Collaboration Agreement - Novartis Agribusiness Biotechnology Research Inc. and Diversa Corp.
Addendum to the "COLLABORATION AGREEMENT" between Novartis Agribusiness
Biotechnology Research, Inc. and Diversa Corporation.
This addendum dated and effective as of the date last below written (the
"Effective Date") is between Diversa Corporation ("Diversa"), a Delaware
corporation, and Novartis Agribusiness Biotechnology Research, Inc.
("Novartis"), a corporation organized under the laws of Delaware, (collectively,
the "Parties").
WHEREAS, Diversa has isolated and characterized a [*****];
WHEREAS, Novartis would like to receive such [*****] for [*****] against a
[*****];
NOW, THEREFORE, in consideration of the mutual covenants set forth in this
addendum, the Parties hereby agree as follows:
(1) Diversa will [*****]. to Novartis, which are Diversa [*****]. Novartis
will [*****] to [*****] The cost associated with the transfer of such
[*****] is set at [*****].
(2) If and when [*****] are [*****] as [*****] (as defined in clause 1 of the
Collaboration Agreement) by the Research Committee, [*****] will be
conducted under the terms set forth in the Collaboration Agreement.
(3) The scope of a [*****] license will be the use in [*****], applying to
Crops the definition set forth in Collaboration Agreement.
(4) This addendum, when fully executed, will be made an integral part of the
Collaboration Agreement.
Accepted and Agreed to:
NOVARTIS AGRIBUSINESS DIVERSA CORPORATION
BIOTECHNOLOGY RESEARCH, Inc.
/s/ Stephen V. Evola /s/ Jay M. Short
---------------------------- --------------------------
By: Dr. Stephen V. Evola By: Dr. Jay M. Short
Co-President Chief Executive Officer
*Confidential Treatment Requested
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COLLABORATION AGREEMENT
between
NOVARTIS AGRIBUSINESS BIOTECHNOLOGY RESEARCH, INC.
and
DIVERSA CORPORATION
<PAGE>
COLLABORATION AGREEMENT
This Collaboration Agreement, dated and effective as of January 25, 1999
(the "Effective Date"), is between Diversa Corporation ("Diversa"), a Delaware
corporation, and Novartis Agribusiness Biotechnology Research, Inc.,
("Novartis"), a corporation organized under the laws of Delaware (collectively,
the "Parties").
R E C I T A L S
WHEREAS, Diversa has discovered and developed [*****] (as defined below),
as well as proprietary technologies for the [*****] and is in the possession of
Diversa Technology (as defined below) relating to said [*****] and technologies;
WHEREAS, Novartis discovers, develops, and commercializes products useful
in [*****] including [*****] as well as applied products which confer similar
benefits;
WHEREAS, Novartis and Diversa desire to collaborate to apply the [*****]
and Diversa Technology to produce [*****]
NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, the parties hereby agree as follows:
1. Definitions.
"ADR" shall have the meaning set forth in Section 11.3.
"Advanced Field Trials" shall mean advanced testing trials of a [*****]
after successful testing in [*****] in a manner representative of [*****]
including determining the [*****] of a [*****] in [*****] under [*****]
"Affiliate" shall mean any entity that directly or indirectly Owns, is
Owned by or is under common Ownership, with Novartis, NADI or Diversa, as the
case may be, where "Owns" or "Ownership" means direct or indirect possession of
[*****] of the outstanding voting securities of a corporation or a comparable
equity interest in any other type of entity.
"Agreement" shall mean this Collaboration Agreement.
"Alternate" shall have the meaning set forth in Section 3.4.
1. *Confidential Treatment Requested
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"Audited Party" shall have the meaning set forth in Section 6.9.
"Auditing Party" shall have the meaning set forth in Section 6.9.
"[*****] Project" shall have the meaning set forth in Section 2.1.4.
"Biomolecule(s)" shall mean [*****] regardless of whether they [*****]
including [*****]
"[*****] Project" shall have the meaning set forth in Section 2.1.
"Change of Control" shall mean any of the following [*****] [*****] (a) a
merger or consolidation of Diversa which results in the voting securities of
Diversa outstanding immediately prior thereto ceasing to represent at least
[*****] of the combined voting power of the surviving entity immediately after
such merger or consolidation; (b) the sale of all or substantially all of the
assets of Diversa; or (c) any one person (other than Diversa, any trustee or
other fiduciary holding securities under an employee benefit plan of Diversa, or
any corporation owned directly or indirectly by the stockholders of Diversa, in
substantially the same proportion as their ownership of stock of Diversa),
together with any of such person's "affiliates" or "associates", as such terms
are used in the Securities Exchange Act of 1934, as amended, becoming the
beneficial owner of [*****] of the combined voting power of the outstanding
securities of Diversa or by contract or otherwise having the right to control
the Board of Directors or equivalent governing body of Diversa or the ability to
cause the direction of management of Diversa.
"Committee Member" shall have the meaning set forth in Section 3.
"Confidential Information" shall have the meaning set forth in Section 7.1.
"Crop" shall mean any [*****]
"[*****]" shall mean all [*****] that are derived from Licensed [*****]
through [*****] and all [*****] through [*****] to any Licensed [*****] and any
[*****] of such [*****]
"[*****]" shall mean all [*****] that are [*****] through [*****] and all
[*****] that are [*****] through [*****] to any Novartis [*****] and any [*****]
of such [*****]
2. *Confidential Treatment Requested
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"[*****] Biomolecule" shall mean any [*****] or [*****] which exhibits
[*****] in the [*****] Field and which the [*****] has elected to [*****].
"[*****] Net Sales" shall mean the [*****] and [*****] determined in
accordance with the definition of Net Sales [*****] as established by competent
written records, with the intent of determining the [*****].
"Disclosing Party" shall mean that Party disclosing Confidential
Information to the other Party under Section 7.
"Dispute" shall have the meaning set forth in Section 11.3.
"Diversa Biomolecules" shall mean all [*****] which are provided by Diversa
to Novartis under the Collaboration Agreement and [*****].
"Diversa Inventions" shall mean those Inventions over which Diversa has
exclusive ownership and control as provided in Sections 5.1 and 5.2.3.
"Diversa Know-How" shall mean all know-how, trade secrets, inventions,
data, processes, procedures, devices, methods, formulas, media and/or all lines,
reagents, protocols and marketing and other information, including improvements
thereon, whether or not patentable, which are not covered by the Diversa Patent
Rights, but which are necessary or useful for the commercial exploitation of the
Diversa Patent Rights or the conduct of the Projects or otherwise relate to
[*****] or Royalty-Bearing Products, and which are owned by or licensed to
Diversa, with the right to license, as of the Effective Date or otherwise during
the Research Period.
"Diversa Patent Rights" shall mean all patent and provisional patent
applications, issued and subsisting patents and substitutions, divisionals,
continuations, continuations-in-part, reissues, reexaminations, extensions and
supplementary protection certificates thereof, including foreign counterparts of
the foregoing owned by or licensed to Diversa, with the right to license,
[*****] [*****]. Without limiting the generality of the foregoing, [*****] under
Sections 5.1.1, 5.1.3 and 5.1.4, or [*****] under Section 5.2.3.
"[*****]" will document the research phase to be performed by [*****]
including [*****].
3. *Confidential Treatment Requested
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"Diversa Technology" shall mean the Diversa Know-How and the Diversa Patent
Rights.
"[*****]" shall mean [*****].
"[*****]" shall mean [*****].
"Indemnitees" shall have the meaning set forth in Section 9.1.
"Indemnitor" shall have the meaning set forth in Section 9.1.
