AMENDED AND RESTATED SPONSORED RESEARCH AGREEMENT BETWEEN CERES, INC. and TEXAS AGRILIFE RESEARCH

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

Exhibit 10.12

EXECUTION COPY

AMENDED AND RESTATED SPONSORED RESEARCH AGREEMENT
BETWEEN
CERES, INC.
and
TEXAS AGRILIFE RESEARCH

This Amended and Restated Sponsored Research Agreement (“Agreement”) is made and entered into as of September 24, 2011 (the “Effective Date”) by and between Ceres, Inc., a corporation with principal offices in Thousand Oaks, California, a Delaware corporation (“CERES”) and Texas AgriLife Research (“AGRILIFE”) with principal offices in College Station, Texas, a member of The Texas A&M University System (“TAMUS”), an agency of the State of Texas. CERES and AGRILIFE are collectively referred to as “Parties” and individually as a “Party.”

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

WHEREAS, AGRILIFE, formerly known as The Texas Agricultural Experiment Station, a member of TAMUS (“TAES”), and CERES have conducted such research under that certain Sponsored Research Agreement, dated as of August 29, 2007 (as amended, supplemented and otherwise modified by way of those certain written amendments entered into by the Parties, effective as of June 18, 2008, July 15, 2008, October 22, 2008 and August 29, 2007, the “Original Agreement”);

WHEREAS, the Parties desire to continue to improve germplasm, develop lines and hybrids of sorghum and its interbreeding species and develop DNA markers and marker platform technology to advance the development of biomass/bioenergy crops and enter into a master research agreement to facilitate such activities;

WHEREAS, the Parties desire for CERES to have rights to commercialize such technologies, germplasm and other results arising out of the research conducted by AGRILIFE under this Agreement in connection with the production of bioenergy, biofuels, biochemical, sugar, and other bioproducts; and

WHEREAS, pursuant to Article 16.A of the Original Agreement the Parties desire to amend and restate the Original Agreement in its entirety, incorporating by reference the Appendices to the Original Agreement as provided in Article II.C hereof, and proceed with the Program (as defined below) under this Agreement.

NOW THEREFORE, in consideration of the mutual covenants and premises contained in

Amended and Restated Sponsored Research Agreement		Page 1 of 34

this Agreement, the receipt and sufficiency of which is acknowledged, the Parties agree as follows:

I.		PROJECT MANAGEMENT
		A. AGRILIFE will perform research projects as agreed upon by the Parties (each such research project, a “Project,” and all such Projects, together, the “Program”). The proposals for, review of, recommendations to the Executive Committee for approval of, and implementation of the Projects under the Program will be overseen by a committee of four members (the “Management Committee”). Two members will be nominated by each Party to serve on the Management Committee.
		B. The Management Committee will be a forum for communication and exchange of information regarding the implementation of the Projects under the Program. It shall have no authority to make any modifications to this Agreement, but may formulate recommendations to change the Projects under the Program or to take advantage of additional funding opportunities and present such recommendations to CERES and AGRILIFE for consideration. AGRILIFE agrees to permit CERES representatives to confer as necessary with Principal Investigators. It is understood and agreed that the Management Committee and CERES representatives have no authority to supervise, direct or control the work performed hereunder.
		C. Recommendations of the Management Committee shall be made by unanimous agreement and recorded in a manner prescribed by the Management Committee as a true record of the recommendations. If the Management Committee cannot come to a unanimous agreement on any matter for which it is responsible, then the Management Committee shall refer the matter to the Executive Committee.
		D. The Management Committee shall have the discretion to designate any selected gene or group of genes as a cloning target (“Cloning Target”). The Management Committee shall also have the discretion to decide that a selected gene or group of genes is no longer a Cloning Target. The selection or deselection of a Cloning Target will be communicated to all Principal Investigators conducting Projects under the Agreement at the time of such selection or deselection.
		E. The Management Committee will meet at least once every four (4) months with additional meetings as mutually agreed upon and exchange information and data regarding the implementation of the Program. At least one (1) week before each Management Committee meeting, AGRILIFE will provide CERES with a report on the Program activities performed since the last Management Committee meeting. A preferred format for such reports will be created by the Management Committee. Such reports will contain at least the following with respect to each pending Project (“Basic Report Information”):

Amended and Restated Sponsored Research Agreement		Page 2 of 34

	•		status update;
	•		actual spending relative to budget, including FTE breakout;
	•		description of Subject Inventions and germplasm generated during the period; and
	•		copies of slide presentations summarizing research progress.

Upon CERES’ request, additional information, if not specifically included in the Basic Report Information, shall be delivered to CERES as supporting information with respect to each pending Project at the related meeting (“Additional Information”), including, without limitation:

	•		breeding records;
	•		copies of field or greenhouse books and records;
	•		DNA sequencing results of genotypes;
	•		detailed descriptions of each genotype sequenced including phenotypes collected;
	•		other genotyping data collected including QTL’s and markers;
	•		current markers being utilized for genotyping breeding materials; and
	•		as may be requested from time to time, copies of raw field trial data.

In addition to providing the Basic Report Information and Additional Information to CERES in connection with such Management Committee meetings, upon CERES’ request, AGRILIFE shall update the Basic Report Information and Additional Information and provide such updated Basic Report Information and Additional Information to CERES within ten (10) days after AGRILIFE’s receipt of such request.

II.

PROGRAM MANAGEMENT

		A. A committee of four (4) members (the “Executive Committee”) will oversee the activities between the Parties for the Program. Two (2) members will be nominated by each Party to serve on the Executive Committee. The Executive Committee will meet at least once every six (6) months with additional meetings as mutually agreed upon by the Parties. Each Party will ensure that at least one nominee has sufficient signature authority to enact the obligations of the Executive Committee set forth in this Agreement. Any of the members of the Management Committee may join any such meetings of the Executive Committee unless the Executive Committee unanimously indicates otherwise.
		B. The Executive Committee will be responsible and have authority for the approval, rejection, modification, extension and cancellation of Projects and for overseeing the budget for Projects. In connection with each Project, the Executive Committee

1. will be responsible for tracking the milestones specified in the work statement for such Project and will have authority to cancel such

Amended and Restated Sponsored Research Agreement		Page 3 of 34

Project in the event any such milestone is not met; and

2. will have authority to increase or decrease the budget on a semi-annual basis for such Project.

		In addition, the Executive Committee will have authority for re-allocating priorities within the Program based on, among other things, any market events and/or any technical successes achieved or difficulties encountered in connection with any Project.
		C. Notwithstanding the meeting frequency described in Article II.A., the Executive Committee shall hold a special meeting within ten (10) business days of the Effective Date. At such special meeting, the Executive Committee will consider and take actions it deems appropriate with respect to the following matters: (1) reviewing and confirming the status of the Parties’ existing activities under the Original Agreement as further described in Appendices A, B and C as amended, of the Original Agreement, (collectively, the “Original Workplan”); (2) determining which aspects of the Original Workplan will remain active and transition into Projects under this Agreement; (3) determining the handling of any aspects of the Original Workplan which will not transition into Projects under this Agreement; and (4) any other matters which the Executive Committee deems appropriate to facilitate the transition of Original Workplan activities under the Original Agreement to Projects under this Agreement. The Original Workplan is incorporated herein by reference; however, the Parties acknowledge that each Proposed Project will have a budget and that Appendix B is incorporated herein for informational purposes only.
		D. Either Party may submit proposals to the Management Committee for any research and development project that such Party wishes to include as a Project under this Agreement (“Proposed Project”). Any such proposal shall be in the form of Appendix A and shall include at least a reasonably detailed description of such Proposed Project, the goal(s) of such Proposed Project and the proposed timeline, milestones and budget for such Proposed Project. The Management Committee will decide whether to recommend acceptance of the Proposed Project to the Executive Committee within twelve (12) months after its receipt of the proposal for such Proposed Project. The Executive Committee shall consider the Management Committee’s recommended Proposed Projects, if any, at each regular meeting of the Executive Committee, and make the final decision whether to accept or reject each Proposed Project. If the Executive Committee decides to accept and proceed with any such Proposed Project as a new Project under this Agreement, the Executive Committee shall request that the Management Committee develop a scope of work statement (including, without limitation, budget, targeted start date and completion date and agreed upon milestones and deliverables) with respect to such new Project, substantially in the form of Appendix A. Upon the execution of such work statement by the Parties, the research project described in such work statement shall be a Project under this Agreement.

Amended and Restated Sponsored Research Agreement		Page 4 of 34

		E. In the event that, following completion of the Proposed Project process set forth in Article II.C., the Executive Committee decides not to fund a Proposed Project within the CERES Field (“Unfunded Proposed Project”), such Unfunded Proposed Project shall be referred by the Executive Committee back to the Management Committee. If AGRILIFE desires to pursue alternate funding opportunities, AGRILIFE shall present not more than one (1) Unfunded Proposed Project annually to the Executive Committee for reconsideration at a regular meeting of the Executive Committee. Upon the Parties’ mutual written agreement, the Management Committee may recommend in writing that the Executive Committee reconsider certain additional Unfunded Proposed Projects from time to time as part of the Executive Committee’s regular meeting agenda. The Executive Committee shall be responsible for determining the outcome of any such Unfunded Proposed Project in a manner which shall not unduly impact the respective interests of the Parties and which is subject to the provisions of Article IV hereof. The Parties contemplate that such potential outcomes may include, but not be limited to, engaging in joint efforts to obtain funding from agencies or organizations that provide grants for research, creating jointly-owned companies that may pursue the Proposed Project, delaying the funding by CERES of such Proposed Project for a reasonable period, or revising the statement of work and budget for the Proposed Project.
		F. If the Executive Committee cannot come to a unanimous agreement on any matter for which it is responsible, then the members of the Executive Committee nominated by CERES shall make the final decision with regard to such matter, except that the members of the Executive Committee nominated by AGRILIFE shall make the final decision with regard to whether AGRILIFE has the capacity and capability to perform any Project or whether any proposed budget for any Project is reasonably feasible.

III.		RESEARCH MANAGEMENT
		A. The research under each Project will be supervised by the Principal Investigator(s) identified in such Project. No substitution of any such Principal Investigator(s) will be made without the prior written consent of CERES.
		B. Each Party acknowledges and agrees that the Projects are research in nature and hence the achievement of the deliverables and/or milestones specified in the Projects cannot be guaranteed. Neither Party guarantees any particular outcome or specific yield arising from any Project.
		C. Each Party will require any and all of its employees and researchers who will perform Program activities to sign a statement stating that they have read and understand the obligations of AGRILIFE under Article VI and Article XI. AGRILIFE affirms that, as per The Texas A&M University System Policy 17.01, Subsection 2.2.1, intellectual property conceived or developed with support from TAMUS or any of its members in the form of administered funds shall be owned by TAMUS, and that the funding received from CERES will constitute such administered funds under such policy.

Amended and Restated Sponsored Research Agreement		Page 5 of 34

		D. Except in the case of permitted subcontracting as provided in Article III.H, below, each Party will conduct Program activities exclusively in laboratories, greenhouses or fields under full control of or owned by that Party. Each Party will take all reasonable precautions to prevent damage to or third party access to any information related to, or unintentional destruction of or release of, any germplasm created in the Program.
		E. Each Party will strictly comply, and use its commercially reasonable efforts to cause its employees and researchers conducting Program activities to comply, with notebook and breeding book keeping policies of the highest standards as applicable in the field. Each Party will record and keep all field evaluation, composition and marker data in user-friendly and secure electronic database format with limited access.
		F. Each Party shall be responsible for its compliance, and will comply, with all applicable laws, rules and regulations, including, without limitation, those relating to genetically modified organisms (to the extent the Program involves such organisms), and will obtain any and all permits or authorizations or proceed to any notifications which may be required by such laws, rules and regulations.
		When contributing sorghum germplasm for Program activities, the contributing Party will verify what the origin of the material is and inform the other Party in writing from whom/where and approximately on what date such Party initially obtained such germplasm. If the germplasm contributed is governed by the Convention on Biological Diversity (“CBD”) or the International Treaty on Plant Genetic Resources for Food and Agriculture (“ITPGRFA”), the contributing Party will be responsible for obtaining all necessary authorizations to commercialize any such genetic material and the results arising from the use of such genetic material, as applicable under the CBD and/or ITPGRFA, under financial terms and conditions defined by the applicable authorizing body under the CBD or ITPGRFA, as applicable, and neither Party will use any germplasm in the Program for which the preceding condition is not satisfied. Further, each Party shall only contribute germplasm to the Program for which such Party has breeding rights with the right to commercialize the progeny.
		G. Any subcontracting of Program activities to a third party by AGRILIFE will be subject to CERES’ prior written approval which will not be unreasonably withheld. CERES may subcontract any Program activities to any third party.

IV.

RESTRICTIONS ON AGRILIFE RESEARCH.

A.

Definitions

1. “Biomass/Bioenergy/Sweet Sorghum” means

a) sorghum or Sorghum [***] which has been identified, bred, or selected for the purpose of conversion to fuels, chemicals, sugar, energy or other bioproducts, including, but not limited to, sorghum

Amended and Restated Sponsored Research Agreement		Page 6 of 34

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

which has been bred to produce higher biomass yields, higher yields of cellulose, higher yields of sugar, other improved composition, improved agronomics, improved net energy balance or improved energy density or which has been bred to make its cellulose or sugars more available to conversion or more efficiently converted, or

b) sorghum or Sorghum [***] lines that enable better breeding or contribute to the development of commercial products, including, but not limited to, energy, fuels, chemicals, sugar or other bioproducts.

Biomass/Bioenergy/Sweet Sorghum shall not include

c) sorghum or Sorghum [***] which has been improved through breeding for increased starch yields, including, but not limited to, grain sorghums (even where such sorghum must necessarily produce increased yields of sugar to achieve increased starch content), or

d) sorghum or Sorghum [***] which has been improved through breeding for a purpose that does not include conversion to fuels, chemicals, sugar, energy or other bioproducts, including, but not limited to, the purposes of silage, forage, grain or other traditional uses for sorghum for feed or food purposes

2. “CERES Field” means Germplasm Improvement to develop Biomass/Bioenergy/Sweet Sorghum.

3. “Germplasm Improvement” means any activities to improve sorghum or Sorghum [***], including without limitation selection, breeding, marker development or marker assisted breeding or transgenic improvement.

4. “Sorghum [***]” or “Sorghum [***]” means [***] plants (those which do [***] and [***] or [***]) created utilizing the [***] and [***] of the [***] sorghum [***].

B.

AGRILIFE acknowledges and agrees that during the term of this Agreement:

1. To the extent that AGRILIFE conducts, directly or indirectly, any research in the CERES Field, other than in the Program, under any funding or any collaboration agreement other than this Agreement, AGRILIFE agrees not to grant any rights in the CERES Field to any person or entity other than CERES.

2. AGRILIFE will notify CERES in advance in writing of any

Amended and Restated Sponsored Research Agreement		Page 7 of 34

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

			contemplated projects in Germplasm Improvement in sorghum and/or Sorghum [***], outside the CERES Field, that would result in the grant of any rights by AGRILIFE, TAMUS and/or any other TAMUS member to a for-profit person or entity pursuant to a sponsored research agreement or other funded collaboration agreement in which such for-profit person or entity finances such research and, at CERES’ request, to discuss in good faith any such project with CERES, subject to any applicable confidentiality provisions.
			3. AGRILIFE’s participation in any third-party sponsored research in Biomass/Bioenergy/Sweet Sorghum, outside the CERES Field, shall be subject to AGRILIFE’S compliance with the Guidelines for Future Collaborative Opportunities (“Guidelines”) which are included in the Amended and Restated Intellectual Property Rights Agreement entered into as of August 27, 2007 by and between TAMUS and CERES, as amended and restated as of September 24, 2011, the “IPRA”). Both Parties agree to comply with such Guidelines.
			4. Unfunded Proposed Projects in the CERES Field shall be handled as set forth in Article II.E.
			5. AGRILIFE agrees that germplasm developed using any Lines will only be released or made available to third parties for commercialization or Germplasm Improvement if such germplasm

a) is less than five percent (5%) identical to any of the Lines under exclusive option or exclusive license to CERES based on genetic contribution as determined by pedigree,

b) contains no specific Allele(s) optioned or exclusively licensed to CERES to which a Line’s specific valuable phenotype or trait is attributable,

c) contains no Subject Inventions optioned or exclusively licensed to CERES, and

d) contains no CERES proprietary technology or intellectual property.

The foregoing provisions in this Article IV.B.5 do not limit and are subject to Article IV.B.1, Article IV.B.2, Article IV.B.3 and Article IV.B.4.

