EXHIBIT 10.4
(REDACTED)
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-1-
RESEARCH CONTRACT AND LICENSE AGREEMENT
This Research Contract and License Agreement (the "Agreement") is
entered into as of July 1, 1999, by and between ▇▇▇▇▇-▇▇▇▇▇▇▇ Ag Company Inc.
("RP Ag Co."), an incorporated company organized and existing under the laws of
New York and wholly-owned subsidiary of ▇▇▇▇▇-▇▇▇▇▇▇▇ Agro S.A. ("▇▇▇▇▇-▇▇▇▇▇▇▇
Agro"), and Agrinomics LLC ("Agrinomics"), a limited liability company organized
and existing under the laws of Delaware.
RECITALS
A. Agrinomics has been formed pursuant to that certain Limited
Liability Company Agreement dated as of July 1, 1999 (the "LLC Agreement"),
among Agritope, Inc. ("Agritope"), ACTTAG Inc. ("ACTTAG"), a wholly-owned
subsidiary of Agritope, and RP Ag Co., to conduct and coordinate a plant
functional genomics program (the "Research Program") involving the activation
tagging of large numbers of Arabidopsis plants in an attempt to create seeds and
plants in which one or more genes are overexpressed; screening to identify
phenotypic traits of interest in such plants; the isolation, sequencing and gene
rescue of the associated genotypes; confirmation of phenotypes using such genes;
and related activities, all as is more fully described in the Operating Plan of
Agrinomics as adopted and amended from time to time by the Members of Agrinomics
(the "Operating Plan"). Agrinomics expects to exploit the results of the
Research Program commercially as is more fully described in the Operating Plan.
Terms used herein and defined in the LLC Agreement shall have the meanings
specified in the LLC Agreement unless otherwise stated herein.
B. Agrinomics expects to exploit the results of the Research Program
commercially as is more fully described from time to time in the Operating Plan.
The agreements forming Agrinomics, and the Operating Plan, contemplate that RP
Ag Co. and its Affiliates will have certain marketing and commercialization
rights in defined fields of application for certain discoveries made in the
Research Program.
C. RP Ag Co. and its Affiliates have extensive experience, facilities,
technologies, and personnel that the parties believe will be useful in the
conduct of the Research Program.
D. Each of RP Ag Co. and Agrinomics desires that RP Ag Co. render (or
cause to be rendered by third parties) certain research services to Agrinomics,
at the request of Agrinomics, in accordance with the Operating Plan and this
Agreement.
-2-
AGREEMENT
1. DEFINITIONS
1.1 "AFFILIATE" means a person or entity that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with RP Ag Co. For purposes of this definition, the
term "control" means the possession, directly or indirectly, of 50% or more of
the share capital or voting rights. For the purposes of this Agreement only, RP
Ag Co. and Agrinomics will not be considered Affiliates of each other.
1.2 "AGRINOMICS PROGRAM PATENTS" means, other than the RP Ag Co.
Program Patents, Agrinomics' rights and interests, whether owned or licensed, in
and to the exploitation of United States and foreign patents and patent
applications, if any, including without limitation those rights and interests of
Agrinomics developed by it or acquired by it under any or all of the current or
future Research Contracts defined in the LLC Agreement, in each case covering or
disclosing any aspect or part of the Agrinomics Program Technology. As used in
this Agreement, "patent(s)" includes without limitation utility patents, whether
for articles, compounds, plants, plant materials or products, processes,
methods, or other patentable subject matter; plant variety protection
certificates and rights under the Plant Variety Protection Act of 1970, as
amended; plant patents under the Plant Patent Act of 1930, as amended; design
patents; utility model rights; and all similar legally-protectible rights or
properties in any nation or jurisdiction.
1.3 "AGRINOMICS PROGRAM TECHNOLOGY" means, other than the RP Ag
Co. Program Technology, any and all deliverables, services, intellectual
properties, rights, and contributions from any person or entity under the
Research Program, and all related information, technical or otherwise, and
protein sequences, gene constructs, data, techniques, manuals, instructions,
samples, germplasm, inventions, development processes, assays, improvements, and
specifications developed directly by Agrinomics in the course of the Research
Program or to be provided to it under any or all of the current or future
Research Contracts defined in the LLC Agreement, and all intellectual property
rights therein and thereto, to the extent owned by Agrinomics or to be licensed
or to be owned by Agrinomics under such Research Contracts.
1.4 [ * ]
1.5 "BACKGROUND PATENTS" means, other than the RP Ag Co. Program
Patents, RP Ag Co.'s and its Affiliates' rights under United States and foreign
patents and patent applications, if any, in each case covering or disclosing any
of the Background Technology or any inventions that are otherwise related to or
useful for the development or exploitation of the Program Technology, or any
Program Product, and all rights therein and thereto, to the extent the same are
owned by RP Ag Co. or its Affiliates or available for its or their use or
sublicensing without fee, royalty or encumbrance, as listed in Schedule 2 in
accordance with Section 3.2 below.
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-3-
1.6 "BACKGROUND TECHNOLOGY" means, other than the RP Ag Co.
Program Technology, all information, technical or otherwise, including, but not
limited to, that comprised in formulae, protein sequences, gene constructs,
data, techniques, manuals, instructions, samples, germplasm, inventions,
development processes, assays, improvements, and specifications, delivered or
disclosed by RP Ag Co. or its Affiliates to Agrinomics prior to the date of this
Agreement with regard to the Research Program or disclosed by RP Ag Co. or its
Affiliates to Agrinomics hereafter during the period of the Research Program and
in the course of the Research Services, that is or may be related to or useful
in the Research Program or for the development or commercial exploitation of any
Program Technology or any Program Product, and all intellectual property rights
therein and thereto, to the extent the same are owned by RP Ag Co. or its
Affiliates or available for its or their use or sublicensing without fee,
royalty or encumbrance, as listed in Schedule 2 in accordance with Section 3.2
below.