"Initial Projects" shall mean the [*****] Project, the [*****] Project, the
[*****] Project and the [*****] Project.
"Inventions" shall have the meaning set forth in Section 5.1.
"[*****] Project" shall have the meaning set forth in Section 2.3.
"License" shall have the meaning set forth in Section 4.1.
"License Agreement" shall have the meaning set forth in Section 4.4.
"Licensed Biomolecule" shall mean each [*****] subject to a License granted
[*****] of the [*****] (a) [*****] of which [*****] is within the [*****] or (b)
which [*****] is [*****].
"License Fees" shall have the meaning set forth in Section 6.4.
"[*****] Activity Level" shall mean, with respect to each Project, [*****].
"[*****] Project" shall have the meaning set forth in Section 2.1.2.
"[*****]" shall mean [*****].
4.
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"Net Sales" shall mean the [*****] less [*****]. For each Royalty-Bearing
Product, the gross invoice price shall [*****] including, without limitation,
[*****].
With respect to sales by Novartis [*****] Affiliates [*****] of any product
which incorporates both (i) [*****] and (ii) [*****], Net Sales shall be
calculated by [*****] by the [*****] as used herein, shall mean a [*****] and
the [*****] The [*****] of such components shall be equal to the [*****]
provided, however, that, in the event that the [*****].
"[*****] Project" shall mean a [*****], undertaken pursuant to the terms of
this Agreement.
"Novartis Biomolecules" shall mean all [*****] which are provided by
Novartis to Diversa under the Collaboration Agreement.
"[*****] Field" shall mean, with [*****] the [*****]. The [*****] Field for
[*****] is set forth in this Agreement. The [*****] Field for each [*****] is as
set forth in the [*****].
"Novartis Inventions" shall mean those Inventions over which Novartis has
exclusive ownership and control as provided in Section 5.1 and 5.2.3.
"Novartis Patent Rights" shall mean all patent and provisional patent
applications, issued and subsisting patents and substitutions, divisionals,
continuations, continuations-in-part, reissues, reexaminations, extensions and
supplementary protection certificates thereof, including foreign counterparts of
the foregoing owned by
5. *Confidential Treatment Requested
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or licensed to Novartis, with the right to license, as of the Effective Date or
[*****] claiming inventions owned (or in-licensed) and controlled by Novartis
which are necessary or useful for the [*****] or [*****] Royalty-Bearing
Products. Without limiting the generality of the foregoing, Novartis Patent
Rights include any patents and patent applications claiming Inventions owned by
Novartis under Sections 5.1.2, 5.1.3 and 5.1.4, or transferred to Novartis under
Section 5.2.3.
"Novartis [*****]" shall mean a [*****]. Such documentation will include
the [*****] Any Novartis [*****] submitted with respect to any [*****] will also
include the [*****] Field and the [*****] for [*****] under such [*****] The
[*****].
"Option" shall have the meaning set forth in Section 4.1.
"Option Effective Date" shall have the meaning set forth in Section 4.1.
"Option Exercise Date" shall have the meaning set forth in Section 4.3.
"Option Period" shall have the meaning set forth in Section 4.2.
"Party" means Diversa or Novartis.
"[*****]" shall mean, with respect to each [*****] [*****] may include
[*****].
"Projects" shall mean [*****] and [*****], collectively.
"Project Plans" shall mean [*****] and [*****], collectively.
"Receiving Party" shall mean that Party receiving Confidential Information
under Section 7.1.
"Research Committee" shall have the meaning set forth in Section 3.
6. *Confidential Treatment Requested
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"Research Period" shall mean the period beginning on the [*****] and ending
[*****].
"Royalty-Bearing Product" shall mean a commercial product containing any
Licensed [*****], provided that a Licensed [*****] alone shall not be a [*****]
"Royalty Period" shall mean, with respect to each Royalty-Bearing Product
in any country, [*****] of such Royalty-Bearing Product in such country and
ending upon the later to occur of (a) [*****] or (b) [*****] or (c) [*****].
"Senior Executives" shall have the meaning set forth in Section 11.3.
"[*****]" shall mean [*****].
"Sublicensee" shall mean any third party (other than an Affiliate of
Novartis, NADI or an Affiliate of NADI or an Affiliate of Diversa) licensed by
Novartis or NADI or their respective Affiliates to make, use (except where the
implied right to use accompanies the sale to the third party of any Royalty-
Bearing Product by Novartis, NADI or their respective Affiliates or
Sublicensees), sell, import, export, advertise, promote and otherwise
commercialize any Royalty-Bearing Product.
"Use" shall mean each use or application for which any Licensed [*****] is
[*****] or any Royalty-Bearing Product [*****]. In the event of [*****] each
[*****] will represent a [*****].
"Valid Claim" shall mean a claim included in any pending patent application
or any issued patent included within the [*****] which, if with respect to any
pending claim, has not been irrevocably abandoned or held to be unpatentable by
a court or other authority of competent jurisdiction in a proceeding which is
not reversed, not appealable and not appealed, or, with respect to any issued
claim, has not been held invalid by a decision of a court or other authority of
competent jurisdiction which is not reversed, not appealable and not appealed.
The above definitions are intended to encompass the defined terms in both the
singular and plural tenses.
7. *Confidential Treatment Requested
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2. Collaboration.
2.1 Projects. The scope of the collaboration between Novartis and
Diversa during [*****] will be the areas of [*****] with the following [*****]
Projects being defined in more detail in the [*****] Projects which are attached
hereto as Exhibit A:
2.1.1 [*****]
2.1.2 [*****]
2.1.3 [*****] and
2.1.4 [*****]
It is further understood that the Parties will, through the auspices of the
Research Committee, also [*****] define additional projects (each a "[*****]
Project").
The Parties contemplate that either Party may have certain of the work to
be performed by such Party in support of a Project performed by an Affiliate of
such Party (and, in the case of Novartis, by NADI or its Affiliates). Each
Party shall remain primarily responsible for the work to be performed by such
Party in support of Projects under this Agreement.
2.2 [*****] Use of [*****]. Novartis agrees that it will use [*****]
pursuant to [*****] only for [*****] such [*****] in connection with [*****]
Project against [*****] and will not [*****] for any [*****]. Novartis may not
[*****] such [*****] to [*****]; provided that Novartis may [*****] such [*****]
to [*****] subject to the [*****] set forth herein and only to the [*****] to
effect the [*****]. Novartis will inform the Research Committee in writing of
the [*****] such [*****] prior to commencing such [*****]. Novartis will provide
Diversa with regular written reports (no less frequently than once per quarter)
identifying the [*****] used in such [*****] and the [*****]. Novartis will
employ a [*****] and to ensure that such [*****] are [*****] from any other
[*****] used by [*****] if applicable) and will provide Diversa with a detailed
description of such system prior to the delivery of any [*****] by Diversa to
Novartis under the Project Plans.
8. *Confidential Treatment Requested
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2.3 [*****] Provided by Diversa. Diversa shall be responsible for
ensuring that all [*****] made available for the [*****] are done so in
compliance with [*****] related thereto.
3. Research Committee.
Novartis and Diversa shall establish a research committee (the "Research
Committee") comprised of [*****] (each, a "Committee Member"), [*****] of whom
shall be appointed by Novartis and [*****] of whom shall be appointed by
Diversa. The Research Committee may invite other representatives of the Parties
to participate in meetings of the Research Committee, as appropriate, provided
that such representatives shall not have the right to vote as a Committee
Member.
