Document:

fs42013a1ex10ix_bgs.htm

Exhibit 10.9

TRANSNETYX HOLDING CORP. 2010 INCENTIVE PLAN

1.           Purpose. The purposes of the Plan are: (a) to promote the interests of the Corporation and its Subsidiaries and its stockholders by strengthening the ability of the Corporation and its Subsidiaries to attract and retain highly competent officers and other key employees; and (b) to provide a means to encourage Stock ownership and proprietary interest in the Corporation.

 

2.           Definitions. Where the context of the Plan permits, words in the masculine gender shall include the feminine gender, the plural form of a word shall include the singular form, and the singular form of a word shall include the plural form. Unless the context clearly indicates otherwise, the following terms shall have the following meanings:

 

“Award” means the grant of incentive compensation under this Plan to a Participant.

 

“Board” means the Board of Directors of the Corporation.

 

“Change of Control” means:

 

(i)         upon the acquisition by any individual, entity or group, including any Person, of beneficial ownership (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of 50% or more of the combined voting power of the then outstanding capital stock of the Corporation that by its terms may be voted on all matters submitted to stockholders of the Corporation generally (“Voting Stock”); provided, however, that the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Corporation (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from the Corporation); (B) any acquisition by the Corporation; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation controlled by the Corporation; or (D) any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving the Corporation, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (A), (B) and (C) of subsection (ii) below shall be satisfied;

 

(ii)        upon the consummation of a reorganization, merger or consolidation of the Corporation, or a sale, lease, exchange or other transfer of all or substantially all of the assets of the Corporation; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: (A) all or substantially all of the beneficial owners of the Voting Stock of the Corporation outstanding immediately prior to such transaction continue to beneficially own, directly or indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than 50% of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, the Corporation or an entity which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's property or assets, directly or indirectly) (the “Resulting Entity”) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and (B) no Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing 50% or more of the combined voting power of the Corporation's then outstanding securities) beneficially owns, directly or indirectly, 50% or more of the combined voting power of the then outstanding securities of the Resulting Entity; and (C) at least a majority of the members of the board of directors of the Resulting Entity were members of the incumbent board of directors of the Corporation at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or

 

  

 

  

 

(iii)       upon the approval of a plan of complete liquidation or dissolution of the Corporation.

 

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

 

“Committee” means the Compensation Committee of the Board and if the Board does not have a Compensation Committee, Committee shall mean the Board or any directors appointed by the Board to administer the Plan.

 

“Corporation” means TRANSNETYX HOLDING CORP., a Delaware corporation, or any successor thereto.

 

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

 

“Fair Market Value” means the price per share determined by the Committee using the reasonable application of a reasonable method.

 

The Committee may determine the Fair Market Value by independent appraisal, provided that the appraisal must value the Stock as of a date that is no more than twelve (12) months before the grant of an Award, and provided further that such appraisal must be updated for any events that occur after the appraisal date and have a material effect on the value of the Stock.  Any informal internal valuation performed must be contained in a written report, performed by a person with valuation knowledge or training who takes into account the following:  (i) the present value of the Corporation’s future cash flows; (ii) private sale price for Stock or equity interests of similarly situated companies; (iii) the value of the Corporation’s tangible and intangible assets; and (iv) any other relevant factors, such as control premiums or marketability discounts, and whether the particular value at market is used by the Corporation for any other material purpose.

 

Any such valuation shall be performed within the twelve (12) months prior to the grant date of the Award and updated for any subsequent events that may materially affect the value of the Stock.

 

A valuation based on a binding formula that is used within a shareholder buy-sell or other similar binding agreement can be used to set prices if such formula price is also used to set the value of the Corporation’s Stock for non-compensatory valuation purposes, and of the buy-sell or other similar agreement governs all such transfers of the Corporation’s Stock.

 

  

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“Incentive Stock Options” means a Stock Option designed to meet the requirements of Code Section 422 or any successor law.

 

 “IPO” the consummation of a registered underwritten public offering of Stock in which the proceeds to the Corporation, net of underwriters’ commissions and all other expenses of the offering (including without limitation accountants’ and attorneys’ fees, filing fees and other expenses of the offering), are not less than [Forty Million Dollars ($40,000,000.00)] pursuant to an effective registration statement under the Securities Act, immediately subsequent to which the Corporation shall be obligated to file annual and quarterly reports with the Securities Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act.

“Nonqualified Stock Option” means a Stock Option that is not an Incentive Stock Option.

 

“Participant” means (i) an employee or consultant of the Corporation or its Subsidiaries; or (ii) a non-employee director or advisor of the Corporation designated by the Committee as eligible to receive an Award under the Plan.

 

 “Performance Unit Awards” means cash incentives subject to the satisfaction of long-term Performance Criteria and granted pursuant to Section 10 below.

 

“Performance Criteria” means business criteria within the meaning of Code Section 162(m), including, but not limited to: revenue; revenue growth; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share; operating income; pre-or after-tax income; net operating profit after taxes; economic value added (or an equivalent metric); ratio of operating earnings to capital spending; cash flow (before or after dividends); cash-flow per share (before or after dividends); net earnings; net sales; sales growth; share price performance; return on assets or net assets; return on equity; return on capital (including return on total capital or return on invested capital); cash flow return on investment; total shareholder return; improvement in or attainment of expense levels; and improvement in or attainment of working capital levels or Performance Criteria. Any Performance Criteria may be used to measure the Corporation’s performance as a whole or any of the Corporation’s business units and may be measured relative to a peer group or index.

 

“Performance Period” means the period as designated by the Committee with a minimum of one year and a maximum of five years.

 

“Person” means any individual, entity or group, including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.

 

“Phantom Stock” means an award providing a Participant with the right to receive the value of a share of Stock at a date on or after vesting in accordance with the terms of such grant and/or upon the attainment of Performance Criteria specified by the Committee in the Award in accordance with Section 9 below.

 

“Plan” means the TRANSNETYX HOLDING CORP. 2010 INCENTIVE PLAN.

 

“Restricted Stock” means Stock subject to a vesting condition specified by the Committee in an Award in accordance with Section 9 below.

 

  

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“Resulting Entity” means the entity resulting from a transaction (including, without limitation, the Corporation or an entity which as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s property or assets, directly or indirectly).

 

“RSU” means a restricted stock unit providing a Participant with the right to receive Stock at a date on or after vesting in accordance with the terms of such grant and/or upon the attainment of Performance Criteria specified by the Committee in the Award in accordance with Section 9 below.

 

“SAR” means a stock appreciation right granted pursuant to Section 8 below.

 

“Securities Act” means the Securities Act of 1933, as ameneded.

 

“Stock” means a share of common stock of the Corporation that, by its terms, may be voted on all matters submitted to stockholders of the Corporation generally.

 

“Stock Option” means the right to acquire shares of Stock at a certain price that is granted pursuant to Section 7 below. The term Stock Option includes both Incentive Stock Options and Nonqualified Stock Options.

 

“Subsidiary” or “Subsidiaries” means any corporation or entity of which the Corporation owns directly or indirectly, at least 50% of the total voting power or in which it has at least a 50% economic interest, and which is authorized to participate in the Plan.

 

3.           Administration. The Plan will be administered by the Board or the Committee, as the Board may designate from time to time, each of whom shall satisfy such requirements as:

 

(a)           The Committee, if designated by the Board, shall have the discretionary authority to construe and interpret the Plan and any Awards granted thereunder, to establish and amend rules for Plan administration, to change the terms and conditions of Awards at or after grant (subject to the provisions of Section 18 below), to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award granted under the Plan, and to make all other determinations which it deems necessary or advisable for the administration of the Plan.

 

(b)           Awards under the Plan to a Participant may be made subject to the satisfaction of one or more Performance Criteria. Performance Criteria shall be established by the Committee for a Participant (or group of Participants) no later than ninety (90) days after the commencement of each Performance Period (or the date on which 25% of the Performance Period has elapsed, if earlier). The Committee may select one or more Performance Criteria and may apply those Performance Criteria on a corporate-wide or division/business segment basis; provided, however, that the Committee may not increase the amount of compensation payable to a Participant upon the satisfaction of Performance Criteria.

 

(c)           The Committee may authorize one or more officers of the Corporation to select employees to participate in the Plan and to determine the number and type of Awards to be granted to such Participants or to non-employee directors of the Corporation. Any reference in the Plan to the Committee shall include such officer or officers.

 

  

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(d)           The determinations of the Board or the Committee shall be made in accordance with their judgment as to the best interests of the Corporation and its stockholders and in accordance with the purposes of the Plan. Any determination of the Board or the Committee under the Plan may be made without notice or meeting of the Board or the Committee.

 

4.           Participants. Participants may consist of all employees and consultants of the Corporation and its Subsidiaries and all non-employee directors and advisors of the Corporation.  Designation of a Participant in any year shall not require the Board or the Committee to designate that person to receive an Award in any other year or to receive the same type or amount of Award as granted to the Participant in any other year or as granted to any other Participant in any year. The Committee shall consider all factors that it deems relevant in selecting Participants and in determining the type and amount of their respective Awards.

 

5.           Shares Available Under the Plan.

 

(a)           There is hereby reserved for issuance under the Plan an aggregate of __________ shares of Stock.  On the first day of the Corporation’s fiscal year beginning in 2011, and each year thereafter, an additional number of shares of stock may be authorized for the Plan equal to up to five percent (5%) of the outstanding shares of Stock or a lesser amount as determined by the Board or the Committee.  Stock covered by an Award granted under the Plan shall not be counted as used unless and until actually issued and delivered to a Participant. Accordingly, if there is (a) a lapse, expiration, termination or cancellation of any Stock Option or other Award outstanding under this Plan prior to the issuance of Stock thereunder or (b) a forfeiture of any shares of Restricted Stock or Stock subject to Awards granted under this Plan prior to vesting, then the Stock subject to these Stock Options or other Awards shall be added to the Stock available for Awards under the Plan. In addition, any Stock covered by an SAR (including an SAR settled in Stock which the Committee, in its discretion, may substitute for an outstanding Stock Option) shall be counted as used only to the extent Stock is actually issued to the Participant upon exercise of the right. Finally, any Stock exchanged by an optionee as full or partial payment of the exercise price under any Stock Option exercised under the Plan, any Stock retained by the Corporation to comply with applicable income tax withholding requirements, and any Stock covered by an Award which is settled in cash, shall be added to the Stock available for Awards under the Plan.

 

(b)           All Stock issued under the Plan may be either authorized and unissued Stock or issued Stock reacquired by the Corporation. All of the available Stock may, but need not, be issued pursuant to the exercise of Incentive Stock Options; provided, however, notwithstanding a Stock Option’s designation, to the extent that Incentive Stock Options are exercisable for the first time by the Participant during any calendar year with respect to Stock whose aggregate Fair Market Value exceeds $100,000, such Stock Options shall be treated as Nonqualified Stock Options.

 

  

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(c)           [No Participant may receive in any calendar year Awards relating to more than twenty-five percent (25%) of the total number of shares of stock reserved under the Plan.]

 

(d)           The Stock reserved for issuance and the other limitations set forth above shall be subject to adjustment in accordance with Section 13 hereto.

 

6.           Types of Awards, Payments, and Limitations.

 

(a)           Awards under the Plan shall consist of Stock Options, SARs, Restricted Stock, Phantom Stock, Performance Unit Awards, RSUs, and other Stock or cash Awards, all as described below. Payment of Awards may be in the form of cash, Stock, other Awards or combinations thereof as the Committee shall determine, and with the expectation that any Award of Stock shall be styled to preserve such restrictions as it may impose. The Committee, either at the time of grant or by subsequent amendment, and subject to the provisions of Sections 18 and 19 hereto, may require or permit Participants to elect to defer the issuance of Stock or the settlement of Awards in cash under such rules and procedures as the Committee may establish under the Plan.

 

(b)           The Committee may provide that any Awards under the Plan earn dividends or dividend equivalents and interest on such dividends or dividend equivalents.  Such dividends or dividend equivalents may be paid currently or may be credited to a Participant’s Plan account and are subject to the same vesting or Performance Criteria as the underlying Award. Any crediting of dividends or dividend equivalents may be subject to such restrictions and conditions as the Committee may establish, including reinvestment in additional Stock or Stock equivalents.

 

(c)           Awards shall be evidenced by an agreement that sets forth the terms, conditions and limitations of such Award. Such terms may include, but are not limited to, the term of the Award, the provisions applicable in the event the Participant’s employment terminates, and the Corporation’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind any Award including without limitation the ability to amend such Awards to comply with changes in applicable law. An Award may also be subject to other provisions (whether or not applicable to similar Awards granted to other Participants) as the Committee determines appropriate, including provisions intended to comply with federal or state securities laws and stock exchange requirements, understandings or conditions as to the Participant’s employment, requirements or inducements for continued ownership of Stock after exercise or vesting of Awards, or forfeiture of Awards in the event of termination of employment shortly after exercise or vesting, or breach of noncompetition or confidentiality agreements following termination of employment.

