Document:

exv10w6

Exhibit 10.6

Confidential

CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER A
CONFIDENTIAL TREATMENT REQUEST, PURSUANT TO RULE 406 OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. THE REDACTED TERMS HAVE BEEN MARKED
IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH THREE ASTERISKS [***].

CO-DEVELOPMENT and COMMERCIALIZATION AGREEMENT

THIS AGREEMENT, effective as of the last date of execution by the parties hereto (hereinafter
referred to as the “Effective Date”) is by and between Psynova Neurotech Ltd., having an address at
St. John’s Innovation Centre, Cowley Road, Cambridge CB4 0WS, UK (hereinafter referred to as
“Psynova”) and Rules Based Medicine, Inc. a corporation having its principal place of business at
3300 Duval Road, Austin, Texas 78759, USA (hereinafter referred to as “RBM”).

RECITALS

	1.	 	Psynova is a leading neurological disorder diagnostic development company.
	 
	2.	 	RBM is a leading immunoassay development and services company.
	 
	3.	 	The parties have agreed that Psynova will provide the Material (hereinafter defined) to RBM
for the purposes of conducting a Research and Development Project (hereinafter defined) as
described in this Agreement.
	 
	4.	 	RBM will undertake the Research and Development Project specifically utilizing the Material
to be supplied by Psynova, and the parties will collaborate in relation to the development,
validation, obtaining of regulatory approval, manufacturing and marketing of diagnostic
immunoassays for schizophrenia arising from the Research and Development Project.
	 
	5.	 	RBM and Psynova have agreed terms upon which RBM may make an investment of up to £2,725,000
in Psynova by providing loans or subscribing for shares in the capital of Psynova.

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties
agree as follows:

	1.	 	Definitions and interpretation
	 
	1.1	 	When used in this Agreement, each of the following terms shall have the meanings set out in
this Article
	 
	 	 	“Affiliate” means any company, partnership or other entity which directly or indirectly
Controls, is Controlled by or is under common Control with a party;
	 
	 	 	“Business Day” means any day (other than a Saturday or a Sunday) on which banks are open
for business in New York and England.
	 
	 	 	“Change of Control” means a change in ownership or Control of Psynova effected through a
merger, consolidation or acquisition by any person or related group of persons of
ownership (directly or indirectly) of all or substantially all of the assets of Psynova or
securities possessing more than fifty percent of the total combined voting power of the
outstanding securities of Psynova; except that such term does not include (i) a
consolidation or merger with a wholly-owned subsidiary of Psynova, (ii) a merger effected
exclusively for the purpose of changing the domicile of Psynova, (iii) the issuance of
shares in an equity financing (including the conversion of the Debenture) in which Psynova
is the surviving corporation, or (iv) any other corporate reorganization, acquisition or
other transaction or series of related transactions involving Psynova, in any such case,
in which the stockholders of Psynova immediately prior to such

 

 

	 	 	transaction or series of related transactions shall own at least 50% of the voting
securities of Psynova or the surviving corporation immediately after such transaction or
series of related transactions.
	 
	 	 	“Commercialisation Plan” means the plan for commercialisation of the Testing Services by
RBM, as set out in Appendices B and C, with such changes as may be approved by unanimous
resolution of the Steering Committee;
	 
	 	 	“Commercialisation Milestone” means the earlier of:
	 
	 	 	(a) twelve months following the achievement of the Schizophrenia Product Milestone; and
	 
	 	 	(b) the point at which the Steering Committee approves by unanimous resolution a business
plan for the twelve month period following the Commercialisation Milestone including the
revenue forecast, minimum sales target and performance milestones for such period;
	 
	 	 	provided that the Steering Committee has determined by unanimous resolution that RBM has
fulfilled or will fulfil its sales and marketing commitment to enable a product to be
launched, including for the avoidance of doubt that the required pre-launch marketing
expenditure set out in Appendix C has been made or will be made by RBM, with such changes
as may be approved by unanimous resolution of the Steering Committee.
	 
	 	 	“Commercialisation Term” means the period commencing on the date the Commercialisation
Milestone has been met, and ending on the date of termination of this Agreement.
	 
	 	 	“Commercialisation Term Year” means any twelve (12) month period during the
Commercialisation Term that commences on (i) the date the Commercialisation Milestone has
been met or (ii) any anniversary of such date.
	 
	 	 	“Confidential Information” of a party means all information in any medium concerning the
business of that party (including without limitation its products, services, plans,
strategies, finances, trade secrets and confidential know-how) that comes into the
possession of the other party as a result of this Agreement or otherwise, and in respect
of Psynova’s Confidential Information includes the data, results and other information
arising from the R&D Project;
	 
	 	 	“Control” or “Controlled” means the ownership of more than 50% of the issued share capital
or the legal power to direct or cause the direction of the general management and policies
of the entity in question;
	 
	 	 	“Debenture” means the debenture to be granted by Psynova in favour of RBM in accordance
with clause 2.7 to secure the Facility, in agreed form.
	 
	 	 	“Debenture Purchase Agreement” means the debenture purchase agreement between RBM, Psynova
and others relating to the purchase of the Debenture.
	 
	 	 	“Debt” has the meaning given in clause 2.2.
	 
	 	 	“Deed of Adherence” means a deed of adherence to the Shareholder Agreement, in the form
set out in Appendix D, subject to such amendments as may be required to reflect changes to
the shareholders of Psynova or amendments to the Shareholder Agreement.
	 
	 	 	“Diagnostic Kits” means a diagnostic kit derived from the Schizophrenia Product which aids
in the diagnosis, stratification, treatment, or research of schizophrenia, and which has
obtained all necessary regulatory approvals.

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	 	 	“Executive Officer” shall mean the Chief Executive Officer of RBM and the Chairman of
Psynova.
	 
	 	 	“Facility” has the meaning given in clause 2.1
	 
	 	 	“Future Products” means any:

	 	(a)	 	new product developed by Psynova or any Affiliate for depression, bipolar
disorder, autism, or additional psychiatric and neurological disorders (‘Relevant
Disorders’); or
	 
	 	(b)	 	new applications for existing products and improved versions of existing
products for Relevant Disorders,

	 	 	including a test or tests that additionally aid in the diagnosis, stratification,
treatment, and research of Relevant Disorders;
	 
	 	 	“Insolvency Event” means in respect of a party:

	 	(c)	 	an order is made or a resolution is passed for the winding-up of the party
except in the case of a voluntary winding-up for the purposes of a solvent
amalgamation or reconstruction which has been approved in writing by the other party
(such approval not to be unreasonably withheld or delayed);
	 
	 	(d)	 	an administrator, receiver, administrative receiver or trustee in
bankruptcy is appointed in relation to the party or all or substantially all of its
assets;
	 
	 	(e)	 	the holder of any security over all or substantially all of the assets of
the party takes any step to enforce that security;
	 
	 	(f)	 	all or substantially all of the assets of the party are subject to
attachment, sequestration, execution or any similar process;
	 
	 	(g)	 	the party is unable to pay its debts as they fall due or enters into a
composition or arrangement with its creditors or any of them; or
	 
	 	(h)	 	anything analogous to any of the events described in paragraphs (a) — (e)
occurs in any jurisdiction.

	 	 	Provided that paragraph (a) does not apply to a petition for winding-up presented by a
creditor which is frivolous or vexatious and is being contested in good faith and with due
diligence and is discharged or struck out within 21 days.
	 
	 	 	“Intellectual Property” or “IP” means all patents and patent rights (including
supplementary protection certificates and the like), rights in inventions, trade marks,
copyright, rights in designs, database rights, utility models, rights to goodwill,
applications and rights to apply for any of those rights, know-how, trade secrets, rights
in confidential information and all other intellectual property rights or forms of
protection of a similar or equivalent nature or effect which may subsist anywhere in the
world (whether or not registered or capable of registration), together with all
applications for registration of and rights to apply for any of the above.
	 
	 	 	“Invention” means an invention conceived by one or more employee or agent of either
Psynova or RBM or the parties jointly, which invention arises from the R&D Project or
otherwise under the terms of this Agreement, and includes without limitation all New
Biomarkers and New Assays.

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	 	 	“IVD Directive” means European Parliament and Council Directive 98/79/EC on ‘In Vitro
Diagnostic Medical Devices’ and comparable directives issued by the United States Food and
Drug Administration.
	 
	 	 	“Know-How” means all technical expertise, information, know-how, knowledge and experience
not in the public domain which is developed either by RBM employees or agents, or Psynova
employees or agents, or jointly by the parties under the R& D Project or otherwise under
this Agreement, but excluding the data and results arising from the R&D Project.
	 
	 	 	“Laws” means all applicable laws, statutes, regulations, directives (including without
limitation the IVD Directive), guidelines, mandatory standards and codes of conduct (and
such standards and codes of conduct that constitute general industry practice), orders,
rules, directions and by-laws made by any regulatory or statutory agency or authority, or
any other authority or public body;
	 
	 	 	“Marketing Plan” means the plan set out in Appendix B;
	 
	 	 	“Material Adverse Change” means the occurrence of any event (including, without
limitation, the filing of any claim, litigation, arbitration or administrative proceeding
or the receipt of any threat to file any claim, litigation, arbitration or administrative
proceeding) or series of events which is reasonably likely to have a material adverse
effect on, or reasonably likely to result in a material adverse change with respect to,
any material licenses, contract rights or intellectual property rights of Psynova, but
excluding any event or series of events initiated or otherwise taken by RBM.
	 
	 	 	“Material” means biomarkers for schizophrenia, as described in the R&D Plan for Phase 1 of
the Research and Development Project.
	 
	 	 	“New Biomarkers” means all biomarkers developed by RBM employees or agents, Psynova
employees or agents, or the parties jointly as a result of or in connection with the R&D
Project.
	 
	 	 	“New Assays” means all assays developed by RBM employees or agents, Psynova employees or
agents, or the parties jointly as a result of or in connection with the R&D Project.
	 
	 	 	“Phase I” means the first phase of the R&D Project, the complete R&D Plan for which is set
out in Part 1 of Appendix A.
	 
	 	 	“Phase II” means the second phase of the R&D Project, an outline of the R&D Plan for which
is set out in Part 2 of Appendix A.
	 
	 	 	“Preferred A Ordinary Shares” means Preferred A Ordinary shares of £0.0001 each in the
capital of Psynova.
	 
	 	 	“Psynova Background IP” means Intellectual Property developed by Psynova independently of
the R&D Project and this Agreement, which relates to any Schizophrenia Product.
	 
	 	 	“Psynova Right” has the meaning given in clause 3.2.
	 
	 	 	“Quarter” shall mean each three month period commencing on 1 January, 1 April, 1 July and
1 October in a calendar year, and “Quarterly” shall mean each period comprising a Quarter.
	 
	 	 	“R&D Plan” means the plan for each of Phase I and Phase II of the R&D Project, including
the obligations of each party and the timeframe for meeting each obligation. The complete
R&D Plan for Phase I is set out in Part 1 of Appendix A. An outline of the R&D Plan for
Phase II

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	 	 	(which plan is to be finalised by the R&D Committee under clause 6) is set out in Part 2
of Appendix A.
	 
	 	 	‘R&D Committee’ has the meaning set out in clause 6.1.
	 
	 	 	‘R&D Term’ means the period commencing on the Effective Date and ending on the date that
both Phase I and Phase II of the R&D Project are complete.
	 
	 	 	“Reasonable Best Endeavours” means a party’s reasonable best endeavours in accordance with
reasonable and customary commercial practice in the industry.
	 
	 	 	“RBM Right” has the meaning given in clause 3.1.
	 
	 	 	“Relevant Services” means the services to be provided by RBM in connection with the R&D
Project, as set out in the R&D Plans for Phase I and Phase II, including biomarker assay
development and biomarker assay testing services.
	 
	 	 	“Research and Development Project” or “R&D Project” means the research program to be
conducted by RBM under this Agreement to develop, validate, manufacture and market
diagnostic assays, a more detailed description of which is set out in Appendix A. The R&D
Project shall be divided into Phase 1 and Phase II.
	 
	 	 	“Schizophrenia Product” means a product arising from the R&D Project, being a test or
tests that aids the early diagnosis stratification, treatment, or research for
schizophrenia, including all modifications, improvements and enhancements of such
product(s) that aid the early diagnosis, stratification, treatment or research of
schizophrenia.
	 
	 	 	“Schizophrenia Product Milestone” means achieving each of the following results in the
validation study for the Schizophrenia Product, as defined in the R&D plan for Phase I as
set out in Part 1 of Appendix A:

	 	(a)	 	The analyte assays selected for the Schizophrenia Product, when tested
against the validation plasma/ serum sample set, must demonstrate at least [***]
specificity and [***] sensitivity in distinguishing schizophrenia samples from healthy
controls.
	 
	 	(b)	 	The analyte assays selected for the Schizophrenia Product will distinguish
schizophrenia from at least one other central nervous system disorder tested in the
validation phase [***].
	 
	 	(c)	 	The analyte assays selected for the Schizophrenia Product, when retested in
a double blind design, against a subset of the validation set (up to 200 samples),
must again demonstrate at least [***] specificity and [***] sensitivity in distinguishing
schizophrenia samples from healthy controls.

	 	 	“Shareholder Agreement” means the shareholder agreement between Porton Capital Technology
Funds, Psynova and others relating to Psynova dated 3 March 2006 as amended;
	 
	 	 	“Shareholder Undertaking” means the consent and undertaking by the shareholders of Psynova
in favour of Psynova and RBM, dated on or about the date of this Agreement;
	 
	 	 	“Steering Committee” has the meaning set out in clause 5.1.
	 
	 	 	“Targeted Territory” means the countries in which RBM will be responsible for the sales
and marketing of the Testing Services, being the US, UK, Germany, Switzerland, and such

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	 	 	additional countries that the Steering Committee unanimously agrees under clause 5 and
12.2 to include in the Targeted Territory.
	 
	 	 	“Technical File” means all necessary documents and information to fully satisfy the
requirements of the IVD Directive, including demonstrating conformity with the essential
requirements set out in Annex I of the IVD Directive;
	 
	 	 	“Territory” means all countries of the world.
	 
	 	 	“Testing Services” means the testing services for the diagnosis, stratification,
treatment, or research of schizophrenia, which is based on any Schizophrenia Product, and
which RBM is licensed to commercialise under clause 12.
	 
	 	 	“Written Resolution” means the written resolution of the shareholders of Psynova to be
adopted at completion of the first exercise of the RBM Right or Psynova Right, in the form
set out in Appendix E, subject to such amendments as may be required to reflect changes to
the articles of association of Psynova.
	 
	1.2	 	Interpretation
	 
	 	 	In this Agreement:

	 	1.2.1	 	all references to clauses and Appendices are references to clauses and
Appendices to this Agreement unless the context otherwise requires. All Appendices
are incorporated into and form part of this Agreement;
	 
	 	1.2.2	 	references to statutory provisions shall, except where the context
requires otherwise, be construed as references to those provisions as amended or
re-enacted or as their application is modified by other provisions (whether before or
after the date of this Agreement from time to time);
	 
	 	1.2.3	 	unless the context otherwise requires, references to the singular include
the plural and vice versa, references to any gender include all other genders, and
references to “persons” shall include individuals, bodies corporate, unincorporated
associations, businesses and partnerships;
	 
	 	1.2.4	 	headings are for ease of reference only and do not affect interpretation;
	 
	 	1.2.5	 	references to the words “includes” or “including” shall be construed
without limitation to the generality of the preceding words; and

	2.	 	Provision of facility by RBM
	 
	2.1	 	Subject to and conditional upon Psynova having executed the Debenture and the Debenture
Purchase Agreement in accordance with clause 2.7 and having taken all actions in accordance
with clause 2.8, RBM, relying upon the representations and warranties set out in schedule 4 of
the Debenture Purchase Agreement, shall make available the following loan facilities to
Psynova:

	 	2.1.1	 	£525,000 in cash, and shall transfer the full amount to Psynova by
telegraphic transfer; and
	 
	 	2.1.2	 	£500,000 as a credit facility which Psynova may use to purchase Relevant
Services from RBM on the signing of, and in accordance with, this Agreement,

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	 	 	the aggregate amount of £1,025,000 to be made available by RBM in accordance with this
clause being referred to as the “Facility”.

	2.2	 	Interest on the outstanding amount of the Facility that has been drawn by Psynova (the
“Debt”) will accrue from day to day at the rate of 8 per cent per annum commencing on the
Effective Date. Interest shall be accrued on a monthly basis and added to principal.
	 
	2.3	 	The interest payable by Psynova shall be less any withholding or deduction required by law.
	 
	2.4	 	Provided the RBM Right or the Psynova Right has not been exercised, Psynova shall repay all
Debt and accrued interest in full on 31 December 2009.
	 
	2.5	 	RBM may demand immediate repayment of the Debt in full or in part together with accrued
interest and/or enforce any security constituted under the Debenture in accordance with the
terms of the Debenture if any of the following events occur (each event referred to as an
“Event of Default”):

	 	2.5.1	 	failure by Psynova to repay the Debt in full on 31 December 2009;
	 
	 	2.5.2	 	a Change of Control shall occur with respect to Psynova;
	 
	 	2.5.3	 	the occurrence of any Insolvency Event;
	 
	 	2.5.4	 	it is or becomes unlawful for Psynova to perform any of its material
obligations under this Agreement, the Debenture or the Debenture Purchase Agreement;
	 
	 	2.5.5	 	if Psynova fails to comply with any of the material obligations expressed
to be assumed by it under this Agreement (except for the repayment obligation under
clause 2 hereof), the Debenture or the Debenture Purchase Agreement, provided that,
where such failure is capable of being remedied, such failure has not been remedied
within a period of thirty (30) days after written notice from RBM to Psynova
requiring it to remedy such failure or, as the case may be, procure that such failure
is remedied; or
	 
	 	2.5.6	 	the occurrence of any Material Adverse Change, provided that, where such
Material Adverse Change is capable of being remedied, such Material Adverse Change
has not been remedied within a period of thirty (30) days after written notice from
RBM to Psynova requiring it to remedy such Material Adverse Change or, as the case
may be, procure that such Material Adverse Change is remedied

	 	 	in each case so long as the RBM Right or the Psynova Right has not been exercised.
	 
	2.6	 	Clause 2.5 above shall not apply to any step, procedure or action permitted under the terms
of this Agreement.
	 
	2.7	 	The Facility will be secured by a first ranking fixed and floating charge over the entire
assets and undertaking present and future of Psynova and an assignment of contractual rights
and insurance policies to the benefit of Psynova. Immediately following the execution of this
Agreement, Psynova shall execute the Debenture and the Debenture Purchase Agreement.
	 
	2.8	 	Psynova shall take all other actions requested by RBM to give effect to such charge or the
other agreements contemplated by this clause 2.
	 
	2.9	 	In the event of the RBM Right or the Psynova Right being exercised, RBM shall automatically
be deemed also to have subscribed for Preferred A Ordinary Shares in respect of the aggregate
of the full amount of the Debt together with all accrued interest and that part (if any) of
the

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	 	 	Facility that remains undrawn at that time (such undrawn part being the “Balance”). For
the avoidance of doubt, the consideration for the issue of Shares pursuant to this clause
2.9 shall be the aggregate of the Debt, interest thereon and an irrevocable commitment by
RBM to provide Relevant Services to Psynova in accordance with this Agreement to a value,
calculated in accordance with this Agreement, equal to the Balance.
	 
	 	 	The subscription shall be made at £0.08086 per Preferred A Ordinary Share. No fractions
of shares shall be issued and the number of shares to be issued shall be rounded down to
the nearest whole number.
	 
	 	 	Completion of this subscription shall take place five Business Days after the date on
which notice is given under clause 3.1.2 or 3.2.3 to exercise the RBM Right or the Psynova
Right when Psynova shall allot and issue to RBM the number of Preferred A Ordinary Shares
subscribed for, enter RBM in its Register of Members as the holder of those shares, and
issue a certificate in respect of those shares. Preferred A Ordinary Shares so allotted
and issued shall be credited as fully paid, and shall rank pari passu with the shares of
the same class in issue on the date of issue, including the right to participate in all
dividends declared or paid, and all other distributions made, in respect of such shares
after the date of issue.
	 
	 	 	Following the completion of this subscription, Psynova shall have no further liability to
RBM in respect of the Debt or any accrued interest.
	 
	3.	 	RBM option to acquire shares
	 
	3.1	 	Psynova grants to RBM the right (the “RBM Right”) to subscribe for 19,562,716 Preferred A
Ordinary Shares subject to the following terms:

	 	3.1.1	 	the price per Preferred A Ordinary Share shall be £0.0869
	 
	 	3.1.2	 	the right must be exercised by RBM giving written notice to Psynova; and
	 
	 	3.1.3	 	the right shall lapse and terminate on the first to occur of (i) six
months following the Schizophrenia Product Milestone, or (ii) 31 December 2009.

	3.2	 	RBM grants to Psynova the right (the “Psynova Right”) to require RBM to subscribe for
19,562,716 Preferred A Ordinary Shares subject to the following terms:

	 	3.2.1	 	the right shall only become exercisable if the Schizophrenia Product
Milestone occurs on or prior to 31 December 2008;
	 
	 	3.2.2	 	the price per Preferred A Ordinary Share shall be £0.0869;
	 
	 	3.2.3	 	the right must be exercised by Psynova giving written notice to RBM;
	 
	 	3.2.4	 	the right shall lapse and terminate six months following the Schizophrenia
Product Milestone;
	 
	 	3.2.5	 	an Insolvency Event with respect to Psynova has not occurred;
	 
	 	3.2.6	 	a Change of Control with respect to Psynova has not occurred;
	 
	 	3.2.7	 	Psynova is not in material breach of this Agreement, the Debenture or the
Debenture Purchase Agreement or any agreement between Psynova and Cambridge
Enterprise Limited and its Affiliates;

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	 	3.2.8	 	a Material Adverse Change with respect to Psynova has not occurred that is
continuing

	3.3	 	Completion of the exercise of the RBM Right or the Psynova Right shall take place five
Business Days after notice is given under clause 3.1.2 or 3.2.3 when:

	 	3.3.1	 	RBM shall satisfy the subscription price due by either:

	 	(a)	 	paying to Psynova by telegraphic transfer the aggregate
price due for the Preferred A Ordinary Shares subscribed for; or
	 
	 	(b)	 	irrevocably committing to provide Relevant Services to
Psynova in accordance with this Agreement to a value, in accordance with
this Agreement, equal to the aggregate price due for the Preferred A
Ordinary Shares subscribed for,

	 	 	 	provided that the maximum amount that may be satisfied in accordance with
paragraph (b) above is £850,000;
	 
	 	3.3.2	 	Psynova shall allot and issue to RBM the number of Preferred A Ordinary
Shares subscribed for, enter RBM in its Register of Members as the holder of those
shares, and issue a certificate in respect of those shares. Preferred A Ordinary
Shares so allotted and issued shall be credited as fully paid, and shall rank pari
passu with the shares of the same class in issue on the date of issue, including the
right to participate in all dividends declared or paid, and all other distributions
made, in respect of such shares after the date of issue; and
	 
	 	3.3.3	 	on exercise of the RBM Right or Psynova Right:

	 	(a)	 	RBM shall execute the Deed of Adherence and Psynova shall
execute it on behalf of each of its shareholders in accordance with the
power of attorney given to it by the Shareholder Undertaking; and
	 
	 	(b)	 	Psynova shall circulate the Written Resolution to
shareholders for signature and shall execute it on behalf of each of those
shareholders in accordance with the power of attorney given to it by the
Shareholder Undertaking.