3.1 Responsibilities. The purpose of the Research Committee shall be to
plan, coordinate, and direct the research efforts related to the Projects. Such
responsibilities include, but are not limited to, the following:
3.1.1 Approval of [*****] Projects. The Research Committee must
approve all [*****] Projects to be performed under the terms of this Agreement.
Such approval will be based on, but not limited to, [*****] especially with
respect to [*****].
3.1.2 Approval of Project Plans. The Research Committee must
approve all Project Plans for all Projects undertaken pursuant to this
Agreement. At that time, the Research Committee will also designate reporting
milestones for Diversa and Novartis to report progress on the Project to the
Research Committee (see Section 3.1.3 below). All amendments to the Project
Plans shall also be approved by the Research Committee and incorporated by
reference into the Agreement. Resources, including but not limited to [*****]
may be [*****] and the Research Committee may [*****]. Project Plans for the
[*****] Projects are attached as Exhibit A.
3.1.3 Review of Reports. At certain reporting milestones defined
by the Research Committee for each Project, Diversa and Novartis shall deliver
to the Research Committee reports disclosing a [*****] including [*****], as
appropriate. The Research Committee will review such data to determine progress
made on the Projects. Reports to the Research Committee shall be subject to the
confidentiality provisions contained herein.
9. *Confidential Treatment Requested
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3.1.4 [*****] of [*****] Field and License Fee [*****] Based on
the research and development efforts undertaken pursuant to this Agreement,
Novartis [*****] to the [*****] for [*****] Such [*****] shall be [*****] a
[*****] Plan with respect to such [*****] and an indication by Diversa [*****]
Based on the information received, the [*****] shall [*****] as a [*****] In the
event the [*****] designates a [*****] as the result of a [*****] Project, the
[*****] will also [*****] the [*****] Field for that [*****] in relation to the
[*****] Project (see Section 4.4.) and will [*****] the License Fee [*****] (see
Section 6.4.3.).
3.1.5 Miscellaneous Matters. The Research Committee will discuss
and propose solutions concerning any and all issues related to Inventions,
intellectual property and contractual matters not clearly addressed in this
Collaboration Agreement.
3.2 Meetings of the Research Committee. The Research Committee shall
meet at least [*****] alternating the sites of the meetings between Diversa's
facilities in San Diego, California and Novartis' facilities in Research
Triangle Park, North Carolina, or at such other times and locations as the
Research Committee determines. Within [*****] following each meeting of the
Research Committee, the Research Committee shall prepare and deliver to both
Parties a written report describing the decisions made, conclusions and actions
agreed upon. Subsequent to written approval by both parties, such report shall
be incorporated as part of this Agreement by reference. The members of the
Research Committee shall have the right to invite any person to attend its
meetings, as mutually agreed.
3.3 Requirements for Action. All actions and decisions of the Research
Committee will require the [*****] of all of its voting members. The Committee
Members or Alternates of Novartis shall collectively have [*****] on the
Research Committee, and the Committee Members or Alternates of Diversa shall
collectively have [*****] on the Research Committee.
3.4 Members. The initial Committee Members of the Research Committee
shall be as follows:
Diversa Representatives Novartis Representatives
[*****] [*****]
[*****] [*****]
A Party may change one or more of its Committee Members, provided, however,
that such person is technically qualified as reasonably demonstrated by that
Party. All appointments and withdrawals of appointment shall be made by written
notice to the other Party.
10. *Confidential Treatment Requested
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Each Party may designate in writing an alternate Committee Member
("Alternate") if the designated Committee Member cannot attend a meeting,
provided, however, that such Alternate is technically qualified as reasonably
demonstrated by that Party. Any action taken with approval of an Alternate
shall be as valid as if taken with the approval of the designated Committee
Member.
3.5 Visits to Facilities. Committee Members shall have reasonable
opportunity to visit the facilities of each Party (and such Party's Affiliates
and, with respect to Novartis, NADI and its Affiliates, if applicable) where
activities under this Agreement are in progress, but no more frequently than
once per quarter and only during normal business hours and with reasonable prior
notice. Each Party shall bear its own expenses in connection with such site
visits, unless such visits are deemed by the Research Committee to be part of
the Project, in which case the costs will be included as part of the applicable
Project Plan. Committee Members shall have the right at any time during the
visit to ask questions of and receive answers from any personnel regarding their
activities and findings hereunder.
3.6 Information Sharing. Each Party shall provide to the Research
Committee information that is relevant to make decisions regarding research and
commercialization efforts related to the Projects. Without limiting the
generality of the foregoing, Novartis will provide Diversa with the opportunity
to review data from the [*****] and the [*****] to determine the status of the
Projects.
3.7 Dispute Resolution. If the Research Committee fails to reach
agreement upon any matter, the dispute will be resolved in accordance with the
procedures set forth in Section 11.3.
4. Grant of Rights.
4.1 Option to License. Subject to the terms and conditions of this
Agreement, with respect to each [*****] Diversa grants to Novartis an exclusive
option (the "Option") to receive an exclusive, worldwide, royalty-bearing
license (the "License") under Section 4.4 so long as Diversa has not previously
granted rights to such [*****] to a third party; provided that, at Novartis'
sole election, such License shall be non-exclusive rather than exclusive, in
which case the Parties agree that the [*****] shall be determined by mutual
agreement of the Parties taking into account a non-exclusive License. Any such
[*****] shall be [*****] to an [*****] of [*****] or to [*****] or any of
[*****].
4.2 Option Period. The Option will be effective ("Option Effective
Date") upon (a) the [*****] of a Biomolecule as a [*****] and (b) payment by
Novartis to Diversa of amounts due under Section 6.3.1 and 6.3.2, as applicable,
and will continue in force for the period (the "Option Period") ending on the
earliest to occur of:
11.
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(a) the Option Exercise Date, or
(b) the date Novartis notifies Diversa that Novartis does not
intend to proceed with further development of the [*****] in accordance with the
applicable [*****] Plan, or
(c) [*****] after the projected date for achievement of any
technical milestone included in the applicable [*****] Plan, as approved by the
[*****] in the event the results of such milestone have not been made known to
Diversa or in the event that achievement of such milestone requires Novartis to
make a milestone payment to Diversa and such payment has not been made to
Diversa; provided that Novartis shall have [*****] after written notice from
Diversa to comply with this provision, or
(d) the [*****] determines that the results of any technical
milestone included in the applicable [*****] Plan, as approved by the [*****]
demonstrate that the applicable [*****] was [*****] in accordance with such
[*****] Plan; provided that the [*****] will meet within [*****] following the
[*****] for achievement of such [*****] to make such [*****] and, if the [*****]
does not meet within such [*****] period, the applicable [*****] will [*****]
provided further that in the event such technical milestone [*****] in
accordance with such [*****] Plan, the [*****] may [*****] in which to achieve
such [*****] if it determines that such [*****] is achievable within a [*****]
consistent with the previously defined [*****] of such [*****] Plan; or
(e) the date that Novartis notifies Diversa in writing that it
waives its right to the Option, or
(f) the date that this Agreement is terminated pursuant to Section
10.2.
4.3 Exercise of Option. Novartis, or its transferee or assignee with
respect to the Option, may exercise the Option with respect to a given
Development Biomolecule by providing Diversa written notice of the exercise of
such Option at any time during the Option Period (the "Option Exercise Date").
If Novartis does not exercise the Option during the Option Period, the Option
shall expire, and Novartis shall have no further rights thereunder and shall
return or destroy all forms of Confidential Information provided to Novartis
under this Agreement relating to the [*****] subject to such Option within
[*****] after such expiration; provided, however, that Novartis may retain one
copy of such Confidential Information for the sole purposes of use in any
litigation resulting from this Agreement or the activities undertaken pursuant
to this Agreement.
