EXHIBIT 10.2
(REDACTED)
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
RESEARCH AND MANAGEMENT CONTRACT
This Research and Management Contract (the "Agreement") is entered into
as of July 1, 1999, by and between Agritope, Inc., a Delaware corporation
("Agritope"), and Agrinomics LLC, a limited liability company organized and
existing under the laws of Delaware (the "Agrinomics").
RECITALS
A. Agrinomics has been formed pursuant to the certain Limited
Liability Company Agreement dated as of July 1, 1999 (the "LLC Agreement"),
among Agritope, ACTTAG Inc., a wholly-owned subsidiary of Agritope ("ACTTAG"),
and ▇▇▇▇▇-▇▇▇▇▇▇▇ Ag Company Inc. ("RP Ag Co."), to conduct and coordinate a
plant functional genomics program (the "Research Program") involving the
activation tagging of large numbers of Arabidopsis plants in an attempt to
create seeds and plants in which one or more genes are overexpressed; screening
to identify phenotypic traits of interest in such plants; the isolation,
sequencing and gene rescue of the associated genotypes; confirmation of
phenotypes using such genes; and related activities, all as is more fully
described in Agrinomics' Operating Plan as adopted and amended from time to time
by the Members of Agrinomics (the "Operating Plan"). Agrinomics expects to
exploit the results of the Research Program commercially as is more fully
described in the Operating Plan. Terms used herein and defined in the LLC
Agreement shall have the meanings specified in the LLC Agreement unless
otherwise stated herein.
B. Agritope has the ability, personnel and facilities required to
provide various management and administrative services required by Agrinomics in
connection with the operation of Agrinomics' business. Agritope also has
extensive experience, facilities, technologies, and personnel that the parties
believe will be useful in the conduct of the Research Program. The agreements
forming Agrinomics, and the Operating Plan, contemplate that Agritope and its
Affiliates will have certain marketing and commercialization rights in defined
fields of application for certain discoveries made in the Research Program.
C. Each of Agritope and Agrinomics desires that Agritope render
(or cause to be rendered by third parties) certain research and administrative
services to Agrinomics, at the request of Agrinomics, in accordance with the
Operating Plan and this Agreement.
AGREEMENT
1. DEFINITIONS
1.1 "ADMINISTRATIVE SERVICES" means all general administrative and
management services conducted by Agritope pursuant to the Operating Plan and
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consistent with any of Agrinomics' specific instruction to Agritope including,
but not limited to, the following:
(a) coordinating, conducting, and otherwise assisting with: (i)
the identification of third parties with which Agrinomics may
from time to time enter into research contracts, subscription
contracts, license agreements, testing or certification
agreements, marketing or distribution agreements, or other
agreements as contemplated in the Operating Plan (the
"Alliance Parties"), and (ii) the negotiation (subject to
approval by the Board of Managers of Agrinomics) and
administration of agreements, and operations under agreements,
with Alliance Parties;
(b) accounting services including the establishment and
maintenance of appropriate accounting books and records,
preparation of appropriate financial statements and schedules,
and maintenance of Agrinomics' books of account and records;
(c) cash management services, including monitoring and collecting
accounts receivable, and monitoring and paying Agrinomics
payables from and out of cash and collections;
(d) electronic data processing services, including without
limitation, payroll, accounting services, and internal audit,
planning and financial services;
(e) assistance in obtaining appropriate fidelity, product
liability, public and personal liability, property damage,
workers' compensation and other applicable insurance;
(f) assistance in obtaining professional services such as legal
counsel, auditors, appraisers, experts and otherwise, and
coordinating the provision thereof for the benefit of
Agrinomics; and
(g) such other services and assistance as Agritope considers to be
in the best interests of Agrinomics.
1.2 "AFFILIATE" means a person or entity that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with Agritope. For purposes of this definition, the
term "control" means the possession, directly or indirectly, of 50% or more of
the share capital or voting rights. For the purposes of this Agreement only,
Agritope and Agrinomics will not be considered Affiliates of each other.
1.3 "AGRINOMICS PROGRAM PATENTS" means, other than the Agritope
Program Patents, Agrinomics' rights and interests, whether owned or licensed, in
and to the exploitation of United States and foreign patents and patent
applications,
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if any, including without limitation those rights and interests of Agrinomics
developed by it or acquired by it under any or all of the current or future
Research Contracts defined in the LLC Agreement, in each case covering or
disclosing any aspect or part of the Agrinomics Program Technology. As used in
this Agreement, "patent(s)" includes without limitation utility patents, whether
for articles, compounds, plants, plant materials or products, processes,
methods, or other patentable subject matter; plant variety protection
certificates and rights under the Plant Variety Protection Act of 1970, as
amended; plant patents under the Plant Patent Act of 1930, as amended; design
patents; utility model rights; and all similar legally-protectible rights or
properties in any nation or jurisdiction.
1.4 "AGRINOMICS PROGRAM TECHNOLOGY" means, other than the Agritope
Program Technology, any and all deliverables, services, intellectual properties,
rights, and contributions from any person or entity under the Research Program,
and all related information, technical or otherwise, and protein sequences, gene
constructs, data, techniques, manuals, instructions, samples, germplasm,
inventions, development processes, assays, improvements, and specifications
developed directly by Agrinomics in the course of the Research Program or to be
provided to it under any or all of the current or future Research Contracts
defined in the LLC Agreement (including without limitation the Existing Agritope
Collection as defined in the LLC Agreement), and all intellectual property
rights therein and thereto, to the extent owned by Agrinomics or to be licensed
or to be owned by Agrinomics under such Research Contracts.
