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RESEARCH AND DEVELOPMENT
AGREEMENT
This Research and Development Agreement (the
"Agreement") is made as of January 24, 1996, by and between
Monsanto Company, a Delaware corporation, with its general
offices at 000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xx. Xxxxx, Xxxxxxxx
00000 ("Monsanto"), and Ecogen Inc., a Delaware corporation
having its principal office at 0000 Xxxxx Xxxxxxxxx Xxxx,
Xxxxxxxxx, XX 00000 ("Ecogen").
W I T N E S S E T H
WHEREAS, Ecogen owns certain existing Bt strain libraries,
certain crystal protein gene libraries, and certain proprietary
rights regarding protein engineering of Bt crystal proteins;
WHEREAS, Monsanto is acquiring certain of such libraries and
proprietary rights in accordance with the Technology Assignment
Agreement dated as of January 24, 1996 ("Assignment Agreement");
WHEREAS, Monsanto has expertise in the field of plant
biotechnology and Ecogen has expertise in finding, screening and
commercializing compounds, including proteins based on the
bacterium Bacillus thurigiensis ("Bt");
WHEREAS, both Monsanto and Ecogen have research facilities
and are capable of conducting research and development within the
Field of the Agreement;
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WHEREAS, Monsanto and Ecogen wish to conduct research and
development which may lead to the commercialization of (i)
improved bioinsecticides, and (ii) plants and/or plant seeds into
the genomes of which Bt genes have been included so that such
plants or plant seeds will express proteins;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, Monsanto and Ecogen agree as follows:
ARTICLE 1 - DEFINITIONS
Capitalized terms not otherwise defined in this Agreement
shall have the same meaning given such terms in the Assignment
Agreement. In addition, the following terms shall have the
meanings set forth below and will include the plural as well as
the singular.
1.1 "Budget Year" shall have the meaning set forth in
Section 3.3.
1.2 "Contract Year" shall mean the year beginning on
January 24, 1996 and ending on January 23, 1997 and each
anniversary thereafter until such time as the Agreement is no
longer in force.
1.3 "Date of this Agreement" shall mean the date first
written above.
1.4 "Ecogen" shall mean Ecogen and its Subsidiaries.
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1.5 "Field of the Agreement" shall mean research and
development in finding, discovering, screening and developing new
proteins and genes.
1.6 "Initial Term of the Agreement" shall mean the period
beginning on the Date of this Agreement and ending on the fourth
anniversary thereof.
1.7 "In Planta Application" means (i) use, development, or
commercialization of transgenic plants, seeds, cells or
components thereof (collectively "Plants") or (ii) use,
development, or commercialization of genetic material used so
that Plants express a new material or an existing material at
levels different from the levels that such Plants otherwise
would.
1.8 "Intellectual Property Rights" means (i) all patent
rights and all right, title and interest in and to all letters
patent and applications for letters patent, and other government
issued or granted indicia of invention ownership including any
substitutions, extensions, reissues, divisions, continuations or
continuations-in-part or applications thereof or therefor
throughout the world; (ii) all rights, title and interest in and
to all trade secrets and trade secret rights arising under the
common law, state law, federal law and laws of foreign countries;
(iii) all copyright rights, and all other literary property and
author rights whether or not copyrightable; and all rights, title
and interest in and to all copyrights, copyright registrations,
certificates of copyright and copyrighted interests throughout
the world; (iv) all rights, title and interest in and to all
know-how whether or not protectable by patent, copyright or trade
secret law; and (v) all goodwill associated with any of the
foregoing; provided, however, that the term "Intellectual
Property Rights" shall not include any trademarks, trade names or
service marks, whether
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registered or arising under the common law, state law, federal law
or the laws of foreign countries or any registrations thereof or
interests therein.
1.9 "Microbial Applications" shall mean use, development or
commercialization of insecticidal, bacterial, fungicidal,
pesticidal, medical, veterinary, scientific, nutritional, food
additive or preservative, materials, textiles, and similar
products; provided, however, that such products shall not include
any product for an In Planta Application.
1.10 "Naturally Occurring Genes" shall mean genes expressed
by Bt that produce proteins without genetic engineering or
protein engineering.
1.11 "R&D Technology" shall mean the Bt strains or genes
discovered or developed pursuant to the Research Program and the
Intellectual Property Rights arising pursuant to the performance
of the parties' obligations under this Agreement.