12. *Confidential Treatment Requested
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4.4 Licenses. In the event that Novartis exercises the Option prior to
the end of the Option Period, Diversa will grant to Novartis a License under the
Diversa Technology to use the [*****] to the extent necessary to make, have
made, use, sell, offer for sale and import Royalty-Bearing Products in the
[*****] Field. For clarification, (a) if the [*****] includes [*****] the
[*****] will entitle [*****] to [*****] the [*****] the [*****] in [*****] and,
to the extent necessary, to [*****] such [*****] in such [*****] to [*****] or
[*****] such [*****] solely in order to [*****] such [*****]; and (b) if the
[*****] includes [*****] the [*****] will entitle [*****] to [*****] the [*****]
in [*****] and to [*****] such [*****]. The terms of each License, including the
Novartis Field and the [*****] for [*****] will be defined in a definitive
license agreement ("License Agreement"), to be agreed upon by both Parties by
the date the Option is exercised. The License for the [*****] will become
effective upon [*****] will continue until [*****] unless the License Agreement
is terminated in accordance with its terms.
4.5 Scope of License.
The Parties hereby agree that the [*****] Field related to the [*****] is
as follows:
4.5.1 [*****] Project. Use in [*****].
4.5.2 [*****] Project. Use in [*****].
4.5.3 [*****] Project. Use in [*****].
4.5.2 [*****] Project. Use in [*****].
For [*****] related to [*****] Projects, the [*****] Field will be [*****]
at the [*****] of such [*****] by the [*****]. It is the intent of the Parties
that the [*****] Field will include the definition of the [*****] or [*****] on
or in which [*****] will be used.
4.6 Rights to Sublicense. Under each License that is exclusive,
Novartis shall have the right to grant sublicenses to Affiliates, NADI and its
Affiliates and third parties, and under each License that is non-exclusive,
Novartis shall have the right to grant sublicenses to Affiliates, and to NADI
and its Affiliates; provided that any such
13. *Confidential Treatment Requested
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sublicense shall expressly provide that the Sublicensee shall be subject in all
respects to the royalty obligations, reports and other provisions in this
Agreement with respect to Royalty-Bearing Products and shall otherwise have
terms consistent with the terms of this Agreement. Novartis shall provide
Diversa with prompt written notice of each sublicense agreement after it is
granted.
4.7 Commercialization of [*****]. Novartis shall have the sole and
absolute discretion to make all decisions relating to marketing and other
commercialization activities in the [*****] Field with respect to any [*****] or
any Royalty-Bearing Product containing such [*****]. However, each License
Agreement shall include certain minimum performance requirements with respect to
the development and commercialization of the applicable [*****] and Royalty-
Bearing Product containing such [*****] as agreed upon by the Parties, and
reversion of rights with respect to such [*****] and Royalty-Bearing Product to
Diversa if Novartis does not satisfy such performance requirements.
5. Intellectual Property Rights.
5.1 Intellectual Property Ownership. Ownership of all inventions,
discoveries, developments and improvements conceived of in the course of work
performed on any Project (the "Inventions") shall be determined in accordance
with this Section 5.1.
5.1.1 Diversa shall have [*****] and [*****] over all [*****]
relating to any [*****] and any [*****] made pursuant to this Agreement
(including but not limited to [*****] and [*****] whether or not any such
[*****] are [*****] including, without limitation, any such [*****] [*****] any
such [*****] (other than [*****]), [*****] of [*****] such [*****] and [*****]
of [*****] such [*****] Diversa will not use any [*****] in the applicable
[*****] except pursuant to the [*****] and will not provide or grant any [*****]
to any [*****] to use any [*****] in the applicable [*****]; provided that
Diversa may use any [*****] in any [*****] outside of the [*****] and may
provide or grant any rights to any [*****] to use any [*****] in any [*****]
outside of the [*****] if the [*****] of such [*****] in the applicable [*****]
was [*****] without use of any information or materials provided to Diversa by
Novartis [*****]. In addition, Diversa will not use, or provide or grant any
rights to any [*****] to [*****], any [*****] for the same or similar use as any
[*****]. Nothing herein is intended to limit Diversa's rights (including the
right to grant licenses to third parties) to any [*****], except [*****]
Biomolecules subject to an Option under Section 4.1, [*****] Biomolecules
subject to a License under a License Agreement, [*****] to the extent their
[*****] is [*****] by this Section 5.1.1 and [*****] Biomolecules to the extent
their [*****] is [*****] by this Section 5.1.1; except that no license, either
express or implied, is granted by [*****] to
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[*****] under any [*****], nor under any other intellectual property rights held
by [*****] or its Affiliates, or by [*****] and its Affiliates, whether or not
such rights arise from the performance of this agreement.
5.1.2 Novartis shall have [*****] and [*****] over all [*****]
relating to any [*****] including, without limitation, such [*****] [*****] of
[*****] such [*****] and [*****] of [*****] such [*****] subject to payment by
Novartis to Diversa of compensation for Royalty-Bearing Products commercialized
[*****] as agreed upon by the Parties prior to any such commercialization.
5.1.3 With respect to all Inventions relating to [*****] in the
course of the Project, (a) [*****] shall have exclusive ownership and control
over all such [*****] having solely [*****] inventors; (b) [*****] shall have
[*****] and [*****] over all such [*****] having [*****] and [*****] inventors;
provided that, except as contemplated by the [*****], Diversa will not [*****],
and will not [*****] or [*****] any [*****] to any [*****] to [*****], any
[*****] that [*****] or was [*****] and/or [*****] using any information or
materials provided to [*****] by [*****]; and (c) [*****] shall have [*****] and
[*****] over all such [*****] having solely [*****] inventors. Diversa hereby
grants a non-exclusive, non-transferable license to Novartis, its Affiliates,
and to NADI and its Affiliates, to any such Inventions described in subsection
(b) solely for Novartis' internal research purposes.
5.1.4 The provisions of Sections 5.1.1, 5.1.2, and 5.1.3 shall
not apply to ownership of any patent applications and patents transferred from
one Party to the other Party under the provisions of Section 5.2.3.
5.1.5 Inventorship of Inventions shall be determined in
accordance with United States patent law.
5.1.6 Each Party will (and will cause any of its Affiliates and,
in the case of Novartis, NADI and any of its Affiliates to) make such
assignments and take such other actions as may be necessary or appropriate to
effect the ownership of Rights in accordance with this Sections 5.1 and 5.2.3.
5.2 Filing, Prosecution and Maintenance of Patents.
5.2.1 Novartis Patent Rights. Novartis shall have the sole right,
at its own expense, to control the filing, prosecution and maintenance of all
Novartis Patent Rights.
5.2.2 Diversa Patent Rights. Diversa shall have the sole right,
at its own expense, to control the filing, prosecution and maintenance of all
Diversa Patent Rights.
5.2.3 Transfer of Patent Rights. If a Party with respect to
Patent Rights claiming any Invention over which it has exclusive ownership and
control that relates to any [*****] or Royalty-Bearing Product decides to
abandon or not to pursue
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prosecution of any such Patent Rights which claim such Invention, it shall
inform and permit the other Party, at the other Party's option and expense, to
undertake such efforts. The Party relinquishing such efforts shall fully
cooperate with the other Party and shall provide to the other Party whatever
assignments and any other documents that may be needed in connection with
prosecution and/or maintenance of such Patent Rights. The Party assuming
prosecution and/or maintenance of Patent Rights from the other Party under the
provisions of this Section 5.2.3, shall have exclusive ownership and control of
any and all Patent Rights transferred, notwithstanding the provisions of
Section 5.1.
