1
EXHIBIT 10.10
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
The Dow Chemical Company - Symyx Technologies
This COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the "Agreement"),
effective as of January 1, 1999 (the "Effective Date"), is made by and between
Symyx Technologies, a California corporation having a principal place of
business at 0000 Xxxxxxx Xxxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 ("Symyx"),
and The Dow Chemical Company, a Delaware corporation, having a principal place
of business at 0000 Xxxxxxx X. Xxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("TDCC").
BACKGROUND
A. Symyx owns and is developing novel, proprietary methods for the
combinatorial preparation and screening of novel materials and has
conducted certain materials discovery research focused on the discovery
and enhancement of [******] and other materials; and
B. TDCC owns and is developing proprietary process technology related to
manufacture of [******] ; and
C. Symyx and TDCC desire to collaborate to research, develop and
commercialize certain [******] on the terms and conditions set forth
below.
NOW, THEREFORE, for and in consideration of the covenants, conditions
and undertakings set forth herein, it is agreed by and between the parties as
follows:
ARTICLE 1
DEFINITIONS
1.1 "Added Value" shall have the meaning set forth in Section 5.2.1(i).
1.2 "Affiliate" shall mean any entity directly or indirectly
controlling, controlled by or under common control with, a party to this
Agreement. For purposes of this Agreement, the direct or indirect ownership of
fifty percent (50%) or more of the outstanding voting securities of an entity,
or the right to receive fifty percent (50%) or more of the profits or earnings
of an entity shall be deemed to constitute control. In addition, any entity
directly or indirectly owned or controlled by, or owning or controlling, TDCC or
Symyx at the maximum control or ownership right legally permitted in a country
where such entity exists, shall be deemed to constitute control provided that it
in fact results in actual control over the management, business and affairs of
such entity.
1.3 "Agreement Compound" shall mean any Lead Compound [******] .
1.4 "Combinatorial Chemistry Technology" shall mean Combinatorial
Chemistry Patent Rights and Combinatorial Chemistry Know-How.
-1-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
2
1.4.1 "Combinatorial Chemistry Patent Rights" shall mean (i) all
U.S. patent applications claiming any inventions or discoveries related to
Combinatorial Chemistry, (ii) all divisions, substitutions, continuations,
continuation-in-part applications, and reissues, re-examinations and extensions
of (i) above, (iii) foreign counterparts of any of the preceding of (i) or (ii)
above, and (iv) patents, utility models or similar grants of rights issuing from
any of the preceding of (i), (ii) or (iii) above .
1.4.2 "Combinatorial Chemistry Know-How" shall mean inventions,
information, data, or materials related to Combinatorial Chemistry, excluding
any inventions claimed in the Combinatorial Chemistry Patent Rights.
1.4.3 [******]
1.5 "Confidential Information" shall mean any information disclosed by
one party (or by an Affiliate of a party on behalf of that party) to the other
party or its representatives in connection with this Agreement which is in
written, graphic, machine readable or other tangible form and is marked
"Confidential" or "Proprietary" or in some other manner to indicate its
confidential nature. Confidential Information may also include information that
is disclosed orally or by observation, provided that such information is
designated as confidential at the time of disclosure and confirmed in writing as
confidential within thirty (30) days after such disclosure.
1.6 [******]
1.7 [******] .
1.8 [******] .
1.9 [******]
1.10 "Direct Modification" shall have the meaning set forth in Section
4.1.3.
1.11 "Discovery Tools" shall have the meaning set forth in Section 2.8.
1.12 "[******] " shall have the meaning set forth in Section 2.5.
1.13 "Executive Committee" shall have the meaning set forth in Section
3.6.
1.14 "Field" means the discovery, development and use of [******] to
make [******] in a defined reaction agreed upon by the parties. The Fields are
set forth in Exhibit A.
1.15 "FTE" shall mean a full-time employee or independent contractor
utilized for the conduct of the Research Program or, in the case of less than
full-time dedication, a full-time equivalent person-year, based on a total of
forty-six and 1/4 (46.25) weeks or one thousand eight hundred fifty (1,850)
hours per year, of work on or directly related to the Research Program.
-2-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
3
1.16 "Independent TDCC Research" shall have the meaning set forth in
Section 2.3.3.
1.17 "Joint Invention" shall have the meaning set forth in Section 7.1.
1.18 "Lead Compound" shall mean a Library Compound which meets the
specific [******] properties established either in the Research Plan or by the
Research Committee for identifying a Lead Compound. The procedure for
identifying a Lead Compound is set forth on Exhibit B hereto. It is understood
and agreed that any Library Compound that is transferred from Symyx to TDCC and
subsequently commercialized by or under authority of TDCC or its Affiliates
shall be deemed a Lead Compound.
1.19 "Library Compound" shall mean any compound or mixture or
composition of matter screened or prepared by or on behalf of Symyx in the
course of the Research Program in order to determine its usefulness [******] in
connection with a Field. However, any compound, mixture or composition of matter
provided to Symyx by TDCC (or by an Affiliate of TDCC on behalf of TDCC) for
screening as a [******] provided under another agreement shall not be deemed to
be a Library Compound.