1.7 "COSTS" means any direct and indirect cost and expense
incurred by RP Ag Co. in performing the Research Services hereunder, which are
attributable to its activities under this Agreement, including, but not limited
to:
(a) that part of the payroll costs (including any overtime, extra
compensation, payroll taxes and the cost of maintaining
employees' benefit plans) of RP Ag Co. and/or its Affiliates'
employees which is properly and reasonably attributable to the
performance of the Research Services; and
(b) that part of RP Ag Co.'s rent and other charges associated
with offices, greenhouses, and other facilities utilized by RP
Ag Co.'s personnel which is properly and reasonably
attributable to the performance of the Research Services;
(c) materials, supplies, usage of equipment and vehicles, and
similar items, to the extent the same will be devoted to the
Research Program, as is consistent with the Operating Plan;
(d) all filing, renewal, and other fees associated with any
permits, regulatory filings or other government authorizations
to the extent required for the conduct by RP Ag Co. and/or its
Affiliates of the Research Services, and all costs of
preparation of applications and supporting studies related
thereto; and
(e) that part of RP Ag Co.'s overhead and general office expenses
which is properly and reasonably attributable to the
performance of the Research Services; it being understood and
agreed that RP Ag Co. and Agrinomics will from time to time as
appropriate agree in writing upon the principles to be used in
the allocation of costs of RP Ag Co. under this Agreement.
-4-
1.8 "EXCLUSIVITY PERIOD" means that period that is determined on a
country by country basis for each Program Product and that extends until there
are no longer any Program Patents in that country applicable to the making,
using, selling, offering for sale, developing or importing/exporting of the
relevant Program Product, or, if later, until all Program Technology relevant to
the applicable Program Product or its development has been disclosed without
restriction to the public (but in the case of countries in the European Union
where there are no longer any Program Patents based at least in part on
technology existing as of the Effective Date, the Exclusivity Period applicable
to the relevant Program Product will not extend longer in such country than ten
years from the first commercial sale thereof in any country in the European
Union). Restrictions on passive marketing (i.e., merely accepting unsolicited
orders) of a Program Product in the European Union will not (unless otherwise
permitted under applicable law) last more than five years from the first
commercial sale thereof in any country in the European Union.
1.9 The "FIELDS" described herein are, and are defined as:
[ * ]
1.10 [ * ]
1.11 "PROGRAM PATENTS" means the Agrinomics Program Patents and the
RP Ag Co. Program Patents.
1.12 "PROGRAM PRODUCTS" means products, processes and technologies
the relevant manufacture, use, sale, offer for sale, development or
import/export of which if done by third parties would in the applicable
jurisdiction infringe upon a claim of a Program Patent, or the conception,
discovery, isolation, or development of which was enabled in a material way by
the use of any Program Technology.
1.13 "PROGRAM TECHNOLOGY" means the Agrinomics Program Technology
and the RP Ag Co. Program Technology.
1.14 [ * ]
1.15 "RESEARCH SERVICES" means the research projects, services, and
licenses described in more detail in the Operating Plan as services to be
provided by RP Ag Co. and/or its Affiliates (as the case may be) to Agrinomics.
The parties anticipate that the Operating Plan will be amended and supplemented
by Agrinomics from time to time, but it is agreed that no change to the Research
Services called for from RP Ag Co. and/or its Affiliates under this Agreement
shall be made without RP Ag Co.'s and/or its Affiliates' prior written consent,
which will not be unreasonably withheld or delayed. Subject to the Operating
Plan and the preceding sentence, the Research Services will include, but will
not be limited to, the following:
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-5-
(a) on-going consultation as to the formulation, amendment and
supplementation of the Operating Plan, including without
limitation, providing certain services from certain RP Ag Co.
employees for service on Agrinomics' Scientific Advisory
Committee and making recommendations to such Scientific
Advisory Committee and to Agrinomics' Board of Managers with
respect thereto;
(b) RP Ag Co. and/or its Affiliates (as the case may be) will
perform and/or provide the following principal tasks,
technologies and capabilities, as more fully described in the
Operating Plan with respect to all activities in the Research
Program (i.e., as applicable to or useful for the RP Ag Co.
Fields and otherwise):
[ * ]
(c) on-going coordination, as reasonably requested by Agrinomics
from time to time, of the Research Services described herein
with other services to be provided to Agrinomics by Agritope
and any third parties with which Agrinomics may from time to
time enter into research contracts, subscription contracts,
license agreements, testing or certification agreements,
marketing or distribution agreements, or other agreements as
contemplated in the Operating Plan (the "Alliance Parties");
and
(d) rendering assistance and consultation in relation to
Agrinomics' patent strategies filings, prosecution and
maintenance activities, in coordination with Agrinomics'
Patent Committee, including without limitation, providing
certain services from certain RP Ag Co. employees for service
on Agrinomics' Patent Committee.
1.16 [ * ]
1.17 "RP AG CO. PROGRAM PATENTS" means RP Ag Co.'s and its
Affiliates' rights and interests in United States and foreign patents and patent
applications, if any, arising from work or activities conducted as part of the
Research Services or otherwise covering any invention, discovery or improvement
made or acquired by or for RP Ag Co. or its Affiliates (whether solely or
jointly with others) in the course of the Research Services or in connection
with the conduct of the Research Program, including without limitation those
rights and interests of RP Ag Co. and its Affiliates to be transferred hereunder
to Agrinomics.
1.18 "RP AG CO. PROGRAM TECHNOLOGY" means any and all deliverables,
services, intellectual properties, rights, and contributions provided or agreed
to be provided by RP Ag Co. under the Research Program, and protein sequences,
gene constructs, data, techniques, manuals, instructions, samples, germplasm,
inventions, development processes, assays, improvements, and specifications to
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-6-
be developed by RP Ag Co. directly in the course of the Research Program, and
all intellectual property rights therein and thereto.