	3.4	 	Any notice given under clause 3.1.2 or 3.2.3 shall be irrevocable unless otherwise agreed by
the parties.
	 
	3.5	 	In addition to RBM’s rights under section 5 of the Debenture Purchase Agreement, Psynova
undertakes to RBM that at all times until either the RBM Right or Psynova Right has been
exercised and has completed or both the RBM Right and the Psynova Right have lapsed, it shall:

	 	3.5.1	 	keep freely and unconditionally available for issue out of its authorised
but unissued share capital such number of Preferred A Ordinary Shares as will enable
the RBM Right and Psynova Right to be satisfied in full;
	 
	 	3.5.2	 	not make any issue, grant or distribution or take any other action the
effect of which would be that, on the exercise of the RBM Right or the Psynova
Right, it would be required to issue Preferred A Ordinary Shares at a discount;
	 
	 	3.5.3	 	send to RBM a copy of every notice, circular, accounts or other document
required by law to be sent by Psynova generally to the holders of the Preferred A
Ordinary Shares

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	 	 	 	or its other ordinary share capital at the same time as they are sent to such shareholders;
	 
	 	3.5.4	 	not without RBM’s prior written consent:

	 	(a)	 	issue any share capital by way of capitalisation of
profits or reserves (including share premium account and any redemption
reserve fund);
	 
	 	(b)	 	pay any dividend;
	 
	 	(c)	 	cancel, reduce or purchase any of its issued or
authorised share capital;
	 
	 	(d)	 	modify the rights attaching to Preferred A Ordinary
Shares or consolidate or subdivide Preferred A Ordinary Shares into shares
of larger or smaller denomination than £0.0001;
	 
	 	(e)	 	issue any share other than as set out in the Director’s
Option ( Director’s Option having the meaning given in the Shareholder
Agreement);
	 
	 	(f)	 	issue any share which has preferential rights to income
or capital to those attaching to Preferred A Ordinary Shares;
	 
	 	(g)	 	fail to abide by any of its obligations, restrictions,
covenants or agreements under this Agreement, the Debenture or the Debenture
Purchase Agreement

	4.	 	R&D Project and Relevant Services
	 
	4.1	 	The R&D Project shall be conducted in two phases, being Phase I and Phase II.
	 
	4.2	 	RBM shall provide the Relevant Services for each of Phase I and Phase II, in accordance with
the relevant R&D Plan for each Phase, and shall use its Reasonable Best Endeavours to meet the
timeframes set out in each R&D Plan for delivery of the Relevant Services.
	 
	4.3	 	Before providing each Relevant Service, RBM shall provide to Psynova a written quotation
setting out its total fees for the provision of such Relevant Service, which fees shall be
determined in accordance with the pricing for the Relevant Service as set forth in the R&D
Plan. Upon successful completion of each such Relevant Service in accordance with the R&D
Plan, RBM shall notify Psynova in writing and, subject to any dispute between the parties in
relation to such Relevant Service, the fees set out in RBM’s quotation for the Relevant
Service shall be applied against the credit for such services as provided in clauses 2.1.2 and
3.3.1(b) of this Agreement.
	 
	4.4	 	RBM shall, and shall procure that each of its employees and agents conduct the Relevant
Services:

	 	4.4.1	 	with all due care and skill, and to the best of their knowledge and
expertise and with the same level of diligence and skill as RBM typically provides in
the ordinary course of its business;
	 
	 	4.4.2	 	in accordance with all Laws;
	 
	 	4.4.3	 	in accordance with all reasonable directions from Psynova from time to
time consistent with the terms of this Agreement.

10

 

	4.5	 	RBM and Psynova shall co-develop the Schizophrenia Product during Phase I of the R&D Project
under the R&D Plan. The parties envisage that Psynova and RBM will work together to co-develop
improvements to the Schizophrenia Product in Phase II of the R&D Project under the R&D Plan.
Any Relevant Service provided by RBM, for which a quotation has been provided under clause 4.3
and accepted by Psynova, and which is in excess of the amounts referred to in clause 2.1.2 (as
to Phase I) and clause 3.3.1(b) (as to Phase II) shall be the responsibility of and invoiced
to Psynova upon successful completion of the Relevant Service in accordance with the R&D Plan.
The amount invoiced by RBM shall not exceed the amount set out in the quotation accepted by
Psynova for the provision of the Relevant Service.
	 
	4.6	 	Phase I of the R&D Project shall be completed when a Schizophrenia Product developed in
accordance with the R&D Plan for Phase I complies with the Schizophrenia Product Milestone.
The determination of whether a Schizophrenia Product complies with the Schizophrenia Product
Milestone shall be made in accordance with clauses 5.8 and 5.9.
	 
	4.7	 	Phase II of the R&D Project shall be completed when the Steering Committee determines that
the R&D Plan for Phase II has been completed in accordance with clauses 5.8 and 5.9.
	 
	4.8	 	Upon successful completion of the Schizophrenia Product Milestone, RBM shall have the right
to commercialise the Testing Services in accordance with clause 12.
	 
	4.9	 	The Parties shall co-operate with each other and work together to acquire grant and other
outside funding from sources such as the Stanley Medical Research Institute.
	 
	5.	 	Steering Committee
	 
	5.1	 	Within five (5) Business Days after the Effective Date, the parties shall establish a
steering committee (“Steering Committee”) comprising three (3) senior managers from Psynova
and two (2) senior managers from RBM (each such manager being referred to herein as a
“Representative”). Each party shall promptly notify the other party of its Representatives,
and may replace its Representatives at any time upon reasonable prior written notice to the
other party.
	 
	5.2	 	Each party shall have the right to appoint an alternative representative to attend specified
meetings of the Steering Committee in place of a Representative on reasonable prior written
notice to the other party.
	 
	5.3	 	Each party shall designate one of its Representatives as co-chair of the Steering Committee,
and such co-chairs shall serve as the primary points of contact between the parties with
respect to matters relating to this Agreement.
	 
	5.4	 	The Steering Committee shall meet regularly, either in person, by telephone or by video
conference, on such dates, and at such times and locations as are agreed between the parties,
providing that the Steering Committee shall meet at least four (4) times every calendar year.
	 
	5.5	 	The quorum for meetings of the Steering Committee shall be at least one Representative of
each party.
	 
	5.6	 	Each party shall be responsible for its own expenses for participating in the Steering
Committee.
	 
	5.7	 	The Steering Committee shall have authority to:

	 	5.7.1	 	discuss progress made and any difficulties encountered;

11

 

	 	5.7.2	 	plan and establish priorities;
	 
	 	5.7.3	 	oversee the execution of the R&D Project in accordance with the R&D Plan
for both Phase I and Phase II;
	 
	 	5.7.4	 	coordinate and direct the mutual efforts of the parties; and
	 
	 	5.7.5	 	provide strategic guidance.

	 	 	in relation to the both the R&D Project, and RBM’s commercialisation of the Testing
Services and any Diagnostic Kits under this Agreement.
	 
	5.8	 	Each member of the Steering Committee shall have one vote. Subject to clause 5.11, the
Steering Committee shall have authority to decide matters relating to its purposes as set out
in clause 5.7. All such matters shall be decided by majority vote, except for the following
major matters, which require the unanimous resolution of all of the Steering Committee
members:

	 	5.8.1	 	any additional countries that shall be added to the Targeted Territory in
which RBM will sell and market the Testing Services, and any consequent changes to
the Marketing Plan, and the revenue forecast, minimum sales targets and performance
milestones referred to in clauses 12.11 and 12.12 on account of the addition of such
countries to the Targeted Territory;
	 
	 	5.8.2	 	the determination of a commercialisation strategy and plan for the
Diagnostic Kits;
	 
	 	5.8.3	 	the validation studies required to determine whether the Schizophrenia
Product complies with the Schizophrenia Product Milestone;
	 
	 	5.8.4	 	determination of whether the Schizophrenia Product complies with the
Schizophrenia Product Milestone;
	 
	 	5.8.5	 	determination of whether the R&D Plan for Phase II has been completed;
	 
	 	5.8.6	 	determination of whether the Commercialisation Milestone has been met;
	 
	 	5.8.7	 	determination of whether the approval of the Steering Committee is
required for any proposed sublicense or subcontract by RBM of the Testing Services or
the manufacture of Diagnostic Kits, and if the Steering Committee determines that
approval is required, whether the Steering Committee approves such sublicence or
subcontract;
	 
	 	5.8.8	 	determination of the business plan, revenue forecast, minimum sales target
and performance milestones for each Commercialisation Term Year; and
	 
	 	5.8.9	 	any matter referred to the Steering Committee under clause 6.8 or any
other matter described in this Agreement (including the R&D Plan) that is to be
determined by unanimous resolution of all the Steering Committee members.

	5.9	 	In the event that the members of the Steering Committee are not able to reach consensus in
relation to any matter requiring unanimous resolution under clause 5.8 within fourteen (14)
days of such matter first being considered by the Steering Committee, the matter shall be
referred to the respective Executive Officer of each party for resolution. If the Executive
Officers are not able to reach resolution within fourteen (14) days of such matter being
referred to them, then if the failure to agree is in relation to:

12

 

	 	5.9.1	 	the matter referred to in clause 5.8.1, the country will not be added to
the Targeted Territory;
	 
	 	5.9.2	 	the matter referred to in clause 5.8.2, RBM shall not be licensed under
clause 13.3 to market and sell the Diagnostic Kits separately from their use in the
provision of the Testing Services; and
	 
	 	5.9.3	 	any matter arising under clauses 5.8.3 — 5.8.9 (inclusive), or any matter
referred to the Steering Committee under clause 6.8, the matter shall be referred to
an appropriately qualified independent expert (the costs and expenses for which shall
be borne by the parties equally) agreed upon by the parties, or selected by Centre
for Effective Dispute Resolution in the event the parties cannot agree on an expert
within fourteen (14) days, and the decision of such expert shall be final and binding
on the parties.

	5.10	 	The minutes of each Steering Committee meeting shall be prepared under the direction of the
co-chairs of the Steering Committee, and circulated promptly after each meeting. Such minutes
shall include a summary of the matters discussed, decisions made and actions agreed upon by
the Steering Committee. Each party shall keep a copy of the minutes of each meeting at its
premises.
	 
	5.11	 	The Steering Committee shall have no authority to:

	 	5.11.1	 	amend or interpret this Agreement;
	 
	 	5.11.2	 	determine whether or not a breach of this Agreement has occurred; or
	 
	 	5.11.3	 	alter the rights or obligations of the parties as set out in this Agreement, except
in relation to the matters resolved as set out in clause 5.8.

	6.	 	R&D Committee
	 
	6.1	 	Within five (5) Business Days after the Effective Date, the parties shall establish a
research and development committee (‘R&D Committee’). Each party may appoint up to four
representatives to the R&D Committee as it considers appropriate. Each party shall promptly
notify the other party of the representatives it has appointed to the R&D Committee, and each
party may replace such representatives at any time upon reasonable prior written notice to the
other party.
	 
	6.2	 	Each party shall designate one of its senior managers to be co-chair of the R&D Committee,
and such co-chairs shall serve as the primary points of contact between the parties with
respect to matters relating to the R&D Project.
	 
	6.3	 	The purpose of the R&D Committee is to plan, establish priorities and coordinate the parties’
activities with respect to matters of science, technology, research and development in
connection with the R&D Project, which shall include without limitation:

	 	6.3.1	 	exchanging scientific and technical information relating to the R&D
Project;
	 
	 	6.3.2	 	preparing, agreeing and implementing an R&D Plan for Phase II of the R&D
Project, which R&D Plan shall be based on the outline set out in Part 2 of Appendix
A, and shall set out in detail the obligations of each party in relation to Phase II,
all deliverables, and the timeframe for completing each obligation and delivering
each deliverable.

13

 

	6.4	 	The R&D Committee shall meet regularly, either in person, by telephone or by video
conference, on such dates, and at such times and locations as are agreed between the parties,
providing that the R&D Committee shall meet at least once every calendar month.
	 
	6.5	 	The quorum for meetings of the R&D Committee shall be at least one representative of each
party.
	 
	6.6	 	Each party shall be responsible for its own expenses for participating in the R&D Committee.
	 
	6.7	 	Each member of the R&D Committee shall have one vote. Subject to clause 6.10, the R&D
Committee shall have authority to decide matters relating to its purposes as set out in clause
6.3. All such matters shall be decided by majority vote, except for the following major
matters, which require the unanimous resolution of all of the R&D Committee:

	 	6.7.1	 	the recommendation by the R&D Committee to the Steering Committee of any
product opportunity on the basis that the R&D Committee believes that all relevant
milestones in relation to that product have been completed; and
	 
	 	6.7.2	 	any other matter that the parties agree in writing from time to time
requires the unanimous resolution of all of the R&D Committee.

	6.8	 	In the event that the members of the R&D Committee are not able to reach consensus in
relation to any matter requiring unanimous resolution under clause 6.7 within fourteen (14)
days of such matter first being considered by the R&D Committee, the matter shall be referred
to the Steering Committee for resolution. If the Steering Committee is not able to reach
resolution within fourteen (14) days of such matter being referred to them, then the procedure
set out in clause 5.9 shall apply.
	 
	6.9	 	The minutes of each R&D Committee meeting shall be prepared under the direction of the
co-chairs of the R&D Committee, and circulated promptly after each meeting. Such minutes shall
include a summary of the matters discussed, decisions made and actions agreed upon by the R&D
Committee. Each party shall keep a copy of the minutes of each meeting at its premises.
	 
	6.10	 	The R&D Committee shall have no authority to:

	 	6.10.1	 	amend or interpret this Agreement;
	 
	 	6.10.2	 	determine whether or not a breach of this Agreement has occurred; or
	 
	 	6.10.3	 	alter the rights or obligations of the parties as set out in this Agreement, except
in relation to the matters set out in clauses 6.3.2 and 6.7.

	7.	 	Psynova Material Furnished to RBM
	 
	7.1	 	In accordance with the R&D Plan, Psynova shall provide to RBM free of charge, such quantity
of Material, and in such instalments, as Psynova in its reasonable discretion determines is
necessary to conduct the R&D Project.
	 
	7.2	 	Upon written request by RBM, Psynova may, in its discretion, supply further quantities of
Material as is required by RBM in connection with the R&D Project, subject to available
supplies and Psynova’s own requirements for the Material.

14

 

	7.3	 	RBM shall only use the Material provided by Psynova under this Agreement for the purpose of
the R&D Project, and not for any other purpose. RBM shall not sell, distribute or otherwise
make available the Material to any third party, except with the prior written consent of
Psynova.
	 
	7.4	 	The Material shall at all times remain the sole property of Psynova. This Agreement does not
transfer to RBM any Intellectual Property rights in the Materials, and RBM acknowledges that
it does not have any right, title or interest in or to the Materials, other than the right to
use the Materials in accordance with clause 7.3.
	 
	7.5	 	PSYNOVA MAKES NO REPRESENTATIONS OR WARRANTIES IN RELATION TO THE MATERIALS, AND FOR THE
AVOIDANCE OF DOUBT, THE PROVISION OF MATERIAL TO RBM DOES NOT IN ANY WAY CONSTITUTE A
REPRESENTATION BY PSYNOVA THAT THE USE OF MATERIAL WILL NOT INFRINGE THE INTELLECTUAL PROPERTY
RIGHTS OR ANY OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, PSYNOVA EXCLUDES ALL IMPLIED TERMS, CONDITIONS AND WARRANTIES (INCLUDING WITHOUT
LIMITATION AS TO SATISFACTORY QUALITY AND FITNESS FOR A PARTICULAR PURPOSE) WHICH BUT FOR THS
CLAUSE WOULD BE IMPLIED OR INCORPORATED INTO THIS AGREEMENT.
	 
	7.6	 	RBM ACKNOWLEDGES THAT THE MATERIAL IS EXPERIMENTAL IN NATURE, AND PSYNOVA MAKES NO
REPRESENTATION THAT THE MATERIAL IS SAFE, NON-TOXIC NOR AS TO THE PRESENCE OR ABSENCE OF
PATHOGENS OR OTHERWISE. THE MATERIAL IS TO BE USED WITH CAUTION AND PRUDENCE IN ANY
EXPERIMENTAL WORK, SINCE ALL OF ITS CHARACTERISTICS ARE UNKNOWN AND IT MAY BE INFECTIOUS OR
OTHERWISE HAZARDOUS. RBM SHALL BEAR ALL RISK TO ITS EMPLOYEES, ITS AGENTS AND ANY OTHER PERSON
RESULTING FROM ANY DIRECT OR INDIRECT USE OF THE MATERIAL BY RBM.
	 
	7.7	 	Upon the earlier to occur of the completion of the R&D Project and termination of this
Agreement, RBM shall, at Psynova’s option, either return to Psynova, or destroy all remaining
Material in its possession or control. RBM shall provide written confirmation by an authorized
representative of RBM within five (5) Business Days of such completion or termination that all
such Materials have been returned or destroyed.
	 
	8.	 	Reporting and Results of Project
	 
	8.1	 	During the term of the R&D Project, RBM shall provide Psynova with Quarterly written update
reports, including all data and results arising from the R&D Project during that Quarter.
	 
	8.2	 	RBM shall submit the reports referred to in clause 8.1 to the address for scientific notices,
as set out in clause 21.
	 
	8.3	 	Psynova shall have the right to use the reports provided by RBM under clause 8.1 (including
all data and results) for any internal purposes it requires in its discretion.
	 
	9.	 	Ownership of Intellectual Property
	 
	9.1	 	Psynova acknowledges that, subject to clause 9.2, it has no interest in any Intellectual
Property rights of RBM and RBM will remain the sole and exclusive owner of all right, title
and interest in any such rights. RBM shall be free to exploit and commercialise all its
Intellectual Property

15

 

	 	 	rights, and to conduct its testing services and kits business, without any duty or obligation to Psynova other than
as stipulated in this Agreement.
	 
	9.2	 	Psynova shall own all Intellectual Property rights in:

	 	9.2.1	 	all Inventions and Know-How, whether patentable or not; and
	 
	 	9.2.2	 	all data and results generated under the R&D Project and during the term
of this Agreement (‘Data’).

	9.3	 	Psynova hereby grants to RBM for the following purposes only in the Territory:

	 	9.3.1	 	a non-exclusive, non-transferable licence (without the right to grant
sub-licences) to use during the R&D Term any Inventions, Know-How and Data developed
under the R&D Project for the purpose of complying with its obligations under the R&D
Plans;
	 
	 	9.3.2	 	subject to clause 9.5, an exclusive, non-transferable licence (without the
right to grant sub-licences except as provided in clause 5.8.7) to use during the
period beginning with the achievement of the Schizophrenia Product Milestone and
ending upon the expiration of the Commercialisation Term any Inventions or Know-How
developed under the R&D Project or any Psynova Background IP for the purpose of
selling, manufacturing or having manufactured the Diagnostic Kits and providing the
Testing Services, in accordance with the terms and conditions of this Agreement;
	 
	 	9.3.3	 	a non- exclusive, non-transferable licence (without the right to grant
sub-licences) to use Psynova Background IP during the R&D Term for the purposes of
complying with its obligations under the R&D Plans;
	 
	 	9.3.4	 	a non-exclusive, non-transferable licence (without the right to grant
sub-licences) to use during the term of this Agreement any Inventions and Know-How
developed under the R&D Project or any Psynova Background IP for the purposes of
RBM’s own non-commercial internal research; and
	 
	 	9.3.5	 	a non-exclusive, non-transferable licence (without the right to grant
sub-licences) to use during the term of this Agreement any Inventions and Know-How
developed under the R&D Project or any Psynova Background IP, solely for the purposes
of RBM’s ongoing “research use only” testing services and kits sales business for
applications other than diagnosis, stratification, treatment and research of
schizophrenia.

	9.4	 	Subject to clause 9.5, Psynova hereby grants to RBM in the Targeted Territory an exclusive,
non-transferable licence (without the right to grant sub-licences except as provided in clause
5.8.7) to use during the period beginning with the achievement of the Schizophrenia Product
Milestone and ending upon the expiration of the Commercialisation Term any Inventions or
Know-How developed under the R&D Project or any Psynova Background IP for the purpose of
commercialising, selling and marketing the Testing Services (and commercialising, selling and
marketing the Diagnostic Kits if so authorised by the Steering Committee as provided in
clauses 5.8.2 and 13.3), in accordance with the terms and conditions of this Agreement.
	 
	9.5	 	RBM hereby grants to Psynova a non-transferable, perpetual, irrevocable, royalty-free,
worldwide licence-back of the rights granted to RBM under the Psynova Background IP in clauses
9.3.2 and 9.4 to use such Psynova Background IP for the purposes of fulfilling its obligations
under this Agreement and for all other purposes determined by Psynova in its discretion (other
than to develop or commercialise products or services that aid the early diagnosis,
stratification, treatment or research of schizophrenia).

16

 

	10.	 	Patents
	 
	10.1	 	Each party shall be responsible for filing and maintaining its own Intellectual Property.
	 
	10.2	 	Psynova may in its discretion decide whether or not to patent any Inventions arising from the
R&D Project.
	 
	10.3	 	The filing and prosecution of any patent applications required by Psynova in relation to
Inventions shall be carried out either by Psynova or counsel mutually agreeable to both
parties and Psynova or such counsel shall provide in advance to both parties for review and
comment, copies of documents to be filed.
	 
	11.	 	Regulatory approval
	 
	11.1	 	RBM and Psynova shall collaborate, under the supervision of the Steering Committee, to
compile all materials necessary for the purposes of RBM obtaining and maintaining all
necessary regulatory approval, through the appropriate IVD Directive, for the marketing of the
Testing Services and (if applicable) the Diagnostic Kit.
	 
	11.2	 	For the avoidance of doubt, unless otherwise agreed in writing between the parties, RBM as
legal holder of any required regulatory approvals, shall be responsible for obtaining and
maintaining all necessary regulatory approval for the marketing of the Testing Services and
(if granted rights to commercialise the Diagnostic Kit under clause 13.3) the Diagnostic Kit.
For the avoidance of doubt, RBM shall be responsible for any required CE marking of the
Diagnostic Kits which are intended to be placed on the market by RBM as in vitro diagnostic
medical devices within the meaning of the IVD Directive in any member state of the European
Union (“European IVD Product”), in accordance with the requirements of the IVD Directive and
for obtaining any approvals and/or certificates from any notified body within the meaning of,
and as may be required by, the IVD Directive in relation to such European IVD Product.
	 
	11.3	 	RBM shall be responsible for obtaining and maintaining all necessary regulatory approval for
the manufacture by RBM of the Diagnostic Kits including for the avoidance of doubt, any
certification of its quality systems by an appropriately accredited certification body which
may be required under the IVD Directive.
	 
	11.4	 	Each party shall provide to the other party all necessary data, analysis, and background
information, including providing the other party with reasonable access to its personnel, that
the other party reasonably requires in connection with obtaining and maintaining the
regulatory approvals referred to in clauses 11.2 and 11.3.
	 
	11.5	 	RBM shall initially bear the cost of obtaining and maintaining all regulatory approval under
this clause 11, however each party shall be entitled to submit in accordance with clause
12.7.2 its reasonable third-party expenses related to obtaining and maintaining such
regulatory approval, so long as such third party expenses have been approved by the Steering
Committee and RBM shall have no responsibility to incur any third party expenses that have not
been approved by the Steering Committee.
	 
	12.	 	Commercialisation of Testing Services
	 
	12.1	 	RBM shall have exclusive rights to perform the Testing Services and manufacture the
Diagnostic Kits in the Territory during the period beginning with the achievement of the
Schizophrenia Product Milestone and ending upon the expiration of the Commercialisation Term
in accordance with the terms of this Agreement.