1.20 "Manufacturing Costs" shall mean (i) all direct and indirect costs
related to the manufacture by TDCC or its Affiliates of Products, including
costs for personnel, materials, quality control, regulatory compliance,
administrative expenses, subcontractors, fixed and variable manufacturing
overhead costs and business unit or division costs reasonably allocable to the
manufacture of Products, as determined and allocated in accordance with
generally accepted accounting principles, consistently applied, excluding costs
for excess manufacturing capacity not reasonably related to projected demand for
Products, or (ii) with respect to Products purchased from a Third Party vendor,
reasonable amounts actually paid to the vendor for such Products in arm's length
transactions.
1.21 "Net Income" shall mean the pro forma amounts attributable to
royalties, license and other fees projected to be received, and projected Net
Sales with respect to a Product, less the projected: (a) Manufacturing Costs for
such Product; and (b) reasonable expenses incurred by TDCC or its Affiliates in
connection with the marketing, shipping or sale of the Product, and general and
administrative expenses relating thereto, all as determined and allocated in
accordance with generally accepted accounting principles, consistently applied.
1.22 "Net Sales" shall mean the invoice price billed by TDCC or its
Affiliates to Third Parties for the sale of Products, after deduction of (1)
cash, trade and/or quantity discounts actually allowed; (2) amounts repaid or
credited by reason of rejections or returns of goods, recalls, chargebacks,
defects, rebates (including government mandated rebates); (3) freight, postage,
and duties paid for and separately identified on the invoice or other
documentation maintained in the ordinary course of business, and (4) excises,
sales taxes, value added taxes, and duties actually paid and separately
identified on the invoice or other documentation maintained in the ordinary
course of business. Net Sales shall also include the amount of fair market value
of all other consideration received by TDCC or its Affiliates in respect of sale
of Products, whether such consideration is in
-3-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
4
cash, payment in kind, exchange or another form. In the case of a transfer of
Products between TDCC and one of its Affiliates or between two Affiliates of
TDCC for any purpose other than research, development or sampling, Net Sales
shall where feasible be determined as provided in Section 5.2.1(vii).
1.23 [******] .
1.24 "Outside Technology" shall have the meaning set forth in Section
2.3.3.
1.25 "Product" shall mean any product that (i) contains an Agreement
Compound, and/or (ii) contains a reaction product or other chemical derivative
of an Agreement Compound, (iii) utilizes in its manufacture any method or
process within the Program Technology developed by Symyx or developed jointly by
Symyx and TDCC, or (iv) utilizes an Agreement Compound in its manufacture,
[******] .
1.26 "Program Experiment" shall have the meaning set forth in Section
2.1.1(b).
1.27 "Program Technology" shall mean Program Patents and Program
Know-How.
1.27.1 "Program Know-How" shall mean inventions, information,
data, or materials developed by Symyx or TDCC or jointly by Symyx and TDCC in
each case in the course of the Research Program that are useful for the
manufacture, use or sale of Agreement Compounds or Products; provided, however,
that Program Know-How shall not include any Combinatorial Chemistry Technology,
Outside Technology, any invention claimed in the Program Patents or results of
Independent TDCC Research.
1.27.2 "Program Patents" shall mean (i) all U.S. patent
applications claiming any inventions or discoveries conceived and reduced to
practice in the course of the Research Program by Symyx or TDCC or jointly by
Symyx and TDCC, or conceived by Symyx before the Research Program and reduced to
practice in the Research Program, which claim an Agreement Compound or a
Product, or method or process for the manufacture of an Agreement Compound or
Product, or a composition-of-matter containing an Agreement Compound or Product,
or a method or process for the use of an Agreement Compound in or for the
manufacture of a Product, in each case that are necessary or materially useful
for the manufacture, use or sale of Agreement Compounds or Products in the
Field, (ii) all divisions, substitutions, continuations, continuation-in-part
applications, and reissues, re-examinations and extensions of (i) above, (iii)
foreign counterparts of any of the preceding of (i) or (ii) above, and (iv)
patents, utility models or similar grants of rights issuing on any of the
preceding of (i), (ii) or (iii) above. It is understood and agreed that Program
Patents shall not include any Combinatorial Chemistry Technology or results of
Independent TDCC Research.
1.28 "Research Committee" shall have the meaning set forth in Section
3.1.
1.29 "Research Plan" shall have the meaning set forth in Section 2.1.
-4-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
5
1.30 "Research Program" shall mean the program of research conducted by
Symyx and/or TDCC on a collaborative basis under this Agreement for the purpose
of identifying and optimizing Agreement Compounds for use [******] in the Field.
It is understood that the Research Program does not include screening of
compounds, mixtures or compositions of matter provided to Symyx by TDCC (or by
an Affiliate of TDCC on behalf of TDCC) for screening [******] , which research
is to be conducted under terms of a separate agreement.
1.31 "Research Program Term" shall have the meaning described in Section
2.2.
1.32 "Sublicensee" shall mean, with respect to a particular Product, a
Third Party to whom TDCC or its Affiliate has granted a license or sublicense to
make, use and sell such Product.
