License Agreement - New Venture LLC and Diversa Corp.
INDUSTRIAL ENZYME
LICENSE AGREEMENT
BETWEEN
NEW VENTURE LLC
AND
DIVERSA CORPORATION
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This LICENSE AGREEMENT (including the Appendices hereto, the "LLC
License") is by and between NEW VENTURE LLC, a limited liability company duly
organized and existing under the laws of the State of Delaware, having a place
of business at San Diego, California, United States of America ("the LLC" 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. The LLC has been formed for expertise in marketing and
commercialization of enzymes to the industrial enzyme marketplace.
C. The LLC and DIVERSA are concurrently with this LLC License entering
into a separate Industrial Enzyme Research Agreement ("IE R&D
Agreement") in order to perform research together to discover and
optimize the function of new genes, processes and products resulting
thereupon that can be marketed and commercialized by the LLC to the
industrial enzyme marketplace.
D. DIVERSA represents that it has Patent Rights and Know-How that pertain
to this LLC License.
E. The LLC is desirous of obtaining, and DIVERSA wishes to grant to the
LLC, a worldwide license to sell Licensed Enzymes (defined below) in
the Approved Fields.
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 LLC 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.
1.1 "Affiliate" means any corporation, firm, limited liability
company, partnership or other entity that is directly or
indirectly controlled by a Party to this LLC License. Control
for this purpose means ownership, directly or through one or
more affiliated entities, of greater than 50 percent (50%) of
the shares of stock entitled to vote for the election of
directors in the case of a corporation, or more than 50
percent (50%) 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 "Approved Fields" shall have the same definition as provided
in the LLC Agreement which definition is hereby incorporated
by reference.
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1.3 "Board of Directors" means the governing body of the LLC
established under the terms of the LLC Agreement.
1.4 "Confidential Information" means all information, DIVERSA
Know-How, scientific, technical, or non-technical data,
Materials, business plans, financial projections, and
marketing and sales information disclosed by one Party to the
other under this LLC License, and including information
disclosed under the IE R&D Agreement regarding Licensed
Enzymes, 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
LLC License) of the ability to grant licenses or sublicenses
to the LLC without violating the terms of any agreement or
other arrangement with any Third Party and to the reasonable,
good faith knowledge and belief of DIVERSA, without violating
the rights of a Third Party.
1.6 "DIVERSA Intellectual Property" means DIVERSA Patent Rights
and DIVERSA Know-How.
1.7 "DIVERSA Know-How" means [***] and [***] discovered or
invented during the term of the IE R&D Agreement, and which
are necessary or appropriate to develop and commercialize
Licensed Products. (Know-How does not include inventions
within the DIVERSA Patent Rights or Joint Patent Rights.)
1.8 "DIVERSA Patent Rights" means (i) all patents and patent
applications which are conceived of during performance of the
IE R&D Agreement, which are assigned to DIVERSA or are Joint
Patent Rights assigned to DIVERSA and the LLC, and which are
necessary for the LLC to make, use or sell the Licensed
Product. If such patent rights arise they shall be listed on
Appendix A-1, attached hereto and made a part hereof; (ii) the
patents and patent applications listed on Appendix A-2,
attached hereto and made a part hereof, are patent rights of
DIVERSA that predate the IE R&D Agreement but which patent
rights are necessary for the LLC to make, use or sell the
Licensed Products; and (iii) 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,
and which are necessary for the LLC to make, have made, use,
sell, have sold, export or import the
*CONFIDENTIAL TREATMENT REQUESTED
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Licensed Products. All patents and patent applications subject
to this definition are listed on Appendix A or will be
included on Appendix A by the end of the term of the IE R&D
Agreement.
1.9 "DOW" means The Dow Chemical Company, having a place of
business at Midland, Michigan. ---
1.10 "Effective Date" means the date of last signature of the
Parties at the end of this LLC License.
1.11 "IE R&D Agreement" means the Industrial Enzyme Collaborative
Research Agreement between the LLC and DIVERSA, executed
concurrently with this LLC License.
1.12 "Joint Patent Rights" means patents which are assigned to both
the LLC and DIVERSA.
