Document:

Exhibit 10.14

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

[USAID FROM THE AMERICAN PEOPLE LOGO]

 

October 11, 2012

 

Eric Rey, President and CEO

Arcadia Biosciences, Inc.

202 Cousteau Place, Suite 105

Davis, CA 95618

Phone No. 530-750-7173

 

Subject: Cooperative Agreement No. AID-OAA-A-13-00001, Development of Heat Tolerant Wheat for South Asia

 

Dear Mr. Rey:

 

Pursuant to the authority contained in the Foreign Assistance Act of 1961, as amended, the U.S. Agency for International Development (USAID) hereby awards to ARCADIA BIOSCIENCES, INC., hereinafter referred to as the “Recipient”, the sum of $3,829,228.00 to provide support for a program in Development of Heat Tolerant Wheat for South Asia as described in the Schedule of this award and in Attachment B, entitled “Program Description.”

 

This Cooperative Agreement is effective and obligation is made as of the date of this letter and shall apply to expenditures made by the Recipient in furtherance of program objectives during the period beginning with the effective date 10/12/2012 and ending 09/30/2017. USAID will not be liable for reimbursing the Recipient for any costs in excess of the obligated amount.

 

This Cooperative Agreement is made to the Recipient to ARCADIA BIOSCIENCES, INC., on condition that the funds will be administered in accordance with the terms and conditions as set forth in Attachment A (the Schedule), Attachment B (the Program Description), and Attachment C (the Standard Provisions), all of which have been agreed to by your organization.

 

Please sign this letter to acknowledge your receipt of the Cooperative Agreement, and return it to the Agreement Officer.

 

Sincerely yours,

 

Agreement Officer

 

Attachments:

A.              Schedule

B.              Program Description

C.              Standard Provisions

D.              Branding Strategy and Marking Plan

 

ACKNOWLEDGED:

 

	
BY:
    	
/s/
    	
 
    
	
TITLE:
    	
 
    	
 
    
	
DATE:
    	
 
    	
 
    

 

1

 

A. GENERAL

 

1. USAID Amount Obligated this Action: $1,146,172.00

2. Total Estimated Program Amount:                         $12,464,040.00

3. Total Estimated USAID Amount:                                $3,829,228.00

4. Leverage Funding (Non-Federal):                                  $8,634,812.00

5. Total Obligated USAID Amount:                                   $1,146,172.00

6. Activity Title: Development of Heat Tolerant Wheat for South Asia

7. USAID Technical Office: BFS

8. Tax I.D. Number: 81-0571538

9. DUNS No.: 135964760

10. LOC Number: HHS-C4625P1

 

B. SPECIFIC

 

GLAAS REQUEST: REQ-BFS-13-000001

 

	
BBFY
    	
 
    	
2012
    
	
EBFY
    	
 
    	
2013
    
	
Fund
    	
 
    	
DV-GFSI
    
	
Operating   Unit (OP)
    	
 
    	
BFS/ARP
    
	
Program   Area
    	
 
    	
A18
    
	
Distribution   Code
    	
 
    	
BFS-APF
    
	
Program   Element
    	
 
    	
A074
    
	
Program   Sub-Element
    	
 
    	
None
    
	
Team/Division
    	
 
    	
None
    
	
BGA
    	
 
    	
997
    
	
Sob-Object   Code SOC
    	
 
    	
4100302
    
	
Obligated   Amount
    	
 
    	
$1,146,172.00
    

 

C. PAYMENT OFFICE

 

U.S. Agency for International Development (USAID)

M/CFO/CMP

loc@usaid.gov

1300 Pennsylvania Ave., NW

SA-44

Washington, DC 20523

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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ATTACHMENT A - SCHEDULE

 

A.1             PURPOSE OF AWARD

 

The purpose of this Cooperative Agreement is to provide support for the program described in Attachment B to this Cooperative Agreement entitled “Program Description.”

 

A.2             PERIOD OF AWARD

 

1.            The effective date of this Award is October 12, 2012. The estimated completion date of this Award is September 30, 2017, as indicated in the Budget in A.4 below.

 

2.            Funds obligated hereunder are available for program expenditures from the effective date of the Award through September 30, 2013

 

A.3             AMOUNT OF AWARD AND PAYMENT

 

1.       The total estimated amount of this Agreement for the period shown in A.2.1 above is $3,829,228.00 as shown in the Budget below.

 

2.       USAID hereby obligates the amount of $1,146,172.00 (U.S. Dollars) for program expenditures during the period set forth in A.2.2 above. The Recipient will be given written notice by the Agreement Officer if additional funds will be added. USAID is not obligated to reimburse the Grantee for the expenditure of amounts in excess of the total obligated amount.

 

3.       Payment will be made to the Recipient by Letter of Credit in accordance with procedures set forth in 22 CFR 226

 

A.4             AWARD BUDGET

 

The following is the Agreement Budget, including local cost financing items, if authorized. Revisions to this budget shall be made in accordance with 22 CFR 226.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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BUDGET

 

	
 
    	
 
    	
Year 1
    	
 
    	
Year 2
    	
 
    	
Year 3
    	
 
    	
Year 4
    	
 
    	
Year 5
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(10/12/12-
    	
 
    	
(10/01/13
    	
 
    	
(10/01/14-
    	
 
    	
(10/01/15-
    	
 
    	
(10/01/16-
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
09/30/13
    	
 
    	
09/30/14
    	
 
    	
09/30/15
    	
 
    	
09/30/16
    	
 
    	
09/30/17
    	
 
    	
Estimated
    	
 
    
	
Cost Element
    	
 
    	
(in $US)
    	
 
    	
(in $US)
    	
 
    	
(in $US)
    	
 
    	
(in $US)
    	
 
    	
(in $US)
    	
 
    	
Total
    	
 
    
	
Personnel
    	
 
    	
138,426.00
    	
 
    	
49,093.00
    	
 
    	
62,710.00
    	
 
    	
68,506.00
    	
 
    	
32,126.00
    	
 
    	
350,861.00
    	
 
    
	
Fringe Benefits
    	
 
    	
38,759.00
    	
 
    	
13,746.00
    	
 
    	
17,559.00
    	
 
    	
19,182.00
    	
 
    	
8,995.00
    	
 
    	
98,241.00
    	
 
    
	
Travel
    	
 
    	
2,600.00
    	
 
    	
—
    	
 
    	
2,600.00
    	
 
    	
—
    	
 
    	
2,600.00
    	
 
    	
7,800.00
    	
 
    
	
Equipment
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    
	
Supplies
    	
 
    	
119,417.00
    	
 
    	
16,250.00
    	
 
    	
26,333.00
    	
 
    	
34,000.00
    	
 
    	
4,000.00
    	
 
    	
200,000.00
    	
 
    
	
Subaward
    	
 
    	
566,144.00
    	
 
    	
307,297.00
    	
 
    	
322,844.00
    	
 
    	
338,393.00
    	
 
    	
353,945.00
    	
 
    	
1,888,623.00
    	
 
    
	
Green House
    	
 
    	
25,458.00
    	
 
    	
209,084.00
    	
 
    	
118,083.00
    	
 
    	
19,500.00
    	
 
    	
—
    	
 
    	
372,125.00
    	
 
    
	
Field Costs
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    
	
Total Direct Costs
    	
 
    	
890,804.00
    	
 
    	
595,470.00
    	
 
    	
550,129.00
    	
 
    	
479,581.00
    	
 
    	
401,666.00
    	
 
    	
2,917,650.00
    	
 
    
	
Indirect Charges
    	
 
    	
255,368.00
    	
 
    	
233,406.00
    	
 
    	
196,162.00
    	
 
    	
142,532.00
    	
 
    	
84,110.00
    	
 
    	
911,578.00
    	
 
    
	
Total
    	
 
    	
1,146,172.00
    	
 
    	
828,876.00
    	
 
    	
746,291.00
    	
 
    	
622,113.00
    	
 
    	
485,776.00
    	
 
    	
3,829,228.00
    	
 
    

 

	
Total USAID:
    	
 
    	
$ 3,829,228.00
    
	
Total Leverage:
    	
 
    	
$ 8,634,812.00
    
	
Grand Total Program: 
    	
 
    	
$ 12,464,040.00
    

 

A.5                   REPORTING AND EVALUATION

 

A.                Financial Reporting

 

The Recipient shall submit an original and one copy. Financial Reports shall be in keeping with 22 CFR 226.52.

 

The recipient shall list each country included in the program and the total amount expended for each country under the award for the reporting period in the “Remarks” block on the Federal Financial Form (SF-425), or on a separate sheet of paper. Financial Reports will be required on a quarterly basis. The recipient shall submit these forms in the following manner:

 

For recipients without a letter of credit:

 

The Recipient must submit one electronic original to the Agreement Officer’s Representative (AOR) with one copy to the Agreement Officer of Standard Form 425 (SF-425) on a quarterly basis.

 

For recipients with a letter of credit:

 

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(1) The recipient must submit the Federal Financial Form (SF-425) on a quarterly basis via electronic format to the U.S. Department of Health and Human Services (http://www.dpm.psc.gov). The recipient must submit a copy of the FFR at the same time to the Agreement Officer and the Agreement Officer’s Technical Representative (AOR).

 

(2) The recipient must submit the original and two copies of all final financial reports to USAID/Washington, M/CFO/CMP/LOC Unit, the Agreement Officer, and the AOR. The recipient must submit an electronic version of the final Federal Financial Form (SF-425) to U.S. Department of Health and Human Services in accordance with paragraph (1) above.

 

Electronic copies of the SF-425 can be found at:

 

http://www.whitehouse.gov/omb/grants/standard_forms/ff_report.pdf and http://www.forms.gov/bgfPortal/docDetails.do?dId=15149.

 

Line item instructions for completing the SF-425 can be found at:

 

http://www.whitehouse.gov/omb/grants/standard_forms/ffr_instructions.pdf.

 

4.                   Reporting on Foreign Taxes shall be in accordance with Attachment C, Required as Applicable Standard Provision II, RAA12, REPORTING HOST GOVERNMENT TAXES (JUNE 2012).

 

B.        Monitoring and Reporting Program Performance

 

1.              Reporting Requirements for the Cooperative Agreement:

 

a.              Semiannual Reports: The Recipient shall submit electronically a copy of a Semiannual Performance Report to the AOR. The Performance Reports must detail progress made against agreed-upon performance indicators. It should present the information contained in 22 CFR 226.51(d). and a detailed accounting of leverage contributions including whether the contribution was cash or in-kind, and if in-kind, provide a description of the contribution, the estimated value, and the basis for determining the estimated value. The AOR will provide guidance on data required in the semiannual reports to meet specific reporting requirements for the Feed the Future initiative.

 

b.              Final Report: The Final Performance Report must present the information described in Section (2)B.1.a. for the duration of the award. The Final Performance Report will replace the last Semiannual Performance Report and must also specifically include an executive summary, an overall description of the Recipient’s activities, accomplishments and attainment of results and impact against agreed-upon indicators, by country of engagement, an assessment of progress made toward accomplishing the objectives and expected results, and conclusions and lessons learned, including identification of future challenges and opportunities for replicating similar programs. The Final Performance Report should detail all deliverables produced by the Program and must also include a Final Fiscal Report that describes how funds were used. The Recipient may be required to provide a cost benefit analysis as part of the Final Performance Report to determine the cost of impacts achieved using a methodology to be determined in consultation with the AOR.

 

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c.               All Reports and deliverables should be provided to the AOTR in a format to be agreed upon with AOR.

 

2.              Annual Work Plans: The Annual Work Plan shall be submitted in a format and on a time schedule agreed to between the AOR and the Recipient.

 

C. Submission of Performance Reports and Other Deliverables

 

The Recipient shall submit an electronic copy to the Washington AOR and to the Agreement Officer, and one electronic copy of the final report to the Development Experience Clearinghouse (DEC). Documents submitted to the DEC should be sent in original format via email to:

 

E-mail (the preferred means of submission):

docsubmit@dec.cdie.org

 

Please reference web site http://www.dec.org/submit_doc.cfm or contact one of the following concerning any questions your organization may have on the reporting requirements:

 

Development Experience Clearinghouse

E-mail: docsubmit@dec.cdie.org

Phone: (301) 562-0641

 

USAID/PPC/DEI

Phone (202) 712-4696

 

A.6              NEGOTIATED INDIRECT COST RATES - ADVANCE UNDERSTANDING ON CEILING INDIRECT COST RATES AND FINAL REIMBURSEMENT FOR INDIRECT COSTS

 

Pending establishment of revised or final indirect cost rates, allowable indirect costs shall be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

 

(1) Reimbursement for allowable indirect costs shall be at final negotiated rates but not in excess of the following ceiling rates:

 

	
Description
    	
 
    	
Rate
    	
 
    	
Base
    	
 
    	
Type
    	
 
    	
Period
    	
 
    
	
G&A
    	
 
    	
52.5
    	
%
    	
(1/)
    	
 
    	
(1/)
    	
 
    	
(1/)
    	
 
    
	
G&A
    	
 
    	
65
    	
%
    	
(2/)
    	
 
    	
(2/)
    	
 
    	
(2/)
    	
 
    

 

*G&A on subawards is limited to 15% for the entire Agreement period, including any extension(s) thereof.

 

(1/)Base of application: Total direct costs incurred excluding G&A expenses Type of Rate: Ceiling

 

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Period: From the Agreement effective date through 09/30/2013.

 

(2/)Base of application: Total direct costs incurred excluding G&A expenses

Type of Rate: Ceiling

Period: From 10/01/2013 — 09/30/2017, including any extensions thereof.

 

(2) The Awardee is required to provide written notification to the indirect cost negotiator prior to implementing any changes which could affect the applicability of the approved rates. Any changes in accounting practice to include changes in the method of charging a particular type of cost as direct or indirect and changes in the indirect cost allocation base or allocation methodology require the prior approval of the Office of Overhead, Special Cost and Closeout (OCC). Failure to obtain such prior written approval may result in cost disallowance.

 

(3) The Government shall not be obligated to pay any additional amount on account of indirect costs above the ceiling rates established in the Agreement. If the final indirect cost rates are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform to the lower rates.

 

(4) This understanding shall not change any monetary ceiling, obligation, cost limitation, or obligation established in the Agreement.

 

A.7             TITLE TO PROPERTY

 

Title to property will vest with the recipient, subject to the conditions in 22 CFR 226.34.

 

A.8             AUTHORIZED GEOGRAPHIC CODE

 

The authorized geographic code for procurement of goods and services under this award is 937.

 

A.9             RESOURCE LEVERAGING

 

The Recipient agrees to expend an amount not less than $8,634,812.00 of the total activity cost of $12,464,040.00. Resource leveraging refers to the portion of project or program costs not borne by the Federal Government. USAID shall have the ability to revise or withdraw from the Alliance agreement when contributions are not forthcoming as originally proposed in this Agreement.

 

A.10 SUBSTANTIAL INVOLVEMENT

 

As delegated by the Agreement Officer, the substantial involvement of the AOR during the administration of the Cooperative Agreement will be limited to:

 

a)             Approval of the Detailed Implementation Plan (DIP), submitted to USAID/BFS/ARP, and any subsequent revisions. BFS/ARP staff and technical specialists will review the DIP and meet with the recipient to discuss strengths and weaknesses. The DIP will provide a plan for the program, including plans for baseline and final surveys and collection of required indicators.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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Substantial changes resulting in any revisions to specific activities, locations, beneficiary population, international training costs, international travel, indirect cost elements, or the procurement plan may require a formal modification to the Agreement by the Agreement Officer. The approved DIP will supplement the initial Program Description in the Agreement and form part of the official documentation.

 

b)             Approval of key personnel, which include principle scientific leaders representing Arcadia Biosciences, CIMMYT and NBPGR.

 

c)              USAID involvement in monitoring progress toward the achievement of program objectives during the performance of this Agreement, include written guidelines for the contents of annual reports, and mid-term and final evaluations in accordance with 22 CFR 226.51

 

d)             Agency and Recipient Collaboration of Joint Participation.

 

a.              USAID concurrence on the substantive provisions of the subawards.

b.              Approval of the recipient’s monitoring and evaluation plans.

c.               Agency monitoring to permit specified kinds of direction or redirection because of interrelationships with other projects.

 

Note:                  Any changes to the Program Description or the approved budget may only be approved by the Agreement Officer after review by the AOR.

 

A.11           PROGRAM INCOME

 

The Recipient shall account for Program Income in accordance with 22 CFR 226.24. Program Income earned under this award shall be added to the project.

 

A.12           SPECIAL PROVISIONS

 

A.12 .1 ENVIRONMENTAL PROVISIONS

 

A. Statutory and Regulatory Requirements

 

1.        The Foreign Assistance Act of 1961, as amended, Section 117 requires that the impact of USAID’s activities on the environment be considered and that USAID include environmental sustainability as a central consideration in designing and carrying out its development programs. This mandate is codified in Federal Regulations (22 CFR 216) and in USAID’s Automated Directives System (ADS) Parts 201.5.10g and 204 (http://www.usaid.gov/policy/ADS/200/), which, in part, require that the potential environmental impacts of USAID-financed activities are identified prior to a final decision to proceed and that appropriate environmental safeguards are adopted for all activities. Recipient environmental compliance obligations under these regulations and procedures are specified in the following paragraphs of this cooperative agreement.

