EXHIBIT 10.18
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/ Xxxxxxx X. Xxxxx /s/ Xxx X. Short
---------------------------- --------------------------
By: Xx. Xxxxxxx X. Xxxxx By: Xx. Xxx X. Short
Co-President Chief Executive Officer
*Confidential Treatment Requested
COLLABORATION AGREEMENT
between
NOVARTIS AGRIBUSINESS BIOTECHNOLOGY RESEARCH, INC.
and
DIVERSA CORPORATION
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
"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
"[*****] 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
"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.
"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
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
"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
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
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
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
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.
(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
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
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
14. *Confidential Treatment Requested
[*****] 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
15. *Confidential Treatment Requested
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
16. *Confidential Treatment Requested
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.
17. *Confidential Treatment Requested
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.
18. *Confidential Treatment Requested
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;
19. *Confidential Treatment Requested
(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.
20. *Confidential Treatment Requested
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
21. *Confidential Treatment Requested
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
22. *Confidential Treatment Requested
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.
23. *Confidential Treatment Requested
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.
24. *Confidential Treatment Requested
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.
25. *Confidential Treatment Requested
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
26. *Confidential Treatment Requested
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,
27. *Confidential Treatment Requested
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
[*****] 00000 Xxxxxxxx Xxxxxx Xxxx
[*****] Xxx Xxxxx, Xxxxxxxxxx 00000
[*****] Attention: Xxxxxxx Xxxxxxxx
[*****] Tel: (000) 000-0000
[*****] Fax: (000) 000-0000
[*****]
with a copy to:
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 9221
Attention: X. Xxxxxxxxxx Xxxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
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
28. *Confidential Treatment Requested
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.
29. *Confidential Treatment Requested
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/ Xxxxxx X. Xxxxx /s/ Xxxxxxxx X. Xxxxxxxxx
----------------------------- ------------------------------
By: Xxxxxx X. Xxxxx Xxxxxxxx X. Xxxxxxxxx
Co-President Chief Executive Officer
30. *Confidential Treatment Requested
EXHIBIT A
Project Plans
29. *Confidential Treatment Requested
Flowchart:
[*****]
6. *Confidential Treatment Requested
PARTNERSHIP PROJECT
R&D PLAN
Title: [*****]
Partner: [*****]
Date: December 4, 1998
Project Description:
[*****]
Project Assumptions:
1. [*****]
2. [*****]
3. [*****]
4. [*****]
5. [*****]
7. *Confidential Treatment Requested
6. [*****]
7. [*****]
8. [*****]
9. [*****]
Delivery:
1. [*****]
2. [*****]
Effort:
[*****]
Flowchart:
[*****]
8. *Confidential Treatment Requested
Delivery:
1. [*****]
2. [*****]
3. [*****]
4. [*****]
Effort:
[*****]
FLOWCHART:
[*****]
10. *Confidential Treatment Requested
Exhibit B
Stock Purchase Agreement
*Confidential Treatment Requested
STOCK PURCHASE AGREEMENT
Dated as of January 25, 1999
by and between
DIVERSA CORPORATION
and
NOVARTIS AGRIBUSINESS
BIOTECHNOLOGY RESEARCH, INC.
Stock Purchase Agreement
Stock Purchase Agreement dated as of January 25, 1999 (this
"Agreement"), by and between Novartis Agribusiness Biotechnology Research, Inc.,
a Delaware corporation (the "Investor"), and Diversa Corporation, a Delaware
corporation (the "Company").
R E C I T A L S
Whereas, the Company and the Investor are parties to that certain
Collaboration Agreement dated as of even date herewith (the "Collaboration
Agreement") pursuant to which the Company and the Investor will collaborate on
the projects described therein; and
Whereas, in connection with such collaboration, the Company wishes to
issue and sell to the Investor, and the Investor wishes to purchase from the
Company, shares of the Company's capital stock, subject to and upon the terms
and conditions hereinafter set forth.
Now, Therefore, in consideration of the foregoing and of the
respective covenants and undertakings hereunder and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto do hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms have the meanings specified
or referred to in this Section 1.
"Board of Directors" shall mean the Board of Directors of the Company.
"Business" shall mean the business, operations and assets of the Company.
"By-Laws" shall mean the by-laws of the Company.
"Certificate of Incorporation" shall mean the Seventh Restated Certificate
of Incorporation in substantially the form attached hereto as Exhibit A.
"Closing" shall have the meaning set forth in Section 3.1.
"Closing Date" shall mean the date and time of the Closing.
"Collaboration Agreement" shall have the meaning set forth in the recitals
to this Agreement.
"Common Stock" shall mean the common stock, $.001 par value, of the
Company.
"Company" shall have the meaning set forth in the first paragraph of this
Agreement.
"Company Closing Documents" shall mean all the documents, instruments and
writings required by this Agreement to be delivered by the Company at the
Closing.
1.
"Contemplated Transactions" shall mean the transactions contemplated by
this Agreement.
"Encumbrance" shall mean any security interest, mortgage, lien, charge,
adverse claim or restriction of any kind, except for transfer restrictions
imposed by the Securities Act or the Exchange Act and state securities laws.
"Equity Stock" shall have the meaning set forth in Rule 3a11-1 under the
Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"GAAP" shall mean generally accepted accounting principles of the United
States.
"Governmental Body" shall mean any United States or state government body,
any agency, commission or authority thereof, or any quasi-governmental or
private body exercising any regulatory or taxing authority thereunder.
"Investor" shall have the meaning set forth in the first paragraph of this
Agreement.