 

(d)           The Committee may make retroactive adjustments to and the Participant shall reimburse to the Corporation any cash or equity based incentive compensation paid to the Participant where such compensation was predicated upon achieving certain financial results that were substantially the subject of a restatement, and as a result of the restatement it is determined that the Participant otherwise would not have been paid such compensation, regardless of whether or not the restatement resulted from the Participant’s gross misconduct. In each such instance, the Corporation will, to the extent practicable, seek to recover the amount by which the Participant’s cash or equity based incentive compensation for the relevant period exceeded the lower payment that would have been made based on the restated financial results. The Corporation will, to the extent permitted by governing law, require reimbursement of any cash or equity based incentive compensation paid to any named executive officer where: (i) the payment was predicated upon the achievement of certain financial results that were subsequently the subject of a substantial restatement, and (ii) in the Committee’s view the officer engaged in fraud or gross misconduct that caused or partially caused the need for the substantial restatement. In each instance described above, the Corporation will, to the extent practicable, seek to recover the described cash or equity based incentive compensation for the relevant period, plus a reasonable rate of interest.

 

  

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(e)           Measurement of the attainment of Performance Criteria may exclude, if the Committee provides in an Award agreement, impact of charges for restructurings, discontinued operations, extraordinary items and other unusual or non-recurring items, and the cumulative effects of tax or accounting changes, each as defined by Generally Accepted Accounting Principles and as identified in the financial statements or in the notes to the financial statements.

 

(f)           The Committee, in its sole discretion, may require a Participant to have amounts or Stock that otherwise would be paid or delivered to the Participant as a result of the exercise or settlement of an Award under the Plan credited to a deferred compensation or stock unit account established for the Participant by the Committee on the Corporation’s books of account. In addition, the Committee may permit Participants to defer the receipt of payments of Awards pursuant to such rules, procedures or programs as may be established for purposes of this Plan.

 

(g)           The Committee need not require the execution of any such agreement by a Participant. Acceptance of the Award by the respective Participant shall constitute agreement by the Participant to the terms of the Award.

 

7.           Stock Options.

 

(a)           Stock Options may be granted to Participants, at any time as determined by the Committee. The Committee shall determine the number of shares subject to each Stock Option and whether the Stock Option is an Incentive Stock Option. The exercise price for each Stock Option shall be determined by the Committee but shall not be less than 100% of the Fair Market Value of the Stock on the date the Stock Option is granted unless the Stock Option is a substitute or assumed Stock Option granted pursuant to Section 14 hereto. Each Stock Option shall expire at such time as the Committee shall determine at the time of grant. Stock Options shall be exercisable at such time and subject to such terms and conditions as the Committee shall determine; provided, however, that no Stock Option shall be exercisable later than the tenth anniversary of its grant. The exercise price, upon exercise of any Stock Option, shall be payable to the Corporation in full by: (i) cash payment or its equivalent; (ii) tendering previously acquired Stock purchased on the open market having a Fair Market Value at the time of exercise equal to the exercise price or certification of ownership of such previously-acquired Stock; and (iii) to the extent permitted by applicable law, delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to the Corporation the amount of sale proceeds from the Stock Option shares or loan proceeds to pay the exercise price and any withholding taxes due to the Corporation.

 

  

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In the discretion of the Committee, a Participant may elect to receive, without the payment by Participant of any additional consideration, the number of shares computed using the following formula:

 

	 	 	 	 	Y (A - B)
	 	 	X =	 	     A
	 	 	 	 	 
	

Where:

	 	X =	 	The number of shares to be issued to the Participant pursuant to this Section 7;
	 	 	 	 	 
	 	 	Y =	 	The number of shares in respect of which the net issue election is made;
	 	 	 	 	 
	 	 	A =	 	The Fair Market Value of one share of Stock at the time the net issue election is made; and
	 	 	 	 	 
	 	 	B =	 	The Exercise Price.

 

In the discretion of the Committee, after an IPO, payment for any shares subject to a Stock Option may also be made by delivering a properly executed exercise notice to the Corporation, together with a copy of irrevocable instructions to a brokerage firm designated by the Corporation to effect the immediate sale of such options and remit to the Corporation, out of the proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares of Stock as well as the amount of any federal, state, local or foreign withholding taxes.

8.           Stock Appreciation Rights.  SARs may be granted to Participants at any time as determined by the Committee. Notwithstanding any other provision of the Plan, the Committee may, in its discretion, substitute SARs which can be settled only in Stock for outstanding Stock Options. The grant price of a substitute SAR shall be equal to the exercise price of the related Stock Option and the substitute SAR shall have substantive terms (e.g., duration) that are equivalent to the related Stock Option. The grant price of any other SAR shall be equal to the Fair Market Value of the Stock on the date of its grant unless the SARs are substitute or assumed SARs granted pursuant to Section 14 hereto. A SAR may be exercised upon such terms and conditions and for the term the Committee in its sole discretion determines; provided, however, that the term shall not exceed the Stock Option term in the case of a substitute SAR or ten years in the case of any other SAR, and the terms and conditions applicable to a substitute SAR shall be substantially the same as those applicable to the Stock Option which it replaces. Upon exercise of a SAR, the Participant shall be entitled to receive payment from the Corporation in an amount determined by multiplying (a) the difference between the Fair Market Value of a share of Stock on the date of exercise and the grant price of the SAR by (b) the number of shares with respect to which the SAR is exercised. The payment may be made in cash or Stock, at the discretion of the Committee, except in the case of a substitute SAR payment which may be made only in Stock.

 

  

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9.           Restricted Stock, RSUs, and Phantom Stock.

 

(a)           Restricted Stock, RSUs, and Phantom Stock may be awarded or sold to Participants under such terms and conditions as shall be established by the Committee. Restricted Stock, RSUs, and Phantom Stock shall be subject to such restrictions as the Committee determines, including, without limitation, any of the following:

 

(i)           a prohibition against sale, assignment, transfer, pledge, hypothecation or other encumbrance for a specified period;

 

(ii)          a requirement that the holder forfeit (or in the case of Stock or RSUs sold to the Participant, resell to the Corporation at cost) such Stock, RSUs, or Phantom Stock in the event of termination of employment during the period of restriction; and

 

(iii)         the attainment of Performance Criteria.

 

(b)           All restrictions shall expire at such times as the Committee shall specify, but generally shall require the Participant to complete three years of service to fully vest in the Award.

 

10.           Performance Unit Awards.

 

(a)           The Committee shall designate the Participants to whom Performance Unit Awards are to be awarded and determine the amount of the Award and the terms and conditions of each such Award; provided the Performance Period will not be less than twelve (12) months and to the extent the Award is designed to constitute performance-based compensation under Code Section 162(m), Performance Criteria shall be established within ninety (90) days of beginning of the period of service to which the Performance Criteria relates. Each Performance Unit Award shall entitle the Participant to a payment in cash upon the attainment of Performance Criteria and other terms and conditions specified by the Committee.

 

(b)           Notwithstanding the satisfaction of any Performance Criteria, the amount to be paid under a Performance Unit Award may be adjusted by the Committee on the basis of such further consideration as the Committee in its sole discretion shall determine. The Committee may, in its discretion, substitute actual Stock for the cash payment otherwise required to be made to a Participant pursuant to a Performance Unit Award.

 

11.           Other Stock or Cash Awards. In addition to the incentives described in Sections 6 through 10 above, the Board or the Committee may grant other incentives payable in cash or in Stock under the Plan as it determines to be in the best interests of the Corporation and subject to such other terms and conditions as it deems appropriate; provided an outright grant of Stock will not be made unless it is offered in exchange for cash compensation that has otherwise already been earned by the recipient including without limitation awards earned under the TRANSNETYX HOLDING CORP. Performance-Based Annual Incentive Plan (or any successor annual incentive plan of the Corporation.

 

12.           Change of Control. Except as otherwise determined by the Committee at the time of grant of an Award, upon a Change of Control, all outstanding Stock Options and SARs shall become vested and exercisable; all restrictions on Restricted Stock, RSUs, and Phantom Stock shall lapse; all Performance Criteria shall be deemed achieved at target levels and all other terms and conditions met; all Performance Unit Awards, RSUs, and Phantom Stock shall be paid out as promptly as practicable; and all other Stock or cash Awards shall be delivered or paid.

 

  

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13.           Adjustment Provisions.

 

(a)           In the event of any change affecting the number, class, market price or terms of the Stock by reason of share dividend, share split, recapitalization, reorganization, merger, consolidation, spin-off, disaffiliation of a subsidiary, combination of Stock, exchange of Stock, Stock rights offering, or other similar event, or any distribution to the holders of Stock other than a regular cash dividend, the Committee shall equitably substitute or adjust the number or class of Stock which may be issued under the Plan in the aggregate or to any one Participant in any calendar year and the number, class, price or terms of shares of Stock subject to outstanding Awards granted under the Plan.

 

(b)           In the event of any merger, consolidation or reorganization of the Corporation with or into another corporation which results in the outstanding Stock of the Corporation being converted into or exchanged for different securities, cash or other property, or any combination thereof, there shall be substituted, on an equitable basis, for each share of Stock then subject to an Award granted under the Plan, the number and kind of shares of stock, other securities, cash or other property to which holders of Stock will be entitled pursuant to the transaction.

 

14.           Substitution and Assumption of Awards. The Board or the Committee may authorize the issuance of Awards under this Plan in connection with the assumption of, or substitution for, outstanding Awards previously granted to individuals who become employees of the Corporation or any subsidiary as a result of any merger, consolidation, acquisition of property or stock, or reorganization, upon such terms and conditions as the Committee may deem appropriate. Any substitute Awards granted under the Plan shall not count against the Stock limitations set forth in Section 5 hereto.

 

15.           Nontransferability. Each Award granted under the Plan shall not be transferable other than by will or the laws of descent and distribution, and each Stock Option and SAR shall be exercisable during the Participant’s lifetime only by the Participant or, in the event of disability, by the Participant’s personal representative. In the event of the death of a Participant, exercise of any Award or payment with respect to any Award shall be made only by or to the beneficiary, executor or administrator of the estate of the deceased Participant or the person or persons to whom the deceased Participant’s rights under the Award shall pass by will or the laws of descent and distribution. Subject to the approval of the Committee in its sole discretion, Stock Options may be transferable to charity or to members of the immediate family of the Participant and to one or more trusts for the benefit of such family members, partnerships in which such family members are the only partners, or corporations in which such family members are the only stockholders. Members of the immediate family means the Participant’s spouse, children, stepchildren, grandchildren, parents, grandparents, siblings (including half brothers and sisters), and individuals who are family members by adoption.

 

16.           Taxes. The Corporation shall be entitled to withhold the amount of any tax attributable to any amounts payable or Stock deliverable under the Plan, after giving notice to the person entitled to receive such payment or delivery, and the Corporation may defer making payment or delivery as to any Award, if any such tax is payable, until indemnified to its satisfaction. A Participant may pay all or a portion of any withholding limited to the minimum statutory amount arising in connection with the exercise of a Stock Option or SAR or the receipt or vesting of Stock hereunder by electing to have the Corporation withhold Stock having a Fair Market Value equal to the amount required to be withheld.

 

  

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17.           Duration of the Plan. No Award shall be made under the Plan more than ten (10) years after the date of its adoption by the Board; provided, however, that the terms and conditions applicable to any Stock Option granted on or before such date may thereafter be amended or modified by mutual agreement between the Corporation and the Participant, or such other person as may then have an interest therein.

 

18.           Amendment and Termination. The Board or the Committee may amend the Plan from time to time or terminate the Plan at any time. However, unless expressly provided in an Award or the Plan, no such action shall reduce the amount of any existing Award or change the terms and conditions thereof without the Participant’s consent; provided, however, that the Committee may, in its discretion without the consent of the Participant: (i) substitute SARs which can be settled only in Stock for outstanding Stock Options; (ii) require an Award be deferred pursuant to Section 6 hereto; (iii) change the terms of an Award or the Plan in the event the exercise price upon vesting is more than fair market value of the underlying Stock of the Company; (iv) at any time the Board or  the Committee determines, in its sole discretion, that an amendment is advisable in light of any change in the Code or the regulations issued thereunder or any ruling or pronouncement by the Treasure Department or Internal Revenue Service; or (v) any time the Board or Committee, in its sole discretion, determines it is advisable or necessary in light of any federal or state securities law or other law or regulation. Notwithstanding any provision of the Plan to the contrary, to the extent that Awards under the Plan are subject to the provisions of Code Section 409A, the Plan as applied to those amounts shall be interpreted and administered so that it is consistent with such Code Section, and the Corporation shall obtain stockholder approval of any Plan amendment to the extent necessary to comply with applicable laws, regulations, or stock exchange rules.

 

19.           Other Provisions.

 

(a)           In the event any Award under this Plan is granted to an employee who is employed or providing services outside the United States and who is not compensated from a payroll maintained in the United States, the Committee may, in its sole discretion: (i) modify the provisions of the Plan as they pertain to such individuals to comply with applicable law, regulation or accounting rules consistent with the purposes of the Plan; and (ii) cause the Corporation to enter into an agreement with any local subsidiary pursuant to which such subsidiary will reimburse the Corporation for the cost of such equity incentives.

 

(b)           Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing the Participant’s employment with the Corporation; nor interfere in any way with the Participant’s right or the Corporation’s right to terminate such relationship at any time, with or without cause, to the extent permitted by applicable laws and any enforceable agreement between the employee and the Corporation.

 

  

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(c)           No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee, in its discretion, shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares of Stock, or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.

 

(d)           In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.

 

(e)           Payments and other benefits received by a Participant under an Award made pursuant to the Plan generally shall not be deemed a part of a Participant’s compensation for purposes of determining the Participant’s benefits under any other employee benefit plans or arrangements provided by the Corporation or a subsidiary, unless the Committee expressly provides otherwise in writing or unless expressly provided under such plan. The Committee shall administer, construe, interpret, and exercise discretion under the Plan and each Award in a manner that is consistent and in compliance with a reasonable, good faith interpretation of all applicable laws, and that avoids (to the extent practicable) the classification of any Award as “deferred compensation” for purposes of Code Section 409A, as determined by the Committee.