1.5 "AGRITOPE PROGRAM PATENTS" means Agritope's and Agritope's
Affiliates' rights and interests in United States and foreign patents and patent
applications, if any, arising from work or activities conducted as part of the
Research Services or otherwise covering any invention, discovery or improvement
made or acquired by or for Agritope or its Affiliates (whether solely or jointly
with others) in the course of the Research Services or in connection with the
conduct of the Research Program, including without limitation those rights and
interests of Agritope and its Affiliates to be transferred hereunder to
Agrinomics.
1.6 "AGRITOPE PROGRAM TECHNOLOGY" means any and all deliverables,
services, intellectual properties, rights and contributions provided or agreed
to be provided by Agritope under the Research Program and all related
information, technical or otherwise, including, but not limited to that
comprised in the Agritope Collection (to the extent to be developed hereunder
under the Research Services as defined below and not already contributed by
Agritope to the capital of Agrinomics under the LLC Agreement), formulae,
protein sequences, gene constructs, data, techniques, manuals, instructions,
samples, germplasm, inventions, development processes, assays, improvements, and
specifications to be developed by Agritope directly in the course of the
Research Program, and all intellectual property rights therein and thereto.
1.7 "BACKGROUND PATENTS" means, other than the Agritope Program
Patents, Agritope's and its Affiliates' rights under United States and foreign
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patents and patent applications, if any, in each case covering or disclosing any
of the Background Technology or any inventions that are otherwise related to or
useful for the development or exploitation of the Collections, the Program
Technology, or any Program Product, and all rights therein and thereto, to the
extent the same are owned by Agritope or its Affiliates or available for its or
their use or sublicensing without fee, royalty or encumbrance, as listed in
Schedule 2 in accordance with Section 3.2 below.
1.8 "BACKGROUND TECHNOLOGY" means, other than the Agritope Program
Technology, all information, technical or otherwise, including, but not limited
to, that comprised in formulae, protein sequences, gene constructs, data,
techniques, manuals, instructions, samples, germplasm, inventions, development
processes, assays, improvements, and specifications, delivered or disclosed by
Agritope or its Affiliates to Agrinomics prior to the date of this Agreement
with regard to the Research Program or disclosed by Agritope or its Affiliates
to Agrinomics hereafter during the period of the Research Program and in the
course of the Research Services, that is or may be related to or useful in the
Research Program or for the development or commercial exploitation of any
Program Technology or any Program Product, and all intellectual property rights
therein and thereto, to the extent the same are owned by Agritope or its
Affiliates or available for its or their use or sublicensing without fee,
royalty or encumbrance, as listed in Schedule 2 in accordance with Section 3.2
below.
1.9 "COSTS" means any direct and indirect cost and expense
incurred by Agritope in performing the Services hereunder, which are
attributable to its activities under this Agreement, including, but not limited
to:
(a) that part of the payroll costs (including any overtime, extra
compensation, payroll taxes and the cost of maintaining
employees' benefit plans) of Agritope's employees which is
properly and reasonably attributable to the performance of the
Services;
(b) that part of Agritope's rent and other charges associated with
offices, greenhouses, and other facilities utilized by
Agritope's personnel which is properly and reasonably
attributable to the performance of the Services;
(c) materials, supplies, usage of equipment and vehicles, and
similar items, to the extent the same will be devoted to the
Research Program, as is consistent with the Operating Plan;
(d) all filing, renewal, and other fees associated with any
permits, regulatory filings or other government authorizations
to the extent required for the conduct by Agritope of the
Services, and all costs of preparation of applications and
supporting studies related thereto; and
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(e) that part of Agritope's overhead and general office expenses
which is properly and reasonably attributable to the
performance of the Services;
it being understood and agreed that Agritope and Agrinomics will from
time to time as appropriate agree in writing upon the principles to be
used in the allocation of costs of Agritope under this Agreement.
1.10 "FEE" shall have the meaning given it in Section 6.1 hereof.
1.11 [ * ]
1.12 "OTHER SERVICES" means such other services as the parties may
mutually agree upon from time to time.
1.13 "PROGRAM PATENTS" means the Agrinomics Program Patents and the
Agritope Program Patents.
1.14 "PROGRAM PRODUCTS" means products, processes and technologies
the relevant manufacture, use, sale, offer for sale, development or
import/export of which if done by third parties would in the applicable
jurisdiction infringe upon a claim of a Program Patent, or the discovery or
isolation of which was made from or using the Agritope Collection, as defined
below in Section 1.17(f), or the conception, discovery, isolation, or
development of which was enabled in a material way by the use of any Program
Technology.
1.15 "PROGRAM TECHNOLOGY" means the Agrinomics Program Technology
and the Agritope Program Technology.
