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OILSEED DEVELOPMENT AGREEMENT
This Agreement is made and entered into effective as of this 8th day of
May, 1996, by and between Calgene, Inc. and Monsanto Company. Based upon
the mutual consideration between the Parties recited below, the Parties do
hereby agree as follows:
ARTICLE 1. BACKGROUND AND PARTIES
1.01 Calgene, Inc., ("Calgene") is a Delaware corporation, having a
principal place of business at 0000 Xxxxx Xxxxxx, Xxxxx, Xxxxxxxxxx 00000.
1.02 Monsanto Company ("Monsanto") is a Delaware corporation,
having a principal place of business at 000 Xxxxx Xxxxxxxxx Xxxxxxxxx,
Xx. Xxxxx, Xxxxxxxx 00000.
1.03 Calgene owns certain technology useful in manipulating seed oil
composition, and other technology applicable to the expression of traits in
plants which can be used to express genes for oil modification, meal
modification or the introduction of useful agronomic traits into oilseed
crops.
1.04 Calgene is willing to grant, and Monsanto desires to obtain, a
license under such Calgene technology to manufacture, have manufactured,
use and sell oilseed products in accordance with the terms and conditions
set forth herein.
1.05 Monsanto has proprietary rights to certain technology applicable
to the engineering of plants and in plant expression, as well as technology
for introducing agronomic traits, which is useful in the improvement of
oilseeds and in modifying oil composition.
1.06 Monsanto is willing to grant, and Calgene desires to obtain, a
license under such Monsanto technology to manufacture, have manufactured,
use and sell oilseed products in accordance with the terms and conditions
set forth herein.
ARTICLE 2. DEFINITIONS
For the purposes of this Agreement, the following words and phrases
shall have the following meanings:
2.01 "Affiliates" shall mean a Calgene Affiliate or a Monsanto
Affiliate.
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2.02 "Agronomic Genes" shall mean genes encoding for disease
resistance, herbicide tolerance, cold tolerance, shatter resistance, yield
improvement, earliness, insect tolerance, drought resistance and heat
resistance and other genes that reduce the net unit cost of production of
agricultural crop plants.
2.03 "Calgene Affiliate" shall mean any company or other legal entity
which controls, or is controlled by, or is under common control with
Calgene, control meaning the holding , directly or indirectly, of more than
twenty percent (20%) of (i) the capital and/or (ii) the voting rights
and/or (iii) the right to elect or appoint directors; provided, however,
that this Paragraph 2.03 shall not include Monsanto or any Monsanto
Affiliates.
2.04 "Calgene Chemical, Inc." shall mean the wholly owned subsidiary of
Calgene located at 0000 Xxxxx Xxxxxxx Xxxx Xxxxx, Xxxxxx, XX 00000.
2.05 "Calgene Patent Rights" shall mean the patent applications listed
in Exhibit D as well as any and all patents maturing from the respective
applications or maturing from applications that are divisionals,
continuations, continuations-in-part of these applications and any and all
reissues or extensions of any of the foregoing, and as added from time to
time per Paragraph 3.04 herein.
2.06 *************************** shall mean each of: (a)
********************* which produce *********** which produces: (i) ***
which (A) is within the ***************** described in Exhibit B hereto for
such **** and (B) does not **************************
***************************************************************** and (ii)
*** which is a *********************************************** **** of the
following *********** from the ***************** of such ****: (A)
********************************************************* or (B)
********************************************* or (C) *********
************************* of any ********* that is ******************* in
the *************************************************;
(b) ******************************** described in (a) above; and
(c) ******************************** described in (b) above.
2.07 ***************************************** shall mean *****
*********************** that ***************************************
*********.
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2.08 **************************** shall mean each of: (a)
************************************************************** which
produce: (i) ***** which (A) is within ********************* described in
Exhibit A hereto for such ****; and (B) does not ******************
********************************* from the ***************** of such ****
and (ii) **** which is a ***************** of the ************* **** or
with one or more of the ********************* from the
******************************** (A) *******************************
************************** or (B) **********************************
********** or (C) ********************************** of any ******** that
is ******************* in the *********************************
**************** or (D) ******************************************** the
************************ that are *********************** in the
*************************** provided that the **********************
*************************** than the ***** in the ****************** for
the ***** provided, however, that with respect to paragraphs 2.08 (a) (ii),
(A), (B), (C), and (D) above, Monsanto and Calgene shall both be
************************************ should ************ have
********************************* and should ************************ be in
the interest of both Parties;
(b) ******************************** described in (a) above; and
(c) ******************************** described in (b) above.
2.09 "Cost of Goods Sold" shall mean a Party's direct and indirect
costs, which are reasonable and necessary, incurred by Monsanto or a
Monsanto Affiliate in producing a Licensed Product or incurred by the Oils
Division in producing all products, as the case may be, in accordance with
general accepted accounting principles consistently applied and with
general industry practices, but excluding amounts included in Overhead
Allocation, Research Expenses or Selling, Administration and General
Expenses.
2.10 "Effective Date" shall mean the date first above written.
2.11 ******************************* shall mean each of: (a)
********************* which produce *********** which produce: (i) ****
which (A) is within the ***************** described in Exhibit C hereto
************* and (B) does not **************************
************************* from the ****************************** and (ii)
**** which is a ******************************** or with one or more of the
following ************************************** of such ***** (A)
********************************************************* or (B)
*********************************************
(b) ******************************** described in (a) above; and
(c) ******************************** described in (b) above.
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2.12 "Licensed Method" shall mean any method whose use or practice
would, in the absence of a license, infringe one or more claims of a patent
application or an unexpired patent included in the Calgene Patent Rights or
Monsanto Patent Rights, respectively, which has not been finally
adjudicated to be invalid by a court of competent
jurisdiction.
