SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
AMENDMENT NO. 1
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MarkOne)
[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required] for the fiscal year ended June 30, 1996 or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period from
_______________ to _____________.
For the Fiscal Year Ended Commission File Number
June 30, 1996 0-14802
CALGENE, INC.
(Registrant)
Delaware 68-0369863
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
1920 Fifth Street, Davis, CA 95616
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (916) 753-6313
Securities registered pursuant to Section 12(b) of the
Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
<PAGE>
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ( )
The aggregate market value of the voting stock held by
nonaffiliates of the Registrant was approximately $187,002,034 as of
July 31, 1996, based upon the closing price on the Nasdaq National
Market System reported for such date. Shares of Common Stock held by
each officer and director and by each person who owns 5% or more of the
outstanding Common Stock have been excluded in that such persons may be
deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
60,443,115 shares of Common Stock were issued and
outstanding as of August 31, 1996.
<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A to the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 1996 is filed solely to
file a copy of Exhibit 10.50 listed in the Index to Exhibits hereto.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CALGENE, INC.
By: /s/ Christian Leleu
--------------------------
Chief Financial Officer
Dated: April 24, 1997 (Principal Financial and
Accounting Officer)
<PAGE>
INDEX
TO EXHIBITS
Exhibits Page
2.1 Agreement and Plan of Reorganization Between Calgene,
Inc. and Monsanto Company dated as of October 13, 1995....(P)
3.1 Certificate of Incorporation of the Registrant.............(P)
3.2 Form of Amended and Restated Certificate of Incorporation
of the Registrant.........................................(P)
10.0 Form of Stockholders Agreement between the Registrant
and Monsanto Company......................................(P)
10.1 Form of Credit Facility Agreement between the Registrant
and Monsanto Company......................................(P)
10.2 Form of Gargiulo Credit Facility Agreement between
the registrant and Monsanto Company.......................(P)
10.3 Form of ACC Deaminase License Agreement between
the Registrant and Monsanto Company.......................(P)
10.4 Form of ADPGPP License Agreement between the Registrant
and Monsanto Company......................................(P)
10.5 Form of CMV License Agreement between the Registrant
and Monsanto Company......................................(P)
10.6* Form of FAD 3 License Agreement between the Registrant
and Monsanto Company......................................(P)
10.7 Form of Fruit Specific Promoter License Agreement
between the Registrant and Monsanto Company...............(P)
10.8 Form of Gemini Virus License Agreement between
the Registrant and Monsanto Company.......................(P)
10.9 Form of Insect Resistance License Agreement between
the Registrant and Monsanto Company.......................(P)
10.10 Form of Oil License Agreement between the Registrant
and Monsanto Company......................................(P)
10.11 Form of Letter Agreement between Calgene, inc.
and Monsanto Company with respect to license of
Recombinant ACC Synthase...................................(P)
10.12 Form of Insect-Protected Cotton License and Seed
Services Agreement between Calgene, Inc. and Monsanto.....(P)
Company
10.13 Second Amended and Restated Employment Agreement
dated October 16, 1995 between Gargiulo, L.P. and
Jeffrey D. Gargiulo.........................................(P)
10.14 Joint Venture Agreement dated as of December 15,
1992 between Gargiulo, L.P. and Dresick Farms, as amended
June 1, 1993................................................(P)
10.15 Joint Venture Agreement dated as of January 1, 1981
between Gargiulo, L.P. and Harllee-Gargiulo, Inc., as
amended October 31, 1989 and October 31, 1994...............(P)
10.16 Joint Venture Agreement dated as of October 31, 1994
between GargiuloMexico, L.L.C. and Hermanos Ley.............(P)
10.17 Marketing Agreement dated as of September 1, 1988
between Gargiulo, Inc. and Harllee-Gargiulo, Inc............(P)
10.18 Change of Control Employment Agreement dated as of
July 19, 1995, between Calgene, Inc. and Roger H. Salquist...(P)
10.19 Change of Control Employment Agreement dated as of
July 19, 1995, between Calgene, Inc. and Roderick N. Stacey..(P)
10.20 Change of Control Employment Agreement dated as of
July 19, 1995, between Calgene, Inc. and Michael J. Motroni..(P)
10.21 Asset Purchase Agreement dated as of December 29,
1995 between Gargiulo, L.P. and Collier Enterprises..........(P)
10.22* Partnership Agreement dated January 31, 1986 between
Registrant Rhone-Poulenc Agrochimie, together with Research
Agreement dated March 15, 1984 and Amendment thereto dated
January 31, 1985.............................................(A)
10.23* Amendment One to the Partnership Agreement dated
January 31, 1986 between Rhone-Poulenc Agrochimie dated
September 30, 1989...........................................(B)
10.24* License Agreement between Registrant and
Rhone-Poulenc Agrochimie dated October 1, 1989..............(B)
10.25* Agreements dated March 21, 1985 between Registrant
and Roussel-Uclaf S.A........................................(A)
10.26* Agreement dated April 1, 1988 between Registrant
and Roussel- Uclaf S.A. which amend the Agreements dated
March 21, 1985 between Registrant and Roussel-Uclaf S.A......(B)
10.27* Agreement dated August 1, 1984 and Agreement
dated August 26, 1985 amending the prior Agreement
between Registrant and Campbell Soup Company.................(A)
10.28* Tomato Research Agreement 1988 to 1990 between
Campbell Soup Company and Registrant effective as of
August 1, 1988 which supersedes the Agreements of
August 1, 1984 and August 26, 1985 between Campbell
Soup Company and the Registrant..............................(B)
10.29* Agreement dated March 20, 1986 between Registrant
and The Procter and Gamble Company...........................(A)
10.30 Commercial Lease dated August 17, 1987, as
amended, covering property located at 1910 and 1920
Fifth Street, Davis, California..............................(C)
10.31 Commercial Lease dated August 31, 1983, as amended,
covering property located at 1970 Fifth Street, Davis
California...................................................(A)
10.32 Commercial Lease dated August 31, 1983, as
amended, covering property in Yolo County................(A)
10.33 Commercial Lease dated May 21, 1987, as amended, covering
property at 1950 Fifth Street, Davis, California.............(C)
10.34 Form of Directors and Officers Indemnification Agreement.....(C)
10.35 401(k)Tax Deferred Investment Plan...........................(D)
10.36 Secured Revolving Credit Agreement Among Registrant
and Harris Trust and Savings Bank and Caisse Nationale
De Credit Agricole Dated April 26, 1990.....................(G)
10.37 First Amendment to Secured Revolving Credit Agreement and
Secured Credit Note Among Registrant and Harris Trust
and Savings Bank dated January 31, 1992......................(E)
10.38 Second Amendment to Secured Revolving Credit Agreement
and Secured Revolving Credit Note Among Registrant and
Harris Trust and Savings Bank Dated January 31, 1993.........(I)
10.39 Third Amendment to Secured Revolving Credit Agreement
Among Registrant and Harris Trust and Savings Bank Dated
August 26, 1993..............................................(O)
10.40 Fourth Amendment to Secured Revolving Credit Agreement and
Secured Revolving Credit Note Among Registrant and
Harris Trust and Savings Bank Dated February 26, 1997.......(O)
10.41 Fifth Amendment to Secured Revolving Credit Agreement
and Secured Credit Note Among Registrant and Harris
Trust and Savings Bank Dated March 15, 1997................(O)
10.42 Sixth Amendment to Secured Revolving Credit Agreement and
Secured Credit Note Among Registrant and Harris Trust and
Savings Bank Dated August 8, 1995............................(O)
10.43 Seventh Amendment to the Secured Revolving Credit
Agreement and Waiver among Calgene, Inc. and Harris
Trust and Savings Bank dated December 29, 1995..............(M)
