<PAGE>
As filed with the Securities and Exchange Commission on March 8, 2000
Registration No. 333-30758
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
PARADIGM GENETICS, INC.
(Exact name of Registrant as specified in our charter)
----------------
<TABLE>
<S> <C> <C>
North Carolina 8731 54-2047837
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number ) Identification Number)
</TABLE>
104 Alexander Drive
Research Triangle Park, North Carolina 27709
(919) 425-3000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------
John A. Ryals, Ph.D.
Chief Executive Officer and President
Paradigm Genetics, Inc.
104 Alexander Drive
Research Triangle Park, North Carolina 27709
(919) 425-3000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies to:
<TABLE>
<S> <C>
Jeffrey M. Wiesen, Esq. David W. Pollak, Esq.
Peter S. Lawrence, Esq. Stephanie M. Gulkin, Esq.
Mintz, Levin, Cohn, Ferris, Morgan, Lewis & Bockius LLP
Glovsky and Popeo, P.C. 101 Park Avenue
One Financial Center New York, NY 10178
Boston, MA 02111 (212) 309-6000
(617) 542-6000
</TABLE>
----------------
Approximate date of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
number for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement number for
the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
----------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth an itemization of all estimated expenses,
all of which we will pay, in connection with the issuance and distribution of
the securities being registered:
<TABLE>
<S> <C>
SEC Registration Fee........................................... $ 26,400
Nasdaq National Market Listing Fee............................. 90,000
----------
NASD Filing Fee................................................ 10,500
----------
Printing and Engraving Fees.................................... 150,000
----------
Legal Fees and Expenses........................................ 375,000
----------
Accounting Fees and Expenses................................... 325,000
----------
Blue Sky Fees and Expenses..................................... 10,000
----------
Transfer Agent and Registrar Fees.............................. 10,000
----------
Miscellaneous.................................................. 3,100
----------
Total...................................................... $1,000,000
==========
</TABLE>
Item 14. Indemnification of Directors and Officers.
The amended and restated certificate of incorporation to be adopted in
connection with our proposed reincorporation into Delaware provides that we
shall indemnify, to the fullest extent authorized by the Delaware General
Corporation Law, each person who is involved in any litigation or other
proceeding because such person is or was a director or officer of Paradigm
Genetics, Inc. or is or was serving as an officer or director of another entity
at our request, against all expense, loss or liability reasonably incurred or
suffered in connection therewith. Our proposed amended and restated certificate
of incorporation provides that the right to indemnification includes the right
to be paid expenses incurred in defending any proceeding in advance of its
final disposition, provided, however, that such advance payment will only be
made upon delivery to us of an undertaking, by or on behalf of the director or
officer, to repay all amounts so advanced if it is ultimately determined that
such director is not entitled to indemnification. If we do not pay a proper
claim for indemnification in full within 60 days after we receive a written
claim for such indemnification, our bylaws authorize the claimant to bring an
action against us and prescribes what constitutes a defense to such action.
Section 145 of the Delaware General Corporation Law permits a corporation
to indemnify any director or officer of the corporation against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any action, suit or
proceeding brought by reason of the fact that such person is or was a director
or officer of the corporation, if such person acted in good faith and in a
manner that he reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal action or
proceeding, if he or she had no reason to believe his or her conduct was
unlawful. In a derivative action, (i.e., one brought by or on behalf of the
corporation), indemnification may be provided only for expenses actually and
reasonably incurred by any director or officer in connection with the defense
or settlement of such an action or suit if such person acted in good faith and
in a manner that he or she reasonably believed to be in, or not opposed to, the
best interests of the corporation, except that no indemnification shall be
provided if such person shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which the action
or suit was brought shall determine that the defendant is fairly and reasonably
entitled to indemnity for such expenses despite such adjudication of liability.
II-1
<PAGE>
Pursuant to Section 102(b)(7) of the Delaware General Corporation Law,
Article Tenth of our amended and restated certificate of incorporation
eliminates the liability of a director to us or our stockholders for monetary
damages for such a breach of fiduciary duty as a director, except for
liabilities arising:
. from any breach of the director's duty of loyalty to us or our
stockholders;
. from acts or omissions that the director knew at the time of the
breach knew or believed were clearly in conflict with the best
interests of the corporation;
. under Section 174 of the Delaware General Corporation Law; and
. from any transaction from which the director derived an improper
personal benefit.
We carry insurance policies insuring our directors and officers against
certain liabilities that they may incur in their capacity as directors and
officers.
Additionally, reference is made to the Underwriting Agreement filed as
Exhibit 1.1 hereto, which provides for indemnification by the underwriters of
Paradigm, our directors and officers who sign the Registration Statement and
persons who control Paradigm, under certain circumstances.
Item 15. Recent Sales of Unregistered Securities.
In the three years preceding the filing of this Registration Statement, we
have sold the following securities that were not registered under the
Securities Act. The following information gives effect to a -for- split of
our common stock effected on , 2000.
(a) Issuances of Capital Stock and Warrants
The sale and issuance of the securities described in paragraphs (1)
through (12) below were deemed to be exempt from registration under the
Securities Act by virtue of Section 4(2) or Regulation D promulgated
thereunder.
(1) On September 9, 1997, we issued 4,400 shares of common stock the
founders of the Company for $1.00 per share.
(2) On February 12, 1998, we issued a common stock dividend of 851.2727
shares for each issued and outstanding share of common stock.
(3) On February 12, 1998, we sold and issued a total of 4,625,000 shares
of Series A Preferred Stock for $0.80 per share to two investors in a
private placement. Each share of Series A Preferred Stock is convertible
into one share of our common stock.
(4) On February 12, 1998, we issued warrants to purchase an aggregate of
437,500 shares of our Series A Preferred Stock at an exercise price of
$0.80 per share to two investors.
(5) On February 12, 1998, we issued 375,000 shares of Series A Preferred
Stock in exchange for the cancellation of notes payable of $300,000.
(6) On March 6, 1998, we issued a total of 62,500 shares of Series A
Preferred Stock in exchange for the cancellation of convertible debt of
$50,000.
(7) On May 29, 1998, we sold and issued a total of 2,500,000 shares of
Series A Preferred Stock for $0.80 per share to two investors in a private
placement.
II-2
<PAGE>
(8) On March 12, 1999, we sold and issued a total of 2,790,698 shares of
Series B Preferred Stock for $2.15 per share to four investors in a private
placement. Each share of our Series B Preferred Stock is convertible into
one share of our common stock.
(9) On January 19, 2000, we issued warrants to purchase an aggregate of
60,000 shares of common stock at an exercise price of $5.00 per share to
one investor.
(10) On July 20, 1999, we issued warrants to purchase an aggregate of
116,279 shares of common stock at an exercise price of $2.15 per share to
one investor.
(11) On July 27, 1999, we issued warrants to purchase an aggregate of
150,000 shares of common stock at an exercise price of $3.00 per share to
one investor.
(12) On January 21, 2000, we sold and issued a total of 3,000,000 shares
of Series C Convertible Preferred Stock for $5.00 per share to five
investors in a private placement. Each share of our Series C Convertible
Preferred Stock is convertible into one share of our common stock.
(b) Certain Grants and Exercises of Stock Options
The sale and issuance of the securities described below were deemed to be
exempt from registration under the Securities Act in reliance on Rule 701
promulgated under Section 3(b) of the Securities Act, as transactions by an
issuer not involving a public offering or transactions pursuant to compensatory
benefit plans and contracts relating to compensation as provided under Rule
701.
Pursuant to our 1998 Stock Option Plan, we have issued options to purchase
an aggregate of 3,331,262 shares of common stock. Of these options:
. options to purchase 120,559 shares of common stock have been canceled
or lapsed without being exercised;
. options to purchase 1,630,245 shares of common stock have been
exercised; and
. options to purchase a total of 1,580,458 shares of common stock are
currently outstanding, at a weighted average exercise price of $1.01
per share.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1** Restated Articles of Incorporation of the Registrant.
3.2* Amended and Restated Certificate of Incorporation of the
Registrant to be filed upon completion of this offering.
3.3** By-laws of the Registrant.
3.4* Restated Bylaws of the Registrant to be effective upon completion
of this offering.
4.1* Form of Common Stock Certificate.
5.1* Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
10.1** Registrant's 1998 Stock Option Plan.
10.2** Founder Employment Agreement, dated February 12, 1998, between the
Registrant and John A. Ryals
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
10.3** Founder Employment Agreement, dated February 12, 1998, between the
Registrant and Scott J. Uknes
10.4** Founder Proprietary Information and Inventions Agreement, dated
February 12, 1998, between the Registrant and John A. Ryals
10.5** Founder Proprietary Information and Inventions Agreement, dated
February 12, 1998, between the Registrant and Scott J. Uknes
10.6** Amended and Restated Registration Rights Agreement, dated January
21, 2000, between the Registrant and certain Founders and
Investors
10.7+ Agreement, dated September 22, 1998 by and between Bayer AG and
the Registrant
10.8+ Collaboration Agreement, dated November 17, 1999, by and between
Monsanto and the Registrant
23.1** Consent of PricewaterhouseCoopers LLP
23.2* Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5.1)
24.1** Powers of Attorney (see Page II-5)
27** Financial Data Schedule -- 1997 and 1998
27.1** Financial Data Schedule -- 1999
</TABLE>
- ------------------
*To be filed by amendment
**Previously filed with the SEC.
+ Confidential treatment requested as to certain provisions, which portions
have been omitted and filed separately with the SEC.
II-4
<PAGE>
(b) Financial Statement Schedules
Financial Statement Schedules are omitted because the information is
included in our financial statements or notes to those financial statements.
Item 17. Undertakings
The undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the Underwriting Agreement,
certificates in such denominations and registered in such names as required by
the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 14 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Boston,
Massachusetts, on March 8, 2000.
PARADIGM GENETICS, INC.
/s/ John A. Ryals
By: _________________________________
John A. Ryals
Chief Executive Officer and
President
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities held on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- -------------------------------------- -------------------------- -------------------
<S> <C> <C>
/s/ John A. Ryals Chief Executive Officer, March 8, 2000
______________________________________ President and Director
John A. Ryals (principal executive
officer)
/s/ Ian A. W. Howes Vice President of Finance March 8, 2000
______________________________________ and Chief Financial
Ian A. W. Howes Officer (principal
financial and accounting
officer)
* Director March 8, 2000
______________________________________
G. Steven Burrill
* Director March 8, 2000
______________________________________
Dennis Dougherty
* Director March 8, 2000
______________________________________
Terrance McGuire
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- -------------------------------------- -------------------------- -------------------
<S> <C> <C>
* Director March 8, 2000
______________________________________
Michael Summers
* Director March 8, 2000
______________________________________
Robert Goodman
* Director March 8, 2000
______________________________________
Henri Zinsli
</TABLE>
* By executing his name hereto on March 8, 2000, John A. Ryals is signing this
document on behalf of the persons indicated above pursuant to powers of
attorney duly executed by such persons and filed with the Securities and
Exchange Commission.
/s/ John A. Ryals
By: ___________________________________
John A. Ryals
Attorney-in-fact
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1** Restated Articles of Incorporation of the Registrant.
3.2* Amended and Restated Certificate of Incorporation of the
Registrant to be filed upon completion of this offering.
3.3** By-laws of the Registrant.
3.4* Restated Bylaws of the Registrant to be effective upon completion
of this offering.
4.1* Form of Common Stock Certificate.
5.1* Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
10.1** Registrant's 1998 Stock Option Plan.
10.2** Founder Employment Agreement, dated February 12, 1998, between the
Registrant and John A. Ryals
10.3** Founder Employment Agreement, dated February 12, 1998, between the
Registrant and Scott J. Uknes
10.4** Founder Proprietary Information and Inventions Agreement, dated
February 12, 1998, between the Registrant and John A. Ryals
10.5** Founder Proprietary Information and Inventions Agreement, dated
February 12, 1998, between the Registrant and Scott J. Uknes
10.6** Amended and Restated Registration Rights Agreement, dated January
21, 2000, between the Registrant and certain Founders and
Investors
10.7+ Agreement, dated September 22, 1998 by and between Bayer AG and
the Registrant
10.8+ Collaboration Agreement, dated November 17, 1999, by and between
Monsanto and the Registrant
23.1** Consent of PricewaterhouseCoopers LLP
23.2* Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5.1)
24.1** Powers of Attorney (See Page II-5)
27** Financial Data Schedule -- 1997 and 1998
27.1** Financial Data Schedule -- 1999
</TABLE>
- ------------------
* To be filed by amendment.
** Previously filed with the SEC.
+ Confidential Treatment requested as to certain provisions, which portions
have been omitted and filed separately with the SEC.
<PAGE>
Exhibit 10.7
------------
Paradigm Genetics, Inc. has omitted from this Exhibit 10.7 portions of the
Agreement for which Paradigm Genetics, Inc. has requested confidential treatment
from the Securities and Exchange Commission. The portions of the Agreement for
which confidential treatment has been requested have been filed separately with
the Securities and Exchange Commission. Such omitted portions have been marked
with an asterisk.
AGREEMENT
This Agreement is entered into by and between Bayer AG (hereinafter
"BAYER") of Leverkusen D51368, Germany and Paradigm Genetics, Inc., (hereinafter
"PARADIGM") of 104 Alexander Drive, Building 2, Research Triangle Park, North
Carolina USA 27709.
WHEREAS, PARADIGM and BAYER have facilities and personnel capable of
conducting research and rendering services for the development of biological
test systems ("ASSAYS") useful for the discovery of new herbicides; and
WHEREAS, PARADIGM and BAYER desire to engage in a collaborative research
program relating to the development of such biological test systems
("ASSAYS"),
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties agree as follows:
1. Scope of Research. BAYER and PARADIGM shall undertake a research
-----------------
collaboration ("RESEARCH COLLABORATION") relating to the identification and
development of novel genes, and/or gene products, gene functions and ASSAYS
useful to measure the potential herbicidal activity of chemical compounds or
substances ("FIELD").
1
<PAGE>
PARADIGM under this Agreement agrees to conduct research and render
services in the FIELD as defined in the RESEARCH PROGRAM exclusively for BAYER.
PARADIGM will not conduct research and render services in the FIELD as
defined in the RESEARCH PROGRAM for other third parties.
"ASSAY" means with respect to a particular target gene, an in vitro or in
vivo assay developed by PARADIGM in the course of the RESEARCH COLLABORATION or
by BAYER, including the required reagents for performing such assay that are not
otherwise readily available, that is suitable for high-throughput screening and
that can measure whether a particular molecule or compound inhibits or
antagonizes (or, if appropriate, agonizes or enhances) the function of the
target gene and/or their products.
Unless indicated otherwise, the term "HERBICIDE" throughout this Agreement
shall mean (for the period prior to ten (10) years after termination of the
RESEARCH COLLABORATION or prior to expiration of any issued patent controlled by
PARADIGM, which patent would result in infringement by BAYER in the absence of
this Agreement, whichever occurs last), a chemical compound or any substance
useful as a herbicide for combating weeds, including a chemical compound or any
substance identified as a potential herbicide discovered, or identified by BAYER
or a sublicensee directly or indirectly as a result of an ASSAY developed during
the RESEARCH COLLABORATION using PARADIGM INTELLECTUAL PROPERTY.
PARADIGM INTELLECTUAL PROPERTY means (i) information that is controlled by
PARADIGM or its Affiliate, including, but not limited to, Proprietary
Information disclosed to BAYER that is necessary or useful for establishing and
performing an ASSAY or otherwise useful for discovering HERBICIDES under this
Agreement, and (ii) all patents controlled by PARADIGM or its affiliate that
claim or cover the components, manufacture or use of an ASSAY or Target Gene, or
the discovery of a HERBICIDE,
2
<PAGE>
where such patents include inventions which were made prior to the end of the
term of this Agreement, including those made prior to the effective date of this
Agreement.
The RESEARCH COLLABORATION shall be conducted in accordance with the
RESEARCH PROGRAM attached hereto as Exhibit A. The RESEARCH COLLABORATION shall
be under the direction and supervision of a JOINT RESEARCH COMMITTEE consisting
of a REPRESENTATIVE and a maximum of three voting members from both PARADIGM and
BAYER as listed in the attached Exhibit B. In the event that the JOINT RESEARCH
COMMITTEE is unable to agree upon the direction of the RESEARCH PROGRAM, BAYER
shall have a super majority vote. In addition, upon decision of the JOINT
RESEARCH COMMITTEE the content of the RESEARCH COLLABORATION may be modified,
including necessary changes in allocation of resources.
2. Meetings. BAYER and PARADIGM shall meet quarterly to discuss the
--------
RESEARCH COLLABORATION. Participants of such meetings shall be determined by the
REPRESENTATIVES. Meetings shall take place alternating at PARADIGM's and BAYER's
facilities unless an alternate location is mutually agreed upon. All meetings
shall be conducted in the English language.
