{"id":42155,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/collaborative-research-and-license-agreement-pioneer-hi-bred.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"collaborative-research-and-license-agreement-pioneer-hi-bred","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/collaborative-research-and-license-agreement-pioneer-hi-bred.html","title":{"rendered":"Collaborative Research and License Agreement – Pioneer Hi-Bred International Inc. and Maxygen Inc."},"content":{"rendered":"
\n                 COLLABORATIVE RESEARCH AND LICENSE AGREEMENT\n\n                                    BETWEEN\n\n                      PIONEER HI-BRED INTERNATIONAL, INC.\n\n                                      AND\n\n                                 MAXYGEN, INC.\n\n                               December 23, 1998\n\n\n\n\n\n\n\n*     CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND FILED\n      SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH\n      RESPECT TO THE OMITTED PORTIONS.\n\n\n\n\n\n \n                 COLLABORATIVE RESEARCH AND LICENSE AGREEMENT\n\n     THIS COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the \"Agreement\") is\nentered into as of December 23, 1998, by and between PIONEER HI-BRED\nINTERNATIONAL, INC., a corporation organized and existing under the laws of the\nState of Iowa at 800 Capital Square, 400 Locust Street, Des Moines, Iowa 50309\n(\"PIONEER\") and MAXYGEN, INC., a corporation organized and existing under the\nlaws of the State of Delaware, located at 3410 Central Expressway, Santa Clara,\nCalifornia 95051 (\"MAXYGEN\").\n\n     WHEREAS, MAXYGEN has expertise in the rearrangement of DNA to produce and\ndiscover genes utilizing proprietary technologies; and\n\n     WHEREAS, PIONEER has expertise in the breeding and development of\nproprietary crop species; and\n\n     WHEREAS, PIONEER and MAXYGEN wish to enter into this Agreement in order to\nperform research together to discover and develop new genes that can be used by\nPIONEER to produce improved seeds and agricultural products; and\n\n     WHEREAS, MAXYGEN will perform research on projects funded and supported by\nPIONEER in order to discover and develop such genes and will license the results\nof such research to PIONEER for the purpose of the development, manufacture and\nsale of products by PIONEER.  MAXYGEN will also modify and adapt the MAXYGEN\nIntellectual Property \n\n                                      -1-\n\n \nas set forth herein in order to facilitate the R&D Program and will work with\nPIONEER to develop and modify screening methods for each project as needed; and\n\n     WHEREAS, PIONEER will perform research to develop products and technology\nbased on the research results discovered by MAXYGEN and\/or PIONEER and will\ngrant to MAXYGEN a license to the results of such research for the purpose of\nthe development, testing, manufacture and sale of products by MAXYGEN.\n\n     NOW, THEREFORE, in consideration of the mutual covenants contained herein,\nand for other good and valuable consideration, the parties hereby agree as\nfollows:\n\n                           SECTION 1.   DEFINITIONS.\n                           ------------------------ \n\n     1.1  \"Affiliate\" means any corporation, firm, limited liability company,\npartnership or other entity that directly or indirectly controls or is\ncontrolled by or is under common control with a party to this Agreement.\nNotwithstanding the actual control exercised by PIONEER, Optimum Quality Grains,\nL.L.C., is to be considered an Affiliate of PIONEER. As used in this Section,\n\"control\" means ownership, directly or through one or more Affiliates, of 50\npercent or more of the shares of stock entitled to vote for the election of\ndirectors, in the case of a corporation, or 50 percent or more of the equity\ninterests in the case of any other type of legal entity, status as a general\npartner\n\n                                      -2-\n\n \nin any partnership, or any other arrangement whereby a party controls or has the\nright to control the Board of Directors or equivalent governing body of a\ncorporation or other entity, or if such level of ownership or control is\nprohibited in any country, any entity owned or controlled by or owning or\ncontrolling at the maximum control or ownership right permitted in the country\nwhere such entity exists.\n\n     1.2  \"Agent\" means any corporation or other entity through which PIONEER or\nMAXYGEN or one or more of their respective Affiliates produces, markets, or\nsells PIONEER or MAXYGEN Licensed Products, as the case may be.\n\n     1.3  \"Benchmark Product\" shall mean a product that (i) does not contain a\nShuffled Gene and (ii) is not made or identified using any MAXYGEN Intellectual\nProperty or Joint Intellectual Property (including without limitation, any\nmethod or process included therein), but which is otherwise identical to a\nPIONEER Licensed Product (or if no such product exists, substantially similar to\na PIONEER Licensed Product) and is available in the same geographic market and\ntime period. A Benchmark Product shall be a commercial product sold by PIONEER\nor its Affiliates or Agents; provided, if PIONEER or its Affiliates or Agents do\nnot sell such a Benchmark Product, then the most comparable product sold by a\nthird party in the applicable geographic market during the applicable time\nperiod shall be used as the Benchmark Product. By way of \n\n                                      -3-\n\n \nillustration, and without limitation, the Benchmark Product for a PIONEER\nLicensed Product which contained one or more Shuffled Genes would be an\notherwise comparable product not containing any Shuffled Genes.\n\n     1.4  \"Confidential Information\" means the Work Plans, and all information,\nincluding, but not limited to, Know-How, biological materials (including the\nPIONEER Material(s) and MAXYGEN Material(s)), and data, scientific, technical,\nor non-technical, business plans, and marketing and sales information disclosed\nby one party to the other hereunder or under the Confidentiality Agreement\nbetween MAXYGEN and PIONEER and E.I. duPont de Nemours and Company dated\nNovember 4, 1997, or under the Amendment to the Confidentiality Agreement\nbetween MAXYGEN, E.I. duPont de Nemours and Company and PIONEER dated July 27,\n1998, for the purposes of the R&D Program, or to fulfill obligations under this\nAgreement, whether disclosed or provided in oral, written, graphic, photographic\nor any other form, except to the extent that such information:\n\n               (i)    as of the date of disclosure is known to the receiving\nparty or its Affiliates, as shown by written documentation, other than by virtue\nof a prior confidential disclosure from the disclosing party to the receiving\nparty or its Affiliates;\n\n                                      -4-\n\n \n               (ii)   as of the date of disclosure is in, or subsequently\nenters, the public domain, through no fault or omission of the receiving party;\nor\n\n               (iii)  as of the date of disclosure or thereafter is obtained\nfrom a third party free from any obligation of confidentiality; or\n\n               (iv)   after the date of disclosure or thereafter is developed by\nthe receiving party independent of the disclosure as shown by written\ndocumentation.\n\n     1.5  \"Controls\" or \"Controlled\" means, with respect to intellectual\nproperty, possession (other than by virtue of this Agreement and the licenses\ngranted herein) of the ability to grant licenses or sublicenses to the other\nparty hereto without violating the terms of any agreement or other arrangement\nwith, or the rights of, any agreement with a third party.\n\n     1.6  \"Effective Date\" means December 23, 1998.\n\n     1.7  \"Enabling Technology\" means such specific tools, technologies and\/or\nmethods relating to [*******] as the parties may agree in writing to have\nMAXYGEN develop in the R&D Program in accordance with an agreed upon written\nWork Plan, to facilitate the development of PIONEER Licensed Products, in each\ncase, which is designated by written agreement by the parties as Enabling\nTechnology.\n\n                                      -5-\n\n \n     1.8  \"FTE\" means the equivalent of one full year of work on a full time\nbasis by a scientist or other professional possessing skills and experience\nnecessary to carry out the R&D Program by MAXYGEN, determined in accordance with\nMAXYGEN's normal policies and procedures.\n\n     1.9  \"Gene\" means any gene selected for Shuffling in the R&D Program by the\nRDSC pursuant to (P)2.1D(a).\n\n     1.10 \"Gene Library\" means, with respect to a particular Gene, the complete\ncollection of Gene Variants produced from the Shuffling of such Gene in\nconnection with the R&D Program.\n\n     1.11 \"Gene Variant\" means any altered form of a Gene made in connection\nwith the R&D Program which is the result of Shuffling.\n\n     1.12 [*******]\n\n     1.13 [*******]\n\n     1.14 [*******]\n\n     1.15 \"Intellectual Property\" means all Patent Rights and Know-How. It is\nunderstood that Intellectual Property does not include any intellectual property\nowned or Controlled by MAXYGEN relating to the practice of Shuffling Technology.\nIt is further understood that Intellectual Property does not include any\nintellectual property owned or Controlled by MAXYGEN or PIONEER as of the\n\n                                      -6-\n\n \nEffective Date or developed outside of and not in connection with the R&D\nProgram.\n\n               (a)  \"MAXYGEN Intellectual Property\" means MAXYGEN Patent Rights\nand MAXYGEN Know-How.\n\n               (b)  \"PIONEER Intellectual Property\" means PIONEER Patent Rights\nand PIONEER Know-How.\n\n               (c)  \"Joint Intellectual Property\" means Joint Patent Rights and\nJoint Know-How.\n\n     1.16 \"Jointly Developed\" or \"Jointly Invented\" means any item developed or\ninvented by both parties. If the item developed or invented is a patentable\ninvention, such invention is jointly developed if both parties' employees or\nconsultants are considered inventors under 35 U.S.C. (S)1 et. seq., and as\n                                                          --------        \ninterpreted by the U.S. Patent and Trademark Office and the United States\ncourts.\n\n     1.17 \"Know-How\" means all Research Results and all non-patented inventions,\nimprovements, discoveries, data, instructions, processes, formulas, information\n(including, without limitation, chemical, physical and analytical, safety,\nmanufacturing and quality control data and information) and trade secrets\ncreated, discovered, or developed during the Research Term and in connection\nwith the R&D Program. It is understood that Know-How does not include any (i)\nShuffling Technology or (ii) inventions within the Patent Rights.\n\n                                      -7-\n\n \n               (a)  \"MAXYGEN Know-How\" means Know-How owned or Controlled by\nMAXYGEN or created, discovered, or developed solely by MAXYGEN in the R&D\nProgram.\n\n               (b)  \"PIONEER Know-How\" means Know-How owned or Controlled by\nPIONEER or created, discovered or developed solely by PIONEER in the R&D\nProgram.\n\n               (c)  \"Joint Know-How\" means Know-How which is created,\ndiscovered, or developed jointly by both parties in the R&D Program.\n\n     1.18 \"Licensed Product\" means a PIONEER Licensed Product or MAXYGEN\nLicensed Product.\n\n     1.19 \"MAXYGEN Crops\" means [*******].\n\n     1.20 \"MAXYGEN Licensed Product\" means any product that is, or is derived\nfrom:\n\n                    (i)   Plant cells, Plant parts, Plants or seeds of a MAXYGEN\nCrop, which (a) [*******] or (b) is identified or produced utilizing PIONEER\nIntellectual Property or Joint Intellectual Property; or\n\n                    (ii)  Plant cells, Plant parts, Plants or seeds of a PIONEER\nCrop, which (a) incorporates or is made through the use of Research Materials\npermitted pursuant to (P)2.1F(f), or (b) is \n\n                                      -8-\n\n \nidentified or produced utilizing PIONEER Intellectual Property or Joint\nIntellectual Property; or\n\n                    (iii) any other product that (a) [*******] which Plant or\norganism is not a PIONEER Crop or MAXYGEN Crop, and products derived from such a\nPlant or other organism, or (b) is identified or produced utilizing PIONEER\nIntellectual Property or Joint Intellectual Property.\n\n     It is understood and agreed that a MAXYGEN Licensed Product includes,\nwithout limitation, (i) a Plant, (ii) macro, micro, and molecular parts of a\nPlant, including, without limitation, seeds and DNA contained therein, and (iii)\nextracts from a Plant, whether in unprocessed or processed form, including\n[*******] in each case, that is or is from a MAXYGEN Crop in (i), above, or a\nPIONEER Crop in (ii), above.\n\n     1.21 \"Net Sales\" means, for a particular PIONEER Licensed Product, the\ngross monies or the monetary equivalent of all other consideration in any form,\nwhether or not invoiced, billed by or due to PIONEER or its Affiliates, or\nSublicensees for the use, sale, lease or transfer of such PIONEER Licensed\nProduct(s); less qualifying costs directly attributable to such use, sale,\nlease, or transfer, to the extent actually allowed and borne by PIONEER. Such\nqualifying costs shall be limited to [*******] costs for the following:\n(i)credits or refunds, not exceeding the original or customary billing or\ninvoice amount, for such claims or returns,\n\n                                      -9-\n\n \n(ii) packaging, (iii) returnable containers, (iv) prepaid transportation\ninsurance premiums, (v) prepaid outbound transportation expenses, (vi)\ndiscounts, in amounts customary in the trade, for quantity purchases, cash\npayments, prompt payments, wholesalers, and distributors, and (vii) taxes,\nincluding sales, use, excise, import, export, and other taxes or duties\n(excluding taxes on income), separately billed or invoiced, and borne by\nPIONEER, imposed by a government agency with the authority to do so on such use,\nsale, lease or transfer. All sales of PIONEER Licensed Products shall be\nrecorded in U.S. dollars and recognized per U.S. Generally Accepted Accounting\nPrinciples (GAAP), consistently applied. A PIONEER Licensed Product used, sold,\nleased, or transferred by gift or for consideration other than money shall be\ndeemed to have a monetary value of the higher of [*******]. In the event that\nany PIONEER Licensed Product(s) are sold, leased or transferred between PIONEER\nand one of its Affiliates, Sublicensees, or Agents or between two of its\nAffiliates, Sublicensees, or Agents or any PIONEER Licensed Product is used by\nPIONEER or one of its Affiliates, Sublicensees, or Agents, the money or monetary\nequivalent of such PIONEER Licensed Product(s) shall be the higher of [*******].\nPIONEER Licensed Product(s) used in testing, clinical or feeding trials, or as\nmarketing samples to develop or promote the PIONEER Licensed Product(s) shall\nnot be included as PIONEER Licensed Product(s)\n\n                                     -10-\n\n \nused, sold, leased, or transferred; provided the PIONEER Licensed Product(s) are\nsupplied to the user at no cost.\n\n          For purposes of determining Net Sales, sales of PIONEER Licensed\nProducts shall not be discounted due to any product \"bundling\" unless PIONEER\nand its Affiliates, Agents and Sublicensees do not offer the PIONEER Licensed\nProduct outside of a \"bundle\". In the case of discounts on \"bundles\" of products\nor services which include PIONEER Licensed Products, PIONEER may with notice to\nMAXYGEN calculate the Net Sales for the applicable PIONEER Licensed Product by\ndiscounting the bona fide list price of a PIONEER Licensed Product by no more\nthan the average percentage discount of all products of PIONEER and\/or its\nAffiliates, Agents or Sublicensees in a particular \"bundle\", calculated as\nfollows:\n\n          Average percentage\n          discount on a          =   (1 - A\/B) x 100\n          particular \"bundle\"\n\nwhere A equals the total discounted price of a particular \"bundle\" of products,\nand B equals the sum of the undiscounted bona fide list prices of each unit of\nevery product in such \"bundle\". PIONEER shall provide MAXYGEN documentation,\nreasonably acceptable to MAXYGEN, establishing such average discount with\nrespect to each \"bundle\".\n\n     1.22 \"Patent Rights\" means (i) all patents and patent applications that\nclaim an invention conceived and reduced to practice by MAXYGEN and\/or PIONEER\nduring the Research Term and in\n\n                                     -11-\n\n \nconnection with the R&D Program or conceived in connection with the R&D Program\nand reduced to practice within [*******] months after the end of the Research\nTerm, and (ii) any divisions, continuations, continuations-in-part, and patents\nthat issue therefrom, reissues, reexaminations, extensions or other governmental\nactions that extend any of the subject matter of the patent applications or\npatents in (i) above, and any substitutions, confirmations, registrations or\nrevalidations of any of the foregoing, in each case, which is owned or\nControlled, in whole or part, by license, assignment or otherwise by MAXYGEN or\nPIONEER during the term of this Agreement.\n\n               (a)  \"MAXYGEN Patent Rights\" means Patent Rights owned or\nControlled solely by MAXYGEN.\n\n               (b)  \"PIONEER Patent Rights\" means Patent Rights owned or\nControlled solely by PIONEER.\n\n               (c)  \"Joint Patent Rights\" shall mean Patent Rights owned or\nControlled by both PIONEER and MAXYGEN.\n\n     1.23 [*******]\n\n     1.24 \"PIONEER Crop\" means [*******].\n\n     1.25 \"PIONEER Material\" or \"MAXYGEN Material\" means the tangible assays or\nbiological materials, and protocols for using the same, provided by PIONEER or\nMAXYGEN, respectively, to the\n\n                                     -12-\n\n \nother in order so that the recipient can perform its obligations under the R&D\nProgram. All improvements to such assays, and derivatives and progeny of any\nsuch biological materials, whether made by the recipient or the provider, shall\nbe considered to be owned by [*******]. By way of illustration and without\nlimitation, improvements to an assay provided by PIONEER to MAXYGEN, whether\nmade by MAXYGEN or PIONEER, would be considered [*******].\n\n     1.26 \"PIONEER Licensed Product\" means any product that is, or is derived\nfrom, Plant cells, Plant parts, Plants or seeds of a PIONEER Crop that: (a)\n[*******], or (b) is identified or produced utilizing MAXYGEN Intellectual\nProperty or Joint Intellectual Property. It is understood and agreed that a\nPIONEER Licensed Product includes, without limitation, (i) a Plant, (ii) macro,\nmicro, and molecular parts of a Plant, including, without limitation, seeds and\nDNA contained therein, and (iii) extracts from a Plant, whether in unprocessed\nor processed form, including [*******] in each case, that is or is from such a\nPIONEER Crop.\n\n     1.27 \"PIONEER Product Technology\" means such specific technologies, tools,\nassays and\/or methods as the parties may agree in writing to have MAXYGEN\ndevelop in the R&D Program in accordance with an agreed upon written Work Plan,\nto facilitate PIONEER's development and testing of PIONEER Licensed Products, in\neach case, which is designated in writing by the RDSC as PIONEER Product\nTechnology pursuant to (P)2.2A.\n\n                                     -13-\n\n \n     1.28 \"Plant\" means a monocotyledonous or dicotyledonous plant that may or\nmay not currently represent a commercial crop, excluding any organisms that are\nnot monocots or dicots, whether unicellular or multicellular, and whether or not\nsuch organism can perform photosynthesis.\n\n     1.29 \"Product Premium\" means with respect to a particular PIONEER Licensed\nProduct, the difference between the Product Price of the PIONEER Licensed\nProduct and the Product Price of the applicable Benchmark Product in the same\ngeographic market and time period. It is understood and agreed that the Product\nPremium shall also include any other consideration (e.g., technology access\nfees, up-front payments, and licensing fees) which PIONEER and its Affiliates,\nAgents and Sublicensees receive for the sale of a PIONEER Licensed Product as\ncompared to the applicable Benchmark Product.\n\n     1.30 \"Product Price\" means average, actual price of a PIONEER Licensed\nProduct or Benchmark Product, as the case may be, sold in a particular\ngeographic market during a particular time period.\n\n     1.31 \"R&D Program\" means the research and development program to be\nconducted by MAXYGEN and PIONEER pursuant to Section 2 and as described in the\nWork Plan.\n\n     1.32 \"R&D Steering Committee\" or \"RDSC\" means the committee created\npursuant to Section 2 hereof.\n\n                                     -14-\n\n \n     1.33 \"Research Data\" means all data, inventions, and any other information\nobtained, developed, conceived and reduced to practice, or derived in the course\nof performance of the R&D Program.\n\n     1.34 \"Research Materials\" mean all tangible property, including without\nlimitation, assays, invented, obtained, discovered, developed, or derived, or\nthe function or utility of which is discovered or determined, in the course of\nperformance of the R&D Program.  