V.		IN-KIND SUPPORT
		A. In partial consideration for the covenants of AGRILIFE contained in this Agreement, within sixty (60) days of the Effective Date or as otherwise set forth in Appendix B, the Parties will enter into good faith negotiations, for a period not to exceed one hundred twenty (120) days without mutual written agreement of the

Amended and Restated Sponsored Research Agreement		Page 8 of 34

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

			Parties, for appropriate contractual agreements as applicable for CERES’ provision to AGRILIFE of certain in-kind research support as further described in Appendix B (collectively, “In-Kind Support”) for AGRILIFE’s use in performing Program activities. For the avoidance of doubt, the obligation to enter into good faith negotiations is a material obligation under this Agreement. Any such use of In-Kind Support by AGRILIFE shall be subject to the terms and conditions of a separate written agreement to be negotiated in good faith and entered into by the Parties. Unless otherwise agreed to by CERES in any such separate written agreement, any such use by AGRILIFE shall be solely for Program activities. Unless otherwise agreed by the Parties in such separate written agreements, any Materials, Derivatives, Progeny, germplasm, Hybrids, Lines or other intellectual property arising out of any use by AGRILIFE of In-Kind Support shall be deemed Program Intellectual Property subject to Article IX.
			B. Notwithstanding anything else in Article IV, Article IX, this Article or otherwise, in no event shall AGRILIFE publish, use or exploit outside of the Program any CERES Original Materials, Derivatives, Progeny, data, information, intellectual property, technology or in-kind research support (including, without limitation, any In-Kind Support) provided or made available by CERES for use in or otherwise in connection with the Program, or any Derivatives, Progeny or information developed or derived therefrom, without in each instance the prior written consent of CERES, which consent may be granted, withheld or conditioned in CERES’ sole discretion.

VI.

TRANSFER OF MATERIALS

A.

DEFINITIONS

1. “Derivatives” means plants made by a Receiving Party from the Original Materials of the other Party through traditional or artificial means, excluding, however, Progeny of the Original Materials. “Derivatives” further means any plant part or seed of Derivatives or biological samples made from Derivatives, or any Progeny of Derivatives.

2. “Existing License and Material Transfer Agreements” means the license and material transfer agreements listed in Appendix C:

3. “Materials” means Original Materials, Derivatives and Progeny of such Original Materials.

4. “Original Materials” means (i) any plant materials owned, jointly owned or otherwise controlled by a Party (“Originating Party”) and transferred to the other Party (“Receiving Party”) under this Agreement, and any Progeny of such materials, and (ii) any plant part or seed of plant materials included in Article VI.A.4.(i) or biological samples made from plant materials included in Article VI.A.4.(i).

Amended and Restated Sponsored Research Agreement		Page 9 of 34

5. “Progeny” means the offspring of a plant produced through asexual propagation or sexual multiplication or maintenance where such offspring is not substantially genetically different from such plant.

			B. It is contemplated that either Party may supply samples to the other Party under the terms of this Article VI.
			C. Within thirty (30) days after the Effective Date, CERES shall provide to the OTC (as defined in Article XIV) a list of all Original Materials received by CERES from AGRILIFE, including for each Original Material the designation of the implementing letter it was received under, which are not the subject of any Existing License and Material Transfer Agreement (excluding any publicly available lines or CERES Confidential Information). For any Original Material which has been received by CERES which was not received under an implementing letter, the Parties shall promptly generate an implementing letter. Both Parties shall periodically update such lists of Original Materials transferred and implementing letters during the term of this Agreement.
			D. The Parties agree that any Original Materials provided by AGRILIFE to CERES pursuant to this Agreement may be used by CERES and its Affiliated Companies for the following purposes and such other purposes as the Parties may mutually agree upon in writing:

	1.		creating Progeny;
	2.		creating Derivatives;
	3.		research activities, evaluation and the conduct of trials using Materials;

			CERES acknowledges that no right in Materials, markers, or DNA sequence data and information, is granted nor grantable herein or in the Original Agreement for CERES’ use for commercial exploitation purposes, and that any grant of commercial exploitation rights must occur through the instrument of a separate agreement, and that such grants of commercial exploitation rights, including without limitation those set forth in the Existing License and Material Transfer Agreements, supersede the limitations on the use for commercial exploitation of Materials, markers, or DNA sequence information, set forth in this Agreement. CERES shall be responsible for its Affiliated Companies’ compliance with this Agreement or any of its provisions.
			E. All Original Materials provided by the Originating Party to the Receiving Party should be considered experimental and should be handled by the Receiving Party with appropriate safety precautions. The Receiving Party agrees to exclusively and restrictedly use all Materials under suitable containment conditions, in a safe manner, and in compliance with all applicable state and federal laws and regulations, and not to use Materials on human subjects.
			F. The Originating Party of the Original Materials will obtain any permits required for the delivery of such Original Materials to the Receiving Party or

Amended and Restated Sponsored Research Agreement		Page 10 of 34

			proceed to any required notifications prior to the delivery of such Original Materials to the Receiving Party, and such Receiving Party will reasonably cooperate with such Originating Party in order to facilitate the issuance of any required permits. The Receiving Party will obtain any authorizations or permits which may be required for its activities with Materials.
			G. The Receiving Party agrees that Materials will be used solely for the purpose of the Program and, in the case where CERES is the Receiving Party, for the purposes described in Article VI.D above.
			H. The Receiving Party will only grant access to Materials intended for Program activities to its employees or researchers who need access to such Materials for the purpose of the Program and, in the case where CERES is the Receiving Party, for the purposes described in Article VI.D above.
			I. The Receiving Party agrees that Materials will not be supplied or made available to any other persons or entities, either within or outside of the Receiving Party, without the prior written approval of the Originating Party. Such Materials will not be sold or transferred for commercial exploitation purposes.
			J. Notwithstanding anything to the contrary in this Article VI, the Parties agree that the Materials provided to CERES by AGRILIFE, or made available to CERES by AGRILIFE, or derived by CERES from AGRILIFE Original Materials, in each case under this Agreement or the Original Agreement, may be supplied to any third parties with whom CERES has entered into any collaboration, evaluation (including, without limitation, field evaluation, composition and/or conversion) and/or material transfer agreements or any agreement similar to any of the foregoing (each a “Collaborator”) or any subcontractors of CERES (each a “Subcontractor”), provided that such Collaborator or Subcontractor, as the case may be, (i) will only be allowed to use such Materials for the purpose of the implementation of, and the exercise of its rights and performance of its obligations under, its agreement or agreements with CERES, (ii) will be subject to applicable obligations with respect to such Materials that are consistent with this Agreement and (iii) will have no greater scope of rights in using such Materials than CERES. Upon AGRILIFE’s reasonable written request, CERES will provide to AGRILIFE reasonable, non-confidential information with respect to such Materials provided pursuant to CERES’ agreements with Collaborators provided that CERES has the right to disclose such information to AGRILIFE; any such information will be deemed Confidential Information of CERES.
			K. In the event that the Receiving Party desires to utilize Materials for any uses beyond the scope of this Agreement, the Parties shall enter into good faith negotiations to establish the terms and conditions for any such purposes; however, nothing in this Agreement shall be construed as a representation that the Originating Party guarantees the grant of such rights.
			L. The Receiving Party will keep and maintain written or electronic records

Amended and Restated Sponsored Research Agreement		Page 11 of 34

			of all use by the Receiving Party of the Original Materials provided or made available by the Originating Party under this Agreement and the Original Agreement, including records of Derivatives and Progeny that have been made, and shall provide such records to the OTC and to the other Party within thirty (30) days after each anniversary of the Effective Date of this Agreement.
			M. AGRILIFE shall make available to CERES for potential selection and transfer under this Agreement materials developed in the Program in which CERES has indicated an interest or which relate to the CERES Field, subject to the limits of such materials’ physical availability.
			N. The Originating Party will accompany each transfer of Original Materials with a transmittal letter that specifies: (i) the roles of each Party involved in the transfer, e.g., who is the Originating Party, (ii) the experimental designation of the Materials and (iii) a statement confirming that the subject Materials are being transferred under the terms of this Agreement. Each Party will provide to the OTC a copy of each such transmittal letter that it provides to the other Party.
			O. No transfer of any Material under this Agreement shall change the ownership of such Material.

VII.

TERM AND TERMINATION

			A. The term of this Agreement shall begin on the Effective Date and continue for fifteen (15) years unless sooner terminated in accordance with this Article VII or extended by the mutual written agreement of the Parties.
			B. This Agreement may be terminated for convenience by CERES at any time prior to the full term of this Agreement set forth in Article VII.A, provided that a written notice is given to AGRILIFE thirty (30) days in advance. However, CERES shall be obligated to pay AGRILIFE for all services, orders, materials, or facilities committed in good faith (and not cancelable or re-allocatable despite AGRILIFE’s efforts to cancel or re-allocate) prior to the effective date of termination.
			C. AGRILIFE shall have the right to terminate this Agreement unilaterally with written notice to CERES in case of failure of CERES to satisfy its material obligations under this Agreement, if CERES fails to cure such failure(s) within (i) thirty (30) days for failures to remit payment for amounts due under this Agreement and (ii) ninety (90) days for all other obligations, in each case after receipt of written notice from AGRILIFE specifying such failure(s).
			D. If there are no active Projects at any time during the term of this Agreement, then, upon written notice by either Party to the other Party, the Executive Committee will meet to define and decide upon any further research projects to perform under this Agreement. If no such research projects are decided upon by the Executive Committee within three (3) months after such meeting, CERES will have the option to continue any previous Projects that were

Amended and Restated Sponsored Research Agreement		Page 12 of 34

			part of the Program, on the same annual budget (adjusted for inflation under the Consumer Price Index (CPI) applicable as of the first day of the calendar quarter in which such continuation is agreed upon) for the remainder of the fifteen (15) year term set forth in Article VII.A. In the event that CERES does not exercise such option within three (3) months from the aforementioned meeting of the Executive Committee, this Agreement may be terminated by either Party upon delivery of a written notice of termination to the other Party with immediate effect.
			E. Promptly upon the delivery of a notice of termination of this Agreement, the Parties will meet to discuss the Program, and each Party will provide to the other Party any data, information, germplasm and any other materials that constitute Joint Inventions or Jointly Owned Lines, if still in existence as of the notice of termination and which has not been provided to such other Party prior to the notice of termination.
			F. Termination of this Agreement shall not affect the rights and obligations of the Parties under this Agreement accrued prior to termination hereof nor any license grants then in existence, subject to payment of remuneration as set forth in any relevant license/commercialization agreements. Further, at or about the effective date of termination, the Parties will negotiate in good faith to reach agreement as to the rights for CERES to use and commercially exploit Subject Inventions and Lines not covered by any relevant license/commercialization agreement between the Parties, which rights will be addressed in one or more written agreements. Such Subject Inventions and Lines shall be deemed subject to the options set forth in this Agreement and to the terms and conditions of the IPRA. In the event of the expiration or any termination of this Agreement, the following provisions shall survive: Articles IV.A, IV.B.5, V.B., VI.A, VI.D, VI.E, VI.F, VI.G, VI.H,VI.I, VI.K, VI.L and VI.O; VII.E and VII.F.; IX, X, XI, XII, XIII, XIV, XV, XVI, XVIII, XXI, XXII.C, XXII.D, XXII.E, XXII.F, XXII.G, XXII.H, XXII.I, XXII.J, XXII.L, and XXIII.

VIII.		PAYMENT
		A. CERES agrees to pay for the direct and indirect cost of work performed under each Project under this Agreement as described in, and up to the maximum amount specified in, the budget for such Project. Within thirty (30) days after the last day of each calendar quarter during the term of this Agreement, AGRILIFE shall provide a written invoice to CERES for the amount of the annual budget for each Project allocated to such calendar quarter as set forth in the work statement for such Project. CERES shall pay such amount within thirty (30) days after CERES’ receipt of such invoice. All payments to AGRILIFE under this Agreement shall be made payable to Texas AgriLife Research and forwarded to the address designated in Article XIV. AGRILIFE acknowledges and agrees that, except with respect to its invoice dated September 30, 2011, all payments required to be made by CERES under the Original Agreement between September 3, 2007 and the Effective Date of this Agreement have been timely made and that CERES

Amended and Restated Sponsored Research Agreement		Page 13 of 34

		otherwise has no further payment obligations under the Original Agreement.
		B. AGRILIFE will expend these funds as needed for labor, equipment, travel, and other operating costs solely in connection with the research conducted under and in accordance with this Agreement. The unexpended balance or any unused supplies with respect to the Program remaining at the completion of the Program shall remain the sole property of AGRILIFE. Notwithstanding the foregoing sentence, the Parties agree that unexpended funds will be used to extend the term and/or scope of the Program as determined by the Executive Committee and that the Parties shall amend the relevant work statement accordingly.
		C. If, at any time, AGRILIFE has reason to believe that the cost of the work with respect to any Project will exceed the applicable amount set forth in any Project work statement, AGRILIFE will promptly notify CERES in writing, giving a revised budget for completion of such work. CERES will not be obligated to reimburse AGRILIFE for any cost in excess of the applicable amount set forth in any Project work statement, and, subject to diligent performance of the Program activities, AGRILIFE will not be obligated to continue such work or incur costs in excess of that amount unless and until this Agreement is amended to increase the maximum amount for such work as mutually agreed upon by the Parties in writing.
		D. CERES and AGRILIFE may jointly seek additional funding opportunities from Federal and State funding sources in support of the Program or in support of expansion of the Program. Where accepting funds from such additional sources would conflict with the obligations of AGRILIFE to CERES or with any of CERES’ rights under this Agreement, the IPRA or the Existing License and Material Transfer Agreements, such acceptance of funds will be contingent upon the approval and subsequent amendment of the Agreement by the Parties.

IX.

PROGRAM INTELLECTUAL PROPERTY

	A.		Definitions

			1. “AGRILIFE Genetic Contribution” means, for any specific Hybrid or New Parental Line: (a) the proportion of the nuclear genes of the Hybrid or the New Parental Line, as applicable, arising from Lines licensed by AGRILIFE to CERES, based on genetic contribution as determined by pedigree and (b) a contribution to be determined on a case-by-case basis in each case where a specific valuable phenotype of that Hybrid or New Parental Line, as applicable, is attributable to specific Allele(s) optioned or licensed to CERES by AGRILIFE.
			2. “Allele” means a particular form of one or more genes determinant for a valuable characteristic of a plant (e.g. drought tolerance, specific flowering time), discovered in the Program by AGRILIFE or CERES solely or by AGRILIFE and CERES jointly.

Amended and Restated Sponsored Research Agreement		Page 14 of 34

			3. “Copyright” means any copyrightable material and its associated copyright.
			4. “Developed by Breeding” means originated by any form of genetic manipulation including but not limited to single or multiple hybridization, backcrossing, genetic transformation or other rearrangement or recombination of genes with or without associated selection.
			5. “Hybrid” means a seed or plant that has resulted from genetic crossbreeding between two or more lines where those lines include one or more (i) Lines or (ii) New Parental Lines.
			6. “Invention” means any invention or discovery that is or may be patentable or otherwise protectable under title 35 of the U.S. Code.
			7. “Jointly-Owned Lines” means Lines which are jointly developed by employees, contractors and/or consultants (other than AGRILIFE) of CERES and employees and/or researchers of AGRILIFE, and Lines where the Materials or Other Contributions of CERES and AGRILIFE have been combined through traditional or artificial means in the Program.
			8. “Lines” means (i) sorghum lines or Sorghum [***] or populations created by AGRILIFE in the course of the Program, or (ii) new genetic lines or populations developed by or for CERES (other than by AGRILIFE) through further selection within any sorghum lines or populations created in the course of the Program, as distinguished from crossing followed by selection.
			9. “New Parental Lines” means new genetic lines or populations which are Developed by Breeding by CERES and which have one or more of the Lines as progenitors.
			10. “Other Contributions” means (i) intellectual and technical contributions to the development of Lines or if from CERES, to the development of Lines, New Parental Lines or Hybrids, such as, without limitation, markers, gene-trait association knowledge or composition knowledge, that inform the breeding and selection process, or transgenic traits and (ii) except with respect to Article IX.A.7 and Article IX.D.1, financial contributions to the development of Lines, or if from CERES, to the development of Lines, New Parental Lines or Hybrids.
			11. “Subject Invention” means any Invention conceived and reduced to practice during the term of this Agreement in the conduct of a Project.

B.

Copyright

1. Title. Title to and the right to determine the disposition of any

Amended and Restated Sponsored Research Agreement		Page 15 of 34

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

			copyrights or copyrightable material first produced or composed in the performance of the Program by AGRILIFE employees and/or researchers only shall remain with AGRILIFE. Title to and the right to determine the disposition of any copyrights or copyrightable material first produced or composed in the performance of the Program by CERES employees only shall remain with CERES. Title to and the right to determine the disposition of any copyrights or copyrightable material first produced or composed in the performance of the Program by employees and/or researchers of AGRILIFE and CERES shall remain with AGRILIFE and CERES.
			2. License to Copyrightable Materials (excluding software). AGRILIFE grants to CERES an irrevocable, royalty-free, non-transferable, non-exclusive and license in AGRILIFE’s rights in any copyrightable materials (technical data, reports, etc.) first developed in the performance of the Program to use, reproduce, display, perform and otherwise exploit (to the extent not prohibited by applicable law) such copyrightable materials. Such grant excludes rights in computer software (including both source and executable code) first developed under this Agreement, its documentation, and/or information databases (“Software”).
			3. Invention Notice (Software). AGRILIFE will notify CERES, in writing stating expressly that each disclosure is a software invention notice under this Agreement within thirty (30) days of receiving a disclosure on Software solely made by employees and/or researchers of AGRILIFE, or of Software jointly made by employees of AGRILIFE and CERES, and each such notice will describe the Software with sufficient specificity to allow assessment by CERES. CERES shall hold such disclosure in confidence and shall not reveal the disclosure to any third party without the written consent of AGRILIFE.
			4. First Right to Negotiate for Commercial Exploitation License. Additionally, AGRILIFE grants to CERES a time-limited first right to negotiate a non-exclusive or exclusive, at CERES’ election, commercial exploitation license (i) to use, reproduce, display, perform and otherwise exploit any Software for commercial exploitation purposes, and to distribute and/or sublicense such Software to third parties. CERES shall advise AGRILIFE in writing within ninety (90) days following delivery of such Software to CERES (“Option Period”) whether or not CERES elects to negotiate a license agreement to obtain commercial exploitation rights to such Software. In the event that CERES elects to negotiate for a commercial exploitation license to such Software, the Parties shall initiate negotiation of such license agreement, such negotiations not to extend beyond one hundred eighty (180) days from CERES’ notice of election (“Negotiation Period”) without the mutual consent of both Parties. Such license shall be negotiated in good faith between the Parties, and shall

Amended and Restated Sponsored Research Agreement		Page 16 of 34

contain reasonable business terms common to CERES’ field of commercial interest and proposed application.

