EXHIBIT 10.16
COLLABORATIVE RESEARCH AGREEMENT
BETWEEN
THE DOW CHEMICAL COMPANY
AND
DIVERSA CORPORATION
TABLE OF CONTENTS
---------------------------------------------------------------------------------------------------
ARTICLE TITLE PAGE NUMBER
---------------------------------------------------------------------------------------------------
1 DEFINITIONS 1
---------------------------------------------------------------------------------------------------
2 R&D PROGRAM 6
---------------------------------------------------------------------------------------------------
3 LICENSE RIGHTS 14
---------------------------------------------------------------------------------------------------
4 PAYMENTS 16
---------------------------------------------------------------------------------------------------
5 LICENSE AGREEMENT; DEVELOPMENT REPORTS 17
---------------------------------------------------------------------------------------------------
6 TREATMENT OF CONFIDENTIAL INFORMATION 17
---------------------------------------------------------------------------------------------------
7 INTELLECTUAL PROPERTY RIGHTS 20
---------------------------------------------------------------------------------------------------
8 PROVISIONS CONCERNING THE FILING, PROSECUTION AND MAINTENANCE OF 21
PATENT RIGHTS
---------------------------------------------------------------------------------------------------
9 LEGAL ACTION 22
---------------------------------------------------------------------------------------------------
10 TERMINATION AND DISENGAGEMENT 23
---------------------------------------------------------------------------------------------------
11 REPRESENTATIONS AND WARRANTIES 25
---------------------------------------------------------------------------------------------------
12 INDEMNIFICATION 26
---------------------------------------------------------------------------------------------------
13 DISPUTE RESOLUTION 27
---------------------------------------------------------------------------------------------------
14 MISCELLANEOUS 28
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
APPENDIX TITLE PAGE
---------------------------------------------------------------------------------------------------
A-1 RESEARCH [*****] A-1
---------------------------------------------------------------------------------------------------
A-2 [*****] PLANS A-2
---------------------------------------------------------------------------------------------------
A-3 RMC MEMBERSHIP A-3
---------------------------------------------------------------------------------------------------
B-1 PATENT RIGHTS [*****] B-1
---------------------------------------------------------------------------------------------------
B-2 DIVERSA PATENT RIGHTS [*****] B-2
---------------------------------------------------------------------------------------------------
* Confidential Treatment Requested
---------------------------------------------------------------------------------------------------
APPENDIX TITLE PAGE
---------------------------------------------------------------------------------------------------
B-3 PATENT RIGHTS [*****] B-3
---------------------------------------------------------------------------------------------------
B-4 [*****] DIVERSA PARENT RIGHTS [*****] B-4
---------------------------------------------------------------------------------------------------
C MILESTONE PAYMENTS C-1
---------------------------------------------------------------------------------------------------
D LICENSE AGREEMENT D-1
---------------------------------------------------------------------------------------------------
E [*****] PROCEDURES E-1
---------------------------------------------------------------------------------------------------
F MATERIAL TRANSFER AGREEMENT F-1
---------------------------------------------------------------------------------------------------
G LICENSED [*****] G-1
---------------------------------------------------------------------------------------------------
H RESEARCH [*****] H-1
---------------------------------------------------------------------------------------------------
iii * Confidential Treatment Requested
COLLABORATIVE RESEARCH AGREEMENT
BETWEEN
THE DOW CHEMICAL COMPANY
AND
DIVERSA CORPORATION
COLLABORATIVE RESEARCH AGREEMENT (including the Appendices hereto, the
"Agreement") by and between THE DOW CHEMICAL COMPANY, a corporation duly formed
and existing under the laws of Delaware, having a place of business at ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America ("DOW" or a "Party"),
and DIVERSA CORPORATION, a corporation duly formed and existing under the laws
of Delaware, having a place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America ("DIVERSA" or a "Party").
R E C I T A L S
A. DIVERSA has discovered and developed enzymes and has expertise in the
rearrangement of DNA to produce and discover genes utilizing proprietary
technologies for the rapid discovery, development and optimization of enzymes.
▇. ▇▇▇ has expertise in the discovery, development and production of
chemical compounds.
▇. ▇▇▇ and DIVERSA wish to enter into this Agreement in order to perform
research together to discover and optimize the [*****] that can be used by DOW
to produce certain, desired [*****].
D. DIVERSA will perform research either independently or with DOW on
projects funded and supported by DOW in order to discover and develop such
[*****] for the purpose of [*****] of products by DOW.
▇. ▇▇▇ will perform research to develop products and technology [*****].
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the Parties hereby agree as
follows:
1 * Confidential Treatment Requested
Article 1. DEFINITIONS
When used in this Agreement, the following terms shall have the meanings set out
below, unless the context requires otherwise. The singular shall be interpreted
as including the plural and vice versa, unless the context clearly indicates
otherwise.
1.1 "Affiliate" means any corporation, firm, limited liability company,
---------
partnership or other entity that directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement.
Control for purpose means ownership, directly or through one or more
affiliated entities, of [*****] or more of the shares of stock
entitled to vote for the election of directors in the case of a
corporation, or [*****] or more of the equity interests in the
case of any other type of legal entity, or any other arrangement whereby a
Party controls or has the right to control the board of directors or
equivalent governing body of a corporation or other entity.
1.2 "Agreement Term" means [*****] or until this Agreement is otherwise
--------------
terminated as provided herein.
1.3 "Areas of Interest" means the development of [*****] Enzymes (as defined
-----------------
below) for use in the following [*****]:
[*****]
1.4 "Confidential Information" means all information, Know-How, scientific,
------------------------
technical, or non-technical data, samples and Materials, business plans,
and marketing and sales information disclosed by one Party to the other
hereunder or under the Option Agreement between DIVERSA and DOW dated June
30, 1997, whether disclosed or provided in oral, written (including but not
limited to electronic, facsimile, paper or other means), graphic,
photographic or any other form, except to the extent that such information:
(i) as of the date of disclosure is known to the receiving Party as
shown by written documentation, other than by virtue of a prior
confidential disclosure from the disclosing Party to the receiving
Party;
(ii) as of the date of disclosure is in, or subsequently enters, the
public domain through no fault or omission of the receiving Party;
(iii) as of the date of disclosure or thereafter is obtained from a Third
Party free from any obligation of confidentiality; or
(iv) as of the date of disclosure or thereafter is developed by the
receiving Party independent of the disclosure by the disclosing
Party as evidenced by written
2 * Confidential Treatment Requested
documentation.
1.5 "Consultants" means a non-Affiliate person who is under confidentiality to
-----------
and paid by a Party to act or advise on that Party's behalf under this
Agreement.
1.6 "Controls" or "Controlled" means, with respect to intellectual property,
-------- ----------
possession (other than by virtue of this Agreement) of the ability to
grant licenses or sublicenses to the other Party hereto without violating
the terms of any agreement or other arrangement with any Third Party
[*****].
1.7 "DIVERSA Intellectual Property" means DIVERSA Patent Rights and DIVERSA
-----------------------------
Know-How and Joint Intellectual Property.
1.8 "DIVERSA Know-How" means know-how Controlled solely by DIVERSA. The term
----------------
"know-how" means all Research Results and all know-how, nonpatented
inventions, improvements, discoveries, data, instructions, [*****]
information (including, without limitation, [*****] and information),
processes, procedures, devices, methods and trade secrets which are
conceived, discovered or invented during the Research Term in the course
of performance of the R&D Program or which have been conceived, discovered
or invented by DIVERSA prior to this Agreement, and which are necessary or
appropriate to develop and commercialize Licensed Products; and does not
include inventions within the Patent Rights.
1.9 "DIVERSA Patent Rights" means Patent Rights Controlled solely by DIVERSA
[*****].
1.10 "DIVERSA Research Results" means Research Results invented or discovered
------------------------
solely by DIVERSA.
1.11 "DOW Intellectual Property" means DOW Patent Rights and DOW Know-How and
-------------------------
Joint Intellectual Property.
1.12 "DOW Know-How" means Know-How Controlled solely by DOW.
------------
1.13 "DOW Patent Rights" means Patent Rights Controlled solely by DOW.
-----------------
1.14 "DOW Research Results" means Research Results invented or discovered
--------------------
solely by DOW.
1.15 "Effective Date" means the date of last signature set forth at the end of
--------------
this Agreement.
1.16 "Field" means [*****]; all Areas of Interest shall fall within this field.
-----
1.17 "FTE" means the equivalent of one full year of work on a full time basis
---
by a scientist or other professional [*****]
3 * Confidential Treatment Requested
[*****].
1.18 "Intellectual Property" means Diversa Intellectual Property and Dow
---------------------
Intellectual Property.
1.19 "[*****] Enzyme" means an enzyme or enzymes, either ex vivo or in vivo,
--------------
provided to Dow by Diversa which is within the claims of DIVERSA Patent
Rights or that incorporates, is derived from, or is identified,
discovered, developed or made through the use of DIVERSA Know-How, which
is developed from the [*****].
1.20 "Jointly Developed" or "Jointly Invented" means any item developed or
----------------- ----------------
invented by both Parties in the course of the performance of the R & D
Program during the Research Term. If the item developed or invented is a
patentable invention, such invention is jointly developed if both Parties'
employees or consultants are considered inventors under 35 U.S.C. et.
seq., as interpreted by the U.S. Patent and Trademark Office and the
United States courts.
1.21 "Joint Intellectual Property" means Joint Patent Rights and Joint Know-
---------------------------
How.
1.22 "Joint Know-How" means Know-How which is Jointly Developed or Jointly
--------------
Invented.
1.23 "Joint Patent Rights" means Patent Rights which are Jointly Developed.
-------------------
1.24 "Joint Research Results" means Research Results which are Jointly
----------------------
Developed or Jointly Invented.
1.25 "Know-How" means all Research Results and all know-how, nonpatented
--------
inventions, improvements, discoveries, data, instructions, [*****]
information (including, without limitation, [*****] and information),
processes, procedures, devices, methods and trade secrets which are
conceived, discovered or invented during the Research Term in the course
of performance of the R&D Program, and which are necessary or appropriate
to develop and [*****].
1.26 "License Agreement" means the agreement described in Section 5.1 hereof.
-----------------
1.27 "Licensed Product" means (i) [*****] which is used to [*****], or (ii)
----------------
[*****] and which is [*****] and which both (i) and (ii) are designated by
the RMC and listed on Appendix G attached hereto, encompassed within
[*****], which is attached hereto and made a part hereof. It is expected
that [*****] at the exercise of each License Agreement.
1.28 "Material" means the original, tangible materials provided by DOW or
--------
DIVERSA to the
4 * Confidential Treatment Requested
other Party in order that the recipient can perform its obligations under
the R&D Program and any exchange of samples developed during the R&D
Program.