It is understood and agreed that the Research\nMaterials shall not include any PIONEER Materials or MAXYGEN Materials, and that\nany assay and\/or biological materials developed solely by PIONEER or solely by\nMAXYGEN for use in the R&D Program shall be deemed to be PIONEER Materials or\nMAXYGEN Materials, respectively.  It is understood and agreed that all Gene\nVariants shall be Research Materials.\n\n     1.35 \"Research Results\" means all Research Data and Research Materials\ncollectively, including without limitation, all Enabling Technology.\n\n          A.   \"MAXYGEN Research Results\" means Research Results invented or\ndeveloped solely by MAXYGEN.\n\n          B.   \"PIONEER Research Results\" means Research Results invented or\ndeveloped solely by PIONEER.\n\n          C.   \"Joint Research Results\" means Research Results invented or\ndeveloped jointly by both parties.\n\n                                     -15-\n\n \n     1.36 \"Research Term\" shall mean the period commencing on the Effective Date\nand, unless extended by written agreement of the parties pursuant to (P)2.1E(b)\nor sooner terminated as provided herein, terminating on the fifth anniversary of\nthe Effective Date.\n\n     1.37 \"Shuffle,\" \"Shuffled\" and \"Shuffling\" mean the recombination and\/or\nrearrangement and\/or mutation of genetic material for the creation of genetic\ndiversity using intellectual property and\/or tangible property owned or\nControlled by MAXYGEN.\n\n     1.38 \"Shuffled Gene\" means (i) any Gene Variant that meets the applicable\nactivity criteria established by the RDSC, which PIONEER selects to commercially\ndevelop, and which the RDSC designates pursuant to (P)2.1D(f), (ii) any PIONEER\nSGD, and (iii) any MAXYGEN SGD.\n\n     1.39 \"Shuffled Gene Derivative\" means any modified form of a Shuffled Gene,\nwhich modification is developed from or made to the Shuffled Gene by any means,\nincluding without limitation, any codon modified variant, splice variant,\nmutation, derivative or variant of a Shuffled Gene, and any fragment(s) of the\npreceding.\n\n          (a) \"MAXYGEN Shuffled Gene Derivative\" or \"MAXYGEN SGD\" means a\nShuffled Gene Derivative which modification is developed or made by MAXYGEN or\nits Affiliates or Sublicensees.\n\n                                     -16-\n\n \n          (b) \"PIONEER Shuffled Gene Derivative\" or \"PIONEER SGD\" means a\nShuffled Gene Derivative which modification is developed or made by PIONEER or\nits Affiliates or Sublicensees.\n\n     1.40 \"Shuffling Technology\" means techniques, methodologies, processes,\nmaterials and\/or instrumentation [*******].  It is understood and agreed that\nspecific assays developed for screening Gene Variants for a particular\nbiological or chemical activity are not included in Shuffling Technology.\n\n     1.41 \"Sublicensee\" means an entity to whom PIONEER or MAXYGEN, as the case\nmay be, has granted a license or sublicense to make, have made, import, use,\nsell, offer for sale, or otherwise exploit Licensed Products.\n\n     1.42 \"Sublicense Payments\" shall mean all consideration (other than pass-\nthrough royalties on Net Sales of PIONEER Licensed Products by Sublicensees due\nto MAXYGEN pursuant to (P)4.3A)received by PIONEER or MAXYGEN, as the case may\nbe, and their respective Affiliates and Agents from Sublicensees in respect of\nany grant of rights to propagate, use or sell or otherwise distribute Licensed\nProducts (including, without limitation, technology access fees, milestone fees,\npayments for the sale of or right to sell Licensed Products, and license and\/or\nsublicense fees, whether such consideration is in cash, payment in kind,\nexchange or another form).  Notwithstanding the above, Sublicense Payments shall\nnot \n\n                                     -17-\n\n \ninclude any amounts received by MAXYGEN or PIONEER, as the case may be, from a\nthird party for [*******].\n\n     1.43 \"Trait\" means a characteristic of a PIONEER Crop associated with one\nor more genes sourced from any organism in any manner, that is manipulated or\ntracked [*******] as part of the PIONEER Licensed Product development process.\n\n     1.44 \"Trait Categories\" means, as shown in Appendix B, the areas of\ninterest from which the projects to be conducted pursuant to the R&D Program\nwill be selected and for which licenses under this Agreement will be granted.\nIn particular, the areas include, for the PIONEER Crops: [*******].\n\n     1.45 \"Work Plan\" means a written plan approved by the R&D Steering\nCommittee describing the activities to be carried out during each 12 month\nperiod of the R&D Program, as modified from time to time by the parties.  The\nWork Plan for the twelve (12) month period starting on the Effective Date is\nattached hereto as Appendix A.\n\n     1.46 The listed Appendices are:\n\n          A.   Appendix A - Work Plan for 1998-1999; and\n\n          B.   Appendix B - Trait Categories in PIONEER Crops.\n\n                                   -18-\n\n \n                           SECTION 2.  R&D PROGRAM.\n                           ----------------------- \n\n          2.1  Implementation of the R&D Program.\n               --------------------------------- \n\n               A.   Basic Provisions of Program.\n                    --------------------------- \n\n                    (a)  The primary objective of the R&D Program shall be the\ndevelopment of genes encoding enhanced or new Traits for PIONEER Crops within\nthe applicable Trait Categories in order to develop new PIONEER Licensed\nProducts. MAXYGEN and PIONEER shall use their reasonable efforts to conduct the\nresearch activities set forth in the Work Plan, and to provide PIONEER Materials\nand MAXYGEN Materials as set forth therein.\n\n                    (b)  In carrying out the R&D Program, MAXYGEN shall devote\nan average of [*******] FTEs per year for each of the five years of the\nResearch Term (\"Staffing Level\"), and PIONEER shall pay MAXYGEN for the services\nof such FTEs as set forth herein. At the request of PIONEER, MAXYGEN will in\ngood faith consider and discuss proposed increases or decreases to the Staffing\nLevel; provided, however, that the Staffing Level shall remain at [*******]\nFTEs, unless the parties, in their sole discretion, agree in writing to\ndifferent staffing levels. Any increase or decrease to the Staffing Level agreed\nto by the parties shall be reflected in the relevant Work Plan and budget\nassociated with such Work Plan.\n\n                                     -19-\n\n \n                    (c)  MAXYGEN and PIONEER shall each use reasonable efforts\nto perform such tasks as are set forth to be performed by the respective party\nin the relevant Work Plan, and to provide such facilities, materials, equipment,\nand assay methods, as are necessary to perform the research activities set forth\nin the Work Plans.\n\n                    (d)  It is understood and agreed that MAXYGEN shall not be\nobligated to utilize on average per year more than [*******] FTEs in the R&D\nProgram. It is further understood that PIONEER shall be responsible for the\nexpense of its own research activities in the R&D Program that are not performed\nat MAXYGEN.\n\n               B.   Collaborative Efforts and Reports.\n                    --------------------------------- \n\n                    (a)  The parties agree that the successful execution of the\nR&D Program will require the collaborative use of both parties' areas of\nexpertise. The parties shall keep the RDSC fully informed about the status of\nthe portions of the R&D Program they respectively perform. Without limiting the\nforegoing, each party shall furnish to the RDSC quarterly written reports within\n30 days after the end of each quarterly period, describing the progress of its\nactivities in connection with the R&D Program in reasonable detail, including:\n(i) a detailed accounting of the FTEs used, (ii) a reasonably detailed synopsis\nof the screening and testing of Gene Variants and Shuffled Genes, and the\ndevelopment of Shuffled Genes and PIONEER Licensed Products, and (iii) a\ndescription of\n\n                                     -20-\n\n \nIntellectual Property arising from the R&D Program.  It is understood and agreed\nthat reports regarding the development and commercialization of PIONEER Licensed\nProducts outside the scope of the R&D Program shall be subject to (P)5.3 below,\nand that reports regarding the development and commercialization of MAXYGEN\nLicensed Products outside the scope of the R&D Program shall be subject to\n(P)5.4 below.\n\n          (b) MAXYGEN and PIONEER shall cooperate in the performance of the R&D\nProgram and, subject to any confidentiality obligations to third parties, shall\nexchange information and materials as necessary to carry out the R&D Program,\npursuant to the provisions of this Agreement.  Each party will attempt to\naccommodate any reasonable request of the other party to send or receive\npersonnel for purposes of discussing the R&D Program.  Such visits and access\nwill be at agreed times, have defined purposes, be of agreed limited duration\nand be scheduled in advance.  The requesting party will bear the travel and\nlodging costs of any such personnel.  It is understood that any such visiting\npersonnel may be subject to reasonable restrictions to protect intellectual\nproperty outside the R&D Program and the rights of third parties, which may\ninclude sequestration from research projects outside of the R&D Program.\n\n          (c) During the Research Program and for a period of three (3) years\nthereafter, MAXYGEN and PIONEER shall maintain \n\n                                     -21-\n\n \nrecords of the R&D Program (or cause such records to be maintained) in\nsufficient detail and good scientific manner as will properly reflect all work\ndone in the R&D Program and results achieved in the performance of the R&D\nProgram; provided, that laboratory notebooks relating to activities conducted\nduring and in connection with the R&D Program shall be retained, at a minimum,\nfor the term of the Agreement. Each party shall use reasonable efforts to\nprovide to the other pertinent Research Data generated by or on behalf of such\nparty in connection with the R&D Program as the other party may reasonably\nrequest. Such Research Data shall include, without limitation: all results\nobtained as a result of activities conducted pursuant to (P)2.1D(d) and (e), and\nall results with respect to (i) any Gene Variants which had activity meeting the\napplicable criteria established by the RDSC, (ii) all results of all assays in\nwhich Gene Variants or protein pools, as the case may be, demonstrated such\nactivity, and (iii) the levels of such activity. It is understood that nothing\nherein shall require, or be construed to require, MAXYGEN to disclose to PIONEER\nany Shuffling Technology, except to the extent necessary for filing patent\napplications claiming Shuffled Genes.\n\n                                     -22-\n\n \n          C.   Work Plans.\n               ---------- \n\n               (a) For each 12-month period during the Research Term after the\nperiod covered by the initial Work Plan of Appendix A, a Work Plan shall be\nprepared by MAXYGEN and PIONEER and approved by the RDSC no later than 60 days\nbefore the end of the then current 12-month period. Absent agreement by the\nparties, MAXYGEN and PIONEER shall continue to conduct research activities\nwithin the scope of the projects set forth in the previous Work Plan, within the\nbounds of the then currently available FTEs.\n\n               (b) Each Work Plan shall, without limitation, set forth specific,\njointly-defined research and development objectives, research projects within\napplicable Trait Categories for PIONEER Crops, research projects relating to\nEnabling Technology and\/or PIONEER Product Technology and resource allocations,\nand shall be designed to facilitate the earliest practical development and\nidentification of new Shuffled Genes associated with applicable Trait Categories\nfor PIONEER Crops.\n\n               (c) The RDSC shall have the authority to redirect the activities\nto be conducted in the R&D Program within and among the Trait Categories, and to\nreallocate the FTEs in support of such activities.\n\n               (d) If the RDSC is unable to agree as to the terms of a Work Plan\nfor any given 12-month period by the date provided \n\n                                     -23-\n\n \nin subsection (a), above, then the matter shall be addressed as provided in\nSection 13, below.\n\n               (e) MAXYGEN shall have no obligation to conduct any research in\nthe R&D Program in any Trait Category or PIONEER Crop except as expressly\ndescribed in (P)2.6A or (P)2.6B below.\n\n          D.   Activities.\n               ---------- \n\n               (a) Selection of Genes for Shuffling. Either party may propose\n                   --------------------------------\ngenes to be Shuffled in the R&D Program, and the final selection of the Genes\nwhich will be Shuffled will be made by the RDSC. PIONEER may also propose the\nShuffling of genes that PIONEER has licensed from a third party which PIONEER\ndoes not have the right to sublicense to MAXYGEN for the development and\ncommercialization of MAXYGEN Licensed Products. At such time as either party\nproposes a gene for Shuffling, it shall inform the RDSC, to the extent it is\nable to do so without breaching any confidentiality obligations, of all rights\nwhich it has to use and sublicense such gene, and any restrictions or\nlimitations thereon, and any information of which it is aware with respect to\nthird party patent applications or patents which may relate to the use of the\ngene in the R&D Program and\/or the development or commercialization of Licensed\nProducts; provided, neither party shall have any obligation to provide the RDSC\nwith any document which would result in a breach of the attorney\/client\nprivilege with respect thereto. The RDSC shall have the sole authority to\n\n                                     -24-\n\n \nselect the Genes which will be Shuffled in the R&D Program. While the RDSC may\nconsider [*******] for both PIONEER and MAXYGEN, the primary criteria that the\nRDSC shall use to select Genes for Shuffling shall be [*******]. It is\nunderstood and agreed that where there is more than one gene which could be\nShuffled for a particular purpose, unless there are material issues relating to\n[*******], the RDSC shall select for Shuffling a Gene for which the proposing\nparty has the right to sublicense. It is further understood and agreed that the\nRDSC shall use all reasonable efforts to identify and select for Shuffling in\neach Trait Category at least [*******]. Unless otherwise agreed in writing, the\nRDSC shall accept or decline to accept a proposed gene as a Gene within ninety\n(90) days of date of receipt of the information described above. If the RDSC\ncannot agree on a particular Gene, the matter shall be resolved as provided for\nin Section 13.1A.\n\n          (b) [*******] for Shuffled Genes.  At such time as the RDSC selects a\n              ----------------------------                                     \nGene to be Shuffled in the R&D Program or within thirty (30) days thereafter,\nthe RDSC shall prepare a written description of [*******] which a Gene Variant\ntherefrom must meet to be considered for designation as a Shuffled Gene.  Such\n[*******] shall in all cases reflect a reasonable commercial level of activity\nrelevant for PIONEER Licensed Products and may be amended from time-to-time by\nthe RDSC.\n\n                                     -25-\n\n \n          (c) Preparation of Gene Libraries and Protein Pools.  MAXYGEN shall\n              -----------------------------------------------                \nuse its Shuffling Technology to prepare libraries of Gene Variants, and prepare\ncrude or purified protein pools from expression of such libraries as set forth\nin the Work Plan.\n\n          (d) Screening.  Except in those cases where MAXYGEN provides PIONEER\n              ---------                                                       \n[*******], for screening by PIONEER, MAXYGEN shall initially screen the Gene\nVariant libraries as set forth in the Work Plan.  PIONEER shall be responsible\nfor screening to identify optimized function in the applicable PIONEER Crop.\n\n          (e) Gene Variant Pools. In the event that MAXYGEN provides to PIONEER\n              ------------------                                               \npools of Gene Variants for screening by PIONEER, PIONEER agrees that,\nnotwithstanding any other provision of this Agreement, that PIONEER will not:\n(i) transfer such Gene Variants to any third party (except PIONEER shall have\nthe license rights set forth in (P)3.1B with regard to Gene Variants which\nbecome Shuffled Genes); (ii) sequence any Gene Variant provided to PIONEER\n(except PIONEER shall have the license rights set forth in (P)3.1B with regard\nto Gene Variants which become Shuffled Genes); or (iii) use the Gene Variants\nexcept for screening in connection with the R&D Program during the Research Term\n(except PIONEER shall have the license rights set forth in (P)3.1B with regard\nto Gene Variants which become Shuffled Genes).  Notwithstanding the above, if\nPIONEER wishes to conduct or have conducted any of the prohibited \n\n                                     -26-\n\n \nactivities in (i)-(iii) above in order to facilitate the conduct of the R&D\nProgram (e.g., to sequence Gene Variants in order to facilitate the transfer of\nsuch Gene Variant(s) into another construct for enhanced expression), then\nPIONEER shall notify the RDSC, providing a written description of the activities\nit wishes to undertake and an explanation why it wishes to undertake such\nactivities. [*******] shall have the authority to authorize PIONEER to conduct\nany or all of the foregoing for a particular purpose, and shall provide any such\nauthorization in writing. At the end of the Research Term, PIONEER shall\npromptly return to MAXYGEN any remaining Gene Variants (i.e., those which have\nnot been designated Shuffled Genes), and provide MAXYGEN written confirmation\nthat all such Gene Variants have been returned. In the event of any conflict\nbetween this (P)2.1D(e) and any other provision of this Agreement, the terms of\nthis (P)2.1D(e) shall govern.\n\n          (f) Selection of Shuffled Genes. [*******] PIONEER may notify MAXYGEN\n              ---------------------------                                      \nthat PIONEER wishes to have designated as Shuffled Genes one or more of the Gene\nVariants which meet the [*******] established by the RDSC, with notice to the\nRDSC identifying the particular Gene Variant(s).  The RDSC shall have the sole\nauthority to determine which Gene Variants shall be designated as Shuffled\nGene(s), and shall make all such designations in writing, [*******].\n\n                                     -27-\n\n \n          (g)  Transfer of Clones; Limited Use.  Following the selection of a\n               -------------------------------                               \nShuffled Gene, MAXYGEN shall transfer to PIONEER a DNA clone containing the\napplicable Shuffled Gene.  Except in connection with the practice of the rights\ngranted PIONEER in (P)3.1B and as clarified in (P)3.1D(a), PIONEER shall not\nwithout the express prior written consent of MAXYGEN, (i) transfer any of the\nShuffled Genes or protein pools or DNA clones supplied to PIONEER to any\nAffiliate, Sublicensee or third party, (ii) sequence any Shuffled Gene or\nprotein(s) provided by MAXYGEN, or (iii) permit any other person or entity to\nobtain or use any of the protein pools or DNA clones supplied to PIONEER for any\npurpose.\n\n          E.   Additional Research Activities.\n               ------------------------------ \n\n               (a) In the event that prior to the end of the Research Term, the\nparties agree that the FTEs involved in the R&D Program cannot be productively\nused to conduct research on the Trait Categories, then PIONEER shall have the\nright to propose to MAXYGEN additional research activities to be conducted in\nconnection with the R&D Program in new trait categories.  If MAXYGEN does not\nhave [*******], it shall notify PIONEER, and in such case, the parties shall\nnegotiate in good faith the terms on which such research activities could be\nconducted in connection with the R&D Program.  Such research activities will\nonly be initiated if the parties reach written agreement on the terms\n\n                                     -28-\n\n \nthereof, including without limitation, milestone payments and royalties on\nresulting products.\n\n          (b)  If it appears that one or more research projects regarding the\nShuffling of Genes in the Trait Categories will not be completed by the end of\nthe Research Term and the RDSC agrees that such research projects are near\ncompletion, PIONEER may with notice to MAXYGEN at least sixty (60) days prior to\nthe end of the Research Term extend the Research Term with respect to such\nresearch projects for a period of [*******], or such other period as PIONEER and\nMAXYGEN may agree in writing (the \"Extension Period\").  