C.

Subject Inventions

			1. Inventorship and Title. Inventorship of inventions, developments, or discoveries in the performance of the Program (“Subject Inventions”) shall be determined in accordance with U.S. Patent Law, whether or not patent applications are pursued. All rights to Subject Inventions invented solely by employees or researchers of AGRILIFE shall belong solely to AGRILIFE (“AGRILIFE Inventions”). All rights to Subject Inventions invented solely by employees, contractors and/or consultants (other than AGRILIFE) of CERES shall belong solely to CERES (“CERES Inventions”). All rights to Subject Inventions invented jointly by employees or researchers of AGRILIFE and employees, contractors and/or consultants (other than AGRILIFE) of CERES (“Joint Inventions”) shall belong jointly to AGRILIFE and CERES.
			2. Marker-Trait Inventions. In the event that a Party uses a mapping population provided by the other Party to discover a marker, Allele or trait, such marker, Allele or trait shall be a Joint Invention, provided, however, that such mapping population is only available to third parties subject to the same condition that the resulting discoveries of markers, Alleles or traits shall be jointly owned by the Party providing the mapping population to the third party, and such third party.
			3. Invention Notice (Subject Invention). AGRILIFE will notify CERES, in writing stating expressly that each disclosure is an invention notice under this Agreement within thirty (30) days of reduction to practice or knowledge of conception or discovery of a Subject Invention solely invented by employees and/or researchers of AGRILIFE, or of a Joint Invention, and each such notice will describe the Subject Invention with sufficient specificity to allow assessment by CERES. CERES shall hold such disclosure in confidence and shall not reveal the disclosure to any third party without the written consent of AGRILIFE.
			4. Option to Obtain a Commercial Exploitation License. AGRILIFE grants to CERES a time-limited option to obtain an exclusive world-wide commercial exploitation license in AGRILIFE’s rights in Subject Inventions and in Joint Inventions, with the right to grant sublicenses, as set forth below.
			5. Exercise of Option to a Commercial Exploitation License. CERES shall advise AGRILIFE in writing within ninety (90) days of such disclosure to CERES of a Subject Invention (“Option Period”) whether or not CERES elects to obtain exclusive commercial exploitation rights to such Subject Invention. In the event that CERES elects to exercise its

Amended and Restated Sponsored Research Agreement		Page 17 of 34

			option to obtain a commercial exploitation license to such Subject Invention, the Parties shall initiate negotiation of a license agreement in compliance with the IPRA, such negotiations not to extend beyond one hundred eighty (180) days from CERES’ notice of election (“Negotiation Period”) without the mutual written consent of both Parties. Such license shall be negotiated in good faith between the Parties and shall contain reasonable business terms common to CERES’ field of commercial interest and proposed application and shall allow CERES to direct patent prosecution for the Subject Invention.
			6. AGRILIFE shall not file a non-provisional application on any Subject Invention without CERES’ written approval prior to the expiration of the later of (i) the Option Period for such Subject Invention and (ii) the Negotiation Period for such Subject Invention.

D.

Lines

			1. Ownership (General). Lines developed by employees, contractors and/or consultants (other than AGRILIFE) of CERES alone without the use of AGRILIFE Materials or Other Contributions, will be owned by CERES. Lines developed by employees and/or researchers of AGRILIFE alone without the use of CERES Materials or Other Contributions will be owned by AGRILIFE. Jointly-Owned Lines jointly developed by employees, contractors and/or consultants (other than AGRILIFE) of CERES and employees and/or researchers of AGRILIFE shall be jointly owned. Lines where the Materials or Other Contributions of CERES and AGRILIFE have been combined through traditional or artificial means in the Program shall be jointly owned.
			2. Ownership (CERES breeding program). In the event that CERES or its Affiliated Companies use Jointly-Owned Lines or Lines owned by AGRILIFE in its or its Affiliated Companies’ own breeding program outside the Program in compliance with this Agreement or a license agreement for Lines as provided in Article IX.D.4, the resulting Lines, New Parental Lines or Hybrids developed by CERES or its Affiliated Companies shall be solely owned by CERES, without regard to whether or not the operative license agreement for Lines was in effect at the time of CERES or its Affiliated Companies’ development of such Lines, New Parental Lines or Hybrids. Any use for commercial exploitation of any Lines, New Parental Lines or Hybrids by CERES or its Affiliated Companies shall be subject to CERES obtaining a license under this Article IX.D and pursuant to the IPRA.
			3. Option to Obtain a Commercial Exploitation License. AGRILIFE grants to CERES a time-limited option to obtain an exclusive world-wide commercial exploitation license in AGRILIFE’s rights in Lines and in Jointly-Owned Lines with the right to grant sublicenses, as set forth

Amended and Restated Sponsored Research Agreement		Page 18 of 34

			below.
			4. Exercise of Option to a Commercial Exploitation License. CERES may at any time identify a Line for which it elects to exercise its option. In addition, the Management Committee may nominate a Line in writing to the Executive Committee which, in the Management Committee’s judgment, exhibits valuable characteristics which may be of interest to CERES. The Executive Committee is responsible for determining whether or not to validate each such Line nomination as a formal written disclosure to CERES (“Lines Disclosure”). Any Lines Disclosure by the Executive Committee will state that such disclosure is a Lines Disclosure under this Agreement and describe the Line with sufficient specificity to allow assessment by CERES. CERES shall advise AGRILIFE in writing within ninety (90) days of any such Lines Disclosure to CERES (“Option Period”) whether or not CERES elects to exercise its option to obtain exclusive commercial exploitation rights to such Line to maintain and increase seed of Lines; develop New Parental Lines; develop Hybrids; and sell Hybrids. In the event that CERES elects to obtain a commercial exploitation license to one or more or all Line(s), the Parties shall initiate negotiation of such license agreement in compliance with the IPRA and substantially in the form of the Annexes thereto, such negotiations not to extend beyond one hundred eighty (180) days from CERES’ notice of election (“Negotiation Period”) without the mutual consent of both Parties.
			5. The Parties agree that any such license as negotiated by the Parties for Line(s) shall be negotiated in good faith and shall contain reasonable business terms common to CERES’ field of commercial interest and proposed application, and shall contain royalty rates customary in the seed industry, taking into consideration, (i) AGRILIFE Genetic Contribution, (ii) Other Contributions of CERES, (iii) financial contributions of each Party, and (iv) germplasm contributed by CERES, if any, all of the foregoing (i) through (iv) to the development of such Lines, New Parental Lines and Hybrids.
			6. Jointly-Owned Lines. Neither AGRILIFE nor CERES shall have the right to commercialize Jointly-Owned Lines without a written agreement between the Parties.
			7. In the event that CERES’ option to license a Line has expired and/or CERES does not license a Line developed under the Program, AGRILIFE shall be able to use such Line for any purpose but subject to the restrictions set forth in this Agreement, including but not limited to those restrictions set forth in Article IV, Article V and Article XI and the restrictions set forth in the IPRA.

E.

Intellectual Property Protection for Joint Inventions and Jointly-Owned Lines

Amended and Restated Sponsored Research Agreement		Page 19 of 34

			1. CERES shall have the responsibility to pursue statutory protection of Joint Inventions or Jointly-Owned Lines, and shall be the “Administering Party” for the purposes of this Agreement.
			2. CERES may, at its sole discretion, make a written request that AGRILIFE be the Administering Party for certain Joint Inventions or Jointly-Owned Lines. Should AGRILIFE agree, it shall provide notice of its agreement in writing and shall be the Administering Party for such Joint Inventions or Jointly-Owned Lines.
			3. The Administering Party shall be responsible for retaining counsel, overseeing the process of securing intellectual property protection (i.e., the preparation, filing and prosecution of patent or plant variety rights application(s)) and maintaining intellectual property protection for the mutual benefit of the Parties, in its best judgment, for that which it had prosecution responsibility. In addition to other reporting responsibilities provided below, the Administering Party shall promptly notify the other Party following retention of counsel. The Parties will provide, and cause their respective employees, researchers and agents to provide, all reasonable assistance which may be required in connection with the filing and prosecution of such intellectual property rights, including without limitation the signing of documents.
			4. The Administering Party shall keep the non-administering Party advised as to all developments with respect to all patent and plant variety rights application(s) and issued patents and plant variety rights covering AGRILIFE owned or Subject Inventions or Joint Inventions or AGRILIFE owned or Jointly-Owned Lines, which includes supplying copies of all papers received and filed in connection with such applications and patents in sufficient time for the non-administering Party to comment thereon. Any decision which would result in a change of legal inventorship or ownership of a patent, patent application or plant variety rights certificate shall not be taken by an Administering Party unless it has first received authorization in writing from the non-administering Party, provided that the Parties shall comply with U.S. law on inventorship.
			5. Each Party agrees to bear all legal expenses incurred by that Party as an Administering Party in obtaining and maintaining patents and plant variety rights, U.S. and foreign, covering Joint Inventions and jointly-owned Lines.
			6. Joint Inventions. Subject to the restrictions set forth in Articles IV and V, for Joint Inventions conceived in the performance of the Program, AGRILIFE and CERES shall be deemed independent owners under 35 USC 262, in the absence of a written agreement between the Parties to the

Amended and Restated Sponsored Research Agreement		Page 20 of 34

contrary.

			F. All grants of intellectual property rights to CERES pursuant to this Agreement or the IPRA will be subject to the reservation by AGRILIFE of an irrevocable, nonexclusive, royalty-free right to use or practice such intellectual property for research and educational purposes only and for the conduct of third-party sponsored research subject to the terms of this Agreement including without limitation Article IV, Article V and Article XI and the IPRA. This reservation excludes Jointly-Owned Lines and any other intellectual property rights of CERES.
			G. If the Parties fail to reach agreement within a Negotiation Period, within thirty (30) days after the end of such Negotiation Period either Party may request through written notification to the other Party that the matter shall be settled in accordance with the following procedures: the disputed contract terms shall be referred to a mutually agreed impartial expert whose decision shall be final. Each Party shall submit to the expert within fifteen (15) days of his/her appointment its position in writing on the disputed contract terms and conditions. Such expert shall be limited to choosing one of such two (2) Party positions on each of the contract terms and conditions or related group of contract terms and conditions that the expert considers most reasonable in the circumstances and shall not make any other determination. Neither Party shall be bound by any determination by the expert which, in the opinion of Party’s counsel, will result or be likely to result in that Party violating any applicable law or regulation.

X.

PUBLICATIONS

A. AGRILIFE shall be free to publish the results of research performed under this Agreement after providing CERES with a sixty (60) day period in which to review each publication for patent purposes (enabling disclosures), to identify any inadvertent disclosure of CERES’ Confidential Information (as such term is defined in Article XI), to identify any disclosure of any copyrights, copyrightable materials, Subject Inventions, germplasm, Hybrids, Lines, Alleles or other intellectual property arising out of the Program (“Program Intellectual Property”) and to identify information generated in the Program relating to Materials, Derivatives, Progeny or the association of marker(s) with a gene which has been defined as a Cloning Target. AGRILIFE agrees to delete, at the request of CERES, any disclosure of CERES Confidential Information and/or any information generated in the Program relating to the association of marker(s) with a gene which has been defined as a Cloning Target. Notwithstanding the foregoing, AGRILIFE shall not be required to remove from publications information generated in the Program relating to the association of marker(s) with a gene which has been defined as a Cloning Target after the earliest of the following events: (i) a patent application is filed on the Cloning Target in the U.S.; or (ii) the Management Committee decides that the Cloning Target is no longer a Cloning Target and such decision is reflected in a written document; or (iii) at the conclusion of the Program, except if otherwise agreed by the Parties at

Amended and Restated Sponsored Research Agreement		Page 21 of 34

		that time.
		B. If necessary to permit the preparation and filing of patent applications and/or to delete any disclosure of CERES’ Confidential Information, or the association of marker(s) with a gene which has been defined as a Cloning Target, AGRILIFE shall agree to an additional delay of publication not to exceed sixty (60) days to prepare and file necessary applications and/or delete such CERES Confidential Information and/or information generated in the Program relating to the association of marker(s) with a gene which has been defined as a Cloning Target. In the event that CERES asks AGRILIFE to file a patent, CERES shall reimburse AGRILIFE for all reasonable, documented costs incurred in such patent application filing(s) as set forth in Article IX. Any further delay of publication shall require a separate agreement between AGRILIFE and CERES. AGRILIFE shall reasonably and in good faith consider and negotiate with CERES with respect to any other requests by CERES to delay any publication.

XI.

CONFIDENTIAL INFORMATION

	a)		The Parties intend to reasonably share all information and data that they develop during the course and for the purpose of the Program. At its sole discretion, either Party may designate information and data that it develops and shares with the other as Confidential Information and such Confidential Information shall be subject to the terms of this Article XI.
	b)		It is contemplated that the disclosing Party (“Discloser”) may be disclosing certain confidential and/or proprietary information to the receiving Party (“Recipient”) unknown to the general public (hereinafter referred to as “Confidential Information”). The Parties agree that the terms of this Article XI shall apply to any confidential and/or proprietary information that may be disclosed under this Agreement, and that such Confidential Information shall be used solely by Recipient for the purposes contemplated and permitted by this Agreement or the IPRA (“Purpose”). Recipient acknowledges that the above-described Confidential Information is confidential and/or proprietary to Discloser and is claimed to be a valuable, special, and unique asset of Discloser.
	c)		Identification of Confidential Information. Confidential Information disclosed that Discloser, in good faith, regards as confidential and/or proprietary shall be clearly marked as “Confidential,” “Proprietary,” or bear any other appropriate notice indicating the sensitive nature of such Confidential Information. Any Confidential Information not easily marked, including Confidential Information that may be orally disclosed, shall, within thirty (30) days of its disclosure, be referenced in writing and designated confidential by Discloser.
	d)		Information shall not be afforded the protection of this Article XI of this Agreement if such information:

Amended and Restated Sponsored Research Agreement		Page 22 of 34

	i)		has been, is now, or later becomes publicly available through no fault of Recipient;
	ii)		has been, is now, or later becomes rightfully learned by Recipient from a third party who is not under restriction or duty imposed by Discloser;
	iii)		has been, is now, or later is furnished to third parties by Discloser, if such disclosure is, or has been, made to third parties without similar restriction, duty or limitation of use;
	iv)		was known to Recipient prior to the date it received such Confidential Information from Discloser; or
	v)		has been, is now, or later is independently developed by Recipient without use of or resort to such Confidential Information, and can be so proven by clear and convincing evidence prepared contemporaneously with such independent development.

e)

Protection of Confidential Information. For a period of three (3) years from the date of termination of a Project under which Confidential Information is disclosed, Recipient will:

	i)		Maintain the Confidential Information in confidence;
	ii)		Not use any such Confidential Information received from Discloser except for the above-stated Purpose;
	iii)		Disclose such Confidential Information received from Discloser only to its employees that have a need to know such Confidential Information in order to fulfill the Purpose; and
	iv)		Not disclose any portion of the Confidential Information received from Discloser to any third party without the prior written consent of Discloser, even if such third party is under similar restriction on disclosure with Discloser.

f)

Recipient agrees to use the same degree of care to protect the confidentiality of all Confidential Information it receives as it uses to protect its own confidential and proprietary information which it does not wish to have published or disseminated. However, in no event shall Recipient use less than a reasonable degree of care to protect the Confidential Information received from Discloser. Recipient further agrees that without Discloser’s written consent, Recipient will not electronically record any conversation or meeting with Discloser personnel or photograph any Discloser facility or premises. In the case where AGRILIFE is the Recipient, access to Confidential Information shall be limited to the employees and researchers of AGRILIFE that have a need to access or know such Confidential

Amended and Restated Sponsored Research Agreement		Page 23 of 34

			Information.
	g)		Notice of Legal Action. If Recipient is under a legal obligation (including, but not limited to, pursuant to law (including Texas Government Code Chapter 552) or court order) to disclose Confidential Information received under this Agreement, Recipient will use reasonable efforts to promptly provide notice to Discloser, and, to the extent permitted by applicable law and, if applicable, authorized by the Office of the Attorney General of the State of Texas will cooperate with Discloser to protect Confidential Information, but only to the extent required by such legal obligation. The Recipient will provide reasonable advance written notice to the Discloser of any such legal requirement and will use reasonable efforts to secure confidential treatment of such Confidential Information prior to its production or disclosure.
	h)		Miscellaneous Requirements for Confidential Information. All Confidential Information disclosed under this Agreement shall remain the property of Discloser. At Discloser’s request, all Confidential Information received by Recipient in tangible form shall be promptly returned or destroyed, provided that each Party may retain one (1) copy of such Confidential Information for record keeping purposes and/or for purposes of exercising any rights or performing any obligations that survive any expiration or termination of this Agreement. Nothing in this Article XI shall be construed as granting a license to any patent or copyright. The disclosure of Confidential Information shall likewise not be construed as any representation, warranty, assurance, or inducement by either Party with respect to infringement of any patent or other proprietary right.

