Millennium shall enter into a broad collaborative research agreement in genomics research with Monsanto and Monsanto Agricultural Genomics ("MAGI").
"MAGI Research Program" means the research activities of MAGI and its contractors in the Field (definition CON) during the Transfer Term, whereby Millennium shall furnish the following services:
Research Services:
(a) performance of research in the Field; and
(b) development of Process Technology with primary applications in the Field;
Additional Technology Transfer Services
(c) services relating to Software Developments;
(d) design, development and manufacture of equipment for use by Monsanto and/or MAGI;
(e) other services relating to the transfer or support of Millennium Process Technology and Millennium Product Technology (other than Base Technology Transfer Services--see Section I.L); and
(f) other services as may be determined by the Joint Program Team from time to time;
Administrative Services:
(g) services regarding the recruitment, hiring and retention of staff and related human resources matters;
(h) services regarding patent filing and prosecution;
(i) services relating to the location, negotiation of leases for, and equipping of MAGI facilities; (j) services relating to accounting, purchasing and other financial matters; and (v) others as may be determined by the Joint Program Team from time to time.
B. Research Period:
From signing to 12/31/2002 ("Transfer Term"), which may be extended by mutual agreement by the parties.
C. Cost Sharing & Reimbursement Basis:
[Per Millennium's 3/98 BIO presentation, MAGI or Monsanto shall be responsible for payment of all FTEs associated with either party's Research Services. Such FTEs are budgeted to be 100 by the end of 1998, increasing to 150/year during the Transfer Term.]
In addition, MAGI shall pay Millennium:
a) ___(CON) for Administrative Services performed by Millennium based upon a reasonable allocation of ___(CON) will be determined by mutual agreement of the parties prior to the commencement of the delivery of such Administrative Services;
b) for all Research Services performed by Millennium at a rate of $___(CON) per FTE;
c) ___(CON) Additional Technology Transfer Services, based upon a reasonable allocation of ___(CON) will be determined by mutual agreement of the parties prior to the commencement of the delivery of such Additional Technology Transfer Services.
[Per Millennium's 12/98 annual report, Millennium realized $38.2 million in revenues associated with technology transfer and license fees, achievement of mutually agreed-upon research objectives, and facilities services under this agreement in 1998, in addition to the $38 up-front payment realized in 1997.]
D. Upfront Payment:
$38 million upon signing in consideration for the transfer and license commencing on such Effective Date of the Millennium Existing Process Technology, Millennium Existing Product Technology and Base Technology Transfer Services.
In addition, MAGI or Monsanto shall pay to Millennium an aggregate of $80 million over the Transfer Term in consideration for the transfer and license of the Millennium New Process Technology, Millennium Process Technology Improvements, Millennium Product Technology (other than Millennium Existing Product Technology) and Base Technology Transfer Services.
E. Benchmark Amounts:
During each Contract Year, MAGI shall make Milestone Payments based upon the achievement of the Annual Milestones (definition CON) for such Contract Year for such Contract Year. The total Milestone Payments payable to Millennium in any Contract Year shall equal (i) $___(CON but $20M per Millennium's 3/98 BIO presentation) if the Annual Milestones are fulfilled for such Contract Year; or (ii) a lesser amount for partial achievement of such Annual Milestones for such Contract Year. In no event shall the Milestone Payments for any Contract Year exceed $___(CON).
[See also Section I.W.]
F. Technology Acquisition Fees:
See Section I.D.
G. Payment Schedule:
On or before each of January 15, April 15, July 15 and October 15 in each Contract Year, with the first such payment to be made on January 15, 1998.
H. Budgets:
CON
I. Reimbursement Start Date:
Signing
J. Regulatory Filings:
All by Monsanto.
K. Special Capital Requirements
NA
L. Patent Ownership:
Millennium shall solely own:
1) all Software Developments, which shall be deemed to be Millennium Process Technology Software or Millennium Informatics Technology included in Millennium New Process Technology or Millennium Process Technology Improvements, as the case may be;
2) any Research Service Inventions that constitutes Process Technology that is an Improvement; and
3) any Research Service Invention that (i) constitutes Process Technology that is not an Improvement to Millennium Process Technology and (ii) is not Predominantly Funded by MAGI ("Millennium Research Service Process Technology Inventions").
