1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. EACH SUCH OMISSION IS DESIGNATED [***].
CaMV PROMOTER LICENSE AGREEMENT
This Agreement (the "Agreement") is entered into on this 31st day of
January, 1996 by and between Monsanto Company, and DEKALB Genetics Corporation
regarding the non-exclusive license of certain patent rights of Monsanto for
use in producing particular herbicide-protected corn plants. Based on the
mutual consideration between the parties recited below, and in partial
consideration for entering into the Investment Agreement of even date herewith,
the parties agree and covenant as set forth below.
SECTION 1-BACKGROUND AND PARTIES
1.01 Monsanto Company ("MONSANTO") is a corporation of the
State of Delaware with principal offices at 800 N. Lindbergh Boulevard, St.
Louis, Missouri 63167.
1.02 DEKALB Genetics Corporation ("DEKALB") is a
corporation of the State of Delaware with principal offices at 3100 Sycamore
Road, DeKalb, Illinois 60115.
1.03 MONSANTO has certain rights in and to patents and/or
patent applications covering Gene(s) and their use.
1.04 DEKALB possesses patents and patent applications,
knowledge, know-how, technical information, germplasm and expertise regarding
the development and marketing of corn hybrids.
1.05 DEKALB is interested in the commercialization of
certain herbicide-protected seed corn and DEKALB seeks to obtain a limited
license under MONSANTO's proprietary rights.
1.06 MONSANTO desires to grant such license, all upon the
terms and conditions provided herein.
SECTION 2-DEFINITIONS
For purposes of this Agreement, the following words and phrases shall
have the following meanings:
2
2.01 The term "Affiliate(s)," as used herein, means with
respect to an entity, any person that is at least fifty percent (50%) owned
by, or, directly or indirectly, is controlled by, under common control with or
in control of, that entity. The term "control" shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of an entity whether through the ownership of
securities, by contract or otherwise.
2.02 The term "CaMV Promoter(s)," as used herein, means a
promoter from a cauliflower mosaic virus.
2.03 The term "Confidential Information," as used herein,
means any proprietary information, including technical, economic, financial or
marketing information, which either party considers confidential and which is
disclosed to the other party as confidential.
2.04 The term "Grower Agreement," as used herein, means
the agreement between DEKALB and the corn grower substantially in the form of
the agreement attached hereto as Appendix B.
2.05 The term "Grower Agreement Fee," as used herein,
means the per Unit fee charged to the corn grower under the terms of the Grower
Agreement, [***].
2.06 The term "Grower Agreement Revenue," as used herein,
means the total amount of Grower Agreement Fees received from licenses to corn
growers for use of Licensed DEKALB Corn Products during the applicable Fiscal
Year, less the Seed Service Fees [***].
2.07 The term "Effective Date" is defined in Subsection
8.01 of this Agreement.
2.08 The term "Fiscal Year," as used herein, means a
twelve-month period ending August 31st.
2
3
2.09 The term "Gene(s)," as used herein, means DNA
comprising a promoter from cauliflower mosaic virus, 5' non-translated regions,
a structural coding region encoding a Glufosinate tolerance protein, and a 3'
non-translated termination/polyadenylation region.
2.10 The term "Hybrid Seed Corn," as used herein, means
seed corn which the grower would plant to produce a single crop of commercial
corn.
2.11 The term "Hybrid Seed Company," as used herein, means
an entity, other than DEKALB and MONSANTO, whose primary seed corn business is
selling Hybrid Seed Corn directly to growers.
2.12 The term "International Associate," as used herein,
means any foreign-based person that has been licensed by DEKALB to sell or
otherwise distribute DEKALB-branded seed products. The International
Associates of DEKALB include, but are not limited to, those listed in Exhibit
A. A third party shall not be considered to be an International Associate
solely on the basis of the granting of a license pursuant to this Agreement.
2.13 The term "Licensed Field," as used herein, means
transgenic corn (including sweet corn) which exhibits protection against
Glufosinate herbicide.
2.14 The term "Licensed MONSANTO Patent Rights" shall mean
all patent licenses and sublicenses for use in the Licensed Field and to which
MONSANTO and/or a wholly-owned Affiliate of MONSANTO is the licensee or
sublicensee (to the extent allowed by such licenses or sublicenses) and all
patents and patent applications filed prior to or during the term of this
Agreement, for use in the Licensed Field and owned by MONSANTO and/or by a
wholly-owned Affiliate of MONSANTO, including but not limited to those listed
in Appendix A-M and any and all patents maturing from these applications or
maturing from applications that are divisionals, continuations or
continuations-in-part of these applications, foreign (i.e., ex-U.S.)
equivalents of the foregoing and any and all reissues or extensions of any of
the foregoing.
2.15 The term "DEKALB Patent Rights" shall mean all patent
licenses and sublicenses for use in the Licensed Field and to which DEKALB
and/or a wholly-owned Affiliate of DEKALB is the licensee or sublicensee (to
the extent allowed by such licenses or sublicenses) and all patents and patent
applications filed prior to or during the term of this Agreement, for use in
the Licensed Field and owned by DEKALB and/or a wholly-owned Affiliate of
DEKALB, including but not limited to those listed in Appendix A-D and any and
all patents maturing from these
3
4
applications or maturing from applications that are divisionals, continuations
or continuations-in-part of these applications, foreign (i.e., ex-U.S.)
equivalents of the foregoing and any and all reissues or extensions of any of
the foregoing.