1.33 "Symyx Patents" shall mean all U.S. patent applications filed on or
before or claiming priority on or before the date five (5) years after the end
of the Research Program claiming any inventions or discoveries owned or
controlled by Symyx (or by any wholly-owned subsidiary of Symyx) which claim an
Agreement Compound or a Product, or method or process for the manufacture of an
Agreement Compound or Product, or a composition-of-matter containing an
Agreement Compound or Product, or a method or process for the use of an
Agreement Compound in or for the manufacture of a Product, in each case that are
necessary or materially useful for the manufacture, use or sale of Agreement
Compounds, or Products in the Field [******] , (ii) all divisions,
substitutions, continuations, continuation-in-part applications, and reissues,
re-examinations and extensions of (i) above, (iii) foreign counterparts of any
of the preceding of (i) or (ii) above, and (iv) patents, utility models or
similar grants of rights issuing on any of the preceding of (i), (ii) or (iii)
above. Notwithstanding the foregoing, it is understood and agreed that "Symyx
Patents" shall not include patent applications or patents claiming inventions
made by Symyx or its wholly-owned subsidiary (solely or jointly) in
collaboration with, or as part of a research program funded by, a Third Party if
such collaboration or research program is not directed to [******] .
1.34 "Third Party" shall mean any party other than Symyx and its
Affiliates, TDCC and its Affiliates, and their permitted assignees.
ARTICLE 2
RESEARCH PROGRAM
2.1 Research Program. Subject to the terms and conditions set forth
herein, Symyx and TDCC shall conduct the research activities in the Fields in a
collaborative effort in accordance with an agreed upon written plan describing
the research activities to be conducted by each party (the "Research Plan"). The
initial Research Plan has been agreed upon by the parties in writing prior to
the Effective Date.
2.1.1 Responsibility - Symyx. During the term of the Research
Program, Symyx shall use efforts that are reasonable in the circumstances and
consistent with professional standards
-5-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
6
applicable to research in the Field as well as relevant standards applied by
Symyx in conducting research outside the Research Program, to conduct research
activities in accordance with the Research Plan to identify, discover or
synthesize [******] in the Fields by preparing and screening Library Compounds
as set forth in the Research Plan.
(a) Compounds Already Identified. Symyx shall make available for
evaluation in the Research Program any compound, mixture or composition of
matter which was screened or prepared by or on behalf of Symyx prior to the
Effective Date or during the Research Program Term and is both (i) owned or
controlled by Symyx to the extent that no obligations to any Third Party will be
violated by use of the compound, mixture or composition in the Research Program
and (ii) believed by Symyx to be potentially useful as a Lead Compound or a
precursor of a Lead Compound.
(b) FTEs and Experiments. During each calendar year quarter of
the Research Program Term, Symyx shall, in its discretion taking into
consideration what is required to achieve the objectives of the Research Plan,
either (i) utilize [******] FTEs to conduct the Research Program or [******] .
Each FTE utilized by Symyx shall be qualified for the activities assigned to him
or her under the Research Program. The FTEs will include FTEs for Chemistry,
Engineering, Database and Software. [******] The Program Experiments conducted
by Symyx during the Research Program will be selected consistent with the
objectives set forth in the Research Plan. Duplication of Program Experiments
during the Research Program will be avoided unless required as a control or for
other valid research purposes consistent with the objectives set forth in the
Research Plan.
(c) Other Responsibilities. Symyx shall use reasonable efforts
to ensure that the most efficient and effective Combinatorial Chemistry
Technology reasonably available to Symyx are made available for conducting the
Research Program. At TDCC's request, Symyx will use commercially reasonable
efforts to provide samples of up to ten (10) grams of any Lead Compound;
however, if such sample cannot be provided at a commercially reasonable cost,
Symyx will so notify TDCC and the parties shall meet to discuss how to proceed.
Notwithstanding any other provision of this Agreement, Symyx shall not, without
its consent, be required to perform research activities other than in accordance
with the Research Plan, [******] 2.1.2 Responsibility - TDCC. During the
Research Program Term, TDCC shall (i) conduct research activities in accordance
with the Research Plan to identify, discover or synthesize [******] in the
Fields, and (ii) to provide Symyx technical information and technical support
reasonably necessary to conduct of the Research Program in accordance with the
Research Plan. TDCC's efforts in conduct of the Research Program shall be
reasonable in the circumstances and consistent with professional standards
applicable to research in the Field as well as relevant standards applied by
TDCC in conducting research outside the Research Program. Notwithstanding any
other provision of this Agreement, TDCC shall not, without its consent, be
required to disclose proprietary information to Symyx which is not essential to
conduct of the Research Program or to provide equipment or materials.
-6-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
7
2.1.2 Responsibility - TDCC. During the Research Program Term,
TDCC shall (i) conduct research activities in accordance with the Research Plan
to identify, discover or synthesize [******] in the Fields, and (ii) to provide
Symyx technical information and technical support reasonably necessary to
conduct of the Research Program in accordance with the Research Plan. TDCC's
efforts in conduct of the Research Program shall be reasonable in the
circumstances and consistent with professional standards applicable to research
in the Field as well as relevant standards applied by TDCC in conducting
research outside the Research Program. Notwithstanding any other provision of
this Agreement, TDCC shall not, without its consent, be required to disclose
proprietary information to Symyx which is not essential to conduct of the
Research Program or to provide equipment or materials.