1.12 "Research Budget" shall mean the forecast of expenses
and expenditures set by Monsanto from time to time for each
Budget Year for that part of the Research Program undertaken by
Ecogen, which may be revised based on the recommendation of the
Supervisory Committee; provided, however the Research Budget
shall not include the cost or expenses of filing, prosecution or
maintenance of patent applications or issued patents.
1.13 "Research Plan" shall mean the Research and Development
Plan as may be amended from time to time, a preliminary draft of
which is attached hereto as Exhibit A, and which Plan shall
include a specific schedule for work, resources to be allocated
by each party,
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the identification of target pests, personnel requirements,
capital needs, and a schedule for the duplication and transfer to
Monsanto of copies of all strains and genes developed under the
Research Program. The selection of projects within the Research
Plan is to be determined by Monsanto, with Ecogen having the right
to object to any project which is inconsistent with the practices
and procedures of Ecogen.
1.14 "Research Program" shall mean all research,
experimentation or development relating to the projects to be
conducted or conducted by the parties hereto under the terms of
the Research Plan, including decisions regarding the filing,
prosecution and maintenance of patent applications and issued
patents.
1.15 "Subsidiary" shall mean a subsidiary more than 50
percent of whose outstanding securities representing the right,
other than as affected by events of default, to vote for the
election of directors, is owned by the applicable party and/or
one or more of such party's other majority-owned Subsidiaries.
Subsidiaries of Ecogen shall also include the entities set forth
in Schedule 3.01 to the Investment Agreement signed
contemporaneously herewith.
1.16 "Supervisory Committee" shall mean the Committee
described in Article 2 hereof.
1.17 "Third Party" shall mean any entity other than
Monsanto, Ecogen and/or Subsidiaries or Affiliates.
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ARTICLE 2 - RESEARCH COLLABORATION
2.1 Research Plan. During the term of this Agreement and
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subject to its terms and conditions, Monsanto and Ecogen shall
use all commercially reasonable efforts to undertake their
respective obligations under the Research Program in accordance
with the Research Plan. The Research Plan shall be updated in
writing and revised from time to time upon mutual written
agreement of the parties upon the recommendation of the
Supervisory Committee. Ecogen agrees to diligently pursue each
project covered by the Research Program and to assign the
appropriate number of personnel required to carry out the
Research Program, each of whom shall be qualified to perform
his/her assigned duties. The parties acknowledge that Ecogen
makes no representation or assurance whatsoever that the Research
Program will be successfully completed or result in the
development of products with any technical or commercial value.
2.2 Research Funding. Monsanto shall be responsible for
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providing all funding necessary for both parties to undertake
their respective duties and obligations under the Research
Program and all other costs and expenses related thereto.
Transfers of funds to Ecogen under the Research Budget during the
Initial Term of this Agreement shall be in accordance with the
terms of Article 3 hereof.
2.3 Supervisory Committee.
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(a) Collaboration between the parties shall be
determined by a Supervisory Committee of four (4) people; two (2)
people appointed by each party. The Chairman of the Supervisory
Committee shall be appointed by Monsanto.
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(b) It is the intent of the parties that information
related to the Research Program be shared with one another in an
open manner. For this purpose, the Supervisory Committee shall
meet periodically and no less than once a quarter to review the
status of the Research Program at mutually convenient locations.
It is contemplated, however, that the parties may meet as
frequently as weekly at Ecogen's facility to review results of
the Research Program. At such meetings the implementation of the
Research Program, including insectary services, insect targets
and sources of insecticidal or other biocidal proteins, shall be
discussed and mutually agreed upon. Each of the parties hereto
shall provide to the Supervisory Committee quarterly written
summaries of data and the status of its work under the Research
Program in such form as such party routinely uses for the summary
of similar research work for its own purposes. Modifications to
the Research Program may be made by the Supervisory Committee as
collaboration progresses in accordance with this Agreement. In
the event that the Supervisory Committee cannot reach a decision
regarding the Research Program, the issue shall be referred for
resolution to a senior business executive of each party
responsible for the Research Program. In the event that the
parties continue to have a good faith dispute, the issue will be
resolved by the Monsanto business executive.
2.4 Continuity of Supervisory Committee. Each party shall
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attempt in good faith to maintain continuity in the identity of
its representatives to the Supervisory Committee.
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ARTICLE 3 - COSTS
3.1 Minimum Payment During Initial Term. Monsanto shall
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provide a minimum of $10 Million for the funding of the Research
Program during the Initial Term of the Agreement in accordance
with the timing set out in Sections 3.2 and 3.3 herein.