2.13 "Licensed Products" shall mean materials, or materials produced by
a Licensed Method, including but not limited to vectors, bacterial cells,
plant cells, plants or seeds, in each case containing a transgene or
otherwise modified by genetic engineering, or products of such transgenic
materials, plant cells, plants or seeds which in the course of their
manufacture, use or sale would, in the absence of a license, infringe one
or more claims of an unexpired patent included in the Calgene Patent
Rights, which has not been finally adjudicated to be invalid by a court of
competent jurisdiction.
2.14 ************************************ shall mean, through
******************** either: (a) **********************************
******************************************* or (b) ********** the
********************** which is ************************************
****************************************** Any such ***************
******************************************************** are specifically
excluded from this definition.
2.15 "Monsanto Affiliate" shall mean any company or other legal entity
which controls, or is controlled by, or is under common control with
Monsanto, control meaning the holding, directly or indirectly, of more than
twenty percent (20%) of (i) the capital and/or (ii) the voting rights
and/or (iii) the right to elect or appoint directors; provided, however,
that this Paragraph 2.15 shall not include Calgene or any Calgene
Affiliates.
2.16 "Monsanto Patent Rights" shall mean the patent applications listed
in Exhibit E as well as any and all patents maturing from the respective
applications or maturing from applications that are divisionals,
continuations, continuations-in- part of these applications and any and all
reissues or extensions of any of the foregoing, and as added from time to
time per Paragraph 3.04 herein.
2.17 "Net Profits for Licensed Products" shall mean, for each
Licensed Product, (a) the Net Sales of such Licensed Product minus (b)
with respect to such Licensed Product, the sum of : (i) Cost of Goods
Sold; (ii) the Selling, Administration and General Expenses; (iii)
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the Overhead Allocation; (iv) interest expenses; and (v) other expenses,
all determined under generally accepted accounting principles consistently
applied.
2.18 "Net Profits of the Oils Division" shall mean, for all of its
products, (a) the Net Sales of such products minus (b) with respect to such
products, the sum of : (i) Cost of Goods Sold; (ii) the Research Expenses;
(iii) Selling, Administration and General Expenses; (iv) the Overhead
Allocation; (v) interest expenses; and (vi) other expenses, all determined
under generally accepted accounting principles consistently applied.
2.19 "Net Sales" shall mean the gross invoiced sales price charged by a
Party, its Affiliates and sublicensees for all Licensed Products in the
case of Monsanto and for all products in the case of the Oils Division,
after deduction of the following items, provided and to the extent such
items are incurred and do not exceed reasonable and customary amounts in
the market in which such sale occurred: (i) trade and quantity discounts
and rebates; (ii) credits or allowances given or made for rejection or
return of previously sold Licensed Products or products as the case may be;
(iii) any tax or government charge (other than an income tax or value added
tax) levied on the sale; and (iv) any charges for freight or insurance. Net
Sales shall include all revenues earned by the Oils Division from Third
Parties which are directly attributable to: (A) contracted research; or (B)
royalties and licensing fees. Other revenues not collected directly by
Monsanto from seed company licensees and any grower license revenues shall
not be included within Net Sales. For example, if Monsanto collects grower
license fees from a xxxxxx and royalty revenues from a seed company,
Calgene shall receive the benefit of direct profits attributable only from
the royalty charged to the seed company. If any gross invoiced sales price
of a Licensed Product or a product, as the case may be, is not determined
on an arm's length basis, then such gross invoiced sales price shall, for
the purposes of this Agreement, be deemed to be equal to the most recent
gross invoiced sales price of such Licensed Product or product to a Third
Party on an arms length basis.
2.20 "Oils Division" shall mean that portion of Calgene's business
operations having responsibility for research, development and/or
commercialization of improved oilseed crops or modified oil, and/or selling
of oilseed, oil or derivative oil products. Such business operations shall
include, without limitation, Calgene Chemical, Inc.
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2.21 "Overhead Allocation" shall mean the actual costs (without markup)
reasonably allocated from a Party's corporate overhead to the business of
Monsanto in making, using or selling Licensed Products or to the Oils
Division in making, using or selling its products, for such expenses as:
(a) facilities; (b) utilities, maintenance and depreciation; (c) regulatory
services; (d) patent filing and prosecution and legal services; (e)
royalties on expensed technology licenses; (f) human resource services; (g)
financial, accounting, risk and treasury management services; (h) use of
office and laboratory space, equipment and supplies at such locations which
Calgene may maintain from time to time; (i) laboratory supplies and
procurement services; (j) greenhouse and growth chamber facilities,
services and supplies; and (k) other services reasonably charged by
Monsanto or Calgene (including without limitation library services,
laboratory services, information system and telecommunication services).
Overhead Allocation shall exclude amounts included in Cost of Goods Sold,
Research Expenses, or Selling, Administration and General Expenses.
2.22 "Party" shall mean Monsanto or Calgene; "Parties" shall mean both
Monsanto and Calgene.
2.23 "Patent Rights" shall mean the Calgene Patent Rights and
the Monsanto Patent Rights.
2.24 "Research Expenses" shall mean research and development expenses
determined in accordance with general accepted accounting principles
consistently applied and with general industry practices, for the
development of all of the products of the Oils Division, but excluding
amounts included in either Overhead Allocation or Cost of Goods Sold.
2.25 "Selling, Administration and General Expenses" shall mean selling,
marketing, administrative and general expenses determined in accordance
with general accepted accounting principles consistently applied and with
general industry practices, for the commercialization of the Licensed
Products for Monsanto and of all of the products of the Oils Division, but
excluding amounts included in either Overhead Allocation or Cost of Goods
Sold.