2.16 The term "Licensed DEKALB Corn Product(s)" shall mean
corn material in the Licensed Field including, but not limited to, cells,
plants, or seeds and products thereof, which are covered by DEKALB Patent
Rights or Licensed MONSANTO Patent Rights.
2.17 The term "MONSANTO Genetic Element(s)," as used
herein, means any DNA sequence or sequences including any DNA containing
promoters, 5' non-translated regions, introns, 3' non-translated
termination/polyadenylation regions and markers that are useful in expressing
recombinant genes in corn, which is supplied to DEKALB by MONSANTO prior to or
during the term of this Agreement, and replicates thereof, which are useful for
the expression of Glufosinate tolerance proteins or are useful for the
selection of transgenic plants from tissue culture.
2.18 The term "MONSANTO Germplasm," as used herein, means
transgenic corn germplasm supplied to DEKALB by MONSANTO.
2.19 The term "MONSANTO Know-How," as used herein, means
any knowledge and proprietary information disclosed to DEKALB by MONSANTO prior
to or during the term of this Agreement, which information is not generally
publicly known, including, without limitation, all chemical, biochemical,
toxicological, manufacturing, formulation, molecular and plant pathology, and
scientific research information, whether or not capable of precise separate
description but which alone or when accumulated gives to the one acquiring it
an ability to develop and commercialize a product through study, testing,
production, formulation or marketing which that party would otherwise not have
been able to develop and commercialize in the same manner.
2.20 The term "Licensed MONSANTO Method" shall mean any
method the use or practice of which would, in the absence of a license,
infringe one or more Valid Claims of an unexpired patent included in the
Licensed MONSANTO Patent Rights or which involves the use of MONSANTO Know-How
or Licensed MONSANTO Non-Patent Proprietary Materials.
2.21 The term "Licensed MONSANTO Non-Patent Proprietary
Materials," as used herein, means all MONSANTO Genetic Element(s), MONSANTO
Germplasm, MONSANTO Plasmid(s) and MONSANTO Gene(s).
4
5
2.22 The term "MONSANTO Plasmid(s)," as used herein, means
a transformation vector(s) which is supplied to DEKALB by MONSANTO prior to or
during the term of this Agreement.
2.23 The term "Glufosinate" means any herbicidally
effective form of phosphinothricin, including any salt thereof.
2.24 The term "Seed Services Fee," as used herein, means a
fee paid for collecting the Grower Agreement Fee.
2.25 The term "Territory," as used herein, means the
world.
2.26 The term "Unit(s)," as used herein, means a quantity
of approximately Eighty Thousand (80,000) kernels.
2.27 The term "Valid Claim," as used herein, means an
issued claim included within the Licensed MONSANTO Patent Rights or DEKALB
Patent Rights which has not been finally held to be invalid or unenforceable by
a decision of a court or other authority of competent jurisdiction which is not
appealable.
2.28 The term "-branded," when used in conjunction with an
entity's name, means a trademark or logo of that entity, whether registered or
not, affixed to a product or product container, or used in advertising,
promotion or other marketing of such a product.
2.29 The term "Net Units," as used herein, means the
number of Units sold of all Licensed DEKALB Corn Products in arm's length sales
to third parties after deduction of credits or allowances given or made for
rejection or return of previously sold Licensed DEKALB Corn Products. Where
the product is covered under the present Agreement and under licenses that
evolve from the Collaboration Agreement and License, or from the
Glyphosate-Protected Corn License Agreement or the Corn Borer-Protected Corn
License Agreement, all three of even date herewith, "Net Units" must be
calculated separately for each Agreement. The use by DEKALB or its Affiliates,
International Associates or sublicensees of commercially reasonable amounts of
Licensed DEKALB Corn Products for promotional sampling or replant shall not be
included in Net Units.
2.30 The term "person," as used herein, shall mean an
individual, corporation, partnership, limited liability company, joint venture,
association, trust, unincorporated organization or other entity.
5
6
SECTION 3-CONVEYANCE OF RIGHTS
3.01 LICENSE GRANT BY MONSANTO:
(a) Subject to the terms and conditions of this
Agreement, MONSANTO hereby grants to DEKALB a royalty-bearing, non-exclusive,
license under the Licensed MONSANTO Patent Rights, MONSANTO Know-How, Licensed
MONSANTO Method and Licensed MONSANTO Non-patent Proprietary Materials, (1) to
make, have made and use Licensed DEKALB Corn Products in the Territory, (2) to
sell Licensed DEKALB Corn Products in the Territory to corn growers who have
entered into the Grower Agreement, and (3) to sublicense DEKALB's Affiliates
and International Associates and Hybrid Seed Companies to make, have made, use,
and sell Licensed DEKALB Corn Products in the Licensed Field in the Territory
to corn growers who have entered into the Grower Agreement. No sublicensee
hereunder shall have the right to further sublicense any rights hereunder.
(b) The sale and/or transfer of Licensed DEKALB Corn
Products to a corn grower shall require execution by the corn grower of the
Grower Agreement and payment of the Grower Agreement Fee by such corn grower.
[***]
3.02 MARKING OF LICENSED DEKALB CORN PRODUCTS:
(a) DEKALB and its sublicensees shall conspicuously
display on all packages containing Licensed DEKALB Corn Products to be sold or
transferred to permitted third-party growers or customers, the following notice
(tailored to reflect the nature of the conveyance), or a notice having the same
meaning and effect, with the blanks appropriately filled in to the extent such
notice is applicable in the respective area:
THESE SEEDS ARE COVERED UNDER U. S. PATENTS ____________.
