Document:

exv10w13

Pages where confidential treatment has been requested are stamped ‘Confidential Treatment
Requested and the Redacted Material has been separately filed with the Commission,’ and the
confidential section has been marked as follows: [***].

Exhibit 10.13

EXECUTION COPY

AMENDED AND RESTATED

INTELLECTUAL PROPERTY RIGHTS AGREEMENT

between

Ceres, Inc.

and

The Texas A&M University System

     This Amended and Restated Intellectual Property Rights Agreement (“Agreement”) is made and
entered into by and between Ceres, Inc., a corporation with principal offices in Thousand Oaks,
California, a Delaware corporation (“CERES”) and The Texas A&M University System (“SYSTEM”), an
agency of the State of Texas, collectively referred to as “Parties” and individually as “Party.”
Capitalized terms used but not defined in this Agreement have the meanings set forth in the ARSRA
(as defined below).

WITNESSETH:

WHEREAS, SYSTEM and CERES have in common the desire to encourage and facilitate the discovery,
dissemination and application of new knowledge, and CERES desires to support said research;

WHEREAS, CERES and SYSTEM, through Texas AgriLife Research (“AGRILIFE”) formerly known as The Texas
Agricultural Experiment Station, a member of SYSTEM, (“TAES”), with principal offices in College
Station, Texas, a member of SYSTEM and an agency of the State of Texas have previously entered into
and conducted research under that certain Sponsored Research Agreement dated as of August 29, 2007,
as amended, supplemented and otherwise modified by way of those certain written amendments entered
into by the Parties, effective as of June 18, 2008, July 15, 2008, October 22, 2008 and August 29,
2007 (the “SRA”) to improve germplasm, develop lines and hybrids of sorghum and its interbreeding
species and develop DNA markers and marker platform technology to advance the development of
biomass/bioenergy crops, which the Parties agreed to amend and restate in its entirety on September
24, 2011 and which is now being referred to as the Amended and Restated Sponsored Research
Agreement (“ARSRA”);

WHEREAS, pursuant to the ARSRA, CERES and SYSTEM, through AGRILIFE will continue to improve
germplasm, develop Lines, Hybrids, Derivatives and Progeny of sorghum and its interbreeding species
and develop DNA markers and marker platform technology to advance the development of
Biomass/Bioenergy/Sweet Sorghum crops;

WHEREAS, the Parties desire that CERES will commercialize such Biomass/Bioenergy/Sweet Sorghum
crops under exclusive license(s) from SYSTEM; and

WHEREAS, pursuant to the ARSRA CERES had and has the right to license certain INTELLECTUAL PROPERTY
RIGHTS from SYSTEM; and

WHEREAS, the Parties have agreed on the rights and obligations of the Parties and the procedures
for such licensing.

			
	 	 	 
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WHEREAS, the Parties entered into that certain Intellectual Property Rights Agreement, dated as of
August 27, 2007 (the “Original IPRA”) with respect to the foregoing; and

WHEREAS, the Parties desire to amend and restate the Original IPRA in its entirety in connection
with the ARSRA and as set forth below.

NOW THEREFORE, in consideration of the mutual covenants and premises contained in this Agreement,
the receipt and sufficiency of which is acknowledged, the Parties agree as follows:

Article 1. Licensing of Intellectual Property Rights

A. General

(1) All grants of intellectual property rights as set forth in Article IX of the ARSRA (other than
copyrights) will be made through the instrument of license agreements substantially in the form of
Appendices A and B. All such grants of intellectual property rights will be subject to the
reservation of rights set forth in the ARSRA, compliance with Article IV of the ARSRA, and
compliance with the Guidelines for Future Collaborative Opportunities which both Parties agree to
comply with and which are included in Appendix C (the “Guidelines”). All grants with respect to
copyrights will be made in accordance with Article IX.B. of the ARSRA.

(2) It is anticipated by the Parties that CERES may, subject to CERES Board of Directors and
shareholder approval, issue warrants as set forth in Article 5.B, giving SYSTEM the right to
purchase CERES stock for a predetermined price per share. The Parties will negotiate diligently
and in good faith about such potential grant of warrants. The Parties acknowledge and agree that
the Warrant (as defined in Article 4.B.(1) below) was issued by CERES to SYSTEM under the Original
IPRA. If the Additional Warrant (as defined in Article 4.B.(2) below has not been issued by CERES
to SYSTEM within nine (9) months after the last signature date of this Agreement, CERES shall have
no further obligation whatsoever with respect to the issuance of the Additional Warrant to SYSTEM.

B. Patentable Inventions

(1) Negotiation of a Commercial Exploitation License. SYSTEM, through AGRILIFE, has granted CERES
in the ARSRA an option to obtain an exclusive world-wide commercial exploitation license in
SYSTEM’s rights in Subject Inventions under the ARSRA, with the right to grant sublicenses. If
CERES exercises such option pursuant to the terms of the ARSRA, the Parties shall initiate
negotiation of a license agreement based on the Example License Agreement for Subject Inventions in
Appendix A and the Parties shall comply with the good faith negotiation process and timelines set
forth in the ARSRA.

(2) Joint Inventions. Joint Inventions conceived under the ARSRA shall be subject to the option
set forth in the ARSRA and the provisions of Article 1.B.(1) hereinabove.

C. Germplasm

(1) Definitions: The terms “Hybrid,” “AGRILIFE Genetic Contribution,” “Other Contributions,”
“Developed by Breeding,” “New Parental Lines,” “Lines,” “Allele,” “Derivatives,” “Progeny,”  ”Existing License and Material Transfer Agreements,” “Ceres Field,” “Biomass/Bioenergy/Sweet
Sorghum,” “Germplasm Improvement,” “Sorghum [***],” “Subject Invention,” “Program” and other
capitalized words not defined herein shall have the definitions set forth in the ARSRA.

			
	 	 	 
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Confidential Treatment Requested and the Redacted Material has been separately filed with the
Commission

 

 

(2) Negotiation of a Commercial Exploitation License. SYSTEM, through AGRILIFE, has granted CERES
in the ARSRA an option to obtain an exclusive (subject to the following sentence with respect to
AGRILIFE Lines) world-wide commercial exploitation license in SYSTEM’s rights in Lines pursuant to
the ARSRA, with the right to grant sublicenses. In the case of any AGRILIFE Line, such exclusive
license shall be subject to any non-exclusive licenses granted prior to the date of the SRA by
TAES, AGRILIFE and/or SYSTEM to any third party with respect to such AGRILIFE Line. If CERES
exercises such option pursuant to the terms of the ARSRA, the Parties shall initiate negotiation of
such license agreement based on the Example License Agreement for Lines in Appendix B and the
Parties shall comply with the good faith negotiation process and timelines set forth in the ARSRA.

Article 2. Term and Termination

A. The period of performance for this Agreement shall begin on September 3, 2007, and shall
continue until the effective Date of expiration or termination of the ARSRA, subject to earlier
termination as provided herein.

B. CERES will have the right to terminate this Agreement unilaterally by written notice to SYSTEM
if SYSTEM or AGRILIFE materially breaches this Agreement or the ARSRA, provided that such breach
remains uncured sixty (60) days after the date of a written notice provided by CERES to SYSTEM
specifying such breach.

C. Termination of this Agreement shall not affect the rights and obligations of the Parties accrued
prior to termination hereof nor any license or, except as set forth in Article 4.E, warrant grants
then in existence, subject to payment of remuneration as set forth in any relevant
license/commercialization or warrant agreements. In the event of the expiration or any termination
of this Agreement, the following provisions shall survive: Articles 2, 3, 4 and 6.

Article 3. Confidentiality

A. SYSTEM shall not disclose this Agreement or any contents of this Agreement to third parties
without the prior written consent of CERES during the term of this Agreement and for five (5) years
thereafter, but SYSTEM shall not be liable for unauthorized disclosures of information which occur
in spite of using all reasonable efforts not to disclose this Agreement or any contents of this
Agreement to third parties. SYSTEM will only make this Agreement available to SYSTEM employees or
researchers on a need-to-know basis.

B. SYSTEM shall not be obligated to keep any portion of this Agreement confidential to the extent
such portion (a) now or hereafter becomes generally available to the public on a non-confidential
basis through no fault or action or failure to act on the part of SYSTEM; or (b) is ordered
produced or disclosed by a court or administrative body of competent jurisdiction or otherwise
required by law, or required to be disclosed by the Attorney General of The State of Texas, but
only to the extent of such required production or disclosure. SYSTEM will provide reasonable
advance written notice to CERES of any such production or disclosure and will use reasonable
efforts to secure confidential treatment of any such information prior to its production or
disclosure.

Article 4. Warrants

A. Warrant.

			
	 	 	 
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Pursuant to the Warrant to Purchase Shares of Common Stock of Ceres, Inc., dated as of July 18,
2008, by and between CERES and SYSTEM (the “Warrant Agreement”), CERES has issued to SYSTEM
a warrant to purchase an aggregate of up to two hundred thousand (200,000) shares of CERES’ Common
Stock at a defined price, as further described in the Warrant Agreement and Amendment Number One
thereto, attached hereto as Appendix D and incorporated herein by this reference.

B. Additional Warrant.

In addition to the Warrant specified in Article 4.A above, subject to CERES’ Board of Directors and
shareholder approval, Articles 1.A.(2), 4.C, 4.D and 4.E and agreement by the Parties on the terms
and conditions of the warrants, CERES shall issue to SYSTEM a warrant to purchase up to two hundred
thousand (200,000) shares of CERES’ Common Stock (the “Additional Warrant”) at a defined price.
The maximum duration of the Additional Warrant would be fifteen (15) years; early termination
provisions may apply. The Additional Warrant would become exercisable in installments as follows,
provided that, at the time of SYSTEM’s exercise of such installment, (i) SYSTEM has not breached,
and is not in breach of any provision of the ARSRA, this Agreement (including without limitation
the Guidelines), Existing Licenses and Material Transfer Agreements (as defined in the ARSRA), or
any license entered into pursuant to this Agreement, (ii) SYSTEM has not proceeded to any
activities (including participation in any Additional Collaboration Project and/or use of any
Lines, Hybrids, Derivatives or Progeny developed in the Program) contrary to CERES’ expressed
preference, as referred to in clause 1.2 of the Guidelines, and (iii) SYSTEM has not collaborated
or is not collaborating with, nor has granted rights to, any party for Germplasm Improvement (as
defined in the ARSRA) of Biomass/Bioenergy/Sweet Sorghum (as defined in the ARSRA) except as
expressly permitted in the ARSRA;

     1. a first installment of sixty-six thousand six hundred sixty-seven (66,667) shares
on the fifth (5th) anniversary of the date of this Agreement, provided CERES has
not terminated this Agreement for breach as provided in Article 2.B on or before such date;

     2. a second installment of sixty-six thousand six hundred sixty-seven (66,667) shares
on the tenth (10th) anniversary of the date of this Agreement, provided CERES
has not terminated this Agreement for breach as provided in Article 2.B on or before such
date; and

     3. a third installment of sixty-six thousand six hundred sixty-six (66,666) shares on
the fifteenth (15th) anniversary of the date of this Agreement, provided CERES
has not terminated this Agreement for breach as provided in Article 2.B on or before such
date;

C. Mechanics of the Additional Warrant shall be subject to advice of the Parties’ respective
securities counsel.

D. For the avoidance of doubt, in no event shall the number of shares of CERES Common Stock that
are the subject of the Additional Warrant exceed two hundred thousand (200,000) shares.

E. Unless CERES terminates for breach as provided in Article 2.B of this Agreement, this Article 4
shall survive termination of this Agreement.

			
	 	 	 
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Article 5. Potential Collaborations

	 	A.	 	Within twelve (12) months after the date of this Agreement, the Parties will begin
non-exclusive good faith negotiations with respect to a potential collaboration in [***]
involving CERES’ [***] (including, without limitation, [***], [***], [***] and [***]) and
AGRILIFE’s, as a member of SYSTEM, germplasm and breeding program. Unless the Parties
agree otherwise in writing, such negotiations shall continue until the earlier to occur of
(a) the one (1) year anniversary of the commencement of such negotiations, or (b) the
execution by the Parties of a definitive written agreement with respect to such
collaboration. For the avoidance of doubt, neither Party shall have any exclusivity or
preemptive rights, rights of first refusal or first negotiation or rights of last offer or
any similar rights with respect to such potential collaboration in [***] involving the
other Party.
	 
	 	B.	 	Within twelve (12) months after the date of this Agreement, the Parties will begin
non-exclusive good faith negotiations with respect to a potential collaboration allowing
AGRILIFE’s, as a member of SYSTEM, use of CERES’ [***] and [***] for research purposes
only in [***] by the Parties and where CERES will have exclusive commercial
exploitation rights to such results. Unless the Parties agree otherwise in
writing, such negotiations shall continue until the earlier to occur of (a) the one (1)
year anniversary of the commencement of such negotiations, or (b) the execution by the
Parties of a definitive written agreement with respect to such collaboration. For the
avoidance of doubt, (i)neither Party shall have any exclusivity or preemptive
rights, rights of first refusal or first negotiation or rights of last offer or any
similar rights with respect to such potential collaboration in [***] and [***] involving
the other Party, and (ii) nothing contained herein shall prohibit or prevent CERES from
granting any rights, including without limitation exclusive rights to, or enter into any
agreements with, any third party with respect to any of its [***], [***] or [***] for use
with any crop.
	 
	 	C.	 	Within twelve (12) months after the date of this Agreement, the Parties will begin
non-exclusive good faith discussions to evaluate a potential collaboration for the
improvement and development of CERES’ Persephone software program for use in [***] and
[***] applications and potentially in [***] applications.

Article 6. Miscellaneous

This Agreement, the ARSRA (including without limitation all Existing License and Material Transfer
Agreements referred to therein) and the Warrant constitute the entire agreement between the Parties
relative to the subject matter, and may be modified or amended only by a written agreement signed
by both Parties. The Parties hereby incorporate by reference Articles IV, V, VI, IX, XII, XIII,
XIV, XV, XVIII, XX, XXII and XXIII of the ARSRA as if set forth fully herein, except for purposes
of such incorporation (a) references to “AGRILIFE” therein shall be deemed to be references to
“SYSTEM,” (b) references to a “Party” therein shall be deemed to be references to a Party as
defined herein, and (c) references to the “Parties” therein shall be deemed to be references to the
Parties as defined herein.

[Signature page follows.]

			
	 	 	 
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Confidential Treatment Requested and the Redacted Material has been separately filed with the
Commission

 

 

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by
their duly authorized representatives.

	 	 	 	 	 	 	 	 	 

	For Ceres, Inc. (“CERES”)	 	 	 	For Texas AgriLife Research
(“AGRILIFE”), a Member of The Texas
A&M University System
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Richard Flavell
	 	 	 	By:
	 	/s/ Craig Nessler
	 

	 	 
	 	 	 	 	 	 
	Name: Richard Flavell, CBE, FRS	 	 	 	Craig Nessler
	Title: Chief Scientific Officer	 	 	 	Director, Texas AgriLife Research
	Date:

	 	 	 	 	 	Date:
	 	9/24/2011
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	For Ceres, Inc. (“CERES”)	 	 	 	For The Texas A&M University System (“TAMUS”)
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Richard Hamilton
	 	 	 	By:
	 	/s/ Brett Cornwell
	 

	 	 
	 	 	 	 	 	 
	Name: Richard Hamilton	 	 	 	Name: Brett Cornwell
	Title: President & Chief Executive Officer	 	 	 	Title: Associate Vice Chancellor for Commercialization
	Date:

	 	9/24/11
	 	 	 	Date:
	 	9-24-2011
	 

	 	 
	 	 	 	 	 	 

			
	 	 	 
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Appendix A

to the Amended and Restated Intellectual Property Rights Agreement

between Ceres, Inc. and The Texas A&M University System

Example License Agreement for Subject Inventions

LICENSE AGREEMENT

Between

Ceres, Inc.

and

The Texas A&M University System

     This agreement (“Agreement”) is made and entered into by and between Ceres, Inc., a
corporation with principal offices in Thousand Oaks, California, (“LICENSEE”) and The Texas A&M
University System with principal offices in College Station, Texas, (“SYSTEM”), an agency of the
State of Texas, collectively referred to as “Parties” and individually as “Party.”

WITNESSETH:

     WHEREAS, SYSTEM and LICENSEE have entered into an Amended and Restated Sponsored Research
Agreement dated [xxxx] (the “ARSRA”) and an associated Amended and Restated Intellectual
Property Rights Agreement (“IPRA”);

     WHEREAS, pursuant to the ARSRA a Subject Invention (as defined in the ARSRA) was created in
which SYSTEM has ownership rights; such Subject Invention relates to “___” (the “Subject Invention”);

     WHEREAS, SYSTEM desires that such intellectual property be commercialized for the public
benefit and welfare; and

     WHEREAS, LICENSEE has represented that it has certain marketing, engineering and financial
capabilities, and that it shall commit itself to a thorough and diligent program of development and
commercialization of SYSTEM’s intellectual property for public benefit; and

     WHEREAS, SYSTEM is willing to grant to LICENSEE, and LICENSEE is willing to accept, a license
to use the Subject Invention, upon the terms and conditions set forth below.

     NOW THEREFORE, in consideration of the mutual covenants and premises contained in this
Agreement, the receipt and sufficiency of which is acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

	1.01	 	“LICENSED TECHNOLOGY” shall mean the Subject Invention relating to SYSTEM Disclosure of
Invention Number ________ entitled “_________________.”
	 
	1.02	 	“PATENT RIGHTS” shall mean each United States patent application filed for protection of
LICENSED TECHNOLOGY; each patent issuing from the foregoing applications; each

			
	 	 	 
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	 	 	divisional, continuation, or continuation-in-part application of the foregoing United
States applications; each equivalent patent application in each country other than the
United States which claims priority under such applications; each patent issuing from the
foregoing applications; and each extension or reissue of such patents.

	1.03	 	“LICENSED PRODUCT” or “LICENSED PRODUCTS” shall mean any product, process, or composition of
matter that is within the scope of any Valid Claim of PATENT RIGHTS. Valid Claim shall mean
and include a claim of a patent application or an unexpired patent or a patent whose
expiration date has been extended by law, so long as such claim shall not have been held
invalid and/or unenforceable in an unappealed or unappealable decision of a court or other
authority of competent jurisdiction.

	1.04	 	“EFFECTIVE DATE” shall mean the date this Agreement has been executed by the last Party.

	1.05	 	“NET SALES” shall mean LICENSEE’s and AFFILIATED COMPANIES’ receipts for sales of LICENSED
PRODUCTS or for SERVICES requiring the use of LICENSED PRODUCTS less the sum of the following:

	 	(a)	 	sales taxes, tariffs, duties and/or use taxes directly
imposed with reference to particular sales;
	 
	 	(b)	 	outbound transportation prepaid or allowed, shipping,
packaging, cost of insurance in transit paid by LICENSEE or an AFFILIATED
COMPANY;
	 
	 	(c)	 	amounts allowed or credited on returns;
	 
	 	(d)	 	customary trade, quality or cash discounts; and
	 
	 	(e)	 	[other deductions which are appropriate to sales of the
LICENSED PRODUCTS may be included.]

	 	 	No deductions shall be made for commissions paid to individuals whether independent sales
agencies or regularly employed by LICENSEE, or for the cost of collections. The value of
sample size quantities of LICENSED PRODUCTS provided for free shall not be included in NET
SALES. Where there is no identifiable sale price (except for samples as referred to in the
previous sentence) or when a LICENSED PRODUCT is sold to other than bona fide, arms length
customers of LICENSEE or any AFFILIATED COMPANY, LICENSEE or the AFFILIATED COMPANY shall
be deemed to have received an amount of NET SALES calculated based on the final sale of the
LICENSED PRODUCTS (wholesale level) to an independent third party. If no such current price
is available, a hypothetical fair market value price will be determined by the Parties
jointly in good faith for the purpose of calculating NET SALES. If trait fees are charged
by LICENSEE specifically for the LICENSED TECHNOLOGY, these fees shall be added to NET
SALES.
	 
	1.06	 	“LICENSE INCOME” shall mean the amount actually received by either LICENSEE or any AFFILIATED
COMPANY in consideration for the grant of sublicenses to sublicensees that are not AFFILIATED
COMPANIES to produce and sell LICENSED PRODUCTS, including up-front fees, lump sum payments
and any other non-running royalty-based payments made on a product-by-product and
jurisdiction-by-jurisdiction basis.

			
	 	 	 
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	1.07	 	“AFFILIATED COMPANY” shall mean any company owned or controlled by, under common control with
or controlling LICENSEE, “control” meaning in this context the direct or indirect ownership of
more than fifty percent (50%) of the voting stock/shares of a company, or the power to
nominate at least half of the directors.

	1.08	 	“SERVICE” shall mean any transaction with a third party in which LICENSEE or an AFFILIATED
COMPANY performs certain activities on behalf and at the request of a third party that would
if not performed by LICENSEE or an AFFILIATED COMPANY require a license under SYSTEM’S PATENT
RIGHTS licensed hereunder, in exchange for payment, but excluding any research collaboration
or sponsored research agreement.

ARTICLE II — LICENSE GRANT

	2.01	 	Grant. SYSTEM grants to LICENSEE and its AFFILIATED COMPANIES an exclusive world-wide license
and right under PATENT RIGHTS to make, have made, use, and sell the LICENSED PRODUCTS and to
perform SERVICES, and to grant sublicenses of the same scope, to the end of the term of this
Agreement as prescribed in Article VIII.

	2.02	 	Reservation. SYSTEM reserves an irrevocable, worldwide, nonexclusive, royalty-free right to
practice the grant made in Article 2.01 for research and educational purposes only, and not
for commercial purposes or for the commercial benefit of third parties. SYSTEM shall comply
with the provisions of the ARSRA, and the IPRA when exercising this right.

	2.03	 	[If applicable] Government Reservation. Rights under this Agreement are subject to rights
required to be granted to the Government of the United States of America pursuant to 35 USC
Section 200-212, including a nonexclusive, nontransferable, irrevocable, paid-up license to
practice or have practiced for or on behalf of the United States the Subject Inventions
throughout the world.

ARTICLE III — CONSIDERATION

	3.01	 	[Optional. Depends on CERES’ contributions to Subject Invention and the value of the Subject
Invention. Can be alternative to royalties in case Subject Invention will only be used
internally by CERES.] License Fee. In consideration for the license granted in this
Agreement, LICENSEE shall make an initial payment in the amount of ___________ dollars
($________). Such payment shall be due no later than thirty (30) days following the EFFECTIVE
DATE. Failure to make this payment within the specified period shall cause this Agreement to
immediately terminate.

	3.02	 	Royalty Rate. As [additional] consideration for the license granted in this Agreement,
LICENSEE shall remit to SYSTEM a royalty of ____ percent (__%) of NET SALES. [Take into
account stacking with other technologies and value of licensed technology to determine rate.]

	3.03	 	[Optional] Minimum Annual Consideration. In order to maintain this exclusive license to
PATENT RIGHTS, LICENSEE shall pay to SYSTEM minimum annual consideration in accordance with
the following schedule:

	 	 	 

	(a) Calendar Year 20_
	 	$ _____
	 
	 	 
	(b) Calendar Years 20__ and 20_
	 	$_____
	 
	 	 
	(c) Calendar Year 20__ and every year thereafter
through the expiration of this Agreement
	 	$_____

 
			
	 	 	 
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	 	 	In the event that LICENSEE’s payment of royalties for the Calendar Year due under Article
3.02 do not meet or exceed the required minimum annual consideration, as specified in this
Article, LICENSEE’s royalty payment for the last quarter of such Calendar Year shall
include payment of the balance needed to achieve the required minimum. In the event this
Agreement expires or is terminated prior to the end of a Calendar Year, the corresponding
minimum annual consideration provided for in this Article shall be prorated for that year.
	 
	3.04	 	Patent Expenses [Reimbursement]. As additional consideration for the license granted in this
Agreement, LICENSEE shall bear the expenses incurred in the prosecution and maintenance of
PATENT RIGHTS, as further described in Article VI.

	3.05	 	If an exclusive license reverts to or is non-exclusive pursuant to Articles 3.02, 5.02 or
6.05, or upon LICENSEE’s election, a lower royalty rate shall be negotiated in good faith
between the Parties. The start of such negotiations shall be evidenced by written notice from
one Party to the other initiating such negotiations, and such negotiations shall not extend
beyond ninety (90) days from the start thereof without the mutual consent of both Parties
(“Negotiation Period”). If the Parties fail to reach agreement within the Negotiation Period,
the lower royalty rate shall be settled in accordance with the following procedures: the
disputed royalty rate shall be referred to a mutually agreed impartial expert whose decision
shall be final. Each Party shall submit to the expert within fifteen (15) days of his
appointment its position in writing on the disputed royalty rate. Such expert shall be
limited to choosing the one of such two (2) party positions that the expert considers most
reasonable in the circumstances and shall not make any other determination. Neither Party
shall be bound by any determination by the expert which, in the opinion of Party’s counsel,
will result or be likely to result in that Party violating any applicable law or regulation.

ARTICLE IV —SUBLICENSES

	4.01	 	Sublicenses. LICENSEE and its AFFILIATED COMPANIES may grant sublicenses to persons, firms or
corporations under such conditions as it may arrange, subject to terms and conditions
consistent with this Agreement, as long as each such sublicense is not repugnant to the public
policies of SYSTEM, the State of Texas, or the United States

	4.02	 	Sublicensee Consideration. Sales of LICENSED PRODUCTS by each sublicensee shall be subject to
the unit royalty due to SYSTEM prescribed in Article 3.02. Further, LICENSEE shall pay to
SYSTEM a royalty of ____ percent (___%) LICENSE INCOME. [Take into account stacking
with other technologies and value of licensed technology to determine rate.]

	4.03	 	Reporting. LICENSEE shall notify SYSTEM of the grant of sublicense to a third party and
provide a redacted copy of the sublicense to SYSTEM. LICENSEE shall not redact any
information unless it could be reasonably considered sensitive to LICENSEE’s business. Upon
reasonable notice by SYSTEM, SYSTEM may through an attorney-at-law review an unredacted copy
of the sublicense but shall not provide any redacted information to business persons within
SYSTEM. LICENSEE shall also provide SYSTEM with the

			
	 	 	 
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	 	 	name, address and scope of each sublicense and a copy of each sublicensee’s report as is
pertinent to calculation of amounts due SYSTEM under this Agreement.

	4.04	 	Non-Cash Transactions. Where there is no identifiable LICENSE INCOME, a hypothetical fair
market value price will be determined by the Parties jointly in good faith for the purpose of
calculating LICENSE INCOME.

ARTICLE V — LICENSEE RESPONSIBILITIES

	5.01	 	Diligence. LICENSEE will use commercially reasonable efforts to actively market the LICENSED
PRODUCTS and SERVICES and will provide a non-binding marketing plan to SYSTEM reflecting its
marketing efforts within ninety (90) days from the EFFECTIVE DATE. LICENSEE will provide
annual updates of such marketing plan.

	5.02	 	Failure to Maintain Diligence. Minimum diligence requirements for the LICENSED PRODUCTS and
SERVICES shall be satisfied by the payment of the minimum annual consideration amounts for the
prescribed BUSINESS YEARS set forth in Article 3.03. If LICENSEE fails to pay to SYSTEM the
prescribed minimum annual consideration within thirty (30) days after the receipt of a written
notice from SYSTEM notifying LICENSEE of the payment failure, SYSTEM shall have the right to
convert the license granted to LICENSEE with respect to each aspect of LICENSED PRODUCTS and
SERVICES to non-exclusive, by written notice to LICENSEE.

	5.03	 	Legal Compliance. LICENSEE must comply with all applicable federal, state and local laws and
regulations in its exercise of all rights granted to it by SYSTEM under this Agreement.

	5.04	 	[If applicable] No Royalties for Sales to U.S. Government. In accordance with 35 USC Section
200-212, LICENSEE has no duty to pay SYSTEM royalties under this Agreement on NET SALES made
to the United States Government, including any United States Government agency. LICENSEE
shall reduce the amount charged for a LICENSED PRODUCT sold to the United States Government by
an amount equal to the royalty otherwise due SYSTEM.

	5.05	 	[If applicable] U.S. Manufacture. In accordance with 35 USC Section 200-212, LICENSED
PRODUCTS shall be manufactured substantially in the United States of America.

ARTICLE VI — PATENTS

	6.01	 	Filing. SYSTEM will have the right to prepare and file, in accordance with its best
judgment, any and all applications for patents covering LICENSED TECHNOLOGY in the United
States that are solely owned by SYSTEM and LICENSEE will have the right to prepare and file
such applications for LICENSED TECHNOLOGY jointly owned by LICENSEE and SYSTEM. Applications
for patents shall be filed in the name of SYSTEM if owned by SYSTEM pursuant to the ARSRA and
in the joint names of SYSTEM and LICENSEE if jointly owned pursuant to the ARSRA. At
LICENSEE’s discretion, patents applications may be filed in any other jurisdiction in the
world.

			
	 	 	 
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	6.02	 	Abandoning patent applications. The following rules shall apply with respect to applications
for patents or SYSTEM owned or jointly owned LICENSED TECHNOLOGY. If the party controlling
prosecution intends to abandon any patent application or patent that party shall first give
sufficient written notice to the other party to permit the other party the opportunity to
assume such filing, examination and/or maintenance. LICENSEE and SYSTEM will consult with
regard to protection of LICENSED TECHNOLOGY.

	6.03	 	Jurisdictions. The obligations of this Article 6.03 shall not apply to any jurisdictions in
which the prosecuting party has elected not to apply for intellectual property protection.
LICENSEE and SYSTEM shall avoid carrying out any act that would prejudice the grant of patent
rights.

	6.04	 	Patent Maintenance. SYSTEM shall maintain at least one U.S. patent resulting from the
prosecution described hereinabove.

	6.05	 	Election not to file. LICENSEE will direct SYSTEM in writing no later than nine (9) months
following the date of filing for each U.S. patent application as to LICENSEE’s selection of
countries outside the United States in which SYSTEM shall seek corresponding patent
protection. SYSTEM shall then have the right to file corresponding patent applications at its
own expense in those countries not selected by LICENSEE; however, the license granted to
LICENSEE in this Agreement shall be non-exclusive in the countries where SYSTEM has filed and
is prosecuting patents or applications at its own expense.

	6.06	 	Prosecution and Maintenance of Non-U.S. Patents. Should LICENSEE select a country other than
the United States in which to file each corresponding patent application, and subsequently
elects not to continue to reimburse SYSTEM for the diligent prosecution and maintenance of
such patent or patent application, it shall so notify SYSTEM at least three (3) months prior
to taking (or not taking) any action which would result in abandonment, withdrawal, or lapse
of such patent or application. SYSTEM shall then have the right to continue maintenance or
prosecution of each such patent or application at its own expense; however, expenses incurred
prior to the point of LICENSEE taking (or not taking) such action shall remain the
responsibility of LICENSEE. The license granted to LICENSEE in this Agreement shall revert to
non-exclusive in the countries where SYSTEM is maintaining or prosecuting such patent or
application at its own expense.

	6.07	 	Financial Responsibility. Except as set forth in Articles 6.05 and 6.06, LICENSEE shall
reimburse SYSTEM for all expenses incurred by SYSTEM in filing, prosecuting, and maintaining
each patent application and patent under PATENT RIGHTS. LICENSEE shall provide payment as
reimbursement of SYSTEM’s documented expenses incurred in filing, prosecuting or maintaining
patent applications or patents as described above within thirty (30) days of receipt of
SYSTEM’s supporting invoice. SYSTEM shall use patent counsel reasonably acceptable to
LICENSEE. LICENSEE acknowledges, however, that SYSTEM’s patent counsel must be approved by
the Attorney General of the State of Texas.

	6.08	 	Information. SYSTEM shall disclose to LICENSEE the complete texts of all patent applications
filed by SYSTEM under PATENT RIGHTS as well as all information received concerning office
actions, the institution or possible institution of any interference, opposition,
re-examination, reissue, revocation, nullification or any other

			
	 	 	 
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	 	 	official proceeding involving PATENT RIGHTS, all in a timely manner so as to allow LICENSEE
to provide input i.e. at least thirty (30) days before a filing needs to be made or a
decision needs to be taken. SYSTEM shall provide to LICENSEE the opportunity to provide
input to the development of each patent application and any official proceedings
thereafter, and will take such input into account.

ARTICLE VII — PAYMENTS AND REPORTS

	7.01	 	When Payments are Due. Unless otherwise specified, payments shall be made annually. Payments
shall be made to The Texas A&M University System, in College Station, Texas, not later than
sixty (60) days after the last day of the calendar year in which they accrue.

	7.02	 	Royalty Reports. LICENSEE shall provide a sales report to SYSTEM each year, providing
information sufficient to allow SYSTEM to calculate amounts due SYSTEM for the reporting
period, in the form attached hereto as ANNEX I.

	7.03	 	Currency. Payment due to SYSTEM shall be paid in U.S. dollars. Royalty payments requiring
conversion shall use the exchange rate as reported in The Wall Street Journal on the
last business day of the royalty reporting period.

	7.04	 	Inspection of Books and Records. At its own expense, SYSTEM may annually inspect LICENSEE’s
books and records as needed to determine royalties payable. LICENSEE shall maintain such books
and records for at least three (3) years following the dates of the underlying transactions.
Any such inspections shall be in confidence and conducted during ordinary business hours, and
SYSTEM will provide LICENSEE prior notice two (2) weeks before making such inspections. SYSTEM
must employ an independent Certified Public Accountant reasonably acceptable to LICENSEE for
this purpose, who will only report to SYSTEM such information as necessary, to determine
royalties payable to SYSTEM and LICENSEE’s compliance with any related obligations to SYSTEM.
If SYSTEM’s audit identifies a shortage of five percent (5%) or more of amounts due to SYSTEM,
then LICENSEE shall pay the costs of SYSTEM’s audit. LICENSEE shall pay all amounts due as a
consequence of such audit to SYSTEM promptly, with interest.

	7.05	 	Interest Charges. Overdue payments may, at the sole discretion of SYSTEM, be subject to a
daily charge commencing on the 31st day after such payment is due, compounded monthly, at the
rate of either one and one-half percent (1.5%) per month or the highest legal interest rate,
whichever is lower. The payment of such interest will not foreclose SYSTEM from exercising any
other rights it may have as a consequence of the lateness of any payment.

ARTICLE VIII — TERM AND TERMINATION

	8.01	 	Expiration. This Agreement, unless sooner terminated as provided herein, shall remain in
effect on a country-by-country basis until (a) failure of SYSTEM to obtain at least one issued
patent for protection of LICENSED TECHNOLOGY, (b) expiration of the last to expire patent
under PATENT RIGHTS, or (c) final and unappealable determination by a court of competent
jurisdiction that PATENT RIGHTS are invalid.

	8.02	 	Termination by Licensee. LICENSEE may terminate this Agreement by providing written notice
to SYSTEM at least ninety (90) days before the termination is to take effect.