XII.		TITLE TO EQUIPMENT
		AGRILIFE shall retain title to all equipment, supplies and other items purchased and/or fabricated with funds provided by CERES under this Agreement.
XIII.		GOVERNING LAW
		The validity, interpretation, and enforcement of this Agreement shall be governed and determined by the laws of the State of Texas, excluding the conflict of laws rules which might require the application of the laws of another jurisdiction.
XIV.		NOTICES
		Formal notices provided under this Agreement must be in writing and delivered by (i) certified mail, return receipt requested, postage prepaid; (ii) hand delivered, costs prepaid; (iii) facsimile with receipt of a successful transmission confirmation; (iv) email; or (v) delivery by a reputable overnight courier service, costs prepaid (in the case of delivery by facsimile or email the notice must be followed immediately by a copy of the notice being delivered by a means provided in (i), (ii), or (v)). The notice will be deemed given on the day the notice

Amended and Restated Sponsored Research Agreement		Page 24 of 34

is received. In the case of notice by facsimile or email, the notice is deemed received at the local time of the receiving machine, and if not received, then the date the follow-up copy is received. Notices must be delivered to the following addresses or at such other addresses as may be later designated in writing. Notices may be required to be delivered under this Agreement to AGRILIFE, to CERES, and to The Texas A&M University System’s Office of Technology Commercialization (“OTC”) acting on behalf of AGRILIFE.

		AGRILIFE:		Diane Gilliland
				Director, Contracts and Grants
				Texas AgriLife Research
				The Office of Sponsored Research Services
				400 Harvey Mitchell Parkway South, Suite 300
				College Station, TX ###-###-####
				E-Mail: ***@***
				Phone: (979)  ###-###-####
				Fax: (979)  ###-###-####
		CERES:		Director of Business Development
				cc: Legal Department
				Ceres, Inc.
				1535 Rancho Conejo Blvd.
				Thousand Oaks, CA 91320
				Phone: (805)  ###-###-####
				Fax: (805)  ###-###-####
		OTC:		Director, Licensing and Intellectual Property
				Office of Technology Commercialization
				800 Raymond Stotzer Parkway, Suite 2020
				College Station, TX 77845
				Phone: (979)  ###-###-####
				Fax: (979)  ###-###-####

XV.		PUBLICITY
		A. AGRILIFE shall have the right to acknowledge the CERES investigator, the AGRILIFE investigator, the nature of the research, and the dollar value of the Agreement and Projects thereunder in AGRILIFE’s records and reports.
		B. Neither Party shall indicate, directly or indirectly, any endorsement by the other Party, or any component institution or agency of such other Party, of any products or services of such Party for any reason whatsoever, without obtaining the express, prior written consent of such other Party. CERES shall not use the name of TAMUS, AGRILIFE, or any component institution or agency of TAMUS, nor the names of any of their employees or researchers nor any adaptation in any advertising, promotional or sales literature to be disseminated to

Amended and Restated Sponsored Research Agreement		Page 25 of 34

		the public without prior written consent obtained from AGRILIFE in each case, except that CERES may continue any such use that was approved by AGRILIFE or TAMUS prior to the Effective Date without obtaining such consent. Neither AGRILIFE nor TAMUS shall use the name of CERES or any of its Affiliated Companies, nor the names of any of their respective employees or researchers nor any adaptation in any advertising, promotional or sales literature to be disseminated to the public without prior written consent obtained from CERES in each case.
		C. Notwithstanding any provision of this Article XV, either of the Parties can disclose or otherwise acknowledge, without restriction, the existence of this Agreement as well as the collaborative relationship between the Parties without the prior consent of the other Party. Notwithstanding the unilateral disclosure rights provided for in this Article XV, if the disclosure or acknowledgement takes the form of a written release by the disclosing Party, the disclosing Party shall provide the other Party a copy of any such unilateral disclosure prior to its release so as to allow the other Party to comment and shall take such comments reasonably into account. However, no advance copy needs to be provided of any releases referred to in this Article XV.C. or of any releases which are identical to previous releases.
		D. The Parties may issue joint press releases regarding their collaboration. Any such press release and any press release by either Party will be subject to the prior written approval of both Parties; provided however, that (i) CERES shall have the right to otherwise disclose information as may be required in CERES’ judgment to comply with SEC or IRS regulations or other laws, rules or regulations governing disclosure of information or to (potential) investors or business partners and (ii) AGRILIFE shall have the right to otherwise disclose information as may be required in AGRILIFE’s judgment to comply with laws, rules or regulations governing disclosure of information. Notwithstanding the unilateral disclosure rights provided for in this Article XV, the disclosing Party shall provide the other Party a copy of any such unilateral disclosure preferably prior to its release.

XVI.

EXPORT ADMINISTRATION

		The results of the Research Program obtained by AGRILIFE are expected to be ordinarily published and shared broadly with the scientific community and therefore are expected to constitute “fundamental research” as defined under the International Traffic in Arms Regulations (ITAR, 22 CFR Sections 120-130) and the Export Administration Regulations (EAR, 15 CFR Sections 730-774). If CERES discloses to AGRILIFE any CERES Confidential Information that is subject to export control, CERES will alert AGRILIFE in writing at the time of disclosure, at which time AGRILIFE will advise CERES if it desires to take receipt of the export-controlled materials. Neither Party shall export or re-export any United States-origin technology, software, or products, or the direct products of that technology, software

Amended and Restated Sponsored Research Agreement		Page 26 of 34

		or products under this Agreement, in violation of United States export control regulations.

XVII.

INDEPENDENT CONTRACTOR

		For the purposes of this Agreement and all services to be provided hereunder, the Parties shall be, and shall be deemed to be, independent contractors, and neither Party is acting as a partner, joint venturer, agent or employee of the other Party. The employees, researchers, officers or agents of AGRILIFE shall not be considered or deemed to be employees, researchers, officers or agents of CERES. Neither Party shall have authority to make any statements, representations nor commitments of any kind, or to take any action which shall be binding on the other Party, except as may be explicitly provided for herein or authorized in writing by such other Party.

XVIII.		SEVERABILITY

		If any of the provisions of this Agreement in the application thereof to any person or circumstance, is rendered or declared illegal for any reason, or shall be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby, but shall be enforced to the greatest extent permitted by applicable law.

XIX.		HEADINGS

		The headings used herein are for reference and convenience only and shall not enter into the interpretation hereof.

XX.		COUNTERPARTS

		This Agreement may be executed in duplicate counterparts, which taken together shall constitute one single representation between the Parties.

XXI.		DISPUTE RESOLUTION

	a)		The Parties shall make every possible attempt to resolve in an amicable manner all disputes between the Parties concerning this Agreement.
	b)		The Parties must use the dispute resolution process provided in Chapter 2260, Texas Government Code, and the related rules adopted by the Texas Attorney General to attempt to resolve in the ordinary course of business. CERES must submit written notice of a claim of breach of contract under this Chapter to Dr. Craig Nessler, Director, who will examine CERES’ claim and any counterclaim and negotiate with CERES in an effort to resolve the claim.
	XXII.		MISCELLANEOUS

Amended and Restated Sponsored Research Agreement		Page 27 of 34

		A. This Agreement, the IPRA and the Existing License and Material Transfer Agreements constitute the entire agreement between the Parties relative to the subject matter hereof and thereof, and may be modified or amended only by a written agreement signed by both Parties. As of the Effective Date, all active, ongoing or proposed activities (including materials developed) by either Party which were initiated under the Original Agreement and are not the subject of the Existing License and Material Transfer Agreements, including without limitation the activities which are the subject of the Original Workplan incorporated by reference as provided in Article II.C, shall be deemed Program activities governed by this Agreement and for the avoidance of doubt, not by the terms and conditions of the Original Agreement which were applicable prior to the Effective Date; subject however to Article II.C and the last sentence of Article VIII.A. This Agreement shall be governed and construed in accordance with the laws of the State of Texas.
		B. This Agreement binds and inures to the benefit of the Parties, their successor or assigns, but may not be assigned by either Party without the prior written consent of the other Party; provided however, CERES shall have the right to assign its rights and obligations under this Agreement to any Affiliated Company without such prior consent. CERES shall also have the right to assign its rights and obligations under this Agreement to a third party in conjunction with the transfer to such third party of substantially all of the assets of CERES associated with performance under this Agreement or substantially all of the stock of CERES, in each case without such prior consent. “Affiliated Company” means any company owned or controlled by, under common control with or controlling CERES, “control” meaning in this context the direct or indirect ownership of more than fifty percent (50%) of the voting stock/shares of a company, or the power to nominate at least half of the directors. Ceres Sementes do Brasil Ltda., a company incorporated under the laws of Brazil, is an Affiliated Company of CERES.
		C. The failure of either Party at any time to require performance by the other Party of any provision of this Agreement shall in no way affect the right to require such performance at any time thereafter nor shall the waiver by either Party of a breach of any provision be taken or held to be a waiver of any succeeding breach of such provision or as a waiver of the provision itself. The waiver of any provision of this Agreement must be in a writing signed by both Parties.
		D. This Agreement, to the greatest extent possible, shall be construed so as to give validity to all of the provisions hereof. If any provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent jurisdiction or is deemed unenforceable under the current applicable law from time to time in effect during the term of this Agreement, the remainder of this Agreement will not be affected or impaired thereby and will continue to be construed to the maximum extent permitted by law. In lieu of each provision which is invalid, illegal or unenforceable, there will be substituted or added as part of this Agreement by

Amended and Restated Sponsored Research Agreement		Page 28 of 34

		mutual written agreement of the Parties, a provision which will be as similar as possible, in economic and business objectives as intended by the Parties, to such invalid, illegal or unenforceable provision, but will be valid, legal and enforceable.
		E. Neither Party shall be liable to the other Party for any incidental, indirect, special, or consequential damage, however caused, and on any theory of liability, arising out of or related to this Agreement.
		F. If either Party fails to fulfill its obligations hereunder (other than an obligation for the payment of money), when such failure is due to a circumstance beyond its reasonable control, including but not limited to fire, flood, civil commotion, riot, war (declared and undeclared), revolution, acts of foreign or domestic terrorism, or embargos, then said failure shall be excused for the duration of such event and for such a time thereafter as is reasonable to enable the Parties to resume performance under this Agreement, provided however, that in no event shall such time extend for period or more than (30) days.
		G. NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, WARRANTIES WITH RESPECT TO THE CONDUCT, COMPLETION, SUCCESS OR PARTICULAR RESULTS OF THE PROGRAM, OR THE CONDITION, OWNERSHIP, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROGRAM OR ANY INTELLECTUAL PROPERTY OR RESEARCH RESULTS OR THAT THE USE OF ANY INTELLECTUAL PROPERTY OR RESEARCH RESULTS WILL NOT INFRINGE ON ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHT OF A THIRD PARTY. NEITHER PARTY SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, PUNITIVE OR OTHER DAMAGES SUFFERED BY THE OTHER PARTY OR ANY OTHER PERSON OR ENTITY RESULTING FROM THE PROGRAM OR THE USE OF ANY INTELLECTUAL PROPERTY, ANY RESEARCH RESULTS OR ANY PRODUCTS RESULTING THEREFROM.
		H. CONCERNING THE INFORMATION AND DATA PROVIDED UNDER THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE AND NON-INFRINGEMENT.
		I. CONCERNING THE MATERIALS PROVIDED UNDER THIS AGREEMENT NO REPRESENTATIONS AND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE PROVIDED HEREIN BY EITHER PARTY,

Amended and Restated Sponsored Research Agreement		Page 29 of 34

		NOR ARE ANY OBLIGATIONS WITH RESPECT TO INFRINGEMENT OF LICENSED PATENTS OR OTHER RIGHTS OF THIRD PARTIES PROVIDED HEREIN.
		J. All representations, warranties, covenants and agreements made in this Agreement and which by their express terms or by implication are to be performed after the execution and/or termination hereof, or are prospective in nature, shall survive such execution and/or termination, as the case may be.
		K. In compliance with federal law, including provisions of Title IX of the Education Amendments of 1972, Sections 503 and 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act of 1990, AGRILIFE and CERES will not discriminate on the basis of race, sex, religion, color, national or ethnic origin, age, disability or military service in their administration of policies, programs, or activities, admission policies, other programs or employment.
		L. Nothing in this Agreement waives or relinquishes the right of either Party to claim any exemptions, privileges and immunities as may be provided by law.
		M. The individuals executing this Agreement on behalf of each Party represent that they are each the duly authorized representatives of such Party on whose behalf the individuals are signing, each with full power and authority to bind said Party to each term and condition set forth in this Agreement.

XXIII.		ORDER OF PRECEDENCE
		In the event of an inconsistency between the provisions of this Agreement, the inconsistency shall be resolved by giving precedence in the following order:

	i)		Any license agreement between CERES and The Texas A&M University System
	ii)		This Agreement
	iii)		The IPRA
	iv)		Project
	v)		Other provisions, documents and/or specifications that are expressly incorporated by reference into this Agreement under any Project.

[Signature page follows.]

Amended and Restated Sponsored Research Agreement		Page 30 of 34

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

For Ceres, Inc. (“CERES”)						For Texas AgriLife Research (“AGRILIFE”)
By:		/s/ Richard Flavell				By:		/s/ Bill McCutchen
Name: Richard Flavell, CBE, FRS						Bill McCutchen
Title: Chief Scientific Officer						Executive Associate Director, Texas AgriLife Research
Date:						Date:		9-24-2011
For Ceres, Inc. (“CERES”)						For Texas AgriLife Research (“AGRILIFE”)
By:		/s/ Richard Hamilton				By:		/s/ Craig Nessler
Name: Richard Hamilton						Craig Nessler
Title: President & Chief Executive Officer						Director, Texas AgriLife Research
Date:		9/24/11				Date:		9/24/2011

Amended and Restated Sponsored Research Agreement		Page 31 of 34

Appendix A
Proposed Project Format

Confidential and Proprietary

TITLE
Research Project Plan

Project Leads:

Ceres Contacts:

Revised/Updated:

ID:

Background

	1.		PURPOSE
	2.		RATIONALE
	3.		REFERENCES (if any)

Goals and Deliverables

LIST DELIVERABLES AND MILESTONES:

COMPLETION DATE:

Work Plan

1.		EXPERIMENTAL DESIGN:
2.		TIMELINE and SCHEDULE:
3.		RESPONSIBLE PARTIES:

Resource Impacts

Future Directions

Amended and Restated Sponsored Research Agreement		Page 32 of 34

Appendix B
In-Kind Support

Technology:

Persephone.

			Phase I. Within sixty (60) days of the Effective Date of this Agreement, CERES and AGRILIFE will begin good faith negotiations for a software access agreement to enable AGRILIFE’s remote access by up to three (3) named AGRILIFE personnel to access certain Program data solely for AGRILIFE’S use in the Program for a period not to exceed two (2) years from the Effective Date.
			Phase II. No later than eighteen (18) months from the Effective Date, CERES and AGRILIFE will begin good faith negotiations for a software license agreement to enable AGRILIFE to deploy software for up to three (3) computers, solely for AGRILIFE’s use in the Program. Upon execution of such software license agreement, the software access agreement contemplated in Phase I will terminate.

Services: Within the later of (i) sixty (60) days after the Effective Date of this Agreement and (ii) the time(s) expressly stated below, CERES and AGRILIFE will begin good faith negotiations for appropriate contractual agreements as applicable for CERES’ provision of the following services to AGRILIFE, solely for AGRILIFE’s use in the Program.

1)		CERES will provide AGRILIFE with certain services for single marker assays as directed by Program objectives, the scope of such services to be discussed and mutually agreed upon at the next regular meeting of the Management Committee following the Effective Date of this Agreement.
2)		CERES will provide AGRILIFE with access to certain CERES breeding nursery locations in the U.S. and Brazil as directed by the Program objectives, the scope of such access to be discussed and mutually agreed upon at the next regular meeting of the Management Committee following the Effective Date of this Agreement.