 

20.           Governing Law, Venue. The Plan and any actions taken in connection herewith shall be governed by and construed in accordance with the laws of the state of Delaware without regard to any state’s conflict of laws principles.

 

21.           Code Section 409A.  This Plan shall be interpreted and administered consistent with Section 409A of the Code and shall incorporate the terms and provisions required by Section 409A.

 

12fs42013a1ex10x_bgs.htm

Exhibit 10.10

 

AMENDED AND RESTATED DISTRIBUTION AGREEMENT

 

BY AND BETWEEN

 

TACONIC FARMS, INC.

 

AND

 

TRANSNETYX, INC.

 

DATED AS OF October 23, 2009

 

  

  

  

 

AMENDED AND RESTATED DISTRIBUTION AGREEMENT

 

THIS AMENDED AND RESTATED DISTRIBUTION AGREEMENT is entered into as of October 23, 2009, by and between Taconic Farms, Inc., a New York corporation ("Taconic"), and Transnetyx, Inc., a Tennessee corporation ("Transnetyx").

 

RECITALS

 

WHEREAS, Taconic and Transnetyx are Parties to that certain Distribution Agreement dated August 9, 2006 (the "Previous Agreement");

 

WHEREAS, the Previous Agreement, subject to the Sixth Interim Extension to the Distribution Agreement dated October 16, 2009, is scheduled to terminate by mutual consent on October 23, 2009;

 

WHEREAS, Taconic and Transnetyx desire to enter into this Agreement to extend and modify the terms of a successful relationship between the Parties to market, sell, and distribute Transnetyx's automated molecular assay services to as broad a customer base as possible;

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

 

	
1.

	
Definitions. In this Agreement, the following terms have the meanings specified or referred to in this Section 1 and shall be equally applicable to both the singular and plural forms.

 

	
1.1

	
"Affiliate" means any Person controlling, controlled by, or under direct or indirect common control with a Party hereto.

 

	
1.2

	
"Agreement" means this Distribution Agreement.

 

	
1.3

	
“Arbitrator" has the meaning set forth in Schedule 18.8.

 

	
1.4

	
"Asian Territory" means China, Hong Kong, India, Indonesia, Malaysia, Singapore, South Korea, and Taiwan.

 

	
1.5

	
"Change of Control" means any proposed transaction or series of transactions that would cause the ownership of a Controlling Interest to be owned by anyone that did not own such Controlling Interest in a Party immediately preceding the transaction(s).

 

	
1.6

	
"Claim" means any claim described in Sections 15.1 or 15.2.

 

	
1.7

	
Commercial Accounts" means for-profit Persons to which the Services are promoted or sold.

 

	
1.8

	
“Confidential Information" means all confidential or proprietary materials or nonpublic marketing and business information exchanged between the Parties, specifically including, but not limited to, assays, assay conditions, DNA isolation methods, Sample processing code, LIMS interface code, web ordering code and results code or any other related expertise disclosed or to be disclosed by Transnetyx to Taconic, or otherwise made available by one Party to the other in connection with or as a result of this Agreement before or after the date hereof irrespective of the form of the communication, together with analyses, compilations, studies or other materials prepared by a receiving Party or its representatives containing (based in whole or in part on) any such information or materials, and shall also include any confidential information disclosed pursuant to the Previous Agreement and that certain Memorandum of Understanding between the Parties dated April 28, 2006.

 

  

1

  

 

	
1.9

	
"Controlling Interest" means 50.1% or more of the outstanding capital stock or voting power of a Party.

 

	
1.10

	
"Corrective Action" has the meaning set forth in Section 5.3(b)(i).

 

	
1.11

	
"Dispute" means all disputes, controversies and claims between the Parties arising out of or relating to this Agreement or the relationship of the Parties under this Agreement.

 

	
1.12

	
"Effective Date" means the date of this Agreement as set forth in the first paragraph.

 

	
1.13

	
"Escrow Materials" has the meaning given that term in Section 11.

 

	
1.14

	
"European Territory" means the United Kingdom, Ireland, France, Germany, Spain, Portugal, Belgium, Luxembourg, the Netherlands, Denmark, Sweden, Norway, Finland, Switzerland, Italy, Austria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia.

 

	
1.15

	
"Force Majeure" means any event or condition outside of Transnetyx's reasonable control including but not limited to; any act of governmental authority, war, riot, fire, explosion, force of nature, strike, lockout, or injunction; inability to obtain fuel, power, raw materials, labor, or transportation facilities; that directly or indirectly causes, or results in, the loss or destruction in whole or in part of any Transnetyx laboratory, and/or which loss, act, event, or destruction prevents Transnetyx from performing the Services as required by this Agreement.

 

	
1.16

	
"Genotyping Services" means automated molecular assays integrated with a proprietary web interface for the purpose of obtaining genotyping orders directly from clients, receiving biopsy samples in a kit, analyzing genotypes in laboratory animals, and electronically reporting such results to clients.

 

	
1.17

	
"Intellectual Property" or "IP" means the processes, inventions, and the information relating to the System embodied in the patent applications identified in Schedule 1.17  attached to and made a part hereof, and all corresponding Patent Cooperation Treaty applications, European Patent Convention applications or applications under similar administrative international conventions that may be filed with respect thereto, and all corresponding national patents and patent applications, together with any divisional, continuation, continuation-in-part, substitution, reissue, extension, supplementary protection certificate or other application based thereon, and all patents issued or assigned to Transnetyx based on any of the foregoing together with any and all improvements, enhancements and additions thereto.

 

  

2

  

 

	
1.18

	
"Laboratory Breeding Accounts" means Persons primarily engaged in the business of developing, producing, housing, breeding, and selling laboratory animals for use in research to which the Services are promoted or sold.

 

	
1.19

	
"License Rights" has the meaning given that term in Section 12.3(a).

 

	
1.20

	
"Minimum Sales Volume" means the volumes of sales of Services by Taconic which must be achieved as described in Section 6.2.

 

	
1.21

	
"Net Revenues" means gross revenues received from the sale of Services less returns and allowances.

 

	
1.22

	
"North American Territory" means the United States and Canada.

 

	
1.23

	
"Party" means a party to this Agreement and its permitted successors and permitted assigns.

 

	
1.24

	
"Person" means an individual, corporation, limited liability company, partnership, sole proprietorship, joint venture, or other form of entity, organization or governmental agency or authority.

 

	
1.25

	
"Removed Accounts" means those Persons listed in Schedule 2.1(b).

 

	
1.26

	
"Renewal Terms" means successive one-year periods.

 

	
1.27

	
"Sample" means a biopsy tissue, submitted for analysis using the System.

 

	
1.28

	
"Service Assets" means those Transnetyx assets, including but not limited to the System, that are used to perform the Services.

 

	
1.29

	
"Services" means Genotyping Services as solely produced by Transnetyx using the System.

 

	
1.30

	
"Steering Committee" means a committee consisting of a minimum of two representatives from each Party having the duties and obligations set forth in this Agreement.

 

	
1.31

	
"Supply Contract" means an agreement reached with a Person to provide special prices, conditions, or services to the entity as a whole in return for consolidated volume and account management from that entity.

 

	
1.32

	
"System" means Transnetyx's proprietary methods for conducting molecular diagnostic tests and providing Genotyping Services as embodied in the IP together with all improvements, enhancements, and additions thereto.

 

  

3

  

 

	
1.33

	
"Taconic Accounts" means (i) Commercial Accounts, (ii) Laboratory Breeding Accounts, and (iii) Taconic Additional Accounts, and excludes Removed Accounts.

 

	
1.34

	
"Taconic Additional Accounts" means those Persons listed in Schedule 2.1(a).

 

	
1.35

	
"Taconic Volume" means the number of biopsy samples submitted for testing by Taconic, its Affiliates, its customers, or in any way for the benefit of Taconic. Taconic Volume shall be comprised of two (2) categories that are defined as follows: (i) "Internal Volume" means Taconic Volume originating from (a) its own breeding and testing of commercial strains of mice for sale to the general public and all internal genotyping and genetic monitoring; and (b) testing requirements for animals bred and housed by Taconic for any and all Taconic customers; and (ii) "3P Volume" means Taconic Volume originating from Taconic Accounts that is not Internal Volume.

 

	
1.36

	
"Term" means the Initial Term and all Renewal Terms.

 

	
1.37

	
"Territories" means the North American Territory, the European Territory, and the Asian Territory.

 

	
1.38

	
"Third Party" means any Person other than Taconic, Transnetyx and their respective Affiliates.

 

	
1.39

	
"Transferred Customers" means all customers in Commercial Accounts and Laboratory Breeding Accounts in the Territories which had previously purchased Transnetyx Services from Transnetyx prior to the effective date of the Previous Agreement.

 

	
1.40

	
"Transferred Customers Accounts" means all previously existing accounts of a Transferred Customer with Transnetyx as of the effective date of the Previous Agreement.

 

	
1.41

	
"Transnetyx Volume" means the number of biopsy samples submitted for testing by Transnetyx, its Affiliates, its customers, or in any way for the benefit of Transnetyx.

 

	
2.

	
Grant of Exclusive Rights to Taconic.

 

Nothing in this Section or this Agreement shall be construed as limiting Transnetyx's rights in or title to the Services to be offered hereunder, and Taconic hereby acknowledges Transnetyx's ultimate rights in and title to those Services. All volumes of Services generated pursuant to this Agreement that is not deemed Taconic Volume as herein defined shall be deemed Transnetyx Volume.

 

	
2.1

	
Exclusive Distribution Rights: Subject to the provisions of Section 2.1(a), (b), (c), and (d), Transnetyx hereby grants to Taconic, and Taconic hereby accepts from Transnetyx, the exclusive rights, even as to Transnetyx, to market, sell, and distribute Services to, and to accept orders for the purchase of the Services from Taconic Accounts in the Territories:, as set forth in this Agreement.. Taconic shall have the exclusive right, even as to Transnetyx, to enter into Supply Contracts for Services with any customer included in Taconic Accounts in the Territories provided, however that such Supply Contracts must include provisions (the form and content of which provisions are approved by Transnetyx) which will provide that, in the event this Agreement is terminated by Transnetyx pursuant to Section 12 as a result of an Event of Default by Taconic, Transnetyx may, if it so chooses, serve as an assignee from Taconic for the right to deliver and sell the Services to the customers. Taconic may extend such exclusive rights to any of its Affiliates, provided, however that such Affiliates shall be bound by the terms of this Agreement and any such extension must be approved in writing by Transnetyx, which approval shall not be unreasonably withheld, prior to any such extension. All volumes of Services generated pursuant to this Section 2.1 shall be deemed Taconic Volume.

 

  

4

  

 

(a)           Within 45 days of this Agreement, Taconic shall deliver to Transnetyx a list of customer accounts it would like to include as Taconic Additional Accounts. Once received, Transnetyx will have a period of 45 days to review this list of accounts and submit any to the Steering Committee for consideration. Upon the final determination by the Steering Committee of any and all accounts submitted for consideration (following the same decision procedures and considerations described in Section 2.1(b)), which shall be made no later than the conclusion of the first Steering Committee meeting following the date of this Agreement, the Parties will provide written acceptance of the Taconic Additional Accounts set forth on Schedule 2.1(a) attached to and made a part hereof.

 

(b)           Every ninety (90) days from the date of this Agreement, Transnetyx shall have the right to request to the Steering Committee that a specific account or accounts be removed as a Taconic Account. The members of the Steering Committee shall work in good faith to make a reasonable determination of the status of the account(s) based on consideration of all factors related to the specific customer account(s), including but not limited to, Taconic's overall relationship with the customer, market conditions, financial and operational factors with the customer, and past, current, and future sales and marketing activities by Taconic. The Steering Committee will also consider, as the case may be, developing and implementing a remedial plan to address the deficiencies in the account(s). Such plan shall include and describe the specific actions, including any duties or activities of either Party as a part of the plan, timetables, and measurable results to be achieved that would maintain the account as a Taconic Account. Any such account removed as a Taconic Account by the Steering Committee will be listed as a Removed Account on Schedule 2.1(b), and thereafter Taconic shall forfeit its exclusive rights granted to it in Section 2.1 to market, sell, and distribute Services to, and to accept orders for the purchase of the Services from the account.

 

(c)           Every ninety (90) days from the date of this Agreement, Taconic shall have the right to request to the Steering Committee that a specific account or accounts, not already a Taconic Account in the Territories, be added as a Taconic Additional Account. The members of the Steering Committee shall work in good faith to make a reasonable determination of the status of the account(s) based on consideration of all factors related to the specific customer account(s), including but not limited to, Taconic's overall relationship with the customer, market conditions, financial and operational factors with the customer, and past, current, and future sales and marketing activities by Taconic.

 

  

5

  

 

(d)           If an account is removed as a Taconic Account, the Steering Committee will determine the average weekly Distributor Margin on the volume of Services sold to that account over the most recent eight (8) weeks prior to removal. The Distributor Margin will be calculated as Net Revenue of Taconic less the Net Revenue of Transnetyx. Transnetyx will provide a credit, in the form of a credit memo issued weekly, to Taconic for the duration of the Initial Term of this Agreement, in an amount equal to the average weekly Distributor Margin on the removed account.

