failure of a Product to conform to the applicable Specifications shall be submitted to Seller
promptly upon discovery, together with reasonable evidence of such nonconformity at the time of inspection. In such case, Seller will promptly repair (or arrange for the repair) or replace the defective Product (or component thereof) at its own cost
and expense and including any shipping and handling costs (for shipping and handling between Buyer’s and Seller’s facilities) after such defective 
  
 *** Confidential Treatment Requested. 
  

 Page 5 of 16 

 
Product (or component thereof) has been returned to Seller, subject to Seller confirming that the Product is defective by virtue of conduct attributable to
Seller and that the claim under the warranty of this Section 4.11 is valid. Seller will repair or replace defective Products within four (4) weeks of receipt of Products that are within warranty and six (6) weeks from receipt of purchase order for
repair of Products that are out of warranty. 
  
 5. Further Seller
Obligations. 
  
 5.1 Quality Control. Seller shall, at
its own expense, provide for the quality control of the Products being manufactured in accordance with standard industry manufacturing practices and its customary business practices. Seller shall perform customary inspections of Products in the
normal course of its business. 
  
 5.2 Technical Support.
Seller agrees to assist Buyer (as and when requested by Buyer) in providing customers with technical support by enabling Buyer to have direct access to Seller by means of telephone and Internet E-mail during normal business hours. Seller further
agrees to provide Buyer with such training and technical assistance in relation to Products as may be reasonably necessary to enable Buyer to use, service and sell Products. 
  
 5.3 Product Discontinuance. Buyer agrees that Seller is not obligated to continue its manufacture and production of
the Products; provided that Seller gives Buyer ninety (90) days written notice of its intent not to do so; and further provided that no such discontinuance will relieve Seller of its obligations to fulfill Purchase Orders submitted by Buyer prior to
such discontinuance date or to fulfill its Product warranty obligations pursuant to Section 5.12. 
  
 5.4 Materials Supply/Product Allocation. Seller shall use its best efforts to ensure that it has access to, either by maintaining an adequate
inventory or though binding supply agreement(s), adequate quantities of critical Product components, particularly CCD chips. In the event that Seller is unable to completely fulfill Buyer’s Purchase Order due to supply shortages, Buyer shall
allocate among the quantities of Product (and/or components that are in short supply) that Seller has in its inventory and is able to manufacture, so that Buyer has at least its proportional share of available supplies available for delivery, as
determined based on its past orders for Products. 
  

 Page 6 of 16 

 6. Confidential Information. 
  
 6.1 Confidential Information. Except as expressly provided herein, each Party agrees to keep confidential all
Confidential Information furnished to it at any time by the Disclosing Party hereunder, and shall not publish or otherwise disclose to any third party which is not an Affiliate (under no less stringent obligations of confidentiality and only for
purposes expressly permitted herein) and shall not use for any purpose except for the purposes expressly contemplated by this Agreement the Disclosing Party’s Confidential Information. Each Party will ensure that its directors, officers,
managers and staff who receive access to such Confidential Information are bound by appropriate confidentiality agreements. To the extent it can be established by competent written proof, Confidential Information shall not include information that:

  

	 	(a)	is already known to the Receiving Party, other than under an obligation of confidentiality, at the time of disclosure; 

  

	 	(b)	is generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party; 

  

	 	(c)	becomes generally available to the public or otherwise part of the public domain after its disclosure to the Receiving Party and other than through any act or omission of the
Receiving Party in breach of this Agreement; 

  

	 	(d)	subsequently lawfully disclosed to the Receiving Party by a third party having no confidentiality obligations with respect thereto; or 

  

	 	(e)	is independently developed by the Receiving Party or its Affiliates without the aid, application or use of the Disclosing Party’s Confidential Information (and such independent
development can be properly documented by the Receiving Party). 