1.16 [ * ]
1.17 "RESEARCH SERVICES" means the research projects, services, and
licenses described in more detail in the Operating Plan as services to be
provided by Agritope to Agrinomics. The parties anticipate that the Operating
Plan will be amended and supplemented by Agrinomics from time to time, but it is
agreed that no change to the Research Services called for from Agritope under
this Agreement shall be made without Agritope's prior consent, which will not be
unreasonably withheld or delayed. Subject to the preceding sentence, the
Research Services will be performed pursuant to the Operating Plan and
Agrinomics' specific instructions, and will include, but will not be limited to,
the following:
(a) on-going consultation as to the formulation, amendment and
supplementation of the Operating Plan, including without
limitation, providing certain services from certain Agritope
employees for service on Agrinomics' Scientific Advisory
Committee and making recommendations to such Scientific
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
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Advisory Committee and to Agrinomics' Board of Managers with
respect thereto;
(b) coordination and management of Agrinomics' relationships with
The Salk Institute for Biological Sciences ("Salk") to the
extent related to and arising under the Research Program and
that certain Research, License and Option Agreement dated as
of October 23, 1998, by and between Salk and Agritope, as such
contract may be amended (the "Salk ACTTAG Research
Agreement");
(c) coordination and management of Agrinomics' relationships with
the University Court of the University of Edinburgh
("University of Edinburgh") to the extent related to and
arising under that certain Research and Option to License
Agreement dated as of January 21, 1999, by and between the
University of Edinburgh and Agritope, as such contract may be
amended (the "University of Edinburgh ACTTAG Research
Agreement");
(d) on-going consultation as to the formulation, amendment and
supplementation of the Research Plan under the Salk ACTTAG
Research Agreement;
(e) on-going consultation as to the formulation, amendment and
supplementation of the Research Plan under the University of
Edinburgh ACTTAG Research Agreement;
(f) the creation at Agritope's facilities of a collection of
Arabidopsis plants and seeds that have been modified using the
ACTTAG(TM) Gene Discovery technologies (the "Agritope
Collection"), which shall be separate from the other
"Collections" which are defined in each of the Salk ACTTAG
Research Agreement (the "Salk Collection") and the University
of Edinburgh ACTTAG Research Agreement (the "University of
Edinburgh Collection"), including without limitation the
following principal tasks related thereto:
[ * ]
(g) Agritope will, to the extent contemplated in Operating Plan,
perform the following principal tasks with respect to each of
the Salk Collection, the University of Edinburgh Collection,
and the Agritope Collections (referred to collectively as the
"Collections"), other than that which is done by Salk or the
University of Edinburgh as to their respective Collections:
[ * ]
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
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(h) on-going coordination of the Research Services described
herein with other services to be provided to Agrinomics by RP
Ag Co. and the Alliance Parties;
(i) rendering assistance and consultation in relation to
Agrinomics' patent strategies, filings, prosecution and
maintenance activities, in coordination with Agrinomics'
Patent Committee, including without limitation, providing
certain services from certain Agritope employees for service
on Agrinomics' Patent Committee; and
(j) such other research services and assistance as Agritope
considers to be in the best interests of Agrinomics.
1.18 [ * ]
1.19 "SERVICES" means Administrative, Research and Other Services.
1.20 "TERM" means the period of this Agreement as determined under
Article 8 hereof, during which the Services will be performed.
2. AGREEMENT TO PERFORM SERVICES; DUTY OF COOPERATION
Agritope, directly or through one or more of its Affiliates, or through
third parties subject to the prior written consent of Agrinomics, hereby agrees
during the Term to provide, or cause to be provided by third parties, the
Services; provided, however, that Agritope reserves the right to decline to
render or cause to be rendered Services in any case where Agritope, in its
judgment, does not have adequate facilities, personnel or resources to perform
or cause to be performed the Services, or where providing the Services would
violate Agritope policies or relevant law. Agritope will exert commercially
reasonable efforts to obtain any and all permits or regulatory filings or other
government authorizations for the conduct by it of the Services hereunder.
Agrinomics shall assist Agritope in all such efforts and otherwise shall provide
Agritope with sufficient information and assistance as reasonably requested by
Agritope to enable Agritope to provide or cause to be provided the Services.
3. PROJECT TECHNOLOGY AND LICENSES
3.1 RIGHTS IN PROGRAM TECHNOLOGY AND PROGRAM PATENTS
(a) All ownership, copyright, patent, trade secrecy, and other
rights and title in and to all Program Technology and Program
Patents shall be owned solely by Agrinomics. Agritope hereby
transfers and assigns to Agrinomics all of the foregoing,
whether now existing or hereafter coming into existence.
Agritope will assist Agrinomics as requested during and after
the term of this Agreement to further evidence and perfect
Agrinomics' rights in such property, including without
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
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limitation, securing appropriate agreements from its
Affiliates and contractors, executing additional instruments
of conveyance, and assisting Agrinomics with applications for
patents, copyright registrations, or other registrations.
Agrinomics may by written notice to Agritope from time to time
decline to accept any Agritope Program Patents as such
hereunder, either entirely or on a country-by-country basis,
from that time forward, and in that event such declined patent
or application shall not be part of the Agritope Program
Patents, but shall be considered part of the Background
Patents.
(b) Agrinomics hereby grants to Agritope and its Affiliates a
nonexclusive, royalty-free, worldwide license, with no right
to sublicense, to use and to exercise the Program Technology
and the Program Patents for research purposes during and in
support of the Research Program.