17

 

	12.2	 	The Steering Committee may decide from time to time that additional countries shall be added
to the Targeted Territory in accordance with clause 5.8, and upon such decision, the Targeted
Territory shall be deemed to include such additional countries. Psynova shall ensure that its
Representatives on the Steering Committee do not unreasonably withhold their consent to the
addition of additional countries comprising the Targeted Territory in accordance with clause
5.8.1. The parties acknowledge that the consent of Psynova’s Representatives will be dependent
on RBM providing evidence that it has sufficient resources and expertise to market the Testing
Services in the additional countries, and the parties agreeing on consequent changes to the
Marketing Plan, and the business plan, revenue forecast, minimum sales targets and performance
milestones referred to in clause 5.8.8.
	 
	12.3	 	RBM shall have exclusive rights to market and sell the Testing Services and Diagnostic Kits
(subject to the authorisation by the Steering Committee as provided in clauses 5.8.2 and 13.3)
in the Targeted Territory, as well as in such additional countries that the Steering Committee
decides from time to time to add to the Targeted Territory during the Commercialisation Term.
RBM shall not directly market or sell the Testing Services outside of such Targeted Territory.
	 
	12.4	 	RBM shall fund all sales and marketing activities for the Testing Services in accordance with
the Marketing Plan, and shall comply with all of its other obligations under the Marketing
Plan, subject to recoupment of such costs under clause 12.7.2.
	 
	12.5	 	Psynova may provide to RBM from time to time a recommended price at which it believes the
Testing Services could be charged to third parties, provided however that RBM shall have
complete discretion to determine the price at which it provides the Testing Services.
	 
	12.6	 	The revenue generated by RBM in commercialising the Testing Services and Diagnostic Kits
under this clause shall be divided between Psynova and RBM as provided in clause 12.7. All
calculations made under clauses 12.7 and 12.8 shall be made in US dollars in accordance with
US generally accepted accounting principles consistently applied.
	 
	12.7	 	The amounts due to Psynova with respect to the commercialisation by RBM or its subcontractors
of the Testing Services and Diagnostic Kits shall be determined on a Quarterly basis according
to the following procedure:

	 	12.7.1	 	within five (5) Business Days of the end of each Quarter (commencing on achievement
of the Schizophrenia Product Milestone), Psynova shall provide to RBM a statement
setting out:

	 	(a)	 	its costs of protecting the Intellectual Property Rights
comprised in each Schizophrenia Product in that Quarter; and
	 
	 	(b)	 	all third party costs incurred by Psynova in that Quarter
in obtaining and maintaining regulatory approval to the extent allowed under
clause 11.5.

	 	12.7.2	 	within thirty (30) days of the end of each Quarter (commencing on achievement of
the Schizophrenia Product Milestone), RBM shall provide to Psynova a statement
setting out the revenue to be divided between the parties, which will equal the
excess of:

	 	(a)	 	the revenue generated by RBM in commercialising the
Testing Services and Diagnostic Kits either itself or received from its
subcontractors in that Quarter; over
	 
	 	(b)	 	Psynova’s costs as described in clause 12.7.1; and
	 
	 	(c)	 	the following costs incurred by RBM:

18

 

	 	(i)	 	RBM’s actual direct costs of
manufacturing the Diagnostic Kits during that Quarter;
	 
	 	(ii)	 	RBM’s actual direct operating costs of
conducting the Testing Services during that Quarter;
	 
	 	(iii)	 	RBM’s reasonable costs of complying
with the Marketing Plan and Commercialisation Plan during that
Quarter excluding any third party non-recurring pre-launch costs
identified in Appendix C. To the extent that RBM receives funding
in the form of grants or other third party payments to offset or
defray the costs of complying with the Marketing Plan and
Commercialisation Plan, such costs will likewise be excluded and
RBM shall be entitled to retain such funding;
	 
	 	(iv)	 	all third party costs incurred by RBM
in that Quarter in obtaining and maintaining regulatory approval to
the extent allowed under clause 11.5; and
	 
	 	(v)	 	where RBM makes a payment to Psynova
under clause 12.13.1 (‘Cure Amount’) for failure to meet the
minimum sales target in a Commercialisation Term Year (‘Default
Year’) and RBM meets the minimum sales target determined by the
Steering Committee for the next Commercialisation Term Year
(‘Succeeding Year’) then, providing that the minimum sales target
for such Succeeding Year is equal to at least the sum of (i) the
minimum sales target for the Default Year; plus (ii) the Cure
Amount, RBM may deduct the Cure Amount from the revenue generated
by RBM in commercialising the Testing Services in the Succeeding
Year, for the purpose of determining the revenue to be divided
between the parties under this clause in such Succeeding Year.

	 	 	 	If the revenue generated by RBM in any Quarter is not sufficient to cover the
costs and amounts referred to in this clause, such costs and amounts may be
brought forward and applied in subsequent Quarters until they have been covered
in full as if such costs were incurred in the subsequent Quarters, provided that
this sentence shall not apply to costs incurred prior to achievement of the
Schizophrenia Product Milestone. Costs shall be applied so as to reimburse the
parties pro rata in proportion to the total amounts described in clauses 12.7.2
(b) and (c) above.

	12.8	 	Within thirty (30) days of the end of each Quarter (commencing on achievement of the
Schizophrenia Product Milestone), RBM shall provide to Psynova:

	 	12.8.1	 	a statement setting out:

	 	(a)	 	the revenue generated by RBM in commercialising the
Testing Services and Diagnostic Kits either itself or received from its
subcontractors in that Quarter;
	 
	 	(b)	 	the costs incurred by each party as referred to in
clauses 12.7.1 and 12.7.2, and the balance of the revenue to be divided
between the parties under clause 12.7.2; and

19

 

	 	(c)	 	the total amount due to Psynova under this clause
(comprising the pro rata reimbursement to be paid to Psynova under clause
12.7.1 and [***] of the excess amount calculated under clause 12.7.2); and

	 	12.8.2	 	payment of the amount referred to in clause 12.8.1(c) above.

	12.9	 	Each party shall keep at its normal place of business, accurate and up-to-date records and
accounts (‘Records’) in sufficient detail to enable verification of the costs incurred and
revenue generated by each party as referred to in clause 12.7, including without limitation
all third party invoices.
	 
	12.10	 	Each party shall make its Records available for audit by the other party or its
representatives on at least ten (10) Business Days prior written notice and within normal
business hours, such audits not to take place more than once a year in relation to each party.
If an audit conducted under this clause reveals that the revenue or costs reported by either
party under clause 12.7 are not correct, the amount paid to Psynova under clause 12.8.2 shall
be promptly adjusted, either by Psynova reimbursing to RBM any amount overpaid under clause
12.8.2 or RBM paying to Psynova any additional amounts due under that clause (as applicable).
If the underpayment or overpayment is 4% or more, the party that has not correctly reported
the revenue or costs under clause 12.7 shall also pay the reasonable costs of the audit.
	 
	12.11	 	RBM shall use Reasonable Best Endeavours to meet the targets and milestones under the
Commercialisation Plan, including:

	 	12.11.1	 	achieving the revenue forecast for the Testing Services in each Commercialisation
Term Year as determined by the Steering Committee in accordance with clause 5.8.8;
	 
	 	12.11.2	 	meeting in each Commercialisation Term Year the minimum sales target as determined
by the Steering Committee in accordance with clause 5.8.8; and
	 
	 	12.11.3	 	meeting the performance milestones as determined by the Steering Committee in
accordance with clause 5.8.8 by the relevant due date for each milestone.

	12.12	 	The business plan, revenue forecasts, minimum sales targets and performance milestones for
the Commercialisation Term will be determined by the Steering Committee as provided in clause
5.8.
	 
	12.13	 	If RBM fails to meet the minimum sales targets or the performance milestones for any
Schizophrenia Product (except to the extent that such failure is due to the fault of Psynova)
during any Commercialisation Term Year:

	 	12.13.1	 	RBM shall have the right, but not the obligation to pay Psynova the difference
between the amount paid to Psynova under clause 12.8.2 for that Schizophrenia Product
in that year, and the amount that would have been paid to Psynova for that
Schizophrenia Product if the minimum sales target and performance milestones for that
year had been met, such payment to be made within forty-five (45) days after the end
of such Commercialisation Term Year;
	 
	 	12.13.2	 	in the event RBM fails to make the payment as described in clause 12.13.1 above,
and such failure continues for forty-five (45) days after the receipt of an overdue
notice from Psynova, Psynova shall have the right to terminate this Agreement upon
written notice to RBM, in which case, clause 19 shall apply, provided that if more
than one Schizophrenia Product has been developed by the parties under the R&D
Project, this Agreement shall only terminate with respect to the Schizophrenia
Product for which RBM has failed to make the payment described in clause 12.13.1, and
in such

20

 

	 	 	 	circumstances, clause 19 shall only apply in relation to that Schizophrenia
Product (and for the avoidance of doubt the rights granted to RBM under clause 9
and this clause 12 shall only terminate in relation to that Schizophrenia
Product). RBM shall have the right to make any payment described in clause
12.13.1 and reserve its rights to institute the dispute resolution process
described in clause 22 to resolve the proper amount of such payment.

	12.14	 	During the term of this Agreement, neither Psynova nor RBM shall manufacture, market, sell,
licence, commercialise or provide testing services or kits in connection with any product
(other than a Schizophrenia Product or the Diagnostic Kit in accordance with the terms of this
Agreement) that aids the diagnosis, stratification, treatment or research of schizophrenia.
For the avoidance of doubt, this clause shall not apply to Psynova in relation to any
Schizophrenia Product for which RBM’s rights have been terminated under clause 12.13.2 and
clause 19.
	 
	12.15	 	RBM shall commercialise the Testing Services:

	 	12.15.1	 	with all due care and skill, and to the best of their knowledge and expertise, and
with the same level of diligence and skill as RBM typically provides in the ordinary
course of its business;
	 
	 	12.15.2	 	in accordance with all Laws;
	 
	 	12.15.3	 	in accordance with all reasonable directions from Psynova from time to time
consistent with the terms of this Agreement.

	13.	 	Diagnostic Kits
	 
	13.1	 	RBM shall at its own cost manufacture or have manufactured all Diagnostic Kits that it
requires in the provision of the Testing Services (subject to recoupment of such costs under
clause 12.7.2).
	 
	13.2	 	RBM shall procure that the Diagnostic Kits are manufactured in accordance with:

	 	13.2.1	 	the Technical File;
	 
	 	13.2.2	 	all applicable Laws; and
	 
	 	13.2.3	 	all reasonable instructions of Psynova from time to time consistent with the terms
of this Agreement.

	13.3	 	The Steering Committee may from time to time agree on a commercialisation strategy and plan
under clause 5.8 for the marketing and sale of the Diagnostic Kits themselves, separately from
their use in the provision the Testing Services. Such commercialisation strategy and plan may
involve Psynova granting RBM a licence to market and sell Diagnostic Kits on such terms and
conditions to be agreed in writing between the parties, including as to the consideration to
be paid by RBM. Unless and until such further licence is granted by Psynova in accordance with
this clause, RBM may only use the Diagnostic Kits for the purposes of providing the Testing
Services, and shall not market or commercialise the Diagnostic Kits themselves.

21

 

	14.	 	Payment
	 
	14.1	 	Except as otherwise provided in this Agreement, all payments due under this Agreement shall
be paid by wire transfer in pounds Sterling to the bank account which Psynova shall nominate
in writing to RBM.
	 
	14.2	 	For the purpose of computing costs under clauses 12.7 and
12.8 involving a currency other than United States Dollars, such
costs shall be converted into United States Dollars at the exchange
rates published at www.oanda.com as of the last business day of the
calendar month in which the costs were incurred. For the purpose of
computing revenue under clauses 12.7 and 12.8 involving a currency
other than United States Dollars, such revenue shall be converted
into United States Dollars according to the exchange rates published
at www.oanda.com on the date revenue is collected from customers in
accordance with US generally accepted accounting principles
consistently applied.
	 
	14.3	 	All payments due under the terms of this Agreement are expressed to be exclusive of Value
Added Tax and other similar sales taxes, which shall be payable additionally if applicable.
	 
	14.4	 	Each party reserves the right to charge interest on all payments which are not made by the
other party by the relevant due date at the rate of eight percent (8%) per annum. Such
interest shall accrue from the date on which the payment became due to the date on which the
receiving party receives the outstanding amount in cleared funds.
	 
	14.5	 	Except for fees for Relevant Services, each party shall make all payments due under this
Agreement and the Debenture in full without any deduction whether by way of set-off,
counterclaim, discount, abatement or otherwise.
	 
	15.	 	Future Products
	 
	15.1	 	Psynova shall inform RBM of any Future Products that it develops during or after the term of
this Agreement (‘First Right of Refusal Period’).
	 
	15.2	 	RBM shall have a first right of refusal on the terms of this clause to enter into an
agreement with Psynova for commercialisation of such Future Products in the Territory.
	 
	15.3	 	RBM shall have fourteen (14) days from the date it receives notice of each Future Product
(‘Notice Period’) to notify Psynova whether it wishes to exercise its first right of refusal.
	 
	15.4	 	If RBM notifies Psynova within the Notice Period that it wishes to exercise its first right
of refusal, Psynova shall negotiate exclusively with RBM in good faith for a period of sixty
(60) days from the date of such notice (or such longer period as may be agreed in writing
between the parties) to agree the terms on which RBM will be granted commercialisation rights
in the Future Products, including without limitation the consideration payable by RBM, and any
restrictions on RBM’s use of the Future Products (‘Negotiation Period’).
	 
	15.5	 	If RBM does not notify Psynova within the Notice Period that it wishes to exercise its first
right of refusal, or if the parties are unable to agree and execute during the Negotiation
Period an agreement setting out the terms on which the commercialisation rights in the
relevant Future Products will be granted to RBM, RBM’s first right of refusal shall expire and
Psynova may, subject to clause 15.6, grant such rights to a third party.
	 
	15.6	 	After expiry of the first right of refusal under clause 15.5, if a third party wishes to
enter into a licence agreement with Psynova for a Future Product, Psynova shall notify RBM of
the relevant terms and conditions of such agreement (‘Third Party Terms’) and RBM shall have
fourteen (14) days (‘Second Notice Period’) to decide whether it is willing to enter into an
agreement with Psynova on substantially the same Third Party Terms.
	 
	15.7	 	If RBM notifies Psynova during the Second Notice Period that it is willing to enter into an
agreement with Psynova on the Third Party Terms, Psynova will enter into an agreement with RBM
on those terms. If RBM does not notify Psynova during the Second Notice Period, or notifies
Psynova that it is not willing to agree to the Third Party Terms, Psynova may enter into

22

 

	 	 	an agreement for the relevant Future Product with a third party, provided, that such
agreement does not conflict with RBM’s rights under this Agreement.
	 
	16.	 	Confidentiality
	 
	16.1	 	Each party (Recipient) shall:

	 	16.1.1	 	keep the Confidential Information of the other party confidential;
	 
	 	16.1.2	 	not disclose the Confidential Information of the other party to any person other
than those of the Recipient’s employees or consultants who have a need to know the
information for the purpose of this Agreement (and only to the extent each has a need
to know);
	 
	 	16.1.3	 	not use the Confidential Information of the other party for any purpose other than
performing the Recipient’s obligations or exercising its rights under this Agreement;
and
	 
	 	16.1.4	 	procure that any person to whom confidential information is disclosed pursuant to
clause 16.1.2 above complies with the restrictions in this clause as if it was a
party to this Agreement.

	16.2	 	Subject to clause 16.3.4 and each party’s right to disclose Confidential Information to its
consultants in accordance with clause 16.1.2, neither Psynova nor RBM shall release any
information to any third party (including without limitation by way of any press release,
educational or scientific conference, promotional material, governmental filing, or discussion
with lenders, investment bankers, public officials, or the media) regarding the existence or
terms of this Agreement without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed. The parties shall not disclose or record this
Agreement or an excerpt of this Agreement in the Patent Office of any country unless the party
wishing to make such recordation obtains the prior written consent of the other party, such
consent not to be unreasonably withheld or delayed.
	 
	16.3	 	The obligations of confidentiality under this clause do not apply to the extent that the
Confidential Information:

	 	16.3.1	 	becomes part of the public domain (otherwise than as a result of a breach of this
Agreement by the Recipient);
	 
	 	16.3.2	 	was rightfully known to or in the possession or control of the Recipient (as shown
by its written records) prior to the date of disclosure to the Recipient by the other
party and not subject to an obligation of confidentiality;
	 
	 	16.3.3	 	was received by the Recipient on an unrestricted basis from a third party
rightfully in possession of such information and not under a duty of confidentiality
to the other party;
	 
	 	16.3.4	 	is required by law to be disclosed, provided that prior to any such disclosure, the
Recipient shall:

	 	(i)	 	provide prompt written notice of the required disclosure
to the disclosing party, to enable the disclosing party to seek a protective
order or otherwise prevent or contest such disclosure;

23

 

	 	(b)	 	to the extent permitted by law, reasonably cooperate with
any such action taken by the disclosing party; and
	 
	 	(c)	 	to the extent practicable, provide to the other party a
copy of the information to be disclosed, and use Reasonable Best Endeavours
to secure confidential treatment of such information.

	16.4	 	Psynova and RBM shall provide to each other the opportunity to review and approve any
proposed publication or presentation (whether oral, written, or otherwise) relating to the R&D
Project or this Agreement, including any abstracts or manuscripts, at least forty-five (45)
days prior to the date of the intended submission of the publication or presentation (‘Review
Period’). The reviewing party shall as soon as practicable and in any event prior to the end
of the relevant Review Period, review the proposed publication or presentation and notify the
other party (‘Notice’) if it reasonably believes that the publication or presentation
includes:

	 	16.4.1	 	Confidential Information of the reviewing party; or
	 
	 	16.4.2	 	patentable subject matter belonging to that reviewing party that requires patent
protection before disclosure of the publication or presentation.

	16.5	 	If the reviewing party notifies the other party under clause 16.4 that the proposed
publication or presentation includes:

	 	16.5.1	 	Confidential Information of the reviewing party, the other party shall remove such
Confidential Information from the publication or presentation before submitting it;
or
	 
	 	16.5.2	 	patentable subject matter of the reviewing party requiring patent protection, the
submission shall be delayed for a period sufficient to permit the reviewing party to
secure such patent protection, but such delay shall not in any circumstances exceed a
period of sixty (60) days from the date of the Notice under clause 16.4.

	16.6	 	If a Notice is not received from the other party under clause 16.4 prior to the end of the
Review Period, it shall be assumed that there is no objection to the proposed publication or
presentation and the relevant party may proceed to submit the proposed publication or
presentation without further notice to the reviewing party.
	 
	17.	 	Indemnity and Liability
	 
	17.1	 	RBM shall indemnify and keep indemnified Psynova, its officers, employees, sub-contractors
and agents (together the ‘Psynova Indemnified Parties’) against any and all claims, liability,
losses, expenses and costs (including legal costs on a full indemnity basis and whether
incurred by or awarded against the Psynova Indemnified Parties), that the Psynova Indemnified
Parties may suffer or incur as a result, whether directly or indirectly, of:

	 	17.1.1	 	the provision of the Testing Services or any other commercialisation or purported
commercialisation of the Diagnostic Kits by RBM;
	 
	 	17.1.2	 	a third party’s allegation that any Inventions or Know-How developed solely by RBM
as part of the R&D Project infringe the Intellectual Property rights of any third
party;
	 
	 	17.1.3	 	any breach of this Agreement by RBM;
	 
	 	17.1.4	 	any negligence, mistake or unlawful or wilful act or omission of RBM, its
employees, agents or subcontractors.

24

 

	17.2	 	Psynova shall indemnify and keep indemnified RBM, its officers, employees, sub-contractors
and agents (together the ‘RBM Indemnified Parties’) against any and all claims, liability,
losses, expenses and costs (including legal costs on a full indemnity basis and whether
incurred by or awarded against the RBM Indemnified Parties), that the RBM Indemnified Parties
may suffer or incur as a result, whether directly or indirectly, of:

	 	17.2.1	 	a third party’s allegation that any Inventions or Know-How developed solely by
Psynova as part of the R&D Project or any Psynova Background IP infringe the
Intellectual Property rights of any third party;
	 
	 	17.2.2	 	any breach of this Agreement by Psynova;
	 
	 	17.2.3	 	any negligence, mistake or unlawful or wilful act or omission of Psynova, its
employees, agents or subcontractors.

	17.3	 	In relation to any claim arising under this Agreement (including without limitation any claim
under the indemnities set out in clauses 17.1 and 17.2), each party shall take reasonable
steps to prevent or mitigate any losses, damages, costs and expenses it may incur in relation
to such claim.
	 
	17.4	 	Subject to clause 17.5, in no event shall a party be liable to the other in contract, tort
(including negligence or breach of statutory duty) or otherwise for any:

	 	17.4.1	 	indirect, special or consequential loss or damage; or
	 
	 	17.4.2	 	loss of profit, loss of revenue, loss of data, loss of goodwill, loss of
reputation, loss of contract or loss of customer.

	17.5	 	Nothing in this Agreement shall exclude or limit the liability of any party for fraudulent
misrepresentation or death or personal injury resulting from negligence.
	 
	18.	 	Term and Termination
	 
	18.1	 	This Agreement shall commence on the Effective Date and shall remain in effect until
terminated in accordance with this clause.
	 
	18.2	 	Either party may terminate this Agreement with immediate effect by written notice to the
other party if the other party:

	 	18.2.1	 	fails to pay any amount due under this Agreement or the Debenture within thirty
(30) days of receipt of an overdue notice from the other party; or
	 
	 	18.2.2	 	is in material breach of this Agreement, the Debenture or the Debenture Purchase
Agreement and, in the case of a breach capable of remedy, fails to remedy such breach
within sixty (60) days of receipt of written notice requiring it to do so; or
	 
	 	18.2.3	 	suffers an Insolvency Event.

	19.	 	Consequences of termination
	 
	19.1	 	On termination of this Agreement for any reason:

25

 

	 	19.1.1	 	the licences granted to each party under the terms of this Agreement shall
automatically terminate and each party shall immediately cease using the Intellectual
Property rights of the other party;
	 
	 	19.1.2	 	each party shall promptly return to the other party all Confidential Information of
that party in its possession or control; and
	 
	 	19.1.3	 	RBM shall immediately cease providing the Testing Services, commercialising the
Testing Services and manufacturing the Diagnostic Kits. RBM shall also immediately
cease commercialising the Diagnostic Kits if it had been granted rights to do so
under clause 13. RBM shall have ninety (90) days from the effective date of
termination to fulfil outstanding orders for Testing Services and sell and market its
existing inventory of Diagnostic Kits.

	19.2	 	Termination of this Agreement shall not affect any rights or obligations of the parties
accrued prior to the date of termination.
	 
	19.3	 	The following clauses shall survive termination of this Agreement: clauses 1, 2, 3 (except
3.2 shall terminate), 8.3, 9.1, 9.2, 14, 15, 16, 17, 19, 22 and 23.11.
	 
	20.	 	Warranty
	 
	 	 	Psynova and RBM each warrant that they have the corporate power and capacity to enter into
this Agreement and to perform its obligations hereunder.
	 