In any such event,\nPIONEER shall provide FTE funding for such projects during the Extension Period\nequal to the average level of FTE support provided in the R&D Program for such\nresearch projects in the six (6) month period prior to the [*******] anniversary\nof the Effective Date, such funding to be paid to MAXYGEN on the [*******]\nanniversary of the Effective Date.\n\n     F.   Research Results.  Research Results shall be treated as described\n          ----------------                                                 \nbelow:\n\n          (a)  Gene Variants.  The treatment of Research Results which are Gene\n               -------------                                                   \nVariants shall depend on whether the Gene which is Shuffled to produce the\napplicable Gene Variant(s) is (x) [*******] (\"a PIONEER Gene\"), or (y) is\n[*******] (a \"Non-PIONEER Gene\").\n                                         \n                                     -29-\n\n \n               (i)   If [*******], then MAXYGEN may not use the Gene Variants\nresulting from such Shuffling for any purpose except the conduct of the R&D\nProgram (except such Gene Variants which become Shuffled Genes), without the\nprior written consent of PIONEER.\n\n               (ii)  If [*******], then MAXYGEN shall not use the Gene Variants\nresulting from such Shuffling for any purpose except the conduct of the R&D\nProgram (except such Gene Variants which become Shuffled Genes), for a period of\n[*******] (the \"Non-Use Period\").  Notwithstanding the above, at the suggestion\nof a third party, during the Non-Use Period, MAXYGEN may [*******], in\nconnection with research conducted with or on behalf of a third party.  It is\nunderstood and agreed that, subject to subparagraph (iii) below, MAXYGEN shall\nbe free to Shuffle any one or more genes not Shuffled in the R&D Program on its\nown behalf or on behalf of a third party outside the R&D Program, subject to the\nlimitations in (P)2.6A.\n\n               (iii) Notwithstanding (ii) above, during the R&D Program, PIONEER\nmay propose to the RDSC the Shuffling in the R&D Program of [*******]. In such\nevent, PIONEER shall present to the RDSC a detailed written explanation why\n[*******]. If the RDSC agrees, then the RDSC shall describe in writing the set\nof all other similar Non-PIONEER Genes (the \"Non-PIONEER Gene Set\") which relate\nto the PIONEER proposal, and, except in connection with the\n\n                                     -30-\n\n \nR&D Program, MAXYGEN shall not conduct any Shuffling of [*******] during the\napplicable Non-Use Period.  Any Gene Variants resulting from the Shuffling of\nany Genes in the Non-PIONEER Genes shall be treated as provided in (ii) above.\n\n               (iv)  PIONEER shall not have any right to use any of the Gene\nVariants (except such Gene Variants which become Shuffled Genes) for any use\noutside the R&D Program.\n\n               (v)   The identities of all Genes Shuffled in the R&D Program is\nConfidential Information of PIONEER, which shall not be disclosed except\npursuant to Sections 6 or 7 below, or as otherwise agreed by PIONEER and\nMAXYGEN.\n\n          (b)  Shuffled Genes.  Gene Variants which have become Shuffled Genes\n               --------------                                                 \nshall be subject to the exclusive licenses set forth in (P)3.1B and (P)3.2B, and\nneither MAXYGEN nor PIONEER shall disclose or use such Shuffled Genes except\npursuant to such licenses.\n\n          (c)  Enabling Technology.  Except for use in connection with the R&D\n               -------------------                                            \nProgram or as expressly permitted pursuant to the licenses in (P)3.1B and C and\n3.2B and C, PIONEER or MAXYGEN shall not have any right to use or disclose\nEnabling Technology to any third party.\n\n                                     -31-\n\n \n          (d)  PIONEER Product Technology. Except for use in connection with the\n               --------------------------                                       \nR&D Program, MAXYGEN shall have no right to use or disclose any PIONEER Product\nTechnology to any third party.\n\n          (e)  Shuffling Technology.  Except disclosure to MAXYGEN in connection\n               --------------------                                             \nwith the R&D Program or to the extent necessary to file patent applications\nclaiming Shuffled Gene(s), PIONEER shall have no right to use or disclose any\nShuffling Technology to any third party.\n\n          (f)  Research Materials.  Except as set forth in (P)2.1F(a) through\n               ------------------\n(e) above, all Research Materials shall be treated as follows. Ownership of such\nResearch Materials shall depend on [*******]. Except for use in connection with\nthe R&D Program or as expressly permitted pursuant to the licenses in (P)3.1B\nand (P)3.2B, PIONEER or MAXYGEN, as the case may be, shall have the [*******]\nright to[*******], as it deems appropriate, any Research Materials made,\nconceived and reduced to practice or otherwise developed [*******]. Any such\nResearch Materials made, conceived and\/or reduced to practice or otherwise\ndeveloped [*******] may be used and disclosed by [*******] outside the R&D\nProgram, pursuant to the licenses granted in (P)3.1B and (P)3.2B.\n\n          (g)  Research Results.\n               ---------------- \n\n               (i)   Research Results that relate directly and\/or specifically\nto Gene Variants, Shuffled Genes, Research\n\n                                     -32-\n\n \nMaterials subject to (f) above which are [*******], PIONEER Product Technology\nand\/or Enabling Technology, shall not be used except in connection with the R&D\nProgram and as expressly permitted pursuant to the licenses in (P)3.1B and 3.2B.\nAll such Research Results shall be treated as Confidential Information of the\nparty(ies) making such Research Results and shall not be disclosed except as\notherwise expressly provided in this Agreement.\n\n               (ii)  Research Results not subject to subparagraph (g)(i) above\nmay be disclosed and used by [*******], without accounting to [*******].\n\n     2.2  R&D Steering Committee.\n          ---------------------- \n\n          A.   Establishment and Functions of RDSC.\n               ----------------------------------- \n\n               (a)  MAXYGEN and PIONEER hereby agree to the establishment of the\nRDSC. The RDSC will act on behalf of the two companies and will be responsible\nfor the planning and monitoring of the R&D Program and for setting forth\nspecific research and development objectives, selecting research projects within\napplicable Trait Categories for PIONEER Crops, and determining resource\nallocation for the R&D Program.\n\n               (b)  The RDSC shall be responsible for approving the conduct of\nany research relating to (i) any Enabling Technology pursuant to (P)2.7, and\n(ii) any PIONEER Product Technology. The RDSC will identify the research\nactivities that constitute the\n\n                                     -33-\n\n \ndevelopment of Enabling Technology and PIONEER Product Technology. In each case,\nthe RDSC will prepare written project descriptions setting forth the specific\nstarting materials and goals for research relating to Enabling Technology and\nPIONEER Product Technology, and include descriptions of such activities as\nappropriate in the Work Plans.\n\n               (c)  In planning and monitoring the R&D Program, the RDSC shall\nassign tasks and responsibilities taking into account each party's respective\nspecific capabilities and expertise in order to avoid duplication and enhance\nefficiency and synergies.\n\n          B.   RDSC Membership.\n               --------------- \n\n               (a)  MAXYGEN and PIONEER shall each appoint, in its sole\ndiscretion, three members to the RDSC, including a Co-Chair designated by\nPIONEER and a Co-Chair designated by MAXYGEN. Substitutes or alternates for the\nCo-Chairs or other RDSC members may be appointed at any time by notice to the\nother party.\n\n               (b)  MAXYGEN shall, in consultation with PIONEER, appoint a full-\ntime Project Coordinator, who is one FTE. This Project Coordinator shall be a\nMAXYGEN member of the RDSC or shall otherwise participate in RDSC meetings on\nbehalf of MAXYGEN.\n\n                                     -34-\n\n \n          C.   Meetings.\n               -------- \n\n          The RDSC shall meet at least quarterly, with such meetings alternating\nbetween Santa Clara, California and Des Moines, Iowa, unless the parties agree\notherwise.  The first such meeting shall be held in Santa Clara, California\nwithin thirty (30) days after the Effective Date.  Any additional meetings shall\nbe held at places and on dates selected by the Co-Chairs of the RDSC.  RDSC\nmembers may agree that participation in any such meeting will be in person, by\ntelephone, or by televideo conference.  In addition, the RDSC may act without a\nformal meeting by a written memorandum signed by the Co-Chairs of the RDSC.\nSubject to the obligations set forth in Section 5, representatives of each party\nmay, in addition to the members of the RDSC and the MAXYGEN Project Coordinator,\nattend RDSC meetings as nonvoting observers at the invitation of either party\nonly with the prior approval of the other party, which consent shall not be\nunreasonably withheld.\n\n          D.   Minutes.\n               ------- \n\n          The RDSC shall keep accurate minutes of its meetings that record all\ndecisions and all actions recommended or taken.  Draft minutes shall be\ndelivered to the Co-Chairs of the RDSC within 20 days after each meeting.  The\nparty hosting the meeting shall be responsible for the preparation and\ncirculation of the draft minutes.  Draft minutes shall be edited by the Co-\nChairs and shall be issued in final form only with their approval and agreement\nas \n\n                                     -35-\n\n \nevidenced by their signatures on the minutes. Minutes of the RDSC meetings shall\nbe Confidential Information.\n\n          E.   Quorum; Voting; Decisions.\n               ------------------------- \n\n          At each RDSC meeting, at least two members appointed by each party\nshall constitute a quorum and decisions shall be made by unanimous vote.  If the\nRDSC is unable to reach agreement on any matter, it shall be referred for\nresolution to the Chief Executive Officer of MAXYGEN and the Vice President & Director, Trait and Technology Development of PIONEER, or their respective\nsuccessors.  Such persons shall meet promptly in person or by telephone and\nendeavor to reach agreement.  If such persons are unable to unanimously resolve\nany dispute, such dispute shall be settled pursuant to Section 13 below.\n\n          F.   Expenses.\n               -------- \n\n          MAXYGEN and PIONEER shall each bear all expenses of their respective\nRDSC members related to their participation on the RDSC and attendance at RDSC\nmeetings.\n\n     2.3  Third Party Licenses.\n          -------------------- \n\n          A.   Responsibility.\n               -------------- \n\n                    (i)   In the event that it is necessary for MAXYGEN to\nacquire any third party license specifically for the conduct of the R&D Program,\nPIONEER will be responsible for the\n\n                                     -36-\n\n \npayment of any amounts due to third parties for the license of intellectual\nproperty necessary solely for the performance of the R&D Program and the costs\nof negotiating and preparing any such license. Notwithstanding the above, it is\nunderstood that MAXYGEN shall be responsible for all payments due to third\nparties for the acquisition of licenses to intellectual property necessary for\nthe practice of Shuffling Technology per se and the costs of negotiating and\n                                     --- --\npreparing such licenses.\n\n                    (ii)  If PIONEER is not able to grant to MAXYGEN a\nsublicense to any Gene(s) which are Shuffled in the R&D Program for use in\ndevelopment or commercialization of MAXYGEN Licensed Products, MAXYGEN will be\nresponsible for acquiring licenses to such Genes as needed for its own\ncommercialization activities. Notwithstanding the above, with respect to any\ngene(s) to which PIONEER obtains license rights from a third party after the\nEffective Date, which gene(s) PIONEER wishes to Shuffle in the R&D Program,\nPIONEER shall use reasonable efforts to acquire from such other third party the\nright to sublicense such Gene and Shuffled Genes based thereon to MAXYGEN for\nuse pursuant to (P)3.2B. Other than the rights granted in Section 3, PIONEER\nwill be responsible for acquiring, at its own expense, its own licenses to all\nother technologies needed for development and commercialization of PIONEER\nLicensed Products and MAXYGEN will be responsible for acquiring, at its own\nexpense, its own licenses to all other technologies needed for development and\ncommercialization of\n\n                                     -37-\n\n \nMAXYGEN Licensed Products. With respect to any gene(s) licensed from a third\nparty, PIONEER shall use reasonable efforts to acquire the right to sublicense,\nwithout additional payments, provided if PIONEER is unable to acquire such\nsublicense rights without additional charge, MAXYGEN shall be responsible for\npaying any amounts due to acquire and practice such sublicenses.\n\n          B.   Infringement Claims.  In the event that during the Research Term\n               -------------------                                             \nPIONEER or MAXYGEN receives a written notice of an allegation of actual or\npossible patent infringement from a third party based on the use of a particular\nGene which has been or is planned to be Shuffled in the conduct of the R&D\nProgram, such party shall promptly notify the other providing an explanation of\nthe circumstances.\n\n     2.4  Capital Expenditures.  In the event that the conduct of the R&D\n          --------------------                                           \nProgram can be facilitated by the purchase of specialized capital equipment, the\nRDSC shall determine whether such equipment shall be purchased. If the RDSC\napproves any such purchase, PIONEER will purchase or pay to MAXYGEN the full\ncost (including costs for taxes, shipping, etc.) for such purchases and PIONEER\nshall own such equipment.  MAXYGEN shall have no obligation to purchase any such\nequipment unless PIONEER provides reimbursement therefore.  Unless otherwise\nagreed, any capital equipment purchased under this paragraph 2.4 shall be\nsubject to the following: (i) [*******], (ii) individual items of equipment may\nnot cost less than \n\n                                     -38-\n\n \n[*******], and (iii) budgets for equipment must be presented by the RDSC to\nPIONEER on or before March 30 of the applicable year.\n\n     2.5  Post Research Term Cooperation.  At least three (3) months prior to\n          ------------------------------                                     \nthe expiration of the Research Term, the parties shall meet to agree on\nmechanisms for coordinating and managing activities (e.g., patent prosecution,\npublication review) that will occur after the expiration of the Research Term\nwhich would otherwise be addressed by the RDSC.\n\n     2.6  Research Exclusivity.\n          -------------------- \n\n          A.   During the Research Term, MAXYGEN will not collaborate with any\nentity nor undertake any research activities not for the direct benefit of\nPIONEER with the intent of using Shuffling Technology to [*******] (\"the\nExclusive Trait Areas\").\n\n          B.   During the Research Term, MAXYGEN will conduct non-exclusive\nresearch in connection with the R&D Program in the following Trait Categories:\n[*******].\n\n          C.   It is understood and agreed that, subject to its obligation to\nconduct research pursuant to (P)2.6B, MAXYGEN may conduct research on its own\nbehalf and with third parties with respect to any gene and\/or Plant, except with\nregard to the Exclusive Trait Areas for which PIONEER retains exclusivity,\nincluding without limitation, research with respect to the Trait Categories and\nPIONEER Crops subject to (P)2.6B.\n\n                                     -39-\n\n \n     2.7  Enabling Technology.\n          ------------------- \n\n          A.   The parties anticipate that the development of products within\nthe Trait Categories may be significantly enhanced by the application of\nShuffling Technology in the area of Enabling Technology.  Unless mutually agreed\nin writing, application of Shuffling Technology for development of Enabling\nTechnology will only be undertaken pursuant to the R&D Program and relating to\nat least one Trait Category upon mutual agreement of the parties and inclusion\nin the Work Plan.  It is understood that any effort to develop Enabling\nTechnology shall be undertaken on a case-by-case basis, based on a written\nproject description which describes the specific starting materials and goals\nand the successful outcome(s).\n\n          B.   At such time as a party proposes that a project be conducted for\nthe development of Enabling Technology, it shall inform, to the extent it is\nable to do so without breaching any confidentiality obligations, the RDSC of all\nrights which it has with respect to the underlying technology on which such\nEnabling Technology will be based or will require, including without limitation,\nany rights it has to use and sublicense such underlying technology, and any\nrestrictions or limitations thereon, and any information of which it is aware\nwith respect to third party patent applications or patents which may relate to\nthe use of the proposed Enabling Technology in the R&D Program and\/or for the\ndevelopment \n\n                                     -40-\n\n \nor commercialization of Licensed Products; provided, neither party shall have\nany obligation to provide the RDSC with any document which would result in a\nbreach of the attorney\/client privilege with respect thereto. The RDSC shall\nhave the sole authority to authorize the conduct and scope of projects in the\nR&D Program intended to produce Enabling Technology. If the RDSC cannot agree on\na particular Enabling Technology project, the matter shall be resolved as\nprovided for in (P)13.1A.\n\n          C.   Prior to such time as the RDSC approves the conduct of research\nrelating to any Enabling Technology, the parties shall negotiate in good faith\nthe rights, if any, which (i) PIONEER shall have to use such Enabling Technology\nother than [*******], and\/or (ii) MAXYGEN shall have to use such Enabling\nTechnology other than [*******].  In the event the parties fail to reach\nagreement on such rights, the only rights that PIONEER and MAXYGEN shall have to\nuse the applicable Enabling Technology are those set forth in (P)3.1C and\n(P)3.2C below, respectively.\n\n          D.   Prior to commencing research with respect to any Enabling\nTechnology, the parties shall agree on an appropriate royalty or other value\ncapture mechanism therefore.\n\n     2.8  Rice.  Immediately following the execution of this Agreement, and\n          ----                                                             \nuntil July 1, 1999, unless MAXYGEN earlier enters into an agreement with a third\nparty regarding the use of Shuffling Technology with respect to rice for those\nprojects which PIONEER \n\n                                     -41-\n\n \nwishes to conduct with MAXYGEN, MAXYGEN and PIONEER will negotiate in good faith\nthe terms of a further agreement regarding the use of Shuffling Technology for\nagreed research projects with respect to rice, and corresponding license rights.\nIt is understood and agreed that neither party shall be obligated to enter into\nany such agreement, and that MAXYGEN shall be free to enter into an agreement\nwith a third party with respect to rice at any time prior to or after July 1,\n1999.\n\n     2.9  Shuffling Technology.  During the Research Term, MAXYGEN shall use\n          --------------------                                              \nreasonable efforts to continue to develop and improve its Shuffling Technology;\nprovided, however, PIONEER acknowledges that technology development is\ninherently an uncertain activity and agrees that MAXYGEN shall not have breached\nits commitment under this paragraph in the event that any third party develops\nor invents methods or technology relating to the creation of genetic diversity.\n\n                         SECTION 3.  LICENSE RIGHTS.\n                         --------------------------\n\n          3.1  To PIONEER.\n               ---------- \n\n          A.   Research License.  Subject to the terms and conditions of this\n               ----------------                                              \nAgreement, MAXYGEN agrees to grant, and hereby grants to PIONEER a non-\nexclusive, nontransferable, non-sublicensable, royalty-free, worldwide license\nunder MAXYGEN's \n\n                                     -42-\n\n \ninterest in the Intellectual Property and MAXYGEN Materials solely to conduct\nthe R&D Program.\n\n               B.   Commercial Licenses.