THE PURCHASE OF THESE SEEDS CONVEYS NO LICENSE UNDER SAID
PATENTS TO USE THESE
6
7
SEEDS. A LICENSE MUST FIRST BE OBTAINED FROM ________ BEFORE
THESE SEEDS CAN BE USED IN ANY WAY.
(b) Where transactions occur in countries whose primary
language is not English, a translation of the notice in the appropriate
language shall be used if appropriate or required by law.
3.03 NO OTHER LICENSES: No license is granted by this
Agreement, under the Licensed MONSANTO Patent Rights or any other patent right
by implication or otherwise, to make, have made, use or sell directly or by
sublicense Licensed DEKALB Corn Products for any use outside the Licensed
Field.
3.04 DEKALB TO LICENSE GROWERS: [***] DEKALB
shall directly license corn growers under the DEKALB Patent Rights and Licensed
MONSANTO Patent Rights, to use the Licensed DEKALB Corn Products. The form of
the Grower Agreement shall be substantially as set forth in Appendix B and the
Grower Agreement shall be used as provided therein. The Grower Agreement Fee
charged by DEKALB, and the amount of the Grower Agreement Revenue, [***]
Whether the Grower Agreement Fee and the Grower Agreement Revenue reasonably
reflect the foregoing value is [***]
3.05 DEKALB'S OBLIGATIONS:
(a) Subject to Subsection 3.01(c), DEKALB shall require
in its and its sublicensees' agreements with dealers and distributors, by
addendum to existing agreements and inclusion in future agreements, that
such dealers and distributors have growers/purchasers of the Licensed DEKALB
Corn Products execute the Grower Agreement, and DEKALB shall make all
reasonable efforts to have each of its dealers and distributors comply with
such requirements. The Grower Agreement shall be executed in quadruplicate.
Each dealer or distributor shall retain a copy of the Grower Agreement,
provide a copy to the grower (or the grower's authorized representative) and
shall forward the others to:
7
8
Signed original: [neutral third party]
_____________________________
_____________________________
_____________________________
Copy of the signed original with a DEKALB Genetics Corporation
copy of the invoice to: 3100 Sycamore Road
DeKalb, Illinois 60115
Attention: Richard O. Ryan
President and Chief Operating
Officer
(b) Subject to Subsection 3.01(c), DEKALB and its
sublicensees shall obligate each dealer and distributor to invoice the grower
for the Grower Agreement Fee at the time of sale of the Licensed DEKALB Corn
Product. Each dealer and distributor shall also be obligated to remit the
Grower Agreement Fees collected to DEKALB.
(c) DEKALB shall make efforts, consistent with its normal
credit and collection policies and procedures, to collect such fees. Any
amounts collected by DEKALB from its sublicensees, dealers and distributors
which have Grower Agreement Fees due to MONSANTO shall be distributed between
DEKALB and MONSANTO on a pro rata basis taking into consideration the relative
amounts due to both DEKALB and MONSANTO for the overall transaction.
(d) Except to the extent provided for in Subsection
3.05(c), if DEKALB or any of its Affiliates, International Associates and
sublicensees are unable to collect the past due Grower Agreement Fees from its
dealers and distributors, DEKALB or any of its Affiliates, International
Associates and sublicensees shall not be liable to MONSANTO for such delinquent
accounts. DEKALB shall be permitted to independently pursue collection of such
past due Grower Agreement Fees at its sole discretion.
3.06 FUTURE ACCESS: During the term of this Agreement,
[***] shall have the right to [***] within the Licensed Field, either
internally or with any third party, such that results of that [***] and rights
flowing from that research, will not be subject to the grants under [***] of
this Agreement.
8
9
SECTION 4-PAYMENTS, REPORTS AND RECORD RETENTION
4.01 PAYMENTS BY DEKALB: In consideration for the license
grants hereunder, DEKALB shall remit to MONSANTO the [***] of the DEKALB Grower
Agreement Revenue; and (b) [***] sold by DEKALB and its Affiliates and
International Associates and sublicensees hereunder until the obligation of
DEKALB to pay MONSANTO expires.
4.02 MOST FAVORED LICENSEE STATUS:
(a) If MONSANTO subsequently grants a license under the
Licensed MONSANTO Patent Rights to a third party having terms which considered
as a whole are more favorable to the licensee than the terms granted to DEKALB
considered as a whole, then MONSANTO shall promptly advise DEKALB as to such
more favorable terms. DEKALB shall, at its election, be entitled upon notice
to MONSANTO to have this Agreement amended to substitute such third-party terms
for the terms of this Agreement as of the date upon which such license
containing the more favorable terms shall have become effective; provided
however that, DEKALB also agrees to have the Agreement amended to contain any
additional obligations that are recited in such license containing the more
favorable terms.
(b) In the event MONSANTO shall at any time while this
Agreement is in effect be compelled by applicable law to issue licenses under
the Licensed MONSANTO Patent Rights in the Licensed Field to any other person
with royalty terms more favorable than those granted to DEKALB hereunder,
MONSANTO shall inform DEKALB of the order compelling any such licenses and
shall offer the royalties only with respect to the country or countries wherein
such compulsory licenses have been ordered so that the new royalty terms shall
be no less favorable to DEKALB than those granted to any third party under any
such compulsory license.
(c) Nothing in this Subsection 4.02 shall entitle DEKALB
to any retroactive adjustment, reduction in royalty, or other relief from any
of the provisions of this Agreement merely because MONSANTO shall commence
proceedings against a third party who shall infringe the Licensed MONSANTO
Patent Rights, which proceedings shall be resolved by the third party becoming
licensed under the Licensed MONSANTO Patent Rights, so long as such subsequent
license agreement shall, at least prospectively, impose upon such third party
terms as to royalty no more favorable than the royalty terms imposed upon
DEKALB under this Agreement.