 

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2. In addition, recipient must comply with host country environmental regulations unless otherwise directed in writing by USAID. In case of conflict between host country and USAID regulations, the latter shall govern.

 

3. No activity funded under this cooperative agreement will be implemented unless an environmental threshold determination, as defined by 22 CFR 216, has been reached for that activity, as documented in a Request for Categorical Exclusion (RCE), Initial Environmental Examination (IEE), or Environmental Assessment (EA) duly signed by the Bureau Environmental Officer (BEO). (Hereinafter, such documents are described as “approved Regulation 216 environmental documentation.”)

 

B.      Program Activities

 

1.                      As part of its initial Work Plan, and all Annual Work Plans thereafter, the recipient, in collaboration with the USAID Agreement Officer’s Technical Representative (AOTR) and Mission Environmental Officer or Bureau Environmental Officer, as appropriate, shall review all ongoing and planned activities under this cooperative agreement to determine if they are within the scope of the approved Regulation 216 environmental documentation.

 

2.                      If the recipient plans any new activities outside the scope of the approved Regulation 216 environmental documentation, it shall prepare an amendment to the documentation for USAID review and approval. No such new activities shall be undertaken prior to receiving written USAID approval of environmental documentation amendments.

 

3.                      Any ongoing activities found to be outside the scope of the approved Regulation 216 environmental documentation shall be halted until an amendment to the documentation is submitted and written approval is received from USAID.

 

C.      Mitigation and Monitoring Plan

 

1.                      Unless the approved Regulation 216 documentation contains a complete environmental mitigation and monitoring plan (EMMP) or a project mitigation and monitoring (M&M) plan, the recipient shall prepare an EMMP or M&M Plan describing how the recipient will, in specific terms, implement all IEE and/or EA conditions that apply to proposed project activities within the scope of the award. The EMMP or M&M Plan shall include monitoring the implementation of the conditions and their effectiveness.

 

2.                      Integrate a completed EMMP or M&M Plan into the initial work plan.

 

3.                      Integrate an EMMP or M&M Plan into subsequent Annual Work Plans, making any necessary adjustments to activity implementation in order to minimize adverse impacts to the environment.

 

A.12.2            NON-FEDERAL AUDITS

 

In accordance with 22 C.F.R. Part 226.26 Recipients and subrecipients are subject to the audit

 

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requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501—7507) and revised OMB Circular A—133, “Audits of States, Local Governments, and Non-Profit Organizations.” Recipients and subrecipients must use an independent, non-Federal auditor or audit organization which meets the general standards specified in generally accepted government auditing standards (GAGAS) to fulfill these requirements.

 

A.12.3             BRANDING AND MARKING REQUIREMENTS

 

All USAID-sponsored assistance awards are required to adhere to branding policies and marking Requirements for grants and cooperative agreements in accordance with AAPD 05-11(http://www.usaid.gov/business/business_opportunities/cib/pdf/aapd05_11.pdf), 22 CFR 226.91, and ADS 320 (http://www.usaid.gov/policy/ads/300/320.pdf). This includes visibly displaying the USAID Standard Graphic Identity that clearly communicates assistance is, “From the American people” on all programs, projects, activities, publications, public communications, and commodities provided or supported through USAID assistance awards. AAPD 05-11 requires that, after the evaluation of the applications, the USAID Agreement Officer will request the Apparently Successful Applicant to submit a Branding Strategy that describes how the program, project, or activity is named and positioned, how it is promoted and communicated to beneficiaries and cooperating country citizens, and identifies all donors and explains how they will be acknowledged.

 

Branding Strategy and Marking Plan: The Recipient’s Branding Strategy and Marking Plan in Attachment D is hereby incorporated into this Award.

 

-END OF SCHEDULE-

 

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ATTACHMENT B - PROGRAM DESCRIPTION

 

Development of Heat Tolerant Wheat for South Asia

 

EXECUTIVE SUMMARY

 

Among major staple crops, global wheat yields may be the hardest hit according to a number of climate change models. And while wheat is the most drought-adapted of major crops, improving heat adaptation would make wheat a climate resilient staple. An estimated 1.2 billion poor people—the majority of whom live in South Asia—depend on wheat. The International Food Policy Research Institute estimates that wheat yields in South Asia could decline as much as 50% by 2050 and recent research in India suggests that most crop models have underestimated the impact of extreme heat by as much as 50%.

 

Development of more heat tolerant varieties of wheat aligns Arcadia’s business interests and those of USAID and CIMMYT in poverty reduction and food security. Arcadia has significant commercial partnerships and investments focused on developing new technologies in wheat for global markets. CIMMYT is the leader in wheat germplasm improvement for developing countries. This alliance will bring the technical resources and expertise of both organizations together, spurring technological innovation to address a significant global challenge.

 

Only modest genetic gains in yield in heat stressed environments have been achieved to date, but work in wheat and other cereals points clearly to genetic diversity in the heat sensitivity of starch synthesis, membrane thermostability, and photosynthesis. We will target these metabolic constraints by pyramiding natural genetic diversity identified at CIMMYT and India’s National Bureau of Plant Genetic Resources with induced genetic diversity in starch synthesis developed at Arcadia in order to improve wheat heat adaptation in a fundamental way.

 

CIMMYT has already pioneered a number of high throughput phenotyping methodologies for stress adaptive traits and applied them successfully in breeding and QTL discovery. In this project, membrane thermostability and chlorophyll fluorescence will be used specifically to expand the screening of diverse germplasm for hot environments. The project will capitalize on two major genetic resource screening efforts already underway; namely the World Wheat Collection at CIMMYT and the Indian Wheat Collection from the National Bureau of Plant Genetic Resources (NBPGR). Sources of heat tolerance arising from these screens will be used to initiate breeding for climate-ready wheat by pyramiding the new traits into the best available germplasm. In addition, we will use a reverse genetics approach to identify the genetic basis of these two key heat tolerance traits and obtain new induced alleles. CIMMYT and NBPGR materials will be screened at the DNA level at Arcadia by TILLING candidate genes that affect membrane function and thermotolerance.

 

Another major impact of heat directly linked to yield loss is the shortening of the grain-filling period, which is characterized by a rapid increase in starch accumulation. Heat stress during grain filling reduces starch accumulation as much as 58% by reducing the expression of multiple enzymes involved in starch biosynthesis. Arcadia will aim to counteract this effect—the

 

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regulated reduction of sink strength under heat stress—by increasing the expression and stability of enzymes in the starch synthesis pathway of reproductive tissues through both TILLING and transgenic approaches.

 

By the end of this five-year program, partners will have identified and confirmed, through extensive phenotyping, a set of elite genetic resources with respect to novel heat tolerance mechanisms and will have established a climate-ready wheat breeding pipeline with the first products in preliminary yield trials. Following the grant period, we anticipate additional trials in more locations and on combinations of these new technologies to determine optimal levels of heat tolerance in diverse geographies. Arcadia will develop the protein safety data package that would be required in common across global markets for any transgenic traits and make this available to CIMMYT.

 

Commercialization of new heat tolerant wheat technologies will then occur in parallel by both CIMMYT and its national partners, and by Arcadia Biosciences and its commercial partners. Reflecting the value of USAID’s public investment and CIMMYT’s co-development, Arcadia will provide CIMMYT rights in developing countries to new heat tolerant wheat technologies that may be derived from Arcadia intellectual property. Thus, CIMMYT will take forward new breeding products that arise from its germplasm screens as well as any TILLING and transgenic technologies that arise from Arcadia’s effort. CIMMYT will make these available to national programs to introgress into locally adapted varieties. In parallel, Arcadia will pursue commercial opportunities globally for new TILLING and transgenic technologies. Arcadia will retain exclusive commercial rights to any of its own intellectual property in developed countries.

 

DETAILED PROGRAM DESCRIPTION

 

Here we propose a program of collaborative research to develop new heat tolerant wheat lines. We will apply several technical strategies that address physiological processes known to be affected by heat stress in wheat. CIMMYT and Arcadia bring complementary technical resources to this effort. This combination will increase the likelihood of a significant breakthrough over each organization working alone.

 

As a partner in this program, USAID plays a critical role in facilitating this alliance. The Agency will provide resources to enable CIMMYT and NBPGR to expand their efforts in germplasm screening and to conduct field tests of novel lines coming from Arcadia. USAID support will entice Arcadia to expand exploratory research on this target trait in wheat. In exchange, this program will leverage Arcadia’s investment during and beyond the life of the grant and provide public sector access to intellectual property in the commercially valuable wheat market of South Asia.

 

GOAL AND OBJECTIVE

 

The goal of this collaboration is to increase the incomes of farmers by developing new varieties of wheat that have higher yields under average and heat stressed conditions. The target is to add value to farmers both in advanced economies such as North America and Europe as well as

 

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to small farmers in developing countries, thus leveraging both commercial and development investment.

 

By the end of the proposed five-year grant, Arcadia and CIMMYT expect to develop and conduct field trials of new wheat lines with the potential for increased yield. Following this initial demonstration of efficacy, Arcadia will continue commercial investment and development of technologies in collaboration with its global seed company partners and provide technical support to CIMMYT as needed. Through the Borlaug Institute for South Asia and programs such as the Cereal Systems Initiative for South Asia, CIMMYT will also take technologies forward in developing countries through its partnerships with national programs.

 

If the technical strategies are successful, similar TILLING and transgenic approaches could be applied to rice, the largest global staple, which, as wheat, experiences negative yield impacts by heat stress during grain-filling.

 

BACKGROUND

 

Among major staple crops, global wheat yields may be the hardest hit according to a number of climate change models. And while wheat is the most drought-adapted of major crops, improving heat adaptation would make wheat a climate resilient staple. Developing countries are both significant producers and importers of wheat. An estimated 1.2 billion poor people—the majority of whom live in South Asia—depend on wheat. As much as 80% of wheat in the developing world is produced and consumed in the same country (Ortiz et al., 2008). At the same time, wheat accounts for 43% of food imports in developing countries, underscoring the importance of global wheat trade to food security. Demand for wheat is projected to increase by 60% by 2050 in developing countries. As we saw with the global food price crisis in 2008, poor yields in major wheat exporting countries such as Australia can have a significant impact on global prices and disproportionately harmful impact on the poor.

 

Wheat has been shown to lose 3—4% of yield per °C above the optimum daytime temperature of 15°C (Wardlaw et al., 1989). Since the 1980s, global wheat productivity is estimated to have been reduced by as much as 5% (Lobell et al., 2011) due to increasing temperature, and wheat yields in South Asia could decline as much as 50% by 2050 (IFPRI, 2009). Recent research in India suggests that most crop models have underestimated the impact of extreme heat by as much as 50% (Lobell et al., 2012).

 

Development of more heat tolerant varieties of wheat aligns Arcadia’s business interests and those of USAID and CIMMYT in poverty reduction and food security. Arcadia has significant commercial partnerships and investments focused on developing new technologies in wheat for global markets. CIMMYT is the leader in wheat germplasm improvement for developing countries. Through combined public investment and co-development, this partnership will expand and accelerate progress on delivering significant advances in heat tolerance. CIMMYT will gain the rights in developing countries to heat tolerant wheat innovations developed by the private sector partner, including the valuable South Asian market.

 

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PARTNERS AND THEIR RESOURCES

 

To this collaborative effort, Arcadia will bring commercial product development expertise, technical resources for generation of transgenic wheat lines, a world-class wheat TILLING germplasm resource, expertise in identification of novel alleles through TILLING, and concepts for TILLING and transgenic targets for heat tolerance. Critically, Arcadia will also bring commercial investment to this partnership both during the life of the grant and through investment in the regulatory package for any transgenic technologies that arise from this collaboration. Arcadia will share this regulatory data and collaborate with CIMMYT in taking products forward in developing countries. In exchange for USAID support and CIMMYT’s technical assistance, Arcadia will provide CIMMYT with commercial rights in developing countries to technologies developed by Arcadia under this project. The estimated value of Arcadia investment in this project is over [...*...] in cash investment. Arcadia will commit to leverage several additional investments: regulatory data for one new transgenic product—estimated at [...*...] a proprietary wheat TILLING resource with an estimated value of [...*...] and an estimated [...*...] in revenue from our intellectual property rights in providing CIMMYT with rights to commercialize Arcadia technologies that arise from this program in the major wheat markets of South Asia (India is the global leader in wheat acreage).

 

CIMMYT will bring several major benefits to this collaboration including: (1) Access to ~80,000 accessions of wheat genetic resources housed in the World Wheat Collection in Mexico that are currently being pre-screened for favorable growth characteristics at high temperature; (2) High throughput phenotyping technologies that have been specifically designed for genetic resource screening and large-scale breeding; (3) Expertise in physiological breeding for abiotic stressed environments that has already resulted a new generation of advanced lines based on the pyramiding of stress adaptive traits; and (4) A product delivery and uptake pathway defined by the International Wheat Improvement Network (IWIN) which has a legacy of over 40 years of germplasm sharing and well-documented impacts in terms of productivity gains for impoverished farmers (Evenson and Gollin, 2003)

 

The NBPGR of India will provide the following key components to this project: (1) Expertise in genetic resource utilization; (2) Access to ~20,000 wheat accessions that will have been pre-screened for favorable growth characteristics at high temperature; (3) Access to field screening locations situated within major wheat breeding target locations representing over 20 million hectares of wheat either experiencing or at risk of the detrimental effects of heat stress; and (4) Analogue sites, or ‘hot-spots’ where selection can be made for future climate scenarios. NBPGR will also reach out to the Directorate of Wheat Research to collaborate in this screening effort in India.

 

USAID will play several important roles: the provision of funding to defray potential lost revenue to the private sector partner and to stimulate all parties to expand or accelerate their efforts, and the provision of strategic guidance in linking commercial and development objectives. Funding from USAID has been a significant factor in Arcadia’s decision to invest in heat tolerant wheat and to enter into this partnership with CIMMYT. Success from this seed funding will likely lead to very significant further investment by Arcadia and its commercial partners, beyond that

 

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estimated here, to further commercially develop these products, in markets that will include South Asia. Public funding has been a key to Arcadia’s ability to forego significant potential revenue in South Asia by allowing CIMMYT freedom to operate in that valuable wheat market. The USAID’s funding will allow CIMMYT to purchase equipment to improve and expand germplasm screening and will allow CIMMYT, Arcadia, and NBPGR to hire additional technicians to increase their levels of effort on heat tolerance. With many years of experience with regulatory policies and partnerships in India, USAID will provide technical advice to the partners in taking any transgenic technologies forward in the target countries.

 

TECHNICAL APPROACH

 

Heat stress in wheat growing environments typically occurs either as chronic increased temperature or as extreme heat shock. Chronic temperature stress accelerates development rate and inhibits key metabolic processes. This reduces the size of plant organs and, ultimately, reduces yield. Extreme shocks can trigger premature senescence resulting in potentially drastic and unpredictable yield losses (Wardlaw et al., 1994).

 

Only modest genetic gains in yield in heat stressed environments have been achieved to date (Lillemo, et al., 2005; Lopes et al., 2012). Our limited understanding of the complex interaction of cellular and molecular mechanisms with whole plant adaptation has restricted breakthroughs in breeding for heat tolerance. [...*...]

 

CIMMYT’s Wheat Physiology group has pioneered a number of high throughput phenotyping methodologies that have been applied in breeding and gene discovery (Reynolds et al., 2009; Salekdeh et al., 2009). For this project we shall adapt two published methodologies for high throughput screening protocols. [...*...]

 

Diverse germplasm for screening will come from four different sources:

 

1)             100 highly promising elite lines [...*...] based on agronomic and physiological characterization of hundreds of [...*...] wheat breeding lines ([...*...]).

 

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2)             1,000 lines [...*...] selected from large scale screening of ~80,000 accessions of the World Wheat Collection housed at CIMMYT (SeeD).

3)             294 genotypes from the Wheat Association Mapping Initiative (WAMI) panel that have been evaluated by national program collaborators in major wheat growing environments worldwide (Lopes et al., 2012), many of which encompass heat stress (e.g. Bangladesh, India, Mexico, Sudan, Texas).

4)             1,000 lines [...*...] by the NBPRG resulting from a screen of more than 20,000 wheat accessions under the National Initiative on Climate Resilient Agriculture.

 

NBPGR will analyze the results of the screening (in 2012) of its 20,000 germplasm accessions in order to select the best heat adapted candidates for this project. Approximately 350 of these selected lines will be screened annually for [...*...] for a total of 1,000 lines screened by the end of the project. In addition, screening of the best [...*...] of lines will be repeated in a second cycle [...*...] as well as of the selections made in [...*...] from previous cycles. NPBGR will also send the best [...*...] of lines screened [...*...] for CIMMYT to use in the climate ready wheat crossing program.

 

Germplasm identified through CIMMYT’s phenotypic screening will be used immediately in breeding (for details see work plan). We will also employ a reverse genetics approach to identify the genetic basis of [...*...] and obtain new induced alleles. CIMMYT materials will be screened at the DNA level at Arcadia by TILLING candidate genes that affect [...*...]