	 	 	EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATION OR WARRANTY TO THE OTHER PARTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY ACKNOWLEDGES THAT THIS
AGREEMENT PROVIDES FOR AN INNOVATIVE PROGRAM USING NEW TECHNOLOGIES AND THAT NO WARRANTY
IS MADE REGARDING THE SUCCESS OF ANY RESEARCH AND DEVELOPMENT DONE PURSUANT TO THIS
AGREEMENT OR THE UTILITY OF ANY INFORMATION, MATERIALS OR TECHNOLOGY PROVIDED HEREUNDER.
	 
	21.	 	Notices
	 
	21.1	 	All notices and other communications hereunder shall be in writing and shall be delivered by
prepaid express courier; or sent by prepaid post (registered or certified mail with return
receipt requested ); or sent by facsimile to the address or facsimile number of the recipient
set out below.
	 
	 	 	To RBM:

	 	 	 
	For Legal Notices and Patent Filings

	 	For Scientific Reports
	Rules Based Medicine

	 	Rules Based Medicine
	3300 Duval Road

	 	3300 Duval Road
	Austin

	 	Austin
	Texas 78759

	 	Texas 78759
	Attn:

	 	Attn: Dr. Mike Spain

26

 

	 	 	To Psynova:

	 	 	 
	For Legal Notices and Patent Filings

	 	For Scientific Reports
	Psynova Neurotech Ltd

	 	Psynova Neurotech Ltd
	St. John’s Innovation Centre

	 	St. John’s Innovation Centre
	Cowley Road

	 	Cowley Road
	Cambridge CB4 0WS

	 	Cambridge CB4 0WS
	United Kingdom

	 	United Kingdom
	Attn. Dr. Tony Lewis

	 	Attn. Dr. George McAllister

	21.2	 	Any notice given pursuant to this clause shall be deemed to have been received:

	 	21.2.1	 	if delivered by courier, at the time of delivery; or
	 
	 	21.2.2	 	if sent by post:

	 	(a)	 	where posted in the country of the addressee, on the
second Business Day following the day of posting, and
	 
	 	(b)	 	where posted in any other country, on the fifth Business
Day following the day of posting; or

	 	21.2.3	 	if sent by facsimile, on acknowledgement by the recipient facsimile receiving
equipment if the acknowledgement occurs before 1700 hours local time on a Business
Day in the country of the recipient and in any other case on the following Business
Day.

	21.3	 	A party may notify the other party of a change of its name, relevant addressee, address or
facsimile number in accordance with this clause.
	 
	22.	 	Dispute resolution
	 
	22.1	 	A party claiming that a dispute has arisen shall notify the other party (‘Dispute Notice’).
	 
	22.2	 	Each party shall ensure that its representatives attempt in good faith to resolve the
dispute.
	 
	22.3	 	If the representatives of each party have not been able to resolve the dispute within 10
Business Days after the issue of the Dispute Notice, the dispute shall be escalated to the
Executive Officer of each party.
	 
	22.4	 	If the dispute is not resolved by the Executive Officers within a further 10 Business Days,
either party may refer the dispute to mediation to be conducted in accordance with the Centre
for Effective Dispute Resolution (CEDR) Model Mediation Procedure. Unless otherwise agreed
between the parties, the mediator will be nominated by CEDR. To initiate the mediation a party
must give notice in writing to the other party to the dispute requesting mediation. A copy of
the request should be sent to the CEDR. The courts of England shall have exclusive
jurisdiction to settle any claim, dispute or matter of difference which may arise out of, or
in connection with, the mediation. If the dispute is not settled by mediation within
forty-five (45) days of commencement of the mediation or within such further period as the
parties may agree in writing, the dispute shall be referred to and finally resolved by
arbitration pursuant to clause 22.5.

27

 

	22.5	 	Matters referred to arbitration shall be finally resolved through arbitration in accordance
with the Rules of the London Court of International Arbitration (the “LCIA Rules”) then in
force which LCIA Rules are deemed to be incorporated by reference in this Clause 22.5:

	 	22.5.1	 	the number of arbitrators shall be three, with one arbitrator to be nominated by
the claimant and a second arbitrator to be nominated by the respondent. The third
arbitrator, who shall act as chairman of the arbitration, shall be nominated by
agreement between the two arbitrators nominated by the parties;
	 
	 	22.5.2	 	if (i) any party fails to nominate an arbitrator; or (ii) the two party appointed
arbitrators fail to reach agreement on the nomination of a chairperson within 30 days
of the nomination of the second of such arbitrators, the President of the London
Court of International Arbitration shall make such appointment only, in accordance
with the LCIA Rules;
	 
	 	22.5.3	 	the seat (or legal place) of arbitration and venue of the proceedings shall be
London, England. The language to be used in the arbitral proceedings shall be
English;
	 
	 	22.5.4	 	the parties expressly agree that the right to make an application under section 45
or to appeal under section 69 of the Arbitration Act 1996 is hereby excluded in
respect of any arbitration or with respect to any award made; and
	 
	 	22.5.5	 	judgement upon any award made may be entered in any court having jurisdiction over
a party or the assets of a party owning the judgement, or application may be made to
such court for a judicial acceptance of the award and an order of enforcement, as the
case may be.

	23.	 	Miscellaneous Provisions
	 
	23.1	 	No Agency. RBM shall have the status of an independent contractor under this Agreement and
nothing in this Agreement shall be construed as authorization for either party to act as agent
for the other. Psynova shall not incur any liability for any act or failure to act by
employees or agents of RBM and RBM shall not incur any liability for any act or failure to act
by employees of Psynova.
	 
	23.2	 	No Use of Name. Neither party shall use the name of the other party in any publication
without the express written consent of the other party, except as required by law.
	 
	23.3	 	Amendment. This Agreement may not be amended, supplemented or otherwise modified except by
an instrument in writing signed by authorized representatives of both parties.
	 
	23.4	 	Assignment. Neither party may assign its rights or obligations under this Agreement without
the prior written consent of the other. Notwithstanding the foregoing, both Psynova and RBM
shall have the right to assign this Agreement to an Affiliate and/or to any successor in
interest to which this Agreement relates.
	 
	23.5	 	Sub-contracting: RBM may only sub-contract its obligations under this Agreement with the
prior written consent of the Steering Committee in accordance with clause 5.8.7, which will
not be unreasonably withheld, conditioned or delayed. RBM shall be responsible under this
Agreement for any breach of this Agreement by a sub-contractor as if such breach had been a
breach by RBM of this Agreement.
	 
	23.6	 	Further Action. Each party shall do such acts and things as may be necessary or desirable to
give full effect to this Agreement.

28

 

	23.7	 	Third party rights. Nothing in this Agreement is intended to confer on any person any right
to enforce any term of this Agreement which that person would not have had but for the
Contracts (Rights of Third Parties) Act 1999.
	 
	23.8	 	Severability. Each party agrees that, should any provision of this Agreement be determined
by a court of competent jurisdiction to violate or contravene any applicable law or policy,
such provision will be severed or modified by the court to the extent necessary to comply with
the applicable law or policy, and such modified provision and the remainder of the provisions
hereof will continue in full force and effect.
	 
	23.9	 	Entire Agreement. This Agreement, including all of the Appendices, and the other agreements
referred to herein constitute the entire agreement between the parties concerning the subject
matter hereof and supersede all written and oral prior agreements and understandings with
respect thereto.
	 
	23.10	 	Waiver. Failure by either party to enforce any rights under this Agreement shall not be
construed as a waiver of such rights nor shall a waiver by either party in one or more
instances be construed as constituting a continuing waiver or as a waiver in other instances.
	 
	23.11	 	Governing Law. This Agreement shall be governed by English law and both parties submit to
the exclusive jurisdiction of the English Courts for the resolution of any dispute which may
arise out of or in connection with this Agreement.
	 
	23.12	 	Signature. This Agreement may be executed in one or more counterparts by the parties by
signature of a person having authority to bind the party, each of which when executed and
delivered by facsimile, electronic transmission or by mail delivery, will be an original and
all of which shall constitute but one and the same Agreement.
	 
	23.13	 	Force Majeure. Non-performance of either party will be excused to the extent that
performance is rendered impossible by strike (excluding strikes of the employees of the party
claiming the force majeure), fire, flood, governmental acts or orders or restrictions arising
after the date of this Agreement, failure of suppliers, or any other reason where failure to
perform is beyond the reasonable control and not caused by the negligence of the
non-performing party, provided that such non-performing party shall:

	 	23.13.1	 	promptly notify the other party in writing upon the occurrence of the force
majeure event, describing the circumstance of the force majeure event and its
expected duration, and shall notify the other party immediately of the cessation of
the force majeure event; and
	 
	 	23.13.2	 	use its Reasonable Best Endeavours to remedy its inability to perform and to
mitigate the effects of the force majeure event.

	 	 	If the delay resulting from the force majeure event continues for a period of 6 months or
more, the party not affected by the force majeure event shall thereupon have the right to
terminate this Agreement in accordance with clause 18 of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their respective officers
thereunto duly authorized.

29

 

	 	 	 	 
	 	RULES-BASED MEDICINE, INC

 	 
	 	By:  	/s/
T. Craig Benson 	 
	 	 	Authorized Representative 	 
	 	 	Name:  	T. Craig Benson 	 
	 	 	Title:  	President
and CEO 	 
	 	 	Date:  	09/05/08 	 
	 
	 	PSYNOVA NEUROTECH LIMITED

 	 
	 	By:  	/s/
C. R. Lowe
 	 
	 	 	Authorized Representative 	 
	 	 	Name:  	Prof. C. R. Lowe 	 
	 	 	Title:  	Director 	 
	 	 	Date:  	08 May
2008 	 
	 

30

 

APPENDIX A

Research and Development Plans

Part 1: Detailed R&D plan for First and Second Generation Schizophrenia Products

	1.	 	Biomarker Discovery and Selection

Part 1:  Phase 1

Label-free LC-MS/MS profiling.

	 	 	Psynova will complete proteomic platform analysis of the following sample sets:

	 	a)	 	Drug naive, first onset schizophrenics vs. matched controls [n=40 in total; 20 schiz; 20 controls, serum],
	 
	 	b)	 	First onset schizophrenic patient longitudinal samples — first onset and 4 week antipsychotic
treatment time points [n=120 in total, 20 risperidone, 20 quetiapine 20 olanzapine, 2 time points;
serum only]

	 	 	We will apply state of the art Label-free nano-LC-MS based proteomic profiling platforms to
enable the deepest interrogation of the relevant proteomes for specific biomarkers. 
	 
	 	 	In this study,
each sample will be depleted of the 20 most abundant proteins using an immunoaffinity kit (Sigma,
St. Louis MO). Without the depletion step the abundant proteins (which make up >95% of serum
proteins) would mask the expression of lower abundance proteins of interest. Following trypsin
digestion, samples will subsequently be separated using split-less nanoUltra Performance Liquid
Chromatography (10kpsi nanoAcquity, Waters, Milford MA) and a C18 nanoColumn (75μm i.d., 200mm
length, 1.7μm particle size) (Waters, Milford MA), at 300n1/min using a 120 minute gradient. The
nanoUPLC will be coupled through a nanoESI online emitter of 7cm
length and 10um tip (New
Objective, Woburn, MA) to a Quadrupole Time-of-Flight Mass Spectrometer (Qtof Premier, Waters,
Milford MA). Data will be acquired in MSE (Expression) mode. In this mode the quadrupole is set to
transfer all incident ions while the collision cell switches from low to high collision energy
intermittently throughout the acquisition time. The total cycle time for each scan was 1.25 seconds
During data processing the software matches each precursor ion to its corresponding fragments based
on the ions’ exact mass and retention time. This results in fragmentation information for every
incident ion even in the case of co-eluting peptides. Mass accuracy will be maintained throughout
the analysis time due to the use of a LockSpray. A reference compound
(Glu-Fibrinopeptide B, Sigma,
St Louis MO) will be infused using the LockSpray and scanned every 30
seconds.
	 
	 	 	Data generated will
be processed using the latest version of ProteinLynx Global Server (Waters, Milford MA). The data
will be automatically smoothed, background subtracted, centred, deisotoped, charge state reduced
and mass corrected (based on the reference scans). Processed data will be sent to databank search
using human sequences of the latest version of Swissprot. For further analysis and filtering, data
will be exported to the free statistical software package R (http://cran.r-project.org) Filtering
criteria will be set to include only high confidence peptides. These will be detected in (i) at
least two out of three injections of each sample, (ii) at least 80% of samples in any one of the
groups. Furthermore, only those peptides will be included that were
(iii) identified in the databank
search with more than 95% probability Calculation of the protein abundance will be based only on
correlating peptides of each protein (as described in Schwarz et al. 2007) Statistical analysis
(both univariate and multivariate) will be performed to find the most significantly altered
proteins in the samples.

 

 

	 	 	The top 20 prioritised candidate biomarkers will enter the
validation phase.
	 
	 	 	The R&D Committee will prioritise the candidates based on differential expression data,
availability of reagents for immunoassays, and intellectual property
standing. The resulting list
will be used to guide the Assay Development activity described below.

Delivery Milestone

	•	 	From this approach and previous work from the Bahn lab we expect to derive a prioritised list of at
least 20 (or 50 if phase 2 is implemented) candidate biomarkers whose plasma or serum expression
levels are statistically different (t test) between schizophrenia and controls (or between treated
and untreated first onset schizophrenics)

	 	 	The R&D Committee will have final approval for acceptance of candidate biomarkers into the assay
development phase.

Timelines

	 	 	Within 1 month of the Effective Date, a list of approximately 20 biomarkers will be decided upon
and prioritized for assay development.

	2.	 	Human MAP profiling

	 	 	Miniaturized and parallelized sandwich immunoassays, e g Multi-Analyte Profiling tests are highly
sensitive assay-systems that allow the accurate quantification of a high number of target proteins
in body fluids. These so-called multiplexed assay systems can replace the traditional single tests
and allow the simultaneous determination of a large number of parameters from minute amounts of
samples. Multiplexed immunoassay systems that are capable of detecting quantitative differences for
more than 200 marker proteins in human plasma have been implemented under CLIA/GLP conditions and
can often identify candidate biomarkers of a disease even if these markers have not previously been
linked to the condition.
	 
	 	 	Multi Analyte Profiles (MAPs) based on the Luminex xMAP ® technology platform, was established to
measure hundreds of biochemical markers in a very small sample volume. Any stimulus endured by an
individual can result in alterations of biochemical pathways, yet few of these changes are
well-characterized. Using MAPs to measure a broad spectrum of biomarkers, a more comprehensive
analysis of an individual’s physiological status can be obtained.
	 
	 	 	We will utilise the latest available Human MAPTM, which measures over 200 analytes in human
plasma or serum (Table 1) to look for biomarkers with utility in the early diagnosis and treatment
of psychiatric disorders by screening the entire 800 sample
validation collection.
	 
	 	 	800 “Validation Samples” will be selected by Psynova in collaboration with Dr Sabine Bahn and her
clinical collaborators to investigate the selectivity and sensitivity
of candidate biomarker assays.
Details on the current collection of samples are in the table below. The final set of Validation
Samples will be approved by the R&D Committee prior to any
biomarker testing by RBM.

 

 

	 	 	Analyte assays with potential clinical utility will be selected for further product development.

	 
	 	 	Generated results will be analyzed, including the modelling
of random inter-subject variation on
serum analyte concentrations. It is well known, that for many analytes, concentration levels vary
greatly between individual subjects, but are very stable over time in repeated samples from the
same subject. Linear mixed-effects models will be used to measure these distinct sources of
variation, and find individual analytes that best discriminate between the different groups.

	 
	 	 	It will
be very likely that no single analyte can reliably distinguish between normal and case controls. In
this case, multivariate classification techniques, such as linear
discriminant analysis, random
forest models, and projection-based methods (e.g., principal components analysis) will be applied
to identify robust collections of biomarkers that accurately categorize subjects within these
groups. Biomarker signatures will be constructed using canonical variate analysis and other
multivariate techniques.

 

 

Table 1 Current version of the Human MAP(TM)
Antigens
Autoimmune
Infectious Disea

1 ACE (CD143) 49 FSH 98 MCP-1 147 ASCA 190 Adenovirus 234

2 ACTH 50 Galanin 99 MCP-3 148. â-2 Glycoprotein 191 Bordetella pertussis 235

3 Adiponectin 51 G-CSF 100 M CSF 149 C1q 192 Chlamydia pneumoniae 236

4 Agouti-related Protein (AgRP) 52 GLP-1 Active 101 MDC 150 Centromere Prot 193 Chlamydia trachomatis 237

5 Alpha Fetoprotein 53 GLP 1 Total 102 MIF 151 Collagen Type 1 194 Cholera Toxin 238

6 Alpha-1 Antitrypsin 54 Glucagon 103 MIP-l beta 15Z
Collagen Type 2 195 Cholera Toxin â 239

7 Alpha-2 Macroglobulin 55. Glutathione S- Transferase 104 MIP-l alpha 153 Collagen Type 4 196 Campylobacter 240

8 Amphiregulin 56 GM-CSF 105 MMP-2 154 Colleen Type 6 197 Cytomegalovirus 241

9 Angiopoietin 2 (ANG 2) 57 GRO alpha 106 MMP-3 155 Cyto P450 198 Diphtheria Toxin 242.

10 Angiotensinogen 58 Growth Hormone 107 MMP-9 156. ds DNA 199 Epstean-Barr NA 243

11 Apolipoprotein A l 59 Haptoglobin 108 Myeloperoxidase 157 Histone 200 Epstein-Barr EA 244

12. Apolipoprotein CIII 60 HB-EGF 109 Myoglobin 158. Histone H1 201 Epstein-Barr VCA 245

13 Apolipoprotein H 61 HCC-4 110 OSM 159 Histone H2A 202 Helicobacter pylon 246

14 ASP 62 Hepatocyte Growth Factor (HGF) 111 PAI-t 160 Histone H2B 203 HBV Core
5 AXL 63 HGH 112 Pancreatic polypeptide 161 Histone H3 204 HBV Envelope
6 Beta-2 Microglobulin 64 1309 113 PAPP-A 162. Histone H4 205 HBV Surface (Ad)
7 Betacellulin (BLC) 65 ICAM-1 114 Progesterone 163 HSC-70 206 HBV Surface (Ay)
8 B-Lymphocyte Chemoattraccant (BLC) 66 IFN-gamma 115 Progranulin (GRN) 164 HSP-32 207 HCV Core
19 BMP-6 67 IgA 116 Prolactin 165 HSP-65 208 HCV NS3
20 Brain-Derived Neurotrop Factor 68 IgE 117 Prostate Specific Antigo Free 166 HSP-71 209 HCV NS4
21 C Reactive Protein 69 IGF BP 2 118 Prostatic Acid Phosph 167 HSP-90á 210 HCV NS5
22 Calcitonin 70 IGF-1 119 Pulmonary and Activa Regulated Chemokine (PARC 168 HSP-90â 211 Hepatitis A
23 Cancer Antigen 125 71 IgM 120 PYY 169 Insulin 212. Hepatitis D
24 Cancer Antigen 19 9 72 IL-10 121 RANTES 170 JO-1 213 HEV orf2 3KD
25 Carcinoembryonic Antige 73 IL-11 122 Resistin 171 Mitochondrial 214 HEV orf2 6KD
26 CD40 74 IL-12 p40 123 Secretin 172. Myeloperoxidase 215 HEV orf3 3KD
27 CD40 Ligand 75 IL-12 p70 124 Serum Amyloid P 173 Pancreatic Islet C 216 HIV-1 p24
28 Cihary Neurotrophic Fact (CNTF) 76 IL-13 125 Sex Hormone Binding Globulin 174 PCNA 217 HIV-1 gp41
29 Complement 3 77 IL-15 126 SCOT 175 PM 1 218 HIV-1 gp120
30 Cortisol 78 IL-16 127 Stem Cell Factor 176 PR3 219 HPV
31 Creatine Kinase MB 79 IL-17 128 Testosterone 177 Ribosomal P 220 HSV 1/2
32. EGF 80 IL-17E 129 TGF-alpha 178 RNP-A 221 HSV-1 gD
33 EGF-R 81 IL-IS 130 TGF-beta 3 179 RNP-C 222 HSV-2gG
34 ENA-78 82 IL-1 alpha 131 Thrombopoietin 180 RNP 223 HTLV 1/2
35 Endothelin 1 83 IL-1 beta 132 Thrombospondin-1 181 Sel-70 224 Influenza A
36 EN-RAGE 84 IL-1 ra 133 Thymus Expressed Chemokine (TECK) 182 Smith 225 Influenza A H3N2
37 Eotaxin 85 IL-2 134 Thyroid Stimulating Hormone 183 SSA 226 Influenza B

Eotaxin 3 86 IL-23 135 Thyroxine Binding Globulin 184 SSB 227 Leishmania donovani

Epiregulin 87 IL-3 136 TIMP-1 185 T3 228 Lyme disease

Erythropoietin 88 IL-4 137 TIMP-2 186 T4 229 Mumps

Factor VII 89 IL-5 138 Tissue Factor 187 Thyroglobulin 230 M pneumoniae

FAS 90 IL-6 139 TNF RII 188 rTG (Celiac Dise 231 M tuberculosis

43 FAS Ligand 91 IL-7 140 TNF-alpha 189 Thyroid mucroso 232 Parainfluenza 1
44 Fatty Acid Binding Prote 92 IL-8 141 TNF-beta 233

45 Ferritin 93 Insulin 142 TRAIL-R3
46 FGF basic 94 Leptin 143 TSH
47 FGF-4 95 LH 144 VCAM-1
48 Fibrinogen 96 Lipoprotein (a) 145 VEGF
97 Lymphotactin 146 von Willebrand Factor

 

 

Current Psynova Validation Samples (804 samples)

	 	 	 	 	 
	Type	 	Number
	Drug naive first onset schizophrenia
	 	 	126	 
	Minimally treated first onset schizophrenia
	 	 	91	 
	Acute psychotic (not first episode)
	 	 	79	 
	Drug treated schizophrenics
	 	 	209	 
	First onset (Before and after 4wks antipsychotics)
	 	 	45	 
	Acute psychotic (Before and after 4wks antipsychotics)
	 	 	63	 
	Prodromal schizophrenia
	 	 	45	 
	Healthy controls
	 	 	135	 
	Bipolar Disorder
	 	 	56	 
	Unipolar Depression (longitudinal samples)
	 	 	60	 
	Current Total
	 	 	804	 

Delivery Milestones

	 	•	 	Psynova will coordinate the selection, aliquoting and shipment of Validation Samples
to RBM.

	 	•	 	Validation Samples must be of sufficient volume and quality (specifications to
be decided by the R&D Committee)
	 
	 	•	 	Psynova will supply Validation Samples in appropriate aliquots for the full
MAP testing and the forthcoming testing with the New Assays.

	 	•	 	RBM will carry out the screening of the Validation Samples as rapidly as possible. The
conduct of such screening and sample processing by RMB shall constitute a Relevant
Service under this Agreement, and the fee for such service shall be [***] per sample.
	 
	 	•	 	Psynova and RBM will jointly carry out the data analysis and generate a second
prioritised assay list for further development, filing of IP etc.

 

 

	 	•	 	From this approach and we expect to derive 5 analyte assays suitable for inclusion in the early
diagnosis of schizophrenia product (version 1)
	 
	 	•	 	The R&D Committee will have final approval for acceptance of candidate biomarker assays into the
next product development phase.

Timelines:

Psynova will complete the selection, aliquoting and shipment of Validation Samples to RBM within 3
months of signing this agreement.

RBM will carry out the screening of Validation Samples set and produce a data report within 1 month
of receiving the complete set of qualified Validation Samples.

Psynova and RBM will carry out the data analysis and generate a prioritised assay list for further
development, filing of IP etc within 1 month of receiving the
data report from RBM.

