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                                                                  EXHIBIT 10.121

                            RESEARCH AND DEVELOPMENT
                                   AGREEMENT

                 This Research and Development Agreement (the "Agreement") is
made as of January 24, 1996, by and between Monsanto Company, a Delaware
corporation, with its general offices at 800 North Lindbergh Boulevard, St.
Louis, Missouri 63167 ("Monsanto"), and Ecogen Inc., a Delaware corporation
having its principal office at 2005 Cabot Boulevard West, Langhorne, PA 19047
("Ecogen").

                              W I T N E S S E T H

        WHEREAS, Ecogen owns certain existing Bt strain libraries, certain
crystal protein gene libraries, and certain proprietary rights regarding
protein engineering of Bt crystal proteins;

        WHEREAS, Monsanto is acquiring certain of such libraries and
proprietary rights in accordance with the Technology Assignment Agreement dated
as of January 24, 1996 ("Assignment Agreement");

        WHEREAS, Monsanto has expertise in the field of plant biotechnology and
Ecogen has expertise in finding, screening and commercializing compounds,
including proteins based on the bacterium Bacillus thurigiensis ("Bt");

        WHEREAS, both Monsanto and Ecogen have research facilities and are
capable of conducting research and development within the Field of the
Agreement;
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        WHEREAS, Monsanto and Ecogen wish to conduct research and development
which may lead to the commercialization of (i) improved bioinsecticides, and
(ii) plants and/or plant seeds into the genomes of which Bt genes have been
included so that such plants or plant seeds will express proteins;

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Monsanto and Ecogen agree as follows:

                                    ARTICLE
1 - DEFINITIONS

        Capitalized terms not otherwise defined in this Agreement shall have
the same meaning given such terms in the Assignment Agreement.  In addition,
the following terms shall have the meanings set forth below and will include
the plural as well as the singular.

        1.1      "Budget Year" shall have the meaning set forth in Section 3.3.

        1.2      "Contract Year" shall mean the year beginning on January 24,
1996 and ending on January 23, 1997 and each anniversary thereafter until such
time as the Agreement is no longer in force.

        1.3      "Date of this Agreement" shall mean the date first written
above.

        1.4      "Ecogen" shall mean Ecogen and its Subsidiaries.





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        1.5      "Field of the Agreement" shall mean research and development
in finding, discovering, screening and developing new proteins and genes.

        1.6      "Initial Term of the Agreement" shall mean the period
beginning on the Date of this Agreement and ending on the fourth anniversary
thereof.

        1.7      "In Planta Application" means (i) use, development, or
commercialization of transgenic plants, seeds, cells or components thereof
(collectively "Plants") or (ii) use, development, or commercialization of
genetic material used so that Plants express a new material or an existing
material at levels different from the levels that such Plants otherwise would.

        1.8      "Intellectual Property Rights" means (i) all patent rights and
all right, title and interest in and to all letters patent and applications for
letters patent, and other government issued or granted indicia of invention
ownership including any substitutions, extensions, reissues, divisions,
continuations or continuations-in-part or applications thereof or therefor
throughout the world; (ii) all rights, title and interest in and to all trade
secrets and trade secret rights arising under the common law, state law,
federal law and laws of foreign countries; (iii) all copyright rights, and all
other literary property and author rights whether or not copyrightable; and all
rights, title and interest in and to all copyrights, copyright registrations,
certificates of copyright and copyrighted interests throughout the world; (iv)
all rights, title and interest in and to all know-how whether or not
protectable by patent, copyright or trade secret law; and (v) all goodwill
associated with any of the foregoing; provided, however, that the term
"Intellectual Property Rights" shall not include any trademarks, trade names or
service marks, whether





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registered or arising under the common law, state law, federal law or the laws
of foreign countries or any registrations thereof or interests therein.

        1.9      "Microbial Applications" shall mean use, development or
commercialization of insecticidal, bacterial, fungicidal, pesticidal, medical,
veterinary, scientific, nutritional, food additive or preservative, materials,
textiles, and similar products; provided, however, that such products shall not
include any product for an In Planta Application.

        1.10     "Naturally Occurring Genes" shall mean genes expressed by Bt
that produce proteins without genetic engineering or protein engineering.

        1.11     "R&D Technology" shall mean the Bt strains or genes
discovered or developed pursuant to the Research Program and the Intellectual
Property Rights arising pursuant to the performance of the parties' obligations
under this Agreement.