  
 6.2 Permitted Use and Disclosures. The Receiving Party may disclose the Disclosing Party’s Confidential Information to the extent required by law, rule, regulation, act or order of any governmental
authority or agency; provided that in advance of disclosure Receiving Party promptly notifies the Disclosing Party of such requirement in order to provide the Disclosing Party an opportunity to seek a protective order or other similar order with
respect to such Confidential Information, and thereafter the Receiving Party discloses only the minimum information required to be disclosed in order to comply, whether or not a protective order or other similar order is obtained by the Disclosing
Party. Further, a Party may disclose the existence and terms of this Agreement: (a) to existing or potential investors or acquirers or 

  

 Page 7 of 16 

 
merger partners, or to professional advisors (e.g., attorneys, accountants and prospective investment bankers) involved in such activities, for the limited
purpose of evaluating such investment or transaction and under appropriate conditions of confidentiality, only to the extent necessary and with the agreement by these permitted individuals to maintain such Confidential Information in strict
confidence; (b) to legal counsel; and (c) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement. 
  
 6.3 Ownership of Confidential Information. As between the Parties, Seller agrees that all drawings, specifications and written material currently
owned by Buyer and disclosed to Seller hereunder shall be and remain the sole property of Buyer. As between the Parties, Buyer agrees that Seller shall retain ownership of the Product design and manufacturing process used by Seller, including, but
not limited to all drawings, specifications and written materials currently owned by Seller and disclosed to Buyer hereunder and shall retain unrestricted rights to manufacture and sell the Product worldwide. 
  
 6.4 No Unauthorized Representations. Except as explicitly provided
hereunder, neither Party may make any representation or statement of any kind concerning the other Party, the relationship between the Parties or the contents of this Agreement, including representations or statements concerning the other
Party’s business, affairs, products, services, prices, discounts, fees, whether on a Party’s web site(s), whether written, oral or otherwise without the prior authorization of the other Party. 
  
 7. Term and Termination. 
  
 7.1 Term. This Agreement shall take effect upon the Effective Date, and unless terminated earlier pursuant to
Sections 7.2 through 7.4, shall continue in full force and effect for eighteen (18) months thereafter. If, however, neither Party gives written notice of termination within six (6) months of the foregoing expiration date or any mutually agreed
extension thereof, the term of this Agreement shall automatically be extended for successive periods of eighteen (18) months from the date of expiration then in effect, provided that the Parties agree on changes (if any) to Product pricing for such
extended period. 
  
 7.2 Breach. Either Party may terminate
this Agreement upon written notice in the event the other Party has materially breached or defaulted in the performance of any of its obligations hereunder, and if such default is not corrected within thirty (30) days after the breaching Party
receives written notice from the other Party with respect to such default. 
  

 Page 8 of 16 

 7.3 Bankruptcy. Either Party may terminate this Agreement upon written notice of termination to
the other Party, at any time, upon or after: (a) the filing by the other Party of a petition in bankruptcy or insolvency; (b) upon any other proceeding or action whether by or against the Party under the relevant law on insolvency or bankruptcy; (c)
the making, either voluntarily or involuntarily, by the other Party of any assignment or attempt of assignment for the benefit of creditors; (d) upon or after the institution of any proceedings for the liquidation or winding up of the other
Party’s business; or (e) for the termination of its corporate charter. 
  
 7.4 Accrued Obligations/Survival. Expiration or termination of this Agreement for any reason shall not release either Party from any obligation or liability which, at the time of such termination, has already
accrued to the other Party or which is attributable to a period prior to such termination nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement.
Sections 1,3 (for a period of twelve (12) months only), 4.4, 4.11, 4.12, 5.2, 6, 7.4, 8, 9, 11, 14, 17, 19 and 20 shall survive expiration or termination of this Agreement for any reason. Except as otherwise provided in this Section 7.4, all rights
and obligations of the Parties under this Agreement shall terminate upon expiration or termination of this Agreement for any reason. 
  
 8. Representations and Warranties. 
  
 (a) Seller warrants and represents to Buyer that it: (i) has the full right and authority to enter into this Agreement and grant the rights granted
herein; (ii) has not received notice from a third party that the manufacture, sale, lease, transfer or use of the Products would infringe any intellectual property rights of a third party; (iii) has not been a party to, or threatened with, a product
liability suit involving the Products; (iv) shall comply with all applicable laws, rules and regulations relating to the performance of its activities under this Agreement; and (v) has the full right and authority to manufacture, and have
manufactured, and supply the Products. 
  