2.26 *************************** shall mean ******************* ****
that are ******************************************************** *******
and which have been ************************************ of a
*************************************************************** from
*********** that are ***********************************************
*********** provided, however, that Monsanto and Calgene shall both
*************************************** should either Party have a
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******************************* and should *************************
in the interest of both Parties. *********************************
******************* are specifically excluded from this definition.
2.27 ************************************ shall be **********
that has the composition of Exhibit C and that has a ***************
********************************************************************
*******************************************
2.28 ***************************************** shall mean ****
************************ that contain *******************************
*****
2.29 "Technical Information" shall mean all trade secrets, know-how,
knowledge, technology, means, methods, processes, practices, formulas,
techniques, procedures, technical assistance, data, specifications,
biological materials and other valuable information and materials of
whatever nature, whether confidential or not, and whether proprietary or
not, which is now in (or hereafter during the term of this Agreement comes
into) the possession of the licensing Party and which is relevant to the
development of any Licensed Product or products of the Oils Division, as
the case may be.
2.30 Third Party shall mean any person, corporation or other business
entity other than Calgene, Monsanto and their respective Affiliates.
2.31 "Valid Claim" means a claim of any unexpired patent or patent
application in any country in the world, which shall not have been
withdrawn, canceled or disclaimed, nor held invalid by a court of competent
jurisdiction in an unappealed or unappealable decision.
ARTICLE 3. RIGHTS & OBLIGATIONS
3.01 Grant to Monsanto. Subject to the terms and conditions of
this Agreement, Calgene grants to Monsanto during the term of this
Agreement: (a) a worldwide, **********************************
****************************************************************
****************************************************************
************ royalty bearing (in accordance with Paragraph 4.02) license to
make, have made, use and sell ************************** using Calgene
Patent Rights, with rights to sublicense pursuant to Paragraph 3.01(e);
(b) a worldwide, ************* royalty bearing (in accordance with
Paragraph 4.02) license to make, have made, use and sell (i) any
************************* and (ii) subject to Calgene obtaining
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*******************************************************************
****************************** so long as the products described in (i) and
(ii) ****************************************** using Calgene Patent
Rights, with rights to sublicense pursuant to Paragraph 3.01(e);
(c) a worldwide, ************ with Calgene *******************
**************************************************************
**************************************************************
************ royalty bearing (in accordance with Paragraph 4.02) license to
make, have made, use and sell (i) ***************** and (ii) subject to
Calgene obtaining ************************
**************************************************************
so long as the products described in (i) and (ii) ************
*********************** using Calgene Patent Rights, with rights to
sublicense pursuant to Paragraph 3.01(e); and
(d) a worldwide, ************* royalty free license, with no right to
sublicense, to make, have made and use, for research purposes only, oilseed
products other than *************************************
*********************************************************** using
Calgene Patent Rights;
(e) For **********************************************************
************ the limited right to sublicense only transgenic plant
germplasm produced by Monsanto (with the right to develop, use and sell new
varieties and/or hybrids produced therefrom by traditional plant breeding)
containing genes developed or in-licensed by Monsanto to any Third Party or
any Monsanto Affiliate, provided that Monsanto shall not be permitted to
in-license or otherwise acquire a gene from a Third Party and ************
license to that Third Party or an affiliate of that Third Party transgenic
plant germplasm containing said gene falling within the scope of the
Licensed Patents, and provided further that Monsanto shall provide notice
of such sublicense to Calgene within a reasonable period before entering
into such sublicense with a Third Party.
3.02 Grant to Calgene. Subject to the terms and conditions of
this Agreement, Monsanto grants to Calgene during the term of this
Agreement: (a) a worldwide, *************************************
******************************************************************
******************************************************************
*************** and (ii) other agreements or options which are not limited
as to field of use and which are signed as of the effective date hereof),
royalty bearing (in accordance with Paragraph 4.03) license to make, have
made, use and sell *************************
*************************************** using Monsanto Patent Rights, with
rights to sublicense pursuant to Paragraph 3.02(d);
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(b) a worldwide, ************** royalty bearing (in accordance with
Paragraph 4.03) license to make, have made, use and sell **********
********************************************************** using Monsanto
Patent Rights, without the right to sublicense (unless such sublicense was
granted before such product became a ****************
***************************************************
(c) a worldwide, ************* royalty bearing (in accordance with
Paragraph 4.03) license, with no right to sublicense, to make, have made
and use, for research purposes only, oilseed products other than
*******************************************************************
*******************************************************************
using Monsanto Patent Rights;
(d) for ************************************************************
********* the limited right to sublicense only transgenic plant germplasm
produced by Calgene (with the right to develop, use and sell new varieties
and/or hybrids produced therefrom by traditional plant breeding) containing
genes developed or in-licensed by Calgene to any Third Party or Calgene
Affiliate, provided that Calgene shall not be permitted to in-license or
otherwise acquire a gene from a Third Party and *********** license to that
Third Party or affiliate of that Third Party transgenic plant germplasm
containing said gene falling within the scope of the Licensed Patents, and
provided further that Calgene shall provide notice of such sublicense to
Monsanto within a reasonable period before entering into such sublicense
with a Third Party;
(e) Any licenses granted herein and any sublicensees granted a sublicense
under Paragraph 3.02 to any **************** shall be required by Calgene
to *********************************************
*********************************** including but not limited to
****************************************************************
****************************************************************
******************* covering such **************** and
(f) No license is granted herein to commercialize an ************** in
any country in which *********************************** said
***************
3.03 ************************************ With respect to the rights
granted under Paragraph 3.01 (c), Calgene shall not grant any additional
licenses or sublicenses to Third Parties under Calgene Patent Rights for
********************************************* *********************** that
***********************************
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3.04 Other Rights and Obligations (a) Calgene and Monsanto shall
consult from time to time regarding Monsanto and Calgene technology,
patents and patent applications, which shall be ******************* ******
on the following basis: (i) US patents or applications and their foreign
counterparts shall be ******************************* ********* shall
include ******************************************* ****** (to the extent
that such technology can be ***********), that are applicable to the
development of ***************************
*********************************************************************
and (ii) US patents or applications and their foreign counterparts shall be
************************************* and shall include
*************************************************** (to the extent that
such technology can be ***********), that are applicable to the development
of ***************************************************
******************************************************************
*****************
(b) With respect to the research rights granted under Paragraphs 3.01 (d)
and 3.02 (c), each Party agrees to consider granting licenses covering
additional products in the event that the other Party develops a
commercially useful application;
(c) Each Party grants to the other Party a ************* right during the
term of this Agreement to use the Technical Information in connection with
such Party's exercise of its rights and licenses granted hereunder. If a
Party reasonably requests, the other Party shall provide to the requesting
Party free of charge (other than reimbursement for reasonable out-of-pocket
costs) all of the Technical Information.