        1.12     "Research Budget" shall mean the forecast of expenses and
expenditures set by Monsanto from time to time for each Budget Year for that
part of the Research Program undertaken by Ecogen, which may be revised based
on the recommendation of the Supervisory Committee; provided, however the
Research Budget shall not include the cost or expenses of filing, prosecution
or maintenance of patent applications or issued patents.

        1.13     "Research Plan" shall mean the Research and Development Plan
as may be amended from time to time, a preliminary draft of which is attached
hereto as Exhibit A, and which Plan shall include a specific schedule for work,
resources to be allocated by each party,





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the identification of target pests, personnel requirements, capital needs, and
a schedule for the duplication and transfer to Monsanto of copies of all
strains and genes developed under the Research Program.  The selection of
projects within the Research Plan is to be determined by Monsanto, with Ecogen
having the right to object to any project which is inconsistent with the
practices and procedures of Ecogen.

        1.14     "Research Program" shall mean all research, experimentation or
development relating to the projects to be conducted or conducted by the
parties hereto under the terms of the Research Plan, including decisions
regarding the filing, prosecution and maintenance of patent applications and
issued patents.

        1.15     "Subsidiary" shall mean a subsidiary more than 50 percent of
whose outstanding securities representing the right, other than as affected by
events of default, to vote for the election of directors, is owned by the
applicable party and/or one or more of such party's other majority-owned
Subsidiaries.  Subsidiaries of Ecogen shall also include the entities set forth
in Schedule 3.01 to the Investment Agreement signed contemporaneously herewith.

        1.16     "Supervisory Committee" shall mean the Committee described in 
Article 2 hereof.

        1.17     "Third Party" shall mean any entity other than Monsanto,
Ecogen and/or Subsidiaries or Affiliates.





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                       ARTICLE  - RESEARCH COLLABORATION

        2.1      Research Plan.  During the term of this Agreement and subject
to its terms and conditions, Monsanto and Ecogen shall use all commercially
reasonable efforts to undertake their respective obligations under the Research
Program in accordance with the Research Plan.  The Research Plan shall be
updated in writing and revised from time to time upon mutual written agreement
of the parties upon the recommendation of the Supervisory Committee.  Ecogen
agrees to diligently pursue each project covered by the Research Program and to
assign the appropriate number of personnel required to carry out the Research
Program, each of whom shall be qualified to perform his/her assigned duties.
The parties acknowledge that Ecogen makes no representation or assurance
whatsoever that the Research Program will be successfully completed or result
in the development of products with any technical or commercial value.

        2.2      Research Funding.  Monsanto shall be responsible for providing
all funding necessary for both parties to undertake their respective duties and
obligations under the Research Program and all other costs and expenses related
thereto.  Transfers of funds to Ecogen under the Research Budget during the
Initial Term of this Agreement shall be in accordance with the terms of Article
3 hereof.

        2.3      Supervisory Committee.

                 (a)     Collaboration between the parties shall be determined
by a Supervisory Committee of four (4) people; two (2) people appointed by each
party.  The Chairman of the Supervisory Committee shall be appointed by
Monsanto.





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                 (b)     It is the intent of the parties that information
related to the Research Program be shared with one another in an open manner.
For this purpose, the Supervisory Committee shall meet periodically and no less
than once a quarter to review the status of the Research Program at mutually
convenient locations.  It is contemplated, however, that the parties may meet
as frequently as weekly at Ecogen's facility to review results of the Research
Program.  At such meetings the implementation of the Research Program,
including insectary services, insect targets and sources of insecticidal or
other biocidal proteins, shall be discussed and mutually agreed upon.  Each of
the parties hereto shall provide to the Supervisory Committee quarterly written
summaries of data and the status of its work under the Research Program in such
form as such party routinely uses for the summary of similar research work for
its own purposes.  Modifications to the Research Program may be made by the
Supervisory Committee as collaboration progresses in accordance with this
Agreement.  In the event that the Supervisory Committee cannot reach a decision
regarding the Research Program, the issue shall be referred for resolution to a
senior business executive of each party responsible for the Research Program.
In the event that the parties continue to have a good faith dispute, the issue
will be resolved by the Monsanto business executive.

        2.4      Continuity of Supervisory Committee.  Each party shall attempt
in good faith to maintain continuity in the identity of its representatives to
the Supervisory Committee.





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                               ARTICLE 3 - COSTS

        3.1      Minimum Payment During Initial Term.  Monsanto shall provide a
minimum of $10 Million for the funding of the Research Program during the
Initial Term of the Agreement in accordance with the timing set out in Sections
3.2 and 3.3 herein.