3. Reports. PARADIGM agrees to submit to BAYER a written summary of
-------
meetings of the JOINT RESEARCH COMMITTEE, including protocols. PARADIGM further
agrees to furnish BAYER with a final written report summarizing the results of
the RESEARCH PROGRAM within sixty (60) days of completion of the RESEARCH
COLLABORATION. This final report shall include, but not be limited to, all data,
conclusions, results, observations, a detailed description of all procedures,
and the like. The final report shall be owned by BAYER and all information
contained in such report relating to the FIELD and resulting from the RESEARCH
COLLABORATION under this Agreement submitted to BAYER may be utilized by BAYER
for any purpose in the FIELD, subject to the provisions of this Agreement. All
such reports shall constitute CONFIDENTIAL INFORMATION subject to the provisions
of Article 6.
3
<PAGE>
4. Consideration. In consideration of the services provided by PARADIGM
-------------
during the RESEARCH COLLABORATION and the rights obtained by BAYER under this
Agreement, BAYER shall provide PARADIGM with the following payments:
a) [________________________________________________]* upon execution
of this Agreement by both parties, [______________________
__________________________________________________________________]*
b) A total of [______________________________________________
_______________]* during the initial first three years after
execution of this Agreement ("Initial Term") and [_______________
_____________________________________________]* during the fourth
and fifth years after execution of this Agreement of the total five
(5) year term ("Extended Term") according to the following schedule
with each payment due as specified in Exhibit C:
Year 1 [________]*
Year 2 [________]*
Year 3 [________]*
Subtotal (years 1-3) [________]*
Year 4 [________]*
Year 5 [________]*
Subtotal (years 4-5) [________]*
Total (years 1-5) [________]*
The first installment shall be payable and due [_____________]*, and the
subsequent [_______]* installments payable prior to [__________________________
________________]* thereafter.
4
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
c) Technical payments of:
i) [_________________________________]* upon delivery of and/or
access to a first customized agricultural database (AgDB(TM)
BAYER 1.0) to BAYER;
ii) [__________________________]* upon delivery of and/or access
to a second customized agricultural database (AgDB(TM) BAYER
2.0) to BAYER;
iii) [__________________________________________]* for each ASSAY
delivered to BAYER by PARADIGM up to a maximum of
[______]* ASSAYS. The total number of ASSAYS in the first
three (3) years shall be a minimum of [________]* and a
maximum of [_______] The total number of ASSAYS in the five
year Extended Term shall be a minimum of [_______]* and a
maximum of [______]*. The maximum total number of assays to
be delivered may be increased upon written agreement of the
JOINT RESEARCH COMMITTEE.
d) Product Milestone payments of
i) [______________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
_________]*;
ii) A [_______]* payment of [___________________________]* upon
first commercial sale of each and every HERBICIDE in
5
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
a major market country; wherein "major market countries" are
NAFTA countries, Japan, China, India and all countries that
are members of the European Union.
[___________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________]*
e) SUCCESS FEE PAYMENTS on the annual Net Sales of each HERBICIDE of
[_________________________]* of worldwide Net Sales for
[_____________________________________________________________]* after the first
commercial sale of a HERBICIDE in a major market country, such
[_______________________________________________________________________________
______________________________________________]* after the first commercial sale
in a major market country as defined in Article 4.d.ii.
f) Net Sales for purposes of calculating SUCCESS FEE PAYMENTS
royalties under this Article means the sum of the invoiced sales price of a
HERBICIDE billed to independent customers who are not Affiliates or joint
venture partner, less to the extent included in the invoiced sales price, (i)
credits, allowances, discounts and rebates to, and chargebacks from the account
of, such independent customers for spoiled, damaged, out-dated and returned, but
not replaced, HERBICIDE; (ii) actual freight and insurance costs incurred in
transporting such HERBICIDE in final form to such customers; (iii) cash,
quantity and trade discounts and other price reduction programs; (iv) sales,
use, value added and other direct taxes incurred; and (v) customs, duties,
surcharges and other governmental charges incurred in connection with the
exportation or importation of such HERBICIDE in final form. Affiliate for
purposes of this Agreement means, with respect to a party, any other party which
directly or indirectly controls, is controlled by or is under common control
with such party. A party shall be regarded as in control of another if it owns,
or directly or indirectly
6
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
controls at least fifty percent (50%) of the voting stock or other ownership
interest of the other party, or if it, directly or indirectly, possesses the
power to direct or to cause the direction of the management and policies of the
other party by any means whatsoever. Unless stated otherwise, all SUCCESS FEE
PAYMENTS shall be made within sixty (60) days after the end of each royalty
period. A SUCCESS FEE PAYMENT period for purposes of this Agreement means each
quarter of each calendar year in which SUCCESS FEE PAYMENTS are due. Such
SUCCESS FEE PAYMENTS shall be paid in US Dollars and all SUCCESS FEE PAYMENTS
for worldwide sales shall be converted to US Dollars at the exchange rate quoted
in the Wall Street Journal on the last business day of each period. Total annual
net sales shall be based on total sales for a calendar year or portion thereof
PARADIGM shall have the right at any time to request to inspect the records of
sales and to audit the calculation of SUCCESS FEE PAYMENTS for any period and
BAYER shall grant such request and provide access to the necessary information
within ten (10) business days of receipt by BAYER of notice of such request.
g) If the HERBICIDE active ingredient ("a.i.") is sold in a
Combination Product which contains in addition to the HERBICIDE a.i. other
herbicidal active ingredients different from the HERBICIDE a.i. then Adjusted
Net Sales as basis for SUCCESS FEE PAYMENTS shall be computed as follows:
(i) If during the relevant accounting period, the HERBICIDE
was sold and its content of the HERBICIDE a.i. is comparable to
the Combination Product, then the following formula shall be
applicable:
[____________________________________________________________________]*
7
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
All percentages being percentages by weight.
If during the relevant accounting period, no appropriate
HERBICIDE was sold, then the dates of an appropriate HERBICIDE
sold within one year before the relevant accounting period shall
be applicable.
ii) If neither during the relevant accounting period nor within
one year before the relevant accounting period any HERBICIDE of
comparable content of the HERBICIDE a.i. in the Combination
Product was sold, then the Adjusted Net Sales of the Combination
Product is computed according to the ratio (by weight) of the
content of the HERBICIDE a.i. in HERBICIDE and the total content
of the agricultural chemicals from the Net Sales of the
Combination Product.
5. Withholding Taxes. BAYER shall have the right to deduct from the
SUCCESS FEE PAYMENTS the tax which PARADIGM is liable to pay thereon under the
German tax law and for the payment of which PARADIGM is responsible.
PARADIGM shall immediately be sent a tax receipt certifying the payments of
the tax, so that PARADIGM may use it for claiming a credit on the tax payable by
PARADIGM in her own country on such SUCCESS FEE PAYMENTS.
No deduction shall be made if PARADIGM furnishes a document from the German
tax authorities by the time of the payment of the SUCCESS FEE PAYMENTS
certifying that the SUCCESS FEE PAYMENTS are exempt from tax in the Federal
Republic of Germany according to the convention for the avoidance of double
taxation between USA and the Federal Republic of Germany.
8
<PAGE>
The German value added tax (VAT) will be administrated by BAYER for
PARADIGM. PARADIGM will not invoice any VAT to BAYER.
Each party undertakes to cooperate with the other party to achieve the tax
arrangements which are most favorable for both parties.
6. Grants, Licenses and Options. The following grants of rights are given
-----------------------------
by the parties to this Agreement:
a) PARADIGM grants to BAYER a worldwide, exclusive license,
including the right to sublicense, to use PARADIGM INTELLECTUAL PROPERTY for the
discovery and identification of HERBICIDES. If however, any ASSAY is not used by
BAYER to screen at least [_________________________]* compounds within
[___________]* after delivery of such ASSAY to BAYER by PARADIGM it shall be
considered abandoned and the worldwide, exclusive license to BAYER for such
ASSAY under this Article 6a shall be considered revoked and all conveyed rights
in such ASSAY shall revert to PARADIGM.
If such reverted ASSAY is used by or licensed by PARADIGM for the
discovery, identification and development of chemical compounds or substances to
be used as herbicides, PARADIGM shall negotiate in good faith terms of an
agreement whereby PARADIGM would pay to BAYER a reasonable payment for the use
of the ASSAY in the FIELD, such payment taking into consideration the payments
made for such ASSAY in the FIELD by BAYER. BAYER shall have the option to forego
any payment from PARADIGM for the reverted ASSAY in return for a co-exclusive
right to use such ASSAY in the FIELD. As far as PARADIGM obtains royalties for
the discovery or identification of chemical substances or compounds as a result
of a reverted ASSAY in the FIELD to be used as herbicides, BAYER shall receive
[______________]* of the net royalty income.
b) For the term BAYER uses PARADIGM INTELLECTUAL PROPERTY
9
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
as defined in this Agreement, PARADIGM grants to BAYER an exclusive option to
negotiate in good faith to obtain an exclusive license to results of an
additional research collaboration on herbicide tolerance of plant crops to each
HERBICIDE based on the target genes, including modifications and analogues of
such genes and any other herbicides. Upon exercise of an option under this
Article 5b by written notice, BAYER and PARADIGM shall undertake negotiations to
complete an agreement of terms to a license to results of an additional research
collaboration within ninety (90) days of exercise of the option. The terms of
such a license for an additional research collaboration may include a one time
licensing fee, periodic research payments, milestone payments and a commercially
reasonable royalty rate. Negotiations to acquire such a license shall take into
consideration factors affecting PARADIGM's business including, but not limited
to, size of market, development time and cost, product performance relative to
competing products and the like.
c) BAYER shall hold a fully paid, irrevocable, exclusive license,
without the right to sublicense to third parties, to use AgDB(TM) BAYER 1.0,
AgDB(TM) BAYER 2.0, AgDB(TM) BAYER 3.0 and AgDB(TM) BAYER 4.0, including
software developed by PARADIGM associated with Analytical Packages AnP1 and
AnP2.
d) PARADIGM grants to BAYER a [_______________________________________
___________]*. If BAYER exercises such license rights, BAYER shall inform
PARADIGM in writing and provide PARADIGM with results and data relating thereto
and grant to PARADIGM the right to make such results and data a part of
PARADIGM's AgDB(TM).
[_______________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
10
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
________________________________________________________________________________
_____________________________________________________________________________]*.
e) PARADIGM hereby grants to BAYER [________________________________
___________________________________________________________________________
_______]*.
f) BAYER grants PARADIGM the right to use HERBICIDES identified or
discovered during the RESEARCH COLLABORATION to develop and use selectable
markers. Any selectable marker developed as a result of this Article may be used
by either BAYER or PARADIGM for research purposes, shall be treated as
CONFIDENTIAL INFORMATION, and shall be jointly owned by BAYER and PARADIGM and
treated as if it were a JOINT PATENT outside the FIELD pursuant to Article 9.
g) Upon BAYER's request, PARADIGM shall positively consider to
extend the FIELD of this Agreement to additional still to be defined objectives,
e.g., quality traits in plants and the like.
7. Confidentiality. In view of the parties' proprietary rights and
---------------
interests concerning their facilities and technology, PARADIGM and BAYER agree
that during the term of and any subsequent &tension of this Agreement and for a
period of five (5) years thereafter, each party shall hold in confidence any
CONFIDENTIAL INFORMATION: a) received by one party ("Receiving Party") from the
other party ("Disclosing Party")("Proprietary Information"), or 2) that results
from the RESEARCH COLLABORATION under this Agreement ("New Information"). Such
CONFIDENTIAL INFORMATION includes, but is not limited to, confidential or
proprietary information, business plan information, reports, materials, know-
how, data, both technical and non-technical, procedures, databases, documents,
specifications, techniques, ASSAYS, results, product development, conclusions,
and the like (including the terms of this
11
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
Agreement). Each party shall not disclose such information to any third party or
use such information for any purpose, except as provided herein, and necessary
for the fulfillment of the terms and provisions of this Agreement, without the
prior written approval of the other party. The parties shall have no obligations
with respect to any portion of such Proprietary Information and BAYER shall have
no obligations with respect to any portion of such New Information which:
a) is or later becomes generally available to the public by use,
publication or the like through no fault of the Receiving Party in the case of
Proprietary Information or BAYER in the case of New Information;
b) is obtained from a third party who had the legal right to disclose
the same to the Receiving Party in the case of Proprietary Information or BAYER
in the case of New Information;
c) the Receiving Party in the case of Proprietary Information or BAYER
in the case of New Information already possesses, as evidenced by written
records, predating receipt thereof from of the Receiving Party in the case of
Proprietary Information or BAYER in the case of New Information.
8. Publication. PARADIGM and BAYER recognize the importance to present or
------------
publish scientific articles and the importance to protect Proprietary
Information from premature disclosure to third parties relating to the FIELD.
However, BAYER agrees to obtain written permission from PARADIGM prior to
submission of any such presentation or article for publication that contains
PARADIGM's Proprietary Information or New Information or prior to disclosure of
PARADIGM's Proprietary Information or New Information to third parties. PARADIGM
agrees to obtain written permission from BAYER prior to submission of any such
presentation or article for publication that contains BAYER's Proprietary
Information or prior to disclosure of BAYER's Proprietary Information to third
parties. Each party agrees to provide to the REPRESENTATIVE of
12
<PAGE>
the other party all such presentations or articles or disclosure of Proprietary
Information or New Information to third parties at least sixty (60) days prior
to submission of such presentations or articles for publication or prior to the
intended disclosure of CONFIDENTIAL INFORMATION to third parties. The receiving
REPRESENTATIVE will notify the other party within the thirty (30) days following
receipt of the contents of the proposed publication or disclosure of any
comments they may have. The parties agree to remove any Proprietary Information
and BAYER agrees to delay disclosures, presentations or articles for publication
for up to ninety (90) days in order to file a patent application if it is
determined that the presentations or articles for publication or disclosure of
contain New Information with potentially patentable subject matter.
9. Inventions and Patents
----------------------
9.1 Ownership of Research Intellectual Property.
-------------------------------------------
a) Any patents or technology arising from inventions first conceived
or discovered by one or more employees of BAYER in the performance of the
RESEARCH COLLABORATION shall belong to BAYER ("BAYER PATENTS"). Any patents
arising from inventions first conceived or discovered by one or more employees
of PARADIGM in the performance of the RESEARCH COLLABORATION shall belong to
PARADIGM ("PARADIGM PATENTS"). Any patents arising from an invention first
conceived or discovered jointly by one or more employees of BAYER and one or
more employees of PARADIGM in the performance of RESEARCH COLLABORATION shall
belong jointly to BAYER and PARADIGM ("JOINT PATENTS'). JOINT PATENTS within the
FIELD shall be subject to the provisions of this Agreement. Neither party of any
JOINT PATENT outside the FIELD shall exploit their undivided interest in such
JOINT PATENT without the written consent of the other party. Each party agrees
to cooperate with the other in preparing and executing any documents necessary
to obtain patent protection in any country in the world. Inventorship shall be
determined in accordance with the applicable patent laws of the jurisdiction
where the relevant patent application is filed.
13
<PAGE>
9.2 Disclosure of Patentable Inventions. In addition to the disclosures
-----------------------------------
required under this Agreement, each party shall submit a written report to the
other within sixty (60) days of the end of each quarter summarizing any
invention arising during the prior quarter of the RESEARCH COLLABORATION in the
FIELD which it believes may be patentable.
9.3 Patent Prosecution and Maintenance: Abandonment.
------------------------------------------------
a) PARADIGM PATENTS. PARADIGM shall control the filing, prosecution
----------------
and maintenance of all PARADIGM PATENTS arising from the RESEARCH COLLABORATION.
In the event PARADIGM elects not to file in a reasonable time or to cease
prosecution of a filed application for a PARADIGM PATENT or to abandon an issued
PATENT, PARADIGM shall notify BAYER not less than two (2) months before any
relevant deadline, and BAYER shall have the right to assume control over the
prosecution of such filed application for a PARADIGM PATENT or maintenance of
such issued PARADIGM PATENT.
b) BAYER PATENTS. BAYER shall control the filing prosecution and
--------------
maintenance of all BAYER patents. In the event BAYER elects not to file in a
reasonable time or to cease prosecution of a filed application for a BAYER
PATENT or to abandon an issued BAYER PATENT, BAYER shall notify PARADIGM not
less than two (2) months before any relevant deadline, and PARADIGM shall have
the right to assume control over the prosecution of such filed application for a
BAYER PATENT or maintenance of such issued BAYER PATENT.
c) JOINT PATENTS. PARADIGM shall control the initial preparation,
--------------
filing, prosecution and maintenance in the U.S. of all JOINT PATENTS arising
from the RESEARCH COLLABORATION. BAYER shall be responsible for subsequent
filing, prosecution and maintenance in Europe of all JOINT PATENTS arising from
the RESEARCH COLLABORATION. Outside the U.S. and Europe ("Rest of World"),
PARADIGM and BAYER shall jointly be responsible for the filing, prosecution and
maintenance in Rest of World of all JOINT PATENTS arising from the RESEARCH
14
<PAGE>
COLLABORATION. In the event PARADIGM or BAYER elects not to file in a reasonable
time or to cease prosecution of a filed application for a JOINT PATENT or to
abandon an issued JOINT PATENT, they shall notify the other party not less than
two (2) months before any relevant deadline, and the other party shall have the
right to assume control over the prosecution of such filed application for a
JOINT PATENT or maintenance of such issued JOINT PATENT.