(c) Agrinomics hereby grants to Agritope and its Affiliates a
nonexclusive, royalty-free, worldwide license, with no right
to sublicense, to use and to exercise the Agritope Program
Technology (but not any of the Program Patents, unless under a
separate agreement entered pursuant to Section 4 or otherwise)
other than the Agritope Collection itself for internal
research purposes.
(d) The Research Contract between Agrinomics and RP Ag Co.
provides that RP Ag Co. shall grant to Agritope the exclusive
right to enter into one or more exclusive implementation and
worldwide Commercialization Agreements as defined therein with
respect to the exploitation of any Program Technology and/or
Program Patents in [ * ] in one or more of the [ * ].
(e) Agrinomics hereby grants to Agritope and its Affiliates [ * ]
option [ * ] to obtain, pursuant to Section 4 below, a
royalty-bearing, worldwide license under the Program
Technology and the Program Patents, to make, have made, use,
sell, offer for sale, develop, and import/export any Program
Product that is not [ * ] or subject to Section 3.1(d) in any
or all of the [ * ].
(f) [ * ]
3.2 LICENSES TO BACKGROUND TECHNOLOGY AND BACKGROUND PATENTS
(a) Schedule 2 hereto contains a complete list and description of
all Background Patents and Background Technology, as currently
anticipated by Agritope. Agritope shall promptly (and at least
annually) supplement such list and description throughout the
Term by written notices to Agrinomics if and when any
additional Background Patents or Background Technology not
previously so listed and described is used or applied, or is
proposed to be used or applied, by Agritope or its Affiliates,
at their sole discretion, in performing the Research Services
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
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or otherwise in connection with the Research Program. For the
avoidance of doubt, no Background Patents or Background
Technology shall be withdrawn from Schedule 2 without prior
written consent of Agrinomics.
(b) Agritope will retain all ownership, copyright, trade secrecy,
and other rights and title in and to all Background Technology
and Background Patents [ * ], subject only to the express
licenses granted herein.
(c) Agritope hereby grants to Agrinomics a nonexclusive,
royalty-free, worldwide license, with right to sublicense, to
use and to exercise the Background Technology and the
Background Patents [ * ] for research purposes during and in
support of the Research Program.
(d) Agritope hereby grants to Agrinomics a nonexclusive,
royalty-free, worldwide license, with right to sublicense,
under the Background Technology and the Background Patents, to
make, have made, use, sell, offer for sale, develop and
export/import any and all Program Products; provided, however,
that no right or license is granted to Agrinomics to exploit
commercially [ * ].
4. LICENSES AND COMMERCIALIZATION AGREEMENTS IN [ * ]
The specific terms, conditions, royalty rates or formulas, payment
terms, audit rights, and other aspects of the licenses, if any, under Section
3.1(e) above with respect to Program Products in [ * ] shall be determined under
mutual written Commercialization Agreements that shall be entered between
Agritope and Agrinomics prior to the conduct of any marketing or
commercialization activities under any such licenses. The parties acknowledge
and agree that, if and to the extent that it would be in the best interests of
Agrinomics to retain (and to have the right to license to other entities) rights
or licenses described in Section 3.1(e) in particular territories or in
particular products or applications, Agritope and Agrinomics will attempt in
good faith to agree that Agritope will not obtain licenses under Section 3.1(e)
in those territories, products, or applications. If the parties do not reach
agreement within ninety days starting from the first date of notification by
Agritope to Agrinomics (which notification shall occur within the [ * ] option
period stated in Section 3.1(e)) of Agritope's exercise of its option under
Section 3.1(e) with respect to a Program Product for implementation or
commercialization in a particular application in [ * ] (the "Notice Date" with
respect thereto), as to whether and to what extent there will be a license to
Agritope in particular territories, products, or applications for such Program
Product, then the provisions of such an agreement will be determined by binding
arbitration conducted in accordance with Section 10 below. If, in connection
with the negotiation of a Commercialization Agreement (to the extent there will
be a grant of a license to Agritope under Section 3.1(e)), the parties are not
in agreement on all the terms, including without limitation the scope and nature
of any exclusive rights thereunder, royalty rates, or other terms, within [ * ]
starting from the applicable Notice Date, then the provisions of such
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
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Commercialization Agreement will be determined by binding arbitration conducted
in accordance with Section 10 below, which arbitration shall as to any
Commercialization Agreement be guided by and consistent with the terms set forth
below in Section 4 (i) - (vii). The arbitrations referred to in the preceding
two sentences as to a particular Program Product may be conducted as a single
proceeding.
(i) If exclusive marketing rights under the Commercialization
Agreements are desired by Agritope, then Agritope or its
Affiliate or sublicensee would provide a marketing plan to
Agrinomics [ * ]. Based on this information, Agrinomics and
Agritope would negotiate in good faith to determine
geographical regions in which Agritope would have exclusive or
nonexclusive marketing rights with rights to sublicense.
Agrinomics would give Agritope exclusivity in [ * ], and
Agritope will be granted nonexclusive rights in other regions.
Any exclusive marketing rights granted for a particular
geographical region would become nonexclusive in the event
that Agritope and its sublicensees do not achieve and maintain
a substantial market share in such geographical region. The
definition of [ * ] would be determined by such arbitration,
if it is not otherwise mutually agreed to by Agrinomics and
Agritope on a case-by-case basis for each such Program
Product.