3.2 Initial Payment. Monsanto shall transfer to Ecogen the
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sum of $3 Million upon execution of the Assignment Agreement;
provided, however, that Monsanto shall be entitled to receive a
credit in the amount of $2 Million against payment of this $3
Million for the loans made pursuant to the Senior Promissory Note
dated November 2, 1995 from Ecogen to Monsanto. Such Note shall
be cancelled and returned to Ecogen at the Closing of the
transactions contemplated pursuant to the terms of the Assignment
Agreement and Ecogen shall have no further obligations with
respect to such Note.
3.3 Research Budget. On or before thirty (30) days after
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the Date of this Agreement, Monsanto will develop, with input
from the Supervisory Committee, and present to the Supervisory
Committee a Research Budget for the period beginning on the Date
of this Agreement and ending on October 31, 1996. At least
ninety (90) days prior to November 1, 1996, Monsanto will present
to the Supervisory Committee a Research Budget developed by
Monsanto for the year beginning on November 1, 1996 and ending on
October 31, 1997 taking into consideration the recommendations
made by the Supervisory Committee. This period and each yearly
period ending on October 31 of the applicable year thereafter
shall be designated as a "Budget Year". The Research Budget
shall include, to the extent practicable, a break-down of the
budget by "Budget Year" quarters. Monsanto will present to the
Supervisory Committee
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at least 90 days prior to the beginning of any Budget Year a
Research Budget developed by Monsanto for each of the following
Budget Years taking into consideration the recommendations made by
the Supervisory Committee. In any given Contract Year Monsanto
shall spend not less than $1.5 Million under that part of the
Research Program undertaken by Ecogen. In no event shall Monsanto
transfer to Ecogen less than $1.5 Million in any one Contract
Year. Monsanto shall transfer to Ecogen such amounts as are
sufficient to ensure that Ecogen prior to the beginning of each
quarter of the Budget Year has funds available from Monsanto in an
amount equal to the expenses set forth in the Research Budget for
the then current Budget Year quarter. Such amount shall be
adjusted for the difference, if any, between (i) actual expenses
and expenditures incurred by Ecogen in prior quarters under the
Research Program and (ii) the cash transfers made by Monsanto to
Ecogen with respect to such previous quarters.
3.4 Allocated Researchers and Equipment Purchases. In
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establishing the Research Budget, each researcher employed by
Ecogen shall be included in the Research Budget at an annual rate
of $250,000, which annual rate shall include all costs and
expenses for personnel, supplies, existing equipment, and
overhead with respect to such researcher and shall include the
cost of any new equipment required to be purchased hereunder the
individual cost of which is less than $50,000. If any piece of
equipment purchased pursuant to the Research Budget costs $50,000
or more, Monsanto shall pay the entire cost of such piece of
equipment. Any such payment for new equipment will be paid to
Ecogen within fifteen (15) days of delivery to Monsanto of an
invoice from the vendor. Any payments for new equipment shall be
credited against Monsanto's obligations under Section 3.1 and 3.3
hereof. Any new equipment purchased pursuant to the Research
Program shall be owned by Ecogen as long as the cost of such
equipment is credited against Monsanto's obligations under
Sections 3.1 and 3.3 hereof. Any
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payments to Third Party consultants shall be approved in advance
by the Supervisory Committee and shall be included in the Research
Budget for which Monsanto shall receive a credit against
Monsanto's obligations under Section 3.1 and 3.3 hereof.
3.5 Payments Upon Termination. Upon termination of this
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Agreement for any reason other than the termination of this
Agreement by Monsanto pursuant to an Event of Default by Ecogen
occurring under the provisions of Section 5.3, Monsanto shall
promptly pay to Ecogen an amount equal to the difference between
$10 Million and all amounts previously paid to Ecogen pursuant to
Article 3 of this Agreement. In the event that Monsanto has
funded at least $10 Million under this Agreement, upon
termination of the Agreement, any amounts transferred to Ecogen
by Monsanto under this Agreement (i) which have not been spent or
(ii) for which expenses have not been incurred by Ecogen prior to
such termination, shall be returned to Monsanto within ninety
(90) days of such termination.
ARTICLE 4 - INVENTIONS, LICENSES AND PATENTS
4.1 License Grant for Intellectual Property Arising Under
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Agreement. Ecogen shall have a worldwide, perpetual, exclusive,
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fully paid up, royalty-free, transferable license to the R&D
Technology to make, have made, offer for sale, import, use or
sell products solely for Microbial Applications. The rights
granted in this Agreement include the right to grant sublicenses.