4.03 REPORTS: Within sixty (60) days after the end of
each Fiscal Year, DEKALB shall provide MONSANTO with a written report of the
Net Units of Licensed DEKALB Corn Products sold by DEKALB and its Affiliates
and
9
10
International Associates and sublicensees during such Fiscal Year and the
Grower Agreement Revenue received on licenses of Licensed DEKALB Corn Products
in the Licensed Field in the Territory under the Licensed MONSANTO Patent
Rights or DEKALB Patent Rights. The report shall contain the determination of
payments due MONSANTO based on such Grower Agreement Revenue or Net Units, as
may be the case.
4.04 PAYMENTS:
(a) Concurrently with the submission of reports pursuant
to Subsection 4.03, DEKALB shall make the payments then due. Payments shall be
in United States dollars. Payments due on sales for Licensed DEKALB Corn
Products outside the United States shall first be calculated in the foreign
currency and then converted to 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 period for which payments
are due. Payments shall be without set off and free and clear of any taxes,
duties, fees or charges other than withholding taxes, if any.
(b) Each payment to MONSANTO hereunder shall be sent to:
(i) MONSANTO's account by wire transfer:
[***]
with a written notice of such wire transfer, or
(ii) to another account in the United States which
MONSANTO may subsequently designate from time to time by notice to DEKALB.
4.05 RECORDS RETENTION:
(a) DEKALB agrees to keep, and shall cause its
Affiliates, International Associates and sublicensees to keep, records of the
sales of all Licensed DEKALB Corn Products in sufficient detail to permit
MONSANTO to confirm the accuracy of DEKALB's payment calculations. At
MONSANTO's request, DEKALB shall permit an independent accountant appointed by
MONSANTO and reasonably acceptable to DEKALB to examine, not more often than
once during any Fiscal Year and under appropriate confidentiality provisions,
upon reasonable notice of at least ten (10) days and at reasonable times and in
a manner that does not interfere unreasonably with DEKALB's business, such
records solely to the extent necessary to verify DEKALB's calculations. Such
records shall be kept and examination thereof shall be limited to a period of
time no more than three (3) Fiscal Years immediately preceding the request for
examination.
10
11
(b) The audit of DEKALB's record shall be at MONSANTO's
expense, provided that, if a net aggregate discrepancy of more than ten percent
(10%) is found in favor of DEKALB, then DEKALB shall be obligated to re-imburse
MONSANTO for the cost of the audit.
4.06 LATE PAYMENT: Notwithstanding any other remedy
available to MONSANTO under the provisions of this Agreement, if any sum of
money owed to MONSANTO hereunder is not paid when due, the unpaid amount shall
bear interest compounded quarterly, at an annual rate of one (1) percentage
point above the prime rate quoted by Morgan Guaranty Trust Company of New York
on the day payment was due, until paid.
4.07 [***] OF DEKALB GROWER AGREEMENT FEE: MONSANTO
shall have the option, to the extent it feels that the Grower Agreement Fee
[***] Licensed DEKALB Corn Products to the grower, of requesting a formal
discussion with DEKALB in accordance with [***]. If the parties
fail to reach agreement after such discussion, MONSANTO shall have the [***].
4.08 EFFECT OF TERMINATION OF THE INVESTMENT AGREEMENT:
(a) Upon termination of the Investment Agreement between
MONSANTO and DEKALB of even date hereof before the termination of the
Collaboration Agreement and License between MONSANTO and DEKALB of even date
hereof, because of (1) the issuance by any governmental authority of any order
or decree requiring MONSANTO to terminate the Investment Agreement, which order
or decree resulted from MONSANTO's voluntary action, or (2) the termination of
the Investment Agreement by MONSANTO other than for Cause, as defined in the
Investment Agreement in Subsection 9.1.6, then (i) Subsection 4.01 shall be
modified so that the term [***] shall replace the term
[***], and the term [***] shall replace the term [***] and (ii)
Subsection 4.09 shall be amended to provide that DEKALB shall receive [***] of
the royalties and MONSANTO shall receive [***] of the royalties paid, if any.
(b) Upon termination of the Investment Agreement between
MONSANTO and DEKALB of even date hereof before the termination of the
Collaboration Agreement and License between DEKALB and MONSANTO of even date
hereof because of the issuance by any governmental authority of any order or
decree requiring DEKALB to terminate the Investment Agreement, which order or
11
12
decree resulted from DEKALB's voluntary action, then Subsection 4.01 shall be
modified so that the term [***]shall replace the term
[***] and the term [***] shall replace the term [***] and (ii)
Subsection 4.09 shall be amended to provide that MONSANTO shall receive
[***] of the royalties and DEKALB shall receive [***] of
the royalties paid, if any.
4.09 [***] and on a country by country basis, in the event
DEKALB grants licenses to any third parties for use within the Licensed Field
[***]
4.10 FIRST COMMERCIAL SALE IN A COUNTRY:
(a) DEKALB shall promptly advise MONSANTO in writing of
the first commercial sales of Licensed DEKALB Corn Products in each country of
the Territory.
(b) At the time such first commercial sale is reported
pursuant to this Subsection 4.10, DEKALB shall briefly describe the
relationship between DEKALB and the entity making the first commercial sale.
