<PAGE>
As filed with the Securities and Exchange Commission on December 21, 1999
Registration No. 333- 92853
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Amendment No. 1
To
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
Diversa Corporation
(Name of Issuer in Its Charter)
<TABLE>
<CAPTION>
Delaware 8731 22-3297375
<S> <C> <C>
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
10665 Sorrento Valley Road
San Diego, CA 92121
(858) 623-5106
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------
Jay M. Short, Ph.D.
Chief Executive Officer
Diversa Corporation
10665 Sorrento Valley Road
San Diego, CA 92121
(858) 623-5106
(Name, Address, Telephone Number of Agent for Service)
Copies to:
<TABLE>
<S> <C>
M. Wainwright Fishburn, Jr., Esq. Faye H. Russell, Esq.
Nancy Denyes Krueger, Esq. Maria P. Sendra, Esq.
David B. Berger, Esq. Brobeck, Phleger & Harrison LLP
Cooley Godward LLP 550 West "C" Street
4365 Executive Drive, Suite 1100 San Diego, California 92101
San Diego, California 92121 (619) 234-1966
(858) 550-6000
</TABLE>
---------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
---------------
If any of the securities being registered on this Form are being offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to 462(d) under the
Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the registration statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
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- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by the Registrant in
connection with the sale of the common stock being registered. All the amounts
shown are estimates except for the SEC registration fee and the NASD filing
fee.
<TABLE>
<S> <C>
Registration fee......................................................... 22,400
NASD filing fee.......................................................... 9,000
Nasdaq National Market listing fee....................................... *
Printing and engraving expenses.......................................... *
Legal fees and expenses.................................................. *
Accounting fees and expenses............................................. *
Blue Sky fees and expenses............................................... *
Transfer agent and registrar fees........................................ *
Premium for directors' and officers' insurance........................... *
Miscellaneous............................................................ *
------
Total................................................................ *
======
</TABLE>
- --------
* Estimated.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Bylaws require that directors and officers be indemnified to
the maximum extent permitted by Delaware law.
The Delaware General Corporation Law (the "Delaware GCL") provides that a
director or officer of a corporation (i) shall be indemnified by the
corporation for all expenses of litigation or other legal proceedings when he
is successful on the merits, (ii) may be indemnified by the corporation for the
expenses, judgments, fines and amounts paid in settlement of such litigation
(other than a derivative suit) even if he is not successful on the merits if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation (and, in the case of a
criminal proceeding, had no reason to believe his conduct was unlawful), and
(iii) may be indemnified by the corporation for expenses of a derivative suit
(a suit by a stockholder alleging a breach by a director or officer of a duty
owed to the corporation), even if he is not successful on the merits, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, provided that no such
indemnification may be made in accordance with this clause (iii) if the
director or officer is adjudged liable to the corporation, unless a court
determines that, despite such adjudication but in view of all of the
circumstances, he is entitled to indemnification of such expenses. The
indemnification described in clauses (ii) and (iii) above shall be made upon
order by a court or a determination by (i) a majority of disinterested
directors, (ii) if there are no such directors or if such directors so direct,
by independent legal counsel in a written opinion or (iii) the stockholders
that indemnification is proper because the applicable standard of conduct is
met. Expenses incurred by a director or officer in defending an action may be
advanced by the corporation prior to the final disposition of such action upon
receipt of an undertaking by such director or officer to repay such expenses if
it is ultimately determined that he is not entitled to be indemnified in
connection with the proceeding to which the expenses relate. The Company's
Certificate of Incorporation includes a provision eliminating, to the fullest
extent permitted by Delaware law, director liability for monetary damages for
breaches of fiduciary duty.
The Company has entered into indemnity agreements (the "Indemnity
Agreements") with each director or officer designated by the Board of
Directors. The Indemnity Agreements require that the Company indemnify
II-1
<PAGE>
directors and officers who are parties thereto in all cases to the fullest
extent permitted by Delaware law. Under the Delaware GCL, except in the case of
litigation in which a director or officer is successful on the merits,
indemnification of a director or officer is discretionary rather than
mandatory. Consistent with the Company's Bylaw provision on the subject, the
Indemnity Agreements require the Company to make prompt payment of litigation
expenses at the request of the director or officer in advance of
indemnification provided that he undertakes to repay the amounts if it is
ultimately determined that he is not entitled to indemnification for such
expenses. The advance of litigation expenses is mandatory; under the Delaware
GCL such advance would be discretionary. Under the Indemnity Agreements, the
director or officer is permitted to bring suit to seek recovery of amounts due
under the Indemnity Agreements and is entitled to recover the expenses of
seeking such recovery unless a court determines that the action was not made in
good faith or was frivolous. Without the Indemnity Agreements, the Company
would not be required to pay the director or officer for his expenses in
seeking indemnification recovery against the Company. Under the Indemnity
Agreements, directors and officers are not entitled to indemnity or advancing
of expenses (i) if such director or officer has recovered payment under an
insurance policy for the subject claim, or has otherwise been indemnified
against the subject claim, (ii) for actions initiated or brought by the
director or officer and not by way of defense (except for actions seeking
indemnity or expenses from the Company), (iii) if the director or officer
violated section 16(b) of the Exchange Act or similar provisions of law or (iv)
if a court of competent jurisdiction determines that the director or officer
failed to act in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any proceeding
which is of a criminal nature, had reasonable cause to believe his conduct was
unlawful. Absent the Indemnity Agreements, indemnification that might be made
available to directors and officers could be changed by amendments to the
Company's Certificate of Incorporation or Bylaws.
The underwriting agreement provides that the underwriters are obligated,
under some circumstances, to indemnify our directors, officers and controlling
persons against specified liabilities, including liabilities under the
Securities Act. Reference is made to the form of underwriting agreement filed
as Exhibit 1.1 to this registration statement.
In addition, we have an existing directors and officers liability insurance
policy.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Since January 1, 1997, the Registrant has sold and issued the following
unregistered securities:
(a) On July 14, 1997, the Registrant issued and sold 844,444 shares of its
Series C Preferred Stock to Finnfeeds International Limited for a purchase
price of $1,900,000, in connection with the Registrant's Collaboration
Agreement with Finnfeeds International Limited. The Registrant relied on the
exemption provided by Section 4(2) and/or Regulation D promulgated under the
Securities Act. The sale was made without general solicitation or advertising.
The purchaser was a sophisticated investor with access to all relevant
information necessary to evaluate the investment and represented to the
Registrant that the securities were being acquired for investment.
(b) On September 2, 1997, the Registrant issued to 15 investors, secured
promissory notes for an aggregate of $3,432,804 that were convertible into
shares of the Registrant's Series D Preferred Stock. The Registrant relied on
the exemption provided by Section 4(2) and/or Regulation D promulgated under
the Securities Act. The issuances were made without general solicitation or
advertising. Each investor was a sophisticated investor with access to all
relevant information necessary to evaluate the investment and represented to
the Registrant that the securities were being acquired for investment.
(c) On October 22, 1997, the Registrant issued and sold an aggregate of
24,809,555 shares of its Series D Preferred Stock to 27 investors for an
aggregate purchase price of $21,088,122, which reflected the conversion of all
of the Registrant's outstanding Series I Preferred Stock and convertible,
secured promissory notes into Series D Preferred Stock. The Registrant relied
on the exemption provided by Section 4(2) and/or
II-2
<PAGE>
Regulation D promulgated under the Securities Act. The sales were made without
general solicitation or advertising. Each purchaser was a sophisticated
investor with access to all relevant information necessary to evaluate the
investment and represented to the Registrant that the securities were being
acquired for investment.
(d) On January 25, 1999, the Registrant issued and sold 5,555,556 shares of
its Series E Preferred Stock to Novartis Agribusiness Biotechnology Research,
Inc. for a purchase price of $7,333,334 in connection with a Collaboration
Agreement between the parties. The Registrant relied on the exemption provided
by Section 4(2) and/or Regulation D promulgated under the Securities Act. The
sale was made without general solicitation or advertising. The purchaser was a
sophisticated investor with access to all relevant information necessary to
evaluate the investment and represented to the Registrant that the securities
were being acquired for investment.
(e) From time to time since January 1, 1997, the Registrant has granted
stock options to purchase shares of its common stock to various employees and
consultants pursuant to its 1994 Employee Incentive and Non-Qualified Stock
Option Plan. With respect to all grants of options, exemption from registration
was unnecessary in that the transactions did not involve a "sale" of securities
as that term is used in Section 2(a)(3) of the Securities Act.
(f) From time to time since August 28, 1997, the Registrant has granted
stock options to purchase shares of its common stock to various employees and
consultants pursuant to its 1997 Equity Incentive Plan. With respect to all
grants of options, exemption from registration was unnecessary in that the
transactions did not involve a "sale" of securities as that term is used in
Section 2(a)(3) of the Securities Act.
(g) As of September 30, 1999, the Registrant had issued and sold, in the
aggregate, 181,333 shares of its common stock for per share exercise prices
ranging from $0.20 to $0.70 to employees and consultants pursuant to their
exercise of stock options granted under the Registrant's 1994 Employee
Incentive and Non-Qualified Stock Option Plan. The Registrant relied on the
exemption provided by Rule 701 under the Securities Act.
(h) As of September 30, 1999, the Registrant had issued and sold, in the
aggregate, 2,203,295 shares of its common stock for per share exercise prices
ranging from $0.146 to $0.60 to employees and consultants pursuant to their
exercise of stock options granted under the Registrant's 1997 Equity Incentive
Plan. The Registrant relied on the exemption provided by Rule 701 under the
Securities Act.
The common stock amounts and per share exercise prices in the descriptions
above reflect the -for- stock split of the Registrant's common stock which
will take place prior to effectiveness of this offering. The recipients of the
above-described securities represented their intention to acquire the
securities for investment only and not with a view to distribution thereof.
Appropriate legends were affixed to the stock certificates issued in such
transactions. All recipients had adequate access, through employment or other
relationships, to information about the Registrant.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
<TABLE>
<CAPTION>
Number
Exhibit Description of Document
------- ----------------------------------------------------------------------
<C> <S>
1.1* Form of Underwriter's Agreement.
3.1** Registrant's Certification of Incorporation, as amended, as currently
in effect.
3.2** Registrant's Bylaws, as amended, as currently in effect.
3.3** Form of Amended and Restated Certificate of Incorporation, to be filed
prior to the Closing.
3.4** Form of Registrant's Amended and Restated Certificate of
Incorporation, to be effective upon the closing of this offering.
3.5** Form of Registrant's Amended and Restated Bylaws, to be effective upon
the closing of this offering.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Number
Exhibit Description of Document
------- ----------------------------------------------------------------------
<C> <S>
4.1* Form of common stock Certificate of Registrant.
5.1* Opinion of Cooley Godward LLP.
10.1** Form of Indemnity Agreement entered into between the Company and its
directors and executive officers.
10.2** 1994 Employee Incentive and Non-Qualified Stock Option Plan, as
amended.
10.3** Form of Stock Option Agreement under the 1994 Employee Incentive and
Non-Qualified Stock Option Plan.
10.4** 1997 Equity Incentive Plan.
10.5** Form of Stock Option Grant Notice and Stock Option Agreement under the
1997 Equity Incentive Plan.
10.6 1999 Non-Employee Directors' Stock Option Plan.
10.7** Form of Stock Option Grant Notice and Related Stock Option Agreement
under the 1999 Non-Employee Directors' Stock Option Plan.
10.8** 1999 Employee Stock Purchase Plan.
10.9** Amended and Restated Stockholders' Agreement by and among the Company
and the Stockholders identified therein, dated January 25, 1999.+
10.10** Form of Warrant Agreement to purchase Series A Preferred Stock (with
schedule of holders attached).
10.11** Form of Warrant Agreement to purchase Common Stock (with schedule of
holders attached).
10.12** Form of Warrant Agreement to purchase Common Stock (with schedule of
holders attached).
10.13** Multi-Tenant Office R&D Building Lease by and between the Company and
Sycamore/San Diego Investors, dated September 24, 1996.
10.14** Master Lease Agreement by and between the Transamerica Business Credit
Corporation and the Company, dated April 4, 1997.
10.15 License Agreement by and between the Company and The Dow Chemical
Company, dated July 20, 1997 and July 22, 1997.+
10.16 Collaborative Research Agreement by and between the Company and The
Dow Chemical Company, dated July 20, 1999 and July 22, 1999.+
10.17** License Agreement by and between the Company and Finfeeds
International Limited, dated December 1, 1998.+
10.18** Collaboration Agreement by and between the Company and Novartis
Agribusiness Biotechnology Research, Inc., dated January 25, 1999, as
amended.+
10.19** Stock Purchase Agreement by and between the Company and Novartis
Agribusiness Biotechnology Research, Inc., dated January 25, 1999.+
10.20** Collaboration Agreement by and between the Company and Rhone-Poulenc
Animal Nutrition S.A., dated June 28, 1999.+
10.21** License Agreement by and between the Company and Invitrogen
Corporation, dated March 29, 1999.+
10.22 License Agreement by and between the Company and Mycogen Corporation,
dated December 1997, as amended on March 6, 1998 and December 19,
1997.+
10.23** Patent Cross-License Agreement by and between the Company and Terragen
Discovery Inc., dated November 18, 1999.+
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Number
Exhibit Description of Document
------- ---------------------------------------------------------------------
<C> <S>
10.24** Joint Venture Agreement by and between the Company and Novartis Seeds
AG, dated December 1, 1999.+
10.25** Research Lease by and between the Company One Cell Systems, Inc.,
dated February 16, 1999.+
10.26** Research and Development Agreement by and between the Company and
Novartis Enzymes, Inc., dated December 1, 1999.+
10.27** Employment Offer Letter to Patrick Simms, dated February 3, 1997.
10.28** Employment Offer Letter to Jay Short, dated August 30, 1994.
10.29** Employment Offer Letter to Karin Eastham, dated April 2, 1999.
10.30** Employment Offer Letter to William H. Baum, dated July 31, 1997.
10.31** Separation Agreement by and between the Company and Terrance J.
Bruggeman, effective as of April 12, 1999.
10.32** Separation Agreement by and between the Company and Kathleen H. Van
Sleen, effective as of May 10, 1999.
10.33** Letter Agreement with Jay M. Short, Ph.D., dated June 25, 1998.
23.1** Consent of Ernst & Young LLP, Independent Auditors.
23.2** Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1** Power of Attorney. Reference is made to pages II-7 and II-8.
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
** Previously filed as an exhibit to this Registration Statement on December
15, 1999.
+ Confidential Treatment will be requested with respect to portions of this
exhibit. Omitted portions will be filed separately with the Securities and
Exchange Commission.
(b) Schedules
All schedules are omitted because they are not required, are not applicable
or the information is included in the financial statements or notes thereto.
Item 17. Undertakings.
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to provisions described in Item 14 or otherwise, the registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act (and, where applicable, each filing of an
II-5
<PAGE>
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(2) That, for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this Registration Statement as of
the time it was declared effective.
(3) For the purpose of determining any liability under the Act, each post-
effective amendment that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-6
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-1 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, in the City of San Diego, County of San Diego, State of
California, on the 21st day of December, 1999.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jay M. Short* President, Chief Executive December 21, 1999
_________________________________ Officer, Chief Technology
Jay M. Short, Ph.D. Officer and Director
(Principal Executive
Officer)
/s/ Karin Eastham Senior Vice President, December 21, 1999
____________________________________ Finance and Chief Financial
Karin Eastham Officer (Principal Financial
Officer)
/s/ James H. Cavanaugh* Director December 21, 1999
____________________________________
James H. Cavanaugh, Ph.D.
/s/ Daniel T. Carroll* Director December 21, 1999
____________________________________
Daniel T. Carroll
/s/ Patricia M. Cloherty* Director December 21, 1999
____________________________________
Patricia M. Cloherty
/s/ Donald D. Johnston* Director December 21, 1999
____________________________________
Donald D. Johnston
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Director December , 1999
____________________________________
Mark Leschly
Director December , 1999
____________________________________
Melvin I. Simon, Ph.D.
/s/ Peter Johnson Director December 21, 1999
____________________________________
Peter Johnson
</TABLE>
/s/ Karin Eastham
*By: __________________________
Karin Eastham
Attorney-in-Fact and Agent
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number
Exhibit Description of Document
------- ----------------------------------------------------------------------
<C> <S>
1.1* Form of Underwriter's Agreement.
3.1** Registrant's Certification of Incorporation, as amended, as currently
in effect.
3.2** Registrant's Bylaws, as amended, as currently in effect.
3.3** Form of Amended and Restated Certificate of Incorporation, to be filed
prior to the Closing.
3.4** Form of Registrant's Amended and Restated Certificate of
Incorporation, to be effective upon the closing of this offering.
3.5** Form of Registrant's Amended and Restated Bylaws, to be effective upon
the closing of this offering.
4.1* Form of common stock Certificate of Registrant.
5.1* Opinion of Cooley Godward LLP.
10.1** Form of Indemnity Agreement entered into between the Company and its
directors and executive officers.
10.2** 1994 Employee Incentive and Non-Qualified Stock Option Plan, as
amended.
10.3** Form of Stock Option Agreement under the 1994 Employee Incentive and
Non-Qualified Stock Option Plan.
10.4** 1997 Equity Incentive Plan.
10.5** Form of Stock Option Grant Notice and Stock Option Agreement under the
1997 Equity Incentive Plan.
10.6 1999 Non-Employee Directors' Stock Option Plan.
10.7** Form of Stock Option Grant Notice and Related Stock Option Agreement
under the 1999 Non-Employee Directors' Stock Option Plan.
10.8** 1999 Employee Stock Purchase Plan.
10.9** Amended and Restated Stockholders' Agreement by and among the Company
and the Stockholders identified therein, dated January 25, 1999.+
10.10** Form of Warrant Agreement to purchase Series A Preferred Stock (with
schedule of holders attached).
10.11** Form of Warrant Agreement to purchase Common Stock (with schedule of
holders attached).
10.12** Form of Warrant Agreement to purchase Common Stock (with schedule of
holders attached).
10.13** Multi-Tenant Office R&D Building Lease by and between the Company and
Sycamore/San Diego Investors, dated September 24, 1996.
10.14** Master Lease Agreement by and between the Transamerica Business Credit
Corporation and the Company, dated April 4, 1997.