5.3 Cooperation of the Parties. Each Party agrees (and will cause any
--------------------------
of its Affiliates and, in the case of Novartis, NADI and any of its Affiliates)
to cooperate fully in the preparation, filing, prosecution and maintenance of
any patent rights arising under this Agreement. Such cooperation includes, but
is not limited to:
(a) executing all papers and instruments, or using reasonable
efforts to cause its employees or agents, to execute such papers and
instruments, so as to effectuate the ownership of intellectual property rights
set forth in Section 5.1 above and to enable the other Party to file and to
prosecute patent applications and to maintain patents in any country;
(b) promptly informing the other Party of any matters coming to
such Party's attention that may affect the preparation, filing, or prosecution
of any such patent applications or the maintenance of any such patents; and
(c) undertaking no actions that are potentially deleterious to the
preparation, filing, or prosecution of such patent applications or to the
maintenance of such patents.
5.4 Infringement by Third Parties.
5.4.1 Notice. Diversa and Novartis shall promptly notify the other
in writing of any alleged or threatened infringement of any patent or patent
application included in the Diversa Patent Rights or Novartis Patent Rights of
which they become aware. Both Parties shall use reasonable efforts in
cooperating with each other to terminate such infringement without litigation.
5.4.2 [*****] Actions. Novartis shall have the first right to
bring and control, by counsel of its own choice, any action or proceeding with
respect to infringement of any [*****], as well as any [*****],[*****] to
[*****] or [*****] at the time of commencement of such action or proceeding.
[*****] shall have the right, at its own expense, to participate in any such
action regarding the [*****] by counsel of its own choice. Upon written notice
to [*****], [*****] may require [*****] to participate in such action as a
necessary party to such action, at [*****] expense. If [*****] fails to bring an
action or proceeding with respect to any such [*****] within (a) [*****]
following the notice of alleged infringement or (b) [*****] before the time
limit, if
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any, set forth in the appropriate laws and regulations for the filing of such
actions, whichever comes first, [*****] shall have the right to bring and
control any such action, at its own expense and by counsel of its own choice,
and [*****] shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice.
5.4.3 [*****] Actions. [*****] shall have the right to bring and
control, by counsel of its own choice, any action or proceeding with respect to
infringement of any [*****] which are not [*****] to [*****] or a [*****] at the
time of commencement of such action or proceeding.
5.4.4 Cooperation; Awards. In the event a Party brings an
infringement action, the other Party shall (and will cause any of its Affiliates
and, in the case of [*****] to) cooperate fully, including if required to bring
such action, the furnishing of a power of attorney. Neither Party shall have the
right to settle any patent infringement litigation under this Section 5.4 in a
manner that diminishes the rights or interests of the other Party without the
prior written consent of such other Party. Except as otherwise agreed to by the
Parties as part of a cost sharing arrangement, any recovery realized as a result
of such litigation, after reimbursement of any litigation costs of Diversa and
Novartis, shall belong to the Party who brought the action.
5.5 Claimed Infringement by Third Parties. Diversa and Novartis shall
promptly notify the other in writing of any allegation by a third party that the
exercise of the rights granted to Novartis under this Agreement or the
activities conducted by either Party under this Agreement infringes or may
infringe the intellectual property rights of such third party. Each Party will
use reasonable efforts (and will cause any of its Affiliates and, in the case of
Novartis, NADI and any of its Affiliates) to cooperate with the other Party to
resolve or defend against such claims. Neither Party shall have the right to
settle any patent infringement litigation under this Section 5.5 in a manner
that diminishes the rights or interests of the other Party without the prior
written consent of such other Party.
6. Payments, Reports, and Records.
6.1 Equity. Simultaneous with the execution of this Agreement, Novartis
shall purchase [*****] of Diversa preferred stock in exchange for a Transaction
Amount of [*****] pursuant to a Stock Purchase Agreement which is attached as
Exhibit B.
6.2 Research Funding. With respect to research performed [*****],
Novartis will reimburse Diversa on a monthly basis at a rate of [*****] per full
time equivalent based on actual work performed by Diversa under the applicable
Project Plan.
6.3 Milestone Payments. For each Use of each [*****] developed pursuant
to this Agreement, Novartis shall pay to Diversa the following amounts upon
achievement of each of the milestones under each Project.
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6.3.1 [*****] upon the [*****] by the [*****] of a [*****].
6.3.2 [*****] upon the [*****] of [*****] as provided for in the
[*****] and approved by the [*****].
6.3.3 [*****] upon the [*****] of [*****] as provided for in the
[*****] and approved by the [*****].
Such milestone payments in Section 6.3 shall be [*****] and shall [*****]
to Diversa under this Agreement. Novartis shall promptly notify Diversa of each
occurrence of any of the foregoing milestone events.
6.4 License Fee Payments. In consideration of each License granted to
Novartis by Diversa under Section 4.2 herein, Novartis shall pay Diversa the
following license fees ("License Fees") for each [*****] payable [*****] as
follows:
6.4.1 First, upon the [*****] of the [*****] with respect to a
[*****], [*****] for [*****] associated with [*****] will be agreed to for such
[*****] in accordance with Section [*****]; provided that, in no event shall the
[*****] under this Section 6.4.1 be [*****].
6.4.2 Second, upon the [*****] of [*****] containing [*****] in
an amount to be agreed to at the time the [*****] for such [*****] in accordance
with Section [*****].
The License Fees will be determined by [*****] of the [*****]. Such
License Fees in Section 6.4 shall be [*****] and shall [*****] to Diversa under
this Agreement.
6.5 Royalties. In consideration of the Licenses granted to Novartis by
Diversa hereunder, for all sales by Novartis, its Affiliates and Sublicensees of
Royalty-Bearing Products in the applicable Novartis Field, Novartis shall pay to
Diversa a royalty of either (a) [*****] and [*****], or (b) [*****] and [*****],
provided that such percentages in (b) [*****] The [*****] in either case will
be determined by [*****] of the [*****] in the [*****] applicable to such
[*****] based upon the factors described in Section 6.6.
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6.5.1 Sales to Affiliates and Sublicensees. [*****] royalty shall
accrue on sales among Novartis, its Affiliates and Sublicensees, unless Novartis
or such Affiliate or Sublicensee is the end user of a Royalty-Bearing Product.
Royalties shall be payable [*****] for [*****] of Royalty-Bearing Product sold.
6.5.2 [*****] Royalties. [*****] may [*****] with [*****] over
time under the [*****] to the extent such [*****] are [*****] of the [*****] of
[*****] and would make it [*****] for [*****] to [*****] with the terms of the
Agreement:
6.5.2.1 [*****] pays [*****] for a [*****] resulting in [*****]
to [*****];
6.5.2.2 A [*****] does not provide the [*****] to [*****] the
[*****] of the [*****] of [*****] hereunder; a [*****] will be based upon the
[*****] of the [*****]; or
6.5.2.3 The [*****] attributed to a [*****] in [*****] over
[*****] or [*****] to be [*****], although not [*****] from a [*****].
In the event such a [*****] the Parties agree to [*****] in [*****] provided
that any [*****] in the [*****] shall [*****] the [*****] of the [*****].
6.6 [*****] License Fees and Royalties. The [*****] License Fees under
Section 6.4 and the royalty rates under Section 6.5 will be [*****] by [*****]
of the [*****] based on [*****] such as [*****] the [*****] is [*****].