MAGI shall solely own:
4) all Research Service Inventions that constitute Product Technology ("Research Service Product Technology Inventions") and all such Product Technology shall be deemed to be MAGI Product Technology; and
5) any Research Service Invention that (i) constitutes Process Technology that is not an Improvement and (ii) is Predominantly Funded by MAGI ("MAGI Research Service Process Technology Inventions"), and any such Process Technology shall be deemed to be MAGI New Process Technology.
"Base Technology Transfer Services" means those technology transfer services to be provided by Millennium at one facility for MAGI and one facility for Monsanto that are reasonably necessary to (a) transfer to MAGI and support the Millennium Process Technology and Millennium Product Technology consistent with the Annual MAGI Research, Development and Technology Transfer Plan and (b) transfer to Monsanto and support the Millennium Process Technology consistent with the Annual Monsanto Technology Transfer Workplan.
"Informatics Platform" means the hardware, software and operating system configuration that is necessary for MAGI or Monsanto, as the case may be, to have installed aspects of the Millennium Informatics Technology as specified from time to time in the Annual MAGI Research, Development and Technology Transfer Plan and the Annual Monsanto Technology Transfer Workplan.
"MAGI New Process Technology" means (a) Process Technology that is both (i) developed by MAGI or its majority owned subsidiaries during the Transfer Term and (ii) solely or jointly owned by MAGI or its affiliates, and (b) Process Technology licensed in from third parties by MAGI or its majority-owned subsidiaries during the Transfer Term (but only to the extent that transfer or sublicensing is permitted by such third party agreements) other than MAGI Improvements to Millennium Process Technology.
"MAGI Process Technology" means MAGI Improvements to Millennium Process Technology and MAGI New Process Technology.
"Millennium Existing Process Technology" means Process Technology (including applicable Millennium Informatics Technology and Millennium Process Technology Software) which (a) is solely or jointly owned by Millennium (other than MBIO) as of the Execution Date, or (b) has been licensed in from third parties by Millennium (other than MBIO) as of the Execution Date (but only to the extent that transfer or sublicensing is permitted by such third party agreements). Millennium Existing Process Technology shall not include Millennium Research-Stage Process Technology.
"Millennium Existing Product Technology" means Product Technology (a) which solely or jointly owned by Millennium as of the Execution Date, and (b) which has been licensed in from third parties by Millennium as of the Execution Date (but only to the extent that transfer or sublicensing is permitted by such third party agreements), in either case which is reasonably useful in connection with the research, development or commercialization of products, services and technologies for use in the Field.
"Millennium Informatics Technology" means Process Technology that consists of software that is fully operational and fully supported for use by the relevant research group at Millennium, in object code form only, which (a) is (i) solely or jointly owned by Millennium (other than MBIO) as of the Execution Date or during the Transfer Term, or (ii) licensed in from third parties by Millennium (other than MBIO) during the Transfer Term (but only to the extent that transfer or sublicensing is permitted by such third party agreements) and (b) is useful for the automated processing and integration of data and information (regardless of the source of such data or information) on ___(CON), including, but not limited to, software tools used (1) to analyze ___(CON), (2) to predict ___(CON), (3) to identify ___(CON), and (4) to analyze ___(CON); provided, however, that Millennium Informatics Technology shall not include (A) Millennium Process Technology Software, or (B) metatools (i.e., software tools used to develop the Millennium Informatics Technology itself). "Predominantly Funded by MAGI" means that MAGI and/or its affiliates has/have provided 51% or more of the funds used in making a Research Service Invention.
M. Patent Filing Costs:
Each of the parties shall bear its own costs and expenses in filing, prosecuting and maintaining Patent Rights.
N. Patent Defense Costs:
All by Millennium during the Transfer Term and the Extension Period. Thereafter, Millennium shall have the sole right to decide whether to institute an infringement suit or take other appropriate action with respect to an infringement of the Transferred Technology Intellectual Property Rights. "Extension Period" means (i) with respect to infringement of Transferred Technology Intellectual Property Rights by a ___(CON) period commencing as of the expiration of the Transfer Term, and (ii) with respect to infringement of Transferred Technology Intellectual Property Rights by a person or entity that ___(CON) period commencing as of the expiration of the Transfer Term.