1.13 "Licensed Enzyme" means any Enzyme which is used in the
Approved Fields, and which is identified, discovered, or
developed under the IE R&D Agreement, and which is designated
by the Board of Directors to be licensed by this LLC License,
and which is listed on Appendix C, attached hereto, and
encompassed within DIVERSA Patent Rights listed on Appendix
A-1 or A-2, attached hereto.
1.14 "Licensed Product" means any product containing or consisting
of a Licensed Enzyme and listed on Appendix B attached hereto.
1.15 "Limited Liability Company Agreement" or "LLC Agreement" means
the agreement executed between DOW and DIVERSA on June 29,
2000, establishing a joint venture to market industrial
enzymes.
1.16 "Material" means the original, tangible materials of any type
provided by the LLC or DIVERSA to the other Party in order
that the recipient can perform its obligations under this LLC
License.
1.17 "Territory" means the world.
1.18 "Third Party" means anyone other than the LLC or DIVERSA, or
their respective Affiliates.
ARTICLE II
PATENT LICENSE GRANT
--------------------
2.1 Grant of License to the LLC - Subject to the terms and
conditions of this LLC License, DIVERSA hereby grants to the
LLC, and the LLC hereby accepts:
(a) in the Approved Fields, an exclusive, royalty-free,
worldwide license, including the right to grant
sublicenses pursuant to Section 2.2, under the
DIVERSA Patent Rights to use Licensed Enzymes to
make, have made, import, have imported, use, have
used, sell, have sold and otherwise exploit Licensed
Products;
(b) a non-exclusive royalty-free license to any Know-How
required to exploit the rights granted under (a), and
for the LLC or its Affiliates to make, have made,
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import, have imported, use, have used, sell, have
sold and otherwise exploit Licensed Products in the
Approved Fields.
Appendix C attached hereto specifies each Licensed Enzyme, its
respective Approved Field, and the DIVERSA Patent Rights from
Appendix A associated with the Licensed Enzyme. Appendix C
will be modified from time to time to include new Licensed
Enzymes. If a Licensed Product is other than a Licensed
Enzyme, then such Licensed Product shall be listed on Appendix
B and the DIVERSA Patent Rights associated from Appendix A
associated with the Licensed Product. For the listings on
Appendix B, it is expected that families of Licensed Products
made from one or more Licensed Enzymes for each Approved Field
shall be listed together. The listing for Appendix C for the
Licensed Enzymes are for all Approved Fields as a class of
enzymes (e.g. [***]).
2.2 Sublicensing - The license granted under Section 2.1 to the
LLC includes the right to sublicense Third Parties, whether or
not Affiliates of the LLC, including the right to enter into
distributor contracts, manufacturing contracts with the
Preferred Supplier as defined in the LLC Agreement, or other
commercial transactions, including but not limited to
sublicensing a competitor of the LLC. The LLC will be
responsible for the observance by all sublicensees of all
applicable provisions of this LLC License and will cause all
sublicensees to observe the covenants in this LLC License
(i.e., regarding confidentiality, maintaining records, and
governmental regulations, as well as other provisions such as
payments). All sublicenses, other than a label license, shall
be in writing and the terms of any sublicense must be approved
in advance by the Board of Directors. The LLC shall notify
DIVERSA in writing within thirty (30) days of the grant of any
sublicense hereunder.
2.3 Reservations by the LLC and DIVERSA - The LLC and DIVERSA
reserve the right to work with Third Parties outside the
Approved Fields, or after the IE R&D Agreement terminates,
within all Approved Fields, except that for [***] from the
termination of the IE R&D Agreement, DIVERSA agrees [***] as
per the terms of the LLC Agreement which terms are
incorporated herein by reference. Additionally, DIVERSA agrees
to provide support for [***] after termination of this LLC
License or the IE R&D Agreement to the LLC or its licensees in
accord with a Services Agreement to be executed by the Parties
subsequently to this LLC License and in accord with the terms
of the LLC Agreement which terms are incorporated herein by
reference.