6.7 Reports and Payments. Within [*****] after the conclusion of each
Royalty Period, Novartis shall pay to Diversa the estimated royalty payment due
for such Royalty Period based on the royalty rates applicable to units of
Royalty-Bearing Products shipped during such Royalty Period less estimated
returns, and shall deliver to Diversa a report containing the following
information:
(a) Estimated gross sales and returns of Royalty-Bearing Products
by Novartis, its Affiliates and Sublicensees during the applicable Royalty
Period in each country of sale;
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(b) Adjustments and calculation of Net Sales for the applicable
Royalty Period in each country of sale; and
(c) Calculation of royalty.
Any corrections to the estimated [*****] royalty payment will be established at
the [*****] and factored into the corresponding royalty payment for such
[*****]. All amounts payable under this Section will first be calculated in the
currency of sale and then converted into U.S. dollars. The buying rates
involved for the currency of the United States into which the currencies
involved are being exchanged shall be the one quoted by The Wall Street Journal
at the close of business on the last business day of the applicable Royalty
Period. Such amounts shall be paid without deduction, except as required by
law, of any withholding taxes, value-added taxes, or other charges applicable to
such payments.
6.8 Payments in U.S. Dollars. All payments due under this Agreement
shall be payable in United States dollars.
6.9 Records. Novartis and its Affiliates shall maintain complete and
accurate records of Royalty Bearing Products made, used or sold by them or
their Sublicensees under this Agreement, and any amounts payable to Diversa in
relation to Royalty Bearing Products, which records shall contain sufficient
information to Diversa to confirm the accuracy of any reports delivered to them
in accordance with Section 6.7. Novartis and its Affiliates shall retain such
records relating to a given Royalty Period for at least three (3) years after
the conclusion of that Royalty Period. Diversa (acting as the "Auditing
Party") shall have the right, at its own expense, to cause an independent
certified public accountant reasonably acceptable to Novartis, to inspect such
records of Novartis or its Affiliates (the "Audited Party") during normal
business hours for the sole purpose of verifying any reports and payments
delivered under this Agreement. Such accountant shall not disclose to the
Auditing Party any information other than information relating to accuracy of
reports and payments delivered under this Agreement and shall provide the
Audited Party with a copy of any report given to the Auditing Party. The
Parties shall reconcile any underpayment or overpayment within [*****] after the
accountant delivers the results of the audit. The Auditing Party shall bear the
full cost of the audit unless, the audit performed under this Section reveals an
underpayment in excess of [*****] in any Royalty Period, in which case the
Audited Party shall bear the full cost of such audit. Diversa may exercise its
rights under this Section only once every year and only with reasonable prior
notice to Novartis. Novartis shall use commercially reasonable efforts to
ensure that the other Party will have access to records of Royalty-Bearing
Products sold by its Affiliates.
6.10 Late Payments. In the event that any payment, including royalty
payments, due hereunder is not made when due, the payment shall accrue interest
from that date due at the rate of [*****]; provided however, that in no event
shall such rate exceed the maximum legal annual interest rate. The payment of
such interest shall not limit Diversa from exercising any other rights it may
have as a consequence of the lateness of any payment.
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7. Confidential Information.
7.1 Definition of Confidential Information. Confidential Information
shall mean any technical or business information, whether orally or in writing,
furnished by the Disclosing Party to the Receiving Party in connection with this
Agreement. Such Confidential Information shall include, without limitation, the
existence and terms of this Agreement, the identity of a [*****], the [*****],
any [*****], if relevant, the use of a [*****], Diversa Technology, Novartis
Technology, trade secrets, know-how, inventions, technical data or
specifications, testing methods, business or financial information, research and
development activities, product and marketing plans, and customer and supplier
information, including, but not limited to, such items that become known to a
Party during visits to the facilities of the other Party.
7.2 Obligations. The Receiving Party agrees that it shall:
(a) Maintain all Confidential Information in strict confidence,
except that the Receiving Party may disclose or permit the disclosure of any
Confidential Information to its Affiliates, directors, officers, employees,
consultants and advisors (or, in the case of Novartis, also to NADI and its
Affiliates, directors, officers, employees, consultants and advisors) who are
obligated to maintain the confidential nature of such Confidential Information
and who need to know such Confidential Information for the purposes set forth in
this Agreement;
(b) Use all Confidential Information solely for the purposes set
forth in, or as permitted by, this Agreement; and
(c) Allow its Affiliates, directors, officers, employees,
consultants and advisors (or, in the case of Novartis, also NADI and its
Affiliates, directors, officers, employees, consultants and advisors) to
reproduce the Confidential Information only to the extent necessary to effect
the purposes set forth in this Agreement, with all such reproductions being
considered Confidential Information.
Each Party shall be responsible for any breaches of this Section 7.2. by any of
its Affiliates, directors, officers, employees, consultants and advisors.
7.3 Exceptions. The obligations of the Receiving Party under Section
7.2. above shall not apply to any specific Confidential Information to the
extent that the Receiving Party can demonstrate that such Confidential
Information:
(a) Was in the public domain prior to the time of its disclosure
under this Agreement;
(b) Entered the public domain after the time of its disclosure
under this Agreement through means other than an unauthorized disclosure
resulting from an act
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or omission by the Receiving Party or its Affiliates, directors, officers,
employees, consultants, advisors or agents;
(c) Was or is independently developed or discovered by the
Receiving Party without use of the Confidential Information, and which can be
demonstrated by written record;
(d) Is or was disclosed to the Receiving Party at any time, whether
prior to or after the time of its disclosure under this Agreement, by a third
party having no fiduciary relationship with the Disclosing Party and having no
obligation of confidentiality to the Disclosing Party with respect to such
Confidential Information; or
(e) Is required to be disclosed to comply with applicable laws or
regulations (such as disclosure to the SEC, the EPA, the FDA, or the United
States Patent and Trademark Office or to their foreign equivalents), or to
comply with a court or administrative order, provided that the Disclosing Party
receives prior written notice of such disclosure and that the Receiving Party
takes all reasonable and lawful actions to obtain confidential treatment for
such disclosure and, if possible, to minimize the extent of such disclosure.
7.4 Survival of Obligations. The obligations set forth in Sections
[*****] and [*****] shall remain in effect after termination or expiration of
this Agreement for a period of [*****].
7.5 Public Announcement. The Parties shall issue a joint press release
regarding this Agreement, the text of which shall be subject to mutual agreement
of the Parties. Except for the information disclosed in the joint press
release, neither party shall use the name of the other party or reveal the
existence of or terms of this Agreement in any publicity or advertising without
the prior written approval of the other party, except that (i) either party may
use the text of a written statement approved in advance by both parties without
further approval, and (ii) either party shall have the right to identify the
other party and to disclose the terms of this Agreement as required by
applicable securities laws or other applicable law or regulation, provided that
the receiving party takes reasonable and lawful actions to minimize the degree
of such disclosure.
7.6 Publication. The Parties shall cooperate in appropriate publication
of the results of research and development work performed pursuant to the
Projects, but subject to the predominating interest to obtain patent protection
for any patentable subject matter. To this end, prior to any public disclosure
of such results, the Party proposing disclosure shall send the other Party a
copy of the information to be disclosed, and shall allow the other party [*****]
from the date of receipt in which to determine whether the information to be
disclosed contains subject matter for which patent protection should be sought
prior to disclosure, or otherwise contains Confidential Information of the
reviewing Party. The Party proposing disclosure shall be free to proceed with
the disclosure unless prior to the expiration of such [*****] period the
reviewing Party notifies the Party proposing disclosure that the disclosure
contains
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subject matter for which patent protection should be sought or Confidential
Information of the reviewing Party, and the Party proposing publication shall
then delay public disclosure of the information for an additional period to be
mutually agreed upon to permit the preparation and filing of a patent
application on the subject matter to be disclosed or for the Parties to
determine a mutually acceptable modification to such publication to protect the
Confidential Information of the reviewing Party adequately. The Party proposing
disclosure shall thereafter be free to publish or disclose the information. The
determination of authorship for any paper shall be in accordance with accepted
scientific practice.