O. 3rd-Party Patents:
MBIO, an affiliate of Millennium, has not granted to Millennium the right to sublicense ___(CON), and, accordingly, the licenses (see Section II.A) shall not include ___(CON). At the request of MAGI or Monsanto, Millennium agrees to use best efforts to cause MBIO to grant a license to such ___(CON) to Monsanto or MAGI at the expense of Millennium.
P. Non-Compete Provisions:
Millennium and/or its affiliates may, in a collaboration with a third party (a "Collaborator"), seek to research, develop and commercialize products and services which are developed with or constitute or comprise select aspects of Millennium Process Technology and/or Millennium Product Technology ("Allowed Activities") and which (i) have applications ___(CON), (ii) are not (A) products, services or methods used in the production, destruction, alteration or control of plants, (B) plants or products derived from plants or (C) products, services or methods ___(CON) ("Field Products") and (iii) the primary application of which is not to research, develop or commercialize Field Products.
Millennium agrees that:
1) during the Transfer Term and for a period of ___(CON) after the expiration of the Transfer Term it will not, and it will cause its affiliates to not, in either case without the prior written consent of Monsanto: (a) ___(CON) in the ___(CON) which is ___(CON) or (b) ___(CON).
2) for a period of ___(CON) after the expiration of the Transfer Term it will not, and it will cause its affiliates to not, in either case without the prior written consent of Monsanto, grant to a Significant Agricultural Enterprise a license in the Field to (a) Millennium Process Technology, or (b) Process Technology owned by Millennium during such ___(CON) period.
"Significant Agricultural Enterprise" means (a) a company which has ___(CON) from the sale of Field Products, determined on a consolidated basis during its most recently completed fiscal year, in excess of ___(CON) and (b) any affiliates of such company.
Q. Publications:
No provision
R. Core Technology:
Millennium agrees to install the Millennium Informatics Technology at ___(CON) (such facilities designated by MAGI and Monsanto, respectively), provided that MAGI and/or Monsanto has purchased and installed the Informatics Platform (including obtaining necessary Third Party Software). The cost of such initial installation is included in the initial payment. Millennium shall provide the following Base Technology Transfer Services for the Millennium Informatics Technology:
A. Problem reporting, tracking and monitoring by a dedicated connection or by encrypted electronic mail via the Internet;
B. Reasonable telephone support for problem determination, verification and resolution on a call-back basis during Millennium's normal business hours;
C. Upgrades installed and in productive use at Millennium which Millennium shall deliver and install in accordance with the instructions of the Technology Transfer Coordinating Team and/or Joint Program Team no more frequently than semi-annually;
D. Training;
E. Diligent work to promptly resolve defects and errors in the Millennium Informatics Technology or Documentation.
S. Cancellation Amounts:
None
T. Termination:
The Agreement may be terminated:
a) by either party upon uncured material breach of the other party;
b) by Monsanto and MAGI in the event that Millennium (other than MBIO), taken as a whole, cease to be ___(CON) during the Transfer Term; or
c) see Section I.V.
Six months prior to the expiration of the Transfer Term or promptly after termination of this Agreement, MAGI and Monsanto shall have the option of (i) negotiating with Millennium for Millennium to continue to maintain and support ___(CON) (with Millennium having the obligation to offer and provide maintenance and support to MAGI and Monsanto on terms no less favorable than the terms for support and maintenance offered to other similarly situated licensees of Millennium, but only if Millennium at such time is maintaining and supporting the ___(CON), as the case may be, at Millennium or any third party) or (ii) obtaining ___(CON) and/or the Millennium Informatics Technology in MAGI or Monsanto's possession.
U. Product Reversion:
To Millennium (certain conditions CON), except if the breaching party is Millennium, Monsanto and MAGI shall retain their respective non-royalty-bearing and royalty-bearing licenses granted to them by Millennium with respect to Millennium Process Technology and Millennium Product Technology transferred to them up to the date of such termination, subject to the continued payment of all applicable amounts previously earned as of the effective date of termination and all royalties due or to become due; provided that such payments shall be subject to reduction to reflect the nature of the breach and the damages caused thereby, such reduction to be agreed upon in good faith by the parties.