3.05 No Other Rights. Except as expressly provided herein, no other
license, right or license is granted by this Agreement (by implication or
otherwise) by either Party to the other Party to any other patent rights.
ARTICLE 4. CONSIDERATION, PAYMENTS & RECORDS
4.01 Monsanto Fees. Except as provided for in Paragraph 10.13, in
consideration for the licenses to Calgene Patent Rights granted hereunder,
Monsanto shall pay to Calgene the following: (a) a *** ******,
non-refundable licensing fee for licenses under Calgene Patent Rights
granted under this Agreement, due upon signing of this agreement; (b) a
*********** funded research and development payment to further the
development of plant expression or oil modification technologies which may
be added to Exhibit D under Paragraph 3.04, due upon signing of this
agreement, such payment to be used by Calgene to fund research and
development during the 3 year period beginning from
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the effective date of this Agreement; and (c) for any lump-sum license fee
received on sublicenses granted by Monsanto under Paragraph 3.01(e) of this
Agreement, **** of any such fees to Calgene at the time the fees are
collected.
4.02 Monsanto Royalties Due. (a) Except as provided for in Paragraph
10.13, in further consideration for the licenses to Calgene Patent Rights
granted hereunder, Monsanto shall pay to Calgene a royalty equal to **** of
the Net Profits for each Licensed Product calculated for such Licensed
Product sold by Monsanto and Monsanto Affiliates; provided, however, that
(i) Monsanto shall use reasonable efforts to obtain information as to Net
Profits for each Licensed Product sold by Monsanto Affiliates, but Calgene
recognizes that, for some Monsanto Affiliates, such information will not be
available to Monsanto; and (ii) where such information is not available,
Calgene and Monsanto shall negotiate in good faith on an alternative
methodology to determine the compensation due to Calgene on such Net
Profits;
(b) Except as provided for in Paragraph 10.13, for Net Sales of Licensed
Products by sublicensees of Monsanto or a Monsanto Affiliate, further
consideration for the licenses to Calgene Patent Rights granted hereunder
shall be paid to Calgene based on the greater of: (i) **** of any net
license fees, royalties or other income received by Monsanto or a Monsanto
Affiliate resulting from Third Party sales of Commodity Oilseed Products,
Commodity Canola Products and Commodity High Stearate Canola Products that
utilize Calgene Patent Rights under sublicenses granted by Monsanto or a
Monsanto Affiliate. In no event will the definition of Net Profits of
Licensed Products include items in this subparagraph; (ii) either: (A) ****
of net sales of such sublicensees, provided that Monsanto's direct grower
license revenues (or other revenues not collected from seed company
licensees) are at least **** of such net sales; or (B) **** of Monsanto's
direct grower license revenues (or other revenues not collected from seed
company licensees) in the event that such revenues are less than **** of
such net sales. In no event will the definition of Net Profits of Licensed
Products include items in this subparagraph;
(c) Earned royalties shall accrue to Calgene, subject to the provisions of
Paragraph 4.06, when Licensed Products are invoiced, or if not invoiced,
when delivered to a Third Party;
(d) If a Licensed Product and several other items are sold and invoiced
together, the discount on such sale shall be computed as a fraction, the
numerator of which is the gross invoiced sales price of such Licensed
Product and items as a bundle and the denominator of which is the sum of
the then-current list prices of Monsanto, the
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Monsanto Affiliate or their respective sublicensee, as the case may be, for
such Licensed Product and items. Upon the invoicing or delivery of such
bundle, the gross invoiced sales price for such Licensed Product shall be
deemed to be: (i) the then-current list price of Monsanto, the Monsanto
Affiliate or their respective sublicensee, as the case may be, for such
Licensed Product; multiplied by (ii) the discount, as computed above.
4.03 Calgene Royalties Due. In consideration for paying to Calgene the
amount described in Paragraph 4.01(b) above, the licenses of Paragraph 3.02
and sharing Technical Information as provided in Paragraph 3.04(c), Calgene
shall pay to Monsanto **** of the positive Net Profits of the Oils
Division. If the Oils Division acquires new business operations,
facilities, technologies and/or license rights after the Effective Date,
then Monsanto shall have the option either: (i) to contribute **** of the
amounts paid by the Oils Division for such acquisition; or (ii) to not
contribute any such amount, in which case Monsanto's **** share of the
positive Net Profits of the Oils Division shall be reduced accordingly.
4.04 First Commercial Sale. (a) Monsanto shall promptly advise Calgene
in writing of the first commercial sale of Licensed Products in each
country. (b) The earned royalties described in Paragraph 4.02 shall be
deemed to be payable for Licensed Products invoiced or delivered in each
country of the world so long as the Calgene Patent Rights covering such
Licensed Products have not expired or have not been declared invalid in
such country.