        3.2      Initial Payment.  Monsanto shall transfer to Ecogen the sum of
$3 Million upon execution of the Assignment Agreement; provided, however, that
Monsanto shall be entitled to receive a credit in the amount of $2 Million
against payment of this $3 Million for the loans made pursuant to the Senior
Promissory Note dated November 2, 1995 from Ecogen to Monsanto.  Such Note
shall be cancelled and returned to Ecogen at the Closing of the transactions
contemplated pursuant to the terms of the Assignment Agreement and Ecogen shall
have no further obligations with respect to such Note.

        3.3      Research Budget.  On or before thirty (30) days after the Date
of this Agreement, Monsanto will develop, with input from the Supervisory
Committee, and present to the Supervisory Committee a Research Budget for the
period beginning on the Date of this Agreement and ending on October 31, 1996.
At least ninety (90) days prior to November 1, 1996, Monsanto will present to
the Supervisory Committee a Research Budget developed by Monsanto for the year
beginning on November 1, 1996 and ending on October 31, 1997 taking into
consideration the recommendations made by the Supervisory Committee.  This
period and each yearly period ending on October 31 of the applicable year
thereafter shall be designated as a _Budget Year".  The Research Budget shall
include, to the extent practicable, a break-down of the budget by "Budget Year"
quarters.  Monsanto will present to the Supervisory Committee





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at least 90 days prior to the beginning of any Budget Year a Research Budget
developed by Monsanto for each of the following Budget Years taking into
consideration the recommendations made by the Supervisory Committee.  In any
given Contract Year Monsanto shall spend not less than $1.5 Million under that
part of the Research Program undertaken by Ecogen.  In no event shall Monsanto
transfer to Ecogen less than $1.5 Million in any one Contract Year.  Monsanto
shall transfer to Ecogen such amounts as are sufficient to ensure that Ecogen
prior to the beginning of each quarter of the Budget Year has funds available
from Monsanto in an amount equal to the expenses set forth in the Research
Budget for the then current Budget Year quarter. Such amount shall be adjusted
for the difference, if any, between (i) actual expenses and expenditures
incurred by Ecogen in prior quarters under the Research Program and (ii) the
cash transfers made by Monsanto to Ecogen with respect to such previous
quarters.

        3.4      Allocated Researchers and Equipment Purchases.  In
establishing the Research Budget, each researcher employed by Ecogen shall be
included in the Research Budget at an annual rate of $______*, which annual
rate shall include all costs and expenses for personnel, supplies, existing
equipment, and overhead with respect to such researcher and shall include the
cost of any new equipment required to be purchased hereunder the individual
cost of which is less than $50,000.  If any piece of equipment purchased
pursuant to the Research Budget costs $50,000 or more, Monsanto shall pay the
entire cost of such piece of equipment.  Any such payment for new equipment
will be paid to Ecogen within fifteen (15) days of delivery to Monsanto of an
invoice from the vendor.  Any payments for new equipment shall be credited
against Monsanto's obligations under Section 3.1 and 3.3 hereof.  Any new
equipment purchased pursuant to the Research Program shall be owned by Ecogen
as long as the cost of such 

---------------
*  Confidential treatment requested.





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equipment is credited against Monsanto's obligations under Sections 3.1 and 3.3
hereof.  Any payments to Third Party consultants shall be approved in advance
by the Supervisory Committee and shall be included in the Research Budget for
which Monsanto shall receive a credit against Monsanto's obligations under
Section 3.1 and 3.3 hereof.

        3.5      Payments Upon Termination.  Upon termination of this Agreement
for any reason other than the termination of this Agreement by Monsanto
pursuant to an Event of Default by Ecogen occurring under the provisions of
Section 5.3, Monsanto shall promptly pay to Ecogen an amount equal to the
difference between $10 Million and all amounts previously paid to Ecogen
pursuant to Article 3 of this Agreement.  In the event that Monsanto has funded
at least $10 Million under this Agreement, upon termination of the Agreement,
any amounts transferred to Ecogen by Monsanto under this Agreement (i) which
have not been spent or (ii) for which expenses have not been incurred by Ecogen
prior to such termination, shall be returned to Monsanto within ninety (90)
days of such termination.

                  ARTICLE 4 - INVENTIONS, LICENSES AND PATENTS

        4.1      License Grant for Intellectual Property Arising Under
Agreement.  Ecogen shall have a worldwide, perpetual, exclusive, fully paid up,
royalty-free, transferable license to the R&D Technology to make, have made,
offer for sale, import, use or sell products solely for Microbial Applications.
The rights granted in this Agreement include the right to grant sublicenses.
In addition, Ecogen shall have a perpetual and permanent right to hold and
possess Bt strains and genes discovered or developed hereunder, solely for
Microbial Applications. Licenses granted pursuant to this Section during the
term of this Agreement shall survive the termination or expiration of this
Agreement for any reason.