ARTICLE III
PAYMENTS
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3.1 Sharing of Profits - DIVERSA shall share in the profits
generated from the marketing and sale of Licensed Products in
accord with the terms stated in the LLC Agreement which terms
are incorporated herein by reference. DIVERSA agrees that this
sharing of profits per the LLC Agreement is adequate and
sufficient consideration for this LLC License.
ARTICLE IV
*CONFIDENTIAL TREATMENT REQUESTED
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PATENT RIGHTS
-------------
4.1 DIVERSA to Maintain DIVERSA Patent Rights - DIVERSA shall have
the obligation and be responsible at its own cost and expense
for prosecuting the patent applications in DIVERSA Patent
Rights and for maintaining, and where possible extending,
those DIVERSA Patent Rights for the term of this LLC License.
4.2 Notice of Patent Lapse of Patent Rights - DIVERSA shall
promptly advise the LLC of the grant, lapse, nullification,
revocation, surrender, or invalidation of any of DIVERSA
Patent Rights, at least in advance of any abandonment to
enable the LLC to assume that prosecution, at the LLC's
expense, should the LLC not agree to such abandonment.
4.3 Validity, Non-Infringement - DIVERSA does not warrant that the
manufacture, use and sale of Licensed Enzymes do not fall
within the scope of Third Party patents or the intellectual
property rights of a Third Party. However, to the best of
DIVERSA's knowledge, information and belief, that as of the
designation of any given Licensed Enzyme under the terms of
the IE R&D Agreement, the use of the Licensed Enzyme to
manufacture, use and sell the Licensed Products does not fall
within the scope of Third Party patents which are not owned or
licensed by DIVERSA.
4.4 Disclaimer of Warranties as to Patent Rights - Other than as
stated in Section 4.3, DIVERSA makes no representation that
the inventions covered in any DIVERSA Patent Rights are
patentable or that the DIVERSA 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.
4.5 Hold Harmless - DIVERSA agrees to hold the LLC harmless for
patent infringement under any DIVERSA patents or patents
licensed to the LLC which may be otherwise infringed by the
LLC's performance under this LLC License so long as this LLC
License is in effect and is not terminated.
4.6 Cooperation - DIVERSA and the LLC shall use good faith efforts
to cooperate with respect to any issues that concern the
development of the Licensed Products under this LLC License.
The LLC is aware that competition in the Territory is likely
if no DIVERSA Patent Rights or Joint Patent Rights exist or
are obtained, and the LLC accepts this LLC License with that
knowledge. DIVERSA shall promptly inform the LLC of any
references or information of which DIVERSA becomes aware which
might significantly impact the scope of the DIVERSA Patent
Rights or dominate DIVERSA Patent Rights.
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 disclosed pursuant to the terms of
this LLC 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
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Confidential Information initially received in a non-written
form shall be reduced to writing within thirty (30) days 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. The LLC shall continue to
use the same good faith efforts with respect to the DIVERSA
Confidential Information already in its possession under the
IE R&D Agreement. Each Party may use Confidential Information
of the other Party only to the extent required to accomplish
the purposes of this LLC 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 that 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 - The LLC may disclose
Confidential Information to its Affiliates, sublicensees,
consultants, contractors (parties under contract with the LLC
for the custom manufacturing or shipping of Licensed Products
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 Licensed
Products, and to commercialize Licensed Products under this
LLC License, under conditions of confidentiality at least as
stringent as those set out in Article V.
5.4 Survival of Confidentiality - Termination of this LLC 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 LLC License for five (5) years.
ARTICLE VI
ASSIGNMENT
----------
6.1 Assignment by the LLC - The LLC shall not have the right to
assign its rights hereunder, except as provided for by the
terms in the LLC Agreement which terms are incorporated herein
by reference.
6.2 Assignment by DIVERSA - DIVERSA shall have the right to assign
its rights in this LLC 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 LLC 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 LLC
License relates, whether by merger, sale of stock, sale of
assets or otherwise.
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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 manufacture, use or the sale of a
Licensed Enzyme in the Territory (regardless of use) infringes
a patent of such Third Party, the LLC will give prompt written
notice to DIVERSA of such claim if it concerns DIVERSA Patent
Rights. The Parties shall confer in accord with Section 7.2.