10.44 Eighth Amendment to the Secured Revolving Credit
Agreement and Secured Revolving Credit Note Among
Calgene, Inc. and Harris Trust and Savings Bank
dated January 23, 1996.......................................(M)
10.45 Ninth Amendment to the Secured Revolving Credit
Agreement and Second Revolving Credit Note Among
Calgene, Inc. and Harris Trust and Savings Bank
dated March 28, 1996.........................................(N)
10.46 1989 Employee Stock Purchase Plan............................(G)
10.47 Joint Venture and Partnership Agreement by and
between Kirin Brewery Co. Ltd. and Registrant
dated March 14, 1990.........................................(G)
10.48* License Agreement between Registrant and Campbell
Soup Company dated August 9, 1991............................(J)
10.49 Letter of Intent with Monsanto Company.......................(L)
10.50** Oilseed Development Agreement between Registrant
and Monsanto Company dated May 8, 1996......................68
10.51 1981 Stock Option Plan as amended............................(B)
10.52 1991 Stock Option Plan.......................................(J)
10.53 1996 Stock Option Plan.......................................(P)
21.1 Subsidiaries of Registrant...................................(I)
23.1*** Consent of Independent Auditors..............................96
<PAGE>
27*** Article 5 of Financial Data Schedule for Fiscal
Year Ended June 30, 1996.....................................97
(A) Incorporated by reference to Registrant's Form S-1 Registration No. 33-5921
(B) Incorporated by reference to Registrant's Form 10-K dated September 30, 1989
(C) Incorporated by reference to Registrant's Form 10-K dated September 30, 1987
(D) Incorporated by reference to Registrant's Form 10-K dated September 30, 1988
(E) Incorporated by reference to Registrant's Form 10-K dated June 30, 1992
(F) Intentionally omitted
(G) Incorporated by reference to Registrant's Form 10-K dated June 30, 1990
(H) Intentionally omitted
(I) Incorporated by reference to Registrant's Form 10-K dated June 30, 1993, as
amended
(J) Incorporated by reference to Registrant's Form 10-K dated June 30, 1991
(K) Intentionally omitted
(L) Incorporated by reference to Registrant's Form 8-K dated June 28, 1995
(M) Incorporated by reference to Registrant's Form 10-Q dated December 31, 1995
(N) Incorporated by reference to Registrant's Form 10-Q dated March 31, 1996
(O) Incorporated by reference to Registrant's Form 10-K/A dated October 30, 1995
(P) Incorporated by reference to Registrant's Registration Statement on Form S-4
dated February 6, 1996
* Confidential treatment of certain portions of these documents has been
granted
** Confidential treatment has been requested as to portions thereof
*** Previously filed
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
OILSEED DEVELOPMENT AGREEMENT
This Agreement is made and entered into effective as of this 8th
day of May, 1996, by and between Calgene, Inc. and Monsanto Company.
Based upon the mutual consideration between the Parties recited below,
the Parties do hereby agree as follows:
ARTICLE 1. BACKGROUND AND PARTIES
1.01 Calgene, Inc., ("Calgene") is a Delaware corporation, having
a principal place of business at 1920 Fifth Street, Davis, California
95616.
1.02 Monsanto Company ("Monsanto") is a Delaware corporation,
having a principal place of business at 800 North Lindbergh Boulevard,
St. Louis, Missouri 63167.
1.03 Calgene owns certain technology useful in manipulating seed
oil composition, and other technology applicable to the expression of
traits in plants which can be used to express genes for oil
modification, meal modification or the introduction of useful
agronomic traits into oilseed crops.
1.04 Calgene is willing to grant, and Monsanto desires to obtain,
a license under such Calgene technology to manufacture, have
manufactured, use and sell oilseed products in accordance with the
terms and conditions set forth herein.
1.05 Monsanto has proprietary rights to certain technology
applicable to the engineering of plants and in plant expression, as
well as technology for introducing agronomic traits, which is useful
in the improvement of oilseeds and in modifying oil composition.
1.06 Monsanto is willing to grant, and Calgene desires to obtain,
a license under such Monsanto technology to manufacture, have
manufactured, use and sell oilseed products in accordance with the
terms and conditions set forth herein.
ARTICLE 2. DEFINITIONS
For the purposes of this Agreement, the following words and
phrases shall have the following meanings:
2.01 "Affiliates" shall mean a Calgene Affiliate or a Monsanto
Affiliate.
-1-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
2.02 "Agronomic Genes" shall mean genes encoding for disease
resistance, herbicide tolerance, cold tolerance, shatter resistance,
yield improvement, earliness, insect tolerance, drought resistance and
heat resistance and other genes that reduce the net unit cost of
production of agricultural crop plants.
2.03 "Calgene Affiliate" shall mean any company or other legal
entity which controls, or is controlled by, or is under common control
with Calgene, control meaning the holding , directly or indirectly, of
more than twenty percent (20%) of (i) the capital and/or (ii) the
voting rights and/or (iii) the right to elect or appoint directors;
provided, however, that this Paragraph 2.03 shall not include Monsanto
or any Monsanto Affiliates.
2.04 "Calgene Chemical, Inc." shall mean the wholly owned
subsidiary of Calgene located at 7247 North Central Park Drive,
Skokie, IL 60076.
2.05 "Calgene Patent Rights" shall mean the patent applications
listed in Exhibit D as well as any and all patents maturing from the
respective applications or maturing from applications that are
divisionals, continuations, continuations-in-part of these
applications and any and all reissues or extensions of any of the
foregoing, and as added from time to time per Paragraph 3.04 herein.
2.06 *************************** shall mean each of: (a)
********************* which produce *********** which produces: (i)
*** which (A) is within the ***************** described in Exhibit B
hereto for such **** and (B) does not **************************
***************************************************************** and
(ii) *** which is a ***********************************************
**** of the following *********** from the ***************** of such
****: (A) ********************************************************* or
(B) ********************************************* or (C) *********
************************* of any ********* that is *******************
in the *************************************************;
(b) ******************************** described in (a) above; and
(c) ******************************** described in (b) above.
2.07 ***************************************** shall mean *****
*********************** that ***************************************
*********.
-2-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
2.08 **************************** shall mean each of: (a)
************************************************************** which
produce: (i) ***** which (A) is within ********************* described
in Exhibit A hereto for such ****; and (B) does not ******************
********************************* from the ***************** of such
**** and (ii) **** which is a ***************** of the *************
**** or with one or more of the ********************* from the
******************************** (A) *******************************
************************** or (B) **********************************
********** or (C) ********************************** of any ********
that is ******************* in the *********************************
**************** or (D) ********************************************
the ************************ that are *********************** in the
*************************** provided that the **********************
*************************** than the ***** in the ******************
for the ***** provided, however, that with respect to paragraphs 2.08
(a) (ii), (A), (B), (C), and (D) above, Monsanto and Calgene shall
both be ************************************ should ************ have
********************************* and should ************************
be in the interest of both Parties;
(b) ******************************** described in (a) above; and
(c) ******************************** described in (b) above.