1.19 [ * ]
1.20 "TERM" means the period of this Agreement as determined under
Article 8 hereof, during which the Research Services will be performed.
2. AGREEMENT TO PERFORM RESEARCH SERVICES; DUTY OF COOPERATION
RP Ag Co., directly or through one or more of its Affiliates, or
through third parties subject to the prior written consent of Agrinomics, hereby
agrees during the Term to provide, or cause to be provided by third parties, the
Research Services; provided, however, that RP Ag Co. reserves the right to
decline to render or cause to be rendered Research Services in any case where RP
Ag Co., in its judgment, does not have adequate facilities, personnel or
resources to perform or cause to be performed the Research Services, or where
providing the Research Services would violate RP Ag Co. policies or relevant
law. RP Ag Co. will exert commercially reasonable efforts to obtain any and all
permits or regulatory filings or other government authorizations for the conduct
by it of the Services hereunder. Agrinomics shall assist RP Ag Co. in all such
efforts and otherwise shall provide RP Ag Co. with sufficient information and
assistance as reasonably requested by RP Ag Co. to enable RP Ag Co. to provide
or cause to be provided the Research Services.
3. PROGRAM TECHNOLOGY/PATENTS AND LICENSES
3.1 RIGHTS IN PROGRAM TECHNOLOGY AND PROGRAM PATENTS
(a) All ownership, copyright, patent, trade secrecy, and other
rights and title in and to all Program Technology and Program
Patents shall be owned solely by Agrinomics. RP Ag Co. hereby
transfers and assigns to Agrinomics all of the foregoing,
whether now existing or hereafter coming into existence,
subject to the rights of third parties. RP Ag Co. will assist
Agrinomics as requested during and after the term of this
Agreement to further evidence and perfect Agrinomics' rights
in such property, including without limitation, securing
appropriate agreements from its Affiliates and contractors,
executing additional instruments of conveyance, and assisting
Agrinomics with applications for patents, copyright
registrations, or other registrations. Agrinomics may by
written notice to RP Ag Co. from time to time decline to
accept any RP Ag Co. Program Patents as such hereunder, either
entirely or on a country-by-country basis, from that time
forward, and in that event such declined patent or application
shall not be part of the RP Ag Co. Program Patents, but shall
be considered part of the Background Patents.
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-7-
(b) Agrinomics hereby grants to RP Ag Co. and its Affiliates a
nonexclusive, royalty-free, worldwide license, with no right
to sublicense, to use and to exercise the Program Technology
and the Program Patents for research purposes during and in
support of the Research Program.
(c) Agrinomics hereby grants to RP Ag Co. a worldwide license,
with right to sublicense, under the Program Technology and the
Program Patents and as described in Section 4.1(a) below, to
make, have made, use, sell, offer for sale, develop, and
import/export any and all Program Products within [ * ]. This
license under this Section 3.1(c) shall be exclusive during
the Exclusivity Period to the extent that [ * ] and otherwise
shall be nonexclusive. Notwithstanding the foregoing,
Agrinomics and RP Ag Co. hereby agree that, [ * ] RP Ag Co.
hereby grants to Agritope, as a third-party beneficiary, the
right to enter into one or more exclusive (where such rights
of RP Ag Co. are exclusive hereunder, and otherwise
nonexclusive) implementation and worldwide commercialization
agreements, as described in Section 4.1(b) below, with respect
to the exploitation of any Program Technology and/or Program
Patents in the [ * ] in one or more of [ * ]. If in any
particular instance, Agritope declines its right to obtain any
such license, [ * ] or shall not respond prior to the end of
that time period, the rights for that Program Product in that
crop in [ * ] shall revert to RP Ag Co. pursuant to this
Section 3.1(c).
(d) Agrinomics hereby grants to RP Ag Co. and its Affiliates:
(i) [ * ] option [ * ] to obtain, pursuant to Section 4.2
below, a royalty-bearing, worldwide license under the
Program Technology and the Program Patents, to make,
have made, use, sell, offer for sale, develop, and
import/export any [ * ]; and
(ii) [ * ] option [ * ] to negotiate with Agrinomics to
obtain a license, under terms and with a scope to be
determined as provided in Section 4.3 below, to make,
have made, use, sell, offer for sale, develop, and
import/export any Program Product that [ * ].
(e) Agrinomics hereby agrees to afford RP Ag Co. and its
Affiliates a right of first negotiation and, if applicable as
described below, a right of first refusal, to contract with
Agrinomics to conduct any Agrinomics project directed to the
implementation or commercialization within the [ * ] of any
novel genes owned by Agrinomics and discovered by Agrinomics
or its Affiliates or contractors directly in the course of the
Research Program; provided, however that these rights shall
not apply to any project directed to any [ * ].
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-8-
(i) Pursuant to such right of first negotiation,
Agrinomics shall notify RP Ag Co. of any decision by
Agrinomics during the Term to conduct any
implementation or commercialization project covered
by RP Ag Co.'s rights under this clause (e). Such
decision is acknowledged to be that of Agrinomics to
make in its sole discretion. Agrinomics shall
negotiate in good faith with RP Ag Co. and only with
RP Ag Co., for a period of [ * ] following such
notification in order to reach agreement on RP Ag
Co.'s or its Affiliates' conducting such project.
Such an agreement, if reached, may include a
commercialization agreement with respect any Program
Product that may result from such project, or it may
provide that a commercialization agreement therefor
would be entered later, pursuant to Section 4.2.