8. Representations and Warranties.
8.1 Authorization. Each Party represents and warrants to the other that
it has the legal right and power to enter into this Agreement, to extend the
rights and licenses granted to the other in this Agreement, and to fully perform
its obligations hereunder, and that the performance of such obligations will not
conflict with its charter documents or any agreements, contracts, or other
arrangements to which it is a party.
8.2 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION AND EXTENDS NO WARRANTY OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES AS TO MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.
8.3 Limitation of Liability. IN NO EVENT WILL EITHER PARTY, ITS
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER
PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES,
WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT
LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT.
9. Indemnification.
9.1 Indemnification. [*****] (the "Indemnitor") shall indemnify, defend,
and hold harmless [*****] and its Affiliates and their directors, officers,
employees, and agents and their respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss, or expense incurred by or
imposed upon the Indemnitees or any one of them in connection with any claims,
settlements, suits, actions, demands, or judgments arising out of any [*****]
concerning any [*****] that is [*****] by the [*****] or its [*****] or [*****]
pursuant to any [*****] under [*****]; provided, however, that such
indemnification right shall not apply to any liability, damage, loss, or expense
to the extent directly attributable to the negligence, reckless misconduct, or
intentional misconduct of the Indemnitees. An Indemnitee shall not be entitled
to indemnification for the settlement of any claim pursuant to this Agreement
unless it obtains the prior written consent of the Indemnitor to such
settlement.
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9.2 Procedures. Any Indemnitee that intends to claim indemnification
under Section 9.1 shall promptly notify the Indemnitor of any claim in respect
of which the intends to claim such indemnification, and the Indemnitor shall
assume the defense thereof with counsel mutually satisfactory to the Parties;
provided, however, that an Indemnitee shall have the right to retain its own
counsel, with the fees and expenses of no more than the law firm representing
all Indemnitees in the proceeding or related proceeding, to be paid by the
Indemnitor, if representation of such Indemnitee by the counsel retained by the
Indemnitor would be inappropriate due to actual or potential differing interests
between such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in Section 9.1. shall not apply to amounts
paid in settlement of any loss, claim, liability or action if such settlement is
effected without the consent of the Indemnitor. The failure to deliver notice to
the Indemnitor within a reasonable time after the commencement of any such
action, shall not relieve the Indemnitor of any liability to the Indemnitee
under Section 9.1, except to the extent the Indemnitor has been prejudiced by
such failure to give notice. Each Party and its Affiliates and their employees
and agents shall cooperate fully with the other Party and its legal
representatives in the investigation of any action, claim or liability covered
by this indemnification.
10. Term; Termination.
10.1 Term. The term of this Agreement will commence as of the Effective
Date of this Agreement and, unless sooner terminated as provided hereunder, will
expire upon the later of (i) the [*****], or (ii) the [*****].
10.2 Termination.
10.2.1 Change of Control. [*****] shall have the right to terminate
this Agreement upon the occurrence of a Change of Control during the Research
Period by providing written notice of termination to Diversa within [*****]
following receipt of written notice of the occurrence of such Change of Control.
In the event that [*****] does not terminate this Agreement under this Section
10.2.1, this Agreement will be binding upon [*****] and [*****], or any
successor to [*****] in such Change of Control.
10.2.2 Mutual Consent. This Agreement may be terminated at any time
by mutual written agreement of the Parties.
10.2.3 Material Breach. In the event that a Party commits a material
breach of any of its obligations under this Agreement (other than as provided in
Section 10.4) and such Party fails (i) to remedy that breach within [*****]
after receiving written notice thereof from the other Party or (ii) to commence
dispute resolution pursuant to Section 10.3, within [*****] after receiving
written notice of that breach from the other Party, the other Party may
immediately terminate this Agreement upon written notice to the breaching Party.
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10.2.4 Breach of Payment Obligations. In the event that Novartis
fails to make timely payment of any amounts due under this Agreement within
[*****] after demand therefor, Diversa may terminate this Agreement upon [*****]
prior written notice, unless the Novartis cures such breach by paying all past-
due amounts within such [*****] notice period, provided that Novartis shall be
entitled to use such cure provision no more than once in any [*****].
10.3 Disposition of Confidential Information. In the event of termination
or expiration of this Agreement, the Parties shall return or destroy all forms
of Confidential Information provided to them under this Agreement, within
[*****] after such termination or expiration, provided, however, that each Party
may retain one copy of such Confidential Information for the sole purpose of use
in any litigation resulting from this Agreement or the activities undertaken
pursuant to this Agreement and further provided, that if Diversa is the
breaching Party, Novartis may retain Development [*****], if any, pursuant to
the Licenses granted pursuant to Section 4.
10.4 Effect of Termination or Expiration. Termination or expiration of
this Agreement shall not relieve the parties of any obligation accruing prior to
such termination or expiration and shall not terminate any License granted or
License Agreement entered into prior to such termination or expiration. The
provisions of Sections [*****] shall survive the expiration or termination of
this Agreement, and the provisions of Sections [*****] shall survive the
termination of this Agreement with respect to [*****]. Termination of this
Agreement pursuant to Section 10.2 shall not limit any other rights and remedies
of the terminating party.
11. Miscellaneous.
11.1 Relationship of Parties. Nothing in this Agreement is intended or
shall be deemed to constitute a partnership, agency, employer-employee or joint
venture relationship between the parties. No party shall incur any debts or make
any commitments for the other, except to the extent, if at all, specifically
provided herein.
11.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of [*****] other than those provisions
governing conflicts of law.
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11.3 Dispute Resolution Procedures.
(a) The parties hereby agree that they will attempt in good faith to
resolve any controversy, claim or dispute ("Dispute") arising out of or relating
to this Agreement promptly by negotiations. Any such Dispute which is not
settled by the parties within [*****] after notice of such Dispute is given by
one party to the other in writing shall be referred to the Chief Executive
Officer of Diversa and the appropriate Senior Executive of Novartis who are
authorized to settle such Disputes on behalf of their respective companies
("Senior Executives"). The Senior Executives will meet for negotiations within
[*****] of such notice of Dispute, at a time and place mutually acceptable to
both Senior Executives. If the Dispute has not been resolved within [*****]
after the end of the [*****] negotiation period referred to above (which period
may be extended by mutual agreement), unless otherwise specifically provided for
herein, any Dispute will be settled first by non-binding mediation and
thereafter by arbitration as described in subsections (b) and (c) below.
(b) Any Dispute which is not resolved by the parties within the time
period described in subsection (a) shall be submitted to an alternative dispute
resolution process ("ADR"). Within [*****] after the expiration of the [*****]
period set forth in subsection (a), each party shall select for itself a
representative with the authority to bind such party and shall notify the other
party in writing of the name and title of such representative. Within [*****]
after the date of delivery of such notice, the representatives shall schedule a
date for engaging in non-binding ADR with a neutral mediator or dispute
resolution firm mutually acceptable to both representatives. Any such mediation
shall be held in [*****] if brought by [*****] and [*****],[*****] if brought by
[*****]. Thereafter, the representatives of the parties shall engage in good
faith in an ADR process under the auspices of such individual or firm. If the
representatives of the parties have not been able to resolve the Dispute within
[*****] after the conclusion of the ADR process, or if the representatives of
the parties fail to schedule a date for engaging in non-binding ADR within the
[*****] set forth above, the Dispute shall be settled by binding arbitration as
set forth in subsection (c) below. If the representatives of the parties resolve
the dispute within the [*****] set forth above, then such resolution shall be
binding upon the parties. If either party fails to abide by such resolution, the
other party can immediately refer the matter to arbitration under Section
11.3(c).
