Exhibit 10.21
XxxXxxxx.xxx, Inc.
0000 XxXxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
October 19, 1999
STRICTLY CONFIDENTIAL
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Monsanto Company
000 X. Xxxxxxxxx
Xx. Xxxxx, XX 00000
Attn. Xxxxxx Xxxxxxxxxxx
Re: Strategic Relationship between XxxXxxxx.xxx, Inc. ("SciQuest") and
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Monsanto ("Monsanto")
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Dear :
This Letter Agreement, together with the attached Term Sheet, set forth the
general terms and conditions of the proposed business transaction between
SciQuest and Monsanto. The proposed business transaction will involve
Monsantoagreeing to utilize SciQuest as its exclusive third party direct
laboratory products electronic aggregator for North America and to grant
SciQuest a right of first offer to act as its exclusive third party direct
laboratory products electronic aggregator for territories outside of North
America ("Third Party Aggregator"). This Agreement constitutes a binding
agreement to consummate the transactions described herein, except as expressly
provided in the Term Sheet. The summary of important terms and conditions of
the proposed transaction and the intentions of the parties are set forth herein
and in the attached Term Sheet, the terms of which are incorporated herein by
reference.
1. Definitive Agreements. The terms, conditions and intentions set forth
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herein and in the Term Sheet are to be supplemented by mutually acceptable,
additional agreements to be negotiated and executed by SciQuest and
Monsanto("Additional Agreements"). Such Additional Agreements shall contain
such warranties, representations, covenants, agreements that are typically found
in transactions of the type contemplated herein in addition to such other
provisions agreed to by the parties at that time. SciQuest and Monsantowill
cooperate with each other to the fullest extent in connection with the prompt
negotiation and execution of Additional Agreements and other necessary
documentation.
2. Confidentiality and Trade Secrets. In the performance of this Letter
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Agreement, each party may disclose to the other certain Proprietary Information.
For the purposes of this Letter Agreement, (i) "Proprietary Information" means
Trade Secrets and any other information that is of value to its owner and
is treated as confidential and includes proprietary information received from
Monsanto's Purchasing Department; (ii) "Trade Secrets" means business or
technical information, including, but not limited to, a formula, pattern,
program, device, compilation of information, method, technique, or process that:
(y) derives independent actual or potential commercial value from not being
generally known or readily ascertainable through independent development or
reverse engineering by persons who can obtain economic value from its disclosure
or use; and (z) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy; (iii) "Owner" refers to the party
disclosing Proprietary Information hereunder, whether such party is SciQuest or
Monsantoand whether such disclosure is directly from Owner or through Owner's
employees or agents; and (iv) "Recipient" refers to the party receiving any
Proprietary Information hereunder. Standard exceptions to the confidentiality
obligations shall apply and be more fully described in the definitive
agreements.
Recipient acknowledges and agrees that the Proprietary Information shall
remain the sole and exclusive property of Owner or a third party providing such
information to Owner. The disclosure of the Proprietary Information to
Recipient does not confer upon Recipient any license, interest, or rights of any
kind in or to the Proprietary Information, except as provided under this Letter
Agreement. Recipient shall require any Recipient of Proprietary Information to
abide by the restrictions of this Agreement concerning the Proprietary
Information before disclosing such Proprietary Information to the Recipient.
Subject to the terms set forth herein, Recipient shall protect the Proprietary
Information of Owner with the same degree of protection and care Recipient uses
to protect its own Proprietary Information, but in no event less than reasonable
care. With regard to Confidential Information and the Trade Secrets, the
obligations in this Section shall continue for a period of three (3) years after
disclosure.
3. Termination. Either party may terminate this Letter Agreement on or
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after December 1, 1999 in the event the parties have not completed the mutually
satisfactory definitive agreements or upon a material breach of this Letter
Agreement by the other party, which breach shall continue for at least thirty
days following delivery of written notice of such breach. The provisions of
paragraph 2 shall survive the termination of this Letter Agreement.
4. Closing. The transactions contemplated herein shall occur on a date to
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be set pursuant to the terms of the Additional Agreements, in the offices of
SciQuest, but, in any event, no later than 10:00 a.m. on [++++++++] (the
"Closing").
5. Most Favored Nations Pricing. SciQuest represents that the prices and
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payment terms offered by SciQuest under its system are the optimum offered by
SciQuest to any customer with comparable business terms, a comparable purchase
pattern and comparable annual dollar volume. In the event any other customer is
given better prices and/or terms by SciQuest, SciQuest shall automatically
extend the same prices and/or terms to Monsantoretroactive to the date on which
such terms were first offered.
6. Expenses. Each party will bear and pay its own costs and expense
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incurred with respect to the transactions contemplated herein.
7. Publicity. Neither SciQuest nor Monsantoshall issue a publicity
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release or public announcement or otherwise make any disclosure (other than
disclosure by SciQuest relating to the registration statement on Form S-1 filed
by it in connection with its initial public offering) concerning this Letter
Agreement or the transactions contemplated hereby, without prior review and
written consent by the other party hereto.
8. Entire Understanding. This Letter Agreement and the attached Term
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Sheet embody the entire understanding of the parties hereto with respect to the
transactions contemplated herein and supersede all prior or contemporaneous
written or oral understandings or arrangements and commitments with respect
thereto. This Letter Agreement and the attached Term Sheet may be amended,
modified, superseded or canceled only by a written instrument which specifically
states that it amends this such document, executed by an authorized officer of
each entity to be bound thereby.
9. Governing Law. This Letter Agreement shall be governed by and
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construed in accordance with the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.
If this Letter Agreement is acceptable to you, please do so signify by
signing this copy of the Letter Agreement and returning it to the undersigned no
later than October__, 1999.