 (b) Buyer warrants and
represents to Seller that it: (i) has the full right and authority to enter into this Agreement; (ii) has determined, based upon its own due diligence, that the Products are suitable for their intended use by Buyer; (iii) that Buyer has not relied
on any warranties, promises, understandings or representations express or implied, of the Seller relating to the Products, except for such warranties and representations as are expressly stated herein; and 

  

 Page 9 of 16 

 
(iv) shall comply with all applicable laws, rules and regulations relating to the performance of its activities in connection with the Products. 

 
 9. Indemnification. 
  
 (a) Seller agrees to indemnify and hold Buyer, its agents and employees harmless from and against all claims, liabilities
(including product liability), costs, damages, losses, judgments for damages or expenses (including reasonable attorney’s fees) caused by, arising out of, or resulting from Seller’s: (i) environmental contamination or release of hazardous
substance or hazardous wastes to the environment, provided that such occurrence does not result from the conduct described in paragraph 9(b) below; or (ii) defective (in either design or manufacture) Product, provided that, in the case of a design
defect, it did not arise due to an element of the Specification that Seller does not apply to any other buyer. Buyer agrees to give Seller prompt notice in writing of the institution of any suit, including any suit or claim asserted or made by any
governmental authority having jurisdiction, and Buyer agrees to permit Seller to have control and conduct of the defense of such suit, and to give Seller all needed information in the Buyer’s possession and all authority and assistance
necessary to enable Seller to carry on the defense of such suit and any appeal from a judgment or decree rendered therein. No offer of settlement, settlement or compromise in the course of such indemnification shall be binding on Buyer without its
prior written consent (which consent shall not be unreasonably withheld). 
  
 (b) Buyer agrees to indemnify and hold Seller, its agents and employees, harmless from and against all claims, liabilities, costs, damages, losses, judgments, or expenses (including reasonable attorneys’ fees)
caused by, arising out of, or resulting from: (i) Seller’s incorporation (with Buyer’s approval) into the Products of Buyer’s Confidential Information regarding its own designs and specifications; or (ii) Buyer’s misuse or
mishandling of a Product. Seller agrees to give Buyer prompt notice in writing of the institution of any suit, including any suit or claim asserted or made by any governmental authority having jurisdiction; and Seller agrees to permit Buyer to have
control in the conduct of the defense of such suit, and to give Buyer any information in the Seller’s possession and all authority and assistance necessary to enable Buyer to carry on the defense of such suit and any appeal from the judgment or
decree rendered therein. In offer of settlement, the settlement or compromise in the course of such indemnification shall be binding on Seller without its prior written consent (which consent shall not be unreasonably withheld). 
  

 Page 10 of 16 

 10. Assignability. Neither Party may assign this Agreement to a third party except upon conveyance or transfer
(whether by merger, acquisition, sale of assets, or otherwise) of all, or substantially all, of such Party’s business pertaining to the subject matter of this Agreement, in which event the transferee shall agree in writing that this Agreement
and all of its provisions shall be binding upon that transferee as if the transferee were an original signatory to this Agreement. 
  
 11. Dispute Resolution. 
  
 11.1 Governing Law. This Agreement shall be construed and interpreted in accordance with, and the rights and obligations of the Parties shall be
determined by, the laws of the State of Arizona. 
  
 11.2
Disputes. If Buyer and Seller are unable to resolve any dispute between them, either Buyer or Seller may, by written notice to the other, have such dispute referred to the Chief Executive Officers (or equivalent position) of Buyer and Seller,
for attempted resolution by good faith negotiations within thirty (30) days after such notice is received. 
  