1.29 "Patent Rights" means (i) all patents and patent applications which are
-------------
conceived of by DIVERSA and/or DOW during the Research Term and in the
course of performance of the R & D Program, and which are necessary for
DOW to make, use or sell the Royalty Bearing Products (as defined in the
License Agreement); if such patent rights arise they shall be listed on
Appendix B-1, attached hereto and made a part hereof; (ii) the patents and
patent applications listed on Appendix B-2, attached hereto and made a
part hereof, are patent rights of DIVERSA that [*****]; (iii) the [*****];
and (iv) any divisions, continuations, continuations-in-part, reissues,
reexaminations, extensions or other governmental actions which extend any
of the subject matter of the patent applications or patents in (i) or (ii)
above, and any substitutions, confirmations, patents-of-addition,
registrations or revalidations of any of the foregoing, in each case,
------------
which are Controlled by DIVERSA or DOW during the Research Term and which
are necessary for DOW to make, have made, use, sell, have sold, export or
import the Royalty Bearing Products. All patents and patent applications
subject to this definition are listed on Appendix B or will be included on
Appendix B by the end of the Agreement Term.
1.30 "R&D Program" means the research and development program to be conducted
-----------
during the Research Term by DIVERSA and DOW pursuant to Section 2, as more
fully described [*****].
1.31 "Research Data" means all data, [*****] and any other information
-------------
obtained or developed in the course of performance of the R&D Program.
1.32 "Research Management Committee" or "RMC" means the committee created
----------------------------- ---
pursuant to Section 2.2 hereof and which membership is defined in ▇▇▇▇▇▇▇▇
▇-▇, attached hereto and made a part hereof.
1.33 "Research Materials" mean all tangible property obtained or developed in
------------------
the course of performance of the R&D Program, including but not limited to
[*****] Enzymes.
1.34 "Research Project Flow Chart" means a chart as Appendix H, attached hereto
---------------------------
for reference, to aid in understanding the efforts made under this
Agreement and the [*****].
5 * Confidential Treatment Requested
1.35 "Research Results" means Research Data and Research Materials.
----------------
1.36 "[*****]" means a specific target within [*****] as specifically
-------
described in Appendix A-1 hereto and made a part hereof, as may be amended
from time to time by the RMC in its written minutes.
1.37 "[*****]" means a [*****] within [*****] as specifically described in
-------
Appendix A-1 hereto and made a part hereof, as may be amended from time to
time by the RMC in its written minutes.
1.38 "Research Term" means the period commencing on the Effective Date and,
-------------
unless extended by written agreement of the Parties or sooner terminated
as provided herein, terminating on the third (3) anniversary of the
Effective Date.
1.39 "Responsible Party" shall have the meaning set forth in Section 8.1.2.
-----------------
1.40 "Staffing Level" shall have the meaning set forth in Section 2.1.1(d).
--------------
1.41 "Third Party" means any party who is not a Party, or an Affiliate.
-----------
1.42 "[*****] Plans" mean the written plans drafted and approved by the RMC
-------------
defining the activities to be carried out for, and the budget for, each
[*****] during each twelve month period of the R&D Program, as more
specifically detailed in [*****] attached hereto and made a part hereof,
as modified from time to time by the RMC in its written minutes. The
[*****] Plan Procedures are provided in [*****], attached hereto and made
a part hereof.
Article 2. R&D PROGRAM
2.1 Implementation of the R&D Program.
----------------------------------
2.1.1 Basic Provisions of Program.
(a) The primary objective of the R&D Program shall be the
identification and development of [*****] Enzymes providing
enhanced or new properties useful in the [*****]. The Research
[*****] indicates the progress expected to occur under this
Agreement; namely, from [*****] discovery to [*****] Enzyme to
identification of a Licensed [*****]. Once a Licensed [*****]
is identified then the License Agreement pertains for the
remainder of the [*****].
(b) DIVERSA and DOW shall use their reasonable good faith efforts
to conduct the research activities set forth in the [*****]
Plans, and to provide Materials as set forth therein. Both
Parties shall employ the best methods they know which are
legally available to them to
6 * Confidential Treatment Requested
perform the [*****] Plans. However, [*****] (which basis must
be explained to DIVERSA) about the ability of DIVERSA to
[*****], then DOW may request a modification to the [*****]
Plan. DOW accepts that this could effect the ability to obtain
the desired [*****] Enzyme(s) for the [*****].
(c) The Research [*****] and Research [*****], both in [*****], are
defined in the [*****] Plans in [*****], as amended from time
to time by the RMC in its written minutes.
(d) In carrying out the R&D Program, DIVERSA shall devote [*****]
FTEs per year for each of the [*****] years of the Research
Term ("Staffing Level"), and DOW shall pay DIVERSA for the
services of such FTEs as set forth herein. At the request of
DOW, DIVERSA will in good faith consider and discuss proposed
increases or decreases to the Staffing Level with adjustments
in payments. Notwithstanding the foregoing or anything
contained herein to the contrary, that the Staffing Level shall
remain at [*****] FTEs, unless the Parties, in each Party's
sole discretion, agree in writing to increase or decrease the
Staffing Level. Any increase or decrease to the Staffing Level
agreed to by the Parties shall be [*****] in the relevant
[*****] Plan for each Research [*****] or Research [*****] and
the budget associated with such [*****] Plan. Unless previously
consented to in writing by DOW, the budget for the [*****] Plan
for each Research [*****] and Research [*****] shall remain
within the funding proposed in Section 4. No more than [*****]
times per Research Term year, DOW shall have the right to
audit, at its expense, during regular business hours at
DIVERSA's place of business and, if conducted at different
sites also where the work is performed, both for the technology
development and FTEs assigned to the R&D Program.
(e) DIVERSA and DOW shall use commercially reasonable efforts to
perform the tasks set forth in the [*****] Plans, and to
provide the facilities, materials and equipment necessary to
perform the research activities set forth in the [*****] Plans.
(f) DIVERSA shall not be obligated to utilize more than [*****]
FTEs per year in the R&D Program. DOW shall be responsible for
the expense of research activities in the R&D Program that are
[*****], provided that DOW is notified of the reasons why
DIVERSA [*****], is notified of the [*****], and gives its
prior written consent.
-------------
(g) At such time as each [*****] Plan is under consideration by the
RMC, DOW may propose to the RMC to [*****] any selected
7 * Confidential Treatment Requested
Research [*****] or Research [*****] and upon acceptance of
the proposal by the RMC in its written minutes, DIVERSA will
[*****] in respect of such Research [*****] or Research
[*****], subject to DOW's obligations to maintain the Staffing
Level. In such event, DOW may propose a substitute Research
[*****] or Research [*****] within [*****] of the Areas of
Interest to be included in the R&D Program, which shall be
subject to the approval of the RMC. In the event no replacement
Research [*****] in any Area of Interest can be identified by
DOW and approved by the RMC, then (i) DOW may propose a new
[*****] which when accepted by the RMC would be added by
amendment to this Agreement or a new Research [*****] or
Research [*****] within the Field and if this new replacement
is acceptable to DIVERSA, this new replacement shall be
instituted promptly; or (ii) the Staffing Level will be
adjusted in accordance with Section 2.1.1(d).
(h) Upon any such abandonment under Section 2.1.1(g), DOW shall
have no further commercial rights with respect to any [*****]
Enzymes or other DIVERSA Intellectual Property related to the
abandoned Research [*****] or Research [*****]. DIVERSA shall,
however, be free to continue the research efforts on its own
behalf or with a Third Party at [*****] to DOW. All Joint
Intellectual Property related to any abandoned Research [*****]
or Research [*****] shall be listed on [*****] 3, attached
hereto and made a part hereof. DOW shall retain the right to do
research or non-commercial development using such Research
[*****]. However, if DOW should later develop during the
Agreement Term a suitable [*****] which DOW then desires to
commercialize and which product used [*****] Enzyme or DIVERSA
Patent Rights, then DOW would request [*****] DIVERSA. Unless
the abandoned Area of Interest has been [*****], DIVERSA shall
negotiate using good faith efforts with DOW for such [*****].
2.1.2 Collaborative Efforts and Reports.
---------------------------------
(a) The Parties agree that the successful execution of the R&D
Program will require the collaborative use of both Parties'
areas of expertise. The Parties shall keep the RMC fully
informed about the status of the portions of the R&D Program
they respectively perform. Without limiting the foregoing, each
Party shall furnish to the RMC [*****] reports within [*****]
days after the end of each [*****] period, describing the
progress of its activities in connection with the R&D Program
in reasonable
8 * Confidential Treatment Requested
detail, including at least:
(i) an estimation by DIVERSA of the FTEs used for each
Research [*****] and Research [*****] and the budget
used for each [*****] Plan, and
(ii) a summary of the testing and development of
[*****] Enzymes and Licensed [*****].
The reports described in this Section 2.1.2 (a) shall describe
all [*****] Enzymes that have been put into [*****], and shall
also contain sufficient other information to allow a Party to
monitor the other Party's compliance with this Agreement,
including without limitation, each Party's obligations with
respect to the accomplishment of the [*****]. All reports and
information provided under this Section 2.1.2 (a) shall be
deemed Confidential Information of the Party which provided
the information.
(b) DIVERSA and DOW shall cooperate in the performance of the R&D
Program and, subject to any confidentiality obligations to
Third Parties or legal restrictions, shall exchange
information [*****] as necessary to carry out the R&D Program
pursuant to the provisions of this Agreement. Each Party will
attempt to accommodate any reasonable request of the other
Party to send or receive personnel for purposes of discussing
the R&D Program. Such visits and access will be at mutually
agreed times, have defined purposes, be of agreed limited
duration, and be scheduled in advance. Each Party shall
[*****] of their respective personnel related to these visits.
It is understood that any such visiting personnel may be
[*****] the R&D Program and the rights of Third Parties, which
may include [*****] of the R&D Program. All personnel shall
abide by the required rules for any Third Party visiting that
Party's site, including, but not limited to, [*****] and other
matters.
(c) During the Research Term and for a period of [*****] years
thereafter, DIVERSA and DOW shall maintain records of the R&D
Program (or cause such records to be maintained) in sufficient
detail and good scientific manner as will properly reflect all
work done in the R&D Program and results achieved in the
performance of the R&D Program. Each Party shall allow the
other Party to have reasonable access to all pertinent
Research [*****] generated by or on behalf of such Party with
respect to each [*****] Enzyme. This retention of records may
be extended if there is a legal proceeding pending (i.e.,
court action, or US
9 * Confidential Treatment Requested
interference or opposition involving the Intellectual
Property) where those records are reasonably required and a
written request with the reason is provided to the Party.