7.2 Mutual Decisions - From the Effective Date and using their
good faith efforts, DIVERSA and the LLC shall discuss any
claim or suit brought by a Third Party for patent infringement
and mutually evaluate whether that Third Party's patent is
infringed by the manufacture, use or sale of any Licensed
Enzyme covered in DIVERSA Patent Rights by the LLC or its
Affiliates in the Territory. Specifically, DIVERSA and the LLC
shall mutually try to agree on:
(a) the strategy for such suit or claim, e.g. whether to
negotiate a settlement, sue or withdraw selling the
Licensed Enzyme from the country in the Territory in
which infringement is claimed;
(b) the basis to be determined for sharing the costs of
litigation, damages awarded, and royalty to be paid
to the Third Party ;
(c) which Party should conduct the defense or if both
DIVERSA and the LLC should jointly defend; and the
consequences of such decisions.
7.3 Third Party License - The LLC shall use its good faith efforts
to negotiate any necessary agreement for royalty payment to
Third Parties with a view to enabling Licensed Products to be
commercialized in the Territory. As of the Licensed Enzyme
designation, neither Party is aware of the need for any such
Third Party license.
ARTICLE VIII
PATENT ENFORCEMENT & LITIGATION
-------------------------------
8.1 Enforcement -
8.1.1 If either Party learns of any infringement of DIVERSA
Patent Rights by a Third Party, it shall promptly
notify the other Party.
8.1.2 If the possible infringement concerns a Licensed
Enzyme that is competing with the LLC, then DIVERSA
shall request at least a preliminary injunction and
removal from the market place of all infringing 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 the LLC may do so at the LLC's
expense and shall be entitled to any recovery
obtained from such litigation, settlement or
compromise thereof and the LLC retains all damages
received.
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8.2 Settlement - Any settlement of an infringement suit, whether
brought by the LLC or by DIVERSA, shall be subject to the
consent of both Parties, which consent shall not be
unreasonably withheld.
8.3 Cooperation - Each Party shall cooperate with the other Party
to the extent reasonably requested in any legal action:
(i) related to this LLC License brought by a Third Party
against one Party; or
(ii) related to this LLC License brought by a Third Party
against both Parties; or
(iii) taken against a Third Party by either Party regarding
DIVERSA Patent Rights in the Approved Fields in the
Territory, 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.
In addition, the LLC shall not settle any claim or suit in any
manner that shall adversely affect any DIVERSA Patent Rights
or requiree any payment by DIVERSA, 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 Licensed Enzyme, whether
in vivo or in vitro, to the LLC or any regulation for safety
of the culture.
9.2 Compliance by the LLC - The LLC agrees to comply with all
necessary United States, and other countries' governmental
regulations in the Territory with respect to export of
Know-How and any Licensed Product. The LLC agrees to not
export or re-export any Know-How or Licensed Product received
from DIVERSA or the direct products of such technology to any
prohibited country listed in the U.S. Export Administration
Regulations (15 C.F.R. ss.700 et seq.) unless properly
authorized by the U.S. Government.
9.3 Clearances - The LLC agrees to obtain all necessary clearances
from any government in the Territory for export or re-export
with respect to the Know-How or Licensed Products.
ARTICLE X
PRODUCT LIABILITY AND INDEMNIFICATION
-------------------------------------
10.1 Indemnity by DIVERSA - DIVERSA shall indemnify and hold the
LLC, 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:
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(a) the intentional misconduct or negligence of DIVERSA;
or
(b) the breach by DIVERSA of its representations,
warranties or agreements given in this LLC License;
or
(c) any activity carried out with Licensed Enzyme by
DIVERSA other than through the LLC and its Affiliates
under this LLC License or other written agreements
between the Parties;
provided, however, that the LLC shall give DIVERSA notice in
writing in accord with Article XV as soon as practicable of
any such claim or lawsuit and shall permit DIVERSA to
undertake the defense thereof (including the right to settle
the claim solely for monetary consideration) at DIVERSA's
expense. However,
(i) The LLC will cooperate in such defense by providing
access to witnesses and evidence available to it. The
LLC shall have the right to participate in any
defense to the extent that in its judgment, the LLC
may be prejudiced thereby; and
(ii) in any claim or suit in which the LLC seeks
indemnification by DIVERSA, the LLC shall not settle,
offer to settle or admit liability or damages in any
such claim or suit without the prior written consent
of DIVERSA.
