LINE LICENSE AGREEMENT Between Ceres, Inc. and The Texas A&M University System
Exhibit 10.15
Pages where confidential treatment has been requested are stamped ‘Confidential Treatment Requested and the
Redacted Material has been separately filed with the Commission,’ and the confidential section has been
marked as follows: [***].
Between
and
The Texas A&M University System
This agreement (“Agreement”) is made and entered into by and between Ceres, Inc., a
corporation with principal offices in Thousand Oaks, California, (“LICENSEE”) and The Texas A&M
University System with principal offices in College Station, Texas, (“SYSTEM”), an agency of the
State of Texas, collectively referred to as “Parties” and individually as “Party.”
WHEREAS, SYSTEM, through The Texas Agricultural Experiment Station (a member of SYSTEM, and
now known as Texas AgriLife Research) (“AGRILIFE”), and LICENSEE have entered into a Sponsored
Research Agreement dated August 29, 2007 (the “SRA”) as well as an associated Intellectual Property
Rights Agreement dated August 29, 2007 (“IPRA”);
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1.01 | “LINE” shall mean the sorghum line designated as R07007, which was created by SYSTEM prior to the conduct of the SRA, and in which SYSTEM has ownership rights, and new genetic lines or populations developed by LICENSEE through further selection within the LINE, as distinguished from crossing followed by selection. | |
1.02 | “INTELLECTUAL PROPERTY RIGHTS” shall mean all rights in any patent, plant variety protection certification, plant breeders’ rights, or any applications thereof, or any other intellectual property protection, covering the LINE, HYBRIDS or NEW PARENTAL LINES, that may be filed or exist in any jurisdiction in the world, with the exception of trademarks and service marks. A list of such INTELLECTUAL PROPERTY RIGHTS will be more specifically included in ANNEX I, which may be amended from time to time as provided in Article 6.05 and evidenced in writing. | |
1.03 | “NEW PARENTAL LINES” shall mean new genetic lines or populations which are developed by breeding by LICENSEE and which has the LINE as a progenitor. | |
1.04 | “HYBRID” shall mean a seed or plant that has resulted from genetic crossbreeding between two or more lines where those lines include (i) the LINE or (ii) one or more NEW PARENTAL LINES. | |
1.05 | “EXISTING HYBRIDS” shall mean those HYBRIDS designated as ES 5200 and ES 5201, developed and owned by LICENSEE prior to the EFFECTIVE DATE, as contemplated under Article 8.D.(2) of the SRA. | |
1.06 | “COMMERCIAL SEED” shall mean seed of HYBRIDS that is sold for purposes other than the production of propagating material. | |
1.07 | “TRAIT FEE” shall mean any upfront or annual fee collected by LICENSEE or any AFFILIATED COMPANY in conjunction with NET SALES as an additional remuneration for the sale of COMMERCIAL SEED that has a particular valuable trait or characteristic. | |
1.08 | “AGRILIFE GENETIC CONTRIBUTION” shall mean, for any specific HYBRID or NEW PARENTAL LINE: (a) the proportion of the nuclear genes of the HYBRID or the NEW PARENTAL LINE, as applicable, arisen from the LINE, based on DNA Marker Analysis as defined in the SRA; (b) a contribution to be determined on a case-by-case basis in each case where a specific valuable phenotype of that HYBRID or the NEW PARENTAL LINE, as applicable, is attributable to specific ALLELE(s) optioned or licensed to LICENSEE by SYSTEM; and (c) OTHER CONTRIBUTIONS from AGRILIFE. | |
1.09 | “OTHER CONTRIBUTIONS” shall mean (i) intellectual and technical contributions to the development of the LINE or if from LICENSEE, to the development of the LINE, NEW PARENTAL LINES or HYBRIDS such as, without limitation, markers, gene-trait association knowledge or composition knowledge, that inform the breeding and selection |
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process, or transgenic traits and (ii) financial contributions to the development of the LINE, or if from LICENSEE, to the development of the LINE, NEW PARENTAL LINES or HYBRIDS. |