Nothing herein shall require, or be construed to require, that
DIVERSA disclose to DOW any DIVERSA Know-How, except to the
extent necessary for the filing of patent applications
[*****]. DOW shall not be required to disclose to DIVERSA any
DOW Know-How or any DOW [*****] on any Research [*****],
Research [*****] or [*****] Enzyme, except for the reasonable
information required by the RMC.
2.1.3 Work Plans.
----------
(a) In order to carry out the R&D Program, the RMC shall develop a
[*****] Plan for each Research [*****] and Research [*****].
These [*****] Plans shall be in writing and attached hereto as
[*****]. The [*****] Plans for each initial Research [*****]
and Research [*****] will be agreed to not later than [*****]
after the Effective Date and will be attached hereto as
Appendix [*****] and made a part hereof. For each [*****]
period during the Research Term after the period covered by the
initial [*****] Plans attached hereto as Appendix [*****],
[*****] Plans shall be prepared by the co-chairs of the RMC and
approved by the RMC no later than [*****] days before the end
of the then current [*****] period. Absent written agreement by
the Parties, DIVERSA and DOW shall continue to conduct research
activities within the scope of the projects set forth in the
previous [*****] Plans, within the bounds of the then currently
available FTEs.
(b) Each [*****] Plan shall set forth specific, [*****] research,
and development, objectives, including, without limitation, the
applicable Research [*****] and Research [*****] within Areas
of Interest, and resource allocations in accordance with the
procedures set forth in Appendix [*****] attached hereto. Each
[*****] Plan will reflect at least [*****], but no more than
[*****] research milestones per year. These research milestones
shall be designed to facilitate diligent development and
identification of [*****] Enzymes for use in the Research
[*****] or Research [*****]. The RMC will review research
milestones on at least a [*****] basis. If the milestones are
not met, then in the next written [*****] Plan, the RMC must
(i) revise these milestones and/or [*****] Plan, (ii) replace
the Research [*****] or Research [*****] with another Research
[*****] or Research [*****] using their good faith efforts,
(iii) if the replacement under (ii) is not deemed viable by the
RMC, then DIVERSA and DOW agree to use their good faith efforts
to permit some new [*****] in the Field to be substituted as a
new [*****], or
10 * Confidential Treatment Requested
(iv) abandon that Research [*****] or Research [*****] if so
requested by DOW.
(c) If the RMC is unable to agree as to the terms of a [*****] Plan
for any given [*****] period following the initial [*****]
period for a [*****] Plan, by the date provided in Section
2.1.3(a), above, then the matter shall be addressed as provided
in Article 13 below .
(d) The [*****] Plans may be modified by the RMC to satisfy the
requirements of the Research [*****] and Research [*****], but
a written copy of each revised [*****] Plan, signed by the co-
chairs, shall be supplied to each Party as an amendment to
Appendix [*****].
2.1.4 Additional Research Activities.
------------------------------
(a) In the event that prior to the end of the Research Term, all
research activities directed to [*****] Research [*****] and
Research [*****] have been successfully completed or terminated
by agreement of the Parties, then DOW shall have the right to
propose to DIVERSA:
(i) [*****] Research [*****] or Research [*****] to be
pursued in the Areas of Interest under the R&D
Program, or
(ii) deploying the FTEs on Research [*****] and
Research [*****] which are already underway, or
(iii) if (i) and (ii) are not available, then
considering deploying, using their good faith efforts,
the FTE's on Research [*****] or Research [*****]
within the Areas of Interest and for which DIVERSA has
[*****] or serious obligations ([*****]) to a Third
Party, or
(iv) if (i) through (iii) are not available, then
reducing the number of FTE's and [*****] for those
FTEs no longer required computed in accordance with
Section 4.4.
If DIVERSA does not have [*****] with respect to the Research
[*****] or Research [*****] proposed in Section 2.1.4(a)(i) or
(iii) and does not have a [*****] on its own behalf or with a
Third Party, the Parties shall negotiate in good faith the
terms on which such additional research activities
11 * Confidential Treatment Requested
may be conducted under the R&D Program. Such additional
research activities will only be initiated if the Parties reach
written agreement on the terms thereof, including, without
limitation, milestone and other payments on resulting products.
(b) During the R&D Program DOW may also propose that additional
research activities directed to [*****] and Research [*****]
and Research [*****] within those Areas of Interest, using
their good faith efforts, be conducted in connection with the
R&D Program. In such event, the Parties shall discuss an
expansion of the R&D Program, provided DIVERSA shall have no
obligation to conduct any such activities with DOW unless terms
for such activities are agreed to in writing by the Parties. If
DIVERSA does not have a [*****] with respect to a proposed
additional Research [*****]or Research [*****]on its [*****] or
with a Third Party, DIVERSA will notify DOW in writing of such
within [*****] days of the proposal, and within [*****] days of
such notice, the RMC will implement a [*****] for each
additional Research [*****] or Research [*****]. In the event
the RMC fails to initiate a [*****] Plan within such [*****]
day period, or if DOW notifies DIVERSA in writing that it does
not intend to pursue an additional Research [*****] or Research
[*****], DIVERSA shall have [*****] to DOW under this Agreement
with respect to such [*****] Research [*****] or Research
[*****] and may collaborate with a Third Party on such [*****]
Research [*****] or Research [*****].
(c) DOW shall further have the right during the [*****] period
following the Effective Date to propose up to [*****] projects
encompassed in new Areas of Interest [*****]. DIVERSA will
consider such proposal, and, if the Parties agree to proceed,
the Parties will negotiate a separate agreement for such a
collaboration [*****]. The separate agreement will contain
terms consistent with other DIVERSA agreements of this nature
for [*****], including a separate [*****], and different
milestone and [*****] payments.
2.1.5 Disclosures.
-----------
If DIVERSA or DOW wishes to disclose any Research [*****] to a Third
Party on a confidential basis, it shall first submit a description
of the proposed disclosure directly to all members of the RMC for
review at least [*****] prior to any such disclosure. Within [*****]
of receipt of such description, the RMC shall notify DIVERSA or DOW,
as the case may be, of its approval or denial of
12 * Confidential Treatment Requested
such disclosure, provided such approval shall not be unreasonably
withheld. Failure to provide such notice within the [*****] period
shall be deemed to be consent to the proposed disclosure.
Notwithstanding the foregoing, subject to Section 2.5, DIVERSA may
provide any [*****] Enzyme under confidentiality terms at least as
strict as this Agreement to a Third Party [*****] for use [*****] the
Areas of Interest. DOW may provide any [*****] Enzyme under
confidentiality terms at least as strict as this Agreement to any
Third Party without the consent of the RMC or DIVERSA if used within
the Areas of Interest if used with technology or intellectual property
unavailable to DIVERSA.
2.2 Research Management Committee.
-----------------------------
2.2.1 Establishment and Functions of RMC.
----------------------------------
(a) DIVERSA and DOW hereby agree to establish the RMC. The RMC
will act on behalf of the Parties and will be responsible
for the planning and monitoring of the R&D Program and for
setting forth specific research and development
objectives, including, without limitation, (i) preparation
and approval of each [*****] Plan in accordance with the
procedures set forth in Appendix [*****] attached hereto
and made a part hereof, (ii) determining whether research
projects should be continued as active projects, and (iii)
determining resource allocation for the R&D Program, so as
to insure that meaningful research and development
activity will be undertaken on all Research [*****] and
Research [*****] in each [*****] period, taking into
account that the overall research and development focus
reflects both [*****] priorities.
(b) In planning and monitoring the R&D Program, the RMC shall
assign tasks and responsibilities taking into account each
Party's respective specific capabilities and expertise in
order to avoid duplication and enhance efficiency and
synergies. For example, [*****].
2.2.2 RMC Membership.
--------------
DIVERSA and DOW each shall appoint, in its sole discretion,
[*****] members to the RMC, including a co-chair designated by
DOW and a co-chair designated by DIVERSA. Substitutes or
alternates for the co-chairs
13 * Confidential Treatment Requested
or other RMC members, if any, may be appointed at any time by
written notice to the other Party prior to any meeting of the
RMC. All RMC members shall be full time employees of DIVERSA
and DOW. If either Party desires that an employee of an
Affiliate or a consultant attend an RMC meeting, then such
consultant to a Party must be under confidentiality obligations
to that Party having terms at least a strict as those of this
Agreement, must be approved in writing to attend by the other
Party, and such person has no vote in the decisions of the RMC.
The initial co-chairs and other RMC members are identified in
Appendix [*****] attached hereto and made a part hereof, which
Appendix shall be updated in writing from time to time to
reflect any changes in RMC membership.
2.2.3 Meetings.
--------
The RMC shall meet at least quarterly, with such meetings
alternating between [*****], and [*****], unless the Parties
agree otherwise. The first such meeting shall be held in
[*****] within [*****] days after the Effective Date at which
time the initial [*****] Plans shall be finalized. Any
additional meetings, other than [*****], shall be held at
places and on dates selected by the co-chairs of the RMC. RMC
members may participate in any such meeting in person, by
telephone or by videoconference. In addition, the RMC may act
without a formal meeting by a written memorandum signed by the
co-chairs of the RMC. Subject to the obligations set forth in
Article 6, other full-time employees of each Party, in addition
to the members of the RMC, may attend RMC meetings as nonvoting
observers at the invitation of either Party with the prior
written approval of the other Party.
2.2.4 Minutes.
-------
The RMC shall keep minutes of its meetings that record all
decisions and all actions recommended or taken. The Party
hosting the meeting shall be responsible for the preparation of
the meeting agenda and preparation and circulation of the draft
minutes. Draft minutes shall be delivered by mail, electronic
mail or facsimile to the co-chairs of the RMC within [*****]
after each meeting. Any intellectual property issues that may
need attention will be highlighted and forwarded to each
Party's Patent Coordinator. Draft minutes shall be edited by
the co-chairs and shall be issued in final form only with their
approval and agreement as evidenced by their signatures on the
minutes. A copy of the signed minutes shall be retained in each
Party's files for at least [*****] after termination of this
Agreement.
2.2.5 Quorum; Voting; Decisions.
-------------------------
At each RMC meeting, at least [*****] members appointed by each
Party shall constitute a quorum and decisions shall be made by
[*****] vote. If the RMC is unable to reach agreement on any
matter, such dispute shall be
14 * Confidential Treatment Requested
settled pursuant to Article 13 below.
2.2.6 Expenses.
--------
DIVERSA and DOW shall [*****] expenses of their respective RMC
members related to their participation on the RMC and
attendance at RMC meetings.