"IPO" and "IPO Shares" shall have the meanings set forth in Section 2.3.
"IPO Closing" and "IPO Closing Date" shall have the meanings set forth in
Section 3.4.
"Non-Scientific Founders" shall mean Xxxx Xxxxxxxx and Xx. Xxxxx Xxxx.
"Person" shall mean any individual, corporation, partnership, a limited
liability company, joint venture, trust, association, unincorporated
organization, other entity, or Governmental Body.
"Proprietary Rights" shall mean all patents, patent applications, patent
licenses, trademarks, tradenames, trade secrets, service marks, brand marks,
brand names, copyrights, copyright applications, inventions, technologies, know-
how, formulae, processes, names and likeness owned or licensed by the Company.
"Purchase Price" shall have the meaning set forth in Section 2.2.
"Restated Stockholders' Agreement" shall mean the Amended and Restated
Stockholders' Agreement, amending and restating the Stockholders' Agreement in
substantially the form attached hereto as Exhibit B, to be entered into by and
among the Company and certain holders of the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, Series D Preferred Stock
and Series E Preferred Stock of the Company as of the Closing Date.
"Restated Voting Agreement" shall mean the Amended and Restated Voting
Agreement, amending and restating the Voting Agreement in substantially the form
attached hereto as Exhibit C, to be entered into by and among the Company,
certain holders of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock
2.
and Series E Preferred Stock and certain of the holders of Common Stock of the
Company as of the Closing Date.
"Restricted Stock Agreements" shall mean the Restricted Stock Agreements
dated December 21, 1994 between the Company and each of the Scientific Founders
and the Non-Scientific Founders and the Restricted Stock Agreement dated
December 15, 1994 between the Company and Xxxxx Xxxxx.
"Restricted Stock Option Agreements" shall mean the Restricted Stock Option
Agreements dated December 21, 1994 between the Company and each of the
Scientific Founders and the Non-Scientific Founders and the Restricted Stock
Option Agreement dated December 19, 1994 between the Company and Xxxxx Xxxxx.
"Scientific Founders" shall mean Dr. Xxxxxx Xxxxx, Xx. Xxxxxxx X. Xxxxxx,
Xx. Xxxx Xxxxxxx and Xxxxxxx X. Xxxxxxxxx.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series A Preferred Stock" shall mean the Series A Convertible Preferred
Stock, $.001 par value per share, of the Company.
"Series B Preferred Stock" shall mean the Series B Convertible Preferred
Stock, $.001 par value per share, of the Company.
"Series C Preferred Stock" shall mean the Series C Convertible Preferred
Stock, $.001 par value per share, of the Company.
"Series D Preferred Stock" shall mean the Series D Convertible Preferred
Stock, $.001 par value per share, of the Company.
"Series E Preferred Stock" shall mean the Series E Convertible Preferred
Stock, $.001 par value per share, of the Company.
"Series E Shares" shall have the meaning set forth in Section 2.2.
"Stockholders' Agreement" shall mean the Stockholders' Agreement dated as
of May 13, 1996, as amended on July 14, 1997 and October 22, 1997, by and among
the Company and certain holders of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock of the Company.
"Voting Agreement" shall mean the Voting Agreement dated as of May 13,
1996, as amended on July 14, 1997 and October 22, 1997, by and among the
Company, the holders of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock and certain of the holders
of Common Stock of the Company.
3.
2. Purchase and Sale of Shares.
2.1 Authorization of the Series E Preferred Stock. On or before the
Closing, the Company shall adopt and file with the Secretary of State of the
State of Delaware the Certificate of Incorporation. The Series E Preferred Stock
shall have the voting powers, dividend rights, liquidation rights, designations,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations and restrictions thereof, set forth in the
Certificate of Incorporation, the terms of which are incorporated herein by
reference as though set forth herein in full.
2.2 Purchase and Sale of the Series E Shares. Subject to the terms and
conditions of this Agreement, at the Closing to be held as provided in Section
3, the Company shall issue, sell and deliver to the Investor, and the Investor
shall purchase from the Company, 5,555,556 shares of Series E Preferred Stock
(the "Series E Shares"), free and clear of all Encumbrances, for the purchase
price of $12,500,001 (the "Purchase Price"). The Purchase Price shall be paid by
the Investor to the Company at the Closing in immediately available funds by
wire transfer or by delivery of bank cashier's checks or certified checks or by
such other form as approved by the Company.
2.3 Purchase and Sale of the IPO Shares. Subject to the terms and
conditions hereof, at the time that the Company completes an initial
underwritten public offering of its Common Stock (an "IPO") in which the Company
realizes aggregate net proceeds of at least $10,000,000, the Investor shall have
the right to purchase from the Company that number of shares of the Company's
Common Stock having an aggregate value of up to 10% of the aggregate gross
proceeds of the IPO (the "IPO Shares"), to be issued and sold in a private
placement to close simultaneously with the completion of the IPO, at the price
per share to the public in the IPO. The Company shall provide prompt written
notice to the Investor of the proposed IPO and the Investor shall have 20 days
following the date of such notice from the Company to exercise its right to
purchase the IPO shares by providing written notice to the Company, which notice
shall specify the anticipated number of IPO shares to be purchased (subject to
adjustment based on the actual gross proceeds of the IPO and the actual price
per share to the public in the IPO). If the Investor does not provide written
notice to the Company within such 20-day period or provides written notice to
the Company within such 20-day period that it does not wish to purchase the IPO
shares, then the Investor shall have no further right to purchase shares from
the Company, unless the Company does not complete the proposed IPO within nine
months of the date of the Company's notice of such proposed IPO, in which case
the Investor will again have the right set forth in this Section 2.3. If the
Investor provides written notice to the Company of its election to purchase the
IPO Shares within such 20-day period, then the Investor shall purchase from the
Company, and the Company shall issue and sell to the Investor, the IPO Shares in
a private placement to close simultaneously with the closing of the IPO.