 

Pioneered by Arcadia scientist Dr. Claire McCallum, TILLING is a non-GM technology that combines advances in molecular biology with functional genomics to accelerate crop improvement (McCallum 2000). TILLING uses mutagenesis to induce novel DNA variation in elite germplasm. TILLING can also be used to screen existing germplasm for diversity in candidate genes associated with a trait of interest, [...*...] in order to link an observed phenotype with a genetic change. [...*...]

 

TILLING is particularly advantageous for breeding new traits in hexaploid wheat since it often requires genetic homozygosity of three similar genes from each of the A, B and D genomes before a phenotype can be observed. Using TILLING, alterations of each of these genes can be identified separately and then combined through breeding to achieve a new trait not previously available in wheat germplasm. Arcadia’s high-throughput TILLING capacity and wheat experience allows an entire library of [...*...] to be screened for a single gene target [...*...]

 

In addition to [...*...] a second major impact of heat directly linked to yield loss [...*...]

 

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[...*...]

 

We will use Arcadia’s high-throughput TILLING population in wheat to [...*...]

 

Arcadia will identify novel alleles [...*...]

 

A third target, [...*...]

 

[...*...]

 

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CIMMYT and Arcadia will conduct field tests of the TILLING and transgenic materials [...*...] in collaboration with the NBPGR. [...*...] CIMMYT will collaborate with the National Bureau of Plant Genetic Resources. In Year 2 and beyond, CIMMYT will conduct breeding work to incorporate heat tolerance sources into the appropriate agronomic backgrounds for deployment in different wheat agro-ecosystems in the developing world, either currently affected, or predicted to be affected, by heat stress.

 

ANTICIPATED IMPACT AND RESULTS

 

The impact of a 10% yield gain due to greater heat tolerance in wheat would be $120 per hectare of increased value to South Asian farmers in Bangladesh, Pakistan, Nepal, and India. This will contribute to the Feed the Future Intermediate Result of Improved Agricultural Productivity as measured through increased gross margin per unit of land. No significant changes in management practices or other input costs are anticipated in the use of heat tolerant wheat seed varieties. Thus, these technologies should increase gross margins directly by increasing yields.

 

When commercialized, the technologies arising from this collaboration will contribute to the number of hectares under improved technologies as a result of USAID assistance. The lines arising from germplasm screens and TILLING would be ready for introgression into local varieties starting [...*...] with commercialization [...*...]. Transgenic materials would need to undergo regulatory approval prior to extensive introgression and thus would be commercialized subsequently.

 

During the grant period itself, the proposed project will move several technologies through the stages of research and development. It is estimated that at the end of the grant period, we will achieve the following results:

 

·                  [...*...]

·                  It is estimated all of these will have undergone field testing.

 

PATHWAY TO COMMERCIALIZATION

 

As all parties will have non-exclusive rights to commercialize technologies in South Asia, it is expected that there will be parallel commercialization paths. [...*...]

 

The germplasm from the project will be distributed [...*...] by the International Wheat Improvement Network (IWIN) which has a legacy of over 40 years of germplasm sharing and well documented impacts in terms of productivity gains for impoverished farmers (Evenson and Gollin, 2003). [...*...] the germplasm will be

 

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distributed by the National Wheat Program for multi-location yield testing. Following appropriate approval processes, material will be disseminated widely, including to private seed companies, extension services and farmer organizations.

 

TECHNICAL AND FINANCIAL FEASIBILITY

 

The technical approach outlines above provides the data supporting this approach, combined with the discussion of the expertise and roles of each partner, addresses the technical feasibility. The cash investment of the private sector partner described above and the budget narrative provide evidence of the financial feasibility.

 

DURATION AND IMPLEMENTATION TIMELINE

 

We propose a five-year project. [...*...]

 

Annex A includes the timeline of major research activities and milestones and below a more detailed discussion.

 

Activities in Year 1 (October 2012 to September 2013)

 

Planning

 

Year 1 will begin with a planning meeting involving all partners leading to the establishment of experimental procedures, work plans, and timelines for the rest of the project. The following issues will be addressed:

 

[...*...]

 

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[...*...]

 

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[...*...]

 

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[...*...]

 

SUSTAINABILITY BEYOND LIFE OF GRANT

 

The value of heat tolerance in wheat in North America, Australia, and Europe will drive Arcadia’s investment to commercialize promising technologies that arise from this grant. [...*...]

 

Similarly, CIMMYT has the extensive experience and associations with public and private seed channels in South Asia necessary to develop and release new varieties that will arise from this collaboration. The establishment of the Borlaug Institute for South Asia is evidence of CIMMYT’s extensive presence in the target region. As a Public International Organization, and given the alignment with the new Wheat Global Alliance, CIMMYT expects to have additional resources to support the continued development and extension of technologies arising from the proposed grant.

 

PLANNING MATRIX

 

The proposed program is a focused effort around research and thus will not require a complex set of indicators of progress and measurement tools. The Implementation Timeline in Annex A above provides a matrix of activities and timelines for reporting progress against the appropriate Feed the Future indicators have been indicated. A discussion of these indicators is also provided in the following section on Monitoring and Evaluation.

 

MONITORING AND EVALUATION

 

As outlined in the section on Anticipated Impact and Results, upon commercialization of

 

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products from this project, we expect to contribute to the Feed the Future Intermediate Result of Improved Agricultural Productivity. During the grant period, we will report results under the Sub-Intermediate Results 1.2 and 3.

 

Specifically, under 1.2: Enhanced Technology Development, Dissemination, Management and Innovation, we will have technologies under both Phase I and II. As the project will be developing a number of distinct approaches to heat tolerance, we will define a “technology” as each genetically segregating line selected in germplasm screens, progeny of breeding, each allele identified through TILLING, and each transgene target. We will report the number of technologies in both phases. [...*...]

 

This project is a public-private partnership and thus will contribute to Intermediate Result 3 in the first year, as measured by the number of public-private partnerships formed. After the grant period when technologies are ready for commercialization, it is expected there will be additional public-private partnerships through CIMMYT and its national partners.

 

ROLE OF USAID SUPPORT

 

The role of USAID support is addressed in the section on the role of the partners and in the draft MOU. The specifics applications of the financial support requested from USAID are detailed in the technical approach and budget narrative.

 

GENDER CONSIDERATIONS

 

The long-term development impacts of this project are expected to equally benefit men and women from diverse social groups dependent on wheat farming. In addition to this, the development of wheat varieties with improved heat tolerance is also expected to contribute towards increased incomes at farm household level.

 

From a technology development perspective, the results of this project will provide the basis for further efforts to combine improved heat tolerance with other combinations of traits in wheat to address the specific needs and preferences of men and women wheat farmers and consumers in diverse socio-economic and agro-ecological contexts.

 

For the proposed activities, the issue of gender considerations is found to be relevant primarily in relation to staffing and professional development as well as other workplace-related aspects. The applicants are committed to equal opportunity principles and will ensure that recruitment and professional development opportunities take gender equity into account as appropriate.

 

STAFFING AND MANAGEMENT PLAN

 

The key staff at Arcadia include: [...*...] The CVs of these

 

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principals are provided in the Annex.

 

The overall coordinator for the CIMMYT operation, including liaison with NBPGR and Arcadia will be [...*...]. An Associate Scientist will be appointed to run the experiments with a small team of technicians in Mexico, to ensure coordination of experiments and germplasm exchange with Arcadia and NBPGR, and to analyze and report data. Crossing and germplasm selection will be conducted in collaboration with a pre-breeder (to be appointed) dedicated to germplasm improvement under heat and drought stress. The CV of [...*...] is provided in the Annex. The coordinator of [...*...] Director of NBPGR.

 

The parties to this partnership — Arcadia, CIMMYT, NBPGR, and USAID — will form a joint program management committee composed of equal representation from each organization. The program management committee shall meet, in person or by conference call, twice a year to determine collaborative activities, establish work plans detailing those activities and the timeline for completion of the same, review progress against the work plan, and determine how to best move the project forward.

 

EXPERIENCE OF PARTNERS

 

Wheat is a core crop for Arcadia investment and we have existing transgenic and TILLING wheat research and seed company partners in all major markets. Arcadia has expertise in TILLING of starch pathways through development of a high-fiber white wheat product. We are also developing a non-transgenic herbicide tolerant wheat, and low gluten wheat through TILLING. We have partnered with USAID on the development of abiotic stress tolerant rice and wheat for South Asia. Through the African Agricultural Technology Foundation, Arcadia will deliver African rice varieties with our NUE, WUE, and salt tolerance technologies.

 

CIMMYT is the leading developer of wheat germplasm for developing countries. An estimated 80 percent of spring bread wheat in developing countries is planted to varieties containing CIMMYT germplasm. CIMMYT leads the International Wheat Yield Consortium and is a member of the International Triticeae Mapping Initiative. With the establishment of the Borlaug Institute for South Asia, CIMMYT has deepened its already strong roots with public and private institutions in the target region. CIMMYT co-leads the new CGIAR Research Program, WHEAT, where heat tolerance is among the top objectives. In addition to core support from USAID, CIMMYT has had many special projects with USAID, including the Cereal Systems Initiative for South Asia, CSISA.

 

I.                                        Conclusion, Summary Statement

 

The partnership between Arcadia Biosciences, CIMMYT and NBPGR creates a powerful consortium of leading experts to collectively develop and advance new wheat technologies with improved tolerance to heat coupled by increased yield through improved grain filling. Arcadia has the research capacity and experience in developing new transgenic crops and identifing new varieties through the TILLING platform. Promising germplasms will then subsequently be field

 

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tested by CIMMYT and NBPGR. Arcadia has the expertise to help facilitate the commercialization and dissemination of new varieties through previous experience working with India as well as meeting requirements for biosafety approvals. All participants in this partnership have a long history of working in the development and commercialization of wheat, some participating in other ongoing projects currently supported by USAID.

 

-END OF PROGRAM DESCRIPTION-

 

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ATTACHMENT C - STANDARD PROVISIONS

 

I. MANDATORY STANDARD PROVISIONS FOR U.S. NONGOVERNMENTAL ORGANIZATIONS

 

(See “MANDATORY STANDARD PROVISIONS FOR U.S. NONGOVERNMENTAL ORGANIZATIONS” listed under Mandatory References titled “Standard Provisions for U.S. Nongovernmental Organizations” in ADS 303.)

 

M1. APPLICABILITY OF 22 CFR PART 226 (MAY 2005)

 

a.                                      All provisions of 22 CFR 226 and all Standard Provisions attached to this agreement are applicable to the recipient and to subrecipients which meet the definition of “Recipient” in part 226, unless a section specifically excludes a subrecipient from coverage. The recipient must assure that subrecipients have copies of all the attached standard provisions.

 

b.                                      For any subawards made with Non-U.S. subrecipients the recipient must include the applicable “Standard Provisions for Non-US Nongovernmental Organizations.” Recipients are required to ensure compliance with monitoring procedures in accordance with OMB Circular A-133.

 

[END OF PROVISION]

 

M2. INELIGIBLE COUNTRIES (MAY 1986)

 

Unless otherwise approved by the USAID Agreement Officer, funds will only be expended for assistance to countries eligible for assistance under the Foreign Assistance Act of 1961, as amended, or under acts appropriating funds for foreign assistance.

 

[END OF PROVISION]

 

M3. NONDISCRIMINATION (JUNE 2012)

 

No U.S. citizen or legal resident shall be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination on the basis of race, color, national origin, age, disability, or sex under any program or activity funded by this award when work under the grant is performed in the U.S. or when employees are recruited from the U.S.

 

Additionally, USAID is committed to achieving and maintaining a diverse and representative workforce and a workplace free of discrimination. Based on law, Executive Order, and Agency policy, USAID prohibits discrimination, including harassment, in its own workplace on the basis of race, color, religion, sex (including pregnancy and gender identity), national origin, disability, age, veteran’s status, sexual orientation, genetic information, marital status, parental status, political affiliation, and any other conduct that does not adversely affect the performance of the employee. In addition, the Agency strongly encourages its recipients and their subrecipients and vendors (at all tiers), performing both in the U.S. and overseas, to develop and enforce comprehensive nondiscrimination policies for their workplaces that include protection for all their employees on these expanded bases, subject to applicable law.

 

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[END OF PROVISION]

 

M4. AMENDMENT OF AWARD (JUNE 2012)

 

This award may only be amended in writing, by formal amendment or letter, signed by the Agreement Officer (AO), and in the case of a bilateral amendment, by the AO and an authorized official of the recipient.

 

[END OF PROVISION]

 

M5. NOTICES (JUNE 2012)

 

Any notice given by USAID or the recipient is sufficient only if in writing and delivered in person, mailed or e-mailed as follows:

 

(1)                                 To the USAID Agreement Officer, at the address specified in this award; or

 

(2)                                 To the recipient, at the recipient’s address shown in this award, or to such other address specified in this award.

 

[END OF PROVISION]

 

M6. SUBAGREEMENTS (JUNE 2012)

 

a.                                     Subawardees and contractors have no relationship with USAID under the terms of this award. All required USAID approvals must be directed through the recipient to USAID.

 

b.                                     Notwithstanding any other term of this award, subawardees and contractors have no right to submit claims directly to USAID and USAID assumes no liability for any third party claims against the recipient.

 

[END OF PROVISION]

 

M7. OMB APPROVAL UNDER THE PAPERWORK REDUCTION ACT (DECEMBER 2003)

 

Information collection requirements imposed by this award are covered by OMB approval number 0412-0510; the current expiration date is 04/30/2005. The Standard Provisions containing the requirement and an estimate of the public reporting burden (including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information) are

 

	
Standard Provision
    	
 
    	
Burden Estimate
    	
 
    
	
Air Travel and   Transportation
    	
 
    	
1(hour)
    	
 
    
	
Ocean Shipment of Goods
    	
 
    	
.5
    	
 
    
	
Patent Rights
    	
 
    	
.5
    	
 
    
	
Publications
    	
 
    	
.5
    	
 
    
	
Negotiated Indirect Cost   Rates - (Predetermined and Provisional)
    	
 
    	
1
    	
 
    
	
Voluntary Population   Planning
    	
 
    	
.5
    	
 
    
	
Protection of the   Individual as a Research Subject
    	
 
    	
1
    	
 
    

 

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22 CFR 226
    	
 
    	
Burden Estimate
    	
 
    
	
22 CFR 226.40-.49,   Procurement of Goods and Services
    	
 
    	
1
    	
 
    
	
22 CFR 226.30 -.36,   Property Standards
    	
 
    	
1.5
    	
 
    

 

Comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, may be sent to the Office of Acquisition and Assistance, Policy Division (M/OAA/P), U.S. Agency for International Development, Washington, DC 20523-7801 and to the Office of Management and Budget, Paperwork Reduction Project (0412-0510), Washington, DC 20503.

 

[END OF PROVISION]

 

M8. USAID ELIGIBILITY RULES FOR GOODS AND SERVICES (JUNE 2012)

 

a.                                      This provision is not applicable to commodities or services that the recipient provides with private funds as part of a cost-sharing requirement, or with Program Income generated under this award.

 

b.                                      Ineligible and Restricted Commodities and Services:

 

(1)                                 Ineligible Commodities and Services. The recipient must not, under any circumstances, procure any of the following under this award:

 

(i) Military equipment,

(ii) Surveillance equipment,

(iii) Commodities and services for support of police or other law enforcement activities,

(iv) Abortion equipment and services,

(v) Luxury goods and gambling equipment, or

(vi) Weather modification equipment.

 

(2)                                 Ineligible Suppliers. Any firms or individuals that do not comply with the requirements in Standard Provision, “Debarment, Suspension and Other Responsibility Matters” and Standard Provision, “Preventing Terrorist Financing” must not be used to provide any commodities or services funded under this award.

 

(3)                                 Restricted Commodities. The recipient must obtain prior written approval of the Agreement Officer (AO) or comply with required procedures under an applicable waiver, as provided by the AO when procuring any of the following commodities:

 

(i) Agricultural commodities,

(ii) Motor vehicles,

(iii) Pharmaceuticals,

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(iv) Pesticides,

(v) Used equipment,

(vi) U.S. Government-owned excess property, or

(vii) Fertilizer.

 

c.                                       Source and Nationality:

 

Except as may be specifically approved in advance by the AO, all commodities and services that will be reimbursed by USAID under this award must be from the authorized geographic code specified in this award and must meet the source and nationality requirements set forth in 22 CFR 228. If the geographic code is not specified, the authorized geographic code is 937. When the total value of procurement for commodities and services during the life of this award is valued at $250,000 or less, the authorized geographic code for procurement of all goods and services to be reimbursed under this award is code 935. For a current list of countries within each geographic code, see: http://www.usaid.gov/policy/ads/300/310.pdf.

 

M9. DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILITY MATTERS (JUNE 2012)

 

a.                                      The recipient agrees to notify the Agreement Officer (AO) immediately upon learning that it or any of its principals:

 

(1)                                 Are presently excluded or disqualified from covered transactions by any Federal department or agency;

 

(2)                                 Have been convicted within the preceding three-year period preceding this proposal; been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, receiving stolen property, making false claims, or obstruction of justice; commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects your present responsibility;

 

(3)                                 Are presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph a.(2); and

 

(4)                                 Have had one or more public transactions (Federal, State, or local) terminated for cause or default within the preceding three years.