2.3 Third Party Licenses.
--------------------
2.3.1 DOW Responsibility.
------------------
In the event that DOW can reasonably demonstrate that [*****]
of a Third Party's patent rights would [*****] under a [*****]
Plan, then DOW shall so notify DIVERSA. DIVERSA shall state
whether it has obtained or is planning to obtain [*****] of the
[*****] Plan to go forward. If DOW elects to [*****], then the
RMC may amend the [*****] Plan if only DOW can [*****]. If DOW
and DIVERSA elect not to [*****], then the [*****] Plan shall
be altered by the RMC to enable the performance of the modified
[*****] Plan.
2.3.2 DIVERSA Responsibility.
----------------------
In the event that it is necessary to [*****] to perform the R&D
Program with regard to [*****] provided by DIVERSA, including,
without limitation, [*****], DIVERSA will be responsible for
the payment of any amounts due to Third Parties for the [*****]
for the performance of the R&D Program with regard to such
[*****] and the costs of [*****]. The decision [*****] shall be
solely DIVERSA's, and DOW shall be notified of that decision.
Notwithstanding the foregoing, DIVERSA shall be responsible for
[*****] for use of an [*****] Enzyme. DIVERSA and DOW shall
promptly notify the other Party in writing of any allegation by
a Third Party that the use of an [*****] Enzyme [*****]. If DOW
believes that a [*****] to use an [*****] Enzyme, then DOW
shall express its concerns to DIVERSA in writing. DIVERSA shall
explain to DOW whether it agrees that a [*****] and shall
provide sufficient explanation and reasons for its answer.
Should DIVERSA be aware and concerned of such [*****] or be
considering, instituting or have instituted a [*****], then all
such [*****] by DIVERSA. The decision whether such a license is
required shall be DIVERSA's. Notwithstanding the foregoing,
DIVERSA shall
15 * Confidential Treatment Requested
use good faith efforts to terminate [*****].
2.3.3 Infringement Claims.
-------------------
In the event that DOW or DIVERSA receives a written notice of
an allegation of possible patent infringement from a Third
Party or determines that there is such possible infringement
based on (i) the use of a particular [*****], which has been or
is planned to be used in the conduct of the R&D Program, or
(ii) the use of an [*****] Enzyme or Confidential Information
of DIVERSA [*****], such Party shall, within [*****] days,
notify the other Party in writing and provide an explanation of
the circumstances. If such possible infringement is of concern
to DOW, DIVERSA may provide a [*****] to DOW from [*****],
which may be based on a [*****], explaining DIVERSA's position
and the bases therefore.
In such event if no prior legal opinion has been done such that
the [*****], then the Parties shall forward a copy of such
claim to a [*****] and request that such [*****]. The cost of
this review shall be borne by [*****]. If the [*****] that the
activities of the R&D Program with respect to the [*****] would
be found by a court of competent jurisdiction to infringe a
claim of the Third Party patent which is likely to be found
valid, then within [*****] days of such [*****], either
(i) a [*****] will be substituted by DIVERSA for use in the
[*****] Enzyme in the R&D Program, subject to the approval of
the RMC, or
(ii) DIVERSA will notify DOW that it will [*****] from such
Third Party for any intellectual property rights necessary for
use of the [*****] in the R&D Program pursuant to Section
2.3.2, or
(iii) if the claim relates to alleged infringement of [*****]
used to obtain a [*****] an [*****] Enzyme, DIVERSA will
determine if an alternative technology could be used that does
not infringe the claim of such Third Party patent, and propose
to the RMC that such [*****], whereupon any [*****] Plan
relating to the aforementioned [*****] Enzyme will be modified
by the RMC; or
(iv) the RMC may elect to cease to conduct any activity in the
R&D Program requiring the use of [*****] and, if necessary,
reallocate DIVERSA's FTEs to other activities within the R&D
Program,
16 * Confidential Treatment Requested
If either (i), (ii), (iii), or (iv) above is not satisfied
within [*****], DOW may, upon written notice to DIVERSA,
immediately terminate this Agreement and cease all payments,
after such notice, except for work performed prior to receipt
of such notice by DIVERSA and the payment due under Section
10.4.
2.4 Post Research Term Cooperation.
------------------------------
At least [*****] months prior to the expiration of the Research Term, the
Parties shall meet to agree on mechanisms for coordinating and managing
activities (including, but not limited to, patent prosecution and
publication review) that will occur after the expiration of the Research
Term which would otherwise be addressed by the RMC. Any patent applications
included in Intellectual Property or Joint Intellectual Property which have
not been filed shall be filed in the first instance during the Agreement
Term, and both Parties shall cooperate with respect to all issues and
formal papers. As part of such considerations, if any research project has
not yet resulted in a Licensed [*****] and requires reasonable additional
development to accomplish such result, and either the RMC notifies DOW and
DIVERSA at its last meeting of this development request or DOW notifies
DIVERSA not later than [*****] months after the expiration of the Research
Term that DOW wishes to continue such research project with the help of
DIVERSA, then DIVERSA agrees to consider in good faith the terms of such a
continuation as proposed by DOW, which, in any event, will include the
undertaking by DIVERSA to give to DOW access to experienced DIVERSA FTEs to
be employed in the diligent continuation of the research project at the
same cost as set forth in Section 4.4 hereof plus [*****]. Notwithstanding
the foregoing, in no event will DIVERSA be obligated to continue any
Research [*****] beyond the Research Term. Should DIVERSA elect not to
continue with such incomplete [*****], then DOW is permitted to continue
such [*****] in any manner, including with a Third Party, but without the
use of DIVERSA Intellectual Property.
2.5 Research Exclusivity.
--------------------
During the Research Term, DIVERSA will not collaborate with or license the
rights to any Third Party to use any [*****] Enzyme in a Research [*****]
to convert a Research [*****] to a [*****], as defined in Appendix [*****],
so long as DOW satisfies the diligence obligations set forth in the [*****]
Plan with respect to the development of the applicable [*****] Enzyme.
During the Research Term, DOW will not collaborate with or license the
rights to any Third Party to evolve any enzyme in a Research [*****] to
convert a Research [*****] to a [*****], as defined in Appendix [*****].
Article 3. LICENSE RIGHTS
3.1 To DOW.
------
(a) Subject to the terms and conditions of this Agreement, DIVERSA hereby
grants to DOW a non-exclusive, nonsublicensable, royalty-free,
17 * Confidential Treatment Requested
worldwide license under the specific DIVERSA Intellectual Property
listed on Appendix [*****] and Appendix [*****] (attached hereto and
made a part hereof) to all Research [*****] using any Licensed [*****]
to make, have made, import, have imported, use, have used, sell, have
sold and otherwise exploit Royalty Bearing Products (as defined in the
License Agreement), and a royalty-free license to all DIVERSA Know-How
required for DOW to commercialize Royalty Bearing Products, and the
[*****] provided to DOW by DIVERSA hereunder solely to conduct the R&D
Program. DOW (i) shall promptly notify DIVERSA in writing of any
improvements to the DIVERSA Intellectual Property conceived of or
developed by DOW during the Research Term (the "Improvements"), and
(ii) shall irrevocably assign to DIVERSA all right, title and interest
in and to such Improvements. Such Improvements shall be included in
the DIVERSA Intellectual Property licensed to DOW under this Section
3.1 and under the License Agreement.
(b) Should DOW determine that modification of an [*****] Enzyme is
required, after it has been provided to DOW by DIVERSA under the terms
of this Agreement, to make the Licensed [*****] related to such
[*****] Enzyme [*****], then DOW may request that DIVERSA perform such
added modification under the R&D Program or, if this Agreement has
terminated, then under terms to be negotiated in good faith by the
Parties. DOW may use the [*****] or request that a Third Party perform
the desired modifications of an [*****] Enzyme:
(1) if DIVERSA is unwilling to perform such added modification,
or
(2) upon (i) the transfer or sale of all or substantially all of
the business of DIVERSA to which this Agreement relates, whether
by merger, sale of stock, sale of assets or otherwise, to a
[*****], or (ii) the bankruptcy, insolvency, dissolution or
winding up of DIVERSA (other than dissolution or winding up for
the purposes of [*****]), then DOW or its Affiliates may modify
the [*****] Enzyme to make the Licensed [*****] related to the
[*****] Enzyme commercially viable and DOW continues to be able
to use DIVERSA Intellectual Property listed in Appendix [*****]
(attached hereto and made a part hereof) solely to modify the
[*****] Enzyme and/or the Licensed [*****] related to the [*****]
Enzyme, provided that DOW pays DIVERSA for the [*****].
(c) Notwithstanding the foregoing Sections 3.1 (a) and (b), DOW (or DOW
with its consultants or though a separate agreement between DOW and a
Third Party) may
18 * Confidential Treatment Requested
conduct independent research activities outside the R&D Program,
whether within the Areas of Interest or not, and [*****], but except
as otherwise agreed to by DIVERSA in writing, DOW agrees that it will
not itself or through any Third Party use any DIVERSA Intellectual
Property, Joint Intellectual Property and/or Research [*****] to
develop a [*****] Licensed [*****], except under the terms of this
Agreement.
3.2 To DIVERSA.
----------
Subject to the terms and conditions of this Agreement, DOW hereby grants to
DIVERSA (i) a nonexclusive, nontransferable, nonsublicensable, royalty-
free, worldwide research license to DOW Intellectual Property, where
legally possible, and the [*****] provided to DIVERSA by DOW, solely to
conduct the R&D Program, and (ii) a nonexclusive, nontransferable,
nonsublicensable, royalty-free, worldwide license under any patents, trade
secrets and other intellectual property Controlled by DOW that relate to
[*****] Enzymes in the R&D Program.
3.3 Assignment.
----------
3.3.1 DOW.
---
DOW shall have the right to assign its rights in the license granted
herein (or any part thereof) to an Affiliate; provided, however,
that DOW shall continue to be responsible for the obligations of any
such Affiliate. DOW may assign its rights hereunder in connection
with the transfer or sale of all or substantially all of the
business of DOW to which this Agreement relates, whether by merger,
sale of stock, sale of assets or otherwise.
3.3.2 DIVERSA.
-------
DIVERSA shall have no right to assign its rights in the licenses
granted to it by DOW pursuant to Section 3.2 hereof (or any part
thereof) to any of its Affiliates or any Third Party, except in
connection with the transfer or sale of all or substantially all of
the business of DIVERSA to which this Agreement relates, whether by
merger, sale of stock, sale of assets or otherwise. If DIVERSA is
acquired by a Third Party [*****] for Research [*****] or if DIVERSA
is controlled by merger, sale of stock, sale of assets or otherwise
to a Third Party competitor, then prior to closure of such
acquisition, DOW shall be informed of the identity of the Third
Party competitor and at DOW's sole discretion can elect to terminate
this Agreement under Section 10.4 and request in writing immediate
return of all Confidential Information.