3. Closing.
3.1 Place and Time. The closing of the sale and purchase of the Series E
Shares pursuant to Section 2.2 (the "Closing") shall take place at the offices
of Xxxxxx Godward llp, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx,
at 10:00 a.m. (San Diego time) on
4.
January 4, 1999 following the satisfaction of the conditions set forth in
Sections 8 and 9, or at such other place, date and time as the parties may agree
in writing.
3.2 Deliveries by the Company. At the Closing, the Company shall deliver
the following to the Investor:
(a) A certificate representing the Series E Shares delivered pursuant
to Section 2.2, duly registered in the name of the Investor.
(b) The documents set forth in Section 8.
(c) The Restated Stockholders' Agreement.
(d) The Restated Voting Agreement.
(e) All other documents, instruments and writings required by this
Agreement to be delivered by the Company at the Closing.
3.3 Deliveries by the Investor. At the Closing, the Investor shall
deliver the following to the Company:
(a) A wire transfer of immediately available US dollar funds in the
amount of the Purchase Price to an account designated by the Company not less
than two (2) days prior to the Closing.
(b) The documents set forth in Section 9.
(c) An executed signature page to the Restated Stockholders'
Agreement.
(d) An executed signature page to the Restated Voting Agreement.
(e) All other documents, instruments and writings required by this
Agreement to be delivered by the Investor at the Closing.
3.4 IPO Closing. Subject to the terms of Sections 8 and 9, the closing of
the sale and purchase of the IPO Shares under this Agreement (the "IPO Closing")
shall be held at the time and date of the completion of the IPO (the "IPO
Closing Date") at the offices of Xxxxxx Godward, 0000 Xxxxxxxxx Xxxxx, Xxxxx
0000, Xxx Xxxxx, Xxxxxxxxxx, or at such time and place as the Company and the
Investor may agree. At the IPO Closing, subject to the terms and conditions
hereof, the Company shall deliver to the Investor a stock certificate registered
in the name of Investor representing the IPO Shares, dated as of the IPO Closing
Date, against payment of the purchase price therefor by wire transfer of
immediately available US dollar funds to an account designated by the Company
not less than two (2) days prior to the IPO Closing.
5.
4. Representations and Warranties of the Company.
The Company represents and warrants to the Investor as follows:
4.1 Organization of the Company; Authorization.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, with full corporate
power and authority to enter into this Agreement, the Restated Stockholders'
Agreement and the Restated Voting Agreement and to perform all of its
obligations hereunder and thereunder, and to own or lease its properties and to
engage in its business as presently conducted. The Company is duly qualified and
in good standing as a foreign corporation under the laws of each jurisdiction in
which the failure to so qualify would have a material adverse effect on its
business or properties. The Company has no subsidiaries, nor does it own any
equity interest in, or control directly or indirectly, any other entity.
(b) The execution, delivery and performance of this Agreement, the
Restated Stockholders' Agreement and the Restated Voting Agreement by the
Company have been authorized by all necessary action and constitute valid and
binding obligations of the Company, enforceable against it in accordance with
their terms.
4.2 Capitalization.
(a) As of the Closing, the authorized Equity Stock of the Company
will consist of (i) 82,472,584 shares of Common Stock, of which 5,347,322 shares
are issued and outstanding, (ii) 10,501,000 shares of Series A Preferred Stock,
of which 10,000,000 shares are issued and outstanding, (iii) 24,566,184 shares
of Series B Preferred Stock, all of which are issued and outstanding, (iv)
844,444 shares of Series C Preferred Stock, all of which are issued and
outstanding, (v) 24,809,555 shares of Series D Preferred Stock, all of which are
issued and outstanding, and (vi) 5,555,556 shares of Series E Preferred Stock,
none of which are issued and outstanding (excluding the Series E Shares). All of
such issued and outstanding shares have been duly authorized and validly issued
and are fully paid and non-assessable.
(b) A true and complete list of the holders of record of all issued
and outstanding Equity Stock of the Company on the date hereof and reflecting
the issuance of the Series E Shares on the Closing Date, including the number of
shares of Equity Stock owned by each such holder, and the number of shares of
Equity Stock reserved by the Company for each specified purpose is set forth on
Schedule 4.2 hereto.
(C) The issuance of the Series E Shares to be issued to the Investor
hereunder simultaneously with the Closing and the shares of Common Stock
issuable upon conversion of the Series E Shares have been or will be on or prior
to the Closing duly authorized. The Company has or will on or prior to the
Closing duly reserve for issuance the shares of Common Stock issuable upon
conversion of the Series E Shares. No further approval or authorization of the
stockholders or the directors of the Company, of any Governmental Body or
foreign governmental body or of any other Person is required for the issuance
and sale of the Series E Shares or the shares of Common Stock issuable on
conversion thereof. When paid for by, and issued to, the Investor, the Series E
Shares will be validly issued, fully paid and non-assessable,
6.
and, except as set forth in this Agreement, the Restated Stockholders'
Agreement, the Restated Voting Agreement or the Certificate of Incorporation or
under applicable law, will not be subject to any restriction on use, voting or
transfer. The Series E Preferred Stock will have the designations, preferences
and relative participating, optional and other special rights as set forth in
the Certificate of Incorporation. The shares of Common Stock issuable to the
Investor upon conversion of the Series E Shares will, upon conversion of the
Series E Shares in accordance with the Certificate of Incorporation, be validly
issued, fully paid and non-assessable, and, except as set forth in this
Agreement, the Restated Stockholders' Agreement, the Restated Voting Agreement
or the Certificate of Incorporation or under applicable law, will not be subject
to any restriction on use, voting or transfer. Assuming the truth of the
Investor's representations and warranties contained in Section 5, the offer,
sale and issuance of the Series E Shares (and any shares of Common Stock
issuable on conversion thereof) are exempt from the registration requirements of
the Securities Act and applicable state securities laws.