(ii) Agritope and its Affiliates shall grant to Agrinomics and its
Affiliates a nonexclusive, worldwide and perpetual license,
with right to sublicense, to make, have made, use, sell, offer
for sale, develop and import/export, in any crop or
application, any and all improvements on any Program Product
and/or Program Technology made by Agritope or its Affiliates
or sublicensees during the term of each such license. Such
license will be royalty-bearing, at a rate to be determined by
mutual agreement of Agritope and Agrinomics. If such mutual
agreement is not reached prior to the first commercial launch
by Agrinomics or its sublicensee of any product pursuant to
such sublicense, then such royalty rate shall be determined by
the arbitration referred to hereinabove, if it is not
otherwise mutually agreed to Agrinomics and Agritope on a
case-by-case basis.
(iii) Agritope and its Affiliates shall not grant any sublicenses
under any such license without the prior written consent of
Agrinomics, which consent shall not be unreasonably withheld
with respect to any such license to the extent the license to
Agritope is exclusive, it being agreed that consent to any
sublicensing of any such license to Agritope that is
nonexclusive may be withheld in Agrinomics' sole discretion.
Any such sublicense must, without limitation, provide that
Agrinomics shall have a royalty-free, nonexclusive, worldwide
and perpetual license, with right to sublicense, to make, have
made, use, sell, offer for sale, and import any or all
improvements made by the sublicensee during the term of such
sublicense.
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
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(iv) Royalties to be paid by Agritope to Agrinomics with respect to
fees or other consideration paid to Agritope or its Affiliates
by any sublicensee under any such license (other than fees or
consideration measured by sales of Program Products made by
the sublicensee and covered by net sales royalties pursuant to
the Commercialization Agreement) in return for the grant of
such sublicense, shall be [ * ].
(v) All royalties shall be paid quarterly, within [ * ] after the
end of the calendar quarter, in US Dollars, to Agrinomics'
account in Portland, Oregon.
(vi) Agritope shall keep, and shall cause its Affiliates and
sublicensees to keep, for at least five years, full and
accurate books and records in sufficient detail so that sums
due Agrinomics hereunder can be properly calculated. Agritope
shall permit, and shall cause its Affiliates and sublicensees
to permit, representatives of Agrinomics to examine its books
and records at reasonable times and intervals for the purpose
of verifying the accuracy of the written statements submitted
by Agritope and its Affiliates and sums paid or payable
hereunder. Such examination shall be made at the expense of
Agrinomics, except that if such examination discloses a
discrepancy of five percent (5%) or more in the amount of
royalties and other payments due to Agrinomics, then Agritope
shall reimburse Agrinomics for the costs of such examination.
(vii) Such licenses shall survive the expiration or termination of
the Term of this Agreement and shall be effective for the
longer of the duration of any applicable licensed patents, or
[ * ] following the date of the Commercialization Agreement
for the applicable Program Product. Following such term, such
licenses shall become fully-paid, worldwide and nonexclusive.
5. ACCOUNTS, BOOKS AND RECORDS
5.1 ACCOUNTS. Agritope shall maintain one or more segregated bank
accounts (the "Accounts") for the benefit of Agrinomics and in Agrinomics' name.
Agritope shall deposit directly into the Accounts any payments to Agrinomics, or
other funds belonging to Agrinomics, it receives.
5.2 COLLECTIONS AND PAYMENTS. Agritope shall have the right to
collect and remit money on Agrinomics' behalf and to settle claims in favor of
or against Agrinomics if the amount in controversy is less than $100,000.
Agritope shall be authorized to pay, on a current basis, the ordinary operating
expenses of Agrinomics not to exceed $100,000 per item.
5.3 PERIODIC REPORTS. Within thirty days after the start of each
calendar quarter during the Term, Agritope shall provide Agrinomics with a
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
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report listing all receipts into and disbursements from the Accounts for the
previous quarter. Agritope shall provide Agrinomics with copies of all bank
statements for the Accounts, and all funds in the Accounts shall be held by
Agritope in trust for Agrinomics.
5.4 BOOKS AND RECORDS. Agritope agrees to maintain adequate books
and records regarding the provision of Services under this Agreement, including
accounting for the Costs, with appropriate supporting documentation. Agrinomics
shall have, upon not less than forty-eight (48) hours prior written notice to
Agritope, access during normal business hours, to the books and records of
Agritope relating to the Services. Agrinomics shall have the right to review
such books and records and copy same at its own cost and expense.
5.5 AUDIT RIGHTS. Agrinomics shall have the right to audit
Agritope's books and records once every twelve months for the purpose of
confirming the Costs for the previous twelve month period. Agrinomics shall give
reasonable notice of its intent to audit, and the parties will attempt to
schedule such audit so as not to unreasonably interfere with the conduct of
Agritope's operations. Agrinomics agrees to notify Agritope within 30 days
should Agrinomics believe that all or any portion of an invoice or credit memo
is not supported by the audit, and the parties agree to meet promptly to resolve
any Cost which Agrinomics believes is not supported by the audit. Any such audit
shall be at the expense of Agrinomics, unless the inspection or audit reveals,
with respect to the period under audit, that the Costs have been overstated, or
royalties have been understated, by more than 5%, in which event Agritope shall
pay or reimburse Agrinomics for the reasonable expenses of such inspection or
audit, in addition to Agrinomics' other remedies for such overpayment or
underpayment.