3.4 Retained Rights.
----------------
3.4.1 DIVERSA.
-------
DIVERSA shall retain all right, title and interest in and to the
DIVERSA
19 * Confidential Treatment Requested
Intellectual Property and Joint Intellectual Property, except as
expressly granted to DOW in Section 3.1 or in the License Agreement.
DIVERSA may grant to Third Parties licenses under the Diversa
Intellectual Property for use of [*****] Enzymes; provided, however,
that such licenses do not conflict with the license granted to DOW
herein or under the License Agreement, and provided that in the
event the [*****] Enzyme is a [*****] provided by DOW to DIVERSA
under the terms of this Agreement, DIVERSA obtains DOW's prior
written consent (which may be withheld for any reason) and pays a
reasonable royalty to DOW in accordance with a separate license
agreement to be negotiated in good faith between the Parties.
DIVERSA shall inform DOW of the application(s) for an [*****] Enzyme
that is intended transferred to a Third Party if the [*****] Enzyme
is a [*****] provided by DOW to DIVERSA under the terms of this
Agreement.
Notwithstanding the license granted to DOW in Section 3.1, DIVERSA
shall retain the right to use all [*****] Enzymes for its own
research purposes (i.e., to develop, improve and validate its
technology and intellectual property).
3.4.2 DOW.
---
DOW shall retain all right, title and interest in and to the DOW
Intellectual Property and Joint Intellectual Property, except as not
expressly granted to DIVERSA in Section 3.2; provided, however, that
during the Agreement Term, DOW shall not grant any license under the
DOW Intellectual Property or Joint Intellectual Property which
conflicts with the license granted to DIVERSA herein.
Article 4. PAYMENTS
4.1 Technology Development.
----------------------
Within [*****] days after the Effective Date, DOW shall pay to DIVERSA a
technology development fee of [*****] Dollars, and shall similarly provide
DIVERSA with a technology development fee of [*****] Dollars, during the
Agreement Term, within [*****] days of each of the successive two
anniversary dates of the Effective Date.
Thus within [*****] days after the Effective date, DOW shall pay to DIVERSA
a technology development fee of [*****] Dollars and [*****] Dollars for the
first quarter FTE payment under Section 4.4 for a total of [*****] Dollars.
20 * Confidential Treatment Requested
4.2 Milestone Payments.
------------------
DOW shall make milestone payments to DIVERSA as set forth in Appendix
[*****] attached hereto and made a part hereof. The RMC shall determine
whether DIVERSA has achieved a milestone and shall note such decision in
its signed minutes. If the RMC cannot reach a decision, then Article 13
shall control. The milestone goal achievements shall be determined [*****]
by the RMC at its meeting [*****], shall be performance driven goals, and
shall be paid by DOW to DIVERSA [*****] days after the determination has
been made by the RMC that the milestone was met. The amount of milestone
payments in a given year may be up to [*****] Dollars for all [*****]
Plans.
4.3 Payments.
--------
All payments due under this Agreement shall be made in accord with the
respective sections of Article 4 by bank wire transfer in immediately
available funds to a bank account designated in writing to DOW by DIVERSA.
In the event that the due date of any payment subject to this Article 4
hereof is a Saturday, Sunday or national holiday, such payment may be paid
on the following business day. Any late payments shall bear interest to the
extent permitted by applicable law at the prime rate (as reported by the
Bank of America, San Francisco, California, or its successor), on the date
such payment is due plus an additional [*****], calculated on the number of
days such payment is delinquent. The rights provided in this Section 4.3
shall in no way limit any other remedies available to DIVERSA hereunder.
4.4 FTE Payments.
------------
4.4.1 In addition to the other payments due pursuant to this Article 4,
DOW will pay to DIVERSA a nonrefundable amount of [*****] Dollars
per year for the [*****] FTEs set forth in Section 2.1.1(d) for each
of the [*****] years of the Research Term, commencing as of the
Effective Date.
4.4.2 Payments due pursuant to the above Section 4.4.1 shall be made in
advance, on or before the first day of each calendar quarter, with
the first and last payments prorated in the event that the Effective
Date is not the first day of a calendar quarter. Should payment be
due on a Saturday, Sunday or national holiday, such payment may be
paid on the following business day. In the event that the Parties
agree to a different Staffing Level for any given calendar quarter,
the payment set forth in this Section 4.4 shall be prorated
accordingly based on a level of funding of [*****] Dollars per year
per FTE. Any change in the amount of the FTE payment due in a
quarter shall be reported to DOW by DIVERSA in writing [*****] days
in advance of such payment.
Article 5. LICENSE AGREEMENT; DEVELOPMENT REPORTS
21 * Confidential Treatment Requested
5.1 License Agreement.
-----------------
The Parties have entered into a License Agreement covering [*****] Enzymes
and Licensed [*****] executed contemporaneously with this Agreement, a copy
of which is attached hereto for reference as Appendix [*****]. DIVERSA
hereby represents:
(a) that it is willing and able to grant to DOW
(i) an exclusive, royalty bearing, worldwide license under the
DIVERSA Intellectual Property to use the [*****] Enzymes and the
[*****] the [*****] Enzymes in a Research [*****] to make, have
made, use, sell, offer for sale and import Royalty Bearing
Products (as defined in the License Agreement), and
(ii) a non-exclusive, royalty bearing, worldwide license under DIVERSA
Intellectual Property to improve Licensed [*****]; and
(b) that to the best of its knowledge, there are [*****] required for DOW
to practice the DIVERSA Intellectual Property.
5.2 DOW may perform research within the Areas of Interest independent of this
Agreement. If DOW desires that a Third Party assist DOW in such research,
it shall be in accordance with Sections 3.1, 3.3 and 3.4.
Article 6. TREATMENT OF CONFIDENTIAL INFORMATION
6.1 Confidentiality.
---------------
6.1.1 General.
-------
(a) DIVERSA and DOW each recognize that the other Party's
Confidential Information constitutes highly valuable and
proprietary confidential information. Subject to the terms and
conditions of Article 8, DIVERSA and DOW agree that, except as
required by applicable law, rule or regulation (including the
filing and prosecution of patent applications) or judicial or
administrative order, during the Agreement Term and for
[*****] years thereafter, unless these terms are modified by
the License Agreement after the expiration of the Agreement
Term that:
(i) it will keep confidential and will cause its
employees, consultants, and Affiliates, to keep
confidential, all Confidential Information of the
other Party that is disclosed to it, or to any of
its employees or consultants, under or in
connection with this Agreement; and
(ii) neither it nor any of its respective employees,
consultants or Affiliates shall use Confidential
Information of the other Party for any purpose
whatsoever, except as expressly permitted in this
Agreement.
22 * Confidential Treatment Requested
(b) Notwithstanding subsection (a) above:
(i) either Party may disclose the other Party's
Confidential Information to the extent reasonably
necessary in prosecuting or defending litigation,
complying with applicable governmental regulations or
court orders or otherwise submitting information to tax
or other governmental authorities; provided that, if a
Party is required to make any such disclosure of the
other Party's Confidential Information, it will give
reasonable advance notice to the other Party of such
disclosure and will use reasonable efforts to secure
confidential treatment of such Confidential Information
(whether through protective orders or otherwise); and
(ii) the Parties will reasonably cooperate with each
other in the making of reasonable disclosures of
Confidential Information to actual and potential
agents, investment bankers, investors and potential
investors of each Party; provided, however, that such
disclosures shall be critically required for an
investment objective, notice shall be provided to the
Party who owns the Confidential Information to protect
its rights, and only be made under the terms of a
confidentiality agreement providing protections no less
stringent than those contained herein.
6.1.2 Restricted Access.
-----------------
(a) Disclosure of a Party's Confidential Information to any of the
officers, employees, consultants or agents of the other Party
shall be made only if and to the extent necessary to carry out
rights and responsibilities under this Agreement, shall be
limited to the maximum extent possible, consistent with such
rights and responsibilities, and shall only be made to persons
who are bound to maintain the confidentiality thereof and not
to use such Confidential Information except as expressly
permitted by this Agreement. If DOW discloses any DIVERSA
Confidential Information to [*****], it shall do so under these
same terms and conditions of this Section 6.1.2.
(b) Each Party shall use at least the same standard of care, but no
less than a reasonable standard of care for this industry, as
it uses to protect its own Confidential Information to ensure
that its [*****], employees, agents, consultants and other
representatives do not disclose or make any unauthorized use of
Confidential Information of the other Party. Each Party shall
promptly notify the other Party of any unauthorized use or
disclosure of Confidential Information of the other Party.
(c) Within [*****] days following termination or expiration of this
Agreement, each Party will return to the other Party, or
destroy, upon the written request of the other Party, all
Confidential
23 * Confidential Treatment Requested
Information disclosed to it by the other Party pursuant to this
Agreement, including all copies and extracts of documents;
provided that a Party may retain Confidential Information of
the other Party relating to any license or right to use
Intellectual Property that survives such termination and one
copy of all other Confidential Information may be retained in
confidential and inactive archives solely for the purpose of
establishing the contents thereof and to determine the
continuing obligations of each Party.
6.1.3 Employee Confidentiality Agreements.
-----------------------------------
DIVERSA and DOW each represent that all of its employees and any
consultants to such Party participating in the R&D Program or who
shall otherwise have access to Confidential Information of the other
Party are bound by written agreements to maintain such information
in confidence and not to use such information except as expressly
permitted herein. Each Party agrees to [*****] by which its
employees and consultants are bound.
6.2 Publicity.
---------
Except as expressly provided herein, neither Party may disclose the
existence or terms of this Agreement without the prior written consent of
the other Party; provided, however, that either Party may make such
disclosure to the extent required by law and that either Party may make a
disclosure of the existence of this Agreement to its attorneys, advisers,
investors, prospective investors, lenders and other financing sources,
under circumstances that reasonably ensure the confidentiality thereof.
Notwithstanding the foregoing, the Parties shall mutually agree upon a
press release to announce the execution of this Agreement, together with a
corresponding Q&A outline for use in responding to inquiries about the
Agreement; thereafter, DOW and DIVERSA may each disclose to Third Parties
the information contained in such press release and Q&A outline without the
need for further approval by the other Party. In no event shall the
financial terms of this Agreement be publicly disclosed, except to the
extent required by any Securities and Exchange Commission filings or
regulations, but all financial terms must be redacted prior to submission.