9.4 Costs. Each party shall retain control over and bear all expenses
-----
associated with the filing, prosecution and maintenance of patents relating to
the Field on inventions made before the effective date of this Agreement by such
party.
BAYER shall retain control over and bear all expenses associated with the
filing, prosecution and maintenance of BAYER PATENTS. PARADIGM shall retain
control over and bear all expenses associated with the filing, prosecution and
maintenance of PARADIGM PATENTS. In the FIELD, PARADIGM shall bear all expenses
associated with the filing, prosecution and maintenance of JOINT PATENTS in the
U.S. In the FIELD, BAYER shall bear all expenses associated with the filing,
prosecution and maintenance of JOINT PATENTS in EUROPE and Rest of World.
Outside the FIELD, PARADIGM and BAYER shall equally share all expenses
associated with the filing, prosecution and maintenance of JOINT PATENTS.
In the FIELD, BAYER may elect not to pay any such costs and expenses with
respect to a patent application of issued patent covering a particular JOINT
PATENT, provided BAYER notifies PARADIGM not less than two (2) months before any
relevant deadline. If PARADIGM assumes the expenses associated with future
prosecution of the patent application or maintenance of the issued Patent,
PARADIGM will thereby become the sole owner of the JOINT PATENT.
If BAYER elects not to pay such costs and expenses in the FIELD with
respect to a particular PARADIGM PATENT and/or JOINT PATENTS, PARADIGM may take
over or abandon prosecution and maintenance and bear expenses associated with
those
15
<PAGE>
patents, but in any case, BAYER will only lose (i) exclusive user rights, which
shall become non-exclusive, and/or (ii) any remuneration payable by PARADIGM to
BAYER as provided for in this Agreement.
9.5 Confidential Treatment. All information disclosed under Sections 9.2
----------------------
and 9.3 shall be treated as confidential pursuant to Article 7.
9.6 The provisions of this Article 9 shall be applicable mutatis mutandis
to such portions of PARADIGM INTELLECTUAL PROPERTY generated during the RESEARCH
COLLABORATION under this Agreement.
10. Term. This Agreement shall be effective upon the execution of this
----
Agreement and the RESEARCH COLLABORATION shall commence October 1, 1998 and
continue for the Initial Term of three (3) years. The Initial Term may be
extended and this Agreement shall remain in continuous and uninterrupted effect
for another two (2) years term, unless terminated as provided in Article 11,
11. Termination. a) Except as provided in Article 11b and 11c of this
-----------
Agreement or unless mutually agreed to by both parties to Agreement shall
terminate:
i) September 30, 2001; or
ii) on September 30, 2003, if extended in
accordance with Article 10.
b) Provided the milestones of Article 4.c.ii and Article 4.c.iii have
not been achieved on or before September 30, 2001 or in the event that necessary
internal funding by BAYER is not approved, BAYER may terminate this Agreement
effective one hundred and twenty (120) days after providing notice to PARADIGM
of BAYER's intent to terminate this Agreement.
c) A party may terminate this Agreement upon or after the breach of
16
<PAGE>
any material provision of this Agreement, if the breaching party has not cured
such breach within ninety (90) days after notice thereof from the other party.
The licenses granted hereunder to the non-breaching party shall survive a
termination of this Agreement under this Article 10c and shall remain in full
force and effect, so long as such non-breaching party shall continue to comply
with its obligations under this Agreement to the breaching party in respect of
such licenses (including without limitation, any reporting, payment, funding,
development, commercialization, or royalty obligations) as if this Agreement had
not been terminated.
d) In the event a third party issued patent is found by a court of
competent jurisdiction to prevent the parties from the performance of the
RESEARCH COLLABORATION and/or the development and/or use of assays in the FIELD,
either party may terminate this agreement by giving the other party thirty (30)
days notice.
12. Notices. Unless otherwise stated, any notice or reports required to be
-------
given under the terms of this Agreement may be given by certified letter
addressed to the other party and addressed to the party at the following
address. All such notices and reports shall be written in the English language.
Any notice so given shall be deemed to have been served when hand delivered to
the other party or at the expiration of two (2) days from the time of posting.
For BAYER: Professor Dr. Dieter Berg
Bayer AG
Agricultural Center Monheim
D-51368 Leverkusen
Germany
For PARADIGM: Dr. John Ryals, CEO
Paradigm Genetics, Inc.
104 Alexander Drive, Building 2
Research Triangle Park,
17
<PAGE>
North Carolina 27709
Copy to: Henry Nowak, General Counsel
Vice President of Intellectual Property
13. Publicity. During the term of this Agreement, neither party hereto will
---------
use the name of the other party in publicity or advertising without the written
approval of the other party. Neither party will make any public announcement of
the existence and nature of this Agreement or the RESEARCH COLLABORATION without
the written consent of the other party. However, nothing in this Article or
elsewhere in this Agreement is intended to restrict either party from disclosing
the existence and nature of this Agreement if required by applicable law.
14. Liability. a) Subject to the provisions of Article 14.b, each party
---------
hereto agrees to be responsible and assume liability for its own wrongful or
negligent acts or omissions, or those of its officers, agents or employees to
the full extent allowed by law. Further, each party warrants and represents that
it has adequate liability insurance for the protection of itself and its
officers, employees and agents, while acting within the scope of their
employment by the party. Neither party warrants that any license granted herein
allows the making using or selling of any product or technique resulting from
the RESEARCH COLLABORATION without liability to any third party or a license
from such third party. Each party is liable for its own actions and neither
indemnifies the other for any act of patent infringement by or against such
third party.
b) PARADIGM agrees to indemnify BAYER for any damages that may
result from a successful claim by a third party of patent infringement as
indicated by a judgment against BAYER by a court of competent jurisdiction,
where such claim of infringement results from use of an ASSAY in the FIELD and
where such judgment is based upon infringement of a patent that has issued prior
to October 1,1998.
c) Additionally, PARADIGM agrees to indemnify BAYER for any damages that
18
<PAGE>
may result from a successful claim by a third party of patent infringement as
indicated by a judgment against BAYER by a court of competent jurisdiction,
where such claim of infringement results from use of an ASSAY in the FIELD and
where such judgment is based upon infringement of a patent that has issued prior
to a decision in writing by the JOINT RESEARCH COMMITTEE to develop an ASSAY
from a target gene. PARADIGM shall provide the JOINT RESEARCH COMMITTEE with a
review of relevant patent literature known to PARADIGM and BAYER, including any
possible infringement issues.
15. Independent Contractor. In the performance of all services hereunder,
----------------------
neither party is authorized or empowered to act as agent for the other for any
purpose and shall not on behalf of the other enter into any contract, warranty,
or representation as to any matter. Neither party shall be bound by the acts of
the other.
16. Warranties. The parties warrant and represent that they have the right
----------
to enter into this Agreement. Both parties further warrant and represent that
the terms of this Agreement are not inconsistent with other contractual
obligations, expressed or implied that they may have.
17. Amendments. No modification to this Agreement shall be effective unless
----------
made in writing and signed by a duly authorized representative of each party.
18. Entire Agreement. This agreement constitutes the entire Agreement
----------------
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings between the parties (whether written or
oral) relating to said subject matter.
19. Survival of Terms. The terms of Articles 1, 3, 4, 5, 6, 7, 8, 9,12,14,
-----------------
20, 22 and 24 shall survive any termination of this Agreement pursuant to
Article 11.
19
<PAGE>
20. No Implied License. Neither party by this Agreement grants to the other
------------------
any license, express or implied, to any technology, know-how, inventions,
improvements, trade secrets or materials that it possesses, except for research
purposes necessary to conduct the RESEARCH COLLABORATION. Upon the termination
of the RESEARCH COLLABORATION, the parties' intellectual property rights with
respect to the results of the RESEARCH COLLABORATION shall be as set forth in
Article 6, and neither party shall have any implied license to any other
technology, know-how, inventions, improvements, trade secrets or materials of
the other party.
21. Force Majeure. Neither party shall be held liable or responsible to the
-------------
other party nor be deemed to have defaulted under or breached this Agreement for
failure or delay in fulfilling or performing any term of this Agreement to the
extent, and for so long as, such failure or delay is caused by or results from
causes beyond the reasonable control of the affected party including but not
limited to fire, floods, embargoes, war, acts of war (whether war be declared or
not), insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions, or delays in acting by any
governmental authority or the other party.
22. Assignment. Neither party shall assign or transfer any interest in this
----------
Agreement, nor assign any claims for money due or to become due during this
Agreement, without the prior written approval of the other party. Subject to the
foregoing, the agreement shall inure to the benefit of and shall be binding upon
the successors and permitted assigns of the parties.
23. Compliance with Laws. Each party agrees that it will comply with all
--------------------
applicable international, national, state, province and local laws, codes,
regulations, rules and orders in the performance and direction of the work under
this Agreement. The parties represent and agree that they shall diligently apply
for and use their best efforts to obtain all necessary government licenses and
permits for the execution of this Agreement and any transactions required
hereunder.
20
<PAGE>
24. Governing Law. This Agreement shall be governed by the common law and
-------------
the laws of the State of North Carolina and the United States, and the parties
hereby submit to the jurisdiction of the North Carolina courts, both state and
federal. Any proceedings relating to this Agreement shall be conducted in the
English language.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates set forth below.
PARADIGM GENETICS, INC. BAYER AG
By: By:
--------------------------- -----------------------------
Dr. John A. Ryals Dr. Bamelis
CEO and President Member of Board
Date: Date:
--------------------------- ---------------------------
BAYER AG
By:
---------------------------
Dr. Wulff
Head, Business Group
Crop Protection
Date:
-------------------------
21
<PAGE>
EXHIBIT A
Research Program
[------------------------------------------------------------------
------------------------------------------------------------------]*
22
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* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
* Paradigm Genetics, Inc. requests confidential treatment for EXHIBIT A in its
entirety. EXHIBIT A consists of six pages of text.
<PAGE>
EXHIBIT B
JOINT RESERCH COMMITTEE
BAYER REPRESENTATIVE: [___________]*
BAYER VOTING MEMBERS: [___________]*
[___________]*
[___________]*
BAYER NON-VOTING MEMBERS: [___________]*
PARADIGM REPRESENTATIVE: [___________]*
PARADIGM VOTING MEMBERS: [___________]*
[___________]*
[___________]*
23
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
EXHIBIT C
Payment Schedule
QUARTER DUE DATE AMOUNT DUE (U.S. Dollars)
1 October 1, 1998 [________]*
2 January 1, 1999 [________]*
3 April, 1999 [________]*
4 July 1, 1999 [________]*
5 October 1, 1999 [________]*
6 January 1, 2000 [________]*
7 April 1, 2000 [________]*
8 July 1, 2000 [________]*
9 October 1, 2000 [________]*
10 January 1, 2001 [________]*
11 April 1, 2001 [________]*
12 July 1, 2001 [________]*
13 October 1, 2001 [________]*
14 January 1, 2002 [________]*
15 April 1, 2002 [________]*
16 July 1, 2002 [________]*
17 October 1, 2002 [________]*
18 January 1, 2003 [________]*
19 April 1, 2003 [________]*
20 July 1, 2003 [________]*
24
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
Side Letter
To the Paradigm Genetics, Inc. / Bayer AG - Agreement
Dated September 22, 1998
We mutually agree that Article 11.b (page 17) for a better understanding of the
parties interests should read:
"11 .b) Provided the milestones of Article 4.c.ii and 4.c.iii have not been
achieved as indicated in Exhibit A (in particular delivery of AG DB 2.0
by October 1, 2000) BAYER may notify PARADIGM that it is in breach of
this Agreement and PARADIGM will be given 90 (ninety) days to cure the
breach by delivering Ag DB 2.0 to BAYER. If PARADIGM does not deliver Ag
DB 2.0 within the ninety (90) days period, then BAYER may terminate this
Agreement effective one hundred twenty (120) days after providing notice
to PARADIGM of BAYER's interest to terminate this Agreement. However, if
PARADIGM is able to deliver Ag DB 2.0 to BAYER during this one hundred
twenty (120) days period then the Agreement will not terminate. In the
event that necessary internal funding by BAYER is not approved BAYER may
terminate this Agreement at September 30, 2001, providing notice to
PARADIGM ninety (90) days before this date."
PARADIGM GENETICS, INC. BAYER AG
By: By:
________________________ ____________________________
Dr. John A. Ryals Dr. F.R. Heiker
CEO and President Head of Chemical Research
Date: Sept. 22, 1998 Date: Sept. 22, 1998
--------------------- --------------
BAYER AG
By:
____________________________
Dr. Adrian
Patents and Licensing
Date: Sept. 22, 1998
--------------
25
<PAGE>
Side Letter
To the Paradigm Genetics, Inc. / Bayer AG - Agreement
Dated September 22, 1998
We mutually agree that for a better understanding of the parties interests,
Article 4, first sentence, should be modified to clarify that the
consideration provided by Bayer is for the services provided by Paradigm
Genetics, and therefore should read:
4. Consideration. In consideration of the services provided
-------------
by PARADIGM during the RESEARCH COLLABORATION under this
Agreement, BAYER shall Provide PARADIGM with the following
payments:
Moreover, Article 6.a., first paragraph, should be modified to clarify that
the License to Paradigm is royalty-free, and therefore should read:
a) PARADIGM grants to BAYER a worldwide, royalty-free,
exclusive license, including the right to sublicense, to use
PARADIGM INTELLECTUAL PROPERTY to the extent necessary for
the operation of a licensed ASSAY for discovery and
identification of HERBICIDES If, however, any ASSAY is not
used by BAYER to screen [___________ _____________________]*
compounds within [_________________]* after delivery of such
ASSAY to BAYER by PARADIGM it shall be considered abandoned
and the worldwide, royalty-free exclusive license to BAYER
for such ASSAY under this Article 6a shall be considered
revoked and all conveyed rights in such ASSAY shall revert
to PARADIGM.
PARADIGM GENETICS, INC. BAYER AG
By: By:
___________________________ ____________________________
Dr. John A. Ryals Dr. Heiker
CEO and President Head of Research
Date: Oct 30, 1998 Date: Nov. 17, 1998
------------ -------------
BAYER AG
By:
____________________________
Dr. Adrian Patents and Licensing
Date: Nov. 9, 1998
------------
26
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
AMENDMENT
WHEREAS, PARADIGM GENETICS, INC. and BAYER AG entered into a collaborative
research program relating to the development of biological test systems dated
September 22,1998 (the "AGREEMENT"), the parties herewith agree to amend the
AGREEMENT as follows:
Section 4.c(i) shall be deleted in its entirety and replaced with:
[__________________________]* upon delivery of and/or access to a first
customized agricultural database (AgDB(TM)\BAYER\ 1.0) to BAYER AG;
Section 4.c(ii) shall be deleted in its entirety and replaced with:
[__________________________________]* upon delivery of and/or access to
a second customized agricultural database (AgDB (TM)\BAYER\ 2.0) to BAYER
AG;
BAYER AG PARADIGM GENETICS, INC.
____________________________ ___________________________
Signature Signature
John A. Ryals
____________________________
Printed or Typed Name
President & CEO
____________________________
Title
10.9.99 10.8.99
- ---------------------------- ---------------------------
Date Date
BAYER AG
____________________________
Signature
____________________________
Printed or Typed Name
____________________________
Title
13.9.99
- ----------------------------
Date
27
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* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
AMENDMENT
WHEREAS, PARADIGM GENETICS, INC. and BAYER AG entered into a collaborative
research program relating to the development of biological test systems dated
September 22, 1998 ("the AGREEMENT"), the parties herewith agree to amend the
AGREEMENT as follows:
Section 4.c(I) shall be deleted in its entirety and replaced with:
[________________________]* upon delivery of and/or access
to a first customized agricultural database
(AgDB(TM)\BAYER/ 1.0) to BAYER, such payment to be made
within 60 days of the first anniversary of execution of
this Agreement, [_______________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
______________________]*
PARADIGM GENETICS, INC. BAYER AG
By: ______________________ By: ______________________
Dr. John A. Ryals
CEO ______________________
______________________
Date: 24.11.99
--------------------
BAYER AG
By:
_______________________
_______________________
_______________________
Date: 30.11.99
---------------------
28
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* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
Exhibit 10.8
------------
Paradigm Genetics, Inc. has omitted from this Exhibit 10.8 portions of the
Agreement for which Paradigm Genetics, Inc. has requested confidential treatment
from the Securities and Exchange Commission. The portions of the Agreement for
which confidential treatment has been requested have been filed separately with
the Securities and Exchange Commission. Such omitted portions have been marked
with an asterisk.