Amended and Restated Sponsored Research Agreement		Page 33 of 34

Appendix C
Existing License and Material Transfer Agreements

(1)		The Line License Agreement entered into by Ceres, Inc. and The Texas A&M University System (of which AGRILIFE is a part) dated October 16, 2009 covering the sorghum Line known as R07007.
(2)		The Line License Agreement entered into by Ceres, Inc. and The Texas A&M University System (of which AGRILIFE is a part) dated July 12, 2011 covering the Lines known as A/B.05040-08CS6466/6465 and A/B.05038-08CS6460/6459.
(3)		The Material Transfer Agreement entered into by Ceres, Inc. and The Texas A&M University System (of which AGRILIFE is a part) dated April 23, 2008, as amended covering the S1-S2 Materials as defined therein.
(4)		The Material Transfer Agreement entered into by Ceres, Inc. and The Texas A&M University System (of which AGRILIFE is a part) dated April 23, 2008, as amended covering the S3 Materials as defined therein.
(5)		The Material Transfer Agreement entered into by Ceres, Inc. and The Texas A&M University System (of which AGRILIFE is a part) dated April 23, 2008, as amended covering the S4a Materials as defined therein.
(6)		The Material Transfer Agreement entered into by Ceres, Inc. and The Texas A&M University System (of which AGRILIFE is a part) dated April 23, 2008, as amended covering the S4b Materials as defined therein.

Amended and Restated Sponsored Research Agreement		Page 34 of 34

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

SPONSORED RESEARCH AGREEMENT
between
Ceres, Inc.
and
The Texas Agricultural Experiment Station
of The Texas A&M University System

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

WITNESSETH:

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

WHEREAS, the Parties desire to improve germplasm, develop lines and hybrids of sorghum and its interbreeding species and develop DNA markers and marker platform technology to advance the development of biomass/bioenergy crops;

WHEREAS, the Parties have agreed on guidelines setting forth how CERES and TAES will cooperate to make the benefits of such crops available to the public.

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

Article 1. Scope and Management of Work

A. TAES agrees to perform the work set forth in Appendix A (the “Program”) entitled “Crop Development Using Marker-Assisted Breeding.” Any additional work not specifically identified in the scope of work statement, but which is indicated during the course of the study shall be separately negotiated and funded for the appropriate amounts to be agreed upon by CERES and TAES.

B. The work will be under the direction of TAES’ principal investigators, Prof. William Rooney and Prof. John Mullet (each a “Principal Investigator”). No substitution may be made for TAES’ principal investigator without the prior written concurrence of CERES.

C. A committee of four members (the “Management Committee”) will oversee the

implementation of the Program. Two members will be nominated by each Party to serve on the Management Committee.

D. The Management Committee will be a forum for communication and exchange of information regarding the implementation of the Program. It shall have no authority to make any modifications to this Agreement, but may formulate recommendations to change the Program or to take advantage of additional funding opportunities and present such recommendations to CERES and TAES for consideration. TAES agrees to permit CERES representatives to confer as necessary with Principal Investigators. It is understood and agreed that the Management Committee and CERES representatives have no authority to supervise, direct or control the work performed hereunder.

E. Recommendations of the Management Committee shall be made by unanimous agreement and recorded in a manner prescribed by the Management Committee as a true record of the recommendations. If the Management Committee cannot come to a unanimous agreement on any matter then the Management Committee shall make no recommendation on that matter.

F. TAES’ contact for administrative matters relating to the work performed hereunder is:

Diane Gilliland
Agriculture Program Contracts & Grants
2147 TAMU
College Station, TX ###-###-####
***@***
Phone: (979)  ###-###-####
Fax: (979)  ###-###-####

Physical Address:
3000 Briarcrest Dr. Suite 101
Bryan, TX 77802

G. Each Party will require any and all of its employees and researchers who will perform Program activities to sign a statement stating that they have read and understand the obligations of TAES under Article 11 (Confidentiality) and Article 15 (Materials). TAES affirms that, as per The Texas A&M University System Policy 17.01, Subsection 2.2.1, intellectual property conceived or developed with support from the System or any of its members in the form of administered funds shall be owned by the System, and that the funding received from CERES will constitute such administered funds under such policy.

H. Each Party will conduct Program activities exclusively in laboratories, greenhouses or fields under full control of or owned by that Party. Each Party will take all reasonable precautions to prevent damage to, or unintentional destruction of or release of any germplasm created in the Program.

I. Each Party will strictly comply, and use its best efforts to cause its employees and researchers conducting Program activities to comply, with notebook and breeding book keeping policies of the highest standards as applicable in the field. Each Party will record and keep all field evaluation, composition and marker data in user-friendly electronic database format.

J. Each Party shall be responsible for its compliance with all applicable laws, rules and regulations, including, without limitation, those relating to genetically modified organisms (to the extent the Program involves such organisms), and for obtaining any and all permits or authorizations or proceed to any notifications which may be required by such laws, rules and regulations.

K. When contributing sorghum germplasm for Program activities, the contributing Party will verify what the origin of the material is and inform the other Party in writing from whom/where and approximately on what date such Party initially obtained such germplasm. If the germplasm contributed is governed by the Convention on Biological Diversity (“CBD”), the contributing Party will be responsible for obtaining all necessary authorizations to commercialize any progeny of such material under defined financial terms and conditions, and neither Party will use any germplasm in the Program for which the preceding condition is not satisfied. Further, each Party shall only contribute germplasm to the Program for which such Party has breeding rights with the right to commercialize the progeny.

L. Any subcontracting of Program activities to a third party by TAES will be subject to CERES’ prior written approval which will not be unreasonably withheld.

M. TAES agrees not to conduct Germplasm Improvement (as defined in Article 8.A.2) under a funding or collaboration agreement which grants rights to any person or entity other than CERES in Biomass/Bioenergy Sorghum (as defined in Article 8.A.2) during the term of this Agreement.

Article 2. Period of Performance

The period of performance for this Agreement shall begin on September 3, 2007, and shall end on September 2, 2012 (“Program Term”). This period may be extended by mutual agreement of the Parties in writing.

Article 3. Consideration and Payment

A. CERES agrees to pay for the direct and indirect cost of work of this Agreement to a maximum amount of four million three hundred ninety three thousand one hundred fifty eight dollars ($4,393,158) as described in the budget and attached as Appendix B. Twenty payments in the amount of $193,157.90 shall be made quarterly with the first payment being due and payable within thirty (30) days of execution of this Agreement. In addition to the quarterly payments, CERES agrees to pay $470,000.00 within thirty

(30) days of execution of this Agreement and $60,000.00 upon the first anniversary of this Agreement for the purchase of equipment as described in Appendix B. TAES will invoice CERES when the payments become due. All payments to TAES under this Agreement shall be made payable to The Texas Agricultural Experiment Station and forwarded to the address designated in Article 5.

B. TAES will expend these funds as needed for labor, equipment, travel, and other operating costs in connection with the research. The unexpended balance or any unused supplies remaining at the completion of the project shall remain the sole property of TAES. The Parties agree that unexpended funds will be used to extend the term and/or scope of the Program and that they shall amend this Agreement accordingly. Title to all equipment purchased under this Agreement shall vest with TAES upon acquisition.

C. If, at any time, TAES has reason to believe that the cost of the work will exceed the amount set forth in Article 3.A, TAES will notify CERES in writing, giving a revised budget for completion of the work. CERES will not be obligated to reimburse TAES for any cost in excess of the amount set forth in Article 3.A, and, subject to diligent performance of the Program activities, TAES will not be obligated to continue the work or incur costs in excess of that amount unless and until this Agreement is amended to increase the maximum amount.

D. CERES and TAES may jointly seek additional funding opportunities from Federal and State funding sources in support of the Program or in support of expansion of the Program. Where accepting funds from such additional sources would conflict with the obligations of TAES to CERES, such acceptance of funds will be contingent upon the approval and subsequent amendment of the Agreement by the Parties.

Article 4. Exchange of Information, Data and Germplasm

The Parties intend to reasonably share all information and data that they develop during the course and for the purpose of the Program. At its sole discretion, CERES may designate information and data that it develops and shares with TAES as CERES Confidential Information and such Confidential Information shall be subject to the terms of Article 11. The Management Committee will meet at least quarterly with additional meetings as mutually agreed upon and exchange information and data regarding the implementation of the Program. At least one (1) week before each Management Committee meeting, each Party will provide the other Party with a report on the Program activities performed since the last Management Committee meeting. A preferred format for such reports will be created by the Management Committee. Such reports will contain at least the following:

—    quarterly status update and FTE breakout;

—    actual spending relative to budget;

—    description of Subject Inventions and germplasm generated during the period; and

—    copies of slide presentations summarizing research progress.

Additional information, if not specifically included in the reports, shall be delivered as supporting information at the related quarterly meeting, if available:

—    breeding records;

—    copies of field or greenhouse books and records; and

—    copies of raw field trial data.

TAES shall supply samples of germplasm and Lines developed in the course of the Program activities upon request by CERES. Further, the following procedure will be followed for release of Lines. “Release Date” means the date that a Line developed, tested and evaluated pursuant to the terms of this Agreement is ready for release for commercialization, wherein upon such decision, such variety will be formally released by TAES (if owned by TAES) or CERES and TAES jointly (if jointly owned). CERES, on advice of the breeder(s) of each Line, shall establish, in its sole discretion, an appropriate Release Date for such Lines. The Parties agree that the development of new Lines will not always result in Lines that are commercially acceptable or releasable.

Article 5. Notices

Formal notices provided under this Agreement must be in writing and delivered by (i) certified mail, return receipt requested; (ii) hand delivered; (iii) facsimile with receipt of a successful transmission confirmation; (iv) email; or (v) delivery by a reputable overnight courier service (in the case of delivery by facsimile or email the notice must be followed immediately by a copy of the notice being delivered by a means provided in (i), (ii), or (v)). The notice will be deemed given on the day the notice is received. In the case of notice by facsimile or email, the notice is deemed received at the local time of the receiving machine, and if not received, then the date the follow-up copy is received. Notices must be delivered to the following addresses or at such other addresses as may be later designated in writing.

TAES:		Diane Gilliland
		Agriculture Program Contracts & Grants
		2147 TAMU
		College Station, TX ###-###-####
		***@***
		Phone: (979)  ###-###-####
		Fax: (979)  ###-###-####
		Physical Address:
		3000 Briarcrest Dr. Suite 101
		Bryan, TX 77802
CERES:		Director of Business Development
		cc: Legal Department
		Ceres, Inc.
		1535 Rancho Conejo Blvd.

		Thousand Oaks, CA 91320
		Phone: (805)  ###-###-####
		Fax: (805)  ###-###-####

Article 6. Independent Contractor

A. It is expressly understood and agreed that TAES is an independent contractor in the performance of the research and is not acting as a partner, joint venturer, or agent of CERES under this Agreement. The employees, researchers, officers, or agents of TAES or TAMUS shall not be considered or deemed to be employees, researchers, officers, or agents of CERES. TAES shall have exclusive direction and control over the manner and method of carrying out the tasks for accomplishing the research to be performed pursuant to this Agreement, CERES being interested only in the completed performance of the research contemplated.

B. Neither Party is authorized or empowered to act as an agent for the other for any purpose and shall not on behalf of the other enter into any contract, warranty, or representation as to any matter. Neither shall be bound by the acts or conduct of the other.

Article 7. Publicity

A. CERES shall not indicate, directly or indirectly, any endorsement by TAMUS, TAES, or any component institution or agency of TAMUS, of any products or services of CERES for any reason whatsoever, without obtaining the express, prior written consent of TAMUS. CERES shall not use the name of TAMUS, TAES, or any component institution or agency of TAMUS, nor the names of any of their employees or researchers nor any adaptation in any advertising, promotional or sales literature to be disseminated to the public without prior written consent obtained from TAMUS in each case.

B. Notwithstanding any provision of this Article, either of the Parties can disclose or otherwise acknowledge, without restriction, the existence of this Agreement as well as the collaborative relationship between the Parties without the prior consent of the other Party. Notwithstanding the unilateral disclosure rights provided for in this Article, if the disclosure or acknowledgement takes the form of a written release by the disclosing Party, the disclosing Party shall provide the other Party a copy of any such unilateral disclosure prior to its release so as to allow the other Party to comment and shall take such comments reasonably into account. However, no advance copy needs to be provided of any releases referred to in Article 7.C. or of any releases which are identical to previous releases.

C. The Parties may issue joint press releases regarding their collaboration. Any such press release and any press release by either Party will be subject to the prior written approval of both Parties; provided however, that (i) CERES shall have the right to otherwise disclose information as may be required in CERES’ judgment to comply with SEC or IRS regulations or other laws, rules or regulations governing disclosure of information or to (potential) investors or business partners and (ii) TAES shall have the

right to otherwise disclose information as may be required in TAES’ judgment to comply with laws, rules or regulations governing disclosure of information. Notwithstanding the unilateral disclosure rights provided for in this Article, the disclosing Party shall provide the other Party a copy of any such unilateral disclosure preferably prior to its release.

Article 8. Intellectual Property

A. General

(1) Except for grants of copyright, all grants of intellectual property rights as set forth in this Article 8 will be made through the instrument of license agreement substantially in the forms included in the Intellectual Property Rights Agreement (“IPRA”) of even date herewith between TAMUS and CERES.

(2) All grants of intellectual property rights as set forth in this Article 8 will be subject to TAES reservation of an irrevocable, nonexclusive, royalty-free right to use or practice the intellectual property for research and educational purposes only and for the conduct of third party sponsored research; subject, however, to compliance with the Guidelines for Future Collaborative Opportunities which both Parties agree to comply with and which are included in the IPRA. This reservation excludes Lines developed by CERES or other intellectual property rights of CERES. TAES agrees that such sponsored research will not grant to third party sponsors any rights already granted to CERES, and that such third party sponsors will be notified of TAES’ use of Subject Inventions and Lines which are licensed or optioned to CERES. Further, TAES agrees that germplasm developed using Lines will only be released or made available to third parties for commercialization or Germplasm Improvement when (i) such germplasm is less than five percent (5%) identical to any of the Lines under exclusive option or exclusive license to CERES based on DNA Marker Analysis, (ii) contains no specific Allele(s) optioned or exclusively licensed to CERES to which a Line’s specific valuable phenotype is attributable and (iii) contains no Subject Inventions optioned or exclusively licensed to CERES, or other CERES proprietary technology. The foregoing provisions do not limit and are subject to Article 1.M hereof. “Germplasm Improvement” shall mean any activities to improve sorghum to produce Biomass/Bioenergy Sorghum, including without limitation selection, breeding, marker development or marker assisted breeding or transgenic improvement. “Biomass/Bioenergy Sorghum” shall mean sorghum which has been bred for the purpose of conversion to fuels or energy, including but not limited, bred to produce higher biomass yields, higher yields of cellulose, higher yields of sugar , other improved composition, improved agronomics, improved net energy balance, improved energy density or which has been bred to make its cellulose or sugars more available to conversion or more efficiently converted. Biomass/Bioenergy Sorghum shall not include (i) sorghum which has been improved through breeding for increased starch yields, including but not limited to grain sorghums, even where such sorghum must necessarily produce increased yields of sugar to achieve increased starch content or (ii) sorghum which has been improved through breeding for a purpose that does not include conversion to fuels or energy, including but not limited to the purposes of sugar

production, silage, forage, grain or other traditional uses for sorghum. TAES will notify CERES in advance in writing of any contemplated projects under (i) or (ii) which would result in the grant of rights by TAES or TAMUS to a for-profit party, and at CERES’ request discuss such project with CERES, subject to any applicable confidentiality provisions, “DNA Marker Analysis” shall mean a comparison according to a mutually agreed process based on a mutually agreed set of approximately one hundred (100) markers. The Management Committee will define DNA Marker Analysis within two (2) years of the latest signature date of this Agreement.

(3) The Parties shall consult as soon as possible but in any case within twenty (20) days of receiving an Invention Notice. Such consultation shall concern whether to proceed to obtain intellectual property protection on disclosed CERES Inventions, TAES Inventions and/or Joint Inventions or whether to protect the same through other methods. (All such terms are as defined hereinafter in Article 8 C.(1).)

Each Party shall be responsible for securing intellectual property protection for its own Subject Inventions. CERES shall have the first option to pursue protection of Joint Inventions, and any protection of Lines which are jointly owned, in the joint names of both Parties. If CERES so elects by written notice within sixty (60) days of such initial consultation or with respect to Lines, at any time but before ninety (90) days after the end of the period set forth in Article 2, CERES shall be the “Administering Party” for the purposes of this Agreement. If CERES does not so elect, TAES shall be the Administering Party for the purposes of this Agreement.

TAES may, at its sole discretion, make a written request that CERES be the Administering Party for certain TAES Inventions or other Subject Inventions for which it is the Administering Party. Should CERES agree, it shall provide notice of its agreement in writing and shall be the Administering Party for such Inventions.

The Administering Party shall be responsible for retaining counsel, overseeing the process of securing intellectual property protection (i.e., the preparation, filing and prosecution of patent or plant variety rights application(s)) and maintaining intellectual property protection for the mutual benefit of the Parties, in its best judgment, for that which it had prosecution responsibility. In addition to other reporting responsibilities provided below, the Administering Party shall promptly notify the other Party following retention of counsel. The Parties will provide, and cause their respective employees, researchers and agents to provide, all reasonable assistance which may be required in connection with the filing and prosecution of such intellectual property rights, including without limitation the signing of documents.