In addition, DIVERSA may (i) make public statements regarding Licensed
[*****] by announcing in general terms the achievement of milestones,
following consultation with DOW and with the prior written consent of DOW,
and (ii) without the prior consent of DOW, make public statements, without
identifying DOW, regarding the overall success rate(s) achieved by and/or
for its customers with the use of its technology, including a general
description of activities undertaken in connection with the R&D Program,
and success of such activities. DOW is free to make public statements,
press releases, and the like, with respect to Licensed [*****].
6.3 Publication.
-----------
A Party wishing to publish or otherwise publicly disclose its Research
[*****] shall first submit a draft of the proposed manuscripts
simultaneously to all members of the RMC
24 * Confidential Treatment Requested
for review by the other Party at least [*****] days prior to any submission
for publication or other public disclosure. To avoid loss of patent rights
as a result of premature public disclosure of patentable information, the
reviewing Party shall notify the submitting Party in writing within [*****]
days after receipt of such proposed disclosure whether the reviewing Party
desires that a patent application be filed on any invention disclosed in
such proposed disclosure. In the event that the reviewing Party desires
such filing, the submitting Party shall withhold publication or disclosure
of such proposed disclosure until the earlier of (i) the date a patent
application is filed thereon, or (ii) the date the Parties determine after
consultation that no patentable invention exists, or (iii) [*****] days
after receipt by the submitting Party of the reviewing Party's written
notice of the reviewing Party's desire to file such patent application. If
the proposed disclosure contains Confidential Information of the reviewing
Party that is subject to nondisclosure obligations under this Article 6,
the submitting Party agrees to remove such Confidential Information upon
request of the reviewing Party.
Article 7. INTELLECTUAL PROPERTY RIGHTS
7.1 Disclosure of Inventions.
------------------------
Each Party shall promptly inform the RMC of all Research [*****] relevant
to the progress of each [*****] Plan towards its pre-agreed goals, in
accordance with a procedure established by the RMC.
7.2 Ownership.
---------
All intellectual property rights, which are in possession of either Party
as of the Effective Date, shall remain in the possession of that Party.
Ownership of inventions conceived of during the course of the collaboration
in the Areas of Interest (the "Inventions") will be as follows:
7.2.1 DIVERSA Intellectual Property Rights.
------------------------------------
DIVERSA shall have sole and exclusive ownership of all right, title
and interest on a worldwide basis in and to any DIVERSA Research
Results.
7.2.2 DOW Intellectual Property Rights.
--------------------------------
DOW shall have sole and exclusive ownership of all right, title and
interest on a worldwide basis in and to any DOW Research Results.
7.2.3 Joint Intellectual Property Rights.
----------------------------------
DOW and DIVERSA shall jointly own all Joint Research Results.
7.2.4 Inventions Relating to [*****] Enzymes or Licensed Products.
-----------------------------------------------------------
Notwithstanding the foregoing, (i) DIVERSA will own all Inventions
relating to compositions of matter, uses or methods of, or otherwise
involving, any [*****] Enzyme or [*****] except for Joint
Intellectual Property
25 * Confidential Treatment Requested
or [*****] supplied by DOW, and (ii) DOW will own all Inventions
relating to compositions of matter, uses or methods of, or otherwise
involving, products made by Licensed [*****] in the Areas of
Interest. If the product made by the Licensed [*****] is within the
Field but outside the Areas of Interest, then DOW shall have a right
of first refusal for a reasonable time to obtain rights for that use
under a separate license agreement.
7.3 Patent Coordinators.
-------------------
DIVERSA and DOW shall each appoint a patent coordinator ("Patent
Coordinator") who shall serve as such Party's primary liaison with the
other Party on matters relating to ownership of Inventions, inventorship,
patent filing, prosecution, maintenance and enforcement. Each Party may
replace its Patent Coordinator at any time by notice in writing to the
other Party. The initial Patent Coordinator from DIVERSA is [*****] and
from DOW is [*****].
7.4 Inventorship.
------------
Except as specifically provided above, ownership of Inventions and
inventorship shall be determined by the Patent Coordinators in accordance
with United States patent law. If the Patent Coordinators can not agree on
inventorship or ownership of Inventions, then a neutral patent attorney
acceptable to both Parties shall make the determination, with each Party
[*****].
7.5 Deposits.
--------
Should deposits of the [*****] Enzyme or Licensed [*****] be desired by
either Party to support the filing of a patent application, both Parties
agree to cooperate to enable and obtain such deposit. Ownership of and
costs for the deposit shall be borne by the Party responsible in accordance
with Article 8.
Article 8. PROVISIONS CONCERNING THE FILING, PROSECUTION AND MAINTENANCE OF
PATENT RIGHTS
The following provisions relate to the filing, prosecution and maintenance
of Patent Rights claiming Inventions.
26 * Confidential Treatment Requested
8.1 Filing and Prosecution of Patents.
---------------------------------
8.1.1 Primary Responsibilities.
------------------------
In consultation with the Patent Coordinators, the RMC will
coordinate the determination of what patents will be filed on
Research [*****]. Unless the RMC agrees otherwise in writing, the
Parties shall have the following responsibilities for patent filing,
prosecution and maintenance (including the defense of interferences,
oppositions and similar proceedings) (collectively, "Patent
Activities"):
(a) Royalty Bearing Products (as defined in the License Agreement).
--------------------------------------------------------------
DOW will be responsible, at its sole expense, for Patent
Activities with respect to Inventions made by DIVERSA or DOW or
Jointly Developed relating primarily to Royalty Bearing
Products and [*****] that use [*****] Enzymes and/or [*****]
Enzymes that make Royalty Bearing Products (as defined in the
License Agreement) in accordance with Section 7.2.4 (ii).
(b) Improved Enzymes. DIVERSA will be responsible, at its sole
-----------------
expense, for Patent Activities with respect to Inventions made
by DIVERSA or DOW or Jointly Developed relating primarily to
[*****] Enzymes in accordance with Section 7.2.4 (i).
(c) All Other Inventions. DOW will be responsible, at its sole
--------------------
expense, for Patent Activities with respect to Inventions made
solely by DOW not otherwise covered in Section 8.1.1 (a) and
(b). DIVERSA will be responsible, at its sole expense, for
Patent Activities with respect to Inventions made solely by
DIVERSA not otherwise covered in Section 8.1.1 (a) and (b). In
the case of Inventions Jointly Developed not otherwise covered
in Section 8.1.1, Patent Activities shall be conducted by
outside counsel, reasonably acceptable to both Parties, with
equal control and joint responsibility for costs incurred in
connection with the applicable Patent Activities.
8.1.2 Cooperation.
-----------
In each case in Section 8.1.1 above, the Party responsible for
Patent Activities for the applicable patent applications (the
"Responsible Party") shall use reasonable efforts to obtain patent
coverage that is as broad as possible to [*****] thereof. Each Party
shall be kept informed of all substantive matters relating to the
preparation and prosecution of all patent applications under the
Joint Patent Rights.
8.2 Elective Termination of Rights.
------------------------------
If at any time the Responsible Party does not wish to file any patent
application or
27 * Confidential Treatment Requested
wishes to discontinue the prosecution or maintenance of any Patent Rights
claiming any [*****] Enzyme or Licensed [*****] filed in any country, it
shall promptly give notice of such intention to the other Party. The latter
shall have the right, [*****], to assume responsibility for
the filing, prosecution or maintenance of any such Patent Rights on a
country-by-country basis at its own expense, by giving notice to the
Responsible Party of such intention within [*****] days. No assignment of
Patent Rights shall occur to the other Party unless specifically agreed to
under appropriate negotiated terms and conditions. In any such case, the
Party declining such responsibilities shall not grant any Third Party a
license under its interest in the applicable Patent Rights in the
applicable country or countries and may not practice the applicable Patent
Rights for any commercial use (but may practice, royalty free such Patent
Rights for research use) without the prior written consent of the other
Party. The other Party will bear the costs of Patent Activities with
respect to all Patent Rights for which it has assumed responsibility
pursuant to this Section 8.2.
Article 9. LEGAL ACTION
9.1 Actual or Threatened Infringement.
---------------------------------
9.1.1 Notice.
------
In the event either Party becomes aware any where in the world of
any actual or threatened commercially material infringement or
unauthorized possession, knowledge or use of any Patent Rights
(collectively, an "Infringement"), that Party shall, within 60 days,
notify the other Party and provide it with all available details to
the extent it is legally permitted to do so. The [*****].
9.1.2 Primary Responsibility.
----------------------
(a) Notwithstanding the foregoing, if the Parties do not otherwise
agree on a course of action, DOW shall have primary
responsibility for the prosecution, prevention or termination
of any Infringement of DOW's Patent Rights hereunder, at DOW's
expense and with the sharing of recoveries as specified below.
(b) DIVERSA shall have primary responsibility for the prosecution,
prevention or termination of any Infringement of DIVERSA's
Patent Rights, at DIVERSA's expense and with the sharing of
recoveries as specified below.
If either Party which has primary responsibility as described in (a)
or (b) above determines that it is necessary or desirable for the
other Party to join any such suit, action or proceeding, the other
Party shall execute all papers and perform such other acts as may be
reasonably required in the circumstances, at the
28 * Confidential Treatment Requested
expense of the Party which has primary responsibility.
9.1.3 Jointly-Owned Patents.
---------------------
In the event of an Infringement of Joint Patent Rights, the Parties
shall agree which Party will have the rights and responsibilities of
abating such Infringement, and how the expenses and any recovery
thereof shall be shared. In this event, the responsible Party shall
[*****], and shall keep the other Party fully informed as to the
status of such matters. In the event only one Party wishes to pursue
such proceeding, it shall have the right to proceed alone, at its
expense, and may retain any recovery, and the other Party agrees, at
the request and expense of the Party initiating such action, to
cooperate and join in any proceedings in the event that a Third
Party asserts that the co-owner of such Joint Invention is necessary
or indispensable to such proceedings.
9.1.4 Costs.
-----
DOW shall bear the cost of any proceeding or suit under this Section
9.1 brought by DOW; DIVERSA shall bear the cost of any such
proceeding or suit brought by DIVERSA. In each such case, the
Responsible Party shall have the right first to [*****] in such suit
or in [*****] incurred by such Party, including [*****]. The
remainder shall [*****] so incurred. Any remaining amounts or any
non-monetary recovery shall be kept by the Responsible Party. If the
suit results in damages being owed to a Third Party, then the
Responsible Party [*****], except if the suit is based on Joint
Patent Rights and both Parties are actively involved, then the costs
and damages are to [*****].
9.1.5 Separate Counsel.
----------------
Each Party shall always have the right to be represented by counsel
of its own selection and at its own expense in any suit instituted
under this Section 9.1 by the other Party for an Infringement.
9.1.6 Standing.
--------
If either Party lacks standing and the other Party has standing to
bring any such suit, action or proceeding as specified above, then
the Responsible Party may request the other Party to do so at the
Responsible Party's expense. The Party with standing is under no
obligation to comply with such request, but rather is free to refuse
such request.