			
	 	 	 
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	8.03	 	Termination by System. If LICENSEE materially breaches this Agreement, SYSTEM may give
LICENSEE written notice of the breach. LICENSEE shall have a period of sixty (60) days from
receipt of the notice to cure the breach. If LICENSEE does not cure the breach within this
period, SYSTEM may terminate this Agreement in writing without further notice.

	8.04	 	Matters Surviving Termination. All accrued obligations and claims, including reimbursement
of patent expenses, license fee obligations, royalty obligations, minimum annual consideration
obligations, interest charge obligations, and all other financial obligations, and claims or
causes of action for breach of this Agreement, shall survive termination of this Agreement.
Obligations of confidentiality shall survive termination of this Agreement. This section
controls in the case of a conflict with any other section of this Agreement.

ARTICLE IX — INDEMNIFICATION AND REPRESENTATION

	9.01	 	Indemnification. LICENSEE SHALL AT ALL TIMES DURING THE TERM OF THIS AGREEMENT AND THEREAFTER
INDEMNIFY, DEFEND, AND HOLD HARMLESS SYSTEM, ITS REGENTS, OFFICERS, AND EMPLOYEES AGAINST ANY
CLAIM, PROCEEDING, DEMAND, LIABILITY OR EXPENSE (INCLUDING LEGAL EXPENSE AND REASONABLE
ATTORNEYS’ FEES) WHICH RELATES TO INJURY TO PERSONS OR TO PROPERTY, ANY ACTION BROUGHT BY A
THIRD PARTY ALLEGING INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, OR AGAINST ANY OTHER CLAIM,
PROCEEDING, DEMAND, EXPENSE, AND LIABILITY OF ANY KIND WHATSOEVER RESULTING FROM THE
PRODUCTION, MANUFACTURE, SALE, COMMERCIAL USE, LEASE, CONSUMPTION, OR ADVERTISEMENT OF
LICENSED PRODUCTS OR ARISING FROM ANY OBLIGATION OF LICENSEE OR SUBLICENSEE(S) UNDER THIS
AGREEMENT AND NOT CAUSED BY BREACH OF THIS AGREEMENT BY SYSTEM (HEREINAFTER JOINTLY REFERRED
TO AS “CLAIMS”), PROVIDED THAT SYSTEM SHALL PROMPTLY PROVIDE WRITTEN NOTICE OF ANY CLAIM TO
LICENSEE, AND THAT, SUBJECT TO THE APPROVAL OF THE ATTORNEY GENERAL OF THE STATE OF TEXAS,
LICENSEE SHALL HAVE THE RIGHT TO CONDUCT THE DEFENSE OF ANY CLAIM, AND THAT SYSTEM SHALL
COOPERATE WITH LICENSEE AS LICENSEE MAY REQUEST IN ANY SUCH DEFENSE, AT LICENSEE’S REQUEST AND
EXPENSE.

	9.02	 	Representation. SYSTEM represents that it owns and has title to PATENT RIGHTS and has the
full right and power to grant the license set forth in Article 2.01, and that there are no
outstanding agreements, assignments, or encumbrances inconsistent with the provisions of this
Agreement. SYSTEM MAKES NO OTHER REPRESENTATIONS AND EXTENDS NO OTHER WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, NOR DOES SYSTEM ASSUME ANY OBLIGATIONS WITH RESPECT TO
INFRINGEMENT OF PATENT RIGHTS OR OTHER RIGHTS OF THIRD PARTIES DUE TO LICENSEE’S ACTIVITIES
UNDER THIS AGREEMENT.

ARTICLE X — NOTICES

			
	 	 	 
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	10.01	 	Notices. Payments, notices, or other communications required by this Agreement shall be
sufficiently made or given if mailed by certified First Class United States mail, postage
pre-paid, or by commercial carrier (e.g., FedEx, UPS, etc.) when such carrier maintains
receipt or record of delivery, addressed to the address stated below, or to the last address
specified in writing by the intended recipient.
	 
	 	 	If to SYSTEM:

Director, Licensing and Intellectual Property

Office of Technology Commercialization

800 Raymond Stotzer Parkway, Suite 2020

College Station, TX 77845

Phone: (979) 847-8682

Fax: (979) 845-1402

	 	 	 

	If to LICENSEE for Legal Matters:

	 	for Financial Matters:
	         Director of Business Development

	 	Director of Business Development
	         cc: Legal Department

	 	cc: Chief Financial Officer
	         Ceres, Inc.

	 	Ceres, Inc.
	         1535 Rancho Conejo Blvd.

	 	1535 Rancho Conejo Blvd.
	         Thousand Oaks, CA 91320

	 	Thousand Oaks, CA 91320

ARTICLE XI — MISCELLANEOUS PROVISIONS

	11.01	 	Notice of Infringement. SYSTEM and LICENSEE shall promptly notify one another in writing of
any alleged infringement of any PATENT RIGHTS. Within thirty (30) days after receipt of such
notice, SYSTEM and LICENSEE shall formulate a strategy for resolving the alleged infringement.
LICENSEE acknowledges that SYSTEM’s involvement, participation, and representation in any
litigation requires the prior written consent of SYSTEM and the Attorney General of the State
of Texas, and subject to the granting of that consent, SYSTEM may be joined as a party in any
action brought by LICENSEE, so long as LICENSEE shall pay all of SYSTEM’s reasonable costs and
expenses. LICENSEE will have the right, at its own discretion and expense, to take any action
to enforce and to initiate and prosecute suits for infringement PATENT RIGHTS covering jointly
owned Subject Inventions. LICENSEE and SYSTEM will consult with each other upon a course of
action and enforcement strategy. LICENSEE will be responsible for the conduct of any such
enforcement action, and SYSTEM will reasonably cooperate with LICENSEE to effect the
enforcement action, and if appropriate, determine a settlement position. LICENSEE shall be
responsible for retaining counsel but will consult with SYSTEM and retain counsel reasonably
acceptable to SYSTEM. For purposes of settlement, LICENSEE shall be the contact with the
Parties’ counsel as well as the opposing Party(ies) and shall have the right to enter into
settlements, subject to the prior written consent of SYSTEM if such settlement involves any
admission adverse to LICENSEE or SYSTEM and further, if required by applicable law, of the
Attorney General of the State of Texas, in the case of SYSTEM such consent not to be
unreasonably withheld and to be provided to LICENSEE within ten (10) business days of receipt
of LICENSEE’s written request. LICENSEE shall keep SYSTEM advised as to all developments with
respect to the enforcement action and settlement discussions, which
includes supplying to SYSTEM copies of all papers received and filed in sufficient time for
SYSTEM to comment thereon. SYSTEM may attend any and all meetings with the Parties’
counsel and the opposing side for settlement purposes. If necessary, and subject to 

 
			
	 	 	 
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	 	 	the consent of the Attorney General of the State of Texas, SYSTEM agrees to enter into a joint
defense agreement. Any damages received by LICENSEE as a result of an enforcement action
of rights to jointly owned Subject Inventions, after deduction of all enforcement related
costs incurred by LICENSEE, shall be considered as NET SALES or LICENSE INCOME, as
appropriate, for the purpose of remuneration payments to SYSTEM.

	11.02	 	Export Controls. It is understood that SYSTEM is subject to United States laws and
regulations controlling the export of technical data, computer software, laboratory prototypes
and other commodities, and that its obligations hereunder are contingent on compliance with
applicable United States export laws and regulations. The transfer of certain technical data
and commodities may require a license from the cognizant agency of the United States
Government or written assurances by LICENSEE that LICENSEE shall not export data or
commodities to certain countries without prior approval of such agency. SYSTEM neither
represents that a license shall not be required nor that, if required, it shall be issued.

	11.03	 	Confidential Information. Sales reports submitted by LICENSEE under Article VII and audit
reports made pursuant to Article 7.04 shall be considered as Confidential Information under
this Agreement and shall not be disclosed by SYSTEM to any third party except as may be
required in response to a valid order of a court or other government body of the United States
or any political subdivision thereof, as required under the Texas Public Information Act.
Should the Parties contemplate exchange of other information of a confidential nature, they
shall enter into a separate confidentiality agreement.

	11.04	 	Non-Use of Names. LICENSEE shall not use the names of The Texas A&M University System, nor
of any of its employees or components, nor any adaptation thereof, in any advertising,
promotional or sales literature without the prior written consent obtained from SYSTEM in each
case, except that LICENSEE may state that it is licensed by SYSTEM under PATENT RIGHTS.

	11.05	 	Trademarks. LICENSEE may select, own and use its own trademark on LICENSED PRODUCTS.
However, nothing herein shall be construed as granting to LICENSEE any license or other right
under any trade name, trademark, or service mark owned or licensed by SYSTEM. Conversely,
SYSTEM shall have no rights to trade names, trademarks, or service marks owned by LICENSEE.

	11.06	 	Assignment of this Agreement. This Agreement binds and enures to the benefit of the
Parties, their successor or assigns, but may not be assigned by either Party without the prior
written consent of the other Party; provided however, LICENSEE shall have the right to assign
its rights and obligations under this Agreement to any AFFILIATED COMPANY without such prior
consent, but with written notice to SYSTEM. LICENSEE shall also have the right to assign its
rights and obligations under this Agreement to a third party in conjunction with the transfer
to such third party of substantially all of the assets of LICENSEE associated with performance
under this Agreement without such prior consent.

	11.07	 	Force Majeure. Other than an obligation for the payment of money, SYSTEM, upon receipt of
documentation from LICENSEE which it deems appropriate, shall excuse any
breach of this Agreement, which is proximately caused by war, strike, act of God, or other
similar circumstance normally deemed outside the control of well-managed businesses.

			
	 	 	 
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	11.08	 	Entire Agreement. Other than the ARSRA and the IPRA and any licenses issued by SYSTEM to
CERES thereunder, this Agreement contains the entire understanding of the Parties with respect
to PATENT RIGHTS, and supersedes all other written and oral agreements between the Parties
with respect to PATENT RIGHTS. It may be modified only by a written amendment signed by the
Parties.

	11.09	 	Governing Law. The validity, interpretation, and enforcement of this Agreement shall be
governed and determined by the laws of the State of Texas, excluding the conflict of laws
rules which might require the application of the laws of another jurisdiction.

	11.10	 	Disputes.

A. The Parties shall make every possible attempt to resolve in an amicable manner all
disputes between the Parties concerning the interpretation of this Agreement.

B. The Parties must use the dispute resolution process provided in Chapter 2260, Texas
Government Code, and the related rules adopted by the Texas Attorney General to attempt to
resolve any claim for breach of contract made by LICENSEE that cannot be resolved in the
ordinary course of business. LICENSEE must submit written notice of a claim of breach of
contract under this Chapter to B.J. Crain, Associate Vice Chancellor, who will examine
LICENSEE’s claim and any counterclaim and negotiate with LICENSEE in an effort to resolve
the claim.

	11.11	 	Headings. Headings appear solely for convenience of reference. Such headings are not part
of, and shall not be used to construe, this Agreement.

	11.12	 	No Waiver; Severability. No waiver of any breach of this Agreement shall constitute a
waiver of any other breach of the same or other provision of this Agreement and no waiver
shall be effective unless made in writing. This Agreement, to the greatest extent
possible, shall be construed so as to give validity to all of the provisions hereof. If any
provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent
jurisdiction or is deemed unenforceable under the current applicable law from time to time in
effect during the term of this Agreement, the remainder of this Agreement will not be affected
or impaired thereby and will continue to be construed to the maximum extent permitted by law.
In lieu of each provision which is invalid, illegal or unenforceable, there will be
substituted or added as part of this Agreement by mutual written agreement of the Parties, a
provision which will be as similar as possible, in economic and business objectives as
intended by the Parties to such invalid, illegal or unenforceable provision, but will be
valid, legal and enforceable.

	11.13	 	Damages. Neither Party shall be liable for indirect, special, remote, incidental or
consequential damages or loss of profit in connection with this Agreement or its
implementation.

ARTICLE XII — CONFIDENTIALITY

	12.01	 	As used in this Agreement, the term “Confidential Information” shall mean all
non-public-information received by one Party from the other in the framework of this
Agreement. Confidential Information may include, but is not limited to, information

			
	 	 	 
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	 	 	concerning the disclosing Party’s operations, research, processes, techniques, data, sales,
marketing, promotion and other activities. Any reports provided by LICENSEE to SYSTEM
pursuant to this Agreement are Confidential Information. Confidential Information
disclosed that Discloser, in good faith, regards as confidential and/or proprietary shall be
clearly marked as “Confidential,” “Proprietary,” or bear any other appropriate notice
indicating the sensitive nature of such Confidential Information. Any Confidential
Information not easily marked, including Confidential Information that may be orally
disclosed, shall, within thirty (30) days of its disclosure, be referenced in writing and
designated confidential by Discloser.

	12.02	 	Sales reports submitted by LICENSEE under Article VII and audit reports made pursuant to
Article 7.04 shall be considered as Confidential Information under this Agreement and shall
not be disclosed by SYSTEM to any third party except as may be required in response to a valid
order of a court or other government body of the United States or any political subdivision
thereof, as required under the Texas Public Information Act. Should the Parties contemplate
exchange of other information of a confidential nature, they shall enter into a separate
confidentiality agreement.

	12.03	 	From receipt to five (5) years after the disclosure of the relevant Confidential
Information, the receiving Party shall not use, except as is expressly allowed by this
Agreement, and/or disclose any Confidential Information to any third party without the prior
written consent of the disclosing Party. Confidential Information shall only be made
accessible to each Party’s employees and/or agents on a need-to-know basis.

	12.04	 	The receiving Party shall have no obligations of confidentiality for information that: can
be established through clear and convincing evidence to be in the possession of the receiving
Party prior to the disclosure by the disclosing Party; is or becomes public knowledge through
no fault of the receiving Party; is acquired from others not under an obligation of
confidentiality to the disclosing Party; and/or was independently developed by the receiving
Party as demonstrated by clear and convincing evidence prepared contemporaneously with such
independent development. In addition, LICENSEE shall have the right to use and disclose
SYSTEM Confidential Information (a) as required to file for INTELLECTUAL PROPERTY RIGHTS, (b)
as required to exercise its commercialization rights granted in or on the basis of this
Agreement and for related marketing activities, (c) as required by laws, rules or regulations
or court orders such as, without limitation, SEC or IRS regulations, or (d) in LICENSEE’S
reasonable judgment, to (potential) investors and business partners. Further, SYSTEM shall
have the right to use and disclose LICENSEE Confidential Information if any such information
is ordered produced or disclosed by a court or administrative body of competent jurisdiction
or otherwise required by law, or required to be disclosed by the Attorney General of The State
of Texas, but only to the extent of such required production or disclosure. To the extent
reasonably possible SYSTEM will give prior written notice of such required production or
disclosure to LICENSEE and if so requested by LICENSEE, use reasonable efforts to obtain
confidential treatment of the information disclosed to the maximum extent possible.

     The Parties have caused this Agreement to become effective as of the date last executed below.

			
	 	 	 
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	For Ceres, Inc. (“CERES”)	 	 	 	For The Texas A&M University System
(“TAMUS”)
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:	 	 	 	Brett Cornwell
	Title:	 	 	 	Associate Vice Chancellor for Commercialization
	Date:

	 	 	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	For Ceres, Inc. (“CERES”)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

			
	 	 	 
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ANNEX I

to the Example License Agreement for Subject Inventions

between Ceres, Inc. and The Texas A&M University System

Royalty Report

[template to be developed during negotiations of license]

			
	 	 	 
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Appendix B

to the Amended and Restated Intellectual Property Rights Agreement

between Ceres, Inc. and The Texas A&M University System

Example License Agreement for Lines

LINE LICENSE AGREEMENT

Between

Ceres, Inc.

and

The Texas A&M University System

     This agreement (“Agreement”) is made and entered into by and between Ceres, Inc., a
corporation with principal offices in Thousand Oaks, California, (“LICENSEE”) and The Texas A&M
University System with principal offices in College Station, Texas, (“SYSTEM”), an agency of the
State of Texas, collectively referred to as “Parties” and individually as “Party.”

WITNESSETH:

     WHEREAS, SYSTEM, through The Texas Agricultural Experiment Station (a member of SYSTEM, and
now known as Texas AgriLife Research) (“AGRILIFE”), and LICENSEE have entered into an Amended and
Restated Sponsored Research Agreement dated [insert final ARSRA date] (the “ARSRA”) as well as an
associated Amended And Restated Intellectual Property Rights Agreement dated as of August 29, 2007
(“IPRA”);

     WHEREAS, one or more LINES (as defined hereinafter) have been created by SYSTEM and used by
LICENSEE pursuant to the ARSRA;

     WHEREAS, SYSTEM desires that the LINES be commercialized for the public benefit and welfare;

     WHEREAS, SYSTEM has provided the LINES to LICENSEE and LICENSEE has created the HYBRIDS, NEW
PARENTAL LINES, and/or DERIVATIVES (as defined hereinafter);

     WHEREAS, the HYBRIDS, NEW PARENTAL LINES, and/or DERIVATIVES, as applicable, are ready to be
commercialized;

     WHEREAS, LICENSEE has represented that it has certain marketing, engineering and financial
capabilities, and that it shall commit itself to a thorough and diligent program of development and
commercialization of the LINES and HYBRIDS, NEW PARENTAL LINES, and/or DERIVATIVES for public
benefit; and

			
	 	 	 
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     WHEREAS, SYSTEM is willing to grant to LICENSEE, and LICENSEE is willing to accept, a license
to use the LINES, upon the terms and conditions set forth below.

     NOW THEREFORE, in consideration of the mutual covenants and premises contained in this
Agreement, the receipt and sufficiency of which is acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

	1.01	 	“AFFILIATED COMPANY” shall mean any company owned or controlled by, under common control with
or controlling LICENSEE, “control” meaning in this context the direct or indirect ownership of
more than fifty percent (50%) of the voting stock/shares of a company, or the power to
nominate at least half of the directors.

	1.02	 	“AGRILIFE GENETIC CONTRIBUTION” shall mean, for any specific HYBRID, DERIVATIVE or NEW
PARENTAL LINE: (a) the proportion of the nuclear genes of the HYBRID, DERIVATIVE or the NEW
PARENTAL LINE, as applicable, arisen from LINES, based on genetic contribution as determined
by pedigree as defined in the ARSRA; (b) a contribution to be determined on a case-by-case
basis in each case where a specific valuable phenotype of that HYBRID, DERIVATIVE or the NEW
PARENTAL LINE, as applicable, is attributable to specific ALLELE(s) optioned or licensed to
LICENSEE by SYSTEM; and (c) OTHER CONTRIBUTIONS from AGRILIFE.

	1.03	 	“ALLELE” shall mean a particular form of one or more genes determinant for a valuable
characteristic of a plant (e.g. drought tolerance, specific flowering time), discovered in the
Program as defined under the ARSRA by SYSTEM or by SYSTEM and LICENSEE jointly; provided that
the particular form of such gene or genes is covered by a VALID CLAIM.

	1.04	 	“BUSINESS YEAR” shall mean the twelve (12)-month period beginning September 1 and ending
August 31 of the following calendar year (e.g. the 2011 BUSINESS YEAR runs from September 1,
2010 through August 31, 2011.). LICENSEE may request from time to time to amend the starting
and ending dates defined as the BUSINESS YEAR as may be reasonable for the conduct of
LICENSEE’s business. Such amendment must be mutually agreed to in writing by the Parties.

	1.05	 	“COMMERCIAL SEED” shall mean seed of HYBRIDS that is sold for purposes other than the
production of propagating material.

	1.06	 	“DERIVATIVES” means plants made by a Receiving Party from the Original Materials (as defined
in the ARSRA) of the other Party through traditional or artificial means, excluding, however,
PROGENY of the Original Materials. DERIVATIVES further means any plant part or seed of
DERIVATIVES or biological samples derived from DERIVATIVES, or any PROGENY of DERIVATIVES.

	1.07	 	“EFFECTIVE DATE” shall mean the date this Agreement has been executed by the last Party.

	1.08	 	“EXISTING HYBRIDS” shall mean those HYBRIDS designated as [Identify one or more which are
subject of this license], developed and owned by LICENSEE prior to the EFFECTIVE DATE.

			
	 	 	 
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	1.09	 	“HYBRID” shall mean a seed or plant that has resulted from genetic crossbreeding between two
or more lines where those lines include (i) the LINE or (ii) one or more NEW PARENTAL LINES.

	1.10	 	“INTELLECTUAL PROPERTY RIGHTS” shall mean all rights in any patent, plant variety protection
certification, plant breeders’ rights, or any applications thereof, or any other intellectual
property protection, covering the LINES, HYBRIDS, DERIVATIVES, or NEW PARENTAL LINES, that may
be filed or exist in any jurisdiction in the world, with the exception of trademarks and
service marks. A list of such INTELLECTUAL PROPERTY RIGHTS will be more specifically included
in ANNEX I, which may be amended from time to time as provided in Article 6.05 and
evidenced in writing.

	1.11	 	“LICENSE INCOME” shall mean the amount actually received by either LICENSEE or any AFFILIATED
COMPANY in consideration for the grant of sublicenses to sublicensees that are not AFFILIATED
COMPANIES to the LINES or any HYBRID, DERIVATIVE or NEW PARENTAL LINE to exploit the same and
to produce and sell COMMERCIAL SEED, including up-front fees, lump sum payments and any
running royalties on a product-by-product and jurisdiction-by-jurisdiction basis.

	1.12	 	“LINE” and “LINES” shall mean [describe one or more Lines to be licensed, as applicable] of
the sorghum lines designated as [identify], which were created by SYSTEM either prior to the
conduct of the SRA (as defined in the ARSRA) or during the Program as defined in the ARSRA and
in which SYSTEM has ownership rights, and new genetic lines or populations developed by
LICENSEE through further selection within the LINES, as distinguished from crossing followed
by selection. LINE or LINES includes PROGENY.

	1.13	 	“NEW PARENTAL LINES” shall mean new genetic lines or populations which are developed by
breeding by LICENSEE and which has one or more of the LINES as a progenitor.

	1.14	 	“NET SALES” shall mean LICENSEE’s and AFFILIATED COMPANIES’ receipts for sales of COMMERCIAL
SEED or for SERVICES requiring the use of the LINES, to a bona fide, arms length customer,
less the sum of the following:

	 	(a)	 	sales taxes, tariffs, duties and/or use taxes directly
imposed with reference to particular sales;
	 
	 	(b)	 	outbound transportation prepaid or allowed, shipping,
packaging, cost of insurance in transit paid by LICENSEE or an AFFILIATED
COMPANY;
	 
	 	(c)	 	amounts allowed or credited on returns;
	 
	 	(d)	 	customary trade, quantity or cash discounts;
	 
	 	(e)	 	cost of any coating materials or treatments that may have
been applied to the COMMERCIAL SEED; and
	 
	 	(f)	 	other deductions which are appropriate to sales of the
LICENSED PRODUCTS may be included by mutual agreement of the Parties, to be
specified in ANNEX II to this Agreement.

	 	 	No deductions shall be made for commissions paid to individuals whether independent sales
agencies or regularly employed by LICENSEE. The value of sample size quantities

			
	 	 	 
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	 	 	of seed provided for demonstration, marketing or research purposes shall not be included in
NET SALES. Where there is no identifiable sale price (except for samples as referred to in
the previous sentence), or when COMMERCIAL SEED is sold to other than a bona fide, arms
length customer of LICENSEE or an AFFILIATED COMPANY, LICENSEE or the AFFILIATED COMPANY
shall be deemed to have received an amount of NET SALES calculated based on the final sale
of the COMMERCIAL SEED to an independent third party. If no such current price is
available, a hypothetical fair market value price will be determined by the Parties jointly
in good faith for the purpose of calculating NET SALES. Further, TRAIT FEES, if any, net
of any applicable deductions, shall be added to NET SALES if related to a trait contributed
by SYSTEM. NET SALES shall not include sales of COMMERCIAL SEED by LICENSEE to any
AFFILIATED COMPANY, by any AFFILIATED COMPANY to LICENSEE, or by any AFFILIATED COMPANY to
any other AFFILIATED COMPANY, except if the entity to which the COMMERCIAL SEED is sold is
the end user of such COMMERCIAL SEED.

	1.15	 	“OTHER CONTRIBUTIONS” shall mean (i) intellectual and technical contributions to the
development of the LINES or if from LICENSEE, to the development of the LINES, DERIVATIVES,
NEW PARENTAL LINES or HYBRIDS such as, without limitation, markers, gene-trait association
knowledge or composition knowledge, that inform the breeding and selection process, or
transgenic traits and (ii) financial contributions to the development of the LINES, or if from
LICENSEE, to the development of the LINES, NEW PARENTAL LINES, DERIVATIVES, or HYBRIDS.

	1.16	 	“PROGENY” shall mean the offspring of a plant produced through asexual propagation or sexual
multiplication or maintenance where such offspring is not substantially genetically different
from such plant.

	1.17	 	“SERVICE” shall mean any transaction with a third party in which LICENSEE or an AFFILIATED
COMPANY performs certain activities on behalf and at the request of a third party that would
if not performed by LICENSEE or an AFFILIATED COMPANY require a license under SYSTEM’S
INTELLECTUAL PROPERTY RIGHTS licensed hereunder, in exchange for payment, but excluding any
research collaboration or sponsored research agreement.

	1.18	 	“TRAIT FEE” shall mean any upfront or annual fee collected by LICENSEE or any AFFILIATED
COMPANY in conjunction with NET SALES as an additional remuneration for the sale of COMMERCIAL
SEED that has a particular valuable trait or characteristic.

	1.19	 	“VALID CLAIM” shall mean a claim of a patent application or patent owned or co-owned by
SYSTEM, which claim has been maintained and has not expired and which has not been declared
invalid or unenforceable by a competent court or authority in a final judgment against which
no appeal to a court or authority having mandatory jurisdiction is possible or the term for
any such appeal has expired without the appeal being filed.

ARTICLE II — LICENSE GRANT

	2.01	 	Grant of Rights in LINES. Subject to the reservations in Article 2.02, SYSTEM grants to
LICENSEE and its AFFILIATED COMPANIES an exclusive world-wide license and right, including a
license under SYSTEM’s rights and interest in any INTELLECTUAL

			
	 	 	 
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	 	 	PROPERTY RIGHTS covering the LINES, DERIVATIVES, and/or HYBRIDS (i) to maintain and
increase seed of the LINES; (ii) to develop NEW PARENTAL LINES; (iii) to develop
DERIVATIVES, and/or HYBRIDS; and (iv) to produce and sell COMMERCIAL SEED, and to grant
sublicenses of the same scope, including the right to sublicense use of NEW PARENTAL LINES,
DERIVATIVES, and/or HYBRIDS to the end of the term of this Agreement as prescribed in
Article VIII.

	2.02	 	Reservation. SYSTEM reserves an irrevocable, worldwide, nonexclusive, royalty-free right to
practice the grant made in Article 2.01 under (i), (ii) and (iii) for research, demonstration
and educational purposes only, and not for commercial purposes or for the commercial benefit
of third parties. SYSTEM shall comply with the provisions of the ARSRA, and the IPRA, when
exercising this right..

	2.03	 	[if applicable] Government Reservation. Rights under this Agreement are subject to rights
required to be granted to the Government of the United States of America pursuant to 35 USC
Section 200-212, including a nonexclusive, nontransferable, irrevocable, paid-up license to
practice or have practiced for or on behalf of the United States any patented LINES throughout
the world.

ARTICLE III — CONSIDERATION

	3.01	 	Up-front Fee. As consideration for the license granted in this Agreement, LICENSEE shall pay
a single up-front fee of [identify word and number amount].

	3.02	 	Royalty Rate. In addition, LICENSEE shall pay SYSTEM a royalty on NET SALES of COMMERCIAL
SEED of each HYBRID, which will be calculated in accordance with this Article 3.02. Whenever a
particular HYBRID, or for sublicensing purposes, a particular DERIVATIVE and/or NEW PARENTAL
LINE is ready for commercial release, LICENSEE will notify SYSTEM thereof, and provide the
applicable royalty rate based on the principles set forth in this Article 3.02 with
information on the calculation of such rate.

	 	a)	 	Base Rate. Where the COMMERCIAL SEED is of a HYBRID which is entirely
composed of AGRILIFE GENETIC CONTRIBUTION, and no OTHER CONTRIBUTIONS from LICENSEE,
the royalty rate shall be [identify word and number amount] (XX%) of NET SALES if the
HYBRID results solely from the LINE or LINES and another line licensed under the same
terms and conditions regarding royalty payments from SYSTEM;
	 
	 	 	 	If a HYBRID is not entirely composed of AGRILIFE GENETIC CONTRIBUTION, the royalty
rate shall be calculated by taking the base rate specified in this Article 3.02(a),
and reducing the applicable base rate in function of the dilution of the AGRILIFE
GENETIC CONTRIBUTION in such HYBRID by:

	 	—	 	OTHER CONTRIBUTIONS from LICENSEE; and
	 
	 	—	 	crossing of the LINE OR LINES which is or are a progenitor of
such HYBRID with other germplasm, including, but not limited to
DERIVATIVES, and/or NEW PARENTAL LINES.

			
	 	 	 
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	 	 	 	On the basis of the foregoing calculation, the royalty rate on NET SALES for the
EXISTING HYBRIDS is [insert word and number amount] (this should be specified here
since the EXISTING HYBRIDS are defined/known at time of execution). The applicable
royalty rate for other HYBRIDS, DERIVATIVES, or NEW PARENTAL LINES created using
the LINES will be determined using the process described in this Article 3.02.
	 
	 	b)	 	No royalties shall be due with respect to HYBRIDS, DERIVATIVES, or NEW
PARENTAL LINES that contain less than five percent (5%) AGRILIFE GENETIC CONTRIBUTION
and contain no specific ALLELE(s).
	 
	 	c)	 	If SYSTEM has any comments or questions concerning LICENSEE’s applicable
royalty rate for a HYBRID, DERIVATIVE, or NEW PARENTAL LINE, SYSTEM will inform
LICENSEE thereof in writing within thirty (30) days from the date of LICENSEE’s
notification and the Parties will discuss in good faith. If SYSTEM does not respond
in writing to the aforementioned notification of LICENSEE within thirty (30) days, the
royalty rates in such notification shall be final. If a dispute regarding the royalty
rate arises that cannot be resolved amicably within thirty (30) days after LICENSEE’s
aforementioned notification, the following procedures shall apply: such dispute shall
be referred to a mutually agreed expert whose decision shall be final. Each Party
shall submit to the expert within fifteen (15) days of his appointment its position in
writing on the appropriate royalty rate. Such expert shall be required to choose the
one of such two (2) party positions that the expert considers most reasonable in the
circumstances and shall not make any independent determination (“Royalty Expertise
Procedure”).

	3.03	 	Minimum Annual Consideration. In order to maintain this exclusive license to the LINE,
LICENSEE shall pay to SYSTEM minimum annual consideration as follows:

	 	(a)	 	for the 20___ BUSINESS YEAR: no payment will be due;
	 
	 	(b)	 	for the 20__ BUSINESS YEAR: [identify word and number amount]; and
	 
	 	(c)	 	for the 20__ BUSINESS YEAR until [the 20___ BUSINESS YEAR or termination or
expiration of this Agreement]: [identify word and number amount] per BUSINESS YEAR.

	 	 	LICENSEE’S payment of royalties for a BUSINESS YEAR due under Articles 3.02 and 4.02, shall
be credited against the minimum annual consideration due in respect of such BUSINESS YEAR
pursuant to this Article 3.03. In the event that LICENSEE’s payment of royalties for a
BUSINESS YEAR due under Articles 3.02 and 4.02 do not meet or exceed the required minimum
annual consideration, as specified in this Article, LICENSEE’s royalty payment for the
BUSINESS YEAR shall include payment of the balance needed to achieve the required minimum.
In the event this Agreement expires or is terminated prior to the end of a BUSINESS YEAR,
the corresponding minimum annual consideration provided for in this Article shall be
prorated for that BUSINESS YEAR.
	 
	3.04	 	Intellectual Property Rights. The royalties and other payments due under Articles III and IV
of this Agreement are in consideration of all INTELLECTUAL PROPERTY RIGHTS listed in ANNEX I.
As additional consideration for the license granted in this Agreement,

			
	 	 	 
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	 	 	LICENSEE shall bear the reasonable documented expenses incurred in the filing, prosecution
and maintenance of INTELLECTUAL PROPERTY RIGHTS on which an exclusive license is granted
pursuant to Article 2.01, as further described in
Article VI.

	3.04	 	Non-exclusive License Royalty Rate. If an exclusive license on a LINE, which is a parental
line of the HYBRID of which COMMERCIAL SEED is sold, reverts to or is non-exclusive pursuant
to Article 5.02 or any other applicable provisions or upon LICENSEE’s election, a lower
royalty rate not to exceed fifty percent (50%) of the exclusive royalty rate shall be
negotiated in good faith between the Parties. The start of such negotiations shall be
evidenced by written notice from one Party to the other initiating such negotiations, and such
negotiations shall not extend beyond ninety (90) days from the start thereof without the
mutual consent of both Parties (“Negotiation Period”). If the Parties fail to reach agreement
within the Negotiation Period, the non-exclusive royalty rate shall be settled in accordance
with the following procedures: the disputed royalty rate shall be referred to a mutually
agreed impartial expert whose decision shall be final. Each Party shall submit to the expert
within fifteen (15) days of his appointment its position in writing on the disputed royalty
rate. Such expert shall be limited to choosing the one of such two (2) party positions that
the expert considers most reasonable in the circumstances and shall not make any other
determination. Neither Party shall be bound by any determination by the expert which, in the
opinion of Party’s counsel, will result or be likely to result in that Party violating any
applicable law or regulation.

	3.05	 	Royalty Duration. The license granted under this Agreement in respect of the LINES shall be
deemed to be fully paid up, and no further amounts shall be due or payable by LICENSEE under
this Agreement in respect of such LINE or LINES (including, without limitation, in respect of
any HYBRID, DERIVATIVE or NEW PARENTAL LINE), on a country-by-country basis, with effect from
(a) the expiration of all registered or patented INTELLECTUAL PROPERTY RIGHTS solely or
jointly owned by SYSTEM covering such LINE in such country, or (b) in countries where the LINE
which is not covered by any registered or patented INTELLECTUAL PROPERTY RIGHTS solely or
jointly owned by SYSTEM in such country, the expiration of all registered or patented
INTELLECTUAL PROPERTY RIGHTS solely or jointly owned by SYSTEM covering such LINE in the
United States of America.

ARTICLE IV —SUBLICENSES

	4.01	 	Sublicenses. LICENSEE and its AFFILIATED COMPANIES may grant sublicenses to persons, firms or
corporations under such conditions as it may arrange, subject to terms and conditions
consistent with this Agreement, as long as each such sublicense is not repugnant to the public
policies of SYSTEM, the State of Texas, or the United States.

	4.02	 	Sublicensee Consideration. LICENSEE shall pay to SYSTEM a royalty on LICENSE INCOME as
follows:

	 	a)	 	Base Rate. Where the sublicense is for a HYBRID, DERIVATIVE or a LINE which
is entirely composed of AGRILIFE GENETIC CONTRIBUTION, and no OTHER CONTRIBUTIONS from
LICENSEE, the royalty rate shall be [insert word and number amount] percent (XX%) of
LICENSE INCOME.