(d) Except as set forth in Schedule 4.2 hereto, there are no
outstanding options, rights, conversion rights, agreements or commitments of any
kind relating to the issuance, sale, purchase, redemption, voting or transfer by
the Company of any Equity Stock or other securities of the Company or any rights
outstanding which permit or allow the holder thereof to cause the Company to
file a registration statement or which permit or allow the holder thereof to
include securities of the Company in a registration statement filed by the
Company, other than the rights granted pursuant to the Restricted Stock
Agreements, Restricted Stock Option Agreements, the Restated Stockholders'
Agreement and the Restated Voting Agreement. There are no preemptive or other
similar rights with respect to any Equity Stock of the Company except rights
granted under the Stockholders' Agreement. None of the outstanding Equity Stock
or other securities of the Company was issued in violation of the Securities
Act, or the securities or blue sky laws of any state. The Company has delivered
to the Investor copies of the certificate of incorporation and by-laws (or other
governing instrument) of the Company, as currently in effect.
(e) In the event of the IPO, the Company will update the
capitalization information set forth in subsections (a) through (d) above to the
IPO Closing Date.
4.3 No Conflict as to the Company. Neither the execution and delivery of
this Agreement, the Restated Stockholders' Agreement or the Restated Voting
Agreement, nor the issuance of the Series E Shares or the Common Stock issuable
on conversion thereof will (a) violate any provision of the Certificate of
Incorporation or By-Laws of the Company or (b) violate, or be in conflict with,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or excuse performance by any Person of
any of its obligations under, or cause the acceleration of the maturity of any
debt or obligation pursuant to, or result in the creation or imposition of any
material Encumbrance upon any property or assets of the Company under, any
material agreement to which the Company is a party or by which the Company or
any of its property is bound, or (c) violate any statute or law or any judgment,
decree, order, regulation or rule of any court or other Governmental Body
applicable to the Company.
7.
4.4 Financial Statements; Financial Position; Absence of Undisclosed
Liabilities.
(a) The Company has delivered to the Investor a copy of the Company's
audited financial statements as of December 31, 1997 and for the fiscal year
then ended, together with the notes thereto (the "Annual Financial Statements"),
and a balance sheet of the Company as of October 31, 1998 (such balance sheet
shall hereafter be referred to as the "Current Balance Sheet") and the related
income statement for the fiscal quarter then ended (the "Current Financial
Statements"; the Current Financial Statements together with the Annual Financial
Statements are collectively referred to herein as the "Financial Statements").
Except as set forth on Schedule 4.4 hereto, the Financial Statements (i) present
fairly the financial condition of the Company as of their respective dates and
the results of operations for their respective periods (subject to, in the case
of the Current Financial Statements, year-end and audit adjustments), (ii) were
prepared in accordance with the books and records of the Company, (iii) are true
and correct and complete and (iv) present fairly the financial position and
related results of operations of the Company as of the times and for the periods
referred to therein, in accordance with GAAP consistently applied throughout the
period involved and prior periods. Furthermore, except as set forth in Schedule
4.4 hereto, the Company hereby confirms that there have been no changes during
the periods covered in the Financial Statements in the Company's accounting
principles and practices.
(b) As of the date hereof, except as set forth on Schedule 4.4
hereto, (i) the Company has no indebtedness or liabilities of any nature
(matured or unmatured, fixed or contingent, direct or indirect, as guarantor or
in any other capacity) which are not set forth on the Current Balance Sheet, and
(ii) all reserves established by the Company and set forth on the Current
Balance Sheet are adequate for the purposes for which they were established.
(c) Except as described elsewhere in this Agreement or as set forth
on Schedule 4.4 hereto, since the date of the Current Balance Sheet:
(i) the Company has not entered into any transaction which was
not in the ordinary course of its business;
(ii) there has been no material adverse change in the Business
of the Company;
(iii) there has been no damage to, or destruction or loss of,
physical property (whether or not covered by insurance) which may have a
material adverse effect on the Business of the Company;
(iv) the Company has not declared or paid any cash dividend or
made any distribution on its securities, or redeemed, purchased, or otherwise
acquired any of its securities;
(v) the Company has not received any notice that there has
been a loss of, or cancellation of a material order by, any customer of the
Company;
8.
(vii) there has been no borrowing or agreement to borrow by the
Company or change in the contingent obligations of the Company by way of
guaranty, endorsement, indemnity, warranty, or otherwise or grant of a mortgage
or security interest in any properties of the Company;
(viii) there has not been any payment of any obligation or
liability other than current liabilities paid in the ordinary course of
business; and
(ix) there has been no sale, assignment, transfer or
encumbrance of any tangible asset of the Company except in the ordinary course
of business and no sale, assignment, transfer or encumbrance of any Proprietary
Right or other intangible asset of the Company or, to the knowledge of the
Company, any unauthorized disclosure of any proprietary confidential information
of the Company.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is no
litigation arbitration, claim, action, suit, governmental or other proceeding
(formal or informal) or investigation pending with respect to the Company or any
of its businesses, properties or assets, or, to the Company's knowledge, any of
its directors, officers or employees to the extent such proceeding relates to
the business of the Company. Except as set forth in Schedule 4.5 hereto, the
Company is not subject to any judgment, order or decree.