6. FEES
6.1 IN GENERAL. Except as is otherwise provided with respect to
specific tasks or Services in the Operating Plan, Agrinomics shall pay or cause
to be paid to Agritope, as the exclusive compensation to Agritope for Services
to be performed by it hereunder, a fee (the "Fee") equal to the Costs.
6.2 BUDGETS; FEE PAYMENTS. Agrinomics shall pay Agritope the sum
of one-fourth of the applicable portion of the annual business plan budget per
quarter with a true-up for actual costs before the closing of Agritope's books
at year-end, on or before the first business day of each quarter, as an
estimated total Fee for all Services to be rendered to Agrinomics during such
quarter. Such quarterly payment shall be adjusted by mutual written agreement of
Agrinomics and Agritope as changes are made to Agrinomics' budget or the
Operating Plan, or otherwise as needed in light of experience of the parties
under this Agreement or any anticipated substantial change in the Services or
Costs thereof. Within 45 days after the end of each calendar quarter, or as near
thereto as practicable, Agritope shall compute and advise Agrinomics by invoice
or credit memo of the actual total amount payable hereunder for Services in
respect of such quarter. The parties shall make the proper adjustments to make
the amounts paid for Services during such quarter equal the Fees actually
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payable therefor, either by Agrinomics' paying any shortfall within ten days
following the end of such 45-day period, or by Agritope's giving Agrinomics a
credit against any subsequent payment in the amount of any prior overpayment.
7. CONFIDENTIALITY
7.1 PROTECTION OF INFORMATION. Each of Agritope and Agrinomics
agrees: (i) to take all reasonable precautions and to use its best efforts to
maintain the confidentiality of all Confidential Information (as defined below)
that such party (the "Recipient") obtains in respect to the other (the
"Disclosing Party"); and (ii) not to use or disclose such Confidential
Information to any third parties other than the Recipient's Affiliates that are
similarly bound to protect the same or otherwise with the written approval of
the Disclosing Party or as permitted by Section 7.2. "Confidential Information"
means all proprietary or confidential information owned or provided by a
Disclosing Party other than information that (A) was previously known to the
Recipient or any of its Affiliates (other than from a Disclosing Party or an
Affiliate thereof), or (B) is available or, without the fault of the Recipient
or any of its Affiliates (other than Agrinomics), becomes available to the
general public, or (C) is lawfully received by the Recipient from a third party
that, to the Recipient's knowledge, is not bound by any similar obligation of
confidentiality. The disclosure of Confidential Information shall not constitute
any grant of license or any other rights nor generate any business arrangements
unless specifically set forth herein or in another agreement.
7.2 CERTAIN DISCLOSURES. A Recipient may disclose Confidential
Information to appropriate regulatory authorities, attorneys, accountants and
pursuant to any order of a court, administrative agency or other governmental
authority and may take any lawful action that it deems necessary to protect its
interests or the interests of its Affiliates under, or to enforce compliance
with the terms and conditions of, this Agreement; PROVIDED, HOWEVER, that in the
event that it appears that a Recipient may become legally compelled to disclose
any Confidential Information, it will promptly consult with the Disclosing Party
as to the reasons for such disclosure and will afford the Disclosing Party a
reasonable opportunity to obtain a protective order as to such information and
will use reasonable efforts to obtain reliable assurance that the information
disclosed will be treated confidentially.
8. STATUS AND LIABILITIES OF THE PARTIES
8.1 NO AGENCY. Nothing herein contained shall make Agritope an
agent, general representative or employee of Agrinomics for any purpose, and
Agritope shall render the Services and perform its other obligations hereunder
as an independent contractor on a non-exclusive basis. Agritope shall not have
the power to bind Agrinomics unless and except as, in respect of any specific
matters, it is hereafter expressly authorized to do so in writing by Agrinomics.
8.2 DUTY OF GOOD FAITH. Agritope agrees to perform the Services
contemplated by the terms of this Agreement diligently and in good faith.
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Agritope shall not have liability for any act done or omitted to be done in the
performance of the Services unless done or omitted to be done as a result of
Agritope's gross negligence or willful misconduct.
8.3 INDEMNIFICATION. Agrinomics shall indemnify and defend
Agritope and its Affiliates (other than Agrinomics), licensees and permitted
assigns, and their respective directors, officers, and employees and agents (the
"Indemnified Parties") from and against (i) any and all claims of any employee
of Agrinomics relating to his or her employment, including claims of breach of
expenses or implied contract, benefits, wrongful termination, discrimination or
harassment, except to the extent such claims are the result of any action of
Agritope or its employees, acting in their capacity as such employees; (ii) any
and all claims of any third party arising from any of Agritope's actions or
omissions to act, within the scope of this Agreement, including without
limitation as to environmental matters; and (iii) any costs or expenses
(including reasonable attorneys' fees and costs) incurred by the Indemnified
Parties relating to such claims. Notwithstanding the foregoing, Agrinomics shall
have no liability for any claims, costs or expenses to the extent caused by
Agritope's gross negligence or willful misconduct, or Agritope's breach of its
agreements hereunder, and Agritope shall indemnify and defend Agrinomics and its
Affiliates (other than Agritope and its Affiliates), licensees and permitted
assigns, and their respective directors, officers, and employees and agents from
and against any claim arising by reason of such gross negligence, willful
misconduct or breach of its agreements hereunder, including without limitation
as to environmental matters.