Monsanto/Paradigm Genetics Collaboration Agreement
November 17, 1999
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. DEFINITIONS........................................................... 1
1.1 Affiliate...................................................... 1
1.2 Agreement...................................................... 1
1.3 Average Net Benchmark Product Price............................ 2
1.4 Average Net Product Price...................................... 2
1.5 Benchmark Product.............................................. 3
1.6 DNA............................................................ 3
1.7 Effective Date of this Agreement............................... 3
1.8 Grace Periods.................................................. 3
1.9 Gene Patent Rights............................................. 3
1.10 Paradigm Gene Patent Rights.................................... 4
1.11 Improvements................................................... 4
1.12 Know How....................................................... 4
1.13 Licensed Products.............................................. 4
1.14 Licensed Patent Rights......................................... 4
1.15 Monsanto Enabling Technology................................... 4
1.16 Monsanto Licensed Products..................................... 4
1.17 Monsanto DNA Information....................................... 5
1.18 Net Product Revenues........................................... 5
1.19 Paradigm Licensed Products..................................... 5
1.20 Permitted Data................................................. 5
1.21 Project Commencement Date...................................... 5
1.22 Project Committee.............................................. 5
1.23 Production Target Level........................................ 5
1.24 Project Plan................................................... 6
1.25 Project Quarter................................................ 6
1.26 Project Technology............................................. 6
1.27 Product Sublicense Payments.................................... 6
1.28 Subsidiary..................................................... 6
1.29 Term of this Agreement......................................... 6
1.30 Value Added.................................................... 6
1.31 Monsanto Patents............................................... 7
1.32 Paradigm Patents............................................... 7
1.33 Joint Patents.................................................. 7
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
2. CONVEYANCE OF RIGHTS:.................................................................................... 7
2.1 Assignment to Monsanto:............................................................................ 7
2.2 License to Monsanto: Licensed Patent Rights........................................................ 7
2.3 License to Monsanto: Paradigm Gene Patent Rights................................................... 7
2.4 License to Monsanto: Paradigm Gene Patent Rights - restriction on license.......................... 7
2.5 License to Monsanto: restriction on license........................................................ 8
2.6 License to Paradigm: Licensed Patent Rights........................................................ 8
2.7 License to Monsanto: research license - [________________]*........................................ 8
2.8 License to Paradigm: research license - [________________]*........................................ 8
2.9 License to Paradigm: research license - Monsanto Enabling Technology in research crops............. 9
2.10 to Paradigm: research license - Monsanto Enabling Technology - restriction on license.............. 9
2.11 License to Paradigm: restriction on license........................................................ 9
3. FUNDED PROJECT........................................................................................... 9
3.1 Funded Project..................................................................................... 9
3.2 Contribution of Monsanto........................................................................... 9
3.2.1 Monsanto DNA supplied.......................................................................... 10
3.2.2 Counting Monsanto DNA.......................................................................... 10
3.2.3 Counting for failed experiments................................................................ 10
3.3 Contribution of Paradigm........................................................................... 11
3.3.1 Conducting Project Plan........................................................................ 11
3.3.2 Database Compatibility......................................................................... 11
3.3.3 Biological Materials........................................................................... 11
3.3.4 Contribution of Third Party Information........................................................ 11
3.3.4.1 Right to Summary Information............................................................. 11
3.3.4.2 Consequence of Using Permitted Data...................................................... 11
3.3.4.3 Consequence of Expansion................................................................. 12
3.4 Project Committee.................................................................................. 12
3.4.1 Committee Duties............................................................................... 12
3.4.2 Committee Structure............................................................................ 12
3.4.3 Meetings....................................................................................... 12
3.4.4 Decision Making................................................................................ 12
3.5 Term and Termination of Funded Project.................................................................. 13
3.5.1 Early Termination - Production Target Levels Achieved.......................................... 13
3.5.2 Early Termination - Production Target Levels Not Achieved...................................... 13
3.5.3 Early Termination - Other Reasons.............................................................. 14
3.5.4 Extension...................................................................................... 14
3.5.5 Surviving Paragraphs........................................................................... 14
4. PAYMENTS................................................................................................ 14
4.1 Project Funding.................................................................................... 14
4.1.1 Inducement Fee................................................................................. 14
4.1.1.1 Termination Refund........................................................................ 15
4.1.2 Annual Technology Enhancement Fee.............................................................. 15
4.1.3 Quarterly Payment.............................................................................. 15
</TABLE>
ii
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* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
<TABLE>
<S> <C>
4.1.4 Production Target Level Payments................................................................ 15
4.1.5 Additional Optional Projects.................................................................... 16
4.1.5.1..[___]*..................................................................................... 16
4.1.5.2 .Increase in Arabidopsis................................................................... 16
4.1.5.3 Increase in Arabidopsis.................................................................... 16
4.1.5.4 Impact of Expansion - Production Target Level Measurement.................................. 17
4.1.5.5 Impact of Expansion - right to terminate................................................... 17
4.2 Royalties - Monsanto Licensed Products.............................................................. 17
4.2.1 Minimum Royalty................................................................................. 17
4.2.2 One Royalty..................................................................................... 18
4.2.3 Third Party Royalty Offset...................................................................... 18
4.2.4 Monsanto Royalty Buy-Out........................................................................ 18
4.3 License or sublicense of Licensed Patent Rights by Monsanto......................................... 18
4.4 Royalties - Paradigm Licensed Products.............................................................. 19
4.5 Valuation of Non-Monetary Consideration for Product Sublicense Payments:............................ 19
5. RECORDS.................................................................................................. 19
5.1 Payments of Royalties............................................................................... 19
5.2 Books and Records for Royalty Payments.............................................................. 19
5.3 Late Payment of Royalties........................................................................... 20
6. INTELLECTUAL PROPERTY.................................................................................... 20
6.1 Ownership of Project Technology Other Than Gene Patent Rights....................................... 20
6.2 Disclosure of Patentable Inventions................................................................. 20
6.3 Access to Gene Patent Rights........................................................................ 21
6.4 Patent Prosecution and Maintenance; Paradigm Patents................................................ 21
6.5 Patent Prosecution and Maintenance; Monsanto Patents................................................ 21
6.6 Patent Prosecution and Maintenance; Joint Patents................................................... 21
6.7 Gene Patent Rights.................................................................................. 22
6.7.1 Disclosure...................................................................................... 22
6.7.2 Prosecution of applications..................................................................... 22
6.8 Cooperation......................................................................................... 22
6.9 Costs............................................................................................... 22
6.10 Patent Litigation: Right to Bring Suit.............................................................. 23
6.11 Confidential Treatment............................................................................. 23
7. CONFIDENTIALITY.......................................................................................... 23
7.1 Confidential Information:........................................................................... 23
7.2 Confidentiality and Limited Use:.................................................................... 23
7.2.1 Limited Use:.................................................................................... 23
7.2.2 Exceptions to Disclosure of Confidential Information:........................................... 24
7.3 Exceptions to Classification as Confidential:....................................................... 24
7.3.1 Publicly Available:............................................................................. 24
</TABLE>
iii
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* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
<TABLE>
<S> <C>
7.3.2 Already Known:............................................. 24
7.3.3 Third Party Disclosure:.................................... 24
7.4 Specific Information:............................................ 24
7.5 Disclosures to Personnel:........................................ 25
7.6 Return of Confidential Information:.............................. 25
7.7 Confidential Status of Agreement:................................ 25
7.8 Disclosure to Third Parties...................................... 25
7.8.1 Consultants................................................ 25
7.8.2 Investors.................................................. 26
7.9 Publications..................................................... 26
8. REPRESENTATION AND WARRANTIES........................................ 26
8.1 Monsanto......................................................... 26
8.2 Paradigm......................................................... 27
8.3 Third Party Obligation........................................... 27
9. INDEMNIFICATION...................................................... 28
9.1 General -Paradigm................................................ 28
9.2 General -Monsanto................................................ 28
9.3 Other Loss....................................................... 28
10. APPLICABLE LAW...................................................... 29
10.1 Governing Law; Jurisdiction..................................... 29
11. MISCELLANEOUS PROVISIONS............................................ 29
11.1 Notices:........................................................ 29
11.2 Assignability:.................................................. 30
11.3 Dispute Resolution.............................................. 30
11.3.1 General................................................... 30
11.3.2 Parties Shall Meet........................................ 30
11.3.3 CEOs Shall Meet........................................... 30
11.3.4 Arbitration Trigger....................................... 30
11.3.5 Arbitration Rules......................................... 31
11.3.6 Agreements to Agree....................................... 31
11.4 Tax Reporting:.................................................. 31
11.5 Severability:................................................... 32
11.6 Counterparts:................................................... 32
11.7 Headings:....................................................... 32
11.8 Agreement references:........................................... 32
11.9 Appendices:..................................................... 32
11.10 Export Control:................................................. 32
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
11.11 Force Majeure:.............................................. 33
11.12 Negation of Agency:......................................... 33
11.13 Other Requests:............................................. 33
11.14 Amendment and Waiver:....................................... 34
</TABLE>
v
<PAGE>
THIS IS AN AGREEMENT effective November 17, 1999, ("Effective Date of this
Agreement") by and between Paradigm Genetics Inc. a corporation organized under
the laws of North Carolina having its principal place of business at 104
Alexander Drive, Building 2, P.O. Box 14528, Research Triangle Park, North
Carolina 27009 ("Paradigm") and Monsanto Company ("Monsanto"), a Delaware
corporation, having a principal place of business at 800 North Lindbergh
Boulevard, St. Louis, Missouri 63167.
WHEREAS, Monsanto has certain rights relating to genes which impart traits
in plants and plants containing such genes, such rights including possession of
technical information and know-how relating to such plants and their use, and
ownership of U.S. and foreign patent applications covering the plants, seeds,
genes and their use;
WHEREAS, Paradigm has expertise in transforming Arabidopsis plants with DNA
and analyzing the resultant plants for functional changes, including possession
of technical information and know how relating to such plants and their analysis
and use, and ownership of U.S. and foreign patent applications covering the
plants, genes and their use.
WHEREAS, Monsanto and Paradigm are contemplating establishing a strategic
functional genomics research alliance to create proprietary intellectual
property and products for both parties relating to gene sequences provided by
Monsanto to Paradigm;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:
1. DEFINITIONS
-----------
Terms in this Agreement defined in the singular have the same meanings when
used in the plural and vice versa. For purposes of this Agreement, the following
words and phrases shall have the following meanings:
1.1 Affiliate
"Affiliate" shall mean with respect to any person or entity, any other
person or entity which directly or indirectly controls, is controlled by or is
under common control with such person or entity. A person or entity shall be
deemed to be "controlled" by any other person or entity if such other person or
entity (i) possesses, directly or indirectly, power to direct or cause the
direction of the management and policies of such person or entity whether by
contract or otherwise, (ii) has direct or indirect ownership of more than 50%
(in the aggregate) of the voting power of all outstanding shares entitled to
vote at a general election of directors of the person or entity or (iii) has
direct or indirect ownership of more than 50% of the equity interests in a
partnership or a limited liability company.
1.2 Agreement
"Agreement" shall mean this collaboration agreement.
<PAGE>
1.3 Average Net Benchmark Product Price
"Average Net Benchmark Product Price" shall mean the average gross invoiced
sales price received by Monsanto and its Affiliates for the sale of a unit
of Benchmark Product, or if no Benchmark Product is sold by Monsanto or its
Affiliates, all consideration received by a third party for the Benchmark
Product, in each case, in arm's length sales to an independent third party,
in a particular country for the applicable period, after deduction of the
following items, provided and to the extent such items are actually
incurred and documented and do not exceed reasonable and customary amounts
in the market in which such sale occurred: (i) trade discounts actually
allowed; (ii) credits, rebates and returns; (iii) freight and duties paid
for and separately identified on the invoice or other documentation
maintained in the ordinary course of business, (iv) taxes, duties and other
compulsory payments to governmental authorities actually paid and
separately identified on the invoice or other documentation maintained in
the ordinary course of business, and (v) dealer/distributor and seed
service fees paid by Monsanto and its Affiliates. All sales of Benchmark
Products between Monsanto and any of its Affiliates and sublicensees shall
be disregarded for purposes of computing Average Net Benchmark Product
Price. A "sale" shall include any transfer or other disposition for
consideration, and Average Net Benchmark Product Price shall include all
consideration received by Monsanto or its Affiliates in respect of any sale
of Benchmark Products, whether such consideration is in cash, payment in
kind, exchange or another form.
1.4 Average Net Product Price
"Average Net Product Price" shall mean the average gross invoiced sales
price received by Monsanto and its Affiliates for the sale of a unit of
Licensed Product in arm's length sales to an independent third party, in a
particular country for the applicable period, after deduction of the
following items, provided and to the extent such items are actually
incurred and documented and do not exceed reasonable and customary amounts
in the market in which such sale occurred: (i) trade discounts actually
allowed; (ii) credits, rebates and returns; (iii) freight and duties paid
for and separately identified on the invoice or other documentation
maintained in the ordinary course of business, (iv) taxes, duties and other
compulsory payments to governmental authorities actually paid and
separately identified on the invoice or other documentation maintained in
the ordinary course of business, and (v) dealer/distributor and seed
service fees paid by Monsanto and its Affiliates. All sales of Licensed
Products between Monsanto and any of its Affiliates and sublicensees shall
be disregarded for purposes of computing Average Net Product Price. A
"sale" shall include any transfer or other disposition for consideration,
and Average Net Product Price shall include all consideration received by
Monsanto or its Affiliates in respect of any sale of Licensed Product,
whether such consideration is in cash, payment in kind, exchange or another
form. Average Net Product Price shall not be discounted due to any product
"bundling" unless Monsanto or its Affiliates does not offer the Licensed
Product outside of a "bundle". In the case of discounts on "bundles" of
products or services which include Licensed Products, Monsanto may with
notice to Paradigm calculate the Average Net Product Price by discounting
the bona fide list price
2
<PAGE>
of a Licensed Product by no more than the average percentage discount of
all products of Monsanto and/or its Affiliates in a particular "bundle",
calculated as follows:
Average percentage
discount on a = (1 -A/B)x 100
particular "bundle"
where A equals the total discounted price of a particular "bundle" of
products, and B equals the sum of the un-discounted bona fide list prices
of each unit of every product in such "bundle". Monsanto shall provide
Paradigm documentation, reasonably acceptable to Paradigm, establishing
such average discount with respect to each "bundle".
1.5 Benchmark Product
"Benchmark Product" shall mean a product not covered by Licensed Patent
Rights, but otherwise identical to a Licensed Product, or if no such
product exists, substantially similar to a Licensed Product, but not
covered by Licensed Patent Rights, in each case, available in the same
country and time period. A Benchmark Product must be a commercial product
sold by Monsanto or its Affiliates or a third party. If Monsanto or its
Affiliates do not sell such a Benchmark Product, then the most suitable
product that meets the above definition sold by a third party in the
applicable country during the applicable time period shall be used as the
Benchmark Product.
1.6 DNA
"DNA" shall mean deoxyribonucleic acid or other similar material.
1.7 Effective Date of this Agreement
"Effective Date of this Agreement" shall mean the date first written above.
1.8 Grace Periods
"Grace Period" shall mean for the Project Plan's years 1 and 2, 120 days
beyond the Project Quarter given to achieve the Production Target Level for
such Project Quarter and during the Project Plan's years 3 and beyond, 90
days beyond the Project Quarter given to achieve the Production Target
Level for such Project Quarter.
1.9 Gene Patent Rights
"Gene Patent Rights" shall mean Licensed Patent Rights claiming an
invention relating to the making, composition or function of any Monsanto
DNA Information other than patent rights claiming discoveries or inventions
not discovered or developed in the course of carrying out the Project Plan.
3
<PAGE>
1.10 Paradigm Gene Patent Rights
"Paradigm Gene Patent Rights" shall mean patent rights of Paradigm claiming
discoveries or inventions related to Monsanto DNA Information not
discovered or developed in the course of carrying out the Project Plan.
1.11 Improvements
"Improvements" shall mean any improvements to Monsanto Enabling Technology.
Improvements may or may not result in patentable subject matter.
1.12 Know How
"Know How" shall mean information and material known to Monsanto necessary
to use any particular Monsanto Enabling Technology, including, but not
limited to DNA constructs, probes, and antibodies.
1.13 Licensed Products
"Licensed Product" shall mean a particular product or a particular species
of animals, plants, plant or animal parts, animal progeny, seed of plants
and products from any of the foregoing, or the process of making any of the
above, which, in the absence of a license, would infringe at least one (1)
claim of an unexpired U.S. or foreign patent included within Licensed
Patent Rights.
1.14 Licensed Patent Rights
"Licensed Patent Rights" shall mean (i) patent rights of Monsanto or
Paradigm claiming [_________________]*, (ii) patent rights of Monsanto
claiming Monsanto DNA Information, and (iii) patent rights of Paradigm
claiming Monsanto DNA Information other than patent rights claiming
discoveries or inventions not discovered or developed in the course of
carrying out the Project Plan.
1.15 Monsanto Enabling Technology
"Monsanto Enabling Technology" shall mean proprietary DNA, processes,
techniques and Know How of Monsanto owned by Monsanto or otherwise
licensable by Monsanto to Paradigm at the Project Commencement Date which
assists in or improves the ability to insert or express DNA in plants,
including without limitation, those technologies listed in Appendix K.
