Exhibit 10.13
 INTELLECTUAL PROPERTY RIGHTS AGREEMENT
between
Ceres, Inc.
and
The A&M University System
         Article 1. Licensing of Intellectual Property Rights
 A. General
 Appendices A B.
 Appendix C
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B. Patentable Inventions
 Negotiation of a Commercial License Appendix A.
 Joint Inventions
 C. Germplasm
 Definitions:
 Negotiation of a Commercial License Appendix B
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Article 2. Term and Termination
   Article 3. Confidentiality
   Article 4. Discount to Qualifying Entities
  1.
    
    QUALIFYING SYSTEM ENTITY or QSE shall be any entity that operates a
BIOREFINERY and (i) that is established within fifteen (15) years from the Effective
Date; (ii) that is designated as such by SYSTEM to CERES in writing; (iii) in which
SYSTEM has ownership, directly or Indirectly, of one percent (1%) or more of the
voting stock or other voting interest, and such voting stock or other voting interest
is QUALIFYING EQUITY; and (iv) whose principal biorefining activities are in the
TERRITORY. Indirectly shall mean that SYSTEM has ownership of voting stock or other
voting interest of a legal entity (Intermediate Entity) that has
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direct ownership of voting stock or other voting interest of the entity that operates a
BIOREFINERY in such manner that the result of the multiplication of the percentage of
SYSTEM ownership in the Intermediate Entity with the percentage of the Intermediate
Entity ownership in the entity operating the BIOREFINERY shall be equivalent to one
percent (1%) direct ownership, or more. For example, if the Intermediate Entity owns
ten percent (10%) of the entity operating the BIOREFINERY, SYSTEM must own ten percent
(10%) of the Intermediate Entity, or if the Intermediate Entity owns two percent (2%)
of the entity operating the BIOREFINERY, SYSTEM must own fifty percent (50%) of the
Intermediate Entity.2.
    
    QUALIFYING EQUITY shall mean voting stock or other voting interest which is
granted to SYSTEM, directly or Indirectly, (i) during the formation of a QSE in
exchange for contributions by SYSTEM to such formation; (ii) in exchange for sponsored
research or consulting performed by SYSTEM for a QSE; (iii) in exchange for the grant
of rights in intellectual property by SYSTEM; or (iv) one or more of the foregoing.
However, the discount referred to in this Article 4 shall not qualify as a
contribution for which voting stock or another voting interest is granted if it is the
sole such contribution.3.
    
    BIOREFINERY shall be any single location facility which converts raw plant
biomass into liquid transportation fuel and/or bioproducts, and/or uses biomass to
generate power or electricity.4.
    
    LIST PRICE DISCOUNT shall be fifteen percent (15%) off LIST PRICE.5.
    
    BEST PRICE DISCOUNT shall be five percent (5%) off BEST PRICE.6.
    
    QUALIFYING CONDITIONS shall be (i) that COMMERCIAL SEED orders shall be
PRE-PRODUCTION ORDERS; (ii) that all biomass grown from the COMMERCIAL SEED purchased
by a QSE will only be used by its BIOREFINERY; (iii) that payment is made as per the
PAYMENT PROCEDURE; and (iv) that QSE exclusively places orders in the calendar year
of the PRE-PRODUCTION ORDER with CERES for all non-grain-type sorghum seed. If a
COMPETITOR has voting stock or other voting interest in a QSE or has a CONFLICT PERSON
as a representative on the Board of Directors or other governing body of the entity, a
further QUALIFYING CONDITION shall be that the QSE must have entered into an exclusive
feedstock supply agreement with CERES as contemplated in Article 4.B.8.7.
    
    PAYMENT PROCEDURE shall be the payment of the ESTIMATED PRICE by QSE to
CERES in three tranches: fifteen percent (15%) at time of order, thirty-five (35%) at
production, and the remaining balance on delivery, with this final payment on delivery
adjusted to achieve payment of the DISCOUNT PRICE.8.
    
    ESTIMATED PRICE shall be, at the time of ordering, the lowest of the
following prices: the then-current LIST PRICE adjusted for the LIST PRICE DISCOUNT, or
the then-current BEST PRICE adjusted for the BEST PRICE DISCOUNT, provided however
that if the lowest of said adjusted prices result in CERES GROSS MARGIN on the sale
being reduced by more than twenty-five percent (25%), such adjusted price shall be
revised so that CERES GROSS MARGIN is reduced by exactly twenty-five percent (25%).
However, if CERES has granted discounts to
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comparable customers in terms of their business relationship with CERES for comparable
orders of COMMERCIAL SEED of the same HYBRID in the TERRITORY placed at or around the
same time, resulting in CERES GROSS MARGIN being reduced by a percentage higher than
twenty-five percent (25%), such higher price percentage of GROSS MARGIN reduction shall
be substituted in the previous sentence.9.
    
    DISCOUNT PRICE shall be, at the time of delivery, the lowest of the
following prices: the then-current LIST PRICE adjusted for the LIST PRICE DISCOUNT, or
the then-current BEST PRICE adjusted for the BEST PRICE DISCOUNT, provided however
that if the lowest of said adjusted prices results in CERES GROSS MARGIN on the sale
being reduced by more than twenty-five percent (25%), such adjusted price shall be
revised so that CERES GROSS MARGIN is reduced by exactly twenty-five percent (25%).
However, if CERES has granted discounts to comparable customers in terms of their
business relationship with CERES for comparable orders of COMMERCIAL SEED of the same
HYBRID in the TERRITORY placed at or around the same time, resulting in CERES GROSS
MARGIN being reduced by a percentage higher than twenty-five percent (25%), such
higher price percentage of GROSS MARGIN reduction shall be substituted in the previous
sentence. In the case where the DISCOUNT PRICE is more than the ESTIMATED PRICE, the
DISCOUNT PRICE shall be the ESTIMATED PRICE, provided however that any production cost
increases will be added to such ESTIMATED PRICE, except if such increases are not
passed on by CERES to comparable customers in terms of their business relationship
with CERES for comparable orders of COMMERCIAL SEED of the same HYBRID in the
TERRITORY placed at or around the same time.10.
    
    HYBRID shall mean a seed or plant that has resulted from genetic
crossbreeding between two or more lines where those lines include one or more (i)
Lines under exclusive license from SYSTEM or (ii) New Parental Lines, and which seed
or plant is royalty bearing under a license to such a Line from SYSTEM to CERES.11.
    
    GROSS MARGIN shall mean, for a particular sale of COMMERCIAL SEED, NET
SALES less (i) COGS and (ii) royalties due to SYSTEM on such NET SALES.12.
    
    NET SALES shall be as defined in the Example License Agreement for Lines in
Appendix B.13.
    
    COGS shall mean cost of goods sold as determined by CERES on a consistent
basis in accordance with GAAP.14.
    
    LIST PRICE shall mean the published germplasm list price applied by CERES
at the time of delivery of the seed to the QSE for sale of COMMERCIAL SEED of the
relevant HYBRID to growers in the TERRITORY.15.
    
    BEST PRICE shall mean the germplasm price at which CERES is fulfilling
comparable orders of COMMERCIAL SEED of the relevant HYBRID in the TERRITORY to
comparable customers in terms of their business relationship with CERES to those
placed by the QSE at or around the same time. For the purposes of this definition,
all rebates offered to such customers shall be included in the calculation of the
germplasm price offered to such customers.
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16.
    
    COMPETITOR shall mean (i) any party that performs any of the following
activities: plant biotechnology, plant genomics or plant breeding, or development,
production or sale of sorghum or corn; (ii) Monsanto Company, E.I. DuPont de Nemours
and Company, Dow Chemical Company, Syngenta AG, BASF AG, Bayer AG and Mendel
Biotechnology, Inc., SorBio Energy Systems, Edenspace, Agrivida, Speedling, Targeted
Growth and FuturaGene or any successor to any part of such entitys activities
relating to seed, plant biotechnology or plant genomics ; or (iii) any affiliate of
the entities listed in (i) or (ii). For purposes of this definition, affiliate
shall mean any company owned or controlled by, under common control with or
controlling the entities listed in (i) or (ii), with control meaning in this context
the direct or indirect ownership of fifty percent (50%) or more of the voting
stock/shares of a company, or the power to nominate at least half of the directors.17.
    
    CONFLICT PERSON shall mean any employee of a COMPETITOR, or member of the
Board of Directors or Scientific Advisory Board, of a COMPETITOR, who is involved in
crop improvement activities.18.
    
    COMMERCIAL SEED shall mean HYBRID seed offered for sale in CERES catalog
that is sold for purposes other than the production of propagating material.19.
    
    RECONDITIONING shall mean retesting and/or rebagging seed returned to CERES
after the planting season.20.
    
    TERRITORY shall mean the United States of America.21.
    
    PRE-PRODUCTION ORDERS shall mean firm orders placed and accepted at least
eighteen (18) months prior to the applicable seed production season, so that the
applicable seeds may be planted and grown.22.
    
    TRAIT FEE shall mean any upfront or annual fee collected by CERES or any
AFFILIATED COMPANY in conjunction with NET SALES as an additional remuneration for the
sale of COMMERCIAL SEED that has a particular valuable trait or characteristic.23.
    
    SERVICE FEE shall mean any fee for services provided by CERES to growers,
BIOREFINERIES, the QSE or other relevant entities, including, but not limited to,
agronomy services, re-plant guarantees, quality assurance, quality determination,
consulting on variety selection.
  1.
    
    Subject to compliance with applicable law, CERES agrees to sell COMMERCIAL
SEED to any QSE (subject to Article 4.B.7) at a DISCOUNT PRICE under QUALIFYING
CONDITIONS. The QSE shall also be responsible for payment of any non-germplasm
related fees such as TRAIT FEES, SERVICE FEES, seed treatment etc. associated with the
relevant HYBRID. Any rebates on such non-germplasm related fees offered by CERES to
comparable customers in terms of their business relationship with CERES for comparable
orders of COMMERCIAL SEED of the relevant HYBRID in the TERRITORY to those placed by
the QSE at or around the same time shall also be offered to the QSE. Such obligation
shall apply,
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with respect to each such QSE, for deliveries made within ten (10) years from the date
of the first delivery of COMMERCIAL SEED to such QSE.2.
    