10.15 License Agreement between the Company and The Dow Chemical Company,
dated July 20, 1997 and July 22, 1997.+
10.16 Collaborative Research Agreement by and between the Company and The
Dow Chemical Company, dated July 20, 1999 and July 22, 1999.+
10.17** License Agreement by and between the Company and Finfeeds
International Limited, dated December 1, 1998.+
10.18** Collaboration Agreement by and between the Company and Novartis
Agribusiness Biotechnology Research, Inc., dated January 25, 1999, as
amended.+
10.19** Stock Purchase Agreement by and between the Company and Novartis
Agribusiness Biotechnology Research, Inc., dated January 25, 1999.+
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number
Exhibit Description of Document
------- ----------------------------------------------------------------------
<C> <S>
10.20** Collaboration Agreement by and between the Company and Rhone-Poulenc
Animal Nutrition S.A., dated June 28, 1999.+
10.21** License Agreement by and between the Company and Invitrogen
Corporation, dated March 29, 1999.+
10.22 License Agreement by and between the Company and Mycogen Corporation,
dated December 1997, as amended on March 6, 1998 and December 19,
1997.+
10.23** Patent Cross-License Agreement by and between the Company and Terragen
Discovery Inc., dated November 18, 1999.+
10.24** Joint Venture Agreement by and between the Company and Novartis Seeds
AG, dated December 1, 1999.+
10.25** Research Lease by and between the Company One Cell Systems, Inc.,
dated February 16, 1999.+
10.26** Research and Development Agreement by and between the Company and
Novartis Enzymes, Inc., dated December 1, 1999.+
10.27** Employment Offer Letter to Patrick Simms, dated February 3, 1997.
10.28** Employment Offer Letter to Jay Short, dated August 30, 1994.
10.29** Employment Offer Letter to Karin Eastham, dated April 2, 1999.
10.30** Employment Offer Letter to William H. Baum, dated July 31, 1997.
10.31** Separation Agreement by and between the Company and Terrance J.
Bruggeman, effective as of April 12, 1999.
10.32** Separation Agreement by and between the Company and Kathleen H. Van
Sleen, effective as of May 10, 1999.
10.33** Letter Agreement with Jay M. Short, Ph.D., dated June 25, 1998.
23.1** Consent of Ernst & Young LLP, Independent Auditors.
23.2** Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1** Power of Attorney. Reference is made to pages II-7 and II-8.
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
** Previously filed as exhibit to this Registration Statement on December 15,
1999.
+ Confidential Treatment will be requested with respect to portions of this
exhibit. Omitted portions will be filed separately with the Securities and
Exchange Commission.
<PAGE>
EXHIBIT 10.6
DIVERSA CORPORATION
1999 Non-Employee Directors' Stock Option Plan
Adopted on December 13, 1999
Approved By Stockholders _______________, _____
Effective Date: _______________, 1999
Termination Date: None
1. Purposes.
(a) Eligible Option Recipients. The persons eligible to receive Options
are the Non-Employee Directors of the Company.
(b) Available Options. The purpose of the Plan is to provide a means by
which Non-Employee Directors may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of Nonstatutory
Stock Options.
(c) General Purpose. The Company, by means of the Plan, seeks to retain
the services of its Non-Employee Directors, to secure and retain the services of
new Non-Employee Directors and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its Affiliates.
2. Definitions.
(a) "Affiliate" means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.
(b) "Annual Grant" means an Option granted annually to all Non-Employee
Directors who meet the criteria specified in subsection 6(b) of the Plan.
(c) "Annual Meeting" means the annual meeting of the stockholders of the
Company.
(d) "Board" means the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means Diversa Corporation, a Delaware corporation.
(h) "Consultant" means any person, including an advisor, (i) engaged by
the Company or an Affiliate to render consulting or advisory services and who is
compensated for
1.
<PAGE>
such services or (ii) who is a member of the Board of Directors of an Affiliate.
However, the term "Consultant" shall not include either Directors of the Company
who are not compensated by the Company for their services as Directors or
Directors of the Company who are merely paid a director's fee by the Company for
their services as Directors.
(i) "Continuous Service" means that the Optionholder's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Optionholder's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Optionholder renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Optionholder
renders such service, provided that there is no interruption or termination of
the Optionholder's Continuous Service. For example, a change in status from a
Non-Employee Director of the Company to a Consultant of an Affiliate or an
Employee of the Company will not constitute an interruption of Continuous
Service. The Board or the chief executive officer of the Company, in that
party's sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal leave.
(j) "Director" means a member of the Board of Directors of the Company.
(k) "Disability" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.
(l) "Employee" means any person employed by the Company or an Affiliate.
Mere service as a Director or payment of a director's fee by the Company or an
Affiliate shall not be sufficient to constitute "employment" by the Company or
an Affiliate.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(n) "Fair Market Value" means, as of any date, the value of the Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable.
(ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.
(o) "Initial Grant" means an Option granted to a Non-Employee Director who
meets the criteria specified in subsection 6(a) of the Plan.
2.
<PAGE>
(p) "IPO Date" means the effective date of the initial public offering of
the Common Stock.
(q) "Non-Employee Director" means a Director who is not an Employee.
(r) "Nonstatutory Stock Option" means an Option not intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(s) "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(t) "Option" means a Nonstatutory Stock Option granted pursuant to the
Plan.
(u) "Option Agreement" means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(v) "Optionholder" means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.
(w) "Plan" means this Diversa Corporation 1999 Non-Employee Directors'
Stock Option Plan.
(x) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.
(y) "Securities Act" means the Securities Act of 1933, as amended.
3. Administration.
(a) Administration by Board. The Board shall administer the Plan. The Board
may not delegate administration of the Plan to a committee.
(b) Powers of Board. The Board shall have the power, subject to, and within
the limitations of, the express provisions of the Plan:
(i) To determine the provisions of each Option to the extent not
specified in the Plan.
(ii) To construe and interpret the Plan and Options granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Option Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective.
(iii) To amend the Plan or an Option as provided in Section 12.
3.
<PAGE>
(iv) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company that are not in conflict with the provisions of the Plan.
(c) Effect of Board's Decision. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.
4. Shares Subject to the Plan.
(a) Share Reserve. Subject to the provisions of Section 11 relating to
adjustments upon changes in the Common Stock, the Common Stock that may be
issued pursuant to Options shall not exceed in the aggregate Two Hundred
Thousand (200,000) shares of Common Stock (determined after the stock split
approved by the Board on December 13, 1999).
(b) Reversion of Shares to the Share Reserve. If any Option shall for any
reason expire or otherwise terminate, in whole or in part, without having been
exercised in full, the shares of Common Stock not acquired under such Option
shall revert to and again become available for issuance under the Plan.
(c) Source of Shares. The shares of Common Stock subject to the Plan may
be unissued shares or reacquired shares, bought on the market or otherwise.
5. Eligibility.
The Options as set forth in section 6 automatically shall be granted under
the Plan to all Non-Employee Directors.
6. Non-Discretionary Grants.
(a) Initial Grants. Without any further action of the Board, a Non-
Employee Director shall be granted an Initial Grant as follows:
(i) On the IPO Date, each person who is then a Non-Employee Director
automatically shall be granted an Initial Grant to purchase Twenty Thousand
(20,000) shares of Common Stock (determined after the stock split approved by
the Board on December 13, 1999) on the terms and conditions set forth herein.
(ii) After the IPO Date, each person who is elected or appointed for
the first time to be a Non-Employee Director automatically shall, upon the date
of his or her initial election or appointment to be a Non-Employee Director by
the Board or stockholders of the Company, be granted an Initial Grant to
purchase Twenty Thousand (20,000) shares of Common Stock (determined after the
stock split approved by the Board on December 13, 1999) on the terms and
conditions set forth herein.
4.
<PAGE>
(b) Annual Grants. Without any further action of the Board, a Non-Employee
Director shall be granted an Annual Grant as follows: On the day following each
Annual Meeting commencing with the Annual Meeting in 2001, each person who is
then a Non-Employee Director automatically shall be granted an Annual Grant to
purchase Five Thousand (5,000) shares of Common Stock (determined after the
stock split approved by the Board on December 13, 1999) on the terms and
conditions set forth herein; provided, however, that if the person has not been
serving as a Non-Employee Director for the entire period since the preceding
Annual Meeting, then the number of shares subject to the Annual Grant shall be
reduced pro rata for each full quarter prior to the date of grant during which
such person did not serve as a Non-Employee Director.
7. Option Provisions.
Each Option shall be in such form and shall contain such terms and
conditions as required by the Plan. Each Option shall contain such additional
terms and conditions, not inconsistent with the Plan, as the Board shall deem
appropriate. Each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:
(a) Term. No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) Exercise Price. The exercise price of each Option shall be one hundred
percent (100%) of the Fair Market Value of the stock subject to the Option on
the date the Option is granted. Notwithstanding the foregoing, an Option may be
granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.
(c) Consideration. The purchase price of stock acquired pursuant to an
Option may be paid, to the extent permitted by applicable statutes and
regulations, in any combination of the following methods:
(i) By cash or check.
(ii) Provided that at the time of exercise the Common Stock is
publicly traded and quoted regularly in The Wall Street Journal, by delivery of
already-owned shares of Common Stock either that the Optionholder has held for
the period required to avoid a charge to the Company's reported earnings
(generally six months) or that the Optionholder did not acquire, directly or
indirectly from the Company, that are owned free and clear of any liens, claims,
encumbrances or security interests, and that are valued at Fair Market Value on
the date of exercise. "Delivery" for these purposes shall include delivery to
the Company of the Optionholder's attestation of ownership of such shares of
Common Stock in a form approved by the Company. Notwithstanding the foregoing,
the Optionholder may not exercise the Option by tender to the Company of Common
Stock to the extent such tender would violate the provisions of any law,
regulation or agreement restricting the redemption of the Company's stock.
5.
<PAGE>
(iii) Provided that at the time of exercise the Common Stock is
publicly traded and quoted regularly in The Wall Street Journal, pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of Common Stock, results in either the receipt of
cash (or check) by the Company or the receipt of irrevocable instructions to pay
the aggregate exercise price to the Company from the sales proceeds.
(iv) Pursuant to the following deferred payment provisions:
(1) One hundred percent (100%) of the aggregate exercise price,
plus accrued interest, shall be due four (4) years from date of exercise or upon
termination of your Continuous Service.
(2) Interest shall be compounded annually and shall be charged
at the minimum rate of interest necessary to avoid the treatment as interest,
under any applicable provisions of the Code, of any portion of any amounts other
than amounts stated to be interest under the deferred payment arrangement.
(3) At any time that the Company is incorporated in Delaware,
payment of the Common Stock's "par value," as defined in the Delaware General
Corporation Law, shall be made in cash and not by deferred payment.
(4) The Optionholder must, as a part of his or her written
notice of exercise, give notice of the election of this payment alternative and
must tender to the Company a promissory note and a security agreement covering
the purchased shares of Common Stock, both in form and substance satisfactory to
the Company, or such other or additional documentation as the Company may
request.
(d) Transferability. An Option is transferable by will or by the laws of
descent and distribution. An Option also is transferable (i) by instrument to
an inter vivos or testamentary trust, in a form accepted by the Company, in
which the Option is to be passed to beneficiaries upon the death of the trustor
(settlor) and (ii) by gift, in a form accepted by the Company, to a member of
the "immediate family" of the Optionholder as that term is defined in 17 C.F.R.
240.16a-1(e). An Option shall be exercisable during the lifetime of the
Optionholder only by the Optionholder and a permitted transferee as provided
herein. However, the Optionholder may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a third party who, in
the event of the death of the Optionholder, shall thereafter be entitled to
exercise the Option.
(e) Exercise Schedule. The Option shall be immediately exercisable in full
as of the Date of Grant of the Option.
(f) Vesting Schedule. Options shall vest as follows:
(i) Initial Grants shall provide for vesting of 1/36/th/ of the
shares of Common Stock subject to the Option each month after the date of the
grant of the Option.
6.
<PAGE>
(ii) Annual Grants shall provide for vesting of 1/36/th/ of the shares
of Common Stock subject to the Option each month after the date of the grant of
the Option.
(g) Termination of Continuous Service. In the event an Optionholder's
Continuous Service terminates (other than upon the Optionholder's death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise it as of the date of termination) but
only within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Optionholder's Continuous Service, or
(ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionholder does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate.
(h) Extension of Termination Date. If the exercise of the Option following
the termination of the Optionholder's Continuous Service (other than upon the
Optionholder's death or Disability) would be prohibited at any time solely
because the issuance of shares would violate the registration requirements under
the Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in subsection 7(a) or (ii) the
expiration of a period of three (3) months after the termination of the
Optionholder's Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements.
(i) Disability of Optionholder. In the event an Optionholder's Continuous
Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise it as of the date of termination), but only within such
period of time ending on the earlier of (i) the date twelve (12) months
following such termination or (ii) the expiration of the term of the Option as
set forth in the Option Agreement. If, after termination, the Optionholder does
not exercise his or her Option within the time specified herein, the Option
shall terminate.
(j) Death of Optionholder. In the event (i) an Optionholder's Continuous
Service terminates as a result of the Optionholder's death or (ii) the
Optionholder dies within the three-month period after the termination of the
Optionholder's Continuous Service for a reason other than death, then the Option
may be exercised (to the extent the Optionholder was entitled to exercise the
Option as of the date of death) by the Optionholder's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the Option upon the Optionholder's death, but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death or (2) the expiration of the term of such Option as
set forth in the Option Agreement. If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate.
8. Covenants of the Company.
(a) Availability of Shares. During the terms of the Options, the Company
shall keep available at all times the number of shares of Common Stock required
to satisfy such Options.
7.
<PAGE>
(b) Securities Law Compliance. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Options and to issue and sell shares of Common Stock
upon exercise of the Options; provided, however, that this undertaking shall not
require the Company to register under the Securities Act the Plan, any Option or
any stock issued or issuable pursuant to any such Option. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of stock under the Plan, the Company shall be relieved
from any liability for failure to issue and sell stock upon exercise of such
Options unless and until such authority is obtained.
9. Use of Proceeds from Stock.
Proceeds from the sale of stock pursuant to Options shall constitute
general funds of the Company.
10. Miscellaneous.
(a) Stockholder Rights. No Optionholder shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares subject
to such Option unless and until such Optionholder has satisfied all requirements
for exercise of the Option pursuant to its terms.
(b) No Service Rights. Nothing in the Plan or any instrument executed or
Option granted pursuant thereto shall confer upon any Optionholder any right to
continue to serve the Company as a Non-Employee Director or shall affect the
right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant's agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case may
be.
(c) Investment Assurances. The Company may require an Optionholder, as a
condition of exercising or acquiring stock under any Option, (i) to give written
assurances satisfactory to the Company as to the Optionholder's knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Option; and (ii) to give written assurances satisfactory
to the Company stating that the Optionholder is acquiring the stock subject to
the Option for the Optionholder's own account and not with any present intention
of selling or otherwise distributing the stock. The foregoing requirements, and
any assurances given pursuant to such requirements, shall be inoperative if
(iii) the issuance of the shares upon the exercise or acquisition of stock under
the Option has been registered under a then currently effective registration
statement under the Securities Act or (iv) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable
8.
<PAGE>
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.
(d) Withholding Obligations. The Optionholder may satisfy any federal,
state or local tax withholding obligation relating to the exercise or
acquisition of stock under an Option by any of the following means (in addition
to the Company's right to withhold from any compensation paid to the
Optionholder by the Company) or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold shares from the shares of
the Common Stock otherwise issuable to the Optionholder as a result of the
exercise or acquisition of stock under the Option, provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of the Common Stock.
11. Adjustments upon Changes in Stock.
(a) Capitalization Adjustments. If any change is made in the stock subject
to the Plan, or subject to any Option, without the receipt of consideration by
the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and maximum number of securities subject both to the Plan pursuant to
subsection 4(a) and to the nondiscretionary Options specified in Section 5, and
the outstanding Options will be appropriately adjusted in the class(es) and
number of securities and price per share of stock subject to such outstanding
Options. The Board shall make such adjustments, and its determination shall be
final, binding and conclusive. (The conversion of any convertible securities of
the Company shall not be treated as a transaction "without receipt of
consideration" by the Company.)
(b) Change in Control--Dissolution or Liquidation. In the event of a
dissolution or liquidation of the Company, then all outstanding Options shall
terminate immediately prior to such event.
(c) Change in Control--Asset Sale, Merger, Consolidation or Reverse
Merger. In the event of (i) a sale, lease or other disposition of all or
substantially all of the assets of the Company, (ii) a merger or consolidation
in which the Company is not the surviving corporation or (iii) a reverse merger
in which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, then any surviving corporation or acquiring corporation shall assume
any Options outstanding under the Plan or shall substitute similar Options
(including an option to acquire the same consideration paid to the stockholders
in the transaction described in this subsection 11(c) for those outstanding
under the Plan). In the event any surviving corporation or acquiring corporation
refuses to assume such Options or to substitute similar Options for those
outstanding under the Plan, then
9.
<PAGE>
with respect to Options held by Optionholders whose Continuous Service has not
terminated, the vesting of such Options (and the time during which such Options
may be exercised) shall be accelerated in full, and the Options shall terminate
if not exercised at or prior to such event. With respect to any other Options
outstanding under the Plan, such Options shall terminate if not exercised prior
to such event.
12. Amendment of the Plan and Options.
(a) Amendment of Plan. The Board at any time, and from time to time, may
amend the Plan. However, except as provided in Section 11 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of Rule 16b-3 or any Nasdaq or
securities exchange listing requirements.
(b) Stockholder Approval. The Board may, in its sole discretion, submit
any other amendment to the Plan for stockholder approval.
(c) No Impairment of Rights. Rights under any Option granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.
(d) Amendment of Options. The Board at any time, and from time to time,
may amend the terms of any one or more Options; provided, however, that the
rights under any Option shall not be impaired by any such amendment unless (i)
the Company requests the consent of the Optionholder and (ii) the Optionholder
consents in writing.
13. Termination or Suspension of the Plan.
(a) Plan Term. The Board may suspend or terminate the Plan at any time. No
Options may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) No Impairment of Rights. Suspension or termination of the Plan shall
not impair rights and obligations under any Option granted while the Plan is in
effect except with the written consent of the Optionholder.
14. Effective Date of Plan.
The Plan shall become effective on the IPO Date, but no Option shall be
exercised unless and until the Plan has been approved by the stockholders of the
Company, which approval shall be within twelve (12) months before or after the
date the Plan is adopted by the Board.
15. Choice of Law.
All questions concerning the construction, validity and interpretation of
this Plan shall be governed by the law of the State of California, without
regard to such state's conflict of laws rules.
10.