SECTION 5-REGULATORY APPROVAL AND PRODUCT REGISTRATION
5.01 REGULATORY APPROVALS: DEKALB shall have sole
responsibility for seeking any necessary and/or appropriate regulatory
approvals and/or product registrations for Licensed DEKALB Corn Products. The
costs of securing such approvals and/or registrations shall be borne solely by
DEKALB.
12
13
5.02 REQUEST FOR INFORMATION BY DEKALB: Subject to the
provisions of Subsection 5.01, MONSANTO shall, at the reasonable request of
DEKALB, provide assistance to DEKALB in seeking such regulatory approvals
and/or product registrations, including data, studies and any applicable
regulatory filings which MONSANTO may have in its possession; provided,
however, that MONSANTO shall not be obligated to conduct any new experiments or
other work with respect to any such request by DEKALB.
SECTION 6-PATENT PROCUREMENT AND ENFORCEMENT
6.01 PATENT PROCUREMENT: MONSANTO shall have the
exclusive right to apply for, and seek issuance of, maintain or abandon any or
all of the Licensed MONSANTO Patent Rights.
6.02 PATENT ENFORCEMENT:
(a) DEKALB and MONSANTO shall each give prompt notice to
the other of any infringement of the Licensed MONSANTO Patent Rights or DEKALB
Patent Rights within the Licensed Field which may come to its attention.
(b) MONSANTO shall have the exclusive right (but not the
obligation) to institute and conduct legal action against third-party
infringers of the Licensed MONSANTO Patent Rights, and to enter into such
settlement agreements as may be deemed appropriate by MONSANTO. MONSANTO shall
receive the full benefits of any action it takes pursuant to this Subsection
6.02; provided however, that once any attorney's fees and other reasonable
costs incurred in conducting such legal action have been deducted from any
recovery obtained from enforcement of Licensed MONSANTO Patent Rights which
arise, MONSANTO shall pay to DEKALB its pro rata portion of such recovery,
calculated in accordance with the terms of this Agreement as they apply to
amounts received pursuant to the applicable Licensed MONSANTO Patent Rights.
(c) If the infringing activities of the third party
result in a material adverse effect on the business of DEKALB or any of its
Affiliates, International Associates and sublicensees and at the end of One
Hundred and Eighty (180) days from the receipt of notice by DEKALB of such
infringement, the third party is both unlicensed under the Licensed MONSANTO
Patent Rights and is engaging in activities which are an infringement of the
Licensed MONSANTO Patent Rights, and MONSANTO has not brought a suit, action or
other proceeding for infringement against such third party, then DEKALB and all
of its Affiliates and International Associates and sublicensees shall be
excused from making the payments otherwise due hereunder with respect to
revenues derived from sales of Licensed DEKALB Corn Products in the country
area where the competitive infringing activity occurs. Such excuse from
payment shall arise only as to sales of the affected Licensed DEKALB
13
14
Corn Products in the country area in which the infringing products are
sold and shall continue only for so long as the infringing products continue to
be infringing and to so compete with such Licensed DEKALB Corn Products,
unchallenged by any suit, action or other proceeding for infringement brought
by MONSANTO. If the infringing activities of more than one third party result
in such a material adverse effect, then MONSANTO will fulfill its obligation
under this Subsection through litigation with only one such third party at a
time. Notwithstanding any provisions in this Subsection 6.02(c), if the
infringing third party's product also infringes the DEKALB Patent Rights and
DEKALB has not brought suit, action or other proceeding against the subject
third party, then MONSANTO shall not be obligated to bring any infringement
suit, action or other proceeding against the subject third party.
(d) DEKALB shall not have the right (by operation of law
or otherwise) to enforce any Licensed MONSANTO Patent Right licensed hereunder
against any alleged infringer.
SECTION 7-WARRANTIES AND LIABILITIES
7.01 REPRESENTATIONS AND WARRANTIES:
(a) MONSANTO represents and warrants that:
(i) it is the owner or licensee of the Licensed
MONSANTO Patent Rights to the extent required for the
grant of rights contained herein;
(ii) Appendix A-M lists the MONSANTO-owned patent
applications and patents known to or believed by
MONSANTO to be necessary to make, have made, use, or
sell Licensed DEKALB Corn Products and that, to the
extent any patent necessary to make, have made, use,
or sell the Licensed DEKALB Corn Products issues to
or is controlled by MONSANTO during the term of this
Agreement that is not listed in Appendix A-M, DEKALB
shall be entitled to continue to make, have made,
use, or sell the Licensed DEKALB Corn Products
without paying additional royalty;
(iii) it has not previously granted, and will not
grant to any third party during the term of this
Agreement, any rights and licenses under the Licensed
MONSANTO Patent Rights that are in conflict with the
rights granted to DEKALB herein; and
(iv) it has full power, right and authority to
enter into and carry out its obligations under
this Agreement.
(b) DEKALB represents and warrants that it has full
power, right and authority to enter into and carry out its obligations under
this Agreement.
14
15
7.02 NO OTHER WARRANTIES: EXCEPT FOR THE EXPRESS
WARRANTIES IN SUBSECTION 7.01, MONSANTO MAKES NO WARRANTIES REGARDING THE
LICENSED MONSANTO PATENT RIGHTS (INCLUDING, WITHOUT LIMITATION, THE VALIDITY OR
SCOPE OF THE LICENSED MONSANTO PATENT RIGHTS) OR THE LICENSED DEKALB CORN
PRODUCTS (INCLUDING, WITHOUT LIMITATION, THE NON-INFRINGEMENT OF THE LICENSED
DEKALB CORN PRODUCTS ON THIRD PARTY PATENT RIGHTS) OR OTHERWISE, EXPRESS OR
IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW.