2.09 "Cost of Goods Sold" shall mean a Party's direct and
indirect costs, which are reasonable and necessary, incurred by
Monsanto or a Monsanto Affiliate in producing a Licensed Product or
incurred by the Oils Division in producing all products, as the case
may be, in accordance with general accepted accounting principles
consistently applied and with general industry practices, but
excluding amounts included in Overhead Allocation, Research Expenses
or Selling, Administration and General Expenses.
2.10 "Effective Date" shall mean the date first above written.
2.11 ******************************* shall mean each of: (a)
********************* which produce *********** which produce: (i)
**** which (A) is within the ***************** described in Exhibit C
hereto ************* and (B) does not **************************
************************* from the ****************************** and
(ii) **** which is a ******************************** or with one or
more of the following ************************************** of such
***** (A) *********************************************************
or (B) *********************************************
(b) ******************************** described in (a) above; and
(c) ******************************** described in (b) above.
-3-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
2.12 "Licensed Method" shall mean any method whose use or
practice would, in the absence of a license, infringe one or more
claims of a patent application or an unexpired patent included in the
Calgene Patent Rights or Monsanto Patent Rights, respectively, which
has not been finally adjudicated to be invalid by a court of competent
jurisdiction.
2.13 "Licensed Products" shall mean materials, or materials
produced by a Licensed Method, including but not limited to vectors,
bacterial cells, plant cells, plants or seeds, in each case containing
a transgene or otherwise modified by genetic engineering, or products
of such transgenic materials, plant cells, plants or seeds which in
the course of their manufacture, use or sale would, in the absence of
a license, infringe one or more claims of an unexpired patent included
in the Calgene Patent Rights, which has not been finally adjudicated
to be invalid by a court of competent jurisdiction.
2.14 ************************************ shall mean, through
******************** either: (a) **********************************
******************************************* or (b) ********** the
********************** which is ************************************
****************************************** Any such ***************
******************************************************** are
specifically excluded from this definition.
2.15 "Monsanto Affiliate" shall mean any company or other legal
entity which controls, or is controlled by, or is under common control
with Monsanto, control meaning the holding, directly or indirectly, of
more than twenty percent (20%) of (i) the capital and/or (ii) the
voting rights and/or (iii) the right to elect or appoint directors;
provided, however, that this Paragraph 2.15 shall not include Calgene
or any Calgene Affiliates.
2.16 "Monsanto Patent Rights" shall mean the patent
applications listed in Exhibit E as well as any and all patents
maturing from the respective applications or maturing from
applications that are divisionals, continuations, continuations-in-
part of these applications and any and all reissues or extensions of
any of the foregoing, and as added from time to time per Paragraph
3.04 herein.
2.17 "Net Profits for Licensed Products" shall mean, for each
Licensed Product, (a) the Net Sales of such Licensed Product minus (b)
with respect to such Licensed Product, the sum of : (i) Cost of Goods
Sold; (ii) the Selling, Administration and General Expenses; (iii)
-4-
<PAGE>
the Overhead Allocation; (iv) interest expenses; and (v) other
expenses, all determined under generally accepted accounting
principles consistently applied.
2.18 "Net Profits of the Oils Division" shall mean, for all of
its products, (a) the Net Sales of such products minus (b) with
respect to such products, the sum of : (i) Cost of Goods Sold; (ii)
the Research Expenses; (iii) Selling, Administration and General
Expenses; (iv) the Overhead Allocation; (v) interest expenses; and
(vi) other expenses, all determined under generally accepted
accounting principles consistently applied.
2.19 "Net Sales" shall mean the gross invoiced sales price
charged by a Party, its Affiliates and sublicensees for all Licensed
Products in the case of Monsanto and for all products in the case of
the Oils Division, after deduction of the following items, provided
and to the extent such items are incurred and do not exceed reasonable
and customary amounts in the market in which such sale occurred: (i)
trade and quantity discounts and rebates; (ii) credits or allowances
given or made for rejection or return of previously sold Licensed
Products or products as the case may be; (iii) any tax or government
charge (other than an income tax or value added tax) levied on the
sale; and (iv) any charges for freight or insurance. Net Sales shall
include all revenues earned by the Oils Division from Third Parties
which are directly attributable to: (A) contracted research; or (B)
royalties and licensing fees. Other revenues not collected directly
by Monsanto from seed company licensees and any grower license
revenues shall not be included within Net Sales. For example, if
Monsanto collects grower license fees from a farmer and royalty
revenues from a seed company, Calgene shall receive the benefit of
direct profits attributable only from the royalty charged to the seed
company. If any gross invoiced sales price of a Licensed Product or a
product, as the case may be, is not determined on an arm's length
basis, then such gross invoiced sales price shall, for the purposes of
this Agreement, be deemed to be equal to the most recent gross
invoiced sales price of such Licensed Product or product to a Third
Party on an arms length basis.
2.20 "Oils Division" shall mean that portion of Calgene's
business operations having responsibility for research, development
and/or commercialization of improved oilseed crops or modified oil,
and/or selling of oilseed, oil or derivative oil products. Such
business operations shall include, without limitation, Calgene
Chemical, Inc.
-5-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
2.21 "Overhead Allocation" shall mean the actual costs
(without markup) reasonably allocated from a Party's corporate
overhead to the business of Monsanto in making, using or selling
Licensed Products or to the Oils Division in making, using or selling
its products, for such expenses as: (a) facilities; (b) utilities,
maintenance and depreciation; (c) regulatory services; (d) patent
filing and prosecution and legal services; (e) royalties on expensed
technology licenses; (f) human resource services; (g) financial,
accounting, risk and treasury management services; (h) use of office
and laboratory space, equipment and supplies at such locations which
Calgene may maintain from time to time; (i) laboratory supplies and
procurement services; (j) greenhouse and growth chamber facilities,
services and supplies; and (k) other services reasonably charged by
Monsanto or Calgene (including without limitation library services,
laboratory services, information system and telecommunication
services). Overhead Allocation shall exclude amounts included in Cost
of Goods Sold, Research Expenses, or Selling, Administration and
General Expenses.
2.22 "Party" shall mean Monsanto or Calgene; "Parties" shall
mean both Monsanto and Calgene.
2.23 "Patent Rights" shall mean the Calgene Patent Rights and
the Monsanto Patent Rights.
2.24 "Research Expenses" shall mean research and development
expenses determined in accordance with general accepted accounting
principles consistently applied and with general industry practices,
for the development of all of the products of the Oils Division, but
excluding amounts included in either Overhead Allocation or Cost of
Goods Sold.
2.25 "Selling, Administration and General Expenses" shall mean
selling, marketing, administrative and general expenses determined in
accordance with general accepted accounting principles consistently
applied and with general industry practices, for the commercialization
of the Licensed Products for Monsanto and of all of the products of
the Oils Division, but excluding amounts included in either Overhead
Allocation or Cost of Goods Sold.