2.2 Research Program Term. The Research Program Term shall commence on
the Effective Date and, unless earlier terminated, continue thereafter for a
period [******] or such other period as the parties may mutually agree in
writing.
2.3 Exclusivity and Independent Research.
2.3.1 In the Field. During the Research Program Term, Symyx
shall not conduct any research activities outside the Research Program, on its
own behalf or on behalf of any Third Party, directed to [******] within the
scope of the Field. In addition, during the Research Program Term, Symyx shall
not knowingly provide Library Compounds to a Third Party for use in [******].
2.3.2 Other [******] Research by Symyx. It is understood that
Symyx will conduct research activities outside the Research Program ("Other
[******] Research") during the Research Program Term for itself and/or Third
Parties for the purpose of [******] other than in the Field. In the event some
Symyx employees work on both the Research Program and the Other [******]
Research, Symyx shall use good faith commercially reasonable efforts to avoid
potential conflicts or overlaps between the Research Program and Other [******]
Research and misappropriation of any Confidential Information. It is understood
that the Library Compounds are regularly used by Symyx and that Symyx can use
and screen the Library Compounds for any use on its own behalf or for Third
Parties, including without limitation for Other [******] Research, except to the
extent that Symyx has granted to TDCC exclusive rights to screen and optimize
the Library Compounds in the Field as set forth in Section 2.3.1. In the event
that Symyx becomes aware of information, data, materials or inventions which
Symyx believes may advance the Research Program, in the course of conducting
research outside of the Research Program at its own expense or in collaboration
with a Third Party, Symyx will make available these information, data, materials
and inventions for use in the Research Program to the extent it is free to do so
without violating obligations to any Third Party; provided, however, it is
understood that this provision shall not impose, or be construed to impose, any
obligation on Symyx to identify or make itself aware of any such information,
data, materials and inventions.
2.3.3 Independent TDCC Research. It is understood that this
Agreement shall not prohibit TDCC from conducting research activities outside of
and independent from the Research
-7-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
8
Program ("Independent TDCC Research") during the Research Program Term for
itself and/or with Third Parties for the purpose of [******]. In the event some
TDCC employees work on both the Research Program and the Independent TDCC
Research, TDCC shall use good faith commercially reasonable efforts to avoid
potential conflicts or overlaps between the Research Program and Independent
TDCC Research and misappropriation of any Confidential Information of Symyx. In
the event that TDCC in the course of conducting research outside of and
independent from the Research Program discovers information, data, materials or
inventions ("Outside Technology") which TDCC believes may advance the Research
Program, TDCC may make such Outside Technology available for use in the Research
Program the extent it is free to do so without violating obligations to any
Third Party, and it is understood that such Outside Technology shall not be
deemed to be Program Technology; provided, however, that information, data,
materials or inventions made in the Research Program shall be deemed to be
Program Technology whether or not such information, data, materials or
inventions were made using Outside Technology.
2.4 Changes to Fields. The initial Fields activated in the Research Plan
shall be two or more Fields designated in the Research Plan. During the Research
Program Term, TDCC and Symyx may agree to conduct research in one or more
additional Fields, or to amend Exhibit A to create a new Field. In the event
that TDCC and Symyx agree to a new Field, this will be documented by appropriate
written modifications to the Research Plan, including criteria for identifying a
Lead Compound in such Field, and appropriate modifications in writing to the
staffing plan of the Research Program activities in connection with such Field.
TDCC and Symyx may also agree to discontinue activity in one or more Fields by
written modifications to the Research Plan. Appropriate modifications or
adjustments to staffing of the Research Program will be agreed to reflect any
changes in activity of the Fields. The Research Committee described in Section
3.1 shall in general provide direction for any changes in Fields and make formal
recommendations to the Executive Committee. Symyx shall not unreasonably refuse
to agree to changes proposed by TDCC to change activity in the Fields. TDCC
shall not unreasonably refuse to agree to adjustments in staffing of the
Research Program proposed by Symyx as a consequence of any changes in the
activity of the Fields.
2.5 [******]
2.6 Research Records. Symyx and TDCC shall maintain records of the
Research Program (or cause such records to be maintained) in sufficient detail
and in good scientific manner as will properly reflect the work done and results
achieved in the performance of the Research Program (including information
sufficient to establish dates of conception and reduction to practice of
inventions). Access to such records shall be granted as provided in Sections
5.1.3 and 7.2.
2.7 Development and Commercialization of Agreement Compounds and
Products. TDCC and its Affiliates shall be responsible for all expenses incurred
for the development and commercialization of Agreement Compounds and Products by
TDCC and its Affiliates under the terms of this Agreement.