    For a particular order of COMMERCIAL SEED by a QSE, CERES and the QSE shall
determine the DISCOUNT in good faith. If CERES and the QSE fail to reach agreement
within one hundred eighty (180) days after the start of such negotiations which shall
be evidenced by written notice from one party to the other initiating such
negotiations, the DISCOUNT shall be determined in accordance with the following
procedures: the dispute shall be referred to a mutually agreed impartial expert whose
decision shall be final. Each Party shall submit to the expert within fifteen (15)
days of his appointment its position in writing on the desired discount. Such expert
shall be limited to choosing the one of such two (2) party positions on the discount
and shall not make any other determination. Neither Party shall be bound by any
determination by the expert which, in the opinion of Partys counsel, will result or
be likely to result in that Party violating any applicable law or regulation.3.
    
    COMMERCIAL SEED orders will be guaranteed and non-cancelable provided that
CERES will not be liable for failure to deliver COMMERCIAL SEED as a result of crop or
production failure (without limiting any obligation to refund any purchase price
paid). It is anticipated that under purchase agreements between CERES and the QSE the
QSE will own all returned or unplanted seed and will promptly return all such unused
seed to CERES for RECONDITIONING. CERES will receive a standard market rate for
RECONDITIONING.4.
    
    CERES will distribute COMMERCIAL SEED directly to the QSE. It is anticipated
that under purchase agreements between CERES and the QSE such seed will be provided by
the QSE to the grower in a CERES seed bag, under the CERES brand name, trademark, and
logo, with the requirement that the resulting biomass be delivered to the QSE and the
further requirement that if the seed is not used within a specified period of time
after delivery, the seed must be tested and only used if it meets the standards
specified by CERES.5.
    
    If SYSTEM materially breaches this Agreement or the SRA, CERES may give
SYSTEM written notice of the breach. SYSTEM shall have a period of sixty (60) days
from receipt of the notice to cure the breach. If SYSTEM does not cure the breach
within this period, CERES may terminate this Agreement without further notice, and/or
may sever the provisions of Article 4 of this Agreement. Unless CERES terminates for
breach as provided above, this Article 4 shall survive termination of this Agreement.6.
    
    CERES may in its discretion choose to license to a QSE certain LINES or NEW
PARENTAL LINES for COMMERCIAL SEED production on an annual basis under reasonable
commercial terms.7.
    
    No more than five (5) BIOREFINERIES may qualify for a DISCOUNT. Should
SYSTEM designate to CERES, within the period of time ending fifteen (15) years from
the Effective Date, BIOREFINERIES beyond such initial five (5), CERES agrees to enter
into good faith negotiations with SYSTEM to determine an appropriate discount for each
such additional BIOREFINERY and the qualifying conditions that each such BIOREFINERY
would be required to meet and restrictions that each such BIOREFINERY would be subject
to, in order to qualify for such
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discount, taking into account then-current and projected market conditions and the
scope and nature of the use of the COMMERCIAL SEED by such BIOREFINERIES. If no
discount has been successfully negotiated within six (6) months of the commencement of
any negotiation on behalf of a particular BIOREFINERY as contemplated in this Article
4.B.7, CERES shall have no further obligation to negotiate with SYSTEM regarding such
discount or to grant any discount.8.
    
    For each QSE in which a COMPETITOR has voting stock or other voting interest,
or has a CONFLICT PERSON as a representative on the Board of Directors or other
governing body of the entity, CERES agrees to enter into good-faith negotiations with
such QSE for the purpose of entering into an exclusive feedstock supply agreement,
pursuant to which such QSE will purchase all cellulosic biomass to be used as
feedstock (other than (i) agricultural residues such as corn stover, wheat straw or
sugarcane bagasse (ii) in each QSE financial year, cellulosic biomass purchased from
growers with whom the QSE has no production or advance purchase contracts, up to five
percent (5%) of the total volume of cellulosic biomass purchased by the QSE in that
financial year) from a source or sources using CERES seed to produce the biomass
purchased, so as to enable the last-mentioned QUALIFYING CONDITION of Article 4.A.6 to
be met by such QSE.9.
    
    At its own expense, SYSTEM may annually inspect CERES books and records as
needed to verify compliance with this Article 4. CERES shall maintain such books and
records for at least three (3) years following the dates of the underlying
transactions. Any such inspections shall be in confidence and conducted during
ordinary business hours, not more than once a year, and SYSTEM will provide CERES
prior notice two (2) weeks before making such inspections. SYSTEM must employ an
independent Certified Public Accountant reasonably acceptable to CERES for this
purpose, who will only report to SYSTEM such information as necessary to determine
prices charged to QSEs and CERES compliance with any related obligations to SYSTEM.
If SYSTEMs audit identifies an overcharge by CERES to any QSE(s) of five percent (5%)
or more and CERES does not dispute the findings of the audit, which will be fully
communicated in writing to CERES, the following shall apply: (i) CERES shall pay the
costs of SYSTEMs audit, and (ii) CERES shall promptly pay all overcharges due as a
consequence of such audit to the QSE(s), with interest. If CERES disputes the
findings of the audit, Article 12 of the SRA, incorporated herein pursuant to Article
6.B hereof, shall apply.
 Article 5. Milestones
  1.
    
    Research Milestone  Marker-Trait Association shall mean the execution by
both Parties of an exclusive license agreement for a patented or patent pending
marker-trait association discovered in the Program, for a gene defined in the Program
in Appendix A to the SRA or by the Management Committee.2.
    
    Research Milestone  Lines shall mean the execution by both Parties of an
exclusive license agreement for a distinct Line (including related lines and
populations) developed in the Program.
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3.
    
    Commercial Milestone shall mean market introduction in the United States of
a Hybrid having at least one Line developed in the Program as a parental line and
which Hybrid is royalty bearing under an exclusive license to such Line from SYSTEM to
CERES.
  1.
    
    Subject to CERES Board of Directors and shareholder approval, Article
1.A.(3), and agreement on the terms and conditions of the warrants, CERES shall issue
to SYSTEM a warrant to purchase up to a maximum of two hundred thousand (200,000) of
            shares of CERES Common Stock (the Warrant) at a defined price. The maximum
duration of the Warrant would be ten (10) years; early termination provisions may
apply. The Warrant would become exercisable in installments as follows:
 a)
    
    equal installments of twenty five hundred (2,500) shares each
time a Research Milestone  Marker-Trait Association is reached; there will
be up to five (5) such installments;b)
    
    equal installments of twenty five hundred (2,500) shares each
time a Research Milestone  Lines is reached; there will be up to five (5)
such installments;c)
    
    equal installments of five thousand (5,000) shares each time
a Commercial Milestone is reached; there will be up to five (5) such
installments.
 2.
    
    Each installment of shares will be quadruple the defined number, with respect
to each particular Milestone, if at the time such Milestone is achieved, (i) SYSTEM
has not breached, and is not in breach of any provision of the SRA, this Agreement
including the Guidelines for Future Collaborative Opportunities attached as Appendix C
or any license entered into pursuant to this Agreement, (ii) SYSTEM has not proceeded
to any activities (participation in an Additional Collaboration Project and/or use of
Lines or Hybrids developed in the Program) contrary to CERES expressed preference, as
referred to in clause 1.2 of the aforementioned Guidelines, and (iii) SYSTEM has not
collaborated or is not collaborating with, nor has granted rights to, any party other
than an academic organization for Germplasm Improvement (as defined in the SRA) of
Biomass/Bioenergy Sorghum (as defined in the SRA) intended to be used for the
bioenergy market.
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Article 6. Miscellaneous
 Appendix C
   CERES, INC.
    
    
    
    THE TEXAS A&M UNIVERSITY SYSTEM/s/ Peter MasciaPeter Mascia
    
    
    
    /s/ Mark A. HusseyMark A. HusseyVice President of Product Development
    
    
    
    Director, Texas Agricultural Experiment StationDate: August 25, 2007
    
    
    
    Date: 8-29-2007/s/ Richard HamiltonRichard Hamilton
    
    
    
    /s/ Elsa MuranoElsa MuranoPresident & Chief Executive Officer
    
    
    
    Vice Chancellor & Dean of College of Agriculture and Life SciencesDate: August 29, 2007
    
    
    
    Date: 8-29-07/s/ Guy K. DiedrichGuy K. DiedrichVice Chancellor forTechnology CommercializationDate: August 29, 2007
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Appendix A
to the Intellectual Property Rights Agreement
between Ceres, Inc. and The Texas A&M University System
 Example License Agreement for Subject Inventions
 LICENSE AGREEMENT
 Between
 Ceres, Inc.
 and
 The Texas A&M University System
   [xxxx]
      ARTICLE I  DEFINITIONS
 1.01
    
    LICENSED TECHNOLOGY shall mean the Subject Invention relating to SYSTEM Disclosure of
Invention Number ________ entitled _________________.
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1.02
    
    PATENT RIGHTS shall mean each United States patent application filed for protection of
LICENSED TECHNOLOGY; each patent issuing from the foregoing applications; each divisional,
continuation, or continuation-in-part application of the foregoing United States applications;
each equivalent patent application in each country other than the United States which claims
priority under such applications; each patent issuing from the foregoing applications; and
each extension or reissue of such patents.1.03
    
    LICENSED PRODUCT or LICENSED PRODUCTS shall mean any product, process, or composition of
matter that is within the scope of any Valid Claim of PATENT RIGHTS. Valid Claim shall mean
and include a claim of a patent application or an unexpired patent or a patent whose
expiration date has been extended by law, so long as such claim shall not have been held
invalid and/or unenforceable in an unappealed or unappealable decision of a court or other
authority of competent jurisdiction.
 [Note: The Parties expect to expand the grant to Copyrights as required.]
 1.04
    
    EFFECTIVE DATE shall mean the date this Agreement has been executed by the last Party.1.05
    
    NET SALES shall mean LICENSEEs and AFFILIATED COMPANIES receipts for sales of LICENSED
PRODUCTS or for SERVICES requiring the use of LICENSED PRODUCTS less the sum of the following:
 (a)
    
    sales taxes, tariffs, duties and/or use taxes directly
imposed with reference to particular sales;(b)
    
    outbound transportation prepaid or allowed, shipping,
packaging, cost of insurance in transit paid by LICENSEE or an AFFILIATED
COMPANY;(c)
    
    amounts allowed or credited on returns;(d)
    
    customary trade, quality or cash discounts; and(e)
    
    [other deductions which are appropriate to sales of the
LICENSED PRODUCTS may be included.]
 No deductions shall be made for commissions paid to individuals whether independent sales
agencies or regularly employed by LICENSEE, or for the cost of collections. The value of
sample size quantities of LICENSED PRODUCTS provided for free shall not be included in NET
SALES. Where there is no identifiable sale price (except for samples as referred to in the
previous sentence) or when a LICENSED PRODUCT is sold to other than bona fide, arms length
customers of LICENSEE or any AFFILIATED COMPANY, LICENSEE or the AFFILIATED COMPANY shall
be deemed to have received an amount of NET SALES calculated based on the final sale of the
LICENSED PRODUCTS (wholesale level) to an independent third party. If no such current price
is available, a hypothetical fair market value price will be determined by the Parties
jointly in good faith for the purpose of calculating NET SALES. If trait fees are charged
by LICENSEE specifically for the LICENSED TECHNOLOGY, these fees shall be added to NET
SALES.1.06
    
