Common use of Research Funding Clause in Contracts

Research Funding. (a) In addition to the payments contemplated under Sections 5 and 6 hereof, Syngenta agrees to pay Diversa for FTEs for Directed Research and Project Research (the “FTE Funding”) $20.665 million per annum for the initial five year term of the Research Term under this Agreement. The cost of the Directed Research and the Project Research to be funded by Syngenta shall be calculated based on the number of FTEs allocated to such work at the following rates for the 2003 calendar year: $[…***…] per annum for FTEs engaged in Project Research (the “Project Research Rate”); and $[…***…] per annum for FTEs engaged in Directed Research (the “Directed Research Rate”). The Project Research Rate and the Directed Research Rate for each FTE shall be CPI adjusted on the annual anniversary of the Effective Date, applying the published CPI figure as of October 31 of the prior year, using 2002 as the base year; provided, however, that in no event shall the Project Research Rate or the Directed Research Rate be reduced. The first CPI adjustment will be for the 2004 Year and will be based on the CPI as of October 31, 2003. If CPI adjustments result in increases in the FTE Funding rate such that the total FTE Funding under this Section 2.6(a) would exceed $20.665 million per annum during any Year, Syngenta may, with reasonable notice to the Research Committee, modify that Year’s Research Plan so as to (i) increase its FTE Funding to maintain the same number of FTEs, or (ii) reduce the number of FTEs, as necessary, to limit its annual FTE Funding to $20.665 million per year. (b) Subject to Section 12.1, for any period of this Agreement beyond the initial five years of the Research Term, Syngenta may fund Directed Research and Project Research at any level of funding in its discretion, as set forth in the provisions of this Section 2.6(b); provided, however, Syngenta must give Diversa at least […***…] notice of extension of the Research Term under this Agreement prior to the expiration of any current Research Term, including the level of FTE Funding during such extension. For purposes of the following provisions, “T” means the last year of the Research Term in which FTE Funding was at least $20.665 million. If Syngenta elects to reduce the FTE Funding in any year after the initial five year Research Term from the prior year’s FTE Funding, it may reduce FTE Funding up to a maximum of 50% of T in the first year of reduction; up to a maximum reduction of 75% of T in the second year; and up to a […***…] reduction in the […***…]. Notwithstanding Section 2.4(d), if the FTE Funding provided by Syngenta under Section 2.6(a) is $[…***…] during any year after the initial five years of the Research Term, all FTE Funding shall be allocated to Project Research unless mutually agreed in writing by the Parties. (c) Annual FTE Funding payments by Syngenta to Diversa shall be made […***…] in advance throughout each year of the Research Term (provided that the last […***…] during the Research Term may be adjusted as necessary for the remaining FTE Funding due). In the event the number of FTEs actually used on the Research Program for any […***…] is less than the number of FTEs to be used in the Research Program based on FTE Funding provided by Syngenta for […***…], the difference shall be carried forward to be used on activities conducted by Diversa in connection with the Research Program during the remaining […***…]. In no event shall this Section 2.6(c) limit or affect Syngenta’s FTE Funding obligations under Section 2.6(a) and (b). The parties agree that, in the event that there are fewer than […***…] Transferred Employees (as defined in the Transaction Agreement) in the […***…] of the Research Program, the FTE Funding will be paid in accordance with this Section 2.6 and Diversa may make up the number of FTEs actually used on the Research Program in the […***…] (if less than the number to be used based on FTE Funding provided by Syngenta for […***…]) in the remaining […***…] of the Research Program. (d) Except as expressly set forth in this Agreement, Diversa shall be responsible for the expense of the conduct of its obligations under the Research Program, including without limitation the expense of personnel, equipment, materials and supplies required to carry out the Research Program, and expenses for the research (except as provided herein), development and commercialization of Diversa Products and any other products (except Syngenta Products) sold or licensed, or developed for sale or license, by Diversa or its Affiliates or Sublicensees which incorporate or are made through use of Program Technology. Syngenta shall be responsible for all other expenses required to carry out the Research Program, including, but not limited to, those related to development and commercialization of Syngenta Products except as otherwise provided in this Agreement. For the avoidance of doubt, the FTE Funding covers the expenses of Diversa activities under the Research Program including the following: (i) all laboratory and office consumables; (ii) equipment including without limitation clean cabinets, constant environment cabinets, and incubators; (iii) costs of contract services as needed such as culture identification/storage, and protein sequencing […***…]; (iv) development of new methods as needed to support new laboratory assays, such as […***…];