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        4.2      Rights of Monsanto: Other Than Microbial Applications.  The
rights to any (0).0.0.0.1 invention related to the Field of the Agreement,
conceived during the performance under this Agreement, and not related solely
to Microbial Applications 2 applications for a patent for the aforesaid
invention, (0).0.0.1 patent granted on such application, and (0).0.0.1.1 all
other Intellectual Property Rights in the Field of the Agreement arising from
the performance under this Agreement and not related solely to Microbial
Applications shall be owned by Monsanto.

        4.3      Rights of Ecogen: Solely Microbial Applications.  The rights
to any (0).0.0.1.2 invention related to the Field of the Agreement conceived
during the performance under this Agreement and which is related solely to
Microbial Applications 3 applications for a patent for the aforesaid invention,
(0).0.0.1 patent granted on such application, and (0).0.0.1.1 all other
Intellectual Property Rights in the Field of the Agreement arising from the
performance under this Agreement related solely to Microbial Applications shall
be owned by Ecogen.

        4.4      Patent Applications by Monsanto.

                 (a)     From time to time, not less than quarterly, the
Supervisory Committee shall make a determination if any patent applications
should be filed to protect inventions conceived in accordance with this
Agreement and if so the countries in which such patent applications should be
filed.  In the event that the Supervisory Committee has decided that one or
more patent applications should be filed regarding an invention that has in
whole or part In Planta Applications, Monsanto shall be responsible for the
filing, prosecution and maintenance of patent applications (and related issued
patents) directed to such rights, including all costs, expenses and taxes
associated therewith.  Monsanto shall include in such patent applications such





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claims, including without limitation claims relating solely or in part to
Microbial Applications as Ecogen shall reasonably request.  Monsanto shall
remain responsible for the filing, prosecution and maintenance of all claims
(and related patent applications and issued patents) that are submitted in such
patent applications whether or not such claims relate solely to Microbial
Applications and whether or not such claims become the subject of divisional
applications, continuation applications or otherwise related applications
directed solely to Microbial Applications.

                 (b)     Ecogen and Monsanto shall cooperate with one another
as to the preparation and prosecution thereof, including, without limitation,
the claim language. Monsanto shall allow Ecogen, at Ecogen's own expense, to
participate to the extent requested in the preparation and prosecution of such
patent applications including, without limitation, (i) the receipt of copies of
all correspondence to or from the United States Patent and Trademark Office or
foreign patent offices, and (ii) the participation in all communications and/or
meetings with the United States Patent and Trademark Office or foreign patent
offices.

        4.5      Abandonment by Monsanto.  Monsanto may decide to allow any
patent application or patent directed in whole or in part to In Planta
Applications that was filed pursuant to Section 4.4 hereof to go abandoned
and/or patent to lapse, and, in such event, Monsanto may also allow any patent
application, divisional application, continuation application or patent
directed solely to Microbial Applications related (as described in the fourth
sentence of Section 4.4) to such patent application or patent to go abandoned
or to lapse; provided, however, Monsanto shall have first provided Ecogen with
adequate opportunity to prosecute and/or maintain any patent application,
divisional application, continuation application or patent that Monsanto has
decided





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to go abandoned or to lapse.  In the event Ecogen elects to prosecute and/or
maintain any such patent application, divisional application, continuation
application or patent, then Monsanto shall assign all of its rights thereto to
Ecogen and Monsanto shall have no license thereto or to any resulting patents;
provided, however, Ecogen shall not have any rights to In Planta Applications
thereunder nor shall Ecogen have the right to grant rights to In Planta
Applications thereunder to any Third Party.

        4.6      Countries Where Patent Applications Are Not Prosecuted.  In
the event the Supervisory Committee shall determine not to file a patent
application in any country with respect to an invention conceived in accordance
with this Agreement, Ecogen may decide to file, prosecute and maintain such a
patent application at its own expense and in its own name after notifying
Monsanto of such decision.  Upon receipt of notice of such decision Monsanto
shall assign its rights to such invention in such country to Ecogen and
Monsanto shall have no rights with respect to such patent application or
related patent in such country unless Monsanto shall reimburse Ecogen for all
of Ecogen's out-of-pocket costs incurred after such notice including, without
limitation, prosecuting the patent application, maintaining the patent
application and resulting patent or any other administrative or legal
proceeding.  Upon receipt of such reimbursement Ecogen shall grant to Monsanto
a royalty-free, worldwide, perpetual exclusive license with the right to
sublicense under such patent solely for In Planta Applications.