3. Assay Development

A set of up to 24 candidate biomarker proteins significantly up- or down-regulated in schizophrenia
will be approved by the R&D Committee for development of New
Assays. Bead based sandwich
immunoassays will be developed by RBM against these biomarkers using commercially available
antibodies where possible. Where no antibodies are available, RBM will seek recombinant antibodies
using their regular supplier. New Assay development by RBM shall constitute a Relevant Service
under this Agreement, and the fee for such service shall be [***] per assay (as specified in the
January 18, 2008 quote) and [***] for the generation of new antibodies and standards. Based on
current results, Psynova has submitted a list of 24 biomarker proteins, 6 of which are in RBM’s
current catalog or in active development. The remaining 18 will enter RBM’s development pipeline
once approved by the R&D Committee.

The New Assays will be validated using guidelines set forth by the Clinical and Laboratory
Standards Institute. Each assay is developed first as a single test to achieve the sensitivity and
dynamic range necessary for that particular analyte The resulting assays will then be incorporated
into multiplexes as appropriate. Validation parameters that are determined for each analyte assay
include.

Least Detectable Dose (LDD). The LDD is the concentration of target analyte that produces a signal
that can be distinguished from that produced by a blank with 99% confidence. It is determined from
the average of the signal for a minimum of 20 replicate determinations of the standard curve blank
for each assay. Three standard deviations are added to the average of the signal, and this value is
converted to concentration as interpolated from the dose response
curve Precision. Precision is
defined by the agreement between replicate measurements of the same material when measured within
Run (intra-assay CV) and over a series of Runs (inter-assay or Total
CV). It is determined by
measuring 3 levels of controls in duplicate over a minimum of 5 Runs and provides information
concerning random error expected in a test result caused by
factors that vary under normal laboratory operating conditions such as pipetting, timing, mixing,
and temperature.

Cross-reactivity Cross-reactivity is the ability of an assay to differentiate and quantify the
analyte of interest in the presence of other similar analytes in the sample that could have a
positive or

 

 

negative effect on the assay value It is determined by testing high concentrations of each MAP
analyte across all multiplexes.

Linearity: Linearity is the ability of the assay to obtain test results which are proportional to
the concentration of analyte in a sample when serially-diluted to produce values within the dynamic
range of the assay. It is determined by testing high positive or spiked samples serially-diluted in
standard curve diluent. The average % recovery throughout the dilution series is then calculated as
observed vs. expected concentration.

Spike Recovery: Spike recovery is performed as an assessment of accuracy which is often not
possible for biological products due to the unavailability of pure “gold” standards. It is used to
account for interference caused by compounds introduced from the physical composition of the sample
or sample matrix that may affect the accurate measurement of the analyte. It is performed by spiking
different amounts of standard spanning the assay range into standard curve diluent (control spike)
and known samples. The average % recovery is calculated as the proportion of spiked standard in the
sample (observed) to that of the control spike (expected) following analysis.

Correlation: The agreement of the multiplexed assay values to other methods is assessed by testing
samples in an alternate commercial immunoassay system, such as an ELISA. This comparison of methods
is performed to estimate inaccuracy or systematic error. Data from the two methods are graphed in a
comparison plot and the correlation coefficient is determined.

Dynamic Range: The dynamic range is defined as the range of standard used to produce the standard
curve It is initially realized during assay development when standards are analyzed in a wide
range above and below the expected concentrations using full-log dilutions. The standards are
subsequently retested using reduced serial dilutions that target the useful, linear part of the
standard curve.

Matrix Interferences: Matrix interference assays are performed to determine whether the presence of
interferants commonly found in samples introduce any systematic error in RBM MAPs. Samples spiked
with high levels of hemoglobin, bilirubin, or triglyceride, as well as unspiked samples, are tested
in each multiplex. % recovery is calculated as observed (spiked sample) result versus expected
(unspiked sample) result.

Delivery Milestone

	 	•	 	RBM will deliver 24 New Assays (or such other number determined by the R&D Committee) meeting the
criteria outlined above.

Timelines:

New Assays will be complete and available for validation studies within 3-7 months of candidate
biomarker approval, subject to any extension granted by the R&D Committee. The R&D Committee will
consider whether any requested extension is justified based on whether any assays are unusually
difficult, have cross-reactivity issues, or are subject to delays due to supply of antibodies and
standards which delays could not be avoided.

The R&D Committee will have final approval for acceptance of New Assays for use in the biomarker
validation phase.

New Assay Validation

As logical groups of New Assays are available and approved by the R&D Committee, RBM will run the
Validation Samples on those assays

 

 

Results will be compared with the confirmed, expert clinical diagnosis of these same patients to
determine which combination of biomarkers gives the best combination of sensitivity and selectivity
in accurately identifying first onset schizophrenic samples from other disorders.

Generated results will be analyzed, including the modelling of random inter-subject variation on
serum analyte concentrations. It is well known, that for many analytes, concentration levels vary
greatly between individual subjects, but are very stable over time in repeated samples from the
same subject. Linear mixed-effects models will be used to measure these distinct sources of
variation, and find individual analytes that best discriminate between the different groups.

It will be very likely that no single analyte can reliably distinguish between normal and case
controls. In this case, multivariate classification techniques, such as linear discriminant
analysis, random forest models, and projection-based methods (e.g., principal components analysis)
will be applied to identify robust collections of biomarkers that accurately categorize subjects
within these groups. Biomarker signatures will be constructed using canonical variate analysis and
other multivariate techniques.

Delivery Milestones

	 	•	 	RBM will use aliquots of the Validation Samples previously
supplied by Psynova.
	 
	 	•	 	RBM will carry out the screening of the Validation Samples as rapidly as possible, using logical
groups of the new assays as they become available and are approved by the R&D Committee, while
striving to conserve sample volume. The conduct of such screening and sample processing by RMB
shall constitute a Relevant Service under this Agreement, and the fee for such service shall be [***] per sample.
	 
	 	•	 	Psynova and RBM will carry out the data analysis and generate a prioritised assay list for
further development, filing of IP etc.
	 
	 	•	 	From this approach and we expect to derive up to 5 new analyte assays suitable for inclusion in
the early diagnosis of schizophrenia product.

Timelines:

Psynova will complete the selection, aliquoting and shipment of Validation Samples to RBM within 3
months of signing this agreement.

RBM will carry out the screening of the Validation Samples within 1 month of any new candidate set
of New Assays being approved by R&D committee.

Psynova and RBM will carry out the data analysis and generate a prioritised assay list for further
development, filing of IP etc within 1 month of receiving the data report from RBM.

 

 

First Generation Product Milestone

The R&D Committee will accept there is a product opportunity on the basis that the selected assays
reach or exceed the agreed First Generation Product Milestone.

	 	i.	 	The analyte assays selected for the Schizophrenia product, when tested against the
Validation Samples, must demonstrate at least [***] specificity and [***] sensitivity in
distinguishing schizophrenia samples from healthy controls.
	 
	 	ii.	 	In addition, the analyte assays selected for the Schizophrenia product will
distinguish schizophrenia from at least one other CNS disorder tested in the validation
phase [***].
	 
	 	iii.	 	Lastly, when retested in a double blind design, against a subset of the Validation Samples (up
to 200 samples), the analyte assays selected for the Schizophrenia product must again demonstrate
at least [***] specificity and [***] sensitivity in distinguishing schizophrenia samples from healthy
controls.

The Steering Committee’s acceptance of the achievement of the first generation product
milestone will trigger the dependent activities agreed in the Co-development and commercialisation
agreement.

Part 2: R&D Plan for Phase II of the R&D Project (outline only, similar to Phase I).

	1.	 	Psynova and RBM shall select up to 30 additional assay development candidates from the ongoing
Psynova discovery projects (in addition to the development candidates
in Phase I).
	 
	2	 	RBM shall develop up to 30 new assays, the development of which shall constitute a Relevant
Service under this Agreement.
	 
	3.	 	Further assays may be developed under this R&D Plan upon written agreement between the parties.
	 
	4.	 	RBM shall carry out validation screening with the Validation Samples on (i) these 30 new assays
and (ii) any other new human assays developed by RBM which are approved by the R&D Committee for use
under this R&D Plan. Such validation screening by RBM shall constitute a Relevant Service under
this Agreement.
	 
	5	 	RBM and Psynova shall analyse the results and the R&D Committee shall decide if there is an
opportunity to refine the First Generation Product. If the parties decide that such an opportunity
exists then they shall refer the matter to the Steering Committee to determine whether it should be
pursued.
	 
	6	 	The Steering Committee shall decide on the Second Generation Product Milestones and the
specifications for such product.
	 
	7	 	The Steering Committee shall decide on any additional validation studies required to test whether
the Second Generation Product complies with the Second Generation Product Milestones, and RBM shall
carry out such validation studies.

 

 

	8.	 	The parties shall analyse the results of the validation studies, and the Steering Committee
shall decide if the Second Generation Product complies with the Second Generation Product
Milestones and specifications.
	 
	9.	 	RBM shall commercialise such approved Second Generation Product through activities similar to
those for the First Generation Product, to be determined by the Steering Committee.

 

 

APPENDIX B

Marketing and Commercialization Plan for the Testing Services

     Product Development and Commercialization

1. RUO Clinical Validation Activities

Once the Schizophrenia Product Milestone has been achieved, RBM and Psynova will co-develop a
specific “diagnostic panel” of assays suitable for carrying out Research Use Only (RUO) testing.

The Steering Committee will agree on a strategy to use the RUO test to gather clinical data to
demonstrate the efficacy of the test in aiding in the early diagnosis of schizophrenia.

It is envisaged that this strategy will involve establishing contacts and collaborations with about
10 leading psychiatric centres of excellence in the US. The goal will be to enrol the number of
patients necessary into a clinical trial of the RUO test such that the efficacy of the test can be
established as defined in a mutually agreed clinical strategy.

This phase of the project is vital to establish the clinical evidence and scientific publications
that will be necessary to convince the clinical community, health insurers and payors, and
regulatory authorities of the clinical and socioeconomic value of using the early diagnostic test
on their patients.

Psynova and RBM will incorporate clinical data questionnaires and algorithms into these studies to
improve the specificity and sensitivity of the test.

RBM and Psynova will jointly apply to organizations such as the Stanley Research Foundation and
NIMH to help fund this phase of the product development.

RBM and Psynova will also approach major insurers such as Blue Shield’s Research division with the
view to participating in the early evaluation of this technology on their nationwide patient
groups. A successful evaluation could lead to the test being reimbursed by insurers prior to
regulatory approval.

It is critical not to set an expected price for this test during this phase, as we want the final
product pricing policy to be based on a fair proportion of the overall savings in healthcare costs
that will be achieved by using such a test. However, it is understood that this testing will be
done at prices such that RBM and Psynova will earn an appropriate commercial margin.

RBM will provide the CLIA certified, central testing lab for biomarker measurements.

Psynova will provide the clinical questionnaire and algorithm components and carry out the data
analysis, using methods approved by the R&D Committee RBM and Psynova will have access to all
primary and analyzed data

 

 

Psynova, RBM, and Cambridge will collaborate or assist other researchers on the preparation and
publishing of any scientific articles arising from this activity RBM and Psynova will have the
right to use the results of the studies in any Marketing and Sales activity.

These activities and the commercial strategy will be supervised and directed by the Steering
Committee.

Major Goals

	 	•	 	Development of a comprehensive reimbursement strategy including payor / reimbursement consulting
with qualified experts (EU & US)
	 
	 	•	 	Develop an economic model which represents the potential value created by utilizing the planned
commercial test in the target patient population
	 
	 	•	 	Development of a clinical strategy to support the regulatory and reimbursement goals including
market validation studies
	 
	 	•	 	Design and perform appropriate focus groups with physicians, patients, payors, regulators and
others as necessary to develop regulatory, reimbursement and clinical strategies
	 
	 	•	 	Plan, register, develop necessary materials and attend appropriate trade and scientific shows
	 
	 	•	 	Define requirements, search for and hire appropriate sales people necessary to support activities
at 10 leading US psychiatric centers of excellence
	 
	 	•	 	Generate peer-reviewed articles on the efficacy of the test

All of these market development activities need to be reviewed, prioritized and determined by the
Steering Committee.

Timelines

It is expected that RUO testing activities will begin within 1-3 months of the Schizophrenia
Product Milestone being approved by the Steering Committee.

Duration of these activities will be agreed and managed by the Steering Committee.

2. “Commercial” testing

In parallel with RUO activities, RBM and Psynova will co-develop a commercially available version
of the “diagnostic test” prior to regulatory approval. The regulatory approach will be defined
based on the regulatory strategy determined in the RUO Clinical Validation phase and may include
Homebrew, 510k, IVDMIA, and other or combination of approaches as determined by the Steering
Committee.

Major Activities

	 	•	 	RBM will be responsible for the sales and marketing activities for this testing service.

 

 

	 	•	 	Psynova will make all reasonable efforts to produce scientific and marketing
materials to aid in this activity in a timely manner.
	 
	 	•	 	Psynova will make their scientific personnel available to RBM
for attendance of
scientific and trade shows, visits and other interactions with key
customers, and
secondary technical support.
	 
	 	•	 	Psynova may provide to RBM from time to time a recommended price at which it
believes the Testing Services could be charged to third parties, provided however that
RBM shall have complete discretion to determine the price at which it provides the
Testing Services.
	 
	 	•	 	RBM and Psynova will mutually agree on a revenue forecast for the Testing
Services, which will include customary terms and conditions such as minimum sales
targets.
	 
	 	•	 	Psynova and RBM will equally share all profits from the sales of the Testing
Services, once expenses for operations, sales, marketing, regulatory
approval, and IP
relevant to the product have been subtracted.

3. Sales & Marketing

RBM will
undertake activities relevant to the commercialization plan in a
timely manner and
under the direction of the steering committee. Activities will
include those listed in Appendix C.
Activities will be adjusted by the Steering Committee.

Marketing Strategy

RBM will manage a marketing program initially targeted at thought-leaders, early adopters, and
large psychiatric institutions. The intention is to use the scientific standing of the Bahn Lab and
Cambridge University to convince psychiatrists of the high-value of the test.

	 	•	 	Stanley Research Foundation: The Parties plan to enlist the support of Stanley in
recruiting and funding the activity of leading psychiatrists as we conduct a large clinical
market validation study.
	 
	 	•	 	Clinical Marketing Study: to address the key issues that will drive the adoption of the
Schizophrenia Product as part of standard clinical practice. In the months leading up to
the commercial launch of the testing services, the Parties will conduct a series of focus
groups and surveys targeting psychiatrists, hospital administrators, and reimbursement
officials. The results of this program will guide the design of a clinical study with
samples coming from multiple sites.
	 
	 	•	 	Trade Shows / Scientific Conferences: We will attempt to get invitations for members
of the Bahn lab or collaborators to give scientific presentations at these events.

 

 

	 	•	 	Marketing Communications: This should be a coordinated effort around
advertisements, brochures, case studies, webinars, and powerpoint presentations. A
central part of this program will be to build a website for the Schizophrenia Product that
will provide information to psychiatrists and the public as well as a means for these
customers to communicate with us and among themselves.
	 
	 	•	 	Public Relations: The Schizophrenia Product will be a novel diagnostic product for the
psychiatric field and should attract the notice of the trade press and, perhaps, the popular
scientific press.

Sales Strategy

RBM will build a team of sales professionals to commercialize the Schizophrenia product. Over
the first 2 years, and guided by sales results and forecasts, RBM will add up to 4 representatives
in the US and 3 representatives in the EU. An additional sales professional will be hired to
market the product directly to major psychiatric centers in Asia, Africa, and Latin America, and
to manage broad-market distributors in those territories.

The general sales strategy will be to target larger psychiatric institutions, usually those that
have a research component. The first contact will often come through the marketing efforts at trade
shows and scientific conferences. The initial task will be to organize a technical presentation at
the institution. It is likely that these efforts can be coordinated so that a highly qualified
technical person from the Bahn lab or Psynova can give several
presentations in the same territory over a
few days. A typical sales process will then be followed: quotes, volume discounts, bulk
shipment of samples, etc.

The larger centers will be encouraged to participate in our ongoing validation efforts. They will
still be expected to purchase the testing services, but they could get access to our database and
could be included as authors on scientific publications.

Customer and Technical Support

RBM will staff and train a call center providing immediate customer support for logistic issues
related to sample shipments, billing, etc. The call center will operate to cover business hours in
the target markets and may have staff in the US and Europe.

Technical support will be handled directly by RBM, with secondary support from Psynova.

 

 

APPENDIX C

Draft Spending Plan for Commercialization Activities

RBM Schizphrenia Dx Commercialization Plan

l-May-08

DRAFT- FOR DISCUSSION PURPOSES ONLY

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Recurring Expenses	 	2Q prior	 	1Q prior	 	1Q after	 	2Q after	 	3Q after	 	4Q after
	 
	Sales & Marketing Executive [***]
	 	 	 	 	 	 	 	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	US Sales Person [***]
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	US Sales Person [***]
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	[***]	 
	US Sales Person [***]
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	US Sales Person [***]
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	EU Sales Person [***]
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	EU Sales Person [***]
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	[***]	 
	EU Sales Person [***]
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	International
Sales/BD Person [***]
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sales travel [***]
	 	 	 	 	 	 	 	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	Marketing communications
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	Trade shows [***]
	 	 	 	 	 	 	 	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	Scientific shows [***]
	 	 	 	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	Advertising
	 	 	 	 	 	 	 	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 
	Total
	 	$	—	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Non-Recurring Expenses*
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Regulatory Consulting- EU
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	Regulatory Consulting- US
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	Payor / Reimbursement Consulting
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	Marketing validation study
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	Focus Groups / Surveys
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 
	 
	Total
	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 	 	$	[***]	 

Non-Recurring
Expenses as noted in 12 7 2 (c) (iii)

&M executive- experience in the Dx field, able to hire and manage a sales group, strategic
contributor sales group- 4 US, 3 EU, 1 BD

Marketing
communications includes website, creative, printing, etc

Trade shows- plan on 4 per year to be staffed by S&M personnel

Scientific shows- plan on 8 per year with talks/posters from Bahn lab or Psynova technical
personnel

This plan may be affected by the final deal structure R&D results, and operational plans

This plan does not include any expenses for Accounting, Administration, and other Corporate
functions

Rules Based Medicine, Inc

CONFIDENTIAL

 

 

APPENDIX D

Deed of Adherence and Amendment

THIS DEED is made on

200[9]

BETWEEN:

	1.	 	PORTON CAPITAL TECHNOLOGY FUNDS a company registered in Grand
Cayman of P O Box 309 GT, Ugland House, South Church Street, George Town,
Cayman Islands (“PCT”); PORTON CAPITAL INC a company registered in Grand
Cayman of P O Box 309 GT, Ugland House, South Church Street, George Town,
Cayman Islands (“PCI”); THE CHALLENGE FUND TRADING COMPANY
LIMITED a company registered in England and Wales under number 3878072 whose
registered office is at The Old Schools, Trinity Lane, Cambridge, Cambridgeshire
CB2 1TN (“CFT”); CAMBRIDGE ENTERPRISE LIMITED
(formerly Cambridge
University Technical Services Limited) a company registered in England and Wales
under number 1069886 whose registered office is at The Old Schools,
Trinity Lane,
Cambridge, Cambridgeshire CB2 1TN (“CE”); THE CHANCELLOR, MASTERS
AND SCHOLARS OF THE UNIVERSITY OF CAMBRIDGE of the Old Schools,
Trinity Lane, Cambridge CB2 1TN (“the University”); SABINE BAHN of 13
Mackenzie Road, Cambridge CB1 2AN (“Dr Bahn”); and CHRISTOPHER ROBIN
LOWE of The Limes, Hempstead, Saffron Walden, Essex CB10 2PW (“Professor
Lowe”);
	 
	2.	 	PSYNOVA NEUROTECH LIMITED (formerly Psynova Limited), a company
registered in England and Wales under number 5524107 whose registered office is at St.
John’s Innovation Centre, Cowley Road, Cambridge CB4 0WS (“Psynova”),
	 
	 	 	together the “Existing Parties”, and
	 
	3	 	RULES BASED MEDICINE, INC., a corporation having its principal place of
business at 3300 Duval Road, Austin, Texas 78759, USA (“RBM”)

WHEREAS:

	1.	 	The Existing Parties are the parties to a Shareholder Agreement relating to Psynova
dated 3 March 2006 (the “Shareholder Agreement”).
	 
	2.	 	RBM has agreed to subscribe for shares in the capital of Psynova and wishes to adhere
to the Shareholder Agreement.
	 
	3.	 	The Existing Parties and RBM have agreed to make certain amendments to the
Shareholder Agreement in connection with RBM’s subscription.

NOW IN THIS DEED IT IS HEREBY AGREED AND DECLARED as follows:

 

 

	1.	 	RBM agrees that it will observe, perform and be fully bound by and assume the benefit of
the provisions of the Shareholder Agreement in all respects as if RBM were an original
party to the Shareholder Agreement.
	 
	2.	 	The Existing Parties and RBM agree that the Shareholder Agreement shall be amended as
follows:

	 	(a)	 	insert a new definition of “RBM Director”:
	 
	 	 	 	“ “RBM Director” means a non-executive director of the Company
appointed by RBM from time to time under the provisions of the Articles of
Association;”
	 
	 	(b)	 	amend the definition of “Shareholders” to insert “RBM” and “the University”
into the list of persons referred to therein;
	 
	 	(c)	 	insert a new clause 7.1.4 (and renumber the existing clause 7.1.4 accordingly as
clause 7.1.5) as follows:

	 	“7.1.4 	 	 for as long as RBM holds Preferred A Shares, RBM shall be entitled
to appoint two non-executive directors and in the same way shall be
entitled to remove from office and replace any person so appointed;”

	 	(d)	 	in clauses 7.2, 7.3 and 7.5, each reference to “CFT or PCT” or “any CFT Director
or PCT Director” or any similar phrase shall be amended to refer to “CFT,
PCT or RBM” or “any CFT Director, PCT Director or RBM Director” or
otherwise similarly amended;
	 
	 	(e)	 	insert a new clause 7.8 as follows:

	 	“7.8 	 	 RBM undertakes and agrees that each RBM Director shall abstain
from voting in respect of any matter directly relating to the Co-Development and Commercialisation Agreement between the
Company and RBM dated [date] (the “Co-Development
Agreement”) where RBM has a conflict of interest with the
Company ”

	 	(f)	 	in clause 11 1, the reference to “the prior written consent of PCT (and for a
period of 12 months from the date of this Agreement the consent of CFT)”
shall be amended to refer to “the Required Consent”;
	 
	 	(g)	 	in clause 11.4, the reference to “approval by PCT” shall be amended to refer to
“the Required Consent”;
	 
	 	(h)	 	in clauses 11.2 and 11.3, each reference to “PCT and CFT” or any similar phrase
shall be amended to refer to “PCT, CFT and RBM” or otherwise similarly
amended;
	 
	 	(i)	 	in clause 13, the reference to “the prior written consent of PCT or PCI (and for a
period of 12 months from the date of this Agreement the consent of CFT)”
shall be amended to refer to “the Required Consent”.