<PAGE>
EXHIBIT 10.15
LICENSE AGREEMENT
BETWEEN
THE DOW CHEMICAL COMPANY
AND
DIVERSA CORPORATION
1
<PAGE>
<TABLE>
<CAPTION>
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ARTICLE TITLE PAGE
NUMBER
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
I DEFINITIONS 1
- -------------------------------------------------------------------------------------------------
II PATENT LICENSE GRANT 4
- -------------------------------------------------------------------------------------------------
III PAYMENTS 6
- -------------------------------------------------------------------------------------------------
IV PATENT RIGHTS 9
- -------------------------------------------------------------------------------------------------
V CONFIDENTIALITY 11
- -------------------------------------------------------------------------------------------------
VI ASSIGNMENT 12
- -------------------------------------------------------------------------------------------------
VII THIRD PARTY INFRINGEMENT CLAIMS 12
- -------------------------------------------------------------------------------------------------
VIII PATENT ENFORCEMENT & LITIGATION 13
- -------------------------------------------------------------------------------------------------
IX U.S. EXPORT CONTROL AND GOVERNMENT LICENSES 14
- -------------------------------------------------------------------------------------------------
X PRODUCT LIABILITY AND INDEMNIFICATION 15
- -------------------------------------------------------------------------------------------------
XI WARRANTY & DISCLAIMER, 16
- -------------------------------------------------------------------------------------------------
XII TERM AND TERMINATION 17
- -------------------------------------------------------------------------------------------------
XIII FORCE MAJEURE 18
- -------------------------------------------------------------------------------------------------
XIV DISPUTE RESOLUTION 19
- -------------------------------------------------------------------------------------------------
XV NOTICES 20
- -------------------------------------------------------------------------------------------------
XVI MISCELLANEOUS PROVISIONS 21
- -------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
APPENDIX TITLE PAGE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A PATENT RIGHTS A
- --------------------------------------------------------------------------------------------------------------------
A-1 [*****] PATENT RIGHTS A-1
- --------------------------------------------------------------------------------------------------------------------
A-2 [*****] PATENT RIGHTS [*****] A-2
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
i * Confidential Treatment Requested
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
APPENDIX TITLE PAGE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
[*****]
- --------------------------------------------------------------------------------------------------------------------
A-3 [*****] PATENT RIGHT [*****] A-3
- --------------------------------------------------------------------------------------------------------------------
B [*****] PATENT RIGHTS B-1
- --------------------------------------------------------------------------------------------------------------------
C LICENSED [*****] C-1
- --------------------------------------------------------------------------------------------------------------------
D [*****] D-1
- --------------------------------------------------------------------------------------------------------------------
E [*****] E-1
- --------------------------------------------------------------------------------------------------------------------
F [*****] F-1
- --------------------------------------------------------------------------------------------------------------------
G OPTION AGREEMENT G-1
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
ii * Confidential Treatment Requested
<PAGE>
This LICENSE AGREEMENT (including the Appendices hereto, the "License") is
by and between THE DOW CHEMICAL COMPANY, a corporation duly formed and existing
under the laws of the State of Delaware, having a place of business at 2030 Dow
Center, Midland, Michigan 48674, United States of America ("DOW" or a "Party"),
and DIVERSA CORPORATION, a corporation duly formed and existing under the laws
of the State of Delaware, having a place of business at 10665 Sorrento Valley
Road, San Diego, California 92121, United States 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.
B. DOW has expertise in the discovery, development and production of chemical
compounds.
C. DOW and DIVERSA are concurrently with this License entering into a separate
Collaborative Research and Development Agreement ("Agreement") in order to
perform research together to discover and optimize the [*****] that can be
used by DOW to produce certain, desired [*****].
D. DIVERSA represents that it has Patent Rights and Know-How that pertain to
this License.
E. DOW is desirous of obtaining, and DIVERSA wishes to grant to DOW, a
worldwide, exclusive royalty-bearing license to [*****].
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
for other good and valuable consideration, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
When used in this License, 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 * Confidential Treatment Requested
<PAGE>
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 License.
Control for this 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" means the Collaborative Research Agreement between DOW and
---------
DIVERSA, executed concurrently with this License.
1.3 "Areas of Interest" means the development of Improved Enzymes (as defined
-----------------
below) for use in the following [*****] specific areas:
(a) [*****]
(b) [*****]
(c) [*****]
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
under this License, and including information disclosed under the Agreement
regarding Licensed Products, 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:
(a) 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;
(b) as of the date of disclosure is in, or subsequently enters, the
public domain through no fault or omission of the receiving
Party;
(c) as of the date of disclosure or thereafter is obtained from a
Third Party free from any obligation of confidentiality; or
(d) 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 documentation.
1.5 "Controls" or "Controlled" means, with respect to intellectual property,
-------- ----------
possession by DIVERSA (other than by virtue of this License) of the ability
to grant licenses or sublicenses to DOW without violating the terms of any
agreement or other arrangement with any Third Party and to the [*****].
2 * Confidential Treatment Requested
<PAGE>
1.6 "[*****]" means a [*****] that is not [*****] whereupon the [*****] shall
-------
be [*****] on the [*****] and [*****] of the [*****] including a [*****] of
[*****] an [*****].
1.7 "Effective Date" means the date of last signature of the Parties at the end
--------------
of this License.
1.8 "Field" means [*****], [*****].)
1.9 "[*****] Enzyme" means an enzyme or enzymes, either ex vivo or in vivo,
--------------
provided to DOW by DIVERSA which is within the claims of Patent Rights or
Joint Patent Rights or that incorporates, is derived from, or is
identified, discovered, developed or made through the use of Know-How,
which is developed in the [*****] under the Agreement.
1.10 "Joint Patent Rights" means patent rights, which are jointly developed or
-------------------
invented by both Parties under the Agreement in accordance with its terms,
as shown in [*****], which [*****] may be modified to include joint patent
rights obtained during the [*****] under the Agreement, and which rights
pertain to a [*****]. Joint Patent Rights concern only the scope of the
claims that have not been held invalid or unenforceable after all appeals
have been exhausted. Claims shall be deemed valid unless held otherwise.
1.11 "Know-How" means all Research Results, as defined and obtained under the
--------
Agreement, and all know-how, nonpatented inventions, improvements,
discoveries, data, instructions, [*****], information (including, without
limitation, [*****] and information), procedures, devices, methods and
trade secrets which are conceived, discovered or invented during the term
of the Agreement, and which are necessary or appropriate to develop and
[*****]
1.12 "Licensed Product" means (i) [*****] Enzyme which is used to [*****] using
----------------
a [*****], or (ii) [*****] Enzyme which is [*****], for which both (i) and
(ii) are designated by the RMC, and encompassed
3 * Confidential Treatment Requested
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within DIVERSA Patent Rights or Joint Patent Rights and listed on Appendix
C, which is attached hereto and made a part hereof and which is identical
to Appendix G of the Agreement.
1.13 "Material" means the original, tangible materials of any type provided by
--------
DOW or DIVERSA to the other Party in order that the recipient can perform
its obligations under this License.
1.14 "Net Sales" means the amount invoiced on sales of [*****]:
---------
(a) [*****]; and
(b) [*****]; and
(c) [*****]; and
(d) [*****]; and
(e) [*****].
[*****].
1.15 "Patent Rights" means patent and patent applications Controlled solely by
-------------
DIVERSA as shown in Appendix A, including:
(a) all patents and patent applications which are conceived of under the
Agreement, and which are necessary (but for this License DOW would
infringe these patents) for DOW to make, use or sell the Royalty
Bearing Products; and are listed on Appendix A-1, attached hereto and
made a part hereof, which Appendix A-1 may be modified to include
Patent Rights obtained during this License;
(b) the patents and patent applications listed on Appendix A-2, attached
hereto and made a part hereof, are patent rights of DIVERSA that
[*****]; and
(c) 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
4 * Confidential Treatment Requested
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(i) or (ii) above, and any substitutions, confirmations, patents-of-
addition, registrations or revalidations of any of the foregoing,
which Patent Rights are necessary (but for this License DOW would
infringe these patents) for DOW to make, use or sell the Royalty
Bearing Products, which shall be listed on Appendix A-1 or A-2,
respectively;
(d) [*****];
in each case, which are Controlled by DIVERSA. All patents and patent
applications subject to this definition are listed on Appendix A or will be
included on Appendix A as they are developed or obtained under the
Agreement and this License. Patent Rights concern only the scope of the
claims that have not been held invalid or unenforceable after all appeals
have been exhausted. Claims shall be deemed valid unless held otherwise.
1.16 "Royalty Bearing Product" means the material resulting from the
-----------------------
application of a [*****] or a [*****] in a [*****] (defined in the
Agreement), which shall be classified by its [*****] and listed in [*****],
attached hereto and made a part hereof. ([*****].)
1.17 "Royalty Bearing Product [*****]" means the [*****] in accord with [*****],
-------------------------------
as attached hereto and made a part hereof. The Royalty Bearing Product
[*****].
1.18 "Royalty [*****]" means the [*****] Royalty Bearing Product, as determined
---------------
by the [*****], read from the [*****] on Appendix [*****], attached hereto
and made a part hereof.
1.19 "Territory" means [*****].
---------
1.20 "Third Party" means anyone other than DOW or DIVERSA, or their respective
-----------
Affiliates.
5 * Confidential Treatment Requested
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ARTICLE II
PATENT LICENSE GRANT
--------------------
2.1 Grant of License to DOW - Subject to the terms and conditions of this
-----------------------
License, DIVERSA hereby grants to DOW, and DOW hereby accepts:
(a) an exclusive, royalty-bearing, world-wide license, including the right
to grant sublicenses pursuant to Section 2.4, under the DIVERSA Patent
Rights and Joint Patent Rights to make, have made, import, have
imported, use, have used, sell, have sold and otherwise exploit
Royalty Bearing Products;
(b) an exclusive, world-wide license, including the right to grant
sublicenses pursuant to Section 2.4, under DIVERSA's enzymes [*****]
to use enzymes to convert [*****] products [*****]. The royalty for
this grant is obtained by DIVERSA under [*****];
(c) a non-exclusive, royalty-bearing, world-wide license to [*****]; and
(d) a [*****] license to any Know-How [*****].
2.2 Grant of [*****] - If [*****] desires that any [*****] be [*****] after
----------------
[*****] supplies it to [*****] under the terms of the Agreement, then [*****]
may [*****]:
(a) [*****]; or
(b) [*****]; or
(c) [*****].
6 * Confidential Treatment Requested
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Notwithstanding the above, [*****] if (i) a [*****]; or (ii) [*****].
[*****].
2.3 Grant of Rights to Use [*****] for [*****] within the Field [*****] of
----------------------------------------------------------------------
the Agreement - In the event [*****] desires to [*****] to [*****]
-------------
Products to make, have made, use, sell, offer for sale and import
products [*****], DIVERSA and DOW agree to negotiate such rights in
good faith, [*****]. If [*****].
2.4 Sublicensing - The [*****] license granted under Section 2.1(a) to
------------
DOW includes the right to sublicense Third Parties, whether or not
Affiliates of DOW, including the right to [*****], including but not
limited to sublicensing a competitor of DOW. DOW [*****] as a result
of any sublicensee and [*****] in the [*****] in the [*****]. DOW
[*****]. All sublicenses, other than a label license for DOW Net
Sales, [*****]. DOW [*****] within [*****] of the grant of any
7 * Confidential Treatment Requested
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sublicense hereunder. Notwithstanding the foregoing, [*****].
2.5 Reservations by DOW - DOW reserves the right to work with [*****]
-------------------
outside the [*****], or after the Agreement terminates [*****], or to
[*****].
2.6 [*****] Improved Enzyme Production - If DOW chooses not to [*****]
----------------------------------
[*****] a [*****], DIVERSA shall be given a [*****]. DIVERSA must
[*****] with any other [*****]. Any [*****] received by DIVERSA shall
be held confidential by DOW. If DIVERSA is the [*****] of the [*****],
DOW and DIVERSA [*****]. Such [*****] may include the [*****]. If such
an [*****], it shall contain at a [*****]. This [*****].
2.7 Prior Option Agreement - DOW exercised its rights under a prior Option
----------------------
(copy attached for reference as Appendix H) for a license to a [*****]
for an [*****] Enzyme and [*****]. This License shall also be a
[*****].
ARTICLE III
PAYMENTS
--------
3.1 [*****] Payment for [*****] under [*****] - To meet the [*****] under
-----------------------------------------
the Option in accord with Section 2.7, DOW shall pay DIVERSA [*****]
within [*****] from the [*****]. This License shall suffice for the
exercise of the Option for a license.
8 * Confidential Treatment Requested
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3.2 License Product [*****] - When an [*****] Enzyme is identified by
--------------------------
the RMC under the Agreement as being adequately developed for
commercialization, then DOW [*****] inform DIVERSA in writing within
[*****] days whether such [*****] Enzyme shall become a Licensed
Product under this License. If DOW desires to [*****] an [*****]
Enzyme as a Licensed Product, then it shall be listed on either
Appendix C or D under the terms of this License and classified by DOW
[*****] of [*****] as to [*****] applies in accord with [*****]. Up to
[*****] Enzymes per Royalty Bearing Product can be [*****]. Within
[*****] of [*****] of [*****] Enzyme as a Licensed Product, DOW
[*****] for each [*****], and all other [*****]. If [*****] an [*****]
Enzyme as a Licensed Product, then DIVERSA [*****], unless [*****]
applies.
3.3 License Fees - Within [*****] of the identification by the RMC of a
Licensed Product in accordance with Section 3.2, DOW shall pay to
DIVERSA a license fee of [*****] dollars. Only [*****].
3.4 Commercialization Fees - Within [*****] of the [*****] by DOW
of each [*****], DOW shall pay to DIVERSA [*****]. Only [*****].
3.5 Royalty Payments - Royalties owed for each Royalty Bearing Product are
subject to Section 4.8 and [*****]. DIVERSA and DOW shall discuss the
[*****]. The [*****] shall be subject to DIVERSA approval, which shall
not be unreasonably withheld. In the [*****].
9 * Confidential Treatment Requested
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3.6 Method of Payment - All payments due under this License shall be made in
-----------------
accord with the respective sections of Article III by check or 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 III 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 [*****] or its successor bank) on the
date such payment is due plus [*****], calculated on the number of
days such payment is delinquent. The rights provided in this Section 3.6
shall in no way limit any other remedies available to DIVERSA hereunder.
3.7 Sublicense Payments - Any sublicense agreement for Royalty Bearing Product
-------------------
shall contain royalty provisions that [*****]. DOW [*****].
3.8 [*****].
3.9 [*****].
3.10 Exchange Rate and Payment - Royalty payments shall be paid to DIVERSA
-------------------------
in US dollars in funds to be deposited in a US account as instructed in
writing by DIVERSA in accordance with Section 3.6. If DOW receives payment
on Royalty Bearing Products in currency other than US dollars, such
payments shall be converted to US dollars on the last day of the calendar
quarter using an exchange rate established by a leading [*****], such as
[*****], and published in [*****], but are not due for [*****] from
-----
[*****].
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If DOW receives payment in a form other than a currency, it shall be
estimated at its fair market value and converted to U.S. dollars.
3.11 Quarterly Royalty Reports and Payments - Within [*****] after the
--------------------------------------
[*****], DOW shall submit a report on the Net Sales on Royalty Bearing
Product for the [*****] in sufficient detail to enable a calculation of the
royalty due in accord with Article III and payment of the royalty (if any)
due. The [*****] reports will also specify the calculations based on
Sections 3.7 and 3.10, [*****].
3.12 Books of Account - DOW shall maintain true and complete books of account
----------------
containing an accurate record of all data necessary for the proper
computation of royalty payments due from it or on behalf of any Affiliate.
Such records shall be maintained for at least [*****] after the date
of the pertinent royalty payment.
3.13 Audit Right - DIVERSA shall have the right through a firm of independent
-----------
public accountants to whom DOW has no reasonable objection, to examine the
books of account of DOW at reasonable times within [*****] after
the end of the calendar year to which they relate (but not more than once
in each calendar year) for the purpose of verifying the correctness of any
report concerning payment of royalties under Article III. Such examination
shall be made during normal business hours at the place of business of DOW.
The information provided as a result of any such examination shall be
maintained in confidence on the terms specified in Article V. The fees and
expenses of such an audit shall be borne by DIVERSA, unless such audit
discloses an underpayment of more than [*****] of the amount due
under this License. In such case, DOW shall bear the full cost of such
audit. If any such audit shows any underpayment or overcharge, a correcting
payment or credit against future royalties shall be made. Any payment
required from DOW to DIVERSA from such audit shall be made within
[*****] of DIVERSA's receipt of the auditors' statement. [*****].
3.14 Withholding Tax Payments - If any taxes for DIVERSA's account,
------------------------
withholding or otherwise, are levied by any taxing authority in the
Territory in connection with the receipt by DIVERSA of any amounts payable
under Article III of this License according to any tax treaty or agreement
between the United States and any country in the Territory, then DOW shall
have the
11 * Confidential Treatment Requested
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right to pay such taxes to the local tax authorities and the payment to
DIVERSA shall be the [*****], together with
(a) [*****],
(b) [*****], and
(c) [*****], and
(d) [*****].
ARTICLE IV
PATENT RIGHTS
-------------
4.1 DIVERSA to Maintain Patent Rights - DIVERSA shall [*****] be responsible
---------------------------------
at its own cost and expense for prosecuting the patent applications in
Patent Rights for maintaining and extending those Patent Rights for the
term of this License. DIVERSA shall use good faith efforts to prosecute,
issue and maintain all Patent Rights.
DIVERSA shall supply DOW with a copy of all Patent Rights applications,
their published texts, and issued patents. Where available a translation
into English shall be provided.
4.2 Joint Patent Rights -
-------------------
In those instances where joint inventors (as defined by 35 U.S.C. et seq.)
between DOW (or its Affiliate) and DIVERSA (or its Affiliate) result in a
patentable invention, then DOW and DIVERSA shall mutually determine, using
their good faith efforts:
(a) whether DOW or DIVERSA shall file a patent application;
(b) whether the patent application has joint ownership and joint
claim structure; and
(c) which Party should prosecute the patent application and pay the
annuities.
Thus DOW shall have joint ownership rights to such Joint Patent Rights in
accord with Article II. If either Party desires exclusive rights to Joint
Patent Rights, then such Party must notify the other and both Parties
shall negotiate in good faith. Should such joint inventorship arise, then
the Parties shall discuss in good faith how the costs are shared, which
Party should file the Joint Patent Rights, where the Joint Patent Rights
should be
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filed, and, if term extension or restoration is available, who should
extend the patent. [*****].
Each Party shall supply the other Party with a copy of all joint patent
applications, their published texts, and issued patents included in the
Joint Patent Rights under its control and their official actions and shall
advise the other Party on the content of any responses. Where available a
translation into English shall be provided.
4.3 Notice of Patent Lapse of Patent Rights and Joint Patent Rights -
---------------------------------------------------------------
DIVERSA shall promptly advise DOW of the grant, lapse, nullification,
revocation, surrender, or invalidation of any of the Patent Rights and
Joint Patent Rights under its control at least in advance of any
abandonment to enable DOW to assume that prosecution, at DOW's expense,
should DOW not agree to such abandonment. If under these facts, DOW
succeeds in issuing the Patent, then patent costs shall be credited
against royalty payments. DOW shall promptly advise DIVERSA of the grant,
lapse, nullification, revocation, surrender, or invalidation of any of the
Joint Patent Rights under its control at least in advance of any
abandonment to enable DIVERSA to assume that prosecution, at DIVERSA's
expense, should DIVERSA not agree to such abandonment.
4.4 Validity, Non-Infringement - DIVERSA [*****] that [*****] of [*****] do
--------------------------
not fall within the scope of Third Party patents or the industrial
property rights of a Third Party. However, to the best of DIVERSA's
knowledge, information and belief, that [*****], the [*****] for the
[*****] does not fall within the scope of Third Party patents which are
not owned or licensed by DIVERSA.