 

b.                                      The recipient agrees that, unless authorized by the AO, it will not knowingly enter into any subagreements or contracts under this award with a person or entity that is included on the Excluded Parties List System (www.epls.gov/). The recipient further agrees to include the

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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following provision in any subagreements or contracts entered into under this award:

 

DEBARMENT, SUSPENSION, INELIGIBILITY, AND VOLUNTARY EXCLUSION (JUNE 2012)

 

The recipient/contractor certifies that neither it nor its principals is presently excluded or disqualified from participation in this transaction by any Federal department or agency.

 

c.                                       The policies and procedures applicable to debarment, suspension, and ineligibility under USAID-financed transactions are set forth in Subpart C of 2 CFR Section 180, as supplemented by 2 CFR 780.

 

[END OF PROVISION]

 

M10. DRUG-FREE WORKPLACE (JUNE 2012)

 

a.              The recipient must comply with drug-free workplace requirements in subpart B (or subpart C, if the recipient is an individual) of 2 CFR 782, which adopts the Government-wide implementation (2 CFR part 182) of sec. 5152—5158 of the Drug-Free Workplace Act of 1988 (Pub. L. 100—690, Title V, Subtitle D; 41 U.S.C. 701—707).

 

[END OF PROVISION]

 

M11. EQUAL PARTICIPATION BY FAITH-BASED ORGANIZATIONS (JUNE 2012)

 

a.                                      Faith-Based Organizations Encouraged.

 

Faith-based organizations are eligible to compete on an equal basis as any other organization to participate in USAID programs. Neither USAID nor entities that make and administer subawards of USAID funds will discriminate for or against an organization on the basis of the organization’s religious character or affiliation. A faith-based organization may continue to carry out its mission, including the definition, practice, and expression of its religious beliefs, within the limits contained in this provision. More information can be found at the USAID Faith-Based and Community Initiatives Web site: http://transition.usaid.gov/our_work/global_partnerships/fbci/ and 22 CFR 205.1.

 

b.                                      Inherently Religious Activities Prohibited.

 

(1)                                 Inherently religious activities include, among other things, worship, religious instruction, prayer, or proselytization.

 

(2)                                 The recipient must not engage in inherently religious activities as part of the programs or services directly funded with financial assistance from USAID. If the recipient engages in inherently religious activities, it must offer those services at a different time or location from any programs or services directly funded by this award, and participation by beneficiaries in any such inherently religious activities must be voluntary.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(3)                                 These restrictions apply equally to religious and secular organizations. All organizations that participate in USAID programs, including religious ones, must carry out eligible activities in accordance with all program requirements and other applicable requirements governing USAID-funded activities.

 

(4)                                 These restrictions do not apply to USAID-funded programs where chaplains work with inmates in prisons, detention facilities, or community correction centers, or where USAID funds are provided to religious or other organizations for programs in prisons, detention facilities, or community correction centers, in which such organizations assist chaplains in carrying out their duties.

 

(5)                                 Notwithstanding the restrictions of b.(1) and (2), a religious organization that participates in USAID-funded programs or services

 

(i)                                                  Retains its independence and may continue to carry out its mission, including the definition, practice, and expression of its religious beliefs, provided that it does not use direct financial assistance from USAID to support any inherently religious activities,

 

(ii)                                               May use space in its facilities, without removing religious art, icons, scriptures, or other religious symbols, and

 

(iii)                                                Retains its authority over its internal governance, and it may retain religious terms in its organization’s name, select its board members on a religious basis, and include religious references in its organization’s mission statements and other governing documents.

 

c.                                       Construction of Structures Used for Inherently Religious Activities Prohibited. The recipient must not use USAID funds for the acquisition, construction, or rehabilitation of structures to the extent that those structures are used for inherently religious activities, such as sanctuaries, chapels, or other rooms that the recipient uses as its principal place of worship. Except for a structure used as its principal place of worship, where a structure is used for both eligible and inherently religious activities, USAID funds may not exceed the cost of those portions of the acquisition, construction, or rehabilitation that are attributable to eligible activities.

 

d.                                      Discrimination Based on Religion Prohibited. The recipient must not discriminate against any beneficiary or potential beneficiary on the basis of religion or religious belief as part of the programs or services directly funded with financial assistance from USAID.

 

e.                                       A religious organization’s exemption from the Federal prohibition on employment discrimination on the basis of religion, set forth in Sec. 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e—1 is not forfeited when the organization receives financial assistance from USAID.

 

f.                                        The Secretary of State may waive the requirements of this section in whole or in part, on a

 

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case-by-case basis, where the Secretary determines that such waiver is necessary to further the national security or foreign policy interests of the United States.

 

[END OF PROVISION]

 

M12. PREVENTING TERRORIST FINANCING — IMPLEMENTATION OF E.O. 13224 (JUNE 2012)

 

a.                                      The recipient is reminded that U.S. Executive Orders and U.S. law prohibits transactions with, and the provision of resources and support to, individuals and organizations associated with terrorism. The recipient must not engage in transactions with, or provide resources or support to, individuals and organizations associated with terrorism. In addition, the recipient must verify that no support or resources are provided to individuals or entities that appear on the Specially Designated Nationals and Blocked Persons List maintained by the U.S. Treasury (online at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx) or the United Nations Security designation list (online at: http://www.un.org/sc/committees/1267/aq_sanctions_list.shtml).

 

b.                                      This provision must be included in all subagreements, including contracts and subawards, issued under this award.

 

[END OF PROVISION]

 

M13. MARKING AND PUBLIC COMMUNICATIONS UNDER USAID-FUNDED ASSISTANCE (JUNE 2012)

 

a.                                      The USAID Identity is the official marking for USAID, comprised of the USAID logo and brandmark with the tagline “from the American people.” The USAID Identity is on the USAID Web site at www.usaid.gov/branding. Recipients must use the USAID Identity, of a size and prominence equivalent to or greater than any other identity or logo displayed, to mark the following:

 

(1)                                 Programs, projects, activities, public communications, and commodities partially or fully funded by USAID;

 

(2)                                 Program, project, or activity sites funded by USAID, including visible infrastructure projects or other physical sites;

 

(3)                                 Technical assistance, studies, reports, papers, publications, audio-visual productions, public service announcements, Web sites/Internet activities, promotional, informational, media, or communications products funded by USAID;

 

(4)                                 Commodities, equipment, supplies, and other materials funded by USAID, including commodities or equipment provided under humanitarian assistance or disaster relief programs; and

 

(5)                                 Events financed by USAID, such as training courses, conferences, seminars, exhibitions, fairs, workshops, press conferences and other public activities. If the USAID Identity cannot be displayed, the recipient is encouraged to otherwise

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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acknowledge USAID and the support of the American people.

 

b.                                      When this award contains an approved Marking Plan, the recipient must implement the requirements of this provision following the approved Marking Plan.

 

c.                                       If a “Marking Plan” is not included in this award, the recipient must propose and submit a plan for approval within the time specified by the Agreement Officer (AO).

 

d.                                      The AO may require a preproduction review of program materials and “public communications” (documents and messages intended for external distribution, including but not limited to correspondence; publications; studies; reports; audio visual productions; applications; forms; press; and promotional materials) used in connection with USAID-funded programs, projects or activities, for compliance with an approved Marking Plan.

 

e.                                       The recipient is encouraged to give public notice of the receipt of this award and announce progress and accomplishments. The recipient must provide copies of notices or announcements to the Agreement Officer’s Representative (AOR) and to USAID’s Office of Legislative and Public Affairs in advance of release, as practicable. Press releases or other public notices must include a statement substantially as follows:

 

“The U.S. Agency for International Development administers the U.S. foreign assistance program providing economic and humanitarian assistance in more than 80 countries worldwide.”

 

f.                                        Any “public communication” in which the content has not been approved by USAID must contain the following disclaimer:

 

“This study/report/audio/visual/other information/media product (specify) is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of [insert recipient name] and do not necessarily reflect the views of USAID or the United States Government.”

 

g.                                       The recipient must provide the USAID AOR, with two copies of all program and communications materials produced under this award.

 

h.                                      The recipient may request an exception from USAID marking requirements when USAID marking requirements would:

 

(1)                                 Compromise the intrinsic independence or neutrality of a program or materials where independence or neutrality is an inherent aspect of the program and materials;

 

(2)                                 Diminish the credibility of audits, reports, analyses, studies, or policy recommendations whose data or findings must be seen as independent;

 

(3)                                 Undercut host-country government “ownership” of constitutions, laws, regulations, policies, studies, assessments, reports, publications, surveys or audits, public service

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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announcements, or other communications;

 

(4)                                 Impair the functionality of an item;

 

(5)                                 Incur substantial costs or be impractical;

 

(6)                                 Offend local cultural or social norms, or be considered inappropriate; or

 

(7)                                 Conflict with international law.

 

i.                                          The recipient may submit a waiver request of the marking requirements of this provision or the Marking Plan, through the AOR, when USAID-required marking would pose compelling political, safety, or security concerns, or have an adverse impact in the cooperating country.

 

(1)                                 Approved waivers “flow down” to subagreements, including subawards and contracts, unless specified otherwise. The waiver may also include the removal of USAID markings already affixed, if circumstances warrant.

 

(2)                                 USAID determinations regarding waiver requests are subject to appeal by the recipient, by submitting a written request to reconsider the determination to the cognizant Assistant Administrator.

 

j.                                         The recipient must include the following marking provision in any subagreements entered into under this award:

 

“As a condition of receipt of this subaward, marking with the USAID Identity of a size and prominence equivalent to or greater than the recipient’s, subrecipient’s, other donor’s, or third party’s is required. In the event the recipient chooses not to require marking with its own identity or logo by the subrecipient, USAID may, at its discretion, require marking by the subrecipient with the USAID Identity.”

 

[END OF PROVISION]

 

M14. REGULATIONS GOVERNING EMPLOYEES (AUGUST 1992)

 

(The following applies to the recipient’s employees working in the cooperating country under the agreement who are not citizens of the cooperating country.)

 

a.                                      The recipient’s employees must maintain private status and may not rely on local U.S. Government offices or facilities for support while under this grant.

 

b.                                      The sale of personal property or automobiles by recipient employees and their dependents in the foreign country to which they are assigned are subject to the same limitations and prohibitions which apply to direct-hire USAID personnel employed by the Mission, including the rules contained in 22 CFR 136, except as this may conflict with host government regulations.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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c.                                       Other than work to be performed under this award for which an employee is assigned by the recipient, employees of the recipient must not engage directly or indirectly, either in the individual’s own name or in the name or through an agency of another person, in any business, profession, or occupation in the foreign countries to which the individual is assigned. In addition, the individual must not make loans or investments to or in any business, profession, or occupation in the foreign countries to which the individual is assigned.

 

d.                                      The recipient’s employees, while in a foreign country, are expected to show respect for its conventions, customs, and institutions, to abide by its applicable laws and regulations, and not to interfere in its internal political affairs.

 

e.                                       In the event the conduct of any recipient employee is not in accordance with the preceding paragraphs, the recipient’s chief of party must consult with the USAID Mission Director and the employee involved, and must recommend to the recipient a course of action with regard to such employee.

 

f.                                        The parties recognize the rights of the U.S. Ambassador to direct the removal from a country of any U.S. citizen or the discharge from this grant award of any third country national when, in the discretion of the Ambassador, the interests of the United States so require.

 

g.                                       If it is determined, either under e. or f. above, that the services of such employee should be terminated, the recipient must use its best efforts to cause the return of such employee to the United States, or point of origin, as appropriate.

 

[END OF PROVISION]

 

M15. CONVERSION OF UNITED STATES DOLLARS TO LOCAL CURRENCY (NOVEMBER 1985)

 

(This provision applies when activities are undertaken outside the United States.)

 

Upon arrival in the cooperating country, and from time to time as appropriate, the recipient’s chief of party must consult with the Mission Director who must provide, in writing, the procedure the recipient and its employees must follow in the conversion of United States dollars to local currency. This may include, but is not limited to, the conversion of currency through the cognizant United States Disbursing Officer or Mission Controller, as appropriate.

 

[END OF PROVISION]

 

M16. USE OF POUCH FACILITIES (AUGUST 1992)

 

(This provision applies when activities are undertaken outside the United States.)

 

a.                                      Use of diplomatic pouch is controlled by the Department of State. The Department of State has authorized the use of pouch facilities for USAID recipients and their employees as a general policy, as detailed in items (1) through (6) below. However, the final decision regarding use of pouch facilities rest with the Embassy or USAID Mission. In consideration of the use of pouch facilities, the recipient and its employees agree to indemnify and hold harmless, the Department of State and USAID for loss or damage occurring in pouch

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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transmission:

 

(1)                                 Recipients and their employees are authorized use of the pouch for transmission and receipt of up to a maximum of .9 kgs per shipment of correspondence and documents needed in the administration of assistance programs.

 

(2)                                 U.S. citizen employees are authorized use of the pouch for personal mail up to a maximum of .45 kgs per shipment (but see a.(3) below).

 

(3)                                 Merchandise, parcels, magazines, or newspapers are not considered to be personal mail for purposes of this standard provision and are not authorized to be sent or received by pouch.

 

(4)                                 Official and personal mail pursuant to a.(1) and (2) above sent by pouch should be addressed as follows:

 

Name of individual or organization (followed by letter symbol “G”)

City Name of post (USAID/        )

Agency for International Development

Washington, DC 20523-0001

 

(5)                                 Mail sent via the diplomatic pouch may not be in violation of U.S. Postal laws and may not contain material ineligible for pouch transmission.

 

(6)                                 Recipient personnel are NOT authorized use of military postal facilities (APO/FPO). This is an Adjutant General’s decision based on existing laws and regulations governing military postal facilities and is being enforced worldwide.

 

b.                                      The recipient is responsible for advising its employees of this authorization, these guidelines, and limitations on use of pouch facilities.

 

c.                                       Specific additional guidance on grantee use of pouch facilities in accordance with this standard provision is available from the Post Communication Center at the Embassy or USAID Mission.

 

[END OF PROVISION]

 

M17. TRAVEL AND INTERNATIONAL AIR TRANSPORTATION (JUNE 2012)

 

a.                                      PRIOR BUDGET APPROVAL

 

Direct charges for travel costs for international air travel by individuals are allowable only when each international trip has received prior budget approval. Such approval is met when all of the following are met:

 

(1)                                 The trip is identified by providing the following information: the number of trips, the number of individuals per trip, and the origin and destination countries or regions;

 

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(2)                                 All of the information noted at a.(1) above is incorporated in the Schedule of this award or amendments to this award; and

 

(3)                                 The costs related to the travel are incorporated in the budget of this award.

 

The Agreement Officer (AO) may approve, in writing, international travel costs that have not been incorporated in this award. To obtain AO approval, the recipient must request approval at least three weeks before the international travel, or as far in advance as possible. The recipient must keep a copy of the AO’s approval in its files. No other clearance (including country clearance) is required for employees of the recipient, its subrecipients or contractors. International travel by employees who are not on official business of the recipient, such as rest and recuperation (R&R) travel offered as part of an employee’s benefits package, must be consistent with the recipient’s personnel and travel policies and procedures and does not require approval.

 

b.                                      TRAVEL COSTS

 

All travel costs must comply with the applicable cost principles and must be consistent with those normally allowed in like circumstances in the recipient’s non-USAID-funded activities. Costs incurred by employees and officers for travel, including air fare, costs of lodging, other subsistence, and incidental expenses, may be considered reasonable and allowable only to the extent such costs do not exceed charges normally allowed by the non-profit organization in its regular operations as the result of the non-profit organization’s written travel policy.

 

In the absence of a reasonable written policy regarding international travel costs, the standard for determining the reasonableness of reimbursement for international travel costs will be the Standardized Regulations (Government Civilians, Foreign Areas), published by the U.S. Department of State, as from time to time amended. The most current Standardized Regulations on international travel costs may be obtained from the AO. In the event that the cost for air fare exceeds the customary standard commercial airfare (coach or equivalent) or the lowest commercial discount airfare, the recipient must document one of the allowable exceptions from the applicable cost principles.

 

c.                                       FLY AMERICA ACT RESTRICTIONS

 

(1)                                 The recipient must use U.S. Flag Air Carriers for all international air transportation (including personal effects) funded by this award pursuant to the Fly America Act and its implementing regulations to the extent service by such carriers is available.

 

(2)                                 In the event that the recipient selects a carrier other than a U.S. Flag Air Carrier for international air transportation, in order for the costs of such international air transportation to be allowable, the recipient must document such transportation in accordance with this provision and maintain such documentation pursuant to the Standard Provision, “Accounting, Audit and Records.” The documentation must use one of the following reasons or other exception under the Fly America Act:

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(i)                                     The recipient uses a European Union (EU) flag air carrier, which is an airline perating from an EU country that has signed the US-EU “Open Skies” agreement (http://www.state.gov/e/eb/rls/othr/ata/i/ic/170684.htm).