2.26 *************************** shall mean *******************
**** that are ********************************************************
******* and which have been ************************************ of a
*************************************************************** from
*********** that are ***********************************************
*********** provided, however, that Monsanto and Calgene shall both
*************************************** should either Party have a
-6-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
******************************* and should *************************
in the interest of both Parties. *********************************
******************* are specifically excluded from this definition.
2.27 ************************************ shall be **********
that has the composition of Exhibit C and that has a ***************
********************************************************************
*******************************************
2.28 ***************************************** shall mean ****
************************ that contain *******************************
*****
2.29 "Technical Information" shall mean all trade secrets,
know-how, knowledge, technology, means, methods, processes, practices,
formulas, techniques, procedures, technical assistance, data,
specifications, biological materials and other valuable information
and materials of whatever nature, whether confidential or not, and
whether proprietary or not, which is now in (or hereafter during the
term of this Agreement comes into) the possession of the licensing
Party and which is relevant to the development of any Licensed Product
or products of the Oils Division, as the case may be.
2.30 Third Party shall mean any person, corporation or other
business entity other than Calgene, Monsanto and their respective
Affiliates.
2.31 "Valid Claim" means a claim of any unexpired patent or
patent application in any country in the world, which shall not have
been withdrawn, canceled or disclaimed, nor held invalid by a court of
competent jurisdiction in an unappealed or unappealable decision.
ARTICLE 3. RIGHTS & OBLIGATIONS
3.01 Grant to Monsanto. Subject to the terms and conditions of
this Agreement, Calgene grants to Monsanto during the term of this
Agreement: (a) a worldwide, **********************************
****************************************************************
****************************************************************
************ royalty bearing (in accordance with Paragraph 4.02)
license to make, have made, use and sell **************************
using Calgene Patent Rights, with rights to sublicense pursuant to
Paragraph 3.01(e);
(b) a worldwide, ************* royalty bearing (in accordance with
Paragraph 4.02) license to make, have made, use and sell (i) any
************************* and (ii) subject to Calgene obtaining
-7-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
*******************************************************************
****************************** so long as the products described in
(i) and (ii) ****************************************** using Calgene
Patent Rights, with rights to sublicense pursuant to Paragraph
3.01(e);
(c) a worldwide, ************ with Calgene *******************
**************************************************************
**************************************************************
************ royalty bearing (in accordance with Paragraph 4.02)
license to make, have made, use and sell (i) *****************
and (ii) subject to Calgene obtaining ************************
**************************************************************
so long as the products described in (i) and (ii) ************
*********************** using Calgene Patent Rights, with rights to
sublicense pursuant to Paragraph 3.01(e); and
(d) a worldwide, ************* royalty free license, with no right to
sublicense, to make, have made and use, for research purposes only,
oilseed products other than *************************************
*********************************************************** using
Calgene Patent Rights;
(e) For **********************************************************
************ the limited right to sublicense only transgenic plant
germplasm produced by Monsanto (with the right to develop, use and
sell new varieties and/or hybrids produced therefrom by traditional
plant breeding) containing genes developed or in-licensed by Monsanto
to any Third Party or any Monsanto Affiliate, provided that Monsanto
shall not be permitted to in-license or otherwise acquire a gene from
a Third Party and ************ license to that Third Party or an
affiliate of that Third Party transgenic plant germplasm containing
said gene falling within the scope of the Licensed Patents, and
provided further that Monsanto shall provide notice of such sublicense
to Calgene within a reasonable period before entering into such
sublicense with a Third Party.
3.02 Grant to Calgene. Subject to the terms and conditions of
this Agreement, Monsanto grants to Calgene during the term of this
Agreement: (a) a worldwide, *************************************
******************************************************************
******************************************************************
*************** and (ii) other agreements or options which are not
limited as to field of use and which are signed as of the effective
date hereof), royalty bearing (in accordance with Paragraph 4.03)
license to make, have made, use and sell *************************
*************************************** using Monsanto Patent Rights,
with rights to sublicense pursuant to Paragraph 3.02(d);
-8-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
(b) a worldwide, ************** royalty bearing (in accordance with
Paragraph 4.03) license to make, have made, use and sell **********
********************************************************** using
Monsanto Patent Rights, without the right to sublicense (unless such
sublicense was granted before such product became a ****************
***************************************************
(c) a worldwide, ************* royalty bearing (in accordance with
Paragraph 4.03) license, with no right to sublicense, to make, have
made and use, for research purposes only, oilseed products other than
*******************************************************************
*******************************************************************
using Monsanto Patent Rights;
(d) for ************************************************************
********* the limited right to sublicense only transgenic plant
germplasm produced by Calgene (with the right to develop, use and sell
new varieties and/or hybrids produced therefrom by traditional plant
breeding) containing genes developed or in-licensed by Calgene to any
Third Party or Calgene Affiliate, provided that Calgene shall not be
permitted to in-license or otherwise acquire a gene from a Third Party
and *********** license to that Third Party or affiliate of that Third
Party transgenic plant germplasm containing said gene falling within
the scope of the Licensed Patents, and provided further that Calgene
shall provide notice of such sublicense to Monsanto within a
reasonable period before entering into such sublicense with a Third
Party;
(e) Any licenses granted herein and any sublicensees granted a
sublicense under Paragraph 3.02 to any **************** shall be
required by Calgene to *********************************************
*********************************** including but not limited to
****************************************************************
****************************************************************
******************* covering such **************** and
(f) No license is granted herein to commercialize an ************** in
any country in which *********************************** said
***************
3.03 ************************************ With respect to the
rights granted under Paragraph 3.01 (c), Calgene shall not grant any
additional licenses or sublicenses to Third Parties under Calgene
Patent Rights for *********************************************
*********************** that ***********************************
-9-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
3.04 Other Rights and Obligations (a) Calgene and Monsanto shall
consult from time to time regarding Monsanto and Calgene technology,
patents and patent applications, which shall be *******************
****** on the following basis: (i) US patents or applications and
their foreign counterparts shall be *******************************
********* shall include *******************************************
****** (to the extent that such technology can be ***********), that
are applicable to the development of ***************************
*********************************************************************
and (ii) US patents or applications and their foreign counterparts
shall be ************************************* and shall include
*************************************************** (to the extent
that such technology can be ***********), that are applicable to the
development of ***************************************************
******************************************************************
*****************
(b) With respect to the research rights granted under Paragraphs 3.01
(d) and 3.02 (c), each Party agrees to consider granting licenses
covering additional products in the event that the other Party
develops a commercially useful application;
(c) Each Party grants to the other Party a ************* right during
the term of this Agreement to use the Technical Information in
connection with such Party's exercise of its rights and licenses
granted hereunder. If a Party reasonably requests, the other Party
shall provide to the requesting Party free of charge (other than
reimbursement for reasonable out-of-pocket costs) all of the Technical
Information.
3.05 No Other Rights. Except as expressly provided herein, no
other license, right or license is granted by this Agreement (by
implication or otherwise) by either Party to the other Party to any
other patent rights.