4.5 Disclaimer of Warranties as to Patent Rights - Other than as stated in
--------------------------------------------
Section 4.4, DIVERSA makes no representation that the inventions covered
in any Patent Rights are patentable or that the Patent Rights are or will
be valid or enforceable, nor does DIVERSA warrant or represent that the
exercise of the rights licensed hereunder is free of infringement of
patent rights of Third Parties.
4.6 Hold Harmless - [*****] agrees to hold [*****] harmless for [*****] under
-------------
[*****]
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<PAGE>
which may be [*****] under this License so long as this License is in
effect and is not terminated.
4.7 Cooperation - DIVERSA and DOW shall use good faith efforts to cooperate
-----------
with respect to any issues that concern the development of the [*****]
under this License. [*****]. DIVERSA shall promptly inform DOW of [*****].
4.8 Patent Rights Issues - DOW [*****] owes DIVERSA under Article III for
Royalty Bearing Products made using Licensed Products [*****]. DIVERSA
agrees that it [*****].
4.9 Country list for Global Filing Issues - DIVERSA shall file all Patent
-------------------------------------
Rights at least in the US and PCT [*****].
4.10 DOW technology and patents - DOW may develop and patent technology [*****]
--------------------------
or [*****] during this License. [*****].
ARTICLE V
CONFIDENTIALITY
---------------
5.1 Efforts - Each Party shall use good faith efforts to retain in confidence
-------
and not disclose to any Third Party each other's Confidential Information
14 * Confidential Treatment Requested
<PAGE>
disclosed pursuant to the terms of this License. Such "good faith efforts"
shall mean the same degree of care, but no less than a reasonable degree
of care, as the receiving Party uses to protect its own Confidential
Information of a like nature. All Confidential Information initially
received in a non-written form shall be reduced to writing within [*****]
by the disclosing Party and such writing provided to the receiving Party.
The receiving Party shall not be obligated if such writing is not received
timely. DOW shall continue to use the same good faith efforts with respect
to the DIVERSA Confidential Information already in its possession under
the Agreement. Each Party may use Confidential Information of the other
Party only to the extent required to accomplish the purposes of this
License.
5.2 Notwithstanding the provisions of Section 5.1, if the receiving Party
becomes legally compelled to disclose any of the disclosing Party's
Confidential Information, the receiving Party shall promptly advise the
disclosing Party of such required disclosure in order that the disclosing
Party may seek a protective order confidential treatment or such other
remedy as the disclosing Party may consider appropriate in the
circumstances. The receiving Party shall disclose only that portion of the
Confidential Information which it is legally required to disclose. Such a
disclosure shall not release the receiving Party with respect to the
Confidential Information so disclosed except to the extent of permitting
the required disclosure.
5.3 Disclosure to Affiliates, Contractors - DOW may disclose Confidential
-------------------------------------
Information to its Affiliates, sublicensees, consultants, contractors
(parties under contract with DOW for the custom manufacturing or shipping
of Royalty Bearing Product or obtention of registration in the Territory),
as may be necessary to exercise the rights granted hereunder and to
register and prepare for commercialization of Royalty Bearing Product, and
to commercialize Royalty Bearing Product under this License, under
conditions of confidentiality at least as stringent as those set out in
Article V.
5.4 Survival of Confidentiality - Termination of this License for any reason
---------------------------
shall not relieve the Parties of their obligations under Article V. The
provisions of Article V shall survive termination of this License for
[*****] years.
15 * Confidential Treated Requested
<PAGE>
ARTICLE VI
ASSIGNMENT
----------
6.1 DOW - DOW shall have the right to assign its rights in this License
---
(or any part hereof) 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 License
relates, whether by merger, sale of stock, sale of assets or otherwise.
6.2 DIVERSA - DIVERSA shall have the right to assign its rights in this
-------
License (or any part hereof) to an Affiliate: provided, however, that
DIVERSA shall continue to be responsible, using its reasonable best
efforts, for the obligations of any such Affiliate, including honoring the
terms of this License. DIVERSA may assign its rights hereunder in
connection with the transfer or sale of all or substantially all of the
business of DIVERSA to which this License relates, whether by merger, sale
of stock, sale of assets or otherwise.
ARTICLE VII
THIRD PARTY INFRINGEMENT CLAIMS
-------------------------------
7.1 Defense of Third Party Patent Claims - If a claim is brought by a
------------------------------------
Third Party that the [*****] of a [*****] in the [*****] (regardless of
[*****]) infringes a patent of such Third Party, DOW will give prompt
written notice to DIVERSA of such claim if it concerns Patent Rights or
Joint Patent Rights. [*****].
7.2 [*****] Decisions - From the [*****] and using [*****], [*****].
-----------------
Specifically, DIVERSA and DOW [*****]:
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(a) [*****];
(b) [*****];
(c) [*****].
7.3 Third Party License - The Parties shall use their good faith efforts
-------------------
(either individually or together) to [*****]. As of the [*****], DIVERSA
is not aware of the need for any such Third Party license .
ARTICLE VIII
PATENT ENFORCEMENT & LITIGATION
-------------------------------
8.1 Prosecution by DIVERSA -
----------------------
8.1.1 DIVERSA, at its sole discretion, may take action on its own behalf
and expense to institute any action or proceeding by reason of
infringement of any of the Patent Rights related to [*****]. If
either Party learns of any infringement of Patent Rights by a Third
Party, it shall promptly notify the other Party. DIVERSA shall have
the first right, at its own expense, to prosecute all litigation
against a Third Party infringer. DOW shall provide all reasonable
cooperation, including [*****], required to prosecute such
litigation. DOW shall be consulted concerning the litigation.
DIVERSA gets to [*****].
8.1.2 If the possible infringement concerns a [*****] for the [*****]
that is [*****], then DIVERSA shall [*****] and removal from the
market place of all infringing
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Third Party products. DIVERSA will bear the costs and shall be
entitled to any recovery obtained from such litigation,
settlement or compromise thereof. If DIVERSA elects not to take
action for such infringement, then DOW may do so at DOW's expense
and shall be entitled to any recovery obtained from such
litigation, settlement or comprise thereof and DOW retains all
damages received.
8.1.3 If the infringement of the [*****] is in areas that are [*****],
then DIVERSA shall [*****].
8.1.4 If a Patent Right is finally declared invalid or unenforceable in
a judicial or administrative proceeding from which no appeal is
or can be taken, then from and after that date with respect to
that Patent Right in that country of the [*****], [*****]. If no
other Patent Right is providing protection in that country of the
[*****], then [*****].
8.2 Neither Party Defends - If neither DIVERSA nor DOW will defend the Patent
---------------------
Rights in a particular country in the Territory, then for that Patent
Rights in that country the royalty under Article III is [*****].
8.3 Joint Patent Rights Suits - If the litigation concerns Joint Patent
-------------------------
Rights, then both DIVERSA and DOW shall mutually work together and
[*****].
8.4 Settlement - Any settlement of an infringement suit, whether brought by
----------
DOW or by DIVERSA, shall be [*****].
8.5 Cooperation - Each Party shall cooperate with the other Party to the
-----------
extent reasonably requested in any legal action:
(i) brought by a Third Party against one Party; or
(ii) brought by a Third Party against both Parties; or
(iii) taken against a Third Party by either Party regarding Patent
Rights or Joint Patent Rights in the [*****] in the [*****], and
each Party shall have the right to participate in any defense,
compromise or settlement to the extent that, in its judgment, it
may be prejudiced thereby.
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In addition, DOW shall not settle any claim or suit in any manner that
shall adversely affect any Patent Rights or Joint Patent Rights, require
any payment by DIVERSA or reduce the royalty due to DIVERSA hereunder
without the prior written consent of DIVERSA.
ARTICLE IX
EXPORT CONTROL AND GOVERNMENT REGULATIONS
-----------------------------------------
9.1 Compliance by DIVERSA - DIVERSA agrees to comply with all governmental
---------------------
regulations for shipping [*****] Enzyme, [*****], to DOW or any
regulation for safety of the [*****].
9.2 Compliance by DOW - DOW agrees to comply with all necessary United
-----------------
States, European and other country's governmental regulations in the
[*****] with respect to export of [*****] and any [*****]. DOW agrees to
not export or re-export any [*****] or [*****] received from DIVERSA or
the [*****] to any prohibited country listed in the U.S. Export
Administration Regulations (15 C.F.R. (S)700 et seq.) unless properly
authorized by the U.S. Government.
9.3 Clearances - DOW agrees to obtain all necessary clearances from any
----------
government in the [*****] for export or re-export with respect to the
[*****] or [*****].
ARTICLE X
PRODUCT LIABILITY AND INDEMNIFICATION
-------------------------------------
10.1 Indemnity by DIVERSA - DIVERSA shall indemnify and hold DOW, its agents,
--------------------
directors, officers, employees and Affiliates harmless from and against
any and all liabilities, claims, demands, damages, costs, expenses or
money judgments (including reasonable attorneys' fees and expenses)
incurred by or rendered against any of them for personal injury,
sickness, disease or death or property damage which directly arise out
of:
(a) the [*****]; or
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(b) the [*****]; or
(c) [*****];
provided, however, that [*****]. However,
(i) [*****]; and
(ii) [*****].
10.2 Indemnity by DOW - DOW shall defend, indemnify and hold DIVERSA and its
----------------
Affiliates, and their respective agents, directors, officers, and
employees harmless from and against any and all losses, liabilities,
claims, demands, damages, costs, expenses or money judgments (including
reasonable attorneys' fees and expenses) incurred by or rendered against
any of them for personal injury, sickness, disease or death or property
damage which arise out of
(i) the [*****]; or
(ii) the [*****]; or
(iii) the [*****];
provided, however, that [*****]. However,
(i) [*****]; and
(ii) [*****].
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ARTICLE XI
WARRANTY AND DISCLAIMER
-----------------------
11.1 Belief of Accuracy - DIVERSA represents that the [*****] and any
------------------
[*****] transferred or provided to DOW hereunder are believed to be
accurate and complete as of their then current status at DIVERSA at the
date when the [*****] is added to Appendix [*****] or as of the [*****]
and that DIVERSA's interpretations and conclusions drawn therefrom were
made in good faith and in the exercise of DIVERSA's scientific judgment
as of the dates of the documents contained therein, and that to the best
of DIVERSA's knowledge, data subject to regulations is in compliance with
such regulations.
11.2 Reliance - DOW represents that it will be solely relying on [*****] of
--------
the [*****] and the [*****] hereunder and on [*****] in using the [*****]
of [*****].
11.3 Mutual Representations - DIVERSA and DOW each represents and warrants as
----------------------
follows:
11.3.1 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 License.
11.3.2 Authorization - The execution, delivery and performance by it of
-------------
this License 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.
11.3.3 Binding Agreement - This Agreement is a legal, valid and binding
-----------------
obligation of it, enforceable against it in accordance with its
terms and conditions.
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11.3.4 Warranty Disclaimer - EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
-------------------
THIS License, NEITHER 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 License 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.
11.3.5 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 License 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 XII
TERM AND TERMINATION
--------------------
12.1 Term - Unless terminated under the provisions of this Article XII, this
----
License shall continue in full force and effect until the [*****],
subject to the survivorship clause Section 12.7.
12.2 [*****].
22 * Confidential Treatment Requested
<PAGE>
12.3 Termination by DOW - DOW may surrender and terminate this License on
------------------
three (3) months written notice to DIVERSA, either for [*****] or this
License as a whole. DOW will disclose to DIVERSA its reasons for any such
termination. It is understood that [*****].
12.4 Termination by DIVERSA - DIVERSA shall have the further right to
----------------------
terminate this License immediately, but separately on [*****], on written
notice to DOW if:
(a) DOW shall cease to carry on business or a receiver shall be
appointed to DOW's assets; or
(b) DOW fails to meet any of its payments in accord with Article III;
however, DOW shall be entitled to a period of [*****] from the
delivery of a notice of failure to pay in which to remedy or to
undertake to remedy the same; or
(c) DOW breaches any material provision (e.g., Sections 2.2 and 2.4)
of this License and has not cured such breach within [*****] after
written notice thereof by DIVERSA.
12.5 On Termination - DOW shall, upon termination of this License by DIVERSA
--------------
under Section 12.4, termination by DOW under Section 12.3, or termination
by either Party under Section 12.8:
(a) pay to DIVERSA all payments and royalties due or accrued at the
termination date within [*****] after termination; and
(b) make no further use of any kind of any and all Know-How and
Confidential Information of DIVERSA disclosed hereunder by
DIVERSA, except to the extent such information has become public
knowledge other than through fault of DOW, and make no further use
of the surviving Patent Rights.
12.6 Effect of Termination.
(a) Upon termination of this License, all rights to the DIVERSA
Intellectual Property as defined in the Agreement shall revert to
DIVERSA; and
(b) Within [*****] following the termination of this License,
but separately on [*****], each party shall return to the other
Party, or destroy, upon the written request of the other Party,
any and all Confidential Information of the other Party in its
possession; and
(c) Expiration or termination of this License shall not relieve the
Parties of any obligation accruing prior to such expiration or
termination.
23 * Confidential Treatment Requested
<PAGE>
12.7 Survival of [*****] - On termination of this License: the [*****]
-------------------
confidentiality set forth in Article V shall survive for the time stated
therein; Export Control compliance set forth in Article IX shall survive;
and the indemnification [*****] set forth in Article X and third party
infringement claims set forth in Article VII shall also survive as to all
claims or actions arising from events which occurred before termination.
Article XIV shall survive termination of this License so long as any
disputes arising prior to such termination exist.
12.8 Bankruptcy - 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 [*****] of the filing thereof, then the other Party may, at its
sole election upon notice to the Insolvent Party, terminate this License
by written notice under Section 15.1.
All rights and licenses granted under or pursuant to this License shall
be deemed to be, for purposes of Section 365(n) of the US Bankruptcy
Code, licenses or rights to "intellectual property" as defined under
Section 101(52) of the US Bankruptcy Code. The Parties agree that each
Party, as a licensee of such rights under this License, shall retain and
may fully exercise all of its rights and elections under the US
Bankruptcy Code, subject to performance by the licensee of its
preexisting obligations under this License.
ARTICLE XIII
FORCE MAJEURE
-------------
13.1 Event of Force Majeure - In the event that performance under this
----------------------
License, or any obligation hereunder, is hindered, delayed or prevented
by reason of acts of God, strikes, lockouts, labor troubles, intervention
of any governmental authority, fire, riots, insurrections, invasions, war
or other reason of similar nature beyond the reasonable control of the
Party and are without its fault or negligence, then performance of that
act shall be excused for the period of the delay and the period for the
performance of that act shall be extended for an equivalent period.
13.2 Notification. Upon occurrence of an event of force majeure, the
-------------
affected Party shall promptly notify the other Party in writing, setting
forth the nature of the occurrence, its expected duration and how that
Party's performance is affected.
24 * Confidential Treatment Requested
<PAGE>
The affected Party shall resume the performance of its obligations as
soon as practicable after the force majeure event ceases.
ARTICLE XIV
DISPUTE RESOLUTION
------------------
14.1 Choice of Law - This License shall be governed by the laws of the State
-------------
of [*****], excepting its conflict of laws principles, in all respects of
validity, construction and performance, except that all questions
concerning the construction, validity, coverage or infringement of Patent
Rights or Joint Patent Rights shall be decided in accordance with the
patent law of [*****].
14.2 Disputes - Both Parties shall make good faith efforts to resolve any
--------
questions concerning construction and performance under this License,
[*****], by:
14.2.1 Notice, contact and negotiation, all proceedings and documents
in English, between the Parties listed under Article 15.1
within [*****] from the date of the notice by negotiation
either by telephone or by meeting in [*****]; and
14.2.2 If unsuccessful under Article 14.2.1, then senior executive
management with settlement authority and counsel of DOW and
DIVERSA shall meet at a mutually agreeable location within
[*****] from a date of notice that Article 14.2.1 failed to
resolve the issues. Counsel shall present the legal and factual
arguments to such executives in English, with supporting
evidence if necessary, and resolution by these executives is
expected within [*****], which may be reduced to writing in
English as an amendment to this License; and
14.2.3 If such executives have not met or resolved the issues under
Article 14.2.2, then within [*****] from the date of the notice
under Article 14.2.1, the Parties shall submit the issues to
mediation in [*****], in English, in accordance with the Rules
of the American Arbitration Association ("AAA"), which may be
modified by the Parties, and judgment shall not be binding. The
Parties agree that the following procedures shall be adhered to
even though they may, in part, not be in full conformance with
said Rules:
(a) [*****] Mediators shall be selected from a list of at
least [*****] arbitrators selected by the AAA composed of
counsel with
25 * Confidential Treatment Requested
<PAGE>
chemistry, molecular biology or pharmaceutical expertise who are
practicing or retired partners in law firms or in-house corporate
counsel not affiliated with the Parties with at least [*****] of
experience in law and knowledge of the pertinent laws of any
country relevant to the dispute. The mediation proceedings and
reports shall be in English. The time from the beginning of
submission for mediation and conclusion of any oral or written
proceedings shall not exceed [*****]; and
(b) Limited discovery to only that which each Party has a
substantial, demonstrable need, and shall be conducted in the
most expeditious and cost-effective manner. The Mediators shall
resolve any issues with regard to the discovery. Decision by the
Mediators shall be given in writing within [*****] from the end
of oral proceedings; and
(c) The decision by the Mediators is binding, but should either Party
then need to have a Court of competent jurisdiction for the
Parties enforce the decision, either Party may introduce into
court the decision reached by Mediation with its supporting
evidence.
ARTICLE XV
NOTICES
-------
15.1 Official - Any notice, request or communication specifically provided for
--------
or permitted to be given under this License must be in writing and may be
delivered by hand delivery, overnight courier service, or electronic
transmission such as facsimile, and shall be deemed effective as of the
time of actual delivery thereof to the addressee. For purposes of notice
the addresses of the Parties shall be as follows:
If to DIVERSA:
Diversa Corporation
10665 Sorrento Valley Road
San Diego, California 92121
Attention: [*****]
26 * Confidential Treatment Requested
<PAGE>
[*****]
With a copy to:
Diversa Corporation
10665 Sorrento Valley Road
San Diego, California 92121
Attention: [*****]
If to DOW:
[*****]
Attention: [*****]
27 * Confidential Treatment Requested
<PAGE>
15.2 Development Issues - For purposes of commercial development reporting, the
------------------
addresses of the Parties shall be as follows:
If to DIVERSA:
Diversa Corporation
10665 Sorrento Valley Road
San Diego, California 92121
Attention: [*****]
If to DOW:
[*****]
Attention: [*****]
ARTICLE XVI
MISCELLANEOUS PROVISIONS
------------------------
16.1 Amendments - This License may be amended only in writing executed by both
----------
Parties.
16.2 Entirety of Agreement - This License together with the Agreement sets
---------------------
forth the entire agreement and understanding between the Parties hereto
with respect to the commercialization of Royalty Bearing Products in the
Territory.