 

(ii)                                  Travel to or from one of the following countries on an airline of that country when no city pair fare is in effect for that leg (see http://apps.fas.gsa.gov/citypairs/search/):

 

a.                                      Australia on an Australian airline,

b.                                      Switzerland on a Swiss airline, or

c.                                       Japan on a Japanese airline;

 

(iii)                               Only for a particular leg of a route on which no US Flag Air Carrier provides service on that route;

 

(iv)                              For a trip of 3 hours or less, the use of a US Flag Air Carrier at least doubles the travel time;

 

(v)                                 If the US Flag Air Carrier offers direct service, use of the US Flag Air Carrier would increase the travel time by more than 24 hours; or

 

(vi)                              If the US Flag Air Carrier does not offer direct service,

 

a.                                      Use of the US Flag Air Carrier increases the number of aircraft changes by 2 or more,

 

b.                                      Use of the US Flag Air Carrier extends travel time by 6 hours or more, or

 

c.                                       Use of the US Flag Air Carrier requires a layover at an overseas interchange of 4 hours or more.

 

d.                                      DEFINITIONS

 

The terms used in this provision have the following meanings:

 

(1)                                 “Travel costs’’ means expenses for transportation, lodging, subsistence (meals and incidentals), and related expenses incurred by employees who are on travel status on official business of the recipient for any travel outside the country in which the organization is located. “Travel costs” do not include expenses incurred by employees who are not on official business of the recipient, such as rest and recuperation (R&R) travel offered as part of an employee’s benefits package that are consistent with the recipient’s personnel and travel policies and procedures.

 

(2)                                 “International air transportation” means international air travel by individuals (and their personal effects) or transportation of cargo by air between a place in the United States and a place outside thereof, or between two places both of which are outside the United

 

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States.

 

(3)                                 “U.S. Flag Air Carrier” means an air carrier on the list issued by the U.S. Department of Transportation at http://ostpxweb.dot.gov/aviation/certific/certlist.htm. U.S. Flag Air Carrier service also includes service provided under a code share agreement with another air carrier when the ticket, or documentation for an electronic ticket, identifies the U.S. flag air carrier’s designator code and flight number.

 

(4)                                 For this provision, the term “United States” includes the fifty states, Commonwealth of Puerto Rico, possessions of the United States, and the District of Columbia.

 

e.                                       SUBAGREEMENTS

 

This provision must be included in all subagreements, including all subawards and contracts, under which this award will finance international air transportation.

 

[END OF PROVISION]

 

M18. OCEAN SHIPMENT OF GOODS (JUNE 2012)

 

APPLICABILITY: This provision is applicable for awards and subawards for which the recipient contracts for ocean transportation for goods purchased or financed with USAID funds. In accordance with 22 CFR 228.21, ocean transportation shipments are subject to the provisions of 46 CFR Part 381.

 

OCEAN SHIPMENT OF GOODS (JUNE 2012)

 

a.                                      Prior to contracting for ocean transportation to ship goods purchased or financed with USAID funds under this award, the recipient must contact the office below to determine the flag and class of vessel to be used for shipment:

 

U.S. Agency for International Development,

Office of Acquisition and Assistance, Transportation Division

1300 Pennsylvania Avenue, NW

Washington, DC 20523-7900

Email: oceantransportation@usaid.gov

 

b.                                      This provision must be included in all subagreements, including subwards and contracts.

 

[END OF PROVISION]

 

M19. VOLUNTARY POPULATION PLANNING ACTIVITIES — MANDATORY REQUIREMENTS (MAY 2006)

 

Requirements for Voluntary Sterilization Programs

 

(1)                                 Funds made available under this award must not be used to pay for the performance of involuntary sterilization as a method of family planning or to coerce or provide any financial

 

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incentive to any individual to practice sterilization.

 

Prohibition on Abortion-Related Activities:

 

(1)                                 No funds made available under this award will be used to finance, support, or be attributed to the following activities: (i) procurement or distribution of equipment intended to be used for the purpose of inducing abortions as a method of family planning; (ii) special fees or incentives to any person to coerce or motivate them to have abortions; (iii) payments to persons to perform abortions or to solicit persons to undergo abortions; (iv) information, education, training, or communication programs that seek to promote abortion as a method of family planning; and (v) lobbying for or against abortion. The term “motivate,” as it relates to family planning assistance, must not be construed to prohibit the provision, consistent with local law, of information or counseling about all pregnancy options.

 

(2)                                 No funds made available under this award will be used to pay for any biomedical research which relates, in whole or in part, to methods of, or the performance of, abortions or involuntary sterilizations as a means of family planning. Epidemiologic or descriptive research to assess the incidence, extent or consequences of abortions is not precluded.

 

[END OF PROVISION]

 

M20. TRAFFICKING IN PERSONS (JUNE 2012)

 

a.                                      USAID is authorized to terminate this award, without penalty, if the recipient or its employees, or any subrecipient or its employees, engage in any of the following conduct:

 

(1)                                 Trafficking in persons (as defined in the Protocol to Prevent, Suppress, and Punish Trafficking in Persons, especially Women and Children, supplementing the UN Convention against Transnational Organized Crime) during the period of this award;

 

(2)                                 Procurement of a commercial sex act during the period of this award; or

 

(3)                                 Use of forced labor in the performance of this award.

 

b.                                      For purposes of this provision, “employee” means an individual who is engaged in the performance of this award as a direct employee, consultant, or volunteer of the recipient or any subrecipient.

 

c.                                       The recipient must include in all subagreements, including subawards and contracts, a provision prohibiting the conduct described in a(1)-(3) by the subrecipient, contractor or any of their employees.

 

[END OF PROVISION]

 

M21. SUBMISSIONS TO THE DEVELOPMENT EXPERIENCE CLEARINGHOUSE AND PUBLICATIONS (JUNE 2012)

 

a.                                      Submissions to the Development Experience Clearinghouse (DEC).

 

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1)                                     The recipient must provide the Agreement Officer’s Representative one copy of any Intellectual Work that is published, and a list of any Intellectual Work that is not published.

 

2)                                     In addition, the recipient must submit Intellectual Work, whether published or not, to the DEC, either on-line (preferred) or by mail. The recipient must review the DEC Web site for submission instructions, including document formatting and the types of documents to submit. Submission instructions can be found at: http://dec.usaid.gov.

 

3)                                     For purposes of submissions to the DEC, Intellectual Work includes all works that document the implementation, evaluation, and results of international development assistance activities developed or acquired under this award, which may include program and communications materials, evaluations and assessments, information products, research and technical reports, progress and performance reports required under this award (excluding administrative financial information), and other reports, articles and papers prepared by the recipient under the award, whether published or not. The term does not include the recipient’s information that is incidental to award administration, such as financial, administrative, cost or pricing, or management information.

 

4)                                     Each document submitted should contain essential bibliographic information, such as 1) descriptive title; 2) author(s) name; 3) award number; 4) sponsoring USAID office; 5) development objective; and 6) date of publication.

 

5)                                     The recipient must not submit to the DEC any financially sensitive information or personally identifiable information, such as social security numbers, home addresses and dates of birth. Such information must be removed prior to submission. The recipient must not submit classified documents to the DEC.

 

b.                                      In the event award funds are used to underwrite the cost of publishing, in lieu of the publisher assuming this cost as is the normal practice, any profits or royalties up to the amount of such cost must be credited to the award unless the schedule of the award has identified the profits or royalties as program income.

 

[END OF PROVISION]

 

[END OF MANDATORY PROVISIONS]

 

II. REQUIRED AS APPLICABLE STANDARD PROVISIONS FOR U.S. NONGOVERNMENTAL ORGANIZATIONS

 

RAA3. NEGOTIATED INDIRECT COST RATE - PROVISIONAL (Profit) (APRIL 1998)

 

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APPLICABILITY: This provision applies to for-profit organizations whose indirect cost rates under this award are on a provisional basis.

 

NEGOTIATED INDIRECT COST RATE - PROVISIONAL (Profit) (APRIL 1998)

 

a. Provisional indirect cost rates must be established for the recipient’s accounting periods during the term of this award. Pending establishment of revised provisional or final rates, allowable indirect costs must be reimbursed at the rates, on the bases, and for the periods shown in the schedule of this award. Indirect cost rates and the appropriate bases must be established in accordance with FAR Subpart 42.7.

 

b. Within six months after the close of the recipient’s fiscal year, the recipient must submit to the cognizant agency for audit the proposed final indirect cost rates and supporting cost data. If USAID is the cognizant agency or no cognizant agency has been designated, the recipient must submit three copies of the proposed final indirect cost rates and supporting cost data, to the Overhead, Special Costs, and Closeout Branch, Office of Acquisition and Assistance, USAID, Washington, DC 20523-7802. The proposed rates must be based on the recipient’s actual cost experience during that fiscal year. Negotiations of final indirect cost rates must begin soon after receipt of the recipient’s proposal.

 

c. Allowability of costs and acceptability of cost allocation methods must be determined in accordance with the applicable cost principles.

 

d. The results of each negotiation must be set forth in an indirect cost rate agreement signed by both parties. Such agreement is automatically incorporated into this award and must specify (1) the agreed upon final rates, (2) the bases to which the rates apply, (3) the fiscal year for which the rates apply, and (4) the items treated as direct costs. The agreement must not change any monetary ceiling, award obligation, or specific cost allowance or disallowance provided for in this award.

 

e. Pending establishment of final indirect cost rates for any fiscal year, the recipient must be reimbursed either at negotiated provisional rates or at billing rates acceptable to the Agreement Officer, subject to appropriate adjustment when the final rates for the fiscal year are established. To prevent substantial overpayment or underpayment, the provisional or billing rates may be prospectively or retroactively revised by mutual agreement.

 

f. Failure by the parties to agree on final rates is a 22 CFR 226.90 dispute.

 

[END OF PROVISION]

 

RAA10. PROHIBITION OF ASSISTANCE TO DRUG TRAFFICKERS (JUNE 1999)

 

APPLICABILITY: This provision is applicable where performance of the award will take place in “Covered” Countries, as described in ADS 206 (see 206.5.3).

 

PROHIBITION OF ASSISTANCE TO DRUG TRAFFICKERS (JUNE 1999)

 

a. USAID reserves the right to terminate assistance to, or take other appropriate measures with respect to, any participant approved by USAID who is found to have been convicted of a narcotics offense or

 

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to have been engaged in drug trafficking as defined in 22 CFR 140.

 

b. (1) For any loan over $1,000 made under this agreement, the recipient must insert a clause in the loan agreement stating that the loan is subject to immediate cancellation, acceleration, recall, or refund by the recipient if the borrower or a key individual of a borrower is found to have been convicted of a narcotics offense or to have been engaged in drug trafficking as defined in 22 CFR 140.

 

(2) Upon notice by USAID of a determination under section (1) and at USAID’s option, the recipient agrees to immediately cancel, accelerate, or recall the loan, including refund in full of the outstanding balance. USAID reserves the right to have the loan refund returned to USAID.

 

c. (1) The recipient agrees not to disburse, or sign documents committing the recipient to disburse, funds to a subrecipient designated by USAID (“Designated Subrecipient”) until advised by USAID that: (i) any United States Government review of the Designated Subrecipient and its key individuals has been completed; (ii) any related certifications have been obtained; and (iii) the assistance to the Designated Subrecipient has been approved. Designation means that the subrecipient has been unilaterally selected by USAID as the subrecipient. USAID approval of a subrecipient, selected by another party, or joint selection by USAID and another party is not designation.

 

(2) The recipient must insert the following clause, or its substance, in its agreement with the Designated Subrecipient:

 

“The recipient reserves the right to terminate this [Agreement/Contract] or take other appropriate measures if the [Subrecipient] or a key individual of the [Subrecipient] is found to have been convicted of a narcotic offense or to have been engaged in drug trafficking as defined in 22 CFR 140.”

 

[END OF PROVISION]

 

RAA11. INVESTMENT PROMOTION (NOVEMBER 2003)

 

a. Except as specifically set forth in this award or otherwise authorized by USAID in writing, no funds or other support provided hereunder may be used for any activity that involves investment promotion in a foreign country.

 

b. In the event the recipient is requested or wishes to provide assistance in the above area or requires clarification from USAID as to whether the activity would be consistent with the limitation set forth above, the recipient must notify the Agreement Officer and provide a detailed description of the proposed activity. The recipient must not proceed with the activity until advised by USAID that it may do so.

 

c. The recipient must ensure that its employees and subrecipients and contractors providing investment promotion services hereunder are made aware of the restrictions set forth in this clause and must include this clause in all contracts and other subagreements entered into hereunder.

 

[END OF PROVISION]

 

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RAA12. REPORTING HOST GOVERNMENT TAXES (JUNE 2012)

 

APPLICABILITY: This provision is applicable to all USAID agreements that obligate or subobligate FY 2003 or later funds except for agreements funded with Operating Expense, Pub. L. 480 funds, or trust funds, or agreements where there will be no commodity transactions in a foreign country over the amount of $500.

 

a. By April 16 of each year, the recipient must submit a report containing:

 

(1) Contractor/recipient name.

(2) Contact name with phone, fax and e-mail.

(3) Agreement number(s).

(4) The total amount of value-added taxes and customs duties (but not sales taxes) assessed by the host government (or any entity thereof) on purchases in excess of $500 per transaction of supplies, materials, goods or equipment, during the 12 months ending on the preceding September 30, using funds provided under this contract/agreement.

(5) Any reimbursements received by April 1 of the current year on value-added taxes and customs duties reported in (4).

(6) Reports are required even if the recipient did not pay any taxes or receive any reimbursements during the reporting period.

(7) Cumulative reports may be provided if the recipient is implementing more than one program in a foreign country.

 

b. Submit the reports to: U.S. Agency for International Development (USAID)

 

M/CFO/CMP

SA-44, 1300 Pennsylvania Ave.

Washington, D.C. 20523

 

With a copy to: USAID AOR of this Agreement.

 

c. Host government taxes are not allowable where the Agreement Officer provides the necessary means to the recipient to obtain an exemption or refund of such taxes, and the recipient fails to take reasonable steps to obtain such exemption or refund. Otherwise, taxes are allowable in accordance with the Standard Provision, “Allowable Costs,” and must be reported as required in this provision.

 

d. The recipient must include this reporting requirement in all applicable subagreements, including subawards and contracts.

 

[END OF PROVISION]

 

RAA13. FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL CONFERENCES (JUNE 2012)

 

a. U.S. Government funds under this award must not be used to finance the travel, per diem, hotel expenses, meals, conference fees or other conference costs for any member of a foreign government’s delegation to an international conference sponsored by a multilateral organization, as defined below, unless approved by the Agreement Officer in writing.

 

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b. Definitions:

 

(1) A foreign government delegation is appointed by the national government (including ministries and agencies but excluding local, state and provincial entities) to act on behalf of the appointing authority at the international conference. A conference participant is a delegate for the purposes of this provision, only when there is an appointment or designation that the individual is authorized to officially represent the government or agency. A delegate may be a private citizen.

 

(2) An international conference is a meeting where there is an agenda, an organizational structure, and delegations from countries other than the conference location, in which country delegations participate through discussion, votes, etc.

 

(3) A multilateral organization is an organization established by international agreement and whose governing body is composed principally of foreign governments or other multilateral organizations.

 

[END OF PROVISION]

 

RAA17. USAID DISABILITY POLICY - ASSISTANCE (DECEMBER 2004)

 

a.      The objectives of the USAID Disability Policy are (1) to enhance the attainment of United States foreign assistance program goals by promoting the participation and equalization of opportunities of individuals with disabilities in USAID policy, country and sector strategies, activity designs and implementation; (2) to increase awareness of issues of people with disabilities both within USAID programs and in host countries; (3) to engage other U.S. Government agencies, host country counterparts, governments, implementing organizations and other donors in fostering a climate of nondiscrimination against people with disabilities; and (4) to support international advocacy for people with disabilities. The full text of the policy paper can be found at the following Web site: pdf.usaid.gov/pdf_docs/PDABQ631.pdf

 

b.        USAID therefore requires that the recipient not discriminate against people with disabilities in the implementation of USAID funded programs and that it make every effort to comply with the objectives of the USAID Disability Policy in performing the program under this grant or cooperative agreement. To that end and to the extent it can accomplish this goal within the scope of the program objectives, the recipient should demonstrate a comprehensive and consistent approach for including men, women, and children with disabilities.

 

[END OF PROVISION]

 

RAA18. STANDARDS FOR ACCESSIBILITY FOR THE DISABLED IN USAID ASSISTANCE AWARDS INVOLVING CONSTRUCTION (SEPTEMBER 2004)

 

a.       One of the objectives of the USAID Disability Policy is to engage other U.S. Government agencies, host country counterparts, governments, implementing organizations, and other donors in fostering a climate of nondiscrimination against people with disabilities. As part of this policy USAID has established standards for any new or renovation construction project funded by USAID to allow access by people with disabilities (PWDs). The full text of the policy paper can be found at the following Web site: pdf.usaid.gov/pdf_docs/PDABQ631.pdf.

 

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b.       USAID requires the recipient to comply with standards of accessibility for people with disabilities in all structures, buildings or facilities resulting from new or renovation construction or alterations of an existing structure.