1.16 Monsanto Licensed Products
"Monsanto Licensed Products" shall mean Licensed Products, other than
chemical herbicides, which (i) infringe a Licensed Patent for which
Paradigm has an ownership interest or which lists a Paradigm employee as an
inventor, or (ii) infringe a Licensed Patent, the patentability of which
was based, in whole or in part, on [________________]* to which an employee
of Paradigm made a material contribution.
4
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* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
1.17 Monsanto DNA Information
"Monsanto DNA Information" shall mean DNA and sequence information for such
DNA provided by Monsanto to Paradigm including, but not limited to, full
length cDNA clones, genomic clones, PCR primers to be used to amplify the
desired gene from a target DNA or sequence for 5' and 3' PCR primers.
1.18 Net Product Revenues
"Net Product Revenues" shall mean the gross invoiced sales of Licensed
Products received by Paradigm or their respective Affiliates during the
applicable period in arm's length transactions after deduction of the
following items, provided and to the extent such items are actually
incurred and do not exceed reasonable and customary amounts in each market
in which such sales occurred: (i) trade and quantity discounts and rebates;
(ii) credits or allowances made for rejection or return of previously sold
Licensed Products; (iii) any tax or government charge levied on the sale,
such as value added tax (but not including income tax); and (iv) any
charges for freight or insurance. In the event that the Licensed Product is
not sold or is used internally by Paradigm or an Affiliate of Paradigm, or
is sold or otherwise transferred to a third party for a price lower than if
it had been sold to a third party in an arm's length transaction ("fair
market value"), then Net Products Revenues shall be the fair market value
of the Licensed Product.
1.19 Paradigm Licensed Products
"Paradigm Licensed Products" shall mean chemical herbicides which (i)
infringe a Licensed Patent for which Monsanto has an ownership interest or
which lists a Monsanto employee as an inventor, or (ii) infringe a Licensed
Patent the patentability of which was based, in whole or in part, on
[________________]* to which an employee of Monsanto made a material
contribution.
1.20 Permitted Data
"Permitted Data" shall have the meaning set forth in Article 3.3.4.
1.21 Project Commencement Date
"Project Commencement Date" shall mean February 1, 2000.
1.22 Project Committee
"Project Committee" shall mean the committee established in Article 3.4.
1.23 Production Target Level
"Production Target Level" shall mean, for each Project Quarter, the
achievement by Paradigm of the goal set forth in bold print in Appendix C
or in any other Appendix adopted under Article 4.1.5.
5
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* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
1.24 Project Plan
"Project Plan" shall mean the plan attached as Appendix B, as amended by
the Project Committee.
1.25 Project Quarter
"Project Quarter" shall mean a calendar quarter starting from the Project
Commencement Date.
1.26 Project Technology
"Project Technology" shall mean any materials, know-how, information,
discoveries or inventions that are discovered or developed in the course of
carrying out the Project Plan.
1.27 Product Sublicense Payments
"Product Sublicense Payments" shall mean all consideration received by
Monsanto and its Affiliates or Paradigm and its Affiliates from licensees
or sublicensees of Licensed Patent Rights in respect of any grant of rights
to make, use, sell or import Licensed Products (including, without
limitation, royalties or other payments for the sale of Licensed Products,
sublicense fees and Production payments) less pro rata deductions (based on
the number of technologies licensed to the licensee or sublicensee) for:
(i)dealer/distributor and seed service fees actually paid by Monsanto and
its Affiliates or Paradigm and its Affiliates, and (ii) taxes, duties and
other compulsory payments to governmental authorities actually paid and
separately identified on the invoice or the documentation maintained in the
ordinary course of business.
1.28 Subsidiary
"Subsidiary" shall mean an Affiliate controlled by a party to this
Agreement.
1.29 Term of this Agreement
"Term of this Agreement" shall be 6 years from the Project Commencement
Date unless extended or terminated as provided for in this Agreement.
1.30 Value Added
"Value Added" shall mean (i) the difference between the Average Net Product
Price of a Licensed Product as compared to the Average Net Benchmark
Product Price of the applicable Benchmark Product in the same country and
time period, and (ii) any other identifiable value (which is not merely
speculative) attributable to the Licensed Patent Right's contribution to
any Licensed Product sales, including, without limitation, increased market
share of a Licensed Product and market share maintenance of a Licensed
Product, in each case, as compared to the applicable Benchmark Product. It
is understood and agreed that "Value Added" shall include all incremental
value which is identifiable (and not merely speculative) which Monsanto and
its Affiliates receives
6
<PAGE>
from customers of Licensed Products. For Licensed Products where there is
no Benchmark Product, the Value Added will equal the Average Net Product
Price.
1.31 Monsanto Patents
"Monsanto Patents" shall have the definition provided in Article 6.1.
1.32 Paradigm Patents
"Paradigm Patents" shall have the definition provided in Article 6.1.
1.33 Joint Patents
"Joint Patents" shall have the definition provided in Article 6.1.
2. CONVEYANCE OF RIGHTS:
--------------------
2.1 Assignment to Monsanto:
Subject to the terms and conditions of this Agreement and for the
consideration as set forth in Article 4, Paradigm agrees to assign and
hereby assigns to Monsanto Paradigm's right, title and interest to the Gene
Patent Rights.
2.2 License to Monsanto: Licensed Patent Rights
Except for Gene Patent Rights assigned to Monsanto pursuant to Article 2.1,
subject to the terms and conditions of this Agreement (including, without
limitation, Article 2.5) and for the consideration as set forth in Article
4, Paradigm hereby grants to Monsanto under Paradigm's interest in the
Licensed Patent Rights and for the life of such Licensed Patent Rights a
perpetual non-exclusive, world-wide license to make and use
[________________]* and Monsanto DNA Information and a perpetual exclusive,
world-wide license to develop, make, have made, import, use, sell, have
sold, and offer to sell Monsanto Licensed Products. Paradigm further grants
Monsanto the right to sublicense any of the above rights.
2.3 License to Monsanto: Paradigm Gene Patent Rights
Paradigm grants to Monsanto, Subsidiaries of Monsanto and wholly-owned
Affiliates of Monsanto under Paradigm's interest in Paradigm Gene Patent
Rights a perpetual non-exclusive, world-wide license to use Monsanto DNA
Information for research purposes only. Such right shall not extend to any
other Paradigm owned or in-licensed technology.
2.4 License to Monsanto: Paradigm Gene Patent Rights - restriction on license
No right to commercialize a plant produced under Article 2.3 is granted in
this Agreement and Paradigm shall be under no obligation to provide such a
license. Monsanto shall be responsible for maintaining sufficient records
on the use of plants
7
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* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
which infringe Paradigm Gene Patent Rights so that such plants can be
identified. To the extent that Monsanto or an Affiliate of Monsanto seeks
to produce and analyze plants for a third party, Monsanto shall inform such
third party that the rights granted Monsanto under Paradigm Gene Patent
Rights is limited to the use of such plants solely by Monsanto and only for
research purposes and that any license necessary to commercialize any
plants can only be granted by Paradigm.
2.5 License to Monsanto: restriction on license
Nothing in this Agreement shall be construed as granting a license under
any Paradigm patents other than Licensed Patent Rights or Paradigm Gene
Patent Rights. No license is granted to any Licensed Product which
infringes a Paradigm patent that is not included in Licensed Patent Rights
or Paradigm Gene Patent Rights.
2.6 License to Paradigm: Licensed Patent Rights
Subject to the terms and conditions of this Agreement and for the
performance of the Research Plan and other consideration as set forth
herein, Monsanto hereby grants to Paradigm under the Licensed Patent Rights
except for those patent rights directed to DNA other than Arabidopsis DNA
and, if the Project Plan is extended under Article 4.1.5.1, except for
those patent rights directed to DNA other than Arabidopsis and [___]* DNA,
and for the life of such Licensed Patent Rights a perpetual non-exclusive
world-wide license to make and use [________________]* and Monsanto DNA
Information directed to Arabidopsis DNA and, if the Project Plan is
extended under Article 4.1.5.1, [___]* DNA and a perpetual exclusive world-
wide license to develop, make, have made, import, use, sell, have sold, and
offer to sell Paradigm Licensed Products. Monsanto further grants Paradigm
the right to sublicense the rights to develop, make, have made, import,
use, sell, have sold, and offer to sell Paradigm Licensed Products.
2.7 License to Monsanto: research license - [________________]*
Paradigm grants to Monsanto, Subsidiaries of Monsanto and wholly-owned
Affiliates of Monsanto under Paradigm's interest in Licensed Patent Rights
and [________________]* a perpetual non-exclusive, worldwide license to use
[________________]* for research purposes only. Such right shall not extend
to any other Paradigm owned or in-licensed [________________]*.
2.8 License to Paradigm: research license - [________________]*
Monsanto grants Paradigm and those Subsidiaries of Paradigm at the
Effective Date of this Agreement under Monsanto's interest in Licensed
Patent Rights except for those patent rights directed to DNA other than
Arabidopsis DNA and, if the Project Plan is extended under Article 4.1.5.1,
except for those patent rights directed to DNA other than Arabidopsis and
[___]* DNA, and [________________]* a perpetual nonexclusive, world-wide
license to use [____________]* and Monsanto DNA Information directed to
Arabidopsis DNA and, if the Project Plan is extended under Article 4.1.5.1,
[___]* DNA for research purposes only. Such right shall not extend to any
other Monsanto owned or in-licensed[________________]*, including Monsanto
DNA Information that is not from
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<PAGE>
Arabidopsis or, if the Project Plan is extended under Article 4.1.5.1,
[___]*, except as set forth in Article 2.9.
2.9 License to Paradigm: research license - Monsanto Enabling Technology
in research crops
Monsanto grants Paradigm and Subsidiaries of Paradigm under Monsanto's
interest in Monsanto Enabling Technology a perpetual, nonexclusive, U.S.
and Europe only, license to use Monsanto Enabling Technology in
Arabidopsis, tobacco and, if the Project Plan is extended under Article
4.1.5.1, [___]* for research purposes only. Such right shall not extend to
any other Monsanto owned or in-licensed technology, whether or not licensed
to Paradigm herein, except and to the extent as set forth in Article 2.8.
Notwithstanding the foregoing, such research license shall not apply to
research in herbicide resistance in any plant species.
2.10 License to Paradigm: research license - Monsanto Enabling Technology -
restriction on license
No right to commercialize a plant produced under Article 2.9 is granted in
this Agreement and Monsanto shall be under no obligation to provide such a
license. Paradigm agrees to keep any plant produced in the United States
and Europe. Paradigm shall be responsible for maintaining sufficient
records on the use of Monsanto Enabling Technology so that such plants can
be identified. To the extent that Paradigm or an Affiliate of Paradigm
seeks to produce and analyze plants for a third party, Paradigm shall
inform such third party that the rights granted Paradigm under Monsanto
Enabling Technology is limited to the use of such plants solely by Paradigm
and only for research purposes and that any license necessary to
commercialize any plants can only be granted by Monsanto. Paradigm agrees
to grant and hereby grants a royalty-free, nonexclusive license to Monsanto
to any Improvements created by Paradigm.
2.11 License to Paradigm: restriction on license
Nothing in this Agreement shall be construed as granting a license under
any Monsanto patents other than Licensed Patent Rights and Monsanto
Enabling Technology. No license is granted to any Licensed Product which
infringes a Monsanto patent that is not included in Licensed Patent Rights
or Monsanto Enabling Technology.
3. FUNDED PROJECT
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3.1 Funded Project
Subject to the terms and conditions set forth herein, commencing on the
Project Commencement Date, Paradigm shall conduct the project pursuant to
the Project Plan, as described herein or as amended by the Project
Committee. Paradigm shall be responsible for the management and
implementation of the Project Plan.
3.2 Contribution of Monsanto
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Monsanto will supply Monsanto DNA Information to Paradigm as provided in the
Project Plan to allow Paradigm to meet the Production Target Levels as set forth
in the applicable Appendix.
3.2.1 Monsanto DNA supplied
In the case of Monsanto DNA Information relating to a species
other than Arabidopsis, such Monsanto DNA Information shall be in
the form of a
[__________________________________________________________]*
each such non-Arabidopsis DNA, Paradigm will provide [________
__________________________________________________________]*.
Monsanto agrees to provide to Paradigm [________________________
_____________________________________________]*. Under the
Project Plan, Monsanto shall be limited to providing no more than
[_________________]* non-Arabidopsis DNA of which no more than
[_____________________]* will be from [___]*, no more than
[__________________]* will be from [__________]* and no more than
[_______________]* will be from
[________________________________]*. These amounts will be
proportionally expanded if Monsanto exercise the options under
Articles 4.1.5.2 or 4.1.5.3. Monsanto will use diligent efforts
to assure that all Monsanto DNA Information is accurate.
3.2.2 Counting Monsanto DNA
For purposes of calculating the achievement of Production Target
Levels,
[__________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
____________________________________________]*. It is
additionally expected that control experiments will be included
in the Project Plan which will not be counted towards the
Production Target Levels.
3.2.3 Counting for failed experiments
In the event that Paradigm attempts diligently to insert the DNA from any
Monsanto DNA Information into Arabidopsis as set forth in the Project Plan
but is unable to do so, then for purposes of calculating the achievement of
Production Target Levels, Paradigm will be deemed to have achieved
[___________________]* of an analysis.
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3.3 Contribution of Paradigm
3.3.1 Conducting Project Plan
Paradigm shall use diligent efforts to conduct the Project Plan and
meet the Production Target Levels set out in the appendices.
3.3.2 Database Compatibility
Paradigm agrees to make diligent efforts to report data generated from the
Project Plan in a customized database as described in the Project Plan.
This data base will be updated on a monthly basis.
3.3.3 Biological Materials
Paradigm will provide Monsanto with reasonable access to biological
materials generated in the course of conducting the Project Plan as set
forth in the Project Plan.
3.3.4 Contribution of Third Party Information
In the event that Monsanto provides Monsanto DNA Information to Paradigm
that Paradigm has already analyzed for a third party, Paradigm agrees, to
the extent it has the right to do so, to make available to the Project
Committee data resulting from such analysis on the following basis:
3.3.4.1 Right to Summary Information
For each such analysis Paradigm will initially provide to the
Project Committee a brief summary of the data which will consist of
a statement as to whether the data shows a statistically significant
deviation from data obtained from a wild type Arabidopsis plant. The
Project Committee will then determine whether or not to receive the
data that Paradigm has the right to deliver ("Permitted Data"). If
the Project Committee chooses not to receive the Permitted Data and
not to have Paradigm analyze such Monsanto DNA Information
independently in the Project Plan, then the specific Monsanto DNA
Information will not be counted in the throughput targets for the
Project Plan and Monsanto can replace that Monsanto DNA Information
with different Monsanto DNA Information to be analyzed by Paradigm,
provided, however, that the Project Committee may only do so with
respect to [__]* DNA sequences provided by Monsanto.
3.3.4.2 Consequence of Using Permitted Data
If the Project Committee decides to proceed with a full analysis, it
will elect to receive the Permitted Data and, assuming the Permitted
Data does not contain all the analysis provided in the Project Plan,
have Paradigm
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<PAGE>
complete the analysis of the Monsanto DNA Information as provided in
the Project Plan. If the Project Committee chooses to receive the
Permitted Data, or if the Project Committee decides to have Paradigm
complete the analysis of that Monsanto DNA Information in the
Project Plan, or if the Project Committee elects to not receive the
Permitted Data for any DNA sequences in excess of [__]*, then that
Monsanto DNA Information will be counted in the throughput targets
for Paradigm in the Project Plan.
3.3.4.3 Consequence of Expansion
In the event that the Project Plan is expanded as set forth in
Article 4.1.5.2 or Article 4.1.5.3, there will be no limit to the
number of times the Project Committee may elect not to receive the
Permitted Data; provided, however, that of at any time Monsanto has
not provided Paradigm with sufficient Monsanto DNA Information to be
able to achieve the Production Target Levels set forth in the
appropriate Appendix, then Monsanto DNA Information which was not
counted in the throughput targets for the Project Plan because it
was not elected will be counted for purposes of determining the
Production Target Level.
3.4 Project Committee
3.4.1 Committee Duties
The duties of the Project Committee shall be as specified in this
Agreement and as determined in writing by the parties, so long as
such written determination is not inconsistent with this Agreement
unless the parties amend the Agreement accordingly.
3.4.2 Committee Structure
The Project Committee shall be comprised of three Monsanto and three
Paradigm employees designated by Monsanto and Paradigm,
respectively. Each party is free to name and change its Project
Committee Members without permission from the other party.
3.4.3 Meetings
The Project Committee shall meet quarterly at Paradigm or other
location as agreed upon by both parties. The Project Committee will
prepare quarterly science reports and the minutes of the meetings
will be approved by both parties.