V. Change in Control:
If a Change in Control occurs during the Transfer Term, Monsanto may elect to terminate this Agreement.
"Change Of Control" means (i) a merger or consolidation of Millennium and a Significant Agricultural Enterprise which results in the voting securities of Millennium outstanding immediately prior thereto ceasing to represent at least ___%(CON) of the combined voting power of the surviving entity immediately after such merger or consolidation, or (ii) a Significant Agricultural Enterprise, together with its affiliates or associates, becoming the beneficial owner of
(A)___%(CON) or more of the combined voting power of the outstanding securities of Millennium, or
(B) an option to acquire an amount of such securities which, when taken together with the amount of securities beneficially owned, would represent an aggregate of ___%(CON) or more of the combined voting power of the outstanding securities of Millennium, or (iii) the sale or other transfer of all or substantially all of the assets of Millennium to a Significant Agricultural Enterprise.
W. Options/Other:
In order to ensure the recruitment and retention of employees of the highest caliber, the MAGI Oversight Board shall recommend to the governing body of MAGI the terms of an incentive plan for its employees which may be in the form of cash, stock, or phantom equity arrangements and shall make annual awards to its employees based upon the achievement of specified performance criteria, which criteria shall include, but not be limited to, the Annual Milestones. The amount of cash and/or number of shares to be reserved for issuance under the plan, and the criteria for making individual awards, will be recommended for consideration by the governing body of MAGI on an annual basis.
The parties recognize that Millennium has an interest in ensuring that meaningful incentive programs are implemented at MAGI in as much as a significant portion of its compensation is derived from the achievement of the Annual Milestones, and therefore the setting of such Annual Milestones shall take into consideration the level of such incentives.
Accordingly, MAGI and Monsanto agree to consider in good faith recommendations made by Millennium with regard to cash and/or stock incentives to be provided to MAGI employees. Notwithstanding the foregoing, the parties agree that all final determinations regarding employee incentives shall be made by MAGI in its sole discretion.
2. Product License(s)
A. License Holder/Type:
Millennium grants to MAGI and its affiliates:
1) an exclusive license under Millennium's and its affiliates' rights to the Millennium Process Technology and Millennium Process Technology Patent Rights and Copyrights, to develop, have developed, make, have made, distribute for sale, sell, offer to sell, use, practice, import and export products, services and technologies in the Field, subject to the following limitations:
a) the Existing Licenses;
b) MAGI and its affiliates shall not have the right to distribute for sale, sell or offer for sale, or sublicense others to distribute for sale, sell or offer for sale, products, services or technologies that constitute or comprise Millennium Process Technology;
c) such license shall be ___(CON) after the expiration of the Transfer Term;
2) an exclusive license under Millennium's and its affiliates' rights to the Millennium Product Technology and Millennium Product Technology Patent Rights, to develop, have developed, make, have made, distribute for sale, sell, offer to sell, use, practice, import and export products, services or technologies in the Field; provided, however, that ___(CON) shall be subject to and limited by the ___(CON).
Millennium grants to Monsanto and its affiliates a perpetual exclusive license under Millennium's and its affiliates' rights to the Millennium Process Technology and Millennium Process Technology Patent Rights and Copyrights to develop, have developed, make, have made, distribute for sale, sell, offer to sell, use, practice, import and export products, outside of the Field; provided, however, that Monsanto and its affiliates shall not have the right to distribute for sale, sell or offer for sale products, services or technologies that constitute or comprise Millennium Process Technology.