7.03 INDEMNIFICATION: EXCEPT TO THE EXTENT CAUSED BY
MONSANTO'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, DEKALB SHALL DEFEND AND
INDEMNIFY MONSANTO 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 OF ANY LICENSED DEKALB CORN PRODUCT BY
DEKALB OR ANY DEKALB AFFILIATE; PROVIDED, HOWEVER, THAT (I) DEKALB SHALL HAVE
SOLE CONTROL OF SUCH DEFENSE, AND (II) MONSANTO SHALL PROVIDE NOTICE PROMPTLY
TO DEKALB OF ANY ACTUAL OR THREATENED CLAIM OF WHICH MONSANTO BECOMES AWARE.
7.04 LIMITED LIABILITY: EXCEPT TO THE EXTENT PROVIDED FOR
IN SUBSECTION 7.03 ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
LOSS OF 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.
SECTION 8-TERM AND TERMINATION
8.01 TERM:
(a) The term of this Agreement shall begin upon the
closing of the Investment Agreement between MONSANTO and DEKALB of even date
(the "Effective Date"), and shall end upon expiration, revocation, abandonment
or invalidation of the last-to-expire patent within the Licensed MONSANTO
Patent
15
16
Rights or DEKALB Patent Rights, unless terminated sooner in accordance with
this Section 8. Upon expiration, revocation, abandonment or invalidation of
the last-to-expire U.S. patent within the Licensed MONSANTO Patent Rights or
DEKALB Patent Rights, DEKALB and any of DEKALB's Affiliates, International
Associates and sublicensees shall have a paid up license in all countries of
the Territory except those countries where patents included within the Licensed
MONSANTO Patent Rights or DEKALB Patent Rights shall then still be in effect.
(b) In those countries of the Territory where Licensed
MONSANTO Patent Rights extend beyond the term of the Licensed MONSANTO Patent
Rights in the United States, DEKALB and all of their Affiliates, International
Associates and sublicensees shall have a paid-up license, on a country by
country basis, upon expiration, revocation, abandonment or invalidation of such
Licensed MONSANTO Patent Rights in the respective ex.-U.S. country.
8.02 TERMINATION OF AGREEMENT FOR BREACH:
(a) Either party may terminate this Agreement upon at
least sixty (60) days written notice to the other party should the other party
commit a material breach of its obligations or be in material default under any
of the provisions of this Agreement, provided that the other party has failed
to cure the breach or default (or, if such breach or default cannot be cured
within the sixty (60) day period, the other party has not taken reasonable
steps to cure the breach or default) within the same sixty (60) day notice
period.
(b) Notwithstanding a party's right to terminate this
Agreement as a result of a non-cured material breach by the other party, the
non-breaching party shall not be prevented from seeking any other remedy which
may be available to it in equity, including specific performance on the part of
the party in breach.
8.03 INSOLVENCY: Either party may terminate this
Agreement if, at any time:
(a) the other party makes an assignment for the benefit
of creditors or admits in writing its inability generally to pay or is
generally not paying its debts as such debts become due;
(b) any decree or order for relief is entered against the
other party under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law;
(c) the other party petitions for or applies to any
tribunal for, or consents to, the appointment of, or taking possession by, a
trustee, receiver, custodian, liquidator or similar official, of such other
party or any substantial part of its assets, or commences a voluntary case
under the bankruptcy law of any jurisdiction;
(d) any such petition or application is filed, or any
such proceedings are commenced, against the other party and such other party by
any act indicates its
16
17
approval thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order for relief, order, judgment or decree remains
unstayed and in effect for more than sixty (60) days; or
(e) any order, judgment or decree is entered in any
proceedings against the other party decreeing the dissolution of such other
party and such order, judgment or decree remains unstayed and in effect for
more than sixty (60) days.
8.04 EFFECTS OF TERMINATION/SURVIVAL:
(a) Expiration or termination of this Agreement
shall not relieve the parties of any obligation accruing prior to or upon such
expiration or termination. Accordingly, Subsections 7.03, 7.04 and Section 9
shall survive expiration or termination of this Agreement and DEKALB shall not
be relieved of any payment obligation that may have accrued prior to or
subsequent to such expiration or termination.
(b) Upon an early termination of this Agreement
under Subsection 8.02 as a result of DEKALB's material breach or material
default, DEKALB and its Affiliates and International Associates and
sublicensees shall be entitled to sell remaining inventories of any Licensed
DEKALB Corn Products covered under Licensed MONSANTO Patent Rights which are
already in its or their possession or then under production, Such sales shall
be in accordance with this Agreement, and DEKALB shall continue to be obligated
to make all applicable payments hereunder. Thereafter any remaining Licensed
DEKALB Corn Products which are not intended to be sold, and all materials and
information relating to or provided by MONSANTO, if any, shall be destroyed or
shall be returned, respectively, and the destruction shall be certified to
MONSANTO by a representative of DEKALB.
SECTION 9-CONFIDENTIALITY
9.01 CONFIDENTIAL INFORMATION: The parties have
previously disclosed, and it is anticipated that it will be necessary, in
connection with their obligations under this Agreement, for DEKALB and MONSANTO
to disclose to each other Confidential Information. The Confidential
Information shall include, but not be limited to, information disclosed in
writing or other tangible form, including samples of materials.