 

(e)           If an account is removed as a Taconic Account, and if Transnetyx sells the Service to the account at a price per Sample lower than 1.25 times the price per Sample at which Transnetyx sells the Service to Taconic at the existing volume level of the Taconic Volume ("Taconic Base Retail Price"), Transnetyx will provide a credit, in the form of a credit memo issued weekly, to Taconic for the duration of the Initial Term of this Agreement, in an amount equal to fifty percent (50%) of the difference between the Taconic Base Retail Price and the price per Sample sold to the account.

 

	
2.2

	
Transnetyx Transferred Customers Accounts.

 

(f)            All volumes of Services related to the Transferred Customer Accounts shall be deemed Taconic Volume, except that all Samples submitted by principal investigators from animal lines that were active at the effective date of the Previous Agreement shall be deemed "Transferred Volume" and a part of Transnetyx Volume. Such Transferred Volume is specified on Schedule 2.2 attached to and made a part hereof.

 

(g)           Transferred Customers will continue to order Services from Taconic. Taconic will continue to assume all customer service and invoicing responsibilities.

 

	
2.3

	
Distribution Assurance. During the Term, Transnetyx agrees that it will not grant to, on either an exclusive or non-exclusive basis, any Third Party the rights to market, sell, and distribute Services to, or to accept orders for the purchase of the Services from any Taconic Account, in the Territories without the express written consent of Taconic, which consent shall not be unreasonably withheld.

 

	
2.4

	
Non-Compete Assurance. Taconic agrees that it will not seek to develop, construct, operate, market, sell, or distribute a "System", as defined in Section 1,during the Term. Further, Taconic acknowledges that to do so would be in direct competition with Transnetyx and in conflict with the rights and privileges granted in Section 2.1. Both Parties acknowledge that Taconic currently offers, and will continue to offer, services for the analysis of genotypes in laboratory animals, that do not compete with "Services" as defined in Section 1.

 

  

6

  

 

	
2.5

	
Non-Related Activities. Nothing in this Agreement shall be construed as to prevent either Party from offering services or products unrelated to Genotyping Services or to the Services to be offered hereunder.

 

	
3.

	
Payments.

 

	
3.1

	
Prices. Except for Transferred Volume, Taconic shall pay Transnetyx a price per Sample for 3P Volume based on the average weekly number of Samples of 3P Volume submitted to Transnetyx, and a price per Sample for Internal Volume based on the average weekly number of Samples of Internal Volume submitted to Transnetyx, as set forth in the Price Matrix on Schedule 3.1 attached to and made a part hereof. The prices in Schedule 3.1 will apply to all Samples of 3P and Internal Volume submitted to Transnetyx during a quarter based on the average weekly volume of Samples of 3P and Internal Volume, respectively, submitted during the last eight (8) weeks of the prior quarter. In its sole and complete discretion, Transnetyx may provide a Manufacturer Suggested Retail Price ("MSRP") for Services sold by Taconic. Nothing in the agreement shall require Taconic or Transnetyx to sell Services at the Transnetyx MSRP.

 

	
  

	
(a)

	
Samples included in Transferred Volume shall be paid for by Taconic at the same price as established by Transnetyx for the customer prior to the transfer of the account to Taconic, less $1.00 per Sample.

 

	
3.2

	
Price Guarantee. Transnetyx represents and warrants that it will not sell the Services to any Person, or permit the sale of the Services to a Person, at materially equivalent service levels (including but not limited to turn-around time and accuracy), terms, testing methodology or technology, or other material provision to those that are sold to Taconic, and at materially equivalent or lower volume levels than the Taconic Volume, at a price per Sample that is less than the price per Sample paid by Taconic for the Taconic Volume as shown on Schedule 3.1

 

	
3.3

	
Invoices. Transnetyx shall invoice Taconic weekly for the number of Samples of Taconic Volume and Transferred Volume processed by Transnetyx.

 

	
3.4

	
Disputed Amounts. Taconic may withhold any amounts due hereunder if Taconic in good faith disputes the amount claimed by Transnetyx to be due hereunder and Taconic notifies Transnetyx of such Dispute within thirty (30) days after receiving an invoice, statement or other notification that such amount is due. The foregoing right to withhold payment of disputed amounts shall be limited to amounts disputed in good faith, and interest shall not accrue and be payable on the net amount determined to be payable.

 

	
3.5

	
Payments. Taconic shall pay invoices net 30 days from the date of an undisputed invoice. Taconic shall make payment by electronic funds transfer. If any undisputed amounts due hereunder have not been received by the due date, such overdue amounts shall bear interest from the due date at the rate of 1.5% per month, or portion thereof, until received.

 

	
3.6

	
No Acknowledgement. Payments made by Taconic in the amount or less than the amount shown on any invoice from Transnetyx shall not be construed as an acceptance or agreement with the amount so stated. Either Party may recover from the other Party the amount of any overpayment or underpayment if requested within twelve (12) months after the close of the calendar year in which such overpayment or underpayment was made.

 

  

7

  

 

	
3.7

	
Breeding Referrals. Transnetyx shall refer existing or potential laboratory breeding leads to Taconic. A lead shall include the name of the institution, the Principal Investigator's name, phone number, or e-mail address.

 

	
3.8

	
Audit.

 

	
  

	
(a)

	
Either Party may audit the other Party's books and records to the extent necessary to determine such other Party's compliance with the terms of this Agreement. A Party's right to audit the other Party's books and records for any calendar year shall expire twelve (12) months after the close of such calendar year. The Party performing an audit shall use independent auditors to perform such audit that are reasonably acceptable to the audited Party. Such independent auditors shall enter into an agreement with the Parties, on terms that are agreeable to both Parties, under which such independent auditors shall agree to maintain the confidentiality of the information and materials obtained during the course of such audit and shall only disclose to the Party requesting the audit whether the records are correct or not and the specific details concerning any discrepancies. The findings of such audit shall be considered Confidential Information for the purposes of this Agreement.

 

	
  

	
(b)

	
Any audit shall be conducted during regular Business Hours and in a manner that does not interfere unreasonably with the operations of the Party being audited. Each Party may perform an audit once each calendar year during the Term; provided that a Party may perform an additional audit at anytime if the preceding audit reveals a failure to conform in any material respect to the terms of this Agreement. Each audit shall begin upon the date specified by the auditing Party in a notice to the other Party and shall be completed as soon as practicable. Such notice shall be given to the Party to be audited a minimum of 30 days prior to the commencement of the audit.

 

	
  

	
(c)

	
The audited Party may review the audit results and offer corrections to any perceived inaccuracies. The Party requesting the audit shall pay the costs of the independent auditors conducting such audit, unless the final results of an audit by Taconic reveal an overpayment of $5,000 or 10%, whichever is greater, or more or the final results of an audit by Transnetyx reveal an underpayment of $5,000, or 10%, whichever is greater, or more; in which case, the audited Party shall pay the costs of conducting such audit. If the final audit report concludes that an overpayment or underpayment has occurred during the audited period, such payment shall be remitted by the Party responsible for such payment to the other Party within 30 days after the date such auditor's written report identifying the overpayment or underpayment is delivered to the Party responsible for such payment.

 

  

8

  

 

	
4.

	
Steering Committee

 

	
4.1

	
Objectives. The Steering Committee shall be responsible for administering the following activities: (a) monitoring the performance of the Parties under this Agreement including account activity; (b) monitoring Taconic sales volumes for purposes of calculating actual Taconic Volume levels as required in Section 6.2; (c) reviewing the activities of each Party's sales and sales support personnel to determine if client inquiries are being appropriately responded to; (d) evaluating market trends, new opportunities and potential changes needed to the Services; (e) coordinating and developing joint marketing efforts and approving use of each Party's trademarks in any promotional material used by the other Party; (f) approving any amendments to this Agreement; and (g) attempting to resolve Disputes between the Parties under this Agreement. Each Party's representatives on the Steering Committee shall be responsible for obtaining all necessary internal approvals for any proposed matters voted on by the Steering Committee. Once a Party's representatives on the Steering Committee have voted on any matter, the other Party may assume the other Party has approved such vote.

 

	
4.2

	
Members. Initially, the Steering Committee shall include Kevin Leak, Senior VP of Client Relations, Ann Seman, Associate Product Manager, and selected other members of the Product Management team for Taconic and Robert Bean, President & CEO, Bradley Nelson, CFO, and Clint Musgrove, Product Manager for Transnetyx. Upon at least one week prior notice to the other Party, a Party may substitute or replace on a going-forward basis one or more of its Steering Committee representatives. Regardless of the number of representatives for each Party serving on the Steering Committee at any time, each Party shall have one vote on any decision or issue presented. All decisions of the Steering Committee must be made by unanimous consent or unanimous written consent.

 

	
4.3

	
Meetings. The Steering Committee shall meet at least twice every calendar year, unless otherwise agreed. The meeting place shall alternate between facilities of each Party or may, if the Steering Committee so elects, be carried out by teleconference or videoconference. The Party deemed to be hosting a meeting shall prepare written minutes of such meeting which shall be circulated promptly following the meeting for review and approval by the other Party, which approval shall not be unreasonably withheld or delayed.

 

	
4.4

	
Notice of Meetings. No action may be taken by the Steering Committee unless each member receives at least three-business days notice, or waives such notice in writing, or unanimous written consent to such action is obtained from the Steering Committee authorizing such action in advance. Steering Committee meetings may be recessed as necessary to permit members to seek any required approvals prior to voting on any matter before the Steering Committee.

 

	
4.5

	
Costs. Each Party shall bear its own costs regarding such meetings and the work of the Steering Committee.

 

  

9

  

 

	
5.

	
Performance of Services.

 

	
5.1

	
Transnetyx.

 

	 	
(a) 

	
Taconic shall meet the following requirements for the Services:

 

	 	
(i)

	
For 3P Volume and Internal Volume, Transnetyx shall maintain a twenty-four (24) or seventy-two (72) hour turnaround time, as specified by the customer or Taconic upon order submission, for test results from time of Sample receipt to availability of test results to Taconic/customer via Web site or file transfer. Taconic will accept reasonable exceptions to this standard when notified by Transnetyx within a reasonable period of time, not to exceed 48 hours, that a material increase in Sample submissions by a Taconic Account results in the need to order significantly larger quantities of assay specific test reagents. For purposes of this Section, a "material increase" is defined as a 100% increase over the prior month's volume related to that specific Taconic Account.

 

	 	
(ii)

	
Transnetyx shall maintain Transnetyx web site uptime (excluding scheduled maintenance) of ninety eight percent (98%) each month, but under all circumstances any interruption in service shall not last longer than 48 hours.

 

	 	
(iii)

	
Transnetyx shall maintain a forty-eight (48) hour turnaround time for provision of Sample submission supplies (i.e. Transnetyx kits for biopsy sample submission) to customer.

 

	 	
(iv)

	
Transnetyx shall respond to queries regarding test accuracy within 24 hours and at its own cost. Questions shall be resolved within seven business days. Confirmed incorrect test results shall not exceed 1% of the total number of Samples submitted by Taconic and its customers quarterly.

 

	 	
(v)

	
Transnetyx shall develop protocols for the performance of new automated molecular assays based on information provided by Taconic. Transnetyx shall use commercially reasonable efforts to develop such protocols within four (4) weeks of the date Transnetyx accepts Taconic's information as complete.

 

	 	
(b)

	
Transnetyx shall, upon the reasonable request of Taconic, visit clients with Taconic representatives and host visits by clients to Transnetyx laboratories (subject to receipt by Transnetyx of an executed Nondisclosure Agreement from the client in form and substance satisfactory to Transnetyx).

 

  

10

  

 

	 	
(c)

	
Any failure to meet the foregoing requirements will be referred to the Steering Committee for consideration and remediation, and in all events shall remain subject to the provisions of Section 13.

 

	
5.2

	
Taconic.

 

	 	
(a)

	
Taconic shall meet the following requirements for the Services:

 

	 	
(i)

	
Taconic shall use its reasonable best efforts to promote the sale of the Services in the Territories and to develop a market demand for the Services in the Territories.

 

	 	
(ii)

	
Taconic will publish availability of the Services in its promotional materials, at scientific meetings and on its web site. Orders for purchase of Services by Taconic customers will be submitted through the Taconic web site. Taconic shall maintain the Taconic web site up time (excluding scheduled maintenance) of ninety eight percent (98%) each month, but under all circumstances any interruption in service shall not last longer than 48 hours.

 

	 	
(iii)

	
Taconic shall maintain a sales organization which attends trade shows, conferences and promotional events in order to promote Taconic and the Services. The Taconic sales force will promote these services to Taconic Accounts .

 

	 	
(b)

	
Any failure to meet the requirements of (a) above will be referred to the Steering Committee for consideration and remediation. Any infringement by Taconic of Transnetyx's IP or utilization by Taconic of Confidential Information not expressly allowed herein shall be an Event of Default.

 

	 	
(c)

	
Taconic shall have the right to continue its current practice of operating one or more molecular laboratories for purposes of performing molecular assays to satisfy Internal Volume. Taconic agrees that it will not utilize in any manner or infringe Transnetyx's IP or utilize Transnetyx's Confidential Information when operating such laboratories. Taconic will assign the processing of Internal Volume to either its lab or Transnetyx in its sole discretion. Taconic will assign the processing of 3P Volume to Transnetyx, unless otherwise directed by the customer. For 3P Volume, if Transnetyx does not or cannot produce a functioning assay, in conformance with Transnetyx's established assay development procedures, then that certain assay and the associated 3P Volume may be processed by Taconic at its discretion. Within sixty (60) days of this agreement, the Parties will review all current 3P Volume assays to evaluate those which Transnetyx has or could develop functioning assays and is able to process, and those which Transnetyx cannot. Every six (6) months Transnetyx may request a review of new or existing customer assays associated with 3P Volume.