(ii) If, despite such good faith efforts, such an
agreement is not reached in the negotiation period,
RP Ag Co. shall be afforded a further period of [ * ]
during which it would have a right of first refusal
to accept any deal for such a implementation or
commercialization project in the same gene in the
[ * ] offered by Agrinomics to any other person or
entity on terms that are, taken as a whole, more
beneficial to such other person or entity than the
best terms Agrinomics had offered to RP Ag Co. during
the negotiation period (that is, if Agrinomics so
offers any such deals in such period). If no such
more favorable deals are offered, or if offered, RP
Ag Co. declines to agree to perform them [ * ], then
Agrinomics shall be free to enter into one or more
agreements with third parties for the conduct of such
projects. [ * ]
(f) Agrinomics hereby grants to RP Ag Co. and its Affiliates a
nonexclusive, royalty-free, worldwide license, with no right
to sublicense, to use and to exercise the RP Ag Co. Program
Technology (but not any of the Program Patents, unless
otherwise stated in this Agreement or under a separate
agreement) for internal research purposes;
(g) [ * ]
3.2 LICENSES TO BACKGROUND TECHNOLOGY AND BACKGROUND PATENTS
(a) Schedule 2 hereto contains a complete list and description of
all Background Patents and Background Technology, as currently
anticipated by RP Ag Co. RP Ag Co. shall promptly (and at
least annually) supplement such list and description
throughout the Term by written notices to Agrinomics if and
when any additional Background Patents or Background
Technology not previously so listed and described is used or
applied, or is proposed to be used or applied, by RP Ag Co. or
its Affiliates, at their sole discretion, in performing the
Research Services or otherwise in connection with the Research
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-9-
Program. For the avoidance of doubt, no Background Patents or
Background Technology shall be withdrawn from Schedule 2
without prior written consent of Agrinomics.
(b) RP Ag Co. will retain all ownership, copyright, trade secrecy,
and other rights and title in and to all Background Technology
and Background Patents [ * ], subject only to the express
licenses granted herein.
(c) RP Ag Co. hereby grants to Agrinomics a nonexclusive,
royalty-free, worldwide license, with right to sublicense, to
use and to exercise the Background Technology and the
Background Patents (including without limitation [ * ]) for
research purposes during and in support of the Research
Program.
(d) Subject to RP Ag Co. rights under Section 3.1 above, RP Ag Co.
hereby grants to Agrinomics a nonexclusive, royalty-free,
worldwide license, with right to sublicense, under the
Background Technology and the Background Patents, to make,
have made, use, sell, offer for sale, and import any and all
Program Products; provided, however, that no right or license
is granted to Agrinomics to exploit commercially [ * ].
4. LICENSES AND COMMERCIALIZATION AGREEMENTS
4.1 EXCLUSIVE LICENSES IN THE [ * ]
(a) The parties hereby agree that all licenses in [ * ] as and to
the extent stated in Section 3.1(c). The specific terms,
conditions, royalty rates or formulas, payment terms, audit
rights, and other aspects of the exclusive licenses hereunder
(apart from the worldwide exclusivity PER SE which is
automatically granted, as and to the extent stated in Section
3.1(c)) in [ * ] shall be determined by mutual written
agreements (the "Commercialization Agreements") to be entered
between Agrinomics and RP Ag Co. prior to the conduct of any
marketing or commercialization activities under such licenses.
If, in connection with the negotiation of a Commercialization
Agreement, the parties are not in agreement on all the terms,
including without limitation, royalty rates, or other terms,
within [ * ] starting from the date of notification by RP Ag
Co. of its intent to enter into a Commercialization Agreement,
then the provisions of the Commercialization Agreement as to
such terms will be determined by binding arbitration conducted
in accordance with Section 9 below. [ * ] then, in
consideration for such rights granted to Agrinomics, RP Ag Co.
and its Affiliates [ * ].
(b) The specific terms, conditions, royalty rates or formulas,
payment terms, audit rights, and other aspects of Agritope's
exclusive licenses, to the extent stated in Section 3.1(c), in
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-10-
[ * ] shall be determined by mutual written agreements (the
"Commercialization Agreements") to be entered between Agritope
and RP Ag Co. prior to the conduct of any marketing or
commercialization activities under such licenses. If, in
connection with the negotiation of a Commercialization
Agreement, Agritope and RP Ag Co. are not in agreement on all
the terms, including without limitation, royalty rates, or
other terms, within [ * ] starting from the date of
notification by RP Ag Co. to Agritope of its intent to enter
into a Commercialization Agreement with respect to [ * ], then
the provisions of the Commercialization Agreement as to such
terms will be determined by binding arbitration conducted
between RP Ag Co. and Agritope under an arbitration agreement
on substantially the terms set forth in Section 9 below. [ * ]
4.2 RIGHT TO OBTAIN LICENSES FOR [ * ]
The specific terms, conditions, royalty rates or formulas, payment
terms, audit rights, and other aspects of the licenses under Section 3.1(d)(i)
above with respect to [ * ] shall be determined under mutual written
Commercialization Agreements to be entered between RP Ag Co. and Agrinomics
prior to the conduct of any marketing or commercialization activities under such
licenses. If, in connection with the negotiation of a Commercialization
Agreement, the parties are not in agreement on all the terms, including without
limitation, the scope and nature of any exclusive rights thereunder, royalty
rates, or other terms, within [ * ] starting from the first date of notification
by RP Ag Co. to Agrinomics (which notification shall occur within the [ * ]
option period stated in Section 3.1(d)(i)) of its desire to enter into such a
Commercialization Agreement with respect to a particular [ * ] in a particular
application (the "Notice Date" with respect thereto), then the provisions of
such Commercialization Agreement will be determined by binding arbitration
conducted in accordance with Section 9 below, which arbitration shall be guided
by and consistent with the following terms:
(i) If exclusive marketing rights under the Commercialization
Agreements are desired by RP Ag Co., then RP Ag Co. or its
Affiliate or sublicensee would provide a marketing plan to
Agrinomics, [ * ]. Based on this information, Agrinomics and
RP Ag Co. would negotiate in good faith to determine
geographical regions in which RP Ag Co. would have exclusive
or nonexclusive marketing rights with rights to sublicense.