    LICENSE INCOME shall mean the amount actually received by either LICENSEE or any AFFILIATED
COMPANY in consideration for the grant of sublicenses to sublicensees that are not AFFILIATED
COMPANIES to produce and sell LICENSED
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PRODUCTS, including up-front fees, lump sum payments and any other non-running
royalty-based payments made on a product-by-product and jurisdiction-by-jurisdiction basis.1.07
    
    AFFILIATED COMPANY shall mean any company owned or controlled by, under common control with
or controlling LICENSEE, control meaning in this context the direct or indirect ownership of
more than fifty percent (50%) of the voting stock/shares of a company, or the power to
nominate at least half of the directors.1.08
    
    SERVICE shall mean any transaction with a third party in which LICENSEE or an AFFILIATED
COMPANY performs certain activities on behalf and at the request of a third party that would
if not performed by LICENSEE or an AFFILIATED COMPANY require a license under SYSTEMS PATENT
RIGHTS licensed hereunder, in exchange for payment, but excluding any research collaboration
or sponsored research agreement.
 ARTICLE II  LICENSE GRANT
 2.01
    
    Grant. SYSTEM grants to LICENSEE and its AFFILIATED COMPANIES an exclusive world-wide license
and right under PATENT RIGHTS to make, have made, use, and sell the LICENSED PRODUCTS and to
perform SERVICES, and to grant sublicenses of the same scope, to the end of the term of this
Agreement as prescribed in Article VIII.2.02
    
    Reservation. SYSTEM reserves an irrevocable, worldwide, nonexclusive, royalty-free right to
practice the grant made in Article 2.01 for research and educational purposes only, and not
for commercial purposes or for the commercial benefit of third parties. SYSTEM shall comply
with the provisions of the SRA and the IPRA when exercising this right.2.03
    
    Government Reservation. Rights under this Agreement are subject to rights required to be
granted to the Government of the United States of America pursuant to 35 USC Section 200-212,
including a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the United States the Subject Inventions throughout the world.
 ARTICLE III  CONSIDERATION
 3.01
    
    [Optional. Depends on CERES contributions to Subject Invention and the value of the Subject
Invention. Can be alternative to royalties in case Subject Invention will only be used
internally by CERES.]License Fee. In consideration for the license granted in this
Agreement, LICENSEE shall make an initial payment in the amount of ___________ dollars
($________). Such payment shall be due no later than thirty (30) days following the EFFECTIVE
DATE. Failure to make this payment within the specified period shall cause this Agreement to
immediately terminate.3.02
    
    Royalty Rate. As [additional]consideration for the license granted in this Agreement,
LICENSEE shall remit to SYSTEM a royalty of ____ percent (__%) of NET SALES. [Take into
account stacking with other technologies and value of licensed technology to determine rate.]
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3.03
    
    [Optional]Minimum Annual Consideration. In order to maintain this exclusive license to
PATENT RIGHTS, LICENSEE shall pay to SYSTEM minimum annual consideration in accordance with
the following schedule:
 (a
    )
    
    Calendar Year 200
    
    $
    __________(b
    )
    
    Calendar Years 200 and 200
    
    $
    __________(c
    )
    
    Calendar Year 200 and every year thereafter
through the expiration of this Agreement
    
    $
    __________
 In the event that LICENSEEs payment of royalties for the Calendar Year due under Article
3.02 do not meet or exceed the required minimum annual consideration, as specified in this
Article, LICENSEEs royalty payment for the last quarter of such Calendar Year shall
include payment of the balance needed to achieve the required minimum. In the event this
Agreement expires or is terminated prior to the end of a Calendar Year, the corresponding
minimum annual consideration provided for in this Article shall be prorated for that year.3.04
    
    Patent Expenses [Reimbursement]. As additional consideration for the license granted in this
Agreement, LICENSEE shall bear the expenses incurred in the prosecution and maintenance of
PATENT RIGHTS, as further described in Article VI.3.05
    
    If an exclusive license reverts to or is non-exclusive pursuant to Articles 3.02, 5.02 or
6.05, or upon LICENSEEs election, a lower royalty rate shall be negotiated in good faith
between the Parties. The start of such negotiations shall be evidenced by written notice from
one Party to the other initiating such negotiations, and such negotiations shall not extend
beyond ninety (90) days from the start thereof without the mutual consent of both Parties
(Negotiation Period). If the Parties fail to reach agreement within the Negotiation Period,
the lower royalty rate shall be settled in accordance with the following procedures: the
disputed royalty rate shall be referred to a mutually agreed impartial expert whose decision
shall be final. Each Party shall submit to the expert within fifteen (15) days of his
appointment its position in writing on the disputed royalty rate. Such expert shall be
limited to choosing the one of such two (2) party positions that the expert considers most
reasonable in the circumstances and shall not make any other determination. Neither Party
shall be bound by any determination by the expert which, in the opinion of Partys counsel,
will result or be likely to result in that Party violating any applicable law or regulation.
 ARTICLE IV  SUBLICENSES
 4.01
    
    Sublicenses. LICENSEE and its AFFILIATED COMPANIES may grant sublicenses to persons, firms or
corporations under such conditions as it may arrange, as consistent with this Agreement, as
long as each such sublicense is not repugnant to the public policies of SYSTEM, the State of
Texas, or the United States.4.02
    
    Sublicensee Consideration. Sales of LICENSED PRODUCTS by each sublicensee shall be subject to
the unit royalty due to SYSTEM prescribed in Article 3.02. Further, LICENSEE shall pay to
SYSTEM a royalty of ____ percent (%) LICENSE INCOME. [Take into account stacking
with other technologies and value of licensed technology to determine rate.]
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4.03
    
    Reporting. LICENSEE shall notify SYSTEM of the grant of sublicense to a third party and
provide a redacted copy of the sublicense to SYSTEM. LICENSEE shall not redact any
information unless it could be reasonably considered sensitive to LICENSEEs business. Upon
reasonable notice by SYSTEM, SYSTEM may through an attorney-at-law review an unredacted copy
of the sublicense but shall not provide any redacted information to business persons within
SYSTEM. LICENSEE shall also provide SYSTEM with the name, address and scope of each
sublicense and a copy of each sublicensees report as is pertinent to calculation of amounts
due SYSTEM under this Agreement.4.04
    
    Non-Cash Transactions. Where there is no identifiable LICENSE INCOME, a hypothetical fair
market value price will be determined by the Parties jointly in good faith for the purpose of
calculating LICENSE INCOME.
 ARTICLE V  LICENSEE RESPONSIBILITIES
 5.01
    
    Milestones. In accomplishing the commercialization under this Agreement, LICENSEE shall
demonstrate to the satisfaction of SYSTEM achievement of the following milestones:EXAMPLE: LICENSEE shall complete development of a commercial prototype of a LICENSED
PRODUCT no later than _____ months following EFFECTIVE DATE.EXAMPLE: LICENSEE shall record first sales of LICENSED PRODUCTS no later than ______ months
following EFFECTIVE DATE.Other Milestones to be defined upon the basis of LICENSEEs business plan for
LICENSED PRODUCTS.LICENSEE shall provide written notification to SYSTEM within thirty (30) days of achieving
each milestone.[Milestones may be substituted or postponed by payments to be agreed for each particular
license agreement.]5.02
    
    Failure to Accomplish Milestones. Should LICENSEE fail to achieve any milestone specified in
Article 5.01, or should LICENSEE fail to record NET SALES for two (2) consecutive Calendar
Years once sales begin, SYSTEM, at its sole option and as its sole remedy, may waive the
requirement to achieve the milestone, may revise the license granted herein to a non-exclusive
license, or may renegotiate the missed milestone.5.03
    
    Legal Compliance. LICENSEE must comply with all applicable federal, state and local laws and
regulations in its exercise of all rights granted to it by SYSTEM under this Agreement.5.04
    
    No Royalties for Sales to U.S. Government. In accordance with 35 USC Section 200-212,
LICENSEE has no duty to pay SYSTEM royalties under this Agreement on NET SALES made to the
United States Government, including any United States Government agency. LICENSEE shall
reduce the amount charged for a LICENSED PRODUCT sold to the United States Government by an
amount equal to the royalty otherwise due SYSTEM.
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5.05
    
    U.S. Manufacture. In accordance with 35 USC Section 200-212, LICENSED PRODUCTS shall be
manufactured substantially in the United States of America.
 ARTICLE VI  PATENTS
 6.01
    
    Filing. SYSTEM will have the right to prepare and file, in accordance with its best
judgment, any and all applications for patents covering LICENSED TECHNOLOGY in the United
States that are solely owned by SYSTEM and LICENSEE will have the right to prepare and file
such applications for LICENSED TECHNOLOGY jointly owned by LICENSEE and SYSTEM. Applications
for patents shall be filed in the name of SYSTEM if owned by SYSTEM pursuant to the SRA and in
the joint names of SYSTEM and LICENSEE if jointly owned pursuant to the SRA. At LICENSEEs
discretion, patents applications may be filed in any other jurisdiction in the world.6.02
    
    Abandoning patent applications. The following rules shall apply with respect to applications
for patents or SYSTEM owned or jointly owned LICENSED TECHNOLOGY. If the party controlling
prosecution intends to abandon any patent application or patent that party shall first give
sufficient written notice to the other party to permit the other party the opportunity to
assume such filing, examination and/or maintenance. LICENSEE and SYSTEM will consult with
regard to protection of LICENSED TECHNOLOGY.6.03
    
    Jurisdictions. The obligations of this Article 6.03 shall not apply to any jurisdictions in
which the prosecuting party has elected not to apply for intellectual property protection.
LICENSEE and SYSTEM shall avoid carrying out any act that would prejudice the grant of patent
rights.6.04
    
    Patent Maintenance. SYSTEM shall maintain at least one U.S. patent resulting from the
prosecution described hereinabove.6.05
    
    Election not to file. LICENSEE will direct SYSTEM in writing no later than nine (9) months
following the date of filing for each U.S. patent application as to LICENSEEs selection of
countries outside the United States in which SYSTEM shall seek corresponding patent
protection. SYSTEM shall then have the right to file corresponding patent applications at its
own expense in those countries not selected by LICENSEE; however, the license granted to
LICENSEE in this Agreement shall be non-exclusive in the countries where SYSTEM has filed and
is prosecuting patents or applications at its own expense.6.06
    