1.10 | “EFFECTIVE DATE” shall mean the date this Agreement has been executed by the last Party. | |
1.11 | “NET SALES” shall mean LICENSEE’s and AFFILIATED COMPANIES’ receipts for sales of COMMERCIAL SEED or for SERVICES requiring the use of the LINE, to a bona fide, arms length customer, less the sum of the following: |
(a) | sales taxes, tariffs, duties and/or use taxes directly imposed with reference to particular sales; | ||
(b) | outbound transportation prepaid or allowed, shipping, packaging, cost of insurance in transit paid by LICENSEE or an AFFILIATED COMPANY; | ||
(c) | amounts allowed or credited on returns; | ||
(d) | customary trade, quality or cash discounts; | ||
(e) | cost of any coating materials or treatments that may have been applied to the COMMERCIAL SEED; and | ||
(f) | other deductions which are appropriate to sales of the LICENSED PRODUCTS may be included by mutual agreement of the Parties, to be specified in Annex II to this Agreement. |
No deductions shall be made for commissions paid to individuals whether independent sales agencies or regularly employed by LICENSEE. The value of sample size quantities of seed provided for demonstration, marketing or research purposes shall not be included in NET SALES. Where there is no identifiable sale price (except for samples as referred to in the previous sentence), or when COMMERCIAL SEED is sold to other than a bona fide, arms length customer of LICENSEE or an AFFILIATED COMPANY, LICENSEE or the AFFILIATED COMPANY shall be deemed to have received an amount of NET SALES calculated based on the final sale of the COMMERCIAL SEED to an independent third party. If no such current price is available, a hypothetical fair market value price will be determined by the Parties jointly in good faith for the purpose of calculating NET SALES. Further, TRAIT FEES, if any, net of any applicable deductions, shall be added to NET SALES if related to a trait contributed by SYSTEM. NET SALES shall not include sales of COMMERCIAL SEED by LICENSEE to any AFFILIATED COMPANY, by any AFFILIATED COMPANY to LICENSEE, or by any AFFILIATED COMPANY to any other AFFILIATED COMPANY, except if the entity to which the COMMERCIAL SEED is sold is the end user of such COMMERCIAL SEED. | ||
1.12 | “LICENSE INCOME” shall mean the amount actually received by either LICENSEE or any AFFILIATED COMPANY in consideration for the grant of sublicenses to sublicensees that are not AFFILIATED COMPANIES to the LINE or any HYBRID or NEW PARENTAL LINE to exploit the same and to produce and sell COMMERCIAL SEED, including up-front fees, lump sum payments and any running royalties on a product-by-product and jurisdiction-by-jurisdiction basis. |
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1.13 | “AFFILIATED COMPANY” shall mean any company owned or controlled by, under common control with or controlling LICENSEE, “control” meaning in this context the direct or indirect ownership of more than fifty percent (50%) of the voting stock/shares of a company, or the power to nominate at least half of the directors. | |
1.14 | “SERVICE” shall mean any transaction with a third party in which LICENSEE or an AFFILIATED COMPANY performs certain activities on behalf and at the request of a third party that would if not performed by LICENSEE or an AFFILIATED COMPANY require a license under SYSTEM’S INTELLECTUAL PROPERTY RIGHTS licensed hereunder, in exchange for payment, but excluding any research collaboration or sponsored research agreement. | |
1.15 | “ALLELE” shall mean a particular form of one or more genes determinant for a valuable characteristic of a plant (e.g. drought tolerance, specific flowering time), discovered in the Program under the SRA by SYSTEM or by SYSTEM and LICENSEE jointly, such as Ma5/Ma6 conferring photoperiod sensitivity; provided that the particular form of such gene or genes is covered by a VALID CLAIM. | |