\n                    ------------------- \n\n                    (a) Subject to the terms and conditions of this Agreement,\nMAXYGEN agrees to grant, and hereby grants, to PIONEER, worldwide, royalty-\nbearing licenses, with the right to sublicense as set forth in (P)3.1(B)(b)\nbelow, under MAXYGEN's interest in the Intellectual Property (whether solely or\njointly owned by MAXYGEN) as follows:\n\n                        (i)  an exclusive license to make, have made, and use\nShuffled Genes (excluding [*******]) and Enabling Technology together with\nShuffled Genes (excluding [*******]), in each case, in the PIONEER Crops, to\ndevelop, make, have made, use, import, offer for sale, sell, and have sold\nPIONEER Licensed Products; and\n\n                        (ii) a non-exclusive license to make, have made, and use\nResearch Results subject to (P)2.1F(f) and (g) in the PIONEER Crops, to develop,\nmake, have made, use, import, offer for sale, sell, and have sold PIONEER\nLicensed Products.\n\n                    (b) Sublicenses. PIONEER shall have the right to sublicense\n                        ----------- \nthe rights granted in (P)3.1B(a) with respect to [*******] for which it has\nlicenses as set forth in (P)3.1B(a). Following the execution of any sublicense,\nPIONEER shall provide to MAXYGEN the\n\n                                     -43-\n\n \nidentity of the Sublicensee and a description of the PIONEER Licensed Products\nand rights sublicensed to the Sublicensee and the territory of such sublicense.\nEach sublicense granted by PIONEER shall be consistent with all the terms and\nconditions of this Agreement, and subordinate thereto, and PIONEER shall remain\nresponsible to MAXYGEN for the financial obligations arising under this\nAgreement based upon the activities of each such Sublicensee. No Sublicensee may\ngrant further sublicenses of such rights, or assign such sublicense, without\nMAXYGEN's prior written consent. Upon termination of this Agreement, or of any\nlicense to PIONEER hereunder, for any reason, any applicable sublicenses granted\nby PIONEER hereunder shall survive, subject to the terms and conditions hereof.\n\n               C.   Enabling Technology.\n                    ------------------- \n\n                         (i)   It is understood that the license set forth in\n(P)3.1B includes a license, with the right to grant sublicenses, to make, have\nmade and use the Enabling Technology to develop, make, have made, use, offer for\nsale, sell and have sold PIONEER Licensed Products incorporating Shuffled Genes\n(excluding [*******]) in the applicable Trait Categories in the PIONEER Crops in\naccordance with such license, but does not include a license to [*******]\n\n                         (ii)  In the event that PIONEER and MAXYGEN mutually\nagree in writing pursuant to (P)2.7D upon an appropriate \n\n                                -44-                             \n\n \nroyalty or other value capture mechanism for other uses of Enabling Technology\nby PIONEER [*******], MAXYGEN will grant to PIONEER a nonexclusive, royalty-\nbearing, worldwide license for such uses of the applicable Enabling Technology.\n\n               D.   No Other Products.\n                    ----------------- \n\n                    (a) It is understood and agreed that pursuant to the\nlicenses granted in (P)3.1B that PIONEER may conduct such activities (e.g., the\nsequencing and mutagenesis of Shuffled Genes) as it reasonably deems appropriate\nto develop Shuffled Genes including PIONEER SGDs (but excluding [*******]) and\nPIONEER Licensed Products based thereon.\n\n                    (b) Except in connection with the development or\ncommercialization of PIONEER Licensed Products, PIONEER and its Affiliates and\nSublicensees shall not develop or commercialize, or authorize the development or\ncommercialization of, any gene (or genetic element) which is based on or derived\nfrom any Gene Variant, Shuffled Gene (or Enabling Technology, as the case may\nbe), or any Plant or product derived therefrom which contains or is made with\nthe use of such a gene (or genetic element), regardless of whether such gene (or\ngenetic element) is made or obtained through synthesis, or mutation of a\nstarting gene (or genetic element). Except in connection with the development or\ncommercialization of PIONEER Licensed Products, PIONEER will not itself, or\nthrough any third party, use any MAXYGEN Intellectual \n                                     \n                                     -45-\n\n \nProperty, Joint Intellectual Property and\/or Research Results or structure-\nfunction data relating to any Gene Variants, including without limitation,\nconsensus sequences or structural motifs, to reverse engineer, reconstruct,\nsynthesize or otherwise modify or copy any Gene Variant or Shuffled Gene or any\nother gene or product with similar biological activities, or to attempt the\nsame.\n\n                    (c) If a dispute arises between the parties which the\nparties are unable to resolve regarding whether or not a product sold by PIONEER\nor its Affiliates or Agents or Sublicensees is a PIONEER Licensed Product, the\ndispute shall be settled by binding arbitration pursuant to (P)13.2 herein;\nprovided, however, PIONEER shall bear the burden of proof in establishing that\nsuch product is not a PIONEER Licensed Product subject to this Agreement.\n\n     3.2  To MAXYGEN.\n          ---------- \n\n          A.   Research License.  Subject to the terms and conditions of this\n               ----------------                                              \nAgreement, PIONEER agrees to grant, and hereby grants, to MAXYGEN (i) a non-\nexclusive, nontransferable, non-sublicensable, royalty-free, worldwide license\nunder PIONEER's interest in the Intellectual Property and PIONEER Materials, and\n(ii) a non-exclusive, nontransferable, non-sublicensable, royalty-free,\nworldwide license under any patents, trade secrets and other intellectual\nproperty owned or Controlled by PIONEER that are \n                                     \n                                     -46-\n\n \nnecessary or useful for the conduct of the R&D Program, in each case, solely to\nconduct the R&D Program.\n\n               B.   Commercial License.\n                    ------------------ \n\n                    (a) Subject to the terms and conditions of this Agreement,\nPIONEER agrees to grant, and hereby grants, to MAXYGEN, a worldwide, royalty-\nbearing license under PIONEER's interest in the Intellectual Property (whether\nsolely or jointly owned by PIONEER), as follows:\n\n                        (i)  an exclusive license to make, have made, and use\nShuffled Genes (excluding [*******]) and Enabling Technology together with\nShuffled Genes (excluding [*******]) in each case, in MAXYGEN Crops, to develop,\nmake, have made, propagate, have propagated, use, import, offer for sale, sell\nand have sold MAXYGEN Licensed Products, including the right to grant\nsublicenses; and\n\n                        (ii) a non-exclusive license to make, have made, and use\nResearch Results subject to (P)2.1F(f) and (g) in MAXYGEN Crops, to develop,\nmake, have made, use, import, offer for sale, sell and have sold MAXYGEN\nLicensed Products, including the right to grant sublicenses.\n\n                    (b) Subject to the terms and conditions of this Agreement,\nPIONEER agrees to grant, and hereby grants, to MAXYGEN, a worldwide, royalty-\nbearing license under PIONEER's interest in \n                                      \n                                     -47-\n\n \nthe Intellectual Property (whether solely or jointly owned by PIONEER) as\nfollows:\n\n                        (i)  an exclusive license to make, have made, sell,\noffer to sell, import and use Shuffled Genes (excluding [*******]) in Plants\nother than PIONEER Crops and MAXYGEN Crops, and for uses other than in Plants,\nand to develop, make, have made, use, import, offer for sale, sell and have sold\nMAXYGEN Licensed Products derived therefrom, including the right to grant\nsublicenses; and\n\n                        (ii) a non-exclusive license to make, have made, sell,\noffer to sell, import and use Research Results subject to (P)2.1F(f) and (g) in\nPlants other than PIONEER Crops and MAXYGEN Crops, and for uses other than in\nPlants, and to develop, make, have made, use, import, offer for sale, sell and\nhave sold MAXYGEN Licensed Products derived therefrom, including the right to\ngrant sublicenses.\n\n                    (c) It is understood that the license to MAXYGEN set forth\nin (P)3.2B(a) does not convey any license to use Shuffled Genes or PIONEER SGDs\nor MAXYGEN SGDs (i) [*******] or (ii) [*******]. It is further understood that\nMAXYGEN shall not have the right to use or license any Shuffled Gene or any\nPIONEER SGD or any MAXYGEN SGD which is Jointly Developed in the R&D Program to\nany third party for use in [*******], so long as [*******], but shall have the\nright to [*******]\n                                     \n                                     -48-\n\n \n                    (d) Sublicenses. MAXYGEN shall have the right to sublicense\n                        -----------\nthe rights granted in (P)3.2B(a) and (b). Following the execution of any\nsublicense, MAXYGEN shall provide to PIONEER the identity of the Sublicensee and\na description of the MAXYGEN Licensed Products and rights sublicensed to the\nSublicensee and the territory of such sublicense. Each sublicense granted by\nMAXYGEN shall be consistent with all the terms and conditions of this Agreement,\nand subordinate thereto, and MAXYGEN shall remain responsible to PIONEER for the\nfinancial obligations arising under this Agreement based upon the activities of\neach such Sublicensee. No Sublicensee may grant further sublicenses of such\nrights, or assign such sublicense, without PIONEER's prior written consent. Upon\ntermination of this Agreement, or of any licenses granted to MAXYGEN hereunder,\nfor any reason, any applicable sublicenses granted by MAXYGEN hereunder shall\nsurvive, subject to terms and conditions herein.\n\n               C.   Enabling Technology.\n                    ------------------- \n\n                        (i) It is understood that the licenses set forth in\n(P)3.2B(a) include a license, with the right to grant and authorize sublicenses,\nunder PIONEER's interest in the Enabling Technology to make, have made, sell,\nhave sold, import, use, and have used MAXYGEN Licensed Products incorporating\nEnabling Technology, together with Shuffled Genes (excluding [*******]) in \n\n                                     -49-\n\n \nthe MAXYGEN Crops in accordance with such license, but does not include a\nlicense to [*******]\n\n                        (ii) In the event that PIONEER and MAXYGEN mutually\nagree in writing pursuant to (P)2.7D upon an appropriate royalty or other value\ncapture mechanism for other uses of Enabling Technology by MAXYGEN [*******],\nPIONEER will grant to MAXYGEN a nonexclusive, royalty-bearing, worldwide license\nfor such uses of the applicable Enabling Technology.\n\n     3.3  Third Party Rights.\n          ------------------ \n\n          A.   Overlapping Rights.  It is understood that MAXYGEN is in the\n               ------------------                                          \nbusiness of Shuffling DNA on behalf of third parties, and that MAXYGEN will\ngrant such third parties rights after the Effective Date to acquire licenses for\ngenes derived from Shuffling that are similar to PIONEER's rights under this\nSection 3.  Notwithstanding the licenses granted PIONEER above, it is possible\nthat a third party may acquire rights from MAXYGEN with respect to one or more\ngenes of which MAXYGEN is a sole or joint owner; accordingly, MAXYGEN's grant of\nrights in this Section 3 is limited to the extent that (i) a third party (either\nalone or jointly with MAXYGEN) has filed a patent application with respect to\nsuch gene prior to the filing by PIONEER (either alone or jointly with MAXYGEN)\nof a patent application with respect to such a gene or (ii) MAXYGEN has, prior\nto identification of the nucleotide sequence of a gene in the R&D Program\ngranted a third party a \n                                     \n                                     -50-\n\n \nlicense or other rights with respect to such a gene, and subject to any such\ngrant of rights to a third party.\n\n          B.   Limited Liability.  It is understood and agreed that, even if\n               -----------------                                            \nMAXYGEN complies with its obligations under this Agreement, genes derived\nthrough Shuffling activities that are provided to third parties in the course of\nMAXYGEN's other business activities may result in third party patent\napplications and patents, including patent applications and patents owned by\nsuch third parties, or owned jointly by MAXYGEN and such third parties, which\ncould conflict with patent applications and patents owned by PIONEER, or jointly\nowned by PIONEER and MAXYGEN hereunder.  MAXYGEN will use its reasonable efforts\nto avoid such conflict and, unless PIONEER is damaged as a proximate result of a\nmaterial breach by MAXYGEN of the terms of (P)2.6 or any of the representations\nand warranties in Section 11, then MAXYGEN shall have no liability under this\nAgreement with respect to any such conflict.\n\n     3.4  Assignments.  Each party shall have the further right to assign its\n          -----------                                                        \nrights in the licenses granted herein (or any part thereof) to one or more of\nits Affiliates; provided, however, that the party making such assignment shall\nbe responsible for the obligations of such Affiliates.\n                                      \n                                     -51-\n\n \n      5.3    Retained Rights.\n             --------------- \n\n             A.   MAXYGEN. MAXYGEN shall retain all rights under its interest in\n                  -------\nthe Shuffling Technology assigned to MAXYGEN pursuant to (P)7.3, and in the\nMAXYGEN Intellectual Property and Joint Intellectual Property that are not\nexpressly granted to PIONEER in (P)3.1A, and to any intellectual property and\/or\ntangible materials developed by it or on its behalf after the Research Term or\noutside the scope of this Agreement. It is understood that MAXYGEN may, among\nother things, grant to third parties (i) licenses under its interest in such\nIntellectual Property for [*******], and (ii) licenses under its interest in\nintellectual property developed outside the R&D Program for any use; provided,\nhowever, that during the term of this Agreement, MAXYGEN shall not grant any\nlicense under such Intellectual Property which conflicts with the licenses\ngranted to PIONEER herein. Notwithstanding the exclusive licenses granted to\nPIONEER in (P)3.1A, MAXYGEN shall retain the right to use all Shuffled Genes for\nits own research purposes (i.e., to develop, improve and validate its technology\nand intellectual property).\n\n          B.   PIONEER.  PIONEER shall retain all rights under its interest in\n               -------                                                        \nthe PIONEER Product Technology assigned to PIONEER pursuant to (P)7.3, and in\nthe PIONEER Intellectual Property and Joint Intellectual Property that are not\nexpressly granted to MAXYGEN in (P)3.1B, and to any intellectual property and\/or\ntangible materials developed by it or on its behalf after the Research Term \n                                      \n                                     -52-\n\n \nor outside the scope of this Agreement. It is understood that PIONEER may, among\nother things, grant to third parties licenses under its interest in such\nIntellectual Property for [*******]; provided, however, that during the term of\nthis Agreement, PIONEER shall not grant any license under such Intellectual\nProperty which conflicts with the licenses granted to MAXYGEN herein. It is\nunderstood and agreed that nothing in this Agreement grants (or shall be\nconstrued to grant) to PIONEER any licenses to intellectual property or\nmaterials developed by or on behalf of third parties outside of the R&D Program.\n\n     3.6  Other Rights.\n          ------------ \n\n          A.   MAXYGEN Covenant.  In furtherance of the licenses granted to\n               ----------------                                            \nPIONEER in (P)3.1B, MAXYGEN agrees that, to the extent necessary for PIONEER to\npractice the license granted in (P)3.1B, for so long as PIONEER is not in\ndefault with respect to any payment due to MAXYGEN hereunder by more than thirty\n(30) days, MAXYGEN shall not bring any claim or action against PIONEER, or its\nAffiliates or Sublicensees, based on or asserting that the making, using,\nselling, importing or offering for sale or import of a PIONEER Licensed Product\nin accordance with the license set forth in (P)3.1, infringes [*******];\nprovided, however, if any amounts are due from MAXYGEN to third parties as a\nresult of the practice of such third party patent rights by PIONEER and its\nAffiliates and Sublicensees pursuant to the foregoing covenant, PIONEER or its\n                                     \n                                     -53-\n\n \nAffiliates or Sublicensees shall pay to MAXYGEN or the third party, as agreed by\nPIONEER and MAXYGEN, any amounts due to such third party; provided it is\nunderstood that MAXYGEN shall be solely responsible for any amounts due to third\nparties for [*******]. This covenant does not extend to any infringement by\nPIONEER or its Affiliates or Sublicensees of a claim of a U.S. or foreign patent\nowned or Controlled by MAXYGEN outside the scope of the specific covenant\ndescribed above [*******].\n\n          B.   PIONEER Covenant.  In furtherance of the licenses granted to\n               ----------------                                            \nMAXYGEN in (P)3.2, PIONEER agrees that, to the extent necessary for MAXYGEN to\npractice the license granted in (P)3.2B, for so long as MAXYGEN is not in\ndefault with respect to any payment due to PIONEER hereunder by more than thirty\n(30) days, PIONEER shall not bring any claim or action against MAXYGEN, or its\nAffiliates or Sublicensees, based on or asserting that the manufacture, use,\nsale, offer for sale or import of a MAXYGEN Licensed Product in accordance with\nthe license set forth in (P)3.2 infringes [*******]; provided, however, if any\namounts are due from PIONEER to third parties as a result of the foregoing\ncovenant, MAXYGEN or its Affiliates or Sublicensees shall pay to PIONEER or the\nthird party, as agreed by MAXYGEN and PIONEER, any amounts due to such third\nparty as a result of the practice of such third party patent rights by MAXYGEN\nand its Affiliates and Sublicensees. This covenant does not extend to any\ninfringement by MAXYGEN or its Affiliates or Sublicensees of a claim of a U.S.\nor foreign patent \n                                     \n                                     -54-\n\n \nowned or Controlled by PIONEER outside the scope of the specific covenant\ndescribed above [*******].\n\n                            SECTION 4.  PAYMENTS.\n                            --------------------\n\n          4.1  Payments Due Upon Execution of this Agreement.  Within [*******]\n               ---------------------------------------------                   \ndays after the Effective Date, PIONEER shall pay to MAXYGEN a non-refundable\nlicense fee of [*******].\n\n          4.2  Equity Investment.  In conjunction with the execution of this\n               -----------------                                            \nAgreement, PIONEER will enter into a Stock Purchase Agreement of even date\nherewith.\n\n          4.3  Royalties to MAXYGEN.\n               -------------------- \n\n               A.   PIONEER Licensed Products.  In consideration of the licenses\n                    -------------------------                                   \ngranted above, PIONEER shall pay to MAXYGEN a royalty on Net Sales of PIONEER\nLicensed Products (except PIONEER Licensed Products subject to (P)4.3B below) at\nthe rate of:\n\n                    (a) Where the Product Premium of the PIONEER Licensed\nProduct ranges from [*******] to [*******] compared to the applicable Benchmark\nProduct in the same geographic area, [*******] percent of Net Sales of the\napplicable PIONEER Licensed Product.\n\n                    (b) Where the Product Premium of the PIONEER Licensed\nProduct ranges from [*******] to [*******] compared to the applicable Benchmark\nProduct, [*******] percent of Net Sales of the applicable PIONEER Licensed\nProduct.\n                                     \n                                     -55-\n\n \n                    (c) Where the Product Premium of the PIONEER Licensed\nProduct is [*******] compared to the applicable Benchmark Product, [*******]\npercent of Net Sales of the applicable PIONEER Licensed Product.