    Prosecution and Maintenance of Non-U.S. Patents. Should LICENSEE select a country other than
the United States in which to file each corresponding patent application, and subsequently
elects not to continue to reimburse SYSTEM for the diligent prosecution and maintenance of
such patent or patent application, it shall so notify SYSTEM at least three (3) months prior
to taking (or not taking) any action which would result in abandonment, withdrawal, or lapse
of such patent or application. SYSTEM shall then have the right to continue maintenance or
prosecution of each such patent or application at its own expense; however, expenses incurred
prior to the point of LICENSEE taking (or not taking) such action shall remain the
responsibility of LICENSEE. The license granted to LICENSEE in this Agreement shall revert to
non-exclusive in the countries
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where SYSTEM is maintaining or prosecuting such patent or application at its own expense.6.07
    
    Financial Responsibility. Except as set forth in Articles 6.05 and 6.06, LICENSEE shall
reimburse SYSTEM for all expenses incurred by SYSTEM in filing, prosecuting, and maintaining
each patent application and patent under PATENT RIGHTS. LICENSEE shall provide payment as
reimbursement of SYSTEMs documented expenses incurred in filing, prosecuting or maintaining
patent applications or patents as described above within thirty (30) days of receipt of
SYSTEMs supporting invoice. SYSTEM shall use patent counsel reasonably acceptable to
LICENSEE. LICENSEE acknowledges, however, that SYSTEMs patent counsel must be approved by
the Attorney General of the State of Texas.6.08
    
    Information. SYSTEM shall disclose to LICENSEE the complete texts of all patent applications
filed by SYSTEM under PATENT RIGHTS as well as all information received concerning office
actions, the institution or possible institution of any interference, opposition,
re-examination, reissue, revocation, nullification or any other official proceeding involving
PATENT RIGHTS, all in a timely manner so as to allow LICENSEE to provide input i.e. at least
thirty (30) days before a filing needs to be made or a decision needs to be taken. SYSTEM
shall provide to LICENSEE the opportunity to provide input to the development of each patent
application and any official proceedings thereafter, and will take such input into account.
 ARTICLE VII  PAYMENTS AND REPORTS
 7.01
    
    When Payments are Due. Unless otherwise specified, payments shall be made annually. Payments
shall be made to The Texas A&M University System, in College Station, Texas, not later than
sixty (60) days after the last day of the calendar year in which they accrue.7.02
    
    Royalty Reports. LICENSEE shall provide a sales report to SYSTEM each year, providing
information sufficient to allow SYSTEM to calculate amounts due SYSTEM for the reporting
period, in the form attached hereto as ANNEX I.7.03
    
    Currency. Payment due to SYSTEM shall be paid in U.S. dollars. Royalty payments requiring
conversion shall use the exchange rate as reported in The Wall Street Journal on the
last business day of the royalty reporting period.7.04
    
    Inspection of Books and Records. At its own expense, SYSTEM may annually inspect LICENSEEs
books and records as needed to determine royalties payable. LICENSEE shall maintain such books
and records for at least three (3) years following the dates of the underlying transactions.
Any such inspections shall be in confidence and conducted during ordinary business hours, and
SYSTEM will provide LICENSEE prior notice two (2) weeks before making such inspections. SYSTEM
must employ an independent Certified Public Accountant reasonably acceptable to LICENSEE for
this purpose, who will only report to SYSTEM such information as necessary, to determine
royalties payable to SYSTEM and LICENSEEs compliance with any related obligations to SYSTEM.
If SYSTEMs audit identifies a shortage of five percent (5%) or more of amounts due to SYSTEM,
then LICENSEE shall pay the costs of SYSTEMs audit. LICENSEE shall pay all amounts due as a
consequence of such audit to SYSTEM promptly, with interest.
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7.05
    
    Interest Charges. Overdue payments may, at the sole discretion of SYSTEM, be subject to a
daily charge commencing on the 31st day after such payment is due, compounded monthly, at the
rate of either one and one-half percent (1.5%) per month or the highest legal interest rate,
whichever is lower. The payment of such interest will not foreclose SYSTEM from exercising any
other rights it may have as a consequence of the lateness of any payment.
 ARTICLE VIII  TERM AND TERMINATION
 8.01
    
    Expiration. This Agreement, unless sooner terminated as provided herein, shall remain in
effect on a country-by-country basis until (a) failure of SYSTEM to obtain at least one issued
patent for protection of LICENSED TECHNOLOGY, (b) expiration of the last to expire patent
under PATENT RIGHTS, or (c) final and unappealable determination by a court of competent
jurisdiction that PATENT RIGHTS are invalid.8.02
    
    Termination by Licensee. LICENSEE may terminate this Agreement by providing written notice
to SYSTEM at least ninety (90) days before the termination is to take effect.8.03
    
    Termination by System. If LICENSEE materially breaches this Agreement, SYSTEM may give
LICENSEE written notice of the breach. LICENSEE shall have a period of sixty (60) days from
receipt of the notice to cure the breach. If LICENSEE does not cure the breach within this
period, SYSTEM may terminate this Agreement in writing without further notice.8.04
    
    Matters Surviving Termination. All accrued obligations and claims, including reimbursement
of patent expenses, license fee obligations, royalty obligations, minimum annual consideration
obligations, interest charge obligations, and all other financial obligations, and claims or
causes of action for breach of this Agreement, shall survive termination of this Agreement.
Obligations of confidentiality shall survive termination of this Agreement. This section
controls in the case of a conflict with any other section of this Agreement.
 ARTICLE IX  INDEMNIFICATION AND REPRESENTATION
 9.01
    
    Indemnification. LICENSEE SHALL AT ALL TIMES DURING THE TERM OF THIS AGREEMENT AND THEREAFTER
INDEMNIFY, DEFEND, AND HOLD HARMLESS SYSTEM, ITS REGENTS, OFFICERS, AND EMPLOYEES AGAINST ANY
CLAIM, PROCEEDING, DEMAND, LIABILITY OR EXPENSE (INCLUDING LEGAL EXPENSE AND REASONABLE
ATTORNEYS FEES) WHICH RELATES TO INJURY TO PERSONS OR TO PROPERTY, ANY ACTION BROUGHT BY A
THIRD PARTY ALLEGING INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, OR AGAINST ANY OTHER CLAIM,
PROCEEDING, DEMAND, EXPENSE, AND LIABILITY OF ANY KIND WHATSOEVER RESULTING FROM THE
PRODUCTION, MANUFACTURE, SALE, COMMERCIAL USE, LEASE, CONSUMPTION, OR ADVERTISEMENT OF
LICENSED PRODUCTS OR ARISING FROM ANY OBLIGATION OF LICENSEE OR SUBLICENSEE(S) UNDER THIS
AGREEMENT AND NOT CAUSED BY BREACH OF THIS AGREEMENT BY SYSTEM (HEREINAFTER JOINTLY REFERRED
TO AS CLAIMS), PROVIDED THAT SYSTEM SHALL
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PROMPTLY PROVIDE WRITTEN NOTICE OF ANY CLAIM TO LICENSEE, AND THAT, SUBJECT TO THE APPROVAL
OF THE ATTORNEY GENERAL OF THE STATE OF TEXAS, LICENSEE SHALL HAVE THE RIGHT TO CONDUCT THE
DEFENSE OF ANY CLAIM, AND THAT SYSTEM SHALL COOPERATE WITH LICENSEE AS LICENSEE MAY REQUEST
IN ANY SUCH DEFENSE, AT LICENSEES REQUEST AND EXPENSE.9.02
    
    Representation. SYSTEM represents that it owns and has title to PATENT RIGHTS and has the
full right and power to grant the license set forth in Article 2.01, and that there are no
outstanding agreements, assignments, or encumbrances inconsistent with the provisions of this
Agreement. SYSTEM MAKES NO OTHER REPRESENTATIONS AND EXTENDS NO OTHER WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, NOR DOES SYSTEM ASSUME ANY OBLIGATIONS WITH RESPECT TO
INFRINGEMENT OF PATENT RIGHTS OR OTHER RIGHTS OF THIRD PARTIES DUE TO LICENSEES ACTIVITIES
UNDER THIS AGREEMENT.
 ARTICLE X  NOTICES
 10.01
    
    Notices. Payments, notices, or other communications required by this Agreement shall be
sufficiently made or given if mailed by certified First Class United States mail, postage
pre-paid, or by commercial carrier (e.g., FedEx, UPS, etc.) when such carrier maintains
receipt or record of delivery, addressed to the address stated below, or to the last address
specified in writing by the intended recipient.If to SYSTEM:
 
 If to LICENSEE for Legal Matters:
    
    for Financial Matters:Director of Business Development
    
    Director of Business Developmentcc: Legal Department
    
    cc: ControllerCeres, Inc.
    
    Ceres, Inc.1535 Rancho Conejo Blvd.
    