Agrinomics would give RP Ag Co. exclusivity in [ * ], and RP
Ag Co. will be granted nonexclusive rights in other regions.
Any exclusive marketing rights granted for a particular
geographical region would become nonexclusive in the event
that RP Ag Co. and its sublicensees do not achieve and
maintain a substantial market share in such geographical
region. The definition of [ * ] would be determined by such
arbitration, if it is not otherwise mutually agreed to by
Agrinomics and RP Ag Co. on a case-by-case basis for each such
[ * ].
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-11-
(ii) RP Ag Co. and its Affiliates shall grant to Agrinomics and its
Affiliates a nonexclusive, worldwide and perpetual license,
with right to sublicense, to make, have made, use, sell, offer
for sale, develop and import/export, in any crop or
application, any and all improvements on any Program Product
and/or Program Technology made by RP Ag Co. or its Affiliates
or sublicensees during the term of each such license. Such
license will be royalty-bearing, at a rate to be determined by
mutual agreement of RP Ag Co. and Agrinomics. If such mutual
agreement is not reached prior to the first commercial launch
by Agrinomics or its sublicensee of any product pursuant to
such sublicense, then such royalty rate shall be determined by
the arbitration referred to hereinabove, if it is not
otherwise mutually agreed to Agrinomics and RP Ag Co. on a
case-by-case basis.
(iii) RP Ag Co. and its Affiliates shall not grant any sublicenses
under any such license without the prior written consent of
Agrinomics, which consent shall not be unreasonably withheld
with respect to any such license to the extent the license to
RP Ag Co. is exclusive, it being agreed that consent to any
sublicensing of any such license to RP Ag Co. that is
nonexclusive may be withheld in Agrinomics' sole discretion.
Any such sublicense must, without limitation, provide that
Agrinomics shall have a royalty-free, nonexclusive, worldwide
and perpetual license, with right to sublicense, to make, have
made, use, sell, offer for sale, and import any or all
improvements made by the sublicensee during the term of such
sublicense.
(iv) Royalties to be paid by RP Ag Co. to Agrinomics with respect
to fees or other consideration paid to RP Ag Co. or its
Affiliates by any sublicensee under any such license (other
than fees or consideration measured by sales of [ * ] made by
the sublicensee and covered by net sales royalties pursuant to
the Commercialization Agreement) in return for the grant of
such sublicense, shall be [ * ].
(v) All royalties shall be paid quarterly, within [ * ] after the
end of the calendar quarter, in US Dollars, to Agrinomics'
account in Portland, Oregon.
(vi) RP Ag Co. shall keep, and shall cause its Affiliates and
sublicensees to keep, for at least five years, full and
accurate books and records in sufficient detail so that sums
due Agrinomics hereunder can be properly calculated. RP Ag Co.
shall permit, and shall cause its Affiliates and sublicensees
to permit, representatives of Agrinomics to examine its books
and records at reasonable times and intervals for the purpose
of verifying the accuracy of the written statements submitted
by RP Ag Co. and its Affiliates and sums paid or payable
hereunder. Such examination shall be made at the expense of
Agrinomics, except that if such examination discloses a
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-12-
discrepancy of five percent (5%) or more in the amount of
royalties and other payments due to Agrinomics, then RP Ag Co.
shall reimburse Agrinomics for the costs of such examination.
(vii) Such licenses shall survive the expiration or termination of
the Term of this Agreement and shall be effective for the
longer of the duration of any applicable licensed patents, or
[ * ] following the date of the Commercialization Agreement
for the applicable [ * ]. Following such term, such licenses
shall become fully-paid, worldwide and nonexclusive.
4.3 RIGHT TO NEGOTIATE LICENSES FOR OTHER PROGRAM PRODUCTS
The specific terms, conditions, royalty rates or formulas, payment
terms, audit rights, and other aspects of the licenses, if any, under Section
3.1(d)(ii) above with respect to Program Products that are not [ * ] shall be
determined under mutual written Commercialization Agreements that may be entered
between RP Ag Co. and Agrinomics prior to the conduct of any marketing or
commercialization activities under any such licenses. The parties acknowledge
and agree that, if and to the extent that it would be in the best interests of
Agrinomics to retain (and to have the right to license to other entities) rights
or licenses described in Section 3.1(d)(ii) in particular territories or in
particular products or applications, RP Ag Co. and Agrinomics will attempt in
good faith to agree that RP Ag Co. will not obtain licenses under Section
3.1(d)(ii) in those territories, products, or applications. If the parties do
not reach agreement within [ * ] starting from the first date of notification by
RP Ag Co. to Agrinomics (which notification shall occur within the [ * ] option
period stated in Section 3.1(d)(ii)) of RP Ag Co.'s exercise of its option under
Section 3.1(d)(ii) with respect to a Program Product for implementation or
commercialization in a particular application (the "Notice Date" with respect
thereto), as to whether and to what extent there will be a license to RP Ag Co.
in particular territories, products, or applications for such Program Product,
then the provisions of such an agreement will be determined by binding
arbitration conducted in accordance with Section 9 below. If, in connection with
the negotiation of a Commercialization Agreement (to the extent there will be a
grant of a license to RP Ag Co. under Section 3.1(d)(ii)), the parties are not
in agreement on all the terms, including without limitation the scope and nature
of any exclusive rights thereunder, royalty rates, or other terms, within [ * ]
starting from the applicable Notice Date, then the provisions of such
Commercialization Agreement will be determined by binding arbitration conducted
in accordance with Section 9 below, which arbitration shall as to any
Commercialization Agreement be guided by and consistent with the terms set forth
in Section 4.2 (i) - (vii). The arbitrations referred to in the preceding two
sentences as to a particular Program Product may be conducted as a single
proceeding.