 

  

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5.3

	
Complaints.

 

	
  

	
(a)

	
Complaints. Each Party shall promptly notify the other Party of any complaints it or its Affiliates receive regarding the Services. Except as provided in Sections  5.1(a) and 5.1(b), all complaints shall be shared with the other Party within seven business days after receiving such complaint. The Parties shall cooperate with each other in any necessary and appropriate investigation of any complaint. Transnetyx is responsible for the investigation of each complaint it receives regarding any Services, whether such complaints are received from Taconic or other Persons. Taconic is responsible for customer service issues regarding such complaints, including returns and refunds. Transnetyx shall compile all complaints received and shall provide Taconic with a quarterly report identifying the number and type of complaints it has received regarding any Services and the status of each such complaint. The Steering Committee shall review the quarterly report identifying complaints and shall work with the Parties to improve and rectify any recurring problems identified in such complaints.

 

	
  

	
(b)

	
Corrective Actions.

 

	
  

	
(i)

	
Each Party shall promptly notify the other Party's Steering Committee Members of the notifying Party's belief that a recall or other field corrective action (collectively referred to as "Corrective Action") is necessary with respect to Services. Such belief may be based on complaints received by a Party or other information regarding any Services that comes to the attention of a Party, including, information regarding the System or its output. If either Party reasonably determines that a Corrective Action is appropriate, the Parties shall undertake such Corrective Action through the Steering Committee. The Party making such determination shall notify the other Party of its determination, and thereafter, the Steering Committee shall meet promptly (via teleconference or at a time and place mutually agreeable to the Parties) to develop a coordinated response with respect to such Corrective Action. Each Party shall review with the Steering Committee any statements to be made to any Third Party (including, governmental or administrative officials, or the general public) relating to a Corrective Action prior to the publication or release of such statements. If a Corrective Action or like procedures are necessary, each Party shall cooperate fully with the Steering Committee to ensure expeditious completion of such Corrective Action.

 

	
  

	
(ii)

	
If a Corrective Action relates to a System manufacturing or design defect, Transnetyx shall be responsible for and pay Correction Costs. If a Corrective Action relates to marketing or distribution of Services by Taconic, Taconic shall be responsible for and pay all Correction Costs. If Correction Costs are incurred by a Party that are the responsibility of the other Party, the responsible Party shall reimburse the Party incurring such Correction Costs within 30 days after receipt of an itemized invoice therefore.

 

  

12

  

 

	
  

	
(iii)

	
The obligations of the Parties set forth in this Section 5.3(b) are intended to comply with the laws, rules and regulations, of each country in which the Products are distributed. The requirements of this Section 5.3(b) shall therefore be construed and interpreted to comply with all such laws, rules and regulations. To the extent provisions of this Section 5.3(b) do not adequately reflect any such law, rule or regulation, such provisions shall be revised to the extent reasonably necessary to make such provisions legal and valid in accordance with such laws, rules and regulations.

 

	
6.

	
Marketing and Sales

 

	
6.1

	
Marketing and Sales Plan. On a semi-annual basis, the Steering Committee shall establish a Marketing and Sales Plan with respect to the Services.

 

	
6.2

	
Minimum Sales Volume Requirement.

 

	
  

	
(a)

	
Taconic must achieve and maintain sales of Services at a minimum of 7,000 Samples per week from the date of this Agreement in order to retain the exclusive distribution rights set forth in Section 2.1. The weekly volume of sales of Services shall be calculated based on the average weekly Taconic Volume of the eight (8) weeks prior to the calculation date.

 

	
  

	
(b)

	
If Taconic fails to meet and maintain the Minimum Sales Volume, Transnetyx may, upon 30 days notice to Taconic, terminate Taconic's exclusivity, even as to Transnetyx, as granted in Section 2.1. In the event of any such termination, Taconic may continue to exercise any and all the rights granted to it under Section 2.1 on a non-exclusive basis for the duration of the Initial Term.

 

	
  

	
(i)

	
Such termination of exclusivity and the action described in 6.2(c) below shall be Transnetyx's sole remedy for Taconic's failure to meet the Minimum Sales Volume.

 

	
  

	
(ii)

	
Prior to Transnetyx terminating exclusivity, the members of the Steering Committee shall work in good faith to develop a plan for remedial action that takes into account Taconic's total contribution to increasing volume levels including joint client activities, not-for-profit referrals, as well as Transnetyx's own performance that may have affected client satisfaction, in order to adjust the Minimum Sales Volume and provide Taconic with an opportunity to continue to maintain its exclusive distribution rights. In the event the Steering Committee does develop such a plan for remedial action, and Taconic fails to meet the Minimum Sales Volume or other provisions of such plan, then Transnetyx may exercise its right to terminate Taconic's exclusivity without returning to the Steering Committee for a second time.

 

  

13

  

 

	
  

	
(iii)

	
Loss of exclusivity shall mean that Transnetyx will have the option of servicing all existing Taconic Volume customers on a direct basis. Transnetyx shall not name a Third Party as a distributor or sales representative until the expiration date of this Agreement.

 

	
  

	
(c)

	
If Taconic fails to meet and maintain the Minimum Sales Volume, Transnetyx may Terminate the provision for credits provided to Taconic as described in Sections 2.1(d) and 2.1(e).

 

	
  

	
(d)

	
The Steering Committee shall meet twice each calendar year during the Term to determine whether market or other conditions require that the Minimum Sales Volume and/or prices per Sample charged to Taconic be increased or decreased for the next calendar year or that any changes be made to either Section 6.2(a) or Schedule 3.1 for the next calendar year.

 

	
6.3

	
Product Literature. Taconic shall not make any claims about the Services except those approved by Transnetyx. All of Taconic's marketing, sales and other promotional materials regarding the Services shall be prepared by Taconic (at Taconic's sole expense) subject to Transnetyx's approval of the content and representations describing the Service and System, which approval shall not be unreasonably withheld or delayed. If Transnetyx fails to respond to Taconic within 15 business days after it submits materials to Transnetyx for approval, Transnetyx shall be deemed for all purposes to have approved such materials. If Transnetyx subsequently determines and notifies Taconic that previously approved materials or materials Transnetyx failed to respond to require a change, Transnetyx shall identify the materials requiring the change, the required changes, the reasons for the changes, the timing for such changes, whether it requires existing materials to be returned, and whether Taconic is required to cease distributing such materials. In such event, Taconic shall comply with all reasonable instructions of Transnetyx and Transnetyx shall be responsible for all costs associated with complying with such instructions.

 

	
6.4

	
Field Sales Support.

 

	
  

	
(a)

	
Taconic sales personnel shall represent the Services and solicit business in a manner consistent with the Marketing Plan developed by the Steering Committee. Transnetyx shall support that plan by providing field support, sales ideas, technical support in the field and any other sales training or sales support that advances the overall goal of the alliance.

 

	
  

	
(b)

	
Transnetyx sales personnel shall represent Taconic breeding services and solicit business in a manner consistent with the Marketing Plan developed by the Steering Committee. Taconic shall support that plan by providing field support, sales ideas, technical support in the field and any other sales training or sales support that advances the overall goal of the alliance.

 

  

14

  

 

	
7.

	
Additional Duties.

 

	
7.1

	
Technical Support.  Transnetyx and Taconic shall provide the following additional duties; any failure to meet the following requirements will be referred to the Steering Committee for consideration and remediation:

 

	
  

	
(a)

	
Initial technical support to customers will be provided by a Taconic Product Manager. In-depth technical support, site inspections and QA audits will be provided by a Transnetyx Technical Expert and Operations Personnel.

 

	
  

	
(b)

	
Transnetyx will train Taconic personnel regarding the best practices for support of Transnetyx assays, including assay transfer, customer support, sales and marketing. Process flow diagrams and complete support contact mapping will be provided to Taconic by Transnetyx.

 

	
  

	
(c)

	
Taconic will provide sales and technical support to Transnetyx sales persons for the purpose of referring customer for laboratory animal breeding services.

 

	
7.2

	
Information Technology. Transnetyx and Taconic shall provide the following additional duties; any failure to meet the following requirements will be referred to the Steering Committee for consideration and remediation:

 

	
  

	
(a)

	
Transnetyx and Taconic IT personnel will integrate Transnetyx's web site into Taconic's web site.

 

	
  

	
(b)

	
Consistent with Taconic's rights under Section 2 of this Agreement, Transnetyx's website shall direct all customers of accounts for which Taconic has rights under Section 2 of this Agreement to Taconic's web site. Taconic will also submit orders for Internal Volume using the Taconic web site or "File Drop" method.

 

	
  

	
(c)

	
Transnetyx agrees to work with Taconic IT staff to make available the "File Drop" method currently used by Transnetyx and its customers to allow Taconic the ability to send data to Transnetyx regarding genotyping orders and receive those assay results back into the Taconic database without need of the Taconic/Transnetyx web interface. The file drop method is specified and will be supported by Transnetyx staff insofar as reasonable instructions and examples are provided to Taconic or one of its customers for the purpose of automated interface. Transnetyx staff will not participate in any code development or editing of the Taconic LIMS interface or database.

 

	
7.3

	
European Laboratory. During Steering Committee meetings and as events may develop, in each Party's sole discretion and without disclosing any proprietary or confidential information, the Parties intend to keep each other informed of any future intentions and plans for growth, development, or expansion in the European Territory, and to discuss the possibility of collaborating, co-locating, licensing, or jointly operating a facility in the European Territory for the provision of Services. Nothing in this section shall be construed as requiring any Party to discuss its plans or strategies, or take any action independently or with the other Party in connection with those plans or strategies.

 

  

15

  

 

	
8.

	
Standard of Care. Each Party shall use commercially reasonable efforts in the performance of its obligations hereunder.

 

	
9.

	
Intellectual Property.

 

	
9.1

	
Ownership.

 

	 	
(a)

	
Taconic acknowledges that Transnetyx or its Affiliates are the owners or licensees of their respective trademarks and trade names that Transnetyx uses in its business. Except as set forth in this Agreement, Taconic has no right, title or interest in such trademarks or trade names. Before commencing use of any of the Transnetyx's trademarks or trade names in connection with any promotional or other materials prepared by Taconic that has not been previously approved by Transnetyx, Taconic shall submit such materials to Transnetyx for approval, which approval shall not be unreasonably withheld or delayed. If Transnetyx fails to notify Taconic within 15 days after it submits materials to Transnetyx for approval that it does not approve such materials (providing in reasonable details the reasons for such disapproval), Transnetyx shall be deemed for all purposes to have approved Taconic's use of the trademarks and trade names contained therein. If the promotional or other materials were prepared by Transnetyx, Taconic is presumed to have Transnetyx's permission to use the trademarks and trade names in such materials and no further consent is required.

 

	 	
(b)

	
Transnetyx acknowledges that Taconic or its Affiliates are the owners or licensees of their respective trademarks and trade names that Taconic uses in connection with its business. Except as set forth in this Agreement, Transnetyx has no right, title or interest in such trademarks or trade names. Before commencing any use of any of Taconic's trademarks or trade names in connection with any promotional, packaging, or other materials that has not been previously approved by Taconic, Transnetyx shall submit such materials for Taconic's written approval, which approval shall not be unreasonably withheld or delayed. If Taconic fails to notify Transnetyx within 15 business days after it submits materials to Taconic for approval that it does not approve such materials (providing in reasonable details the reasons for such disapproval), Taconic shall be deemed for all purposes to have approved Transnetyx's use of the trademarks and trade names contained therein. If the promotional or other materials were prepared by Taconic, Transnetyx shall be presumed to have Taconic's permission to use the trademarks and trade names in such materials and no further consent is required.

 

	
9.2

	
Infringement.

 

	
  

	
(a)

	
If Taconic becomes aware of any infringement or improper use by any other Person of Transnetyx's trademarks or trade names relating to the Services, Taconic shall notify Transnetyx. Subject to Section 15, Transnetyx shall have sole discretion and control, including over settlement, regarding any proceedings relating to infringement or improper use of its trademarks and trade names.Taconic may choose to be represented by its own counsel in any such proceedings and such representation shall be solely at Taconic's expense.

 

  

16

  

 

	
  

	
(b)

	
If Transnetyx becomes aware of any infringement or improper use by any other Person of Taconic's trademarks or trade names relating to Services, Transnetyx shall notify Taconic. Subject to Section 15, Taconic shall have sole discretion and control, including over settlement, regarding any proceedings relating to infringement or improper use of its trademarks and trade names. Transnetyx may choose to be represented by its own counsel in any such proceedings and such representation shall be solely at Transnetyx's expense.