4.05 Royalty Reports (a) Beginning December 31, 1996, and annually
thereafter, Monsanto shall submit to Calgene a progress report covering the
activities related to the development and testing of all Licensed Products
and the obtaining of the governmental approvals necessary for marketing
them. These progress reports shall be made for each Licensed Product until
the first commercial sale of that Licensed Product occurs in the United
States.(b) After the first commercial sale of a Licensed Product anywhere
in the world, Monsanto will make annual royalty reports to Calgene on or
before February 28th of each year. Each such royalty report will cover the
most recently completed calendar year and will show: (i) the gross sales
and Net Profits for each Licensed Product; (ii) the number of each type of
Licensed Product sold; (iii) the royalties, in U.S. dollars, payable
hereunder with respect to such sales; (iv) the method used to calculate the
royalty; and (v) the exchange rates used.(c) For each calendar year
(commencing with calendar year 0000), Xxxxxxx will make annual reports to
Monsanto on or before February 28th following each such year. Each such
report will cover the most recently completed calendar year and will show:
(i) the gross sales and Net Profits of
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the Oils Division; (ii) the number of each type of product sold by the Oils
Division; (iii) the payments, in U.S. dollars, payable hereunder with
respect to such sales; (iv) the method used to calculate the payments; and
(v) the exchange rates used. (d) If no sales have been made during any
calendar year, a statement to this effect shall be required.
4.06 Manner of Payment (a) Concurrent with the submission of reports
pursuant to Paragraph 4.05, Monsanto shall make the earned royalty payments
then due and Calgene shall make the payments then due pursuant to Paragraph
4.03. All payments hereunder shall be made by deposit of United States
Dollars in the requisite amount to such bank account in the United States
as the receiving Party may from time to time designate by notice to the
other. As to the royalty payments payable to Calgene, amounts shall first
be calculated in the currency in which the sale of a Licensed Product took
place and then converted to U.S. Dollars at the closing buying rate for the
last business day of the calendar year for which such payment is due, as
set by Chase Manhattan Bank of New York. Payments shall be without set off
and free and clear of any taxes, duties, fees or charges other than
withholding taxes, if any.(b) If at any time legal restrictions prevent the
prompt remittance of part or all royalties by Monsanto with respect to any
country where a Licensed Product is sold, Monsanto shall have the right and
option to make such payments by depositing the amount thereof in local
currency to Calgene's account in a bank or other depository in such
country. If, after one year, these legal restrictions still exist, Monsanto
shall pay the royalties owed to Calgene in interest from its source of
funds in the U.S.
4.07 No Non-Monetary Consideration for Sales. Neither Party shall
accept or solicit any non-monetary consideration in the sale of any
Licensed Product or products, other than as would be reflected in the
calculation of Net Sales. The use by a Party of commercially reasonable
amounts of Licensed Products or products for promotional sampling shall not
violate this prohibition.
4.08 Records Retention. (a) Monsanto agrees to keep, and shall cause
Monsanto Affiliates and sublicensees to keep, records showing all Licensed
Products manufactured, used and/or sold and licensing of all Licensed
Products in sufficient detail to permit Calgene to confirm the accuracy of
Monsanto's earned royalty calculations. Calgene agrees to keep, and shall
cause Calgene Affiliates and sublicensees to keep, records showing all
products manufactured, used and/or sold by the Oils Division and licensing
of all products by the Oils Division in sufficient detail to permit
Monsanto to confirm the accuracy of Calgene's payment calculations. All
determinations related to royalties and payments due under this Agreement
shall be
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
made in accordance with generally accepted accounting principles as is
normal industry practice. (b) At the request of a Party, the other Party
shall permit an independent, certified public accountant appointed by the
requesting Party and reasonably acceptable to such other Party to examine,
upon reasonable notice, and at reasonably times, records solely to the
extent necessary to verify the other Party's calculations. Such records
shall be kept and examination thereof shall be limited to a period of time
no more than two (2) calendar years.(c) Prompt adjustment shall be made by
the Parties to reflect the results of any such audit. The audit of a
Party's records shall be at the auditing Party's expense provided that if a
net aggregate discrepancy in the audited Party's favor of more than five
percent (5%) is found, then the audited Party shall be obligated to
reimburse the auditing Party for the cost of the audit. (d) The Parties
agree that any dispute arising from an audit of a Party's records and which
can not be resolved by the Parties shall be subject to the following
arbitration procedure; (i) the Parties shall first have their respective
CEO's meet to review the issues raised by the audit, provided that, in the
event that Monsanto has acquired a majority of the outstanding Calgene
stock, an independent director of the Calgene board shall stand in for the
Calgene CEO in such audit review; and (ii) should the procedure in
4.08(d)(i) fail to resolve the dispute, the parties shall appoint an
outside arbitrator which is acceptable to both parties, with authority to
resolve the dispute.
4.09 Late Payment. Notwithstanding any other remedy available to either
Party under the provisions of this Agreement, if any sum of money owned to
a Party hereunder is not paid when due, the unpaid amount shall bear
interest at the lesser of: (a) a rate of 10% per annum or (b) maximum
interest rate under applicable law, calculated from the date payment was
due until actually received by such Party.
4.10 ********************************. If the **************
***************************************************************** to be
***************************** which becomes *********************
***************************************************************** or
****************************** or through ***********************
****************************** (hereinafter referred to as an
**********************), then ***************************************
************ which shall ********************************************
********************* would have been ******************************* *****
pursuant to this Agreement, *********************************.