(c) If the parties have not been able to resolve the Dispute as
provided in subsections (a) and (b) above, the Dispute shall be finally settled
by binding arbitration. Any arbitration hereunder shall be conducted under rules
of conciliation and arbitration of the International Chamber of Commerce by
three arbitrators chosen according to the following procedure: each of the
parties shall appoint one arbitrator and the two so nominated shall choose the
third; provided that in the case of a dispute as to decisions of the Research
Committee each party shall designate one (1) neutral having the following
minimum scientific qualifications: a Ph.D. degree in chemistry or life sciences
and/or an M.D. degree plus at least [*****] of relevant business or scientific
research experience. These [*****] shall select a third neutral having
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the same minimum scientific qualifications within [*****] of the appointment of
the first [*****]. None of the neutrals shall be an employee, director or
shareholder of either Party or any of their Affiliates or NADI or its Affiliates
or otherwise have a materially conflicting interest in the outcome of such
proceeding. If the arbitrators chosen by the Parties cannot agree on the choice
of the third arbitrator within a period of [*****] after their appointment, then
the third arbitrator with such requisite qualifications shall be appointed by
the Court of Arbitration of the International Chamber of Commerce. Any such
arbitration shall be held in [*****] if brought by [*****] and [*****] if
brought by [*****], or such other location as the arbitrators may agree, and
shall be conducted in English. The arbitral award (i) shall be final and binding
upon the parties; and (ii) may be entered in any court of competent
jurisdiction.
(d) Nothing contained in this Section or any other provisions of
this Agreement shall be construed to limit or preclude a party from bringing any
action in any court of competent jurisdiction for injunctive or other
provisional relief to compel the other party to comply with its obligations
hereunder before or during the pendency of mediation or arbitration proceedings.
The parties hereby irrevocably consent to submit to the jurisdiction of the
federal courts located within the [*****] and agree that venue is proper in any
such court and will not seek to alter or contest such venue.
11.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
11.5 Headings. All headings in this Agreement are for convenience only
and shall not affect the meaning of any provision hereof.
11.6 Binding Effect. This Agreement and all rights and obligations
hereunder shall inure to the benefit of and be binding upon the Parties, their
Affiliates, and their respective lawful successors and assigns (including,
without limitation, any successor to Diversa upon a Change of Control).
11.7 Assignment. Except as otherwise provided herein, neither this
Agreement nor any interest hereunder will be assignable in part or in whole by
any Party without the prior written consent of the other Party; provided,
however, that either Party may assign this Agreement to any of its Affiliates
(or in the case of Novartis, also to ([*****]) or to any successor by merger or
sale of substantially all of its business to which this Agreement relates
(provided that, in the event of such merger or sale, no intellectual property of
any acquiring corporation that is not a Party shall be included in the
technology licensed hereunder). This Agreement will be binding upon the
successors and permitted assigns of the Parties. Any assignment which is not in
accordance with this Section will be void.
11.8 Notices. All notices, requests, demands and other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given upon the date of receipt if
delivered by hand,
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recognized international overnight courier, confirmed facsimile transmission, or
registered or certified mail, return receipt requested, postage prepaid to the
following addresses or facsimile numbers:
If to Novartis: If to Diversa:
NOVARTIS AGRIBUSINESS
[*****] Diversa Corporation
[*****] 10665 Sorrento Valley Road
[*****] San Diego, California 92121
[*****] Attention: Carolyn Erickson
[*****] Tel: (619) 453-7020
[*****] Fax: (619) 453-7032
[*****]
with a copy to:
Cooley Godward LLP
4365 Executive Drive, Suite 1100
San Diego, CA 9221
Attention: M. Wainwright Fishburn, Esq.
Tel: 619-550-6018
Fax: 619-453-3555
Either party may change its designated address and facsimile number by notice to
the other party in the manner provided in this Section.
11.9 Amendment and Waiver. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
parties. Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to waive
any rights or fail to act in any other instance, whether or not similar.
11.10 Severability. In the event that any provision of this Agreement
shall, for any reason, be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall not affect any other provision hereof,
and the parties shall negotiate in good faith to modify the Agreement to
preserve (to the extent possible) their original intent.
11.11 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements or understandings between the parties relating to the subject
matter hereof.
11.12 Regulatory Filings. Novartis shall have sole responsibility for
making all regulatory filings worldwide, including, without limitation, all
filings required by the Biodiversity Convention and other legislation related to
the ownership or use of
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biological resources, and obtaining the necessary approvals to market Royalty-
Bearing Products. Diversa will cooperate to provide information required to make
and maintain such filings, as appropriate.
11.13 Force Majeure. Neither party shall be held liable or responsible to
the other party, nor be deemed to be in breach of this Agreement, for failure or
delay in fulfilling or performing any provisions of this Agreement (other than
payment obligations) when such failure or delay is caused by or results from any
cause whatsoever outside the reasonable control of the party concerned
including, but not limited to, fire, explosion, breakdown of plant, damage to
plant material by pests or otherwise, strike, lock-out, labor disputes, casualty
or accident, lack or failure of transportation facilities, flood, lack or
failure of sources of supply or of labor, raw materials or energy, civil
commotion, embargo, any law, regulation, decision, demand or requirement of any
national or local government or authority. The party claiming relief shall,
without delay, notify the other party by registered airmail or by telefax of the
interruption and cessation thereof and shall use its best efforts to remedy the
effects of such hindrance with all reasonable dispatch. The onus of proving that
any such Force Majeure event exists shall rest upon the party so asserting.
During the period that one party is prevented from performing its obligations
under this Agreement due to a Force Majeure event, the other party may, in its
sole discretion, suspend any obligations that relate thereto. Upon cessation of
such Force Majeure event the parties hereto shall use their best efforts to make
up for any suspended obligations. If such Force Majeure event is anticipated to
continue, or has existed for [*****], this Agreement may be forthwith terminated
by either party by registered airmail or by telefax. In case of such termination
the terminating party will not be required to pay to the other party any
indemnity whatsoever.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.
NOVARTIS AGRIBUSINESS
BIOTECHNOLOGY RESEARCH, INC. DIVERSA CORPORATION
/s/ Steven V. Evola /s/ Terrance J. Bruggeman
----------------------------- ------------------------------
By: Steven V. Evola Terrance J. Bruggeman
Co-President Chief Executive Officer
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EXHIBIT A
Project Plans
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Flowchart:
[*****]
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PARTNERSHIP PROJECT
R&D PLAN
Title: [*****]
Partner: [*****]
Date: December 4, 1998
Project Description:
[*****]
Project Assumptions:
1. [*****]
2. [*****]
3. [*****]
4. [*****]
5. [*****]
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6. [*****]
7. [*****]
8. [*****]
9. [*****]
Delivery:
1. [*****]
2. [*****]
Effort:
[*****]
Flowchart:
[*****]
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Delivery:
1. [*****]
2. [*****]
3. [*****]
4. [*****]
Effort:
[*****]
FLOWCHART:
[*****]
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Exhibit B
Stock Purchase Agreement
*Confidential Treatment Requested
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