8.4 NO WARRANTIES. Each party affirms that it has no actual
knowledge that any of the technology, rights or other services, products or
activities to be performed, licensed or provided by it under or in connection
with this Agreement would, as so performed or provided, or as used or further
distributed as contemplated, infringe any intellectual property right of any
person or entity. Each party will promptly inform the other of any such
knowledge that it may obtain during the term of this Agreement. EXCEPT AS FORTH
HEREIN, NEITHER PARTY MAKES ANY WARRANTIES HEREUNDER, WHETHER OF RESEARCH
SUCCESS, MERCHANTABILITY OR NONINFRINGEMENT, AND AGRITOPE AND AGRINOMICS HEREBY
DISCLAIM ANY IMPLIED WARRANTIES AND ANY WARRANTIES ARISING BY TRADE USAGE OR
COURSE OF PERFORMANCE.
8.5 NO CONSEQUENTIAL OR INCIDENTAL DAMAGES. In no event shall
either party have any liability to the other or to any third-party whomsoever
for consequential or incidental damages. Specifically, Agritope shall have no
liability for any consequential or incidental damages, whether arising from its
own acts or failures to act, or from services provided or failed to be provided
by third-party providers, except to the extent such damages involve harm to
persons or physical property and arise directly from Agritope's gross negligence
or willful misconduct. Agrinomics agrees that the remuneration to be paid to
Agritope hereunder for the Services contemplated herein reflect these
limitations of liability and disclaimers of warranties.
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9. TERM AND TERMINATION
9.1 TERM. The Term shall commence on the Closing Date under the
LLC Agreement, and shall expire on the earliest of: (a) the termination of the
LLC Agreement; (b) a termination hereof at the election of a Member pursuant to
a right to do so as described in the LLC Agreement; (c) June 30, 2004; or (d)
the date of termination otherwise specified in this Article 9. In the event of
an expiration of the Term pursuant to subsection (c) above, the Term shall
automatically renew as of July 1, 2004, and as of every October 1 thereafter for
a term that shall expire the following September 30, subject to the termination
provisions otherwise specified in this Article 9.
9.2 NON-RENEWAL. Either party to this Agreement may either (i)
terminate the Term effective at the end of the then-current Term, or (ii)
require renegotiation, with no obligation of either party to enter into an
agreement, of this Agreement, effective at the end of the then-current Term, by
giving written notice to the other party sixty (60) days in advance of the end
of the then-current Term. Once notice under this Section 9.2 has been given,
this Agreement will not automatically renew under Section 9.1.
9.3 TERMINATION FOR DEFAULT. If either party materially breaches
any of the terms, conditions or agreements contained in this Agreement to be
kept, observed or performed by it, the other party may terminate this Agreement,
at its option and without prejudice to any of its other legal or equitable
rights or remedies, by giving the party who committed the breach ninety (90)
days' notice in writing, unless the notified party within such 90-day period
shall have cured the breach. Neither party will be considered in breach of this
Agreement for purposes of the termination remedy stated herein during any period
in which there is a good faith dispute between the parties as to the existence
of such breach. If the parties are, despite negotiations at the highest levels
of their respective managements over a period of at least ninety days, unable to
resolve any good faith dispute between them as to the existence of such breach,
such dispute may at the election of either party be resolved in accordance with
Section 10.
9.4 EFFECT OF TERMINATION OR EXPIRATION. Any termination or
expiration of the Term will not affect any rights or obligations which have
arisen prior to the date of such termination. Except for a termination due to
the uncured default of Agrinomics, Agrinomics' licenses granted under Section
3.2(c) and 3.2(d) will survive any termination or expiration of the Term. Except
for a termination due to the uncured default of Agritope, Agritope's licenses
under clauses (a) and (c) - (f) of Section 3.1 and Section 4 will survive any
termination or expiration of the Term; provided, however, that Agritope's
licenses under clauses (c) - (f) of Section 3.1 (and its rights under Section 4
with respect thereto) will not apply to any Program Product containing protein
sequences, gene constructs, data, techniques, manuals, instructions, samples,
germplasm, inventions, development processes, assays, or improvements, first
discovered following the end of the Term. The provisions of Sections 5.4 and 5.5
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and Articles 7, 9, 10, and 11 will survive any termination or expiration of the
Term.