9.1.7 Cooperation.
-----------
29 * Confidential Treatment Requested
In any action under this Section 9.1, each Party shall fully
cooperate with and assist the other Party as reasonably requested.
No suit regarding DIVERSA Intellectual Property or Joint
Intellectual Property may be settled by DOW without DIVERSA's prior
written consent. No suit regarding DOW Intellectual Property or
Joint Intellectual Property may be settled by DIVERSA without DOW's
prior written consent.
9.2 Defense of Claims Asserted by Third Parties Against DOW.
-------------------------------------------------------
DOW shall indemnify DIVERSA for the development, manufacture, use,
handling, storage, sale or other disposition of Licensed [*****] or
Research [*****] by DOW or its Affiliates during the Agreement Term.
9.3. Defense of Claims Asserted by Third Parties Against DIVERSA.
-----------------------------------------------------------
DIVERSA shall indemnify DOW for the development, manufacture, use,
handling, storage, sale or other disposition of [*****] Enzyme or Research
[*****] by DIVERSA or its Affiliates during the Agreement Term.
9.4 Notice.
------
DOW or DIVERSA shall notify the other in accord with Section 14.1 of any
suits or claims or proceedings brought against it under Section 9.2 or 9.3,
respectively.
Article 10. TERMINATION AND DISENGAGEMENT
10.1 Term.
----
This Agreement shall be effective as of the Effective Date and, unless
otherwise terminated earlier pursuant to this Agreement, shall continue in
full force and effect until the end of the Agreement Term. Nevertheless,
this Agreement may be terminated at any time upon mutual written agreement
of the Parties, provided that DOW pays any actual costs to DIVERSA done
under the [*****] Plans until the date of termination.
10.2 Material Breach. In the event either Party has materially breached or
---------------
defaulted in the performance of any of its obligations hereunder, the
nonbreaching Party may terminate this Agreement. A material breach of this
Agreement by a Party shall be deemed to have occurred:
(a) upon the failure of a Party to pay, when due, any amount due
hereunder to the other Party, if such Party has not paid the
amount due within [*****] days after receiving notice from the
non-breaching Party of such failure to pay; or
(b) upon breach of any other material obligation or condition by a
Party, if such Party has not cured such breach within [*****]
days after receiving written notice from the nonbreaching Party
of such breach. For this purpose a breach of a material
obligation must result from a failure to meet that Party's
representations,
30 * Confidential Treatment Requested
warrantees, covenants or performance under the [*****] Plan.
10.3 Bankruptcy.
----------
10.3.1 If either Party (the "Insolvent Party") files for protection under
bankruptcy laws, makes an assignment for the benefit of creditors,
appoints or suffers appointment of a receiver or trustee over its
property, files a voluntary petition under any bankruptcy or
insolvency act or has any such petition filed against it which is
not discharged within [*****] days of the filing thereof, then the
other Party may, at its sole election upon notice to the Insolvent
Party, terminate this Agreement by written notice to such Party.
10.3.2 All rights and licenses granted under or pursuant to this Agreement
shall be deemed to be, for purposes of Section 365(n) of the U.S.
Bankruptcy Code, licenses or rights to "intellectual property" as
defined under Section 101(52) of the U.S. Bankruptcy Code. The
Parties agree that each Party, as a licensee of such rights under
this Agreement, shall retain and may fully exercise all of its
rights and elections under the U.S. Bankruptcy Code, subject to
performance by the licensee of its preexisting obligations under
this Agreement.
10.4 Termination by DOW.
------------------
DOW may terminate this Agreement upon [*****] days prior written notice to
DIVERSA; provided, however, that DOW shall pay to DIVERSA (i) [*****] upon
termination of this Agreement during the [*****] following the Effective
Date, and (ii) [*****] upon termination of this Agreement during the
[*****] following the Effective Date. DOW may immediately terminate this
Agreement in accord with Section 3.3.2 by providing [*****] days written
notice to DIVERSA and providing payment of any remaining technology
development fees of Section 4.1 (but no payment of any remaining FTE fees
under Section 4.4). Notwithstanding the foregoing, DIVERSA will not refund
DOW any portion of any payments made under Section 4.4.
10.5 Effect of Termination; Accrued Obligations.
------------------------------------------
10.5.1 Accrued Obligations.
-------------------
Termination of this Agreement for any reason shall not release any
Party hereto from any liability which, at the time of such
termination, has already accrued to the other Party or which is
attributable to a period prior to such termination, nor preclude
either Party from pursuing any rights and remedies it may have
hereunder or at law or in equity which accrued or are based upon
any event occurring prior to such termination.
10.5.2 Licenses.
--------
(i) In the event that DOW terminates this Agreement to DIVERSA,
pursuant to Section 10.2, then the R&D Program shall immediately
terminate and all
31 * Confidential Treatment Requested
payments due by DOW to DIVERSA shall immediately terminate. This
Agreement relates to research rights only and all commercial rights
are stated in the License Agreement and are not affected hereby.
(ii) In the event DOW terminates the Agreement pursuant to Section 10.
3.1, the licenses granted to DIVERSA in Article 3 shall terminate.
(iii) In the event DIVERSA terminates the Agreement pursuant to Section
10.3.1, the licenses granted to DOW in Article 3 shall terminate.
10.6 Surviving Provisions.
--------------------
Articles 12, 13 and 14 and Sections 6.1, 6.2, 7.2, 7.5, 10.5, 11.1.4 and
11.1.5 of this Agreement shall survive the expiration or termination of
this Agreement for any reason.
Article 11. REPRESENTATIONS AND WARRANTIES
11.1 Mutual Representations.
----------------------
DIVERSA and DOW each represents and warrants as follows:
11.1.1 Organization.
------------
It is a corporation duly organized, validly existing and is in good
standing under the laws of the jurisdiction of its incorporation,
is qualified to do business and in good standing as a foreign
corporation in each jurisdiction in which the performance of its
obligations hereunder requires such qualification and has all
requisite power and authority, corporate or otherwise, to conduct
its business as now being conducted, to own, lease and operate its
properties and to execute, deliver and perform this Agreement.
11.1.2 Authorization.
-------------
The execution, delivery and performance by it of this Agreement
have been duly authorized by all necessary corporate action and do
not and will not: (a) require any consent or approval of its
stockholders or (b) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to
it or any provision of its charter documents.
11.1.3 Binding Agreement.
-----------------
This Agreement is a legal, valid and binding obligation of it,
enforceable against it in accordance with its terms and conditions.
11.1.4 Warranty Disclaimer.
-------------------
The Parties acknowledge that the research activities contemplated
hereunder are experimental, and that the R&D Program may not be
successful. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER
32
PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY CONFIDENTIAL INFORMATION, PATENT
RIGHTS, KNOW-HOW, [*****] ENZYMES, LICENSED [*****], OR OTHER
TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS
AGREEMENT AND HEREBY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR VALIDITY OF
TECHNOLOGY OR PATENT CLAIMS, ISSUED OR PENDING, WITH RESPECT TO ANY
AND ALL OF THE FOREGOING.
11.1.5 Limited Liability.
-----------------
EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER DIVERSA NOR DOW WILL
BE LIABLE TO THE OTHER PARTY WITH RESPECT TO ANY SUBJECT MATTER OF
THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR
OTHER LEGAL OR EQUITABLE THEORY FOR (i) ANY SPECIAL, INDIRECT,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS OR
(ii) COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR
SERVICES.
Article 12. INDEMNIFICATION
12.1 Indemnification.
----------------
Neither Party shall indemnify the other Party nor its Affiliates, or
respective officers, directors, employees and agents and its respective
successors, heirs and assigns ("Indemnitees") except for Sections 9.2 and
9.3, its respective gross negligence, or failure to perform using its
reasonable best efforts under the [*****] Plans. This paragraph does not
limit either Party's other remedies available to it under the laws.
12.2 Procedure.
---------
A Party that intends to claim indemnification under this Article 12 (the
"Indemnitee") shall promptly notify the other Party (the "Indemnitor") in
writing of any loss, claim, damage, liability or action in respect of which
the Indemnitee or any of its Affiliates or their directors, officers,
employees, agents, consultants or counsel intend to claim such
indemnification, and the Indemnitor shall have the right to participate in,
and, to the extent the Indemnitor so desires, to assume the defense thereof
with counsel of its own choice.
The indemnity agreement in this Article 12 shall not apply to amounts paid
in settlement of any loss, claim, damage, liability or action if such
settlement is made without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure to deliver written notice
to the Indemnitor within a reasonable time after the commencement of any
such action, if prejudicial to its ability
33 * Confidential Treatment Requested
to defend such action, shall relieve such Indemnitor of any liability to
the Indemnitee under this Article 12.
At the Indemnitor's request, the Indemnitee under this Article 12, and its
employees and agents, shall cooperate fully with the Indemnitor and its
legal representatives in the investigation and defense of any action, claim
or liability covered by this indemnification and provide full information
with respect thereto.
Article 13. DISPUTE RESOLUTION
13.1 Informal Dispute Resolution.
---------------------------
13.1.1 Senior Officials.
----------------
The Parties recognize that a bona fide dispute as to certain
matters may from time to time arise during the Agreement Term,
which relates to either Party's rights or obligations hereunder. In
the event of the occurrence of such a dispute, either Party may, by
written notice to the other Party, have such dispute referred to
the [*****] of DIVERSA and the [*****] of DOW, or their successors
or counterparts, for resolution by good faith negotiations within
[*****] days after such notice is received at a [*****].
13.1.2 Interim Conduct.
---------------
If the Parties are unable to reach agreement with respect to a
[*****] Plan pursuant to Section 13.1.1, then such dispute shall be
resolved as described in Section 13.2 below.
13.2 Arbitration.
-----------
Any dispute under this Agreement, except one that arises with respect to
determination of Research [*****] or Research [*****], which is not settled
by mutual consent pursuant to Section 13.1, shall be finally settled by
binding arbitration, conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (or such rules as
are appropriate to the dispute) by three independent, neutral arbitrators
having at least 15 years of experience in the areas of the contested issues
and appointed in accordance with said rules. The procedures or rules for
the arbitration may be modified by mutual consent of the Parties, including
having mediation rather than an arbitration conducted. Any arbitration
shall be in English held in [*****]. The arbitrators shall determine what
discovery shall be permitted, consistent with the goal of limiting the cost
and time that the Parties must expend for discovery; provided, however,
that the arbitrators shall permit such discovery, as they deem necessary to
permit an equitable resolution of the dispute. Any written evidence
originally in a language other than English shall be submitted in English
translation accompanied by the original or a true copy thereof. Except as
otherwise expressly
34 * Confidential Treatment Requested
provided in this Agreement, the costs of the arbitration, including
administrative and arbitrator fees, shall be [*****] by the Parties and
each Party shall bear its own costs and attorneys' and witness' fees
incurred in connection with the arbitration.