Respectfully,
XXXXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxx
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Mr. M. Xxxxx Xxxxxxx
President and Chief Executive Officer
ACCEPTED AND AGREED TO BY:
MONSANTO
By: /s/ Xxxxx X. Xxxxxx
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Name: XXXXX X. XXXXXX
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Title: ASSISTANT GENERAL COUNSEL
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Date: 10/21/99
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TERM SHEET
XxxXxxxx.xxx, Inc.
and
Monsanto
October 12, 1999
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Parties: XxxXxxxx.xxx, Inc. - "SciQuest"
Monsanto Company- "Monsanto"
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Relationship: Monsanto shall use its best efforts to use SciQuest as its preferred third party
direct laboratory products electronic aggregator for North America. In addition,
Monsanto shall not enter into any agreement with a third party to serve as a third
party direct laboratory products electronic aggregator in any territory outside of
North America unless Monsanto shall have first notified SciQuest of such opportunity
and shall have negotiated in good faith for SciQuest to act as its third party direct
laboratory products electronic aggregator in such territory. Monsanto's shall make best
faith efforts to use SciQuest as its exclusive third party electronic channel for
marketing and selling its used, refurbished and surplus scientific equipment through an
electronic distribution system.
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Term: 3 years.
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Minimum Volume: Monsanto shall use reasonable efforts to purchase a minimum of $5 million in Qualified
Scientific Products through the SciQuest system in each calendar year during the term
of the relationship. Failure to reach this above stated minimum volume in any year
shall not be considered a breach of agreement. The minimum volume shall include any
purchases by "Monsanto Subsidiaries". Monsanto Subsidiaries shall be defined as any
foreign or domestic subsidiary, including any incorporated or unincorporated company,
joint venture or partnership, which is at least fifty percent (50%) owned, directly or
indirectly by Monsanto, or if not fifty percent (50%) owned, then the maximum percent
ownership permitted by law in the relevant country, and shall include any company or
enterprise which, irrespective of ownership, is operated by Monsanto or a "Monsanto
Subsidiary". Only subsidiaries having the express authorization of Monsanto shall be
included.
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Initial Warrants: In partial consideration for Monsanto's entering into the relationship, directing its
suppliers to participate in the SciQuest system, participating in reasonable case
studies and promoting as agreed to between the parties from time to time the SciQuest
solution, SciQuest shall issue to Monsanto, upon the execution of Definitive
Agreements, a warrant to acquire 10,000 shares of SciQuest common stock at an exercise
price of $0.001 per share. One-third of the Initial Warrant shall be exercisable upon
each anniversary of the date the Initial Warrant is granted.
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Monsanto's Suppliers: Monsanto shall use its best efforts to direct all of its suppliers of scientific
products and supplies to use SciQuest as the Third Party Aggregator for Monsanto
purchases. Monsanto agrees to the use of customary and reasonable letters, meetings
and other communications designed to lead to the acceptance by such suppliers of
SciQuest as Monsanto's electronic purchasing intermediary.
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Participation in Case Monsanto will, if it deems appropriate, participate in reasonable case studies to be
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Study: conducted by SciQuest regarding electronic distribution of scientific products and
supplies and the SciQuest system. Monsanto acknowledges that by so agreeing it may
incur certain reasonable expenses and that the results of such case studies may be used
by SciQuest in its marketing efforts, if approved by Monsanto. Monsanto specifically
agrees to allow SciQuest to use the fact that Monsanto is a customer of SciQuest in
all reasonable business uses, if approved by Monsanto, and if specifically agreed to in
writing, may consider allowing SciQuest to use its name in publications, etc.
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Promotion of SciQuest As agreed by the parties on a case by case basis, Monsanto shall promote the SciQuest
Solution: solution in the scientific products industry, to scientific product suppliers and to
other buyers of scientific products and supplies.
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Incentive Warrants: To encourage maximum utilization of the SciQuest system by Monsanto, SciQuest shall
issue to Monsanto, on February 15th 2001, 2002 and 2003, additional warrants to acquire
that number of shares of SciQuest common stock determined below, at the price to the
public in the initial public offering of SciQuest's common stock (the "Incentive
Warrants"). The number of shares of common stock eligible to be purchased pursuant to
the Incentive Warrants for each calendar year shall be determined as follows:
. For 2000 (which shall consist of the period from the date of this Term Sheet until
December 31, 2000), the number of shares shall be equal to the quotient of (i) the
annual volume of Qualified Scientific Products sold to Monsanto through the SciQuest
system divided by (ii) [++++++++].
. For 2001, the number of shares shall be equal to the quotient of (i) the annual
volume of Qualified Scientific Products sold to Monsanto through the SciQuest system
less year 2000 volume) divided by (ii) [++++++++].
. For 2002, the number of shares shall be equal to the quotient of (i) the annual
volume of Qualified Scientific Products sold to Monsanto through the SciQuest system
less year 2001 volume) divided by (ii) [++++++++].
Incentive Warrants shall be exercisable upon issuance. [++++++++++++++++++++]
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Termination of Warrants: The Initial warrants and the Incentive warrants shall terminate, to the extent not
already exercised, upon the termination of the Definitive Agreements and, in any event,
five years after issuance.
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Adjustment of Shares: All references to share information, including number of shares and price per share,
shall be deemed automatically adjusted to reflect any stock dividend, stock split,
reverse stock dividend or reverse stock split or any recapitalization of SciQuest.
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Qualified Scientific Qualified Scientific Products are scientific products or supplies sold through the
Products SciQuest system on standard terms; provided, however, that Qualified Scientific
Products shall not include orders of scientific products or supplies that are sold
pursuant to terms negotiated by Monsanto with the supplier and that yield SciQuest a
nominal commission or discount.
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