In addition, Ecogen shall have a perpetual and permanent right to
hold and possess Bt strains and genes discovered or developed
hereunder, solely for Microbial Applications. Licenses granted
pursuant to this Section during the term of this Agreement shall
survive the termination or expiration of this Agreement for any
reason.
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4.2 Rights of Monsanto: Other Than Microbial Applications.
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The rights to any (i) invention related to the Field of the
Agreement, conceived during the performance under this Agreement,
and not related solely to Microbial Applications
(ii) applications for a patent for the aforesaid invention,
(iii) patent granted on such application, and (iv) all other
Intellectual Property Rights in the Field of the Agreement
arising from the performance under this Agreement and not related
solely to Microbial Applications shall be owned by Monsanto.
4.3 Rights of Ecogen: Solely Microbial Applications. The
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rights to any (i) invention related to the Field of the Agreement
conceived during the performance under this Agreement and which
is related solely to Microbial Applications (ii) applications for
a patent for the aforesaid invention, (iii) patent granted on
such application, and (iv) all other Intellectual Property Rights
in the Field of the Agreement arising from the performance under
this Agreement related solely to Microbial Applications shall be
owned by Ecogen.
4.4 Patent Applications by Monsanto.
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(a) From time to time, not less than quarterly, the
Supervisory Committee shall make a determination if any patent
applications should be filed to protect inventions conceived in
accordance with this Agreement and if so the countries in which
such patent applications should be filed. In the event that the
Supervisory Committee has decided that one or more patent
applications should be filed regarding an invention that has in
whole or part In Planta Applications, Monsanto shall be
responsible for the filing, prosecution and maintenance of patent
applications (and related issued patents) directed to such
rights, including all costs, expenses and taxes associated
therewith. Monsanto shall include in such patent applications
such
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claims, including without limitation claims relating solely or in
part to Microbial Applications as Ecogen shall reasonably request.
Monsanto shall remain responsible for the filing, prosecution and
maintenance of all claims (and related patent applications and
issued patents) that are submitted in such patent applications
whether or not such claims relate solely to Microbial Applications
and whether or not such claims become the subject of divisional
applications, continuation applications or otherwise related
applications directed solely to Microbial Applications.
(b) Ecogen and Monsanto shall cooperate with one
another as to the preparation and prosecution thereof, including,
without limitation, the claim language. Monsanto shall allow
Ecogen, at Ecogen's own expense, to participate to the extent
requested in the preparation and prosecution of such patent
applications including, without limitation, (i) the receipt of
copies of all correspondence to or from the United States Patent
and Trademark Office or foreign patent offices, and (ii) the
participation in all communications and/or meetings with the
United States Patent and Trademark Office or foreign patent
offices.
4.5 Abandonment by Monsanto. Monsanto may decide to allow
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any patent application or patent directed in whole or in part to
In Planta Applications that was filed pursuant to Section 4.4
hereof to go abandoned and/or patent to lapse, and, in such
event, Monsanto may also allow any patent application, divisional
application, continuation application or patent directed solely
to Microbial Applications related (as described in the fourth
sentence of Section 4.4) to such patent application or patent to
go abandoned or to lapse; provided, however, Monsanto shall have
first provided Ecogen with adequate opportunity to prosecute
and/or maintain any patent application, divisional application,
continuation application or patent that Monsanto has decided
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to go abandoned or to lapse. In the event Ecogen elects to
prosecute and/or maintain any such patent application, divisional
application, continuation application or patent, then Monsanto
shall assign all of its rights thereto to Ecogen and Monsanto
shall have no license thereto or to any resulting patents;
provided, however, Ecogen shall not have any rights to In Planta
Applications thereunder nor shall Ecogen have the right to grant
rights to In Planta Applications thereunder to any Third Party.
4.6 Countries Where Patent Applications Are Not Prosecuted.
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In the event the Supervisory Committee shall determine not to
file a patent application in any country with respect to an
invention conceived in accordance with this Agreement, Ecogen may
decide to file, prosecute and maintain such a patent application
at its own expense and in its own name after notifying Monsanto
of such decision. Upon receipt of notice of such decision
Monsanto shall assign its rights to such invention in such
country to Ecogen and Monsanto shall have no rights with respect
to such patent application or related patent in such country
unless Monsanto shall reimburse Ecogen for all of Ecogen's out-
of-pocket costs incurred after such notice including, without
limitation, prosecuting the patent application, maintaining the
patent application and resulting patent or any other
administrative or legal proceeding. Upon receipt of such
reimbursement Ecogen shall grant to Monsanto a royalty-free,
worldwide, perpetual exclusive license with the right to
sublicense under such patent solely for In Planta Applications.