ARTICLE 4. CONSIDERATION, PAYMENTS & RECORDS
4.01 Monsanto Fees. Except as provided for in Paragraph 10.13,
in consideration for the licenses to Calgene Patent Rights granted
hereunder, Monsanto shall pay to Calgene the following: (a) a $7
million, non-refundable licensing fee for licenses under Calgene
Patent Rights granted under this Agreement, due upon signing of this
agreement; (b) a $10 million funded research and development payment
to further the development of plant expression or oil modification
technologies which may be added to Exhibit D under Paragraph 3.04, due
upon signing of this agreement, such payment to be used by Calgene to
fund research and development during the 3 year period beginning from
-10-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
the effective date of this Agreement; and (c) for any lump-sum
license fee received on sublicenses granted by Monsanto under
Paragraph 3.01(e) of this Agreement, **** of any such fees to Calgene
at the time the fees are collected.
4.02 Monsanto Royalties Due. (a) Except as provided for in
Paragraph 10.13, in further consideration for the licenses to Calgene
Patent Rights granted hereunder, Monsanto shall pay to Calgene a
royalty equal to **** of the Net Profits for each Licensed Product
calculated for such Licensed Product sold by Monsanto and Monsanto
Affiliates; provided, however, that (i) Monsanto shall use reasonable
efforts to obtain information as to Net Profits for each Licensed
Product sold by Monsanto Affiliates, but Calgene recognizes that, for
some Monsanto Affiliates, such information will not be available to
Monsanto; and (ii) where such information is not available, Calgene
and Monsanto shall negotiate in good faith on an alternative
methodology to determine the compensation due to Calgene on such Net
Profits;
(b) Except as provided for in Paragraph 10.13, for Net Sales of
Licensed Products by sublicensees of Monsanto or a Monsanto Affiliate,
further consideration for the licenses to Calgene Patent Rights
granted hereunder shall be paid to Calgene based on the greater of:
(i) **** of any net license fees, royalties or other income received
by Monsanto or a Monsanto Affiliate resulting from Third Party sales
of Commodity Oilseed Products, Commodity Canola Products and
Commodity High Stearate Canola Products that utilize Calgene Patent
Rights under sublicenses granted by Monsanto or a Monsanto Affiliate.
In no event will the definition of Net Profits of Licensed Products
include items in this subparagraph; (ii) either: (A) **** of net
sales of such sublicensees, provided that Monsanto's direct grower
license revenues (or other revenues not collected from seed company
licensees) are at least **** of such net sales; or (B) **** of
Monsanto's direct grower license revenues (or other revenues not
collected from seed company licensees) in the event that such revenues
are less than **** of such net sales. In no event will the definition
of Net Profits of Licensed Products include items in this
subparagraph;
(c) Earned royalties shall accrue to Calgene, subject to the
provisions of Paragraph 4.06, when Licensed Products are invoiced, or
if not invoiced, when delivered to a Third Party;
(d) If a Licensed Product and several other items are sold and
invoiced together, the discount on such sale shall be computed as a
fraction, the numerator of which is the gross invoiced sales price of
such Licensed Product and items as a bundle and the denominator of
which is the sum of the then-current list prices of Monsanto, the
-11-
<PAGE>
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
Monsanto Affiliate or their respective sublicensee, as the case may
be, for such Licensed Product and items. Upon the invoicing or
delivery of such bundle, the gross invoiced sales price for such
Licensed Product shall be deemed to be: (i) the then-current list
price of Monsanto, the Monsanto Affiliate or their respective
sublicensee, as the case may be, for such Licensed Product; multiplied
by (ii) the discount, as computed above.
4.03 Calgene Royalties Due. In consideration for paying to
Calgene the amount described in Paragraph 4.01(b) above, the licenses
of Paragraph 3.02 and sharing Technical Information as provided in
Paragraph 3.04(c), Calgene shall pay to Monsanto **** of the positive
Net Profits of the Oils Division. If the Oils Division acquires new
business operations, facilities, technologies and/or license rights
after the Effective Date, then Monsanto shall have the option either:
(i) to contribute **** of the amounts paid by the Oils Division for
such acquisition; or (ii) to not contribute any such amount, in which
case Monsanto's **** share of the positive Net Profits of the Oils
Division shall be reduced accordingly.
4.04 First Commercial Sale. (a) Monsanto shall promptly advise
Calgene in writing of the first commercial sale of Licensed Products
in each country. (b) The earned royalties described in Paragraph 4.02
shall be deemed to be payable for Licensed Products invoiced or
delivered in each country of the world so long as the Calgene Patent
Rights covering such Licensed Products have not expired or have not
been declared invalid in such country.
4.05 Royalty Reports (a) Beginning December 31, 1996, and
annually thereafter, Monsanto shall submit to Calgene a progress
report covering the activities related to the development and testing
of all Licensed Products and the obtaining of the governmental
approvals necessary for marketing them. These progress reports shall
be made for each Licensed Product until the first commercial sale of
that Licensed Product occurs in the United States.(b) After the first
commercial sale of a Licensed Product anywhere in the world, Monsanto
will make annual royalty reports to Calgene on or before February 28th
of each year. Each such royalty report will cover the most recently
completed calendar year and will show: (i) the gross sales and Net
Profits for each Licensed Product; (ii) the number of each type of
Licensed Product sold; (iii) the royalties, in U.S. dollars, payable
hereunder with respect to such sales; (iv) the method used to
calculate the royalty; and (v) the exchange rates used.(c) For each
calendar year (commencing with calendar year 1997), Calgene will make
annual reports to Monsanto on or before February 28th following each
such year. Each such report will cover the most recently completed
calendar year and will show: (i) the gross sales and Net Profits of
-12-
<PAGE>
the Oils Division; (ii) the number of each type of product sold by the
Oils Division; (iii) the payments, in U.S. dollars, payable hereunder
with respect to such sales; (iv) the method used to calculate the
payments; and (v) the exchange rates used. (d) If no sales have
been made during any calendar year, a statement to this effect shall
be required.
4.06 Manner of Payment (a) Concurrent with the submission of
reports pursuant to Paragraph 4.05, Monsanto shall make the earned
royalty payments then due and Calgene shall make the payments then due
pursuant to Paragraph 4.03. All payments hereunder shall be made by
deposit of United States Dollars in the requisite amount to such bank
account in the United States as the receiving Party may from time to
time designate by notice to the other. As to the royalty payments
payable to Calgene, amounts shall first be calculated in the currency
in which the sale of a Licensed Product took place and then converted
to U.S. Dollars at the closing buying rate for the last business day
of the calendar year for which such payment is due, as set by Chase
Manhattan Bank of New York. Payments shall be without set off and free
and clear of any taxes, duties, fees or charges other than withholding
taxes, if any.(b) If at any time legal restrictions prevent the prompt
remittance of part or all royalties by Monsanto with respect to any
country where a Licensed Product is sold, Monsanto shall have the
right and option to make such payments by depositing the amount
thereof in local currency to Calgene's account in a bank or other
depository in such country. If, after one year, these legal
restrictions still exist, Monsanto shall pay the royalties owed to
Calgene in interest from its source of funds in the U.S.