9.02 CONFIDENTIALITY AND LIMITED USE:
(a) With respect to all Confidential Information, both
DEKALB and MONSANTO agree as follows, it being understood that "recipient"
indicates the party
17
18
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 with the same care and diligence as the recipient maintains its own
Confidential Information. Confidential Information shall not be disclosed to
third parties by the recipient and, further, shall not be used except for
purposes contemplated in this Agreement. All confidentiality and limited use
obligations with respect to the Confidential Information shall terminate ten
(10) years after the termination date of this Agreement.
(b) 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
recipient's attorneys, accountants, banks and financial sources and its
advisors; or (iii) in confidence, in connection with the sale of substantially
all the business assets to which this Agreement relates, 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.
(c) Notwithstanding any provision to the contrary, a
party seeking to make a disclosure to an entity not bound to confidentiality on
terms consistent with those herein shall first provide to the other party a
copy of the material proposed to be disclosed and shall obtain the consent of
the other party before making the disclosure, which consent shall not be
unreasonably withheld.
9.03 EXCEPTIONS: The obligations of confidentiality and
limited use shall not apply to any of the Confidential Information which:
(a) is publicly available by publication or other documented
means or later becomes likewise publicly available through no act or fault of
recipient; or
(b) is already known to recipient before receipt from the
disclosing party, as demonstrated by recipient's written records; or
(c) is made known to recipient by a third party who did not
obtain it directly or indirectly from the disclosing party and who does not
obligate recipient to hold it in confidence; or
(d) is independently developed by the recipient as
evidenced by credible written research records of recipient's employees or
agents who did not have access to the disclosing party's Confidential
Information.
Specific information should not be deemed to be within any of these
exclusions merely because it is embraced by more general information falling
within these exclusions.
18
19
9.04 DISCLOSURES TO PERSONNEL: Recipient agrees to advise
those of its officers, directors, employees, associates, agents, consultants,
Affiliates and International Associates 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.
9.05 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. 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.
9.06 CONFIDENTIAL STATUS OF AGREEMENT: The terms of this
Agreement shall be deemed to be Confidential Information and shall be dealt
with according to the confidentiality requirements of this Section 9. Neither
party will make public disclosures concerning specific terms of this Agreement
without obtaining the prior written consent of the other party, which consent
shall not be unreasonably withheld and except as may be necessary, in the
opinion of counsel of the party making the disclosure, to comply with the
requirements of any stock exchange or over-the-counter market on which the
shares of such party may be listed or of any law, governmental regulation or
order. If a party determines that such a disclosure is necessary, it shall
promptly notify the other party so that the other party can obtain confidential
treatment of its Confidential Information.
SECTION 10-MISCELLANEOUS
10.01 NOTICES: Any notice or other communication required
or permitted to be given by either party under this Agreement shall be given in
writing and shall be effective when delivered, if delivered by hand or by
electronic facsimile or five days after mailing if mailed by registered or
certified mail, postage prepaid and return receipt requested, addressed to each
party at the following addresses or such other address as may be designated by
notice pursuant to this Subsection 10.01:
19
20
If to MONSANTO: Monsanto Company
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
Attention: Robert T. Fraley, Ph.D.
President, Ceregen
Facsimile: (314) 694-7771
with copies to: Monsanto Company
700 Chesterfield Pkwy North
St. Louis, Missouri 63198
Attention: Patent Counsel, Ceregen
Monsanto Company
Mail Code BB4F
Facsimile: (314) 537-6047
Monsanto Company
700 Chesterfield Pkwy North
St. Louis, Missouri 63198
Attention: William M. Ziegler
Business Dir., Corn and
Soybeans
Mail Code BB4D
Facsimile: (314) 537-6047
If to DEKALB: DEKALB Genetics Corporation
3100 Sycamore Road
DeKalb, Illinois 60115
Attention: Richard O. Ryan
President and Chief Operating Officer
Facsimile: (815) 758-3711
20
21
with copies to: DEKALB Genetics Corporation
3100 Sycamore Road
DeKalb, Illinois 60115
Attention: John H. Witmer, Jr.
Senior Vice President and
General Counsel
Facsimile: (815) 758-6953
DEKALB Genetics Corporation
62 Maritime Dr.
Mystic, Conn. 06355
Attention: Catherine J. Mackey, Ph.D.
Vice President, Research
Facsimile: (860) 572-5241
10.02 PROVISIONS CONTRARY TO LAW: In performing this Agreement, the
parties shall comply with all applicable laws and regulations. Nothing in this
Agreement shall be construed so as to require the violation of any law, and
wherever there is any conflict between any provision of this Agreement and any
law the law shall prevail, but in such event the affected provision of this
Agreement shall be affected only to the extent necessary to bring it within the
applicable law.
10.03 FORCE MAJEURE:
(a) 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).
(b) The party invoking this Subsection 10.03 shall give
the other party written notice and full particulars of such force majeure
event.
(c) Both MONSANTO and DEKALB shall use reasonable efforts
to mitigate the effects of any force majeure on their respective part.
10.04 RELATIONSHIP OF THE PARTIES: Notwithstanding any provision
hereof, for all purposes of this Agreement each party shall be and act as an
independent
21
22
contractor and not as partner, joint venturer or agent of the other and shall
not bind nor attempt to bind the other to any contract, without the prior
written consent of the party to be bound.
10.05 USE OF NAMES: Unless otherwise required by the terms of this
Agreement, neither party shall use the name of the other in any promotional
materials or advertising without the prior written consent of the other.
10.06 ASSIGNABILITY AND CHANGE IN CONTROL:
(a) The rights acquired herein by DEKALB are not
assignable or transferable in whole or part (by operation of law or otherwise)
to any third party without the prior written consent of MONSANTO, except as
provided in Subsection 10.06 (c).