\n\n                    (d) In cases where PIONEER and its Agents, Affiliates and\nSublicensees do not sell a Benchmark Product corresponding to a particular\nPIONEER Licensed Product, and believe that the applicable Product Price of the\nBenchmark Product is lower than the Product Price of a comparable Benchmark\nProduct sold by PIONEER would be due to generally higher PIONEER prices, then\nPIONEER may notify MAXYGEN and provide a written explanation of its position. In\nsuch event, the parties shall determine in good faith the Product Price of the\napplicable Benchmark Product which will be used to determine the applicable\nPrice Premium; provided, however, such royalty shall be no less than [*******]\nof Net Sales of the applicable PIONEER Licensed Product. In the event that the\nparties are unable to agree on the royalty due, such matter shall be submitted\nby either party to binding arbitration pursuant to Section 13.\n\n                    (e) In cases where there is no Benchmark Product because no\ncomparable product exists, the parties shall determine in good faith the royalty\nrate which will be applied prior to commercialization of the applicable PIONEER\nLicensed Product; provided, however, such royalty shall be in the range of\n[*******]\n                                     -56-\n\n \nto [*******] of Net Sales of the applicable PIONEER Licensed Product. In the\nevent that the parties are unable to agree on the royalty due, such matter shall\nbe submitted by either party to binding arbitration pursuant to Section 13.\n\n          (f) In any country where there are no Patent Rights covering the\napplicable PIONEER Licensed Product, if a competitor of PIONEER is marketing a\nproduct in commercially material quantities as a result of an unauthorized use\nof MAXYGEN Shuffling Technology, which product would be within the definition of\na PIONEER Licensed Product if marketed by PIONEER, then PIONEER shall notify\nMAXYGEN providing a written description of the product and the identity of the\nparty who is making and selling such product. MAXYGEN shall use such reasonable\nefforts to inform PIONEER within ninety (90) days of receipt of such\ninformation, whether it believes such product was made via an unauthorized use\nof Shuffling Technology. If such product was made with the unauthorized use of\nShuffling Technology, then PIONEER's royalty obligations hereunder in such\ncountry for the corresponding PIONEER Licensed Product with respect to sales\nthereof occurring in such country after the date of PIONEER's notice to MAXYGEN\nshall be reduced by [*******] for so long as commercially material sales of such\nother product continue in such country.\n\n          (g) Notwithstanding the foregoing provisions of this (P)4.3, no\nroyalties shall be due to MAXYGEN with regard to \n\n                                     -57-\n\n \nPIONEER Licensed Products which do not incorporate and are not made with\n[*******], and are identified or produced using only [*******].\n\n          B.   [*******]. The royalty paid to MAXYGEN for any PIONEER Licensed\nProduct based on or a Shuffled Gene imparting [*******] and the value capture\nstrategy which will be the basis for payments to MAXYGEN will be determined in\ngood faith by MAXYGEN and PIONEER prior to commercialization of the first\napplicable PIONEER Licensed Product; provided, however, such royalty shall be no\nless than [*******] of Net Sales of the applicable PIONEER Licensed Product. In\nthe event that the parties are unable to agree on the royalty due, such matter\nshall be submitted by either party to binding arbitration pursuant to Section\n13.\n\n          C.   Royalty Offset. [*******] percent [*******] of all milestone\n               --------------                                              \npayments paid by PIONEER to MAXYGEN pursuant to (P)4.4 below, are creditable\nagainst the royalties due under (P)4.3 on PIONEER Licensed Products that contain\na Shuffled Gene within the same Trait Category for which the applicable\nmilestone payment was made. The milestone payments may offset up to a maximum of\n[*******] percent [*******] of the royalties due to MAXYGEN from PIONEER with\nrespect to the applicable PIONEER Licensed Product(s) per year. All unexpended\nmilestone payment credits are to be carried forward and applied against\nroyalties until the full credit is taken by PIONEER.\n\n                                     -58-\n\n \n          D.   Enabling Technology - Payments.\n               ------------------------------ \n\n               (a)  [*******].\n\n               (b)  PIONEER shall pay to MAXYGEN additional amounts, to be\ndetermined in good faith by MAXYGEN and PIONEER prior to MAXYGEN granting a\nlicense, as set forth in (P)3.1 (C), for PIONEER Licensed Products which do not\ncontain a Shuffled Gene, but are, or incorporate, or are identified, or made\nwith the use of Enabling Technology. Unless otherwise agreed, such payments\nshall be agreed by the parties at such time as the work plan for the research on\nthe applicable Enabling Technology is established; provided, such royalty shall\nbe no more than [*******] of Net Sales of the applicable PIONEER Licensed\nProduct. In the event that the parties are unable to agree on the royalty due\n(or other value capture mechanism) for a particular PIONEER Licensed Product\nand\/or use of Enabling Technology within one hundred and twenty (120) days after\nfirst negotiating such royalty, such matter may be submitted by either party to\nbinding arbitration pursuant to Section 13.\n\n          E.   Sublicense Payments.\n               ------------------- \n\n               (a)  In addition to royalties due pursuant to (P)4.3.A on Net\nSales by Sublicensees, PIONEER shall pay to MAXYGEN [*******] of any and all\nSublicense Payments collected by PIONEER pursuant to this Agreement from any\nAgent or Sublicensee.\n\n                                     -59-\n\n \n               (b) If PIONEER or its Affiliates wishes to grant a third party a\nsublicense under the MAXYGEN's interest in the MAXYGEN Intellectual Property or\nJoint Intellectual Property, or rights under the MAXYGEN's interest in the\nMAXYGEN Intellectual Property or Joint Intellectual Property with regard to a\nPIONEER Licensed Product, in exchange for any consideration in a form other than\ncash or a cash equivalent (e.g., a license under other intellectual property\nowned or Controlled by PIONEER), then PIONEER shall notify MAXYGEN and the fair\nmarket value of the non-cash consideration received by PIONEER and its\nAffiliates for such rights or product, as the case may be, shall be agreed by\nPIONEER and MAXYGEN, or if the parties are unable to agree on such fair market\nvalue, either party may submit such matter to arbitration pursuant to Section 13\nbelow, in order to determine the fair market value of such consideration.\n\n     4.4  Milestone Payments.\n          ------------------ \n\n          A.   Payments to MAXYGEN for [*******]. In addition to the other\n               ---------------------------------                          \npayments contemplated herein, PIONEER shall pay to MAXYGEN the following\namounts, in each case within 30 days following the occurrence of the specific\nevent. The full payment amounts set forth below shall only be paid with respect\nto [*******] to reach the applicable milestone. The specific events are:\n\n                                     -60-\n\n \n                    (i)   Once PIONEER (i) obtains successful test results at a\nlevel agreed upon by the parties in the Work Plan, [*******] that are based in\nwhole or in part on such Shuffled Gene, or (b) elects to pursue further\ndevelopment of a plant or seed based in whole or part on a Shuffled Gene after\n[*******], [*******]; and\n\n                    (ii)  Upon [*******] regulatory approval in any country that\nallows commercial sale of PIONEER Licensed Product, [*******]; and\n\n                    (iii) Upon [*******] commercial sale in any country of\nPIONEER Licensed Product, [*******].\n\n          B.   Payments to MAXYGEN for [*******]. Should PIONEER achieve any of\n               ---------------------------------                                \nthe milestone events in (P)4.4A with respect to [*******] containing a Shuffled\nGene [*******], after PIONEER has paid the applicable milestone payment for\n[*******] containing a Shuffled Gene expressing a Trait [*******] in accordance\nwith (P)4.4A, PIONEER shall pay MAXYGEN additional milestone payments at\n[*******] set forth in subparagraph 3.2C(a) above. [*******].\n\n                                     -61-\n\n \n     4.5  Payments to PIONEER.\n          ------------------- \n\n          A.   Direct Sales of MAXYGEN Licensed Products.\n               ----------------------------------------- \n\n                    (i)  At the present time, it is not foreseen that MAXYGEN\nshall be selling MAXYGEN Licensed Products that are developed, made or sold as a\npart of MAXYGEN's day-to-day business, and that MAXYGEN shall be sublicensing\nunder the licenses granted in this Agreement. However, if during the life of\nthis Agreement, MAXYGEN or its successor company shall exercise the licenses\ngranted in a means other than by sublicensing to third parties, MAXYGEN or its\nsuccessor company shall enter into negotiations in good faith with PIONEER to\nestablish a royalty rate for MAXYGEN Licensed Products made from the use of\nShuffled Genes to be paid to PIONEER in consideration of the licenses granted\nabove. MAXYGEN shall inform PIONEER of its intent to sell MAXYGEN Licensed\nProducts at least 6 months prior to its sale of the first such product, in order\nto allow time to negotiate the royalty rate that shall be due on Net Sales. Such\nroyalty rate shall be based on Product Premiums as set forth in (P)4.3A, and in\nno event shall the royalty rate applied to MAXYGEN Licensed Products and due to\nPIONEER exceed the royalty rate applied to PIONEER Licensed Products and due to\nMAXYGEN in (P)4.3A.\n\n                    (ii) Notwithstanding the foregoing (P)4.5A(i), no royalties\nshall be due to PIONEER with regard to MAXYGEN Licensed\n\n                                     -62-\n\n \nProducts which do not incorporate and are not made with [*******], and are\nidentified or produced using only [*******].\n\n          B.   Sublicense Payments.\n               ------------------- \n\n          MAXYGEN shall pay to PIONEER [*******] of any and all Sublicense\nPayments collected by MAXYGEN pursuant to this Agreement from any Sublicensee\nfor the use of Shuffled Genes or [*******].\n\n          C.   Non-PIONEER Genes. Notwithstanding (P)4.5A and B above, no\n               -----------------                                          \nroyalties or Sublicense Payments shall be due to PIONEER with regard to MAXYGEN\nLicensed Products which incorporate or are made with the use of [*******], or\nare identified or produced using only [*******].\n\n     4.6  Royalty Term. The royalties due hereunder shall be payable on a\n          ------------                                                   \ncountry-by-country and Licensed Product-by-Licensed Product basis in each\ncountry until the date which is: (i) the expiration of the last to expire of the\npatents within the Patent Rights licensed from the other party hereto covering\nthe applicable Licensed Product, or the manufacture, use or sale of the Licensed\nProduct in such country, or (ii) if there are never any Patent Rights covering\nthe applicable Licensed Product or the manufacture, use or sale of such Licensed\nProduct in a particular country, until [*******] years following the first\ncommercial sale of such Licensed Product in such country.\n\n                                     -63-\n\n \n     4.7  Timing. Royalty payments on sales of Licensed Products made during\n          ------                                                             \neach party's fiscal quarter by each of the parties and any fees due from their\nSublicensees sales, shall be due to the other party within [*******] days after\nthe end of each fiscal quarter, at which time a written report showing total\nsales of Licensed Products made by a party hereto and its Affiliates, Agents and\nSublicensees stated separately for each, and the calculation of Net Sales based\nthereon, including details on deductions for all qualified costs set forth in\n(P)1.21, stated separately on a country-by-country and Licensed Product-by-\nLicensed Product basis, accompanied by sufficient information to enable the\nlicensor to verify the accuracy of the royalty calculations made by PIONEER, and\na detailed explanation of the methodology used to determine the royalty payment,\nby Licensed Product. Notwithstanding the above, if PIONEER is unable to meet the\nforegoing obligation to provide quarterly reports and royalty payments, and\nrequests the right to make semi-annual or annual royalty payments, the parties\nagree to discuss in good faith such a request.\n\n     4.8  Currency. Royalties due hereunder shall be paid in U.S. Dollars. As to\n          --------                                                            \nsales occurring in a currency other than U.S. Dollars, the amount due shall\nfirst be calculated in the currency in which sale occurred and then converted to\nU.S. Dollars at the closing selling rate for U.S. Dollars, as quoted in the Wall\nStreet Journal for the last business day of the fiscal quarter for which royalty\npayments are due.\n\n                                     -64-\n\n \n     4.9  Payment Method; Late Payments. All payments due under this Agreement\n          -----------------------------                                        \nshall be made by bank wire transfer in immediately available funds to a bank\naccount designated by the party to which such royalties are due. In the event\nthat the due date of any payment subject to Section 4 hereof is a Saturday,\nSunday or national holiday, such payment may be paid on the following business\nday. Any late payments shall bear interest to the extent permitted by applicable\nlaw at the prime rate (as reported by the Bank of America, San Francisco,\nCalifornia (or its successor), on the date such payment is due) plus an\nadditional two percent (2%) (on an annualized basis), calculated on the number\nof days such payment is delinquent. The rights provided in this Section 4.9\nshall in no way limit any other remedies available to the party to which such\nroyalties are due.\n\n     4.10 Records; Inspection. The parties shall keep, and shall require their\n          -------------------                                                  \nSublicensees to keep, for [*******] years from the date of each payment of\nroyalties hereunder, complete and accurate records of sales of Licensed Products\nby it and its Affiliates, Agents and Sublicensees in sufficient detail to allow\nthe accruing royalties to be determined accurately. Both parties shall have the\nright during such [*******] year period, but no more than [*******] every year,\nto appoint an independent certified public accountant reasonably acceptable to\nthe other party to audit such records, during normal business hours and upon\nreasonable advance notice, solely for the purpose of verifying the accuracy of\nthe royalty\n\n                                     -65-\n\n \ncalculation made. Such inspection shall be at the auditing party's sole expense\nunless it reveals an underpayment by the other party of at least [*******]\npercent [*******] of the amount due, in which case the reasonable costs of such\ninspection shall be reimbursed by the audited party together with payment for\nany unpaid amounts that are discovered shall be paid promptly, together with\ninterest thereon from the date such payments were due at the prime rate (as\nreported by the Bank of America, San Francisco, California (or its successor),\nplus an additional two percent (2%) on an annualized basis.\n\n     4.11 Tax Matters. All royalty amounts and other payments required to be\n          -----------                                                        \npaid by MAXYGEN or PIONEER to the other pursuant to this Agreement shall be paid\nwith deduction for withholding for or on account of any taxes (other than taxes\nimposed on or measured by net income) or similar governmental charge imposed by\na jurisdiction other than the United States (\"Withholding Taxes\"). The party\npaying such taxes shall provide the other party a certificate evidencing payment\nof any Withholding Taxes hereunder.\n\n     4.12 Technology Enhancement Funding. In addition to the other payments to\n          ------------------------------                                       \nMAXYGEN provided herein, PIONEER will pay to MAXYGEN non-refundable technology\nenhancement funding of [*******] per year for each year of the R&D Program\n(including any extension thereof), to perform research to further enhance the\nShuffling Technology. Such payments shall be used by MAXYGEN to [*******]. The\nfirst\n\n                                     -66-\n\n \nsuch payment shall be due within [*******] days of the Effective Date, and each\nadditional annual payment shall be due on the successive anniversaries of such\ndate.\n\n     4.13 FTE Payments.\n          ------------ \n\n          A.   In addition to the payment due pursuant to the other paragraphs\nof this Section 4, PIONEER will pay to MAXYGEN, for the [*******] FTEs set forth\nin (P)2.1A(b), a non-refundable amount of [*******] per year during [*******] of\nthe Research Term, commencing as of the Effective Date.\n\n          B.   Payments due pursuant to (P)4.13 above shall be made in advance,\non or before the first day of each calendar quarter, with the first and last\npayments prorated in the event that the Effective Date is not the first day of a\ncalendar quarter. In the event that the parties agree to a different Staffing\nLevel for any given calendar quarter as set forth in (P)2.1A(b), the payment set\nforth in this (P)4.13 shall be pro-rated accordingly based on a level of funding\nof [*******] per year per FTE.\n\n     4.14 PIONEER Activities. PIONEER shall fund its own activities under the\n          ------------------                                                  \nR&D Program.\n\n                                     -67-\n\n \n                         SECTION 5. COMMERCIALIZATION.\n                         -----------------------------\n\n          5.1  Due Diligence. PIONEER shall actively pursue commercialization of\n               -------------                                                  \neach Shuffled Gene with commercially reasonable diligence with the same level of\nefforts it makes with its own intellectual property of comparable commercial\npotential and patent protection and include:\n\n                   (a) [*******] within [*******] years of the date of delivery\nof the applicable Shuffled Gene to PIONEER. This [*******] year limitation only\napplies if any necessary and effective assays developed by MAXYGEN and\/or\nPIONEER for measuring efficacy of the Shuffled Gene are available at the date of\ndelivery of the applicable Shuffled Gene. If such assays are not available at\nthe date of delivery of the Shuffled Gene, the start of the [*******] year\nlimitation will not begin until the assays are available. This diligence\nactivity shall be satisfied when [*******]; and\n\n                   (b) [*******] within [*******] years of initial demonstration\nof [*******] in the first PIONEER Crop containing the applicable Shuffled Gene\n(assuming [*******] continue to demonstrate the commercial level of efficacy).\nIf reasonable freedom-to-operate concerns arise during this period regarding the\nShuffled Gene and\/or the other construct components involved [*******], and\nPIONEER must substitute other construct components, then the start of the\n[*******] year limitation will begin when the\n\n                                     -68-\n\n \nnew constructs are created. This diligence obligation shall be satisfied when\n[*******]; and\n\n               (c) [*******] within [*******] years of [*******] (assuming\n[*******] continue to demonstrate the commercial level of efficacy). The\nultimate number of individual hybrids or varieties carrying the applicable\nShuffled Gene will vary considerably depending upon the Trait and the breadth of\ngeographies where markets exist. This diligence obligation is determined to be\nmet when [*******]; and\n\n               (d) [*******] within [*******] years of first [*******] (assuming\n[*******] continue to demonstrate the commercial level of efficacy). It is\nrecognized and accepted that the time to [*******] may vary widely among PIONEER\nLicensed Products, depending upon the Trait and PIONEER Crop, and that [*******]\nare continuing to change. If [*******] change during the [*******] year\nlimitation, then the term to meet this diligence obligation shall be reasonably\nextended, as agreed by the parties, to reflect the change in the [*******]. This\ndiligence obligation is determined to be met when [*******]; and\n\n               (e) [*******] within [*******] years of [*******] (assuming\n[*******] continue to demonstrate the commercial level of efficacy).\n\n                                     -69-\n\n \nIt is recognized and accepted that the efficacy of each Shuffled Gene will\ntypically be tested and demonstrated in the field in one PIONEER Crop before\nPIONEER may wish to begin developing the Shuffled Gene in additional PIONEER\nCrops. Therefore, the commercialization due diligence targets identified above\nwill not start for additional PIONEER Crops until selected events containing the\nspecific Shuffled Gene are [*******] in the first PIONEER Crop.