			
	 	 	 
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	 	b)	 	If the sublicense is for a HYBRID, DERIVATIVE or LINE that is not entirely
composed of AGRILIFE GENETIC CONTRIBUTION, or for a NEW PARENTAL LINE, the royalty
rate shall be calculated by taking:

	 	(i)	 	the base rate specified in Article 4.02(a);
	 
	 	(ii)	 	and reducing the applicable base rate in function of the
dilution of the AGRILIFE GENETIC CONTRIBUTION in such HYBRID, LINE or NEW
PARENTAL LINE by:

	 	—	 	 OTHER CONTRIBUTIONS from LICENSEE, and
	 
	 	—	 	 in the case of HYBRIDS, the crossing of the LINE which is a
progenitor of such HYBRID with other germplasm, including, but not
limited to, DERIVATIVES, and/or NEW PARENTAL LINES.

On the basis of the foregoing calculation, the royalty rate on LICENSE INCOME for
the EXISTING HYBRIDS is [insert word and number amount] percent (XX%). For other
HYBRIDS, DERIVATIVES, or NEW PARENTAL LINES created using the LINES, the process
for determining the applicable royalty rate as described in this Article 4.02 and
as defined in Articles 3 and 4 of Appendix B of the IPRA in effect upon the
EFFECTIVE DATE of this Agreement shall be used.

	4.03	 	Reporting. LICENSEE shall notify SYSTEM of the grant of sublicense to a third party and
provide a redacted copy of the sublicense to SYSTEM. LICENSEE shall not redact any
information unless it could be reasonably considered sensitive to LICENSEE’s business. Upon
reasonable notice by SYSTEM, SYSTEM may through an attorney-at-law review an unredacted copy
of the sublicense but shall not provide any redacted information to business persons within
SYSTEM. LICENSEE shall also provide SYSTEM with the name, address and scope of each
sublicense and a copy of each sublicensee’s report as is pertinent to calculation of amounts
due SYSTEM under this Agreement.

	4.04	 	Non-Cash Transactions. Where there is no identifiable LICENSE INCOME, a hypothetical fair
market value price will be determined by the Parties jointly in good faith for the purpose of
calculating LICENSE INCOME.

ARTICLE V — LICENSEE RESPONSIBILITIES

	5.03	 	Diligence. LICENSEE will use commercially reasonable efforts to actively market the EXISTING
HYBRIDS and will provide a non-binding marketing plan to SYSTEM reflecting its marketing
efforts within ninety (90) days from the EFFECTIVE DATE. LICENSEE will provide annual updates
of such marketing plan.

	5.04	 	Failure to Maintain Diligence. Minimum diligence requirements for the LINE shall be satisfied
by the payment of the minimum annual consideration amounts for the prescribed BUSINESS YEARS
set forth in Article 3.03. If LICENSEE fails to pay to SYSTEM the prescribed minimum annual
consideration within thirty (30) days after the receipt of a written notice from SYSTEM
notifying LICENSEE of the payment failure, SYSTEM shall have the right to convert the license
granted to LICENSEE with respect to each LINE to non-exclusive, by written notice to LICENSEE.

			
	 	 	 
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	5.05	 	Legal Compliance. LICENSEE must comply with all applicable federal, state and local laws and
regulations in its exercise of all rights granted to it by SYSTEM under this Agreement.

	5.06	 	[if applicable] No Royalties for Sales to U.S. Government. In accordance with 35 USC
Section 200-212, LICENSEE has no duty to pay SYSTEM royalties under this agreement on NET
SALES made to the United States Government, including any United States Government Agency.
LICENSEE shall reduce the amount charged for COMMERCIAL SEED covered by patent applications or
patents licensed under this Agreement sold to the United States Government by an amount equal
to the royalty otherwise due SYSTEM.

	5.07	 	[if applicable] U.S. Manufacture. In accordance with 35 USC Section 200-212, COMMERCIAL SEED
covered by patent applications or patents licensed under this Agreement shall be manufactured
substantially in the United States of America.

ARTICLE VI — INTELLECTUAL PROPERTY

	6.01	 	Filing. LICENSEE will have the right to prepare and file, in consultation with SYSTEM, any
and all applications for patents, plant variety rights or other forms of intellectual property
protection or variety registration, in any jurisdiction throughout the world, for HYBRIDS, the
LINES and NEW PARENTAL LINES, whether solely or jointly owned by SYSTEM. At the request of
LICENSEE, SYSTEM will cooperate fully with LICENSEE by providing information and executing
documents necessary for LICENSEE to conduct the activities concerning the filings, prosecution
and other proceedings anticipated under this paragraph. Applications for patents or plant
variety rights on each particular HYBRID or the LINES shall be filed in the name of SYSTEM
(AGRILIFE) if owned by SYSTEM pursuant to the ARSRA, in the name of LICENSEE (CERES) if owned
by LICENSEE pursuant to the ARSRA and in the joint names of SYSTEM (AGRILIFE) and LICENSEE
(CERES) if jointly owned pursuant to the ARSRA. Applications for patents or plant variety
rights on NEW PARENTAL LINES shall be filed in the name of LICENSEE (CERES). For the avoidance
of doubt, LICENSEE acknowledges that applications filed under this Article 6.01 that are
solely in the name of LICENSEE shall not affect LICENSEE’s obligations to SYSTEM, including
but not limited to LICENSEE’s obligations under Article III with respect to the LINE, HYBRIDS,
and NEW PARENTAL LINES claimed in such applications.

	6.02	 	Abandoning IP Applications. The following rules shall apply with respect to applications for
intellectual property protection on SYSTEM owned or jointly owned LINES or HYBRIDS. If the
Party controlling prosecution intends to abandon any patent plant variety rights, pending or
granted in any jurisdiction, that Party shall first give sufficient written notice to the
other Party to permit the other Party the opportunity to assume such filing, examination
and/or maintenance.

	6.03	 	Jurisdiction. The obligations of this Article 6.03 shall not apply to any jurisdictions in
which the prosecuting Party has elected not to apply for intellectual property protection.
LICENSEE and SYSTEM shall avoid carrying out any act that would prejudice the grant of
INTELLECTUAL PROPERTY RIGHTS. Without limitation, neither Party shall make available
reproductive material of the HYBRIDS or LINE at a date or in a manner that

			
	 	 	 
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	 	 	might jeopardize the right to seek INTELLECTUAL PROPERTY RIGHTS protection for the HYBRIDS
or LINE.

[add sections 6.04-6.08 from Appendix A if patents are licensed under this license.]

	6.04	 	Information. The provisions of this Article shall apply with respect to applications for
intellectual property protection on SYSTEM owned or jointly owned LINE or HYBRIDS. LICENSEE
shall keep SYSTEM promptly and fully informed of the course of patent and plant variety rights
prosecution or other proceedings. LICENSEE shall provide to SYSTEM the opportunity to provide
input to the development of the patent and plant variety rights application(s) and any
official proceedings thereafter. LICENSEE shall disclose to SYSTEM the complete texts of all
patent and plant variety rights applications filed by LICENSEE under INTELLECTUAL PROPERTY
RIGHTS as well as all information received concerning office actions, the institution or
possible institution of any interference, opposition, re-examination, reissue, revocation,
nullification or any other official proceeding involving INTELLECTUAL PROPERTY RIGHTS. If
LICENSEE fails to reasonably incorporate the input of SYSTEM, or fails to keep SYSTEM
informed, LICENSEE, upon the request of SYSTEM, must transfer prosecution of the
application(s) to SYSTEM. Nothing in this Article 6.04 affects LICENSEE’s obligations under
Article 3.04 of this Agreement.

	6.05	 	List of INTELLECTUAL PROPERTY RIGHTS. The list of INTELLECTUAL PROPERTY RIGHTS existing as
of the EFFECTIVE DATE is included in ANNEX I. When either Party files for or obtains
additional INTELLECTUAL PROPERTY RIGHTS, such Party will provide to the other Party an updated
version of ANNEX I, including a list of such additional INTELLECTUAL PROPERTY RIGHTS
and such updated version of ANNEX I will be substituted for the then existing version.

ARTICLE VII — PAYMENTS AND REPORTS

	7.01	 	When Payments are Due. Unless otherwise specified, payments shall be made annually. Payments
shall be made to The Texas A&M University System, in College Station, Texas, not later than
sixty (60) days after the last day of the BUSINESS YEAR in which they accrue.

	7.02	 	Royalty Reports. LICENSEE shall provide a sales report to SYSTEM each BUSINESS YEAR,
providing information sufficient to allow SYSTEM to calculate amounts due to SYSTEM for the
reporting period, in the form attached hereto as ANNEX II.

	7.03	 	Currency. Payment due to SYSTEM shall be paid in U.S. dollars. Royalty payments requiring
conversion shall use the exchange rate as reported in The Wall Street Journal on the
last business day of the royalty reporting period.

	7.04	 	Inspection of Books and Records. At its own expense, SYSTEM may annually inspect LICENSEE’s
books and records as needed to determine royalties payable. LICENSEE shall maintain such books
and records for at least three (3) BUSINESS YEARS following the dates of the underlying
transactions. Any such inspections shall be in confidence and conducted during ordinary
business hours, and SYSTEM will provide LICENSEE prior notice two (2) weeks before making such
inspections. SYSTEM must employ an

			
	 	 	 
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	 	 	independent Certified Public Accountant reasonably acceptable to LICENSEE for this purpose,
who will only report to SYSTEM such information as necessary, to determine royalties
payable to SYSTEM and LICENSEE’s compliance with any related obligations to SYSTEM. If
SYSTEM’s audit identifies a shortage of five percent (5%) or more of amounts due to SYSTEM,
then LICENSEE shall pay the costs of SYSTEM’s audit. LICENSEE shall pay all amounts due as
a consequence of such audit to SYSTEM promptly, with interest.

	7.05	 	Interest Charges. Overdue payments may, at the sole discretion of SYSTEM, be subject to a
daily charge commencing on the 31st day after such payment is due, compounded monthly, at the
rate of either one and one-half percent (1.5%) per month or the highest legal interest rate,
whichever is lower. The payment of such interest will not foreclose SYSTEM from exercising any
other rights it may have as a consequence of the lateness of any payment.

ARTICLE VIII — TERM AND TERMINATION

	8.01	 	Expiration. Subject to any other rights of termination under this Article VIII, this
Agreement shall remain in full force and effect on a country-by-country basis until all
registered or patented INTELLECTUAL PROPERTY RIGHTS solely or jointly owned by SYSTEM and
covering such LINES in such country have expired.

	8.02	 	Termination by Licensee. LICENSEE may terminate this Agreement by providing written notice
to SYSTEM at least ninety (90) days before the termination is to take effect.

	8.03	 	Termination by System. If LICENSEE materially breaches this Agreement, SYSTEM may give
LICENSEE written notice of the breach. LICENSEE shall have a period of sixty (60) days from
receipt of the notice to cure the breach. If LICENSEE does not cure the breach within this
period, SYSTEM may terminate this Agreement in writing without further notice.

	8.04	 	Matters Surviving Termination. All accrued obligations and claims, including reimbursement
of patent expenses, license fee obligations, royalty obligations, minimum annual consideration
obligations, interest charge obligations, and all other financial obligations, and claims or
causes of action for breach of this Agreement, shall survive termination of this Agreement.
Obligations of confidentiality shall survive termination of this Agreement. This section
controls in the case of a conflict with any other section of this Agreement.

ARTICLE IX — INDEMNIFICATION AND REPRESENTATION

	9.01	 	Indemnification. LICENSEE SHALL AT ALL TIMES DURING THE TERM OF THIS AGREEMENT AND
THEREAFTER INDEMNIFY, DEFEND, AND HOLD HARMLESS SYSTEM, ITS REGENTS, OFFICERS, AND EMPLOYEES
AGAINST ANY CLAIM, PROCEEDING, DEMAND, LIABILITY OR EXPENSE (INCLUDING LEGAL EXPENSE AND
REASONABLE ATTORNEYS’ FEES) WHICH RELATES TO INJURY TO PERSONS OR TO PROPERTY, ANY ACTION
BROUGHT BY A THIRD PARTY ALLEGING INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, OR AGAINST ANY
OTHER CLAIM,

			
	 	 	 
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	 	 	PROCEEDING, DEMAND, EXPENSE, AND LIABILITY OF ANY KIND WHATSOEVER RESULTING FROM THE
PRODUCTION, MANUFACTURE, SALE, COMMERCIAL USE, LEASE, CONSUMPTION, OR ADVERTISEMENT OF
COMMERCIAL SEED OR ARISING FROM ANY OBLIGATION OF LICENSEE OR SUBLICENSEE(S) UNDER THIS
AGREEMENT AND NOT CAUSED BY BREACH OF THIS AGREEMENT BY SYSTEM (HEREINAFTER JOINTLY
REFERRED TO AS “CLAIMS”), PROVIDED THAT SYSTEM SHALL PROMPTLY PROVIDE WRITTEN NOTICE OF ANY
CLAIM TO LICENSEE, AND THAT, SUBJECT TO THE APPROVAL OF THE ATTORNEY GENERAL OF THE STATE
OF TEXAS, LICENSEE SHALL HAVE THE RIGHT TO CONDUCT THE DEFENSE OF ANY CLAIM, AND THAT
SYSTEM SHALL COOPERATE WITH LICENSEE AS LICENSEE MAY REQUEST IN ANY SUCH DEFENSE, AT
LICENSEE’S REQUEST AND EXPENSE.

	9.02	 	Representation. SYSTEM represents that it has the full right and power to grant the license
set forth in Article 2.01, and that there are no outstanding agreements, assignments, or
encumbrances inconsistent with the provisions of this Agreement. SYSTEM MAKES NO OTHER
REPRESENTATIONS AND EXTENDS NO OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, NOR DOES SYSTEM ASSUME ANY OBLIGATIONS WITH RESPECT TO INFRINGEMENT OF PATENT RIGHTS
OR OTHER RIGHTS OF THIRD PARTIES DUE TO LICENSEE’S ACTIVITIES UNDER THIS AGREEMENT.

ARTICLE X — NOTICES

	10.01	 	Notices. Payments, notices, or other communications required by this Agreement shall be
sufficiently made or given if mailed by certified First Class United States mail, postage
pre-paid, or by commercial carrier (e.g., FedEx, UPS, etc.) when such carrier maintains
receipt or record of delivery, addressed to the address stated below, or to the last address
specified in writing by the intended recipient.

	 	 	 

	If to SYSTEM:

	 	Director, Licensing and Intellectual Property

Office of Technology Commercialization

800 Raymond Stotzer Parkway, Suite 2020

College Station, TX 77845

Phone: (979) 847-8682

Fax: (979) 845-1402

	 	 	 

	If to LICENSEE for Legal Matters:

	 	for Financial Matters:
	
                        Vice President of Operations

	 	Vice President of Operations
	                        cc: Legal Department

	 	cc: Chief Financial Officer
	                        Ceres, Inc.

	 	Ceres, Inc.
	                        1535 Rancho Conejo Blvd.

	 	1535 Rancho Conejo Blvd.
	                        Thousand Oaks, CA 91320

	 	Thousand Oaks, CA 91320

ARTICLE XI — MISCELLANEOUS PROVISIONS

			
	 	 	 
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	11.01	 	Notice of Infringement. SYSTEM and LICENSEE shall promptly notify one another in writing of
any alleged infringement of any INTELLECTUAL PROPERTY RIGHTS. Within thirty (30) days after
receipt of such notice, SYSTEM and LICENSEE shall formulate a strategy for resolving the
alleged infringement. LICENSEE acknowledges that SYSTEM’s involvement, participation, and
representation in any litigation requires the prior written consent of SYSTEM and the Attorney
General of the State of Texas, and subject to the granting of that consent, SYSTEM may be
joined as a party in any action brought by LICENSEE, so long as LICENSEE shall pay all of
SYSTEM’s reasonable costs and expenses. LICENSEE will have the right, at its own discretion
and expense, to take any action to enforce and to initiate and prosecute suits for
infringement of INTELLECTUAL PROPERTY RIGHTS covering the LINE, HYBRIDS, DERIVATIVES, and/or
NEW PARENTAL LINES. LICENSEE and SYSTEM will consult with each other upon a course of action
and enforcement strategy. LICENSEE will be responsible for the conduct of any such
enforcement action, and SYSTEM will reasonably cooperate with LICENSEE to effect the
enforcement action, and if appropriate, determine a settlement position. LICENSEE shall be
responsible for retaining counsel but will consult with SYSTEM and retain counsel reasonably
acceptable to SYSTEM. For purposes of settlement, LICENSEE shall be the contact with the
Parties’ counsel as well as the opposing Party(ies) and shall have the right to enter into
settlements, subject to the prior written consent of SYSTEM if such settlement involves any
admission adverse to LICENSEE or SYSTEM and further, if required by applicable law, of the
Attorney General of the State of Texas, in the case of SYSTEM such consent not to be
unreasonably withheld and to be provided to LICENSEE within ten (10) business days of receipt
of LICENSEE’s written request LICENSEE shall keep SYSTEM advised as to all developments with
respect to the enforcement action and settlement discussions, which includes supplying to
SYSTEM copies of all papers received and filed in sufficient time for SYSTEM to comment
thereon. SYSTEM may attend any and all meetings with the Parties’ counsel and the opposing
side for settlement purposes. If necessary, and subject to
the consent of the Attorney
General of the State of Texas, SYSTEM agrees to enter into a joint defense agreement. Any
damages received by LICENSEE as a result of an enforcement action of rights to jointly owned
INTELLECTUAL PROPERTY RIGHTS, after deduction of all enforcement related costs incurred by
LICENSEE, shall be considered as NET SALES or LICENSE INCOME, as appropriate, for the
purpose of remuneration payments to SYSTEM.

	11.02	 	Export Controls. It is understood that SYSTEM is subject to United States laws and
regulations controlling the export of technical data, computer software, laboratory prototypes
and other commodities, and that its obligations hereunder are contingent on compliance with
applicable United States export laws and regulations. The transfer of certain technical data
and commodities may require a license from the cognizant agency of the United States
Government or written assurances by LICENSEE that LICENSEE shall not export data or
commodities to certain countries without prior approval of such agency. SYSTEM neither
represents that a license shall not be required nor that, if required, it shall be issued.

	11.03	 	Non-Use of Names. LICENSEE shall not use the names of The Texas A&M University System, nor
of any of its employees or components, nor any adaptation thereof, in any advertising,
promotional or sales literature without the prior written consent obtained from
SYSTEM in each case, except that LICENSEE may state that it is licensed by SYSTEM under
INTELLECTUAL PROPERTY RIGHTS.

			
	 	 	 
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	 	Page 33 of 60

 

 

	11.04	 	Trademarks. LICENSEE may select, own and use its own trademark on COMMERCIAL SEED and in
connection with SERVICES. However, nothing herein shall be construed as granting to LICENSEE
any license or other right under any trade name, trademark, or service mark owned or licensed
by SYSTEM. Conversely, SYSTEM shall have no rights to trade names, trademarks, or service
marks owned by LICENSEE.

	11.05	 	Assignment of this Agreement. This Agreement binds and enures to the benefit of the
Parties, their successor or assigns, but may not be assigned by either Party without the prior
written consent of the other Party; provided however, LICENSEE shall have the right to assign
its rights and obligations under this Agreement to any AFFILIATED COMPANY without such prior
consent, but with written notice to SYSTEM. LICENSEE shall also have the right to assign its
rights and obligations under this Agreement to a third party in conjunction with the transfer
to such third party of substantially all of the assets of LICENSEE associated with performance
under this Agreement without such prior consent.

	11.06	 	Force Majeure. Other than an obligation for the payment of money, SYSTEM, upon receipt of
documentation from LICENSEE which it deems appropriate, shall excuse any breach of this
Agreement, which is proximately caused by war, strike, act of God, or other similar
circumstance normally deemed outside the control of well-managed businesses.

	11.07	 	Entire Agreement. Other than the ARSRA and the IPRA, Existing License Agreements and
Material Transfer Agreements (as defined in the ARSRA), and any license agreement executed
pursuant to [Article 1.A.(1) of the IPRA], this Agreement contains the entire understanding of
the Parties with respect to INTELLECTUAL PROPERTY RIGHTS, and supersedes all other written and
oral agreements between the Parties with respect to INTELLECTUAL PROPERTY RIGHTS. It may be
modified only by a written amendment or agreement signed by the Parties, except as provided in
[Article 6.05].

	11.08	 	Governing Law. The validity, interpretation, and enforcement of this Agreement shall be
governed and determined by the laws of the State of Texas, excluding the conflict of laws
rules which might require the application of the laws of another jurisdiction.

	11.9	 	Disputes.

A. The Parties shall make every possible attempt to resolve in an amicable manner all
disputes between the Parties concerning the interpretation of this Agreement.

B. The Parties must use the dispute resolution process provided in Chapter 2260, Texas
Government Code, and the related rules adopted by the Texas Attorney General to attempt to
resolve any claim for breach of contract made by LICENSEE that cannot be resolved in the
ordinary course of business. LICENSEE must submit written notice of a claim of breach of
contract under this Chapter to B.J. Crain, Associate Vice Chancellor, who will examine
LICENSEE’s claim and any counterclaim and negotiate with LICENSEE in an effort to resolve
the claim.

	11.10	 	Headings. Headings appear solely for convenience of reference. Such headings are not part
of, and shall not be used to construe, this Agreement.

	11.12	 	No Waiver; Severability. No waiver of any breach of this Agreement shall constitute a
waiver of any other breach of the same or other provision of this Agreement and no waiver

			
	 	 	 
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	 	Page 34 of 60

 

 

	 	 	shall be effective unless made in writing. This Agreement, to the greatest extent
possible, shall be construed so as to give validity to all of the provisions hereof. If any
provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent
jurisdiction or is deemed unenforceable under the current applicable law from time to time in
effect during the term of this Agreement, the remainder of this Agreement will not be affected
or impaired thereby and will continue to be construed to the maximum extent permitted by law.
In lieu of each provision which is invalid, illegal or unenforceable, there will be
substituted or added as part of this Agreement by mutual written agreement of the Parties, a
provision which will be as similar as possible, in economic and business objectives as
intended by the Parties to such invalid, illegal or unenforceable provision, but will be
valid, legal and enforceable.

	11.13	 	Damages. Neither Party shall be liable for indirect, special, remote, incidental or
consequential damages or loss of profit in connection with this Agreement or its
implementation.

ARTICLE XII — CONFIDENTIALITY

	12.01	 	As used in this Agreement, the term “Confidential Information” shall mean all
non-public-information received by one Party from the other in the framework of this
Agreement. Confidential Information may include, but is not limited to, information
concerning the disclosing Party’s operations, research, processes, techniques, data, sales,
marketing, promotion and other activities. Any reports provided by LICENSEE to SYSTEM
pursuant to this Agreement are Confidential Information. Confidential Information
disclosed that Discloser, in good faith, regards as confidential and/or proprietary shall be
clearly marked as “Confidential,” “Proprietary,” or bear any other appropriate notice
indicating the sensitive nature of such Confidential Information. Any Confidential
Information not easily marked, including Confidential Information that may be orally
disclosed, shall, within thirty (30) days of its disclosure, be referenced in writing and
designated confidential by Discloser.

	12.02	 	Sales reports submitted by LICENSEE under Article VII and audit reports made pursuant to
Article 7.04 shall be considered as Confidential Information under this Agreement and shall
not be disclosed by SYSTEM to any third party except as may be required in response to a valid
order of a court or other government body of the United States or any political subdivision
thereof, as required under the Texas Public Information Act. Should the Parties contemplate
exchange of other information of a confidential nature, they shall enter into a separate
confidentiality agreement.

	12.03	 	From receipt to five (5) years after the disclosure of the relevant Confidential
Information, the receiving Party shall not use, except as is expressly allowed by this
Agreement, and/or disclose any Confidential Information to any third party without the prior
written consent of the disclosing Party. Confidential Information shall only be made
accessible to each Party’s employees and/or agents on a need-to-know basis.

	12.04	 	The receiving Party shall have no obligations of confidentiality for information that: can
be established through clear and convincing evidence to be in the possession of the
receiving Party prior to the disclosure by the disclosing Party; is or becomes public
knowledge through no fault of the receiving Party; is acquired from others not under an
obligation of confidentiality to the disclosing Party; and/or was independently developed

			
	 	 	 
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	 	 	by the receiving Party as demonstrated by clear and convincing evidence prepared
contemporaneously with such independent development. In addition, LICENSEE shall have the
right to use and disclose SYSTEM Confidential Information (a) as required to file for
INTELLECTUAL PROPERTY RIGHTS, (b) as required to exercise its commercialization rights
granted in or on the basis of this Agreement and for related marketing activities, (c) as
required by laws, rules or regulations or court orders such as, without limitation, SEC or
IRS regulations, or (d) in LICENSEE’S reasonable judgment, to (potential) investors and
business partners. Further, SYSTEM shall have the right to use and disclose LICENSEE
Confidential Information if any such information is ordered produced or disclosed by a
court or administrative body of competent jurisdiction or otherwise required by law, or
required to be disclosed by the Attorney General of The State of Texas, but only to the
extent of such required production or disclosure. To the extent reasonably possible
SYSTEM will give prior written notice of such required production or disclosure to LICENSEE
and if so requested by LICENSEE, use reasonable efforts to obtain confidential treatment of
the information disclosed to the maximum extent possible.

[Signature page follows]

 
			
	 	 	 
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     The Parties have caused this Agreement to become effective as of the date last executed below.

	 	 	 	 	 	 	 	 	 

	CERES, INC.	 	 	 	THE TEXAS A&M UNIVERSITY SYSTEM
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	Brett L. Cornwell
	Title:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Associate Vice Chancellor for

Commercialization
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 	 	 

			
	 	 	 
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ANNEX I

to the Example LINE LICENSE AGREEMENT

between Ceres, Inc. and The Texas A&M University System

LINES

SYSTEM INTELLECTUAL PROPERTY RIGHTS

(include all patent applications/patents (including on Subject Inventions covering Lines), plant

variety protection rights, etc.

			
	 	 	 
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	 	Page 38 of 60

 

 

ANNEX II

to the Example LINE LICENSE AGREEMENT

between Ceres, Inc. and The Texas A&M University System

Royalty Report

Date of report: þ

BUSINESS YEAR of report: þ

HYBRID, DERIVATIVE OR

NEW PARENTAL 

LINE: [identify]

LINE(s): [identify]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Royalty Calculation     
	 	 	 	 	 	 	 	 	 	 	AGRILIFE	 	 
	 	 	 	 	 	 	 	 	 	 	GENETIC	 	 
	 	 	 	 	 	 	OTHER	 	CONTRIBUTION	 	Royalty
	 	 	Base Rate	 	CONTRIBUTIONS*	 	**	 	Rate
	NET SALES
	 	XX%	 	 	0	%	 	 	50	%	 	 	X	%
	LICENSE INCOME
	 	XX%	 	 	0	%	 	 	50	%	 	XX%

	 	 	 
	*OTHER CONTRIBUTIONS
	Name of Contribution	 	Deduction %
	None

	 	None

 

			
	**	 	AGRILIFE GENETIC
CONTRIBUTION
[Additional Information
if Needed]

Total revenue: [$X]

Additional deductions for NET SALES None

NET SALES for BUSINESS YEAR: [$X]

Royalties due on NET SALES: [$X]

LICENSE INCOME for BUSINESS YEAR: [$X]

Royalties due on LICENSE INCOME: [$X]

[If other HYBRIDS, DERIVATIVES, PROGENY and/or NEW PARENTAL LINES are developed, this format
will be used.]

			
	 	 	 
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Appendix C

to the Amended and Restated Intellectual Property Rights Agreement

Between

Ceres, Inc.

and

The Texas A&M University System

Guidelines for Future Collaborative Opportunities

(Capitalized words are as defined in the Amended and Restated Sponsored Research

 Agreement
(“ARSRA”))

PURPOSE:

CERES and SYSTEM may jointly pursue collaborative activities with third party collaborators.
During the term of the Program, SYSTEM will notify CERES, in writing, of any contemplated internal
projects or projects with third parties that specifically involve Lines, Hybrids, and/or
Derivatives and/or Progeny (as defined in the ARSRA) and that do not involve Germplasm Improvement
(as defined in the ARSRA) (hereinafter “Additional Collaboration Project”). CERES will notify
SYSTEM of certain contemplated projects as provided hereinafter. The Parties will comply with the
provisions set forth hereinafter under SYSTEM CONTACT PROCESS and CERES CONTACT PROCESS. These
guidelines do not apply to Germplasm Improvement, which is addressed in the ARSRA.

GUIDING PRINCIPLES:

The principles contained within this Appendix are meant to guide discussions of potential future
Additional Collaboration Project opportunities between CERES and SYSTEM. CERES is generally
interested in pursuing Additional Collaboration Project opportunities with SYSTEM as long as the
opportunity is consistent with CERES’ business interests and has no negative impact on CERES’
commercialization activities or competitive position. CERES’ intention is to position itself as
the leading provider of proprietary improved sorghum within the CERES Field (as defined in the
ARSRA) market. Both Parties agree that product differentiation, intellectual property protection,
and exclusive access are important factors to build a leading position in this market. Both
Parties recognize that participation of a Party in an Additional Collaboration Project initiated by
the other Party is subject, among other factors, to its capacity to do so, and the Parties reaching
an agreement through good faith discussions.

SYSTEM CONTACT PROCESS:

During the term of the Program the following process will apply in the event that SYSTEM is
contacted regarding an Additional Collaboration Project with a third party, or in the event that
SYSTEM is contemplating an internal Additional Collaboration Project:

SYSTEM will notify: 1) the contacting party or internal project principal investigator of the
rights of CERES to participate and 2) CERES in writing within thirty (30) days of receiving a bona
fide contact from a third party or a research proposal from an internal project principal
investigator. CERES will respond, in writing, within thirty (30) days of receipt of notice with a
decision about whether it wishes to participate in the opportunity.

	 	1.1.	 	If CERES elects to participate in the Additional Collaboration Project CERES and

			
	 	 	 
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	 	Page 40 of 60

 

 

	 	 	 	SYSTEM will discuss in good faith the development of a joint proposal.

	 	1.2.	 	If CERES elects not to participate in the Additional Collaboration Project, CERES
will notify SYSTEM in writing that CERES does not wish to participate in the Additional
Collaboration Project and, if applicable, will provide reasons as to why CERES would
prefer that SYSTEM not use Lines, Hybrids, Derivatives or Progeny developed in the
Program, or not to pursue the activity at all, and SYSTEM will take CERES’ rationale into
account in deciding how to proceed. The Parties agree to meet within thirty (30) days of
the receipt of CERES’ response to discuss CERES rationale and preference for SYSTEM not to
use Lines, Hybrids, Derivatives or Progeny, or not to pursue the activity.
	 
	 	1.2.1.	 	If SYSTEM elects to pursue the Additional Collaboration Project:

	 	1.2.1.1.	 	SYSTEM will take measures to ensure that material developed in the Program
and results of the Additional Collaboration Project are properly blinded so as
not to allow differentiation from other material;
	 
	 	1.2.1.2.	 	the Additional Collaboration Project will occur at a SYSTEM research
facility;
	 
	 	1.2.1.3.	 	CERES will have access to the results of such Additional Collaboration
Project to the extent allowed by the relevant agreements between SYSTEM and
the third party and SYSTEM will use reasonable efforts to obtain such right
for CERES;
	 
	 	1.2.1.4.	 	if any result obtained in an Additional Collaboration Project using
material developed in the Program has an application for Germplasm
Improvement, SYSTEM will grant CERES an option to negotiate an exclusive
license to use such result for Germplasm Improvement.

CERES CONTACT PROCESS:

During the term of the Program the following process will apply. If CERES is approached by a third
party with a project to be conducted by such party or by CERES, related to extension research,
logistics, agriculture economics, or agricultural engineering for sorghum to be used as feedstock
for the bioenergy market, the following process will apply. If the entity to be conducting or
commissioning the research is located in the State of Texas and the work to be conducted is in the
State of Texas, CERES will, unless it deems the matter sensitive, or is restricted by
confidentiality or is requested not to disclose the matter by the third party, notify SYSTEM in
writing if CERES wishes to pursue the project jointly with SYSTEM or to give SYSTEM the opportunity
to pursue the project individually. In all other cases, CERES will use its discretion as to
whether or not to involve SYSTEM in the project. After written notification, SYSTEM will respond,
in writing, within thirty (30) days of receipt with a decision to pursue the project requested by
CERES. If SYSTEM does not respond, in writing, within thirty (30) days of receipt with a decision
to pursue the project, CERES may elect to pursue the project individually.

NOTIFICATION:

The Parties shall notify one another in writing at the following addresses:

			
	 	 	 
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CERES Contact for Collaborative Opportunities:

Director of Business Development

Ceres, Inc.

1535 Rancho Conejo Blvd.

Thousand Oaks, CA 91320

cc: Legal Department

SYSTEM Contact for Collaborative Opportunities:

Bill F. McCutchen, Ph.D.

Agriculture and Life Sciences Building

600 John Kimbrough Boulevard, Suite 512

College Station, TX 77843

			
	 	 	 
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Appendix D

to the Amended and Restated Intellectual Property Rights Agreement

Between

Ceres, Inc.

and

The Texas A&M University System

Warrant to Purchase Shares of Common Stock of Ceres, Inc., dated as of July 18, 2008, by and

between CERES and SYSTEM

and

Amendment No. 1

Warrant to Purchase Shares of Common Stock

THIS WARRANT AND THE SECURITIES FOR WHICH IT MAY BE EXERCISED HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED OR REGISTERED UNDER
STATE SECURITIES OR BLUE SKY LAWS AND THE APPLICABLE RULES AND REGULATIONS THEREUNDER. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION, AND NEITHER THESE
SECURITIES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT,
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND THE APPLICABLE RULES AND REGULATIONS THEREUNDER.
THE ISSUER OF THIS WARRANT MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ISSUER, IN ITS SOLE DISCRETION, TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS
CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO
THE SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN ANY SECURITIES REPRESENTED BY THIS
CERTIFICATE.

THE SECURITIES FOR WHICH THIS WARRANT MAY BE EXERCISED WILL BE SUBJECT TO THE TERMS AND CONDITIONS
OF AN AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AGREEMENT BY AND AMONG THE HOLDER, THE COMPANY
AND CERTAIN HOLDERS OF CAPITAL STOCK OF THE COMPANY AND AN AMENDED AND RESTATED INVESTORS’ RIGHTS
AGREEMENT AMONG THE HOLDER, THE COMPANY AND CERTAIN HOLDERS OF CAPITAL STOCK OF THE COMPANY.
COPIES OF THESE AGREEMENTS
MAY BE OBTAINED UPON WRITTEN REQUEST OF THE SECRETARY OF THE COMPANY.

 
			
	 	 	 
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	 	Page 43 of 60

 

 

WARRANT TO PURCHASE SHARES OF COMMON STOCK

of

CERES, INC.