4.6 Proprietary Rights. To the Company's current actual knowledge, (a)
the Company has sufficient ownership or rights to all patents, patent
applications, trademarks, copyrights, trade secrets and other proprietary rights
necessary for its business as currently conducted and (b) the Company has
received no claims or charges that the Company's business as currently conducted
infringes any patents, patent applications, trademarks, copyrights, trade
secrets or other propriety rights of third parties.
4.7 Compliance with Law. Except as set forth on Schedule 4.7 hereto,
the operations of the Company have been conducted in all material respects in
accordance with all applicable laws, regulations and other requirements of all
Governmental Bodies having jurisdiction over the Company. The Company has not
received any notification of any asserted present or past failure by the Company
to comply with any such laws, rules or regulations.
4.8 No Brokers, Finders or Investment Bankers. Except as set forth in
Schedule 4.8 hereto, neither the Company nor any of its officers or directors
has employed any broker, or investment banker or incurred any liability which
remains unsatisfied for any brokerage or finder's fees or commissions or similar
payments in connection with this Agreement or the Contemplated Transactions.
4.9 Disclosure. No representations or warranties by the Company in this
Agreement and no statement contained in any document (including, without
limitation, the financial statements, certificates, or other writing furnished
or to be furnished to the Investor or any of its representatives pursuant to the
provisions hereof or in connection with the Contemplated Transactions) contains
any untrue statement of material fact or omits to state any material fact
necessary, in light of the circumstances under which it was made, in order to
make the statements herein or therein not misleading. Documents delivered or to
be delivered to the Investor
9.
pursuant to this Agreement are true and complete copies of what they purport to
be. Any projections or budgets with respect to the Company furnished to the
Investor or any of its representatives pursuant to the provisions hereof or in
connection with the Contemplated Transactions, have been prepared with
reasonable care, are based on good faith estimates and assumptions, and
represent good faith projections of results of operations to be achieved for the
periods covered by such projections or budgets. The Company does not warrant
that the projections can or will be achieved.
5. Representations and Warranties of the Investor.
The Investor represents and warrants to the Company as follows:
5.1 Authorization. The Investor has the full power and authority to
enter into this Agreement, the Restated Stockholders' Agreement and the Restated
Voting Agreement and to perform all of its obligations hereunder and thereunder.
The execution, delivery and performance of this Agreement, the Restated
Stockholders' Agreement and the Restated Voting Agreement by it have been duly
authorized by all necessary action and constitute valid and binding obligations
of the Investor, enforceable against it in accordance with their terms. The
execution, delivery and performance of this Agreement, the Restated
Stockholders' Agreement and the Restated Voting Agreement by the Investor does
not violate any provision of the governing instrument of the Investor, conflict
with or constitute a default under any material agreement, indenture or
instrument to which the Investor is a party or by which it or its property is
bound or violate any statute or law or any judgment, decree, order, regulation
or rule of any court or other Governmental Body applicable to the Investor.
5.2 Investment Representations. The Investor has knowledge and
experience in financial and business matters sufficient to enable it to evaluate
the merits and risks of an investment in the Series E Shares and the IPO Shares.
The Investor has assets sufficient to enable it to bear the economic risk of its
investment in the Series E Shares and the IPO Shares and has assets in excess of
Five Million Dollars ($5,000,000). The Investor is acquiring the Series E Shares
and the IPO Shares for its own account and not with a present view to, or for
sale in connection with, any distribution thereof. The Investor understands
that: the Series E Shares (and the Common Stock issuable upon conversion
thereof) have not been, and the IPO Shares will not be, registered under the
Securities Act by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act pursuant to the exemption
provided in Section 4(2) thereof; the Series E Shares (and the Common Stock
issuable upon conversion thereof) have not been, and the IPO Shares will not be,
registered under applicable state securities laws by reason of their issuance in
a transaction exempt from such registration requirements; and the Series E
Shares (and the Common Stock issuable upon conversion thereof) and the IPO
Shares may not be sold or otherwise disposed of unless registered under the
Securities Act and applicable state securities laws (the Company being under no
obligation so to register such Series E Shares, the Common Stock issuable on
conversion thereof or the IPO Shares) or exempted from registration. The
Investor further understands that the exemption from registration afforded by
Rule 144 promulgated under the Securities Act is not presently available with
respect to the Series E Shares, the Common Stock issuable upon conversion
thereof and the IPO Shares.
10.
5.3 Investor's Acknowledgment as to Information. The Investor or its
representatives have received from the Company such information as they
requested with respect to the Company as the Investor has deemed necessary and
relevant in connection with the Contemplated Transactions, and the Investor has
had the opportunity, directly or through such representatives, to ask questions
of and receive answers from persons acting on behalf of the Company necessary to
verify the information so obtained.
5.4 No Brokers, Finders or Investment Bankers. Neither the Investor nor
any of its officers or directors has employed any broker, finder or investment
banker or incurred any liability which remains unsatisfied for any brokerage or
finder's fees or commissions or similar payments in connection with this
Agreement or the Contemplated Transactions.