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ARTICLE 5. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION
5.01 Representations and Warranties. (a) Calgene represents and
warrants that: (i) it has the right to grant the licenses described herein;
(ii) it has not previously granted (except for agreements with Third
Parties described in Paragraph 3.01(a)), and will not grant to any Third
Party during the term of this Agreement, any rights and licenses under the
Calgene Patent Rights that are inconsistent with the rights granted to
Monsanto herein; and (iii) it has full power, right and authority to enter
into and carry out its obligations under this Agreement;
(b) Monsanto represents and warrants that: (i) it has the right to grant
the licenses described herein; (ii) it has not previously granted (except
for agreements with Third Parties described in Paragraph 3.01(b)), and will
not grant to any Third Party during the term of this Agreement, any rights
and licenses under the Monsanto Patent Rights that are inconsistent with
the rights granted to Calgene herein; and (iii) it has full power, right
and authority to enter into and carry out its obligations under this
Agreement;
(c) The Parties, upon execution of this Agreement, shall diligently proceed
with their respective development, manufacture and sale of Licensed
Products or products, as the case may be, and shall earnestly and
diligently endeavor to market the same within a reasonable time after
execution of this Agreement and in quantities sufficient to meet the market
demands therefore; and
(d) The Parties and their respective Affiliates and sublicensees shall
respectively endeavor to obtain all necessary government approval for the
manufacture, use and sale of Licensed Products or products that a Party or
its respective sublicensees plan to sell.
5.02 No Warranties. EXCEPT FOR THE EXPRESS WARRANTIES IN PARAGRAPH
5.01, NEITHER PARTY MAKES ANY WARRANTIES TO THE OTHER REGARDING THE PATENT
RIGHTS (INCLUDING, WITHOUT LIMITATION, THE VALIDITY OR SCOPE OF THE PATENT
RIGHTS) OR THE LICENSED PRODUCTS OR PRODUCT (INCLUDING, WITHOUT LIMITATION,
THE NONINFRINGEMENT OF THE LICENSED PRODUCTS OR PRODUCTS ON THIRD PARTY
PATENT RIGHTS) OR OTHERWISE, EXPRESS OR IMPLIED, EITHER IN FACT OR BY
OPERATION OF LAW.
5.03 Indemnification. (a) Except to the extent caused by the other
Party's gross negligence or willful misconduct, each Party (the
"Indemnifying Party's ) shall defend and indemnify against, and hold the
other Party (the "indemnitee") and its employees, directors, officers and
agents harmless from, any loss, cost, liability or expense (including court
costs and reasonable fees of attorneys and
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other professionals) incurred from a claim (other than a claim of
infringement of a patent right) arising or alleged to arise out of the
manufacture, use, distribution or sale of, where Monsanto is the
indemnifying Party, any Licensed Product by Monsanto or any Monsanto
Affiliate or sublicensee of Monsanto, and where Calgene is the indemnifying
Party, any product by the Oils Division or any sublicensee of the Oils
Division; provided, however, that (i) the indemnifying Party shall have
sole control of such defense, and (ii) the indemnitee shall provide notice
promptly to the indemnifying Party of any actual or threatened claim of
which the indemnitee becomes aware.(b) Calgene indemnifies Monsanto and
holds Monsanto harmless for and against any claims arising out of a breach
of the representation and warranty made in Paragraph 5.01(a).(c) Monsanto
indemnifies Calgene and holds Calgene harmless for and against any claims
arising out of a breach of the representation and warranty made in
Paragraph 5.01(b).
ARTICLE 6. CONFIDENTIALITY
6.01 Confidential Information. It is anticipated that it will be
necessary, in connection with their obligations under this Agreement, for
Monsanto and Calgene to disclose to each other confidential propriety
business and/or technical information ("Confidential Information") relating
to their respective business, products and technologies. The Confidential
Information shall include information disclosed in writing or other
tangible form, including electronic transmissions and samples of materials.
If disclosed orally, the Confidential Information shall be summarized in
written form within thirty (30) days by the disclosing Party and a copy
provided to the recipient.
6.02 Confidentiality and Limited Use.(a) With respect to all
Confidential Information, both Monsanto and Calgene agree as follows, it
being understood that "recipient" indicates the Party receiving the
Confidential Information from the other "disclosing" Party. Confidential
Information disclosed to the recipient shall remain the property of the
disclosing Party and shall be maintained in confidence by the recipient and
shall not be disclosed to third parties by the recipient and, further,
shall not be used by the recipient except for purposes contemplated in this
Agreement. All confidentiality and limited use obligations with respect to
the Confidential Information shall terminate ten (10) years after the
disclosure of such Confidential Information.(b) Notwithstanding any
provision to the contrary, a Party may disclose Confidential Information of
the other: (i) in connection with the order of a court or other
governmental body or as required by or in compliance with laws or
regulations; (ii) in confidence, to attorneys, accountants, banks and
financing sources and
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
their advisors; or (iii) in confidence, in connection with a proposed
sublicense, merger or acquisition, or the like, so long as, in each case,
the entity to which disclosure is made binds itself to confidentiality on
terms consistent with those set forth herein, in an agreement in which the
Party whose Confidential Information is to be disclosed is expressly named
as a third party beneficiary.
6.03 Exceptions. The obligations of confidentiality and limited use
shall not apply to any of the Confidential Information which: (a) is
publicly available by publication or other documented means or later
becomes likewise publicly available through no act or fault of recipient;
or (b) is already known to recipient before receipt from the disclosing
Party, as demonstrated by recipient's written records; or (c) is made known
to recipient by a third party who did not breach confidentiality
obligations to the disclosing Party and which third party does not obligate
recipient to hold it in confidence.Specific information should not be
deemed to be within any of these exclusions merely because it is embraced
by more general information falling within these exclusions.