 

	
9.3

	
Inventions. This Agreement grants a limited license to Taconic to use, only as may be reasonably necessary to effectuate the purposes of this Agreement, and subject to the control and approval of Transnetyx, the trademarks, copyrights, Confidential Information and knowledge of the Intellectual Property used by Transnetyx in connection with the Services or embodied in the System. Taconic agrees to execute any and all documents as Transnetyx may determine are necessary or desirable to evidence the limited license granted hereunder for recording purposes. Any and all improvements, modifications, inventions or discoveries by Taconic or its employees, directly relating to the Intellectual Property, made as a result of Taconic's access to the Confidential Information and Intellectual Property, shall be the sole and exclusive property of Transnetyx. In furtherance of the foregoing, Taconic hereby assigns, and agrees to assign, all such improvements, modifications, inventions and discoveries to Transnetyx, and further authorizes Transnetyx as its attorney-in-fact to execute all such documents as Transnetyx may determine are necessary or desirable to confirm the foregoing assignment and/or Transnetyx's ownership rights to such improvements, modifications, inventions or discoveries. It is expressly understood and agreed between the parties that Transnetyx retains full ownership of all trademarks, patents, copyrights, Confidential Information and Intellectual Property described above in this Section 9.3. Except as otherwise provided in Section 12.3, in the event of termination of this Agreement, Taconic agrees that all rights of access to or to use the trademarks, patents, copyrights, Confidential Information and Intellectual Property granted hereunder shall revert to Transnetyx, and Taconic shall have no interest therein whatsoever.

 

	
10.

	
Change of Control; Sale of Service Assets.

 

	
10.1

	
Direct Competitors to Taconic. In the event of either (i) a proposed Change of Control of Transnetyx which will result in a Controlling Interest in Transnetyx being held by Charles Rivers Laboratories, Covance, Life Technologies or Harlan Incorporated, or (ii) the proposed sale of the Service Assets to Charles Rivers Laboratories, Covance, Life Technologies or Harlan Incorporated (both (i) and (ii) collectively "Competitor Sale"), Transnetyx shall first offer to sell the Controlling Interest or Service Assets to Taconic. At least thirty (30) days prior to the closing of the proposed Competitor Sale, Transnetyx shall deliver to Taconic notice of its intent to sell the Controlling Interest or Service Assets, including the purchase price consideration Transnetyx intends to accept for the Controlling Interest or Service Assets (the "Offer"). Taconic shall have thirty (30) days within which to accept the Offer as well as a customary time period thereafter in which to close the transaction. If Taconic does not accept the Offer, then Transnetyx may dispose of the Controlling Interest or Service Assets on the terms described in the Offer; provided, however, that Taconic shall have the option to: (i) continue this Agreement and Transnetyx's obligations hereunder (which shall remain in full force and be binding on Transnetyx's successor) for a term up to five (5) year from the date of close of the Competitor Sale, or (ii) to exercise the rights described in Section 12.3(a), (b), and (c). Should Taconic exercise the option specified in 12.3(a), then Taconic shall pay Transnetyx a royalty as set forth in Schedule 10.1 attached to and made a part hereof, in lieu of the royalty set forth in Section 12.3(a). Such royalty shall continue to be paid until expiration of the last patent included in the IP.

 

  

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10.2

	
Notice of Other Transactions. In the event of either a proposed Change of Control or sale of the Service Assets of Transnetyx to any Person other than those listed in Section 10.1, Transnetyx shall deliver to Taconic notice of its intent to sell the Controlling Interest or Service Assets at least thirty (30) days prior to the closing of the proposed transaction. This notice is informational only and confers no authority to Taconic to review or consent to the proposed transaction.

 

	
11.

	
Escrow.  Within thirty (30) days following execution of this Agreement, Transnetyx will deposit plans, designs, specifications and manufacturing documentation, including any applicable source codes, necessary for manufacture of a System (the "Escrow Materials") with an escrow agent reasonably acceptable to Taconic. Transnetyx will promptly update Escrow Materials in the event of any material change. The Escrow Material shall be maintained under an agreement which provides that the escrow agent shall furnish Taconic with a copy of the Escrow Materials in accordance with this Agreement. The costs associated with furnishing and maintaining the Escrow Materials, including the fee of any escrow agent, will be paid by Transnetyx.

 

	
12.

	
Term and Termination.

 

	
12.1

	
Term. Unless sooner terminated as set forth in this Agreement, this Agreement shall continue in effect for an Initial Term of Three (3) years from the date of the Agreement. THEREAFTER, THIS AGREEMENT SHALL AUTOMATICALLY RENEW FOR SUCCESSIVE RENEWAL TERMS OF ONE YEAR EACH, UNLESS EITHER PARTY NOTIFIES THE OTHER PARTY ONE HUNDRED AND EIGHTY DAYS PRIOR TO THE END OF THE THEN-CURRENT TERM OF ITS INTENTION TO TERMINATE THE AGREEMENT.

 

	
12.2

	
Termination. This Agreement may be terminated as follows:

 

	
  

	
(a)

	
By the mutual written consent of the Parties; or

 

	
  

	
(b)

	
Upon the Event of Default (only if so declared as a default by the non-defaulting party). An "Event of Default" shall mean:

 

	
  

	
(i)

	
a material breach or material non-performance of a Party's obligations under this Agreement if, at the end of 30 days following notice from the other Party, such material breach or material non-performance has not been cured and is continuing;

 

  

18

  

 

	
  

	
(ii)

	
(A) a Party files a voluntary petition in bankruptcy; (B) a Party is adjudged bankrupt; (C) a court assumes jurisdiction of the assets of the other Party under an applicable reorganization act; (D) a trustee or receiver is appointed by a court for all or a substantial portion of the assets of the other Party; (E) a Party dissolves its business, becomes insolvent, suspends its business or announces its intention to do any of the foregoing; or (F) a Party makes an assignment of substantially all of its assets for the benefit of its creditors; or

 

	
  

	
(iii)

	
If either Party delivers notice to the other Party that that it intends to cease marketing, offering, or providing the Services.

 

	
12.3

	
Consequences of Taconic's Termination of Agreement in the Event of Default by Transnetyx.  If Taconic terminates this Agreement pursuant to an Event of Default:

 

	 	
(a)

	
Transnetyx shall grant Taconic a worldwide, perpetual, irrevocable, non-exclusive license to the IP and System for the Services related to laboratory animals only, and sufficient access to the Escrowed Materials and know-how to operate an assay laboratory equivalent to Transnetyx's Memphis laboratory (the "License Rights"), in exchange for a royalty of five percent (5%) of Net Revenues; provided, however, that Taconic's obligation to pay royalties shall terminate upon the earlier of (i) the lapse or expiration of the last patent listed on Schedule 1.17, or (ii) December 1, 2022;

 

	
  

	
(b)

	
Taconic shall have the right to construct, own and operate its own testing laboratory providing Services related to laboratory animals only;

 

	
  

	
(c)

	
Within ninety (90) days of termination by Taconic as a result of an Event of Default, Transnetyx shall be required (i) to disclose to Taconic all its know-how, including web site and LIMS code related to the System; and (ii) provide to Taconic personnel all related training in the efficient operation and maintenance of a laboratory constructed to subsection (b) above, both (i) and (ii) completed to the satisfaction of Taconic, not unreasonably withheld; and

 

	
  

	
(d)

	
Transnetyx agrees that for three (3) years following a termination by Taconic as a result of an Event of Default by Transnetyx it will refrain from (i) marketing, selling or distributing Services in the Territories and (ii) directly or indirectly, without Taconic's prior written consent, offering to employ or employing in any manner any employees of Taconic while they are in Taconic's employ, and not to offer to employ or employ in any manner any of Taconic's former employees for a period of six (6) months after they have left Taconic's employ.

 

	
 

	

THE`FOREGOING SHALL BE TACONIC'S SOLE AND EXCLUSIVE REMEDY FOR AN EVENT OF DEFAULT.

 

  

19

  

 

	
12.4

	
Consequences of Transnetyx's Termination of Agreement in the Event of Default by Taconic. If Transnetyx terminates this Agreement pursuant to an Event of Default:

 

	
 

	

All rights Taconic has pursuant to this Agreement shall terminate and all exclusive rights and title to market, sell, and distribute the Services to all customers in the Territories shall revert to Transnetyx. Further Taconic agrees that for three (3) years following a termination by Transnetyx as a result of an Event of Default by Taconic it will refrain from: (i) soliciting orders for or providing Services or Genotyping Services in the Territories, except for analysis of genotypes pertaining to Internal Volume and 3P Volume existing as of the Effective Date and (ii) directly or indirectly, without Transnetyx's prior written consent, offering to employ or employing in any manner any employees of Transnetyx while they are in Transnetyx's employ, and not to offer to employ or employ in any manner any of Transnetyx's former employees for a period of six (6) months after they have left Transnetyx's employ.

 

	
 

	

THE FOREGOING SHALL BE TRANSNETYX'S SOLE AND EXCLUSIVE REMEDY FOR AN EVENT OF DEFAULT.

 

	
12.5

	
Survival. The rights and obligations of the Parties set forth in Sections 9, 12.3-12.5, 15, 16 17, and 18 shall survive the termination of this Agreement in its entirety for any reason, provided that the obligations under Section 17 shall cease five (5) years after the termination of this Agreement.

 

	
13.

	
Force Majeure.

 

	
13.1

	
Force Majeure. Provided Transnetyx complies with the conditions of this Article 13, Transnetyx shall not be in Default as a result of its failure to fulfill any of its obligations under this Agreement, which failure results directly from Force Majeure.

 

	
13.2

	
Thirty Day Notice. Transnetyx shall give Taconic written notice within forty-eight (48) hours of the occurrence of any Force Majeure on which it wishes to rely to excuse its failure to perform any of its obligations pursuant to this Agreement. Notwithstanding the foregoing, in the event Transnetyx is unable to remedy any condition of Force Majeure within thirty (30) days of notice sent to Taconic, then:

 

	
  

	
(a)

	
Transnetyx will work with the Steering Committee to develop and immediately begin implementation of a reconstruction plan, and review with the Steering Committee performance under the plan on a weekly basis. As part of the plan, Taconic will process as many Samples as practicable in its own molecular laboratory, and Transnetyx shall forward to Taconic all Samples that it receives from clients for processing by Taconic; and

 

	
  

	
(b)

	
Taconic shall be entitled to a limited release from the Escrow Materials of the specific molecular assays and genetic materials required for Taconic to process in its existing facilities Samples Taconic deems critical during the reconstruction period.

 

  

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(c)

	
Upon establishment of Transnetyx processing capabilities, Taconic shall return all Escrow Materials to the escrow agent and be prohibited from utilizing for its own testing or testing of any of its customers samples any of same including but not limited to assays, assay conditions, DNA isolation methods, Sample processing code, LIMS interface code, web ordering code and results code or any other related expertise it has learned during the period described above.

 

	
13.3

	
One Hundred Twenty Day Notice. In the event that Transnetyx is unwilling or unable to remedy the condition of Force Majeure within one hundred twenty (120) days of notice sent to Taconic pursuant to Section 13.2, then:

 

	 	
(a)

	
Taconic may exercise the License Rights and construct its own laboratory at its expense, subject to payment of a royalty of five percent (5%) of net revenues until such time as Transnetyx is able to fully perform its responsibilities under the Agreement; and

 

	 	
(b)

	
Transnetyx shall disclose to Taconic all its related know-how and provide to Taconic personnel all related training in the efficient operation and maintenance of a laboratory.

 

	 	
(c)

	
Upon establishment of Transnetyx processing capabilities, Taconic shall return all Escrow Materials to Transnetyx and be prohibited from utilizing Escrow Materials for its own testing or testing of any of its customers samples including but not limited to assays, assay conditions, DNA isolation methods, Sample processing code, LIMS interface code, web ordering code and results code or any other related expertise it has learned during the period described above.

 

	
14.

	
Representations, Warranties and Covenants.

 

	
14.1

	
Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party as follows:

 

	
  

	
(a)

	
Existence. It is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its formation and has the requisite power and authority to enter into and perform its obligations under this Agreement in accordance with its terms without the consent of any other Person.

 

	
  

	
(b)

	
Due Authorization. The execution, delivery, and performance of this Agreement by it have been duly and effectively authorized by all necessary action. This Agreement, upon execution by both Parties, shall constitute the legal, valid and binding obligation of it, except as may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors rights generally and except as may be limited by general principles of equity.

 

	
  

	
(c)

	
No Conflict. The execution, delivery and performance of this Agreement by it, do not conflict with any provision of law applicable to it or result in any breach of its constituent documents, or any order, judgment or other restriction by which it may be bound.

 

  

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15.

	
Indemnification.

 

	
15.1

	
By Taconic. Taconic shall indemnify and hold harmless Transnetyx, its Affiliates and their respective members, officers, directors, employees and agents from and against:

 

	
  

	
(a)

	
any claim asserted by any Third Party against Transnetyx or its Affiliates arising out of or relating to any negligent act or omission or willful misconduct or omission, by Taconic or its officers, directors, employees, representatives or agents in the performance of its obligations set forth in this Agreement;

 

	
  

	
(b)

	
any claim asserted by any Third Party against Transnetyx or any of its Affiliates arising out of or relating to claims, representations or warranties made by Taconic about any Services that: (i) exceed the claims, representations and warranties made by Transnetyx regarding any Services; or (ii) were not otherwise approved by Transnetyx; and

 

	
  

	
(c)

	
any claim asserted by any Third Party against Transnetyx or any of its Affiliates alleging that the use of any of Taconic's trademarks or trade names as contemplated by this Agreement infringe, misappropriate, violate or dilute any trademark or trade name of any Third Party.