    1535 Rancho Conejo Blvd.Thousand Oaks, CA 91320
    
    Thousand Oaks, CA 91320
 ARTICLE XI  MISCELLANEOUS PROVISIONS
 11.01
    
    Notice of Infringement. SYSTEM and LICENSEE shall promptly notify one another in writing of
any alleged infringement of any PATENT RIGHTS. Within thirty (30) days after receipt of such
notice, SYSTEM and LICENSEE shall formulate a strategy for resolving the alleged infringement.
LICENSEE acknowledges that SYSTEMs involvement, participation, and representation in any
litigation requires the prior written consent of SYSTEM and the Attorney General of the State
of Texas, and subject to the granting of that consent, SYSTEM may be joined as a party in any
action brought by LICENSEE, so long as LICENSEE shall pay all of SYSTEMs reasonable costs and
expenses. LICENSEE will have the right, at its own discretion and expense, to take any
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action to enforce and to initiate and prosecute suits for infringement PATENT RIGHTS
covering jointly owned Subject Inventions. LICENSEE and SYSTEM will consult with each
other upon a course of action and enforcement strategy. LICENSEE will be responsible for
the conduct of any such enforcement action, and SYSTEM will reasonably cooperate with
LICENSEE to effect the enforcement action, and if appropriate, determine a settlement
position. LICENSEE shall be responsible for retaining counsel but will consult with SYSTEM
and retain counsel reasonably acceptable to SYSTEM. For purposes of settlement, LICENSEE
shall be the contact with the Parties counsel as well as the opposing Party(ies) and shall
have the right to enter into settlements. LICENSEE shall keep SYSTEM advised as to all
developments with respect to the enforcement action and settlement discussions, which
includes supplying to SYSTEM copies of all papers received and filed in sufficient time for
SYSTEM to comment thereon. SYSTEM may attend any and all meetings with the Parties
counsel and the opposing side for settlement purposes. If necessary, and subject to the
consent of the Attorney General of the State of Texas, SYSTEM agrees to enter into a joint
defense agreement. Any damages received by LICENSEE as a result of an enforcement action
of rights to jointly owned Subject Inventions, after deduction of all enforcement related
costs incurred by LICENSEE, shall be considered as NET SALES or LICENSE INCOME, as
appropriate, for the purpose of remuneration payments to SYSTEM.11.02
    
    Export Controls. It is understood that SYSTEM is subject to United States laws and
regulations controlling the export of technical data, computer software, laboratory prototypes
and other commodities, and that its obligations hereunder are contingent on compliance with
applicable United States export laws and regulations. The transfer of certain technical data
and commodities may require a license from the cognizant agency of the United States
Government or written assurances by LICENSEE that LICENSEE shall not export data or
commodities to certain countries without prior approval of such agency. SYSTEM neither
represents that a license shall not be required nor that, if required, it shall be issued.11.03
    
    Confidential Information. Sales reports submitted by LICENSEE under Article VII and audit
reports made pursuant to Article 7.04 shall be considered as Confidential Information under
this Agreement and shall not be disclosed by SYSTEM to any third party except as may be
required in response to a valid order of a court or other government body of the United States
or any political subdivision thereof, as required under the Texas Public Information Act.
Should the Parties contemplate exchange of other information of a confidential nature, they
shall enter into a separate confidentiality agreement.11.04
    
    Non-Use of Names. LICENSEE shall not use the names of The Texas A&M University System, nor
of any of its employees or components, nor any adaptation thereof, in any advertising,
promotional or sales literature without the prior written consent obtained from SYSTEM in each
case, except that LICENSEE may state that it is licensed by SYSTEM under PATENT RIGHTS.11.05
    
    Trademarks. LICENSEE may select, own and use its own trademark on LICENSED PRODUCTS.
However, nothing herein shall be construed as granting to LICENSEE any license or other right
under any trade name, trademark, or service mark owned or licensed by SYSTEM. Conversely,
SYSTEM shall have no rights to trade names, trademarks, or service marks owned by LICENSEE.
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11.06
    
    Assignment of this Agreement. This Agreement binds and enures to the benefit of the
Parties, their successor or assigns, but may not be assigned by either Party without the prior
written consent of the other Party; provided however, LICENSEE shall have the right to assign
its rights and obligations under this Agreement to any AFFILIATED COMPANY without such prior
consent, but with written notice to SYSTEM. LICENSEE shall also have the right to assign its
rights and obligations under this Agreement to a third party in conjunction with the transfer
to such third party of substantially all of the assets of LICENSEE associated with performance
under this Agreement without such prior consent.11.07
    
    Force Majeure. Other than an obligation for the payment of money, SYSTEM, upon receipt of
documentation from LICENSEE which it deems appropriate, shall excuse any breach of this
Agreement, which is proximately caused by war, strike, act of God, or other similar
circumstance normally deemed outside the control of well-managed businesses.11.08
    
    Entire Agreement. Other than the SRA and the IPRA this Agreement contains the entire
understanding of the Parties with respect to PATENT RIGHTS, and supersedes all other written
and oral agreements between the Parties with respect to PATENT RIGHTS. It may be modified
only by a written amendment signed by the Parties.11.09
    
    Governing Law. The validity, interpretation, and enforcement of this Agreement shall be
governed and determined by the laws of the State of Texas, excluding the conflict of laws
rules which might require the application of the laws of another jurisdiction.11.10
    
    Disputes.A. The Parties shall make every possible attempt to resolve in an amicable manner all
disputes betweem the Parties concerning the interpretation of this Agreement.B. The Parties must use the dispute resolution process provided in Chapter 2260, Texas
Government Code,and the related rules adopted by the Texas Attorney General to attempt to
resolve any claim for breach of contract made by LICENSEE that cannot be resolved in the
ordinary course of business. LICENSEE must submit written notice of a claim of breach of
contract under this Chapter to B.J. Crain, Associate Vice Chancellor, who will examine
LICENSEEs claim and any counterclaim and negotiate with LICENSEE in an effort to resolve
the claim.11.11
    
    Headings. Headings appear solely for convenience of reference. Such headings are not part
of, and shall not be used to construe, this Agreement.11.12
    
    No Waiver; Severability. No waiver of any breach of this Agreement shall constitute a
waiver of any other breach of the same or other provision of this Agreement and no waiver
shall be effective unless made in writing. This Agreement, to the greatest extent
possible, shall be construed so as to give validity to all of the provisions hereof. If any
provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent
jurisdiction or is deemed unenforceable under the current applicable law from time to time in
effect during the term of this Agreement, the remainder of this Agreement will not be affected
or impaired thereby and will continue to be construed to the maximum extent permitted by law.
In lieu of each provision which is invalid, illegal or
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unenforceable, there will be substituted or added as part of this Agreement by mutual
written agreement of the Parties, a provision which will be as similar as possible, in
economic and business objectives as intended by the Parties to such invalid, illegal or
unenforceable provision, but will be valid, legal and enforceable.11.13
    
    Damages. Neither Party shall be liable for indirect, special, remote, incidental or
consequential damages or loss of profit in connection with this Agreement or its
implementation.
  CERES, INC.
    
    
    
    THE TEXAS A&M UNIVERSITY SYSTEMBy:
    
    
    
    
    
    Guy K. DiedrichVice Chancellor Federal Relations,Title:
    
    
    
    
    
    Research and CommercializationDate:Date:By:Title:Date:
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ANNEX I  to the Example License Agreement for Subject Inventions
between Ceres, Inc. and The Texas A&M University System
 Royalty Report
 [template to be developed during negotiations of license]
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Appendix B
to the Intellectual Property Rights Agreement
between Ceres, Inc. and The Texas A&M University System
 Example License Agreement for Lines
 LICENSE AGREEMENT
 Between
 Ceres, Inc.
 and
 The Texas A&M University System
   [xxxx]
 ANNEX I
      1.01
    
    LINES shall mean the Lines defined in ANNEX I. [include list with indication of
TAES GENETIC CONTRIBUTION and all INTELLECTUAL PROPERTY RIGHTS the subject of the Agreement].
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1.02
    
    INTELLECTUAL PROPERTY RIGHTS shall mean all rights in any patent, plant variety, plant
breeders rights, registration, or any applications thereof, or any other intellectual
property protection, for LINES, HYBRIDS or NEW PARENTAL LINES, that may be filed or exist in
any jurisdiction in the world, with the exception of Trademarks.1.03
    
    NEW PARENTAL LINES shall mean new genetic lines or populations which are developed by
breeding by LICENSEE and which have one or more of the LINES as progenitors.1.04
    
    HYBRID shall mean a seed or plant that has resulted from genetic crossbreeding between two
or more lines where those lines include one or more (i) LINES or (ii) NEW PARENTAL LINES.1.05
    
    COMMERCIAL SEED shall mean seed of HYBRIDS that is sold for purposes other than the
production of propagating material.1.06
    
    TRAIT FEE shall mean any upfront or annual fee collected by LICENSEE or any AFFILIATED
COMPANY in conjunction with NET SALES as an additional remuneration for the sale of COMMERCIAL
SEED that has a particular valuable trait or characteristic.1.07
    
    TAES GENETIC CONTRIBUTION shall mean, for any specific LINE (a) the proportion of the
nuclear genes of the LINE arisen from LINES licensed by SYSTEM to LICENSEE, based on DNA
Marker Analysis as defined in the SRA; (b) a contribution to be determined on a case-by-case
basis in each case where a specific valuable phenotype of that LINE is attributable to
specific ALLELE(s) optioned or licensed to LICENSEE by SYSTEM; and (c) OTHER CONTRIBUTIONS
from TAES.1.08
    
    OTHER CONTRIBUTIONS shall mean (i) intellectual and technical contributions to the
development of LINES or if from LICENSEE, to the development of LINES, NEW PARENTAL LINES or
HYBRIDS such as, without limitation, markers, gene-trait association knowledge or composition
knowledge, that inform the breeding and selection process, or transgenic traits and (ii)
financial contributions to the development of LINES, or if from LICENSEE, to the development
of LINES, NEW PARENTAL LINES or HYBRIDS.1.09
    
    EFFECTIVE DATE shall mean the date this Agreement has been executed by the last Party.1.10
    
    NET SALES shall mean LICENSEEs and AFFILIATED COMPANIES receipts for sales of COMMERCIAL
SEED or for SERVICES requiring the use of LINES less the sum of the following:
 (a)
    
    sales taxes, tariffs, duties and/or use taxes directly
imposed with reference to particular sales;(b)
    
    outbound transportation prepaid or allowed, shipping,
packaging, cost of insurance in transit paid by LICENSEE or an AFFILIATED
COMPANY;(c)
    
    amounts allowed or credited on returns;
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(d)
    
    customary trade, quality or cash discounts;(e)
    
    cost of any coating materials or treatments that may have
been applied to the COMMERCIAL SEED; and(f)
    
    [other deductions which are appropriate to sales of the
LICENSED PRODUCTS may be included].
 No deductions shall be made for commissions paid to individuals whether independent sales
agencies or regularly employed by LICENSEE. The value of sample size quantities of seed
provided for free shall not be included in NET SALES. Where there is no identifiable sale
price (except for samples as referred to in the previous sentence) or when COMMERCIAL SEED
is sold to other than bona fide, arms length customers of LICENSEE or any AFFILIATED
COMPANY, LICENSEE or the AFFILIATED COMPANY shall be deemed to have received an amount of
NET SALES calculated based on the final sale of the COMMERCIAL SEED (wholesale level) to an
independent third party. If no such current price is available, a hypothetical fair market
value price will be determined by the Parties jointly in good faith for the purpose of
calculating NET SALES. Further, TRAIT FEES, if any, net of any applicable deductions,
shall be added to NET SALES if related to a trait contributed by SYSTEM.1.11
    
    LICENSE INCOME shall mean the amount actually received by either LICENSEE or any AFFILIATED
COMPANY in consideration for the grant of sublicenses to sublicensees that are not AFFILIATED
COMPANIES to produce and sell COMMERCIAL SEED, including up-front fees, lump sum payments and
any running royalties on a product-by-product and jurisdiction-by-jurisdiction basis.1.12
    