(b) Any transfer, assignment or delegation made or
attempted in violation of this Subsection 10.06 shall be void and of no effect.
(c) Upon any change in control of DEKALB (by acquisition,
merger, consolidation or otherwise) resulting in, direct or indirect, ownership
of the voting stock of DEKALB at a level of greater than fifty percent (50%) by
a single entity or by two or more entities acting together or, control as a
consequence of a shareholder agreement, joint venture agreement or other
agreement, DEKALB may assign its rights hereunder to any such successor(s) in
interest; Upon any such change in control, the payments under Subsection 4.01
shall [***] of the Grower Agreement Revenue, and
(ii) [***] and if Subsection 4.09 is applicable, MONSANTO would
receive [***] of the royalty and other consideration.
(d) Upon any change in control of MONSANTO (by
acquisition, merger, consolidation or otherwise) resulting in, direct or
indirect, ownership of the voting stock of MONSANTO at a level of greater than
fifty percent (50%) by a single entity or by two or more entities acting
together or, control as a consequence of a shareholder agreement, joint venture
agreement or other agreement, MONSANTO may assign its rights hereunder to any
such successor(s) in interest; Upon any such change in control, payments under
Subsection 4.01 shall [***] of the Grower
Agreement Revenue, and (ii) [***] and if Subsection 4.09 is
applicable, MONSANTO would receive [***] of the royalty and other
consideration.
(e) This Subsection shall not apply to any such change in
control in which MONSANTO becomes the controlling party.
10.07 ENTIRE AGREEMENT; AMENDMENTS; WAIVER: This Agreement
constitutes the full understanding of the parties, a complete allocation of
risks between them and a complete and exclusive statement of the terms and
conditions of their
22
23
agreement relating to the subject matter hereof and supersedes any and all
prior agreements, whether written or oral, that may exist between the parties
with respect thereto. Except as otherwise specifically provided in this
Agreement, no conditions, usage of trade, course of dealing or performance,
understanding or agreement purporting to modify, vary, explain or supplement
the terms or conditions of this Agreement shall be binding unless hereafter
made in writing and signed by the party to be bound and no modification shall
be effected by the acknowledgment or acceptance of documents containing terms
or conditions at variance with or in addition to those set forth in this
Agreement. No waiver by any party with respect to any breach or default or of
any right or remedy and no course of dealing or performance, shall be deemed to
constitute a continuing waiver of any other breach or default or of any right
or remedy, unless such waiver be expressed in writing signed by the party to be
bound. Failure of a party to exercise any right shall not be deemed a waiver
of such right or rights in the future.
10.08 CHOICE OF LAW: IT IS THE INTENTION OF THE PARTIES HERETO THAT
ALL QUESTIONS WITH RESPECT TO THE CONSTRUCTION OF THIS AGREEMENT AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO BUSINESS ARRANGEMENTS ENTERED
INTO AND PERFORMED ENTIRELY WITHIN THE STATE OF DELAWARE.
10.09 EXPORT CONTROL: Notwithstanding any other provisions of this
Agreement, DEKALB agrees to make no disclosure or use of any Confidential
Information of MONSANTO furnished or made known to DEKALB 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, DEKALB agrees not to
export, directly or indirectly, either
(a) the technical data furnished or made known to DEKALB
pursuant to this Agreement; or
(b) the "direct product" thereof; or
(c) 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.
23
24
10.10 MEET AND CONFER: It is the intention of the parties that in
the event any dispute arises under this Agreement, the parties shall first meet
and confer with one another to attempt to negotiate a resolution of such
dispute without recourse to litigation.
10.11 ARBITRATION: Disputes arising out of Subsections 3.01(c),
3.04, 4.07 or 4.09 of this Agreement will be finally settled by arbitration
conducted in accordance with the arbitration rules and guidelines outlined in
attached Appendix C. The arbitration will be held in Chicago, Illinois as
promptly as possible at such time as the arbitrator(s) may determine. The
decision of the arbitrator(s) will be final and binding upon the parties
hereto.
10.12 REMEDIES: Except as otherwise expressly stated in this
Agreement, the rights and remedies of a party set forth herein with respect to
failure of the other to comply with the terms of this Agreement (including,
without limitation, rights of full termination of this Agreement) are not
exclusive, the exercise thereof shall not constitute an election of remedies
and the aggrieved party shall in all events be entitled to seek whatever
additional remedies may be available in law or in equity.
10.13 FEES: Except as otherwise provided herein, each party shall
bear its own legal fees incurred in connection with the transactions
contemplated hereby, provided, however, that if any party to this Agreement
seeks to enforce its rights under this Agreement by legal proceedings or
otherwise, the non-prevailing party shall pay all costs and expenses incurred
by the prevailing party, including, without limitation, all reasonable
attorneys' fees.
10.14 HEADINGS: Headings herein are for convenience of reference
only and shall in no way affect interpretation of this Agreement.
10.15 COUNTERPARTS: This Agreement may be executed in any number of
counterparts with the same effect as if all parties had signed the same
document. All such counterparts shall be deemed an original, shall be construed
together and shall constitute one and the same instrument.
24
25
10.16 APPENDICES: The appended Appendices and Exhibits form an
integral part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
MONSANTO COMPANY DEKALB GENETICS
CORPORATION
By: Robert T. Fraley By: Bruce P. Bickner
--------------------------- -------------------------
Robert T. Fraley, Ph.D Bruce P. Bickner
Title: President, Ceregen Title: Chairman and CEO
25