4.07 No Non-Monetary Consideration for Sales. Neither Party
shall accept or solicit any non-monetary consideration in the sale of
any Licensed Product or products, other than as would be reflected in
the calculation of Net Sales. The use by a Party of commercially
reasonable amounts of Licensed Products or products for promotional
sampling shall not violate this prohibition.
4.08 Records Retention. (a) Monsanto agrees to keep, and shall
cause Monsanto Affiliates and sublicensees to keep, records showing
all Licensed Products manufactured, used and/or sold and licensing of
all Licensed Products in sufficient detail to permit Calgene to
confirm the accuracy of Monsanto's earned royalty calculations.
Calgene agrees to keep, and shall cause Calgene Affiliates and
sublicensees to keep, records showing all products manufactured, used
and/or sold by the Oils Division and licensing of all products by the
Oils Division in sufficient detail to permit Monsanto to confirm the
accuracy of Calgene's payment calculations. All determinations
related to royalties and payments due under this Agreement shall be
-13-
<PAGE>
made in accordance with generally accepted accounting principles as is
normal industry practice. (b) At the request of a Party, the other
Party shall permit an independent, certified public accountant
appointed by the requesting Party and reasonably acceptable to such
other Party to examine, upon reasonable notice, and at reasonably
times, records solely to the extent necessary to verify the other
Party's calculations. Such records shall be kept and examination
thereof shall be limited to a period of time no more than two (2)
calendar years.(c) Prompt adjustment shall be made by the Parties to
reflect the results of any such audit. The audit of a Party's records
shall be at the auditing Party's expense provided that if a net
aggregate discrepancy in the audited Party's favor of more than five
percent (5%) is found, then the audited Party shall be obligated to
reimburse the auditing Party for the cost of the audit. (d) The
Parties agree that any dispute arising from an audit of a Party's
records and which can not be resolved by the Parties shall be subject
to the following arbitration procedure; (i) the Parties shall first
have their respective CEO's meet to review the issues raised by the
audit, provided that, in the event that Monsanto has acquired a
majority of the outstanding Calgene stock, an independent director of
the Calgene board shall stand in for the Calgene CEO in such audit
review; and (ii) should the procedure in 4.08(d)(i) fail to resolve
the dispute, the parties shall appoint an outside arbitrator which is
acceptable to both parties, with authority to resolve the dispute.
4.09 Late Payment. Notwithstanding any other remedy available
to either Party under the provisions of this Agreement, if any sum of
money owned to a Party hereunder is not paid when due, the unpaid
amount shall bear interest at the lesser of: (a) a rate of 10% per
annum or (b) maximum interest rate under applicable law, calculated
from the date payment was due until actually received by such Party.
4.10 Licensed Patent Rights Challenge. If the validity of a
patent claim of the Calgene Patent Rights is adjudicated and found to
be invalid by judgment of decree which becomes not further reviewable
though the exhaustion of all permissible applications for rehearing or
review by a superior tribunal, or through expiration of the time
permitted for such applications (hereinafter referred to as an
"irrevocable judgment"), then Monsanto shall be relieved from payment
of royalties which shall accrue after the date of such irrevocable
judgment which royalties would have been required to be paid to the
other Party pursuant to this Agreement, solely as a result of such
claim.
-14-
<PAGE>
ARTICLE 5. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION
5.01 Representations and Warranties. (a) Calgene represents
and warrants that: (i) it has the right to grant the licenses
described herein; (ii) it has not previously granted (except for
agreements with Third Parties described in Paragraph 3.01(a)), and
will not grant to any Third Party during the term of this Agreement,
any rights and licenses under the Calgene Patent Rights that are
inconsistent with the rights granted to Monsanto herein; and (iii) it
has full power, right and authority to enter into and carry out its
obligations under this Agreement;
(b) Monsanto represents and warrants that: (i) it has the right to
grant the licenses described herein; (ii) it has not previously
granted (except for agreements with Third Parties described in
Paragraph 3.01(b)), and will not grant to any Third Party during the
term of this Agreement, any rights and licenses under the Monsanto
Patent Rights that are inconsistent with the rights granted to Calgene
herein; and (iii) it has full power, right and authority to enter into
and carry out its obligations under this Agreement;
(c) The Parties, upon execution of this Agreement, shall diligently
proceed with their respective development, manufacture and sale of
Licensed Products or products, as the case may be, and shall earnestly
and diligently endeavor to market the same within a reasonable time
after execution of this Agreement and in quantities sufficient to meet
the market demands therefore; and
(d) The Parties and their respective Affiliates and sublicensees shall
respectively endeavor to obtain all necessary government approval for
the manufacture, use and sale of Licensed Products or products that a
Party or its respective sublicensees plan to sell.
5.02 No Warranties. EXCEPT FOR THE EXPRESS WARRANTIES IN
PARAGRAPH 5.01, NEITHER PARTY MAKES ANY WARRANTIES TO THE OTHER
REGARDING THE PATENT RIGHTS (INCLUDING, WITHOUT LIMITATION, THE
VALIDITY OR SCOPE OF THE PATENT RIGHTS) OR THE LICENSED PRODUCTS OR
PRODUCT (INCLUDING, WITHOUT LIMITATION, THE NONINFRINGEMENT OF THE
LICENSED PRODUCTS OR PRODUCTS ON THIRD PARTY PATENT RIGHTS) OR
OTHERWISE, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW.
5.03 Indemnification. (a) Except to the extent caused by the
other Party's gross negligence or willful misconduct, each Party (the
"Indemnifying Party's ) shall defend and indemnify against, and hold
the other Party (the "indemnitee") and its employees, directors,
officers and agents harmless from, any loss, cost, liability or
expense (including court costs and reasonable fees of attorneys and
-15-
<PAGE>
other professionals) incurred from a claim (other than a claim of
infringement of a patent right) arising or alleged to arise out of the
manufacture, use, distribution or sale of, where Monsanto is the
indemnifying Party, any Licensed Product by Monsanto or any Monsanto
Affiliate or sublicensee of Monsanto, and where Calgene is the
indemnifying Party, any product by the Oils Division or any
sublicensee of the Oils Division; provided, however, that (i) the
indemnifying Party shall have sole control of such defense, and (ii)
the indemnitee shall provide notice promptly to the indemnifying Party
of any actual or threatened claim of which the indemnitee becomes
aware.(b) Calgene indemnifies Monsanto and holds Monsanto harmless for
and against any claims arising out of a breach of the representation
and warranty made in Paragraph 5.01(a).(c) Monsanto indemnifies
Calgene and holds Calgene harmless for and against any claims arising
out of a breach of the representation and warranty made in Paragraph
5.01(b).
ARTICLE 6. CONFIDENTIALITY
6.01 Confidential Information. It is anticipated that it will be
necessary, in connection with their obligations under this Agreement,
for Monsanto and Calgene to disclose to each other confidential
propriety business and/or technical information ("Confidential
Information") relating to their respective business, products and
technologies. The Confidential Information shall include information
disclosed in writing or other tangible form, including electronic
transmissions and samples of materials. If disclosed orally, the
Confidential Information shall be summarized in written form within
thirty (30) days by the disclosing Party and a copy provided to the
recipient.
6.02 Confidentiality and Limited Use.(a) With respect to all
Confidential Information, both Monsanto and Calgene agree as follows,
it being understood that "recipient" indicates the Party receiving the
Confidential Information from the other "disclosing" Party.