          This certifies that, for value received, The Texas A&M University System, an agency of the
State of Texas (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from Ceres, Inc., a Delaware corporation (the “Company”), that certain number of
shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), as
determined in Section 1 below, upon surrender hereof, at the principal office of the Company
referred to below, with the Notice of Exercise form attached hereto duly executed, and simultaneous
payment therefore in lawful money of the United States or otherwise as hereinafter provided, at the
Exercise Price set forth in Section 3 below. The number of shares for which this Warrant shall be
exercisable and the Exercise Price per share of Common Stock are subject to adjustment from time to
time as provided in Section 10 below. The term “Warrant” as used herein shall include this
Warrant and any warrants delivered in substitution or exchange therefore as provided herein. Each
capitalized term used but not defined herein shall have the meaning ascribed thereto in the
Intellectual Property Rights Agreement dated August 29, 2007 between the Company and the Holder
(the “IP Agreement”).

          1. Number of Shares. (a) This Warrant shall be exercisable for an aggregate of up to
200,000 shares (the “Shares”) of Common Stock, subject to adjustment as set forth in Section 10
below, and shall become exercisable in installments as follows:

     (i) equal installments of twenty five hundred (2,500) shares of Common Stock
each time a Research Milestone — Marker-Trait Association, as defined in Article
5.A.1. of the IP Agreement (“Marker-Trait Association Milestone”), is
reached, up to a maximum of five such installments;

     (ii) equal installments of twenty five hundred (2,500) shares of Common Stock
each time a Research Milestone — Lines, as defined in Article 5.A.2. of the IP
Agreement (“Lines Milestone”), is reached, up to a maximum of five such
installments; and

     (iii) equal installments of five thousand (5,000) shares of Common Stock each
time a Commercial Milestone, as defined in Article 5.A.3. of the IP Agreement
(“Commercial Milestone”), is reached, up to a maximum of five such
installments.

     (b) The number of shares of Common Stock for which this Warrant may become exercisable
pursuant to the achievement of a Marker-Trait Association Milestone, a Lines Milestone or a
Commercial Milestone shall be multiplied by

 
			
	 	 	 
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	 	Page 44 of 60

 

 

four (4) with respect to each particular installment (an “Installment”)
provided that, at the time such milestone is achieved, (i) the Holder has not breached, and
is not in breach of any provisions of the Sponsored Research Agreement, dated August 29,
2007, between the Company and the Holder (the “SRA”), the IP Agreement including
the Guidelines for Future Collaborative Opportunities attached as Appendix C thereto (the
“Guidelines”), or any license entered into pursuant to the IP Agreement, (ii) the
Holder has not proceeded to any activities, such as participation in an Additional
Collaboration Project and/or use of Lines or Hybrids developed in the Program, contrary to
the Company’s expressed preference, as referred to in Clause 1.2 of the Guidelines, and
(iii) the Holder has not collaborated or is not collaborating with, nor has granted rights
to, any other party other than an academic organization for Germplasm Improvement, as
defined in the SRA, of Biomass/Bioenergy Sorghum, as defined in the SRA, intended to be
used for the bioenergy market.

          2. Term of Warrant. This Warrant shall remain exercisable for a period of ten (10)
years from August 29, 2007 (the “Exercise Period”). Nothing to the contrary withstanding,
this Warrant shall terminate and may no longer be exercised upon the termination by the Company of
the IP Agreement pursuant to Section 4.B.5 thereof or upon termination by the Company of the SRA in
event that the Holder breaches any provision of the SRA.

          3. Exercise Price. The exercise price shall be $10.00 per share (the “Exercise
Price”).

          4. Exercise of Warrant.

     (a) The purchase rights for the Shares represented by this Warrant are exercisable by
the Holder, subject to Section 1 hereof, in whole or in part, such number of Shares and the
Exercise Price being subject to adjustment as provided in Section 10 below, at any time, or
from time to time, during the applicable Exercise Period, by the surrender of this Warrant
and the Notice of Exercise annexed hereto duly completed and executed on behalf of the
Holder, at the office of the Company (or such other office or agency of the Company as it
may designate by notice in writing to the Holder at the address of the Holder appearing on
the books of the Company), upon payment in cash, by cashier’s check or by wire transfer in
immediately available funds of the purchase price of the Shares to be purchased.

     (b) Any Installment of this Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as provided above,
and the person entitled to receive the Shares issuable upon such exercise shall be treated
for all purposes as the holder of record of such Shares as of the close of business on such
date. As promptly as practicable on or after such date and in any event within ten (10)
business days thereafter, the Company, at its expense, shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for the number
of Shares issuable upon such exercise. In the event that any Installment of this Warrant
is exercised in part,

 
			
	 	 	 
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the Company, at its expense, will execute and deliver a new Warrant of like tenor
exercisable for the maximum number of Shares for which this Warrant may then be exercised.
All other terms and conditions of such amended Warrant shall be identical to those
contained herein.

     (c) Upon the first exercise of this Warrant in whole or in part, as provided in
Section 1, the Holder shall execute and become a party to (i) the Fifth Amended and
Restated Right of First Refusal and Co-Sale Agreement dated September 5, 2007, as amended
(the “Right of First Refusal and Co-Sale Agreement”) among the Company, the Investors (as
defined therein) and the Founders (as defined therein), and (ii) the Amended and Restated
Investors’ Rights Agreement Dated September 5, 2007 (the “Investors’ Rights Agreement”), as
amended, between the Company and the Investors (as defined therein).

     (d) Notwithstanding any provisions herein to the contrary, if the fair market value of
one share of Common Stock is greater than the Exercise Price (at the date of calculation as
set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the portion
thereof being canceled) by the surrender of this Warrant at the office of the Company (or
such other office or agency of the Company as it may designate by notice in writing to the
Holder at the address of the Holder appearing on the books of the Company) together with
the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder
and notice of such election in which event the Company shall issue to the Holder a number
of shares of Common Stock computed using the following formula:

	 	 	 	 	 

	X =

	 	Y (A-B)

A
	 	 

			
	Where X = 	 	the number of shares of Common Stock to be issued to the Holder 
	 
	Y =	 	 the number of shares of Common Stock purchasable
under the Warrant or, if only a portion of the Warrant is being exercised,
the portion of the Warrant being canceled (at the date of such
calculation)
	 
	A =	 	 the fair market value of one share of Common Stock
(at the date of such calculation)
	 
	B =	 	 Exercise Price (as adjusted to the date of such calculation)

     For purposes of the above calculation, the fair market value of one share of Common Stock
shall be determined as follows:

(i) in the event that the Common Stock is listed or admitted to trading on the
NASDAQ Global Select Market or any other national securities exchange, the average
of the last reported sales price on such exchange for

 
			
	 	 	 
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	 	Page 46 of 60

 

 

the ten (10) consecutive trading days prior to the date of determination of such
fair market value;

(ii) in the event such security is no longer listed or admitted to trading on any
national securities exchange or traded on any national market system, the average
of the reported closing bid and ask prices in the over-the-counter market on such
date as shown by the NASD automated quotation system, or if such securities are not
then quoted on such system, as published by the National Quotation Bureau,
Incorporated or any similar successor organization, and in either case as reported
by any member firm of any national securities exchange selected by the Company; or

(iii) in the event clauses (i) or (ii) are not applicable, the fair market value as
determined by the Company’s Board of Directors in good faith.

          5. No Fractional Shares or Scrip. No fractional Shares or scrip representing
fractional Shares shall be issued upon the exercise of any Installment of this Warrant. In lieu of
any fractional Share to which the Holder would otherwise be entitled, the Company shall make a cash
payment equal to the Exercise Price multiplied by such fraction.

          6. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of loss,
theft or destruction, on delivery of an affidavit of loss of stock certificate and indemnity
agreement reasonably satisfactory in form and substance to the Company or, in the case of
mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute
and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

          7. Rights of Stockholders. Subject to Section 10 of this Warrant, the Holder, in its
capacity as such, shall not be entitled to vote or receive dividends or be deemed the holder of the
Shares or any other securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder,
as such, any of the rights of a stockholder of the Company, such as any right to vote for the
election of directors or upon any matter submitted to stockholders at any meeting thereof, to give
or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par value, consolidation,
merger, conveyance or otherwise), to receive notice of meetings, or to receive dividends or
subscription rights or otherwise, until any Installment of this Warrant shall have been exercised
and the Shares purchasable upon the exercise hereof shall have been issued, as provided herein.

          8. Transfer of Warrant.

     (a) Warrant Register. The Company will maintain a register (the “Warrant
Register”) containing the names and addresses of the Holder or Holders.

 
			
	 	 	 
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Any Holder of this Warrant may change its address as shown on the Warrant Register by
written notice to the Company requesting such change. Any notice or written communication
required or permitted to be given to the Holder may be delivered or given by mail to such
Holder as shown on the Warrant Register and at the address shown on the Warrant Register.
Until this Warrant is transferred on the Warrant Register of the Company, the Company may
treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for
all purposes, notwithstanding any notice to the contrary.

     (b) Warrant Agent. The Company may, by written notice to the Holder, appoint
an agent for the purpose of maintaining the Warrant Register referred to in Section 8(a)
above, issuing the Shares or other securities then issuable upon the exercise of this
Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the foregoing.
Thereafter, any such registration, issuance, exchange or replacement, as the case may be,
shall be made at the office of such agent.

     (c) Transferability and Non-negotiability of Warrant. This Warrant may not be
transferred or assigned in whole or in part without the prior written consent of the
Company. Any transfer of this Warrant must comply with the requirements of this Section 8,
and any assignee or transferee of this Warrant shall be required to accept this Warrant
subject to all rights and obligations of the Holder set forth herein. In addition, this
Warrant may not be transferred in whole or in part without compliance with all applicable
Federal and state securities laws by the transferor and the transferee (including the
delivery of investment representation letters and legal opinions reasonably satisfactory to
the Company, if such are requested by the Company).

     (d) Exchange of Warrant Upon a Transfer. On surrender of this Warrant for
exchange, properly endorsed on the Assignment Form, and subject to the provisions of this
Warrant with respect to compliance with all applicable Federal and state securities laws,
and with the limitations on assignments and transfers and contained in this Section 8, the
Company at its expense shall issue to or on the order of the Holder a new warrant or
warrants of like tenor, in the name of the Holder or as the Holder (on payment by the
Holder of any applicable transfer taxes) may direct, for the number of Shares issuable upon
exercise thereof.

     (e) Compliance with Securities Laws.

     (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this
Warrant and the Shares to be issued upon exercise hereof are being acquired solely
for the Holder’s own account and not as a nominee for any other party, for
investment, and that the Holder will not offer, sell, pledge, hypothecate or
otherwise transfer or dispose of this Warrant or any Shares to be issued upon
exercise hereof except under circumstances that will not result in a violation of
the Securities Act or any state securities or blue sky laws.

 
			
	 	 	 
	Amended and Restated Intellectual Property Rights Agreement
	 	Page 48 of 60

 

 

     (ii) The Holder of this Warrant understands that neither this Warrant nor the
Shares have been registered under the Securities Act. The Holder of this Warrant
also understands that the Warrant and the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based in
part upon the Holder’s representations contained herein.

     (iii) The Holder hereby represents and warrants that the Holder has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company and has
the capacity to protect its own interests. The Holder must bear the economic risk
of this investment indefinitely unless the Warrant (or the Shares) are registered
pursuant to the Securities Act, or an exemption from registration is available.
The Holder understands that the Company has no present intention of registering the
Warrant or the Shares. The Holder also understands that there is no assurance that
any exemption from registration under the Securities Act will be available and
that, even if available, such exemption may not allow the Holder to transfer all or
any portion of the Warrant or the Shares under the circumstances, in the amounts or
at the times the Holder might propose.

     (iv) The Holder represents and warrants that it is a governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal).

     (v) This Warrant and all Shares issued upon exercise hereof shall be stamped or
imprinted with legends in substantially the following forms (in addition to any
legend required by state securities laws or any agreement to which the Holder is a
party):

     (A) “THIS WARRANT AND THE SECURITIES FOR WHICH IT MAY BE EXERCISED HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR QUALIFIED OR REGISTERED UNDER STATE SECURITIES OR BLUE SKY LAWS, AND THE
APPLICABLE RULES AND REGULATIONS THEREUNDER. THESE SECURITIES HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION, AND NEITHER THESE SECURITIES
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
SECURITIES ACT, APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND THE APPLICABLE
RULES AND REGULATIONS THEREUNDER. THE ISSUER OF THIS WARRANT MAY REQUIRE AN
OPINION OF COUNSEL IN FORM

 
			
	 	 	 
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AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER, IN ITS SOLE DISCRETION,
TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE MUST BE
SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE
SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN ANY SECURITIES REPRESENTED BY
THIS CERTIFICATE.”

     (B) “THE SECURITIES FOR WHICH THIS WARRANT MAY BE EXERCISED ARE SUBJECT TO THE
TERMS AND CONDITIONS OF AN AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AGREEMENT BY
AND AMONG THE HOLDER, THE CORPORATION AND CERTAIN HOLDERS OF CAPITAL STOCK OF THE
COMPANY AND AN AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT AMONG THE HOLDER,
THE COMPANY AND CERTAIN HOLDERS OF CAPITAL STOCK OF THE COMPANY. COPIES OF THESE
AGREEMENTS MAY BE OBTAINED UPON WRITTEN REQUEST OF THE SECRETARY OF THE COMPANY.”

          9. Reservation of Stock. The Company covenants that during the term this Warrant is
exercisable, the Company will reserve from its authorized and unissued Shares a sufficient number
of shares to provide for the issuance of the Shares upon the exercise of this Warrant and, from
time to time, will take all steps necessary to amend its Certificate of Incorporation (the
“Charter”) to provide sufficient reserves of Shares issuable upon exercise of the Warrant. The
Company further covenants that all Shares that may be issued upon the exercise of this Warrant,
upon exercise of the rights represented by this Warrant and payment of the Exercise Price all as
set forth herein, will be duly authorized, validly issued and fully paid and non-assessable. The
Company agrees that its issuance of this Warrant shall constitute full authority to its officers
who are charged with the duty of executing stock certificates to execute and issue the necessary
certificates for the Shares upon the exercise of this Warrant.

          10. Adjustments. The Exercise Price and the number of Shares purchasable hereunder
are subject to adjustment from time to time as follows:

     10.1 Merger, Sale of Assets, Etc.

     (a) If at any time, while this Warrant, or any portion thereof, is outstanding
and unexpired there shall be (i) a reorganization (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for herein),
(ii) a merger or consolidation of the Company with or into another corporation in
which the Company is not the surviving entity, or a reverse triangular merger in
which the Company is the surviving entity but the shares of the Company’s capital
stock outstanding immediately

 
			
	 	 	 
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prior to the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise, then, as a part of such
reorganization, merger or consolidation, if any Installment of this Warrant remains
unexercised prior to such reorganization, merger or consolidation, lawful provision
shall be made so that the holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the periods specified herein and upon
payment of the Exercise Price then in effect, the number of shares of stock or
other securities or property of the successor corporation resulting from such
reorganization, merger or consolidation, which a holder of the Shares deliverable
upon exercise of this Warrant would have been entitled to receive in such
reorganization, consolidation or merger if this Warrant had been exercised
immediately before such reorganization, merger or consolidation, all subject to
further adjustment as provided in this Section 10. The foregoing provisions of
this Section 10.1 shall similarly apply to successive reorganizations,
consolidations or mergers, and to the stock or securities of any other corporation
which are at the time receivable upon the exercise of this Warrant. If the per
share consideration payable to the holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company’s
Board of Directors. In all events, appropriate adjustment (as determined in good
faith by the Company’s Board of Directors) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the Holder
after the transaction, to the end that the provisions of this Warrant shall be
applicable after that event, as near as reasonably may be, in relation to any
 shares or other property deliverable after that event upon exercise of this
Warrant.

     (b) Notices of Record Date. In the event that the Company shall
propose at any time to merge with or into any other corporation, or sell, lease or
convey all or substantially all its property or business, or to liquidate, dissolve
or wind up, then the Company shall send to the holder of this Warrant at least ten
(10) days’ prior written notice of the date on which a record shall be taken for
determining rights to vote in respect of such event.

     10.2 Reclassification, etc. If the Company at any time while any Installment of this
Warrant, or any portion thereof, remains outstanding and unexpired shall, by reclassification of
securities or otherwise, change any of the securities as to which purchase rights under this
Warrant exist into the same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of securities as would
have been issuable as the result of such change with respect to the securities which were subject
to the purchase rights under this Warrant immediately prior to such reclassification or other
change and the Exercise Price therefore shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 10.

 
			
	 	 	 
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               10.3 Adjustments for Dividends in Stock or Other Securities or Property. If while
this Warrant, or any portion hereof, remains outstanding and unexpired the holders of the
securities as to which purchase rights under this Warrant exist at the time shall have received,
or, on or after the record date fixed for the determination of eligible stockholders, shall have
become entitled to receive, without payment therefore, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then and in each case,
this Warrant shall represent the right to acquire, in addition to the number of Shares of the
security receivable upon exercise of this Warrant, and without payment of any additional
consideration therefore, the amount of such other or additional stock or other securities or
property (other than cash) of the Company which such holder would hold on the date of such exercise
had it been the holder of record of the security receivable upon exercise of this Warrant on the
date hereof and had thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such period by the
provisions of this Section 10.

               10.4 No Impairment. The Company will not, by any voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or performed hereunder by
the Company, but will at all times in good faith assist in the carrying out of all the provisions
of this Section 10 and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the holders of this Warrant against impairment.

          11. Miscellaneous.

          11.1 Governing Law. This Warrant shall be governed by and construed under the laws of
the State of Delaware as applied to agreements among Delaware residents entered into and to be
performed entirely within Delaware.

          11.2 Entire Agreement. This Warrant, the exhibits and schedules hereto, and the
documents referred to herein, constitute the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof, and supersede all prior agreements and
understandings, whether oral or written, between the parties hereto with respect to the subject
matter hereof.

          11.3 Binding Effect. This Warrant and the various rights and obligations arising
hereunder shall inure to the benefit of and be binding upon the Company and its successors and
assigns, and Holder and its permitted successors and assigns.

          11.4 Waiver; Consent. Any term of this Warrant may be amended with the written
consent of the Company and the Holder. No waivers of or exceptions to any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a
further or continuing waiver of any such term, condition or provision.

          11.5 Severability. If one or more provisions of this Warrant are held to

 
			
	 	 	 
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be unenforceable under applicable law, such provision shall be excluded from this Warrant and
the balance of the Warrant shall be interpreted as if such provision were so excluded and the
balance shall be enforceable in accordance with its terms.

	[Remainder of Page Intentionally Left Blank]

 
			
	 	 	 
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          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers
thereunto duly authorized on __________, 2008.

	 	 	 	 	 
	 	CERES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Richard Hamilton 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	THE TEXAS A&M UNIVERSITY SYSTEM

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

			
	Amended and Restated Intellectual Property Rights Agreement
	 	Page 54 of 60

 

 

NOTICE OF EXERCISE

To: Ceres, Inc.

     (1) The undersigned hereby elects to purchase _______ shares of Common Stock, par value $.01
per share, of Ceres, Inc. (the “Shares”), pursuant to the terms of the attached Warrant.

     (2) The undersigned tenders herewith payment of the purchase price for such Shares in full:

	 	o	 	in cash
	 
	 	o	 	elects to receive a number of shares upon
exercise calculated in accordance with Section 4(d) of the Warrant,
if such section is applicable at the date of exercise.

     (3) In exercising this Warrant, the undersigned hereby confirms and acknowledges that (i) the
Shares are being acquired solely for the account of the undersigned and not as a nominee for any
other party, for investment, and that the undersigned will not offer, sell, pledge, hypothecate or
otherwise transfer or dispose of any such Shares except under circumstances that will not result in
a violation of the Securities Act of 1933, as amended (the “Securities Act”), or any state
securities or blue sky laws, and (ii) the undersigned is an “accredited investor” (as defined in
Rule 501(a) of Regulation D under the Securities Act.

     (4) Please issue a certificate or certificates representing said Shares in the name of the
undersigned or in such other name as is specified below:

	 	 	 

	 

	 	 
	 

	 	[Name]
	 
	 	 
	 

	 	 
	 

	 	[Name]

     (5) Please issue a new Warrant for the unexercised portion of the attached Warrant in the name
of the undersigned or in such other name as is specified below:

	 	 	 

	 

	 	 
	 

	 	[Name]

	 	 	 

	 

	 	 
	Date:                    , 20__ 

	 	[Signature]

 
			
	 	 	 
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FORM OF ASSIGNMENT

(To be executed by the registered holder hereof)

     FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the assignee named below all the rights of the undersigned under this Warrant with
respect to the number of shares of Common Stock, par value $.01 per share, of Ceres, Inc. covered
thereby set forth below:

	 	 	 	 	 
	 	 	Address and Jurisdiction	 	Number of Shares
	Name of Assignee	 	of Organization	 	of Common Stock
	 
	 
	 	 
	 	 

	 	 	 

	Dated:                     

	 	 
	 

	 	Signature of Registered Holder
	 
	 	 
	 

	 	 
	 

	 	Name of Registered Holder
	 

	 	(Please Print)

	 	 	 

	Witness:
	 	 
	 
	 

	 	 

 
			
	 	 	 
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AMENDMENT NO. 1

TO

WARRANT TO PURCHASE SHARES OF COMMON STOCK

          This AMENDMENT NO. 1 TO WARRANT TO PURCHASE SHARES OF COMMON STOCK (this “Amendment”)
is entered into as of September 24, 2011 between The Texas A&M University System, an agency of the
State of Texas (the “Holder”), and Ceres, Inc., a Delaware corporation (the
“Company”).

          Reference is made to that certain Warrant to Purchase Shares of Common Stock (the
“Warrant”) issued by the Company in favor of the Holder having the issue date of July 18,
2008. Terms defined in the Warrant are used herein as therein defined.

          In connection with the execution of the IP Agreement (as defined below) by the Company and the
Holder and the execution of the ARSRA (as defined below) by the Company and Texas Agrilife
Research, a member of the Holder, the parties hereby agree to amend the Warrant as follows:

          The last sentence of the first paragraph of the Warrant is hereby amended in its entirety to
read as follows:

“Each capitalized term used but not defined herein shall have the meaning
ascribed thereto in the Intellectual Property Rights Agreement dated
August 29, 2007 between the Company and the Holder, as amended and
restated by the Company and Holder as of September 24, 2011 by way of the
Amended and Restated Intellectual Property Rights Agreement (the “IP
Agreement”).”

          Section 1(a) of the Warrant is hereby amended in its entirety to read as follows:

“This Warrant shall be exercisable for an aggregate of up to 200,000
shares (the “Shares”) of Common Stock, subject to adjustment as set forth
in Section 10 below, and shall become exercisable in installments as
follows:

     (i) equal installments of twenty five hundred (2,500) shares of
Common Stock each time a Marker-Trait Association Milestone is reached, up
to a maximum of five such installments;

     (ii) equal installments of twenty five hundred (2,500) shares of
Common Stock each time a Lines Milestone is reached, up to a maximum of
five such installments; and

			
	 	 	 
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(iii) equal installments of five thousand (5,000) shares of Common
Stock each time a Commercial Milestone is reached, up to a maximum of five
such installments.

For the avoidance of doubt, in no event shall the number of shares of
Common Stock that are the subject of this Warrant exceed 200,000 shares.”

          Section 1(b) of the Warrant is hereby amended in its entirety to read as follows:

“The number of shares of Common Stock for which this Warrant may become
exercisable pursuant to the achievement of a Marker-Trait Association
Milestone, a Lines Milestone or a Commercial Milestone shall be multiplied
by four (4) with respect to each particular installment (an
“Installment”) provided that, at the time such milestone is
achieved, (i) neither the Holder nor Texas Agrilife Research, a member of
the Holder (“Texas Agrilife”) has breached, or is in breach of,
any provisions of the Sponsored Research Agreement, dated August 29, 2007,
between the Company and the Holder (the “SRA”), as amended and
restated by the Company and Texas AgriLife by way of the Amended and
Restated Sponsored Research Agreement, dated September 24, 2011, between
the Company and Texas Agrilife (the “ARSRA”), the IP Agreement
including the Guidelines for Future Collaborative Opportunities attached
as Appendix C thereto (the “Guidelines”), or any license entered
into pursuant to the IP Agreement, (ii) neither the Holder nor Texas
Agrilife has proceeded to any activities, such as participation in an
Additional Collaboration Project and/or use of Lines or Hybrids developed
in the Program, contrary to the Company’s expressed preference, as
referred to in Clause 1.2 of the Guidelines, and (iii) neither the Holder
nor Texas Agrilife has collaborated or is collaborating with, nor has
granted rights to, any other party for Germplasm Improvement of
Biomass/Bioenergy/Sweet Sorghum.”

          Section 1 of the Warrant is hereby amended by adding the following subsection (c):

“(c) For purposes of this Warrant:

“Marker-Trait Association Milestone” means the execution by the
Holder and the Company of an exclusive license agreement for a patented or
patent pending marker-trait association discovered in the Program (as
defined in the ARSRA), which marker and related data have been transferred
from the Holder to the Company, for a gene defined in the Program or by
the Executive Committee (as

 
			
	 	 	 
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defined in the ARSRA) which the Holder has used to develop a Line (as
defined in the ARSRA) and/or Derivative (as defined in the ARSRA), which
Line or Derivative and related data have also been transferred from the
Holder to the Company.

“Lines Milestone” means the exclusive licensing of a distinct Line
or Derivative through execution by the Holder and the Company of an
exclusive license agreement granting rights in such Line or Derivative
(including related lines and populations) developed in the Program.

“Commercial Milestone” means market introduction in the United
States or Brazil of a Hybrid (as defined in the ARSRA) or Derivative
having at least one finished inbred Line that is stable, pure and
reproducible and that is developed in the Program as a parental line and
transferred from the Holder to the Company as breeder seed suitable for
commercial increase and which Hybrid or Derivative is royalty bearing
under an exclusive license to such Line from the Holder to the Company.”

          Section 2 of the Warrant is hereby amended in its entirety to read as follows:

“Term of Warrant. This Warrant shall remain exercisable for a
period of ten (10) years from August 29, 2007 (the “Exercise
Period”). Nothing to the contrary withstanding, this Warrant shall
terminate and may no longer be exercised upon the termination by the
Company of the IP Agreement pursuant to Section 2.B thereof or upon
termination by the Company of the ARSRA in the event that AGRILIFE
materially breaches any provision of the ARSRA which breach is not cured
within sixty (60) days after the date of written notice provided by CERES
to AGRILIFE specifying such breach.”

          This Amendment and the Warrant set forth in full all of the representations and agreements of
the parties with respect to the subject matter hereof and supersede all prior discussions,
representations, agreements and understandings between the parties with respect to the subject
matter hereof. Except as herein expressly amended, all of the terms and provisions of the Warrant
shall continue in full force and effect and the same are hereby ratified and confirmed. This
Amendment is deemed attached to and made part of the Warrant instrument, which all together shall
comprise the Warrant instrument.

[Remainder of Page Intentionally Left Blank]

 
			
	 	 	 
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     IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed by its
officers thereunder duly authorized on the date first written above.

	 	 	 	 	 	 	 	 	 

	Company:	 	 	 	Holder:
	 
	 	 	 	 	 	 	 	 
	Ceres, Inc.	 	 	 	The Texas A&M University System
	 
	 	 	 	 	 	 	 	 
	By

	 	 	 	 	 	By	 	 
	 

	 	 
	 	 	 	 	 	 
	Name: Paul Kuc	 	 	 	Name:
	Title: Chief Financial Officer	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	Ceres, Inc.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name: Richard Hamilton	 	 	 	 	 	 
	Title: President & Chief Executive
Officer	 	 	 	 	 	 

 
			
	 	 	 
	Amended and Restated Intellectual Property Rights Agreement
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INTELLECTUAL PROPERTY RIGHTS AGREEMENT

between

Ceres, Inc.

and

The A&M University System

     This agreement (“Agreement”) is made and entered into by and between Ceres, Inc., a
corporation with principal offices in Thousand Oaks, California, a Delaware corporation (“CERES”)
and The Texas A&M University System (“SYSTEM”), an agency of the State of Texas, collectively
referred to as “Parties” and individually as “Party.”

WITNESSETH:

WHEREAS, SYSTEM and CERES have in common the desire to encourage and facilitate the discovery,
dissemination and application of new knowledge, and CERES desires to support said research;

WHEREAS, CERES and SYSTEM, through The Texas Agricultural Experiment Station (“TAES”) with
principal offices in College Station, Texas, and a member of SYSTEM have entered into a Sponsored
Research Agreement (the “SRA”) to improve germplasm, develop lines and hybrids of sorghum and its
interbreeding species and develop DNA markers and marker platform technology to advance the
development of biomass/bioenergy crops;

WHEREAS, the Parties desire that CERES will commercialize such biomass/bioenergy crops under
exclusive license(s) from SYSTEM; and

WHEREAS, pursuant to the SRA, CERES has the right to license certain INTELLECTUAL PROPERTY RIGHTS
from SYSTEM; and

WHEREAS, the Parties have agreed on the rights and obligations of the Parties and the procedures
for such licensing.

NOW THEREFORE, in consideration of the mutual covenants and premises contained in this Agreement,
the receipt and sufficiency of which is acknowledged, the Parties agree as follows:

Article 1. Licensing of Intellectual Property Rights

A. General

(1) All grants of intellectual property rights as set forth in Article 8 of the SRA, other than
copyrights, will be made through the instrument of license agreements substantially in the form of
Appendices A and B.

(2) All such grants of intellectual property rights will be subject to SYSTEM’s reservation of an
irrevocable, worldwide, nonexclusive, royalty-free right to use or practice the intellectual
property as set forth in the SRA, subject, however, to compliance with Article 1.M of the SRA and
the Guidelines for Future Collaborative Opportunities which both Parties agree to comply with and
which are included in Appendix C.

(3) It is anticipated by the Parties that CERES may, in consideration for achievement of certain
research and commercial milestones defined in Article 5 and subject to CERES Board of

Page 1 of 41

 

Directors and shareholder approval, issue warrants as set forth in Article 5.B, giving SYSTEM the
right to purchase CERES stock for a predetermined price per share. The Parties will negotiate
diligently and in good faith about such potential grant of warrants. If no warrant has been issued
by CERES to SYSTEM within nine (9) months after the last signature date of this Agreement, CERES
shall have no further obligation whatsoever with respect to the issuance of warrants to SYSTEM.

B. Patentable Inventions

(1) Negotiation of a Commercial License. SYSTEM, through TAES, has granted CERES in the SRA a
time-limited option to obtain an exclusive world-wide commercial license in SYSTEM’s rights in
Subject Inventions under the SRA, with the right to grant sublicenses. If CERES advises SYSTEM as
per the terms of the SRA that CERES elects to obtain an exclusive commercial license to such
Subject Invention, the Parties shall initiate negotiation of a license agreement based on the
Example License Agreement for Subject Inventions in Appendix A. The start of such negotiations
shall be evidenced by written notice from one Party to the other initiating such negotiations, and
such negotiations shall not extend beyond one hundred eighty (180) days from the start thereof
without the mutual consent of both Parties (“Negotiation Period”). Such license shall be negotiated
in good faith between the Parties and shall contain reasonable business terms common to CERES’
field of commercial interest and proposed application. If the Parties fail to reach agreement
within the Negotiation Period, the terms and conditions of the license on which no agreement was
reached shall be settled in accordance with the following procedures: the disputed contract terms
shall be referred to a mutually agreed impartial expert whose decision shall be final. Each Party
shall submit to the expert within fifteen (15) days of his appointment its position in writing on
the disputed contract terms and conditions. Such expert shall be limited to choosing one of such
two (2) party positions on each of the contract terms and conditions or related group of contract
terms and conditions that the expert considers most reasonable in the circumstances and shall not
make any other determination. Neither Party shall be bound by any determination by the expert
which, in the opinion of Party’s counsel, will result or be likely to result in that Party
violating any applicable law or regulation.

(2) Joint Inventions. Joint Inventions conceived under the SRA shall be subject to the option set
forth in the SRA and the provisions of (1) hereinabove.

C. Germplasm

(1) Definitions: The terms “Hybrid,” “TAES Genetic Contribution,” “Other Contributions,” “Developed
by Breeding,” “New Parental Lines,” “Lines,” and “Allele” shall have the definitions set forth in
the SRA.

(2) Negotiation of a Commercial License. SYSTEM, through TAES, has granted CERES in the SRA a
time-limited option to obtain an exclusive world-wide commercial license in SYSTEM’s rights in
Lines under the SRA, with the right to grant sublicenses. If CERES advises SYSTEM as per the terms
of the SRA that CERES elects to obtain an exclusive world-wide license to maintain and increase
seed of Lines; develop New Parental Lines; develop Hybrids; and sell Hybrids; the Parties shall
initiate negotiation of such license agreement based on the Example License Agreement for Lines in
Appendix B. The start of such negotiations shall be evidenced by written notice from one Party to
the other initiating such negotiations, and such negotiations shall not extend beyond one hundred
eighty (180) days from the start thereof without the mutual consent of both Parties (“Negotiation
Period”). Such license shall be negotiated in good faith between the Parties and shall contain
royalty rates customary in the seed industry taking into consideration (i)

Page 2 of 41

 

TAES Genetic Contribution, (ii) Other Contributions of CERES and (iii) financial contributions of
CERES, all to the development of the Lines and Hybrids. If the Parties fail to reach agreement
within the Negotiation Period, the terms and conditions of the license on which no agreement was
reached shall be settled in accordance with the following procedures: the disputed contract terms
shall be referred to a mutually agreed impartial expert whose decision shall be final. Each Party
shall submit to the expert within fifteen (15) days of his appointment its position in writing on
the disputed contract terms and conditions. Such expert shall be limited to choosing the one of
such two (2) party positions on each of the contract terms and conditions or related group of
contract terms and conditions that the expert considers most reasonable in the circumstances and
shall not make any other determination. Neither Party shall be bound by any determination by the
expert which, in the opinion of Party’s counsel, will result or be likely to result in that Party
violating any applicable law or regulation.

Article 2. Term and Termination

A. The period of performance for this Agreement shall begin on September 3, 2007 (the “Effective
Date”), and shall continue until the rights and obligations of the Parties hereunder shall expire
according to their terms, subject to earlier termination as provided herein.

B. Termination of this Agreement shall not affect the rights and obligations of the Parties accrued
prior to termination hereof nor any license or warrant grants then in existence, subject to payment
of remuneration as set forth in any relevant license/commercialization or warrant agreements.

Article 3. Confidentiality

A. SYSTEM shall make all reasonable efforts not to disclose this Agreement or the contents thereof
to third parties without the prior written consent of CERES for a period of five (5) years from the
date of this Agreement, but SYSTEM shall not be liable for unauthorized disclosures of information
which occur in spite of such efforts. SYSTEM will only make this Agreement available to SYSTEM
employees or researchers on a need-to-know basis.