        4.7      Patent Applications by Ecogen.  Ecogen shall be responsible
for the filing and prosecution of patent applications directed solely to its
rights under Section 4.2 hereof including all costs, expenses and taxes
associated therewith.  Ecogen may decide to allow any such patent application
or resulting patent to go abandoned and/or to lapse; provided, however, Ecogen
shall





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have first provided Monsanto with adequate opportunity to prosecute and/or
maintain any such patent application or resulting patent.  In the event
Monsanto elects to prosecute and/or maintain any such patent application or
resulting patent, Ecogen shall assign all of its rights thereto to Monsanto and
Ecogen shall have the rights set forth in Section 4.1 hereof with respect to
such patent application and resulting patent.

        4.8      No Warranty.  Neither Monsanto nor Ecogen warrants to the
other that any patent obtained is valid or enforceable.

        4.9      Other Ecogen Programs.

                 (a)     Ecogen shall offer (the "Offer") Monsanto the
opportunity to participate in each of Ecogen's own research and development
programs in existence or commenced during the term of the Agreement (the
"Ecogen Programs"), other than Excluded Technology, which are not part of the
Research Program for which in Ecogen's good faith judgment there is a
reasonable expectation that the Ecogen Program will result in technology
applicable to the Field of the Agreement for In Planta Applications.  Such
Offer shall be in writing and in reasonable detail and shall be made as soon as
Ecogen has a reasonable expectation that the technology will be applicable to
the Field of the Agreement.  Each such Ecogen Program shall be called a
"Designated Program."  Such Offer shall be made prior to initiation of the
Designated Program. For Designated Programs already under way as of the Date of
this Agreement, Ecogen shall inform Monsanto of the existence of these
Designated Programs at or before the first meeting of the Supervisory
Committee.  Ecogen shall have no duty to present to Monsanto an Offer for





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any Ecogen Programs funded by a Third Party and Monsanto shall have no rights
to such Ecogen Programs.

                 (b)     Should Monsanto desire to have a Designated Program
become subject to this Agreement, it shall notify Ecogen of that decision
within thirty (30) days from Monsanto's receipt of the Offer.  The parties
shall negotiate in good faith to modify the Research Program and increase the
Budget, if necessary, to account for the Designated Program.

                 (c)     If Monsanto decides not to have a Designated Program
become subject to this Agreement the results and Intellectual Property arising
from the Designated Program corresponding to the Offer shall be owned solely by
Ecogen and Monsanto shall have no rights thereto.

                 (d)     If Ecogen has not offered an Ecogen Program to
Monsanto and such Ecogen Program results during the term of this Agreement and
within 3 months thereafter in technology applicable to the target pests in the
Research Program, then Monsanto shall have the option to acquire a license, on
the same terms and conditions of the Monsanto License Agreement dated of even
date herewith, for such technology for In Planta Applications by reimbursing
Ecogen for Ecogen's cost in developing such technology based upon the costs and
expenses per year per researcher as if the technology were developed pursuant
to this Agreement and Monsanto had paid the costs of such researcher pursuant
to the terms of Section 3.4.

        4.10     Genes Discovered by Ecogen.  All genes or strains discovered
by Ecogen in Ecogen's research outside the Research Program shall be owned
solely by Ecogen; provided,





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however, that Ecogen shall license to Monsanto Naturally Occurring Genes
applicable to the target pests of the Research Program that are discovered by
Ecogen to the extent Ecogen then has the right to do so.  In that event such a
license shall be deemed to be part of the Research Program.

        4.11     Other Research by Monsanto.  It is envisioned that in the
course of this Agreement, evaluation of useful Bt Genes by Monsanto will create
research at Monsanto that will have application to Ecogen's performance of its
obligations under this Agreement. Manipulation of Bt Genes in microorganisms
with application to gene discovery expression and protein stability will be
shared with Ecogen for purposes of enhancing gene discovery, expression and
protein stability in connection with Ecogen's performance of its obligations
under this Agreement.  Use of such manipulation techniques for the development
of microbial pesticides shall be licensed to Ecogen in paid-up, royalty-free
worldwide license, with the right to sublicense, for use solely in Microbial
Applications.

        4.12     During the term of this Agreement, each party shall notify the
other of the existence of an infringement of which such party becomes aware of
an invention or other Intellectual Property Right conceived during or arising
from the performance under this Agreement.