Research Funding. (a) In addition During the Joint Venture Period, Novartis will fund, or will cause to be funded, under the payments contemplated under Sections 5 and 6 hereof, Syngenta agrees to pay Diversa for FTEs for Directed Research and Project Research (the “FTE Funding”) $20.665 million per annum for the initial five year term terms of the Research Term under this and Development Agreement the minimum total number of Research FTEs for research and related activities of the Joint Venture indicated in the column "Total Research FTEs" below, which includes the minimum number of Research FTEs at Diverse indicated in the column "Diversa Research FTEs" below. Funding for the Research FTEs for research and related activities of the Joint Venture conducted at Diversa shall be provided to Diversa through Newco pursuant to the Research and Development Agreement. The cost of the Directed Research and the Project Research Subsequent to be funded by Syngenta shall be calculated based on the number of FTEs allocated to such work at the following rates for the 2003 calendar year: $[…***…**] per annum for FTEs engaged and until such time as the Research and Development Agreement is entered into by the Parties, payments shall be made in Project Research (accordance with the “Project Research Rate”); and $Letter of Intent executed between the Parties on […***…**] per annum for FTEs engaged in Directed Research (Any such payments made pursuant to the “Directed Research Rate”). The Project Research Rate and the Directed Research Rate for each FTE Letter of Intent shall be CPI adjusted on applied to the annual anniversary FTE payment obligations under the Research and Development Agreement. Year Total Research FTEs Diversa Research FTEs Year 1 [*****] [*****] Year 2 [*****] [*****] Year 3 [*****] [*****] Year 4 [*****] [*****] Year 5 [*****] [*****] The cost per Research FTE for the first [*****] of the Effective Date, applying Joint Venture Period shall be [*****] for Diversa Research FTEs and [*****] for all other Research FTEs. Beginning in the published CPI figure as of October 31 [*****] year of the prior yearJoint Venture Period, using 2002 as the base year; provided, however, that in no event shall the Project Research Rate or the Directed Research Rate be reduced. The first CPI a cost-of- living adjustment will be for applied to all Research FTEs. Thereafter, the 2004 Year cost- of-living adjustment will be applied on a yearly basis and will be based on the CPI as of October 31, 2003. If CPI adjustments result in increases in the FTE Funding rate such that the total FTE Funding under this Section 2.6(a) would exceed $20.665 million per annum during any Year, Syngenta may, with reasonable notice to the Research Committee, modify that Year’s Research Plan so as to (i) increase its FTE Funding to maintain the same number of FTEs, or (ii) reduce the number of FTEs, as necessary, to limit its annual FTE Funding to $20.665 million per yearstandard Consumer Price Index values. (b) Subject to Section 12.1, for any period of this Agreement beyond the initial five years of the Research Term, Syngenta may fund Directed Research and Project Research at any level of funding in its discretion, as set forth in the provisions of this Section 2.6(b); provided, however, Syngenta must give Diversa at least […***…] notice of extension of the Research Term under this Agreement prior to the expiration of any current Research Term, including the level of FTE Funding during such extension. For purposes of the following provisions, “T” means the last year of the Research Term in which FTE Funding was at least $20.665 million. If Syngenta elects to reduce the FTE Funding in any year after the initial five year Research Term from the prior year’s FTE Funding, it may reduce FTE Funding up to a maximum of 50% of T in the first year of reduction; up to a maximum reduction of 75% of T in the second year; and up to a […***…] reduction in the […***…]. Notwithstanding Section 2.4(d), if the FTE Funding provided by Syngenta under Section 2.6(a) is $[…***…] during any year after the initial five years of the Research Term, all FTE Funding shall be allocated to Project Research unless mutually agreed in writing by the Parties. (c) Annual FTE Funding payments by Syngenta to Diversa shall be made […***…] in advance throughout each year of the Research Term (provided that the last […***…] during the Research Term may be adjusted as necessary for the remaining FTE Funding due). In the event the number of FTEs actually used on the Research Program for any […***…] is less than the number of FTEs to be used in the Research Program based on FTE Funding provided by Syngenta for […***…], the difference shall be carried forward to be used on activities conducted by Diversa in connection with the Research Program during the remaining […***…]. In no event shall this Section 2.6(c) limit or affect Syngenta’s FTE Funding obligations under Section 2.6(a) and (b). The parties agree that, in the event that there are fewer than […***…] Transferred Employees (as defined in the Transaction Agreement) in the […***…] of the Research Program, the FTE Funding will be paid in accordance with this Section 2.6 and Diversa may make up the number of FTEs actually used on the Research Program in the […***…] (if less than the number to be used based on FTE Funding provided by Syngenta for […***…]) in the remaining […***…] of the Research Program. (d) Except as expressly set forth in this Agreement, Diversa shall be responsible for the expense of the conduct of its obligations under the Research Program, including without limitation the expense of personnel, equipment, materials and supplies required to carry out the Research Program, and expenses for the research (except as provided herein), development and commercialization of Diversa Products and any other products (except Syngenta Products) sold or licensed, or developed for sale or license, by Diversa or its Affiliates or Sublicensees which incorporate or are made through use of Program Technology. Syngenta shall be responsible for all other expenses required to carry out the Research Program, including, but not limited to, those related to development and commercialization of Syngenta Products except as otherwise provided in this Agreement. For the avoidance of doubt, the FTE Funding covers the expenses of Diversa activities under the Research Program including the following: (i) all laboratory and office consumables; (ii) equipment including without limitation clean cabinets, constant environment cabinets, and incubators; (iii) costs of contract services as needed such as culture identification/storage, and protein sequencing […***…]; (iv) development of new methods as needed to support new laboratory assays, such as […***…];