-8-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
9
2.8 Discovery Tools. It is understood that Symyx has been at its own
expense developing and intends to continue to develop [******] (collectively,
the "Discovery Tools"), and that Symyx intends to offer some or all of these
Discovery Tools to TDCC and/or TDCC Affiliates and possibly to Third Parties,
either through sale of equipment and supplies and/or licenses to intellectual
property or some other means selected at Symyx's discretion. Symyx agrees to
provide TDCC a proposal (the "Tools Proposal") setting forth a summary of terms
which in Symyx's opinion are essential and on which Symyx is willing to license
and/or sell such Discovery Tools to TDCC on or before April 1, 1999, and Symyx
and TDCC agree to negotiate in good faith to enter into a written agreement for
such license and/or sale of Discovery Tools for a period of sixty (60) days
following delivery of the Tools Proposal, it being understood that such written
agreement shall set forth mutually agreed terms and conditions on which Symyx
will license and/or sell Discovery Tools on a non-exclusive basis as reasonably
required for internal research use by TDCC and/or TDCC's Affiliates. In order to
provide TDCC an opportunity to be one of Symyx's first customers to exploit the
Discovery Tools for [******] applications, Symyx will not ship or deliver the
Discovery Tools to any of the companies listed in Exhibit C earlier than one
year after the date Symyx notifies TDCC such Discovery Tools are available for
shipment to TDCC, provided that TDCC or TDCC's Affiliates enter into a written
agreement with Symyx to purchase and/or license Discovery Tools on or before
sixty (60) days after Symyx has delivered the Tools Proposal to TDCC, and such
agreement is not breached by TDCC. Symyx shall also not knowingly deliver
Discovery Tools to a Third Party which Symyx has reason to know at the time of
contracting to deliver same would be used for the benefit of any of the
companies on Exhibit C during the period, if any, that Symyx is obligated not to
license or sell Discovery Tools to such companies. It is understood and agreed
that the terms for sale of Discovery Tools by Symyx to TDCC are to be mutually
agreed in writing and this Agreement does not itself obligate Symyx to sell or
TDCC to purchase such Discovery Tools, or obligate either Symyx or TDCC to
accept or agree to terms and conditions of any such sale and/or license. In the
event that Symyx and TDCC do not conclude a written agreement regarding purchase
or license of Discovery Tools within sixty (60) days of delivery of the Tools
Proposal, TDCC and Symyx may mutually agree to terms of such an agreement at a
later date but Symyx shall be free to ship or deliver Discovery Tools to any
party.
2.9 Third Party Claims. In the event that TDCC or Symyx receives a
written notice from any Third Party alleging patent infringement,
misappropriation of trade secrets, or other violation of intellectual property
rights, based on research activities in the Research Program (i) such party
shall promptly notify the other, and (ii) Symyx shall have the right, in its
discretion, to cease to conduct any research activities that are the subject of
such claim without liability to TDCC; provided, however, that if TDCC acquires a
license to permit the conduct of such activities by Symyx in the Research
Program, and/or if TDCC and Symyx mutually agree in writing upon terms of
indemnification by TDCC for Symyx's conduct of such activities, then Symyx will
resume or continue, as appropriate, such activities in accordance with the
Research Plan and the terms and conditions of this Agreement. In the event Symyx
decides to cease to conduct any research activities pursuant to this Section
2.9, Symyx and TDCC shall endeavor to change or modify the Fields as provided in
Section 2.4 in a manner which maintains the value of the Research Program to
TDCC; provided, however, that if such cessation of research activities by Symyx
will have a material
-9-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
10
adverse impact on the Research Program which in the reasonable opinion of TDCC
will not be adequately remedied by a change or modification of Fields, then TDCC
shall have the right to terminate the Research Program on thirty (30) days
written notice to Symyx specifying termination pursuant to this Section 2.9 and
identifying the ceased research activities giving rise to the termination.
ARTICLE 3
MANAGEMENT
3.1 Establishment of Research Committee. Symyx and TDCC shall establish
a committee (the "Research Committee") to (i) monitor technical progress in the
Research Program and report progress to the Executive Committee, (ii) modify the
Research Plan as needed within the scope of the Fields, (iii) establish criteria
to define Lead Compounds within each Field, and (iv) recommend to the Executive
Committee changes in the Fields in accordance with Section 2.4, and (v) ensure
open communications between the parties.
3.2 Membership of Research Committee. The Research Committee shall be
comprised of three (3) representatives designated by each of Symyx and TDCC, or
such other equal number of representatives as the parties may from time to time
agree in writing, with each party's representatives selected by that party.
Either party may replace one or more of their respective Research Committee
members at any time, upon written notice to the other party. The chairperson of
the Research Committee shall be selected by TDCC. The secretary of the Research
Committee shall be selected by Symyx.
3.3 Technical Team and Program Coordinator. Symyx and TDCC shall each
designate two or more representatives to serve on a Technical Team which will:
(i) provide day to day oversight and coordination of activities under the
Research Program, and (ii) initiate and respond to communications between the
parties related to conduct of the Research Program. Each party shall designate a
single program coordinator to lead its representatives on the Technical Team and
to resolve or facilitate resolution of issues arising under the provisions of
this Agreement. The Technical Team shall report progress and refer unresolved
disputes to the Research Committee. Each party may change its designated program
coordinator or representatives on the Technical Team at any time upon written
notice to the other.