Confidential Information disclosed to the recipient shall remain the
property of the disclosing Party and shall be maintained in confidence
by the recipient and shall not be disclosed to third parties by the
recipient and, further, shall not be used by the recipient except for
purposes contemplated in this Agreement. All confidentiality and
limited use obligations with respect to the Confidential Information
shall terminate ten (10) years after the disclosure of such
Confidential Information.(b) Notwithstanding any provision to the
contrary, a Party may disclose Confidential Information of the other:
(i) in connection with the order of a court or other governmental body
or as required by or in compliance with laws or regulations; (ii) in
confidence, to attorneys, accountants, banks and financing sources and
-16-
<PAGE>
their advisors; or (iii) in confidence, in connection with a proposed
sublicense, merger or acquisition, or the like, so long as, in each
case, the entity to which disclosure is made binds itself to
confidentiality on terms consistent with those set forth herein, in an
agreement in which the Party whose Confidential Information is to be
disclosed is expressly named as a third party beneficiary.
6.03 Exceptions. The obligations of confidentiality and
limited use shall not apply to any of the Confidential Information
which: (a) is publicly available by publication or other documented
means or later becomes likewise publicly available through no act or
fault of recipient; or (b) is already known to recipient before
receipt from the disclosing Party, as demonstrated by recipient's
written records; or (c) is made known to recipient by a third party
who did not breach confidentiality obligations to the disclosing Party
and which third party does not obligate recipient to hold it in
confidence.Specific information should not be deemed to be within any
of these exclusions merely because it is embraced by more general
information falling within these exclusions.
6.04 Disclosures to Personnel. Recipient agrees to advise
those of its officers, directors, stockholders, employees, associates,
agents, consultants, Affiliates, and sublicensees who become aware of
the Confidential Information, of these confidentiality and limited use
obligations and agrees, prior to any disclosure of Confidential
Information to such individuals or entities, to make them bound (by
written agreement or otherwise) by obligations of confidentiality and
limited use of the same stringency as those contained in this
Agreement.
6.05 Confidential Status of Agreement. The terms of this
Agreement including the royalty rate shall be deemed to be
Confidential Information and shall be dealt with according to the
confidentiality requirements of this Article 6. Both Parties agree
furthermore, that neither Party will make public disclosures
concerning other specific terms of this Agreement without obtaining
the prior written consent of the other Party, which consent shall not
be unreasonably withheld, except to the extent required by law or
regulation.
ARTICLE 7. PATENT PROSECUTION, ENFORCEMENT AND INFRINGEMENT
7.01 Patent Prosecution. (a) Calgene shall have the exclusive
right to apply for and seek issuance of, maintain or abandon any or
all of the Calgene Patent Rights; (b) Monsanto shall have the
exclusive right to apply for and seek issuance of, maintain or abandon
any or all of the Monsanto Patent Rights.
-17-
<PAGE>
7.02 Patent Enforcement. (a) Calgene and Monsanto shall each
give prompt notice to the other of any infringement of the Patent
Rights which may come to its attention; b) The Party holding such
Patent Rights shall have the exclusive right (but not the obligation)
to institute and conduct legal action against Third Party infringers
of a Patent Right, and to enter into such settlement agreements as it
may deem appropriate. The Party holding such Patent Rights shall
receive the full benefits of any action it takes pursuant to this
Paragraph 7.02; (c) If the infringing activities of the Third Party
result in a material adverse effect on the business of a Party
relating to Licensed Products and at the end of 180 days from the
receipt of notice by such Party of such infringement, the Third Party
is both unlicensed under the Patent Rights and is engaging in
activities which are an infringement of the Patent Rights, and the
Party which owns and/or controls the involved Patent Rights has not
brought a suit, action or other proceeding for infringement against
such Third Party, then: (i) when such affected Party is Monsanto, it
shall be excused from paying the earned royalty otherwise due
hereunder with respect to revenues derived from sales of Licensed
Products in the geographic area where the competitive infringing
activity occurs; and (ii) when such affected Party is Calgene, Calgene
shall be entitled to make a reduction (which is reasonable under the
circumstances) in the earned royalty otherwise due on the Net Profits
of the Oils Division to reflect the impact on sales of its products in
the geographic area where the competitive infringing activity occurs.
Such excuse or reduction, as the case may be, from payment shall arise
only as to sales of the affected Licensed Products in the geographic
area in which the infringing products are sold and shall continue only
for so long as the infringing products continue to be infringing and
to so compete with the Licensed Products; (d) Neither Party shall have
the right (by operation of law or otherwise) to enforce any Patent
Right (owned and/or controlled by the other Party) licensed hereunder
against any alleged infringer.
7.03 Infringement. In the event of any claim or suit against
Calgene or Monsanto for infringement of any intellectual property
right of any Third Party as the result of the manufacture, use or sale
of the Licensed Products or products by a Party or distributors,
agents or customers of such Party, the Parties shall cooperate in good
faith in determining how to respond to such claim or suit.
ARTICLE 8. TERM
8.01 Term. The term of this Agreement shall commence on the
Effective Date and, shall continue for fifteen (15) years, which term
is automatically extended until the expiration of any patent listed on
Exhibits D and E hereto.
-18-
<PAGE>
8.02 No Right to Terminate for Breach. In the event of a
breach or default of any of the provisions hereof by either Party, the
non-breaching non-defaulting Party may seek to recover monetary
damages against the breaching or defaulting Party (after giving such
Party written notice and a reasonable opportunity to cure) or to seek
specific performance, injunctive or other equitable relief, other than
termination of this Agreement. The non-breaching non-defaulting Party
shall not have the right to terminate this Agreement.
ARTICLE 9. PATENT MARKING/USE OF NAMES/TRADEMARKS
9.01 The Parties agree to mark all Licensed Products and
products, as the case may be, made, used or sold under the terms of
this Agreement, or their containers, in accordance with the applicable
patent marking laws.
9.02 Nothing contained in this Agreement shall be construed as
conferring any right to use in advertising, publicity, or other
promotional activities any name, trade name, trademark, service mark
or other designation of either Party hereto (including contraction,
abbreviation or simulation of any of the foregoing).
ARTICLE 10. GENERAL PROVISIONS
10.01 Notices. All notices and other communications required or
permitted under this Agreement shall be deemed to be properly given
when in writing and sent by registered or certified mail, postage
prepaid or by reputable courier service or by telefax with receipt
confirmation, to the other Party at the address set forth below, or at
such other address as either Party may be in writing designate from
time to time for these purposes.
If to CALGENE: Calgene, Inc.