10.2 Indemnity by the LLC - the LLC 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 development, manufacturing, testing, handling,
storage, use, promotion, sale or distribution of
Licensed Products by the LLC or its Affiliates,
except for those instances provided in Section 10.1
for which DIVERSA is obligated to indemnify the LLC;
or
(ii) the breach by the LLC of any of its representations,
warranties or covenants contained in this LLC License
or any agreement contemplated by the terms of this
LLC License; or
(iii) the intentional misconduct or gross negligence of the
LLC;
provided, however, that DIVERSA shall give the LLC notice in
writing in accord with Article XV as soon as practicable of
any such claim or lawsuit and shall permit the LLC to
undertake the defense thereof at the LLC's expense. However,
(i) DIVERSA will cooperate in such defense by providing
access to witnesses and evidence available to it.
DIVERSA shall have the right to participate in any
defense to the extent that in its judgment, DIVERSA
may be prejudiced thereby; and
(ii) In any claim or suit in which DIVERSA seeks
indemnification by the LLC, DIVERSA shall not settle,
offer to settle or admit liability or damages in any
such claim or suit without the prior written consent
of the LLC.
ARTICLE XI
WARRANTY AND DISCLAIMER
-----------------------
11.1 Belief of Accuracy - DIVERSA represents that the Know-How,
Licensed Enzyme, DIVERSA Patent Rights, information and any
Confidential Information transferred or provided to the LLC
hereunder are believed to be accurate and complete as of their
then current status at DIVERSA, that DIVERSA's interpretations
and
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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 - The LLC represents that it will be solely relying
on its own evaluation of the Licensed Enzyme and the other
Confidential Information transferred or provided to it
hereunder and on its scientific expertise in using the same in
its development and commercialization of Licensed Products.
11.3 Mutual Representations - DIVERSA and the LLC 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 or
organization, 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 LLC License.
11.3.2 Authorization - The execution, delivery and
performance by it of this LLC 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 LLC License is a legal,
valid and binding obligation of it, enforceable
against it in accordance with its terms and
conditions.
11.3.4 Warranty Disclaimer - EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS LLC License, NEITHER Party MAKES ANY
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY Confidential
Information, DIVERSA Patent Rights, Know-How,
Licensed Enzymes, Licensed Products, OR OTHER
TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT
MATTER OF THIS LLC 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 THE LLC WILL BE LIABLE TO
THE OTHER Party WITH RESPECT TO ANY SUBJECT MATTER OF
THIS LLC 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.
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ARTICLE XII
TERM AND TERMINATION
--------------------
12.1 Term - Unless terminated under the provisions of this Article
XII, this LLC License shall continue in full force and effect
until the expiration of the last to expire Patent Rights and
Joint Patent Rights listed on Appendix A, subject to the
survivorship clause Section 12.7.
12.2 Termination - This LLC License shall terminate under the
following circumstances:
12.2.1 Dissolution/Liquidation - upon the dissolution or
liquidation of either Party in accord with the terms
stated in the LLC Agreement which terms are
incorporated herein by reference.
12.2.2 LLC Bankruptcy - if the LLC 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 sixty (60) days of the
filing thereof. The Licensed Products shall be held
as an asset of the LLC.
12.2.3 Early termination - if the LLC breaches this LLC
License in any manner that requires cure and a remedy
is reasonably possible, then the LLC shall discuss
all related issues of such breach and cure with the
Board of Directors for resolution prior to any
termination.
12.3 DIVERSA's Termination Rights - DIVERSA shall further have the
right to terminate, but separately on each Licensed Product,
on written notice to the LLC if the LLC breaches any material
provision (e.g., Sections 2.2 and 2.4) of this LLC License and
has not cured such breach within thirty (30) days after
written notice thereof by DIVERSA. Any breach under this
provision, prior to any termination hereunder, must be brought
by DIVERSA to the Board of Directors of the LLC for resolution
within thirty (30) days, and then, if necessary, subject to
the dispute resolution provisions of Article XIV.