B. SYSTEM shall not be obligated to keep any portion of this Agreement confidential to the extent
such portion (a) now or hereafter becomes generally available to the public on a non-confidential
basis through no fault or action or failure to act on the part of SYSTEM; or (b) is ordered
produced or disclosed by a court or administrative body of competent jurisdiction or otherwise
required by law, or required to be disclosed by the Attorney General of The State of Texas, but
only to the extent of such required production or disclosure.

Article 4. Discount to Qualifying Entities

A. Additional Definitions.

	 	1.	 	“QUALIFYING SYSTEM ENTITY” or “QSE” shall be any entity that operates a
BIOREFINERY and (i) that is established within fifteen (15) years from the Effective
Date; (ii) that is designated as such by SYSTEM to CERES in writing; (iii) in which
SYSTEM has ownership, directly or Indirectly, of one percent (1%) or more of the
voting stock or other voting interest, and such voting stock or other voting interest
is QUALIFYING EQUITY; and (iv) whose principal biorefining activities are in the
TERRITORY. “Indirectly” shall mean that SYSTEM has ownership of voting stock or other
voting interest of a legal entity (“Intermediate Entity”) that has

Page 3 of 41

 

	 	 	 	direct ownership of voting stock or other voting interest of the entity that operates a
BIOREFINERY in such manner that the result of the multiplication of the percentage of
SYSTEM ownership in the Intermediate Entity with the percentage of the Intermediate
Entity ownership in the entity operating the BIOREFINERY shall be equivalent to one
percent (1%) direct ownership, or more. For example, if the Intermediate Entity owns
ten percent (10%) of the entity operating the BIOREFINERY, SYSTEM must own ten percent
(10%) of the Intermediate Entity, or if the Intermediate Entity owns two percent (2%)
of the entity operating the BIOREFINERY, SYSTEM must own fifty percent (50%) of the
Intermediate Entity.
	 
	 	2.	 	“QUALIFYING EQUITY” shall mean voting stock or other voting interest which is
granted to SYSTEM, directly or Indirectly, (i) during the formation of a QSE in
exchange for contributions by SYSTEM to such formation; (ii) in exchange for sponsored
research or consulting performed by SYSTEM for a QSE; (iii) in exchange for the grant
of rights in intellectual property by SYSTEM; or (iv) one or more of the foregoing.
However, the discount referred to in this Article 4 shall not qualify as a
contribution for which voting stock or another voting interest is granted if it is the
sole such contribution.
	 
	 	3.	 	“BIOREFINERY” shall be any single location facility which converts raw plant
biomass into liquid transportation fuel and/or bioproducts, and/or uses biomass to
generate power or electricity.
	 
	 	4.	 	“LIST PRICE DISCOUNT” shall be fifteen percent (15%) off LIST PRICE.
	 
	 	5.	 	“BEST PRICE DISCOUNT” shall be five percent (5%) off BEST PRICE.
	 
	 	6.	 	“QUALIFYING CONDITIONS” shall be (i) that COMMERCIAL SEED orders shall be
PRE-PRODUCTION ORDERS; (ii) that all biomass grown from the COMMERCIAL SEED purchased
by a QSE will only be used by its BIOREFINERY; (iii) that payment is made as per the
“PAYMENT PROCEDURE;” and (iv) that QSE exclusively places orders in the calendar year
of the PRE-PRODUCTION ORDER with CERES for all non-grain-type sorghum seed. If a
COMPETITOR has voting stock or other voting interest in a QSE or has a CONFLICT PERSON
as a representative on the Board of Directors or other governing body of the entity, a
further QUALIFYING CONDITION shall be that the QSE must have entered into an exclusive
feedstock supply agreement with CERES as contemplated in Article 4.B.8.
	 
	 	7.	 	“PAYMENT PROCEDURE” shall be the payment of the ESTIMATED PRICE by QSE to
CERES in three tranches: fifteen percent (15%) at time of order, thirty-five (35%) at
production, and the remaining balance on delivery, with this final payment on delivery
adjusted to achieve payment of the DISCOUNT PRICE.
	 
	 	8.	 	“ESTIMATED PRICE” shall be, at the time of ordering, the lowest of the
following prices: the then-current LIST PRICE adjusted for the LIST PRICE DISCOUNT, or
the then-current BEST PRICE adjusted for the BEST PRICE DISCOUNT, provided however
that if the lowest of said adjusted prices result in CERES’ GROSS MARGIN on the sale
being reduced by more than twenty-five percent (25%), such adjusted price shall be
revised so that CERES’ GROSS MARGIN is reduced by exactly twenty-five percent (25%).
However, if CERES has granted discounts to

Page 4 of 41

 

	 	 	 	comparable customers in terms of their business relationship with CERES for comparable
orders of COMMERCIAL SEED of the same HYBRID in the TERRITORY placed at or around the
same time, resulting in CERES’ GROSS MARGIN being reduced by a percentage higher than
twenty-five percent (25%), such higher price percentage of GROSS MARGIN reduction shall
be substituted in the previous sentence.
	 
	 	9.	 	“DISCOUNT PRICE” shall be, at the time of delivery, the lowest of the
following prices: the then-current LIST PRICE adjusted for the LIST PRICE DISCOUNT, or
the then-current BEST PRICE adjusted for the BEST PRICE DISCOUNT, provided however
that if the lowest of said adjusted prices results in CERES’ GROSS MARGIN on the sale
being reduced by more than twenty-five percent (25%), such adjusted price shall be
revised so that CERES’ GROSS MARGIN is reduced by exactly twenty-five percent (25%).
However, if CERES has granted discounts to comparable customers in terms of their
business relationship with CERES for comparable orders of COMMERCIAL SEED of the same
HYBRID in the TERRITORY placed at or around the same time, resulting in CERES’ GROSS
MARGIN being reduced by a percentage higher than twenty-five percent (25%), such
higher price percentage of GROSS MARGIN reduction shall be substituted in the previous
sentence. In the case where the DISCOUNT PRICE is more than the ESTIMATED PRICE, the
DISCOUNT PRICE shall be the ESTIMATED PRICE, provided however that any production cost
increases will be added to such ESTIMATED PRICE, except if such increases are not
passed on by CERES to comparable customers in terms of their business relationship
with CERES for comparable orders of COMMERCIAL SEED of the same HYBRID in the
TERRITORY placed at or around the same time.
	 
	 	10.	 	“HYBRID” shall mean a seed or plant that has resulted from genetic
crossbreeding between two or more lines where those lines include one or more (i)
Lines under exclusive license from SYSTEM or (ii) New Parental Lines, and which seed
or plant is royalty bearing under a license to such a Line from SYSTEM to CERES.
	 
	 	11.	 	“GROSS MARGIN” shall mean, for a particular sale of COMMERCIAL SEED, NET
SALES less (i) COGS and (ii) royalties due to SYSTEM on such NET SALES.
	 
	 	12.	 	“NET SALES” shall be as defined in the Example License Agreement for Lines in
Appendix B.
	 
	 	13.	 	“COGS” shall mean cost of goods sold as determined by CERES on a consistent
basis in accordance with GAAP.
	 
	 	14.	 	“LIST PRICE” shall mean the published germplasm list price applied by CERES
at the time of delivery of the seed to the QSE for sale of COMMERCIAL SEED of the
relevant HYBRID to growers in the TERRITORY.
	 
	 	15.	 	“BEST PRICE” shall mean the germplasm price at which CERES is fulfilling
comparable orders of COMMERCIAL SEED of the relevant HYBRID in the TERRITORY to
comparable customers in terms of their business relationship with CERES to those
placed by the QSE at or around the same time. For the purposes of this definition,
all rebates offered to such customers shall be included in the calculation of the
germplasm price offered to such customers.

Page 5 of 41

 

	 	16.	 	“COMPETITOR” shall mean (i) any party that performs any of the following
activities: plant biotechnology, plant genomics or plant breeding, or development,
production or sale of sorghum or corn; (ii) Monsanto Company, E.I. DuPont de Nemours
and Company, Dow Chemical Company, Syngenta AG, BASF AG, Bayer AG and Mendel
Biotechnology, Inc., SorBio Energy Systems, Edenspace, Agrivida, Speedling, Targeted
Growth and FuturaGene or any successor to any part of such entity’s activities
relating to seed, plant biotechnology or plant genomics ; or (iii) any affiliate of
the entities listed in (i) or (ii). For purposes of this definition, ‘affiliate’
shall mean any company owned or controlled by, under common control with or
controlling the entities listed in (i) or (ii), with ‘control’ meaning in this context
the direct or indirect ownership of fifty percent (50%) or more of the voting
stock/shares of a company, or the power to nominate at least half of the directors.
	 
	 	17.	 	“CONFLICT PERSON” shall mean any employee of a COMPETITOR, or member of the
Board of Directors or Scientific Advisory Board, of a COMPETITOR, who is involved in
crop improvement activities.
	 
	 	18.	 	“COMMERCIAL SEED” shall mean HYBRID seed offered for sale in CERES’ catalog
that is sold for purposes other than the production of propagating material.
	 
	 	19.	 	“RECONDITIONING” shall mean retesting and/or rebagging seed returned to CERES
after the planting season.
	 
	 	20.	 	“TERRITORY” shall mean the United States of America.
	 
	 	21.	 	“PRE-PRODUCTION ORDERS” shall mean firm orders placed and accepted at least
eighteen (18) months prior to the applicable seed production season, so that the
applicable seeds may be planted and grown.
	 
	 	22.	 	“TRAIT FEE” shall mean any upfront or annual fee collected by CERES or any
AFFILIATED COMPANY in conjunction with NET SALES as an additional remuneration for the
sale of COMMERCIAL SEED that has a particular valuable trait or characteristic.
	 
	 	23.	 	“SERVICE FEE” shall mean any fee for services provided by CERES to growers,
BIOREFINERIES, the QSE or other relevant entities, including, but not limited to,
agronomy services, re-plant guarantees, quality assurance, quality determination,
consulting on variety selection.

B. Discounted Seed Sales by CERES to QSEs.

	 	1.	 	Subject to compliance with applicable law, CERES agrees to sell COMMERCIAL
SEED to any QSE (subject to Article 4.B.7) at a DISCOUNT PRICE under QUALIFYING
CONDITIONS. The QSE shall also be responsible for payment of any non-germplasm
related fees such as TRAIT FEES, SERVICE FEES, seed treatment etc. associated with the
relevant HYBRID. Any rebates on such non-germplasm related fees offered by CERES to
comparable customers in terms of their business relationship with CERES for comparable
orders of COMMERCIAL SEED of the relevant HYBRID in the TERRITORY to those placed by
the QSE at or around the same time shall also be offered to the QSE. Such obligation
shall apply,

Page 6 of 41

 

	 	 	 	with respect to each such QSE, for deliveries made within ten (10) years from the date
of the first delivery of COMMERCIAL SEED to such QSE.
	 
	 	2.	 	For a particular order of COMMERCIAL SEED by a QSE, CERES and the QSE shall
determine the DISCOUNT in good faith. If CERES and the QSE fail to reach agreement
within one hundred eighty (180) days after the start of such negotiations which shall
be evidenced by written notice from one party to the other initiating such
negotiations, the DISCOUNT shall be determined in accordance with the following
procedures: the dispute shall be referred to a mutually agreed impartial expert whose
decision shall be final. Each Party shall submit to the expert within fifteen (15)
days of his appointment its position in writing on the desired discount. Such expert
shall be limited to choosing the one of such two (2) party positions on the discount
and shall not make any other determination. Neither Party shall be bound by any
determination by the expert which, in the opinion of Party’s counsel, will result or
be likely to result in that Party violating any applicable law or regulation.
	 
	 	3.	 	COMMERCIAL SEED orders will be guaranteed and non-cancelable provided that
CERES will not be liable for failure to deliver COMMERCIAL SEED as a result of crop or
production failure (without limiting any obligation to refund any purchase price
paid). It is anticipated that under purchase agreements between CERES and the QSE the
QSE will own all returned or unplanted seed and will promptly return all such unused
seed to CERES for RECONDITIONING. CERES will receive a standard market rate for
RECONDITIONING.
	 
	 	4.	 	CERES will distribute COMMERCIAL SEED directly to the QSE. It is anticipated
that under purchase agreements between CERES and the QSE such seed will be provided by
the QSE to the grower in a CERES seed bag, under the CERES brand name, trademark, and
logo, with the requirement that the resulting biomass be delivered to the QSE and the
further requirement that if the seed is not used within a specified period of time
after delivery, the seed must be tested and only used if it meets the standards
specified by CERES.
	 
	 	5.	 	If SYSTEM materially breaches this Agreement or the SRA, CERES may give
SYSTEM written notice of the breach. SYSTEM shall have a period of sixty (60) days
from receipt of the notice to cure the breach. If SYSTEM does not cure the breach
within this period, CERES may terminate this Agreement without further notice, and/or
may sever the provisions of Article 4 of this Agreement. Unless CERES terminates for
breach as provided above, this Article 4 shall survive termination of this Agreement.
	 
	 	6.	 	CERES may in its discretion choose to license to a QSE certain LINES or NEW
PARENTAL LINES for COMMERCIAL SEED production on an annual basis under reasonable
commercial terms.
	 
	 	7.	 	No more than five (5) BIOREFINERIES may qualify for a DISCOUNT. Should
SYSTEM designate to CERES, within the period of time ending fifteen (15) years from
the Effective Date, BIOREFINERIES beyond such initial five (5), CERES agrees to enter
into good faith negotiations with SYSTEM to determine an appropriate discount for each
such additional BIOREFINERY and the qualifying conditions that each such BIOREFINERY
would be required to meet and restrictions that each such BIOREFINERY would be subject
to, in order to qualify for such

Page 7 of 41

 

	 	 	 	discount, taking into account then-current and projected market conditions and the
scope and nature of the use of the COMMERCIAL SEED by such BIOREFINERIES. If no
discount has been successfully negotiated within six (6) months of the commencement of
any negotiation on behalf of a particular BIOREFINERY as contemplated in this Article
4.B.7, CERES shall have no further obligation to negotiate with SYSTEM regarding such
discount or to grant any discount.
	 
	 	8.	 	For each QSE in which a COMPETITOR has voting stock or other voting interest,
or has a CONFLICT PERSON as a representative on the Board of Directors or other
governing body of the entity, CERES agrees to enter into good-faith negotiations with
such QSE for the purpose of entering into an exclusive feedstock supply agreement,
pursuant to which such QSE will purchase all cellulosic biomass to be used as
feedstock (other than (i) agricultural residues such as corn stover, wheat straw or
sugarcane bagasse (ii) in each QSE financial year, cellulosic biomass purchased from
growers with whom the QSE has no production or advance purchase contracts, up to five
percent (5%) of the total volume of cellulosic biomass purchased by the QSE in that
financial year) from a source or sources using CERES seed to produce the biomass
purchased, so as to enable the last-mentioned QUALIFYING CONDITION of Article 4.A.6 to
be met by such QSE.
	 
	 	9.	 	At its own expense, SYSTEM may annually inspect CERES’ books and records as
needed to verify compliance with this Article 4. CERES shall maintain such books and
records for at least three (3) years following the dates of the underlying
transactions. Any such inspections shall be in confidence and conducted during
ordinary business hours, not more than once a year, and SYSTEM will provide CERES
prior notice two (2) weeks before making such inspections. SYSTEM must employ an
independent Certified Public Accountant reasonably acceptable to CERES for this
purpose, who will only report to SYSTEM such information as necessary to determine
prices charged to QSEs and CERES’ compliance with any related obligations to SYSTEM.
If SYSTEM’s audit identifies an overcharge by CERES to any QSE(s) of five percent (5%)
or more and CERES does not dispute the findings of the audit, which will be fully
communicated in writing to CERES, the following shall apply: (i) CERES shall pay the
costs of SYSTEM’s audit, and (ii) CERES shall promptly pay all overcharges due as a
consequence of such audit to the QSE(s), with interest. If CERES disputes the
findings of the audit, Article 12 of the SRA, incorporated herein pursuant to Article
6.B hereof, shall apply.

Article 5. Milestones

A. Definitions.

	 	1.	 	“Research Milestone — Marker-Trait Association” shall mean the execution by
both Parties of an exclusive license agreement for a patented or patent pending
marker-trait association discovered in the Program, for a gene defined in the Program
in Appendix A to the SRA or by the Management Committee.
	 
	 	2.	 	“Research Milestone — Lines” shall mean the execution by both Parties of an
exclusive license agreement for a distinct Line (including related lines and
populations) developed in the Program.

Page 8 of 41

 

	 	3.	 	“Commercial Milestone” shall mean market introduction in the United States of
a Hybrid having at least one Line developed in the Program as a parental line and
which Hybrid is royalty bearing under an exclusive license to such Line from SYSTEM to
CERES.

B. Warrant.

	 	1.	 	Subject to CERES’ Board of Directors and shareholder approval, Article
1.A.(3), and agreement on the terms and conditions of the warrants, CERES shall issue
to SYSTEM a warrant to purchase up to a maximum of two hundred thousand (200,000) of
            shares of CERES’ Common Stock (the “Warrant”) at a defined price. The maximum
duration of the Warrant would be ten (10) years; early termination provisions may
apply. The Warrant would become exercisable in installments as follows:

	 	a)	 	equal installments of twenty five hundred (2,500) shares each
time a Research Milestone — Marker-Trait Association is reached; there will
be up to five (5) such installments;
	 
	 	b)	 	equal installments of twenty five hundred (2,500) shares each
time a Research Milestone — Lines is reached; there will be up to five (5)
such installments;
	 
	 	c)	 	equal installments of five thousand (5,000) shares each time
a Commercial Milestone is reached; there will be up to five (5) such
installments.

	 	2.	 	Each installment of shares will be quadruple the defined number, with respect
to each particular Milestone, if at the time such Milestone is achieved, (i) SYSTEM
has not breached, and is not in breach of any provision of the SRA, this Agreement
including the Guidelines for Future Collaborative Opportunities attached as Appendix C
or any license entered into pursuant to this Agreement, (ii) SYSTEM has not proceeded
to any activities (participation in an Additional Collaboration Project and/or use of
Lines or Hybrids developed in the Program) contrary to CERES’ expressed preference, as
referred to in clause 1.2 of the aforementioned Guidelines, and (iii) SYSTEM has not
collaborated or is not collaborating with, nor has granted rights to, any party other
than an academic organization for Germplasm Improvement (as defined in the SRA) of
Biomass/Bioenergy Sorghum (as defined in the SRA) intended to be used for the
bioenergy market.

C. Additional Commercial Milestones may be substituted for either type of Research Milestones up to
a total of ten (10) Commercial Milestone equivalents.

D. Mechanics of Warrant subject to advice of securities counsel.

E. For the avoidance of doubt, in no event shall the number of shares of CERES Common Stock the
subject of the Warrant exceed two hundred thousand (200,000) shares.

F. Unless CERES terminates for breach as provided in Paragraph 4.B.5 of this Agreement, this
Article 5 shall survive termination of this Agreement.

Page 9 of 41

 

Article 6. Miscellaneous

A. As an exception to Article 1.M of the SRA, CERES agrees that Chevron, Inc. may provide funding
to SYSTEM or TAES for Germplasm Improvement (as defined in the SRA) activities to be conducted by
TAES, provided that CERES shall have the same rights including, without limitation, options to
negotiate licenses, with respect to the results of such Chevron, Inc. funded Germplasm Improvement
activities as to the results of the Program (as defined in the SRA). The Guidelines for Future
Collaborative Opportunities in Appendix C will apply for Additional Collaboration Projects (as
defined in such Appendix) with Chevron, Inc.

B. This Agreement and the SRA constitute the entire agreement between the Parties relative to the
subject matter, and may be modified or amended only by a written agreement signed by both Parties.
The Parties hereby incorporate by reference Articles 12, 13 and 16 of the SRA as if set forth fully
herein.

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by
their duly authorized representatives.

	 	 	 	 	 	 	 

	CERES, INC.
	 	 	 	THE TEXAS A&M UNIVERSITY SYSTEM	 	 
	 
	 	 	 	 	 	 
	/s/ Peter Mascia
 
Peter Mascia
	 	 	 	/s/ Mark A. Hussey
 
Mark A. Hussey	 	 
	Vice President of Product Development
	 	 	 	Director, Texas Agricultural Experiment Station	 	 
	Date: August 25, 2007
	 	 	 	Date: 8-29-2007	 	 
	 
	 	 	 	 	 	 
	/s/ Richard Hamilton 
Richard Hamilton
	 	 	 	/s/ Elsa Murano 
Elsa Murano	 	 
	President & Chief Executive Officer
	 	 	 	Vice Chancellor & Dean of College of Agriculture and Life Sciences	 	 
	Date: August 29, 2007
	 	 	 	Date: 8-29-07	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	/s/ Guy K. Diedrich 
Guy K. Diedrich	 	 
	 	 	 	 	Vice Chancellor for
Technology Commercialization	 	 
	 	 	 	 	Date: August 29, 2007	 	 

Page 10 of 41

 

Appendix A

to the Intellectual Property Rights Agreement

between Ceres, Inc. and The Texas A&M University System

Example License Agreement for Subject Inventions

LICENSE AGREEMENT

Between

Ceres, Inc.

and

The Texas A&M University System

     This agreement (“Agreement”) is made and entered into by and between Ceres, Inc., a
corporation with principal offices in Thousand Oaks, California, (“LICENSEE”) and The Texas A&M
University System with principal offices in College Station, Texas, (“SYSTEM”), an agency of the
State of Texas, collectively referred to as “Parties” and individually as “Party.”

W I T N E S S E T H :

     WHEREAS, SYSTEM and LICENSEE have entered into a Sponsored Research Agreement dated [xxxx]
(the “SRA”) and an associated Intellectual Property Rights Agreement (“IPRA”);

     WHEREAS, pursuant to the SRA a Subject Invention (as defined in the SRA) was created in which
SYSTEM has ownership rights; such Subject Invention relates to “ “ (the “Subject Invention”);

     WHEREAS, SYSTEM desires that such intellectual property be commercialized for the public
benefit and welfare; and

     WHEREAS, LICENSEE has represented that it has certain marketing, engineering and financial
capabilities, and that it shall commit itself to a thorough and diligent program of development and
commercialization of SYSTEM’s intellectual property for public benefit; and

     WHEREAS, SYSTEM is willing to grant to LICENSEE, and LICENSEE is willing to accept, a license
to use the Subject Invention, upon the terms and conditions set forth below.

     NOW THEREFORE, in consideration of the mutual covenants and premises contained in this
Agreement, the receipt and sufficiency of which is acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

	1.01	 	“LICENSED TECHNOLOGY” shall mean the Subject Invention relating to SYSTEM Disclosure of
Invention Number ________ entitled “_________________.”

Page 11 of 41

 

	1.02	 	“PATENT RIGHTS” shall mean each United States patent application filed for protection of
LICENSED TECHNOLOGY; each patent issuing from the foregoing applications; each divisional,
continuation, or continuation-in-part application of the foregoing United States applications;
each equivalent patent application in each country other than the United States which claims
priority under such applications; each patent issuing from the foregoing applications; and
each extension or reissue of such patents.
	 
	1.03	 	“LICENSED PRODUCT” or “LICENSED PRODUCTS” shall mean any product, process, or composition of
matter that is within the scope of any Valid Claim of PATENT RIGHTS. Valid Claim shall mean
and include a claim of a patent application or an unexpired patent or a patent whose
expiration date has been extended by law, so long as such claim shall not have been held
invalid and/or unenforceable in an unappealed or unappealable decision of a court or other
authority of competent jurisdiction.

[Note: The Parties expect to expand the grant to Copyrights as required.]

	1.04	 	“EFFECTIVE DATE” shall mean the date this Agreement has been executed by the last Party.
	 
	1.05	 	“NET SALES” shall mean LICENSEE’s and AFFILIATED COMPANIES’ receipts for sales of LICENSED
PRODUCTS or for SERVICES requiring the use of LICENSED PRODUCTS less the sum of the following:

	 	(a)	 	sales taxes, tariffs, duties and/or use taxes directly
imposed with reference to particular sales;
	 
	 	(b)	 	outbound transportation prepaid or allowed, shipping,
packaging, cost of insurance in transit paid by LICENSEE or an AFFILIATED
COMPANY;
	 
	 	(c)	 	amounts allowed or credited on returns;
	 
	 	(d)	 	customary trade, quality or cash discounts; and
	 
	 	(e)	 	[other deductions which are appropriate to sales of the
LICENSED PRODUCTS may be included.]

	 	 	No deductions shall be made for commissions paid to individuals whether independent sales
agencies or regularly employed by LICENSEE, or for the cost of collections. The value of
sample size quantities of LICENSED PRODUCTS provided for free shall not be included in NET
SALES. Where there is no identifiable sale price (except for samples as referred to in the
previous sentence) or when a LICENSED PRODUCT is sold to other than bona fide, arms length
customers of LICENSEE or any AFFILIATED COMPANY, LICENSEE or the AFFILIATED COMPANY shall
be deemed to have received an amount of NET SALES calculated based on the final sale of the
LICENSED PRODUCTS (wholesale level) to an independent third party. If no such current price
is available, a hypothetical fair market value price will be determined by the Parties
jointly in good faith for the purpose of calculating NET SALES. If trait fees are charged
by LICENSEE specifically for the LICENSED TECHNOLOGY, these fees shall be added to NET
SALES.
	 
	1.06	 	“LICENSE INCOME” shall mean the amount actually received by either LICENSEE or any AFFILIATED
COMPANY in consideration for the grant of sublicenses to sublicensees that are not AFFILIATED
COMPANIES to produce and sell LICENSED

Page 12 of 41

 

	 	 	PRODUCTS, including up-front fees, lump sum payments and any other non-running
royalty-based payments made on a product-by-product and jurisdiction-by-jurisdiction basis.
	 
	1.07	 	“AFFILIATED COMPANY” shall mean any company owned or controlled by, under common control with
or controlling LICENSEE, “control” meaning in this context the direct or indirect ownership of
more than fifty percent (50%) of the voting stock/shares of a company, or the power to
nominate at least half of the directors.
	 
	1.08	 	“SERVICE” shall mean any transaction with a third party in which LICENSEE or an AFFILIATED
COMPANY performs certain activities on behalf and at the request of a third party that would
if not performed by LICENSEE or an AFFILIATED COMPANY require a license under SYSTEM’S PATENT
RIGHTS licensed hereunder, in exchange for payment, but excluding any research collaboration
or sponsored research agreement.

ARTICLE II — LICENSE GRANT

	2.01	 	Grant. SYSTEM grants to LICENSEE and its AFFILIATED COMPANIES an exclusive world-wide license
and right under PATENT RIGHTS to make, have made, use, and sell the LICENSED PRODUCTS and to
perform SERVICES, and to grant sublicenses of the same scope, to the end of the term of this
Agreement as prescribed in Article VIII.
	 
	2.02	 	Reservation. SYSTEM reserves an irrevocable, worldwide, nonexclusive, royalty-free right to
practice the grant made in Article 2.01 for research and educational purposes only, and not
for commercial purposes or for the commercial benefit of third parties. SYSTEM shall comply
with the provisions of the SRA and the IPRA when exercising this right.
	 
	2.03	 	Government Reservation. Rights under this Agreement are subject to rights required to be
granted to the Government of the United States of America pursuant to 35 USC Section 200-212,
including a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the United States the Subject Inventions throughout the world.

ARTICLE III — CONSIDERATION

	3.01	 	[Optional. Depends on CERES’ contributions to Subject Invention and the value of the Subject
Invention. Can be alternative to royalties in case Subject Invention will only be used
internally by CERES.] License Fee. In consideration for the license granted in this
Agreement, LICENSEE shall make an initial payment in the amount of ___________ dollars
($________). Such payment shall be due no later than thirty (30) days following the EFFECTIVE
DATE. Failure to make this payment within the specified period shall cause this Agreement to
immediately terminate.
	 
	3.02	 	Royalty Rate. As [additional] consideration for the license granted in this Agreement,
LICENSEE shall remit to SYSTEM a royalty of ____ percent (__%) of NET SALES. [Take into
account stacking with other technologies and value of licensed technology to determine rate.]

Page 13 of 41

 

	3.03	 	[Optional] Minimum Annual Consideration. In order to maintain this exclusive license to
PATENT RIGHTS, LICENSEE shall pay to SYSTEM minimum annual consideration in accordance with
the following schedule:

	 	 	 	 	 	 	 	 	 

	 	(a	)	 	Calendar Year 200
	 	$	__________	 
	 	 	 	 	 
	 	 	 	 
	 	(b	)	 	Calendar Years 200 and 200
	 	$	__________	 
	 	 	 	 	 
	 	 	 	 
	 	(c	)	 	Calendar Year 200 and every year thereafter
through the expiration of this Agreement
	 	$	__________	 

	 	 	In the event that LICENSEE’s payment of royalties for the Calendar Year due under Article
3.02 do not meet or exceed the required minimum annual consideration, as specified in this
Article, LICENSEE’s royalty payment for the last quarter of such Calendar Year shall
include payment of the balance needed to achieve the required minimum. In the event this
Agreement expires or is terminated prior to the end of a Calendar Year, the corresponding
minimum annual consideration provided for in this Article shall be prorated for that year.
	 
	3.04	 	Patent Expenses [Reimbursement]. As additional consideration for the license granted in this
Agreement, LICENSEE shall bear the expenses incurred in the prosecution and maintenance of
PATENT RIGHTS, as further described in Article VI.
	 
	3.05	 	If an exclusive license reverts to or is non-exclusive pursuant to Articles 3.02, 5.02 or
6.05, or upon LICENSEE’s election, a lower royalty rate shall be negotiated in good faith
between the Parties. The start of such negotiations shall be evidenced by written notice from
one Party to the other initiating such negotiations, and such negotiations shall not extend
beyond ninety (90) days from the start thereof without the mutual consent of both Parties
(“Negotiation Period”). If the Parties fail to reach agreement within the Negotiation Period,
the lower royalty rate shall be settled in accordance with the following procedures: the
disputed royalty rate shall be referred to a mutually agreed impartial expert whose decision
shall be final. Each Party shall submit to the expert within fifteen (15) days of his
appointment its position in writing on the disputed royalty rate. Such expert shall be
limited to choosing the one of such two (2) party positions that the expert considers most
reasonable in the circumstances and shall not make any other determination. Neither Party
shall be bound by any determination by the expert which, in the opinion of Party’s counsel,
will result or be likely to result in that Party violating any applicable law or regulation.

ARTICLE IV — SUBLICENSES

	4.01	 	Sublicenses. LICENSEE and its AFFILIATED COMPANIES may grant sublicenses to persons, firms or
corporations under such conditions as it may arrange, as consistent with this Agreement, as
long as each such sublicense is not repugnant to the public policies of SYSTEM, the State of
Texas, or the United States.
	 
	4.02	 	Sublicensee Consideration. Sales of LICENSED PRODUCTS by each sublicensee shall be subject to
the unit royalty due to SYSTEM prescribed in Article 3.02. Further, LICENSEE shall pay to
SYSTEM a royalty of ____ percent (%) LICENSE INCOME. [Take into account stacking
with other technologies and value of licensed technology to determine rate.]

Page 14 of 41

 

	4.03	 	Reporting. LICENSEE shall notify SYSTEM of the grant of sublicense to a third party and
provide a redacted copy of the sublicense to SYSTEM. LICENSEE shall not redact any
information unless it could be reasonably considered sensitive to LICENSEE’s business. Upon
reasonable notice by SYSTEM, SYSTEM may through an attorney-at-law review an unredacted copy
of the sublicense but shall not provide any redacted information to business persons within
SYSTEM. LICENSEE shall also provide SYSTEM with the name, address and scope of each
sublicense and a copy of each sublicensee’s report as is pertinent to calculation of amounts
due SYSTEM under this Agreement.
	 
	4.04	 	Non-Cash Transactions. Where there is no identifiable LICENSE INCOME, a hypothetical fair
market value price will be determined by the Parties jointly in good faith for the purpose of
calculating LICENSE INCOME.

ARTICLE V — LICENSEE RESPONSIBILITIES

	5.01	 	Milestones. In accomplishing the commercialization under this Agreement, LICENSEE shall
demonstrate to the satisfaction of SYSTEM achievement of the following milestones:
	 
	 	 	EXAMPLE: LICENSEE shall complete development of a commercial prototype of a LICENSED
PRODUCT no later than _____ months following EFFECTIVE DATE.
	 
	 	 	EXAMPLE: LICENSEE shall record first sales of LICENSED PRODUCTS no later than ______ months
following EFFECTIVE DATE.
	 
	 	 	Other Milestones to be defined upon the basis of LICENSEE’s business plan for
LICENSED PRODUCTS.
	 
	 	 	LICENSEE shall provide written notification to SYSTEM within thirty (30) days of achieving
each milestone.
	 
	 	 	[Milestones may be substituted or postponed by payments to be agreed for each particular
license agreement.]
	 
	5.02	 	Failure to Accomplish Milestones. Should LICENSEE fail to achieve any milestone specified in
Article 5.01, or should LICENSEE fail to record NET SALES for two (2) consecutive Calendar
Years once sales begin, SYSTEM, at its sole option and as its sole remedy, may waive the
requirement to achieve the milestone, may revise the license granted herein to a non-exclusive
license, or may renegotiate the missed milestone.
	 
	5.03	 	Legal Compliance. LICENSEE must comply with all applicable federal, state and local laws and
regulations in its exercise of all rights granted to it by SYSTEM under this Agreement.
	 
	5.04	 	No Royalties for Sales to U.S. Government. In accordance with 35 USC Section 200-212,
LICENSEE has no duty to pay SYSTEM royalties under this Agreement on NET SALES made to the
United States Government, including any United States Government agency. LICENSEE shall
reduce the amount charged for a LICENSED PRODUCT sold to the United States Government by an
amount equal to the royalty otherwise due SYSTEM.

Page 15 of 41

 

	5.05	 	U.S. Manufacture. In accordance with 35 USC Section 200-212, LICENSED PRODUCTS shall be
manufactured substantially in the United States of America.

ARTICLE VI — PATENTS

	6.01	 	Filing. SYSTEM will have the right to prepare and file, in accordance with its best
judgment, any and all applications for patents covering LICENSED TECHNOLOGY in the United
States that are solely owned by SYSTEM and LICENSEE will have the right to prepare and file
such applications for LICENSED TECHNOLOGY jointly owned by LICENSEE and SYSTEM. Applications
for patents shall be filed in the name of SYSTEM if owned by SYSTEM pursuant to the SRA and in
the joint names of SYSTEM and LICENSEE if jointly owned pursuant to the SRA. At LICENSEE’s
discretion, patents applications may be filed in any other jurisdiction in the world.
	 
	6.02	 	Abandoning patent applications. The following rules shall apply with respect to applications
for patents or SYSTEM owned or jointly owned LICENSED TECHNOLOGY. If the party controlling
prosecution intends to abandon any patent application or patent that party shall first give
sufficient written notice to the other party to permit the other party the opportunity to
assume such filing, examination and/or maintenance. LICENSEE and SYSTEM will consult with
regard to protection of LICENSED TECHNOLOGY.
	 