6. Covenants of Investor.
6.1 Standstill Provision. From and after the date of this Agreement,
the Investor shall not, and shall cause its affiliates not to, in any manner,
singly or as part of a partnership, limited partnership, syndicate or other
"Group" (within the meaning of Section 13(d)(3) of the Exchange Act), directly
or indirectly, acquire, or offer or agree to acquire, record ownership or
beneficial ownership in the aggregate greater than 9.9% of the shares of capital
stock of the Company, including but not limited to any securities convertible
into or exchangeable for capital stock or any other right to acquire capital
stock from the Company or any other person (i.e., on a fully-diluted basis),
without the prior written consent of the Company; provided, however, that this
clause shall not apply to (a) any securities obtained or purchased by Investor
pursuant to rights set forth in this Agreement, including but not limited to the
Series E Shares, the Common Stock issuable upon conversion thereof and the IPO
Shares, and (b) any securities issued with respect to the Series E Shares or the
IPO Shares pursuant to a stock split, stock dividend, recapitalization or
reclassification approved by the Company's Board of Directors; and provided,
further, that this clause shall not apply to any securities of the Company held
indirectly by the Investor through one or more investments in any of the
Stockholders listed, as of the date hereof, on the Restated Stockholders'
Agreement, so long as neither Investor, nor any of its affiliates, exercises
"control" (within the meaning of Rule 12b-2 promulgated under the Exchange Act)
with regard to such Stockholder.
6.2 Agreement Not to Sell. The Investor hereby covenants and agrees
that it will not, nor will it permit any of its affiliates (including parents,
subsidiaries or other related entities) to, directly or indirectly sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose or any of the Series E
Shares, the Common Stock issuable upon conversion thereof or the IPO Shares
without the prior written consent of the Company during the period from the
Closing Date or the IPO Closing Date, as applicable, through the later of (a)
completion of the work conducted under all Project Plans under the Collaboration
Agreement; or (b) the earlier of (i) the fifth anniversary of the date of this
Agreement or (ii) the second anniversary of the IPO Closing Date. In order to
enforce the provisions of this Section 6.2, the Company may impose stop-transfer
instructions with respect to the securities held by the Investor and its
affiliates that are subject to the foregoing restriction until the end of such
period.
11.
6.3 Market Stand-Off Provision. The Investor agrees that, during the
period of duration specified by the Company and an underwriter of Common Stock
or other securities of the Company following the effective date of a
registration statement of the Company filed under the Securities Act (which
period shall not exceed 180 days), the Investor shall not, to the extent
requested by the Company, directly or indirectly sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of any securities of the Company held by the
Investor at any time during such period. In order to enforce the provisions of
this Section 6.3, the Company may impose stop-transfer instructions with respect
to the securities held by the Investor and its affiliates that are subject to
the foregoing restriction until the end of such period.
7. Confidentiality.
All information heretofore or hereafter furnished to the Investor by the
Company or on the Company's behalf under this Agreement or in connection with
the Contemplated Transactions shall be deemed Confidential Information, as
defined in Section 7.1 of the Collaboration Agreement, and the provisions of
Section 7 of the Collaboration Agreement (which are hereby incorporated herein
by reference) shall apply to all such Confidential Information.
8. Conditions to the Investor's Obligations.
The obligations of the Investor to effect the Closing or the IPO Closing,
as applicable, shall be subject to the satisfaction at or prior to the Closing
or the IPO Closing, as applicable, of the following conditions, any one or more
of which may be waived by the Investor:
8.1 No Injunction. There shall not be in effect any injunction, order
or decree of a court of competent jurisdiction that prohibits or delays
consummation of any or all of the Contemplated Transactions.
8.2 Representations, Warranties and Agreements. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and as of the Closing
Date or the IPO Closing Date, as applicable, with the same force and effect as
though made at such time; provided, however, that the representations and
warrants shall be modified as required to reflect changes occurring between the
date of this Agreement and the Closing Date or the IPO Closing Date, as
applicable. The Company shall have performed and complied in all material
respects with all agreements, covenants and conditions contained in this
Agreement required to be performed and complied with by it at or prior to the
Closing Date or the IPO Closing Date, as applicable. The Investor shall have
received a certificate as to the foregoing signed by the Chief Executive Officer
of the Company.
8.3 Regulatory Approvals. All licenses, authorizations, consents,
orders and regulatory approvals of Governmental Bodies necessary in the good
faith judgment of the Investor for the consummation of any or all of the
Contemplated Transactions to be effected at the Closing and the IPO Closing,
respectively, shall have been obtained and shall be in full force.
12.
8.4 Other Consents. Consents or waivers from parties other than
Governmental Bodies that are required in connection with the consummation of any
or all of the Contemplated Transactions shall have been obtained and shall be in
full force.
8.5 Secretary of State Certificates. The Investor shall have received
(i) a copy of the Certificate of Incorporation certified as of a recent date by
the Secretary of State of Delaware, and (ii) Certificates of the Secretary of
State of the State of Delaware with respect to the Company, and of each state in
which the Company is qualified to do business as a foreign corporation, as of a
recent date showing the Company to be validly existing or qualified as a foreign
corporation in its states of existence and qualification, as the case may be,
and in good standing.
8.6 Secretary's Certificate of the Company. The Investor shall have
received a Certificate of the Secretary of the Company, certifying (i) that no
document has been filed relating to or affecting the Certificate of
Incorporation of the Company after the date of the Certificate of the Secretary
of State of Delaware furnished pursuant to Section 8.5, (ii) that attached to
the Certificate is a true and complete copy of By-Laws of the Company, as in
full force and effect, and (iii) the names and true signatures of each officer
of the Company who has been authorized to execute and deliver this Agreement,
the Restated Stockholders' Agreement, the Restated Voting Agreement and any
other document required hereunder or thereunder to be executed and delivered by
or on behalf of the Company.