 

c.          The recipient will comply with the host country or regional standards for accessibility in construction when such standards result in at least substantially equivalent accessibility and usability as the standard provided in the Americans with Disabilities Act (ADA) of 1990 and the Architectural Barriers Act (ABA) Accessibility Guidelines of July 2004. Where there are no host country or regional standards for universal access or where the host country or regional standards fail to meet the ADA/ABA threshold, the standard prescribed in the ADA and the ABA will be used.

 

d.         New Construction. All new construction will comply with the above standards for accessibility.

 

e.          Alterations. Changes to an existing structure that affect, the usability of the structure will comply with the above standards for accessibility unless the recipient obtains the Agreement Officer’s advance approval that compliance is technically infeasible or constitutes an undue burden or both. Compliance is technically infeasible where structural conditions would require removing or altering a load-bearing member that is an essential part of the structural frame or because other existing physical or site constraints prohibit modification or addition of elements, spaces, or features that are in full and strict compliance with the minimum requirements of the standard. Compliance is an undue burden where it entails either a significant difficulty or expense or both.

 

f.           Exceptions. The following construction related activities are excepted from the requirements of paragraphs a. through d. above:

 

(1) Normal maintenance, reroofing, painting or wall papering, or changes to mechanical or electrical systems are not alterations and the above standards do not apply unless they affect the accessibility of the building or facility; and

 

(2) Emergency construction (which may entail the provision of plastic sheeting or tents, minor repair and upgrading of existing structures, rebuilding of part of existing structures, or provision of temporary structures) intended to be temporary in nature. A portion of emergency construction assistance may be provided to people with disabilities as part of the process of identifying disaster- and crisis-affected people as “most vulnerable.”

 

[END OF PROVISION]

 

RAA22. CENTRAL CONTRACTOR REGISTRATION AND UNIVERSAL IDENTIFIER (OCTOBER 2010)

 

a. Requirement for Central Contractor Registration (CCR). Unless you are exempted from this requirement under 2 CFR 25.110, you as the recipient must maintain the currency of your information in the CCR until you submit the final financial report required under this award or receive the final payment, whichever is later. This requires that you review and update the information at least annually after the initial registration, and more frequently, if required by changes in your information or another award term.

 

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b. Requirement for Data Universal Numbering System (DUNS) numbers. If you are authorized to make subawards under this award, you:

 

(1) Must notify potential subrecipients that no entity (see definition in paragraph c. of this award term) may receive a subaward from you unless the entity has provided its DUNS number to you.

 

(2) May not make a subaward to an entity unless the entity has provided its DUNS number to you.

 

c. Definitions. For purposes of this award term:

 

(1) Central Contractor Registration (CCR) means the Federal repository into which an entity must provide information required for the conduct of business as a recipient. Additional information about registration procedures may be found at the CCR Internet site (currently at www.ccr.gov).

 

(2) Data Universal Numbering System (DUNS) number means the nine-digit number established and assigned by Dun and Bradstreet, Inc. (D&B) to uniquely identify business entities. A DUNS number may be obtained from D&B by telephone (currently 866-705-5711) or the Internet (currently at fedgov.dnb.com/webform).

 

(3) Entity, as it is used in this award term, means all of the following, as defined at 2 CFR 25, subpart C:

 

(i) A governmental organization, which is a State, local government, or Indian tribe;

(ii) A foreign public entity;

(iii) A domestic or foreign nonprofit organization;

(iv) A domestic or foreign for-profit organization; and

(v) A Federal agency, but only as a subrecipient under an award or subaward to a non-Federal entity.

 

(4) Subaward:

 

(i) This term means a legal instrument to provide support for the performance of any portion of the substantive project or program for which you received this award and that you as the recipient award to an eligible subrecipient.

(ii) The term does not include your procurement of property and services needed to carry out the project or program (for further explanation, see Sec. —.210 of the attachment to OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations”).

(iii) A subaward may be provided through any legal agreement, including an agreement that you consider a contract.

 

(5) Subrecipient means an entity that:

 

(i) Receives a subaward from you under this award; and

(ii) Is accountable to you for the use of the Federal funds provided by the subaward.

 

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ADDENDUM (JUNE 2012):

 

a. Exceptions. The requirements of this provision to obtain a Data Universal Numbering System (DUNS) number and maintain a current registration in the Central Contractor Registration (CCR) do not apply, at the prime award or subaward level, to:

 

(1) Awards to individuals

(2) Awards less than $25,000 to foreign recipients to be performed outside the United States (based on a USAID determination)

(3) Awards where the Agreement Officer determines, in writing, that these requirements would cause personal safety concerns.

 

b. This provision does not need to be included in subawards.

 

[END OF PROVISION]

 

RAA23. REPORTING SUBAWARDS AND EXECUTIVE COMPENSATION (OCTOBER 2010)

 

a. Reporting of first-tier subawards.

 

(1) Applicability. Unless you are exempt as provided in paragraph d. of this award term, you must report each action that obligates $25,000 or more in Federal funds that does not include Recovery funds (as defined in section 1512(a)(2) of the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5) for a subaward to an entity (see definitions in paragraph e. of this award term).

 

(2) Where and when to report.

 

(i) You must report each obligating action described in paragraph a.(1) of this award term to www.fsrs.gov.

 

(ii) For subaward information, report no later than the end of the month following the month in which the obligation was made. (For example, if the obligation was made on November 7, 2010, the obligation must be reported by no later than December 31, 2010.)

 

(3) What to report. You must report the information about each obligating action that the submission instructions posted at www.fsrs.gov specify.

 

b. Reporting Total Compensation of Recipient Executives.

 

(1) Applicability and what to report. You must report total compensation for each of your five most highly compensated executives for the preceding completed fiscal year, if —

 

(i) The total Federal funding authorized to date under this award is $25,000 or more;

 

(ii) In the preceding fiscal year, you received—

 

(A) 80 percent or more of your annual gross revenues from Federal procurement contracts (and

 

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subcontracts) and Federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and

 

(B) $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts) and Federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and

 

(iii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at www.sec.gov/answers/execomp.htm.)

 

(2) Where and when to report. You must report executive total compensation described in paragraph b.(1) of this award term:

 

(i) As part of your registration profile at www.bpn.gov/ccr.

 

(ii) By the end of the month following the month in which this award is made, and annually thereafter.

 

c. Reporting of Total Compensation of Subrecipient Executives.

 

(1) Applicability and what to report. Unless you are exempt as provided in paragraph d. of this award term, for each first-tier subrecipient under this award, you must report the names and total compensation of each of the subrecipient’s five most highly compensated executives for the subrecipient’s preceding completed fiscal year, if—

 

(i) In the subrecipient’s preceding fiscal year, the subrecipient received—

 

(A) 80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and

 

(B) $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts), and Federal financial assistance subject to the Transparency Act (and subawards); and

 

(ii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at www.sec.gov/answers/execomp.htm.)

 

(2) Where and when to report. You must report subrecipient executive total compensation described in paragraph c.(1) of this award term:

 

(i) To the recipient.

 

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(ii) By the end of the month following the month during which you make the subaward. For example, if a subaward is obligated on any date during the month of October of a given year (for example, between October 1 and 31), you must report any required compensation information of the subrecipient by November 30 of that year.

 

d. Exemptions.

 

If, in the previous tax year, you had gross income, from all sources, under $300,000, you are exempt from the requirements to report:

 

(1) Subawards, and

 

(2) The total compensation of the five most highly compensated executives of any subrecipient.

 

e. Definitions.

 

For purposes of this award term:

 

(1) Entity means all of the following, as defined in 2 CFR 25:

 

(i) A governmental organization, which is a State, local government, or Indian tribe;

(ii) A foreign public entity;

(iii) A domestic or foreign nonprofit organization;

(iv) A domestic or foreign for-profit organization; and

(v) A Federal agency, but only as a subrecipient under an award or subaward to a non-Federal entity.

 

(2) Executive means officers, managing partners, or any other employees in management positions.

 

(3) Subaward:

 

(i) This term means a legal instrument to provide support for the performance of any portion of the substantive project or program for which you received this award and that you as the recipient award to an eligible subrecipient.

(ii) The term does not include your procurement of property and services needed to carry out the project or program (for further explanation, see Sec.     .210 of the attachment to OMB Circular A-133, “Audits of States, Local Governments, and Non- Profit Organizations”).

(iii) A subaward may be provided through any legal agreement, including an agreement that you or a subrecipient considers a contract.

 

(4) Subrecipient means an entity that:

 

(i) Receives a subaward from you (the recipient) under this award; and

(ii) Is accountable to you for the use of the Federal funds provided by the subaward.

 

(5) Total compensation means the cash and noncash dollar value earned by the executive during the recipient’s or subrecipient’s preceding fiscal year and includes the following (for more information see 17 CFR 229.402(c)(2)):

 

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(i) Salary and bonus.

(ii) Awards of stock, stock options, and stock appreciation rights. Use the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year in accordance with the Statement of Financial Accounting Standards No. 123 (Revised 2004) (FAS 123R), Shared Based Payments.

(iii) Earnings for services under nonequity incentive plans. This does not include group life, health, hospitalization, or medical reimbursement plans that do not discriminate in favor of executives, and are available generally to all salaried employees.

(iv) Change in pension value. This is the change in present value of defined benefit and actuarial pension plans.

(v) Above-market earnings on deferred compensation which is not tax-qualified.

(vi) Other compensation, if the aggregate value of all such other compensation (for example, severance, termination payments, value of life insurance paid on behalf of the employee, perquisites or property) for the executive exceeds $10,000.

 

[END OF PROVISION]

 

RAA.24 PATENT REPORTING PROCEDURES (JULY 2012)

 

As incorporated by 22 CFR 226.36 and the standard provision “APPLICABILITY OF 22 CFR PART 226,” the clause at 37 CFR 401.14 (“Patent Rights (Small Business Firms and Nonprofit Organizations)”) is incorporated by reference into this award as if set forth in full text. The recipient must use the National Institutes of Health EDISON Patent Reporting and Tracking system (http://www.iedison.gov) to fulfill its disclosure obligations under 37 CFR 401.14(c)(1). The recipient must also submit reports on utilization of subject inventions annually to the Agreement Officer’s Representative under 37 CFR 401.14(h), and the last report must be provided within 90 days of the expiration of the agreement.

 

[END OF PROVISION]

 

-END OF PROVISIONS-

 

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ATTACHMENT D — BRANDING STRATEGY AND MARKING PLAN

 

“USAID BRANDING STRATEGY”

 

Development of Heat Tolerant Wheat for South Asia

 

AWARD NUMBER

 

DATE OF PLAN

 

1)                                     Purpose

 

What is the intended purpose for the branding/marketing of the program.

 

To raise communicate to the scientific community and to raise awareness among seed companies and national programs of the opportunity to partner with us to disseminate the products of the research.

 

2)                                     Positioning

 

What is the intended name of this program, project, or activity?

 

“Heat Tolerant Wheat for South Asia”

 

Will a program logo be developed and used consistently to identify this program? If yes, please attach a copy of the proposed program logo.

 

No, we will not use a program logo.

 

3)                                     Program Communications and Publicity

 

Who are the primary and secondary audiences for this project or program?

 

The primary audiences as this stage are research institutions and seed companies. The secondary audiences are developing country governments and farmer organizations.

 

What communications or program materials will be used to explain or market the program to beneficiaries?

 

A summary of the project may appear on the websites of partners, we will issue a press release at the start of the project, we will likely present posters on the research at scientific conferences, and as the research reaches field efficacy, may host field visits from seed companies, NARS, and farmer organizations.

 

What is the main program message?

 

We are developing new technologies to sustain wheat yields in the face of rising temperatures due to climate change.

 

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Will the recipient announce and promote publicly this program or project to host country citizens? If yes, what press and promotional activities are planned?

 

No.

 

Please provide any additional ideas about how to increase awareness that the American people support this project or program.

 

We will issue a joint press release and have in the past spoke at scientific and industry meetings in the U.S. to promote the value of the partnership with USAID.

 

4)                                     Acknowledgements

 

Will there be any direct involvement from a host country government ministry? If yes, please indicate which one or ones. Will the recipient acknowledge the ministry as an additional co-sponsor?

 

The National Biodiversity and Plant Gene Resources is a government institute under the Ministry of Agriculture. They will be acknowledged as a partner, but not a co-sponsor. We have not specified co-funding or cost-sharing from the government.

 

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53

 

GENERAL INSTRUCTIONS

 

USAID’s policy requires non-U.S., non-governmental organizations, including cooperating country non-governmental organizations (and in rare cases, Public International Organizations) to follow marking requirements for assistance awards. Marking requirements, including requests for presumptive exceptions and waivers for assistance awards must be in accordance with 22 CFR 226.91.

 

With reference to ADS Sections 320.3.3.2 and 22 CFR 226.91 the Recipient shall prepare a Marking Plan containing information substantially similar to the sample provided below:

 

“USAID MARKING PLAN”

AWARD TITLE

AWARD NUMBER

DATE OF PLAN

 

(1)                                 Requirement: A description of the public communications, commodities, and program materials that the recipient will produce as a part of the grant or cooperative agreement and which will visibly bear the USAID identity. These include: (i) program, project, or activity sites funded by USAID, including visible infrastructure projects or other programs, projects, or activities that are physical in nature; (ii) technical assistance, studies, reports, papers, publications, audiovisual productions, public service announcements, websites/Internet activities, and other promotional, informational, media, or communication products funded by USAID; (iii) events financed by USAID, such as training courses, conferences, seminars, exhibitions, fairs, workshops, press conferences, and other public activities; and (iv) all commodities or equipment provided under humanitarian assistance or disaster relief programs, and all other equipment, supplies and other materials funded by USAID, and their export packaging.

 

(2)                                 Table of Supplies and Equipment to be used in a visible manner in the fulfillment of the goals of the            project and an indication of how and where they will be tagged with the USAID identity.

 

Nothing to report here.

 

	
Supply/Equipment
    	
 
    	
Type of Marking
    	
 
    	
Where Marking Placed
    
	
Computers?
    	
 
    	
USAID   Identifying vinyl label
    	
 
    	
On   front of monitor
    
	
Printers?
    	
 
    	
USAID   Identifying vinyl label
    	
 
    	
On   top of printer
    
	
Field   Backpacks?
    	
 
    	
USAID   Identifying vinyl label
    	
 
    	
On   outside of backpack
    

 

(3)                                 Table of Deliverables expected to be produced in the conduct of this program: All deliverables will be marked in a visible manner with the USAID identity; below is an indication of what type of marking will be used and where on the deliverable the USAID identity will be placed.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

54

 

	
Deliverable
    	
 
    	
Type of Marking
    	
 
    	
Where Marking Placed
    
	
Reports
    	
 
    	
USAID printed identity
    	
 
    	
Front cover
    
	
Publications (brochures)
    	
 
    	
USAID printed identity
    	
 
    	
Front cover
    
	
Website
    	
 
    	
USAID web identity
    	
 
    	
Front page
    

 

(4)                                 Sub-recipient: As specified in the standard provisions, the marking requirements will “flow down” to sub-recipients or sub-awards, and will include the USAID-approved marking provision in all USAID funded sub-awards, as follows: “As a condition of receipt of this sub-award, marking with USAID identity of a size and prominence equivalent to or greater that the recipient’s, sub-recipient’s, other donor’s or third party’s is required.”

 

(5)

We will communicate to CIMMYT and NBPGR that they must follow required branding and marking requirements.

 

(6)                                 Any “public communications,” as defined in 22 C.F.R. 226.2, funded by USAID, in which the content has been approved by USAID, will contain the following disclaimer:

 

“This study/report/audio-visual/other information/media product (specify) is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of [insert recipient’s name] and do not necessarily reflect the views of USAID or the United States Government.”

 

(6)                                 As specified in the standard provisions,            will provide the Agreement Officer’s Representative (AOR) or other USAID personnel designated in the grant or cooperative agreement with two copies of all program and communications materials produced under the award. In addition,            will submit one electronic or one hard copy of all final documents to USAID’s Development Experience Clearinghouse.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

55

 

	
MODIFICATION OF ASSISTANCE
    	
 
    	
 
    
	
1.   MODIFICATION
    	
 
    	
2.   EFFECTIVE DATE OF
    	
 
    	
3.   AWARD NUMBER:
    	
 
    	
4.   EFFECTIVE DATE OF
    
	
NUMBER
    	
 
    	
MODIFICATION
    	
 
    	
 
    	
 
    	
AWARD :
    
	
03
    	
 
    	
See   block 15
    	
 
    	
A1D-OAA-A-13-00001
    	
 
    	
10/12/2012
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5. GRANTEE:
    	
 
    	
6. ADMINISTERED BY:
    
	
 
    	
 
    	
 
    
	
Arcadia   Biosciences, Inc.
    	