	6.03	 	Jurisdictions. The obligations of this Article 6.03 shall not apply to any jurisdictions in
which the prosecuting party has elected not to apply for intellectual property protection.
LICENSEE and SYSTEM shall avoid carrying out any act that would prejudice the grant of patent
rights.
	 
	6.04	 	Patent Maintenance. SYSTEM shall maintain at least one U.S. patent resulting from the
prosecution described hereinabove.
	 
	6.05	 	Election not to file. LICENSEE will direct SYSTEM in writing no later than nine (9) months
following the date of filing for each U.S. patent application as to LICENSEE’s selection of
countries outside the United States in which SYSTEM shall seek corresponding patent
protection. SYSTEM shall then have the right to file corresponding patent applications at its
own expense in those countries not selected by LICENSEE; however, the license granted to
LICENSEE in this Agreement shall be non-exclusive in the countries where SYSTEM has filed and
is prosecuting patents or applications at its own expense.
	 
	6.06	 	Prosecution and Maintenance of Non-U.S. Patents. Should LICENSEE select a country other than
the United States in which to file each corresponding patent application, and subsequently
elects not to continue to reimburse SYSTEM for the diligent prosecution and maintenance of
such patent or patent application, it shall so notify SYSTEM at least three (3) months prior
to taking (or not taking) any action which would result in abandonment, withdrawal, or lapse
of such patent or application. SYSTEM shall then have the right to continue maintenance or
prosecution of each such patent or application at its own expense; however, expenses incurred
prior to the point of LICENSEE taking (or not taking) such action shall remain the
responsibility of LICENSEE. The license granted to LICENSEE in this Agreement shall revert to
non-exclusive in the countries

Page 16 of 41

 

	 	 	where SYSTEM is maintaining or prosecuting such patent or application at its own expense.
	 
	6.07	 	Financial Responsibility. Except as set forth in Articles 6.05 and 6.06, LICENSEE shall
reimburse SYSTEM for all expenses incurred by SYSTEM in filing, prosecuting, and maintaining
each patent application and patent under PATENT RIGHTS. LICENSEE shall provide payment as
reimbursement of SYSTEM’s documented expenses incurred in filing, prosecuting or maintaining
patent applications or patents as described above within thirty (30) days of receipt of
SYSTEM’s supporting invoice. SYSTEM shall use patent counsel reasonably acceptable to
LICENSEE. LICENSEE acknowledges, however, that SYSTEM’s patent counsel must be approved by
the Attorney General of the State of Texas.
	 
	6.08	 	Information. SYSTEM shall disclose to LICENSEE the complete texts of all patent applications
filed by SYSTEM under PATENT RIGHTS as well as all information received concerning office
actions, the institution or possible institution of any interference, opposition,
re-examination, reissue, revocation, nullification or any other official proceeding involving
PATENT RIGHTS, all in a timely manner so as to allow LICENSEE to provide input i.e. at least
thirty (30) days before a filing needs to be made or a decision needs to be taken. SYSTEM
shall provide to LICENSEE the opportunity to provide input to the development of each patent
application and any official proceedings thereafter, and will take such input into account.

ARTICLE VII — PAYMENTS AND REPORTS

	7.01	 	When Payments are Due. Unless otherwise specified, payments shall be made annually. Payments
shall be made to The Texas A&M University System, in College Station, Texas, not later than
sixty (60) days after the last day of the calendar year in which they accrue.
	 
	7.02	 	Royalty Reports. LICENSEE shall provide a sales report to SYSTEM each year, providing
information sufficient to allow SYSTEM to calculate amounts due SYSTEM for the reporting
period, in the form attached hereto as ANNEX I.
	 
	7.03	 	Currency. Payment due to SYSTEM shall be paid in U.S. dollars. Royalty payments requiring
conversion shall use the exchange rate as reported in The Wall Street Journal on the
last business day of the royalty reporting period.
	 
	7.04	 	Inspection of Books and Records. At its own expense, SYSTEM may annually inspect LICENSEE’s
books and records as needed to determine royalties payable. LICENSEE shall maintain such books
and records for at least three (3) years following the dates of the underlying transactions.
Any such inspections shall be in confidence and conducted during ordinary business hours, and
SYSTEM will provide LICENSEE prior notice two (2) weeks before making such inspections. SYSTEM
must employ an independent Certified Public Accountant reasonably acceptable to LICENSEE for
this purpose, who will only report to SYSTEM such information as necessary, to determine
royalties payable to SYSTEM and LICENSEE’s compliance with any related obligations to SYSTEM.
If SYSTEM’s audit identifies a shortage of five percent (5%) or more of amounts due to SYSTEM,
then LICENSEE shall pay the costs of SYSTEM’s audit. LICENSEE shall pay all amounts due as a
consequence of such audit to SYSTEM promptly, with interest.

Page 17 of 41

 

	7.05	 	Interest Charges. Overdue payments may, at the sole discretion of SYSTEM, be subject to a
daily charge commencing on the 31st day after such payment is due, compounded monthly, at the
rate of either one and one-half percent (1.5%) per month or the highest legal interest rate,
whichever is lower. The payment of such interest will not foreclose SYSTEM from exercising any
other rights it may have as a consequence of the lateness of any payment.

ARTICLE VIII — TERM AND TERMINATION

	8.01	 	Expiration. This Agreement, unless sooner terminated as provided herein, shall remain in
effect on a country-by-country basis until (a) failure of SYSTEM to obtain at least one issued
patent for protection of LICENSED TECHNOLOGY, (b) expiration of the last to expire patent
under PATENT RIGHTS, or (c) final and unappealable determination by a court of competent
jurisdiction that PATENT RIGHTS are invalid.
	 
	8.02	 	Termination by Licensee. LICENSEE may terminate this Agreement by providing written notice
to SYSTEM at least ninety (90) days before the termination is to take effect.
	 
	8.03	 	Termination by System. If LICENSEE materially breaches this Agreement, SYSTEM may give
LICENSEE written notice of the breach. LICENSEE shall have a period of sixty (60) days from
receipt of the notice to cure the breach. If LICENSEE does not cure the breach within this
period, SYSTEM may terminate this Agreement in writing without further notice.
	 
	8.04	 	Matters Surviving Termination. All accrued obligations and claims, including reimbursement
of patent expenses, license fee obligations, royalty obligations, minimum annual consideration
obligations, interest charge obligations, and all other financial obligations, and claims or
causes of action for breach of this Agreement, shall survive termination of this Agreement.
Obligations of confidentiality shall survive termination of this Agreement. This section
controls in the case of a conflict with any other section of this Agreement.

ARTICLE IX — INDEMNIFICATION AND REPRESENTATION

	9.01	 	Indemnification. LICENSEE SHALL AT ALL TIMES DURING THE TERM OF THIS AGREEMENT AND THEREAFTER
INDEMNIFY, DEFEND, AND HOLD HARMLESS SYSTEM, ITS REGENTS, OFFICERS, AND EMPLOYEES AGAINST ANY
CLAIM, PROCEEDING, DEMAND, LIABILITY OR EXPENSE (INCLUDING LEGAL EXPENSE AND REASONABLE
ATTORNEYS’ FEES) WHICH RELATES TO INJURY TO PERSONS OR TO PROPERTY, ANY ACTION BROUGHT BY A
THIRD PARTY ALLEGING INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, OR AGAINST ANY OTHER CLAIM,
PROCEEDING, DEMAND, EXPENSE, AND LIABILITY OF ANY KIND WHATSOEVER RESULTING FROM THE
PRODUCTION, MANUFACTURE, SALE, COMMERCIAL USE, LEASE, CONSUMPTION, OR ADVERTISEMENT OF
LICENSED PRODUCTS OR ARISING FROM ANY OBLIGATION OF LICENSEE OR SUBLICENSEE(S) UNDER THIS
AGREEMENT AND NOT CAUSED BY BREACH OF THIS AGREEMENT BY SYSTEM (HEREINAFTER JOINTLY REFERRED
TO AS “CLAIMS”), PROVIDED THAT SYSTEM SHALL

Page 18 of 41

 

	 	 	PROMPTLY PROVIDE WRITTEN NOTICE OF ANY CLAIM TO LICENSEE, AND THAT, SUBJECT TO THE APPROVAL
OF THE ATTORNEY GENERAL OF THE STATE OF TEXAS, LICENSEE SHALL HAVE THE RIGHT TO CONDUCT THE
DEFENSE OF ANY CLAIM, AND THAT SYSTEM SHALL COOPERATE WITH LICENSEE AS LICENSEE MAY REQUEST
IN ANY SUCH DEFENSE, AT LICENSEE’S REQUEST AND EXPENSE.
	 
	9.02	 	Representation. SYSTEM represents that it owns and has title to PATENT RIGHTS and has the
full right and power to grant the license set forth in Article 2.01, and that there are no
outstanding agreements, assignments, or encumbrances inconsistent with the provisions of this
Agreement. SYSTEM MAKES NO OTHER REPRESENTATIONS AND EXTENDS NO OTHER WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, NOR DOES SYSTEM ASSUME ANY OBLIGATIONS WITH RESPECT TO
INFRINGEMENT OF PATENT RIGHTS OR OTHER RIGHTS OF THIRD PARTIES DUE TO LICENSEE’S ACTIVITIES
UNDER THIS AGREEMENT.

ARTICLE X — NOTICES

	10.01	 	Notices. Payments, notices, or other communications required by this Agreement shall be
sufficiently made or given if mailed by certified First Class United States mail, postage
pre-paid, or by commercial carrier (e.g., FedEx, UPS, etc.) when such carrier maintains
receipt or record of delivery, addressed to the address stated below, or to the last address
specified in writing by the intended recipient.
	 
	 	 	If to SYSTEM:

Executive Director

Office of Technology Commercialization

3369 TAMU

College Station, Texas, USA 77843-3369

	 	 	 

	If to LICENSEE for Legal Matters:

	 	for Financial Matters:
	Director of Business Development

	 	Director of Business Development
	cc: Legal Department

	 	cc: Controller
	Ceres, Inc.

	 	Ceres, Inc.
	1535 Rancho Conejo Blvd.

	 	1535 Rancho Conejo Blvd.
	Thousand Oaks, CA 91320

	 	Thousand Oaks, CA 91320

ARTICLE XI — MISCELLANEOUS PROVISIONS

	11.01	 	Notice of Infringement. SYSTEM and LICENSEE shall promptly notify one another in writing of
any alleged infringement of any PATENT RIGHTS. Within thirty (30) days after receipt of such
notice, SYSTEM and LICENSEE shall formulate a strategy for resolving the alleged infringement.
LICENSEE acknowledges that SYSTEM’s involvement, participation, and representation in any
litigation requires the prior written consent of SYSTEM and the Attorney General of the State
of Texas, and subject to the granting of that consent, SYSTEM may be joined as a party in any
action brought by LICENSEE, so long as LICENSEE shall pay all of SYSTEM’s reasonable costs and
expenses. LICENSEE will have the right, at its own discretion and expense, to take any

Page 19 of 41

 

	 	 	action to enforce and to initiate and prosecute suits for infringement PATENT RIGHTS
covering jointly owned Subject Inventions. LICENSEE and SYSTEM will consult with each
other upon a course of action and enforcement strategy. LICENSEE will be responsible for
the conduct of any such enforcement action, and SYSTEM will reasonably cooperate with
LICENSEE to effect the enforcement action, and if appropriate, determine a settlement
position. LICENSEE shall be responsible for retaining counsel but will consult with SYSTEM
and retain counsel reasonably acceptable to SYSTEM. For purposes of settlement, LICENSEE
shall be the contact with the Parties’ counsel as well as the opposing Party(ies) and shall
have the right to enter into settlements. LICENSEE shall keep SYSTEM advised as to all
developments with respect to the enforcement action and settlement discussions, which
includes supplying to SYSTEM copies of all papers received and filed in sufficient time for
SYSTEM to comment thereon. SYSTEM may attend any and all meetings with the Parties’
counsel and the opposing side for settlement purposes. If necessary, and subject to the
consent of the Attorney General of the State of Texas, SYSTEM agrees to enter into a joint
defense agreement. Any damages received by LICENSEE as a result of an enforcement action
of rights to jointly owned Subject Inventions, after deduction of all enforcement related
costs incurred by LICENSEE, shall be considered as NET SALES or LICENSE INCOME, as
appropriate, for the purpose of remuneration payments to SYSTEM.
	 
	11.02	 	Export Controls. It is understood that SYSTEM is subject to United States laws and
regulations controlling the export of technical data, computer software, laboratory prototypes
and other commodities, and that its obligations hereunder are contingent on compliance with
applicable United States export laws and regulations. The transfer of certain technical data
and commodities may require a license from the cognizant agency of the United States
Government or written assurances by LICENSEE that LICENSEE shall not export data or
commodities to certain countries without prior approval of such agency. SYSTEM neither
represents that a license shall not be required nor that, if required, it shall be issued.
	 
	11.03	 	Confidential Information. Sales reports submitted by LICENSEE under Article VII and audit
reports made pursuant to Article 7.04 shall be considered as Confidential Information under
this Agreement and shall not be disclosed by SYSTEM to any third party except as may be
required in response to a valid order of a court or other government body of the United States
or any political subdivision thereof, as required under the Texas Public Information Act.
Should the Parties contemplate exchange of other information of a confidential nature, they
shall enter into a separate confidentiality agreement.
	 
	11.04	 	Non-Use of Names. LICENSEE shall not use the names of The Texas A&M University System, nor
of any of its employees or components, nor any adaptation thereof, in any advertising,
promotional or sales literature without the prior written consent obtained from SYSTEM in each
case, except that LICENSEE may state that it is licensed by SYSTEM under PATENT RIGHTS.
	 
	11.05	 	Trademarks. LICENSEE may select, own and use its own trademark on LICENSED PRODUCTS.
However, nothing herein shall be construed as granting to LICENSEE any license or other right
under any trade name, trademark, or service mark owned or licensed by SYSTEM. Conversely,
SYSTEM shall have no rights to trade names, trademarks, or service marks owned by LICENSEE.

Page 20 of 41

 

	11.06	 	Assignment of this Agreement. This Agreement binds and enures to the benefit of the
Parties, their successor or assigns, but may not be assigned by either Party without the prior
written consent of the other Party; provided however, LICENSEE shall have the right to assign
its rights and obligations under this Agreement to any AFFILIATED COMPANY without such prior
consent, but with written notice to SYSTEM. LICENSEE shall also have the right to assign its
rights and obligations under this Agreement to a third party in conjunction with the transfer
to such third party of substantially all of the assets of LICENSEE associated with performance
under this Agreement without such prior consent.
	 
	11.07	 	Force Majeure. Other than an obligation for the payment of money, SYSTEM, upon receipt of
documentation from LICENSEE which it deems appropriate, shall excuse any breach of this
Agreement, which is proximately caused by war, strike, act of God, or other similar
circumstance normally deemed outside the control of well-managed businesses.
	 
	11.08	 	Entire Agreement. Other than the SRA and the IPRA this Agreement contains the entire
understanding of the Parties with respect to PATENT RIGHTS, and supersedes all other written
and oral agreements between the Parties with respect to PATENT RIGHTS. It may be modified
only by a written amendment signed by the Parties.
	 
	11.09	 	Governing Law. The validity, interpretation, and enforcement of this Agreement shall be
governed and determined by the laws of the State of Texas, excluding the conflict of laws
rules which might require the application of the laws of another jurisdiction.
	 
	11.10	 	Disputes.
	 
		 	A. The Parties shall make every possible attempt to resolve in an amicable manner all
disputes betweem the Parties concerning the interpretation of this Agreement.
	 
		 	B. The Parties must use the dispute resolution process provided in Chapter 2260, Texas
Government Code, and the related rules adopted by the Texas Attorney General to attempt to
resolve any claim for breach of contract made by LICENSEE that cannot be resolved in the
ordinary course of business. LICENSEE must submit written notice of a claim of breach of
contract under this Chapter to B.J. Crain, Associate Vice Chancellor, who will examine
LICENSEE’s claim and any counterclaim and negotiate with LICENSEE in an effort to resolve
the claim.
	 
	11.11	 	Headings. Headings appear solely for convenience of reference. Such headings are not part
of, and shall not be used to construe, this Agreement.
	 
	11.12	 	No Waiver; Severability. No waiver of any breach of this Agreement shall constitute a
waiver of any other breach of the same or other provision of this Agreement and no waiver
shall be effective unless made in writing. This Agreement, to the greatest extent
possible, shall be construed so as to give validity to all of the provisions hereof. If any
provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent
jurisdiction or is deemed unenforceable under the current applicable law from time to time in
effect during the term of this Agreement, the remainder of this Agreement will not be affected
or impaired thereby and will continue to be construed to the maximum extent permitted by law.
In lieu of each provision which is invalid, illegal or

Page 21 of 41

 

	 	 	unenforceable, there will be substituted or added as part of this Agreement by mutual
written agreement of the Parties, a provision which will be as similar as possible, in
economic and business objectives as intended by the Parties to such invalid, illegal or
unenforceable provision, but will be valid, legal and enforceable.
	 
	11.13	 	Damages. Neither Party shall be liable for indirect, special, remote, incidental or
consequential damages or loss of profit in connection with this Agreement or its
implementation.

The Parties have caused this Agreement to become effective as of the date last executed below.

	 	 	 	 	 	 	 	 	 

	CERES, INC.	 	 	 	THE TEXAS A&M UNIVERSITY SYSTEM	 	 
	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	Guy K. Diedrich	 	 
	 

	 	 

	 	 	 	Vice Chancellor Federal Relations,	 	 
	Title:

	 	 	 	 	 	Research and Commercialization	 	 
	 

	 	 

	 	 
	 	Date:
                                        
	 	 
	Date:

	 	 	 	 	 		 	 
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

Page 22 of 41

 

ANNEX I

to the Example License Agreement for Subject Inventions

between Ceres, Inc. and The Texas A&M University System

Royalty Report

[template to be developed during negotiations of license]

Page 23 of 41

 

Appendix B

to the Intellectual Property Rights Agreement

between Ceres, Inc. and The Texas A&M University System

Example License Agreement for Lines

LICENSE AGREEMENT

Between

Ceres, Inc.

and

The Texas A&M University System

     This agreement (“Agreement”) is made and entered into by and between Ceres, Inc., a
corporation with principal offices in Thousand Oaks, California, (“LICENSEE”) and The Texas A&M
University System with principal offices in College Station, Texas, (“SYSTEM”), an agency of the
State of Texas, collectively referred to as “Parties” and individually as “Party.”

W I T N E S S E T H :

     WHEREAS, SYSTEM and LICENSEE have entered into a Sponsored Research Agreement dated [xxxx]
(the “SRA”) as well as an associated Intellectual Property Rights Agreement (“IPRA”);

     WHEREAS, pursuant to the SRA certain Lines (as defined in the SRA and further defined in
ANNEX I hereto) were created in which SYSTEM has ownership rights;

     WHEREAS, SYSTEM desires that such Lines be commercialized for the public benefit and welfare;
and

     WHEREAS, LICENSEE has represented that it has certain marketing, engineering and financial
capabilities, and that it shall commit itself to a thorough and diligent program of development and
commercialization of such Lines for public benefit; and

     WHEREAS, SYSTEM is willing to grant to LICENSEE, and LICENSEE is willing to accept, a license
to use the Lines, upon the terms and conditions set forth below.

     NOW THEREFORE, in consideration of the mutual covenants and premises contained in this
Agreement, the receipt and sufficiency of which is acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

	1.01	 	“LINES” shall mean the Lines defined in ANNEX I. [include list with indication of
TAES GENETIC CONTRIBUTION and all INTELLECTUAL PROPERTY RIGHTS the subject of the Agreement].

Page 24 of 41

 

	1.02	 	“INTELLECTUAL PROPERTY RIGHTS” shall mean all rights in any patent, plant variety, plant
breeders’ rights, registration, or any applications thereof, or any other intellectual
property protection, for LINES, HYBRIDS or NEW PARENTAL LINES, that may be filed or exist in
any jurisdiction in the world, with the exception of Trademarks.
	 
	1.03	 	“NEW PARENTAL LINES” shall mean new genetic lines or populations which are developed by
breeding by LICENSEE and which have one or more of the LINES as progenitors.
	 
	1.04	 	“HYBRID” shall mean a seed or plant that has resulted from genetic crossbreeding between two
or more lines where those lines include one or more (i) LINES or (ii) NEW PARENTAL LINES.
	 
	1.05	 	“COMMERCIAL SEED” shall mean seed of HYBRIDS that is sold for purposes other than the
production of propagating material.
	 
	1.06	 	“TRAIT FEE” shall mean any upfront or annual fee collected by LICENSEE or any AFFILIATED
COMPANY in conjunction with NET SALES as an additional remuneration for the sale of COMMERCIAL
SEED that has a particular valuable trait or characteristic.
	 
	1.07	 	“TAES GENETIC CONTRIBUTION” shall mean, for any specific LINE (a) the proportion of the
nuclear genes of the LINE arisen from LINES licensed by SYSTEM to LICENSEE, based on DNA
Marker Analysis as defined in the SRA; (b) a contribution to be determined on a case-by-case
basis in each case where a specific valuable phenotype of that LINE is attributable to
specific ALLELE(s) optioned or licensed to LICENSEE by SYSTEM; and (c) OTHER CONTRIBUTIONS
from TAES.
	 
	1.08	 	“OTHER CONTRIBUTIONS” shall mean (i) intellectual and technical contributions to the
development of LINES or if from LICENSEE, to the development of LINES, NEW PARENTAL LINES or
HYBRIDS such as, without limitation, markers, gene-trait association knowledge or composition
knowledge, that inform the breeding and selection process, or transgenic traits and (ii)
financial contributions to the development of LINES, or if from LICENSEE, to the development
of LINES, NEW PARENTAL LINES or HYBRIDS.
	 
	1.09	 	“EFFECTIVE DATE” shall mean the date this Agreement has been executed by the last Party.
	 
	1.10	 	“NET SALES” shall mean LICENSEE’s and AFFILIATED COMPANIES’ receipts for sales of COMMERCIAL
SEED or for SERVICES requiring the use of LINES less the sum of the following:

	 	(a)	 	sales taxes, tariffs, duties and/or use taxes directly
imposed with reference to particular sales;
	 
	 	(b)	 	outbound transportation prepaid or allowed, shipping,
packaging, cost of insurance in transit paid by LICENSEE or an AFFILIATED
COMPANY;
	 
	 	(c)	 	amounts allowed or credited on returns;

Page 25 of 41

 

	 	(d)	 	customary trade, quality or cash discounts;
	 
	 	(e)	 	cost of any coating materials or treatments that may have
been applied to the COMMERCIAL SEED; and
	 
	 	(f)	 	[other deductions which are appropriate to sales of the
LICENSED PRODUCTS may be included].

	 	 	No deductions shall be made for commissions paid to individuals whether independent sales
agencies or regularly employed by LICENSEE. The value of sample size quantities of seed
provided for free shall not be included in NET SALES. Where there is no identifiable sale
price (except for samples as referred to in the previous sentence) or when COMMERCIAL SEED
is sold to other than bona fide, arms length customers of LICENSEE or any AFFILIATED
COMPANY, LICENSEE or the AFFILIATED COMPANY shall be deemed to have received an amount of
NET SALES calculated based on the final sale of the COMMERCIAL SEED (wholesale level) to an
independent third party. If no such current price is available, a hypothetical fair market
value price will be determined by the Parties jointly in good faith for the purpose of
calculating NET SALES. Further, TRAIT FEES, if any, net of any applicable deductions,
shall be added to NET SALES if related to a trait contributed by SYSTEM.
	 
	1.11	 	“LICENSE INCOME” shall mean the amount actually received by either LICENSEE or any AFFILIATED
COMPANY in consideration for the grant of sublicenses to sublicensees that are not AFFILIATED
COMPANIES to produce and sell COMMERCIAL SEED, including up-front fees, lump sum payments and
any running royalties on a product-by-product and jurisdiction-by-jurisdiction basis.
	 
	1.12	 	“AFFILIATED COMPANY” shall mean any company owned or controlled by, under common control with
or controlling LICENSEE, “control” meaning in this context the direct or indirect ownership of
more than fifty percent (50%) of the voting stock/shares of a company, or the power to
nominate at least half of the directors.
	 
	1.13	 	“SERVICE” shall mean any transaction with a third party in which LICENSEE or an AFFILIATED
COMPANY performs certain activities on behalf and at the request of a third party that would
if not performed by LICENSEE or an AFFILIATED COMPANY require a license under SYSTEM’S
INTELLECTUAL PROPERTY RIGHTS licensed hereunder, in exchange for payment, but excluding any
research collaboration or sponsored research agreement.
	 
	1.14	 	“ALLELE” shall mean a particular form of a gene determinant for a valuable characteristic of
a plant (e.g. drought tolerance, specific flowering time), discovered in the Program under the
SRA by SYSTEM or by SYSTEM and LICENSEE jointly.
	 
	1.15	 	“BREEDER SEED” shall mean seed of a LINE that is of a suitable standard of physical and
genetic purity to produce FOUNDATION SEED and resulted from the final breeding of the LINE as
released by the breeder.
	 
	1.16	 	“FOUNDATION SEED” shall mean foundation seed produced from plants grown directly from BREEDER
SEED, cultivated according to certification regulations and that meets the specifications of
the official seed certifying agency of the State of Texas as well as any additional quality
standards of LICENSEE.

Page 26 of 41

 

ARTICLE II — LICENSE GRANT

	2.01	 	Grant. SYSTEM grants to LICENSEE and its AFFILIATED COMPANIES an exclusive world-wide license
and right to commercialize the LINES, including a license under SYSTEM’s rights and interest
it any INTELLECTUAL PROPERTY RIGHTS covering LINES or HYBRIDS, (i) to maintain and increase
seed of LINES; (ii) to develop NEW PARENTAL LINES; (iii) to develop HYBRIDS; and (iv) to
produce and sell COMMERCIAL SEED, and to grant sublicenses of the same scope, to the end of
the term of this Agreement as prescribed in Article VIII.
	 
	2.02	 	Reservation. SYSTEM reserves an irrevocable, worldwide, nonexclusive, royalty-free right to
practice the grant made in Article 2.01 under (i), (ii) and (iii) for research and educational
purposes only, and not for commercial purposes or for the commercial benefit of third parties.
SYSTEM shall comply with the provisions of the SRA and the IPRA when exercising this right.
	 
	2.03	 	Government Reservation. Rights under this Agreement are subject to rights required to be
granted to the Government of the United States of America pursuant to 35 USC Section 200-212,
including a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the United States any patented LINES throughout the world.
	 
	2.04	 	SYSTEM will supply        lbs of BREEDER SEED to LICENSEE
within         from                the EFFECTIVE DATE.

ARTICLE III — CONSIDERATION

	3.01	 	Royalty Rate. As consideration for the license granted in this Agreement, LICENSEE shall
remit to SYSTEM on NET SALES as follows:

	 	a)	 	a royalty of ___ percent (__%) of NET SALES if the COMMERCIAL SEED is of a
HYBRID which is entirely composed of TAES GENETIC CONTRIBUTION, and no OTHER
CONTRIBUTIONS from LICENSEE;
	 
	 	b)	 	if a HYBRID is not entirely composed of TAES GENETIC CONTRIBUTION, the
royalty rate set forth in Article 3.01(a) will be reduced in function of the dilution
of the TAES GENETIC CONTRIBUTION in such HYBRID by:

	 	–	 	OTHER CONTRIBUTIONS from LICENSEE;
	 
	 	–	 	crossing of the LINES which are progenitors of such HYBRID
with other germplasm, including, but not limited to NEW PARENTAL
LINES,

	 	c)	 	no royalties shall be due with respect to HYBRIDS that contain less than five
percent (5%) TAES GENETIC CONTRIBUTION and contain no specific ALLELE(s).
	 
	 	d)	 	Whenever a particular HYBRID, or for sublicensing purposes, a particular NEW
PARENTAL LINE is ready for release, LICENSEE will notify SYSTEM

Page 27 of 41

 

	 	 	 	thereof, and provide the applicable royalty rate based on the principles set forth
in Articles 3.01(b) and 4.02(b) with information on the calculation of such rate.
If SYSTEM has any comments or questions, SYSTEM will inform LICENSEE thereof in
writing within thirty (30) days from the date of LICENSEE’s notification and the
Parties will discuss in good faith. If SYSTEM does not respond in writing to the
aforementioned notification of LICENSEE within thirty (30) days, the royalty rates
in such notification shall be final. If a dispute regarding the royalty rate arises
that can not be resolved amicably within thirty (30) days after LICENSEE’s
aforementioned notification, the following procedures shall apply: such dispute
shall be referred to a mutually agreed expert whose decision shall be final. Each
Party shall submit to the expert within fifteen (15) days of his appointment its
position in writing on the appropriate royalty rate. Such expert shall be required
to choose the one of such two (2) party positions that the expert considers most
reasonable in the circumstances and shall not make any independent determination
(“Royalty Expertise Procedure”).

	3.02	 	[Optional] Minimum Annual Consideration. In order to maintain this exclusive license to
LINES, LICENSEE shall pay to SYSTEM minimum annual consideration in accordance with the
following schedule:

	 	 	 	 	 	 	 

	 

	 	(a)
	 	Calendar Year 200
	 	$__________
	 
	 

	 	(b)
	 	Calendar Years 200 and 200
	 	$__________
	 
	 

	 	(c)
	 	Calendar Year 200 and every year thereafter
through the expiration of this Agreement
	 	$__________

	 	 	In the event that LICENSEE’s payment of royalties for the Calendar Year due under Article
3.01 do not meet or exceed the required minimum annual consideration, as specified in this
Article, LICENSEE’s royalty payment for the last quarter of such Calendar Year shall
include payment of the balance needed to achieve the required minimum. In the event this
Agreement expires or is terminated prior to the end of a Calendar Year, the corresponding
minimum annual consideration provided for in this Article shall be prorated for that year.
	 
	3.03	 	Intellectual Property Rights. As additional consideration for the license granted in this
Agreement, LICENSEE shall bear the reasonable expenses incurred in the prosecution and
maintenance of INTELLECTUAL PROPERTY RIGHTS, as further described in ARTICLE VI.
	 
	3.04	 	The royalties and other payments due under Articles III and IV of this Agreement are in
consideration of all INTELLECTUAL PROPERTY RIGHTS listed in ANNEX I.
	 
	3.05	 	If an exclusive license on a LINE, which is a parental line of the HYBRID of which COMMERCIAL
SEED is sold, reverts to or is non-exclusive pursuant to Articles 3.02, 5.02 or any other
applicable provisions or upon LICENSEE’s election, a lower royalty rate shall be negotiated in
good faith between the Parties. The start of such negotiations shall be evidenced by written
notice from one Party to the other initiating such negotiations, and such negotiations shall
not extend beyond ninety (90) days from the start thereof without the mutual consent of both
Parties (“Negotiation Period”). If the Parties fail to reach agreement within the Negotiation
Period, the lower royalty rate shall

Page 28 of 41

 

	 	 	be settled in accordance with the following procedures: the disputed royalty rate shall be
referred to a mutually agreed impartial expert whose decision shall be final. Each Party
shall submit to the expert within fifteen (15) days of his appointment its position in
writing on the disputed royalty rate. Such expert shall be limited to choosing the one of
such two (2) party positions that the expert considers most reasonable in the circumstances
and shall not make any other determination. Neither Party shall be bound by any
determination by the expert which, in the opinion of Party’s counsel, will result or be
likely to result in that Party violating any applicable law or regulation.

ARTICLE IV — SUBLICENSES

	4.01	 	Sublicenses. LICENSEE and its AFFILIATED COMPANIES may grant sublicenses to persons, firms or
corporations under such conditions as it may arrange, as consistent with this Agreement, as
long as each such sublicense is not repugnant to the public policies of SYSTEM, the State of
Texas, or the United States.
	 
	4.02	 	Sublicensee Consideration. LICENSEE shall pay to SYSTEM a royalty on LICENSE INCOME as
follows:

	 	a)	 	a royalty of ____ percent (__%) of LICENSE INCOME if the sublicense is for a
HYBRID or LINE which is entirely composed of TAES GENETIC CONTRIBUTION, and no OTHER
CONTRIBUTION from LICENSEE;
	 
	 	b)	 	if the sublicense is for a HYBRID or LINE that is not entirely composed of
TAES ONLY CONTRIBUTION, or for a NEW PARENTAL LINE, the royalty rate will be reduced
in proportion to the dilution of the TAES ONLY CONTRIBUTION in such HYBRID, LINE or
NEW PARENTAL LINE as set forth in Article 3.01(b) and (d);
	 
	 	c)	 	no royalties shall be due with respect to HYBRIDS or NEW PARENTAL LINES that
contain less than five percent (5%) TAES GENETIC CONTRIBUTION and contain no specific
ALLELE(s).

	4.03	 	Reporting. LICENSEE shall notify SYSTEM of the grant of sublicense to a third party and
provide a redacted copy of the sublicense to SYSTEM. LICENSEE shall not redact any
information unless it could be reasonably considered sensitive to LICENSEE’s business. Upon
reasonable notice by SYSTEM, SYSTEM may through an attorney-at-law review an unredacted copy
of the sublicense but shall not provide any redacted information to business persons within
SYSTEM. LICENSEE shall also provide SYSTEM with the name, address and scope of each
sublicense and a copy of each sublicensee’s report as is pertinent to calculation of amounts
due SYSTEM under this Agreement.
	 
	4.04	 	Non-Cash Transactions. Where there is no identifiable LICENSE INCOME, a hypothetical fair
market value price will be determined by the Parties jointly in good faith for the purpose of
calculating LICENSE INCOME.

Page 29 of 41

 

ARTICLE V — LICENSEE RESPONSIBILITIES

	5.01	 	Milestones. In accomplishing the commercialization under this Agreement, LICENSEE shall
demonstrate to the satisfaction of SYSTEM achievement of the following milestones:
	 
	 	 	EXAMPLE: LICENSEE shall complete development of a HYBRID no later than _____ months
following EFFECTIVE DATE.
	 
	 	 	EXAMPLE: LICENSEE shall record first sales of COMMERCIAL SEED no later than ______ months
following EFFECTIVE DATE.
	 
	 	 	Other Milestones to be defined upon the basis of LICENSEE’s business plan for
COMMERCIAL SEED.
	 
	 	 	LICENSEE shall provide written notification to SYSTEM within thirty (30) days of achieving
each milestone.
	 
	 	 	[Milestones may be substituted or postponed by payments to be agreed for each particular
license agreement.]
	 
	5.02	 	Failure to Accomplish Milestones. Should LICENSEE fail to achieve any milestone specified in
paragraph Article 5.01, or should LICENSEE fail to record NET SALES for two (2) consecutive
Calendar Years once sales begin, SYSTEM, at its sole option and as its sole remedy, may waive
the requirement to achieve the milestone, may revise the license granted herein to a
nonexclusive license, or may renegotiate the missed milestone.
	 
	5.03	 	Legal Compliance. LICENSEE must comply with all applicable federal, state and local laws and
regulations in its exercise of all rights granted to it by SYSTEM under this Agreement.
	 