The Administering Party shall keep the non-administering Party advised as to all developments with respect to all patent and plant variety rights application(s) and issued patents and plant variety rights covering TAES owned or jointly owned Subject Inventions or TAES owned or jointly owned Lines, which includes supplying copies of all papers received and filed in connection with such applications and patents in sufficient time for the non-administering Party to comment thereon. Any decision which would

result in a change of legal inventorship or ownership of a patent, patent application or plant variety rights certificate shall not be taken by an Administering Party unless it has first received authorization in writing from the non-administering Party, provided that the Parties shall comply with U.S. law on inventorship.

CERES agrees to bear all legal expenses incurred by CERES as an Administering Party in obtaining and maintaining patents and plant variety rights, U.S. and foreign, covering Subject Inventions and Lines.

B. Copyright

(1) Title. Title to and the right to determine the disposition of any copyrights or copyrightable material first produced or composed in the performance of the Program by TAES employees and/or researchers only shall remain with TAES. Title to and the right to determine the disposition of any copyrights or copyrightable material first produced or composed in the performance of the Program by CERES employees only shall remain with CERES. Title to and the right to determine the disposition of any copyrights or copyrightable material first produced or composed in the performance of the Program by employees and/or researchers of both TAES and CERES shall remain with TAES and CERES.

(2) License to Copyrightable Materials (excluding software). TAES grants to CERES an irrevocable, royalty-free, non-transferable, non-exclusive right and license in TAES’ rights in any copyrightable materials (technical data, reports, etc.) first developed in the performance of the Program to use, reproduce, display and perform (to the extent not prohibited by applicable law). Such grant excludes rights in computer software (including both source and executable code) first developed under this Agreement, its documentation, and/or information databases (“Software”).

(3) First Right to Negotiate for Commercial License. Additionally, TAES grants to CERES a time-limited first right to negotiate a non-exclusive or exclusive, at CERES’ election, commercial license (i) to use, reproduce, display, and perform Software for commercial purposes, and to distribute and/or sublicense such Software to third parties. CERES shall advise TAES in writing within ninety (90) days following delivery of such Software to CERES whether or not CERES elects to negotiate a license agreement to obtain commercial rights to such Software. In the event that CERES elects to negotiate for a commercial license to such Software, the Parties shall initiate negotiation of such license agreement, such negotiations not to extend beyond one hundred eighty (180) days from notice of election without the mutual consent of both Parties. Such license shall be negotiated in good faith between the Parties, and shall contain reasonable business terms common to CERES’ field of commercial interest and proposed application. If the Parties fail to reach agreement within one hundred eighty (180) days after the start of such negotiations which shall be evidenced by written notice from one Party to the other initiating such negotiations, the terms and conditions of the license on which no agreement was reached shall be settled in accordance with the following procedures: the disputed contract terms shall be referred to a mutually agreed impartial expert whose

decision shall be final. Each Party shall submit to the expert within fifteen (15) days of his appointment its position in writing on the disputed contract terms and conditions. Such expert shall be limited to choosing one of such two (2) party positions on each of the contract terms and conditions or related group of contract terms and conditions that the expert considers most reasonable in the circumstances and shall not make any other determination. Neither Party shall be bound by any determination by the expert which, in the opinion of Party’s counsel, will result or be likely to result in that Party violating any applicable law or regulation.

C. Patentable Inventions

(1) Inventorship and Title. Inventorship of inventions, developments, or discoveries first conceived or actually reduced to practice in the performance of the Program (“Subject Inventions”) shall be determined in accordance with U.S. Patent Law, whether or not patent applications are pursued. All rights to Subject Inventions invented solely by employees or researchers of TAES shall belong solely to TAES (“TAES Inventions”). All rights to Subject Inventions invented solely by employees of CERES shall belong solely to CERES (“CERES Inventions”). All rights to Subject Inventions invented jointly by employees or researchers of TAES and employees of CERES (“Joint Inventions”) shall belong jointly to TAES and CERES. In the event that a Party uses a mapping population provided by the other Party to discover a marker or Allele, such marker or Allele shall be a Joint Invention, provided however, that such mapping population is only available to third parties subject to the same condition that the resulting discoveries of markers or Alleles shall be jointly owned by TAES and such third party. TAES will notify CERES, in a writing stating expressly that it is an invention notice under this Agreement (“Invention Notice”), within thirty (30) days of reduction to practice or knowledge of conception or discovery of a Subject Invention solely invented by employees and/or researchers of TAES, or of a Joint Invention, and each Invention Notice will describe the Subject Invention with sufficient specificity to allow assessment by the other Party.

(2) Option to Obtain a Commercial License. TAES grants to CERES a time-limited option to obtain an exclusive world-wide commercial license in TAES’ rights in Subject Inventions, with the right to grant sublicenses, as set forth in the IPRA.

(3) Exercise of Option to a Commercial License. TAES shall promptly disclose to CERES any Subject Invention pursuant to an Invention Notice. CERES shall hold such disclosure in confidence and shall not reveal the disclosure to any third party without the written consent of TAES. CERES shall advise TAES in writing within ninety (90) days of such disclosure to CERES whether or not CERES elects to obtain exclusive commercial rights to such Subject Invention. In the event that CERES elects to obtain a commercial license to such Subject Invention, the Parties shall initiate negotiation of a license agreement in compliance with the IPRA, such negotiations not to extend beyond one hundred eighty (180) days from notice of election without the mutual consent of both Parties. Such license shall be negotiated in good faith between the Parties and shall

contain reasonable business terms common to CERES’ field of commercial interest and proposed application.

(4) Joint Inventions. For Joint Inventions conceived in the performance of the Program, TAES and CERES shall be deemed independent owners under 35 USC 262, in the absence of a written agreement to the contrary. TAES’ rights in such Joint Inventions shall be subject to the option set forth in (2) and (3) hereinabove.

D. Germplasm

(1) Definitions:

	a.		“Hybrid” means a seed or plant that has resulted from genetic crossbreeding between two or more lines where those lines include one or more (i) Lines or (ii) New Parental Lines.
	b.		“TAES Genetic Contribution” means, for any specific Line: (a) the proportion of the nuclear genes of a Line arisen from Lines licensed by TAES to CERES, based on DNA Marker Analysis (as defined in Article 8 A. (2)); (b) a contribution to be determined on a case-by-case basis in each case where a specific valuable phenotype of that Line is attributable to specific Allele(s) optioned or licensed to CERES by TAES; and (c) Other Contributions from TAES.
	c.		“Other Contributions” means intellectual and technical contributions to the development of Lines or if from CERES, to the development of Lines, New Parental Lines or Hybrids, such as, without limitation, markers, gene-trait association knowledge or composition knowledge, that inform the breeding and selection process, or transgenic traits.
	d.		“Developed by Breeding” means originated by any form of genetic manipulation including but not limited to single or multiple hybridization, backcrossing, genetic transformation or other rearrangement or recombination of genes with or without associated selection.
	e.		“New Parental Lines” means new genetic lines or populations which are Developed by Breeding by CERES and which have one or more of the Lines as progenitors.
	f.		“Lines” means sorghum lines or populations created in the course of the Program and new genetic lines or populations developed by CERES through further selection within the Lines, as distinguished from crossing followed by selection.
	g.		“Allele” means a particular form of a gene determinant for a valuable characteristic of a plant (e.g. drought tolerance, specific flowering time), discovered in the Program by TAES or by TAES and CERES jointly.

(2) Ownership. Lines developed by employees of CERES alone will be owned by CERES. Lines developed by employees and/or researchers of TAES alone will be owned by TAES. CERES and TAES shall jointly own Lines where the germplasm and Other Contributions of CERES and TAES have been combined through traditional or artificial means in the Program. When a Party uses jointly owned Lines or Lines owned by TAES in its own breeding programs outside the Program in compliance with this Agreement or a license agreement for Lines as referred to in Article 8.D. (4), the resulting Lines shall be solely owned by that Party. CERES’ use of a jointly owned Line or Line owned by TAES in its own breeding programs, or any commercial use of such Line(s), shall be subject to CERES obtaining a license under this Article 8.D and pursuant to the IPRA. In the event that CERES’ option to license a Line has expired and/or CERES does not license a Line developed under the Program, TAES shall be able to use such Line for any purpose but subject to the restrictions set forth in this Agreement, including but not limited to those restrictions set forth in Articles 1.M and 8.A.(2), and the restrictions set forth in the IPRA.

(3) Option to Obtain a Commercial License. TAES grants to CERES a time-limited option to obtain an exclusive world-wide commercial license to TAES’ rights in Lines, with the right to grant sublicenses, as set forth in the IPRA.

(4) Exercise of Option to a Commercial License. CERES shall advise TAES in writing at any time, but before ninety (90) days after the end of the period set forth in Article 2, whether or not CERES elects to obtain an exclusive world-wide license to maintain and increase seed of Lines; develop New Parental Lines; develop Hybrids; and sell Hybrids. Such license shall contain royalty rates customary in the seed industry, taking into consideration (i) TAES Genetic Contribution, (ii) Other Contributions of CERES, (iii) financial contributions of each Party, and (iv) germplasm contributed by CERES, if any, all to the development of the Lines and Hybrids. In the event that CERES elects to obtain a commercial license to one or more or all Line(s), the Parties shall initiate negotiation of such license agreement in compliance with the IPRA, such negotiations not to extend beyond one hundred eighty (180) days from notice of election without the mutual consent of both Parties.

Article 9. Publications

Subject to what is set forth hereinafter with respect to marker-trait associations, TAES shall be free to publish the results of research performed under this Agreement after providing CERES with a sixty (60) day period in which to review each publication for patent purposes (enabling disclosures), and to identify any inadvertent disclosure of CERES’ Confidential Information (as such term is defined in Article 11). If necessary to permit the preparation and filing of patent applications, TAES shall agree to an additional delay of publication not to exceed sixty (60) days to prepare and file necessary applications, and CERES shall agree to reimburse TAES for all reasonable costs incurred in such filing(s). Any further delay of publication shall require a separate agreement between TAES and CERES. The Parties agree that neither Party shall publish or disclose to any third party any information generated in the Program relating to the association of

(a) marker(s) with a gene which has been defined in the Program in Appendix A or by the Management Committee as a cloning target (“Cloning Target”). Such restriction on publication and disclosure shall cease, and the other provisions on Confidential Information and Publications of this Agreement shall apply, with respect to each Cloning Target, until the earliest of the following events: (i) a patent application is filed on the Cloning Target in the U.S.; or (ii) the Management Committee decides that the Cloning Target is no longer a Cloning Target and such decision is reflected in a written document; or (iii) at the conclusion of the Program, except if otherwise agreed by the Parties at that time.

Article 10. Warranty

CONCERNING THE INFORMATION AND DATA PROVIDED UNDER THIS AGREEMENT, TAES MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR USE.

Article 11. Confidential Information

A. Any confidential or proprietary information disclosed by CERES to TAES for use in the research work conducted under this Agreement (“CERES Confidential Information”) shall be designated as confidential in writing at the time of disclosure to TAES. For the purpose of keeping such information derived from CERES confidential, TAES shall make all reasonable efforts not to disclose such information to third parties or release it for publication without the prior written consent of CERES for a period of five (5) years from the date of this Agreement, but TAES shall not be liable for unauthorized disclosures of information which occur in spite of such efforts. TAES will not use CERES Confidential Information for any purpose other than the implementation of the Program. TAES will only make CERES Confidential Information available to TAES employees or researchers on a need-to-know basis.

B. TAES shall not be obligated to keep information received from CERES confidential if any such information; (a) was already in the possession of TAES as evidenced by existing documentation prior to receipt of information from CERES; (b) appears in issued patents or printed publications; (c) is now or hereafter becomes generally available to the public on a non-confidential basis through no fault or action or failure to act on the part of TAES; (d) is disclosed to TAES by third parties having a bona fide right to make such disclosures; or (e) is ordered produced or disclosed by a court or administrative body of competent jurisdiction or otherwise required by law, or required to be disclosed by the Attorney General of The State of Texas, but only to the extent of such required production or disclosure.

C. Any disclosure by TAES of results of the research performed under this Agreement shall be subject to compliance with Article 9. Publications.

Article 12. Disputes

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

B. The Parties must use the dispute resolution process provided in Chapter 2260, Texas Government Code, and the related rules adopted by the Texas Attorney General to attempt to resolve in the ordinary course of business. CERES must submit written notice of a claim of breach of contract under this Chapter to Dr. Mark Hussey, Director, who will examine CERES’ claim and any counterclaim and negotiate with CERES in an effort to resolve the claim.

Article 13. Governing Law

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

Article 14. Termination

A. This Agreement may be terminated for convenience by CERES at any time prior to the full term of the Agreement period, set forth in Article 2, provided that a written notice is given to TAES thirty (30) days in advance. However, CERES shall be obligated to pay TAES for all services, orders, materials, or facilities committed in good faith prior to the effective date of termination.

B. TAES shall have the right to terminate this Agreement unilaterally with written notice to CERES in case of failure of CERES to satisfy its material obligations under this Agreement, if CERES fails to cure such failure(s) within (i) thirty (30) days for failures to remit payment for amounts due under this Agreement and (ii) ninety (90) days for all other obligations in each case after receipt of written notice from TAES specifying such failure(s).

C. Promptly upon the delivery of a notice of termination of this Agreement, the Parties will meet to discuss the Program, and each Party will provide to the other Party any data, information and germplasm that constitutes Joint Inventions or jointly owned Lines and which has not been provided prior to the notice of termination.

D. Termination of this Agreement shall not affect the rights and obligations of the Parties accrued prior to termination hereof nor any license grants then in existence, subject to payment of remuneration as set forth in any relevant license/commercialization agreements. Further, at or about the effective date of termination, the Parties will negotiate in good faith to reach agreement as to the rights to use and commercially exploit Subject Inventions and Lines not covered by any relevant license/commercialization agreement between the Parties, which rights will be addressed in one or more written agreements. Such Subject Inventions and Lines shall be deemed

subject to the options set forth in this Agreement and to the terms and conditions of the IPRA.

Article 15. Transfer of Materials

A. “Materials” means plant materials or biological samples owned or otherwise controlled by a Party (“Originating Party”) and transferred to the other Party under this Agreement.

B. The Party receiving Material(s) (“Receiving Party”) agrees that the Materials will be used solely for the purpose of the Program, or in the case of CERES, for commercial purposes in accordance with any applicable license agreement between the Parties.

C. The Receiving Party agrees to use the Material(s) in a safe manner and in compliance with all applicable state and federal laws and regulations. The Party who makes a delivery of certain Material(s) will obtain any required permits or proceed to any required notifications prior to the delivery; the other Party will reasonably cooperate in order to facilitate the issuance of any required permits.

D. The Receiving Party will only grant access to Material(s) intended for Program activities to its employees or researchers who need access to such Material(s) for the purpose of the Program.

E. The Receiving Party will exclusively and restrictedly use the Material(s) under suitable containment conditions, and in accordance with all applicable regulations, and will not use it on human subjects. The Receiving Party will obtain any authorizations or permits which may be required for its activities with the Material(s).

F. The Receiving Party agrees that the original Material(s) received from the Originating Party will not be supplied to other entities, either within or outside of the Receiving Party, without the prior written approval of the Originating Party. The original Material(s) will not be sold or transferred for commercial purposes.

G. In the event that Receiving Party desires to utilize the original Material(s) for any uses beyond the scope of this Agreement, the Parties shall enter into good faith negotiations to establish the terms and conditions for any such purposes; however, nothing in this Agreement shall be construed as a representation that the Originating Party may guarantee the grant of such rights.

H. The Receiving Party will keep and maintain written records of all use of the Material(s) received.

I. All Material provided should be considered experimental and should be handled by the Receiving Party with appropriate safety precautions. NO REPRESENTATIONS AND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR

FITNESS FOR A PARTICULAR PURPOSE, ARE PROVIDED HEREIN, NOR ARE ANY OBLIGATIONS WITH RESPECT TO INFRINGEMENT OF LICENSED PATENTS OR OTHER RIGHTS OF THIRD PARTIES PROVIDED HEREIN.

J. In the event of termination or expiration of this Agreement, the Receiving Party will return or destroy, at the sole election of the Originating Party, the Materials no later than thirty (30) days from such termination or expiration, unless the Originating Party has entered into a written agreement for the Receiving Party’s continued use of the Materials.

K. Subject to Article 4, the selection of Material(s) for transfer under this Agreement will be at the sole discretion of the Originating Party. The Originating Party will accompany each transfer of Material with a transmittal letter that specifies: (i) the roles of each Party involved in the transfer, e.g., who is the Originating Party, (ii) the experimental designation of the Material(s) being transferred, and (iii) a statement confirming that the subject Material(s) are being transferred under the terms of this Agreement.

L. All right and title in Material(s) will remain with the Originating Party in each case. CERES and TAES shall each retain ownership of their respective contribution in derivatives produced using Materials where the Materials of CERES and TAES have been combined through traditional or artificial means. Notwithstanding the foregoing, ownership of derivatives which are Lines shall be as set forth in Article 8.D.(2).

Article 16. Miscellaneous

A. This Agreement and the IPRA constitutes the entire agreement between the Parties relative to the subject matter, and may be modified or amended only by a written agreement signed by both Parties. In this Agreement, the words “includes” and “including” mean “includes” and “including” without limitation.