16.3 Severability - If any term or provision under this License is deemed
------------
invalid under the laws of a particular country or jurisdiction, the
invalidity shall not invalidate
28 * Confidential Treatment Requested
<PAGE>
the whole License but it shall be construed as if not containing that
particular term or provision and the rights and obligations of the Parties
shall be construed and enforced accordingly. The Parties shall negotiate
in good faith a substitute provision in compliance with the law to as
nearly as possible retain the Parties intent in legally valid language.
16.4 Waivers, Cumulative Remedies - A waiver by either Party of any term or
----------------------------
condition of this License in any one instance shall not be deemed
construed to be a waiver of such term or condition for any similar
instance in the future or of any subsequent breach hereof. All rights,
remedies, undertakings, obligations and agreements contained in this
License shall be cumulative and none of them shall be a limitation of any
other remedy, right, undertaking, obligation or agreement of either Party.
16.5 Headings - Headings in this License are included herein for ease of
--------
reference and shall not affect the meaning of the provisions of this
License, nor shall they have any other legal effect.
16.6 Other Documents - Each Party agrees to execute such additional papers or
---------------
documents in customary legal form and to make such governmental filings or
applications as may be necessary or desirable to effect the purposes of
this License and carry out its provisions.
16.7 Publicity - Neither DOW nor DIVERSA shall make the financial terms of this
---------
License public, except as required by law or by mutual consent. Either
Party may make such disclosure of the existence of this License to its
attorneys, advisors, investors, prospective investors, leaders and other
financing sources, under circumstances that reasonably ensure
confidentiality. In the event that a filing of a copy of this License with
the US Securities and Exchange Commission is required, then DIVERSA shall
seek confidential treatment of information considered confidential by DOW
and shall redact the financial and as much other information as possible.
Any press release or publicity of this License shall be reviewed and
approved by both Parties prior to any release. It is expected that a Q&A
outline for use in responding to inquires about this License shall be
prepared and used by both Parties. Thereafter both Parties may disclose
the information contained in such press release and Q&A outline without
the need for further approval. In no event shall the financial terms of
this License be publicly disclosed, except as note in the first paragraph
of Section 16.7.
29
<PAGE>
In addition, DIVERSA may make public statements regarding the Licensed
Products by announcing in general terms that DOW has exercised its license
to them.
16.8 Interpretation - DOW and DIVERSA acknowledge and agree that: (i) each
--------------
Party and its counsel reviewed and negotiated the terms and provisions of
this License 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
License; and (iii) the terms and provisions of the License shall be
construed fairly as to all Parties hereto and not in favor of or against
any Party, regardless of which Party was generally responsible for the
preparation of this License.
16.9 Counterparts - This License may be executed simultaneously in two (2) or
------------
more counterparts, each of which shall be deemed an original.
16.10 No Agency or Partnership - Nothing contained in this License 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.
30
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this License to be executed in
duplicate originals as of the last signature date below, by their duly
authorized representatives. This License is intended to be signed concurrently
with the Agreement and shall not be effective until the Agreement has also been
executed by both Parties. Such License may be subject to management and/or
Board approval by each Party. Upon signature such Board approval is indicated
to have been obtained.
DIVERSA CORPORATION THE DOW CHEMICAL COMPANY
By /s/ Jay M. Short, PhD By /s/ Fernand Kaufmann
------------------------ ------------------------
Name Jay M. Short, PhD Name Fernand Kaufmann
Title Chief Executive Officer Title Vice President
New Businesses and Strategic
Development
Date 7/20/99 Date 7/22/99
---------------------- ----------------------
31
Appendix [*]
[*****]
* Confidential Treatment Requested
Appendix [*]
[*****]
* Confidential Treatment Requested
<PAGE>
Appendix [*]
[*****]
* Confidential Treatment Requested
<PAGE>
Appendix [*****]
----------------
[*****]
<TABLE>
<CAPTION>
Title/Subject Filing Date Serial No.
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
[*****] [*****] [*****]
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Confidential Treatment Requested
<PAGE>
Appendix [*]
[*****]
* Confidential Treatment Requested
<PAGE>
Appendix [*]
[*****]
* Confidential Treatment Requested
<PAGE>
Appendix [*]
[*****]
* Confidential Treatment Requested
<PAGE>
Appendix [*****]
[*****]
[*****]:
[*****]:
. [*****].
. [*****].
. [*****].
* Confidential Treatment Requested
<PAGE>
Appendix [*****]
----------------
[*****]
[*****].
"[*****]" [*****].
-------
"[*****]" [*****].
-------
"[*****]" [*****].
-------
"[*****]" [*****].
-------
"[*****]" [*****]
-------
* Confidential Treatment Requested
<PAGE>
[*****].
"[*****]" [*****].
[*****].
[*****]
[*****]
[*****]. [*****];
(a) [*****]; or
(b) [*****].
[*****].
[*****]. [*****].
* Confidential Treatment Requested
<PAGE>
[*****]
[*****] [*****]
- -------
[*****]
[*****]
[*****]
<TABLE>
<CAPTION>
<S> <C>
[*****]
</TABLE>
[*****] [*****]
- -------
[*****]
(a) [*****]
(b) [*****]
[*****]
[*****] [*****]
- -------
* Confidential Treatment Requested
<PAGE>
Appendix [*]
[*****]
OPTION
THE DOW CHEMICAL COMPANY
AND
RECOMINBANT BIOCATALYSIS, INC.
*Confidential Treatment Requested
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE/APPENDIX TITLE PAGE NUMBER
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
1 DEFINITIONS 2
- -------------------------------------------------------------------------------------------------
2 GRANT OF OPTION 5
- -------------------------------------------------------------------------------------------------
3 OPTION PAYMENTS 6
- -------------------------------------------------------------------------------------------------
4 ENZYME USE AND RESEARCH PLAN 8
- --------------------------------------------------------------------------------------------------
5 LICENSE TERMS 10
- --------------------------------------------------------------------------------------------------
6 PATENT RIGHTS 13
- --------------------------------------------------------------------------------------------------
7 CONFIDENTIALITY 15
- --------------------------------------------------------------------------------------------------
8 U.S. EXPORT CONTROL AND GOVERNMENT LICENSES 17
- --------------------------------------------------------------------------------------------------
9 WARRANTY, DISCLAIMER, GUARANTEE 17
- --------------------------------------------------------------------------------------------------
10 TERM AND TERMINATION 18
- --------------------------------------------------------------------------------------------------
11 FORCE MAJEURE 20
- --------------------------------------------------------------------------------------------------
12 NOTICES 20
- --------------------------------------------------------------------------------------------------
13 ASSIGNMENT 22
- --------------------------------------------------------------------------------------------------
14 LIABILITY 23
- --------------------------------------------------------------------------------------------------
15 MISCELLANEOUS PROVISIONS 23
- --------------------------------------------------------------------------------------------------
A LETTER OF INTENT A
- --------------------------------------------------------------------------------------------------
B JOINT PATENTS B
- --------------------------------------------------------------------------------------------------
C PATENTS C
- --------------------------------------------------------------------------------------------------
D RESEARCH PLAN D
- --------------------------------------------------------------------------------------------------
E CONFIDENTIALITY AGREEMENT E
- --------------------------------------------------------------------------------------------------
</TABLE>
i
<PAGE>
OPTION AGREEMENT
----------------
THIS option agreement (hereinafter "OPTION") is made between THE DOW CHEMICAL
COMPANY (hereinafter "DOW" or a "Party"), a corporation duly formed and existing
under the laws of the State of Delaware, having a place of business at 2030 Dow
Center, Midland, Michigan 48674, United States of America, and Recombinant
BioCatalysis Inc. (hereinafter "RBI" or a "Party"), a corporation duly formed
and existing under the laws of Delaware, having a place of business at 10665
Sorrento Valley Road, San Diego, CA 92121;
WITNESSETH:
WHEREAS, DOW possess [*****]; and
WHEREAS, DOW has proprietary rights in this [*****] and desires that the
[*****]; and
WHEREAS, RBI desires to undertake the further evaluation of this [*****] under
the terms of this OPTION and, if RBI is able to [*****], RBI is willing to grant
DOW an exclusive or non-exclusive license to such [*****]
WHEREAS, DOW desires to obtain an exclusive or non-exclusive, global license to
this [*****] and
WHEREAS, RBI desires to supply DOW with such [*****]
NOW, THEREFORE, DOW and RBI, in consideration of the mutual covenants contained
herein, agree as follows:
<PAGE>
ARTICLE 1 - DEFINITIONS
- -----------------------
When used in this OPTION, 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 a corporation or any other entity that at any time during
the term of this OPTION directly or indirectly through one or more
intermediaries is CONTROLLED by the designated Party, but only for so long
as the relationship exists. A corporation or other entity shall no longer
be an AFFILIATE when through loss, divestment, dilution or other reduction
of a Party's ownership, the Party loses CONTROL of such corporation or
other entity.
1.2 "CANDIDATE ENZYMES" means those ENZYMES which meet the criteria of [*****]
[*****].
2 * Confidential Treatment Requested
<PAGE>
1.3 "CDA" means a Confidential Disclosure Agreement between the Parties
effective August 27, 1996 a copy attached hereto as Appendix E.
1.4 "CONFIDENTIAL INFORMATION" means any proprietary information of a Party
that is submitted to the other Party hereunder, including, but not limited
to PATENTS, JOINT PATENTS, ENZYME sample of ENZYME TECHNOLOGY, the FIELD,
financial terms of this OPTION, business information of RBI or DOW and
business development plans for an ENZYMES.
1.5 "CONTROL" or "CONTROLLED" shall mean, in the case of a corporation,
ownership or control, directly or indirectly, of more than [*****] of the
shares of stock entitled to vote for the election of directors and, in the
case of an entity other than a corporation, ownership or control, directly
or indirectly, of more than [*****] of the assets or the ability in the
case of either a corporate or non-corporate entity to direct the management
and affairs of such entity.
1.6 "EFFECTIVE DATE" means [*****]
1.7 "ENZYME" means any [*****] for use under this OPTION in the FIELD,
including TECHNOLOGY such as its [*****] when done by RBI.
1.8 [*****] ENZYMES" means those ENZYMES which meet the criteria of [*****]
1.9 "FIELD" means the use of ENZYME [*****]
1.10 [*****] ENZYMES" means those ENZYMES which meet the criteria of [*****]
1.11 [*****] means the agreement signed between DOW and RBI, [*****] a copy
attached hereto for reference as Appendix A.
3 * Confidential Treatment Requested
<PAGE>
1.12 "LICENSE" means a license agreement contemplated under Section 5.2 to be
granted by RBI to DOW if, by [*****], DOW notifies RBI in writing of its
desire to exercise its rights to obtain a license.
1.13 "JOINT PATENTS" means those PATENTS in the FIELD which are jointly owned by
and have claims present by employees of both DOW and RBI during the term of
this OPTION and, if they exist, shall be listed in Appendix B, which shall
be reviewed and updated [*****] to be attached hereto and made a part
hereof.
1.14 "OPTION TERM" means until [*****] for an [*****] LICENSE and until [*****]
for a [*****] LICENSE, unless extended in writing by the Parties.
1.15 "PATENTS" means all patent applications and patents to which RBI has rights
which claim [*****] to the ENZYME made by RBI (or other inventions,
including but not limited to, apparatus, made by RBI in the course of
performing work under the RESEARCH PLAN) during this OPTION TERM, together
with any continuations, continuations-in-part, divisions, reissues,
registrations, confirmations, patents-of -addition, and extensions of the
foregoing, which claims cover the preparation, use or per se ENZYME in the
TERRITORY, which shall be listed in Appendix C (such patents to be mutually
agreed upon to be listed if regarding other inventions), to be attached
hereto and made a part hereof, and reviewed and updated [*****]
1.16 [*****] ENZYMES" means those ENZYMES which meet the criteria of exhibiting
at least [*****]
1.17 "RESEARCH PLAN" means a mutually agreed upon plan for RBI to perform
research activities to [*****] ENZYME for commercial use to achieve TARGET
ACTIVITY in the FIELD during the OPTION TERM in accord with Appendix D,
attached hereto and made a part hereof.
1.18 "SIGNATURE DATE" means the date of the last signature of the Parties to
this OPTION.
1.19 "TARGET ACTIVITY" refers to the Milestone [*****] target for the [*****]
It is determined at the [*****] and projected from the Milestone 2 data to
be sufficient for a [*****] It is defined in terms of [*****]
4 * Confidential Treatment Requested
<PAGE>
1.20 "TECHNOLOGY" means data for ENZYME, including for example [*****] [*****]
and process to make them
1.21 "TERRITORY" means the [*****]
ARTICLE 2 - GRANT OF OPTION
- ---------------------------
2.1 Grant of OPTION - RBI hereby grants to DOW, and DOW hereby accepts either:
---------------
(1) [*****] right during the OPTION TERM to acquire [*****] LICENSE to
make, have made, use, sell, import and have sold ENZYME(S) for the
FIELD in the TERRITORY under the PATENTS, JOINT PATENTS and
TECHNOLOGY and subject to Section 5.3; or
(2) [*****] right during the OPTION TERM to acquire [*****] LICENSE to
make, have made, use, sell, import and have sold ENZYME(S) for the
FIELD in the TERRITORY under the PATENTS, JOINT PATENTS and
TECHNOLOGY and subject to Section 5.3.
Whether (1) or (2) above is selected is solely DOW's choice during the
OPTION TERM.
2.2 Reservation - DOW reserves for itself and its AFFILIATES the right to do
-----------
internal research on ENZYMES (excluding any [*****] to the ENZYMES made by
RBI) within the FIELD during the OPTION TERM.
2.3 [*****]
2.4 Exercise of OPTION for LICENSE - DOW may exercise its rights under Section
------------------------------
2.1 by providing written notice to RBI of its election under Section 2.1
(1) or (2) on or before [*****]
ARTICLE 3 - OPTION PAYMENTS
- ---------------------------
3.1 Initial Payment for OPTION - Within [*****] from the EFFECTIVE DATE, DOW
--------------------------
shall pay RBI [*****]
3.2 Additional Payments during OPTION TERM - The further payments to RBI by DOW
--------------------------------------
are tied to the achievement of milestone technical events in accord with
Article 4. DOW shall be invoiced [*****] prior to any payment due to RBI
for each of these milestones. The payments for each milestone are:
3.2.1 Milestone 1 - [*****] - [*****] if RBI is technically successful as
---------------------
defined in Article [*****] [*****], if RBI accomplishes this
Milestone 1 in less than [*****] from the date of receipt by RBI of
[*****] from DOW;
5 * Confidential Treatment Requested
<PAGE>
3.2.2 Milestone 2 - [*****] - [*****], payable within [*****] of receipt
---------------------
by DOW of the ENZYME [*****] by DOW that RBI has provided DOW with
[*****] (DOW shall use its reasonable good faith efforts to conclude
such evaluation within [*****] CANDIDATE
[*****] plus [*****] if RBI provides DOW with [*****] CANDIDATE
----
ENZYMES and/or [*****] ENZYME [*****] and
3.2.3 Milestone 3 - [*****]
---------------------
(A) [*****] payable within [*****] of receipt by DOW of the ENZYME
[*****] by DOW that RBI has provided DOW with [*****]plus
----
(B) [*****] payable within [*****] of receipt by DOW of the ENZYME
[*****] by DOW that RBI has provided DOW with [*****] ENZYME
(for both (A) and (B) of this Section 3.2.3 DOW shall use its
reasonable good faith efforts to conclude such evaluations
[*****] of the ENZYMES), plus a bonus of -
----
(i) [*****] if either of the criteria for (B) [*****]
ENZYME are met within [*****] from the EFFECTIVE DATE, plus
----
(ii) [*****] if the [*****] ENZYME exceeds [*****] plus
----
(iii) [*****] if the [*****] ENZYME exceeds [*****]
It is agreed that if any of these milestones categories in Section 3.2 is
surpassed by an ENZYME providing performance at a higher category that the
payments for those surpassed categories will still be made.
The [*****]
These payments are tied to performance under the RESEARCH PLAN described in
Article 4.
3.3 Payments to RBI - All payments under this Article 3 are to be made to:
Recombinant BioCatalysis, Inc. and sent by wire transfer to:
6 * Confidential Treatment Requested
<PAGE>
Account Name: [*****]
Federal ID No.: [*****]
[*****]
ARTICLE 4 - ENZYME USE AND RESEARCH PLAN
- ----------------------------------------
4.1 RBI Obligations - RBI shall maintain sole physical control of the ENZYME
---------------
which shall be treated as CONFIDENTIAL INFORMATION under the terms of
Article 7 of this OPTION. RBI shall use any information provided to it by
DOW solely to [*****] ENZYME in the FIELD. RBI shall provide a written
report with a summary of the data to DOW on a [*****] basis or at a
milestone achievement in accord with Section 4.3 in a [*****] whichever
occurs first. (If clarification of a report is requested by DOW to more
fully understand such report, then a meeting of respective personnel is
permitted.) A final written report shall be provided of the results
obtained by RBI on its [*****] efforts for the ENZYME, including its
[*****] within [*****] at the end of the OPTION TERM or within
--
[*****] upon termination.
4.2 Development Efforts - During the OPTION TERM, RBI shall perform research
-------------------
activities to [*****] the ENZYME to achieve TARGET ACTIVITY in the FIELD in
a diligent manner as specified in Article 3 and described in detail in a
RESEARCH PLAN. Such [*****] can be met by any manner acceptable to the
Parties. The ENZYME is to be [*****] for commercial use in a manner agreed
upon between the Parties. The RESEARCH PLAN may be amended by mutual,
written consent of the Parties. However, either Party may terminate the
research and this OPTION at any technical milestone specified in Section
4.3 for any reason; but if RBI terminates, then DOW has [*****] to notify
RBI whether DOW desires either [*****] LICENSE in accord with Section 2.1
for the ENZYME until that termination. If DOW terminates the research and
this OPTION and any of the milestones beyond Milestone 1 have been achieved
and completed in accord with each milestone requirement in accordance with
Section 4.3, then RBI shall have the rights described in Section 5.2.3.
4.3 Milestones -
----------
4.3.1 Milestone 1
-----------
DOW completes preliminary [*****] and defines general parameters for
the ENZYME, [*****] and
---
RBI develops of a suitable [*****]
4.3.2 Milestone 2
-----------
7 * Confidential Treatment Requested
<PAGE>
RBI [*****] ENZYME by [*****] to obtain CANDIDATE ENZYME, transfers
to DOW the [*****] CANDIDATE ENZYMES and [*****] of each CANDIDATE
ENZYME.
DOW confirms [*****] CANDIDATE ENZYMES and evaluates their
performance attributes [*****]
(DOW and RBI scientists shall discuss the relationship between
[*****] in performance of the [*****] CANDIDATE ENZYME and [*****]
in productivity of the CANDIDATE ENZYME as a supported catalyst.
After such discussions, the Parties shall mutually agree on [*****]
i.e. TARGET ACTIVITY, prior to starting Milestone 3.)
4.3.3 Milestone 3
-----------
(A) RBI increases productivity as stated in Article 3 for [*****]
ENZYMES and transfers [*****] of all such ENZYMES to DOW
together with each ENZYME's [*****] DOW confirms [*****]
ENZYMES and evaluates their performance attributes [*****]
[*****] If [*****] ENZYME [*****] then part (B) below shall
occur.