4.7 Patent Applications by Ecogen. Ecogen shall be
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responsible for the filing and prosecution of patent applications
directed solely to its rights under Section 4.2 hereof including
all costs, expenses and taxes associated therewith. Ecogen may
decide to allow any such patent application or resulting patent
to go abandoned and/or to lapse; provided, however, Ecogen shall
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have first provided Monsanto with adequate opportunity to
prosecute and/or maintain any such patent application or
resulting patent. In the event Monsanto elects to prosecute
and/or maintain any such patent application or resulting patent,
Ecogen shall assign all of its rights thereto to Monsanto and
Ecogen shall have the rights set forth in Section 4.1 hereof with
respect to such patent application and resulting patent.
4.8 No Warranty. Neither Monsanto nor Ecogen warrants to
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the other that any patent obtained is valid or enforceable.
4.9 Other Ecogen Programs.
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(a) Ecogen shall offer (the "Offer") Monsanto the
opportunity to participate in each of Ecogen's own research and
development programs in existence or commenced during the term of
the Agreement (the "Ecogen Programs"), other than Excluded
Technology, which are not part of the Research Program for which
in Ecogen's good faith judgment there is a reasonable expectation
that the Ecogen Program will result in technology applicable to
the Field of the Agreement for In Planta Applications. Such
Offer shall be in writing and in reasonable detail and shall be
made as soon as Ecogen has a reasonable expectation that the
technology will be applicable to the Field of the Agreement.
Each such Ecogen Program shall be called a "Designated Program."
Such Offer shall be made prior to initiation of the Designated
Program. For Designated Programs already under way as of the
Date of this Agreement, Ecogen shall inform Monsanto of the
existence of these Designated Programs at or before the first
meeting of the Supervisory Committee. Ecogen shall have no duty
to present to Monsanto an Offer for
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any Ecogen Programs funded by a Third Party and Monsanto shall
have no rights to such Ecogen Programs.
(b) Should Monsanto desire to have a Designated
Program become subject to this Agreement, it shall notify Ecogen
of that decision within thirty (30) days from Monsanto's receipt
of the Offer. The parties shall negotiate in good faith to
modify the Research Program and increase the Budget, if
necessary, to account for the Designated Program.
(c) If Monsanto decides not to have a Designated
Program become subject to this Agreement the results and
Intellectual Property arising from the Designated Program
corresponding to the Offer shall be owned solely by Ecogen and
Monsanto shall have no rights thereto.
(d) If Ecogen has not offered an Ecogen Program to
Monsanto and such Ecogen Program results during the term of this
Agreement and within 3 months thereafter in technology applicable
to the target pests in the Research Program, then Monsanto shall
have the option to acquire a license, on the same terms and
conditions of the Monsanto License Agreement dated of even date
herewith, for such technology for In Planta Applications by
reimbursing Ecogen for Ecogen's cost in developing such
technology based upon the costs and expenses per year per
researcher as if the technology were developed pursuant to this
Agreement and Monsanto had paid the costs of such researcher
pursuant to the terms of Section 3.4.
4.10 Genes Discovered by Ecogen. All genes or strains
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discovered by Ecogen in Ecogen's research outside the Research
Program shall be owned solely by Ecogen; provided,
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however, that Ecogen shall license to Monsanto Naturally Occurring
Genes applicable to the target pests of the Research Program that
are discovered by Ecogen to the extent Ecogen then has the right
to do so. In that event such a license shall be deemed to be part
of the Research Program.
4.11 Other Research by Monsanto. It is envisioned that in
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the course of this Agreement, evaluation of useful Bt Genes by
Monsanto will create research at Monsanto that will have
application to Ecogen's performance of its obligations under this
Agreement. Manipulation of Bt Genes in microorganisms with
application to gene discovery expression and protein stability
will be shared with Ecogen for purposes of enhancing gene
discovery, expression and protein stability in connection with
Ecogen's performance of its obligations under this Agreement.