 
    	
Acquisition   and Assistance
    
	
202   Cousteau Pl., Suite 200
    	
 
    	
Office   of Acquisition and Assistance
    
	
Davis,   CA 95618
    	
 
    	
M/OAA/BFS,   Room 568A, SA-44
    
	
 
    	
 
    	
1300   Pennsylvania Ave, N.W.
    
	
 
    	
 
    	
Washington,   D.C. 20523
    
	
DUNS NO 1359644760
    	
 
    	
 
    
	
TIN NO. : 81-0571538 
    	
LOC NO. : HHS-C4625P1
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
7. FISCAL DATA:
    	
 
    	
Amount Obligated: $828,876.00
    	
 
    	
8. TECHNICAL OFFICE: E&E/DGST:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
GLAAS   Requisition: REQM-BFS-14-000034
    
	
 
    	
 
    	
 
    
	
Budget Fiscal Year:
    	
 
    	
9. PAYMENT OFFICE:
    
	
 
    	
 
    	
 
    
	
Operating Unit:
    	
 
    	
U.S.   Agency for International Development
    
	
Strategic Objective:
    	
 
    	
Office   of Financial Management
    
	
Team/Division:
    	
 
    	
M/FM/CMP/DC   - SA-44 Room 435K
    
	
Benefiting Geo Area:
    	
 
    	
1300   Pennsylvania Avenue, NW
    
	
Object Class:
    	
 
    	
Washington   DC 20523
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10. FUNDING SUMMARY:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Obligated   Amount
    	
 
    	
Total   Est. Amt.
    	
 
    
	
Amount Prior to this Modification:
    	
 
    	
$
    	
1,146,172.00
    	
 
    	
$
    	
3,829,228.00
    	
 
    
	
Change Made by this Modification:
    	
 
    	
$
    	
828,876.00
    	
 
    	
$
    	
0.00
    	
 
    
	
New/Current Total:
    	
 
    	
$
    	
1,975,048.00
    	
 
    	
$
    	
3,829,228.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.   DESCRIPTION OF MODIFICATION
    
	
 
    
	
The   purpose of this modification is to provide incremental funding in the amount   of $828,876.00 to support the Heat Tolerant Wheat for South Asia program with   Arcadia Biosciences. The total obligated amount has increased by $828,876.00   from $1,146,172.00 to $1,975,048.00.
    
	
 
    
	
ACCOUNTING   DATA:
    
	
 
    
	
Accounting   Template: BFS BRG Funds: BBFY: 2013; EBFY: 2014; Fund: DV-GFSI; OP: BFS/ARP:   Prog Area: A18; Dist Code; BFS- APF; Prog Elem: A074; BGA: 997; SOC: 4100201.
    
	
 
    
	
ALL OTHER TERMS AND CONDITIONS REMAIN THE SAME.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
12. THIS MODIFICATION IS ENTERED   INTO PURSUANT TO THE AUTHORITY OF FAA Act of 1961, as amended AS AMENDED.   EXCEPT AS SPECIFICALLY HEREIN AMENDED, ALL TERMS AND CONDITIONS OF THE GRANT   REFERENCED IN BLOCK #3 ABOVE, AS IT MAY HAVE HERETOFORE BEEN AMENDED, REMAIN   UNCHANGED AND IN FULL FORCE AND EFFECT.
    
	
 
    
	
13. GRANTEE     o      IS        x         IS NOT REQUIRED TO SIGN THIS DOCUMENT TO RECONFIRM ITS AGREEMENT WITH THE   CHANGES EFFECTED HEREIN
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
14. GRANTEE:
    	
15.
    	
THE UNITED STATES OF AMERICA
    
	
 
    	
 
    
	
 
    	
U.S.   AGENCY FOR INTERNATIONAL DEVELOPMENT
    
	
 
    	
 
    
	
BY:
    	
/s/
    	
 
    	
BY:
    	
/s/Charles Jackson
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Charles Jackson
    
	
 
    	
(Name   Typed or Printed)
    	
 
    	
 
    	
(Name Typed or Printed)
    
	
TITLE:
    	
 
    	
 
    	
TITLE:
    	
Agreement Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
DATE:
    	
 
    	
 
    	
DATE:
    	
11/25/2013
    
																									

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

1Exhibit 4.2

 

ARCADIA BIOSCIENCES, INC.

 

INVESTORS’ RIGHTS AGREEMENT

 

March 28, 2014

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
1.                                      Definitions
    	
1
    
	
 
    	
 
    
	
2.                                      Registration Rights
    	
3
    
	
 
    	
 
    
	
2.1.
    	
Demand Registration
    	
3
    
	
2.2.
    	
Company   Registration
    	
5
    
	
2.3.
    	
Underwriting   Requirements
    	
5
    
	
2.4.
    	
Obligations of   the Company
    	
7
    
	
2.5.
    	
Furnish   Information
    	
8
    
	
2.6.
    	
Expenses of   Registration
    	
8
    
	
2.7.
    	
Delay of   Registration
    	
9
    
	
2.8.
    	
Indemnification
    	
9
    
	
2.9.
    	
Reports Under   Exchange Act
    	
11
    
	
2.10.
    	
Limitations on   Subsequent Registration Rights
    	
11
    
	
2.11.
    	
“Market Stand   off” Agreement
    	
11
    
	
2.12.
    	
Restrictions on   Transfer
    	
12
    
	
2.13.
    	
Termination of   Registration Rights
    	
13
    
	
 
    	
 
    	
 
    
	
3.                                      Information Rights
    	
13
    
	
 
    	
 
    	
 
    
	
3.1.
    	
Delivery of Financial Statements
    	
13
    
	
3.2.
    	
Inspection
    	
15
    
	
3.3.
    	
Termination of   Information Rights
    	
15
    
	
3.4.
    	
Confidentiality
    	
15
    
	
 
    	
 
    	
 
    
	
4.                                      Rights to Future Stock Issuances
    	
15
    
	
 
    	
 
    	
 
    
	
4.1.
    	
Right of First Offer
    	
15
    
	
4.2.
    	
Termination
    	
16
    
	
 
    	
 
    	
 
    
	
5.                                      Additional Covenants
    	
17
    
	
 
    	
 
    
	
5.1
    	
Board Matters
    	
17
    
	
5.2
    	
Successor   Indemnification
    	
17
    
	
5.3
    	
Indemnification   Matters
    	
17
    
	
5.4
    	
Right to Conduct   Activities
    	
17
    
	
5.5
    	
Termination of   Covenants
    	
21
    
	
 
    	
 
    	
 
    
	
6.                                      Miscellaneous
    	
18
    
	
 
    	
 
    
	
6.1.
    	
Successors and Assigns
    	
18
    
	
6.2.
    	
Governing Law
    	
18
    
	
6.3.
    	
Counterparts;   Facsimile
    	
18
    
	
6.4.
    	
Titles and   Subtitles
    	
18
    
	
6.5.
    	
Notices
    	
18
    
	
6.6.
    	
Consent Required   to Amend, Terminate or Waive
    	
19
    
	
6.7.
    	
Severability
    	
19
    
	
6.8.
    	
Aggregation of   Stock
    	
19
    
	
6.9.
    	
Additional   Investors
    	
19
    
	
6.10
    	
Entire Agreement
    	
19
    
	
6.11.
    	
Further   Assurances
    	
 
    
	
6.12.
    	
Dispute   Resolution
    	
19
    
	
6.12.
    	
Waiver of Jury   Trial
    	
20
    
	
6.14.
    	
Costs of   Enforcement
    	
20
    
	
6.15.
    	
Delays or Omissions
    	
20
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
6.16.
    	
Acknowledgment
    	
20
    

 

Schedule A                                   -                                            Schedule of Investors

 

ii

 

INVESTORS’ RIGHTS AGREEMENT

 

THIS INVESTORS’ RIGHTS AGREEMENT is made as of the 28th day of March 2014, by and among Arcadia Biosciences, Inc., an Arizona corporation (the “Company”), and each of the investors listed on Schedule A hereto, each of which is referred to in this Agreement as an “Investor”.

 

RECITALS

 

WHEREAS, the Company and the Investors are parties to the Series D Preferred Stock Purchase Agreement of even date herewith (the “Purchase Agreement”); and

 

WHEREAS, in order to induce the Company to enter into the Purchase Agreement and to induce certain of the Investors to invest funds in the Company pursuant to the Purchase Agreement, the Investors and the Company hereby agree that this Agreement shall govern the rights of the Investors to cause the Company to register shares of Common Stock issuable to the Investors, to receive certain information from the Company, and to participate in future equity offerings by the Company, and shall govern certain other matters as set forth in this Agreement;

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.                                      Definitions.  For purposes of this Agreement:

 

1.1.                            “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by or under common control with one or more general partners or managing members of, or shares the same management company with, such Person.

 

1.2.                            “Common Stock” means shares of the Company’s common stock, no par value.

 

1.3.                            “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

1.4.                            “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options and warrants.

 

1.5.                            “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

1.6.                            “Excluded Registration” means (i) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan;

 

 

(ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities (as defined below); or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

 

1.7.                            “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

1.8.                            “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

1.9.                            “GAAP” means generally accepted accounting principles in the United States.

 

1.10.                     “Holder” means any holder of Registrable Securities who is a party to this Agreement.

 

1.11.                     “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, registered domestic partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, of a natural person referred to herein.

 

1.12.                     “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.

 

1.13.                     “IPO” means the Company’s first underwritten public offering of its Common Stock under the Securities Act.

 

1.14.                     “IPO Lock-Up Period” means the period from the date of completion of the IPO until the end of any “lock-up” period during which any Holders agree to be subject to any underwriter’s lock-up or other contractual restriction on the sale of Registrable Securities in connection with such IPO.

 

1.15.                     “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.

 

1.16.                     “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

1.17.                     “Preferred Stock” means, collectively, the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, no par value, of the Company.

 

1.18.                     “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Series D Preferred Stock or upon exercise of the Warrants (as defined below); (ii) any Common Stock, or any Common Stock issuable or issued upon conversion and/or exercise of any other securities of the Company, owned or held by an Investor or acquired by an Investor after the date hereof; and (iii) any Series D Preferred Stock and any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with

 

2

 

respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Section 5.1, and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Section 2.13 of this Agreement.

 

1.19.                     “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities (if any) and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.

 

1.20.                     “Required Registration Amount” means an amount of gross proceeds from a registered public offering that is reasonably anticipated to be equivalent in value to the aggregate amount paid by the selling Holders to the Company under the Purchase Agreement.

 

1.21.                     “Restricted Securities” means the securities of the Company required to bear the legend set forth in Section 2.12(b) hereof.

 

1.22.                     “SEC” means the Securities and Exchange Commission.

 

1.23.                     “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

1.24.                     “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

1.25.                     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

1.26.                     “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.6.

 

1.27.                     “Series D Preferred Stock” means shares of the Company’s Series D Preferred Stock, no par value.

 

1.28.                     “Warrants” shall mean warrants to purchase up to an aggregate maximum of 5,276,885 shares of Common Stock (appropriately adjusted for any stock split, dividend, combination or other recapitalization effected after the date hereof) held by the Investors.

 

2.                                      Registration Rights.  The Company covenants and agrees as follows:

 

2.1.                            Demand Registration.

 

(a)                                 Form S-1 Demand.  If at any time after the earlier of (i) the seven (7) year anniversary of this Agreement, and (ii) one hundred eighty (180) days after the effective date of the registration statement for the IPO, the Company receives a request from Holders of at least fifty percent (50%) of the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with respect to at least twenty percent (20%) of the Registrable Securities then outstanding, or a lesser percent if the anticipated aggregate

 

3

 

offering price, net of Selling Expenses, would exceed $5 million, then the Company shall (x) within ten (10) days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; (y) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Section 2.1(c) and Section 2.3., and (z) use its best efforts to cause such registration statement to be declared effective by the SEC as soon as practicable but in no event later than one hundred eighty (180) days after such request.

 

(b)                                 Form S-3 Demand.  If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Holders of at least twenty percent (20%) of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $1 million, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within forty-five (45) days after the date such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Section 2.1(c) and Section 2.3.

 

(c)                                  Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than sixty (60) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period; and provided further that the Company shall not register any securities for its own account or that of any other stockholder during such sixty (60) day period other than an Excluded Registration.

 

(d)                                 The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a) (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected one registration pursuant to Section 2.1(a), and a second registration pursuant to Section 2.1(a) if the Registrable Securities (on an as-converted basis, following application of the conversion

 

4

 

adjustments contained in the Company’s Articles of Incorporation) total ten percent (10%) or more of the shares of Common Stock outstanding immediately after the closing of the IPO; or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.1(b).  The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(b) (x) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (y) if the Company has effected two (2) registrations pursuant to Section 2.1(b) within the twelve (12) month period immediately preceding the date of such request.  A registration shall not be counted as “effected” for purposes of this Section 2.1(d) until such time as such registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration (other than as a result of information concerning the business or financial condition of the Company which is made known to the Investors after the date on which such registration was requested), and elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Section 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 2.1(d).

 

2.2.                            Company Registration.  If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its securities under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder written notice of such registration.  Upon the written request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, cause to be registered under the Securities Act all of the Registrable Securities that each such Holder has requested to be included in such registration.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration.  The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.6.

 

2.3.                            Underwriting Requirements.

 

(a)                                 If, pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1, and the Company shall include such information in the Demand Notice.  The underwriter(s) will be selected by the Initiating Holders, subject only to the reasonable approval of the Company.  In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein.  All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting.  Notwithstanding any other provision of this Section 2.3, if the managing underwriter(s) advise(s) the Company and the Initiating Holders in writing that in its opinion marketing factors require a limitation on the number of shares to be underwritten, then the Company shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable

 

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Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Investors to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting.  To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.

 

(b)                                 In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company.  If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering.  If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable) to the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders.  To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.  Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities held by the Investors and included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering; or (ii) the number of Registrable Securities included in the offering be reduced below thirty percent (30%) of the total number of securities included in such offering, unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering.  For purposes of the provision in this Section 2.3(b) concerning apportionment, for any selling Holder that is an investment fund, partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.

 

(c)                                  Notwithstanding anything herein to the contrary, whenever the Company shall effect any registration of securities under the Securities Act (whether pursuant to Sections 2.1 or 2.2) in an IPO (or in a follow-on underwritten offering during the IPO Lock-Up Period) which includes securities held by any stockholder of the Company (including in the case of a combined primary and secondary offering), the Holders shall have the right to include in each such registration up to fifty percent (50%) of the secondary securities so to be registered, until the number of the Registrable Securities to be registered by such selling Holders would represent an amount of anticipated proceeds equal to the Required Registration Amount.

 

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Thereafter the secondary securities that are included in any such offering shall be allocated pro rata among the selling stockholders in proportion (as nearly as practicable) to their respective ownership percentages of the Company’s capital stock (excluding the Registrable Securities already covered by such registration) or in such other proportions as shall mutually be agreed to by all such selling stockholders.

 

(d)                                 For purposes of Section 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Section 2.3(a), fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.

 

2.4.                            Obligations of the Company.  Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(a)                                 prepare and file with the SEC a registration statement with respect to such Registrable Securities and use commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of at least 70% of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to one hundred eighty (180) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;

 

(b)                                 prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act with respect to the disposition of all securities covered by such registration statement;

 

(c)                                  furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate the disposition of their Registrable Securities;

 

(d)                                 use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(e)                                  in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

 

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(f)                                   cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(g)                                  notify each Holder holding Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and prepare and furnish to such Holders any supplement or amendment necessary so that the supplemented or amended prospectus no longer includes such untrue or misleading statements or omissions of material fact;

 

(h)                                 provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(i)                                     promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(j)                                    notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

 

(k)                                 after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

 

2.5.                            Furnish Information.  It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.

 

2.6.                            Expenses of Registration.  All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements of one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of at least 70% of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), 

 

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unless the Holders of at least 70% of the Registrable Securities agree to forfeit their right to one registration pursuant to Section 2.1(a) or Section 2.1(b), as the case may be; provided further that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Section 2.1(a) or Section 2.1(b).  All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

2.7.                            Delay of Registration.  No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.8.                            Indemnification.  If any Registrable Securities are included in a registration statement under this Section 2:

 

(a)                                 To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, managers, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

 

(b)                                 To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any) who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Sections 2.8(b) and 2.8(d) exceed the proceeds 

 

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from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

 

(c)                                  Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, give the indemnifying party notice of the commencement thereof.  The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action.  The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action.  The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.

 

(d)                                 To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case, (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

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(e)                                  The obligations of the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement.

 

2.9.                            Reports Under Exchange Act.  With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:

 

(a)                                 make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO;

 

(b)                                 use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and

 

(c)                                  furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company; and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).

 

2.10.                     Limitations on Subsequent Registration Rights.  From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of at least 70% of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that (i) would provide to such holder the right to include securities in any registration on other than a subordinate basis after all Holders have had the opportunity to include in the registration and offering all shares of Registrable Securities that they wish to so include or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities held by such holder or prospective holder; provided that this limitation shall not apply to any additional Investor who becomes a party to this Agreement in accordance with Section 5.9.

 

2.11.                     “Market Stand off” Agreement.  Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company of shares of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1, and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days in the case of the IPO, or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research 

 

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reports and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise.  The foregoing provisions of this Section 2.11 shall apply only to the IPO, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, or the transfer of any shares to any trust for the direct or indirect benefit of the Holder or the immediate family of the Holder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Holders only if all officers and directors are subject to the same restrictions and the Company obtains a similar agreement from all stockholders individually owning more than one percent (1%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock).  The underwriters in connection with such registration are intended third-party beneficiaries of this Section 2.11 and shall have the right, power, and authority to enforce the provisions hereof as though they were a party hereto.  Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 2.11 or that are necessary to give further effect thereto.  Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such agreements, based on the number of shares subject to such agreements.