 11.3 Arbitration. Any and all disputes, controversies and differences arising out of this Agreement or any breach of it, which cannot be settled
pursuant to Section 11.2 shall be finally settled by binding arbitration in the manner described in this Section 11.3. The arbitration shall be conducted pursuant to the commercial arbitration rules of the American Arbitration Association (the
“AAA”) then in effect. Notwithstanding those rules, the arbitration shall be held in Tuscon, AZ if brought by Buyer, or San Francisco, California if brought by Seller, by a single arbitrator, provided that at the request of any Party, the
arbitration shall be conducted by a panel of three (3) arbitrators. The arbitrator(s) shall be selected in accordance with the commercial arbitration rules of the AAA., In any event, the arbitrator(s) selected in accordance with this Section 11.3
are referred to herein as the “Panel”, and at least one (1) member of the Panel shall be an independent expert with experience in the field of the dispute.. The Parties shall share equally the fees of the Panel. Each Party shall bear the
costs of its own attorneys’ fees and experts’ fees; provided that the Panel may, in its discretion award the prevailing Party all or part of the attorneys fees and expenses incurred by the prevailing Party in connection with the
arbitration. Judgment upon the award may be entered in any court having jurisdiction, or 

  

 Page 11 of 16 

 
application may be made to such court for judicial acceptance of the award and/or an order of enforcement, as the case may be. No Party shall initiate
arbitration hereunder unless it has attempted first to resolve the dispute in accordance with Section 11.2. 
  
 12. Amendments. No part of this Agreement may be amended, altered or otherwise modified unless done so in a writing duly executed by the Parties. 
  
 13. Independent Contractors. Nothing contained in this Agreement is intended implicitly, or is to be construed, to constitute Buyer
or Seller as partners in the legal sense. No Party shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or
undertaking with any third party. 
  
 14. Notices. Unless otherwise
indicated differently, all notices, requests, information or demands which any Party may desire or may be required to give to the other Party, shall be in writing and shall be personally delivered or sent via first class United States mail, and sent
to the Party at its address appearing below or such other address as either Party shall subsequently inform the other Party by written notice given as described above: 
  

					
	 	 	If to Seller:	  	 Spectral Instruments
 420 N Bonita Avenue

Tucson, Arizona 85745
 Attn: Keith Copeland

			
	 	 	If to Buyer:	  	 Xenogen
 860 Atlantic Ave.
 Alameda, California 94501
 Attn: Legal Department

  
 All notices, requests, information or
demands so given shall be deemed effective upon receipt or, if mailed, upon receipt or the expiration of the third day following the date of mailing, whichever occurs first, except that any notice of change in address shall be effective only upon
receipt by the Party to whom the notice is addressed. 
  
 15. Non-Waiver.
No waiver of any right or obligation under this Agreement shall act as a continuing waiver of that right or obligation unless agreed in writing between the Parties. 
  

 Page 12 of 16 

 16. Headings. Headings in this Agreement are provided for organizational purposes only and do not control the
interpretation of this Agreement. 
  
 17. Binding Effect. This Agreement
shall inure to the benefit of and bind the Parties, their heirs, successors and permitted assigns. 
  
 18. Severability. If any duly appointed arbitrator or court of competent jurisdiction rules that any portion of this Agreement is invalid for any reason, the remainder of the Agreement shall remain in full
force and effect and shall not be affected thereby. 
  
 19. No Third Party
Beneficiary Rights. Nothing herein shall be construed as granting any third-party beneficiary rights to any third party. 
  
 20. Entire Agreement. This Agreement, including Schedule A, sets forth the entire understanding between the Parties with respect to the subject matter hereof and
supercedes and replaces any and all prior understandings, agreements and discussions between the Parties with respect to such subject matter. 
  
 In witness whereof, the Parties, intending to be legally bound, have caused this Agreement to be executed in their corporate names by their duly
authorized officers as of the date above. 
  

													
	 Spectral Instruments, Inc.,
 an Arizona corporation
	 	 	 	 Xenogen Corporation,
 a Delaware corporation

					
	By	 	/s/ Keith Copeland	 	 	 	By	 	/s/ David W. Carter
	 	 	
	 	 	 	 	 	

	 	 	Name	 	Keith Copeland	 	 	 	 	 	Name	 	David W. Carter
	 	 	Its	 	CEO	 	 	 	 	 	Its	 	Chairman & CEO

  

 Page 13 of 16 

 Schedule A – Products 
  

	1.	600 Series CCD Camera System P/N 2362-1 

  

 Page 14 of 16 

 Schedule B – Specifications 
  
 *** 
  
 *** Confidential Treatment Requested. 
  

 Page 15 of 16

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