(B) RBI [*****] as stated in Article 3 for [*****] ENZYMES and
transfers [*****] of [*****] ENZYMES to DOW together with each
ENZYME's [*****] DOW confirms [*****] ENZYMES and evaluates
their performance attributes [*****].
4.4 RESEARCH PLAN and Payments are tied - The events under Section 4.3 for
-----------------------------------
performance under the RESEARCH PLAN are tied to payments under Article 3.
4.5 DOW Obligations - DOW shall provide the [*****] mentioned in Section 4.3.1,
---------------
Milestone 1, analytical information or know-how, including evaluation of
the [*****] ENZYME at DOW facilities, [*****] and the [*****] All
information supplied by DOW to RBI shall be treated as confidential under
Article 7.
ARTICLE 5 - LICENSE TERMS
- -------------------------
The following terms are contemplated by the Parties to be included in a LICENSE
if, by [*****] of the OPTION TERM, DOW exercises its right to such LICENSE.
8 * Confidential Treatment Requested
<PAGE>
5.1 Exercise Payment - Upon exercise of the right to a LICENSE, a payment shall
----------------
be due to RIBI depending upon whether DOW elects rights under Section 2.1
(1) or (2) as follows. If DOW elects Section 2.1 (1) for [*****] LICENSE,
then a [*****]is payable within [*****] from exercise of the [*****]
LICENSE but no sooner than [*****] If DOW elects Section 2.1(2) for [*****]
[*****] LICENSE, then terms shall be negotiated using reasonable good faith
efforts by the Parties [*****]
5.2 Exercise for LICENSE - The OPTION TERM shall be for the [*****] including
--------------------
any mutually agreed upon extensions. At present both Parties agree that the
OPTION TERM for [*****] LICENSE shall run from the EFFECTIVE DATE until
[*****] and for [*****] LICENSE until [*****] In addition, DOW has [*****]
from its receipt by DOW to evaluate the TECHNOLOGY and [*****] ENZYME
provided by RBI before execution of the LICENSE.
5.2.1 By the end of the OPTION TERM, DOW, at its sole discretion, may
negotiate [*****] LICENSE to the ENZYME and [*****] for the ENZYME
in the FIELD from RBI, or purchase the ENZYME or immobilized ENZYME
from RBI or an alternate supplier in accord with Section 5.3. Upon
execution of the LICENSE, [*****] and terms of sale for any ENZYME
shall be on commercially reasonable terms, mutually agreed upon, and
shall include, without limitation, [*****] (as negotiated by the
Parties in good faith taking into account the value created by the
respective contributions of the Parties, e.g., monetary, scientific
and capital contributions). If DOW exercises the OPTION for [*****]
LICENSE, RBI shall also have the [*****]
5.2.2 In the event that the ENZYME [*****] and DOW has had [*****] from
the time the TECHNOLOGY and [*****] ENZYME was delivered to DOW in
accord with Milestone 3(B) of Section 3.2.3 to test it, and DOW then
provides written notice to RBI in accord with Section 12.1 of DOW's
lack of interest in commercial use of the [*****] ENZYME provided by
RBI, then, RBI shall have the rights described in Section 5.2.3.
5.2.3 RBI Rights - Under the circumstances described in Sections 4.2 and
----------
5.2.2 and in the event that RBI terminates the OPTION in accord with
Section 10.2 upon material breach by DOW, DOW shall have no LICENSE
(but shall have the right for internal research use of ENZYME,
TECHNOLOGY, PATENTS and JOINT PATENTS) and RBI shall have all
commercial rights to make, have made, use, sell, import and have
sold ENZYME for the FIELD in the TERRITORY under the PATENTS, JOINT
PATENTS and TECHNOLOGY by notifying DOW in writing in accord with
Section 12.1 and making the following payments (at RBI's sole
option):
9 * Confidential Treatment Requested
<PAGE>
(A) RBI shall pay DOW as a [*****] fee for DOW's total investment
in the ENZYME (which fee shall be computed from the time of
such request by RBI, but in no event would be less than [*****]
Such payment would be due to DOW within [*****] from invoice by
DOW; or
(B) RBI agrees to pay to DOW reasonable [*****] from RBI's
commercialization or sale of the TECHNOLOGY or PATENTS using
the ENZYME. Such payments shall be negotiated as an agreement
by the Parties using their good faith efforts.
RBI must elect between (A) and (B) within [*****] from DOW's written
notification of lack of interest and convey their election in
writing to DOW in accord with Section 12.1.
Any payments to DOW under this Section 5.2.3 shall be made to. The
Dow Chemical Company, and be sent by wire transfer to: [*****]
5.3 Supply of ENZYME - In the event that the ENZYME is [*****] and is of
----------------
further interest to DOW and DOW exercises its rights to a LICENSE under
Section 2.1, then DOW shall have [*****] from the time the [*****] ENZYME
is delivered in a practicable form to DOW in accord with Milestone 3(B)
under Section 4.3.3 (B) to provide written notice under Section 12.1 to RBI
of DOW's intent to either:
(A) have RBI supply the [*****] ENZYME commercially to DOW. If this
course is mutually agreed upon then a commercial agreement shall
be negotiated using reasonable good faith efforts by the Parties;
or
(B) inform RBI that DOW will use an alternate supplier (not RBI) for
the [*****] ENZYME. RBI agrees to provide to a qualified third
party under appropriate, reasonable licensing terms for the
industry, the information and rights required to supply the
ENZYME to DOW; or
(C) If DOW does not desire any commercial supply of the improved
ENZYME, then refer to Section 5.2.2.
5.4 DOW Evaluation - DOW has the right, during the OPTION TERM and the [*****]
--------------
evaluation period, for its purposes of evaluation only, to produce
sufficient ENZYME for its needs.
10 * Confidential Treatment Requested
<PAGE>
5.5 Other terms - Other customary and negotiated terms are expected to be
-----------
included in the LICENSE and are permitted.
ARTICLE 6 - PATENT RIGHTS
- -------------------------
6.1 RBI to Maintain PATENTS - Any [*****] the ENZYME made by RBI during this
----------------------- -----------
OPTION TERM shall belong to RBI, if within the claimed scope of any PATENT.
DOW shall be informed of all such PATENTS and be provided with a copy
thereof, and provided with their publication numbers or patent numbers and
each country where filing was done. If requested by DOW, a completed file
wrapper for a given application or patent shall be provided to DOW. An
[*****] status of the concerned PATENTS shall be provided to DOW until all
have issued or are abandoned. If DOW exercises its rights for a LICENSE,
then rights to any PATENTS shall be granted in the LICENSE for the FIELD
for the TERRITORY. If RBI obtains rights under Section 5.2.3, then such
rights shall include rights to any PATENTS for the FIELD for the TERRITORY.
6.2 Notice of Patent Lapse - RBI shall advise DOW of the grant,
----------------------
lapse, nullification, revocation, surrender, or invalidation of any of the
PATENTS at the annual update of the PATENT listing for Appendix C.
6.3 JOINT PATENTS - Although unlikely to occur, in those instances where joint
-------------
inventions between DOW and RBI result in a patentable invention, then DOW
and RBI shall mutually determine, using their good faith efforts, whether
the patent application has joint ownership and joint claim structure, and
which Party should prosecute the patent application and pay the annuities.
Both Parties shall elect any countries in which filing shall be done. If
DOW exercises its rights for a LICENSE, then rights to any JOINT PATENTS
shall be granted in the LICENSE for the FIELD for the TERRITORY. If RBI
obtains rights under Section 5.2.3, then such rights shall include rights
to JOINT PATENTS for the FIELD for the TERRITORY.
6.4 TECHNOLOGY - TECHNOLOGY developed during the OPTION TERM or known as of the
----------
[***] by either Party shall remain that Party's property. Any use by one
Party of the other's TECHNOLOGY shall be under the confidentiality
provisions of Article 7.
6.5 DOW Patents - No rights are granted by DOW to RBI to use any DOW
-----------
intellectual property rights including patents (such as sole DOW patents),
trade secrets, confidential information and computer programs, except in
providing the contemplated services under the RESEARCH PLAN. If Section
5.2.3 pertains, then rights to commercial use of the JOINT PATENTS and
ENZYME are granted by DOW to RBI.
ARTICLE 7 - CONFIDENTIALITY
- ---------------------------
7.1 Each Party shall use good faith efforts to retain in confidence and not
disclose to any third party each other's CONFIDENTIAL INFORMATION. Such
"good faith efforts" shall mean the same degree of care, but no less than a
reasonable degree of care, as the receiving Party uses to protect its own
CONFIDENTIAL INFORMATION of a like nature. This obligation shall be
effective from [***] upon the SIGNATURE
11 * Confidential Treatment Requested
<PAGE>
DATE and shall cease [*****] from termination of this OPTION. This
OPTION shall supersede the CDA upon the SIGNATURE DATE .
7.2 Excepted from the obligation of confidentiality under Section 7.1 is that
information which:
(a) is available, or becomes available, to the general public without
fault of the receiving Party; or
(b) is obtained by the receiving Party without an obligation of confidence
from a third party (other than a governmental agency) who is
rightfully in possession of such information and is under no
obligation of confidentiality to the disclosing Party concerning such
information; or
(c) is released from confidentiality in writing by the disclosing Party;
or
(d) is permitted to be disclosed by Section 7.4.
For the purpose of Section 7.1, a specific CONFIDENTIAL INFORMATION shall not be
deemed to be within the foregoing exceptions merely because it is embraced by
more general information in the public domain, or in the possession of the
receiving Party. In addition, any combination of features shall not be deemed to
be within the foregoing exceptions merely because individual features are in the
public domain or in the possession of the receiving Party, but only if the
combination itself and its principle of operation and process to make it are in
the public domain or in the possession of the receiving Party.
7.3 Notwithstanding the provisions of Section 7.1, if the receiving Party
becomes legally compelled to disclose any of the disclosing Party's
CONFIDENTIAL INFORMATION, the receiving Party shall promptly advise the
disclosing Party of such required disclosure in order that the disclosing
Party may seek a protective order or such other remedy as the disclosing
Party may consider appropriate in the circumstances. The receiving Party
shall disclose only that portion of the CONFIDENTIAL INFORMATION which it
is legally required to disclose. Such a disclosure shall not release the
receiving Party with respect to the CONFIDENTIAL INFORMATION so disclosed
except to the extent of permitting the required disclosure. In addition,
the receiving Party may disclose CONFIDENTIAL INFORMATION of the disclosing
Party to the extent such disclosure is reasonably necessary in connection
with the filing or prosecution of JOINT PATENTS. If DOW CONFIDENTIAL
INFORMATION is reasonably necessary to be disclosed in connection with the
filing or prosecution of PATENTS, then DOW's prior written consent must be
obtained in accord with Section 12.1.
7.4 Disclosure to AFFILIATES - RBI or DOW may disclose CONFIDENTIAL INFORMATION
------------------------
to its AFFILIATES, and consultants as may be necessary to exercise the
rights granted hereunder, but only under conditions of confidentiality at
least as stringent as those set out in Sections 7.1, 7.2 and 7.3.
7.5 Document Return - In the event of termination of this OPTION under Article
---------------
10, without exercise of a LICENSE, then:
<PAGE>
(a) RBI will cease its use of the ENZYMES in accord with Section 10.3,
and
(b) each Party will cease its use of all CONFIDENTIAL INFORMATION of the
other Party provided hereunder and, on the disclosing Party's request,
within sixty (60) days either return all such CONFIDENTIAL
INFORMATION, including any copies thereof, ENZYMES in whatever media
or form, or will promptly destroy the same and certify such
destruction to the disclosing Party.
Notwithstanding the above, a Party may retain one copy of any CONFIDENTIAL
INFORMATION of the other Party in its legal files, but shall return or destroy
any DOW samples of ENZYME or ENZYME provided by the other Party. The foregoing
provisions shall not apply to RBI to the extent it exercises its rights under
Section 5.2.3.
ARTICLE 8 - U.S. EXPORT CONTROL AND GOVERNMENT LICENSES
- -------------------------------------------------------
8.1 Compliance - Both Parties agree to comply, at their expense, with all
----------
necessary United States governmental regulations with respect to export of
ENZYMES and TECHNOLOGY in the TERRITORY. Both Parties agree to not export
or re-export any ENZYME or TECHNOLOGY received from the other or the direct
products of such TECHNOLOGY to any prohibited country listed in the U.S.
Export Administration Regulations unless properly authorized by the U.S.
Government. Each Party shall be responsible for the acts of its AFFILIATES,
contractors, and consultants and assumes all liability if it or its
AFFILIATES, fails to obtain any of the necessary licenses or commits any
violations of the United States Export Laws or Regulations (15 C.F.R.
(S)700 et seq.). Each Party shall indemnify the other for its acts and for
any breach of compliance.
8.2 Licenses and Clearances - Both Parties agree to obtain all necessary
-----------------------
licenses or clearances, at its expense, and to comply with all applicable
regulations of agencies in the TERRITORY.
ARTICLE 9 - WARRANTY, DISCLAIMER, GUARANTEE
- -------------------------------------------
9.1 Belief of Accuracy - Each Party represent that ENZYME, TECHNOLOGY and any
------------------
other CONFIDENTIAL INFORMATION transferred or provided to the other Party
hereunder are believed to be accurate and complete as of their current
status on the EFFECTIVE DATE and that each Party's interpretations and
conclusions drawn therefrom were made in good faith and in the exercise of
its scientific judgment as of the dates of the documents contained therein.
However, neither Party warrants or represents that such information is or
will be sufficient to market ENZYME or to commercially produce ENZYME, or
to commercialize ENZYME in the TERRITORY or that DOW or RBI shall be free
to practice or sell any ENZYME.
9.2 DOW Representation - DOW will be solely relying on its own evaluation of
------------------
ENZYME, TECHNOLOGY and the other CONFIDENTIAL INFORMATION transferred or
provided to it hereunder and on its own scientific expertise in using the
same in its development and evaluation of ENZYME.
<PAGE>
9.3 Validity, Non-Infringement - No warranty is provided that the manufacture,
--------------------------
use and sale of ENZYME falls outside the scope of third party patents or
the industrial property rights of a third party.
9.4 Disclaimer of Warranties as to PATENTS - RBI makes no representation that
--------------------------------------
the inventions covered in any PATENTS are patentable or that the PATENTS
are or will be valid or enforceable, nor does RBI warrant or represent that
the exercise of the rights hereunder is free from infringement of patent
rights of third parties.
ARTICLE 10 - TERM AND TERMINATION
- ---------------------------------
10.1 Term - Unless terminated under the provisions of this Article 10, this
----
OPTION shall continue in effect until the end of the OPTION TERM, unless
mutually agreed upon in writing by the Parties to be extended.
10.2 Termination for Breach - In the event of a material breach by either DOW or
----------------------
RBI of any of the obligations contained in this OPTION, the other Party
shall be entitled to terminate this OPTION by notice in writing under
Section 12.1, provided that such notice shall specify the breach or
breaches. If the said breach or breaches are capable of remedy, the Party
committing such breach or breaches shall be entitled to a period of [***]
from the delivery of such notice in which to remedy or to undertake to
remedy the same. In the case the defaulting Party shall fail to remedy the
breach or to undertake to remedy the breach to the satisfaction of the
injured Party, the injured Party shall have the right to cancel this OPTION
in whole or only terminate those rights and obligations relating to the
particular breach by simple notification to the Party in default. Failure
of a Party to exercise its rights under this Section 10.2 shall not be
construed as a waiver as to future breaches whether or not they are
similar.
10.3 Termination by RBI or DOW - Either Party may terminate this OPTION at the
-------------------------
end of any Milestone in Section 4.3 by written notice to the other. Each
will disclose to the other its reasons for any such termination. Upon such
termination, both Parties shall refrain from further use of CONFIDENTIAL
INFORMATION received from the other Party, including ENZYME, except that
this provision shall not apply to RBI if it exercises its rights under
Section 5.2.3.
10.4 Termination by DOW - DOW shall have the further right to terminate this
------------------
OPTION immediately on written notice to RBI if:
(a) RBI shall cease to carry on business or shall go into liquidation or a
receiver shall be appointed to RBI's assets; or
(b) RBI shall become bankrupt or insolvent or unable to meet any of its
performance obligations; or
(c) RBI fails to conduct testing on the ENZYMES for more than [***] from
any Milestone.
10.5 On Termination - DOW shall, upon termination of this OPTION under Article
--------------
10:
* Confidential Treatment Requested
<PAGE>
(a) pay to RBI all payments due or accrued at the termination date within
[*****] after termination; and
(b) make no further use of, or permit any use by any third party of any
kind of any and all ENZYMES disclosed hereunder by RBI, and make no
further use of the surviving PATENTS in the FIELD.
10.6 Survival of Certain Obligations - On termination of this OPTION: the
-------------------------------
obligations of confidentiality set forth in Article 7 shall survive for the
time stated therein; payments due under Article 3 shall survive for the
terms specified; and Export Control compliance set forth in Article 8 shall
survive indefinitely.
ARTICLE 11 - FORCE MAJEURE
- --------------------------
11.1 Event of Force Majeure - In the event that performance under this OPTION,
----------------------
or any obligation hereunder, is hindered, delayed or prevented by reason of
acts of God, strikes, lockouts, labor troubles, intervention of any
governmental authority, fire, riots, insurrections, invasions, war or other
reason of similar nature beyond the reasonable control of the Party and are
without its fault or negligence, then performance of that act shall be
excused for the period of the delay and the period for the performance of
that act shall be extended for an equivalent period.
11.2 Notification. Upon occurrence of an event of force majeure, the affected
------------
Party shall promptly notify the other Party in writing, setting forth the
nature of the occurrence, its expected duration and how that Party's
performance is affected. The affected Party shall resume the performance of
its obligations as soon as practicable after the force majeure event
ceases.
ARTICLE 12 - NOTICES
- --------------------
12.1 Official -Any notice, request or communication specifically provided for
--------
or permitted to be given under this OPTION must be in writing and may be
delivered by hand delivery, courier service, or electronic transmission
such as telex, facsimile, or telegram, and shall be deemed effective as of
the time of actual delivery thereof to the addressee. For purposes of
notice the addresses of the Parties shall be as follows:
DOW:
The Dow Chemical Company
[*****]
[*****]
[*****]
[*****]
* Confidential Treatment Requested
<PAGE>
with a copy to:
The Dow Chemical Company
[*****]
RBI:
Recombinant BioCatalysis, Inc.
[*****]
12.2 For purposes of scientific reporting, the Parties designate as their
respective principle contacts:
DOW:
The Dow Chemical Company
[*****]
RBI:
Recombinant BioCatalysis, Inc.
[*****]
* Confidential Treatment Requested
<PAGE>
Telephone: 619-623-5149
Facsimile: 619-623-5120
12.3 Each Party may change its address and its representative for notice by the
giving of notice thereof in the manner provided in Section 12.1.