 

	
15.2

	
By Transnetyx. Transnetyx shall indemnify and hold harmless Taconic, its Affiliates and their respective members, officers, directors, employees and agents from and against:

 

	
  

	
(a)

	
any claim asserted by any Third Party against Taconic or its Affiliates arising out of or relating to any negligent act or omission or willful misconduct or omission, by Transnetyx or its officers, directors, employees, representatives or agents in the performance of its obligations set forth in this Agreement;

 

	
  

	
(b)

	
any claim asserted by any Third Party against Taconic or its Affiliates related to the Services except to the extent that any such claim: (i) arises out of or relates to claims, representations or warranties made by Taconic or its Affiliates about any Product that exceed the claims, representations and warranties made by Transnetyx about any Product that were not otherwise approved by Transnetyx; and

 

	
  

	
(c)

	
any claim asserted by any Third Party against Taconic or any of its Affiliates alleging that the use of any of Transnetyx's IP, trademarks or trade names as contemplated by this Agreement infringe, misappropriate, violate or dilute any patent rights, trademark or trade name of any Third Party.

 

  

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15.3

	
Procedures. If any Claim is threatened or commenced against any Indemnified Party that an Indemnifying Party is obligated to indemnify and hold harmless an Indemnified Party under Sections 15.1 or 15.2, the Indemnified Party shall notify the Indemnifying Party of the same as promptly as practicable; provided, however, that any delay by the Indemnified Party in notifying the Indemnifying Party shall not constitute a breach of this Agreement and shall not excuse the Indemnifying Party's obligation under this Section  15 except to the extent, if any, that the Indemnifying Party is prejudiced by such delay. After such notice, the Indemnifying Party shall be entitled, if it so elects in writing within ten (10) days after receipt of such notice, to take control of the defense, investigation and settlement of such Claim and to employ and engage attorneys of its choice reasonably acceptable to the Indemnified Party to handle, defend and/or settle the same, at the Indemnifying Party's sole cost and expense. The Indemnified Party shall cooperate in all reasonable respects with the Indemnifying Party and its attorneys in the settlement, investigation, trial and defense of such Claim and any appeal arising there from; provided  however, that the Indemnified Party may, at its own cost and expense, participate through its attorneys or otherwise, in such settlement, investigation, trial and defense of such Claim and any appeal arising there from. The Indemnifying Party shall not settle any Claim that involves a remedy other than the payment of money without the prior consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed.

 

	
15.4

	
Legal Fees. After notice by the Indemnifying Party to the Indemnified Party of its election to assume full control of the defense of any such Claim pursuant to Section 15.3, the Indemnifying Party shall not be liable to the Indemnified Party for any legal expenses incurred thereafter by such Indemnified Party in connection with the investigation, defense or trial of that Claim and any appeal arising there from. If the Indemnifying Party does not assume full control over the defense of a Claim pursuant to Section 15.3: (a) the Indemnifying Party shall be liable for any legal expenses incurred by the Indemnified Party; (b) the Indemnified Party may defend or settle the Claim in such manner as it may deem appropriate, at the cost and expense of the Indemnifying Party; and (c) the Indemnifying Party may participate in such investigation, defense or trial, at its sole cost and expense.

 

	
15.5

	
No Limitations. The foregoing indemnity obligations shall be in addition to, and shall in no respect limit or restrict, any other remedies that may be available to either Party.

 

	
16.

	
Disclaimer of Damages

 

	
16.1

	
Disclaimer. NO REPRESENTATION OR WARRANTY IS MADE WITH RESPECT TO THE SERVICES AND THE SERVICES ARE DELIVERED "AS IS." THIS WARRANTY IS EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR AGAINST INFRINGEMENT, EXCEPT FOR: (a) REIMBURSED OBLIGATIONS FOR THIRD PARTY DAMAGES ARISING PURSUANT TO THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 15; AND (b) A BREACH OF SECTION 17, IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR SPECIAL DAMAGES.

 

  

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17.

	
Confidentiality.

 

	
17.1

	
Obligations. Each Party shall use commercially reasonable efforts to mark its written Confidential Information provided to the other Party pursuant to this Agreement as “Confidential" (or similar designation), and to provide to the other Party a written presentation of any of its Confidential Information presented orally or visually to the other Party within 30 days after disclosure. Notwithstanding the above, any Confidential Information provided by any means from one Party to the other Party, whether marked "Confidential" or not, shall be treated in accordance with this Section 17. Each Party shall be responsible for any breach of the requirements of this section by anyone to whom the Party discloses the Confidential Information. The obligations of the Parties contained in this section are independent, and the existence of any claim or cause of action of one Party against the other, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by either Party of the obligations under this section. Except as expressly authorized by prior written consent of the disclosing Party, the receiving Party shall:

 

	 	
(a) 

	
limit access to any Confidential Information of the other Party received by it to its and its Affiliates' employees, agents, representatives, and consultants who have a need-to-know in connection with this Agreement and the obligations of the Parties hereunder;

 

	 	
(b) 

	
advise such employees, agents, representatives and consultants having access to the Confidential Information of the other Party of the proprietary nature thereof and of the obligations set forth in this Agreement and obligate its employees, agents, representatives, and consultants having access to the Confidential Information to maintain the secrecy of such Confidential Information;

 

	 	
(c) 

	
safeguard all Confidential Information received from the other Party using a reasonable degree of care, but not less than that degree of care used by the receiving Party in safeguarding its own similar information or material; and

 

	 	
(d)

	
except as set forth in this Agreement, not disclose any Confidential Information of the other Party received by it to any Person or disclose to any Person that such information has been made available to or has been inspected by it.

 

	
17.2

	
Exceptions to Confidentiality. The Parties' obligations respecting confidentiality under Section 17.1 shall not apply to any portion of the Confidential Information disclosed to the receiving Party to the extent such information or materials: (a) becomes generally available to the public other than as a result of a disclosure by the receiving Party or it representatives in violation of this Agreement; (b) was already in the possession of the receiving Party, provided that such information or materials is not known by the receiving Party to be subject to another confidentiality agreement with the disclosing Party; (c) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party or its representatives, provided that such source is not known by the receiving Party to be bound by a confidentiality agreement with the disclosing Party; (d) was independently developed by the receiving Party without reference to the Confidential Information; (e) was required to be disclosed to any regulatory body having jurisdiction over either Party or any of its Affiliates; or (f) that disclosure is necessary by reason of applicable legal, accounting or regulatory requirements beyond the reasonable control of the receiving Party. In the case of any disclosure pursuant to Sections 17.2(e) or 17.2(f), to the extent practical, the disclosing Party shall give prior notice to the other Party of the required disclosure and shall use commercially reasonable efforts to obtain a protective order covering such disclosure. If such a protective order is obtained, such information and materials shall continue to be deemed to be Confidential Information.

 

  

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17.3

	
Terms of this Agreement. Neither Party shall disclose any terms or conditions of this Agreement to any Third Party other than their respective legal counsel and financial advisors without the prior consent of the other Party, except as required by applicable law, rule, regulation or court order. In such case, the disclosing Party shall notify the other Party of any such disclosure and use commercially reasonable efforts to provide the other Party with sufficient opportunity to object to such disclosure or to request confidential treatment thereof Notwithstanding the foregoing, promptly after the execution of this Agreement, the Parties shall agree upon the substance of information that may be used to describe the terms of this transaction, and the Parties may disclose such information, as modified by mutual agreement from time to time in writing, without the other Party's consent.

 

	
17.4

	
Public Announcement. Neither Party (nor any Affiliate of either Party) shall originate any written publicity, news release or other public announcement (including, for example, interviews) relating to this Agreement, except as required by law, rule or regulation, without the prior written approval of the other Party, which approval shall not be unreasonably withheld or delayed.

 

	
18.

	
Miscellaneous Provisions.

 

	
18.1

	
Notice. All notices or other communications under this Agreement must be in writing and shall be deemed given or delivered when delivered personally or when sent by registered or certified mail or by private courier addressed as follows or to such other address as either Party may, from time to time, designate by notice to the other Party:

 

If to Taconic:                                   Taconic Farms, Inc.

One Hudson City Centre

Hudson, NY 12534

Attention: Kevin Leak, Senior Vice President, Client Relations

 

  

25

  

 

with a copy to:                                 Taconic Farms, Inc.

One Hudson City Centre

Hudson, NY 12534

Attention: Director of Product Management

If to Transnetyx:                              Transnetyx, Inc.

8110 Cordova Road, Suite 119

Cordova, Tennessee, 38016

Telephone: (901) 507-0476

Facsimile: (901) 507-0480

Attention: Robert Bean, President & CEO

with a copy to:                                 Butler, Snow, O'Mara, Stevens & Cannada, PLLC

6075 Poplar Avenue, Suite 500

Memphis, TN 38119

Telephone: (901) 680-7200

Facsimile: (901) 680-7201

Attention: G. Robert Morris

	
18.2

	
Entire Agreement. This Agreement, and the exhibits contain the entire understanding of the Parties regarding the subject matter hereof, and supersede all prior agreements, understandings or letters of intent between the Parties regarding such subject matter, including the Previous Agreement and that certain Memorandum of Understanding dated as of April 28, 2006 between the Parties.

 

	
18.3

	
Certain Construction Rules. In this Agreement, the words "including," "include" and "includes" shall each be deemed to be followed by the term "without limitation." Any agreement, schedule, attachment or exhibit referred to herein shall mean such agreement, schedule, attachment or exhibit as amended, restated, supplemented or modified from time to time to the extent permitted by the applicable provisions of this Agreement. Reference to any statute, rule or regulation means such statute, rule or regulation as amended at the time and from time to time and includes any successor statute, rule or regulation. Unless otherwise stated, references to recitals, articles, sections, paragraphs, schedules and exhibits shall be references to recitals, articles, sections, paragraphs, schedules and exhibits of this Agreement.

 

	
18.4

	
Amendments. This Agreement may not be amended, modified or supplemented except by a written instrument signed by an authorized representative of each of the Parties.

 

	
18.5

	
Waiver. Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the Party or Parties entitled to the benefit of the terms or provision. Any waiver shall be deemed validly and sufficiently authorized for the purposes of this Agreement if it is authorized in writing by an authorized representative of the Party. The failure of a Party to enforce at any time any provision of this Agreement shall not be construed to be a waiver of the provision, nor in any way to affect the validity of this Agreement or any part of this Agreement or the right of any Party thereafter to enforce each and every provision of this Agreement. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.

 

  

26

  

 

	
18.6

	
Assignment. Either Party may assign or transfer this Agreement in full or in part to any Affiliate of such Party upon notice to the other Party. Either Party may assign or transfer this Agreement by operation or law or otherwise: (a) in connection with any merger or consolidation of such Party with another corporation, provided that such Party furnishes the other Party with notice of such transfer and assumption of all obligations contained herein within ten business days after such merger or consolidation; or (b) in connection with the sale of substantially all of the Party's assets to which this Agreement relates (including the rights of a Party under this Agreement), provided, that (i) the assignee thereof shall assume all of such Party's obligations hereunder, and (ii) the Party furnishes the other Party with notice of such assignment and assumption within ten business days after the same. Except as set forth above, neither Party may assign or transfer this Agreement without the prior written consent of the other Party. In the event of any such assignment or transfer without the other Party's consent, such assignment or transfer shall be deemed to be a material breach of this Agreement. In such event, such other Party may terminate this Agreement upon notice to the other Party, and the non-breaching Party shall have no further obligations to make any payments pursuant to this Agreement. Subject to the foregoing, all provisions contained in this Agreement shall extend to and be binding upon the Parties hereto and their respective permitted successors and permitted assigns.

 

	
18.7

	
Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to such State's principles regarding conflicts of law.

 

	
18.8

	
Dispute Resolution.

 

	
  

	
(a)

	
Subject to Section 18.8(b), any and all Disputes shall be resolved as set forth in Exhibit 18.8.

 

	
  

	
(b)

	
Notwithstanding anything to the contrary set forth herein, neither Party shall be required to submit any Dispute to the dispute resolution procedures set forth in Exhibit 18.8 regarding the interpretation of any provision of this Agreement, the performance by either Party of such Party's obligations under this Agreement or a default hereunder, if such submission would solely be seeking equitable relief from irreparable harm. In connection therewith, the Parties waive all rights to trial by a jury.

 

	
18.9

	
Severability. If any provision of this Agreement or the application of any such provision to any Person or circumstance shall be declared to be invalid, unenforceable or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement, it being the intent and agreement of the Parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to render it valid, legal and enforceable while preserving its intent or, if such modification is not possible, by substituting therefore another provision that is valid, legal and enforceable so as to materially effectuate the Parties' intent.

 

  

27

  

 

	
18.10

	
Independent Contractors. Each Party shall be deemed for all purposes to be an independent contractor and not an agent, partner, joint venturer, or franchisee/franchiser of the other Party. Neither Party may act for or represent the other Party in any way that is not provided for in this Agreement.

 

	
18.11

	
Records Retention. Each Party shall create and maintain accurate books and records in order to allow an independent auditor to determine whether the Party is in compliance with the terms of this Agreement. Each Party shall maintain such books and records for at least five (5) years following the period to which such records apply.

 

	
18.12

	
Headings. The headings in this Agreement are for convenience and shall not affect the interpretation of this Agreement.

 

	
18.13

	
Counterparts. The Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

  

28

  

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.

 

	
TACONIC FARMS, INC.

 

By:           /s/ Kevin Leak                                                      

Name:     Kevin Leak

Title:       Senior Vice President, Client Relations

	
TRANSNETYX, INC.