6.04 Disclosures to Personnel. Recipient agrees to advise those of its
officers, directors, stockholders, employees, associates, agents,
consultants, Affiliates, and sublicensees who become aware of the
Confidential Information, of these confidentiality and limited use
obligations and agrees, prior to any disclosure of Confidential Information
to such individuals or entities, to make them bound (by written agreement
or otherwise) by obligations of confidentiality and limited use of the same
stringency as those contained in this Agreement.
6.05 Confidential Status of Agreement. The terms of this Agreement
including the royalty rate shall be deemed to be Confidential Information
and shall be dealt with according to the confidentiality requirements of
this Article 6. Both Parties agree furthermore, that neither Party will
make public disclosures concerning other specific terms of this Agreement
without obtaining the prior written consent of the other Party, which
consent shall not be unreasonably withheld, except to the extent required
by law or regulation.
ARTICLE 7. PATENT PROSECUTION, ENFORCEMENT AND INFRINGEMENT
7.01 Patent Prosecution. (a) Calgene shall have the *********
*********************************************************************
******************************** (b) Monsanto shall have the
*********************************************************************
*****************************************.
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
7.02 Patent Enforcement. (a) Calgene and Monsanto shall each
give prompt notice to the other of any infringement of the Patent
Rights which may come to its attention; (b) The Party holding such
Patent Rights shall *************************************************
*********************************************************************
of a ************* and to ************************************* as it may
deem appropriate. The Party holding such Patent Rights shall
********************************************************* to this Paragraph
7.02; (c) If the infringing activities of the Third Party result in a
************************************************** relating to
***************** and at the *************** from the ***************** by
such Party of such infringement, the Third Party
***************************************************************
********* which are an infringement of the Patent Rights, and the Party
which owns and/or controls the involved Patent Rights *******
*******************************************************************
************************ (i) when such affected Party is Monsanto, it
*************************************************************
hereunder with **************************************************
*****************************************************************
*****************and (ii) when such affected Party is Calgene, Calgene
********************************************************************
************** in the **********************************************
********************************************************************
********************************************************************.
************************* as the case may be, ************ shall arise
********************************************************************
********************************************** and shall ***********
**************************************************************** and
to so ******** with the Licensed Products; (d) Neither Party shall
****************************************************************
****************************************************************
licensed hereunder *****************************.
7.03 Infringement. In the event of any claim or suit against Calgene or
Monsanto for infringement of any intellectual property right of any Third
Party as the result of the manufacture, use or sale of the Licensed
Products or products by a Party or distributors, agents or customers of
such Party, the Parties shall cooperate in good faith in determining how to
respond to such claim or suit.
ARTICLE 8. TERM
8.01 Term. The term of this Agreement shall commence on the Effective
Date and, shall continue for fifteen (15) years, which term is
automatically extended until the expiration of any patent listed on
Exhibits D and E hereto.
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8.02 No Right to Terminate for Breach. In the event of a breach or
default of any of the provisions hereof by either Party, the non-breaching
non-defaulting Party may seek to recover monetary damages against the
breaching or defaulting Party (after giving such Party written notice and a
reasonable opportunity to cure) or to seek specific performance, injunctive
or other equitable relief, other than termination of this Agreement. The
non-breaching non-defaulting Party shall not have the right to terminate
this Agreement.
ARTICLE 9. PATENT MARKING/USE OF NAMES/TRADEMARKS
9.01 The Parties agree to xxxx all Licensed Products and products, as
the case may be, made, used or sold under the terms of this Agreement, or
their containers, in accordance with the applicable patent marking laws.
9.02 Nothing contained in this Agreement shall be construed as
conferring any right to use in advertising, publicity, or other promotional
activities any name, trade name, trademark, service xxxx or other
designation of either Party hereto (including contraction, abbreviation or
simulation of any of the foregoing).
ARTICLE 10. GENERAL PROVISIONS
10.01 Notices. All notices and other communications required or
permitted under this Agreement shall be deemed to be properly given when in
writing and sent by registered or certified mail, postage prepaid or by
reputable courier service or by telefax with receipt confirmation, to the
other Party at the address set forth below, or at such other address as
either Party may be in writing designate from time to time for these
purposes.
If to CALGENE: Calgene, Inc.
0000 Xxxxx Xxxxxx, Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Chief Executive Officer
Copy to: Calgene, Inc., 0000 Xxxxx Xxxxxx, Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Vice President
If to MONSANTO: Monsanto Company
000 Xxxxxxxxxxxx Xxxxxxx Xxxxx, Xx. Xxxxx, XX 00000
Attention: President
Ceregen Copy to: Monsanto Company, 000 Xxxxx Xxxxxxxxx Xxxx.,
Xx. Xxxxx, XX 00000
Attention: Group Patent Counsel
The Agricultural Group
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
10.02 Assignability. The rights and obligations acquired herein by
either Party ******************************************************
*******************************************************************
************** of the other Party. ************************** of the
other Party, which ******************************************* a Party
***************************************** under this Agreement in
**********************************************************
******************************* to which this Agreement pertains to a
******************** provided that the ***************** shall agree
***************************************************************** of
this Agreement. **********************************************
********* in violation of this Paragraph 10.02 shall be void and of no
effect.