8.7 Resolutions. The Investor shall have received certified copies of
resolutions duly adopted by the Company's Board of Directors (and stockholders,
if necessary) authorizing the execution and delivery of this Agreement, the
Restated Stockholders' Agreement, the Restated Voting Agreement and each of the
other Company Closing Documents, the amendment and restatement of the
certificate of incorporation of the Company to authorize the Series E Shares,
the issuance and sale of the Series E Shares, the issuance and sale of the IPO
Shares, the reservation of the shares of Common Stock issuable upon conversion
of the Series E Shares and the performance of the Contemplated Transactions and
certifying that such resolutions were duly adopted, are in full force and effect
and have not been rescinded or amended.
8.8 Compliance Evidence. The Investor shall have received such
certificates, documents and information as it may reasonably request in order to
establish satisfaction of the conditions set forth in this Section 8.
9. Conditions to the Company's Obligations.
The obligations of the Company to effect the Closing or the IPO Closing, as
applicable, shall be subject to the satisfaction at or prior to the Closing or
the IPO Closing, as applicable, of the following conditions, any one or more of
which may be waived by the Company.
9.1 No Injunction. There shall not be in effect any injunction, order
or decree of a court of competent jurisdiction that prohibits or delays
consummation of any or all of the Contemplated Transactions.
9.2 Representations, Warranties and Agreements. The representations and
warranties of the Investor set forth in this Agreement shall be true and correct
in all material
13.
respects as of the date of this Agreement and as of the Closing Date or the IPO
Closing Date, as applicable, with the same force and effect as though made at
such time. The Investor shall have performed and complied in all material
respects with the agreements contained in this Agreement required to be
performed and complied with by it prior to the Closing Date or the IPO Closing
Date. The Company shall have received a certificate as to the foregoing signed
by an officer of the Investor.
9.3 Regulatory Approvals. All licenses, authorizations, consents,
orders and regulatory approvals of Governmental Bodies necessary in the good
faith judgment of the Investor for the consummation of any or all of the
Contemplated Transactions to be effected at the Closing and the IPO Closing,
respectively, shall have been obtained and shall be in full force and effect.
9.4 Other Consents. Consents or waivers from parties other than
Governmental Bodies that are required in connection with the consummation of any
or all of the Contemplated Transactions shall have been obtained and shall be in
full force.
9.5 Secretary's Certificate of the Investor. The Company shall have
received a Certificate of the Secretary of the Investor, certifying the names
and true signatures of each officer of the Investor who has been authorized to
execute and deliver this Agreement, the Restated Stockholders' Agreement, the
Restated Voting Agreement and any other document required hereunder or
thereunder to be executed and delivered by or on behalf of the Investor.
9.6 Resolutions. The Company shall have received certified copies of
resolutions duly adopted by the Investor's Board of Directors (and stockholders,
if necessary) authorizing the execution and delivery of this Agreement, the
Restated Stockholders' Agreement, the Restated Voting Agreement and each of the
other documents to be delivered by the Investor hereunder and certifying that
such resolutions were duly adopted, are in full force and effect and have not
been rescinded or amended.
9.7 Compliance Evidence. The Company shall have received such
certificates, documents and information as it may reasonably request in order to
establish satisfaction of the conditions set forth in this Section 9.
9.8 Payment of Purchase Price. At the Closing, Investor shall have
tendered delivery of the Purchase Price as specified in Section 2.2 herein. At
the IPO Closing, the Investor shall have tendered delivery of the purchase price
for the IPO Shares as specified in Section 2.3.
10. Miscellaneous.
10.1 Notices. All notices, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given when
(a) delivered by hand, (b) sent by telex or telecopier (with receipt confirmed),
provided that a copy is mailed by certified mail, return receipt requested, or
(c) when received by the addressee, if sent by Express Mail, Federal Express or
other express delivery service (receipt requested), in each case to the
appropriate addresses, telex numbers and telecopier numbers set forth below (or
to such other
14.
addresses, telex numbers and telecopier numbers as a party may designate as to
itself by notice to the other parties complying as to delivery with this Section
10.1):
If to the Company:
Diversa Corporation
00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxx Godward llp
0000 Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: X. Xxxxxxxxxx Xxxxxxxx, Jr., Esq.
If to the Investor:
Novartis Agribusiness Biotechnology Research, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxxxxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Dr. Juanjo Estruch
with a copy to:
Novartis Seeds, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
10.2 Service of Process. Process in any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
against any of the parties, may be served on any party anywhere in the world,
whether within or without the State of California and may also be served upon
any party in the manner provided for giving of notices to it in Section 10.1.
10.3 Expenses. Each party shall bear its own expenses incident to the
preparation, negotiation, execution and delivery of this Agreement and the
performance of its obligations hereunder.
10.4 Payment. A wire transfer or delivery of a check shall not operate
to discharge any obligation of payment under this Agreement and is accepted
subject to collection.
15.
10.5 Captions. The captions in this Agreement are for convenience of
reference only and shall not be given any effect in the interpretation of this
Agreement.
10.6 Attorneys' Fees. In any action or proceeding brought by a party to
enforce any provision of this Agreement, the prevailing party shall be entitled
to recover the reasonable costs and expenses incurred by it in connection with
that action or proceeding (including, but not limited to, attorneys' fees).
10.7 No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
10.8 Exclusive Agreement; Amendment. This Agreement supersedes all prior
agreements among the parties with respect to its subject matter, is intended
(with the documents referred to herein) as a complete and exclusive statement of
the terms of the agreement among the parties with respect thereto and cannot be
changed or terminated except by a written instrument executed by the party or
parties against whom enforcement thereof is sought.