\n\n     5.2  Lack of Diligence\/Reversion Rights. The rights and licenses granted to\n          ----------------------------------                                  \nPIONEER herein with respect to Shuffled Genes shall terminate on a PIONEER Crop\nby Trait basis (as defined in (P)10.1) and such rights will revert to MAXYGEN\nif:\n\n               (a)  [*******]; and\n\n               (b)  [*******].\n\n     5.3  PIONEER Development Reports. PIONEER shall keep MAXYGEN apprised of\n          ---------------------------                                        \nthe status of the development and commercialization of each Shuffled Gene and\nPIONEER Licensed Product by providing MAXYGEN with a written report within\nthirty (30) days after the end of each calendar half-year detailing such\nactivities with respect to each applicable Shuffled Gene and PIONEER Licensed\nProduct during the term of this Agreement, and at MAXYGEN's request, once per\nyear the director of PIONEER's development activities with regard to any\nparticular PIONEER Licensed Product shall meet with MAXYGEN to discuss the\nstatus and stage of such development. The\n\n                                     -70-\n\n \nreports described in this (P)5.3 shall describe all Shuffled Genes that have\nbeen put into PIONEER Crops or tested in [*******], and all PIONEER Licensed\nProducts for which PIONEER has sought or obtained regulatory approval, or which\nPIONEER has licensed to a Sublicensee for development or commercialization and\nshall also contain sufficient other information to allow MAXYGEN to monitor\nPIONEER's compliance with this Agreement, including without limitation,\nPIONEER's obligations with respect to the accomplishment of the milestones set\nforth in (P)4.4. All reports and information provided under this (P)5.3 shall be\ndeemed Confidential Information of PIONEER.\n\n     5.4  MAXYGEN Development Reports.  MAXYGEN shall keep PIONEER apprised of\n          ---------------------------                                         \nthe status of the development and commercialization of each Shuffled Gene and\nMAXYGEN Licensed Product by providing PIONEER with a written report within\nthirty (30) days after the end of each calendar year detailing such activities\nwith respect to each applicable Shuffled Gene and MAXYGEN Licensed Product\nduring the term of this Agreement. All reports and information provided under\nthis (P)5.4 shall be deemed Confidential Information of MAXYGEN.\n\n     5.5  Technology Enhancement Funding Reporting.  Within 60 days of the\n          ----------------------------------------                        \nEffective Date and on each anniversary of the Effective Date during the period\nin which PIONEER is providing to MAXYGEN technology enhancement funding, MAXYGEN\nwill provide to PIONEER a \n\n                                     -71-\n\n \nwritten summary indicating the activities relating to Shuffling Technology it\nintends to fund in the course of the next year with funding paid pursuant to\n(P)4.12. In addition, within 60 days after the first anniversary of the\nEffective Date and on each anniversary of the Effective Date thereafter during\nthe period in which PIONEER is providing to MAXYGEN technology enhancement\nfunding, MAXYGEN will provide to PIONEER a written summary indicating the\nresults of the MAXYGEN research funded from the technology enhancement funding\nand how such results are being applied to the R&D Program.\n\n             SECTION 6.     TREATMENT OF CONFIDENTIAL INFORMATION.\n             -----------------------------------------------------\n\n     6.1  Confidentiality.\n          ---------------\n\n          A.   General.\n               ------- \n\n               (a)  MAXYGEN and PIONEER each recognize that the other party's\nConfidential Information constitutes highly valuable and proprietary\nconfidential information. For the purposes hereof, PIONEER Material is PIONEER\nConfidential Information and MAXYGEN Material is MAXYGEN Confidential\nInformation. Subject to the terms and conditions of Section 8, MAXYGEN and\nPIONEER each agree that, except as required by applicable law or regulation\n(including the filing and prosecution of patent applications) or judicial or\nadministrative order, during the term of this Agreement and for five years\nthereafter:\n\n                                     -72-\n\n \n               (i)  it will keep confidential, and will cause its employees,\nconsultants, Affiliates, licensees and sublicenses to keep confidential, all\nConfidential Information of the other party that is disclosed to it, or to any\nof its employees, consultants, Affiliates and Agents, under or in connection\nwith this Agreement; and\n\n               (ii) neither it nor any of its respective employees, consultants,\nAffiliates or Agents shall use Confidential Information of the other party for\nany purpose whatsoever except as expressly permitted in this Agreement.\n\n               (b)  Notwithstanding subsection (a), above:\n\n               (i)  either party may disclose the other party's Confidential\nInformation to its Sublicensees or academic collaborators or subcontractors, to\nthe extent reasonably necessary in granting permitted sublicenses or otherwise\nexercising license rights expressly granted to it under the terms of this\nAgreement and the rights set forth in (P)2.1F, provided that prior to any such\ndisclosure such entities execute a written confidentiality agreement providing\nprotections similar to those contained herein;\n\n               (ii) either party may disclose the other party's Confidential\nInformation to the extent reasonably necessary in prosecuting or defending\nlitigation, complying with applicable governmental regulations or court orders\nor otherwise submitting\n\n                                     -73-\n\n \ninformation to tax or other governmental authorities; provided that, if a party\nis required to make any such disclosure of the other party's Confidential\nInformation, other than pursuant to a confidentiality agreement, it will give\nreasonable advance notice to the other party of such disclosure and, will use\nits reasonable efforts to secure confidential treatment of such Confidential\nInformation (whether through protective orders or otherwise); and\n\n               (iii) the parties will reasonably cooperate with each other in\nthe making of reasonable disclosures of Confidential Information to actual and\npotential Agents, investment bankers, investors and potential investors of each\nparty; provided, however, that such disclosures shall only be made under the\nterms of a confidentiality agreement providing protections similar to those\ncontained herein.\n\n          B.   Restricted Access.\n               ----------------- \n\n               (a) Disclosure of a party's Confidential Information to any of\nthe officers, employees, consultants or Agents of the other shall be made only\nif and to the extent necessary to carry out rights and responsibilities under\nthis Agreement, shall be limited to the maximum extent possible consistent with\nsuch rights and responsibilities and shall only be made to persons who are bound\nto maintain the confidentiality thereof and not to use such Confidential\nInformation except as expressly permitted by this Agreement.\n\n                                     -74-\n\n \n               (b) Following termination or expiration of the term of this\nAgreement, each party will return all the Confidential Information disclosed to\nit by the other party pursuant to this Agreement, including all copies and\nextracts of documents, within 60 days of the request of the disclosing party;\nprovided that a party may retain Confidential Information of the other party\nrelating to any license or right to use Intellectual Property that survives such\ntermination and one copy of all other Confidential Information may be retained\nin confidential and inactive archives solely for the purpose of establishing the\ncontents thereof and to determine the continuing obligations of each party.\n\n          C.   Employee Confidentiality Agreements.\n               ----------------------------------- \n\n          MAXYGEN and PIONEER each represent that all of its employees and all\nof the employees of its Affiliates, and any consultants to such party or its\nAffiliates, participating in the R&D Program or who shall otherwise have access\nto Confidential Information of the other party are bound by written agreements\nto maintain such information in confidence and not to use such information\nexcept as expressly permitted herein.  Each party agrees to enforce\nconfidentiality obligations to which its employees and consultants (and those of\nits Affiliates) are obligated.\n\n     6.2  Publicity.  Except as expressly provided herein, neither party may\n          ---------                                                         \ndisclose the existence or terms of this Agreement without the prior written\nconsent of the other party; provided, however, \n\n                                     -75-\n\n \nthat either party may make such a disclosure to the extent required by law and\nthat either party may make a disclosure of the existence and terms of this\nAgreement to its attorneys, advisers, investors, prospective investors, lenders\nand other financing sources, and to strategic partners or licensees for Licensed\nProducts under circumstances that reasonably ensure the confidentiality thereof.\nNotwithstanding the foregoing, the parties may agree upon a press release to\nannounce the execution of this Agreement, together with a corresponding Q&A\noutline for use in responding to inquiries about the Agreement; thereafter,\nPIONEER and MAXYGEN may each disclose to third parties the information contained\nin such press release and Q&A without the need for further approval by the\nother. In addition, MAXYGEN may, following consultation with PIONEER and with\nthe prior written consent of PIONEER, (i) make public statements regarding\nPIONEER Licensed Products by announcing the achievement of milestones and fees\ntherefor, and (ii) make public statements regarding the overall success rate(s)\nachieved by and\/or for its customers with the use of its technology, including a\ngeneral description of activities undertaken in connection with the R&D Program,\nand success of such activities, provided it may not disclose PIONEER's identity;\nprovided, if PIONEER has not approved a particular proposed disclosure within\nthirty (30) days of submission by MAXYGEN of such proposed disclosure, then\nMAXYGEN shall be free to make the proposed disclosure. Once a particular\ndisclosure has been made, MAXYGEN shall be free to make further\n\n                                     -76-\n\n \ndisclosures which do not materially differ therefrom without any further review\nfrom PIONEER. PIONEER is free to make public statements, press releases, and the\nlike, with respect to PIONEER Licensed Products.\n\n     6.3  Publication.  A party wishing to publish or otherwise publicly\n          -----------                                                   \ndisclose the Research Results shall first submit a draft of the proposed\nmanuscripts to the RDSC for review at least ninety (90) days prior to any\nsubmission for publication or other public disclosure.  To avoid loss of patent\nrights as a result of premature public disclosure of patentable information, the\nRDSC shall notify the submitting party in writing within thirty (30) days after\nreceipt of such a proposed disclosure whether either party desires to file a\npatent application on any invention disclosed in such proposed disclosure. In\nthe event that the reviewing party desires to file such a patent application,\nthe submitting party shall withhold publication or disclosure of such proposed\ndisclosure until the earlier of (i) the date a patent application is filed\nthereon, or (ii) the date the parties determine after consultation that no\npatentable invention exists.  Further, if the proposed disclosure contains\nConfidential Information of the reviewing party that is subject to nondisclosure\nobligations under this Section 6, the submitting party agrees to remove such\nConfidential Information upon request of the reviewing party.\n\n                                     -77-\n\n \n                  SECTION 7.     INTELLECTUAL PROPERTY RIGHTS.\n                  --------------------------------------------\n\n     7.1  Disclosure of Inventions.  Each party shall promptly inform the\n               ------------------------                                       \nRDSC of all Research Results relevant to consideration of the progress of each\nproject towards its pre-agreed goals, in accordance with a procedure established\nby the RDSC; provided, MAXYGEN shall have no obligation to disclose any\nShuffling Technology to the RDSC or PIONEER, except to the extent necessary in\npatent filings claiming Shuffled Genes.\n\n     7.2  Ownership.\n          --------- \n\n          A.   MAXYGEN Intellectual Property Rights.\n               ------------------------------------ \n\n          MAXYGEN shall have sole and exclusive ownership of all right, title\nand interest on a worldwide basis in and to any Research Results developed or\ninvented solely by employees or consultants of MAXYGEN.\n\n          B.   PIONEER Intellectual Property Rights.\n               ------------------------------------ \n\n          PIONEER shall have sole and exclusive ownership of all right, title\nand interest on a worldwide basis in and to any Research Results developed or\ninvented solely by employees or consultants of PIONEER.\n\n                                     -78-\n\n \n          C.   Joint Intellectual Property Rights.\n               ---------------------------------- \n\n          PIONEER and MAXYGEN shall jointly own all Joint Research Results.\n\n          D.   PIONEER Materials.  PIONEER shall remain the sole owner of all\n               -----------------                                             \nPIONEER Materials.\n\n          E.   MAXYGEN Materials.  MAXYGEN shall remain the sole owner of all\n               -----------------                                             \nMAXYGEN Materials.\n\n     7.3  Assignment of Shuffling Technology and PIONEER Product Technology.\n          ----------------------------------------------------------------- \n\n          A.   Notwithstanding (P)7.2, PIONEER agrees to assign, and hereby\nassigns, to MAXYGEN all right, title and interest in Joint Intellectual Property\nand PIONEER Intellectual Property claiming Shuffling Technology.\n\n          B.   Notwithstanding (P)7.2, MAXYGEN agrees to assign, and hereby\nassigns, to PIONEER all right, title and interest in Joint Intellectual Property\nand MAXYGEN Intellectual Property claiming PIONEER Product Technology.\n\n          C.   MAXYGEN and PIONEER agree to timely execute such documents as are\nnecessary to result in (i) MAXYGEN's sole ownership of patent applications and\npatents claiming Shuffling Technology as set forth in (P)7.3A and (ii) PIONEER's\nsole ownership \n\n                                     -79-\n\n \nof patent applications and patents claiming PIONEER Product Technology as set\nforth in (P)7.3B.\n\n     7.4  Inventorship.  Inventorship of patentable inventions shall be\n          ------------                                                 \ndetermined by the Patent Coordinators by applying the standards embodied in\nUnited States patent law.\n\n          SECTION 8.     PROVISIONS CONCERNING THE FILING, PROSECUTION\n          ------------------------------------------------------------\n\n                       AND MAINTENANCE OF PATENT RIGHTS.\n                       ---------------------------------\n\n     The following provisions relate to the filing, prosecution and maintenance\nof Patent Rights claiming inventions made in connection with the R&D Program.\n\n     8.1  Filing of Patents.\n          ----------------- \n\n          A.   Primary Responsibilities.  In consultation with the Patent\n               ------------------------                                  \nCoordinators, the RDSC will coordinate the determination of what patents will be\nfiled on Research Results.  Unless the RDSC agrees otherwise in writing, the\nparties shall have the following responsibilities for patent filing, prosecution\nand maintenance (including the defense of interferences, oppositions and similar\nproceedings) (collectively, \"Patent Activities\"):\n\n               (a)  DNA Shuffling. MAXYGEN will be responsible, at its sole \n                    -------------  \nexpense, for Patent Activities for all inventions made by MAXYGEN or PIONEER or\njointly by the parties in connection with the R&D Program relating to Shuffling\nTechnology.\n\n                                     -80-\n\n \n          (b) Plant Transformation, PIONEER Product Testing and Product\n              ---------------------------------------------------------\nDevelopment.  PIONEER will be responsible, at its sole expense, for Patent\n-----------                                                               \nActivities with respect to all inventions made by MAXYGEN or PIONEER or jointly\nby the parties in connection with the R&D Program relating to PIONEER Product\nTechnology, methods of plant transformation, PIONEER product testing and\ndevelopment of PIONEER Licensed Products.\n\n          (c) Gene Libraries.  MAXYGEN will be responsible, at its sole expense,\n              --------------                                                    \nfor Patent Activities with respect to inventions made solely by MAXYGEN in\nconnection with the R&D Program relating to the Gene Libraries produced by\nShuffling.  PIONEER will be responsible, at its sole expense, for Patent\nActivities with respect to inventions made solely by PIONEER (if any) relating\nto the Gene Libraries produced by Shuffling.  In the case of joint inventions\nmade in connection with the R&D Program relating to the Gene Libraries, Patent\nActivities shall be conducted by outside counsel acceptable to both parties with\nequal control and joint responsibility for costs incurred in connection with the\napplicable Patent Activities.\n\n          (d) Shuffled Genes, Proteins Encoded by such Genes, Transgenic Plants\n              -----------------------------------------------------------------\nContaining Shuffled Genes, and Uses Thereof.  PIONEER will be responsible, at\n-------------------------------------------                                  \nits sole expense, for Patent Activities with respect to inventions made by\nMAXYGEN or PIONEER or jointly by the parties in connection with the R&D Program\nrelating\n\n                                     -81-\n\n \nto Shuffled Genes (excluding [*******]), proteins encoded by Shuffled\nGenes (excluding [*******]), transgenic plants containing Shuffled\nGenes (excluding [*******]), and uses thereof in the PIONEER Crops; however, if\na patent application or patent solely claims uses of such Shuffled Genes (other\nthan [*******]), proteins, or transgenic plants outside of PIONEER Crops, then\nMAXYGEN will be responsible, at its sole expense, for such Patent Activities.\n\n               (e)  Screening Assays and Inventions not Covered in Other Groups.\n                    ----------------------------------------------------------- \nPIONEER will be responsible, at its sole expense, for Patent Activities with\nrespect to inventions made solely by PIONEER in connection with the R&D Program\nrelating to screening assays and inventions not otherwise covered in the\nsubsections of (P)8.1A above.  MAXYGEN will be responsible, at its sole expense,\nfor Patent Activities with respect to inventions made solely by MAXYGEN in\nconnection with the R&D Program relating to screening assays and inventions not\ncovered in this (P)8.1A above.  In the case of joint inventions made in\nconnection with the R&D Program relating to screening assays and inventions not\ncovered in (P)8.1(A) above, Patent Activities shall be conducted by outside\ncounsel acceptable to both parties with equal control and joint responsibility\nfor costs incurred in connection with the applicable Patent Activities.\n\n          B.   Cooperation.  In each case above, the party responsible for\n               -----------                                                \nPatent Activities for the applicable patent \n\n                                     -82-\n\n \napplications shall use reasonable efforts to obtain patent coverage that is as\nbroad as possible to cover all potential commercial applications thereof, and\nshall assure that the other party will have the opportunity to provide\nmeaningful and substantive review and comment with respect thereto. Except as\notherwise expressly provided herein, applications filed on joint inventions\nshall be written and filed by outside counsel acceptable to both parties, but\nunder the control of the responsible party. Each party shall be kept informed of\nall substantive matters relating to the preparation and prosecution of all\npatent applications claiming or disclosing inventions made in connection with\nthe R&D Program. Each party shall promptly provide the other with copies of all\npatent prosecution and maintenance documentation and correspondence so that the\nother shall be currently and promptly informed of the continuing prosecution and\nmaintenance of patent applications and patents claiming or disclosing inventions\nmade in connection with the R&D Program. Each party shall have the right to\nreview and comment upon such documentation and correspondence, as well as all\nspecifications, claims and responses to office actions prior to their submission\nto the relevant government patent office.