3.4 Meetings. During the Research Program Term, the Research Committee
shall meet at regular intervals at least four times per year at locations and
times agreed by the parties. Special meetings of the Research Committee may be
called by either party on ten (10) days written notice to the other party. All
meetings shall alternate between offices of TDCC and Symyx unless members of the
Research Committee otherwise agree. Upon consent of the parties, other
representatives of Symyx or TDCC may attend Research Committee meetings as
nonvoting observers. Research Committee members may participate in any such
meeting in person, by telephone, or by televideo conference. Symyx shall prepare
minutes of each Research Committee meeting, which minutes shall
-10-
11
be subject to review and approval by TDCC. The reviewed and approved minutes
shall be signed by Research Committee representatives of each party.
3.5 Decision Making. A quorum of the Research Committee shall be present
at any meeting where at least one member of each party participates in all
decisions. Decisions of the Research Committee shall be made by unanimous
approval. In the event the Research Committee is unable to decide an issue, it
may be referred by either party to the Executive Committee for resolution.
3.6 Executive Committee. Symyx and TDCC shall establish a committee
comprised of one representative each from Symyx and TDCC (the "Executive
Committee"). Each party's representative on the Executive Committee shall be
selected by that party, and either party may replace its Executive Committee
representative at any time, upon written notice to the other party. The initial
members of the Executive Committee shall be [******] for TDCC and [******] for
Symyx. The Executive Committee shall meet at least twice per year at locations
and times agreed by the parties, and members of the Executive Committee may
participate in any such meeting in person, by telephone, or by televideo
conference. Special meetings of the Executive Committee may be called by either
party on fifteen (15) days written notice to the other party. Upon consent of
the parties, other representatives of Symyx or TDCC may attend Executive
Committee meetings as nonvoting observers. Symyx shall prepare minutes of each
Executive Committee meeting, which minutes shall be subject to approval by TDCC
and after approval will be signed by Executive Committee representatives of each
party. The Executive Committee shall (i) oversee the direction of the overall
relationship between TDCC and Symyx, (ii) resolve any disputes not resolved by
the Research Committee, (iii) set the direction of the Research Program within
the bounds set forth in this Agreement and the Research Plan, and (iv) decide
upon changes in Fields. In the event that the Executive Committee cannot reach
unanimous agreement on matters related to the conduct of the Research Program
other than: (a) the interpretation of obligations of confidentiality under this
Agreement, (b) the amount of any payments due hereunder, (c) intellectual
property ownership, (d) additions to or changes in the scope of the Fields, (e)
staffing of research projects, (f) expenditures by Symyx in conducting the
Research Program, and (g) rights granted under Article 4, TDCC shall have the
right to cast the deciding vote. Unresolved disputes related to (a), (b), (c),
(d), (e), (f), or (g) shall be subject to binding arbitration by either party as
set forth in Section 13.16, in the absence of a unanimous decision by the two
members of the Executive Committee.
ARTICLE 4
LICENSES
4.1 License to TDCC.
4.1.1 License in the Fields. Subject to the terms and conditions
of this Agreement, Symyx agrees to grant, and hereby grants, to TDCC, and TDCC
hereby accepts an exclusive (even as to Symyx), worldwide, royalty-bearing
license under Symyx's interest in the Program Technology to
-11-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
12
make, have made, import and use Agreement Compounds to develop, make, have made,
use, sell, offer for sale, and import Products within the scope of the
corresponding Fields. [******]
4.1.2 [******]
4.1.3 [******]
4.2 Sublicenses. Subject to the terms and conditions of this Agreement,
TDCC shall have the right to grant sublicenses under the rights granted in
Section 4.1 above to Affiliates of TDCC; provided that the terms of each such
sublicense shall be consistent with the terms of this Agreement. It is
understood that any such sublicense shall be subject and subordinate to the
terms and conditions of this Agreement, and that TDCC shall remain responsible
for all applicable financial and other obligations under this Agreement for each
such Affiliate sublicensed, including without limitation milestone and royalty
payments due to Symyx hereunder with respect to development and sales of
Products. Subject to the terms and conditions of this Agreement, TDCC or an
Affiliate of TDCC shall also have the right to grant sublicenses under the
rights granted in Sections 4.1.1, 4.1.2 and 4.1.3 above to one or more Third
Parties; provided that any revenue received from such a Sublicensee for such
grant shall be shared in accordance with Section 5.2(iv). TDCC shall provide to
Symyx at least the following information with respect to each Sublicensee or
Affiliate sublicensed: (i) the identity of each Sublicensee or Affiliate
sublicensed, (ii) a summary of the rights granted as to both subject matter and
territory; and (iii) a summary of the Confidential Information of Symyx and
Program Technology furnished to each Sublicensee or Affiliate. No sublicense
granted by TDCC or an Affiliate to a Third Party may be further assigned or
further transferred by any Sublicensee without the prior written consent of
Symyx, which consent shall not be unreasonably withheld; provided, any such a
sublicense may be further assigned by a Sublicensee without the consent of Symyx
in connection with a transfer of substantially all the business of such
Sublicensee to which such sublicense relates.