B. This Agreement binds and enures to the benefit of the Parties, their successor or assigns, but may not be assigned by either Party without the prior written consent of the other Party; provided however, CERES shall have the right to assign its rights and obligations under this Agreement to any Affiliated Company without such prior consent. CERES shall also have the right to assign its rights and obligations under this Agreement to a third party in conjunction with the transfer to such third party of substantially all of the assets of CERES associated with performance under this Agreement without such prior consent. “Affiliated Company” means any company owned or controlled by, under common control with or controlling CERES, “control” meaning in this context the direct or indirect ownership of more than fifty percent (50%) of the voting stock/shares of a company, or the power to nominate at least half of the directors.

C. The failure of either Party at any time to require performance by the other Party of any provision of this Agreement shall in no way affect the right to require such performance at any time thereafter nor shall the waiver by either Party of a breach of any provision be taken or held to be a waiver of any succeeding breach of such provision or

as a waiver of the provision itself.

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

E. Neither Party shall be liable to the other Party for any incidental, indirect, special, or consequential damage, however caused, and on any theory of liability, arising out of or related to the work performed under this Agreement.

F. Each Party must excuse any breach of this Agreement by the other which is proximately caused by government regulation, war, strike, act of God, or other similar circumstance normally deemed outside the control of well-managed business.

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

For Ceres, Inc. (“CERES”)						For The Texas Agricultural Experiment Station (“TAES”)
By: /s/ Peter Mascia						By: /s/ Mark A. Hussey
Name: Peter Mascia						Mark A. Hussey
Title: Vice President of Product Development						Director, Texas Agricultural Experiment Station
Date: August 28, 2007						Date: 8-29-2007
For Ceres, Inc. (“CERES”)						For The Texas Agricultural Experiment Station (“TAES”)
By:		/s/ Richard Hamilton				By:		/s/ Elsa Murano
Name: Richard Hamilton						Elsa Murano
Title: President & Chief Executive Officer						Vice Chancellor & Dean of College of Agriculture and Life Sciences
Date: August 29, 2007						Date: 8/29/07

Appendix A

to the Sponsored Research Agreement
between Ceres, Inc. and The Texas Agricultural Experiment Station of The Texas
A&M University System

Program

“Crop Development Using Marker-Assisted Breeding”
Technical Plan for the Development of Bioenergy Sorghum
Texas A&M University System and Ceres

TABLE OF CONTENTS

		Page
I. Executive Summary			19
II. Overall Goals			19
III. Technical Plan
A. Sorghum Breeding			20
A-1. Sweet sorghum
A-2. High-biomass cellulosic sorghum
B. Sorghum Composition/Conversion Testing			22
B-1. Biomass composition analysis
B-2. Biomass conversion testing
C. Genotyping/Marker-Assisted-Breeding			23
D. Technology Development			24
E. Sorghum Genome Platform			26
F. Bioenergy Traits/Gene Discovery			27

I. Executive Summary:

     Sorghum is one of the most promising biomass feedstocks for the emerging bioenergy/biofuels industry due to its high yield, drought tolerance, and established production systems. Sorghum is also an excellent genetic system with relatively simple genetics, a large and diverse germplasm collection, established genetic/genomic platform and complete genome sequence. Therefore, sorghum has significant commercial value as a biofuels and bioenergy feedstock, as source of genes and IP, and as a source of information useful for a wide range of other grass species being developed for the bioenergy industry (i.e., switchgrass, miscanthus, energy cane).

     The technical plan described in this document is the result of extensive discussion between CERES and TAES. The scope of work includes; (1) breeding for improved sweet sorghum and high biomass cellulosic sorghum, (2) analysis of sorghum for biomass composition and conversion properties, and (3) development of technology for advanced graphical genotyping, enhancement of the sorghum genome platform, and discovery of QTL and genes for bioenergy traits. The technical plan integrates germplasm screening, breeding, composition/conversion analysis, and genomics enabled QTL mapping/gene discovery and marker-assisted breeding (Appendix C, Project Diagram).

     The elements of the technical plan and corresponding budgets are described in sections III and IV. The background and rationale for each near term budgeted objective/activity is provided in outline form, followed by a brief description of research objectives and milestones/deliverables. The technical plan and corresponding budget was designed to identify the most important targets and milestones based on our current understanding of what needs to be done and to build a technology platform that would enable accelerated progress over time. A key feature of the proposed agreement is to establish a sustained investment in the areas of activity described herein for the duration of the contract assuming reasonable progress towards objectives and milestones. This is essential because the research and development activities will often involve graduate students who need support for the duration of their thesis work and because the project requires population and genotype construction and evaluation that requires many years to come to fruition. However, we expect that the distribution of funds relative to technical objectives, and the specifics of the technical plan will change over time as progress occurs, challenges arise, and new opportunities are identified. Therefore the PIs, in consultation with CERES, expect to modify the specific research objectives and distribution of funding to projects over the time course of the Agreement to maximize the impact of investment and overall progress.

II. Overall Goals:

1. Develop bioenergy sorghum inbreds/hybrids that are high yielding, widely adapted, and have optimum biomass composition for biofuels and bioenergy production systems.

2. Identify and capture IP on key genes/alleles that contribute to bioenergy traits to protect the value of sorghum bioenergy genotypes co-developed by TAES/CERES.

3. Develop sorghum as a model C4 bioenergy grass genetic system for trait assessment and gene discovery for use in other biomass crops such as switchgrass and energycane.

III. TECHNICAL PLAN DESCRIPTION.

A. SORGHUM BREEDING.

Introduction: Sorghum (Sorghum bicolor) can be used as a feedstock for biofuels production in several different ways. First, grain sorghum is easily converted to ethanol using the same methodologies used for the conversion of corn to ethanol and ethanol yields from grain sorghum and corn are similar. Second, sweet sorghum cultivars that produce high levels of sugar in the stalk can also be harvested, milled and the juice fermented to ethanol using the same methods that sugarcane processors use. Third, photoperiod sensitive sorghum hybrids have the capability of amassing large tonnages for cellulosic production of biofuels while maintaining the highest water-use efficiency of any crop widely grown in the United States. Moreover, sorghum (all types) is widely adapted and fits very well into production systems throughout the U.S. and world. Combined with the water use efficiency, biofuels production from sorghum is feasible in many regions of the country and the crop will support ecologically sustainable use of the land.

     Grain sorghum hybrids are already available for use in ethanol production. Therefore, over the past 5 years, TAES researchers have focused on the development of sweet and high biomass sorghums for biofuels production. Seed supplies of sweet sorghum varieties are limited; their tall stature and limited seed yields make producing and harvesting seed difficult. Sweet sorghum hybrids will have two advantages over traditional sweet sorghum cultivars. First, seed production and processing will use short grain-type female lines that can easily be harvested using technology already used by the sorghum seed industry. Second, use of hybrids will allow breeders and producers to capture hybrid vigor; early estimates indicate that hybrids will average 120% the yield of the high producing parent in the hybrid. Photoperiod sensitive hybrids that produce large quantities of biomass are commercially available and they are now used for forage production. However, within the TAES program, we have identified specific genotypes from the world collections that have even higher yield potential that would likely be superior for biofuels production in a lignocellulosic conversion system. The manipulation of these lines to develop effective parents for high biomass sorghum hybrid production has been initiated.

Objectives: This proposal requests funds to accelerate the development of both sweet sorghum and high biomass cellulosic bioenergy sorghum genotypes. This activity will complement a recently funded DOE proposal to enhance genomic research into the development of sorghums for biofuels production. At the completion of both proposals, the sorghum hybrids for energy production will be developed for commercial use.

A-1. Sweet Sorghum: Complete the development of A/B lines that have high stem sugar content. Utilize existing varieties as pollinators for hybrid production.

A-2. High-Biomass Cellulosic Sorghum: Develop new pollinators for the production of high biomass photoperiod sensitive sorghum hybrids. Photoperiod sensitive germplasm with very high biomass potential has been identified. To utilize these characters, insensitive versions will be generated that can produce seed in the U.S. allowing these lines to hybridized to existing photoperiod insensitive A/B lines of the right genotypes to produce photoperiod sensitive high biomass sorghum bioenergy hybrids.

Technical Plan:

A-1. Sweet Sorghum [***]

20[***]: Offseason Nursery: [***] of next generation [***] of best [***]. Create [***] seed for additional evaluation of the best lines in multiple [***] to identify the best [***]. Traditional Season: Evaluate selected [***] in multiple locations, measure agronomic potential and [***] potential. If feasible, evaluate [***] potential. Continue completion of selected [***] lines.

20[***]-20[***]: Offseason Nursery: [***] the best lines for [***] (both [***] line and [***] ) to facilitate large scale growouts in the summer of 20[***]. Evaluate sweet sorghum [***]; continue [***] to complete [***] lines of most promising [***]. Traditional Season: Evaluate selected [***] in multiple locations, measure agronomic potential and [***] potential. If feasible, evaluate [***] potential. Release best [***] or [***] lines to [***] for [***] and eventual release. Release of [***]lines in fall of 20[***] is expected if all testing proves their worthiness. Seed of the lines and [***] should be commercially available in the summer of 20[***].

A detailed breeding plan for sweet sorghum is provided in Appendix D.

A-2: High Biomass [***]

20[***] Summer: Grow [***] population, select [***] lines with high biomass potential.

20[***]-20[***]: Offseason: Advance selections to the [***] generation and [***] to [***]line testers

20[***] Summer: Grow [***] generation and evaluate [***] to identify those that produce the highest [***].

20[***]-20[***] Offseason: Grow [***] generation and create [***]. Further improvement of additional new lines will be completed through 20[***].

20[***] Summer: Multilocation testing and evaluation for selection of best [***]. Further advancement of the lines and additional [***]

20[***] Summer: Multilocation testing and evaluation for selection of best [***]. Selected lines released to [***] for [***] and release.

20[***] Summer: Seed of the lines and [***] should be commercially available.

A detailed breeding plan for high biomass cellulosic sorghum is provided in Appendix D.

B.

SORGHUM BIOMASS COMPOSITION/CONVERSION TESTING.

Background and Rationale: The chemical composition of sorghum biomass will significantly influence the logistics of harvesting, transport, storage, processing, pretreatment processes, conversion efficiency and yield of biofuels per dry ton. Therefore, an early objective of this project is to characterize the range of biomass composition present in sorghum germplasm and to identify biomass composition traits that need to be selected for during the breeding process. In addition, the capability to conduct rapid NIR-based composition analysis for sorghum will allow allelic variation that modulates composition to be mapped and the corresponding genes identified and patented. CERES is establishing a state-of-the-art biomass composition-testing laboratory in

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

California. This laboratory will be able to carry out chemical analysis of biomass required to establish standard curves for NIR-based analysis. TAES/CERES propose to establish a biomass composition-testing laboratory at TAES in order to assay several thousand samples generated each cycle of sorghum breeding and to enable genetic analysis of composition traits. The details of this activity are described below.

Technical Plan:

		B-1. Sorghum Biomass Composition Analysis.
1.1.		Establish NIR calibration curves for sorghum biomass samples.

— TAES will sample a range of [***] ([***] of [***])
— TAES will obtain samples from a range of duration, environments, locations
— TAES will provide ~[***] samples to CERES for analysis
— ~[***] gm of dry ([***]% water content) tissue
— whole plant biomass sample = [***] sample
— selected lines sampled for [***]/[***]/[***] separately
— if [***] is present, this needs to be noted or separated out
— CERES will establish calibration curves for NIR
— CERES will conduct [***] of selected samples

1.2.

TAES/CERES will establish a biomass composition-testing lab at TAES.

— laboratory space will be identified for this activity at TAES
— ovens will be purchased for tissue drying
— biomass tissue milling instrumentation will be set up (dust/noise issue)
— NIR instrumentation will be purchased and calibrated

1.3.

Biomass composition testing activity.

— ~[***] samples will be analyzed by NIR per breeding cycle
— additional samples of germplasm and from [***] mapping populations
— selected samples will require [***] analysis validation
— TAES may conduct [***]/[***]/[***] analysis of [***]

B-2. Biomass Pretreatment/Conversion-Testing Activity.

— CERES is developing a range of conversion testing capability
— TAES has developed MixAlco conversion testing capability
— CERES/TAES will also co-develop third party testing agreements

Milestones:

1.       Establish NIR standard curves for sorghum biomass composition analysis (20[***]).
2.      Establish a biomass composition laboratory at TAES (20[***]).
3.      Establish sorghum biomass conversion testing activity (20[***]).
4.      Characterize biomass composition of breeding lines and germplasm.
5.      Characterize biomass composition variation associated with [***].

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

C.

GENOTYPING AND MARKER-ASSISTED-BREEDING (MAB).

Background: Genotyping technology is now routinely used to analyze germplasm, select parents for crossing, accelerate breeding through marker-assisted-selection, and for map-based gene discovery. Genotyping technology is evolving rapidly from gel-based platform technologies (i.e., AFLP, SSR) to a wide range of platforms (i.e., TaqMan, MassArray, SNPlex). Recent advances in high throughput DNA sequencing will also allow sequence-based genotyping using Restriction-Site-Localized Sequencing on instruments such as the Solexa sequencer. This technology is proposed for development in Section D.

     We propose to develop TaqMan assays for MAB of selected QTL in the near term. This technology is being used by CERES and is readily developed for small numbers of loci. In the longer term we plan to transition to RSL/Solexa-based graphical genotyping as soon as this technology is developed. Graphical genotyping could replace the need for MAB in most applications and much more information for selection and genetic mapping experiments.

Technical Plan:

		C-1. Marker-assisted-breeding (MAB) activity:
1.1.		Taqman assay development for MAB.

— [***], [***] initial targets
— sequence ~[***] genes [***] each [***] for [***] discovery
— sequence ~[***] [***] lines, [***], [***]-lines
— optimize [***]based Taqman assays (ABI7900 platform)
— add new markers each year ([***], [***], [***], etc.)
— test BioTrove Taqman platform to explore cost/assay reduction
— test new methods for DNA extraction, tracking, [***] assays

1.2

MAB assay throughput per year.

— ~[***] [***] plants X [***] markers ([***]/[***]) in spring 20[***]; fall 20[***]
— seed from [***] plants will be collected and sent to MAB lab
— seedlings will be grown out and sampled
— DNA extraction via Genogrinder
— [***] breeding cycles requiring MAB per year

		C-2. [***]; MAB and [***] analysis.
2.1		Develop [***] technology (20[***])

— technology development described in Section D
— transition to [***] based [***] for MAB (20[***])

2.2

[***] applications.

— collect [***] of all bioenergy germplasm ([***])
— collect [***] of breeding progeny (MAB)

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

— collect [***] of trait mapping populations ([***])

Milestones and deliverables:

1.      [***]/[***] Taqman assay development (20[***]).
2.      ~[***] MAB assays in 20[***].
3.      New Taqman assay development ([***], [***], [***], etc.) (20[***]-20[***]).
4.      Deployment of [***] based [***] technology (20[***])
5.      Collect [***] of bioenergy germplasm ([***]) (20[***]).
6.      Collect [***] of breeding and trait mapping populations.

D.		TECHNOLOGY DEVELOPMENT.
		D-1. Graphical genotyping using RSL/Solexa technology.

Background and rationale:

— sequencing platforms allow sequence-based genotyping
— sequencing platforms allow digital expression profiling
— (i.e., Genome Sequencer-20 System, Solexa, ABI-based systems)
— Sb genome sequence/genetic map alignment allows sequence/SNP mapping
— haplotypes or graphical genotypes are revealed at sufficient marker density
— graphical genotypes of germplasm will allow better parent/progeny selection
— graphical genotyping will accelerate QTL mapping to gene discovery
— graphical genotyping may replace targeted marker-assisted-breeding
— TAES has developed a graphical genotyping method called Restriction Site Localized sequencing technology (RSL sequencing technology)
— TAES has tested RSL-technology on rice/sorghum using 454 technology
— RSL-sequencing provides a way to sequence genomes at specific sites
— RSL provides a way to re-sequence the same sub-sample of any genome
— the number of sites sequenced can be varied depending on need
— Solexa can collect 1B bp of sequence per run (25-35bp/read) (~$3,000/run)
— sequence sampling every ~4 kbp (two reads/site) = 10 Mbp of sequence
— predicted SNP discovery rate = 1 SNP/82kbp (@ 1SNP/1000bp)
— indexing allows ~100 genotypes per run (~$30/genotype for sequencing)
— more genotypes can be run at lower sequence/SNP coverage
— @ $3/~500 marker-genotype this may replace the need for MAB
— a high quality genome sequence aligned to a genetic map is required

Technical Plan:

1.1

Test RSL-technology on the Solexa sequencing system.