Millennium and its affiliates shall be granted:
3) a co-exclusive (with MAGI and its Affiliates), royalty-free and perpetual license under MAGI's and its affiliates' rights to the MAGI Improvements to Millennium Process Technology and MAGI Improvements Patent Rights and Copyrights relating to Millennium Process Technology to develop, have developed, make, have made, distribute for sale, sell, offer to sell, use, practice, import and export products, services and technologies within and outside the Field;
4) ___(CON) with Millennium or its affiliates; provided, however, that if any such third party engages in significant activities ___(CON), then such sublicense shall require the prior approval of MAGI, under MAGI's and its Affiliates' rights to the MAGI New Process Technology and MAGI New Process Technology Patent Rights and Copyrights to develop, have developed, make, have made, distribute for sale, sell, offer to sell, use, practice, import and export products, services and technologies outside the Field and the Reserve Field (definition CON);
5) a non-exclusive, worldwide, royalty-free and perpetual right and license ___(CON) under MAGI's and its Affiliates' rights to the MAGI Product Technology and the MAGI Product Technology Patent Rights to develop, have developed, make, have made, distribute for sale, sell, offer to sell, use, practice, import and export products, services and technologies ___(CON); and
6) a co-exclusive (with Monsanto and its Affiliates), ___(CON) under Monsanto and its affiliates' rights to the Monsanto Improvements to Millennium Process Technology and Monsanto Improvements Patent Rights and Copyrights relating to Millennium Process Technology to develop, have developed, make, have made, distribute for sale, sell, offer to sell, use, practice, import and export products, services and technologies ___(CON).
"Existing Licenses" shall mean:
-Collaboration Agreement between Hoffmann-La Roche and Millennium, dated March 25, 1994
-Collaborative Research Agreement between Pfizer Inc. and Myco Pharmaceuticals, dated January 1, 1995
-Research and License Agreement between Eli Lilly and Millennium, dated October 2, 1995
-Research and License Agreement between Astra AB and Millennium, dated December 9, 1995
-Research and License Agreement between Eli Lilly and Millennium, dated March 31, 1996
-Bioinformatics Access and License Agreement between American Home Products Corporation and Millennium, effective as of August 1, 1996
-CNS Research, Collaboration and License Agreement between American Home Products Corporation and Millennium, effective as of August 1, 1996
-Transcriptional Profiling Technology Access and License Agreement between American Home Products Corporation and Millennium, effective as of August 1, 1996
-Collaborative Research and License Agreement between Wyeth-Ayerst Laboratories and Millennium, dated as of November 1, 1996
B. Product Field of Use:
[CON but agricultural applications]
C. Territory Splits:
Worldwide
D. Royalty Rate:
[Royalty rates based upon the type of Product are CON.]
Monsanto shall have the option ("Buyout Option") to satisfy its royalty obligations to Millennium by paying to Millennium, on any day during the periods set forth below, the "Exercise Price" corresponding to the periods of such exercise as set forth below, less all amounts paid by Monsanto to Millennium at any time for royalties due Millennium:
Exercise Date Exercise Price
CON$___(CON);
CON$___(CON);
CON$___(CON); and
CON$___(CON).
E. Right to Sublicense:
Only to:
(A) the ___(CON) and
(B) to ___(CON), provided that if any such third party either (x) engages in significant activities in (1) ___(CON) (2) the ___(CON) or (3) the ___(CON) and/or (y) engages in significant activities in the ___(CON), and services for humans or animals, then such sublicense shall require the prior approval of Millennium, which approval shall not be unreasonably withheld.
Monsanto shall pay ___%(CON) of Cash Equivalent Consideration received for licenses granting to third parties the right to use MAGI Product Technology comprised of significant parts of databases or libraries of biological materials or chemical compounds created primarily through the use of Millennium Product Technology or Millennium
F. Term/Patent Life:
Royalty obligations shall expire on the earlier of 10 years from the date of the first arms-length, commercial sale of such Royalty Bearing Products in each country or 20 years following the Effective Date of the Agreement.
G. Adv/Min Royalty & Diligence Requirement
MAGI shall (a) use reasonable efforts in pursuing and conducting research and development pursuant to the MAGI Research Program; and (b) furnish, maintain and preserve suitable and sufficient laboratory facilities, equipment and personnel for the research and development to be undertaken by MAGI during the Transfer Term.
H. Royalty Accounting:
"Adjusted Gross Invoice Price" shall mean the gross invoice price of sales of Royalty Bearing Products less Standard Adjustments.