10.9 Severability. If any term, covenant or condition of this Agreement
or the application thereof to any party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (a) the remainder of this Agreement,
or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the parties that the basic purposes of this Agreement are to be effectuated.
10.10 Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party; provided that, after the
Closing, the Investor may upon ten (10) days prior written notice to the
Company, assign this Agreement to any of its affiliates (as defined by Rule 405
promulgated under the Securities Act) without the prior written consent of the
Company.
10.11 Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
for in this Agreement.
10.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be considered an original, but all of which
together shall constitute the same instrument.
16.
10.13 Governing Law. This Agreement and (unless otherwise provided) all
amendments hereof and waivers and consents hereunder shall be governed by the
internal laws of the State of California, without regard to the conflicts of law
principles thereof.
10.14 Memorandum Regarding Purchase Price. A memorandum setting forth
certain agreements by Diversa and the Investor with regard to the Purchase Price
is attached hereto as Exhibit D.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
17.
In Witness Whereof, the parties hereto have executed this Agreement on the
date first above written, in the case of corporations by their respective
officers thereunto duly authorized.
Diversa Corporation
Dated:_________________________ By:______________________________
Name:____________________________
Title:___________________________
Novartis Agribusiness
Biotechnology Research, Inc.
Dated:_________________________ By:______________________________
Name:____________________________
Title:___________________________
18.
Table Of Contents
Page
1. Definitions................................................................. 1
2. Purchase and Sale of Shares................................................. 4
2.1 Authorization of the Series E Preferred Stock...................... 4
2.2 Purchase and Sale of the Series E Shares........................... 4
2.3 Purchase and Sale of the IPO Shares................................ 4
3. Closing..................................................................... 4
3.1 Place and Time..................................................... 4
3.2 Deliveries by the Company.......................................... 5
3.3 Deliveries by the Investor......................................... 5
3.4 IPO Closing........................................................ 5
4. Representations and Warranties of the Company............................... 6
4.1 Organization of the Company; Authorization......................... 6
4.2 Capitalization..................................................... 6
4.5 Litigation......................................................... 9
4.6 Proprietary Rights................................................. 9
4.7 Compliance with Law................................................ 9
4.8 No Brokers, Finders or Investment Bankers.......................... 9
4.9 Disclosure......................................................... 9
5. Representations and Warranties of the Investor.............................. 10
5.1 Authorization...................................................... 10
5.2 Investment Representations......................................... 10
5.3 Investor's Acknowledgment as to Information........................ 11
5.4 No Brokers, Finders or Investment Bankers.......................... 11
6. Covenants of Investor....................................................... 11
6.1 Standstill Provision............................................... 11
6.2 Agreement Not to Sell.............................................. 11
6.3 Market Stand-Off Provision......................................... 12
7. Confidentiality............................................................. 12
8. Conditions to the Investor's Obligations.................................... 12
8.1 No Injunction...................................................... 12
Table Of Contents
(continued)
PAGE
8.2 Representations, Warranties and Agreements......................... 12
8.3 Regulatory Approvals............................................... 12
8.4 Other Consents..................................................... 13
8.5 Secretary of State Certificates.................................... 13
8.6 Secretary's Certificate of the Company............................. 13
8.7 Resolutions........................................................ 13
8.8 Compliance Evidence................................................ 13
9. Conditions to the Company's Obligations..................................... 13
9.1 No Injunction...................................................... 13
9.2 Representations, Warranties and Agreements......................... 13
9.3 Regulatory Approvals............................................... 14
9.4 Other Consents..................................................... 14
9.5 Secretary's Certificate of the Investor............................ 14
9.6 Resolutions........................................................ 14
9.7 Compliance Evidence................................................ 14
9.8 Payment of Purchase Price.......................................... 14
10. Miscellaneous............................................................... 14
10.1 Notices............................................................ 14
10.2 Service of Process................................................. 15
10.3 Expenses........................................................... 15
10.4 Payment............................................................ 15
10.5 Captions........................................................... 16
10.6 Attorneys' Fees.................................................... 16
10.7 No Waiver.......................................................... 16
10.8 Exclusive Agreement; Amendment..................................... 16
10.9 Severability....................................................... 16
10.10 Assignment......................................................... 16
10.11 Successors and Assigns............................................. 16
10.12 Counterparts....................................................... 16
10.13 Governing Law...................................................... 17
ii.
Table Of Contents
(continued)
Page
10.14 Memorandum Regarding Purchase Price................................ 17
iii.
List of Schedules
Schedule No. Title
------------ -----
Schedule 4.2 Capitalization
Schedule 4.4 Undisclosed Liabilities
Schedule 4.5 Litigation
Schedule 4.7 Compliance with Law
Schedule 4.8 Brokers, Finders or Investment Bankers
iv.
List of Exhibits
Exhibit Title
------- -----
Exhibit A Seventh Restated Certificate of Incorporation
Exhibit B Amended and Restated Stockholders' Agreement
Exhibit C Amended and Restated Voting Agreement
Exhibit D Memorandum Regarding Stock Purchase Agreement
v.
SCHEDULES TO STOCK PURCHASE AGREEMENT
[SEE ATTACHED]
Exhibit A
SEVENTH RESTATED CERTIFICATE OF INCORPORATION
Exhibit B
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
Exhibit C
AMENDED AND RESTATED VOTING AGREEMENT
Exhibit D
MEMORANDUM REGARDING STOCK PURCHASE AGREEMENT