Use of such manipulation techniques for the development of
microbial pesticides shall be licensed to Ecogen in paid-up,
royalty-free worldwide license, with the right to sublicense, for
use solely in Microbial Applications.
4.12 During the term of this Agreement, each party shall
notify the other of the existence of an infringement of which
such party becomes aware of an invention or other Intellectual
Property Right conceived during or arising from the performance
under this Agreement.
4.13 If the infringement referred to in Section 4.12 relates
to an application solely for Microbial Applications, then Ecogen
shall be solely responsible in its sole discretion for the
abatement of the infringement including settlement and the
bringing of a lawsuit and all costs and expenses of such lawsuit,
provided, however, that no settlement shall impose any
affirmative
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obligation or obligation of payment on Monsanto without Monsanto's
prior written consent given in Monsanto's sole discretion.
Monsanto shall provide all reasonable nonmonetary assistance
requested by Ecogen and agrees to be named in the lawsuit if
required by law as a necessary or indispensable party. All
recoveries and damages obtained by Ecogen shall be owned
solely by Ecogen. In the event there is a counterclaim regarding
the validity or enforceability of an Intellectual Property Right,
Monsanto shall be permitted to join in the action at its own
expense, in which case any recovery obtained or damages awarded
shall be first used to reimburse Ecogen's reasonable attorneys'
fees and other out-of-pocket costs in bringing the lawsuit, then
reimbursing Monsanto's reasonable attorneys' fees and other out-
of-pocket costs in joining the action, and then all remaining
recovery and damage award to Ecogen.
4.14 If the infringement referred to in Section 4.12 relates
to an application other than solely for Microbial Applications,
then Monsanto shall be solely responsible in its sole discretion
for the abatement of the infringement including settlement and
the bringing of a lawsuit and all costs and expenses of such
lawsuit, provided, however, that no settlement shall impose any
affirmative obligation or obligation of payment on Ecogen without
Ecogen's prior written consent given in Ecogen's sole discretion.
Ecogen shall provide all reasonable nonmonetary assistance
requested by Monsanto and agrees to be named in the lawsuit if
required by law as a necessary or indispensable party. All
recoveries and damages obtained by Monsanto shall be owned solely
by Monsanto. In the event there is a counterclaim regarding the
validity or enforceability of an Intellectual Property Right,
Ecogen shall be permitted to join in the action at its own
expense, in which case any recovery obtained or damages awarded
shall be first used to reimburse Monsanto's reasonable attorneys'
fees and other out-of-pocket costs in bringing the
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lawsuit, then reimbursing Ecogen's reasonable attorneys' fees and
other out-of-pocket costs in joining the action, and then all
remaining recovery and damage award to Monsanto.
ARTICLE 5 - TERM AND TERMINATION
5.1 Initial Term. The Initial Term of the Agreement shall
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be four (4) years from the Date of this Agreement, after which
this Agreement shall automatically be renewed for successive one
(1) year terms (each a "Renewal Term") unless terminated by
either party's providing two (2) years notice to the other party
prior to the end of the Initial Term or the then current Renewal
Term; provided, however, a party may terminate the Agreement at
the end of a Renewal Term upon at least one year notice any time
on or after the fifth anniversary of the date of this Agreement.
5.2 Survival of Licenses. Any license which has been
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granted to Ecogen pursuant to this Agreement, including one which
has been granted under Section 4.1 hereof, shall survive any
termination of this Agreement, including a termination caused by
an Event of Default.
5.3 Events of Default. Each of the following shall be
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deemed an "Event of Default":
(a) a petition is filed against either party under any
bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, and the party, as applicable,
is not diligently prosecuting a dismissal of such petition and
such petition is not dismissed within 90 days after its filing;
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(b) either party files a petition in voluntary
bankruptcy or seeking relief under any provision of any
bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction
whether now or hereafter in effect, or consents to the filing of
any petition against it under any such law;
(c) a party admits insolvency or bankruptcy or its
inability to pay its debts as they become due or is generally not
paying its debts as such debts become due, or becomes insolvent
or bankrupt or makes an assignment for the benefit of creditors,
or a custodian (including without limitation a receiver,
liquidator or trustee) of the party or any of its property is
appointed by court order or takes possession thereof;
(d) other than a failure by Monsanto to transfer funds
to Ecogen under the Research Budget in accordance with the terms
of Article 3 hereof, a party shall fail to perform any of its
material obligations hereunder for a period of 90 days after
written notice, specifying such failure and requesting that it be
remedied is given to such breaching party by the nonbreaching
party; provided, however, if such default is such that it can be
corrected but cannot be corrected within such 90-day period, it
shall not constitute an Event of Default if corrective action is
instituted by the breaching party within such 90-day period and
diligently pursued until the default is corrected. No such
default shall remain uncured 120 days after written notice.