3.4.4 Decision Making
The Project Committee may modify the Project Plan based upon actual
project results. The Project Committee will also agree upon how to
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<PAGE>
integrate new technology into the project from Monsanto, Paradigm or
third parties. Monsanto will be given a supermajority vote on all
decisions that do not materially change the scope of the Project
Plan or do not require Paradigm to incur any additional costs with
the exception that a unanimous vote is required to change the
provisions of the Project Plan relating to Monsanto's supply of DNA
(Article 3.2) or Monsanto's access to biological materials (Article
3.3.3). Other than the Project Plan, the Project Committee may not
modify this Agreement. Any decisions related to material changes in
the scope or the budget for the Project Plan or related to changing
the terms of this Agreement will require mutual consent of Paradigm
and Monsanto.
3.5 Term and Termination of Funded Project
The Term of this Agreement will be 6 years after the Project Commencement
Date with the possibility to extend the Agreement based upon the mutual
agreement of both parties.
3.5.1 Early Termination - Production Target Levels Achieved
Monsanto will have the option to serve notice of its intention to
terminate the Project Plan at end of any quarter from Project
Quarter 8 to Project Quarter 12 of the Project Plan, such notice
having the effect of terminating the Agreement eighteen (18) months
after such written notice to Paradigm (e.g., notice given at the end
of Project Quarter 8 terminating the Agreement at the end of Project
Quarter 14). In the event of early termination, Production Target
Level payments and quarterly payments remaining the same as set
forth in Appendix C and D until such termination.
3.5.2 Early Termination - Production Target Levels Not Achieved
Both parties will have the option to terminate this Agreement prior
to the expiration of the six (6) year term under the following
conditions. Either party may terminate the Agreement with thirty
(30) days prior written notice given within thirty (30) days after
the relevant period set forth below as follows: (a) after the third
Project Quarter or any subsequent Project Quarter (including its
permitted Grace Period), if Paradigm has achieved no Production
Target Levels at a level requiring payment pursuant to Article 4.1.4
during a period of three (3) consecutive Project Quarters ending
with such Project Quarter (including permitted Grace Periods), or
(b) after the fourth Project Quarter or any subsequent Project
Quarter (including its permitted Grace Period), if Paradigm has
achieved no Production Target Levels at a level requiring payment
pursuant to Article 4.1.4 during fifty percent (50%) or more of the
completed Project Quarters (including permitted Grace Periods). In
the event of termination for failure to achieve Production Target
Levels as set forth above,
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Monsanto shall not be obligated to make any research funding
payments pursuant to Articles 4.1.3 or 4.1.4 to Paradigm that are
due more than thirty (30) days after notice has been given. Monsanto
will have no right to recoup any monies already paid to Paradigm
prior to termination under this Article 3.5.2.
3.5.3 Early Termination - Other Reasons
Either party may terminate this Agreement by reason of failure to
cure a material breach by the other party or upon bankruptcy,
insolvency, and dissolution or winding up of the other party. Any
such termination will require written notice from the terminating
party, specifying, in reasonable detail, the breach or other basis
of the termination. The breaching party will be given 60 days from
receipt of such written notice to cure the breach pursuant to this
Article 3.5.3 prior to actual termination. If the breach is cured
during such period, the notice will have no force or effect.
3.5.4 Extension
Paradigm and Monsanto will meet during the twenty-first Project
Quarter to determine the conditions and terms on which the project
would be extended beyond 6 years. No extension will occur except
upon mutual agreement of the parties.
3.5.5 Surviving Paragraphs
Termination of this Agreement for any reason other than Articles
3.5.2 and 3.5.3 shall not terminate the provisions set forth in
Articles 2, 4.2, 4.3, 4.4, 5, 6, 7, 8, 9, 10 and 11. The rights and
obligations of these Articles shall continue in full force and
effect following any such termination. If Monsanto terminates the
Agreement under Articles 3.5.2 or Article 3.5.3, then all the above
Articles shall survive except for Articles 2.9 and 2.10. Upon any
termination, Monsanto DNA Information shall only include that DNA
that has been analyzed and reported to Monsanto under the Project
Plan.
4. PAYMENTS
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4.1 Project Funding
Monsanto agrees to fund the Project Plan over the Term of this Agreement as
set forth below:
4.1.1 Inducement Fee
As an inducement to Paradigm to commit assets and personnel and
undertake the obligation to conduct the Project Plan over the
Term of this Agreement, Monsanto agrees to pay Paradigm
*[___________________
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___________________________________________________________
_________________________________________________________________
___________________________________]*.
4.1.1.1 Termination Refund
In the event that this Agreement is terminated within
[_______ __________]* of Project Commencement Date due to a
breach by Paradigm, Paradigm shall refund Monsanto
[____________ ___________________]*.
4.1.2 Annual Technology Enhancement Fee
Paradigm shall invest during project years 1-5 at least [_________
_______________________________]* in new technology, either
externally or internally. Such investments shall be approved by the
Project Committee, which approval shall not be unreasonably
withheld.
4.1.3 Quarterly Payment
Monsanto will pay Paradigm the fees set out in Appendix D as
compensation for Paradigm's services under the Project Plan for each
Project Quarter at the beginning of each Project Quarter.
4.1.4 Production Target Level Payments
For each quarter in which Paradigm meets at least 80% (except as set
forth below) of the quarterly Production Target Level, set out in
Appendix C, during the Project Quarter or within the permitted Grace
Period, Monsanto will pay Paradigm the Production payment according
to the following formula:
Production payment =
[Production payment set forth in Appendix E] * [[[actual
deliverable/Production Target Level]-1]*2]+1:
wherein if [actual deliverable/Production Target Level] 0.8,
then Production payment =0 (except as set forth below); and
wherein Production payment cannot be greater than 1.4 *
[Production payment set forth in Appendix D]; and wherein sum of
all Production payments cannot be greater than
[_____________________________________________ ___________]*,
unless one or more of the options in Article 4.1.5 are exercised, in
which event the sum of the Production payments cannot be greater
than the aggregate total of the Production payments on the
appropriate Appendices.
Notwithstanding the foregoing, if during the last three (3)
Project Quarters, there is an insufficient quantity of Monsanto
DNA Information being analyzed under the Project Plan to allow
the Production Target Level to be reached, then
[___________________________________
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<PAGE>
______]* for such quarter will be paid based on
[_____________________ _________]* for such Project Quarter to the
[______________________]* for such Project Quarter subject to the
limit on the sum of all Production payments in the preceding
paragraph.
Such payment will be made within sixty (60) days of the
demonstration of the achievement of the Production Target Level.
4.1.5 Additional Optional Projects
The following changes to the Project Plan will occur upon proper
notice from Monsanto to Paradigm
4.1.5.1.[___]*
Provided that Monsanto gives Paradigm at least [_____________]*
written notice of its desire to [_______]* to the project, in
addition to the project initially described in the Project Plan,
Paradigm will [__ _____________]* to the project. This expansion
will begin as of the beginning of the fifth, sixth, seventh or
eighth Project Quarter and continue for 20 Project Quarters. The
Project Plan will be appropriately amended by the parties.
Production Target Levels for [___]* are set out in Appendix E and
quarterly and production payments for [___]* are set out in
Appendix F.
4.1.5.2. Increase in Arabidopsis
Provided that Monsanto gives Paradigm at least six (6) months
written notice of its desire to increase the number of Arabidopsis
genes to be analyzed, Paradigm will increase the number of genes to
be analyzed in Arabidopsis by [____]* genes. This expansion will
begin as of the beginning of the ninth, tenth, eleventh or twelfth
Project Quarter and continue for 20 Project Quarters, with the Term
of this Agreement being appropriately extended The Project Plan will
be appropriately amended by the parties. Production Target Levels
for this option are set out in Appendix G and quarterly and
production payments for this option are set out in Appendix H.
4.1.5.3 Increase in Arabidopsis
Provided that Monsanto gives Paradigm at least six (6) months
written notice of its desire to increase the number of Arabidopsis
genes to be analyzed, Paradigm will increase the number of genes to
be analyzed in Arabidopsis by [____]* genes. This expansion will
begin as of the beginning of the ninth, tenth, eleventh or twelfth
Project Quarter and continue for 24 Project Quarters with the Term
of this Agreement being appropriately extended. The Project Plan
will be appropriately amended by the parties. Production Target
Levels for this option are set out in
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Appendix I and quarterly and production payments for this option are
set out in Appendix J.
4.1.5.4 Impact of Expansion - Production Target Level Measurement
Each Production Target Level set out in the appendices will be
measured independently with Arabidopsis deliverables counted toward
the Production Target Levels set forth in Appendix C first up to
100% of the Production Target Levels set forth in Appendix C and the
remainder applied to the expansion in Articles 4.1.5.2 or 4.1.5.3,
whichever applies. Production payments for each expansion shall be
calculated pursuant to the formula set forth in Article 4.1.4. In
addition, failure to achieve Production Target Levels for any
expansion in Articles 4.1.5.1, 4.1.5.2 and 4.1.5.3 as described in
Article 3.5.2 shall only give rise to a right of termination of the
expansion and not the original Project Plan unless the Production
Target Levels of the original Project Plan are also not achieved as
set out in Article 3.5.2.
4.1.5.5 Impact of Expansion - right to terminate
If Monsanto exercises its option under Article 4.1.5.1, 4.1.5.2, or
4.1.5.3, then Monsanto's right to terminate this Agreement pursuant
to Article 3.5.1 will terminate.
4.2 Royalties - Monsanto Licensed Products
Monsanto shall pay Paradigm a royalty of [_]* of the aggregate
[__________]* of all Monsanto Licensed Products sold by Monsanto or its
Affiliates or a licensee of Monsanto (except in the case of a bare
sublicense as provided in Article 4.3) subject to the following conditions:
4.2.1 Minimum Royalty
The minimum annual royalty to be paid by Monsanto will be
[_____________________________________]* for each trait within
Monsanto Licensed Products that is covered by Licensed Patent
Rights, provided such trait is used in a crop in Appendix A,
otherwise the minimum royalty shall be [_______________________]*
subject to Article 4.2.2. If earned royalties paid pursuant to
Article 4.2 do not reach this amount, the balance will be paid with
the report delivered for the second half of each annual period
(either fiscal or calendar) pursuant to Article 5.1. By way of
illustration, engineering drought resistance into corn and soybeans
would be a single trait, regardless of the number of genes used to
achieve that trait, with a minimum annual royalty of
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[_______]* and engineering drought resistance and freeze resistance
into corn would be two traits with a minimum annual royalty of
[_______]*.
4.2.2 One Royalty
Royalties shall be paid by Monsanto on a product-by-product basis.
Only one royalty shall be due and payable to Paradigm by Monsanto
regardless of the number of patents included in the Licensed Patent
Rights practiced by Monsanto and its Affiliates and sublicensees in
connection with the production and commercialization of a particular
Licensed Product, provided, such royalty shall reflect [___]* of the
total aggregate [__________]* of such Licensed Product.
4.2.3 Third Party Royalty Offset.
In the event that Monsanto owes royalties directly or indirectly to
an independent third party for licenses to intellectual property
necessary for use of Licensed Patent Rights in the commercialization
of Licensed Products, then Monsanto may offset against royalties due
to Paradigm an amount [__________________________________________]*
being paid to Paradigm with respect to the relevant Licensed Product
(e.g., where Paradigm receives a royalty of
[__________________________]*, Monsanto would be entitled to an
offset equal to [_____________]* of such royalties paid to third
parties). By way of illustration and without limitation, if the
[__________]* for a particular Licensed Product is[_______________
_____________]* and Monsanto owes a royalty to a third party with
respect to such Licensed Product of [__________________]*, then the
royalty due to Paradigm with respect to such Licensed Products would
be [__________________________________]*. Such offsets will not
affect Monsanto's obligation to pay minimum royalties pursuant to
Article 4.2.1.
4.2.4 Monsanto Royalty Buy-Out
Monsanto shall have an option to negotiate with Paradigm with
respect to a one-time payment to Paradigm with respect to each or
all Monsanto Licensed Product in lieu of paying any further
royalties on such products. The parties shall conduct such
negotiation in good faith, but neither shall be obligated to agree
to any buy-out.
4.3 License or sublicense of Licensed Patent Rights by Monsanto.
If Monsanto grants a license or sublicense of Licensed Patent Rights to a
third party non-Affiliate without providing such licensee or sublicensee
with a Licensed Product, Monsanto shall pay Paradigm [___________________]*
of Product Sublicense Payments received for such license or sublicense by
Monsanto, unless the grant is for a crop listed in Appendix A, in which
case
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Monsanto shall pay Paradigm [_________________]* of Product Sublicense
Payments received for such license or sublicense by Monsanto. All such
payments shall apply against the minimum royalty payments set forth in
Article 4.2.1.
4.4 Royalties - Paradigm Licensed Products
Paradigm shall pay Monsanto [____________________________________
_________________________________________________________________]*
received for any license or sublicense granted by Paradigm under the
license granted to it by Article 2.6.
4.5 Valuation of Non-Monetary Consideration for Product Sublicense Payments:
Paradigm or Monsanto can accept non-monetary consideration for the sale of
any product or the grant of any license or sublicense for which Product
Sublicense Payments are to be calculated under this Article, provided that
such non-monetary consideration can be reasonably valued.
5. RECORDS
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5.1 Payments of Royalties
Within ninety (90) days of the end of the applicable semi-annual period
(either fiscal or calendar) following the first commercial sale of a
Licensed Product and within ninety (90) days after the end of each six
months thereafter, the party selling or receiving value for such Licensed
Product shall make a written report to the other party setting forth the
information, including that of Affiliates and licensees or sublicensees,
necessary to permit the other party to calculate and confirm the royalty
payment due the other party, even if no royalty payment is due. At the time
each report is made, the party selling or receiving value shall pay to the
other party the royalties shown by such report to be payable hereunder.
Payments due on sales in foreign currency shall be calculated in United
States dollars on the basis of the rate of exchange in effect for purchase
of dollars at Chase Manhattan Bank, New-York, New York, on the last
business day of the last-preceding June or December, whichever shall be
later. Payments shall be without set off and free and clear of any taxes,
duties, fees or charges other than withholding taxes, if any. Payment shall
be made by wire transfer to an account in the United States which the other
party may designate from time to time by prior, written notice.
5.2 Books and Records for Royalty Payments
Each party shall keep, and shall cause its Affiliates, licensees and
sublicensees to keep, books and records in such reasonable detail as will
permit the reports provided for in this Article hereof to be made and the
royalties payable hereunder to be determined. Each party further agrees to
permit each party's and their
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Affiliates books and records to be inspected and audited from time to time
(but not more often than once annually) during reasonable business hours by
an independent auditor, designated by the holder of such books and records
and approved by the other party, which approval will not be unreasonably
withheld, to the extent necessary to verify the reports provided for in
this article provided, however, that such auditor shall indicate to the
other party only whether the reports and royalties paid are correct, and if
not, the reason why not. In the event that such an audit results in
additional royalties being owed to the other party, such royalties shall be
paid within sixty (60) days from notice of deficiency along with interest
calculated as from the date the correct payment was due to the date of
actual payment at an annual rate of five (5) percentage points above the
prime rate quoted by Chase Manhattan Bank, New York, New York, on the day
payment was due, until paid; and if the original payment was more than five
percent (5%) less than it should have been, the cost of the audit shall be
reimbursed.
5.3 Late Payment of Royalties
If any royalties owed under this Agreement are not paid when due, the
unpaid amount shall bear interest, compounded annually, at an annual rate
of five (5) percentage points above the prime rate quoted by Chase
Manhattan Bank of New York on the day payment was due, until paid or
offset.
6. INTELLECTUAL PROPERTY
---------------------
6.1 Ownership of Project Technology Other Than Gene Patent Rights.
Except as set forth in Article 2.1 of this Agreement (which covers Gene
Patent Rights): (i) any Project Technology and any patent applications and
patents claiming Project Technology first conceived or discovered by one or
more employees of Monsanto shall belong to Monsanto ("Monsanto Patents");
(ii) any Project Technology and any patent applications and patents
claiming an Project Technology first conceived or discovered by one or more
employees of Paradigm shall belong to Paradigm ("Paradigm Patents"); and
(iii) any Project Technology and any patent applications and patents
claiming any Project Technology first conceived or discovered jointly by
one or more employees of Monsanto and one or more employees of Paradigm
shall belong jointly to Monsanto and Paradigm ("Joint Patents"). Each owner
of any Joint Patent shall be free to exploit its undivided interest in such
Joint Patent. Inventorship shall be determined in accordance with United
States patent laws.
6.2 Disclosure of Patentable Inventions
In addition to the disclosures otherwise required under this Agreement,
each party shall submit a written report to the other within sixty (60)
days of the end of
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each Project Quarter summarizing any invention arising in the performance
of the Project Plan during the prior Project Quarter which it believes may
be patentable.
6.3 Access to Gene Patent Rights
Monsanto shall provide Paradigm with access to inspect patent applications
and prosecution files for Gene Patent Rights and to make copies of such
files and prosecution files at its own expense and for its own internal use
upon reasonable notice to Monsanto of Paradigm's intent to perform such
inspection. Paradigm shall bear the out-of pocket costs of inspecting and
copying such patent applications and prosecution files.