        4.13     If the infringement referred to in Section 4.12 relates to an
application solely for Microbial Applications, then Ecogen shall be solely
responsible in its sole discretion for the abatement of the infringement
including settlement and the bringing of a lawsuit and all costs and expenses
of such lawsuit, provided, however, that no settlement shall impose any
affirmative





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obligation or obligation of payment on Monsanto without Monsanto's prior
written consent given in Monsanto's sole discretion.  Monsanto shall provide
all reasonable nonmonetary assistance requested by Ecogen and agrees to be
named in the lawsuit if required by law as a necessary or indispensable party.
All recoveries and damages obtained by Ecogen shall be owned solely by Ecogen.
In the event there is a counterclaim regarding the validity or enforceability
of an Intellectual Property Right, Monsanto shall be permitted to join in the
action at its own expense, in which case any recovery obtained or damages
awarded shall be first used to reimburse Ecogen's reasonable attorneys' fees
and other out-of-pocket costs in bringing the lawsuit, then reimbursing
Monsanto's reasonable attorneys' fees and other out-of-pocket costs in joining
the action, and then all remaining recovery and damage award to Ecogen.

        4.14     If the infringement referred to in Section 4.12 relates to an
application other than solely for Microbial Applications, then Monsanto shall
be solely responsible in its sole discretion for the abatement of the
infringement including settlement and the bringing of a lawsuit and all costs
and expenses of such lawsuit, provided, however, that no settlement shall
impose any affirmative obligation or obligation of payment on Ecogen without
Ecogen's prior written consent given in Ecogen's sole discretion. Ecogen shall
provide all reasonable nonmonetary assistance requested by Monsanto and agrees
to be named in the lawsuit if required by law as a necessary or indispensable
party.  All recoveries and damages obtained by Monsanto shall be owned solely
by Monsanto.  In the event there is a counterclaim regarding the validity or
enforceability of an Intellectual Property Right, Ecogen shall be permitted to
join in the action at its own expense, in which case any recovery obtained or
damages awarded shall be first used to reimburse Monsanto's reasonable
attorneys' fees and other out-of-pocket costs in bringing the





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lawsuit, then reimbursing Ecogen's reasonable attorneys' fees and other
out-of-pocket costs in joining the action, and then all remaining recovery and
damage award to Monsanto.

                        ARTICLE 5 - TERM AND TERMINATION

        5.1      Initial Term.  The Initial Term of the Agreement shall be four
(4) years from the Date of this Agreement, after which this Agreement shall
automatically be renewed for successive one (1) year terms (each a "Renewal
Term") unless terminated by either party's providing two (2) years notice to
the other party prior to the end of the Initial Term or the then current
Renewal Term; provided, however, a party may terminate the Agreement at the end
of a Renewal Term upon at least one year notice any time on or after the fifth
anniversary of the date of this Agreement.

        5.2      Survival of Licenses.  Any license which has been granted to
Ecogen pursuant to this Agreement, including one which has been granted under
Section 4.1 hereof, shall survive any termination of this Agreement, including
a termination caused by an Event of Default.

        5.3      Events of Default.  Each of the following shall be deemed an
"Event of Default":

                 (a)     a petition is filed against either party under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or hereafter in
effect, and the party, as applicable, is not diligently prosecuting a dismissal
of such petition and such petition is not dismissed within 90 days after its
filing;





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                 (b)     either party files a petition in voluntary bankruptcy
or seeking relief under any provision of any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law
of any jurisdiction whether now or hereafter in effect, or consents to the
filing of any petition against it under any such law;

                 (c)     a party admits insolvency or bankruptcy or its
inability to pay its debts as they become due or is generally not paying its
debts as such debts become due, or becomes insolvent or bankrupt or makes an
assignment for the benefit of creditors, or a custodian (including without
limitation a receiver, liquidator or trustee) of the party or any of its
property is appointed by court order or takes possession thereof;

                 (d)     other than a failure by Monsanto to transfer funds to
Ecogen under the Research Budget in accordance with the terms of Article 3
hereof, a party shall fail to perform any of its material obligations hereunder
for a period of 90 days after written notice, specifying such failure and
requesting that it be remedied is given to such breaching party by the
nonbreaching party; provided, however, if such default is such that it can be
corrected but cannot be corrected within such 90-day period, it shall not
constitute an Event of Default if corrective action is instituted by the
breaching party within such 90-day period and diligently pursued until the
default is corrected.  No such default shall remain uncured 120 days after
written notice.