	5.04	 	No Royalties for Sales to U.S. Government. In accordance with 35 USC Section 200-212,
LICENSEE has no duty to pay SYSTEM royalties under this Agreement on NET SALES made to the
United States Government, including any United States Government agency. LICENSEE shall
reduce the amount charged for COMMERCIAL SEED covered by patent applications or patents
licensed under this Agreement sold to the United States Government by an amount equal to the
royalty otherwise due SYSTEM.
	 
	5.05	 	U.S. Manufacture. In accordance with 35 USC Section 200-212, COMMERCIAL SEED covered by
patent applications or patents licensed under this Agreement shall be manufactured
substantially in the United States of America.

ARTICLE VI — INTELLECTUAL PROPERTY

	6.01	 	Filing. SYSTEM will have the right to prepare and file, in accordance with its best judgment,
any and all applications for patents, plant variety rights or other forms of intellectual
property protection or variety registration for HYBRIDS, LINES or NEW PARENTAL LINES in the
United States that are solely owned by SYSTEM and LICENSEE will have the right to prepare and
file such applications for INTELLECTUAL PROPERTY RIGHTS jointly or solely owned by LICENSEE.
Applications for patents or plant variety rights on each particular HYBRID or LINE shall be
filed in the name of SYSTEM (TAES) if owned by SYSTEM pursuant to the SRA, in the name of
LICENSEE (CERES) if owned by LICENSEE pursuant to the SRA and in

Page 30 of 41

 

	 	 	the joint names of SYSTEM (TAES) and LICENSEE (CERES) if jointly owned pursuant to the SRA.
Applications for patents or plant variety rights on NEW PARENTAL LINES shall be filed in
the name of LICENSEE. At LICENSEE’s discretion, patents, plant variety rights and/or other
forms of intellectual property protection may be filed in any other jurisdiction in the
world.
	 
	6.02	 	Abandoning IP Applications. The following rules shall apply with respect to applications for
intellectual property protection on SYSTEM owned or jointly owned LINES or HYBRIDS. If the
Party controlling prosecution intends to abandon any patent plant variety rights, pending or
granted in any jurisdiction, that Party shall first give sufficient written notice to the
other Party to permit the other party the opportunity to assume such filing, examination
and/or maintenance. LICENSEE and SYSTEM will consult with regard to INTELLECTUAL PROPERTY
RIGHTS.
	 
	6.03	 	Jurisdiction. The obligations of this Article 6.03 shall not apply to any jurisdictions in
which the prosecuting party has elected not to apply for intellectual property protection.
LICENSEE and SYSTEM shall avoid carrying out any act that would prejudice the grant of
INTELLECTUAL PROPERTY RIGHTS. Without limitation, neither Party shall make available
reproductive material of the HYBRIDS or LINES at a date or in a manner that might jeopardize
the right to seek INTELLECTUAL PROPERTY RIGHTS protection for the HYBRIDS or LINES.

[add sections 6.04-6.08 from Appendix A if patents are licensed under this license.]

ARTICLE VII — PAYMENTS AND REPORTS

	7.01	 	When Payments are Due. Unless otherwise specified, payments shall be made annually. Payments
shall be made to The Texas A&M University System, in College Station, Texas, not later than
sixty (60) days after the last day of the calendar year in which they accrue.
	 
	7.02	 	Royalty Reports. LICENSEE shall provide a sales report to SYSTEM each year, providing
information sufficient to allow SYSTEM to calculate amounts due SYSTEM for the reporting
period, in the form attached hereto as ANNEX II.
	 
	7.03	 	Currency. Payment due to SYSTEM shall be paid in U.S. dollars. Royalty payments requiring
conversion shall use the exchange rate as reported in The Wall Street Journal on the
last business day of the royalty reporting period.
	 
	7.04	 	Inspection of Books and Records. At its own expense, SYSTEM may annually inspect LICENSEE’s
books and records as needed to determine royalties payable. LICENSEE shall maintain such books
and records for at least three (3) years following the dates of the underlying transactions.
Any such inspections shall be in confidence and conducted during ordinary business hours, and
SYSTEM will provide LICENSEE prior notice two (2) weeks before making such inspections. SYSTEM
must employ an independent Certified Public Accountant reasonably acceptable to LICENSEE for
this purpose, who will only report to SYSTEM such information as necessary, to determine
royalties payable to SYSTEM and LICENSEE’s compliance with any related obligations to SYSTEM.
If SYSTEM’s audit identifies a shortage of five percent (5%) or more of amounts due to SYSTEM,
then LICENSEE shall pay the costs of SYSTEM’s audit.

Page 31 of 41

 

	 	 	LICENSEE shall pay all amounts due as a consequence of such audit to SYSTEM promptly, with
interest.
	 
	7.05	 	Interest Charges. Overdue payments may, at the sole discretion of SYSTEM, be subject to a
daily charge commencing on the 31st day after such payment is due, compounded monthly, at the
rate of either one and one-half percent (1.5%) per month or the highest legal interest rate,
whichever is lower. The payment of such interest will not foreclose SYSTEM from exercising any
other rights it may have as a consequence of the lateness of any payment.
	 
	ARTICLE VIII — TERM AND TERMINATION
	 
	8.01	 	Expiration. Subject to any other rights of termination under this Article, this Agreement
shall remain in full force and effect on a LINE by LINE, HYBRID by HYBRID and country by
country basis until the expiration of all registered or patented INTELLECTUAL PROPERTY RIGHT
covering such product in such country and solely or jointly owned by SYSTEM.
	 
	8.02	 	Termination by Licensee. LICENSEE may terminate this Agreement by providing written notice
to SYSTEM at least ninety (90) days before the termination is to take effect.
	 
	8.03	 	Termination by System. If LICENSEE materially breaches this Agreement, SYSTEM may give
LICENSEE written notice of the breach. LICENSEE shall have a period of sixty (60) days from
receipt of the notice to cure the breach. If LICENSEE does not cure the breach within this
period, SYSTEM may terminate this Agreement in writing without further notice.
	 
	8.04	 	Matters Surviving Termination. All accrued obligations and claims, including reimbursement
of patent expenses, license fee obligations, royalty obligations, minimum annual consideration
obligations, interest charge obligations, and all other financial obligations, and claims or
causes of action for breach of this Agreement, shall survive termination of this Agreement.
Obligations of confidentiality shall survive termination of this Agreement. This section
controls in the case of a conflict with any other section of this Agreement.

ARTICLE IX — INDEMNIFICATION AND REPRESENTATION

	9.01	 	Indemnification. LICENSEE SHALL AT ALL TIMES DURING THE TERM OF THIS AGREEMENT AND
THEREAFTER INDEMNIFY, DEFEND, AND HOLD HARMLESS SYSTEM, ITS REGENTS, OFFICERS, AND EMPLOYEES
AGAINST ANY CLAIM, PROCEEDING, DEMAND, LIABILITY OR EXPENSE (INCLUDING LEGAL EXPENSE AND
REASONABLE ATTORNEYS’ FEES) WHICH RELATES TO INJURY TO PERSONS OR TO PROPERTY, ANY ACTION
BROUGHT BY A THIRD PARTY ALLEGING INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, OR AGAINST ANY
OTHER CLAIM, PROCEEDING, DEMAND, EXPENSE, AND LIABILITY OF ANY KIND WHATSOEVER RESULTING FROM
THE PRODUCTION, MANUFACTURE, SALE, COMMERCIAL USE, LEASE, CONSUMPTION, OR ADVERTISEMENT OF
COMMERCIAL SEED OR ARISING FROM ANY OBLIGATION OF LICENSEE OR SUBLICENSEE(S) UNDER THIS
AGREEMENT AND NOT

Page 32 of 41

 

	 	 	CAUSED BY BREACH OF THIS AGREEMENT BY SYSTEM (HEREINAFTER JOINTLY REFERRED TO AS “CLAIMS”),
PROVIDED THAT SYSTEM SHALL PROMPTLY PROVIDE WRITTEN NOTICE OF ANY CLAIM TO LICENSEE, AND
THAT, SUBJECT TO THE APPROVAL OF THE ATTORNEY GENERAL FO THE STATE OF TEXAS, LICENSEE SHALL
HAVE THE RIGHT TO CONDUCT THE DEFENSE OF ANY CLAIM, AND THAT SYSTEM SHALL COOPERATE WITH
LICENSEE AS LICENSEE MAY REQUEST IN ANY SUCH DEFENSE, AT LICENSEE’S REQUEST AND EXPENSE.
	 
	9.02	 	Representation. SYSTEM represents that it has the full right and power to grant the license
set forth in Article 2.01, and that there are no outstanding agreements, assignments, or
encumbrances inconsistent with the provisions of this Agreement. SYSTEM MAKES NO OTHER
REPRESENTATIONS AND EXTENDS NO OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, NOR DOES SYSTEM ASSUME ANY OBLIGATIONS WITH RESPECT TO INFRINGEMENT OF PATENT RIGHTS
OR OTHER RIGHTS OF THIRD PARTIES DUE TO LICENSEE’S ACTIVITIES UNDER THIS AGREEMENT.

ARTICLE X — NOTICES

	10.01	 	Notices. Payments, notices, or other communications required by this Agreement shall be
sufficiently made or given if mailed by certified First Class United States mail, postage
pre-paid, or by commercial carrier (e.g., FedEx, UPS, etc.) when such carrier maintains
receipt or record of delivery, addressed to the address stated below, or to the last address
specified in writing by the intended recipient.

	 	 	 

	If to SYSTEM:

	 

	 	Executive Director
	 

	 	Office of Technology Commercialization
	 

	 	3369 TAMU
	 

	 	College Station, Texas, USA 77843-3369

	 	 	 	 	 

	If to LICENSEE for Legal Matters:
	 	for Financial Matters:
	 

	 	Director of Business Development
	 	Director of Business Development
	 

	 	cc: Legal Department
	 	cc: Controller
	 

	 	Ceres, Inc.
	 	Ceres, Inc.
	 

	 	1535 Rancho Conejo Blvd.
	 	1535 Rancho Conejo Blvd.
	 

	 	Thousand Oaks, CA 91320
	 	Thousand Oaks, CA 91320

ARTICLE XI — MISCELLANEOUS PROVISIONS

	11.01	 	Notice of Infringement. SYSTEM and LICENSEE shall promptly notify one another in writing of
any alleged infringement of any INTELLECTUAL PROPERTY RIGHTS. Within thirty (30) days after
receipt of such notice, SYSTEM and LICENSEE shall formulate a strategy for resolving the
alleged infringement. LICENSEE acknowledges that SYSTEM’s involvement, participation, and
representation in any litigation requires the prior written consent of SYSTEM and the Attorney
General of the State of Texas, and subject to the granting of that consent, SYSTEM may be
joined as a party in any action brought by LICENSEE, so long as LICENSEE shall pay all of
SYSTEM’s reasonable

Page 33 of 41

 

	 	 	costs and expenses. LICENSEE will have the right, at its own discretion and expense, to
take any action to enforce and to initiate and prosecute suits for infringement of
INTELLECTUAL PROPERTY RIGHTS covering LINES, HYBRIDS and/or NEW PARENTAL LINES. LICENSEE
and SYSTEM will consult with each other upon a course of action and enforcement strategy.
LICENSEE will be responsible for the conduct of any such enforcement action, and SYSTEM
will reasonably cooperate with LICENSEE to effect the enforcement action, and if
appropriate, determine a settlement position. LICENSEE shall be responsible for retaining
counsel but will consult with SYSTEM and retain counsel reasonably acceptable to SYSTEM.
For purposes of settlement, LICENSEE shall be the contact with the Parties’ counsel as well
as the opposing Party(ies) and shall have the right to enter into settlements. LICENSEE
shall keep SYSTEM advised as to all developments with respect to the enforcement action and
settlement discussions, which includes supplying to SYSTEM copies of all papers received
and filed in sufficient time for SYSTEM to comment thereon. SYSTEM may attend any and all
meetings with the Parties’ counsel and the opposing side for settlement purposes. If
necessary, and subject to the consent of the Attorney General of the State of Texas, SYSTEM
agrees to enter into a joint defense agreement. Any damages received by LICENSEE as a
result of an enforcement action of rights to jointly owned INTELLECTUAL PROPERTY RIGHTS,
after deduction of all enforcement related costs incurred by LICENSEE, shall be considered
as NET SALES or LICENSE INCOME, as appropriate, for the purpose of remuneration payments to
SYSTEM.

	11.02	 	Export Controls. It is understood that SYSTEM is subject to United States laws and
regulations controlling the export of technical data, computer software, laboratory prototypes
and other commodities, and that its obligations hereunder are contingent on compliance with
applicable United States export laws and regulations. The transfer of certain technical data
and commodities may require a license from the cognizant agency of the United States
Government or written assurances by LICENSEE that LICENSEE shall not export data or
commodities to certain countries without prior approval of such agency. SYSTEM neither
represents that a license shall not be required nor that, if required, it shall be issued.
	 
	11.03	 	Confidential Information. Sales reports submitted by LICENSEE under Article VII and audit
reports made pursuant to Article 7.04 shall be considered as Confidential Information under
this Agreement and shall not be disclosed by SYSTEM to any third party except as may be
required in response to a valid order of a court or other government body of the United States
or any political subdivision thereof, as required under the Texas Public Information Act.
Should the Parties contemplate exchange of other information of a confidential nature, they
shall enter into a separate confidentiality agreement.
	 
	11.04	 	Non-Use of Names. LICENSEE shall not use the names of The Texas A&M University System, nor
of any of its employees or components, nor any adaptation thereof, in any advertising,
promotional or sales literature without the prior written consent obtained from SYSTEM in each
case, except that LICENSEE may state that it is licensed by SYSTEM under INTELLCTUAL PROPERTY
RIGHTS.
	 
	11.05	 	Trademarks. LICENSEE may select, own and use its own trademark on LICENSED PRODUCTS.
However, nothing herein shall be construed as granting to LICENSEE any license or other right
under any trade name, trademark, or service mark owned or licensed

Page 34 of 41

 

	 	 	by SYSTEM. Conversely, SYSTEM shall have no rights to trade names, trademarks, or service
marks owned by LICENSEE.
	 
	11.06	 	Assignment of this Agreement. This Agreement binds and enures to the benefit of the
Parties, their successor or assigns, but may not be assigned by either Party without the prior
written consent of the other Party; provided however, LICENSEE shall have the right to assign
its rights and obligations under this Agreement to any AFFILIATED COMPANY without such prior
consent, but with written notice to SYSTEM. LICENSEE shall also have the right to assign its
rights and obligations under this Agreement to a third party in conjunction with the transfer
to such third party of substantially all of the assets of LICENSEE associated with performance
under this Agreement without such prior consent.
	 
	11.07	 	Force Majeure. Other than an obligation for the payment of money, SYSTEM, upon receipt of
documentation from LICENSEE which it deems appropriate, shall excuse any breach of this
Agreement, which is proximately caused by war, strike, act of God, or other similar
circumstance normally deemed outside the control of well-managed businesses.
	 
	11.08	 	Entire Agreement. Other than the SRA and the IPRA, this Agreement contains the entire
understanding of the Parties with respect to INTELLECTUAL PROPERTY RIGHTS, and supersedes all
other written and oral agreements between the Parties with respect to INTELLECTUAL PROPERTY
RIGHTS. It may be modified only by a written amendment signed by the Parties.
	 
	11.09	 	Governing Law. The validity, interpretation, and enforcement of this Agreement shall be
governed and determined by the laws of the State of Texas, excluding the conflict of laws
rules which might require the application of the laws of another jurisdiction.
	 
	11.10	 	Disputes.

	 	A.	 	The Parties shall make every possible attempt to resolve in an amicable manner all
disputes between the Parties concerning the interpretation of this Agreement.
	 
	 	B.	 	The Parties must use the dispute resolution process provided in Chapter 2260, Texas
Government Code, and the related rules adopted by the Texas Attorney General to attempt to
resolve any claim for breach of contract made by LICENSEE that cannot be resolved in the
ordinary course of business. LICENSEE must submit written notice of a claim of breach of
contract under this Chapter to B.J. Crain, Associate Vice Chancellor, who will examine
LICENSEE’s claim and any counterclaim and negotiate with LICENSEE in an effort to resolve
the claim.

	11.11	 	Headings. Headings appear solely for convenience of reference. Such headings are not part
of, and shall not be used to construe, this Agreement.
	 
	11.12	 	No Waiver; Severability. No waiver of any breach of this Agreement shall constitute a
waiver of any other breach of the same or other provision of this Agreement and no waiver
shall be effective unless made in writing. This Agreement, to the greatest extent
possible, shall be construed so as to give validity to all of the provisions hereof. If any
provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent
jurisdiction or is deemed unenforceable under the current applicable law from time to

Page 35 of 41

 

	 	 	time in effect during the term of this Agreement, the remainder of this Agreement will not
be affected or impaired thereby and will continue to be construed to the maximum extent
permitted by law. In lieu of each provision which is invalid, illegal or unenforceable,
there will be substituted or added as part of this Agreement by mutual written agreement of
the Parties, a provision which will be as similar as possible, in economic and business
objectives as intended by the Parties to such invalid, illegal or unenforceable provision,
but will be valid, legal and enforceable.
	 
	11.13	 	Damages. Neither Party shall be liable for indirect, special, remote, incidental or
consequential damages or loss of profit in connection with this Agreement or its
implementation.

ARTICLE XII — ADDITIONAL TERMS AND CONDITIONS

	12.01	 	LICENSEE agrees to negotiate in good faith with Texas Foundation Seed Service for the
production of BREEDER SEED and FOUNDATION SEED of LINES exclusively licensed to LICENSEE
pursuant to this Agreement, based on the following principles.

	 	•	 	Annual contract, neither party has an obligation to renew;
	 
	 	•	 	LICENSEE has decided to subcontract production of BREEDER SEED and
FOUNDATION SEED of LINES exclusively licensed to LICENSEE;
	 
	 	•	 	subject to Texas Foundation Seed Service offering competitive conditions,
guaranteeing quality and certification standards and other customary provisions for
exclusive seed production contracts for BREEDER SEED and FOUNDATION SEED;
	 
	 	•	 	LICENSEE will have the right to audit seed production to assess quality
standards and practices; and
	 
	 	•	 	if Texas Foundation Seed Service offers production contracts to growers,
LICENSEE will manage the seed production and assist in the selection of growers.

	 	 	If no agreement on the production contract is reached six (6) months after the EFFECTIVE
DATE, neither LICENSEE nor Texas Foundation Seed Service will have any further obligations
with respect to contract production of BREEDER SEED and FOUNDATION SEED of LINES
exclusively licensed to LICENSEE.
	 
	 	 	The Parties have caused this Agreement to become effective as of the date last executed below.

	 	 	 	 	 	 	 	 	 	 	 

	CERES, INC.	 	 	 	THE TEXAS A&M UNIVERSITY SYSTEM	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	By:	 	 	 	 	 	Guy K. Diedrich	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Title:	 	 	 	 	 	Vice Chancellor Federal Relations, Research	 	 
	 	 	 	 	 	 		 	 
	

	 	 	 	 	 	and Commercialization	 	 
	Date:

	 	

 

	 	 	 	Date:	 	
 

	 	 
	 
	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 

Page 36 of 41

 

ANNEX I

to the Example License Agreement for Lines

between Ceres, Inc. and The Texas A&M University System

LINES

	–	 	TAES GENETIC CONTRIBUTION (components (a) through (c) to be provided)
	 
	–	 	INTELLECTUAL PROPERTY RIGHTS
	 
	 	 	(include all patent applications/patents (including on Subject Inventions covering Lines)
plant variety protection rights etc.)

Page 37 of 41

 

ANNEX II

to the Example License Agreement for Lines

between Ceres, Inc. and The Texas A&M University System

Royalty Report

[template to be developed during negotiations of license]

Page 38 of 41

 

Appendix C

to the Intellectual Property Rights Agreement

Between

Ceres, Inc.

And

The Texas Agricultural Experiment Station of

The Texas A&M University System

Guidelines for Future Collaborative Opportunities

(Capitalized words are as defined in the Sponsored Research Agreement)

PURPOSE:

CERES and SYSTEM may jointly pursue collaborative activities with third party collaborators.
During the term of the Program, SYSTEM will notify CERES, in writing, of any contemplated internal
projects or projects with third parties that specifically involve sorghum Lines and Hybrids (as
defined in the Sponsored Research Agreement) to be used as feedstock for the bioenergy market and
that do not involve Germplasm Improvement (hereinafter “Additional Collaboration Project”). CERES
will notify SYSTEM of certain contemplated projects as provided hereinafter. The Parties will
comply with the provisions set forth hereinafter under SYSTEM CONTACT PROCESS and CERES CONTACT
PROCESS. These guidelines do not apply to Germplasm Improvement, which is addressed in the
Sponsored Research Agreement.

GUIDING PRINCIPLES:

The principles contained within this Appendix are meant to guide discussions of potential future
Additional Collaboration Project opportunities between CERES and SYSTEM. CERES is generally
interested in pursuing Additional Collaboration Project opportunities with SYSTEM as long as the
opportunity is consistent with CERES’ business interests and has no negative impact on CERES’
commercialization activities or competitive position. CERES’ intention is to position itself as
the leading provider of proprietary improved sorghum for the bioenergy market. Both Parties agree
that product differentiation, intellectual property protection, and exclusive access are important
factors to build a leading position in this market. Both Parties recognize that participation of a
Party in an Additional Collaboration Project initiated by the other Party is subject, among other
factors, to its capacity to do so, and the Parties reaching an agreement through good faith
discussions.

SYSTEM CONTACT PROCESS:

During the term of the Program the following process will apply in the event that SYSTEM is
contacted regarding an Additional Collaboration Project with a third party, or in the event that
SYSTEM is contemplating an internal Additional Collaboration Project:

SYSTEM will notify: 1) the contacting party or internal project principal investigator of the
rights of CERES to participate and 2) CERES in writing within thirty (30) days of receiving a bona
fide contact from a third party or a research proposal from an internal project principal
investigator. CERES will respond, in writing, within thirty (30) days of receipt of notice with a
decision about whether it wishes to participate in the opportunity.

	 	1.1.	 	If CERES elects to participate in the Additional Collaboration Project CERES and
SYSTEM will discuss in good faith the development of a joint proposal.
	 
	 	1.2.	 	If CERES elects not to participate in the Additional Collaboration Project, CERES
will

Page 39 of 41

 

	 	 	 	notify SYSTEM in writing that CERES does not wish to participate in the Additional
Collaboration Project and, if applicable, will provide reasons as to why CERES would
prefer that SYSTEM not use Lines or Hybrids developed in the Program, or not to pursue the
activity at all, and SYSTEM will take CERES rationale into account in deciding how to
proceed. The Parties agree to meet within thirty (30) days of the receipt of CERES’
response to discuss CERES rationale and preference for SYSTEM not to use Lines or Hybrids,
or not to pursue the activity.

	 	 1.2.1.	 	If SYSTEM elects to pursue the Additional Collaboration Project:

	 	1.2.1.1.	 	SYSTEM will take measures to ensure that material developed in the Program
and results of the Additional Collaboration Project are properly blinded so as
not to allow differentiation from other material;
	 
	 	1.2.1.2.	 	the Additional Collaboration Project will occur at a SYSTEM research
facility;
	 
	 	1.2.1.3.	 	CERES will have access to the results of such Additional Collaboration
Project to the extent allowed by the relevant agreements between SYSTEM and
the third party and SYSTEM will use reasonable efforts to obtain such right
for CERES;
	 
	 	1.2.1.4.	 	if any result obtained in an Additional Collaboration Project using
material developed in the Program has an application for Germplasm
Improvement, TAES will grant CERES an option to negotiate an exclusive
license to use such result for Germplasm Improvement.

CERES CONTACT PROCESS:

During the term of the Program the following process will apply. If CERES is approached by a third
party with a project to be conducted by such party or by CERES, related to extension research,
logistics, agriculture economics, or agricultural engineering for sorghum to be used as feedstock
for the bioenergy market, the following process will apply. If the entity to be conducting or
commissioning the research is located in the State of Texas and the work to be conducted is in the
State of Texas, CERES will, unless it deems the matter sensitive, is restricted by confidentiality
or is requested not to disclose the matter by the third party, notify SYSTEM in writing if CERES
wishes to pursue the project jointly with SYSTEM or to give SYSTEM the opportunity to pursue the
project individually. In all other cases, CERES will use its discretion as to whether or not to
involve SYSTEM in the project. After written notification, SYSTEM will respond, in writing, within
thirty (30) days of receipt with a decision to pursue the project requested by CERES. If SYSTEM
does not respond, in writing, within thirty (30) days of receipt with a decision to pursue the
project, CERES may elect to pursue the project individually.

NOTIFICATION:

The Parties shall notify one another in writing at the following addresses:

CERES Contact for Collaborative Opportunities:

Director of Business Development

Ceres, Inc.

Page 40 of 41

 

1535 Rancho Conejo Blvd.

Thousand Oaks, CA 91320

SYSTEM Contact for Collaborative Opportunities:

Bill F. McCutchen, Ph.D.

Texas Agricultural Experiment Station

113 Jack K Williams Admin Bldg

College Station, Texas 77843-2142

Page 41 of 41exv10w15

Exhibit 10.15

Pages where confidential treatment has been requested are stamped ‘Confidential Treatment Requested and the
Redacted Material has been separately filed with the Commission,’ and the confidential section has been
marked as follows: [***].

LINE LICENSE AGREEMENT

Between

Ceres, Inc.

and

The Texas A&M University System

     This agreement (“Agreement”) is made and entered into by and between Ceres, Inc., a
corporation with principal offices in Thousand Oaks, California, (“LICENSEE”) and The Texas A&M
University System with principal offices in College Station, Texas, (“SYSTEM”), an agency of the
State of Texas, collectively referred to as “Parties” and individually as “Party.”

W I T N E S S E T H :

     WHEREAS, SYSTEM, through The Texas Agricultural Experiment Station (a member of SYSTEM, and
now known as Texas AgriLife Research) (“AGRILIFE”), and LICENSEE have entered into a Sponsored
Research Agreement dated August 29, 2007 (the “SRA”) as well as an associated Intellectual Property
Rights Agreement dated August 29, 2007 (“IPRA”);

     WHEREAS, a LINE (as defined hereinafter) has been created by SYSTEM and used by LICENSEE
pursuant to the SRA;

     WHEREAS, the LINE contains an ALLELE conferring photoperiod sensitivity, generally referred to
as Ma5/Ma6;

     WHEREAS, SYSTEM desires that the LINE be commercialized for the public benefit and welfare;

     WHEREAS, SYSTEM has provided the LINE to LICENSEE and LICENSEE has created the EXISTING
HYBRIDS (as defined hereinafter);

     WHEREAS, the Parties are discussing a “portfolio license agreement” intended to cover sorghum
lines created pursuant to the SRA and certain sorghum lines provided under Material Transfer and
Evaluation Agreements by SYSTEM to LICENSEE, and the Parties intend to include the LINE in such
agreement when it is finalized, executed by the Parties and in effect;

     WHEREAS, the EXISTING HYBRIDS are ready to be commercialized and this Agreement is intended to
cover the interim period until the aforementioned “portfolio license agreement” is in effect;

     WHEREAS, LICENSEE has represented that it has certain marketing, engineering and financial
capabilities, and that it shall commit itself to a thorough and diligent program of development and
commercialization of the LINE and derived HYBRIDS for public benefit; and

     WHEREAS, SYSTEM is willing to grant to LICENSEE, and LICENSEE is willing to accept, a license
to use the LINE, upon the terms and conditions set forth below.

Page 1 of 18

 

     NOW THEREFORE, in consideration of the mutual covenants and premises contained in this
Agreement, the receipt and sufficiency of which is acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

	1.01	 	“LINE” shall mean the sorghum line designated as R07007, which was created by SYSTEM prior to
the conduct of the SRA, and in which SYSTEM has ownership rights, and new genetic lines or
populations developed by LICENSEE through further selection within the LINE, as distinguished
from crossing followed by selection.
	 
	1.02	 	“INTELLECTUAL PROPERTY RIGHTS” shall mean all rights in any patent, plant variety protection
certification, plant breeders’ rights, or any applications thereof, or any other intellectual
property protection, covering the LINE, HYBRIDS or NEW PARENTAL LINES, that may be filed or
exist in any jurisdiction in the world, with the exception of trademarks and service marks. A
list of such INTELLECTUAL PROPERTY RIGHTS will be more specifically included in ANNEX I, which
may be amended from time to time as provided in Article 6.05 and evidenced in writing.
	 
	1.03	 	“NEW PARENTAL LINES” shall mean new genetic lines or populations which are developed by
breeding by LICENSEE and which has the LINE as a progenitor.
	 
	1.04	 	“HYBRID” shall mean a seed or plant that has resulted from genetic crossbreeding between two
or more lines where those lines include (i) the LINE or (ii) one or more NEW PARENTAL LINES.
	 
	1.05	 	“EXISTING HYBRIDS” shall mean those HYBRIDS designated as ES 5200 and ES 5201, developed and
owned by LICENSEE prior to the EFFECTIVE DATE, as contemplated under Article 8.D.(2) of the
SRA.
	 
	1.06	 	“COMMERCIAL SEED” shall mean seed of HYBRIDS that is sold for purposes other than the
production of propagating material.
	 
	1.07	 	“TRAIT FEE” shall mean any upfront or annual fee collected by LICENSEE or any AFFILIATED
COMPANY in conjunction with NET SALES as an additional remuneration for the sale of COMMERCIAL
SEED that has a particular valuable trait or characteristic.
	 
	1.08	 	“AGRILIFE GENETIC CONTRIBUTION” shall mean, for any specific HYBRID or NEW PARENTAL LINE: (a)
the proportion of the nuclear genes of the HYBRID or the NEW PARENTAL LINE, as applicable,
arisen from the LINE, based on DNA Marker Analysis as defined in the SRA; (b) a contribution
to be determined on a case-by-case basis in each case where a specific valuable phenotype of
that HYBRID or the NEW PARENTAL LINE, as applicable, is attributable to specific ALLELE(s)
optioned or licensed to LICENSEE by SYSTEM; and (c) OTHER CONTRIBUTIONS from AGRILIFE.
	 
	1.09	 	“OTHER CONTRIBUTIONS” shall mean (i) intellectual and technical contributions to the
development of the LINE or if from LICENSEE, to the development of the LINE, NEW PARENTAL
LINES or HYBRIDS such as, without limitation, markers, gene-trait association knowledge or composition knowledge, that inform the breeding and selection

Page 2 of 18

 

	 	 	process, or transgenic traits and (ii) financial contributions to the development of the
LINE, or if from LICENSEE, to the development of the LINE, NEW PARENTAL LINES or HYBRIDS.

	1.10	 	“EFFECTIVE DATE” shall mean the date this Agreement has been executed by the last Party.
	 
	1.11	 	“NET SALES” shall mean LICENSEE’s and AFFILIATED COMPANIES’ receipts for sales of COMMERCIAL
SEED or for SERVICES requiring the use of the LINE, to a bona fide, arms length customer, less
the sum of the following:

	 	(a)	 	sales taxes, tariffs, duties and/or use taxes directly
imposed with reference to particular sales;
	 
	 	(b)	 	outbound transportation prepaid or allowed, shipping,
packaging, cost of insurance in transit paid by LICENSEE or an AFFILIATED
COMPANY;
	 
	 	(c)	 	amounts allowed or credited on returns;
	 
	 	(d)	 	customary trade, quality or cash discounts;
	 
	 	(e)	 	cost of any coating materials or treatments that may have
been applied to the COMMERCIAL SEED; and
	 
	 	(f)	 	other deductions which are appropriate to sales of the
LICENSED PRODUCTS may be included by mutual agreement of the Parties, to be
specified in Annex II to this Agreement.

	 	 	No deductions shall be made for commissions paid to individuals whether independent sales
agencies or regularly employed by LICENSEE. The value of sample size quantities of seed
provided for demonstration, marketing or research purposes shall not be included in NET
SALES. Where there is no identifiable sale price (except for samples as referred to in the
previous sentence), or when COMMERCIAL SEED is sold to other than a bona fide, arms length
customer of LICENSEE or an AFFILIATED COMPANY, LICENSEE or the AFFILIATED COMPANY shall be
deemed to have received an amount of NET SALES calculated based on the final sale of the
COMMERCIAL SEED to an independent third party. If no such current price is available, a
hypothetical fair market value price will be determined by the Parties jointly in good
faith for the purpose of calculating NET SALES. Further, TRAIT FEES, if any, net of any
applicable deductions, shall be added to NET SALES if related to a trait contributed by
SYSTEM. NET SALES shall not include sales of COMMERCIAL SEED by LICENSEE to any AFFILIATED
COMPANY, by any AFFILIATED COMPANY to LICENSEE, or by any AFFILIATED COMPANY to any other
AFFILIATED COMPANY, except if the entity to which the COMMERCIAL SEED is sold is the end
user of such COMMERCIAL SEED.
	 
	1.12	 	“LICENSE INCOME” shall mean the amount actually received by either LICENSEE or any AFFILIATED
COMPANY in consideration for the grant of sublicenses to sublicensees that are not AFFILIATED
COMPANIES to the LINE or any HYBRID or NEW PARENTAL LINE to exploit the same and to produce
and sell COMMERCIAL SEED, including up-front fees, lump sum payments and any running royalties
on a product-by-product and jurisdiction-by-jurisdiction basis.

Page 3 of 18

 

	1.13	 	“AFFILIATED COMPANY” shall mean any company owned or controlled by, under common control with
or controlling LICENSEE, “control” meaning in this context the direct or indirect ownership of
more than fifty percent (50%) of the voting stock/shares of a company, or the power to
nominate at least half of the directors.
	 
	1.14	 	“SERVICE” shall mean any transaction with a third party in which LICENSEE or an AFFILIATED
COMPANY performs certain activities on behalf and at the request of a third party that would
if not performed by LICENSEE or an AFFILIATED COMPANY require a license under SYSTEM’S
INTELLECTUAL PROPERTY RIGHTS licensed hereunder, in exchange for payment, but excluding any
research collaboration or sponsored research agreement.
	 
	1.15	 	“ALLELE” shall mean a particular form of one or more genes determinant for a valuable
characteristic of a plant (e.g. drought tolerance, specific flowering time), discovered in the
Program under the SRA by SYSTEM or by SYSTEM and LICENSEE jointly, such as Ma5/Ma6 conferring
photoperiod sensitivity; provided that the particular form of such gene or genes is covered by
a VALID CLAIM.
	 
	1.16	 	“BUSINESS YEAR” shall mean the twelve (12)-month period beginning September 1 and ending
August 31 of the following calendar year (e.g. the 2010 BUSINESS YEAR runs from September 1,
2009 through August 31, 2010.). LICENSEE may request from time to time to amend the starting
and ending dates defined as the BUSINESS YEAR as may be reasonable for the conduct of
LICENSEE’s business. Such amendment must be mutually agreed to in writing by the Parties.
	 
	1.17	 	“VALID CLAIM” shall mean a claim of a patent application or patent owned or co-owned by
SYSTEM, which claim has been maintained and has not expired and which has not been declared
invalid or unenforceable by a competent court or authority in a final judgment against which
no appeal to a court or authority having mandatory jurisdiction is possible or the term for
any such appeal has expired without the appeal being filed.