5. FEES AND CAPITAL COSTS
5.1 IN GENERAL. Except as is otherwise provided with respect to
specific tasks or Services in the Operating Plan, Agrinomics shall pay or cause
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-13-
to be paid to RP Ag Co., as the exclusive compensation to RP Ag Co. for Research
Services to be performed by it hereunder, a fee (the "Fee") equal to the Costs.
5.2 BUDGETS; FEE PAYMENTS. Agrinomics shall pay RP Ag Co. the sum of
one-fourth of the applicable portion of the annual business plan budget per
quarter with a true-up for actual costs before the closing of RP Ag Co.'s books
at year-end, on or before the first business day of each quarter, as an
estimated total Fee for all Research Services to be rendered to Agrinomics
during such quarter. Such quarterly payment shall be adjusted by mutual written
agreement of Agrinomics and RP Ag Co. as changes are made to Agrinomics' budget
or the Operating Plan, or otherwise as needed in light of experience of the
parties under this Agreement or any anticipated substantial change in the
Research Services or Costs thereof. Within 45 days after the end of each
calendar quarter, or as near thereto as practicable, RP Ag Co. shall compute and
advise Agrinomics by invoice or credit memo of the actual total amount payable
hereunder for Research Services in respect of such quarter. The parties shall
make the proper adjustments to make the amounts paid for Research Services
during such quarter equal the Fees actually payable therefor, either by
Agrinomics' paying any shortfall within ten days following the end of such
45-day period, or by RP Ag Co.'s giving Agrinomics a credit against any
subsequent payment in the amount of any prior overpayment.
5.3 BOOKS AND RECORDS. RP Ag Co. agrees to maintain adequate books and
records regarding the provision of Research Services under this Agreement,
including accounting for the Costs, with appropriate supporting documentation.
Agrinomics shall have, upon not less than forty-eight (48) hours prior written
notice to RP Ag Co., access during normal business hours, to the books and
records of RP Ag Co. relating to the Research Services. Agrinomics shall have
the right to review such books and records and copy same at its own cost and
expense.
5.4 AUDIT RIGHTS. Agrinomics shall have the right to audit RP Ag Co.'s
books and records once every twelve months for the purpose of confirming the
Costs for the previous twelve month period. Agrinomics shall give reasonable
notice of its intent to audit, and the parties will attempt to schedule such
audit so as not to unreasonably interfere with the conduct of RP Ag Co.'s
operations. Agrinomics agrees to notify RP Ag Co. within 30 days should
Agrinomics believe that all or any portion of an invoice or credit memo is not
supported by the audit, and the parties agree to meet promptly to resolve any
Cost which Agrinomics believes is not supported by the audit. Any such audit
shall be at the expense of Agrinomics, unless the inspection or audit reveals,
with respect to the period under audit, that the Costs have been overstated, or
royalties have been understated, by more than 5%, in which event RP Ag Co. shall
pay or reimburse Agrinomics for the reasonable expenses of such inspection or
audit, in addition to Agrinomics' other remedies for such overpayment or
underpayment.
-14-
6. CONFIDENTIALITY
6.1 PROTECTION OF INFORMATION. Each of RP Ag Co. and Agrinomics agrees:
(i) to take all reasonable precautions and to use its best efforts to maintain
the confidentiality of all Confidential Information (as defined below) that such
party (the "Recipient") obtains in respect to the other (the "Disclosing
Party"); and (ii) not to use or disclose such Confidential Information to any
third parties other than the Recipient's Affiliates that are similarly bound to
protect the same or otherwise with the written approval of the Disclosing Party
or as permitted by Section 6.2. "Confidential Information" means all proprietary
or confidential information owned or provided by a Disclosing Party other than
information that (A) was previously known to the Recipient or any of its
Affiliates (other than from a Disclosing Party or an Affiliate thereof), or (B)
is available or, without the fault of the Recipient or any of its Affiliates
(other than Agrinomics), becomes available to the general public, or (C) is
lawfully received by the Recipient from a third party that, to the Recipient's
knowledge, is not bound by any similar obligation of confidentiality. The
disclosure of Confidential Information shall not constitute any grant of license
or any other rights nor generate any business arrangements unless specifically
set forth herein or in another agreement.
6.2 CERTAIN DISCLOSURES. A Recipient may disclose Confidential
Information to appropriate regulatory authorities, attorneys, accountants and
pursuant to any order of a court, administrative agency or other governmental
authority and may take any lawful action that it deems necessary to protect its
interests or the interests of its Affiliates under, or to enforce compliance
with the terms and conditions of, this Agreement; PROVIDED, HOWEVER, that in the
event that it appears that a Recipient may become legally compelled to disclose
any Confidential Information, it will promptly consult with the Disclosing Party
as to the reasons for such disclosure and will afford the Disclosing Party a
reasonable opportunity to obtain a protective order as to such information and
will use reasonable efforts to obtain reliable assurance that the information
disclosed will be treated confidentially.
7. STATUS AND LIABILITIES OF THE PARTIES
7.1 NO AGENCY. Nothing herein contained shall make RP Ag Co. an agent,
general representative or employee of Agrinomics for any purpose, and RP Ag Co.
shall render the Research Services and perform its other obligations hereunder
as an independent contractor on a non-exclusive basis. RP Ag Co. shall not have
the power to bind Agrinomics unless and except as, in respect of any specific
matters, it is hereafter expressly authorized to do so in writing by Agrinomics.
7.2 DUTY OF GOOD FAITH. RP Ag Co. agrees to perform the Research
Services contemplated by the terms of this Agreement diligently and in good
faith. RP Ag Co. shall not have liability for any act done or omitted to be done
in the performance of the Research Services unless done or omitted to be done as
a result of RP Ag Co.'s gross negligence or willful misconduct.