(e) a failure on Monsanto's part to transfer funds to
Ecogen under the Research Budget in accordance with the terms of
Article 3 hereof for a period of 30 days after
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written notice from Ecogen, specifying such failure and requesting
that such funds be transferred;
5.4 Notice of Default. Each party agrees to give the other
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prompt written notice if any petition referred to in Section
5.3(a) or 5.3(b) is filed by or against it or of the occurrence
of any other event or condition which constitutes an Event of
Default immediately upon becoming aware of the existence thereof.
5.5 Termination of Agreement in Event of Default. Subject
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to the provisions of Section 3.5, if an Event of Default shall
have occurred and shall be continuing, the nonbreaching party
shall have the right to terminate this Agreement effective upon
written notice of such termination from the nonbreaching party.
5.6 Suspension of Payments During Cure Period. Not
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withstanding the period in which Ecogen has to cure a breach of
this Agreement and prior to the time in which such breach would
constitute an Event of Default, Monsanto shall have the right to
suspend transfers of funds to Ecogen under the Research Budget
during the applicable cure period and prior to Monsanto's
exercise of its right to terminate this Agreement: (i) if
Monsanto has in good faith given notice to Ecogen of Ecogen's
failure to perform any of its material obligations hereunder
pursuant to Section 5.3(d); or (ii) if any petition referred to
in Section 5.3(a) is filed against Ecogen.
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ARTICLE 6 - CONFIDENTIALITY
6.1 Confidentiality. Confidential Information shall be
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treated by the parties in accordance with the Confidentiality
Agreement executed simultaneously herewith.
ARTICLE 7 - LIABILITY; INDEMNITY;
PATENT INFRINGEMENT; SEVERABILITY
7.1 Limitation of Liability. It is understood and agreed
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that the furnishing of any chemicals, samples or any information
(including Confidential Information) by either party pursuant to
this Agreement is not to be construed as a recommendation by that
party to use the same. FURTHERMORE, WITH RESPECT TO SUCH
INFORMATION, MATERIALS, PRODUCTS, PROCESS INFORMATION, PROCESSES,
ADVICE, CONSULTATIONS, ASSISTANCE, SERVICES, LICENSES AND RIGHTS
PROVIDED HEREUNDER, AND ANY MATERIALS OR PRODUCTS MADE USING
SUCH, NEITHER PARTY MAKES ANY REPRESENTATION, WARRANTY OR
GUARANTEE OF ANY KIND, EXPRESSED OR IMPLIED, AS TO
MERCHANTABILITY, FITNESS FOR PARTICULAR A PURPOSE, SATISFACTORY
RESULTS BASED UPON USE THEREOF OR RELIANCE THEREON, OR OTHERWISE,
AND NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOSS OR
DAMAGE RESULTING FROM THE RELIANCE AND/OR USE THEREOF.
7.2 Indemnification. Notwithstanding the foregoing
---------------
Section, each of the parties agrees to hold the other party
harmless from and against any and all demands, claims, penalties,
liabilities, causes of action, suits, damages, judgments, losses,
costs and expenses (including cost
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of defense, settlement and reasonable attorneys' fees and
expenses) arising out of injury to any employee of such party
resulting from or in any way connected with the performance of
this Agreement, unless arising from the other party's negligence
or willful misconduct.
7.3 Limitation on Infringement. Neither of the parties to
--------------------------
this Agreement shall be liable to the other party in any way for
Third Party patent infringement by said other party arising out
of the use of any information furnished to such other party
pursuant to this Agreement.
ARTICLE 8 - MISCELLANEOUS
8.1 Severability. If any provision of this Agreement is
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found to be unenforceable under any law applicable thereto, then
that provision shall be deemed to have been severed from the
Agreement in that jurisdiction, but all other provisions of the
Agreement shall remain in full force and effect.
8.2 No Partnership Created. The parties acknowledge that
----------------------
this Agreement does not constitute nor does it create any
partnership or joint venture between Monsanto and Ecogen.
8.3 Governing Law. This Agreement shall be governed by and
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shall be construed to take effect according to the laws of the
State of Missouri, United States of America.