1920 Fifth Street, Davis, CA 95616
Attention: Roger Salquist, Chief Executive Officer
Copy to: Calgene, Inc., 1920 Fifth Street, Davis, CA 95616
Attention: Lloyd Kunimoto, Vice President
If to MONSANTO: Monsanto Company
700 Chesterfield Parkway North, St. Louis, MO 63198
Attention: President
Ceregen Copy to: Monsanto Company, 800 North Lindbergh Blvd.,
St. Louis, MO 63167
Attention: Group Patent Counsel
The Agricultural Group
-19-
<PAGE>
10.02 Assignability. The rights and obligations acquired herein
by either Party are not assignable in whole or in part (by operation
of law or otherwise) to any Third Party or to an Affiliate without the
prior written consent of the other Party. Upon prior written consent
of the other Party, which consent shall not be unreasonably withheld,
a Party may assign the applicable rights acquired under this Agreement
in whole or in part as part of the sale or transfer of all or
substantially all of a business to which this Agreement pertains to a
successor or assign, provided that the successor/assign shall agree in
writing to be bound by the terms, conditions and obligations of this
Agreement. Any transfer, assignment or delegation made or attempted
in violation of this Paragraph 10.02 shall be void and of no effect.
10.03 Entire Agreement; Amendments; Waiver. This Agreement
constitutes the full understanding of the Parties, and supersedes any
and all prior agreements as they may relate to licenses granted
herein, with the exception that for sales of Glyphosate tolerant
products by Monsanto the agreements between the Parties regarding
Glyphosate tolerant genes, dated December 20, 1994, (Settlement
Agreement ) and transgenic technologies, dated April 22, 1993,
(Transgenic Plants Agreement ) shall be treated in accordance with
paragraph 10.13 (b) hereto. Except as otherwise specifically provided
in this Agreement, no conditions, understanding or agreement
purporting to modify, vary, explain or supplement the terms or
conditions of this Agreement shall be binding unless hereafter made in
writing and signed by the Party to be bound and no modification shall
be effected by the acknowledgment or acceptance of documents
containing terms or conditions at variance with or in addition to
those set forth in this Agreement. No waiver by any Party with
respect to any breach or default or of any right or remedy and no
course of dealing or performance, shall be deemed to constitute a
continuing waiver of any other breach or default or of any right or
remedy, unless such waiver be expressed in writing signed by the Party
to be bound. Failure of a Party to exercise any right shall not be
deemed a waiver of such right or rights in the future.
10.04 Severability. In case any one or more of the provisions
contained in this Agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions hereof, but
this Agreement shall be construed as if such invalid or illegal or
unenforceable provisions had never been contained herein.
10.05 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
-20-
<PAGE>
10.06 Headings. Headings as to the contents of particular
Articles and Paragraphs are for convenience only and are in no way to
be construed as part of this Agreement or as a limitation of the scope
of the particular Articles and Paragraphs to which they refer.
10.07 Agreement References. All paragraphs and subparagraphs
referred to herein are paragraphs and subparagraphs of this Agreement.
10.08 Exhibits. The appended Exhibits form an integral part of
this Agreement.
10.09 Choice of Law. IT IS THE INTENTION OF THE PARTIES HERETO
THAT ALL QUESTIONS WITH RESPECT TO THE CONSTRUCTION OF THIS AGREEMENT
AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO SHALL BE
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO BUSINESS ARRANGEMENTS ENTERED INTO AND PERFORMED
ENTIRELY WITHIN THE STATE OF NEW YORK.
10.10 Export Control. Notwithstanding any other provisions of
this Agreement, each Party agrees to make no disclosure or use of any
information or technology of the other Party furnished or made known
to such Party pursuant to this Agreement, except in compliance with
the laws and regulations promulgated by the Office of Export
Administration, International Trade Administration, United States
Department of Commerce; and in particular, the Parties agree not to
export, directly or indirectly, either: (a) the technical data or
technical information furnished or made known to either Party by the
other pursuant to this Agreement; or (b) the "direct product" thereof
or (c) any commodity produced using such technical data to any country
or countries unless a general or validated license is first obtained
pursuant to the Export Administration Regulations. The term "direct
product", as used above, is defined to mean the immediate product
(including process and services) produced directly by the use of the
technical data.
10.11 Force Majeure (a) Except for payments of money, neither of
the Parties shall be liable for any default or delay in performance of
any obligation under this Agreement caused by any of the following:
Act of God, war, riot, fire, explosion, accident, flood, sabotage,
compliance with governmental requests, laws, regulations, orders or
actions, national defense requirements or any other event beyond the
reasonable control of such part; or labor trouble, strike, lockout or
injunction (provided that neither of the Parties shall be required to
settle a labor dispute against its own best judgment);(b) The Party
invoking this Paragraph 10.11 shall give the other Party notice and
full particulars of each force majeure event by telephone, telegram,
telex or telecopier as soon as possible after the occurrences of the
-21-
<PAGE>
cause upon which said Party is relying. Telephone, telegram, telex
and telecopier notices shall be confirmed in writing by the sending
Party within 5 days.
10.12 Negation of Agency. It is agreed and understood by the
Parties hereto that each of Monsanto and Calgene, in its performance
of its obligations and responsibilities under this Agreement, is an
independent contractor and that nothing herein contained shall be
deemed to create an agency, partnership, joint venture or like
relationships between the Parties. The manner in which each of
Monsanto and Calgene carry out its performance under this Agreement is
within each of Monsanto's and Calgene's sole discretion and control.
10.13 Existing Agreements. Subject to the provisions of this
paragraph, to the extent that rights provided under existing
agreements between the Parties are not in conflict with this
Agreement, this Agreement shall not terminate rights under such
existing agreements.(a) For any Licensed Product, other than sales of
Glyphosate tolerant canola by Monsanto, if a Party would have an
obligation to pay royalties to the other Party both under this
Agreement and under a prior agreement between the parties, the payment
due the other Party shall be determined only under this Agreement.(b)
Royalties and fees for a Glyphosate tolerant canola Licensed Product
produced by Monsanto shall be determined as follows:(i) if all
necessary Calgene Patent Rights utilized by Monsanto in conferring
glyphosate tolerance to such Licensed Product is covered by the
Settlement Agreement and/or the Transgenic Plants Agreement, the
royalties payable to Calgene shall be determined pursuant to such
Settlement Agreement and/or Transgenic Plants Agreement, as the case
may be;(ii) if such Licensed Product incorporates a Calgene Patent
Right for any purpose other than conferring glyphosate tolerance to
such Licensed Product the royalties payable to Calgene shall be
determined pursuant to this Agreement.For example: if Monsanto sells
glyphosate tolerant genetically transformed canola with a non-
genetically engineered oil composition the royalties would be those
called for in the Transgenic Plants Agreement; if Monsanto sells
Glyphosate tolerant canola which also produces an oil which has been
modified using Calgene Technology licensed under this agreement, the
royalty payable to Calgene for such Licensed Product shall be
determined pursuant to this Agreement.
-22-
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective duly authorized officers as of the day
and year first above written.
CALGENE, INC. MONSANTO COMPANY
By: /s/Roger H. Salquist By: /s/H.A. Verfaillie
Print Name Roger H. Salquist Print Name H.A. Verfaillie
Title: Chmn and CEO Title: Executive VP
-23-
<PAGE>
Exhibit A
EXHIBIT A CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-24-
<PAGE>
Exhibit B
EXHIBIT B CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-25-
<PAGE>
Exhibit C
EXHIBIT C CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-26-
<PAGE>
Exhibit D
EXHIBIT D CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-27-
<PAGE>
Exhibit E
EXHIBIT E CONTAINS CONFIDENTIAL MATERIALS WHICH HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
-28-