-15-
7.3 INDEMNIFICATION. Agrinomics shall indemnify and defend RP Ag Co.
and its Affiliates (other than Agrinomics), licensees and permitted assigns, and
their respective directors, officers, and employees and agents (the "Indemnified
Parties") from and against (i) any and all claims of any employee of Agrinomics
relating to his or her employment, including claims of breach of expenses or
implied contract, benefits, wrongful termination, discrimination or harassment,
except to the extent such claims are the result of any action of RP Ag Co. or
its employees, acting in their capacity as such employees; (ii) any and all
claims of any third party arising from any of RP Ag Co.'s actions or omissions
to act, within the scope of this Agreement, including without limitation as to
environmental matters; and (iii) any costs or expenses (including reasonable
attorneys' fees and costs) incurred by the Indemnified Parties relating to such
claims. Notwithstanding the foregoing, Agrinomics shall have no liability for
any claims, costs or expenses to the extent caused by RP Ag Co.'s gross
negligence or willful misconduct, or RP Ag Co.'s breach of its agreements
hereunder, and RP Ag. Co. shall indemnify and defend Agrinomics and its
Affiliates (other than RP Ag Co. and its Affiliates), licensees and permitted
assigns, and their respective directors, officers, and employees and agents from
and against any claim arising by reason of such gross negligence, willful
misconduct or breach of its agreements hereunder, including without limitation
as to environmental matters.
7.4 NO WARRANTIES. Each party affirms that it has no actual knowledge
that any of the technology, rights or other services, products or activities to
be performed, licensed or provided by it under or in connection with this
Agreement would, as so performed or provided, or as used or further distributed
as contemplated, infringe any intellectual property right of any person or
entity. Each party will promptly inform the other of any such knowledge that it
may obtain during the term of this Agreement. EXCEPT AS FORTH HEREIN, NEITHER
PARTY MAKES ANY WARRANTIES HEREUNDER, WHETHER OF RESEARCH SUCCESS,
MERCHANTABILITY OR NONINFRINGEMENT, AND RP AG CO. AND AGRINOMICS HEREBY DISCLAIM
ANY IMPLIED WARRANTIES AND ANY WARRANTIES ARISING BY TRADE USAGE OR COURSE OF
PERFORMANCE.
7.5 NO CONSEQUENTIAL OR INCIDENTAL DAMAGES. In no event shall either
party have any liability to the other or to any third-party whomsoever for
consequential or incidental damages. Specifically, RP Ag Co. shall have no
liability for any consequential or incidental damages, whether arising from its
own acts or failures to act, or from services provided or failed to be provided
by third-party providers, except to the extent such damages involve harm to
persons or physical property and arise directly from RP Ag Co.'s gross
negligence or willful misconduct. Agrinomics agrees that the remuneration to be
paid to RP Ag Co. hereunder for the Research Services contemplated herein
reflects these limitations of liability and disclaimers of warranties.
-16-
8. TERM AND TERMINATION
8.1 TERM. The Term shall commence on the Closing Date under the LLC
Agreement, and shall expire on the earliest of: (a) the termination of the LLC
Agreement, (b) a termination hereof at the election of a Member pursuant to a
right to do so as described in the LLC Agreement; (c) June 30, 2004, or (d) the
date of termination otherwise specified in this Article 8. In the event of an
expiration of the Term pursuant to subsection (c) above, the Term shall
automatically renew as of July 1, 2004, and as of every October 1 thereafter for
a term that shall expire the following September 30, subject to the termination
provisions otherwise specified in this Article 8.
8.2 NON-RENEWAL. Either party to this Agreement may either (i)
terminate the Term effective at the end of the then-current Term, or (ii)
require renegotiation of this Agreement, with no obligation of either party to
enter into an agreement, effective at the end of the then-current Term, by
giving written notice to the other party sixty (60) days in advance of the end
of the then-current Term. Once notice under this Section 8.2 has been given,
this Agreement will not automatically renew under Section 8.1.
8.3 TERMINATION FOR DEFAULT. If either party materially breaches any of
the terms, conditions or agreements contained in this Agreement to be kept,
observed or performed by it, the other party may terminate this Agreement, at
its option and without prejudice to any of its other legal or equitable rights
or remedies, by giving the party who committed the breach ninety (90) days'
notice in writing, unless the notified party within such 90-day period shall
have cured the breach. Neither party will be considered in breach of this
Agreement for purposes of the termination remedy stated herein during any period
in which there is a good faith dispute between the parties as to the existence
of such breach. If the parties are, despite negotiations at the highest levels
of their respective managements over a period of at least ninety days, unable to
resolve any good faith dispute between them as to the existence of such breach,
such dispute may at the election of either party be resolved in accordance with
Section 9.
8.4 EFFECT OF TERMINATION OR EXPIRATION. Any termination or expiration
of the Term will not affect any rights or obligations which have arisen prior to
the date of such termination. Except for a termination due to the uncured
default of Agrinomics, Agrinomics' licenses granted under Section 3.2 will
survive any termination or expiration of the Term. Except for a termination due
to the uncured default of RP Ag Co., RP Ag Co.'s licenses (and all related
sublicenses) granted under clauses (a) and (c) - (g) of Section 3.1 and Section
4 will survive any termination or expiration of the Term; provided, however,
that RP Ag Co.'s licenses under clauses (c) - (g) of Section 3.1 (and its rights
under Section 4 with respect thereto) will not apply to any Program Product
containing protein sequences, gene constructs, data, techniques, manuals,
instructions, samples, germplasm, inventions, development processes, assays, or
improvements, first discovered following the end of the Term. The provisions of
-17-
Articles 6, 7, 8, 9, and 10 will survive any termination or expiration of the
Term.