4.3 Third Party Rights. It is understood that Symyx is in the business
of conducting materials discovery, research and development with Third Parties,
and that Symyx will continue to grant Third Parties rights to acquire licenses
related to compounds and materials derived from such research. It is possible
that a Third Party may acquire rights from Symyx with respect to one or more
compounds or materials that are solely owned by Symyx or jointly owned by Symyx
and a Third Party and which were made and designed independently of Symyx's
activities in the Research Program. Accordingly, Symyx's grant of rights to TDCC
under Section 4.1 does not include (i) rights that are covered by a patent
application with respect to such a compound or material that was made and
designed independently of activities in the Research Program and is solely owned
by Symyx or a Third Party or jointly owned by Symyx and a Third Party, where
such patent application was filed by a Third Party (either alone or jointly with
Symyx) prior to the filing by TDCC (either alone or jointly with Symyx) of a
patent application with respect to such a compound or material, or (ii) rights
which are subject to a license, option, or other rights that Symyx has granted
to a Third Party prior to the Effective Date. It is understood and agreed that,
even if Symyx complies with its obligations under this Agreement, research for
Third Parties in the course of Symyx's other business
-12-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
13
activities may result in patent applications and patents owned by Third Parties,
or owned jointly by Symyx and such Third Parties, which could conflict with
patent applications and patents owned by TDCC, or jointly owned by TDCC and
Symyx, under this Agreement. Symyx shall use its good faith commercially
reasonable efforts to avoid such conflicts. In the event that conflicts arise
between rights granted to TDCC in the Field and rights granted by Symyx outside
the Field, Symyx agrees to use commercially reasonable efforts to promote a
resolution of the conflict between TDCC and the Third Party via a cross-license
or other arrangement acceptable to the parties involved. It is understood that,
except to the extent that TDCC is damaged as a proximate result of a material
breach by Symyx of Sections 2.3, 4.1.1, or 10.2 of this Agreement, then Symyx
shall have no liability under this Agreement with respect to any such conflict.
4.4 Joint Inventions Outside of the Fields. TDCC, TDCC's Affiliates,
Symyx, and Symyx's Affiliates shall each have the right to use Joint Inventions
for internal research purposes outside of the scope of the Fields; provided,
however, that Symyx shall have the sole right to grant and authorize licenses
and sublicenses under such Joint Inventions to Third Parties outside of the
scope of the Fields. It is further understood and agreed that Symyx shall have
the right to grant Third Parties licenses under Joint Inventions outside of the
scope of the Field that are exclusive even as to TDCC and Symyx; provided, that
if Symyx grants such a license that is exclusive even as to TDCC and Symyx,
Symyx shall promptly notify TDCC in writing and shall pay to TDCC [******]
percent ([******] %) of up-front license fees and royalties payments received by
Symyx from such Third Party in respect of such exclusive license under such
Joint Inventions. Notwithstanding the foregoing, it is understood and agreed
that Symyx may grant exclusive licenses under such Joint Inventions outside of
the Fields to certain Third Parties in connection with the Other [******]
Research described in Section 2.3.2, and that Symyx shall not be required to pay
any amounts to TDCC hereunder in connection with such licenses. It is understood
and agreed that Confidential Information received by Symyx from TDCC shall be
subject to all applicable provisions of Article 9 of this Agreement.
4.5 Retained Rights.
4.5.1 Sole Inventions Outside the Fields. Subject to the license
to Combinatorial Chemistry Technology in Section 4.6, TDCC and Symyx shall each
retain all rights outside the scope of the Fields in and to inventions and
discoveries invented or made solely by such party in the course of the Research
Program.
4.5.2 Symyx Research. Notwithstanding the licenses and rights
granted by Symyx in this Article 4, Symyx shall retain the right to make, have
made, and use any Library Compounds or Agreement Compounds, and use or practice
any processes or methods developed by or on behalf of Symyx in the course of
performing the Research Program, for its own internal research to develop,
improve and validate its tools and Combinatorial Chemistry Technology.
4.6 Combinatorial Chemistry. TDCC agrees to grant, and hereby grants, to
Symyx an irrevocable, royalty-free non-exclusive license, with the right to
grant and authorize sublicenses,
-13-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
14
under TDCC's interest in Combinatorial Chemistry Technology made or invented
solely by TDCC in the course of the Research Program, to conduct activities
using Combinatorial Chemistry. TDCC, TDCC's Affiliates, Symyx and Symyx's
Affiliates shall each have the right to use Combinatorial Chemistry Technology
made or invented jointly by TDCC and Symyx in the course of the Research Program
for internal research purposes; provided, however, that Symyx shall have the
sole right to grant and authorize licenses and sublicenses to Third Parties
under such Combinatorial Chemistry Technology. It is understood that this
Section 4.6 shall not apply to any inventions conceived and reduced to practice
by TDCC independent of the Research Program and without use of, or reference to,
Combinatorial Chemistry Technology owned by Symyx, other than the use of and
reference to the Discovery Tools, if any, licensed or sold to TDCC as set forth
in Section 2.8. Nothing herein shall be construed to obligate TDCC to grant to
Symyx the right to use or sublicense background rights in technology of TDCC
which existed prior to the Effective Date or results of Independent TDCC
Research.