6.4 Patent Prosecution and Maintenance; Paradigm Patents
Paradigm shall control the preparation, filing, prosecution and maintenance
of all Paradigm Patents and be responsible for all costs associated
therewith. In the event Paradigm elects not to file in a reasonable time or
to cease prosecution of a filed application for a Paradigm Patent or to
abandon an issued Paradigm Patent, Paradigm shall notify Monsanto not less
than two (2) months before any relevant deadline, and Monsanto shall have
the right to assume control over the prosecution of such filed application
for a Paradigm Patent or maintenance of such issued Paradigm Patent.
6.5 Patent Prosecution and Maintenance; Monsanto Patents
Monsanto shall control the preparation, filing, prosecution and maintenance
of all Monsanto Patents and be responsible for all costs associated
therewith. In the event Monsanto elects not to file in a reasonable time or
to cease prosecution of a filed application for a Monsanto Patents or to
abandon an issued Monsanto Patents, Monsanto shall notify Paradigm not less
than two (2) months before any relevant deadline, and Paradigm shall have
the right to assume control over the prosecution of such filed application
for a Monsanto Patent or maintenance of such issued Monsanto Patent.
6.6 Patent Prosecution and Maintenance; Joint Patents
The parties shall agree upon an outside law firm who shall prepare, file,
prosecute and maintain Joint Patents under the joint instructions of the
parties. All costs shall be shared equally. In the event Paradigm or
Monsanto elects not to share or continue to share such costs of prosecution
of a filed application for a Joint Patent or maintenance costs for an
issued Joint Patent, it shall notify the other party not less than two (2)
months before any relevant deadline, and the other party shall have the
right to assume sole control over the prosecution of such filed application
for a Joint Patent or maintenance of such issued Joint Patent. In such
event, the party which assumes such control shall have title to such Joint
Patent and the other party agrees to execute the appropriate documents to
assign such patent to the other party.
21
<PAGE>
6.7 Gene Patent Rights
6.7.1 Disclosure
Each party shall promptly disclose to the other any invention made
during the Term of this Agreement by such party which may reasonably
be expected to be the subject of a Gene Patent Right. In order to
safeguard Monsanto's right to prepare, file and prosecute Gene
Patent Rights, Paradigm will not file any patent application which
discloses the sequence, composition or function of any Monsanto DNA
Information until the earlier of: (i) receipt of notice from
Monsanto that a patent application has been filed on such Gene
Patent Rights; or (ii) six (6) months after disclosure by Paradigm
to Monsanto that it seeks to file a patent application that would
disclose the sequence, composition or function of Monsanto DNA
Information, unless the parties mutually agree to extend such time.
6.7.2 Prosecution of applications
Monsanto shall control the preparation, filing, prosecution and
maintenance of all Gene Patent Rights and be responsible for all
costs associated therewith. Monsanto will notify Paradigm of the
filing of each application for a Gene Patent Right within five (5)
days of such filing and provide Paradigm with a copy of such
application. In the event Monsanto elects not to file a patent
applications, ceases prosecution of a filed application for a Gene
Patent Right or decides to abandon an issued Gene Patent Right,
Monsanto shall notify Paradigm as early as possible, but not less
than one (1) month before any relevant deadline, and Paradigm shall
have the right to assume control over the filing of an application
for such Gene Patent Right, prosecution of such filed application
for a Gene Patent Right or maintenance of such issued Gene Patent
Right.
6.8 Cooperation
Each party agrees to cooperate with the other in preparing and executing
any documents necessary or useful to obtain patent protection on any
invention that is subject to this Agreement in any country in the world.
6.9 Costs
Each party shall retain control over and bear all expenses associated with
the filing, prosecution and maintenance of patents on inventions made
before the effective date of this Agreement by such party.
22
<PAGE>
6.10 Patent Litigation: Right to Bring Suit
Each party shall have the sole power to institute and prosecute at its own
discretion and expense suits for infringement of their respective patent
rights, provided that if Monsanto does not bring suit against a party who
is alleged to be infringing any Gene Patent Right through the sale of a
Paradigm Licensed Product within sixty (60) days of a request from
Paradigm to bring such suit, then Paradigm may bring such suit in its own
name or in the name of Monsanto. Each party agrees to cooperate with the
other in any suit brought under this Article. All expenses in such suits
will be borne entirely by the party bringing such suit and such party
shall collect all judgments or awards arising from these suits. In the
event a judgment or award is collected by the party bringing the suit,
then the party not bringing the suit shall be entitled to any royalties or
shares of Product Sublicense Payments which they would otherwise have been
entitled to from the sale of Licensed Products by the infringer.
6.11 Confidential Treatment
All information disclosed under this Article 7 shall be treated as
Confidential Information under Article 8.
7. CONFIDENTIALITY
---------------
7.1 Confidential Information:
It is anticipated that it will be necessary, in connection with their
obligations under this Agreement, for Paradigm and Monsanto, and
Affiliates of either party, to disclose to each other confidential
proprietary business and/or technical information ("Confidential
Information") relating to their respective businesses, products and
technologies. The Confidential Information shall include information
disclosed in writing or other tangible form, including samples of
materials.
7.2 Confidentiality and Limited Use:
7.2.1 Limited Use:
With respect to all Confidential Information, both Paradigm and
Monsanto and Subsidiaries and wholly-owned Affiliates of either
party agree as follows, it being understood that "recipient"
indicates the party receiving the confidential, proprietary
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 or to
Affiliates other than Subsidiaries or wholly-owned Affiliates by the
recipient and, further, shall not be used except for purposes
contemplated
23
<PAGE>
in this Agreement. All confidentiality and limited use obligations
with respect to the Confidential Information shall terminate five
(5) years after the termination date of this Agreement.
7.2.2 Exceptions to Disclosure of Confidential Information:
Notwithstanding any provision to the contrary, a party may disclose
the Confidential Information of the other party: (i) in connection
with an order of a court or other government body or as otherwise
required by or in compliance with law or regulations; provided that
the disclosing party provides the other party with notice and takes
reasonable measures to obtain confidential treatment thereof; (ii)
in confidence to attorneys, accountants, banks and financial sources
and their advisors; or (iii) in confidence, in connection with a
license, sublicense, or acquisition, permitted by this Agreement.
7.3 Exceptions to Classification as Confidential:
The obligations of confidentiality and limited use shall not apply to any
of the Confidential Information which
7.3.1 Publicly Available:
as of the date of disclosure is publicly available by publication or
other documented means or later becomes likewise publicly available
through no act or fault of recipient; or
7.3.2 Already Known:
is already known to recipient before receipt from the disclosing
party, as demonstrated by recipient's written records; or
7.3.3 Third Party Disclosure:
is made known to recipient by a third party who did not obtain it
directly or indirectly from the disclosing party and who does not
obligate recipient to hold it in confidence.
7.4 Specific Information:
Specific information shall not be deemed to be within any of these
exclusions merely because it is embraced by more general information
falling within these exclusions.
24
<PAGE>
7.5 Disclosures to Personnel:
Recipient agrees to advise those of its officers, directors, stockholders,
employees, associates, agents, consultants, and Affiliates 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 obligations of
confidentiality and limited use of the same stringency as those contained
in this Agreement.
7.6 Return of Confidential Information:
Upon termination of this Agreement, originals and copies of Confidential
Information in written or other tangible form will be returned to the
disclosing party by recipient or destroyed by recipient, except to the
extent that it is the subject of a continuing license or other right of
use. One copy of each document may be retained in the custody of the
recipient's legal counsel solely to provide a record of what disclosures
were made.
7.7 Confidential Status of Agreement:
The terms and existence of this Agreement shall be deemed to be
Confidential Information and shall be dealt with according to the
confidentiality requirements of this Article. 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. Notwithstanding the foregoing, at such time as Paradigm or
Monsanto may request, the parties shall mutually agree on a press release
announcing the execution of this Agreement and the basic terms hereof. Once
any written statement is approved for disclosure by both parties, either
party may make subsequent public disclosures of the contents of such
statement without the further approval of the other party.
7.8 Disclosure to Third Parties
7.8.1 Consultants
Monsanto and Paradigm will be permitted to share Project Technology
with third parties who have signed a funded research agreement which
obligates the third party to do research for the party, maintain the
Project Technology confidential and to assign all inventions and
discoveries arising from the Project Technology to the party to the
agreement (either Monsanto or Paradigm). The parties will inform
each other which such third parties have been given access to
Project Technology.
25
<PAGE>
7.8.2 Investors
Paradigm may disclose Confidential Information to current and future
Paradigm investors and other sources and potential sources of
financing so long as, in each case, the entity to which disclosure
is made is bound to confidentiality on terms consistent with those
set forth herein. With respect to Project Technology, such investors
and other sources of financing are to be given a summary of
Confidential Information related to Project Technology, including a
summary of patent information, which the investors can use for
investment purposes only. Such summaries shall be reviewed and
approved by Monsanto prior to any such disclosure, such approval
shall not be unreasonably withheld. Paradigm shall make reasonable
efforts to provide such summaries well in advance of any need to
disclose such summaries. While Monsanto's approval will be deemed to
have been given unless Monsanto notifies Paradigm of its disapproval
within ten (10) days after receipt of the summary, Paradigm agrees
to extend this time period if practicable upon the request of
Monsanto.
7.9 Publications
It is expected that each party may wish to publish the results of its
research under this Agreement. Contributions by the other party shall be
acknowledged in any publication by the publishing party. In order to
safeguard intellectual property rights, the party wishing to publish or
otherwise publicly disclose material which describes or otherwise discloses
the other party's Confidential Information or Project Technology shall
first submit a draft of any proposed manuscript to the Project Committee
for review, comment and consideration of appropriate patent application
preparation activity at least sixty (60) days prior to any submission for
publication or other public disclosure. The Project Committee will advise
the party seeking publication as to whether a patent application will be
prepared and filed or whether Confidential Information should be removed
from the disclosure. The Project Committee will, in cooperation with both
parties, determine the appropriate timing and content of any such
publications. The Project Committee can, in its discretion, request that
the publishing party delay publication for a reasonable time period for the
purpose of preparation of an appropriate patent application(s). If the
Project Committee is no longer functioning, its responsibilities under this
Article 7.9 will be assigned to a committee consisting of one person
designated by Monsanto and one person designated by Paradigm.
8. REPRESENTATION AND WARRANTIES
-----------------------------
8.1 Monsanto
Monsanto represents and warrants that it has the right to make conveyances
and grants in accordance with the Articles hereof, including, without
limitation, the delivery of the Monsanto DNA Information and the grant of
rights to use Monsanto Enabling Technology. It is expressly understood,
however, that in
26
<PAGE>
making the conveyances and grants under this Agreement with the exception
of the foregoing provisions of this paragraph, Monsanto MAKES NO
REPRESENTATION, EXTENDS NO WARRANTIES, EITHER EXPRESS OR IMPLIED, AND
ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO:
1) THE SCOPE OR VALIDITY OF ANY PATENT WHICH MAY FALL WITHIN LICENSED
PATENT RIGHTS;
2) ANY USE OF LICENSED PRODUCT OR MONSANTO ENABLING TECHNOLOGY BEING FREE
FROM INFRINGEMENT OF PATENTS OTHER THAN THE MONSANTO PATENTS CLAIMING
MONSANTO ENABLING TECHNOLOGY OR LICENSED PATENT RIGHTS.
8.2 Paradigm
Paradigm represents and warrants that it has the right to make conveyances
and grants in accordance with the articles hereof. Paradigm does not
warrant that any use of the Project Technology database is without
liability to any third party or without a need to obtain a license from
such third party. Except as set forth in the first sentence of this
paragraph, Paradigm MAKES NO REPRESENTATION, EXTENDS NO WARRANTIES, EITHER
EXPRESS OR IMPLIED, AND ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT
TO:
1) THE SCOPE OR VALIDITY OF ANY PATENT WHICH MAY FALL WITHIN LICENSED
PATENT RIGHTS;
2) ANY USE OF LICENSED PRODUCT BEING FREE FROM INFRINGEMENT OF PATENTS
OTHER THAN THE LICENSED PATENT RIGHTS.
8.3 Third Party Obligation
Paradigm has informed Monsanto that it has an exclusive herbicide discovery
project with a third party that involves functional analysis of Arabidopsis
genes. Paradigm shall not conduct research for Monsanto relating to the
identification and development of novel genes, and/or gene products, gene
functions and assays useful to measure the potential herbicidal activity of
chemical compounds or substances. Notwithstanding the above provisions in
Article 2.1, Monsanto will not own inventions in the field of herbicides
made by Paradigm or any patent application or patent based on such
inventions and Paradigm will grant no rights to Monsanto with respect to
inventions in the field of herbicides or with respect to any patent
application or patent based on such inventions.
27
<PAGE>
9. INDEMNIFICATION
---------------
9.1 GENERAL -PARADIGM
EXCEPT TO THE EXTENT CAUSED BY MONSANTO'S NEGLIGENCE OR WILLFUL MISCONDUCT,
OR ARISING FROM A BREACH BY MONSANTO OF ITS WARRANTIES UNDER ARTICLE 8.1
ABOVE, PARADIGM SHALL DEFEND AND INDEMNIFY AGAINST, AND HOLD MONSANTO AND
ITS EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS HARMLESS FROM, ANY LOSS,
COST, LIABILITY OR EXPENSE (INCLUDING COURT COSTS AND REASONABLE FEES OF
ATTORNEYS AND OTHER PROFESSIONALS) INCURRED FROM ANY CLAIM ARISING OR
ALLEGED TO ARISE OUT OF THE MANUFACTURE, USE, DISTRIBUTION OR SALE BY
PARADIGM OR ANY PARADIGM AFFILIATE OF ANY LICENSED PRODUCT; PROVIDED,
HOWEVER, THAT (I) PARADIGM SHALL HAVE SOLE CONTROL OF SUCH DEFENSE, AND
(II) MONSANTO SHALL PROVIDE NOTICE PROMPTLY TO PARADIGM OF ANY ACTUAL OR
THREATENED CLAIM OF WHICH MONSANTO BECOMES AWARE.
9.2 GENERAL -MONSANTO
EXCEPT TO THE EXTENT CAUSED BY PARADIGM'S NEGLIGENCE OR WILLFUL MISCONDUCT,
OR ARISING FROM A BREACH BY PARADIGM OF ITS WARRANTIES UNDER ARTICLE 8.2
ABOVE, MONSANTO SHALL DEFEND AND INDEMNIFY AGAINST, AND HOLD PARADIGM AND
ITS EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS HARMLESS FROM, ANY LOSS,
COST, LIABILITY OR EXPENSE (INCLUDING COURT COSTS AND REASONABLE FEES OF
ATTORNEYS AND OTHER PROFESSIONALS) INCURRED FROM ANY CLAIM ARISING OR
ALLEGED TO ARISE OUT OF (A) THE MANUFACTURE, USE, DISTRIBUTION OR SALE BY
MONSANTO, ANY MONSANTO AFFILIATE, OR ANY MONSANTO LICENSEE OR SUBLICENSEE
OF ANY PRODUCT CONTAINING ANY LICENSED PRODUCT; OR (B) THE INFRINGEMENT OF
ANY PATENT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT OF ANY THIRD
PARTY AS A RESULT OF THE USE OF ANY MONSANTO DNA INFORMATION IN THE PROJECT
PLAN; PROVIDED, HOWEVER, THAT (I) MONSANTO SHALL HAVE SOLE CONTROL OF SUCH
DEFENSE, AND (II)PARADIGM SHALL PROVIDE NOTICE PROMPTLY TO MONSANTO OF ANY
ACTUAL OR THREATENED CLAIM OF WHICH PARADIGM BECOMES AWARE.
9.3 OTHER LOSS
EXCEPT TO THE EXTENT PROVIDED FOR IN THIS AGREEMENT, NEITHER PARTY
SHALL BE LIABLE TO THE OTHER FOR ANY LOSS OF
28
<PAGE>
PROFITS, LOSS OF BUSINESS, INTERRUPTION OF BUSINESS, INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OF ANY KIND SUFFERED BY SUCH OTHER PARTY FOR BREACH
HEREOF, WHETHER BASED ON CONTRACT OR TORT CLAIMS OR OTHERWISE, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS.
10. APPLICABLE LAW
--------------
10.1 Governing Law; Jurisdiction
THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT AND ANY
DISPUTE CONNECTED WITH THIS AGREEMENT SHALL BE GOVERNED BY AND DETERMINED
IN ACCORDANCE WITH THE STATUTORY, REGULATORY AND DECISIONAL LAW OF THE
STATE OF DELAWARE (EXCLUSIVE OF SUCH STATE'S CHOICE OR CONFLICTS OF LAWS
RULES) AND, TO THE EXTENT APPLICABLE, THE FEDERAL STATUTORY, REGULATORY AND
DECISIONAL LAW OF THE UNITED STATES (EXCEPT FOR THE U.N. CONVENTION ON
CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS, APRIL 10, 1980, U.N. DOC.
A/CONF. 97/18, 19 I.L.M. 668, 671 (1980) REPRINTED IN PUBLIC NOTICE, 52
FED. REG. 662-80 (1987), WHICH IS HEREBY SPECIFICALLY DISCLAIMED AND
EXCLUDED).