1.16 | “BUSINESS YEAR” shall mean the twelve (12)-month period beginning September 1 and ending August 31 of the following calendar year (e.g. the 2010 BUSINESS YEAR runs from September 1, 2009 through August 31, 2010.). LICENSEE may request from time to time to amend the starting and ending dates defined as the BUSINESS YEAR as may be reasonable for the conduct of LICENSEE’s business. Such amendment must be mutually agreed to in writing by the Parties. | |
1.17 | “VALID CLAIM” shall mean a claim of a patent application or patent owned or co-owned by SYSTEM, which claim has been maintained and has not expired and which has not been declared invalid or unenforceable by a competent court or authority in a final judgment against which no appeal to a court or authority having mandatory jurisdiction is possible or the term for any such appeal has expired without the appeal being filed. |
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and in any patent which may result from any of the foregoing, only to the extent necessary to practice the grant provided in Article 2.01. |
a) | Base Rate. Where the COMMERCIAL SEED is of a HYBRID which is entirely composed of AGRILIFE GENETIC CONTRIBUTION, and no OTHER CONTRIBUTIONS from LICENSEE, the royalty rate shall be [***] percent ([***]%) of NET SALES if the HYBRID results solely from the LINE and another line licensed under the same terms and conditions regarding royalty payments from SYSTEM; | ||
b) | If a HYBRID is not entirely composed of AGRILIFE GENETIC CONTRIBUTION, the royalty rate shall be calculated by taking the base rate specified in Article 3.02(a), | ||
and reducing the applicable base rate in function of the dilution of the AGRILIFE GENETIC CONTRIBUTION in such HYBRID by: |
– | OTHER CONTRIBUTIONS from LICENSEE; and | ||
– | crossing of the LINE which is a progenitor of such HYBRID with other germplasm, including, but not limited to NEW PARENTAL LINES. |
On the basis of the foregoing calculation, the royalty rate on NET SALES for the EXISTING HYBRIDS is [***] percent ([***]%). |
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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission
c) | No royalties shall be due with respect to HYBRIDS that contain less than five percent (5%) AGRILIFE GENETIC CONTRIBUTION and contain no specific ALLELE(s). | ||
d) | Where a HYBRID contains less than five percent (5%) AGRILIFE GENETIC CONTRIBUTION and contains at least one specific ALLELE, the royalty rate payable under this Article 3.02 on NET SALES of COMMERCIAL SEED of such HYBRID shall be the same as if the AGRILIFE GENETIC CONTRIBUTION was five percent (5%). |
(a) | for the 2010 BUSINESS YEAR: $[***] and | ||
(b) | for the 2011 BUSINESS YEAR until the 2018 BUSINESS YEAR: $5,000 per BUSINESS YEAR. |
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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission
a) | Base Rate. Where the sublicense is for a HYBRID or a LINE which is entirely composed of AGRILIFE GENETIC CONTRIBUTION, and no OTHER CONTRIBUTIONS from LICENSEE, the royalty rate shall be [***] percent ([***]%) of LICENSE INCOME. | ||
b) | If the sublicense is for a HYBRID or LINE that is not entirely composed of AGRILIFE GENETIC CONTRIBUTION, or for a NEW PARENTAL LINE, the royalty rate shall be calculated by taking: |
(i) | the base rate specified in Article 4.02(a); | ||
(ii) | and reducing the applicable base rate in function of the dilution of the AGRILIFE GENETIC CONTRIBUTION in such HYBRID, LINE or NEW PARENTAL LINE by: |
– | OTHER CONTRIBUTIONS from LICENSEE, and | ||
– | in the case of HYBRIDS, the crossing of the LINE which is a progenitor of such HYBRID with other germplasm, including, but not limited to, NEW PARENTAL LINES. |
On the basis of the foregoing calculation, the royalty rate on LICENSE INCOME for the EXISTING HYBRIDS is [***] percent ([***]%). |
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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission
6.01 | Filing. LICENSEE will have the right to prepare and file, in consultation with SYSTEM, any and all applications for patents, plant variety rights or other forms of intellectual property protection or variety registration, in any jurisdiction throughout the world, for HYBRIDS, the LINE and NEW PARENTAL LINES, whether solely or jointly owned by SYSTEM. At the request of LICENSEE, SYSTEM will cooperate fully with LICENSEE by providing information and executing documents necessary for LICENSEE to conduct the activities concerning the filings, prosecution and other proceedings anticipated under this paragraph. Applications for patents or plant variety rights on each particular HYBRID or the LINE shall be filed in the name of SYSTEM (AGRILIFE) if owned by SYSTEM pursuant to the SRA, in the name of LICENSEE (CERES) if owned by LICENSEE pursuant to the SRA and in the joint names of SYSTEM (AGRILIFE) and LICENSEE (CERES) if jointly owned pursuant to the SRA. Applications for patents or plant variety rights on NEW PARENTAL LINES shall be filed in the name of LICENSEE (CERES). For the avoidance of doubt, LICENSEE acknowledges that applications filed under this Article 6.01 that are solely in the name of LICENSEE shall not affect LICENSEE’s obligations to SYSTEM, including but not limited to LICENSEE’s obligations under Article III with respect to the LINE, HYBRIDS, and NEW PARENTAL LINES claimed in such applications. |
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7.01 | When Payments are Due. Unless otherwise specified, payments shall be made annually. Payments shall be made to The Texas A&M University System, in College Station, Texas, not later than sixty (60) days after the last day of the BUSINESS YEAR in which they accrue. | |
7.02 | Royalty Reports. LICENSEE shall provide a sales report to SYSTEM each BUSINESS YEAR, providing information sufficient to allow SYSTEM to calculate amounts due to SYSTEM for the reporting period, in the form attached hereto as ANNEX II. |
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annual consideration obligations, interest charge obligations, and all other financial obligations, and claims or causes of action for breach of this Agreement, shall survive termination of this Agreement. Obligations of confidentiality shall survive termination of this Agreement. This section controls in the case of a conflict with any other section of this Agreement. |
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If to SYSTEM:
Vice Chancellor
Office of Technology Commercialization
0000 XXXX
Xxxxxxx Xxxxxxx, Xxxxx, XXX 00000-0000
Office of Technology Commercialization
0000 XXXX
Xxxxxxx Xxxxxxx, Xxxxx, XXX 00000-0000
If to LICENSEE for Legal Matters:
|
for Financial Matters: | |
VP of Commercial Development
|
VP of Commercial Development | |
cc: Legal Department
|
cc: Chief Financial Officer | |
Ceres, Inc. | ||
0000 Xxxxxx Xxxxxx Xxxx.
|
0000 Xxxxxx Xxxxxx Xxxx. | |
Xxxxxxxx Xxxx, XX 00000
|
Xxxxxxxx Xxxx, XX 00000 |
ARTICLE XI — MISCELLANEOUS PROVISIONS
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of the United States Government or written assurances by LICENSEE that LICENSEE shall not export data or commodities to certain countries without prior approval of such agency. SYSTEM neither represents that a license shall not be required nor that, if required, it shall be issued. |
A. The Parties shall make every possible attempt to resolve in an amicable manner all
disputes between the Parties concerning the interpretation of this Agreement.
B. The Parties must use the dispute resolution process provided in Chapter 2260, Texas
Government Code, and the related rules adopted by the Texas Attorney General to
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attempt to resolve any claim for breach of contract made by LICENSEE that cannot be
resolved in the ordinary course of business. LICENSEE must submit written notice of a
claim of breach of contract under this Chapter to X.X. Xxxxx, Associate Vice Chancellor,
who will examine LICENSEE’s claim and any counterclaim and negotiate with LICENSEE in an
effort to resolve the claim.