12.4 Rights of the LLC after termination of this LLC License - The
LLC has the right to grant sublicenses for any specific
Licensed Products and such sublicensees rights shall continue
for those Licensed Products and such sublicensee shall assume
any obligations of the LLC to DIVERSA under this Agreement.
12.5 On Termination - The LLC shall, upon termination of this LLC
License under Section 12.2, or termination by DIVERSA under
Section 12.3, on a Licensed Enzyme or Licensed Product basis
for each one, 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 the
LLC, and make no further use of the surviving DIVERSA Patent
Rights. If the LLC License expires by the expiration of the
DIVERSA Patent Rights, then the LLC may continue to use, make
and sell Licensed Enzymes and Licensed Products without
further obligations to DIVERSA hereunder. If any sublicenses
have been granted under Section 2.2, such sublicenses shall
remain in
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effect after termination of this LLC License, but all payments
due the LLC shall be made to DIVERSA.
12.6 Effect of Termination.
(a) Upon termination of this LLC License prior to the
expiration of the relevant DIVERSA Patent Rights on a
Licensed Product or Licensed Enzyme basis, all rights
to the DIVERSA Intellectual Property as defined in
the IE R&D Agreement shall revert to DIVERSA;
(b) Within thirty (30) days following the termination of
this LLC License, but separately on each Licensed
Product, 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 LLC License shall
not relieve the Parties of any obligation accruing
prior to such expiration or termination.
12.7 Survival of Certain Obligations - On termination of this LLC
License: the obligations of confidentiality set forth in
Article V shall survive for the time stated therein; export
control compliance set forth in Article IX shall survive; the
indemnification obligations set forth in Article X; and Third
Party infringement claims set forth in Article VII shall
survive as to all claims or actions arising from events which
occurred before termination. Article XIV shall survive
termination of this LLC License so long as any disputes
arising prior to such termination exist.
12.8 DIVERSA Bankruptcy - if DIVERSA 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 sixty (60)
days of the filing thereof, then the terms of the LLC
Agreement, which terms are incorporated herein by reference,
shall govern. The rights and licenses granted under or
pursuant to this LLC 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 LLC 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 LLC
License.
ARTICLE XIII
FORCE MAJEURE
-------------
13.1 Event of Force Majeure - In the event that performance under
this LLC 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.
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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 LLC License shall be governed by the laws
of the State of Delaware, 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 DIVERSA
Patent Rights or Joint Patent Rights shall be decided in
accordance with the patent law of the country where the patent
was granted.
14.2 Disputes - Both Parties shall make good faith efforts to
resolve any questions concerning construction and performance
under this LLC License, excluding DIVERSA Patent Rights and
antitrust issues (which are settled by court proceeding in the
concerned country), by:
14.2.1 Notice, contact and negotiation, all proceedings and
documents in English, between the Parties listed
under Article 15.1 within one hundred twenty (120)
days from the date of the notice by negotiation
either by telephone or by meeting in Denver, CO; and
14.2.2 If unsuccessful under Article 14.2.1, then senior
executive management with settlement authority and
counsel of the LLC and DIVERSA shall meet at a
mutually agreeable neutral location within sixty (60)
days 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 ten
(10) business days therefrom , which may be reduced
to writing in English as an amendment to this LLC
License; and
14.2.3 If such executives have not met or resolved the
issues under Article 14.2.2, then within seventy five
(75) days from the date of the notice under Article
14.2.1, the Parties shall submit the issues to
mediation in Chicago, IL, in English, in accordance
with the Rules of the American Arbitration
Association ("AAA"), which may be modified by the
Parties, and judgment shall 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) Three Mediators shall be selected from a
list of at least 20 arbitrators selected by
the AAA composed of counsel with chemistry,
molecular biology, industrial enzyme 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 15 years of experience
in law and knowledge of the pertinent laws
of any country relevant to the dispute. If
the dispute issue is relevant for a
commercial expert to advise the Mediators,
one expert selected by the mediators may be
used. 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 six (6) months;
and
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(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
thirty (30) days 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 LLC 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: Jay M. Short, PhD
Chief Executive Officer
Telephone: 858-623-5135
Facsimile: 858-623-5180
With a copy to:
Diversa Corporation
10665 Sorrento Valley Road
San Diego, California 92121
Attention: Carolyn Erickson
Vice President, Intellectual Property
Telephone: 858-623-5104
Facsimile: 858-453-9133
If to the LLC:
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New Venture LLC
10665 Sorrento Valley Road
San Diego, California 92121
Attention:
Telephone:
Facsimile:
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: Jay M. Short, PhD
Chief Executive Officer
Telephone: 619-623-5135
Facsimile: 619-623-5180
If to the LLC:
New Venture LLC
10665 Sorrento Valley Road
San Diego, California 92121
Attention:
Telephone:
Facsimile:
ARTICLE XVI
MISCELLANEOUS PROVISIONS
------------------------
16.1 Amendments - This LLC License may be amended only in writing
executed by both Parties.