A disputed performance or suspended performance(s) pending the resolution
of the arbitration must be completed within a reasonable time period
following the final decision of the arbitrators.
Any arbitration subject to this Article 13 shall be completed within
[*****] from the filing of notice of a request for such arbitration and a
written decision with reasons therefore provided to the Parties. Any
decision shall be deemed confidential and not disclosed to any Third Party.
Should a Party believe that reporting the decision is required by
governmental regulation, then the Parties shall mutually agree as to the
content of such report.
Any decision which requires a monetary payment shall require such payment
to be payable in United States dollars, free of any tax or other deduction.
The Parties agree that the decision shall be the sole, exclusive and
binding remedy between them regarding any and all disputes, controversies,
claims and counterclaims presented to the arbitrators. If a decision is
not complied with by a Party, then any award or decision may be entered in
a court of competent jurisdiction for a judicial recognition of the
decision and an order of enforcement.
Article 14. MISCELLANEOUS
14.1 Notices.
-------
All notices (including, but not limited to, legal matters and copies of the
signed RMC minutes) shall be in writing mailed via certified mail, return
receipt requested, or overnight express mail, courier providing evidence of
delivery, addressed as follows, or to such other address as may be
designated by notice so given from time to time:
If to DOW: THE DOW CHEMICAL COMPANY
[*****]
If to DIVERSA: DIVERSA CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Notices shall be deemed given as of the date received.
If the notice relates to scientific matters, such as the RMC, a [*****]
Plan, a Research [*****], or a Research [*****], the notice for the Parties
is to be supplied and received in the manner described above but sent to:
35 * Confidential Treatment Requested
If to DOW: THE DOW CHEMICAL COMPANY
[*****]
If to DIVERSA: DIVERSA CORPORATION.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. Short, Ph.D.
36 * Confidential Treatment Requested
14.2 Governing Law and Jurisdiction.
-------------------------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of [*****], without regard to the application of
principles of conflicts of law.
14.3 Binding Effect.
--------------
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective legal representatives, successors and
permitted assigns.
14.4 Headings.
--------
Section and subsection headings are inserted for convenience of reference
only and do not form a part of this Agreement.
14.5 Counterparts.
------------
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
14.6 Amendment; Waiver.
-----------------
This Agreement may be amended, modified, superseded or canceled, and any of
the terms may be waived, only by a written instrument executed by each
Party or, in the case of waiver, by the Party or Parties waiving
compliance. Nevertheless, Appendices [*****] may be amended by the
signatures of the co-chairs of the RMC to a revised Appendix, which must
then be supplied to the persons for notice under Section 14.1, and
Appendices [*****] may be amended by the signatures of both Patent
Coordinators listed in Section 7.3. The delay or failure of any Party at
any time or times to require performance of any provisions shall in no
manner affect the rights at a later time to enforce the same. No waiver by
any Party of any condition or of the breach of any term contained in this
Agreement, whether by conduct, or otherwise, in any one or more instances,
shall be deemed to be, or considered as, a further or continuing waiver of
any such condition or of the breach of such term or any other term of this
Agreement.
14.7 No Agency or Partnership.
------------------------
Nothing contained in this Agreement shall give either Party the right to
bind the other Party, or be deemed to constitute either Party as an agent
for the other Party or as a partner with the other Party or any Third
Party.
14.8 Assignment and Successors.
-------------------------
Except as expressly provided herein, this Agreement may not be assigned by
either Party without the prior written consent of the other Party, except
that each Party may, without such consent, assign this Agreement and the
rights, obligations and interests of such Party, in whole or in part, to
any
37 * Confidential Treatment Requested
purchaser or other transferee of all or substantially all of its assets
in the line of business to which this Agreement pertains, or to any
successor corporation resulting from any merger or consolidation of such
Party with or into another entity, subject, however, in the case of
DIVERSA to the restriction set forth in Section 3.3.2. In the event of
any merger or consolidation by a Party into another entity, such Party
shall promptly notify the other Party in writing of such merger or
consolidation and the obligations under this Agreement shall be
maintained and performed by the successor entity unless modified in
accord with Section 14.6.
14.9 Force Majeure.
-------------
Neither DOW nor DIVERSA shall be liable to the other Party for failure of
or delay in performing obligations set forth in this Agreement, and
neither shall be deemed in breach of its obligations, if such failure or
delay is due to natural disasters or any other cause beyond the
reasonable control of a Party, and notice of such prevention of
performance is promptly provided by the non-performing Party to the other
Party. Such excuse shall be continued so long as the condition
constituting force majeure continues and the non-performing Party takes
reasonable efforts to remove the condition. In event of such force
majeure, the Party affected thereby shall use reasonable efforts to cure
or overcome the same and resume performance of its obligations hereunder.
14.10 Interpretation.
--------------
The Parties hereto acknowledge and agree that: (i) each Party and its
counsel reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting Party shall not be employed in the interpretation of this
Agreement; and (iii) the terms and provisions of this Agreement shall be
construed fairly as to all Parties hereto and not in a favor of or
against any Party, regardless of which Party was generally responsible
for the preparation of this Agreement.
14.11 Integration: Severability.
-------------------------
This Agreement (including the Exhibits attached hereto) together with the
License Agreement sets forth all of the agreements and understandings
between the Parties with respect to the subject matter hereof and
supersedes all other agreements and understandings between the Parties
with respect to the same.
If any provision of this Agreement is or becomes invalid or is ruled
invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the Parties that the remainder of
this Agreement shall not be affected. If possible, the invalid provision
shall be replaced with a valid provision, which meets the intent of the
Parties.
14.12 Approvals.
---------
DOW shall be responsible, at its expense, for obtaining any approvals
from governmental entities which may be required under applicable law for
the development of Research [*****] or Licensed [*****], and shall use
its best efforts to obtain all necessary
38 * COnfidential Treatment Requested
approvals as soon as reasonable. DIVERSA shall be responsible, at its
expense, for obtaining any approvals from governmental entities which may
be required under applicable law for the shipment of [*****] Enzymes to
DOW to perform its obligations under the R&D Program.
14.13 Export Controls.
---------------
This Agreement is made subject to any restrictions concerning the export
of Licensed [*****], Research [*****], Research [*****] or Intellectual
Property (collectively, "Technology") from the United States that may be
imposed upon either Party from time to time by laws or regulations of the
United States. Neither Party will export, directly or indirectly, any
Technology to any country for which the United States government or any
agency thereof at the time of export requires an export license or other
governmental approval, without first obtaining the written consent to do
so from the Department of Commerce, Bureau of Export Administration, or
other agency of the United States government when required by applicable
statute or regulation.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in duplicate as of the last signature date below, by their duly authorized
representatives. This Agreement is intended to be signed concurrently with the
License Agreement and shall not be effective until the License Agreement has
also been executed by both Parties.
THE DOW CHEMICAL COMPANY
Date:______________________________ By:_________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
New Businesses and Strategic
Development
DIVERSA CORPORATION
Date:_______________________________ By:_________________________________
▇▇▇ ▇. Short, Ph.D.
Chief Executive Officer
13 Appendix Enc.:
Appendix A-1: [*****]
Appendix A-2: [*****]
Appendix A-3: [*****]
Appendix B-1: [*****]
Appendix B-2: [*****]
Appendix B-3: [*****]
[*****]
39 * Confidential Treatment Requested
Appendix B-4: [*****]
Appendix C: [*****]
Appendix D: [*****]
Appendix E: [*****]
Appendix F: [*****]
Appendix G: [*****]
Appendix H: [*****]
40 * Confidential Treatment Requested
APPENDIX [*****]
RESEARCH [*****] AND/OR RESEARCH [*****]
* Confidential Treatment Requested
APPENDIX [*****]
[*****] PLANS
* Confidential Treatment Requested
APPENDIX [*****]
RMC MEMBERSHIP
* Confidential Treatment Requested
APPENDIX A-3
RMC MEMBERSHIP
The following employees of DIVERSA will represent DIVERSA as the company's
initial RMC members:
[*****]
[*****]
[*****]
The following employees of DOW will represent DOW as the company's initial RMC
members:
[*****]
[*****]
[*****]
[*****]
* Confidential Treatment Requested
APPENDIX [*****]
PATENT RIGHTS DURING THE AGREEMENT TERM UNDER THE [*****] PLANS
* Confidential Treatment Requested
APPENDIX [*****]
DIVERSA PATENT RIGHTS WHICH [*****]
* Confidential Treatment Requested
APPENDIX [*****]
PATENT RIGHTS DIRECTED TO [*****] RESEARCH [*****] AND/OR RESEARCH
[*****]
* Confidential Treatment Requested
APPENDIX [*****]
SPECIFIC [*****] DIVERSA PATENT RIGHTS USED TO [*****] ENZYMES
* Confidential Treatment Requested
APPENDIX [*****]
[*****]
Title/Subject Filing Date Serial No.
------------------------------------------------------------------------------------------
[*****]
* Confidential Treatment Requested
APPENDIX [*****]
[*****]
* Confidential Treatment Requested
APPENDIX [*****]
[*****]
[*****].
* Confidential Treatment Requested
APPENDIX [*****]
LICENSE AGREEMENT
* Confidential Treatment Requested
APPENDIX [*****]
[*****] PLAN PROCEDURES
* Confidential Treatment Requested
APPENDIX E
[*****]
[*****]
I. [*****]
[*****]
1. [*****];
2. [*****]; and
3. [*****].
II. [*****]
[*****]:
1. [*****];
2. [*****];
3. [*****];
4. [*****]; and
5. [*****].
III. [*****]
[*****]:
1. [*****]; and
2. [*****].
IV. [*****]
* Confidential Treatment Requested
[*****].
* Confidential Treatment Requested
APPENDIX [*****]
MATERIAL TRANSFER AGREEMENT
* Confidential Treatment Requested
APPENDIX F
MATERIAL TRANSFER AGREEMENT
[*****]
* Confidential Treatment Requested
[*****]
* Confidential Treatment Requested
THE DOW CHEMICAL COMPANY DIVERSA CORPORATION
_________________________________ _________________________________
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
Date:____________________________ Date:____________________________
APPENDIX [*****]
LICENSED [*****]
* Confidential Treatment Requested
APPENDIX [*****]
RESEARCH [*****]
* Confidential Treatment Requested
APPENDIX [*****]
RESEARCH [*****]
* Confidential Treatment Requested