11. MISCELLANEOUS PROVISIONS
------------------------
11.1 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 providing evidence of delivery or by facsimile 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 Paradigm: Paradigm Genetics Inc.
104 Alexander Drive, Building 2
P0 Box 14528
RTP, North Carolina, 27709
Attention: Chief Executive Officer
with a copy to: Chief Counsel, Paradigm Genetics
If to Monsanto: Monsanto Company
700 Chesterfield Parkway North
St. Louis, Missouri 63198
Attention: President, Ag
29
<PAGE>
Copy to: Monsanto Company
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
Attention: Group Patent Counsel
11.2 Assignability:
The rights and obligations acquired herein by the parties are not
assignable, transferable or otherwise conveyable, in whole or part (by
operation of law or otherwise) to any third party without the consent of
other party, which shall not be unreasonably withheld, except that either
party may, without such consent, assign its rights and obligations to any
purchaser of all or substantially all of the assets of the party related
to this Agreement or to any successor corporation resulting from any
merger or consolidation of a party.
11.3 Dispute Resolution
11.3.1 General
All disputes which may arise under, out of, or in connection with
this Agreement shall be resolved as follows:
11.3.2 Parties Shall Meet
First, the parties shall make all commercially reasonable efforts
to resolve the dispute. If, after making all commercially
reasonable efforts the parties cannot resolve the issue within
six months after written notice of the dispute from one party to
the other, then the parties may appoint one or more independent
parties to assist in resolving the dispute through mediation
("mediation stage").
11.3.3 CEOs Shall Meet
If the mediation described above does not resolve the dispute,
then the Chief Executive Officer of Monsanto and the Chief
Executive Officer of the ultimate parent of Paradigm shall meet
to resolve the dispute.
11.3.4 Arbitration Trigger
In the event such Chief Executive Officers shall not have
resolved such matter within sixty (60) days of written request by
one of such Chief Executive Officers for such a meeting, either
party may initiate arbitration with respect to such dispute in
accordance with paragraph 11.3.5 hereof.
30
<PAGE>
11.3.5 Arbitration Rules
The arbitration proceeding shall be conducted in the City of New
York, State of New York, United States of America, in accordance
with the then existing commercial rules of the American Arbitration
Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction
thereof. The parties hereby agree that service of any notices in
the course of such arbitration at their respective addresses as
provided for in Article 11.1 of this Agreement shall be valid and
sufficient. In any arbitration, the award shall be rendered by a
majority of the members of a Board of Arbitration consisting of
three (3) members, one of whom shall be appointed by Monsanto, the
second by Paradigm, and the third by mutual agreement of the first
two said arbitrators, and none of whom shall be affiliated with
either party or its Affiliates. In the event of failure of said
first two arbitrators to agree within sixty (60) days after
commencement of the arbitration proceeding upon the appointment of
the third member, the third arbitrator shall be appointed by the
American Arbitration Association in accordance with its then
existing rules.
Notwithstanding the foregoing, in the event that either such party
shall fail to appoint an arbitrator within thirty (30) days after
commencement of the arbitration proceeding, such arbitrator and the
third arbitrator shall be appointed by the American Arbitration
Association in accordance with its then existing rules. For the
purposes of this paragraph, the "commencement of arbitration
proceeding" shall be deemed to be the date upon which a written
demand for arbitration is received by the American Arbitration
Association from one of the parties.
11.3.6 Agreements to Agree
The failure by the parties to agree on any matter expressed in this
Agreement as a matter to be agreed upon by or determined by mutual
agreement, decision, consent or approval of the parties shall not
constitute a basis for the initiation by either party of litigation
or arbitration. Any court having jurisdiction under this Article or
any arbitrator shall have no power to decide any such matter to
which such mutual agreement, decision or consent has not been
obtained.
11.4 Tax Reporting:
Monsanto and Paradigm shall treat all payments made by Monsanto under
Article 4.1 as amounts paid for qualified research under section 41(b)(3)
of the Internal Revenue Code of 1986.
31
<PAGE>
11.5 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.
11.6 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.
11.7 Headings:
Headings as to the contents of particular Articles 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 to which they refer.
11.8 Agreement references:
All Articles referred to herein are Articles of this Agreement.
11.9 Appendices:
The appended Appendices form an integral part of this Agreement.
11.10 Export Control:
Notwithstanding any other provisions of this Agreement, Paradigm agrees to
make no disclosure or use of any Monsanto information or Monsanto
technology furnished or made known to Paradigm pursuant to this Agreement,
and Monsanto agrees to make no disclosure or use of any Paradigm
information, Paradigm technology or Improvements disclosed to Monsanto
pursuant to this Agreement except in compliance with the laws and
regulations of the United States of America, including the Export
Administration Regulations promulgated by the Office of Export
Administration International Trade Administration, United States
Department of Commerce; and in particular, each party agrees not to
export, directly or indirectly, either
the technical data furnished or made known to it by the other party
pursuant to this Agreement; or
the "direct product" thereof; or
32
<PAGE>
any commodity produced using such technical data to any country or
countries for which a validated license is required unless a 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.
11.11 Force Majeure:
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
party; 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).
The party invoking this subparagraph shall give the other party notice
and full particulars of such force majeure event by telephone, telegram,
telex or facsimile as soon as possible after the occurrence of the cause
upon which said party is relying. Telephone, telegram, telex and
telecopier notices shall be confirmed in writing by the sending party
within five (5) days.
Both Monsanto and Paradigm shall use reasonable efforts to mitigate the
effects of any force majeure on their respective part.
11.12 Negation of Agency:
It is agreed and understood by the parties hereto that each of Paradigm
and Monsanto, 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 relationship between the parties. The manner in which
each of Paradigm and Monsanto carries out its performance under this
Agreement is within each of Paradigm's and Monsanto's sole discretion and
control.
11.13 Other Requests:
The parties hereto agree that upon reasonable request of the other party,
each such party shall execute and deliver such additional documents and
Agreements, and take such further actions, as may be necessary in order
to fulfill and give effect to the terms of this Agreement.
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<PAGE>
11.14 Amendment and Waiver:
This Agreement may be amended, modified, superseded or canceled, and any
of the terms may be waived, only by a written instrument executed by each
party or, in the case of waiver, by the party or parties waiving
compliance. The delay or failure of any party at any time or times to
require performance of any provisions shall in no manner affect the
rights at a later time to enforce the same. No waiver by any party of any
condition or of the breach of any term contained in this Agreement,
whether by conduct, or otherwise, in any one or more instances, shall be
deemed to be, or considered as, a further or continuing waiver of any
such condition or of the breach of such term or any other term of this
Agreement.
34
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the Effective Date.
PARADIGM GENETICS INC. MONSANTO COMPANY
By________________________________ By______________________________
Date______________________________ Date____________________________
35
<PAGE>
APPENDICES
Appendix A - Major Crops
[___________]*
[___________]*
[___________]*
[___________]*
[___________]*
[___________]*
[___________]*
36
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
Appendix B - Project Plan
[_______________________________________________
_______________________________________________]*
37
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
* Paradigm Genetics, Inc. requests confidential treatment for Appendix B in its
entirety. Appendix B consists of 16.5 pages of text.
<PAGE>
- --------------------------------------------------------------------------------
Appendix C
- --------------------------------------------------------------------------------
Project Plan
Production Target
Levels
- --------------------------------------------------------------------------------
Production
Target Levels per
Quarter
- --------------------------------------------------------------------------------
Constructs Plant Trans Pheno Anal Full Anal
- --------------------------------------------------------------------------------
Q1 [__]*
- --------------------------------------------------------------------------------
Q2 [__]* [__]*
- --------------------------------------------------------------------------------
Q3 [__]* [__]*
- --------------------------------------------------------------------------------
Q4 [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q5 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q6 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q7 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q8 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q9 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q10 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q11 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q12 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q13 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q14 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
38
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
Q15 [__]* [__]* [__]* [__]*
- -----------------------------------------------------------------------------
Q16 [__]* [__]* [__]* [__]*
- -----------------------------------------------------------------------------
Q17 [__]* [__]* [__]* [__]*
- -----------------------------------------------------------------------------
Q18 [__]* [__]* [__]* [__]*
- -----------------------------------------------------------------------------
Q19 [__]* [__]* [__]* [__]*
- -----------------------------------------------------------------------------
Q20 [__]* [__]* [__]* [__]*
- -----------------------------------------------------------------------------
Q21 [__]* [__]* [__]* [__]*
- -----------------------------------------------------------------------------
Q22 [__]* [__]* [__]*
- -----------------------------------------------------------------------------
Q23 [__]* [__]*
- -----------------------------------------------------------------------------
Q24 [__]* [__]*
- -----------------------------------------------------------------------------
Total [____]* [____]* [____]* [____]*
- -----------------------------------------------------------------------------
BOLD NUMBERS =
PRODUCTION
TARGET LEVELS
- -----------------------------------------------------------------------------
39
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Appendix D: Appendix D
- --------------------------------------------------------------------------------
Quarterly Production Target Level
- --------------------------------------------------------------------------------
Payments Payments
- --------------------------------------------------------------------------------
Year 1
- --------------------------------------------------------------------------------
Q1 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q2 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q3 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q4 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 2
- --------------------------------------------------------------------------------
Q5 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q6 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q7 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q8 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 3
- --------------------------------------------------------------------------------
Q9 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q10 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q11 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q12 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 4
- --------------------------------------------------------------------------------
Q13 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q14 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q15 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q16 [__________]* [__________]*
- --------------------------------------------------------------------------------
40
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Year 5
- --------------------------------------------------------------------------------
Q17 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q18 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q19 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q20 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 6
- --------------------------------------------------------------------------------
Q21 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q22 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q23 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q24 [__________]* [__________]*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL [__________]* [__________]*
- --------------------------------------------------------------------------------
41
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* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Appendix E
- --------------------------------------------------------------------------------
[_______________]*
Production Target
Levels
- --------------------------------------------------------------------------------
Production
Target Levels per
Quarter
- --------------------------------------------------------------------------------
Clone/Seq Plant Trans Pheno Anal Full Anal
- --------------------------------------------------------------------------------
Q1 [__]*
- --------------------------------------------------------------------------------
Q2 [__]*
- --------------------------------------------------------------------------------
Q3 [__]*
- --------------------------------------------------------------------------------
Q4 [__]* [__]*
- --------------------------------------------------------------------------------
Q5 [__]* [__]*
- --------------------------------------------------------------------------------
Q6 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q7 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q8 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q9 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q10 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q11 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q12 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q13 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q14 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q11 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
42
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Q16 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q17 [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q18 [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q19 [__]* [__]*
- --------------------------------------------------------------------------------
Q20 [__]* [__]*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total [____]* [____]* [____]* [____]*
- --------------------------------------------------------------------------------
BOLD NUMBERS =
PRODUCTION
TARGET LEVELS
- --------------------------------------------------------------------------------
QUARTERS = [_____]*
QUARTERS (NOT
PROJECT
QUARTERS)
- --------------------------------------------------------------------------------
43
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Appendix F
[__________________]*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Quarterly Production Target Level
- --------------------------------------------------------------------------------
Payments Payments
- --------------------------------------------------------------------------------
Year 1
- --------------------------------------------------------------------------------
Up front access fees [__________]*
- --------------------------------------------------------------------------------
Q1 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q2 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q3 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q4 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 2
- --------------------------------------------------------------------------------
Q5 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q6 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q7 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q8 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 3
- --------------------------------------------------------------------------------
Q9 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q10 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q11 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q12 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 4
- --------------------------------------------------------------------------------
Q13 [__________]* [__________]*
- --------------------------------------------------------------------------------
44
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Q14 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q15 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q16 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 5
- --------------------------------------------------------------------------------
Q17 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q18 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q19 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q20 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 6
- --------------------------------------------------------------------------------
Q21 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q22 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q23 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q24 [__________]* [__________]*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL [__________]* [__________]*
- --------------------------------------------------------------------------------
45
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Appendix G
- --------------------------------------------------------------------------------
Increase in
Arabidopsis Option
Production Target
Levels
- --------------------------------------------------------------------------------
Production
Target Levels per
Qtr
- --------------------------------------------------------------------------------
Clone/Seq Plant Trans Pheno Anal Full Anal
- --------------------------------------------------------------------------------
Q1 [__]*
- --------------------------------------------------------------------------------
Q2 [__]* [__]*
- --------------------------------------------------------------------------------
Q3 [__]* [__]*
- --------------------------------------------------------------------------------
Q4 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q5 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q6 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q7 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q8 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q9 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q10 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q11 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q12 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q13 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q14 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
46
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Q15 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q16 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q17 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q18 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q19 [__]* [__]*
- --------------------------------------------------------------------------------
Q20 [__]* [__]*
- --------------------------------------------------------------------------------
Total [_____]* [_____]* [_____]* [_____]*
- --------------------------------------------------------------------------------
BOLD
NUMBERS =
PRODUCTION
TARGET
LEVELS
- --------------------------------------------------------------------------------
QUARTERS =
OPTION
QUARTERS
(NOT PROJECT
QUARTERS)
- --------------------------------------------------------------------------------
47
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Appendix H
- --------------------------------------------------------------------------------
Increase in Arabidopsis
Option
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Quarterly Production Target Level
- --------------------------------------------------------------------------------
Payments Payments
- --------------------------------------------------------------------------------
Year 1
- --------------------------------------------------------------------------------
Up-front access fees [__________]*
- --------------------------------------------------------------------------------
Q1 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q2 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q3 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q4 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 2
- --------------------------------------------------------------------------------
Q5 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q6 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q7 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q8 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 3
- --------------------------------------------------------------------------------
Q9 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q10 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q11 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q12 [__________]* [__________]*
- --------------------------------------------------------------------------------
Year 4
- --------------------------------------------------------------------------------
48
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Q13 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q14 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q15 [__________]* [__________]*
- --------------------------------------------------------------------------------
Q16 [__________]* [__________]*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL [__________]* [__________]*
- --------------------------------------------------------------------------------
49
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Appendix I
- --------------------------------------------------------------------------------
Increase in
Arabidopsis with 8
Year Term
- --------------------------------------------------------------------------------
Production Target
Levels per Qtr
- --------------------------------------------------------------------------------
Clone/Seq Plant Trans Pheno Anal Full Anal
- --------------------------------------------------------------------------------
Q1 [__]*
- --------------------------------------------------------------------------------
Q2 [__]* [__]*
- --------------------------------------------------------------------------------
Q3 [__]* [__]*
- --------------------------------------------------------------------------------
Q4 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q5 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q6 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q7 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q8 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q9 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q10 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
all [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q12 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q13 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q14 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q15 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q16 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
50
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Q17 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q18 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q19 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q20 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q21 [__]* [__]* [__]* [__]*
- --------------------------------------------------------------------------------
Q22 [__]* [__]*
- --------------------------------------------------------------------------------
Q23 [__]* [__]*
- --------------------------------------------------------------------------------
Q24 [__]*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total [_____]* [_____]* [_____]* [_____]*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOLD NUMBERS =
PRODUCTION
TARGET
LEVELS
- --------------------------------------------------------------------------------
QUARTERS =
OPTION
QUARTERS (NOT
PROJECT
QUARTERS)
- --------------------------------------------------------------------------------
51
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Appendix J
- --------------------------------------------------------------------------------
Increase in Arabidopsis
with 8 Year Term Option
- --------------------------------------------------------------------------------
Quarterly Production Target Level
- --------------------------------------------------------------------------------
Payments Payments
- --------------------------------------------------------------------------------
Year 1
- --------------------------------------------------------------------------------
Up-front access fees [____________]*
- --------------------------------------------------------------------------------
Q1 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q2 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q3 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q4 [____________]* [____________]*
- --------------------------------------------------------------------------------
Year 2
- --------------------------------------------------------------------------------
Q5 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q6 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q7 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q8 [____________]* [____________]*
- --------------------------------------------------------------------------------
Year 3
- --------------------------------------------------------------------------------
Q9 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q10 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q11 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q12 [____________]* [____________]*
- --------------------------------------------------------------------------------
Year 4
- --------------------------------------------------------------------------------
Q13 [____________]* [____________]*
- --------------------------------------------------------------------------------
52
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
- --------------------------------------------------------------------------------
Q14 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q15 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q16 [____________]* [____________]*
- --------------------------------------------------------------------------------
Year 5
- --------------------------------------------------------------------------------
Q17 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q18 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q19 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q20 [____________]* [____________]*
- --------------------------------------------------------------------------------
Year 6 [____________]*
- --------------------------------------------------------------------------------
Q21 [____________]*
- --------------------------------------------------------------------------------
Q22 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q23 [____________]* [____________]*
- --------------------------------------------------------------------------------
Q24 [____________]* [____________]*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL [____________]* [____________]*
- --------------------------------------------------------------------------------
53
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
<PAGE>
Appendix K
Monsanto Enabling Technologies
Monsanto Enabling Technologies
[_____________________________]*
[_____________________________]*
[_____________________________]*
[_____________________________]*
[_____________________________]*
54
- --------
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