\n\n          C.   Elective Termination of Prosecution and Maintenance of Patent\n               -------------------------------------------------------------\nRights.  If at any time the party responsible for Patent Activities pursuant to\n------                                                                         \n(P)8.1A above (the \"Responsible Party\") does not wish to file or wishes to\ndiscontinue the prosecution or maintenance of any Jointly Invented Patent Rights\nclaiming \n\n                                     -83-\n\n \ninventions made in connection with the R&D Program filed in any country, on a\ncountry-by-country basis, it shall promptly give notice of such intention to the\nother party. The latter shall have the right, but not the obligation, to assume\nresponsibility for the prosecution of any such Patent Rights in the applicable\ncountry at its own expense, by giving notice to the Responsible Party of such\nintention within 30 days.\n\n     8.2  Expenses.  Except as otherwise expressly provided above, the\n          --------                                                    \nResponsible Party will bear the costs of Patent Activities with respect to all\nPatent Rights for which it has responsibility pursuant to (P)8.1.\n\n     8.3  Patent Coordinators.  MAXYGEN and PIONEER shall each appoint a patent\n          -------------------                                                  \ncoordinator (\"Patent Coordinator\") who shall serve as such party's primary\nliaison with the other party on matters relating to patent filing, prosecution,\nmaintenance and enforcement. Each party may replace its Patent Coordinator at\nany time by notice in writing to the other party. The initial Patent Coordinator\nfrom MAXYGEN is [*******] and from PIONEER is [*******].\n\n                                     -84-\n\n \n                          SECTION 9.    LEGAL ACTION.\n                          --------------------------\n\n     9.1  Actual or Threatened Infringement.\n          --------------------------------- \n\n          A.   Notice. In the event either party becomes aware of any actual or\n               ------                                                           \nthreatened commercially material infringement or use of any Patent Rights\n(collectively, an \"Infringement\"), that party shall promptly notify the other\nparty and provide it with full details. The parties will meet to discuss the\nappropriate course of action, and may collaborate in pursuing such course or\naction.\n\n          B.   Primary Responsibility. Notwithstanding the foregoing, if the\n               ----------------------                                        \nparties do not otherwise agree on a course of action, PIONEER shall have primary\nresponsibility for the prosecution, prevention or termination of any\nInfringement of PIONEER's sole Patent Rights hereunder, at PIONEER's expense and\nwith the sharing of recoveries as specified below and MAXYGEN shall have primary\nresponsibility for the prosecution, prevention or termination of any\nInfringement of MAXYGEN's Patent Rights, at MAXYGEN's expense and with the\nsharing of recoveries as specified below.  If either party which has primary\nresponsibility as described above determines that it is necessary or desirable\nfor the other to join any such suit, action or proceeding, the second party\nshall execute all papers and perform such other acts as may be reasonably\nrequired in the circumstances, at the responsible party's expense.\n\n                                     -85-\n\n \n          C.   Jointly-Owned Patents. In the event of an Infringement of Patent\n               ---------------------                                            \nRights owned jointly by MAXYGEN and PIONEER, the parties shall agree which party\nwill have the rights and responsibilities of abating such an Infringement, and\nhow the expenses of abating any such Infringement shall be shared. In the event\nthe responsible party becomes involved in any action or proceeding relating to\nthe applicable Patent Rights, the responsible party shall use patent counsel\nreasonably acceptable to the other party, and shall keep the other party fully\ninformed as to the status of such matters. In the event only one party wishes to\npursue in such proceeding, it shall have the right to proceed alone, at its\nexpense, and may retain any recovery, subject to (P)9.1D below, and the other\nparty agrees, at the request and expense of the party initiating such action, to\ncooperate and join in any proceedings in the event that a third party asserts\nthat the co-owner of such Joint Invention is necessary or indispensable to such\nproceedings.\n\n          D.   Costs. PIONEER shall bear the cost of any proceeding or suit\n               -----                                                        \nunder this (P)9.1 brought by PIONEER and MAXYGEN shall bear the cost of any such\nproceeding or suit brought by MAXYGEN. In each such case, the responsible party\nshall have the right first to reimburse itself out of any sums recovered in such\nsuit or in its settlement for all reasonable costs and expenses, including\nreasonable attorney's fees, related to such suit or settlement. The remainder is\nnext to be used to reimburse the other\n\n                                     -86-\n\n \nparty for its costs and expenses so incurred. Any remaining amounts or any non-\nmonetary recovery shall be kept by the responsible party.\n\n          E.   Separate Counsel. Each party shall always have the right to be\n               ----------------                                               \nrepresented by counsel of its own selection and at its own expense in any suit\ninstituted under this Section by the other party for an Infringement.\n\n          F.   Standing. If either party lacks standing and the other party has\n               --------                                                         \nstanding to bring any such suit, action or proceeding as specified above, then\nthe responsible party may request the other party to do so at the responsible\nparty's expense. The party with standing is under no obligation to comply with\nsuch request, but rather is free to refuse such request.\n\n          G.   Cooperation. In any action under this (P)9.1, each party shall\n               -----------                                                    \nfully cooperate with and assist the other as reasonably requested. No suit\nregarding MAXYGEN or Joint Intellectual Property may be settled by PIONEER\nwithout MAXYGEN's consent. No suit regarding PIONEER or Joint Intellectual\nProperty may be settled by MAXYGEN without PIONEER's consent. With respect to\nJoint Intellectual Property, no suit shall be settled by either party without\nthe other party's consent, which consent shall not be unreasonably withheld.\n\n                                     -87-\n\n \n     9.2  Defense of Claims Asserted by Third Parties.\n          ------------------------------------------- \n\n          A.   Infringement Claims Against MAXYGEN. If any action, suit or\n               -----------------------------------                         \nproceeding is brought against MAXYGEN or any officer, director, employee,\nAffiliate or Agent of MAXYGEN alleging the infringement of intellectual property\nrights of a third party by reason of (i) the making or use of any Gene or Gene\nVariants in the conduct of the R&D Program (except to the extent covered by\n(P)9.2B(i)), or (ii) the discovery, development, manufacture, use, sale,\nimportation or offer for sale of a PIONEER Licensed Product by PIONEER or its\nAffiliates, Agents or Sublicensees, PIONEER shall indemnify, defend and hold\nharmless MAXYGEN and its officers, directors, employees, Affiliates and agents\nfrom all liabilities arising out of or in connection with any such action, suit\nor proceeding. MAXYGEN shall have the right to separate counsel at its own\nexpense in any such action, suit or proceeding. The parties will cooperate with\neach other in the defense of any such suit, action or proceeding. PIONEER shall\nnot compromise, settle or otherwise dispose of any such suit, action or\nproceeding without MAXYGEN's prior consent, provided that MAXYGEN shall not\nunreasonably withhold its consent to any settlement which does not have a\nmaterial adverse effect on MAXYGEN or MAXYGEN's business.\n\n          B.   Infringement Claims Against PIONEER. If any action, suit or\n               -----------------------------------                         \nproceeding is brought against PIONEER or any officer, director, employee,\nAffiliate or agent of PIONEER alleging the\n\n                                     -88-\n\n \ninfringement of intellectual property rights of a third party by reason of (i)\nthe use of Shuffling Technology in the conduct of the R&D Program or in the\ndevelopment and commercialization of a PIONEER Licensed Product; and (ii) the\ndiscovery, development, manufacture, use, sale, importation or offer for sale of\nan MAXYGEN Licensed Product by MAXYGEN or its Affiliates, agents or\nSublicensees, MAXYGEN shall indemnify, defend and hold harmless PIONEER and its\nofficers, directors, employees, Affiliates and agents from all liabilities\narising out of or in connection with any such action, suit or proceeding.\nPIONEER shall have the right to separate counsel at its own expense in any such\naction, suit or proceeding. The parties will cooperate with each other in the\ndefense of any such suit, action or proceeding. MAXYGEN shall not compromise,\nlitigate, settle or otherwise dispose of any such suit, action or proceeding\nwithout PIONEER's advice and prior consent, provided that PIONEER shall not\nunreasonably withhold its consent to any settlement which does not have a\nmaterial adverse effect on PIONEER or PIONEER's business.\n\n          C.   Notice. In the event a suit or proceeding subject to this (P)9.2\n               ------                                                           \nis brought against either party that party shall promptly notify the other party\nand provide it with details.\n\n                 SECTION 10.    TERMINATION AND DISENGAGEMENT.\n                 --------------------------------------------\n\n     10.1 Term. This Agreement shall be effective as of the Effective Date and,\n          ----                                                             \nunless otherwise terminated earlier pursuant to \n\n                                     -89-\n\n \nthe other provisions of this Section 10, shall continue in full force and effect\non a Licensed Product-by-Licensed Product and country-by-country basis until the\ndate that is the later of: (i) PIONEER has completed its payment obligations for\nthe R&D Program, or (ii) both PIONEER and MAXYGEN have completed all royalty\nobligations due under any license acquired hereunder in such country.\n\n     10.2 Material Breach.\n          --------------- \n\n          A.   In the event either party has materially breached or defaulted in\nthe performance of any of its obligations hereunder, the other party may\nterminate the licenses granted to the other party with respect to the applicable\nLicensed Products on a Crop-and-Trait Category by Crop-and-Trait Category \n(\"Crop-and-Trait Specific\") basis [*******] or, in cases where Crop-and-Trait\nCategory basis does not apply, on a Licensed Product-by-Licensed Product basis.\nIf more than one Licensed Product is being commercially developed or exploited\nby the breaching party or its Affiliates or Sublicensees hereunder, and a breach\nonly relates to a particular Licensed Product, the other party shall be entitled\nto terminate the licenses only with respect to the applicable Licensed Product.\nA material breach of this Agreement by a party shall be deemed to have occurred:\n\n               (a)  upon the failure of a party to pay, when due, any amount due\nhereunder to the other party, effective [*******]\n\n                                     -90-\n\n \ndays after receiving notice from the non-breaching party of such failure to pay;\nor\n\n               (b)  upon the material breach by a party of the provisions of\nSection 5 effective [*******] days after receiving notice from the non-breaching\nparty of such breach; or\n\n               (c)  upon breach of any material obligation or condition by a\nparty, effective [*******] days after receiving written notice from the non-\nbreaching party of such breach.\n\n          B.   The foregoing notwithstanding, if the default or breach is cured\nor shown to be non-existent within the [*******] notice period described above,\nthe notice shall be deemed automatically withdrawn and of no effect.\n\n     10.3 Bankruptcy.\n          ---------- \n\n          A.   If either party (the \"Insolvent Party\") files for protection\nunder bankruptcy laws, makes an assignment for the benefit of creditors,\nappoints or suffers appointment of a receiver or trustee over its property,\nfiles a petition under any bankruptcy or insolvency act or has any such petition\nfiled against it which is not discharged within [*******] days of the filing\nthereof, then the other party may, at its sole election upon notice to the\nInsolvent Party, terminate the entire Agreement by notice to such party.\n\n                                     -91-\n\n \n          B.   All rights and licenses granted under or pursuant to this\nAgreement shall be deemed to be, for purposes of Section 365(n) of the U.S.\nBankruptcy Code, licenses or rights to \"intellectual property\" as defined under\nSection 101(52) of the U.S. Bankruptcy Code. The parties agree that each party,\nas a licensee of such rights under this Agreement, shall retain and may fully\nexercise all of its rights and elections under the U.S. Bankruptcy Code, subject\nto performance by the licensee of its preexisting obligations under this\nAgreement.\n\n          C.   Notwithstanding Section B. above, the parties agree that under\nthis Agreement PIONEER has not been granted and shall not receive any right or\nlicense to practice any Shuffling Technology, and the provisions of (P)10.3B\nabove do not apply to any intellectual property and materials relating thereto.\n\n     10.4 Limited Cause Termination.\n          ------------------------- \n\n          A.   If PIONEER or MAXYGEN or a third party does not demonstrate that\nShuffled Genes or other genes created or developed through the use of MAXYGEN\nShuffling Technology can be [*******], as shown by [*******], within [*******]\nmonths after the Effective Date, PIONEER shall have the right to terminate this\nAgreement on [*******] months notice to MAXYGEN; provided that such notice shall\nbe deemed automatically withdrawn if MAXYGEN makes such a demonstration prior to\nthe effective date of such termination.  All payments due to MAXYGEN on or\nbefore the effective date of \n\n                                     -92-\n\n \ntermination shall be paid by PIONEER prior to early termination under this\nclause.\n\n          B.   If prior to the end of the Research Term all research activities\nto be conducted in the R&D Program have been successfully completed or\nterminated by written agreement of the parties, and PIONEER and MAXYGEN are\nunable to agree on new research activities in new trait categories to be\nconducted in the R&D Program and the terms thereof as provided in (P)2.1E(a),\nthen PIONEER shall have the right to terminate the R&D Program on [*******]\nmonths notice to MAXYGEN. All payments due to MAXYGEN on or before the effective\ndate of termination shall be paid by PIONEER prior to early termination under\nthis clause.\n\n     10.5 Effect of Termination.\n          --------------------- \n\n          A.   Accrued Obligations. Termination of this Agreement, for any\n               -------------------                                         \nreason shall not release any party hereto from any liability which, at the time\nof such termination, has already accrued to the other party or which is\nattributable to a period prior to such termination, nor preclude either party\nfrom pursuing any rights and remedies it may have hereunder or at law or in\nequity which accrued or are based upon any event occurring prior to such\ntermination.\n\n          B.   Return of Confidential Information and Materials. Upon any\n               ------------------------------------------------           \ntermination of this Agreement, PIONEER and MAXYGEN shall \n\n                                     -93-\n\n \npromptly return to the other party all Confidential Information received from\nthe other party hereto (except one copy of which may be retained by legal\ncounsel for archival purposes and ensuring compliance with Section 6) and other\npertinent obligations under this Agreement, and all PIONEER Materials and\nMAXYGEN Materials shall be returned to the owner thereof.\n\n          C.   Licenses.\n               -------- \n\n                    (i)   In the event that PIONEER terminates the licenses to\nMAXYGEN for a MAXYGEN Licensed Product pursuant to (P)10.2, the licenses granted\nto MAXYGEN in Section 3 shall terminate solely with respect to such MAXYGEN\nLicensed Product, and the licenses to MAXYGEN with respect to other MAXYGEN\nLicensed Products shall remain in full force and effect, subject to all\napplicable terms and conditions of this Agreement.\n\n                    (ii)  In the event that MAXYGEN terminates the licenses to\nPIONEER for a PIONEER Licensed Product, or for a PIONEER Crop and Trait\nCategory, pursuant to (P)10.2, the licenses granted to PIONEER in Section 3\nshall terminate solely with respect to such PIONEER Licensed Product, or PIONEER\nCrop and Trait Category, as the case may be, and the licenses to PIONEER with\nrespect to other PIONEER Licensed Products, or other PIONEER Crops and Trait\nCategories, as the case may be, shall remain in full force and effect, subject\nto all applicable terms and conditions of this Agreement.\n\n                                     -94-\n\n \n                    (iii) In the event PIONEER terminates the Agreement pursuant\nto (P)10.3(A), the licenses granted to MAXYGEN in Section 3 shall terminate.\n\n                    (iv)  In the event MAXYGEN terminates the Agreement pursuant\nto (P)10.3(A), the licenses granted to PIONEER in Section 3 shall terminate.\n\n                    (v)   In the event that PIONEER terminates the Agreement\npursuant to (P)10.4A, all licenses granted to PIONEER and MAXYGEN in Section 3\nshall terminate.\n\n                    (vi)  Except as expressly provided in this (P)10.5(C), in\nthe event of any termination of one or more licenses (but not the entire\nAgreement) under (P)10.2 or (P)10.3, the remaining licenses granted pursuant to\n(P)3.1 and (P)3.2, and the covenants in (P)3.6B solely to the extent they relate\nto the surviving licenses, shall remain in effect.\n\n     10.6 Surviving Provisions. Paragraphs 2.1B(c), 2.1F, 2.5, 3.3, 3.4, 3.5, \n          --------------------                                           \n4.7, 4.9, 4.10, 4.11, 10.5 and 10.6, and Sections 6, 7, 8, 9, 11, 12, 13 and 14\nof this Agreement shall survive the expiration or termination of this Agreement\nfor any reason.\n\n                                     -95-\n\n \n                SECTION 11.    REPRESENTATIONS AND WARRANTIES.\n                ---------------------------------------------\n\n     11.1 Mutual Representations. MAXYGEN and PIONEER each represents and\n          ----------------------                                          \nwarrants as follows:\n\n          A.   Organization.\n               ------------ \n\n          It is a corporation duly organized, validly existing and is in good\nstanding under the laws of the jurisdiction first set forth above, is qualified\nto do business and in good standing as a foreign corporation in each\njurisdiction in which the performance of its obligations hereunder requires such\nqualification and has all requisite power and authority, corporate or otherwise,\nto conduct its business as now being conducted, to own, lease and operate its\nproperties and to execute, deliver and perform this Agreement.\n\n          B.   Authorization.\n               ------------- \n\n          The execution, delivery and performance by it of this Agreement have\nbeen duly authorized by all necessary corporate action and do not and will not:\n(a) require any consent or approval of its stockholders or (b) violate any\nprovision of any law, rule, regulation, order, writ, judgment, injunction,\ndecree, determination or award presently in effect having applicability to it or\nany provision of its charter documents.\n\n                                     -96-\n\n \n          C.   Binding Agreement.\n               ----------------- \n\n          This Agreement is a legal, valid and binding obligation of it\nenforceable against it in accordance with its terms and conditions.