ARTICLE 13 - ASSIGNMENT
- -----------------------
13.1 Assignment - Neither Party to this OPTION shall assign or sublicense any
----------
rights hereunder without the prior written consent of the other Party, such
consent not to be unreasonably withheld. It being agreed, however, that
without such consent being required from RBI, DOW may assign to its
AFFILIATES, but RBI must be notified in writing in accord with Section
12.1.
13.2 Consolidation, Reorganization or Merger - Should RBI be consolidated,
---------------------------------------
reorganized or merged with another entity, this OPTION and all rights and
obligations arising under this OPTION may be assigned to the successor
entity or the assignee of all or substantially all of RBI's business and
assets without DOW's prior written consent. However, RBI shall promptly
notify DOW prior to such action in accord with Section 12.1.
Effect on Successors and Assignees - This OPTION shall inure to the benefit of
and be binding upon such successors and permitted assignees.
ARTICLE 14 - LIABILITY
- ----------------------
14.1 DOW Liability to RBI - Neither DOW, any of its AFFILIATES, nor the
--------------------
respective agents, servants, officers, directors, and employees of each
shall be liable to RBI, or RBI's employees, directors, officers, agents or
legal heirs, for any personal injury, death, or property damage that occurs
while RBI is performing under this OPTION, except to the extent such
injury, death, or property damage is caused by the sole negligence of DOW.
14.2 RBI Liability to DOW - Neither RBI, any of its subsidiaries, nor the
--------------------
respective agents, servants, officers, directors, and employees of each
shall be liable to DOW, or DOW's employees, directors, officers, agents or
legal heirs, for any personal injury, death, or property damage that occurs
while DOW is performing under the OPTION, except to the extent such injury,
death, or property damage is caused by the sole negligence of RBI.
14.3 Safety by RBI - RBI personnel agree to observe the same safety and other
-------------
rules required of DOW employees while RBI is on premises owned, operated,
leased or under the control of DOW.
14.4 Safety by DOW - DOW personnel agree to observe the same safety and other
-------------
rules required of RBI employees while LOW is on premises owned, operated,
leased or under the control of RBI.
ARTICLE 15 - MISCELLANEOUS PROVISIONS
- -------------------------------------
<PAGE>
15.1 Amendments - This OPTION may be amended only in writing executed by both
----------
Parties.
15.2 Disputes - Both Parties shall make good faith efforts to resolve any
--------
questions concerning construction and performance under this OPTION
15.3 Entirety of Agreement - This OPTION sets forth the entire agreement and
---------------------
understanding between the Parties hereto with respect to ENZYME for its
evaluation in the TERRITORY for use in the FIELD. This OPTION shall be
deemed to be in compliance with the LETTER OF INTENT and should any
differences exist, this OPTION shall control.
15.4 Severability - If any term or provision under this OPTION is deemed
------------
invalid under the laws by a United States court of competent jurisdiction,
the invalidity shall not invalidate the whole OPTION but it shall be
construed as if not containing that particular term or provision for that
particular country or jurisdiction and the rights and obligations of the
Parties shall be construed and enforced accordingly. The Parties shall
negotiate in good faith a substitute provision as an addendum to this
OPTION for that particular country or jurisdiction in compliance with the
law to as nearly as possible retain the Parties intent in legally valid
language.
15.5 Waivers, Cumulative Remedies - A waiver by either Party of any term or
----------------------------
condition of this OPTION in any one instance shall not be deemed construed
to be a waiver of such term or condition for any similar instance in the
future or of any subsequent breach hereof. All rights, remedies,
undertakings, obligations and agreements contained in this OPTION shall be
cumulative and none of them shall be a limitation of any other remedy,
right, undertaking, obligation or agreement of either Party.
15.6 Publicity - Neither DOW nor RBI shall make the financial terms of this
---------
OPTION public, except as required by law. In the event that a filing of a
copy of this OPTION with the US Securities and Exchange Commission is
required, then RBI shall seek confidential treatment of information
considered confidential by DOW. Any press release or publicity of this
OPTION shall be reviewed and approved by both Parties prior to any release.
15.7 Choice of Law - This OPTION shall be governed by the laws of the State of
-------------
[***] excepting its conflict of laws principles, in all respects of
validity, construction and performance; except that all questions
concerning the construction, validity, coverage or infringement of PATENTS
or JOINT PATENTS shall be decided in accordance with the patent law of the
country where the PATENT or JOINT PATENT was granted.
15.8 Headings - Headings in this OPTION are included herein for ease of
--------
reference and shall not affect the meaning of the provisions of this
OPTION, nor shall they have any other legal effect.
15.9 Cooperation - RBI and DOW shall use good faith efforts to cooperate with
-----------
respect to any issues that concern the development of the ENZYME under this
OPTION.
*Confidential Treatment Requested
<PAGE>
15.10 RBI's Status - RBI's status hereunder is that of an independent
------------
contractor, and not that of an agent of DOW. As such RBI is responsible of
all Income Tax withholding and the payment of any other appropriate taxes
on all payments to RBI by DOW.
IN WITNESS WHEREOF, the Parties have duly executed duplicate originals of this
OPTION by their appropriate authorized representative. Such OPTION may be
subject to management and/or Board approval by each Party. Separate signature
pages are acceptable in facsimile form and shall be accepted in lieu of original
signatures, provided each Party receives a dated, signed, legible facsimile
indicating the signator for the other Party. Upon the SIGNATURE DATE, this
OPTION shall be effective as of the EFFECTIVE DATE. If requested by either
Party, duplicate originals, bearing the same date as the facsimile signature or
in lieu of facsimile signatures may be provided.
THE DOW CHEMICAL COMPANY RECOMBINANT BIOCATALYSIS, INC.
By: /s/ [*****] By: /s/ [*****]
---------------------------- -------------------------
Name: [*****] Name: [*****]
Title: [*****] Title: [*****]
Central & New Businesses R & D
Date: 7/17/97 Date: 7/9/97
-------------------------- -----------------------
* Confidential Treatment Requested
<PAGE>
APPENDIX A
[*****]
* Confidential Treatment Requested
1.
<PAGE>
[*****]
* Confidential Treatment Requested
2.
<PAGE>
[*****]
* Confidential Treatment Requested
3.
<PAGE>
[*****]
* Confidential Treatment Requested
4.
<PAGE>
[*****]
* Confidential Treatment Requested
5.
<PAGE>
[*****]
* Confidential Treatment Requested
6.
<PAGE>
[*****]
* Confidential Treatment Requested
7.
<PAGE>
[*****]
* Confidential Treatment Requested
8.
<PAGE>
This Appendix is blank as of the
SIGNATURE DATE. Additions during the
OPTION TERM are possible.
1.
<PAGE>
This Appendix is blank as of the
SIGNATURE DATE. Additions during the
OPTION TERM are possible.
1.
<PAGE>
APPENDIX D
[*****]
* Confidential Treatment Requested
1.
<PAGE>
APPENDIX E
[*****]
* Confidential Treatment Requested
1.
<PAGE>
[*****]
* Confidential Treatment Requested
2.
<PAGE>
[*****]
* Confidential Treatment Requested
3.
<PAGE>
EXHIBIT 10.16
COLLABORATIVE RESEARCH AGREEMENT
BETWEEN
THE DOW CHEMICAL COMPANY
AND
DIVERSA CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
ARTICLE TITLE PAGE NUMBER
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
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
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14 MISCELLANEOUS 28
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<CAPTION>
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APPENDIX TITLE PAGE
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<S> <C> <C>
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
- ---------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
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APPENDIX TITLE PAGE
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<S> <C> <C>
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
- ---------------------------------------------------------------------------------------------------
</TABLE>
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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 2030 Dow
Center, Midland, Michigan 48674, United States 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 10665 Sorrento Valley Road, San
Diego, California 92121, United States 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.
B. DOW has expertise in the discovery, development and production of
chemical compounds.
C. DOW 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.
E. 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:
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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
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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 [*****]
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[*****].
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
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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 Appendix
A-3, 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 [*****].
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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
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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
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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
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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
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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
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(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
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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
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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
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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
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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
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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,
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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,
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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
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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
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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.
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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
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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.
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(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
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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
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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
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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.
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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
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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
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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.
-----------
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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,
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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
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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
<PAGE>
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
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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
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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
10665 Sorrento Valley Road
San Diego, California 92121
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:
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If to DOW: THE DOW CHEMICAL COMPANY
[*****]
If to DIVERSA: DIVERSA CORPORATION.
10665 Sorrento Valley Road
San Diego, California 92121
Attention: Jay M. Short, Ph.D.
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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
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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
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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:_________________________________
Fernand Kaufmann
Vice President
New Businesses and Strategic
Development
DIVERSA CORPORATION
Date:_______________________________ By:_________________________________
Jay M. 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: [*****]
[*****]
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Appendix B-4: [*****]
Appendix C: [*****]
Appendix D: [*****]
Appendix E: [*****]
Appendix F: [*****]
Appendix G: [*****]
Appendix H: [*****]
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APPENDIX [*****]
RESEARCH [*****] AND/OR RESEARCH [*****]
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APPENDIX [*****]
[*****] PLANS
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APPENDIX [*****]
RMC MEMBERSHIP
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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:
[*****]
[*****]
[*****]
[*****]
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APPENDIX [*****]
PATENT RIGHTS DURING THE AGREEMENT TERM UNDER THE [*****] PLANS
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
DIVERSA PATENT RIGHTS WHICH [*****]
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
PATENT RIGHTS DIRECTED TO [*****] RESEARCH [*****] AND/OR RESEARCH
[*****]
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
SPECIFIC [*****] DIVERSA PATENT RIGHTS USED TO [*****] ENZYMES
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
[*****]
<TABLE>
<CAPTION>
Title/Subject Filing Date Serial No.
- ------------------------------------------------------------------------------------------
<S> <C> <C>
[*****]
</TABLE>
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
[*****]
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
[*****]
[*****].
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
LICENSE AGREEMENT
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
[*****] PLAN PROCEDURES
* Confidential Treatment Requested
<PAGE>
APPENDIX E
[*****]
[*****]
I. [*****]
[*****]
1. [*****];
2. [*****]; and
3. [*****].
II. [*****]
[*****]:
1. [*****];
2. [*****];
3. [*****];
4. [*****]; and
5. [*****].
III. [*****]
[*****]:
1. [*****]; and
2. [*****].
IV. [*****]
* Confidential Treatment Requested
<PAGE>
[*****].
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
MATERIAL TRANSFER AGREEMENT
* Confidential Treatment Requested
<PAGE>
APPENDIX F
MATERIAL TRANSFER AGREEMENT
[*****]
* Confidential Treatment Requested
<PAGE>
[*****]
* Confidential Treatment Requested
<PAGE>
THE DOW CHEMICAL COMPANY DIVERSA CORPORATION
_________________________________ _________________________________
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
Date:____________________________ Date:____________________________
<PAGE>
APPENDIX [*****]
LICENSED [*****]
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
RESEARCH [*****]
* Confidential Treatment Requested
<PAGE>
APPENDIX [*****]
RESEARCH [*****]
* Confidential Treatment Requested
<PAGE>
EXHIBIT 10.22
SECOND AMENDMENT
The License Agreement ("Agreement") between Mycogen Corporation ("MYCOGEN") and
Diversa Corporation ("DIVERSA"), dated December 19, 1997, was amended on March
6, 1998 ("March 6/th/ Amendment"). In order to avoid possible misunderstandings
as to the rights and obligations arising under the Agreement, as amended, the
following understandings are hereby confirmed:
1. MYCOGEN Technology is defined in Section 1.6 of the Agreement. MYCOGEN
Technology includes information, techniques, data, materials and chemicals
relating to MYCOGEN's proprietary [*****] gene expression system. In
particular, MYCOGEN Technology includes, but is not limited to, the host
strains and expression plasmids of [*****] which were provided to DIVERSA
by MYCOGEN, and all information pertaining to the use of such strains,
including methods and materials used to cultivate these strains and recover
Products, which were provided to DIVERSA by MYCOGEN.
2. Pursuant to Section 11.2 of the March 6/th/ Amendment, DIVERSA agreed that
it shall not [*****]. Consistent with the March 6th Amendment, DIVERSA will
not [*****]. In particular, prohibited [*****] include, but are not limited
to, [*****].
3. Appendix A to this Second Amendment further exemplifies: (i) Know-How owned
or Controlled by MYCOGEN, which is included in the definition of MYCOGEN
Technology in the Agreement, and (ii) [*****],as described in the March
6/th/ Amendment.
4. [*****]. DIVERSA shall promptly disclose to MYCOGEN any such [*****].
MYCOGEN shall have the right to use such [*****].
5. The license granted to DIVERSA under the MYCOGEN Technology, pursuant to
Section 2.1 of the Agreement, is to use the System to produce, make, have
made, use, offer for sale, sell and import Product(s) and other enzymes.
The System is defined in Section 1.8 of the Agreement to mean MYCOGEN's
proprietary [*****] gene expression system, including the host strain,
expression plasmids, and proprietary cultivation and recovery methods
transferred to DIVERSA by MYCOGEN under the terms of the license. The
license granted to DIVERSA by MYCOGEN under the Agreement, as amended on
March 6, 1998, is limited to use of the System as defined in the Agreement.
No rights are granted to use any [*****], except as provided in Paragraphs
2 and 4 of this Second Amendment. It is understood that the Agreement as
amended does not prevent DIVERSA from using information that is both
subject to the exceptions in Section 5.2(a) to (d) of the Agreement and not
covered by patents owned or controlled by MYCOGEN or its Affiliates to
independently develop gene expression systems without the aid, application
or use of Confidential Information received from MYCOGEN.
6. Nothing in the Agreement or the March 6/th/ Amendment shall be construed to
grant to DIVERSA any rights in MYCOGEN's Know-how developed after December
19, 1997, except with respect to [*****], as provided in Section 11.1 of
the March 6/th/ Amendment,
1. *Confidential Treatment Requested
<PAGE>
where this [*****] is Confidential Information of DIVERSA received by
MYCOGEN and this Confidential Information is not subject to any exception
in Section 5.2 of the Agreement.
7. This Second Amendment is a confirmation and clarification of obligations
existing under the Agreement and March 6/th/ Amendment and as such shall be
deemed effective as of March 6, 1998. The definitions of terms defined in
the Agreement and March 6/th/ Amendment are incorporated herein to the
extent such terms have not been expressly explained or clarified by this
Second Amendment.
ACCEPTED AND AGREED TO:
MYCOGEN CORPORATION DIVERSA CORPORATION
_____________________________ ________________________________
Name: Name:
Title: Title:
Date: Date:
2. *Confidential Treatment Requested
<PAGE>
APPENDIX A
Exemplification of MYCOGEN Technology and Improvements
"MYCOGEN Technology", as defined in the License Agreement of December 19, 1997
between MYCOGEN and DIVERSA ("Agreement"), includes, but is not limited to, the
following Know-How owned or Controlled by MYCOGEN on the Effective Date of the
License Agreement that in each case was transferred to DIVERSA by MYCOGEN under
the terms of the Agreement:
A. [*****]
B. [*****]
C. [*****]
1. [*****]
2. [*****]
3. [*****]
4. [*****]
5. [*****]
6. [*****]
7. [*****]
8. [*****]
1. *Confidential Treatment Requested
<PAGE>
9. [*****]
10. [*****]
11. [*****]
12. [*****]
13. [*****]
14. [*****]
15. [*****]
16. [*****]
17. [*****]
D. All documentation for regulatory submissions relating to products produced
in [*****], including TSCA premanufacture notices and toxicology data
E. Confidential Information related to business information of MYCOGEN and its
affiliates pertaining to plans for development and commercialization of [*****]
gene expression system
2. *Confidential Treatment Requested
<PAGE>
IMPROVEMENTS TO MYCOGEN TECHNOLOGY
[*****]
CONFIDENTIAL
AMENDMENT
March 6, 1998
Effective immediately, the License Agreement between Diversa Corporation
(hereinafter "DIVERSA"), and Mycogen Corporation (hereinafter, "MYCOGEN"),
effective December, 1997, is hereby amended as follows:
1. Article 1 - Definitions shall be amended to include the following
definitions:
1.10 "DIVERSA Inventions" means all inventions, discoveries, [*****],
technical information and know-how, whether patentable or not made by DIVERSA's
employees or agents alone or in conjunction with employees or agents of third
parties.
1.11 "MYCOGEN Inventions" means all inventions, discoveries, [*****],
technical information and know-how, whether patentable or not, made by MYCOGEN's
employees or agents alone or in conjunction with employees or agents of third
parties.
1.12 "Joint Inventions" means all inventions, discoveries, [*****],
technical information and know-how, whether patentable or not, made jointly by
DIVERSA's and MYCOGEN's employees or agents.
2. Article 11 - Intellectual Property Ownership shall be added to the Agreement
and shall read as follows:
11.1 Improvements to DIVERSA Know-How. [*****]
11.2 Improvements to MYCOGEN Technology. [*****]
11.3 Except as set forth in Sections 11.1 and 11.2, DIVERSA shall have
exclusive ownership and title to DIVERSA's Inventions, and MYCOGEN shall have
exclusive ownership and title to MYCOGEN's Inventions.
11.4 Except as set forth in Sections 11.1 and 11.2, DIVERSA and MYCOGEN
shall have joint ownership and title to Joint Inventions. Further, in the event
of any such Joint Invention, the parties shall grant to each other a
nonexclusive, irrevocable, royalty free license, without the right to grant
sublicenses, to make, use, import, sell, offer to sell, have made and have used
any such Invention resulting from work under this Agreement.
11.5 DIVERSA shall have the right to prepare, file, prosecute and maintain
patent applications and patents, continuations, continuations-in-part,
divisionals, reissues, additions, renewals, or extensions thereof covering
DIVERSA's Inventions, in countries and regions of its choice throughout the
world, for which DIVERSA shall bear all costs.
11.6 MYCOGEN shall have the right to prepare, file, prosecute and maintain
patent applications and patents, continuations, continuations-in-part,
divisionals, reissues, additions, renewals, or extensions thereof covering
MYCOGEN's Inventions, in countries and regions of its choice throughout the
world, for which MYCOGEN shall bear all costs.
1. *Confidential Treatment Requested
<PAGE>
11.7 DIVERSA shall have the right to prepare, file, prosecute and maintain
patent applications and patents, continuations, continuations-in-part,
divisionals, reissues, additions, renewals, or extensions thereof covering Joint
Inventions, in countries and regions of choice throughout the world, for which
DIVERSA and MYCOGEN shall [*****]:
(a) [*****]
(b) [*****]
DIVERSA shall invoice MYCOGEN for MYCOGEN's [*****], which invoice shall be paid
by MYCOGEN within [*****] days.
11.8 Each party shall provide reasonable assistance to the other party to
facilitate filing and prosecution of all patent applications and maintaining and
extending patents covering inventions and discoveries subject to this section
and shall execute all documents deemed necessary or desirable therefor.
All of the other terms and conditions of the Agreement shall remain in full
force and effect.