 

By:             /s/ Robert J. Bean                                                     

Name:        Robert J. Bean

Title:          President & CEO

 

  

29

  

 

SCHEDULE 1.17

 

Transnetyx Intellectual Property

 

	
Issued Patent No.

	 	
Title

	
US 7,011,943

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
US 6,977,178

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
US 7,282,361

	 	
Systems and methods for transgenic and targeted mutagenesis screening

	
ZL 01803503.5

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
DE 1322784

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
EP 1322784

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
FR 1322784

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
GB 1322784

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
TW 096100720

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

 

	
Published

Application No.

	 	
Title

	
EP 08009183.8

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
JP 2002-525847

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
TW 90125101

	 	
System, method and apparatus for transgenic and targeted mutagenesis screening

	
US 10/233,804

	 	
Detection of genetic sequences using a bipartite probe

	
US 11/154,860

	 	
Device for loading a multi-well plate

	
US 11/130,921

	 	
Systems and methods for ordering, performing and reporting genetic screening

	
US 11/193,254

	 	
System and method for computer network ordering of biological testing

	
CA 2,613,544

	 	
Methods for genotype screening

	
EP 06774001.9

	 	
Methods for genotype screening

	
US 11/166,990

	 	
Methods for genotype screening

	
US 11/739,931

	 	
Methods for genotype screening

	
US 11/739,906

	 	
Methods for genotype screening

	
US 11/739,872

	 	
Methods for genotype screening

	
CA 2,613,089

	 	
Methods for forensic and congenic screening

	
EP 06785425.7

	 	
Methods for forensic and congenic screening

	
US 11/170,477

	 	
Methods for forensic and congenic screening

	
US 11/170,693

	 	
Methods for genotype screening of a strain disposed on an adsorbent carrier

	
US 11/173,791

	 	
Methods for genotype screening using magnetic particles

	
US 12/419,978

	 	
Method and apparatus for forensic screening

	
WO US09/39812

	 	
Method and apparatus for forensic screening

  

a

  

 

SCHEDULE 2.1(a)

 

Taconic Additional Accounts

 

Accepted on (date)                                                                

 

	
TACONIC FARMS, INC.

 

By:                                                                

	
TRANSNETYX, INC.

 

By:                                                                                                                               

 

 

  

b

  

 

SCHEDULE 2.1(b)

 

Removed Accounts

 

Accepted on (date)                                                                

 

	
TACONIC FARMS, INC.

 

By:                                                                

	
TRANSNETYX, INC.

 

By:                                                                                                                               

 

 

  

c

  

 

SCHEDULE 2.2

 

Transferred Volume

 

	
Ace Animals, Inc.

	
6047

6608

IL21

JNJ024

JNJ024 (2)

JNJ053

SPC-TNF

	  	  
	
Boehringer-Ingelheim

	
ApoE x CRP KO

ApoE x HDC

ApoE x JNK2

BI 16 IKKa

BI 16 IKKa/CreER

BI IKKa/MLC2a-Cre

CAM 2 K

CARK

CatS

CD 97

CD19 CRE

CreER

CRP KO

EBI 3

EGLN 3

ENOS Floxed

FLPE TG

GPR 43

GPR2

GR-AF2

GRDim4

HDC

HDC x ApoE

HPH

IKKa

I KKb

IL2 cre

ITK Floxed

JNK-2

MAP 2 K5 Floxed

MeK5 Cre-ER

MGC32399

MK2

MLC2 Cre

N(9)SEH

NLSCRE TG

P2X

P38 Beta

P38 Delta Floxed

P38 Gamma

 

  

d

  

 

 

	 	
P70 MP

PDI 2

PDI 4

PIM 2

PIM2 FLX

Protamine Cre

Rab 37

REL EMB KO

rGRB38

rGRB46

rGRB65 TG

	  	  
	
Bristol-Myers Squibb

	
GC071

GC087

GC106

GC111

GC067

GCO71

GCOO5

Tg2576

	  	  
	
Elixir Pharm.

	
GHSR WT

	  	  
	
Gene Logic

	
AP1

c-Fos

GLC/Malstr/rAP1-Luciferase

NFAT (Cinc)

NFAT(Cinc)

P2753 NFAT

	  	  
	
Jackson Laboratory

	
374063

JR3923

	  	  
	
Johnson & Johnson

	
5HT7

B6:12955-R1u3

B6:129S5-MGL(Lex)

CR23 KO

FAAH KO

H3R

H4R

hCatS KI

MGL

p38B6

	  	  
	
Johnson & Johnson Pharma Res & Dev, LLC

	
B6:12955-R1u3

CR23 KO

H3R

H4R

hCatS KI

MGL

 

  

e

  

 

	
NIBRI

 

	
C x3CR1

Cx3CR1 x ApoE

	  	  
	
Pfizer

	
5HTR2c

ABEB

ACT2

ADAM

APPD

APPsw

BTG

CAMK

CCR2K

CCR5K

CRE luc

CreER

CTT

DISCI

DYE

DYFL

DYKO

DYRK

ECRE

EEP

EER

ENGT

ENO2

ENOK

EPO

FLP

G158

GABAB

GACAM

GAFL

GFAT

GFATE

GPR158

H2DB

H4R

HNK3

HRD1

HSD

HTR2c

LDPP

LDPR

LUC

MADC

MLCA

MLCRE

MLK3

NEST

NK3

NK3D

P2X7

P4CRE

P4FLP

 

  

f

  

 

	  	
PACE4

PC1

PDE2

PDE9

PDE9D

PDFL

PDNC

PKCE

PKCz

POLD

PPARG

PS1

PS1TX

PS1XA

RAGE

SNSR

SRA

SRAD

TCRE

TLACZ

TPB

TPC

TTR

UBF

UBFXA

  
	
Psychogenics

	
SMA 5025

SMA 5025 – Complete

SMAN 5025

	  	  
	
StemCells Inc.

	
tetOPLAU

TgPLAU

	  	  
	
The Jackson Laboratory

	
2020

2726

2810

901817

002052+/-002684

Apoe x Nos3

Apoe x Nos3 (ear punch)

Apoe xNos3

B6.Cg-Tg(cre/Esr1)5Amc/J

B6.Cg-

Tg(TIE2GFP)287Sato/1J

B6CBA-

Tg(HDexon1)62Gpb.1J

B6SJL-Tg(SOD1-

G93A)1Gur.J

C57BL.6J-ApcMin.J

JR 3232

	  	  
	
Wyeth

	
AHP21-MK3

BGH PoIyA

BGH PoIyA x Gene Switch

Cre

Cre x EGFP

 

  

g

  

 

	  	
CX-TREM1

EGFP

EK-GITRL

Gene Switch

Gene Switch x IL 22

hHSD1

hHSD1 L18

hHSD1 L19

hHSD1 L3

hMMP12 K1

hMMP12 KI

Human Androgen Receptor

IL 22

IL17a KO

IL22-L330

IL22xGSW

LCK-Cre2

op

p19 KO

p19K0

pCX-TREM1Fc

PKC zeta KO

Protamine Cre

RHSD

Smurf1 CKO

Smurf1 KO

Tp12

Y

  
	
Wyeth Research

	
A53T

AHP21-MK3

AHP36-RAGE

AHP37 GPR88

App(swe) Tg 2576

App(swe)Tg 2576 - RD1

App(swe)Tg2576 - RD1

BGH PolyA

BGH PoIyA x Gene Switch

Cre

Cre ALB

Cre x EGFP

EGFP

EK-GITRL

Gene Switch

Gene Switch x IL 22

GSW

hHSD1

hHSD1 L18

hHSD1 L19

hHSD1 L3

hMMP12 KI

Human Androgen Receptor

IL 22

IL17a KO

IL22

IL22-L330

 

  

h

  

 

	 	IL22xGSW 

op

p19 KO

p19K0

P19KO-D

pCX-TREM1Fc

PKC zeta KO

Protamine Cre

PSAPP

RD-1

RHSD

Smurf1 KO

Tg2576

THBS4

  

i

  

 

Confidential treatment has been requested.

Redacted material has been separately filed with the Commission

 

SCHEDULE 3.1

 

Transnetyx Prices Charged to Taconic

 

	
3P & Internal Volume - 72 hour Orders ($)

	 
	
 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

Taconic Volume Per 

Week*

	 	
1

allele

	 	
2

allele

	 	
3

allele

	 	
4

allele

	 	
5

allele

	 	
6

allele

	 	
7

allele

	 	
8

allele

	 	
9

allele

	 	
10

allele

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
0 - 499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
500 - 999

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
1,000 - 1,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
1,500 - 2,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
2,500 - 4,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
4,500 - 6,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
6,500 - 8,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
8,500 - 10,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
10,500 - 12,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
12,500 +

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]

 

* The prices in Schedule 3.1 will apply to all Samples of 3P and Internal Volume submitted to Transnetyx during a quarter based on the average weekly volume of Samples of 3P and Internal Volume, respectively, submitted during the last eight (8) weeks of the prior quarter.

 

  

j

  

 

Confidential treatment has been requested.

Redacted material has been separately filed with the Commission

 

SCHEDULE 3.1 (cont)

 

	
3P & Internal Volume - 24 hour Orders ($)

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

Taconic Volume Per 

Week*

	 	
1

allele

	 	
2

allele

	 	 	
3

allele

	 	 	
4

allele

	 	 	
5

allele

	 	 	
6

allele

	 	 	
7

allele

	 	 	
8

allele

	 	 	
9

allele

	 	 	
10

allele

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

0 - 499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	

500 - 999

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	

1,000 - 1,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	

1,500 - 2,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	

2,500 - 4,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	

4,500 - 6,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	

6,500 - 8,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	

8,500 - 10,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	

10,500 - 12,499

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]
	
12,500 +

	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]	 	 	[	***]

 

* The prices in Schedule 3.1 will apply to all Samples of 3P and Internal Volume submitted to Transnetyx during a quarter based on the average weekly volume of Samples of 3P and Internal Volume, respectively, submitted during the last eight (8) weeks of the prior quarter.

 

  

k

  

SCHEDULE 10.1

 

Change of Control Royalty Rates

 

For each Sample processed by Taconic subsequent to Taconic exercising its option due to a Competitor Sale subject to Section 10.1, a royalty shall be paid by Taconic to Transnetyx calculated as:

 

	
  

	
(a)

	
The actual average price per Sample paid by Taconic to Transnetyx for the six months preceding the Change in Control; less

 

	
  

	
(b)

	
Transnetyx's average fully-burdened cost per assay for the completion of the Services included in the Taconic Volume for the six months preceding the Change in Control (based Transnetyx's audited financial information); times

 

	
  

	
(c)

	
Seventy-five percent (75%).

 

  

l

  

 

SCHEDULE 18.8

 

Dispute Resolution

 

1.            Escalation. The Parties shall attempt to settle any Dispute through good faith negotiations in the spirit of mutual cooperation between business executives with authority to resolve the Dispute. Prior to taking action as provided in Section 2 of this Exhibit 18.8, the Parties shall first submit such Dispute to the Steering Committee. The Steering Committee shall attempt to resolve the Dispute through good faith negotiations over a reasonable period, not to exceed 15 business days in the aggregate unless otherwise agreed. Such 15 business day period shall be deemed to commence on the date of a notice from either Party describing the particular Dispute. If the Steering Committee is unable to resolve the Dispute in the allotted time, the Dispute shall be submitted to the Chief Executive Officer of each Party. The Chief Executive Officers to whom any Dispute is submitted shall attempt to resolve the Dispute through good faith negotiations over a reasonable period, not to exceed 15 business days in the aggregate unless otherwise agreed. Such 15 business day period shall be deemed to commence on the date the Dispute was submitted to the Chief Executive Officers. All negotiations pursuant to this Section 1 of this Exhibit 18.8 shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

 

2.            Arbitration. Any Dispute that is not resolved by negotiations pursuant to Section 1 of this Exhibit 18.8 shall, upon the written request of either Party, be resolved by binding arbitration before a single Arbitrator (the "Arbitrator"), conducted in accordance with the Rules of the American Arbitration Association, except to the extent that such rules are inconsistent with this Exhibit 18.8. The Arbitrator shall be selected by the Steering Committee. If the Steering Committee cannot agree on the identity of the Arbitrator within 15 days after the written request to resolve such Dispute by binding arbitration was received by the other Party, each Party shall promptly select a representative who shall jointly, with the other Party's representative, agree on the identity of the Arbitrator. If the representatives cannot thereafter agree on the identity of the Arbitrator within fifteen (15) days, the Arbitrator shall be selected in accordance with the rules of the American Arbitration Association. The Arbitrator shall determine the Dispute in accordance with this Agreement and the substantive rules of law (but not the rules of procedure) that would be applied by a federal court sitting at the site of the arbitration. The arbitration shall take place in Wilmington, Delaware. Except as set forth in the Agreement, the Arbitrator is not empowered to award damages in excess of compensatory damages. The Arbitrator has no power or authority to relieve the Parties from their agreement hereunder to arbitrate or otherwise to amend or disregard any provision of this Agreement, including the provisions of this Section 2 of this Exhibit 18.8. The award of the Arbitrator shall be the sole and exclusive remedy of the Parties and shall be enforceable in any court of competent jurisdiction, subject only to revocation on grounds of fraud or clear bias on the part of the Arbitrator. The statute of limitations of the State of Delaware applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defenses shall be available based upon the passage of time during any negotiation or mediation called for pursuant to Section 1 of this Exhibit 18.8.

 

m

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