9. ARBITRATION OF DISPUTES
If the parties fail to reach agreement with respect to a dispute or
difference (other than as to a question relating to patent validity, which the
parties intend will be decided in litigation and not in arbitration), between
the parties arising out of or in connection with this Agreement, the dispute or
difference will be determined by arbitration in New York City, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association by
an independent and impartial arbitrator, who (unless the parties agree
otherwise) shall have had both training and experience as an arbitrator of
agricultural technology licensing matters, including biotechnology, and who
shall be, and for at least ten years shall have been, a partner, shareholder or
member in a highly respected law firm headquartered in the United States. The
arbitrator may decide any issue as to whether, or as to the extent to which, any
dispute is subject to the arbitration and other dispute resolution provisions in
this Agreement. The arbitrator must base the award on the provisions of this
Agreement and must render the award in a writing which must include an
explanation of the reasons for such award. Any arbitration pursuant to this
section will be governed by the substantive laws of Delaware applicable to
contracts made and to be performed in that state, without regard to conflicts of
law rules, and by the arbitration law of the Federal Arbitration Act (9 U.S.C.
ss.1 et seq.). Judgment upon the award rendered by the arbitrator may be entered
by any court having jurisdiction thereof. The statute of limitations of Delaware
applicable to the commencement of a lawsuit will apply to the commencement of an
arbitration under this Section. All fees, costs and expenses of the arbitrator,
and all other costs and expenses of the arbitration, will be shared equally by
the parties to this Agreement unless such parties agree otherwise or unless the
arbitrator in the award assesses such costs and expenses against one of such
parties or allocates such costs and expenses other than equally between such
parties. Notwithstanding the foregoing, either party may, on good cause shown,
seek a temporary restraining order and/or a preliminary injunction from a court
of competent jurisdiction, to be effective pending the institution of the
arbitration process and the deliberation and award of the arbitrator.
10. GENERAL PROVISIONS
10.1 SEVERABILITY. If any provision of this Agreement shall be held to
be invalid, illegal or unenforceable, such provision shall be enforced to the
maximum extent permitted by law and the parties' fundamental intentions
hereunder, and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
10.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements, proposals, or
understandings, whether written or oral, other than the LLC Agreement and the
-18-
agreements referenced therein. No amendment of this Agreement shall be effective
unless set forth in writing and signed by authorized agents of both parties. No
waiver or consent to any departure by Agrinomics or RP Ag Co. from performance
under this Agreement shall be effective unless set forth in writing and signed
by an authorized agent of the party to be bound, nor shall any such waiver or
consent be construed beyond its explicit terms to imply any subsequent or other
instance of such performance.
10.3 ASSIGNMENT. This Agreement and the Research Services provided
hereunder and/or any rights and/or duties associated therewith may not be
assigned or transferred by RP Ag Co. without the prior written consent of
Agrinomics, which consent will not be unreasonably withheld or delayed;
provided, however, that an assignment to an Affiliate of RP Ag Co. [ * ] will
not require the consent of Agrinomics. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns.
10.4 FORCE MAJEURE. This Agreement shall not be terminated as a result
of any failure of a party to perform any of its obligations hereunder if such
failure is due to circumstances beyond its control (an "Event of Force
Majeure"), including, but not limited to, any requisition by any government
authority, act of war, strike, boycott, lockout, picket, riot, sabotage, civil
commotion, insurrection, epidemic, disease, act of God, fire, flood, accident,
explosion, earthquake, storm, failure of public utilities or common carriers,
mechanical failure, embargo, or prohibition imposed by any governmental body or
agency having authority over the party, provided, that at such time as an Event
of Force Majeure no longer exists, the respective obligations of the parties
hereto shall be reinstated and this Agreement shall continue in full force and
effect. The party affected by any Event of Force Majeure shall give prompt
written notice thereof to the other party hereto and each party each shall use
good faith efforts to minimize the duration and consequences of, and to
eliminate, any such Event of Force Majeure.
10.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to the
choice of law provisions of the State of Delaware or any other jurisdiction to
the contrary.
10.6 NOTICES. Any notice, request, instruction or other document to be
given hereunder shall be in writing, delivered in person, or mailed by certified
or registered mail, return receipt requested, or transmitted by facsimile
transmission with electronic confirmation of receipt to the addressee's address
or facsimile number set forth below (or such other address or facsimile number
as the party changing its address specifies in a notice to the other parties):
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-19-
To RP Ag Co.:
▇▇▇▇▇-▇▇▇▇▇▇▇ Ag Company Inc.
2 ▇.▇. ▇▇▇▇▇▇▇▇▇ Drive
Research Triangle Park
North Carolina 27709, USA
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇-▇▇▇▇▇▇▇ Agro S.A.
▇▇-▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇) ▇▇ ▇▇ ▇▇ ▇▇
To Agrinomics:
Agrinomics LLC
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and with a copy to:
▇▇▇▇▇▇▇ Coie LLP
▇▇▇ -▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices shall be deemed to have been given on the date of service, if served
personally on the party to whom notice is to be given , or on the first day
after transmission by facsimile transmission, if transmitted by facsimile as set
forth above, or on the fifth day after mailing, if mailed as set forth above.
10.7 HEADINGS. The headings of the sections of this Agreement have been
set forth for use of reference only and shall not be used to construe or
interpret the terms and conditions of this Agreement.
10.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
10.9 CONSTRUCTION. This Agreement has been submitted to the scrutiny
of, and has been negotiated by, all parties hereto and their counsel, and shall
-20-
be given a fair and reasonable interpretation in accordance with the terms
hereof, without consideration or weight being given to its having been drafted
by any party hereto or its counsel.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
▇▇▇▇▇-▇▇▇▇▇▇▇ AG COMPANY INC.
By: /s/▇. ▇▇▇▇▇▇▇
Name: Pascal Housset
Title: Director
AGRINOMICS LLC
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
-21-
SCHEDULE 1: [ * ]
-----------------
[ * ]
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-22-
SCHEDULE 2: BACKGROUND PATENTS AND BACKGROUND TECHNOLOGY
--------------------------------------------------------
[ * ]
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
-25-