\n\n          D.   Inventor's Assignment of Rights.\n               ------------------------------- \n\n          It requires that every employee and consultant that is an inventor of\na patentable invention is under an obligation to assign their rights to it, and\nthat it actively requires the signing of such assignment.\n\n          E.   Warranty Disclaimer. The parties acknowledge that the research\n               -------------------                                            \nactivities contemplated hereunder are experimental, and that the R&D Program may\nnot be successful. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,\nNEITHER PARTY MAKES ANY REPRESENTATION AND EXTENDS NO WARRANTY OF ANY KIND WITH\nRESPECT TO ANY CONFIDENTIAL INFORMATION, PATENT RIGHTS, KNOW-HOW, SHUFFLING\nTECHNOLOGY, SHUFFLED GENES, LICENSED PRODUCTS, OR OTHER TECHNOLOGY, GOODS,\nSERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS\nWARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-\nINFRINGEMENT, AND VALIDITY OF TECHNOLOGY OR PATENT CLAIMS, ISSUED OR PENDING,\nWITH RESPECT TO ANY AND ALL OF THE FOREGOING.\n\n          F.   Limited Liability. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER\n               -----------------                                               \nMAXYGEN NOR PIONEER WILL BE LIABLE TO THE OTHER \n\n                                     -97-\n\n \nWITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT,\nNEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (i) ANY\nINDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS OR (ii)\nCOST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES.\n\n                  SECTION 12.    ADDITIONAL INDEMNIFICATION.\n                  -----------------------------------------\n\n     12.1 Indemnification of MAXYGEN by PIONEER. PIONEER shall indemnify, \n          -------------------------------------                           \ndefend and hold harmless MAXYGEN, its Affiliates and their respective directors,\nofficers, employees, and Agents and their respective successors, heirs and\nassigns (the \"MAXYGEN Indemnitees\"), against any liability, damage, loss or\nexpense (including reasonable attorneys' fees and expenses of litigation)\nincurred by or imposed upon the MAXYGEN Indemnitees, or any of them, in\nconnection with any claims, suits, actions, demands or judgments of third\nparties (except those subject to (P)9.2A, which shall be governed by the terms\nthereof), including without limitation personal injury and product liability\nmatters (except to the extent such claims, suits, actions, demands or judgments\nresult from a willful material breach of this Agreement, gross negligence or\nwillful misconduct on the part of a MAXYGEN Indemnitee) arising directly out of\nor in connection with (i) any actions of PIONEER in the performance of the R&D\nProgram, or (ii) the development, testing, production, manufacture, promotion,\nimport, sale or use by any person of any PIONEER Licensed Product manufactured\nor sold by\n\n                                     -98-\n\n \nPIONEER or by an Affiliate, licensee, Sublicensee, distributor or Agent of\nPIONEER.\n\n     12.2 Indemnification of PIONEER by MAXYGEN. MAXYGEN shall indemnify,\n          -------------------------------------                           \ndefend and hold harmless PIONEER, its Affiliates and their respective directors,\nofficers, employees, and Agents and their respective successors, heirs and\nassigns (the \"PIONEER Indemnitees\"), against any liability, damage, loss or\nexpense (including reasonable attorneys' fees and expenses of litigation)\nincurred by or imposed upon the PIONEER Indemnitees, or any of them, in\nconnection with any claims, suits, actions, demands or judgments of third\nparties (except those subject to (P)9.2B, which shall be governed by the terms\nthereof), including, without limitation, personal injury and product liability\nmatters (except to the extent such claims, suits, actions, demands or judgments\nresult from a willful material breach of this Agreement, gross negligence or\nwillful misconduct on the part of a PIONEER Indemnitee) arising out of or in\nconnection with (i) any actions of MAXYGEN in the performance of the R&D\nProgram, or (ii) the development, testing, production, manufacture, promotion,\nimport, sale or use by any person of any MAXYGEN Licensed Product manufactured\nor sold by MAXYGEN or by an Affiliate, agent, licensee, Sublicensee, distributor\nor Agent of MAXYGEN.\n\n     12.3 Procedure. A party (the \"Indemnitee\") that intends to claim\n          ---------                                                   \nindemnification under this Section 12 shall promptly notify \n\n                                     -99-\n\n \nthe other party (the \"Indemnitor\") in writing of any loss, claim, damage,\nliability or action in respect of which the Indemnitee or any of its Affiliates,\nSublicensees or their directors, officers, employees, agents, consultants or\ncounsel intend to claim such indemnification, and the Indemnitor shall have the\nright to participate in, and, to the extent the Indemnitor so desires, to assume\nthe defense thereof with counsel mutually satisfactory to the parties. The\nindemnity agreement in this Section 12 shall not apply to amounts paid in\nsettlement of any loss, claim, damage, liability or action if such settlement is\nmade without the consent of the Indemnitor, which consent shall not be withheld\nunreasonably. The failure to deliver written notice to the Indemnitor within a\nreasonable time after the commencement of any such action, if prejudicial to its\nability to defend such action, shall relieve such Indemnitor of any liability to\nthe Indemnitee under this Section 12. At the Indemnitor's request, the\nIndemnitee under this Section 12, and its employees and agents, shall cooperate\nfully with the Indemnitor and its legal representatives in the investigation and\ndefense of any action, claim or liability covered by this indemnification and\nprovide full information with respect thereto.\n\n                                     -100-\n\n \n                      SECTION 13.    DISPUTE RESOLUTION.\n                      ---------------------------------\n\n     13.1 Informal Dispute Resolution.\n          --------------------------- \n\n          A.   Senior Officials. The parties recognize that a bona fide dispute\n               ----------------                                                 \nas to certain matters may from time to time arise during the term of this\nAgreement which relates to either party's rights or obligations hereunder. In\nthe event of the occurrence of such a dispute, either party may, by notice to\nthe other party, have such dispute referred to the Chief Executive Officer of\nMAXYGEN and the Vice President, Trait and Technology Development of PIONEER, or\ntheir successors or counterparts, for resolution by good faith negotiations\nwithin 30 days after such notice is received.\n\n          B.   Interim Conduct. If the parties are unable to reach agreement\n               ---------------                                              \nwith respect to the next Work Plan as provided above, they shall continue to\nwork at the Staffing Level then prevailing, in a manner consistent with and in\nfurtherance of the then current Work Plan, notwithstanding the expiration of the\nthen-current Work Plan. If the parties are unable to reach any agreement with\nrespect to a Work Plan by the expiration of the then-current Work Plan pursuant\nto (P)13.1(A) above, then such dispute shall be resolved as described in (P)13.2\nbelow.  In addition, any dispute relating to the financial obligations of either\nparty to the other shall be subject to (P)13.2 below.\n\n                                     -101-\n\n \n     13.2 Arbitration. Any dispute under this Agreement relating to the Work\n          -----------                                                        \nPlans or the conduct of R&D Program or the payments due under this Agreement\nand\/or the financial obligations of the parties hereunder, which is not settled\nby mutual consent pursuant to (P)13.1 above, shall be finally settled by binding\narbitration, conducted in accordance with the Commercial Arbitration Rules of\nthe American Arbitration Association by three (3) independent, neutral\narbitrators appointed in accordance with said rules; provided, unless otherwise\nagreed by the parties any dispute relating to the establishment of a royalty\nrate to be arbitrated pursuant to (P)4.3A, (P)4.3B or (P)4.3E shall be resolved\nby a single independent, neutral arbitrator. Any arbitration shall be held in\nSan Francisco, California. The arbitrators shall determine what discovery shall\nbe permitted, consistent with the goal of limiting the cost and time which the\nparties must expend for discovery; provided the arbitrators shall permit such\ndiscovery as they deem necessary to permit an equitable resolution of the\ndispute. Any written evidence originally in a language other than English shall\nbe submitted in English translation accompanied by the original or a true copy\nthereof. Except as otherwise expressly provided in this Agreement, the costs of\nthe arbitration, including administrative and arbitrator(s)' fees, shall be\nshared equally by the parties and each party shall bear its own costs and\nattorneys' and witness' fees incurred in connection with the arbitration. A\ndisputed performance or suspended performances pending the\n\n                                     -102-\n\n \nresolution of the arbitration must be completed within a reasonable time period\nfollowing the final decision of the arbitrator(s). The arbitrators shall be\ndirected that any arbitration subject to this Section shall be completed within\none (1) year from the filing of notice of a request for such arbitration. The\narbitration proceedings and the decision shall not be made public without the\njoint consent of the parties and each party shall maintain the confidentiality\nof such proceedings and decision unless otherwise permitted by the other party.\nAny decision which requires a monetary payment shall require such payment to be\npayable in United States dollars, free of any tax or other deduction. The\nparties agree that the decision shall be the sole, exclusive and binding remedy\nbetween them regarding any and all disputes, controversies, claims and\ncounterclaims presented to the arbitrators. Any award may be entered in a court\nof competent jurisdiction for a judicial recognition of the decision and an\norder of enforcement.\n\n                         SECTION 14.    MISCELLANEOUS.\n                         ----------------------------\n\n     14.1 Notices. All notices shall be in writing mailed via certified mail, \n          -------                                                       \nreturn receipt requested, or overnight express mail, courier providing evidence\nof delivery, addressed as follows, or to such other address as may be designated\nby notice so given from time to time:\n\n                                     -103-\n\n \n          If to PIONEER:   PIONEER HI-BRED INTERNATIONAL, INC.\n                           7300 NW 62\/nd\/ Avenue\n                           Johnson, Iowa 50131-1004\n                           Attention: Vice President, Trait and \n                           Technology Development\n\n                           with a copy to:\n\n                           PIONEER HI-BRED INTERNATIONAL, INC.\n                           800 Capital Square\n                           400 Locust Street\n                           Des Moines, Iowa 50309-234\n                           Attention: General Counsel\n\n          If to MAXYGEN:   MAXYGEN, INC.\n                           3410 Central Expressway\n                           Santa Clara, California 95051\n                           Attention: Chief Executive Officer\n\n     Notices shall be deemed given as of the date received.\n\n     14.2 Governing Law and Jurisdiction. This Agreement, and any arbitration\n          ------------------------------                                      \nrelating hereto, shall be governed by and construed in accordance with the laws\nof the State of California, without regard to the application of principles of\nconflicts of law.\n\n     14.3 Venue. The exclusive venue of any dispute arising out of or in\n          -----                                                          \nconnection with the performance of or any breach of this Agreement which is not\nsubject to arbitration pursuant to (P)13.2, shall be the state courts or U.S.\ndistrict court located in or for MAXYGEN's principal place of business, and the\nparties hereby irrevocably consent to the personal jurisdiction of such courts.\nNotwithstanding the above, this (P)14.3 shall be terminated and have no further\nforce and effect if MAXYGEN is acquired by or merges with a third party having\nassets of [*******] or more prior to the merger with or acquisition of MAXYGEN.\n\n                                     -104-\n\n \n     14.4 Binding Effect. This Agreement shall be binding upon and inure to the\n          --------------                                                        \nbenefit of the parties and their respective legal representatives, successors\nand permitted assigns.\n\n     14.5 Headings. Section and subsection headings are inserted for \n          --------                                                   \nconvenience of reference only and do not form a part of this Agreement.\n\n     14.6 Counterparts. This Agreement may be executed simultaneously in two or\n          ------------                                                          \nmore counterparts, each of which shall be deemed an original.\n\n     14.7 Amendment; Waiver. This Agreement may be amended, modified, superseded\n          -----------------                                           \nor canceled, and any of the terms may be waived, only by a written instrument\nexecuted by each party or, in the case of waiver, by the party or parties\nwaiving compliance. The delay or failure of any party at any time or times to\nrequire performance of any provisions shall in no manner affect the rights at a\nlater time to enforce the same. No waiver by any party of any condition or of\nthe breach of any term contained in this Agreement, whether by conduct, or\notherwise, in any one or more instances, shall be deemed to be, or considered\nas, a further or continuing waiver of any such condition or of the breach of\nsuch term or any other term of this Agreement.\n\n     14.8 No Agency or Partnership. Nothing contained in this Agreement shall\n          ------------------------                                            \ngive either party the right to bind the other, or \n\n                                     -105-\n\n \nbe deemed to constitute the parties as agents for the other or as partners with\neach other or any third party.\n\n     14.9 Assignment and Successors. Except as expressly provided herein, this\n          -------------------------                                            \nAgreement may not be assigned by either party without the consent of the other,\nexcept that each party may, without such consent, assign this Agreement and the\nrights, obligations and interests of such party, in whole or in part, to any of\nits Affiliates, to any purchaser of all or substantially all of its assets in\nthe line of business to which this Agreement pertains, or to any successor\ncorporation resulting from any merger or consolidation of such party into such\nsuccessor corporation.\n\n     14.10  Force Majeure. Neither PIONEER nor MAXYGEN shall be liable for\n            -------------\nfailure of or delay in performing obligations set forth in this Agreement, and\nneither shall be deemed in breach of its obligations, if such failure or delay\nis due to natural disasters or any causes beyond the reasonable control of\nPIONEER or MAXYGEN, as the case may be, and notice of such prevention of\nperformance promptly provided by the nonperforming party to the other party.\nSuch excuse shall be continued so long as the condition constituting force\nmajeure continues and the nonperforming party takes reasonable efforts to remove\nthe condition.  In event of such force majeure, the party affected thereby shall\nuse reasonable efforts to cure or overcome the same and resume performance of\nits obligations hereunder.\n\n                                     -106-\n\n \n     14.11  Interpretation. The parties hereto acknowledge and agree that:\n            --------------                                                 \n(i) each party and its counsel reviewed and negotiated the terms and provisions\nof this Agreement and have contributed to its revision; (ii) the rule of\nconstruction to the effect that any ambiguities are resolved against the\ndrafting party shall not be employed in the interpretation of this Agreement;\nand (iii) the terms and provisions of this Agreement shall be construed fairly\nas to all parties hereto and not in a favor of or against any party, regardless\nof which party was generally responsible for the preparation of this Agreement.\n\n     14.12  Integration: Severability. This Agreement is the sole agreement\n            -------------------------                                       \nwith respect to the subject matter hereof and supersedes all other agreements\nand understandings between the parties with respect to same, including but not\nlimited to the Confidentiality Agreement between MAXYGEN and PIONEER dated July\n27, 1998. If any provision of this Agreement is or becomes invalid or is ruled\ninvalid by any court of competent jurisdiction or is deemed unenforceable, it is\nthe intention of the parties that the remainder of this Agreement shall not be\naffected.\n\n     14.13  Approvals. Each party shall be responsible, at its expense, for\n            ---------                                                       \nobtaining any approvals from the governmental entities which may be required\nunder applicable law for the development, growth or sale of Licensed Products\nsold by it or on its behalf.\n\n                                     -107-\n\n \n     14.14  Export Controls. This Agreement is made subject to any\n            ---------------                                        \nrestrictions concerning the export of Licensed Products or Research Results or\nIntellectual Property (\"Technology\") from the United States that may be imposed\nupon or related to either party to this Agreement from time to time by the\nGovernment of the United States. Neither party will export, directly or\nindirectly, any Technology to any countries for which the United States\nGovernment or any agency thereof at the time of export requires an export\nlicense or other governmental approval, without first obtaining the license or\nwritten approval to do so from the Department of Commerce or other agency of the\nUnited States Government when required by applicable statute or regulation.\n\n                                     -108-\n\n \n     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed\nthis 23\/rd\/ day of December, 1998 by their duly authorized representatives.\n\n\n\n                                        PIONEER HI-BRED INTERNATIONAL, INC.\n\n                                        By:  \/s\/ Anthony Cavalieri\n                                             ---------------------\n                                             Anthony Cavalieri\n                                             Vice President\n\n\n                                        MAXYGEN, INC.\n\n                                        By:  \/s\/ Russell Howard\n                                             ------------------\n                                             Russell Howard\n                                             President and CEO\n\n                                     -109-\n\n \n                                  APPENDIX A\n                                  ----------\n\n\n                                   [*******]\n\n[Appendix A contains the initial work plan for this Agreement, which details the\nspecific projects to be undertaken in the R&D Program, timelines for the\nspecified research activities, and technical information related to the conduct\nof the specified research.]\n\n\n \n                                  APPENDIX B\n                                  ----------\n\n\n                                   [*******]\n\n[Appendix B identifies the specific crops and trait categories that are the \nsubject of this Agreement.]\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8151,8527],"corporate_contracts_industries":[9420],"corporate_contracts_types":[9613,9616],"class_list":["post-42155","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-maxygen-inc","corporate_contracts_companies-pioneer-hi-bred-international-inc","corporate_contracts_industries-food__agricultural","corporate_contracts_types-operations","corporate_contracts_types-operations__ip"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42155"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42155"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42155"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}