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8.4 Notices. All notices or other communications which any
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party to this Agreement may desire or be required to give
hereunder shall be in writing and, except for notices of meetings
of the Supervisory Committee which shall be given as reasonably
agreed among the members of such Committee, shall be given by
personal delivery, by mailing the same by registered or certified
mail, postage prepaid, return receipt requested, or by telefax
followed up by a nationally recognized overnight carrier,
addressed:
(a) If to Monsanto:
Monsanto Company
Ceregen Group
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: President
Telefax Number: 000-000-0000
with a copy to:
Monsanto Company
Ceregen Group
000 Xxxxxxxxxxxx Xxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Intellectual Property Counsel
Telefax Number: 000-000-0000
and (b) if to Ecogen:
Ecogen Inc.
0000 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
Telecopy Number: 000-000-0000
with a copy to:
Dechert, Price & Xxxxxx
Princeton Park Corporate Center
000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy Number: 000-000-0000
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Notices given by personal delivery shall be deemed given when
delivered, otherwise notices shall be deemed given when sent.
8.5 Survival. The provisions of Articles 4 and 6 shall
--------
survive any termination of this Agreement.
8.6 Counterparts. This Agreement may be signed in
------------
counterparts, both of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
8.7 Entire Agreement. This Agreement represents the entire
----------------
understanding of the parties hereto with respect to research and
development in the Field of the Agreement and supersedes all
other and prior memoranda and agreements between the parties
hereto, other than documents executed or delivered at the Closing
of this Agreement or the Assignment Agreement.
8.8 Amendment. No amendment, modification or waiver of
---------
any term or condition of this Agreement shall be valid or of any
force or effect unless made by written instrument signed by the
parties hereto, specifying the exact nature of such amendment,
modification or waiver. Any waiver by any party of any provision
of this Agreement shall not imply a subsequent waiver of that or
any other provision.
8.9 Assignment. Neither party shall assign its rights or
----------
delegate its performance under this Agreement without the prior
written consent of the other, other than the licenses granted
hereunder, which shall be transferable without the prior written
consent of the other party.
8.10 Section Headings. The section captions and headings
----------------
in this Agreement are for convenience and reference purposes only
and should not affect in any way the meaning or interpretation of
this Agreement.
8.11 No Presumption Against Drafter, Qualifications on
-------------------------------------------------
Schedules. The parties to this Agreement have jointly
---------
participated in the negotiation and drafting of this Agreement.
In the
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event an ambiguity or question of intent or interpretation
arises, this Agreement, shall be construed as if drafted jointly
by the parties and no presumptions or burdens of proof shall
arise favoring any party by virtue of the authorship of any of
the provisions of this Agreement.
ARTICLE 9 - AFFIRMATIVE COVENANTS
9.1 So long as the Research and Development Agreement is in
effect, Ecogen covenants that it will:
(a) Furnish to Monsanto (i) such financial statements,
financial information and audit reports as are provided to the
Board of Directors of Ecogen, (ii) Quarterly Reports on Form 10-Q
and Annual Reports on Form 10-K as filed with the Securities and
Exchange Commission and (iii) all other information furnished to
Ecogen's Board of Directors relating to the financial condition
of Ecogen or Ecogen's Bt technology, other than information
relating to (A) potential acquisitions, mergers, joint ventures
or other strategic alliances, (B) its relationship with Monsanto,
and (C) personnel performance and compensation. The information
described in clauses (i) and (iii) above shall be furnished to
Monsanto promptly after the Ecogen Board of Director's meeting
for which such information is provided to Ecogen's Board of
Directors and the information described in clause (ii) above
shall be furnished to Monsanto at the time such reports are filed
with the Securities and Exchange Commission.
(b) Furnish to Monsanto promptly upon preparation a
copy of the minutes of each directors' meeting and each
stockholders' meeting pertaining to financial condition and Bt
Technology other than information relating to (i) potential
acquisitions, mergers, joint ventures or other strategic
alliances, (ii) its relationship with Monsanto and (iii)
personnel performance and compensation.
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IN WITNESS WHEREOF, each party has caused this Agreement to
be executed by its duly authorized representative effective on
the date set forth first above.
MONSANTO COMPANY ECOGEN INC.
By: -------------------------- By: ------------------------------------
Name: Xxxxx X. Xxxx Xxxxx X. Xxxxxx, Xx.
Title: Director, Commercial Chairman and Chief Executive Officer
Partnerships & Alliances
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