    AFFILIATED COMPANY shall mean any company owned or controlled by, under common control with
or controlling LICENSEE, control meaning in this context the direct or indirect ownership of
more than fifty percent (50%) of the voting stock/shares of a company, or the power to
nominate at least half of the directors.1.13
    
    SERVICE shall mean any transaction with a third party in which LICENSEE or an AFFILIATED
COMPANY performs certain activities on behalf and at the request of a third party that would
if not performed by LICENSEE or an AFFILIATED COMPANY require a license under SYSTEMS
INTELLECTUAL PROPERTY RIGHTS licensed hereunder, in exchange for payment, but excluding any
research collaboration or sponsored research agreement.1.14
    
    ALLELE shall mean a particular form of a gene determinant for a valuable characteristic of
a plant (e.g. drought tolerance, specific flowering time), discovered in the Program under the
SRA by SYSTEM or by SYSTEM and LICENSEE jointly.1.15
    
    BREEDER SEED shall mean seed of a LINE that is of a suitable standard of physical and
genetic purity to produce FOUNDATION SEED and resulted from the final breeding of the LINE as
released by the breeder.1.16
    
    FOUNDATION SEED shall mean foundation seed produced from plants grown directly from BREEDER
SEED, cultivated according to certification regulations and that meets the specifications of
the official seed certifying agency of the State of Texas as well as any additional quality
standards of LICENSEE.
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ARTICLE II  LICENSE GRANT
 2.01
    
    Grant. SYSTEM grants to LICENSEE and its AFFILIATED COMPANIES an exclusive world-wide license
and right to commercialize the LINES, including a license under SYSTEMs rights and interest
it any INTELLECTUAL PROPERTY RIGHTS covering LINES or HYBRIDS, (i) to maintain and increase
seed of LINES; (ii) to develop NEW PARENTAL LINES; (iii) to develop HYBRIDS; and (iv) to
produce and sell COMMERCIAL SEED, and to grant sublicenses of the same scope, to the end of
the term of this Agreement as prescribed in Article VIII.2.02
    
    Reservation. SYSTEM reserves an irrevocable, worldwide, nonexclusive, royalty-free right to
practice the grant made in Article 2.01 under (i), (ii) and (iii) for research and educational
purposes only, and not for commercial purposes or for the commercial benefit of third parties.
SYSTEM shall comply with the provisions of the SRA and the IPRA when exercising this right.2.03
    
    Government Reservation. Rights under this Agreement are subject to rights required to be
granted to the Government of the United States of America pursuant to 35 USC Section 200-212,
including a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the United States any patented LINES throughout the world.2.04
    
    SYSTEM will supply lbs of BREEDER SEED to LICENSEE
within  from                the EFFECTIVE DATE.
 ARTICLE III  CONSIDERATION
 3.01
    
    Royalty Rate. As consideration for the license granted in this Agreement, LICENSEE shall
remit to SYSTEM on NET SALES as follows:
 a)
    
    a royalty of ___ percent (__%) of NET SALES if the COMMERCIAL SEED is of a
HYBRID which is entirely composed of TAES GENETIC CONTRIBUTION, and no OTHER
CONTRIBUTIONS from LICENSEE;b)
    
    if a HYBRID is not entirely composed of TAES GENETIC CONTRIBUTION, the
royalty rate set forth in Article 3.01(a) will be reduced in function of the dilution
of the TAES GENETIC CONTRIBUTION in such HYBRID by:
 
    
    OTHER CONTRIBUTIONS from LICENSEE;
    
    crossing of the LINES which are progenitors of such HYBRID
with other germplasm, including, but not limited to NEW PARENTAL
LINES,
 c)
    
    no royalties shall be due with respect to HYBRIDS that contain less than five
percent (5%) TAES GENETIC CONTRIBUTION and contain no specific ALLELE(s).d)
    
    Whenever a particular HYBRID, or for sublicensing purposes, a particular NEW
PARENTAL LINE is ready for release, LICENSEE will notify SYSTEM
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thereof, and provide the applicable royalty rate based on the principles set forth
in Articles 3.01(b) and 4.02(b) with information on the calculation of such rate.
If SYSTEM has any comments or questions, SYSTEM will inform LICENSEE thereof in
writing within thirty (30) days from the date of LICENSEEs notification and the
Parties will discuss in good faith. If SYSTEM does not respond in writing to the
aforementioned notification of LICENSEE within thirty (30) days, the royalty rates
in such notification shall be final. If a dispute regarding the royalty rate arises
that can not be resolved amicably within thirty (30) days after LICENSEEs
aforementioned notification, the following procedures shall apply: such dispute
shall be referred to a mutually agreed expert whose decision shall be final. Each
Party shall submit to the expert within fifteen (15) days of his appointment its
position in writing on the appropriate royalty rate. Such expert shall be required
to choose the one of such two (2) party positions that the expert considers most
reasonable in the circumstances and shall not make any independent determination
(Royalty Expertise Procedure).
 3.02
    
    [Optional]Minimum Annual Consideration. In order to maintain this exclusive license to
LINES, LICENSEE shall pay to SYSTEM minimum annual consideration in accordance with the
following schedule:
 (a)
    
    Calendar Year 200
    
    $__________(b)
    
    Calendar Years 200 and 200
    
    $__________(c)
    
    Calendar Year 200 and every year thereafter
through the expiration of this Agreement
    
    $__________
 In the event that LICENSEEs payment of royalties for the Calendar Year due under Article
3.01 do not meet or exceed the required minimum annual consideration, as specified in this
Article, LICENSEEs royalty payment for the last quarter of such Calendar Year shall
include payment of the balance needed to achieve the required minimum. In the event this
Agreement expires or is terminated prior to the end of a Calendar Year, the corresponding
minimum annual consideration provided for in this Article shall be prorated for that year.3.03
    
    Intellectual Property Rights. As additional consideration for the license granted in this
Agreement, LICENSEE shall bear the reasonable expenses incurred in the prosecution and
maintenance of INTELLECTUAL PROPERTY RIGHTS, as further described in ARTICLE VI.3.04
    
    The royalties and other payments due under Articles III and IV of this Agreement are in
consideration of all INTELLECTUAL PROPERTY RIGHTS listed in ANNEX I.3.05
    
    If an exclusive license on a LINE, which is a parental line of the HYBRID of which COMMERCIAL
SEED is sold, reverts to or is non-exclusive pursuant to Articles 3.02, 5.02 or any other
applicable provisions or upon LICENSEEs election, a lower royalty rate shall be negotiated in
good faith between the Parties. The start of such negotiations shall be evidenced by written
notice from one Party to the other initiating such negotiations, and such negotiations shall
not extend beyond ninety (90) days from the start thereof without the mutual consent of both
Parties (Negotiation Period). If the Parties fail to reach agreement within the Negotiation
Period, the lower royalty rate shall
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be settled in accordance with the following procedures: the disputed royalty rate shall be
referred to a mutually agreed impartial expert whose decision shall be final. Each Party
shall submit to the expert within fifteen (15) days of his appointment its position in
writing on the disputed royalty rate. Such expert shall be limited to choosing the one of
such two (2) party positions that the expert considers most reasonable in the circumstances
and shall not make any other determination. Neither Party shall be bound by any
determination by the expert which, in the opinion of Partys counsel, will result or be
likely to result in that Party violating any applicable law or regulation.
 ARTICLE IV  SUBLICENSES
 4.01
    
    Sublicenses. LICENSEE and its AFFILIATED COMPANIES may grant sublicenses to persons, firms or
corporations under such conditions as it may arrange, as consistent with this Agreement, as
long as each such sublicense is not repugnant to the public policies of SYSTEM, the State of
Texas, or the United States.4.02
    
    Sublicensee Consideration. LICENSEE shall pay to SYSTEM a royalty on LICENSE INCOME as
follows:
 a)
    
    a royalty of ____ percent (__%) of LICENSE INCOME if the sublicense is for a
HYBRID or LINE which is entirely composed of TAES GENETIC CONTRIBUTION, and no OTHER
CONTRIBUTION from LICENSEE;b)
    
    if the sublicense is for a HYBRID or LINE that is not entirely composed of
TAES ONLY CONTRIBUTION, or for a NEW PARENTAL LINE, the royalty rate will be reduced
in proportion to the dilution of the TAES ONLY CONTRIBUTION in such HYBRID, LINE or
NEW PARENTAL LINE as set forth in Article 3.01(b) and (d);c)
    
    no royalties shall be due with respect to HYBRIDS or NEW PARENTAL LINES that
contain less than five percent (5%) TAES GENETIC CONTRIBUTION and contain no specific
ALLELE(s).
 4.03
    
    Reporting. LICENSEE shall notify SYSTEM of the grant of sublicense to a third party and
provide a redacted copy of the sublicense to SYSTEM. LICENSEE shall not redact any
information unless it could be reasonably considered sensitive to LICENSEEs business. Upon
reasonable notice by SYSTEM, SYSTEM may through an attorney-at-law review an unredacted copy
of the sublicense but shall not provide any redacted information to business persons within
SYSTEM. LICENSEE shall also provide SYSTEM with the name, address and scope of each
sublicense and a copy of each sublicensees report as is pertinent to calculation of amounts
due SYSTEM under this Agreement.4.04
    
    Non-Cash Transactions. Where there is no identifiable LICENSE INCOME, a hypothetical fair
market value price will be determined by the Parties jointly in good faith for the purpose of
calculating LICENSE INCOME.
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ARTICLE V  LICENSEE RESPONSIBILITIES
 5.01
    
    Milestones. In accomplishing the commercialization under this Agreement, LICENSEE shall
demonstrate to the satisfaction of SYSTEM achievement of the following milestones:EXAMPLE: LICENSEE shall complete development of a HYBRID no later than _____ months
following EFFECTIVE DATE.EXAMPLE: LICENSEE shall record first sales of COMMERCIAL SEED no later than ______ months
following EFFECTIVE DATE.Other Milestones to be defined upon the basis of LICENSEEs business plan for
COMMERCIAL SEED.LICENSEE shall provide written notification to SYSTEM within thirty (30) days of achieving
each milestone.[Milestones may be substituted or postponed by payments to be agreed for each particular
license agreement.]5.02
    
    Failure to Accomplish Milestones. Should LICENSEE fail to achieve any milestone specified in
paragraph Article 5.01, or should LICENSEE fail to record NET SALES for two (2) consecutive
Calendar Years once sales begin, SYSTEM, at its sole option and as its sole remedy, may waive
the requirement to achieve the milestone, may revise the license granted herein to a
nonexclusive license, or may renegotiate the missed milestone.5.03
    