 

 

	 	(j)	 	in clause 23.1.2, the reference to “CFT, PCI and PCT” shall be amended to refer
to “CFT, PCI, PCT and RBM”;
	 
	 	(k)	 	insert a new definition of “Required Consent”;
	 
	 	 	 	““Required Consent” means the written consent of the holders of a majority
of the issued and outstanding Preferred A Shares.”;
	 
	 	(1)	 	replace the definition of “Annual Business Plan” with:
	 
	 	 	 	““Annual Business Plan” means any business plan of the Company and its
subsidiaries (if any) from time to time to be prepared by the Company and approved by
the Required Consent and the Company in accordance with sub-clause 10.1”
	 
	 	(m)	 	in clause 11.1.2 the words “cease to be a private company or” shall be added at
the beginning of the clause,
	 
	 	(n)	 	in clause 11.1.4 the words “or alter any rights attaching to any class of share in
the capital of the Company” shall be added to the end of such clause;
	 
	 	(o)	 	in clause 11.1.36 the words “(other than under the Option Agreement or the
Director’s Option)” shall be deleted at the end of such clause;
	 
	 	(p)	 	adding the following as clause 11.1.39 “liquidate, dissolve or wind-up the
business and affairs of the Company, effect any Exit (as that term is defined in
the Articles of Association) or Change of Control (as that term is
defined in
the Co-Development Agreement), or consent to any of the foregoing ”,
	 
	 	(q)	 	and add, as an additional clause 11.5 the following:

	 	“11.5 	 	 Each holder of the Preferred A Shares agrees that it will exercise its
rights under this clause 11 in good faith and in a manner that such holder
reasonably believes to be in the best interests of the Company and,
without limitation to the generality of the foregoing, shall not exercise or
withhold the exercise of any such right with the actual intent of
damaging the business of the Company, diverting a business opportunity
from the Company or preventing the Company from taking advantage of
a business opportunity in circumstances where such holder could itself
benefit directly or indirectly ”

	 	(s)	 	add, as an additional clause 11.6 the following

	 	“11.6 	 	 Each Shareholder acknowledges and affirms that RBM and its respective
Associates (the “RBM Related Parties”) have participated (directly or
indirectly) and will continue to participate (directly or indirectly)
in
developing and commercializing testing services and reagent kit products
and related products and services and other businesses that may, are or
will be competitive with the Psynova’s business or that could be suitable
for Psynova (“Other Interests”) and may develop or become aware of
Other Interests.

 

 

Psynova and each Shareholder expressly (i) waives any such conflicts of interest or potential
conflicts of interest and agrees that no RBM Related Party shall have any liability to Psynova or
any Shareholder with respect to such conflicts of interest or
potential conflicts of interest, (ii)
acknowledges and agrees that the RBM Related Parties will not have any duty to disclose to Psynova
or any other Shareholder any Other Interests,
whether or not competitive with Psynova’s business and whether or not
Psynova might be interested in such business opportunity for itself,
(iii)
acknowledges and agrees that the RBM Related Parties have no
obligation to offer any such Other Interests to Psynova or any
Shareholder and (iv) acknowledges and agrees that the RBM Related
Parties subject to any express obligations of RBM to Psynova under the
Co-Development Agreement, may engage in or possess an interest in any
other business or venture of any nature and description, independently or
with others, including any Other Interests, with no obligation to offer
Psynova or any Shareholder the right to participate.Neither Psynova nor
any Shareholder shall have any right in any Other Interests or
independent venture of any RBM Related Party or its income or profits
associated with such Other Interests.

	3	 	The notice details for RBM are as follows

	 	 	 
	RBM
	 	Rules Based Medicine, Inc

	 	 	3300 Duval Road

	 	 	Austin

	 	 	Texas
78759

	Fax number
	 	[           ]

(Attn [          ])

	4	 	Except where expressly set out herein, a person who is not a party to this Deed has no
right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
Deed, but this does not affect any right or remedy of a third party which exists or is
available apart from the Contracts (Rights of Third Parties) Act 1999.
	 
	5	 	This Deed may be executed in any number of counterparts, each of which is an original
and which together have the same effect as if each party had signed
the same document.
	 
	6	 	Nothing in this Deed shall release the parties to the Shareholder Agreement from any
liability in respect of any obligations under the Shareholder Agreement due to be
performed prior to the date first written above.
	 
	7	 	This Deed shall be deemed to be a contract made under and shall be construed in
accordance with and governed by the laws of England. The courts of England have
jurisdiction to settle any dispute arising from or connected with this Deed including a
dispute regarding the existence, validity or termination of this Deed or the consequences
of its nullity.

 

 

IN
WITNESS of which this Deed has been executed as a deed and is delivered on the date first
above written.

	 	 	 	 	 	 	 	 	 	 	 
	EXECUTED AND DELIVERED

	 	 	)	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	AS A DEED by RULES-BASED

	 	 	)	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MEDICINE, INC. a company

	 	 	)	 	 	 	 	 	 	 
	incorporated in State of Delaware by

	 	 				)		 	 	 
	T. Craig Benson being a person

	 	 	)	 	 	 	 	 	 	 
	who, in accordance with the laws

	 	 	)	 	 	 	 	 	 	 
	of that territory, is acting under the

	 	 	)	 	 	 	 	 	 	 
	authority of RULES-BASED

	 	 	)	 	 	 	 	 	 	 
	MEDICINE, INC.

	 	 	)	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	/s/ T. Craig Benson 
T. Craig Benson	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	EXECUTED AND DELIVERED

	 	 	)	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	AS A DEED by PSYNOVA

	 	 	)	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	NEUROTECH LIMITED

	 	 	)	 	 	 	 	/s/ Paul Rodgers	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	acting by two directors or one

	 	 	)	 	 	 	 	Director	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	director and the company secretary
	 	 	)	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	/s/ Sabine Bahn	 	 
	 

	 	 	 	 	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Director/Company Secretary	 	 

[Other Shareholders to execute]

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

 

 

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

 

 

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

 

 

APPENDIX E

Written Resolution

Registered Number: 5524107

PSYNOVA NEUROTECH LIMITED

(the “Company”)

PRIVATE COMPANY LIMITED BY SHARES

 

SHAREHOLDER’S WRITTEN RESOLUTION

CIRCULATED ON

PURSUANT TO CHAPTER 2

OF PART 13 OF THE COMPANIES ACT 2006

 

Pursuant to Chapter 2 of Part 13 of the Companies Act 2006, the directors of the Company
propose that the following resolution is passed as a special resolution.

SPECIAL RESOLUTION

That the Articles of Association of the Company are amended as follows:

	(a)	 	add a new definition in Article 2.1 as follows
	 
	 	 	“ “RBM” means Rules Based Medicine, Inc., a corporation having its principal place of business at
3300 Duval Road, Austin, Texas 78759, USA;”
	 
	(b)	 	amend Article 15.1 to replace the second sentence with;
	 
	 	 	“Subject to article 15.2, the quorum requirement shall be satisfied when persons
representing the holders of a majority of the Preferred A Shares are
present and, in addition,
the number of other shareholders present or represented is not less than the number of persons
present representing the holders of a majority of the Preferred A Shares.”
	 
	(c)	 	insert a new Article 17.4 as follows (and renumber
existing Articles 17.4 to 17.6
accordingly and make appropriate adjustments to cross-references to those Articles):

	 	“17.4	 	RBM may for so long as it holds Shares from time to time appoint two persons to be
Non-Executive Directors in each case by notice given in accordance with the provisions of
article 17.6 and may in like manner remove any Non-Executive Director appointed by RBM and by
like notice from time to time appoint any other person to be Director in the place of a
Director so

 

 

	 	 	 	removed, provided always that no more than two RBM Non-Executive Directors shall hold
office at any one time.”

	(d)	 	amend Article 24.1 as follows;
	 
	 	 	replace “any of articles 17.2, 17.3 and 17.5” with
“any of articles 17.2, 17.3 and 17.4”; and
	 
	 	 	replace “Subject to article 24.2” with “Subject to articles 24.2 and 24.5”;
	 
	(e)	 	amend Article 24.4 by adding “Subject to article 24.5” at the beginning;
	 
	(f)	 	insert a new Article 24.5 as follows (and renumber existing Article 24.5 and Article
24.6 accordingly): 

	 	“24.5	 	A director appointed by RBM in accordance with article 17.4 shall abstain from voting in
respect of any matter directly relating to the Co-Development and Commercialization Agreement
between the Company and RBM dated [date] where RBM has a conflict of interest with the
Company.”

	(g)	 	replace the existing Article 10 with the following:

	 	“10.	 	PRE-EMPTION PROCEDURE ON THE TRANSFER OF SHARES
	 
	 	10.1	 	Except as provided in Articles 9, 11 and 12 no Member, or person entitled to Shares
in the Company by transmission, shall be entitled to transfer his Shares without first offering
them for transfer in accordance with this Article 10. Save as
provided in Article 12, the offer
may be in respect of all or part only of the Shares held by the proposing transferor and shall
be made by the proposing transferor by notice in writing to the Company (“a Transfer Notice”).
	 
	 	10.2	 	The Transfer Notice shall specify the Shares offered (“the Offered Shares”) and the price
at which they are offered (“the Specified Price”). The Transfer Notice shall constitute the
Directors as the agent of the proposing transferor for the sale of the Offered Shares in
accordance with this Article 10 at the Specified Price. Save as provided in article 12.1 the
Transfer Notice may contain a provision that, unless all the Offered Shares are sold under this
Article, none shall be sold and that provision shall have effect (a “Total Transfer
Condition”). The Transfer Notice may not be revoked unless the Directors otherwise agree.
	 
	 	10.3	 	On receipt by the Company of a Transfer Notice the Directors shall (unless RBM is the
proposing transferor or is no longer a member of the Company, in which case articles 10.5 to
10.7 shall apply) as soon as practicable thereafter give notice to RBM of the number and
description of the Offered Shares
and the Specified Price. The notice shall invite RBM to state in writing to the Company within
60 days whether it is willing to purchase any, and if so what number and in what classes (if
relevant) (“RBM Amount”) of the Offered Shares. The Directors shall at the same time give a
copy of the notice to the proposing transferor

 

 

	 	10.4	 	On the expiration of the 60 day period referred to in
article 10.3

	 	10.4.1	 	if the RBM Amount is all of the Offered Shares, then all of the Offered Shares shall be
allocated to RBM and article 10.8 shall apply,
	 
	 	10.4.2	 	if the RBM Amount is none or less than all of the Offered
Shares, then articles 10.5 to
10.7 shall apply.

	 	10.5	 	Where this article applies, then on the expiration of the 60 day period referred to in
article 10.4 (or, where RBM is the proposing transferor or is no longer a member of the
Company, on receipt by the Company of a Transfer Notice) the Directors shall as soon as
practicable thereafter give notice to all the holders of Shares (other than the proposing
transferor and RBM) of the number and description of the Offered Shares less, where applicable,
the RBM Amount (the “Residual Shares”) and the Specified Price The notice shall invite each
such Member to state in writing to the Company within 30 days whether he is willing to purchase
any, and if so what maximum number and in what classes (if relevant) (“Maximum”) of the
Residual Shares The Directors shall at the same time give a copy of the notice to the proposing
transferor
	 
	 	10.6	 	On the expiration of the 30 day period referred to in
article 10.5 the Directors shall
allocate the Residual Shares to or amongst such of the Members as
have stated IN writing to the
Company within that period that they wish to purchase some or all of the Residual Shares (each
a “Purchasing Member”) and such allocation shall in the case of competition be made as nearly
as possible (without creating fractions of shares) pro rata to the number of Shares held by him
but shall not exceed the Maximum which such holder shall have expressed a willingness to
purchase
	 
	 	10.7	 	If the Transfer Notice contains a Total Transfer Condition and following allocation in
accordance with article 10.6, less than all of the Offered Shares have been allocated to RBM
and to Purchasing Members, then no allocation shall be deemed to have
been made and article 10.10 shall apply
	 
	 	10.8	 	On the allocation being made, the Directors shall give details of the allocation in
writing to RBM (if the RBM Amount is greater than zero) and each Purchasing Member (together
the “Purchasers”) and to the proposing transferor and, within seven days after such details are
given, the Purchasers to whom the allocation has been made shall pay the purchase price for,
and accept transfer of, the Offered Shares allocated to them respectively and the proposing
transferor shall be bound, on payment of such purchase price, to transfer the Offered Shares to
the respective Purchasers to whom the allocation has been made
	 
	 	10.9	 	If the proposing transferor after becoming bound to transfer the Offered Shares fails to
do so, the Company may receive the purchase price and the Directors may appoint a person to
execute instruments of transfer of the Offered Shares in favour of the Purchasers to whom the
allocation has been made and shall cause the names of those Purchasers to be entered in the
register of members of the Company as the holders of the Offered Shares and

 

 

	 	 	 	shall hold the purchase price in trust for the proposing transferor The receipt
of the Company shall be a good discharge to those Purchasers and, after their
names have been entered in the Register of Members of the Company under
this provision, the validity of the transaction shall not be questioned by any
person
	 
	 	10.10	 	 If following allocation in accordance with article 10.6, less than all of the
Offered Shares have been allocated to RBM and to Purchasing Members, then
the proposing transferor may (subject to the provisions of Articles
8.3 and 8.4, and other than where the Offered Shares are being sold pursuant to Articles
12.1 to 12.4 inclusive) at any time within a period of 100 days after the expiry
of the 30 day period transfer the Offered Shares not allocated or, if the
Transfer Notice contained a Total Transfer Condition, all of the Offered
Shares, to any person (the “Transferee”) and at any
price (being not less than
the Specified Price) provided that

	 	10.10.1	 	 unless the proposing transferor is RBM, then prior to such transfer
the proposing transferor must offer in writing to transfer all shares
that it proposes to transfer to the Transferee to RBM at the same
price as is to be paid by the Transferee, and RBM may by notice in
writing given within 10 days to the proposing transferor agree to
purchase all such shares at that price, in which case the proposing
transferor shall transfer such shares to RBM within seven days after
RBM gives such notice and RBM shall pay the purchase price for,
and accept transfer of, such shares, article 10.9 shall apply to any
transfer under this article 10.10.1 as it does to a transfer under article
10.8,
	 
	 	10.10.2	 	 if the Transfer Notice contained a Total Transfer Condition he shall
not be entitled to transfer any of the Offered shares unless in
aggregate all of the Offered Shares are so transferred, and
	 
	 	10.10.3	 	 the Directors may require to be satisfied that those Offered Shares
are being transferred under a bona fide sale for the consideration
stated in the transfer without any deduction, rebate or allowance to
the Purchaser and, if not so satisfied, may refuse to register the
instrument of transfer

	 	10.11	 	 If following allocation in accordance with article 10.6, less than all of the
Offered Shares have been allocated to RBM and to Purchasing Members, and
such Offered Shares are being sold pursuant to Articles 12.1-12.4 (inclusive),
the Offered Shares (or the unallocated portion of them) shall continue to be
held by the relevant Member as detailed in Articles 12.1.1 to 12.1.5
inclusive ”

	(h)	 	amend Article 11.1.1 by adding “, provided, however, in no event shall RBM be deemed
to be a “Buyer” for purposes of this Article 11 and the provisions of this Article 11 shall
not apply in the event RBM acquires any Controlling Interest in the Company, however
accomplished ” to the end of such article,

 

 

	(i)	 	amend Article 11.5 by adding “If RBM gives written notice to the Members of its
election to require Members to accept the Offer or if” at the beginning of such article,
	 
	(j)	 	amend Article 3.1 to read in its entirety as follows;
	 
	 	 	“The authorised share capital of the Company is [***] divided into [***]
Ordinary Shares and [***] Preferred A Shares,
	 
	(k)	 	amend Article 4.4 to read in its entirety as follows;

	 	4.4	 	 Dividends

	 	4.4.1 in the event that a dividend or other distribution is declared in
respect of any financial year such sum shall be apportioned (a) first to the
holder(s) of the Preferred A Shares until all amounts described in article 4.2.1
have been fully paid and (b) second, among the holders of Preferred A Shares
and Ordinary Shares pro rata to their holdings as though they constituted one
class of shares.”; and

	(1)	 	amend Article 12.1 by amending the reference to “PCT or PCI” to read as “the holders
of a majority of the issued and outstanding Preferred A Shares”.

We, the undersigned, being all the
members of the Company for the time being entitled to receive
notice of, attend and vote at General Meetings, hereby unanimously pass these special resolutions
and declare that the said resolutions shall for all purposes be valid and effective as if the same
had
been passed at a General Meeting of the Company duly convened and held.

These resolutions may be executed in
any number of counterparts and by different parties on
separate counterparts each of which counterparts shall, when executed, be an original, but all of
the counterparts shall together constitute one and the same instrument and shall become effective
upon the execution of such counterparts by all of the members entitled to receive notice of, attend
and vote at General Meetings.

Each Shareholder to sign

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

 

 

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

 

 

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

	 	 	 	 	 
	 	          )
	 	 	          
	By:  	 	          )
	 	Authorized Representative                        	          )
	 	Name: 	 	          )
	 	Title: 	 	          )
	 	Date: 	 	          )

EXPLANATORY NOTES FOR SHAREHOLDERS:

	1.	 	If you agree to the resolution, please indicate your agreement by signing and dating this
document where indicated above and returning it to the Company.
	 
	2.	 	Once you have indicated your agreement to the resolution, you may not revoke your
agreement.
	 
	3.	 	Unless, by the date at the end of the 28-day period beginning on the circulation date,
sufficient agreement has been received for the resolution to pass, it will lapse. If you
agree to the resolution, please ensure that your agreement reaches us before or on this
dateexv10w9

Exhibit 10.9

RULES-BASED MEDICINE, INC.

2007 LONG TERM INCENTIVE PLAN

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	1. Purpose
	 	 	1	 
	2. Definitions
	 	 	1	 
	3. Administration
	 	 	3	 
	(a) Authority of the Committee
	 	 	3	 
	(b) Manner of Exercise of Committee Authority
	 	 	4	 
	(c) Limitation of Liability
	 	 	4	 
	4. Stock Subject to Plan
	 	 	4	 
	(a) Overall Number of Shares Available for Delivery
	 	 	4	 
	(b) Application of Limitation to Grants of Awards
	 	 	5	 
	(c) Availability of Shares Not Issued under Awards
	 	 	5	 
	(d) Stock Offered
	 	 	5	 
	5. Eligibility
	 	 	5	 
	6. Specific Terms of Awards
	 	 	5	 
	(a) General
	 	 	5	 
	(b) Options
	 	 	5	 
	(c) Stock Appreciation Rights
	 	 	6	 
	(d) Restricted Stock
	 	 	8	 
	(e) Restricted Stock Units
	 	 	8	 
	(f) Bonus Stock and Awards in Lieu of Obligations
	 	 	9	 
	(g) Dividend Equivalents
	 	 	9	 
	(h) Other Stock-Based Awards
	 	 	9	 
	7. Certain Provisions Applicable to Awards
	 	 	9	 
	(a) Termination of Employment
	 	 	9	 
	(b) Stand-Alone, Additional, Tandem, and Substitute Awards
	 	 	10	 
	(c) Term of Awards
	 	 	10	 
	(d) Form and Timing of Payment under Awards
	 	 	10	 
	(e) Non-Competition Agreement
	 	 	10	 
	8. Subdivision or Consolidation; Recapitalization; Change in Control;
Reorganization
	 	 	10	 
	(a) Existence of Plans and Awards
	 	 	10	 
	(b) Subdivision or Consolidation of Shares
	 	 	11	 
	(c) Corporate Recapitalization
	 	 	11	 
	(d) Additional Issuances
	 	 	12	 
	(e) Change in Control
	 	 	12	 
	(f) Change in Control Price
	 	 	13	 
	9. General Provisions
	 	 	13	 
	(a) Restricted Securities
	 	 	13	 
	(b) Transferability
	 	 	14	 

 

 

	 	 	 	 	 
	 	 	Page
	(c) Right of First Refusal
	 	 	15	 
	(d) Purchase Option
	 	 	17	 
	(e) Taxes
	 	 	18	 
	(f) Changes to this Plan and Awards
	 	 	18	 
	(g) Limitation on Rights Conferred under Plan
	 	 	19	 
	(h) Unfunded Status of Awards
	 	 	19	 
	(i) Nonexclusivity of this Plan
	 	 	19	 
	(j) Fractional Shares
	 	 	19	 
	(k) Severability
	 	 	19	 
	(l) Governing Law
	 	 	20	 
	(m) Conditions to Delivery of Stock
	 	 	20	 
	(n) Section 409A of the Code
	 	 	20	 
	(o) Plan Effective Date
	 	 	20	 

 

 

RULES-BASED MEDICINE, INC.

2007 Long Term Incentive Plan

     1. Purpose. The purpose of the Rules-Based Medicine, Inc. 2007 Long Term Incentive Plan (the
“Plan”) is to provide a means through which Rules-Based Medicine, Inc., a Delaware corporation (the
“Company”), and its Subsidiaries may attract and retain able persons as employees, directors and
consultants of the Company, and its Subsidiaries, and to provide a means whereby those persons upon
whom the responsibilities of the successful administration and management of the Company, and its
Subsidiaries, rest, and whose present and potential contributions to the welfare of the Company,
and its Subsidiaries, are of importance, can acquire and maintain stock ownership, or awards the
value of which is tied to the performance of the Company, thereby strengthening their concern for
the welfare of the Company, and its Subsidiaries, and their desire to remain employed. A further
purpose of this Plan is to provide such employees, directors and consultants with additional
incentive and reward opportunities designed to enhance the profitable growth of the Company.
Accordingly, this Plan primarily provides for the granting of Incentive Stock Options, options
which do not constitute Incentive Stock Options, Restricted Stock Awards, Restricted Stock Units,
Stock Appreciation Rights or any combination of the foregoing, as is best suited to the
circumstances of the particular individual as provided herein.

     2. Definitions. For purposes of this Plan, the following terms shall be defined as set forth
below, in addition to such terms defined in Section 1 hereof:

          (a) “Award” means any Option, SAR (including Limited SAR), Restricted Stock Award, Restricted
Stock Unit, Bonus Stock, Dividend Equivalent, or Other Stock-Based Award, together with any other
right or interest granted to a Participant under this Plan.

          (b) “Beneficiary” means one or more persons, trusts or other entities which have been
designated by a Participant, in his or her most recent written beneficiary designation filed with
the Committee, to receive the benefits specified under this Plan upon such Participant’s death or
to which Awards or other rights are transferred if and to the extent permitted under Subsection
9(b) hereof. If, upon a Participant’s death, there is no designated Beneficiary or surviving
designated Beneficiary, then the term Beneficiary means the persons, trusts or other entities
entitled by will or the laws of descent and distribution to receive such benefits.

          (c) “Board” means the Company’s Board of Directors.

          (d) “Change in Control” means a “Deemed Liquidation Event” as such term is defined in the
Amended and Restated Certificate of Incorporation of the Company executed [date], 2007.

          (e) “Code” means the Internal Revenue Code of 1986, as amended from time to time, including
regulations thereunder and successor provisions and regulations thereto.

1

 

          (f) “Committee” means a committee of two or more directors designated by the Board to
administer this Plan.

          (g) “Dividend Equivalent” means a right, granted to a Participant under Subsection 6(g), to
receive cash, Stock, other Awards or other property equal in value to dividends paid with respect
to a specified number of shares of Stock, or other periodic payments.

          (h) “Effective Date” means October 12, 2007.

          (i) “Eligible Person” means all officers and employees of the Company or of any Subsidiary,
and other persons who provide services to the Company or any of its Subsidiaries, including
directors of the Company. An employee on leave of absence may be considered as still in the employ
of the Company or a Subsidiary for purposes of eligibility for participation in this Plan.

          (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
including rules thereunder and successor provisions and rules thereto.