10.03 Entire Agreement; Amendments; Waiver. This Agreement constitutes
the full understanding of the Parties, and supersedes any and all prior
agreements as they may relate to licenses granted herein, with the
exception that for sales of Glyphosate tolerant products by Monsanto the
agreements between the Parties regarding Glyphosate tolerant genes, dated
December 20, 1994, (Settlement Agreement ) and transgenic technologies,
dated April 22, 1993, (Transgenic Plants Agreement ) shall be treated in
accordance with paragraph 10.13 (b) hereto. Except as otherwise
specifically provided in this Agreement, no conditions, understanding or
agreement purporting to modify, vary, explain or supplement the terms or
conditions of this Agreement shall be binding unless hereafter made in
writing and signed by the Party to be bound and no modification shall be
effected by the acknowledgment or acceptance of documents containing terms
or conditions at variance with or in addition to those set forth in this
Agreement. No waiver by any Party with respect to any breach or default or
of any right or remedy and no course of dealing or performance, shall be
deemed to constitute a continuing waiver of any other breach or default or
of any right or remedy, unless such waiver be expressed in writing signed
by the Party to be bound. Failure of a Party to exercise any right shall
not be deemed a waiver of such right or rights in the future.
10.04 Severability. In case any one or more of the provisions contained
in this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, but this
Agreement shall be construed as if such invalid or illegal or unenforceable
provisions had never been contained herein.
10.05 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original with the same effect as if
the signatures thereto and hereto were upon the same instrument.
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10.06 Headings. Headings as to the contents of particular Articles and
Paragraphs are for convenience only and are in no way to be construed as
part of this Agreement or as a limitation of the scope of the particular
Articles and Paragraphs to which they refer.
10.07 Agreement References. All paragraphs and subparagraphs
referred to herein are paragraphs and subparagraphs of this Agreement.
10.08 Exhibits. The appended Exhibits form an integral part of
this Agreement.
10.09 Choice of Law. IT IS THE INTENTION OF THE PARTIES HERETO THAT ALL
QUESTIONS WITH RESPECT TO THE CONSTRUCTION OF THIS AGREEMENT AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO BUSINESS ARRANGEMENTS
ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
10.10 Export Control. Notwithstanding any other provisions of this
Agreement, each Party agrees to make no disclosure or use of any
information or technology of the other Party furnished or made known to
such Party pursuant to this Agreement, except in compliance with the laws
and regulations promulgated by the Office of Export Administration,
International Trade Administration, United States Department of Commerce;
and in particular, the Parties agree not to export, directly or indirectly,
either: (a) the technical data or technical information furnished or made
known to either Party by the other pursuant to this Agreement; or (b) the
"direct product" thereof or (c) any commodity produced using such technical
data to any country or countries unless a general or validated license is
first obtained pursuant to the Export Administration Regulations. The term
"direct product", as used above, is defined to mean the immediate product
(including process and services) produced directly by the use of the
technical data.
10.11 Force Majeure (a) Except for payments of money, neither of the
Parties shall be liable for any default or delay in performance of any
obligation under this Agreement caused by any of the following: Act of God,
war, riot, fire, explosion, accident, flood, sabotage, compliance with
governmental requests, laws, regulations, orders or actions, national
defense requirements or any other event beyond the reasonable control of
such part; or labor trouble, strike, lockout or injunction (provided that
neither of the Parties shall be required to settle a labor dispute against
its own best judgment);(b) The Party invoking this Paragraph 10.11 shall
give the other Party notice and full particulars of each force majeure
event by telephone, telegram, telex or telecopier as soon as possible after
the occurrences of the
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cause upon which said Party is relying. Telephone, telegram, telex and
telecopier notices shall be confirmed in writing by the sending Party
within 5 days.
10.12 Negation of Agency. It is agreed and understood by the Parties
hereto that each of Monsanto and Calgene, in its performance of its
obligations and responsibilities under this Agreement, is an independent
contractor and that nothing herein contained shall be deemed to create an
agency, partnership, joint venture or like relationships between the
Parties. The manner in which each of Monsanto and Calgene carry out its
performance under this Agreement is within each of Monsanto's and Calgene's
sole discretion and control.
10.13 Existing Agreements. Subject to the provisions of this paragraph,
to the extent that rights provided under existing agreements between the
Parties are not in conflict with this Agreement, this Agreement shall not
terminate rights under such existing agreements.(a) For any Licensed
Product, other than sales of Glyphosate tolerant canola by Monsanto, if a
Party would have an obligation to pay royalties to the other Party both
under this Agreement and under a prior agreement between the parties, the
payment due the other Party shall be determined only under this
Agreement.(b) Royalties and fees for a Glyphosate tolerant canola Licensed
Product produced by Monsanto shall be determined as follows:(i) if all
necessary Calgene Patent Rights utilized by Monsanto in conferring
glyphosate tolerance to such Licensed Product is covered by the Settlement
Agreement and/or the Transgenic Plants Agreement, the royalties payable to
Calgene shall be determined pursuant to such Settlement Agreement and/or
Transgenic Plants Agreement, as the case may be;(ii) if such Licensed
Product incorporates a Calgene Patent Right for any purpose other than
conferring glyphosate tolerance to such Licensed Product the royalties
payable to Calgene shall be determined pursuant to this Agreement.For
example: if Monsanto sells glyphosate tolerant genetically transformed
canola with a non- genetically engineered oil composition the royalties
would be those called for in the Transgenic Plants Agreement; if Monsanto
sells Glyphosate tolerant canola which also produces an oil which has been
modified using Calgene Technology licensed under this agreement, the
royalty payable to Calgene for such Licensed Product shall be determined
pursuant to this Agreement.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective duly authorized officers as of the day and
year first above written.
CALGENE, INC. MONSANTO COMPANY
By: /s/Xxxxx X. Xxxxxxxx By: /s/X.X. Xxxxxxxxxx
Print Name Xxxxx X. Xxxxxxxx Print Name X.X. Xxxxxxxxxx
Title: Chmn and CEO Title: Executive VP
-23-
Exhibit A
EXHIBIT A CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-24-
Exhibit B
EXHIBIT B CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-25-
Exhibit C
EXHIBIT C CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-26-
Exhibit D
EXHIBIT D CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-27-
Exhibit E
EXHIBIT E CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-28-