12.01 | As used in this Agreement, the term “Confidential Information” shall mean all non-public-information received by one Party from the other in the framework of this Agreement. Confidential Information may include, but is not limited to, information concerning the disclosing Party’s operations, research, processes, techniques, data, sales, marketing, promotion and other activities. Any reports provided by LICENSEE to SYSTEM pursuant to this Agreement are Confidential Information. | |
12.02 | From receipt to five (5) years after the disclosure of the relevant Confidential Information, the receiving Party shall not use, except as is expressly allowed by this Agreement, and/or disclose any Confidential Information to any third party without the prior written consent of the disclosing Party. Confidential Information shall only be made accessible to each Party’s employees and/or agents on a need-to-know basis. | |
12.03 | The receiving Party shall have no obligations of confidentiality for information that: can be established through written evidence to be in the possession of the receiving Party prior to the disclosure by the disclosing Party; is or becomes public knowledge through no fault of the receiving Party; is acquired from others not under an obligation of confidentiality to the disclosing Party; and/or was independently developed by the receiving Party as demonstrated by documented evidence prepared contemporaneously with such independent development. In addition, LICENSEE shall have the right to use and disclose SYSTEM Confidential Information (a) as required to file for |
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INTELLECTUAL PROPERTY RIGHTS, (b) as required to exercise its commercialization rights granted in or on the basis of this Agreement and for related marketing activities, (c) as required by laws, rules or regulations or court orders such as, without limitation, SEC or IRS regulations, or (d) in LICENSEE’S reasonable judgment, to (potential) investors and business partners. Further, SYSTEM shall have the right to use and disclose LICENSEE Confidential Information if any such information is ordered produced or disclosed by a court or administrative body of competent jurisdiction or otherwise required by law, or required to be disclosed by the Attorney General of The State of Texas, but only to the extent of such required production or disclosure. To the extent reasonably possible SYSTEM will give prior written notice of such required production or disclosure to LICENSEE and if so requested by LICENSEE, use reasonable efforts to obtain confidential treatment of the information disclosed to the maximum extent possible. |
The Parties have caused this Agreement to become effective as of the date last executed below.
CERES, INC. | THE TEXAS A&M UNIVERSITY SYSTEM | |||||
/s/ Xxxx Xxxx | /s/ Xxxxx Xxxxxxxxx, for Xxx Xxxxxxxx | |||||
By:
|
Xxxx Xxxx | Xxx X. Xxxxxxxx | ||||
Title:
|
Vice President of Commercial Development | Vice Chancellor for Federal Relations and Commercialization | ||||
Date:
|
10/9/09 | Date: 10/16/2009 | ||||
/s/ Xxxx Xxxx | ||||||
By:
|
Xxxx Xxxx | |||||
Title: | Vice President of Plant Breeding and Genomics | |||||
Date:
|
10/9/09 |
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INTELLECTUAL PROPERTY RIGHTS
o | Provisional patent application serial #61/082,388 “Utilization of Sorghum Genes (Ma5/Ma6)” |
[Any other relevant INTELLECTUAL PROPERTY RIGHTS to be added.]
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Royalty Report
Date of report: [X]
BUSINESS YEAR of report: [X]
BUSINESS YEAR of report: [X]
HYBRID: ES 5200
LINE(s): R.07007
Royalty Calculation
AGRILIFE | ||||||||||||||||
OTHER | GENETIC | Royalty | ||||||||||||||
Base Rate | CONTRIBUTIONS* | CONTRIBUTION | Rate | |||||||||||||
NET SALES |
[***] | % | 0 | % | 50 | % | [***] | % | ||||||||
LICENSE INCOME |
[***] | % | 0 | % | 50 | % | [***] | % |
*OTHER CONTRIBUTIONS | ||
Name of Contribution | Deduction % | |
None
|
None |
Total revenue: [$X]
Additional deductions for NET SALES from Article 1.12(f): None
NET SALES for BUSINESS YEAR: [$X]
Royalties due on NET SALES: [$X]
LICENSE INCOME for BUSINESS YEAR: [$X]
Royalties due on LICENSE INCOME: [$X]
HYBRID: ES 5201
LINE(s): R.07007
LINE(s): R.07007
Royalty Calculation
AGRILIFE | ||||||||||||||||
OTHER | GENETIC | Royalty | ||||||||||||||
Base Rate | CONTRIBUTIONS* | CONTRIBUTION | Rate | |||||||||||||
Net Sales |
[***] | % | 0 | % | 50 | % | [***] | % | ||||||||
License Income |
[***] | % | 0 | % | 50 | % | [***] | % |
*OTHER CONTRIBUTIONS | ||
Name of Contribution | Deduction % | |
None
|
None |
Total revenue: [$X]
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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission
Additional deductions for NET SALES from Article 1.12(f): None
NET SALES for BUSINESS YEAR: [$X]
Royalties due on NET SALES: [$X]
LICENSE INCOME for BUSINESS YEAR: [$X]
Royalties due on LICENSE INCOME: [$X]
[If other HYBRIDS are developed, this format will be used.]
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