          (k) “Fair Market Value” means, as of any specified date, (i) if the Stock is listed on a
national securities exchange, the closing sales price of the Common Stock as reported on the stock
exchange composite tape on that date (or if no sales occur on that date, on the last preceding date
on which such sales of the Stock are so reported); (ii) if the Stock is not traded on the National
Market System of the NASDAQ or a national securities exchange but is traded over the counter at the
time a determination of its fair market value is required to be made under the Plan, the average
between the reported closing bid and asked prices of Stock on the most recent date on which Stock
was publicly traded; or (iii) in the event Stock is not publicly traded at the time a determination
of its value is required to be made under the Plan, the amount determined by the Board in its
discretion in such manner as it deems appropriate, taking into consideration all factors the Board
deems appropriate including without limitation, the Nonqualified Deferred Compensation Rules.

          (l) “Incentive Stock Option” or “ISO” means any Option intended to be and designated as an
incentive stock option within the meaning of section 422 of the Code or any successor provision
thereto.

          (m) “Nonqualified Deferred Compensation Rules” means the limitations or requirements of
section 409A of the Code and the regulations promulgated thereunder.

          (n) “Option” means a right, granted to a Participant under Subsection 6(b) hereof, to purchase
Stock or other Awards at a specified price during specified time periods.

          (o) “Other Stock-Based Awards” means Awards granted to a Participant under Subsection 6(h)
hereof.

          (p) “Participant” means a person who has been granted an Award under this Plan which remains
outstanding, including a person who is no longer an Eligible Person.

2

 

          (q) “Person” means any person or entity of any nature whatsoever, specifically including an
individual, a firm, a company, a corporation, a partnership, a limited liability company, a trust
or other entity; a Person, together with that Person’s Affiliates and Associates (as those terms
are defined in Rule 12b-2 under the Exchange Act, provided that “registrant” as used in Rule 12b-2
shall mean the Company), and any Persons acting as a partnership, limited partnership, joint
venture, association, syndicate or other group (whether or not formally organized), or otherwise
acting jointly or in concert or in a coordinated or consciously parallel manner (whether or not
pursuant to any express agreement), for the purpose of acquiring, holding, voting or disposing of
securities of the Company with such Person, shall be deemed a single “Person.”

          (r) “Qualifying Public Offering” shall mean a firm commitment underwritten public offering of
Stock for cash where the shares of Stock registered under the Securities Act are listed on a
national securities exchange or the NASDAQ Stock Market.

          (s) “Restricted Stock” means Stock granted to a Participant under Subsection 6(d) hereof, that
is subject to certain restrictions and to a risk of forfeiture.

          (t) “Restricted Stock Unit” means a right, granted to a Participant under Subsection 6(e)
hereof, to receive Stock, cash or a combination thereof at the end of a specified deferral period.

          (u) “Securities Act” means the Securities Act of 1933 and the rules and regulations
promulgated thereunder, or any successor law, as it may be amended from time to time.

          (v) “Stock” means the Company’s Common Stock, par value $0.001 per share, and such other
securities as may be substituted (or resubstituted) for Stock pursuant to Section 8.

          (w) “Stock Appreciation Rights” or “SAR” means a right granted to a Participant under
Subsection 6(c) hereof.

          (x) “Subsidiary” means with respect to the Company, any corporation or other entity of which a
majority of the voting power of the voting equity securities or equity interest is owned, directly
or indirectly, by the Company.

     3. Administration.

          (a) Authority of the Committee. This Plan shall be administered by the Committee
except to the extent the Board elects to administer this Plan, in which case references herein to
the “Committee” shall be deemed to include references to the “Board.” Subject to the express
provisions of the Plan, the Committee shall have the authority, in its sole and absolute
discretion, to (i) adopt, amend, and rescind administrative and interpretive rules and regulations
relating to the Plan; (ii) determine the Eligible Persons to whom, and the time or times at which,
Awards shall be granted; (iii) determine the amount of cash and the number of shares of Stock,
Stock Appreciation Rights, Restricted Stock Units or Restricted Stock Awards, or any combination
thereof, that shall be the subject of each Award; (iv) determine the terms and

3

 

provisions of each Award agreement (which need not be identical), including provisions
defining or otherwise relating to (A) the term and the period or periods and extent of
exercisability of the Options, (B) the extent to which the transferability of shares of Stock
issued or transferred pursuant to any Award is restricted, (C) except as otherwise provided herein,
the effect of termination of employment, or the service relationship with the Company, of a
Participant on the Award, and (D) the effect of approved leaves of absence (consistent with any
applicable regulations of the Internal Revenue Service); (v) accelerate the time of exercisability
of any Award that has been granted; (vi) construe the respective Award agreements and the Plan;
(vii) delegate its duties under the Plan to such agents as it may appoint from time to time; and
(viii) make all other determinations, perform all other acts, and exercise all other powers and
authority necessary or advisable for administering the Plan, including the delegation of those
ministerial acts and responsibilities as the Committee deems appropriate. The Committee may
correct any defect, supply any omission, or reconcile any inconsistency in the Plan, in any Award,
or in any Award agreement in the manner and to the extent it deems necessary or desirable to carry
the Plan into effect, and the Committee shall be the sole and final judge of that necessity or
desirability. The determinations of the Committee on the matters referred to in this Subsection
3(a) shall be final and conclusive. Any determination of the Fair Market Value of Stock for
purposes of the Plan will be made by the Board.

          (b) Manner of Exercise of Committee Authority. Any action of the Committee shall be
final, conclusive and binding on all persons, including the Company, its Subsidiaries,
stockholders, Participants, Beneficiaries, and transferees under Subsection 9(b) hereof or other
persons claiming rights from or through a Participant. The express grant of any specific power to
the Committee, and the taking of any action by the Committee, shall not be construed as limiting
any power or authority of the Committee. The Committee may delegate to officers or managers of the
Company or any Subsidiary, or committees thereof, the authority, subject to such terms as the
Committee shall determine, to perform such functions, including administrative functions, as the
Committee may determine.

          (c) Limitation of Liability. The Committee and each member thereof shall be entitled
to, in good faith, rely or act upon any report or other information furnished to him or her by any
officer or employee of the Company or a Subsidiary, the Company’s legal counsel, independent
auditors, consultants or any other agents assisting in the administration of this Plan. Members of
the Committee and any officer or employee of the Company or a Subsidiary acting at the direction or
on behalf of the Committee shall not be personally liable for any action or determination taken or
made in good faith with respect to this Plan, and shall, to the fullest extent permitted by law, be
indemnified and held harmless by the Company with respect to any such action or determination.

     4. Stock Subject to Plan.

          (a) Overall Number of Shares Available for Delivery. Subject to adjustment in a
manner consistent with any adjustment made pursuant to Section 8, the total number of shares of
Stock reserved and available for issuance in connection with Awards under this Plan shall not
exceed 820,749 shares.

4

 

          (b) Application of Limitation to Grants of Awards. No Award may be granted if the
number of shares of Stock to be delivered in connection with such Award exceeds the number of
shares of Stock remaining available under this Plan minus the number of shares of Stock issuable in
settlement of or relating to then-outstanding Awards. The Committee may adopt reasonable counting
procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of
tandem or substitute awards) and make adjustments if the number of shares of Stock actually
delivered differs from the number of shares previously counted in connection with an Award.

          (c) Availability of Shares Not Issued under Awards. Shares of Stock subject to an
Award under this Plan that expire or are canceled, forfeited, settled in cash or otherwise
terminated without an issuance of shares to the Participant, including (i) the number of shares
withheld in payment of any exercise or purchase price of an Award or taxes relating to Awards, and
(ii) the number of shares surrendered in payment of any exercise or purchase price of an Award or
taxes relating to any Award, will again be available for Awards under this Plan.

          (d) Stock Offered. The shares to be delivered under the Plan shall be made available
from (i) authorized but unissued shares of Stock, (ii) Stock held in the treasury of the Company,
or (iii) previously issued shares of Stock reacquired by the Company, including shares purchased on
the open market.

     5. Eligibility. Awards may be granted under this Plan only to Persons who are Eligible
Persons at the time of grant thereof.

     6. Specific Terms of Awards.

          (a) General. Awards may be granted on the terms and conditions set forth in this
Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date
of grant or thereafter (subject to Subsection 9(f)), such additional terms and conditions, not
inconsistent with the provisions of this Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment by the Participant, or
termination of the Participant’s service relationship with the Company, and terms permitting a
Participant to make elections relating to his or her Award. The Committee shall retain full power
and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that
is not mandatory under this Plan.

          (b) Options. The Committee is authorized to grant Options to Participants on the
following terms and conditions:

               (i) Exercise Price. Each Option agreement shall state the exercise price per share of
Stock (the “Exercise Price”); provided, however, that the Exercise Price per share
of Stock subject to an ISO shall not be less than the greater of (A) the par value per share of the
Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the
Option (or in the case of an individual who owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or its parent or any subsidiary, 110%
of the Fair Market Value per share of the Stock on the date of grant).

5

 

               (ii) Time and Method of Exercise. The Committee shall determine the time or times at
which or the circumstances under which an Option may be exercised in whole or in part (including
based on achievement of performance goals and/or future service requirements), the methods by which
such exercise price may be paid or deemed to be paid, the form of such payment, including without
limitation cash, Stock, other Awards or awards granted under other plans of the Company or any
Subsidiary, or other property (including notes or other contractual obligations of Participants to
make payment on a deferred basis), and the methods by or forms in which Stock will be delivered or
deemed to be delivered to Participants, including, but not limited to, the delivery of Restricted
Stock subject to Subsection 6(d). In the case of an exercise whereby the Exercise Price is paid
with Stock, such Stock shall be valued as of the date of exercise.

               (iii) ISOs. The terms of any ISO granted under this Plan shall comply in all respects
with the provisions of section 422 of the Code. Anything in this Plan to the contrary
notwithstanding, no term of this Plan relating to ISOs (including any SAR in tandem therewith)
shall be interpreted, amended or altered, nor shall any discretion or authority granted under this
Plan be exercised, so as to disqualify either this Plan or any ISO under section 422 of the Code,
unless the Participant has first requested the change that will result in such disqualification.
ISOs shall not be granted more than ten years after the earlier of the adoption of this Plan or the
approval of this Plan by the Company’s stockholders. Notwithstanding the foregoing, the Fair Market
Value of shares of Stock subject to an ISO and the aggregate Fair Market Value of shares of stock
of any parent or Subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code)
subject to any other ISO (within the meaning of section 422 of the Code) of the Company or a parent
or Subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code) that first
becomes purchasable by a Participant in any calendar year may not (with respect to that
Participant) exceed $100,000, or such other amount as may be prescribed under section 422 of the
Code or applicable regulations or rulings from time to time. As used in the previous sentence,
Fair Market Value shall be determined as of the date the ISOs are granted. Failure to comply with
this provision shall not impair the enforceability or exercisability of any Option, but shall cause
the excess amount of shares to be reclassified in accordance with the Code.

          (c) Stock Appreciation Rights. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:

               (i) Right to Payment. An SAR shall confer on the Participant to whom it is granted a
right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of
Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee.

               (ii) Rights Related to Options. An SAR granted in connection with an Option shall
entitle a Participant, upon exercise, to surrender that Option or any portion thereof, to the
extent unexercised, and to receive payment of an amount computed pursuant to Subsection
6(c)(ii)(B). That Option shall then cease to be exercisable to the extent surrendered. SARs
granted in connection with an Option shall be subject to the terms of the Award agreement governing
the Option, which shall comply with the following provisions in addition to those applicable to
Options:

6

 

                    (A) An SAR granted in connection with an Option shall be exercisable only at such time or
times and only to the extent that the related Option is exercisable.

                    (B) Upon the exercise of an SAR related to an Option, a Participant shall be entitled to
receive payment from the Company of an amount determined by multiplying:

                         (1) the difference obtained by subtracting the exercise price of a share of Stock specified in
the related Option from the Fair Market Value of a share of Stock on the date of exercise of the
SAR, by

                         (2) the number of shares as to which that SAR has been exercised.

               (iii) Right Without Option. An SAR granted independent of an Option shall be
exercisable as determined by the Committee and set forth in the Award agreement governing the SAR,
which Award agreement shall comply with the following provisions:

                    (A) Each Award agreement shall state the total number of shares of Stock to which the SAR
relates.

                    (B) Each Award agreement shall state the time or periods in which the right to exercise the
SAR or a portion thereof shall vest and the number of shares of Stock for which the right to
exercise the SAR shall vest at each such time or period.

                    (C) Each Award agreement shall state the date at which the SARs shall expire if not previously
exercised.

                    (D) Each SAR shall entitle a participant, upon exercise thereof, to receive payment of an
amount determined by multiplying:

                         (1) the difference obtained by subtracting the Fair Market Value of a share of Stock on the
date of grant of the SAR from the Fair Market Value of a share of Stock on the date of exercise of
that SAR, by

                         (2) the number of shares as to which the SAR has been exercised.

               (iv) Terms. Except as otherwise provided herein, the Committee shall determine at the
date of grant or thereafter, the time or times at which and the circumstances under which an SAR
may be exercised in whole or in part (including based on achievement of performance goals and/or
future service requirements), the method of exercise, method of settlement, form of consideration
payable in settlement, method by or forms in which Stock will be delivered or deemed to be
delivered to Participants, whether or not an SAR shall be in tandem or in combination with any
other Award, and any other terms and conditions of any SAR. SARs may be either freestanding or in
tandem with other Awards.

7

 

          (d) Restricted Stock. The Committee is authorized to grant Restricted Stock to
Participants on the following terms and conditions:

               (i) Grant and Restrictions. Restricted Stock shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose,
which restrictions may lapse separately or in combination at such times, under such circumstances
(including based on achievement of performance goals and/or future service requirements), in such
installments or otherwise, as the Committee may determine at the date of grant or thereafter.
During the restricted period applicable to the Restricted Stock, the Restricted Stock may not be
sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant.

               (ii) Certificates for Stock. Restricted Stock granted under this Plan may be
evidenced in such manner as the Committee shall determine. If certificates representing Restricted
Stock are registered in the name of the Participant, the Committee may require that such
certificates bear an appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain physical possession of the
certificates, and that the Participant deliver a stock power to the Company, endorsed in blank,
relating to the Restricted Stock.

               (iii) Dividends and Splits. As a condition to the grant of an Award of Restricted
Stock, the Committee may require or permit a Participant to elect that any cash dividends paid on a
share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock or
applied to the purchase of additional Awards under this Plan. Unless otherwise determined by the
Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property
distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same
extent as the Restricted Stock with respect to which such Stock or other property has been
distributed.

          (e) Restricted Stock Units. The Committee is authorized to grant Restricted Stock
Units to Participants, which are rights to receive Stock or cash, as determined by the Committee,
at the end of a specified deferral period, subject to the following terms and conditions:

               (i) Award and Restrictions. Settlement of an Award of Restricted Stock Units shall
occur upon expiration of the deferral period specified for such Restricted Stock Unit by the
Committee (or, if permitted by the Committee, as elected by the Participant). In addition,
Restricted Stock Units shall be subject to such restrictions (which may include a risk of
forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of
the deferral period or at earlier specified times (including based on achievement of performance
goals and/or future service requirements), separately or in combination, in installments or
otherwise, as the Committee may determine. Restricted Stock Units shall be satisfied by the
delivery of cash or Stock in the amount equal to the Fair Market Value of the specified number of
shares of Stock covered by the Restricted Stock Units, or a combination thereof, as determined by
the Committee at the date of grant or thereafter.

8

 

               (ii) Dividend Equivalents. Unless otherwise determined by the Committee at date of
grant, Dividend Equivalents on the specified number of shares of Stock covered by an Award of
Restricted Stock Units shall be either (A) paid with respect to such Restricted Stock Units on the
dividend payment date in cash or in shares of unrestricted Stock having a Fair Market Value equal
to the amount of such dividends, or (B) deferred with respect to such Restricted Stock Units and
the amount or value thereof automatically deemed reinvested in additional Restricted Stock Units,
other Awards or other investment vehicles, as the Committee shall determine or permit the
Participant to elect.

          (f) Bonus Stock and Awards in Lieu of Obligations. The Committee is authorized to
grant Stock as a bonus, or to grant Stock or other Awards in lieu of obligations to pay cash or
deliver other property under this Plan or under other plans or compensatory arrangements. Stock or
Awards granted hereunder shall be subject to such other terms as shall be determined by the
Committee. In the case of any grant of Stock to an officer of the Company or a Subsidiary in lieu
of salary or other cash compensation, the number of shares granted in place of such compensation
shall be reasonable, as determined by the Committee.

          (g) Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents
to a Participant, entitling the Participant to receive cash, Stock, other Awards, or other property
equal in value to dividends paid with respect to a specified number of shares of Stock, or other
periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection
with another Award. The Committee may provide that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested in additional Stock, Awards, or
other investment vehicles, and subject to such restrictions on transferability and risks of
forfeiture, as the Committee may specify.

          (h) Other Stock-Based Awards. The Committee is authorized, subject to limitations
under applicable law, to grant to Participants such other Awards that may be denominated or payable
in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, as
deemed by the Committee to be consistent with the purposes of this Plan, including without
limitation convertible or exchangeable debt securities, other rights convertible or exchangeable
into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of
the Company or any other factors designated by the Committee, and Awards valued by reference to the
book value of Stock or the value of securities of, or the performance of, specified Subsidiaries.
The Committee shall determine the terms and conditions of such Awards. Stock delivered pursuant to
an Award in the nature of a purchase right granted under this Subsection 6(h) shall be purchased
for such consideration, paid for at such times, by such methods, and in such forms, including,
without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine.
Cash awards, as an element of or supplement to any other Award under this Plan, may also be
granted pursuant to this Subsection 6(h).

     7. Certain Provisions Applicable to Awards.

          (a) Termination of Employment. Except as provided herein, the treatment of an Award
upon a termination of employment or any other service relationship by and between a Participant and
the Company or any Subsidiary shall be specified in the agreement controlling such Award.

9

 

          (b) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under this
Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem
with, or in substitution or exchange for, any other Award or any award granted under another plan
of the Company, any Subsidiary, or any business entity to be acquired by the Company or a
Subsidiary, or any other right of a Participant to receive payment from the Company or any
Subsidiary. Such additional, tandem and substitute or exchange Awards may be granted at any time.
If an Award is granted in substitution or exchange for another Award, the Committee shall require
the surrender of such other Award in consideration for the grant of the new Award. In addition,
Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under
other plans of the Company or any Subsidiary, in which the value of Stock subject to the Award is
equivalent in value to the cash compensation, or in which the exercise price, grant price or
purchase price of the Award in the nature of a right that may be exercised is equal to the Fair
Market Value of the underlying Stock minus the value of the cash compensation surrendered.

          (c) Term of Awards. Except as specified herein, the term of each Award shall be for
such period as may be determined by the Committee; provided, however, that in no
event shall the term of any Option or SAR exceed a period of ten years (or such shorter term as may
be required in respect of an ISO under section 422 of the Code).

          (d) Form and Timing of Payment under Awards. Subject to the terms of this Plan and
any applicable Award agreement, payments to be made by the Company or a Subsidiary upon the
exercise of an Option or other Award or settlement of an Award may be made in such forms as the
Committee shall determine, including without limitation cash, Stock, other Awards or other
property. Except as otherwise provided herein, the settlement of any Award may be accelerated, and
cash paid in lieu of Stock in connection with such settlement, in the discretion of the Committee
or upon occurrence of one or more specified events (in addition to a Change in Control). This Plan
shall not constitute an “employee benefit plan” for purposes of section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.

          (e) Non-Competition Agreement. Each Participant to whom an Award is granted under
this Plan may be required to agree in writing as a condition to the granting of such Award not to
engage in conduct in competition with the Company or any of its Subsidiaries for a period after the
termination of such Participant’s employment with the Company and its Subsidiaries as determined by
the Committee.

     8. Subdivision or Consolidation; Recapitalization; Change in Control; Reorganization.

          (a) Existence of Plans and Awards. The existence of this Plan and the Awards granted
hereunder shall not affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or other change in
the Company’s capital structure or its business, any merger or consolidation of the Company, any
issue of debt or equity securities ahead of or affecting Stock or the rights thereof, the
dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all
or any part of its assets or business or any other corporate act or proceeding. In no event will
any action taken by the Committee pursuant to this Section 8 result

10

 

in the creation of deferred compensation within the meaning of section 409A of the Code and
the regulations and other guidance promulgated thereunder.

          (b) Subdivision or Consolidation of Shares. The terms of an Award and the number of
shares of Stock authorized pursuant to Section 4 for issuance under the Plan shall be subject to
adjustment from time to time, in accordance with the following provisions:

               (i) If at any time, or from time to time, the Company shall subdivide as a whole (by a Stock
split, by the issuance of a distribution on Stock payable in Stock, or otherwise) the number of
shares of Stock then outstanding into a greater number of shares of Stock, then (A) the maximum
number of shares of Stock available in connection with the Plan or Awards as provided in Section 4
shall be increased proportionately, and the kind of shares or other securities available for the
Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or
securities) that may be acquired under any Award shall be increased proportionately, and (C) the
price (including the exercise price) for each share of Stock (or other kind of shares or
securities) subject to then outstanding Awards shall be reduced proportionately, without changing
the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject
to restrictions.

               (ii) If at any time, or from time to time, the Company shall consolidate as a whole (by
reverse Stock split, or otherwise) the number of shares of Stock then outstanding into a lesser
number of shares of Stock, (A) the maximum number of shares of Stock available in connection with
the Plan or Awards as provided in Section 4 shall be decreased proportionately, and the kind of
shares or other securities available for the Plan shall be appropriately adjusted, (B) the number
of shares of Stock (or other kind of shares or securities) that may be acquired under any Award
shall be decreased proportionately, and (C) the price (including the exercise price) for each share
of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be
increased proportionately, without changing the aggregate purchase price or value as to which
outstanding Awards remain exercisable or subject to restrictions.

               (iii) Whenever the number of shares of Stock subject to outstanding Awards and the price for
each share of Stock subject to outstanding Awards are required to be adjusted as provided in this
Subsection 8(b), the Committee shall promptly prepare, and deliver to each Participant, a notice
setting forth, in reasonable detail, the event requiring adjustment, the amount of the adjustment,
the method by which such adjustment was calculated, and the change in price and the number of
shares of Stock, other securities, cash, or property purchasable subject to each Award after giving
effect to the adjustments.

               (iv) Adjustments under Subsections 8(b)(i) and (ii) shall be made by the Committee, and its
determination as to what adjustments shall be made and the extent thereof shall be final, binding,
and conclusive. No fractional interest shall be issued under the Plan on account of any such
adjustments.

          (c) Corporate Recapitalization.

               (i) If the Company recapitalizes, reclassifies its capital stock, or otherwise changes its
capital structure (a “recapitalization”), the number and class of shares of

11

 

Stock covered by an Option or an SAR theretofore granted shall be adjusted so that such Option
or SAR shall thereafter cover the number and class of shares of stock and securities to which the
holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior
to the recapitalization, the holder had been the holder of record of the number of shares of Stock
then covered by such Option or SAR and the share limitations provided in Section 4 shall be
adjusted in a manner consistent with the recapitalization.

               (ii) In the event of changes in the outstanding Stock by reason of recapitalization,
reorganizations, mergers, consolidations, combinations, exchanges or other relevant changes in
capitalization occurring after the date of the grant of any Award and not otherwise provided for by
this Section 8, any outstanding Awards and any agreements evidencing such Awards shall be subject
to adjustment by the Committee at its discretion as to the number and price of shares of Stock or
other consideration subject to such Awards. In the event of any such change in the outstanding
Stock, the share limitations provided in Section 4 may be appropriately adjusted by the Committee,
whose determination shall be conclusive.