— conduct simulations on [***]/sorghum to select restriction enzymes
— prepare templates from different genotypes of [***], sorghum
— submit templates to [***] for sequencing (~$10,000 per test)
— analyze results; # unique sequences, map location, error rate, etc.
— SNP frequency, distribution, dependence on restriction enzyme used

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

— streamline DNA extraction, template preparation, sample indexing
— establish a bioinformatics pipeline for sequence processing
— test low pass coverage to allow MAB by [***]

1.2

Applications:

— purchase and set up [***] at TAES and CERES
— transfer technology to the MAB laboratory
— genotype all relevant germplasm lines being used for bioenergy
— genotype breeding lines for MAB
— genotype [***] [***]/[***] populations

Milestones and deliverables:

1.      Test [***] technology on the [***] (20[***])
2.      Refine the technology, test [***] MAB application (20[***])
3.      Utilize [***] technology for bioenergy germplasm/breeding analysis (20[***]-20[***])
4.      Utilize [***] technology for [***] mapping (20[***]-20[***])

D-2. Gene expression platform development: (Solexa/SAGE, qRT-PCR):

Background: A large portion of the phenotypic variation present in germplasm is due to differences in gene expression. Differences in gene expression can be associated with phenotypic variation by combining phenotypic QTL analysis and expression QTL analysis in the same population. This type of eQTL analysis often identifies candidate genes associated with QTL and providing a molecular understanding of mechanism through analysis of cis- and trans-acting factors that modulate gene expression. Gene expression profiling also identifies co-regulated genes and regulon structure and provides diagnostic information about the molecular basis of differences in plant performance. In recent years, TAES has used microarray studies to characterize expression patterns of ~22,000 genes. A more powerful approach is to acquire [***] from [***] using [***]- or [***]-technology combined with a [***] platform. Therefore, we propose to optimize and utilize [***] technology in combination with the Solexa sequencer to obtain [***] of sorghum [***] that varies in [***]. This activity will aid bioenergy pathway gene annotation being done with funding from DOE using SorghumCyc and accelerate the identification of key genes that modulate bioenergy traits.

Technical Plan:
2.1       Optimize [***] profiling technology on the [***].
2.2       Map [***] to genes and genome locations.
2.3       Collect reference profiles of selected treatments/tissues ([***], [***], [***]).
2.4      Utilize [***]/[***] for [***]/[***] discovery/[***] screening projects.
2.5       Conduct qRT-PCR-based [***] analysis to further map out [***].

Milestones and deliverables:
2.1      Optimize [***]/[***] profiling technology (20[***]).
2.2       [***] mapped to genes and the genome sequence (20[***])
2.3       Reference [***] profiles collected from selected treatments (20[***]).
2.4      [***] profiles from sorghum bioenergy genotypes/populations (20[***]).

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

E.

SORGHUM GENOME PLATFORM.

Background and Rationale: Scientists at TAES have been developed a sorghum genome technology platform consisting of integrated genetic, cytogenetic and comparative genome maps since 1998. The TAES sorghum genetic map contains over 3,000 DNA markers based on data collected from 137 RIL lines derived from BTx623 X IS3620C. A physical map that is aligned to the sorghum genetic map has been constructed from ~16X deep BAC libraries, HICF fingerprinting, 6D BAC pooling, and ~5,000 EST-STS linkers. BACs from this map have been end-sequences and sequence scanned providing information for aligning DOE sequence assemblies to the map. The sorghum genome sequence assemblies produced by DOE based on 8X shotgun coverage of the genome are large (up to 14 Mbp). Test alignment of DOE sequence assemblies to SBI03 is promising revealing 6 miss-assemblies in the euchromatic region (~47Mbp) that were easily corrected.

     Funding is requested to accelerate the next set of sorghum genome map platform improvements including aligning the DOE [***] to the TAES [***] and [***] followed by [***] and resolution of issues related to [***] [***]/[***]. In addition, [***] of the [***] will be done in a targeted manner ([***], [***]/[***]) at different levels depending on need (automated [***] and by [***] analysis, [***] models, [***], etc.). For example, DOE funding will allow implementation of [***] of sorghum [***] matching [***] in [***] in 20[***] in collaboration with Doreen Ware/Lincoln Stein (Cold Spring Harbor). We will focus [***] efforts on [***] relevant to [***] with funding from DOE. We also plan to bring in [***] of [***] (from prior [***], RT-PCR data, plus [***]/[***] data when it becomes available). Comparative genetic maps and the comparative aligned genome sequences focused on sorghum, rice, maize, and switchgrass will be updated on a regular basis.

     The TAES sorghum genome map platform is a key resource for all future QTL mapping, annotation, and gene discovery projects done at TAES and those carried out in collaboration with CERES. As such, the genome map/sequence platform provides our group an advantage in terms of gene discovery/IP capture. For QTL mapping and gene discovery research it would be ideal if TAES and CERES were operating with a common genome sequence/genetic map framework. If CERES provides funding to help TAES to continue development of the TAES genome map/sequence platform, then TAES will make the genome map/sequence platform available to CERES with regular quality and annotation updates. CERES will be free to do their own in house annotation of the aligned sorghum genome map/sequence provided by TAES and to use the information provided by TAES for commercial purposes.

Technical Plan:

1.      Phase I alignment of DOE [***] to [***] (20[***]).
2.      Phase II alignment [***], [***] using [***].
3.      Align [***]/[***]/[***]/[***] [***] maps and [***].
4.      Conduct selected [***]and [***].
5.      Identify the location of [***] [***]/[***] ([***]).
6.      Identify the location of [***]-[***] on the [***] ([***]).
7.      Provide bioinformatics support for [***] mapping and other projects.

Milestones and deliverables:

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

1.      DOE sorghum [***] to [***] (20[***]).
2.      Refined [***] X [***] (20[***]).
3.      Targeted [***] of sorghum [***], [***], [***] (20[***]).
4.      Improved [***]/[***] [***] ([***], [***], [***], [***]) (20[***]).
5.      [***] onto the [***] (20[***]).
6.      [***] derived from [***]/[***] onto the [***] (20[***]).

F.		BIOENERGY TRAITS AND GENE DISCOVERY.
		F-1. Flowering time/duration:

Background:

— duration of growth contributes significantly to biomass yield
— vegetative growth stops upon initiation of flowering
— sorghum is a short day plant that responds to photoperiod, thermoperiods
— dominant forms of maturity (Ma) loci repress time to flowering
— Ma1-Ma6 modulate time to flowering; additional Ma loci have been identified
— Ma1 has been mapped (Lin et al., 1995; R. Klein et al., 2007)
— Ma2 mapping in progress (Mullet/Rooney, 2007/8)
— Ma3 = PHYB (Childs et al., 1998 — TAES)
— Ma4 has been mapped, cloning in progress (Mullet/Rooney et al.)
— Ma5/Ma6 have been mapped, cloning in progress (Mullet et al., 2006-8)
— CO/FT mapped; mutations in CO modulate [***] ( = [***])
— [***]+ [***]= [***] when both are [***] ([***] days in College Station)
— [***]/[***] or [***]/[***] [***] is [***] (~[***] days in College Station)
— [***]/[***] [***] regardless of [***] at [***]-[***] ([***] needs checking)
— most [***] germplasm is [***] ([***]) ([***], [***], [***]) and [***]
— [***]-high biomass ([***]) lines will be ‘converted’ to [***] using [***]
— [***] lines will be used as [***] lines for [***]
— [***] [***]-lines X [***]-lines = [***] for testing
— MAB for [***], [***] during the [***] process will save time, cost
— modifiers of Ma5 and Ma6 action have been identified (Mullet et al., unpublished)
— useful for producing hybrids with uniform long duration growth
— useful for releasing hybrids with flowering times optimized to different regions

Technical Plan:

1.1.

Clone [***] (patent) and map modifiers of [***] action to aid MAB.

— [***] has been mapped in a large [***] population (~[***] plants)
— [***] map-based [***] is in progress (~[***] months to candidate [***])
— a [***] with [***]-like action was detected and is now being mapped

1.2.

Clone [***] (patent) and map modifiers of [***] action to aid MAB.

— [***] has been mapped in a large [***] population (~[***] plants)
— a [***] that modifies [***]-action was detected and will be mapped
— [***] map-based [***] will be carried out.

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

Milestones and deliverables:

1.1.      DNA markers for [***]/[***] for use in TAES and CERES breeding programs (20[***]).
1.2.     [***] cloning, IP capture (20[***]).
1.3.     [***] cloning, IP capture (20[***]).
1.4.     Map/markers for [***]/[***] [***] (20[***]).

F-2. Biomass yield, traits, and composition:

Background:

— goal is to optimize biomass yield and composition
— biomass yield is highly heritable in Arabidopsis
— biomass heterosis is observed in At
— biomass plant traits to map include lodging, leaf/stem ratio, stem thickness/mass
— biomass composition traits to map include lignin, cellulose, etc.
— DOE has provided TAES with partial funding for QTL mapping (2/3 years)

Technical Plan:

2.1

Map [***] for [***] and [***] traits in [***]/[***] populations:

— phase I mapping population; [***] [***] lines Dr. Rooney identified in 20[***]
— phase II mapping population; [***] [***] X [***]-line
— select parents based on [***] and [***] data
— assay [***] among top [***] lines (in progress)
— assay [***] of [***] (CERES)/ [***] among [***] lines
— [***] [***] lines (in progress), [***], [***]; assay [***] lines (20[***])
— select for [***] lines that have fairly [***] ([***])/ [***] for [***]
— population size of ~[***] is sufficient for initial [***] mapping
— assay [***] ([***], etc) and [***] at end of season, replicated
— College Station; other sites when time, funding permit
— construct a [***] for [***] mapping (use [***]/[***] technology)
— conduct [***] assays, [***] ([***]/[***])

[***] and follow-up:

— expand sub-populations for [***]
— identify [***]/[***]/[***] region, [***], generate a large [***] population
— identify useful [***], [***] for target trait(s)
— candidate [***], [***] analysis, and validation
— capture IP
— [***] germplasm for [***]
— translate to other [***]

2.2.		[***] analysis of [***] for [***].
		Rationale:

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

— [***] production is highly [***] in Arabidopsis (At) ([***]%)
— [***] main [***] for [***] were identified in At
— [***] for [***] could be mapped at the [***] (=[***] plants)
— best parent [***] was [***] ([***]%); observed at the [***]
— [***] not obvious in At; also less well defined in [***] than [***]
— [***] for specific [***] has also been identified in different systems
— sorghum germplasm is [***]; sorghum shows [***]
— multiple sources of [***] for [***] are likely in sorghum
— goal is to determine if the [***] basis of [***] can be mapped
— if so, [***] contributing to [***] from several sources could be pyramided
— [***] basis of [***] could also be valuable
— [***] basis of [***] might be too complex, too much [***], etc.
— high risk, potentially high reward research activity

Proposed research:

— [***] mapping for [***] can be tested using breeding materials
— ~[***] [***] lines will be derived from each [***]/[***]-[***]
— [***] lines will contain different portions of the [***]-[***] genome
— ~[***] [***]-line-[***] sources will be [***] to [***]-lines each year
— [***] data will be collected to advance the breeding program
— genotype all [***] lines that are [***] to obtain [***]
— utilize [***] technology for [***] (see below)
— test if it is possible to map [***] for [***] of [***]
— we will be mapping [***] (and [***]) [***] in [***]
— [***] for [***] could come from several [***] sources
— expand to other [***] X [***]-lines if this proves useful
— [***] from different sources in phase II breeding activity (20[***])

Milestones and deliverables:
2.1       Construct [***], [***], [***] mapping populations (20[***]).
2.2       [***] data collection on [***] lines (20[***]); [***], (20[***]).
2.3       [***] profiling data (parental lines, [***] lines) (20[***]).
2.4       [***] and [***] map construction (20[***]).
2.5       [***], [***], IP capture, [***], etc. (20[***]).
2.6      Obtain [***] genotypes of [***] population (20[***]).
2.7      Test ability to map [***] basis of variation in [***]/[***] (20[***]).
2.8      If test is positive, analyze other [***]/[***]-line [***] populations (20[***]).

F-3. Height (Dw1-4):

Background:

— variation in plant height is often associated with differences in biomass yield
— Quinby et al. identified four main loci that modulate height (Dw1-4)
— Dw2 and Dw3 have been mapped; Dw3 has been cloned
— map-based cloning of Dw2 is in progress (TAES-ARS collaboration)
— Dw1, Dw4 require further genetic analysis

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

— most [***] lines will be [***] (but this will vary)
— [***] = [***] (used for conversion of [***] lines)
— ‘converted’ [***]-lines need to be at least [***], [***] (and maybe + [***], [***])
— most [***]-lines will be [***]
— [***] need to be at least [***], possibly + [***], [***]
— select [***] lines that are [***] with markers (20[***])

Technical Plan:

3.1

[***] DNA marker development: (budgeted in MAB platform development)

— sequence genes flanking [***] for [***] discovery
— sequence the [***] corresponding to [***]
— sequence genes from [***], [***] germplasm used in breeding
— optimize Taqman assays for MAB
— assay [***] plants for [***]

3.2

Determine if [***] or [***] have an impact on [***]:

— utilize [***] populations and [***] populations
— test association between height and [***] (in [***] backgrounds)
— variation in [***], [***] and other [***] will be present

3.3

Map [***], [***] and other genes for height if an association with [***] is found.

— map height [***] impacting [***] in [***] populations (see below)
— set up specific populations to map [***], [***] genes
— [***]: [***] ([***]) X [***] ([***])
— [***]: [***] ([***]) X Std. [***] ([***])

Milestones and deliverables:
3.1       DNA markers for [***], [***] (20[***]) (included in MAB budget objectives)
3.2       Assessment of [***] or [***] impact on [***] in [***] backgrounds.
3.3       [***], [***] mapping and DNA markers depending on results and funding.

F-4. Other traits:

     The traits listed below were identified as important for the development of superior bioenergy sorghum hybrids in addition to the traits described above that will be targeted for immediate funding. Research on the traits listed below will be initiated as soon as new funding becomes available or as other CERES funded objectives are completed.

4.1      [***] resistance (and other [***], [***] resistance)
4.2       [***] tolerance including [***]
4.3      Response to [***] ([***])
4.4      [***] tolerance ([***])
4.5      [***] efficiency
4.6      [***] ([***], [***])
4.7      [***] tolerance; [***] X [***]

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

Appendix B

to the Sponsored Research Agreement
between Ceres, Inc. and The Texas Agricultural Experiment Station of The Texas
A&M University System

Budget

A. SORGHUM BREEDING

		Year
A. SORGHUM BREEDING		Year 1				Year 2				Year 3				Year 4				Year 5				TOTAL
PI: Bill Rooney
Salaries
To Be Named **			32,000				32,960				33,949				34,967				36,016				169,892
Technician
To Be Named **			18,000				18,540				19,096				19,669				20,259				95,564
Graduate Student
50% Time, 12 Cal Mos.
Student Workers			12,000				12,000				12,000				12,000				12,000				60,000
Subtotal			62,000				63,500				65,045				66,636				68,275				325,457
Fringe Benefits			16,698				16,922				17,154				17,392				17,637				85,803
Total Personnel Costs			78,698				80,422				82,199				84,028				85,912				411,260
Materials & Supplies
Breeding			15,000				15,000				15,000				15,000				15,000				75,000
Agronomic			5,000				5,000				10,000				10,000				10,000				40,000
Quality			15,000				15,000				10,000				10,000				10,000				60,000
Total Materials & Supplies			35,000				35,000				35,000				35,000				35,000				175,000
Travel			16,000				15,000				15,000				15,000				15,000				76,000
Other Costs
GreenHouse			2,000				2,000				2,000				2,000				2,000				10,000
Field Fees			8,000				8,000				8,000				8,000				8,000				40,000
Tuition & Fees
24 hrs @ $276/hr			6,624				6,624				6,624				6,624				6,624				33,120
Total Other Costs			16,624				16,624				16,624				16,624				16,624				83,120
Capital Costs
Equipment			80,000				40,000				0				0				0				120,000
Total Cost — BREEDING		$	226,322			$	187,046			$	148,823			$	150,652			$	152,536			$	865,380

B. COMPOSITION LAB

PI: Bill Rooney		Year 1				Year 2				Year 3				Year 4				Year 5				TOTAL
Salaries
To Be Named **			8,000				8,240				8,487				8,742				9,004				42,473
.25 Technician
Student Workers			5,000				5,000				5,000				5,000				5,000				25,000
Subtotal			13,000				13,240				13,487				13,742				14,004				67,473
Fringe Benefits			3,340				3,382				3,426				3,471				3,518				17,138
Total Personnel Costs			16,340				16,622				16,913				17,213				17,522				84,611
Materials & Supplies
NIR			4,000				4,000				4,000				4,000				4,000				20,000
Total Materials & Supplies			4,000				4,000				4,000				4,000				4,000				20,000
Travel																							0
Other Costs
Wet Chemistry			15,000				15,000				15,000				15,000				15,000				75,000
Total Other Costs			15,000				15,000				15,000				15,000				15,000				75,000
Capital Costs
Equipment			120,000																				120,000
(grinder, dryer, NIR)
Total Cost — Composition Lab		$	155,340			$	35,622			$	35,913			$	36,213			$	36,522			$	299,611

D. TECHNOLOGY/SOLEXA

PI: John Mullet		Year 1				Year 2				Year 3				Year 4				Year 5				TOTAL
Salaries
Post-doc (To be named)			40,000				41,200				42,436				—				—				123,636
subtotal			40,000				41,200				42,436												123,636
Fringe Benefits			12,756				12,968				13,187												38,912
Total Personnel Costs			52,756				54,168				55,623												162,548
Materials and Supplies			30,000				25,000				20,000				—				—				75,000
Capital Costs
Nanospectrometer, PCR machines			35,000																				35,000
Solexa sequencer (TAES)			200000																				200,000
Total Cost — Technology/Solexa		$	317,756			$	79,168			$	75,623											$	472,548