 

2.12.                     Restrictions on Transfer.

 

(a)                                 The Series D Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act.  A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Series D Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.

 

(b)                                 Each certificate or instrument representing (i) the Series D Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clauses (i) and (ii), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Section 2.12(c)) be stamped or otherwise imprinted with a legend substantially in the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

 

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THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in this Section 2.12.

 

(c)                                  The holder of each certificate representing Restricted Securities, by acceptance thereof, agrees to comply in all respects with the provisions of this Section 2.  Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer.  Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company.  The Company will not require such a legal opinion or “no action” letter (x) in any transaction in compliance with SEC Rule 144 or (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration, provided that each such Affiliate transferee agrees in writing to be subject to the terms of this Section 2.12.  Each certificate or instrument evidencing the Restricted Securities transferred as above provided shall bear, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Section 2.12(b), except that such certificate shall not bear such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act.

 

2.13.                     Termination of Registration Rights.  The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Section 2.1 or Section 2.2 shall terminate upon the earliest to occur of:

 

(a)                                 such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without limitation during a three-month period without registration; and

 

(b)                                 the fifth anniversary of the IPO.

 

3.                                      Information Rights.

 

3.1.                            Delivery of Financial Statements.  The Company shall deliver to each Investor:

 

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(a)                                 as soon as practicable, (i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and a comparison between (x) the actual amounts as of and for such fiscal year and (y) the comparable amounts for the prior year and as included in the budget for such year, with an explanation of any material differences between such amounts and a schedule as to the sources and applications of funds for such year, and (iii) a statement of stockholders’ equity as of the end of such year, all such financial statements audited and certified by independent public accountants of nationally recognized standing selected by the Company, unless the holders of a majority of the Registrable Securities agree otherwise; provided that if such audited statements cannot be provided within ninety (90) days after the end of any fiscal year, the Company will within ninety (90) days provide unaudited statements with the same information (and will provide the audited statements when practicable);

 

(b)                                 as soon as practicable, but in any event within thirty (30) days after the end of each of the first three (3) quarters of each fiscal year of the Company, unaudited statements of income and of cash flows for such fiscal quarter, and an unaudited balance sheet and a statement of stockholders’ equity as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);

 

(c)                                  as soon as practicable, but in any event within thirty (30) days of the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited balance sheet and statement of stockholders’ equity as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);

 

(d)                                 as soon as practicable, in accordance with a schedule agreed upon by the Board of Directors, a budget and operating plan for the next fiscal year, approved by the Board of Directors and prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any other budgets or revised budgets prepared by the Company;

 

(e)                                  with respect to the financial statements called for in Section 3.1(a), Section 3.1(b) and Section 3.1(c), an instrument executed by the chief financial officer and chief executive officer of the Company certifying that such financial statements were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (except as otherwise set forth in Section 3.1(b) and Section 3.1(c)) and fairly present the financial condition of the Company and its results of operation for the periods specified therein; and

 

(f)                                   such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as any Investor may from time to time reasonably request; provided, however, that the Company shall not be obligated under this Section 3.1 to provide information (i) that the Company reasonably determines in good faith to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form reasonably acceptable to the Company) or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to the foregoing 

 

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sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.

 

Notwithstanding anything else in this Section 3.1 to the contrary, the Company may cease providing the information set forth in this Section 3.1 during the period starting with the date thirty (30) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Section 3.1 shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.

 

3.2.                            Inspection.  The Company shall permit each Investor, at such Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, business, operations, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Investor; provided, however, that the Company shall not be obligated pursuant to this Section 3.2 to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form reasonably acceptable to the Company) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

3.3.                            Termination of Information Rights.  The covenants set forth in Section 3.1 and Section 3.2 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, or (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, whichever event occurs first.

 

3.4.                            Confidentiality.  Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 3.4 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 3.4; (iii) to any existing or prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided that such Investor informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, provided that (to the extent permitted by applicable law) the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

 

4.                                      Rights to Future Stock Issuances.

 

4.1.                            Right of First Offer.  Subject to the terms and conditions of this Section 4.1 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to each Investor.  An Investor shall be entitled to apportion the right of first offer hereby granted to it in such proportions as it deems appropriate, among (i) itself, (ii) its 

 

15

 

Affiliates and (iii) its beneficial interest holders, such as limited partners, members or any other Person having “beneficial ownership,” as such term is defined in Rule 13d-3 promulgated under the Exchange Act, of such Investor.

 

(a)                                 The Company shall give notice (the “Offer Notice”) to each Investor, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities.

 

(b)                                 By notification to the Company within twenty (20) days after the Offer Notice is given, each Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by such Investor bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Preferred Stock and other Derivative Securities).  At the expiration of such twenty (20) day period, the Company shall promptly notify each Investor that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Investor”) of any other Investor’s failure to do likewise.  During the ten (10) day period commencing after the Company has given such notice, each Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the New Securities for which Investors were entitled to subscribe but that were not subscribed for by the Investors which is equal to the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of Preferred Stock and any other Derivative Securities then held, by such Fully Exercising Investor bears to the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by all Fully Exercising Investors who wish to purchase such unsubscribed shares.  The closing of any sale pursuant to this Section 4.1(b) shall occur within the later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Section 4.1(c).

 

(c)                                  If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Section 4.1(b), the Company may, during the ninety (90) day period following the expiration of the periods provided in Section 4.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice.  If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investors in accordance with this Section 4.1.

 

(d)                                 The right of first offer in this Section 4.1 shall not be applicable to (i) Exempted Securities (as defined in the Company’s Certificate of Incorporation), (ii) shares of Common Stock issued in the IPO, and (iii) the issuance of shares of Series D Preferred Stock to Additional Purchasers pursuant to Subsection 1.3 of the Purchase Agreement.

 

4.2.                            Termination.  The covenants set forth in Section 4.1 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, or (ii) when the Company 

 

16

 

first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, whichever event occurs first.

 

5.                                      Additional Covenants.

 

5.1.                            Board Matters.  Unless otherwise determined by the vote of a majority of the directors then in office, the Board of Directors shall meet at least quarterly in accordance with an agreed-upon schedule.  The Company shall reimburse the nonemployee directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board of Directors.  The Company shall cause to be established, as soon as practicable after such request, and will maintain, an audit and compensation committee, each of which shall consist solely of non-management directors.  Each non-employee director shall be entitled in such person’s discretion to be a member of any Board committee.  The covenants set forth in this Section 5.1 shall terminate and be of no further force or effect upon the earlier of (i) immediately before the consummation of an IPO or (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act.

 

5.2.                            Successor Indemnification.  If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, its Articles of Incorporation, or elsewhere, as the case may be.

 

5.3.                            Indemnification Matters.  The Company hereby acknowledges that one (1) or more of the directors nominated to serve on the Board of Directors by the Investors (each a “Fund Director”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of their affiliates (collectively, the “Fund Indemnitors”).  The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Fund Director are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Fund Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Fund Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Fund Director to the extent legally permitted and as required by the Company’s Articles of Incorporation or Bylaws of the Company (or any agreement between the Company and such Fund Director), without regard to any rights such Fund Director may have against the Fund Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof.  The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of any such Fund Director with respect to any claim for which such Fund Director has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Fund Director against the Company.

 

5.4.                            Right to Conduct Activities.  The Company hereby agrees and acknowledges that Mandala Agribusiness Co-Investments I Limited (“Mandala”) (together with its affiliates) is a professional investment fund, and as such invests in numerous portfolio companies, some of which may be deemed competitive with the Company’s business (as currently conducted or as currently propose to be conducted).  The Company hereby agrees that, to the extent permitted under applicable law, Mandala shall not be liable to the Company for any claim arising out of, or based upon, (i) the investment by

 

17

 

Mandala in any entity competitive with the Company, or (ii) actions taken by any partner, officer or other representative of Mandala to assist any such competitive company, whether or not such action was taken as a member of the board of directors of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company; provided, however, that the foregoing shall not relieve (x) any of the Investors from liability under Section 3.4 of this Agreement associated with the unauthorized disclosure of the Company’s confidential information, or (y) any director or officer of the Company from any liability associated with his or her fiduciary duties to the Company.

 

6.                                      Miscellaneous.

 

6.1.                            Successors and Assigns.  The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate of a Holder or (ii) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Section 2.11.  In addition to the foregoing, the rights of this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that is not an Affiliate or Immediate Family Member of such Holder provided that (a) prior written notice of such transfer is delivered to the Company, (b) the transferee is not a competitor of the Company, as determined by the Company’s Board of Directors in good faith, (c) the transferee acquires in such transfer at least twenty percent (20%) of the Registrable Securities held by such Holder immediately prior to such transfer, and (d) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Section 2.11.  The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

 

6.2.                            Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Arizona, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

6.3.                            Counterparts; Facsimile.  This Agreement may be executed and delivered by facsimile or .PDF format signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

6.4.                            Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

6.5.                            Notices.  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or:  (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt.  All communications shall be sent to the respective parties at their addresses as set forth on Schedule A or Schedule B (as applicable) hereto, or to the principal office of the Company and to the

 

18

 

attention of the Chief Executive Officer, in the case of the Company, or to such facsimile number, or address as subsequently modified by written notice given in accordance with this Section 6.5.

 

6.6.                            Consent Required to Amend, Terminate or Waive.  This Agreement may be terminated or amended, and the observance of any term hereof may be waived (either generally or in a particular instance, and either retroactively or prospectively), only with by a written instrument executed by the Company and the holders of at least a majority of the Registrable Securities then outstanding; provided that the Company may in its sole discretion waive compliance with Section 2.12(c); and provided further that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party.  Notwithstanding the foregoing, this Agreement may not be amended or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment, termination, or waiver applies to all Investors in the same fashion (it being agreed that a waiver of the provisions of Section 4 with respect to a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, notwithstanding the fact that certain Investors may nonetheless, by agreement with the Company, purchase securities in such transaction).  The Company shall give prompt written notice of any amendment, termination or waiver hereunder to any party that did not consent in writing thereto.  Any amendment, termination, or waiver effected in accordance with this Section 6.6 shall be binding on each party and all of such party’s successors and permitted assigns, whether or not any such party, successor or assignee entered into or approved such amendment, termination or waiver.

 

6.7.                            Severability.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

6.8.                            Aggregation of Stock.  All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement, and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

 

6.9.                            Additional Investors.  Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of the Company’s Series D Preferred Stock after the date hereof, whether pursuant to the Purchase Agreement or otherwise, any purchaser of such shares of Series D Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor” for all purposes hereunder.  No action or consent by the Investors shall be required for such joinder to this Agreement by such additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor” hereunder.

 

6.10.                     Entire Agreement.  This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.

 

6.11.                     Further Assurances.  At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as any other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder.

 

6.12.                     Dispute Resolution.  The parties hereby (a) irrevocably and unconditionally submit to the jurisdiction of the federal and state courts located in Maricopa County, Arizona for the

 

19

 

purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal and state courts located within the geographical boundaries of Maricopa County, Arizona, and (c) waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.  Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the federal and state courts located in Maricopa County, Arizona having subject matter jurisdiction.

 

6.13.                     WAIVER OF JURY TRIAL:  EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.  EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

6.14.                     Costs of Enforcement.  If any party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonable attorneys’ fees.

 

6.15.                     Delays or Omissions.  No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

6.16.                     Acknowledgment.  The Company acknowledges that the Investors are in the business of venture capital investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises that may have products or services that compete directly or indirectly with those of the Company.  Nothing in this Agreement shall preclude or in any way restrict the Investors from investing or participating in any particular enterprise whether or not such enterprise has products or services that compete with those of the Company.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

20

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
ARCADIA   BIOSCIENCES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Eric J.   Rey
    
	
 
    	
Name:
    	
Eric J. Rey
    
	
 
    	
Title:
    	
President &   Chief Executive Officer
    

 

[SIGNATURE PAGE TO INVESTORS’ RIGHTS AGREEMENT]

 

 

	
 
    	
INVESTORS:
    
	
 
    	
 
    
	
 
    	
MANDALA AGRIBUSINESS   CO-INVESTMENTS I LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Tej Gujadhur
    
	
 
    	
Name:
    	
Tej Gujadhur
    
	
 
    	
Its:
    	
Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BASF   VENTURE CAPITAL GMBH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE BELLOW FAMILY TRUST UTD
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ARNOLD BENDITCH &   JUDITH E. BENDICH TENANTS IN COMMON
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Arnold   Bendich & Judith E. Bendich
    
	
 
    	
Name:
    	
Arnold Bendich   & Judith E. Bendich
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
VIC KNAUF
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Vic Knauf
    
	
 
    	
Name:
    	
Vic Knauf
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EDMUND LANG
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Edmund Lang
    
	
 
    	
Name:
    	
Edmund Lang
    

 

[SIGNATURE PAGE TO INVESTORS’ RIGHTS AGREEMENT]

 

 

	
 
    	
ILENE H. LANG
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ilene H.   Lang
    
	
 
    	
Name:
    	
Ilene H. Lang
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ANDREW P. PRAGUE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andrew P.   Prague
    
	
 
    	
Name:
    	
Andrew P. Prague
    

 

[SIGNATURE PAGE TO INVESTORS’ RIGHTS AGREEMENT]

 

 

	
 
    	
CMEA   VENTURES LIFE SCIENCES 2000 CIVIL LAW PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Collier
    
	
 
    	
Name:
    	
David Collier
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CMEA   VENTURES LIFE SCIENCES 2000 LIMITED PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David   Collier
    
	
 
    	
Name:
    	
David Collier
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SAINTS CAPITAL V, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
 
    
	
 
    	
Its:
    	
 
    

 

[SIGNATURE PAGE TO INVESTORS’ RIGHTS AGREEMENT]

 

 

SCHEDULE A

 

Investors

 

	
Name   and Address:
    	
 
    
	
 
    	
 
    
	
Mandala   Agribusiness Co-Investments I Limited
    	
With a copy (which shall not constitute notice) to:
    
	
C/O GFin Corporate Services Ltd.
    	
Baker & McKenzie LLP
    
	
9th Floor, Orange Tower
    	
815 Connecticut Avenue NW
    
	
Cybercity, Ebene
    	
Washington, District of Columbia 20006
    
	
Mauritius
    	
Attention: Marc R. Paul, Esq.
    
	
 
    	
 
    
	
BASF Venture Capital GmbH
    	
 
    
	
Attention: Pulakesh Mukherjee
    	
 
    
	
46820 Fremont Boulevard
    	
 
    
	
Fremont, CA 94538
    	
 
    
	
 
    	
 
    
	
The Bellow Family Trust UTD
    	
 
    
	
Attention: Gregory and Jo Ann Bellow
    	
 
    
	
775 Hillcrest Way
    	
 
    
	
Redwood City, CA 94062
    	
 
    
	
 
    	
 
    
	
Arnold Bendich and Judith E. Bendich
    	
 
    
	
Tenants in Common
    	
 
    
	
1754 NE 62nd Street
    	
 
    
	
Seattle, WA 98115
    	
 
    
	
 
    	
 
    
	
CMEA Ventures   Life Sciences 2000
    	
 
    
	
Civil Law   Partnership
    	
 
    
	
Attention: Peter   Gajdos
    	
 
    
	
The Presidio of   San Francisco
    	
 
    
	
One Letterman   Drive
    	
 
    
	
Building C,   Suite CM500
    	
 
    
	
San Francisco,   CA 94129
    	
 
    
	
 
    	
 
    
	
CMEA Ventures   Life Sciences 2000
    	
 
    
	
Limited   Partnership
    	
 
    
	
Attention: Peter   Gajdos
    	
 
    
	
The Presidio of   San Francisco
    	
 
    
	
One Letterman   Drive
    	
 
    
	
Building C,   Suite CM500
    	
 
    
	
San Francisco,   CA 94129
    	
 
    
	
 
    	
 
    
	
Vic Knauf
    	
 
    
	
11835 NE Yeomalt Point Drive
    	
 
    
	
Bainbridge Island, WA 98110
    	
 
    
	
 
    	
 
    
	
Edmund Lang
    	
 
    
	
5 Tabor Hill Road
    	
 
    
	
Lincoln, MA 01773-2905
    	
 
    

 

[SCHEDULE A CONTINUED ON NEXT PAGE]

 

 

	
Name   and Address:
    	
 
    
	
 
    	
 
    
	
Ilene H. Lang
    	
 
    
	
65 W. 13th Street, Apt. 8E
    	
 
    
	
New York, NY 10011
    	
 
    
	
 
    	
 
    
	
Andrew P. Prague
    	
 
    
	
15 Walnut Street, Suite 150
    	
 
    
	
Wellesley, MA 02481
    	
 
    
	
 
    	
 
    
	
Saints Capital   V, L.P.
    	
 
    
	
Attention:   Lilian Shackelford Murray
    	
 
    
	
2020 Union   Street
    	
 
    
	
San Francisco,   CA 94123

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