          (d) Additional Issuances. Except as hereinbefore expressly provided, the issuance by
the Company of shares of stock of any class or securities convertible into shares of stock of any
class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether or not for fair value,
shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of
shares of Stock subject to Awards theretofore granted or the purchase price per share, if
applicable.

          (e) Change in Control. Upon a Change in Control the Committee, acting in its sole
discretion without the consent or approval of any holder, shall affect one or more of the following
alternatives, which may vary among individual holders and which may vary among Options or SARs
(collectively “Grants”) held by any individual holder: (i) accelerate the time at which Grants then
outstanding may be exercised so that such Grants may be exercised in full for a limited period of
time on or before a specified date (before or after such Change in Control) fixed by the Committee,
after which specified date all unexercised Grants and all rights of holders thereunder shall
terminate, (ii) require the mandatory surrender to the Company by selected holders of some or all
of the outstanding Grants held by such holders (irrespective of whether such Grants are then
exercisable under the provisions of this Plan) as of a date, before or after such Change in
Control, specified by the Committee, in which event the Committee shall thereupon cancel such
Grants and pay to each holder an amount of cash per share equal to the excess, if any, of the
amount calculated in Subsection 8(f) (the “Change in Control Price”) of the shares subject to such
Grants over the exercise price(s) under such Grants for such shares, or (iii) make such adjustments
to Grants then outstanding as the Committee deems appropriate to reflect such Change in Control;
provided, however, that the Committee may determine in its sole discretion that no
adjustment is necessary to Grants then outstanding; provided, further,
however, that the right to make such adjustments shall include, but not be limited to, the
modification of Grants such that the holder of the Grant shall be entitled to purchase or receive
(in lieu of the total shares or other consideration that the holder would otherwise be entitled to
purchase or receive under the Grant (the “Total Consideration”)), the number of shares of stock,
other securities, cash or property to which the Total Consideration would have been entitled to in

12

 

connection with the Change in Control (A) in the case of Options, at an aggregate exercise
price equal to the exercise price that would have been payable if the total shares had been
purchased upon the exercise of the Grant immediately before the consummation of the Change in
Control and (B) in the case of SARs, if the SARs had been exercised immediately before the
consummation of the Change in Control.

          (f) Change in Control Price. The “Change in Control Price” shall equal the amount
determined in clause (i), (ii), (iii), (iv) or (v), whichever is applicable, as follows: (i) the
per share price offered to holders of Stock in any merger or consolidation, (ii) the per share
value of the Stock immediately before the Change in Control without regard to assets sold in the
Change in Control and assuming the Company has received the consideration paid for the assets in
the case of a sale of the assets, (iii) the amount distributed per share of Stock in a dissolution
transaction, (iv) the price per share offered to holders of Stock in any tender offer or exchange
offer whereby a Change in Control takes place, or (v) if such Change in Control occurs other than
pursuant to a transaction described in clauses (i), (ii), (iii), or (iv) of this Subsection 8(f),
the Fair Market Value per share of the shares that may otherwise be obtained with respect to such
Grants or to which such Grants track, as determined by the Committee as of the date determined by
the Committee to be the date of cancellation and surrender of such Grants. In the event that the
consideration offered to stockholders of the Company in any transaction described in this
Subsection 8(f) or Subsection 8(e) consists of anything other than cash, the Committee shall
determine the fair cash equivalent of the portion of the consideration offered which is other than
cash.

     9. General Provisions.

          (a) Restricted Securities. Prior to a Qualifying Public Offering, the Stock to be
issued under this Plan, which may be issued in reliance on the exemption from registration set
forth in Rule 701, shall be deemed to be “restricted securities” as defined in Rule 144, such Rules
being promulgated by the Securities and Exchange Commission under the Securities Act as from time
to time in effect and applicable to the Plan and Participants. Resales of such Stock by the holder
thereof shall be in compliance with the Securities Act or an exemption therefrom. Such Stock may
bear a legend if determined necessary by the Committee in substantially the following form:

“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE,
SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE
HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO RULES-BASED
MEDICINE, INC. (WHICH, IN THE DISCRETION OF RULES-BASED MEDICINE,
INC., MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO RULES-BASED
MEDICINE, INC.) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER
DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.”

13

 

          (b) Transferability.

               (i) Permitted Transferees. The Committee may, in its discretion, permit a Participant
to transfer all or any portion of an Option, or authorize all or a portion of an Option to be
granted to an Eligible Person to be on terms which permit transfer by such Participant; provided
that, in either case the transferee or transferees must be any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, in each case with respect to the Participant, any person sharing the Participant’s
household (other than a tenant or employee of the Company), a trust in which these persons have
more than fifty percent of the beneficial interest, a foundation in which these persons (or the
Participant) control the management of assets, or any other entity in which these persons (or the
Participant) own more than fifty percent of the voting interests (collectively, “Permitted
Transferees”); provided further that, (X) there may be no consideration for any such transfer and
(Y) subsequent transfers of Options transferred as provided above shall be prohibited except
subsequent transfers back to the original holder of the Option and transfers to other Permitted
Transferees of the original holder. Agreements evidencing Options with respect to which such
transferability is authorized at the time of grant must be approved by the Committee, and must
expressly provide for transferability in a manner consistent with this Subsection 9(b)(i).

               (ii) Qualified Domestic Relations Orders. An Option, Stock Appreciation Right,
Restricted Stock Unit Award, Restricted Stock Award or other Award may be transferred, to a
Permitted Transferee, pursuant to a domestic relations order entered or approved by a court of
competent jurisdiction upon delivery to the Company of written notice of such transfer and a
certified copy of such order.

               (iii) Other Transfers. Except as expressly permitted by Subsections 9(b)(i) and
9(b)(ii), Awards shall not be transferable other than by will or the laws of descent and
distribution. Notwithstanding anything to the contrary in this Section 9, an Incentive Stock Option
shall not be transferable other than by will or the laws of descent and distribution.

               (iv) Effect of Transfer. Following the transfer of any Award as contemplated by
Subsections 9(b)(i), 9(b)(ii) and 9(b)(iii), (A) such Award shall continue to be subject to the
same terms and conditions as were applicable immediately prior to transfer, provided that the term
“Participant” shall be deemed to refer to the Permitted Transferee, the recipient under a qualified
domestic relations order, or the estate or heirs of a deceased Participant, as applicable, to the
extent appropriate to enable the Participant to exercise the transferred Award in accordance with
the terms of this Plan and applicable law and (B) the provisions of the Award relating to
exercisability shall continue to be applied with respect to the original Participant and, following
the occurrence of any applicable events described therein the Awards shall be exercisable by the
Permitted Transferee, the recipient under a qualified domestic relations order, or the estate or
heirs of a deceased Participant, as applicable, only to the extent and for the periods that would
have been applicable in the absence of the transfer.

               (v) Procedures and Restrictions. Any Participant desiring to transfer an Award as
permitted under Subsections 9(b)(i), 9(b)(ii) or 9(b)(iii) shall make application

14

 

therefor in the manner and time specified by the Committee and shall comply with such other
requirements as the Committee may require to assure compliance with all applicable securities laws.
The Committee shall not give permission for such a transfer if it may not be made in compliance
with all applicable federal, state and foreign securities laws.

               (vi) Registration. To the extent the issuance to any Permitted Transferee of any
shares of Stock issuable pursuant to Awards transferred as permitted in this Subsection 9(b) is not
registered pursuant to the effective registration statement of the Company generally covering the
shares to be issued pursuant to this Plan to initial holders of Awards, the Company shall not have
any obligation to register the issuance of any such shares of Stock to any such transferee.

          (c) Right of First Refusal. If any Participant (“Transferor”), regardless of whether
such Participant is the original holder of the Award contemplated in this Subsection 9(c), proposes
to sell, transfer, assign, hypothecate, make gifts of or in any manner dispose of, encumber, or
alienate (each individually constituting a “Transfer”) to a transferee, any Stock, obtained in
connection with any Award held by such Transferor, either pursuant to a bona fide offer (“Offer”)
from a potential transferee (“Offeror”) or by effecting a gift of the Stock (“Gift”) to a donee
(“Donee”) without consideration, then the Transferor must comply with the provisions of this
Subsection 9(c), including, without limitation, acknowledging and allowing the applicable time
periods to lapse with respect to the rights of the Company as provided herein, before accepting any
such Offer or otherwise affecting the Transfer of any Stock pursuant to such Offer, or affecting
any such Gift.

               (i) Statement of Offer. Before accepting any Offer or affecting any Gift, the
Transferor shall obtain from the Offeror or Donee, as the case may be, a statement (“Statement”) in
writing addressed to the Transferor and signed by the Offeror or Donee, setting forth: (A) the date
of the Statement (the “Statement Date”); (B) the number of shares of Stock covered by the Offer or
Gift and, in the case of an Offer, the price per share to be paid by the Offeror and the terms of
payment of such price; (C) the Offeror’s or Donee’s willingness to be bound by the terms of this
Subsection 9(c) and execute and deliver to the Company such documentation as required under this
Subsection 9(c); (D) the Offeror’s or Donee’s name, address and telephone number; and (E) the
Offeror’s or Donee’s willingness to supply any additional information about himself or herself as
may be reasonably requested by the Company. Promptly upon receipt of a Statement, and before
accepting the Offer or affecting the Gift to which the Statement relates, the Transferor shall
deliver to the Company (1) a copy of the Statement and (2) in the case of an Offer, evidence
reasonably satisfactory to the Company as to the Offeror’s financial ability to consummate the
proposed purchase.

               (ii) Company Rights. Subject to the provisions of Subsection 9(c)(i), upon receipt of
a copy of the Statement, the Company shall have the exclusive right and option (the “Right”), but
not the obligation, to purchase all of the shares of Stock that the Offeror proposes to purchase
from the Transferor or, in the case of a Gift, that the Transferor proposes to give to the Donee
(collectively, “Subject Securities”) (A) in the case of an Offer, for the per share price and on
the terms as set forth in the Statement; provided, however, that if the purchase
price is payable in whole or in part in property (which term shall include the securities of any
issuer other than the Company) other than cash, the Company may pay, in lieu of such property,

15

 

a sum of cash equal to the fair market value of such property as determined by the Transferor
and the Company in good faith or, if the Transferor and the Company do not agree on the fair market
value of such property within five days after the Company delivers written notice (as described
below) of its intention to exercise the Right, then the Transferor and the Company shall select one
independent appraiser (with each of the Transferor and the Company jointly bearing one-half of the
expense of the appraiser) to determine the fair market value of that property and the appraised
fair market value of that property as determined by such appraiser shall be deemed the fair market
value of that property for purposes of this Subsection 9(c)(ii), or (B) in the case of a Gift, the
Fair Market Value of the Subject Securities, as determined in good faith by the Company; provided
that the Transferor may elect to retain the Subject Securities rather than sell the Subject
Securities at the Fair Market Value as determined by the Company by giving written notice thereof
to the Company within five days after such determination by the Company is received in writing by
the Transferor. The Company shall exercise the Right by giving written notice thereof to the
Transferor. Upon exercising the Right, the Company shall have the obligation, to the extent it
lawfully may do so, to purchase the Subject Securities within 30 days after the date of the
Company’s receipt of its copy of the Statement on and subject to the terms and conditions hereof.
If the terms of the purchase include the Transferor’s release of any pledge or encumbrance on the
Subject Securities and the Transferor shall have failed to obtain the release of the pledge or
encumbrance by the purchase date, at the Company’s option the purchase shall occur on the scheduled
date with the purchase price reduced to the extent of all unpaid indebtedness for which the Subject
Securities are then pledged or encumbered. Failure by the Company to exercise the Right, or
failure by the Company to otherwise perform its obligations under this Subsection 9(c)(ii), within
the 30 day period herein prescribed shall be deemed an election by the Company not to exercise the
Right. If the Company exercises the Right and is unable for any reason to perform its obligations
thereunder in accordance with this Subsection 9(c), the Company may assign all or a portion of its
rights under the Right to any one or more of the Company’s stockholders (other than the Transferor)
(“Assignee Stockholder”), as the Board shall determine, in its sole and absolute discretion.

               (iii) Purchase of Less Than All Shares. Anything in Subsection 9(c) to the contrary
notwithstanding, the Company and any Assignee Stockholder individually may, pursuant to the
exercise of the Right, purchase fewer than all of the Subject Securities provided that such Persons
in the aggregate purchase all, and not less than all, of the Subject Securities, and it shall be a
condition precedent to the obligation of any of such Persons to purchase any Subject Securities,
that all, and not less than all, of the Subject Securities have been elected to be purchased
pursuant to the exercise of the Right.

               (iv) Failure to Exercise Right or Consummate Transaction. If the Company elects not
to exercise the Right, or if the Right is exercised and the obligations to be performed thereunder
by the Company are not performed in accordance with this Subsection 9(c), or if the Company’s
rights are assigned to an Assignee Stockholder and such Assignee Stockholder fails to perform his
or her obligations under the assigned Right in accordance with this Subsection 9(c), then, subject
to the application of any applicable state or federal securities laws, the Transferor may dispose
of all of the Subject Securities within 90 days after the date of the Statement at the per share
price and on the terms, if any, as set forth in the Statement free and clear of the terms of this
Subsection 9(c); provided, however, that (A) any subsequent transfer by the Offeror
or Donee, as applicable, shall once again be subject to this Subsection 9(c) and (B) if

16

 

the sale or gift of the Subject Securities is not consummated within such 90-day period, then
the Transfer of any such Stock shall once again be subject to the terms of this Subsection 9(c).

               (v) Legend. To assure the enforceability of the Company’s rights under this
Subsection 9(c), until the date of a Qualifying Public Offering, each certificate or instrument
representing Stock or an Award held by him, her, or it may, in the Committee’s discretion, bear a
conspicuous legend in substantially the following form:

“THE SHARES [REPRESENTED BY THIS CERTIFICATE] [ISSUABLE PURSUANT TO
THIS AGREEMENT] ARE SUBJECT TO THE COMPANY’S RIGHT OF FIRST REFUSAL
IN THE CASE OF A TRANSFER AS PROVIDED UNDER THE RULES-BASED
MEDICINE, INC. 2007 LONG TERM INCENTIVE PLAN AND/OR AN AWARD
AGREEMENT ENTERED INTO PURSUANT THERETO. COPIES OF SUCH PLAN AND
AWARD AGREEMENT ARE AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT
ITS PRINCIPAL EXECUTIVE OFFICES.”

               (vi) Expiration. The rights and obligations pursuant to this Subsection 9(c) hereof
will terminate upon the date of a Qualifying Public Offering.

          (d) Purchase Option.

               (i) Except as otherwise expressly provided in any particular Award, (A) if a Participant
ceases to be employed by or perform services for the Company or its Subsidiaries for any reason at
any time or (B) upon the occurrence of a Change in Control, the Company (and/or its designee(s))
shall have the option (the “Purchase Option”) to purchase, and the Participant (or the
Participant’s executor or the administrator of the Participant’s estate in the event of the
Participant’s death, or the transferee of the Stock or Award in the case of any disposition, or the
Participant’s legal representative in the event of the Participant’s incapacity) (hereinafter,
collectively with such Participant, the “Grantor”) shall sell to the Company and/or its
designee(s), all or any portion (at the Company’s option) of the shares of Stock issued pursuant to
this Plan and held by the Grantor (such shares of Stock herein referred to as the “Purchasable
Shares”).

               (ii) The Company shall give notice in writing to the Grantor of the exercise of the Purchase
Option within one year of the date of the termination of the Participant’s employment or service
relationship or the date of the Change in Control. Such notice shall state the number of
Purchasable Shares to be purchased and the determination of the Board of the Fair Market Value per
share of such Purchasable Shares, or the Change in Control Price as defined in Subsection 8(f), if
applicable. If no notice is given within the time limit specified above, the Purchase Option shall
terminate.

               (iii) The purchase price to be paid for the Purchasable Shares purchased pursuant to the
Purchase Option shall be, the Fair Market Value per share, or the Change in Control Price if
applicable, as of the date of the notice of exercise of the Purchase Option times

17

 

the number of shares being purchased. The purchase price shall be paid in cash. The closing
of such purchase shall take place at the Company’s principal executive offices within ten (10) days
after the purchase price has been determined. At such closing, the Grantor shall deliver to the
purchasers the certificates or instruments evidencing the Purchasable Shares being purchased free
and clear of all liens and encumbrances (if any), duly endorsed (or accompanied by duly executed
stock powers) and otherwise in good form for delivery, against payment of the purchase price by
check of the purchasers. In the event that, notwithstanding the foregoing, the Grantor shall have
failed to obtain the release of any pledge or other encumbrance on any Purchasable Shares by the
scheduled closing date, at the option of the purchasers, the closing shall nevertheless occur on
such scheduled closing date, with the cash purchase price being reduced to the extent of all unpaid
indebtedness for which such Purchasable Shares are then pledged or encumbered.

               (iv) To assure the enforceability of the Company’s rights under this Subsection 9(d), until
the date of a Qualifying Public Offering, each certificate or instrument representing Stock or an
Award held by him, her, or it may, in the Committee’s discretion, bear a conspicuous legend in
substantially the following form:

“THE SHARES [REPRESENTED BY THIS CERTIFICATE] [ISSUABLE PURSUANT TO
THIS AGREEMENT] ARE SUBJECT TO AN OPTION TO REPURCHASE PROVIDED
UNDER THE PROVISIONS OF THE RULES-BASED MEDICINE, INC. 2007 LONG
TERM INCENTIVE PLAN AND/OR AN AWARD AGREEMENT ENTERED INTO PURSUANT
THERETO. COPIES OF SUCH PLAN AND AWARD AGREEMENT ARE AVAILABLE UPON
WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.”

               (v) The Company’s rights under this Subsection 9(d) shall terminate upon the date of a
Qualifying Public Offering.

          (e) Taxes. The Company and any Subsidiary is authorized to withhold from any Award
granted, or any payment relating to an Award under this Plan, including from a distribution of
Stock, amounts of withholding and other taxes due or potentially payable in connection with any
transaction involving an Award, and to take such other action as the Committee may deem advisable
to enable the Company and Participants to satisfy obligations for the payment of withholding taxes
and other tax obligations relating to any Award. This authority shall include authority to
withhold or receive Stock or other property and to make cash payments in respect thereof in
satisfaction of a Participant’s tax obligations, either on a mandatory or elective basis in the
discretion of the Committee.

          (f) Changes to this Plan and Awards. The Board may amend, alter, suspend, discontinue
or terminate this Plan or the Committee’s authority to grant Awards under this Plan without the
consent of stockholders or Participants, except that any amendment or alteration to this Plan,
including any increase in any share limitation, shall be subject to the approval of the Company’s
stockholders not later than the annual meeting next following such Board action if

18

 

such stockholder approval is required by any federal or state law or regulation or the rules
of any stock exchange or automated quotation system on which the Stock may then be listed or
quoted, and the Board may otherwise, in its discretion, determine to submit other such changes to
this Plan to stockholders for approval; provided, however, that, without the
consent of an affected Participant, no such Board action may materially and adversely affect the
rights of such Participant under any previously granted and outstanding Award. The Committee may
waive any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Award
theretofore granted and any Award agreement relating thereto, except as otherwise provided in this
Plan; provided, however, that, without the consent of an affected Participant, no
such Committee action may materially and adversely affect the rights of such Participant under such
Award.

          (g) Limitation on Rights Conferred under Plan. Neither this Plan nor any action taken
hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue
as an Eligible Person or Participant or in the employ or service of the Company or a Subsidiary,
(ii) interfering in any way with the right of the Company or a Subsidiary to terminate any Eligible
Person’s or Participant’s employment or service relationship at any time, (iii) giving an Eligible
Person or Participant any claim to be granted any Award under this Plan or to be treated uniformly
with other Participants or employees or other service providers, or (iv) conferring on a
Participant any of the rights of a stockholder of the Company unless and until the Participant is
duly issued or transferred shares of Stock in accordance with the terms of an Award.

          (h) Unfunded Status of Awards. This Plan is intended to constitute an “unfunded” plan
for certain incentive awards.

          (i) Nonexclusivity of this Plan. Neither the adoption of this Plan by the Board nor
its submission to the stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board or a committee thereof to adopt such other incentive
arrangements as it may deem desirable. Nothing contained in this Plan shall be construed to
prevent the Company or any Subsidiary from taking any corporate action which is deemed by the
Company or such Subsidiary to be appropriate or in its best interest, whether or not such action
would have an adverse effect on this Plan or any Award made under this Plan. No employee,
beneficiary or other person shall have any claim against the Company or any Subsidiary as a result
of any such action.

          (j) Fractional Shares. No fractional shares of Stock shall be issued or delivered
pursuant to this Plan or any Award. The Committee shall determine whether cash, other Awards or
other property shall be issued or paid in lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated.

          (k) Severability. If any provision of this Plan is held to be illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such
provision shall be fully severable and the Plan shall be construed and enforced as if the illegal
or invalid provision had never been included herein. If any of the terms or provisions of this
Plan or any Award agreement conflict with the requirements of section 422 of the Code (with respect
to Incentive Stock Options), then those conflicting terms or provisions shall be

19

 

deemed inoperative to the extent they so conflict with the requirements of section 422 of the
Code. With respect to Incentive Stock Options, if this Plan does not contain any provision
required to be included herein under section 422 of the Code, that provision shall be deemed to be
incorporated herein with the same force and effect as if that provision had been set out at length
herein; provided, further, that, to the extent any Option that is intended to qualify as an
Incentive Stock Option cannot so qualify, that Option (to that extent) shall be deemed an Option
not subject to section 422 of the Code for all purposes of the Plan.

          (l) Governing Law. All questions arising with respect to the provisions of the Plan
and Awards shall be determined by application of the laws of the State of Texas, without giving
effect to any conflict of law provisions thereof, except to the extent Texas state law is preempted
by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to
applicable federal and state laws and to the approval of any governmental authority required in
connection with the authorization, issuance, sale, or delivery of such Stock.

          (m) Conditions to Delivery of Stock. Nothing herein or in any Award granted hereunder
or any Award agreement shall require the Company to issue any shares with respect to any Award if
that issuance would, in the opinion of counsel for the Company, constitute a violation of the
Securities Act or any similar or superseding statute or statutes, any other applicable statute or
regulation, or the rules of any applicable securities exchange or securities association, as then
in effect. At the time of any exercise of an Option or Stock Appreciation Right, or at the time of
any grant of a Restricted Stock Award, Restricted Stock Unit, or other Award the Company may, as a
condition precedent to the exercise of such Option or Stock Appreciation Right or settlement of any
Restricted Stock Award, Restricted Stock Unit or other Award, require from the Participant (or in
the event of his or her death, his or her legal representatives, heirs, legatees, or distributees)
such written representations, if any, concerning the holder’s intentions with regard to the
retention or disposition of the shares of Stock being acquired pursuant to the Award and such
written covenants and agreements, if any, as to the manner of disposal of such shares as, in the
opinion of counsel to the Company, may be necessary to ensure that any disposition by that holder
(or in the event of the holder’s death, his or her legal representatives, heirs, legatees, or
distributees) will not involve a violation of the Securities Act or any similar or superseding
statute or statutes, any other applicable state or federal statute or regulation, or any rule of
any applicable securities exchange or securities association, as then in effect.

          (n) Section 409A of the Code. In the event any Award granted pursuant to the Plan
provides for a deferral of compensation within the meaning of the Nonqualified Deferred
Compensation Rules, such Award shall be designed to comply with the Nonqualified Deferred
Compensation Rules.

          (o) Plan Effective Date. This Plan has been adopted by the Board effective as of
October 12, 2007.

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