ARTICLE II — LICENSE GRANT

	2.01	 	Grant of Rights in LINE. Subject to the reservations in Article 2.03, SYSTEM grants to
LICENSEE and its AFFILIATED COMPANIES an exclusive world-wide license and right, including a
license under SYSTEM’s rights and interest in any INTELLECTUAL PROPERTY RIGHTS covering the
LINE or HYBRIDS, other than the INTELLECTUAL PROPERTY RIGHTS referred to in Article 2.02 (i)
to maintain and increase seed of the LINE; (ii) to develop NEW PARENTAL LINES; (iii) to
develop HYBRIDS; and (iv) to produce and sell COMMERCIAL SEED, and to grant sublicenses of the
same scope, including the right to sublicense use of NEW PARENTAL LINES, to the end of the
term of this Agreement as prescribed in Article VIII.
	 
	2.02	 	Grant of INTELLECTUAL PROPERTY RIGHTS on Ma5/Ma6. SYSTEM grants to LICENSEE and its
AFFILIATED COMPANIES a nonexclusive commercial license and right under SYSTEM’s INTELLECTUAL
PROPERTY RIGHTS in U.S. provisional patent application serial #61/082,388 “Utilization of
Sorghum Genes (Ma5/Ma6)”, in any corresponding patent application in any country of the world,
and in any division, continuation, continuation in-part, re-examination, or extension of any
of the foregoing,

Page 4 of 18

 

	 	 	and in any patent which may result from any of the foregoing, only to the extent necessary
to practice the grant provided in Article 2.01.

	2.03	 	Reservation. SYSTEM reserves an irrevocable, worldwide, nonexclusive, royalty-free right to
practice the grant made in Article 2.01 under (i), (ii) and (iii) for research, demonstration
and educational purposes only, and not for commercial purposes or for the commercial benefit
of third parties. Notwithstanding the above, SYSTEM reserves the right to use the LINE R07007
in the conduct of research sponsored by any third party subject to its compliance with the
provisions of the SRA and the IPRA, including but not limited to the restrictions on Germplasm
Improvement as defined in Article 8.A.(2) of the SRA, when exercising this right.
	 
	2.04	 	Government Reservation. Rights under this Agreement are subject to rights required to be
granted to the Government of the United States of America pursuant to 35 USC Section 200-212,
including a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the United States, if applicable, the patented LINE throughout
the world.

ARTICLE III — CONSIDERATION

	3.01	 	Up-front Fee. As consideration for the license granted in this Agreement, LICENSEE shall pay
a single up-front fee of $[***].
	 
	3.02	 	Royalty Rate. In addition, LICENSEE shall pay SYSTEM a royalty on NET SALES of COMMERCIAL
SEED of each HYBRID, which will be calculated in accordance with this Article 3.02.

	 	a)	 	Base Rate. Where the COMMERCIAL SEED is of a HYBRID which is entirely
composed of AGRILIFE GENETIC CONTRIBUTION, and no OTHER CONTRIBUTIONS from LICENSEE,
the royalty rate shall be [***] percent ([***]%) of NET SALES if the HYBRID results
solely from the LINE and another line licensed under the same terms and conditions
regarding royalty payments from SYSTEM;
	 
	 	b)	 	If a HYBRID is not entirely composed of AGRILIFE GENETIC CONTRIBUTION, the
royalty rate shall be calculated by taking the base rate specified in Article 3.02(a),
	 
	 	 	 	and reducing the applicable base rate in function of the dilution of the AGRILIFE
GENETIC CONTRIBUTION in such HYBRID by:

	 	–	 	 OTHER CONTRIBUTIONS from LICENSEE; and
	 
	 	–	 	crossing of the LINE which is a progenitor of such HYBRID with
other germplasm, including, but not limited to NEW PARENTAL
LINES.

	 	 	 	On the basis of the foregoing calculation, the royalty rate on NET SALES for the
EXISTING HYBRIDS is [***] percent ([***]%).

Page 5 of 18

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission

 

	 	c)	 	No royalties shall be due with respect to HYBRIDS that contain less than five
percent (5%) AGRILIFE GENETIC CONTRIBUTION and contain no specific ALLELE(s).
	 
	 	d)	 	Where a HYBRID contains less than five percent (5%) AGRILIFE GENETIC
CONTRIBUTION and contains at least one specific ALLELE, the royalty rate payable under
this Article 3.02 on NET SALES of COMMERCIAL SEED of such HYBRID shall be the same as
if the AGRILIFE GENETIC CONTRIBUTION was five percent (5%).

	3.03	 	Minimum Annual Consideration. In order to maintain this exclusive license to the LINE,
LICENSEE shall pay to SYSTEM minimum annual consideration as follows:

	 	(a)	 	for the 2010 BUSINESS YEAR: $[***] and
	 
	 	(b)	 	for the 2011 BUSINESS YEAR until the 2018 BUSINESS YEAR: $5,000 per BUSINESS
YEAR.

	 	 	LICENSEE’S payment of royalties for a BUSINESS YEAR due under Articles 3.02 and 4.02, shall
be credited against the minimum annual consideration due in respect of such BUSINESS YEAR
pursuant to this Article 3.03. In the event that LICENSEE’s payment of royalties for a
BUSINESS YEAR due under Articles 3.02 and 4.02 do not meet or exceed the required minimum
annual consideration, as specified in this Article, LICENSEE’s royalty payment for the
BUSINESS YEAR shall include payment of the balance needed to achieve the required minimum.
In the event this Agreement expires or is terminated prior to the end of a BUSINESS YEAR,
the corresponding minimum annual consideration provided for in this Article shall be
prorated for that BUSINESS YEAR.
	 
	3.04	 	Intellectual Property Rights. The royalties and other payments due under Articles III and IV
of this Agreement are in consideration of all INTELLECTUAL PROPERTY RIGHTS listed in ANNEX I.
As additional consideration for the license granted in this Agreement, LICENSEE shall bear the
reasonable expenses incurred in the filing, prosecution and maintenance of INTELLECTUAL
PROPERTY RIGHTS on which an exclusive license is granted pursuant to Article 2.01, as further
described in Article VI.
	 
	3.05	 	Royalty Duration. The license granted under this Agreement in respect of the LINE shall be
deemed to be fully paid up, and no further amounts shall be due or payable by LICENSEE under
this Agreement in respect of such LINE (including, without limitation, in respect of any
HYBRID or NEW PARENTAL LINE), on a country-by-country basis, with effect from (a) the
expiration of all registered or patented INTELLECTUAL PROPERTY RIGHTS solely or jointly owned
by SYSTEM covering such LINE in such country, or (b) in countries where the LINE which is not
covered by any registered or patented INTELLECTUAL PROPERTY RIGHTS solely or jointly owned by
SYSTEM in such country, the expiration of all registered or patented INTELLECTUAL PROPERTY
RIGHTS solely or jointly owned by SYSTEM covering such LINE in the United States of America.

Page 6 of 18

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission

 

ARTICLE IV — SUBLICENSES

	4.01	 	Sublicenses. LICENSEE and its AFFILIATED COMPANIES may grant sublicenses to persons, firms or
corporations under such conditions as it may arrange, as consistent with this Agreement, as
long as each such sublicense is not repugnant to the public policies of SYSTEM, the State of
Texas, or the United States.
	 
	4.02	 	Sublicensee Consideration. LICENSEE shall pay to SYSTEM a royalty on LICENSE INCOME as
follows:

	 	a)	 	Base Rate. Where the sublicense is for a HYBRID or a LINE which is entirely
composed of AGRILIFE GENETIC CONTRIBUTION, and no OTHER CONTRIBUTIONS from LICENSEE,
the royalty rate shall be [***] percent ([***]%) of LICENSE INCOME.
	 
	 	b)	 	If the sublicense is for a HYBRID or LINE that is not entirely composed of
AGRILIFE GENETIC CONTRIBUTION, or for a NEW PARENTAL LINE, the royalty rate shall be
calculated by taking:

	 	(i)	 	the base rate specified in Article 4.02(a);
	 
	 	(ii)	 	and reducing the applicable base rate in function of the
dilution of the AGRILIFE GENETIC CONTRIBUTION in such HYBRID, LINE or NEW
PARENTAL LINE by:

	 	–	 	 OTHER CONTRIBUTIONS from LICENSEE, and
	 
	 	–	 	in the case of HYBRIDS, the crossing of the LINE which is a
progenitor of such HYBRID with other germplasm, including, but not
limited to, NEW PARENTAL LINES.

	 	 	 	On the basis of the foregoing calculation, the royalty rate on LICENSE INCOME for
the EXISTING HYBRIDS is [***] percent ([***]%).

	4.03	 	Reporting. LICENSEE shall notify SYSTEM of the grant of sublicense to a third party and
provide a redacted copy of the sublicense to SYSTEM. LICENSEE shall not redact any
information unless it could be reasonably considered sensitive to LICENSEE’s business. Upon
reasonable notice by SYSTEM, SYSTEM may through an attorney-at-law review an unredacted copy
of the sublicense but shall not provide any redacted information to business persons within
SYSTEM. LICENSEE shall also provide SYSTEM with the name, address and scope of each
sublicense and a copy of each sublicensee’s report as is pertinent to calculation of amounts
due SYSTEM under this Agreement.
	 
	4.04	 	Non-Cash Transactions. Where there is no identifiable LICENSE INCOME, a hypothetical fair
market value price will be determined by the Parties jointly in good faith for the purpose of
calculating LICENSE INCOME.

Page 7 of 18

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission

 

ARTICLE V — LICENSEE RESPONSIBILITIES

	5.01	 	Diligence. LICENSEE will use commercially reasonable efforts to actively market the EXISTING
HYBRIDS and will provide a non-binding marketing plan to SYSTEM reflecting its marketing
efforts within ninety (90) days from the EFFECTIVE DATE. LICENSEE will provide annual updates
of such marketing plan.
	 
	5.02	 	Failure to Maintain Diligence. Minimum diligence requirements for the LINE shall be satisfied
by the payment of the minimum annual consideration amounts for the prescribed BUSINESS YEARS
set forth in Article 3.03. If LICENSEE fails to pay to SYSTEM the prescribed minimum annual
consideration within thirty (30) days after the receipt of a written notice from SYSTEM
notifying LICENSEE of the payment failure, SYSTEM shall have the right to convert the license
granted to LICENSEE with respect to each LINE to non-exclusive, by written notice to LICENSEE.
	 
	5.03	 	Legal Compliance. LICENSEE must comply with all applicable federal, state and local laws and
regulations in its exercise of all rights granted to it by SYSTEM under this Agreement.
	 
	5.04	 	No Royalties for Sales to U.S. Government. In accordance with 35 USC Section 200-212,
LICENSEE has no duty to pay SYSTEM royalties under this Agreement on NET SALES made to the
United States Government, including any United States Government agency. LICENSEE shall
reduce the amount charged for COMMERCIAL SEED covered by patent applications or patents
licensed under this Agreement sold to the United States Government by an amount equal to the
royalty otherwise due SYSTEM.
	 
	5.05	 	U.S. Manufacture. In accordance with 35 USC Section 200-212, COMMERCIAL SEED covered by
patent applications or patents licensed under this Agreement shall be manufactured
substantially in the United States of America.

ARTICLE VI — INTELLECTUAL PROPERTY

	6.01	 	Filing. LICENSEE will have the right to prepare and file, in consultation with SYSTEM, any
and all applications for patents, plant variety rights or other forms of intellectual property
protection or variety registration, in any jurisdiction throughout the world, for HYBRIDS, the
LINE and NEW PARENTAL LINES, whether solely or jointly owned by SYSTEM. At the request of
LICENSEE, SYSTEM will cooperate fully with LICENSEE by providing information and executing
documents necessary for LICENSEE to conduct the activities concerning the filings, prosecution
and other proceedings anticipated under this paragraph. Applications for patents or plant
variety rights on each particular HYBRID or the LINE shall be filed in the name of SYSTEM
(AGRILIFE) if owned by SYSTEM pursuant to the SRA, in the name of LICENSEE (CERES) if owned by
LICENSEE pursuant to the SRA and in the joint names of SYSTEM (AGRILIFE) and LICENSEE (CERES)
if jointly owned pursuant to the SRA. Applications for patents or plant variety rights on NEW
PARENTAL LINES shall be filed in the name of LICENSEE (CERES). For the avoidance of doubt,
LICENSEE acknowledges that applications filed under this Article 6.01 that are solely in the
name of LICENSEE shall not affect LICENSEE’s obligations to SYSTEM, including but not limited
to LICENSEE’s obligations under Article III with respect to the LINE, HYBRIDS, and NEW
PARENTAL LINES claimed in such applications.

Page 8 of 18

 

	6.02	 	Abandoning IP Applications. The following rules shall apply with respect to applications for
intellectual property protection on SYSTEM owned or jointly owned LINES or HYBRIDS. If the
Party controlling prosecution intends to abandon any patent plant variety rights, pending or
granted in any jurisdiction, that Party shall first give sufficient written notice to the
other Party to permit the other Party the opportunity to assume such filing, examination
and/or maintenance.
	 
	6.03	 	Jurisdiction. The obligations of this Article 6.03 shall not apply to any jurisdictions in
which the prosecuting Party has elected not to apply for intellectual property protection.
LICENSEE and SYSTEM shall avoid carrying out any act that would prejudice the grant of
INTELLECTUAL PROPERTY RIGHTS. Without limitation, neither Party shall make available
reproductive material of the HYBRIDS or LINE at a date or in a manner that might jeopardize
the right to seek INTELLECTUAL PROPERTY RIGHTS protection for the HYBRIDS or LINE.
	 
	6.04	 	Information. The provisions of this Article shall apply with respect to applications for
intellectual property protection on SYSTEM owned or jointly owned LINE or HYBRIDS. LICENSEE
shall keep SYSTEM promptly and fully informed of the course of patent and plant variety rights
prosecution or other proceedings. LICENSEE shall provide to SYSTEM the opportunity to provide
input to the development of the patent and plant variety rights application(s) and any
official proceedings thereafter. LICENSEE shall disclose to SYSTEM the complete texts of all
patent and plant variety rights applications filed by LICENSEE under INTELLECTUAL PROPERTY
RIGHTS as well as all information received concerning office actions, the institution or
possible institution of any interference, opposition, re-examination, reissue, revocation,
nullification or any other official proceeding involving INTELLECTUAL PROPERTY RIGHTS. If
LICENSEE fails to reasonably incorporate the input of SYSTEM, or fails to keep SYSTEM
informed, LICENSEE, upon the request of SYSTEM, must transfer prosecution of the
application(s) to SYSTEM. Nothing in this Article 6.04 affects LICENSEE’s obligations under
Article 3.04 of this Agreement.
	 
	6.05	 	List of INTELLECTUAL PROPERTY RIGHTS. The list of INTELLECTUAL PROPERTY RIGHTS existing as
of the EFFECTIVE DATE is included in ANNEX I. When either Party files for or obtains
additional INTELLECTUAL PROPERTY RIGHTS, such Party will provide to the other Party an updated
version of ANNEX I, including a list of such additional INTELLECTUAL PROPERTY RIGHTS
and such updated version of ANNEX I will be substituted for the then existing version.

ARTICLE VII — PAYMENTS AND REPORTS

	7.01	 	When Payments are Due. Unless otherwise specified, payments shall be made annually. Payments
shall be made to The Texas A&M University System, in College Station, Texas, not later than
sixty (60) days after the last day of the BUSINESS YEAR in which they accrue.
	 
	7.02	 	Royalty Reports. LICENSEE shall provide a sales report to SYSTEM each BUSINESS YEAR,
providing information sufficient to allow SYSTEM to calculate amounts due to SYSTEM for the
reporting period, in the form attached hereto as ANNEX II.

Page 9 of 18

 

	7.03	 	Currency. Payment due to SYSTEM shall be paid in U.S. dollars. Royalty payments requiring
conversion shall use the exchange rate as reported in The Wall Street Journal on the
last business day of the royalty reporting period.
	 
	7.04	 	Inspection of Books and Records. At its own expense, SYSTEM may annually inspect LICENSEE’s
books and records as needed to determine royalties payable. LICENSEE shall maintain such books
and records for at least three (3) BUSINESS YEARS following the dates of the underlying
transactions. Any such inspections shall be in confidence and conducted during ordinary
business hours, and SYSTEM will provide LICENSEE prior notice two (2) weeks before making such
inspections. SYSTEM must employ an independent Certified Public Accountant reasonably
acceptable to LICENSEE for this purpose, who will only report to SYSTEM such information as
necessary, to determine royalties payable to SYSTEM and LICENSEE’s compliance with any related
obligations to SYSTEM. If SYSTEM’s audit identifies a shortage of five percent (5%) or more of
amounts due to SYSTEM, then LICENSEE shall pay the costs of SYSTEM’s audit. LICENSEE shall pay
all amounts due as a consequence of such audit to SYSTEM promptly, with interest.
	 
	7.05	 	Interest Charges. Overdue payments may, at the sole discretion of SYSTEM, be subject to a
daily charge commencing on the 31st day after such payment is due, compounded monthly, at the
rate of either one and one-half percent (1.5%) per month or the highest legal interest rate,
whichever is lower. The payment of such interest will not foreclose SYSTEM from exercising any
other rights it may have as a consequence of the lateness of any payment.

ARTICLE VIII — TERM AND TERMINATION

	8.01	 	Expiration. Subject to any other rights of termination under this Article VIII, this
Agreement shall remain in full force and effect on a country-by-country basis until all
registered or patented INTELLECTUAL PROPERTY RIGHTS solely or jointly owned by SYSTEM and
covering such LINES in such country have expired. However, it is anticipated that this
Agreement will be terminated earlier if and when the Parties enter into the “portfolio license
agreement” referred to in the WHEREAS clauses hereof, which “portfolio license agreement” is
intended to cover the LINE and EXISTING HYBRIDS and to replace and supersede this Agreement.
Pending or in the absence of such “portfolio license agreement”, this Agreement remains in
full force and effect until it expires or is terminated pursuant to this Article 8.
	 
	8.02	 	Termination by Licensee. LICENSEE may terminate this Agreement by providing written notice
to SYSTEM at least ninety (90) days before the termination is to take effect.
	 
	8.03	 	Termination by System. If LICENSEE materially breaches this Agreement, SYSTEM may give
LICENSEE written notice of the breach. LICENSEE shall have a period of sixty (60) days from
receipt of the notice to cure the breach. If LICENSEE does not cure the breach within this
period, SYSTEM may terminate this Agreement in writing without further notice.
	 
	8.04	 	Matters Surviving Termination. All accrued obligations and claims, including reimbursement
of patent expenses, license fee obligations, royalty obligations, minimum

Page 10 of 18

 

	 	 	annual consideration obligations, interest charge obligations, and all other financial
obligations, and claims or causes of action for breach of this Agreement, shall survive
termination of this Agreement. Obligations of confidentiality shall survive termination of
this Agreement. This section controls in the case of a conflict with any other section of
this Agreement.

ARTICLE IX — INDEMNIFICATION AND REPRESENTATION

	9.01	 	Indemnification. LICENSEE SHALL AT ALL TIMES DURING THE TERM OF THIS AGREEMENT AND
THEREAFTER INDEMNIFY, DEFEND, AND HOLD HARMLESS SYSTEM, ITS REGENTS, OFFICERS, AND EMPLOYEES
AGAINST ANY CLAIM, PROCEEDING, DEMAND, LIABILITY OR EXPENSE (INCLUDING LEGAL EXPENSE AND
REASONABLE ATTORNEYS’ FEES) WHICH RELATES TO INJURY TO PERSONS OR TO PROPERTY, ANY ACTION
BROUGHT BY A THIRD PARTY ALLEGING INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, OR AGAINST ANY
OTHER CLAIM, PROCEEDING, DEMAND, EXPENSE, AND LIABILITY OF ANY KIND WHATSOEVER RESULTING FROM
THE PRODUCTION, MANUFACTURE, SALE, COMMERCIAL USE, LEASE, CONSUMPTION, OR ADVERTISEMENT OF
COMMERCIAL SEED OR ARISING FROM ANY OBLIGATION OF LICENSEE OR SUBLICENSEE(S) UNDER THIS
AGREEMENT AND NOT CAUSED BY BREACH OF THIS AGREEMENT BY SYSTEM (HEREINAFTER JOINTLY REFERRED
TO AS “CLAIMS”), PROVIDED THAT SYSTEM SHALL PROMPTLY PROVIDE WRITTEN NOTICE OF ANY CLAIM TO
LICENSEE, AND THAT, SUBJECT TO THE APPROVAL OF THE ATTORNEY GENERAL FO THE STATE OF TEXAS,
LICENSEE SHALL HAVE THE RIGHT TO CONDUCT THE DEFENSE OF ANY CLAIM, AND THAT SYSTEM SHALL
COOPERATE WITH LICENSEE AS LICENSEE MAY REQUEST IN ANY SUCH DEFENSE, AT LICENSEE’S REQUEST AND
EXPENSE.
	 
	9.02	 	Representation. SYSTEM represents that it has the full right and power to grant the license
set forth in Article 2.01, and that there are no outstanding agreements, assignments, or
encumbrances inconsistent with the provisions of this Agreement. SYSTEM MAKES NO OTHER
REPRESENTATIONS AND EXTENDS NO OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, NOR DOES SYSTEM ASSUME ANY OBLIGATIONS WITH RESPECT TO INFRINGEMENT OF PATENT RIGHTS
OR OTHER RIGHTS OF THIRD PARTIES DUE TO LICENSEE’S ACTIVITIES UNDER THIS AGREEMENT.

ARTICLE X — NOTICES

	10.01	 	Notices. Payments, notices, or other communications required by this Agreement shall be
sufficiently made or given if mailed by certified First Class United States mail, postage
pre-paid, or by commercial carrier (e.g., FedEx, UPS, etc.) when such carrier maintains
receipt or record of delivery, addressed to the address stated below, or to the last address
specified in writing by the intended recipient.

Page 11 of 18

 

If to SYSTEM:

Vice Chancellor

Office of Technology Commercialization

3369 TAMU

College Station, Texas, USA 77843-3369

	 	 	 

	If to LICENSEE for Legal Matters:

	 	for Financial Matters:
	          VP of Commercial Development

	 	VP of Commercial Development
	          cc: Legal Department

	 	cc: Chief Financial Officer
	          Ceres, Inc.

	 	Ceres, Inc.
	          1535 Rancho Conejo Blvd.

	 	1535 Rancho Conejo Blvd.
	          Thousand Oaks, CA 91320

	 	Thousand Oaks, CA 91320

ARTICLE XI — MISCELLANEOUS PROVISIONS

	11.01	 	Notice of Infringement. SYSTEM and LICENSEE shall promptly notify one another in writing of
any alleged infringement of any INTELLECTUAL PROPERTY RIGHTS. Within thirty (30) days after
receipt of such notice, SYSTEM and LICENSEE shall formulate a strategy for resolving the
alleged infringement. LICENSEE acknowledges that SYSTEM’s involvement, participation, and
representation in any litigation requires the prior written consent of SYSTEM and the Attorney
General of the State of Texas, and subject to the granting of that consent, SYSTEM may be
joined as a party in any action brought by LICENSEE, so long as LICENSEE shall pay all of
SYSTEM’s reasonable costs and expenses. LICENSEE will have the right, at its own discretion
and expense, to take any action to enforce and to initiate and prosecute suits for
infringement of INTELLECTUAL PROPERTY RIGHTS covering the LINE, HYBRIDS and/or NEW PARENTAL
LINES. LICENSEE and SYSTEM will consult with each other upon a course of action and
enforcement strategy. LICENSEE will be responsible for the conduct of any such enforcement
action, and SYSTEM will reasonably cooperate with LICENSEE to effect the enforcement action,
and if appropriate, determine a settlement position. LICENSEE shall be responsible for
retaining counsel but will consult with SYSTEM and retain counsel reasonably acceptable to
SYSTEM. For purposes of settlement, LICENSEE shall be the contact with the Parties’ counsel
as well as the opposing Party(ies) and shall have the right to enter into settlements.
LICENSEE shall keep SYSTEM advised as to all developments with respect to the enforcement
action and settlement discussions, which includes supplying to SYSTEM copies of all papers
received and filed in sufficient time for SYSTEM to comment thereon. SYSTEM may attend any
and all meetings with the Parties’ counsel and the opposing side for settlement purposes. If
necessary, and subject to the consent of the Attorney General of the State of Texas, SYSTEM
agrees to enter into a joint defense agreement. Any damages received by LICENSEE as a result
of an enforcement action of rights to jointly owned INTELLECTUAL PROPERTY RIGHTS, after
deduction of all enforcement related costs incurred by LICENSEE, shall be considered as NET
SALES or LICENSE INCOME, as appropriate, for the purpose of remuneration payments to
SYSTEM.
	 
	11.02	 	Export Controls. It is understood that SYSTEM is subject to United States laws and
regulations controlling the export of technical data, computer software, laboratory prototypes
and other commodities, and that its obligations hereunder are contingent on compliance with
applicable United States export laws and regulations. The transfer of certain technical data
and commodities may require a license from the cognizant agency

Page 12 of 18

 

	 	 	of the United States Government or written assurances by LICENSEE that LICENSEE shall not
export data or commodities to certain countries without prior approval of such agency.
SYSTEM neither represents that a license shall not be required nor that, if required, it
shall be issued.

	11.03	 	Non-Use of Names. LICENSEE shall not use the names of The Texas A&M University System, nor
of any of its employees or components, nor any adaptation thereof, in any advertising,
promotional or sales literature without the prior written consent obtained from SYSTEM in each
case, except that LICENSEE may state that it is licensed by SYSTEM under INTELLECTUAL PROPERTY
RIGHTS.
	 
	11.04	 	Trademarks. LICENSEE may select, own and use its own trademark on COMMERCIAL SEED and in
connection with SERVICES. However, nothing herein shall be construed as granting to LICENSEE
any license or other right under any trade name, trademark, or service mark owned or licensed
by SYSTEM. Conversely, SYSTEM shall have no rights to trade names, trademarks, or service
marks owned by LICENSEE.
	 
	11.05	 	Assignment of this Agreement. This Agreement binds and enures to the benefit of the
Parties, their successor or assigns, but may not be assigned by either Party without the prior
written consent of the other Party; provided however, LICENSEE shall have the right to assign
its rights and obligations under this Agreement to any AFFILIATED COMPANY without such prior
consent, but with written notice to SYSTEM. LICENSEE shall also have the right to assign its
rights and obligations under this Agreement to a third party in conjunction with the transfer
to such third party of substantially all of the assets of LICENSEE associated with performance
under this Agreement without such prior consent.
	 
	11.06	 	Force Majeure. Other than an obligation for the payment of money, SYSTEM, upon receipt of
documentation from LICENSEE which it deems appropriate, shall excuse any breach of this
Agreement, which is proximately caused by war, strike, act of God, or other similar
circumstance normally deemed outside the control of well-managed businesses.
	 
	11.07	 	Entire Agreement. Other than the SRA and the IPRA, and any license agreement executed
pursuant to Article 1.A.(1) of the IPRA, this Agreement contains the entire understanding of
the Parties with respect to INTELLECTUAL PROPERTY RIGHTS, and supersedes all other written and
oral agreements between the Parties with respect to INTELLECTUAL PROPERTY RIGHTS. It may be
modified only by a written amendment or agreement signed by the Parties, except as provided in
Article 6.05.
	 
	11.08	 	Governing Law. The validity, interpretation, and enforcement of this Agreement shall be
governed and determined by the laws of the State of Texas, excluding the conflict of laws
rules which might require the application of the laws of another jurisdiction. 
	 
	11.9	 	Disputes.

A. The Parties shall make every possible attempt to resolve in an amicable manner all
disputes between the Parties concerning the interpretation of this Agreement.

B. The Parties must use the dispute resolution process provided in Chapter 2260, Texas
Government Code, and the related rules adopted by the Texas Attorney General to

Page 13 of 18

 

attempt to resolve any claim for breach of contract made by LICENSEE that cannot be
resolved in the ordinary course of business. LICENSEE must submit written notice of a
claim of breach of contract under this Chapter to B.J. Crain, Associate Vice Chancellor,
who will examine LICENSEE’s claim and any counterclaim and negotiate with LICENSEE in an
effort to resolve the claim.

	11.10	 	Headings. Headings appear solely for convenience of reference. Such headings are not part
of, and shall not be used to construe, this Agreement.
	 
	11.11	 	No Waiver; Severability. No waiver of any breach of this Agreement shall constitute a
waiver of any other breach of the same or other provision of this Agreement and no waiver
shall be effective unless made in writing. This Agreement, to the greatest extent
possible, shall be construed so as to give validity to all of the provisions hereof. If any
provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent
jurisdiction or is deemed unenforceable under the current applicable law from time to time in
effect during the term of this Agreement, the remainder of this Agreement will not be affected
or impaired thereby and will continue to be construed to the maximum extent permitted by law.
In lieu of each provision which is invalid, illegal or unenforceable, there will be
substituted or added as part of this Agreement by mutual written agreement of the Parties, a
provision which will be as similar as possible, in economic and business objectives as
intended by the Parties to such invalid, illegal or unenforceable provision, but will be
valid, legal and enforceable.
	 
	11.12	 	Damages. Neither Party shall be liable for indirect, special, remote, incidental or
consequential damages or loss of profit in connection with this Agreement or its
implementation.

ARTICLE XII — CONFIDENTIALITY

	12.01	 	As used in this Agreement, the term “Confidential Information” shall mean all
non-public-information received by one Party from the other in the framework of this
Agreement. Confidential Information may include, but is not limited to, information
concerning the disclosing Party’s operations, research, processes, techniques, data, sales,
marketing, promotion and other activities. Any reports provided by LICENSEE to SYSTEM
pursuant to this Agreement are Confidential Information.
	 
	12.02	 	From receipt to five (5) years after the disclosure of the relevant Confidential
Information, the receiving Party shall not use, except as is expressly allowed by this
Agreement, and/or disclose any Confidential Information to any third party without the prior
written consent of the disclosing Party. Confidential Information shall only be made
accessible to each Party’s employees and/or agents on a need-to-know basis.
	 
	12.03	 	The receiving Party shall have no obligations of confidentiality for information that: can
be established through written evidence to be in the possession of the receiving Party prior
to the disclosure by the disclosing Party; is or becomes public knowledge through no fault of
the receiving Party; is acquired from others not under an obligation of confidentiality to the
disclosing Party; and/or was independently developed by the receiving Party as demonstrated by
documented evidence prepared contemporaneously with such independent development. In
addition, LICENSEE shall have the right to use and disclose SYSTEM Confidential Information
(a) as required to file for

Page 14 of 18

 

	 	 	INTELLECTUAL PROPERTY RIGHTS, (b) as required to exercise its commercialization rights
granted in or on the basis of this Agreement and for related marketing activities, (c) as
required by laws, rules or regulations or court orders such as, without limitation, SEC or
IRS regulations, or (d) in LICENSEE’S reasonable judgment, to (potential) investors and
business partners. Further, SYSTEM shall have the right to use and disclose LICENSEE
Confidential Information if any such information is ordered produced or disclosed by a
court or administrative body of competent jurisdiction or otherwise required by law, or
required to be disclosed by the Attorney General of The State of Texas, but only to the
extent of such required production or disclosure. To the extent reasonably possible
SYSTEM will give prior written notice of such required production or disclosure to LICENSEE
and if so requested by LICENSEE, use reasonable efforts to obtain confidential treatment of
the information disclosed to the maximum extent possible.

     The Parties have caused this Agreement to become effective as of the date last executed below.

	 	 	 	 	 	 	 

	CERES, INC.	 	THE TEXAS A&M UNIVERSITY SYSTEM	 	 
	 
	 	 	 	 	 	 
	/s/ Anna Rath	 	/s/
Peter Schuerman, for Guy Diedrich	 	 
	 	 	 	 	 
	By:

	 	Anna Rath
	 	Guy K. Diedrich	 	 
	Title:

	 	Vice President of Commercial
Development
	 	Vice Chancellor for Federal Relations and
Commercialization	 	 
	Date:

	 	10/9/09
	 	Date: 10/16/2009	 	 
	 
	 	 	 	 	 	 
	/s/ Jeff Gwyn	 	 	 	 
	 	 	 	 	 
	By:

	 	Jeff Gwyn	 	 	 	 
	Title:	 	Vice President of Plant Breeding and Genomics	 	 
	Date:

	 	10/9/09	 	 	 	 

Page 15 of 18

 

ANNEX I

to the LINE LICENSE AGREEMENT

between Ceres, Inc. and The Texas A&M University System

INTELLECTUAL PROPERTY RIGHTS

	o	 	Provisional patent application serial #61/082,388 “Utilization of Sorghum Genes
(Ma5/Ma6)”

[Any other relevant INTELLECTUAL PROPERTY RIGHTS to be added.]

Page 16 of 18

 

ANNEX II

to the LINE LICENSE AGREEMENT

between Ceres, Inc. and The Texas A&M University System

Royalty Report

Date of report: [X]

BUSINESS YEAR of report: [X]

HYBRID: ES 5200

LINE(s): R.07007

Royalty Calculation

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	AGRILIFE	 	 
	 	 	 	 	 	 	OTHER	 	GENETIC	 	Royalty
	 	 	Base Rate	 	CONTRIBUTIONS*	 	CONTRIBUTION	 	Rate
	NET SALES
	 	 	[***]	%	 	 	0	%	 	 	50	%	 	 	[***]	%
	LICENSE INCOME
	 	 	[***]	%	 	 	0	%	 	 	50	%	 	 	[***]	%

	 	 	 
	*OTHER CONTRIBUTIONS
	Name of Contribution	 	Deduction %
	None

	 	None

Total revenue: [$X]

Additional deductions for NET SALES from Article 1.12(f): None

NET SALES for BUSINESS YEAR: [$X]

Royalties due on NET SALES: [$X]

LICENSE INCOME for BUSINESS YEAR: [$X]

Royalties due on LICENSE INCOME: [$X]

HYBRID: ES 5201

LINE(s): R.07007

Royalty Calculation

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	AGRILIFE	 	 
	 	 	 	 	 	 	OTHER	 	GENETIC	 	Royalty
	 	 	Base Rate	 	CONTRIBUTIONS*	 	CONTRIBUTION	 	Rate
	Net Sales
	 	 	[***]	%	 	 	0	%	 	 	50	%	 	 	[***]	%
	License Income
	 	 	[***]	%	 	 	0	%	 	 	50	%	 	 	[***]	%

	 	 	 
	*OTHER CONTRIBUTIONS
	Name of Contribution	 	Deduction %
	None

	 	None

Total revenue: [$X]

Page 17 of 18

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission

 

Additional deductions for NET SALES from Article 1.12(f): None

NET SALES for BUSINESS YEAR: [$X]

Royalties due on NET SALES: [$X]

LICENSE INCOME for BUSINESS YEAR: [$X]

Royalties due on LICENSE INCOME: [$X]

[If other HYBRIDS are developed, this format will be used.]

Page 18 of 18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}]]