16.2 Entirety of Agreement - This LLC License together with the IE
R&D Agreement, and their respective attachments, between
DIVERSA and the LLC, the LLC Agreement and it respective
attachments executed between DOW and DIVERSA, including, the
Services Agreements to be entered into with the LLC, the
Confidentiality and Transfer Agreement, and their respective
attachments, executed between DOW, the LLC and DIVERSA, and
the Contract Manufacturing Agreement and Development Agreement
executed between DOW and the LLC, all agreements effective as
of the Effective Date sets forth the entire agreement and
understanding between the Parties hereto with respect to the
commercialization of Licensed Products in the Territory.
16.3 Severability - If any term or provision under this LLC License
is deemed invalid under the laws of a particular country or
jurisdiction, the invalidity shall not invalidate the whole
LLC License but it shall be construed as if not containing
that
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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 LLC 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 LLC 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 LLC License are included herein
for ease of reference and shall not affect the meaning of the
provisions of this LLC 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 LLC License and carry
out its provisions.
16.7 Publicity - Neither the LLC nor DIVERSA shall make the
financial terms of this LLC License public, except as required
by law or by mutual consent. Either Party may make such
disclosure of the existence of this LLC 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 LLC License with the US Securities and
Exchange Commission is required, then DIVERSA shall seek
confidential treatment of information considered confidential
by the LLC and shall redact the financial and as much other
information as possible.
Any press release or publicity of this LLC 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 LLC 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 LLC License be publicly disclosed,
except as noted in the first paragraph of Section 16.7.
In addition, DIVERSA may make public statements regarding the
Licensed Enzymes by announcing in general terms that the LLC
has exercised its license to them.
16.8 Interpretation - The LLC and DIVERSA acknowledge and agree
that: (i) each Party and its counsel reviewed and negotiated
the terms and provisions of this LLC 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 LLC License; and (iii) the terms and provisions of the
LLC 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
LLC License.
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16.9 Counterparts - This LLC 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 LLC
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.
IN WITNESS WHEREOF, the Parties have caused this LLC License to be
executed in duplicate originals as of the last signature date below, by
their duly authorized representatives. This LLC License may be signed
in separate counterparts by facsimile. This LLC License is intended to
be signed concurrently with the IE R&D Agreement and shall not be
effective until the IE R&D Agreement has also been executed by both
Parties. Such LLC 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 JV
By /s/ Jay M. Short By /s/ Fernand Kaufmann
----------------------------- --------------------------------
Name Jay M. Short, PhD Name Fernand Kaufmann
Title Chief Executive Officer Title Member, Board of Directors
Date June 29, 2000 Date June 29, 2000
---------------------------- -------------------------------
Enclosures
Appendix A = Patent Rights (A-1 = Joint Patent Rights; A-2 = DIVERSA Patent
Rights)
Appendix B = Licensed Product
Appendix C = Licensed Enzyme with Approved Field
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[***]
*CONFIDENTIAL TREATMENT REQUESTED
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