CONFIDENTIAL
IN WITNESS WHEREOF, the parties have caused this instrument to be executed by
their duly authorized officers as of the day and year set forth below.
ACCEPTED AND AGREED TO:
Mycogen Corporation
/s/ Andrew L. Barnes
- -------------------------------
Print Name: Andrew L. Barnes
--------------------
Print Title: Exec. VP
-------------------
Date: 3/10/98
--------------------------
Diversa Corporation
/s/ Patrick Simms
- -------------------------------
Patrick Simms
Vice President
Date: 3/6/98
--------------------------
2. *Confidential Treatment Requested
<PAGE>
License Agreement
This License Agreement (the "Agreement"), dated as of December, 1997 (the
"Effective Date"), is made by and between Mycogen Corporation, a California
corporation 92121 ("MYCOGEN"), and Diversa Corporation, a Delaware corporation
having its principal offices at 10665 Sorrento Valley Road, San Diego,
California 92121 ("Diversa").
Recitals
Whereas, MYCOGEN possesses a proprietary gene expression System (as defined
below) and other proprietary rights, know-how and experience relating to gene
expression;
Whereas, DIVERSA desires to obtain immediate access and a worldwide,
exclusive license to utilize such gene expression System to produce Product(s);
(as defined below) ;
Whereas, MYCOGEN desires to grant DIVERSA immediate access and a
worldwide, exclusive license to utilize such gene expression System to produce
Product(s);
Now, Therefore, in consideration of the mutual covenants and promises set
forth in the Agreement, the parties agree as follows:
Article 1 - Definitions
1.1 "Affiliate" means an individual, trust, business trust, joint venture,
partnership, corporation, association or any other entity which owns, is owned
by or is under common ownership with a party. For the purposes of this
definition, the term "owns" (including, with correlative meanings, the terms
"owned by" and under common ownership with") as used with respect to any party,
shall mean the possession (directly or indirectly) of more than [*****] of the
outstanding voting securities of a corporation or comparable equity interest in
any other type of entity.
1.2 "Confidential Information" means all information and materials received by
either party from the other party pursuant to this Agreement and all information
and materials developed in the course of the Research Activities, including,
without limitation, Know-How of each party. Confidential Information disclosed
in tangible form shall be marked " Confidential," "Proprietary" or in some other
manner to indicate its confidential nature. If disclosed orally, Confidential
Information shall be designated as confidential at the time of disclosure and
reduced to a written summary by the disclosing party and shall be marked in a
manner to indicated its confidential nature and delivered to the receiving party
within [*****] days after disclosure.
1.3 "Control" means the ability to grant a license or sublicense as provided
for herein without violating the terms of any agreement with or other
arrangement with any Third Party.
1.4 "Gross Revenues" means the [*****]. For purposes of this Agreement, a
[*****] if it consists solely of [*****] and [*****] or more [*****]. [*****]
shall be calculated by multiplying [*****] by the fraction [*****].
1. * Confidential Treatment Requested
<PAGE>
1.5 "Know-How" means information, techniques, data, materials and chemicals
(whether or not patentable), including, without limitation, inventions,
techniques, practices, methods, knowledge, know-how, skill, experience, test
data, [*****], patent and legal data or descriptions, sales and [*****] data.
1.6 "MYCOGEN Technology" means the Know-How owned or Controlled by MYCOGEN
necessary or appropriate to develop, manufacture and commercialize Product(s),
including, without limitation, the Know-How relating to the System, including
the host strain and plasmid vectors.
1.7 "Product(s)" means any enzyme which is obtained by expressing any gene or
combination of genes owned by or licensed to DIVERSA using the System,
including, without limitation, any enzyme sold as an industrial enzyme or
pharmaceutical intermediate.
1.8 "System" means MYCOGEN's proprietary [*****] gene expression system used to
produce the Product(s).
1.9 "Third Party" means any entity other than DIVERSA or MYCOGEN or an
Affiliate of DIVERSA or MYCOGEN.
Article 2 - License Grant
2.1 License. Subject to the terms and conditions set forth herein, MYCOGEN
hereby grants to DIVERSA an exclusive, worldwide license, including the right to
grant sublicenses pursuant to section 2.2, under the MYCOGEN Technology to use
the System to produce, make, have made, use, offer for sale, sell and import
Product(s) and other enzymes, with the exception that Diversa shall not use the
System to contract manufacture any enzyme for any third party. Notwithstanding
the foregoing, MYCOGEN and its Affiliates retain the rights to use the System
for the production of enzymes, including for the production of enzymes for third
parties by MYCOGEN.
2.2 Sublicense. MYCOGEN and DIVERSA contemplate that DIVERSA may from time to
time desire to grant sublicenses to third parties to use the System to produce
Product(s) for DIVERSA to be offered for sale by DIVERSA. Accordingly, DIVERSA
shall have the right to grant one or more sublicenses to any third party to use
the System to produce Product(s), provided that any such sublicense expressly
provides that (i) the sublicensees shall have no right to sublicense the System,
and (ii) the sublicensee shall be subject in all respects to provisions in this
Agreement.
Article 3 - Payments And Royalties
3.1 Payments. In partial consideration for the rights granted herein, DIVERSA
shall pay to MYCOGEN a [*****], [*****] of this Agreement.
3.2 Royalty. DIVERSA shall pay to MYCOGEN a royalty equal to [*****].
3.3 [*****].
2. *Confidential Treatment Requested
<PAGE>
3.4 Duration of Royalty Obligations. Royalty obligations shall continue [*****]
3.5 Reduction in Royalty Rate. In the event that DIVERSA is or becomes
obligated to pay additional royalties to MYCOGEN or any third party under
separate license agreement(s) for use of the System, then up to [*****] of the
additional or third party royalties owed shall be credited against royalties
owed to MYCOGEN under the terms of this Agreement. In no event, however, shall
the royalty obligation owed to MYCOGEN be reduced below [*****] of Gross
Revenues of the Product(s) for any relevant royalty payment period.
Article 4 - Payments and Reports
4.1 Semi-Annual Payments. Royalties shall be calculated on a [*****] basis, and
payable within [*****] after the end of each [*****] based upon Gross Revenues
during the previous [*****] All payments will be made in U.S. Dollars. The
exchange rate for conversion of any currency to U.S. Dollars will be the
exchange rate prevailing at Citibank N.A. in New York for the last business day
of each such [*****] period. Interest will be paid on the outstanding balance of
any late payments at the prime rate of interest reported by Citibank, N.A. in
New York, as such rate may change from time to time plus [*****] per annum from
the due date until the date that such payment in full is actually received.
DIVERSA will assume the risk of any inconvertibility of any currency.
4.2 Reports. DIVERSA shall furnish to MYCOGEN, at the same time as each royalty
payment is due, a written report of Gross Revenues of each Product and the
royalty due and payable, for the [*****] upon which the royalty payment is
based.
4.3 Records. DIVERSA shall keep full, complete and proper records and accounts
of Gross Revenues of each Product, in sufficient detail to enable the royalties
payable to MYCOGEN to be determined. Upon reasonable notice to DIVERSA, MYCOGEN
shall have the right through an independent certified public accountant to audit
DIVERSA's records pertaining to the Product(s) during normal business hours to
verify the royalties payable pursuant to this Agreement; provided, however, that
such audit shall not take place more often than [*****] a year and shall not
cover such records for more than the preceding [*****] and provided further that
such accountant shall report to MYCOGEN only as to the accuracy of the royalty
reports and payments submitted by DIVERSA to MYCOGEN hereunder. Such audit shall
be at MYCOGEN expense; provided, however, in the event the audit discloses that
MYCOGEN was underpaid royalties by at least [*****] for any [*****] then DIVERSA
shall reimburse MYCOGEN for audit costs together with an amount equal to the
additional royalties to which MYCOGEN is entitled. DIVERSA shall preserve and
maintain all such records and accounts required for audit for a period of
[*****] after the [*****] for which the record applies.
Article 5 - Confidentiality
5.1 Nondisclosure. During the Term of this Agreement, and for a period of
[*****] thereafter, each party will maintain all Confidential Information as
confidential and will not disclose any Confidential Information to any Third
Party or use any Confidential Information for any purpose except (a) as
expressly authorized by this Agreement, (b) as required by law or court order,
or (c) to its Affiliates. Each party may use such Confidential Information only
to the
extent required to accomplish the purposes of this Agreement. Each party will
use at least the same standard of care as it uses to protect proprietary or
confidential information of its own to ensure that its Affiliates, employees,
agents, consultants and other representatives do not disclose or make any
unauthorized use of the Confidential Information. Each party will promptly
notify the other upon discovery of any unauthorized use or disclosure of the
Confidential Information.
5.2 Exceptions. Confidential Information shall not include any information
which the receiving party can prove by competent evidence:
3. *Confidential Treatment Requested
<PAGE>
a) is now, or hereafter becomes, through no act or failure to act on the
part of the receiving party, generally known or available;
b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;
c) is hereafter furnished to the receiving party by a Third Party, as a
matter of right and without restriction on disclosure;
d) is independently developed by the receiving party without the aid,
application or use of Confidential Information; or
e) is the subject of a written permission to disclose provided by the
disclosing party.
Article 6 - Representations, Warranties And Covenants
6.1 Corporate Power. Each party hereby represents and warrants that such party
is duly organized and validly existing under the laws of the state of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
6.2 Due Authorization. Each party hereby represents and warrants that such
party is duly authorized to execute and deliver this Agreement and to perform
its obligations hereunder.
6.3 Binding Agreement. Each party hereby represents and warrants that this
Agreement is a legal and valid obligation binding upon it and is enforceable in
accordance with its terms. The execution, delivery and performance of this
Agreement by such party does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any law or regulation of any court, governmental body or
administrative or other agency having authority over it.
6.4 Disclaimer Of Warranties By Mycogen. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, MYCOGEN DOES NOT MAKE ANY REPRESENTATION OR WARRANTY TO DIVERSA OF
ANY NATURE, EXPRESS OR IMPLIED, THAT THE SYSTEM WILL BE USEFUL FOR, OR ACHIEVE
ANY PARTICULAR RESULTS. MYCOGEN SPECIFICALLY DISCLAIMS ANY WARRANTY OF
NONINFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Article 7 - Term And Termination
7.1 Term. This Agreement shall commence as of January 1, 1998, and shall
continue unless terminated in accordance with the terms of this Agreement.
7.2 Termination for Cause. Either party may terminate this Agreement upon 60
days written notice upon the occurrence of any of the following:
a) Upon or after the bankruptcy, insolvency, dissolution or winding up of
the other party (other than dissolution or winding up for the purposes
of reconstruction or amalgamation); or
b) Upon or after the breach of any material provision of this Agreement by
the other party if the breaching party has not cured such breach or
diligently proceeded to cure such breach within the 60 day period
following written notice of termination by the other party.
7.3 Effects of Termination. Expiration or termination of this Agreement shall
not relieve the parties of any obligation accruing prior to such expiration or
termination. The provisions of Sections 4.3, 6.4 and 7.3 and Articles 5, 8 and 9
shall survive termination or expiration of this Agreement.
Article 8 - Dispute Resolution
8.1 Disputes. The parties recognize that disputes as to certain matters may
from time to time arise which relate to either party's rights and/or obligations
hereunder. It is the objective of the parties to
4.
<PAGE>
establish procedures to facilitate the resolution of such disputes in an
expedient manner by mutual cooperation and without resort to litigation. To
accomplish this objective, the parties agree to follow the procedures set forth
in this Article 8 if and when such a dispute arises between the parties.
8.2 Procedure. If a dispute arises between the parties relating to the
interpretation or performance of this Agreement or the grounds for the
termination thereof, the parties agree to hold a meeting, attended by
individuals with decision-making authority regarding the dispute, to attempt in
good faith to negotiate a resolution of the dispute prior to pursuing other
available remedies. If, within [*****] days after such meeting, the parties have
not succeeded in negotiating a resolution of the dispute, such dispute shall be
finally settled only in San Diego, California, in accordance with the rules and
procedures of the American Arbitration Association by [*****] arbitrators
knowledgeable as to biotechnology industry standards. Each party shall select
[*****] arbitrator within [*****] days after the institution of the arbitration
proceeding and the [*****] arbitrator will be selected by mutual agreement of
the other [*****] arbitrators within [*****] days of the appointment of the
[*****] arbitrators selected by the parties. All of the arbitrators will be
neutral, impartial, independent of the parties and others having any known
interest in the outcome; will abide by the ABA and AAA Cannons of Ethics for
neutral arbitrators, and will have no ex parte communications about the case or
about the appointment of the [*****] arbitrator or the arbitrator's views on
matters of law with either party in the appointing process or otherwise during
the pendency of the arbitration. The parties shall bear the costs of arbitration
equally unless the arbitrators, pursuant to their right, but not their
obligation, require the non-prevailing party to bear all or any unequal portion
of the prevailing party's costs. The arbitrators shall prepare and deliver a
written, reasoned opinion conferring their decision within [*****] days of the
final arbitration hearing. The arbitrators shall not have the power to award
punitive damages under this Agreement and such an award is expressly prohibited.
The decision of the arbitrators shall be final and binding on all of the
parties. Judgment on the award so rendered may be entered in any court of
competent jurisdiction at the option of the successful party. The rights and
obligations of the parties to arbitrate any dispute relating to the
interpretation or performance of this Agreement or the grounds for the
termination thereof shall survive the expiration or termination of this
Agreement for any reason.
Article 9 - Indemnification And Insurance
9.1 Patent Infringement Indemnification. DIVERSA will at all times during the
term of this Agreement and thereafter, indemnify, defend and hold harmless
MYCOGEN and its directors, officers, employees, and affiliates, against any
claim, proceeding, demand, liability, or expense (including legal expenses and
reasonable attorney's fees) which relates to any action brought by a third party
alleging infringement of a U.S. or foreign patent as a result of the activities
of DIVERSA under this Agreement, except to the extent that such alleged
infringement is the direct result of an activity of MYCOGEN.
MYCOGEN will at all times during the term of this Agreement and thereafter,
indemnify, defend and hold harmless DIVERSA and its directors, officers,
employees, and affiliates, against any claim, proceeding, demand, liability, or
expense (including legal expenses and reasonable attorney's fees) which relates
to any action brought by a third party alleging infringement of a U.S. or
foreign patent as a result of the activities of MYCOGEN under this Agreement,
except to the extent that such alleged infringement is the direct result of an
activity of DIVERSA.
9.2 Product Liability Indemnification. DIVERSA will at all times during the
term of this Agreement and thereafter, indemnify, defend and hold harmless
MYCOGEN and its directors, officers, employees, and affiliates, against any
claim, proceeding, demand, liability, or expense (including legal expenses and
reasonable attorney's fees) which relates to injury to persons or property, or
against any other claim, proceeding, demand, expense and liability of any kind
whatsoever resulting from the production, manufacture, sale, use, lease,
consumption or advertisement of Product(s), except to the extent that such
alleged infringement is the direct result of an activity of MYCOGEN.
9.3 Obligation of Agents. DIVERSA will require all agents who are involved
with the development, manufacturing, use or sale of Product(s), process or
service relating to this Agreement to provide the same level of indemnification
as set forth in this section.
5. *Confidential Treatment Requested
<PAGE>
9.4 Survival. This Clause 9 will survive expiration or termination of this
Agreement.
Article 10 - Miscellaneous
10.1 Assignment.
(a) Neither party will have the right to assign its rights or
obligations under this Agreement with the prior written consent of the
other party. Any attempted assignment in violation of this provision will
be void. However, this Agreement shall survive any merger, reorganization
or sale of all or substantially all of the assets of either party with or
into another party and no consent for such transaction shall be required
hereunder; provided, however, that in the event of such transaction, no
intellectual property rights of the acquiring corporation shall be
included in the technology licensed hereunder.
(b) This Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns of the parties. Any assignment not in
accordance with this Agreement shall be void.
10.2 Force Majeure. Neither party shall lose any rights hereunder or be liable
to the other party for damages or losses on account of failure of performance by
the defaulting party if the failure is occasioned by government action, war,
fire, explosion, flood, strike, lockout, embargo, act of God, or any other
similar cause beyond the control of the defaulting party; provided, however,
that the party claiming force majeure has exerted all reasonable efforts to
avoid or remedy such condition.
10.3 Notices. Any notices or communications provided for in this Agreement to
be made by either of the parties to the other shall be in writing and delivered
personally or sent by United States mail, registered or certified, postage paid,
by overnight delivery service such as FedEx or UPS or by facsimile, with
confirmation of receipt, addressed as follows:
If to DIVERSA:
Diversa Corporation
10665 Sorrento Valley Road
San Diego, CA 92121
Attn: [*****]
If to MYCOGEN:
MYCOGEN Corporation
5501 Oberlin Drive
San Diego, CA 92121
Attn: [*****]
Either party may by like notice specify or change an address to which notices
and communications shall thereafter be sent. Notices sent by facsimile shall be
effective upon confirmation of receipt, notices sent by mail or overnight
delivery service shall be effective upon receipt, and notices given personally
shall be effective when delivered.
10.4 Governing Law. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of [*****], as such laws are applied to
contracts entered into and to be performed entirely within the State of [*****]
by [*****] residents.
6. *Confidential Treatment Requested
<PAGE>
10.5 Waiver. Except as specifically provided for herein, the waiver from time
to time by either of the parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such party's rights or remedies provided in this
Agreement.
10.6 Severability. If any term, covenant or condition of this Agreement or the
application thereof to any party or circumstance shall, to any extent, be held
to be invalid or unenforceable, then (a) the remainder of this Agreement, or the
application of such term, covenant or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Agreement shall be
valid and be enforced to the fullest extent permitted by law; and (b) the
parties hereto covenant and agree to renegotiate any such term, covenant or
application thereof in good faith in order to provide a reasonably acceptable
alternative to the term, covenant or condition of this Agreement or the
application thereof that is invalid or unenforceable, it being the intent of the
parties that the basic purposes of this Agreement are to be effectuated.
10.7 Independent Contractors. It is expressly agreed that DIVERSA and MYCOGEN
shall be independent contractors and that the relationship between the two
parties shall not constitute a partnership or agency of any kind. Neither
DIVERSA nor MYCOGEN shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior written authorization of the party to
do so.
10.8 Entire Agreement; Amendment. This Agreement sets forth all of the
covenants, promises, agreements, warranties, representations, conditions and
understandings between the parties hereto, and supersedes and terminates all
prior agreements and understanding between the parties with respect to the
subject matter hereof. There are no covenants, promises, agreements, warranties,
representations conditions or understandings, either oral or written, between
the parties other than as set forth herein and therein. No subsequent
alteration, amendment, change or addition to this Agreement shall be binding
upon the parties hereto unless reduced to writing and signed by the respective
authorized officers of the parties.
10.9 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
7.
<PAGE>
In Witness Whereof, the parties have executed this License Agreement as of
the date first set forth above.
Mycogen Corporation Diversa Corporation
By: /s/ Andrew C. Barnes /s/ Patrick Simms
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Patrick Simms
Name: Andrew C. Barnes Vice President
--------------------------------
Title: Exec. VP
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8.