"Standard Adjustments" shall mean with respect to the sale of a Royalty Bearing Product (a) ordinary and customary trade, cash and quantity discounts, (b) excise taxes, sales taxes, consumption taxes and other taxes imposed upon and paid with respect to such sales, (c) freight, insurance and other transportation charges incurred in shipping Royalty Bearing Products to third parties, (d) amounts repaid or credited by reason of rejections, defects, recalls or returns or because of retroactive price reductions, and (e) rebates paid pursuant to governmental regulations.
I. Patent-Royalty Tie-In:
Any Millennium Process Technology Improvement that was Predominantly Funded by MAGI shall not form the basis for any royalty obligation of MAGI or Monsanto to Millennium.
J. Options/Other:
None
3. Manufacturing & Supply
A. Right Holder/Type:
All by Monsanto.
B. Bulk/Dosage Form:
All forms
C. Territory:
Worldwide
D. Reimbursement Basis:
NA
E. Proc. Dev. Terms:
NA
F. Clinical Use Manufacturing:
NA
G. Shipment Terms:
NA
H. Financing:
NA
I. Escape Clause:
Any Millennium Process Technology Improvement that was Predominantly Funded by MAGI shall not form the basis for any royalty obligation of MAGI or Monsanto to Millennium.
J. Product Liability:
Monsanto indemnifies Millennium.
K. Options/Other:
None
4. Collaboration Management
A. Representation:
The parties shall establish:
1) MAGI Oversight Board, comprised of 2 senior executives of Monsanto, 2 senior executives of MAGI and 2 senior executives of Millennium;
2) Joint Program Team, comprised of 2 representatives designated by Monsanto, 2 representatives designated by MAGI and 2 representatives designated by Millennium; and
3) Technology Transfer Coordinating Team, comprising 3 representatives designated by Monsanto and 3 representatives designated by Millennium.
B. Quorum:
See Section IV.C.
C. Basis of Actions:
By majority which must include at least 1 representative of each of the parties (a "Requisite OB Majority").
D. Meetings:
Quarterly
E. Disagreements:
With respect to (a) Consensus Issues, the dispute will be referred to a neutral party for resolution, which resolution shall be final and binding upon the parties, (b) disputes (other than with respect to Consensus Issues) arising out of the failure of the MAGI Oversight Board, the Joint Program Team and/or the Technology Transfer Coordinating Team, to achieve a Requisite OB Majority, Requisite JPT Majority or Requisite TTCT Majority, respectively on any matter presented to such body, the dispute will be resolved in good faith by Monsanto, which resolution shall be final and binding upon the parties.
Consensus Issues shall mean:
1. The determination of the Annual MAGI Research, Development and Technology Transfer Plan and the Annual Monsanto Technology Transfer Workplan; provided, however that (a) the determination of which aspects of the Millennium Process Technology and/or Millennium Product Technology to be transferred in any Contract Year other than the first Contract Year, and (b) the objectives of the MAGI Research Program, shall not be Consensus Issues;
2. The determination of the Administrative Services, Research Services, Planned Technology Services and Additional Technology Transfer Services to be provided by Millennium in each Contract Year, provided that the determination of which technologies included in the Millennium Process Technology and/or Millennium Product Technology to be transferred in any Contract Year other than the first Contract Year shall NOT be a Consensus Issue;
3. The determination of the extent to which the Annual Milestones have been achieved;
4. The MAGI Improvements to Millennium Process Technology, MAGI New Process Technology, MAGI Product Technology and Monsanto Improvements to Millennium Process Technology anticipated to be transferred back to Millennium;
5. The determination of ownership pursuant to Article VI; and 6. Issues arising under Section 4.8 of this Agreement.
F. Buyout/Windup:
NA
G. Options/Other:
None
5. Equity Investment
A. Type of Security:
NA
B. Pricing:
NA
C. Board Seat:
NA
D. Research Tie-Ins:
NA
E. Options & Rights:
None
6. Signatories
A. For Drug Company:
Hendrik A. Verfaillie
President, Monsanto
B. For Biotech Company:
Steven H. Holtzman
Chief Business Officer
Key: CON Confidential Treatment granted by SEC; material omitted from public filings. UKN Unknown NA Not applicable