                 (e)     a failure on Monsanto's part to transfer funds to
Ecogen under the Research Budget in accordance with the terms of Article 3
hereof for a period of 30 days after





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written notice from Ecogen, specifying such failure and requesting that such
funds be transferred;

        5.4      Notice of Default.  Each party agrees to give the other prompt
written notice if any petition referred to in Section 5.3(a) or 5.3(b) is filed
by or against it or of the occurrence of any other event or condition which
constitutes an Event of Default immediately upon becoming aware of the
existence thereof.

        5.5      Termination of Agreement in Event of Default.  Subject to the
provisions of Section 3.5, if an Event of Default shall have occurred and shall
be continuing, the nonbreaching party shall have the right to terminate this
Agreement effective upon written notice of such termination from the
nonbreaching party.

        5.6      Suspension of Payments During Cure Period.  Not withstanding
the period in which Ecogen has to cure a breach of this Agreement and prior to
the time in which such breach would constitute an Event of Default, Monsanto
shall have the right to suspend transfers of funds to Ecogen under the Research
Budget during the applicable cure period and prior to Monsanto's exercise of
its right to terminate this Agreement: (i) if Monsanto has in good faith given
notice to Ecogen of Ecogen's failure to perform any of its material obligations
hereunder pursuant to Section 5.3(d); or (ii) if any petition referred to in
Section 5.3(a) is filed against Ecogen.





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                          ARTICLE 6 - CONFIDENTIALITY

        6.1      Confidentiality.  Confidential Information shall be treated by
the parties in accordance with the Confidentiality Agreement executed
simultaneously herewith.

                       ARTICLE 7 - LIABILITY; INDEMNITY;
                       PATENT INFRINGEMENT; SEVERABILITY

        7.1      Limitation of Liability.  It is understood and agreed that the
furnishing of any chemicals, samples or any information (including Confidential
Information) by either party pursuant to this Agreement is not to be construed
as a recommendation by that party to use the same.   FURTHERMORE, WITH RESPECT
TO SUCH INFORMATION, MATERIALS, PRODUCTS, PROCESS INFORMATION, PROCESSES,
ADVICE, CONSULTATIONS, ASSISTANCE, SERVICES, LICENSES AND RIGHTS PROVIDED
HEREUNDER, AND ANY MATERIALS OR PRODUCTS MADE USING SUCH, NEITHER PARTY MAKES
ANY REPRESENTATION, WARRANTY OR GUARANTEE OF ANY KIND, EXPRESSED OR IMPLIED, AS
TO MERCHANTABILITY, FITNESS FOR PARTICULAR A PURPOSE, SATISFACTORY RESULTS
BASED UPON USE THEREOF OR RELIANCE THEREON, OR OTHERWISE, AND NEITHER PARTY
SHALL BE LIABLE TO THE OTHER FOR ANY LOSS OR DAMAGE RESULTING FROM THE RELIANCE
AND/OR USE THEREOF.

        7.2      Indemnification.  Notwithstanding the foregoing Section, each
of the parties agrees to hold the other party harmless from and against any and
all demands, claims, penalties, liabilities, causes of action, suits, damages,
judgments, losses, costs and expenses (including cost





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of defense, settlement and reasonable attorneys' fees and expenses) arising out
of injury to any employee of such party resulting from or in any way connected
with the performance of this Agreement, unless arising from the other party's
negligence or willful misconduct.

        7.3      Limitation on Infringement.  Neither of the parties to this
Agreement shall be liable to the other party in any way for Third Party patent
infringement by said other party arising out of the use of any information
furnished to such other party pursuant to this Agreement.

                           ARTICLE 8 - MISCELLANEOUS

        8.1      Severability.  If any provision of this Agreement is found to
be unenforceable under any law applicable thereto, then that provision shall be
deemed to have been severed from the Agreement in that jurisdiction, but all
other provisions of the Agreement shall remain in full force and effect.

        8.2      No Partnership Created.  The parties acknowledge that this
Agreement does not constitute nor does it create any partnership or joint
venture between Monsanto and Ecogen.

        8.3      Governing Law.  This Agreement shall be governed by and shall
be construed to take effect according to the laws of the State of Missouri,
United States of America.