    Legal Compliance. LICENSEE must comply with all applicable federal, state and local laws and
regulations in its exercise of all rights granted to it by SYSTEM under this Agreement.5.04
    
    No Royalties for Sales to U.S. Government. In accordance with 35 USC Section 200-212,
LICENSEE has no duty to pay SYSTEM royalties under this Agreement on NET SALES made to the
United States Government, including any United States Government agency. LICENSEE shall
reduce the amount charged for COMMERCIAL SEED covered by patent applications or patents
licensed under this Agreement sold to the United States Government by an amount equal to the
royalty otherwise due SYSTEM.5.05
    
    U.S. Manufacture. In accordance with 35 USC Section 200-212, COMMERCIAL SEED covered by
patent applications or patents licensed under this Agreement shall be manufactured
substantially in the United States of America.
 ARTICLE VI  INTELLECTUAL PROPERTY
 6.01
    
    Filing. SYSTEM will have the right to prepare and file, in accordance with its best judgment,
any and all applications for patents, plant variety rights or other forms of intellectual
property protection or variety registration for HYBRIDS, LINES or NEW PARENTAL LINES in the
United States that are solely owned by SYSTEM and LICENSEE will have the right to prepare and
file such applications for INTELLECTUAL PROPERTY RIGHTS jointly or solely owned by LICENSEE.
Applications for patents or plant variety rights on each particular HYBRID or LINE shall be
filed in the name of SYSTEM (TAES) if owned by SYSTEM pursuant to the SRA, in the name of
LICENSEE (CERES) if owned by LICENSEE pursuant to the SRA and in
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the joint names of SYSTEM (TAES) and LICENSEE (CERES) if jointly owned pursuant to the SRA.
Applications for patents or plant variety rights on NEW PARENTAL LINES shall be filed in
the name of LICENSEE. At LICENSEEs discretion, patents, plant variety rights and/or other
forms of intellectual property protection may be filed in any other jurisdiction in the
world.6.02
    
    Abandoning IP Applications. The following rules shall apply with respect to applications for
intellectual property protection on SYSTEM owned or jointly owned LINES or HYBRIDS. If the
Party controlling prosecution intends to abandon any patent plant variety rights, pending or
granted in any jurisdiction, that Party shall first give sufficient written notice to the
other Party to permit the other party the opportunity to assume such filing, examination
and/or maintenance. LICENSEE and SYSTEM will consult with regard to INTELLECTUAL PROPERTY
RIGHTS.6.03
    
    Jurisdiction. The obligations of this Article 6.03 shall not apply to any jurisdictions in
which the prosecuting party has elected not to apply for intellectual property protection.
LICENSEE and SYSTEM shall avoid carrying out any act that would prejudice the grant of
INTELLECTUAL PROPERTY RIGHTS. Without limitation, neither Party shall make available
reproductive material of the HYBRIDS or LINES at a date or in a manner that might jeopardize
the right to seek INTELLECTUAL PROPERTY RIGHTS protection for the HYBRIDS or LINES.
  ARTICLE VII  PAYMENTS AND REPORTS
 7.01
    
    When Payments are Due. Unless otherwise specified, payments shall be made annually. Payments
shall be made to The Texas A&M University System, in College Station, Texas, not later than
sixty (60) days after the last day of the calendar year in which they accrue.7.02
    
    Royalty Reports. LICENSEE shall provide a sales report to SYSTEM each year, providing
information sufficient to allow SYSTEM to calculate amounts due SYSTEM for the reporting
period, in the form attached hereto as ANNEX II.7.03
    
    Currency. Payment due to SYSTEM shall be paid in U.S. dollars. Royalty payments requiring
conversion shall use the exchange rate as reported in The Wall Street Journal on the
last business day of the royalty reporting period.7.04
    
    Inspection of Books and Records. At its own expense, SYSTEM may annually inspect LICENSEEs
books and records as needed to determine royalties payable. LICENSEE shall maintain such books
and records for at least three (3) years following the dates of the underlying transactions.
Any such inspections shall be in confidence and conducted during ordinary business hours, and
SYSTEM will provide LICENSEE prior notice two (2) weeks before making such inspections. SYSTEM
must employ an independent Certified Public Accountant reasonably acceptable to LICENSEE for
this purpose, who will only report to SYSTEM such information as necessary, to determine
royalties payable to SYSTEM and LICENSEEs compliance with any related obligations to SYSTEM.
If SYSTEMs audit identifies a shortage of five percent (5%) or more of amounts due to SYSTEM,
then LICENSEE shall pay the costs of SYSTEMs audit.
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LICENSEE shall pay all amounts due as a consequence of such audit to SYSTEM promptly, with
interest.7.05
    
    Interest Charges. Overdue payments may, at the sole discretion of SYSTEM, be subject to a
daily charge commencing on the 31st day after such payment is due, compounded monthly, at the
rate of either one and one-half percent (1.5%) per month or the highest legal interest rate,
whichever is lower. The payment of such interest will not foreclose SYSTEM from exercising any
other rights it may have as a consequence of the lateness of any payment.ARTICLE VIII  TERM AND TERMINATION8.01
    
    Expiration. Subject to any other rights of termination under this Article, this Agreement
shall remain in full force and effect on a LINE by LINE, HYBRID by HYBRID and country by
country basis until the expiration of all registered or patented INTELLECTUAL PROPERTY RIGHT
covering such product in such country and solely or jointly owned by SYSTEM.8.02
    
    Termination by Licensee. LICENSEE may terminate this Agreement by providing written notice
to SYSTEM at least ninety (90) days before the termination is to take effect.8.03
    
    Termination by System. If LICENSEE materially breaches this Agreement, SYSTEM may give
LICENSEE written notice of the breach. LICENSEE shall have a period of sixty (60) days from
receipt of the notice to cure the breach. If LICENSEE does not cure the breach within this
period, SYSTEM may terminate this Agreement in writing without further notice.8.04
    
    Matters Surviving Termination. All accrued obligations and claims, including reimbursement
of patent expenses, license fee obligations, royalty obligations, minimum annual consideration
obligations, interest charge obligations, and all other financial obligations, and claims or
causes of action for breach of this Agreement, shall survive termination of this Agreement.
Obligations of confidentiality shall survive termination of this Agreement. This section
controls in the case of a conflict with any other section of this Agreement.
 ARTICLE IX  INDEMNIFICATION AND REPRESENTATION
 9.01
    
    Indemnification. LICENSEE SHALL AT ALL TIMES DURING THE TERM OF THIS AGREEMENT AND
THEREAFTER INDEMNIFY, DEFEND, AND HOLD HARMLESS SYSTEM, ITS REGENTS, OFFICERS, AND EMPLOYEES
AGAINST ANY CLAIM, PROCEEDING, DEMAND, LIABILITY OR EXPENSE (INCLUDING LEGAL EXPENSE AND
REASONABLE ATTORNEYS FEES) WHICH RELATES TO INJURY TO PERSONS OR TO PROPERTY, ANY ACTION
BROUGHT BY A THIRD PARTY ALLEGING INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, OR AGAINST ANY
OTHER CLAIM, PROCEEDING, DEMAND, EXPENSE, AND LIABILITY OF ANY KIND WHATSOEVER RESULTING FROM
THE PRODUCTION, MANUFACTURE, SALE, COMMERCIAL USE, LEASE, CONSUMPTION, OR ADVERTISEMENT OF
COMMERCIAL SEED OR ARISING FROM ANY OBLIGATION OF LICENSEE OR SUBLICENSEE(S) UNDER THIS
AGREEMENT AND NOT
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CAUSED BY BREACH OF THIS AGREEMENT BY SYSTEM (HEREINAFTER JOINTLY REFERRED TO AS CLAIMS),
PROVIDED THAT SYSTEM SHALL PROMPTLY PROVIDE WRITTEN NOTICE OF ANY CLAIM TO LICENSEE, AND
THAT, SUBJECT TO THE APPROVAL OF THE ATTORNEY GENERAL FO THE STATE OF TEXAS, LICENSEE SHALL
HAVE THE RIGHT TO CONDUCT THE DEFENSE OF ANY CLAIM, AND THAT SYSTEM SHALL COOPERATE WITH
LICENSEE AS LICENSEE MAY REQUEST IN ANY SUCH DEFENSE, AT LICENSEES REQUEST AND EXPENSE.9.02
    
    Representation. SYSTEM represents that it has the full right and power to grant the license
set forth in Article 2.01, and that there are no outstanding agreements, assignments, or
encumbrances inconsistent with the provisions of this Agreement. SYSTEM MAKES NO OTHER
REPRESENTATIONS AND EXTENDS NO OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, NOR DOES SYSTEM ASSUME ANY OBLIGATIONS WITH RESPECT TO INFRINGEMENT OF PATENT RIGHTS
OR OTHER RIGHTS OF THIRD PARTIES DUE TO LICENSEES ACTIVITIES UNDER THIS AGREEMENT.
 ARTICLE X  NOTICES
 10.01
    
    Notices. Payments, notices, or other communications required by this Agreement shall be
sufficiently made or given if mailed by certified First Class United States mail, postage
pre-paid, or by commercial carrier (e.g., FedEx, UPS, etc.) when such carrier maintains
receipt or record of delivery, addressed to the address stated below, or to the last address
specified in writing by the intended recipient.
 If to SYSTEM:Executive DirectorOffice of Technology Commercialization3369 TAMUCollege Station, Texas, USA 77843-3369
 If to LICENSEE for Legal Matters:
    
    for Financial Matters:Director of Business Development
    
    Director of Business Developmentcc: Legal Department
    
    cc: ControllerCeres, Inc.
    
    Ceres, Inc.1535 Rancho Conejo Blvd.
    