10. ARBITRATION OF DISPUTES
If the parties fail to reach agreement with respect to a dispute or
difference (other than as to a question relating to patent validity, which the
parties intend will be decided in litigation and not in arbitration), between
the parties arising out of or in connection with this Agreement, the dispute or
difference will be determined by arbitration in New York City, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association by
an independent and impartial arbitrator, who (unless the parties agree
otherwise) shall have had both training and experience as an arbitrator of
agricultural technology licensing matters, including biotechnology, and who
shall be, and for at least ten years shall have been, a partner, shareholder or
member in a highly respected law firm headquartered in the United States. The
arbitrator may decide any issue as to whether, or as to the extent to which, any
dispute is subject to the arbitration and other dispute resolution provisions in
this Agreement. The arbitrator must base the award on the provisions of this
Agreement and must render the award in a writing which must include an
explanation of the reasons for such award. Any arbitration pursuant to this
section will be governed by the substantive laws of Delaware applicable to
contracts made and to be performed in that state, without regard to conflicts of
law rules, and by the arbitration law of the Federal Arbitration Act (9 U.S.C.
ss.1 et seq.). Judgment upon the award rendered by the arbitrator may be entered
by any court having jurisdiction thereof. The statute of limitations of Delaware
applicable to the commencement of a lawsuit will apply to the commencement of an
arbitration under this Section. All fees, costs and expenses of the arbitrator,
and all other costs and expenses of the arbitration, will be shared equally by
the parties to this Agreement unless such parties agree otherwise or unless the
arbitrator in the award assesses such costs and expenses against one of such
parties or allocates such costs and expenses other than equally between such
parties. Notwithstanding the foregoing, either party may, on good cause shown,
seek a temporary restraining order and/or a preliminary injunction from a court
of competent jurisdiction, to be effective pending the institution of the
arbitration process and the deliberation and award of the arbitrator.
11. GENERAL PROVISIONS
11.1 SEVERABILITY. If any provision of this Agreement shall be held
to be invalid, illegal or unenforceable, such provision shall be enforced to the
maximum extent permitted by law and the parties' fundamental intentions
hereunder, and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
11.2 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements, proposals, or
understandings, whether written or oral, other than the LLC Agreement and the
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agreements referenced therein. No amendment of this Agreement shall be effective
unless set forth in writing and signed by authorized agents of both parties. No
waiver or consent to any departure by Agrinomics or Agritope from performance
under this Agreement shall be effective unless set forth in writing and signed
by an authorized agent of the party to be bound, nor shall any such waiver or
consent be construed beyond its explicit terms to imply any subsequent or other
instance of such performance.
11.3 ASSIGNMENT. The Services provided hereunder and/or any rights
and/or duties associated therewith may not be assigned or transferred by
Agritope without the prior written consent of Agrinomics, which consent will not
be unreasonably withheld or delayed; provided, however, that an assignment to an
Affiliate of Agritope will not require the consent of Agrinomics. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
11.4 FORCE MAJEURE. This Agreement shall not be terminated as a
result of any failure of a party to perform any of its obligations hereunder if
such failure is due to circumstances beyond its control (an "Event of Force
Majeure"), including, but not limited to, any requisition by any government
authority, act of war, strike, boycott, lockout, picket, riot, sabotage, civil
commotion, insurrection, epidemic, disease, act of God, fire, flood, accident,
explosion, earthquake, storm, failure of public utilities or common carriers,
mechanical failure, embargo, or prohibition imposed by any governmental body or
agency having authority over the party, provided, that at such time as an Event
of Force Majeure no longer exists, the respective obligations of the parties
hereto shall be reinstated and this Agreement shall continue in full force and
effect. The party affected by any Event of Force Majeure shall give prompt
written notice thereof to the other party hereto and each party each shall use
good faith efforts to minimize the duration and consequences of, and to
eliminate, any such Event of Force Majeure.
11.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the choice of law provisions of the State of Delaware or any other
jurisdiction to the contrary.
11.6 NOTICES. Any notice, request, instruction or other document to
be given hereunder shall be in writing, delivered in person, or mailed by
certified or registered mail, return receipt requested, or transmitted by
facsimile transmission with electronic confirmation of receipt to the
addressee's address or facsimile number set forth below (or such other address
or facsimile number as the party changing its address specifies in a notice to
the other parties):
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To Agritope:
Agritope, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Coie LLP
▇▇▇ -▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To Agrinomics:
Agrinomics LLC
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and with copies to:
▇▇▇▇▇-▇▇▇▇▇▇▇ Ag Company Inc.
2 ▇.▇. ▇▇▇▇▇▇▇▇▇ Drive
Research Triangle Park
North Carolina 27709, USA
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇▇ Agro S.A.
▇▇-▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇) ▇▇ ▇▇ ▇▇ ▇▇
Notices shall be deemed to have been given on the date of service, if served
personally on the party to whom notice is to be given , or on the first day
after transmission by facsimile transmission, if transmitted by facsimile as set
forth above, or on the fifth day after mailing, if mailed as set forth above.
11.7 HEADINGS. The headings of the sections of this Agreement have
been set forth for use of reference only and shall not be used to construe or
interpret the terms and conditions of this Agreement.
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11.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
11.9 CONSTRUCTION. This Agreement has been submitted to the
scrutiny of, and has been negotiated by, all parties hereto and their counsel,
and shall be given a fair and reasonable interpretation in accordance with the
terms hereof, without consideration or weight being given to its having been
drafted by any party hereto or its counsel.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
AGRITOPE, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
AGRINOMICS LLC
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
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SCHEDULE 1: [ * ]
-----------------
[ * ]
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
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SCHEDULE 2: BACKGROUND PATENTS AND BACKGROUND TECHNOLOGY
--------------------------------------------------------
[ * ]
[ * ] = Confidential materials omitted and filed separately with the
Securities and Exchange Commission.