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<PAGE>   23
        8.4      Notices.  All notices or other communications which any party
to this Agreement may desire or be required to give hereunder shall be in
writing and, except for notices of meetings of the Supervisory Committee which
shall be given as reasonably agreed among the members of such Committee, shall
be given by personal delivery, by mailing the same by registered or certified
mail, postage prepaid, return receipt requested, or by telefax followed up by a
nationally recognized overnight carrier, addressed:

                 (a)     If to Monsanto:

                         Monsanto Company
                         Ceregen Group
                         800 North Lindbergh Boulevard
                         St. Louis, Missouri 63167
                         Attn:   President
                         Telefax Number: 314-694-7771

                 with a copy to:

                         Monsanto Company
                         Ceregen Group
                         700 Chesterfield Parkway North
                         St. Louis, Missouri 63198
                         Attn:  Intellectual Property Counsel
                         Telefax Number:  314-537-6047

                 and (b) if to Ecogen:

                         Ecogen Inc.
                         2005 Cabot Boulevard West
                         Langhorne, Pennsylvania 19047
                         Attention:  President
                         Telecopy Number:  215-757-4156

                 with a copy to:

                         Dechert, Price & Rhoads
                         Princeton Park Corporate Center
                         997 Lenox Drive
                         Lawrenceville, New Jersey 08648
                         Attention: James J. Marino, Esq.
                         Telecopy Number:  609-520-3259





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<PAGE>   24
Notices given by personal delivery shall be deemed given when delivered,
otherwise notices shall be deemed given when sent.

        8.5      Survival.  The provisions of Articles 4 and 6 shall survive
any termination of this Agreement.

        8.6      Counterparts.  This Agreement may be signed in counterparts,
both of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

        8.7      Entire Agreement.  This Agreement represents the entire
understanding of the parties hereto with respect to research and development in
the Field of the Agreement and supersedes all other and prior memoranda and
agreements between the parties hereto, other than documents executed or
delivered at the Closing of this Agreement or the Assignment Agreement.

        8.8       Amendment.  No amendment, modification or waiver of any term
or condition of this Agreement shall be valid or of any force or effect unless
made by written instrument signed by the parties hereto, specifying the exact
nature of such amendment, modification or waiver.  Any waiver by any party of
any provision of this Agreement shall not imply a subsequent waiver of that or
any other provision.

        8.9      Assignment.  Neither party shall assign its rights or delegate
its performance under this Agreement without the prior written consent of the
other, other than the licenses granted hereunder, which shall be transferable
without the prior written consent of the other party.

        8.10      Section Headings.  The section captions and headings in this
Agreement are for convenience and reference purposes only and should not affect
in any way the meaning or interpretation of this Agreement.

        8.11     No Presumption Against Drafter, Qualifications on Schedules.
The parties to this Agreement have jointly participated in the negotiation and
drafting of this Agreement.  In the





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<PAGE>   25
event an ambiguity or question of intent or interpretation arises, this
Agreement, shall be construed as if drafted jointly by the parties and no
presumptions or burdens of proof shall arise favoring any party by virtue of
the authorship of any of the provisions of this Agreement.

                       ARTICLE 9 - AFFIRMATIVE COVENANTS

        9.1      So long as the Research and Development Agreement is in
effect, Ecogen covenants that it will:

                 (a)     Furnish to Monsanto (i) such financial statements,
financial information and audit reports as are provided to the Board of
Directors of Ecogen, (ii) Quarterly Reports on Form 10-Q and Annual Reports on
Form 10-K as filed with the Securities and Exchange Commission and (iii) all
other information furnished to Ecogen's Board of Directors relating to the
financial condition of Ecogen or Ecogen's Bt technology, other than information
relating to (A) potential acquisitions, mergers, joint ventures or other
strategic alliances, (B) its relationship with Monsanto, and (C) personnel
performance and compensation.  The information described in clauses (i) and
(iii) above shall be furnished to Monsanto promptly after the Ecogen Board of
Director's meeting for which such information is provided to Ecogen's Board of
Directors and the information described in clause (ii) above shall be furnished
to Monsanto at the time such reports are filed with the Securities and Exchange
Commission.

                 (b)     Furnish to Monsanto promptly upon preparation a copy
of the minutes of each directors' meeting and each stockholders' meeting
pertaining to financial condition and Bt Technology other than information
relating to (i) potential acquisitions, mergers, joint ventures or other
strategic alliances, (ii) its relationship with Monsanto and (iii) personnel
performance and compensation.





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<PAGE>   26
        IN WITNESS WHEREOF, each party has caused this Agreement to be executed
by its duly authorized representative effective on the date set forth first
above.

MONSANTO COMPANY                        ECOGEN INC.



By:    /s/ Derek K. Rapp                By: /s/ James P. Reilly, Jr.
       -----------------                    ------------------------
Name:  Derek K. Rapp                        James P. Reilly, Jr.
Title: Director, Commercial                 Chairman and Chief Executive Officer
       Partnerships & Alliances





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