    1535 Rancho Conejo Blvd.Thousand Oaks, CA 91320
    
    Thousand Oaks, CA 91320
 ARTICLE XI  MISCELLANEOUS PROVISIONS
 11.01
    
    Notice of Infringement. SYSTEM and LICENSEE shall promptly notify one another in writing of
any alleged infringement of any INTELLECTUAL PROPERTY RIGHTS. Within thirty (30) days after
receipt of such notice, SYSTEM and LICENSEE shall formulate a strategy for resolving the
alleged infringement. LICENSEE acknowledges that SYSTEMs involvement, participation, and
representation in any litigation requires the prior written consent of SYSTEM and the Attorney
General of the State of Texas, and subject to the granting of that consent, SYSTEM may be
joined as a party in any action brought by LICENSEE, so long as LICENSEE shall pay all of
SYSTEMs reasonable
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costs and expenses. LICENSEE will have the right, at its own discretion and expense, to
take any action to enforce and to initiate and prosecute suits for infringement of
INTELLECTUAL PROPERTY RIGHTS covering LINES, HYBRIDS and/or NEW PARENTAL LINES. LICENSEE
and SYSTEM will consult with each other upon a course of action and enforcement strategy.
LICENSEE will be responsible for the conduct of any such enforcement action, and SYSTEM
will reasonably cooperate with LICENSEE to effect the enforcement action, and if
appropriate, determine a settlement position. LICENSEE shall be responsible for retaining
counsel but will consult with SYSTEM and retain counsel reasonably acceptable to SYSTEM.
For purposes of settlement, LICENSEE shall be the contact with the Parties counsel as well
as the opposing Party(ies) and shall have the right to enter into settlements. LICENSEE
shall keep SYSTEM advised as to all developments with respect to the enforcement action and
settlement discussions, which includes supplying to SYSTEM copies of all papers received
and filed in sufficient time for SYSTEM to comment thereon. SYSTEM may attend any and all
meetings with the Parties counsel and the opposing side for settlement purposes. If
necessary, and subject to the consent of the Attorney General of the State of Texas, SYSTEM
agrees to enter into a joint defense agreement. Any damages received by LICENSEE as a
result of an enforcement action of rights to jointly owned INTELLECTUAL PROPERTY RIGHTS,
after deduction of all enforcement related costs incurred by LICENSEE, shall be considered
as NET SALES or LICENSE INCOME, as appropriate, for the purpose of remuneration payments to
SYSTEM.
 11.02
    
    Export Controls. It is understood that SYSTEM is subject to United States laws and
regulations controlling the export of technical data, computer software, laboratory prototypes
and other commodities, and that its obligations hereunder are contingent on compliance with
applicable United States export laws and regulations. The transfer of certain technical data
and commodities may require a license from the cognizant agency of the United States
Government or written assurances by LICENSEE that LICENSEE shall not export data or
commodities to certain countries without prior approval of such agency. SYSTEM neither
represents that a license shall not be required nor that, if required, it shall be issued.11.03
    
    Confidential Information. Sales reports submitted by LICENSEE under Article VII and audit
reports made pursuant to Article 7.04 shall be considered as Confidential Information under
this Agreement and shall not be disclosed by SYSTEM to any third party except as may be
required in response to a valid order of a court or other government body of the United States
or any political subdivision thereof, as required under the Texas Public Information Act.
Should the Parties contemplate exchange of other information of a confidential nature, they
shall enter into a separate confidentiality agreement.11.04
    
    Non-Use of Names. LICENSEE shall not use the names of The Texas A&M University System, nor
of any of its employees or components, nor any adaptation thereof, in any advertising,
promotional or sales literature without the prior written consent obtained from SYSTEM in each
case, except that LICENSEE may state that it is licensed by SYSTEM under INTELLCTUAL PROPERTY
RIGHTS.11.05
    
    Trademarks. LICENSEE may select, own and use its own trademark on LICENSED PRODUCTS.
However, nothing herein shall be construed as granting to LICENSEE any license or other right
under any trade name, trademark, or service mark owned or licensed
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by SYSTEM. Conversely, SYSTEM shall have no rights to trade names, trademarks, or service
marks owned by LICENSEE.11.06
    
    Assignment of this Agreement. This Agreement binds and enures to the benefit of the
Parties, their successor or assigns, but may not be assigned by either Party without the prior
written consent of the other Party; provided however, LICENSEE shall have the right to assign
its rights and obligations under this Agreement to any AFFILIATED COMPANY without such prior
consent, but with written notice to SYSTEM. LICENSEE shall also have the right to assign its
rights and obligations under this Agreement to a third party in conjunction with the transfer
to such third party of substantially all of the assets of LICENSEE associated with performance
under this Agreement without such prior consent.11.07
    
    Force Majeure. Other than an obligation for the payment of money, SYSTEM, upon receipt of
documentation from LICENSEE which it deems appropriate, shall excuse any breach of this
Agreement, which is proximately caused by war, strike, act of God, or other similar
circumstance normally deemed outside the control of well-managed businesses.11.08
    
    Entire Agreement. Other than the SRA and the IPRA, this Agreement contains the entire
understanding of the Parties with respect to INTELLECTUAL PROPERTY RIGHTS, and supersedes all
other written and oral agreements between the Parties with respect to INTELLECTUAL PROPERTY
RIGHTS. It may be modified only by a written amendment signed by the Parties.11.09
    
    Governing Law. The validity, interpretation, and enforcement of this Agreement shall be
governed and determined by the laws of the State of Texas, excluding the conflict of laws
rules which might require the application of the laws of another jurisdiction.11.10
    
    Disputes.
 A.
    
    The Parties shall make every possible attempt to resolve in an amicable manner all
disputes between the Parties concerning the interpretation of this Agreement.B.
    
    The Parties must use the dispute resolution process provided in Chapter 2260, Texas
Government Code,and the related rules adopted by the Texas Attorney General to attempt to
resolve any claim for breach of contract made by LICENSEE that cannot be resolved in the
ordinary course of business. LICENSEE must submit written notice of a claim of breach of
contract under this Chapter to B.J. Crain, Associate Vice Chancellor, who will examine
LICENSEEs claim and any counterclaim and negotiate with LICENSEE in an effort to resolve
the claim.
 11.11
    
    Headings. Headings appear solely for convenience of reference. Such headings are not part
of, and shall not be used to construe, this Agreement.11.12
    
    No Waiver; Severability. No waiver of any breach of this Agreement shall constitute a
waiver of any other breach of the same or other provision of this Agreement and no waiver
shall be effective unless made in writing. This Agreement, to the greatest extent
possible, shall be construed so as to give validity to all of the provisions hereof. If any
provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent
jurisdiction or is deemed unenforceable under the current applicable law from time to
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time in effect during the term of this Agreement, the remainder of this Agreement will not
be affected or impaired thereby and will continue to be construed to the maximum extent
permitted by law. In lieu of each provision which is invalid, illegal or unenforceable,
there will be substituted or added as part of this Agreement by mutual written agreement of
the Parties, a provision which will be as similar as possible, in economic and business
objectives as intended by the Parties to such invalid, illegal or unenforceable provision,
but will be valid, legal and enforceable.11.13
    
    Damages. Neither Party shall be liable for indirect, special, remote, incidental or
consequential damages or loss of profit in connection with this Agreement or its
implementation.
 ARTICLE XII  ADDITIONAL TERMS AND CONDITIONS
 12.01
    
    LICENSEE agrees to negotiate in good faith with Texas Foundation Seed Service for the
production of BREEDER SEED and FOUNDATION SEED of LINES exclusively licensed to LICENSEE
pursuant to this Agreement, based on the following principles.
 
    
    Annual contract, neither party has an obligation to renew;
    
    LICENSEE has decided to subcontract production of BREEDER SEED and
FOUNDATION SEED of LINES exclusively licensed to LICENSEE;
    
    subject to Texas Foundation Seed Service offering competitive conditions,
guaranteeing quality and certification standards and other customary provisions for
exclusive seed production contracts for BREEDER SEED and FOUNDATION SEED;
    
    LICENSEE will have the right to audit seed production to assess quality
standards and practices; and
    
    if Texas Foundation Seed Service offers production contracts to growers,
LICENSEE will manage the seed production and assist in the selection of growers.
 If no agreement on the production contract is reached six (6) months after the EFFECTIVE
DATE, neither LICENSEE nor Texas Foundation Seed Service will have any further obligations
with respect to contract production of BREEDER SEED and FOUNDATION SEED of LINES
exclusively licensed to LICENSEE.The Parties have caused this Agreement to become effective as of the date last executed below.
 CERES, INC.
    
    
    
    THE TEXAS A&M UNIVERSITY SYSTEMBy:
    
    
    
    
    
    Guy K. DiedrichTitle:
    
    
    
    
    
    Vice Chancellor Federal Relations, Researchand CommercializationDate:
    
    
    
    
    
    Date:By:Title:Date:
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ANNEX I  to the Example License Agreement for Lines
between Ceres, Inc. and The Texas A&M University System
 LINES
 
    
    TAES GENETIC CONTRIBUTION (components (a) through (c) to be provided)
    
    INTELLECTUAL PROPERTY RIGHTS(include all patent applications/patents (including on Subject Inventions covering Lines)
plant variety protection rights etc.)
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ANNEX II  to the Example License Agreement for Lines
between Ceres, Inc. and The Texas A&M University System
 Royalty Report
 [template to be developed during negotiations of license]
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Appendix C
to the Intellectual Property Rights Agreement
Between
Ceres, Inc.
And
The Texas Agricultural Experiment Station of
The Texas A&M University System
 Guidelines for Future Collaborative Opportunities  (Capitalized words are as defined in the Sponsored Research Agreement)
 PURPOSE
  GUIDING PRINCIPLES
  SYSTEM CONTACT PROCESS
   1.1.
    
    If CERES elects to participate in the Additional Collaboration Project CERES and
SYSTEM will discuss in good faith the development of a joint proposal.1.2.
    
    If CERES elects not to participate in the Additional Collaboration Project, CERES
will
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notify SYSTEM in writing that CERES does not wish to participate in the Additional
Collaboration Project and, if applicable, will provide reasons as to why CERES would
prefer that SYSTEM not use Lines or Hybrids developed in the Program, or not to pursue the
activity at all, and SYSTEM will take CERES rationale into account in deciding how to
proceed. The Parties agree to meet within thirty (30) days of the receipt of CERES
response to discuss CERES rationale and preference for SYSTEM not to use Lines or Hybrids,
or not to pursue the activity.
 1.2.1.
    
    If SYSTEM elects to pursue the Additional Collaboration Project:
 1.2.1.1.
    
    SYSTEM will take measures to ensure that material developed in the Program
and results of the Additional Collaboration Project are properly blinded so as
not to allow differentiation from other material;1.2.1.2.
    
    the Additional Collaboration Project will occur at a SYSTEM research
facility;1.2.1.3.
    
    CERES will have access to the results of such Additional Collaboration
Project to the extent allowed by the relevant agreements between SYSTEM and
the third party and SYSTEM will use reasonable efforts to obtain such right
for CERES;1.2.1.4.
    
    if any result obtained in an Additional Collaboration Project using
material developed in the Program has an application for Germplasm
Improvement, TAES will grant CERES an option to negotiate an exclusive
license to use such result for Germplasm Improvement.
 CERES CONTACT PROCESS
  NOTIFICATION:
   
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