4.7 Limited Use Outside of Field. Except as the parties may otherwise
expressly agree in writing, TDCC shall not use or sell, or authorize the use or
sale of, Program Technology developed solely or jointly by Symyx, or any
Agreement Compound or Library Compound, except (i) in relation to the
manufacture, use or sale of Products within the corresponding Field or Fields in
accordance with the license granted by Symyx in Sections 4.1.1 [******]. It is
understood that this Section 4.7 does not preclude TDCC from the use or sale or
authorizing the use or sale of compounds developed independently by TDCC without
the use of Library Compounds, Confidential Information of Symyx, or Program
Technology.
ARTICLE 5
PAYMENTS
5.1 Research Funding.
5.1.1 [******]
5.1.2 Quarterly Payments. The amounts set forth in Section 5.1.1
shall be paid in advance in four equal installments during each year of the
Research Program. The initial payment shall be made on or before the 1st day of
the month following the Effective Date. Subsequent payments shall be made at
three month intervals thereafter on or before the first day of the applicable
month for the duration of the Research Program term. It is understood and agreed
that all such payments are nonrefundable and noncreditable, except as provided
in Article 12.
5.1.3 Research Program Records. Symyx shall keep complete, true
and accurate books of account and records sufficient to determine the number of
Symyx FTE's utilized, the number of experiments performed by Symyx in each
quarter during the Research Program Term in connection with the performance of
the Research. Such books and records shall be kept at the principal place of
business of Symyx for at least three (3) years following the end of the calendar
-14-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
15
year quarter to which they pertain. Such records will be open for inspection
during normal business hours upon ten (10) days prior notice during such three
(3) year period, by an independent auditor of TDCC, for the purpose of verifying
the number of Symyx FTE's used in the Research Program during the Research
Program Term, and the number of Program Experiments. Such inspections may be
made no more than once each calendar year, at reasonable times mutually agreed
by Symyx and TDCC. It is understood and agreed that TDCC's auditor will be
obliged to execute a reasonable confidentiality agreement prior to commencing
any such inspection.
5.2 Royalties.
5.2.1 [******]
(i) [******]
(ii) [******]
(iii) [******]
(iv) [******]
(v) [******]
(vi) [******]
(vii) Single Royalty Due. Where a Product is sold by
TDCC or its Affiliates to Third Parties and the Product is also converted by
TDCC or its Affiliates into another Product by processing, blending or
fabricating and the resulting converted Product sold, Net Sales shall be
determined on the Product initially made and only a royalty payment for such
initial Product shall be due. In the case of a transfer of Products between TDCC
and one of its Affiliates or between two Affiliates of TDCC for any purpose
other than research, development or sampling, Net Sales shall where feasible be
determined based on the invoiced sales price for substantially identical
Products upon sale to a Third Party customer in the territory or geographic
region where the Product is delivered, less the deductions allowed for such
sales. In the event that Products are transferred between an Affiliate of TDCC
and either TDCC or another Affiliate of TDCC and there have been no comparable
sales of such Products to a Third Party on which to determine a basis of
determining the value of such sale, the invoice price received from invoicing,
shipment or transfer of title in the Product to a person or entity other than
TDCC or its Affiliate, less allowed deductions, shall be used in determining Net
Sales. In the event a Product is sold by TDCC or an Affiliate in combination
with other goods and services, Net Sales of the Product shall also be determined
by reference to the average selling price of the Product without other goods and
services sold to Third Parties during the same time period.
(viii) [******]
-15-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
16
5.2.2 Royalty Term. TDCC's obligation to pay royalties to Symyx
shall continue for each class of Products until the later of (i) twelve (12)
years after the first commercial sale of any Product in such class of Products
on which royalties are payable by TDCC to Symyx, or (ii) the expiration of the
last to expire issued patent covering such Product based on the Program
Technology which is owned and/or controlled by TDCC or Symyx. Notwithstanding
any other provision of this Agreement, all royalty obligations of TDCC or its
sublicensee for all Products shall cease twenty (20) years from the date of the
first commercial sale of the first Product on which royalties are payable by
TDCC to Symyx.
5.3 Payments in Lieu of Royalties. Royalties due on Net Sales of
Products or classes of Products may be burdensome to calculate and report. TDCC
and Symyx in such cases will seek to negotiate an alternative basis for
calculation of consideration payable in lieu of running royalties on such
classes of Products, which both parties deem will result in a payment to Symyx
of an amount commensurate with the royalties otherwise payable under Section
5.2.
5.4 [******]
5.5 Third Party Royalties. Symyx shall not be responsible for payments
due to Third Parties for the manufacture, sale, or use of Products by TDCC or
its Affiliates or Sublicensees.
5.6 Convenience of the Parties. The parties acknowledge that Symyx may
not own or control patent applications or patents covering the manufacture, sale
or use of a particular Product; however, that parties agree that substantial
value is expected to be contributed by Symyx in accelerated identification, time
to market, enhanced probability of success, and the potential for multiple leads
and, for the convenience of the parties, TDCC agrees to pay royalties as
specified herein during the applicable royalty period, regardless of whether a
Product is covered by a patent application or patent owned or controlled by
Symyx.
5.7 Separate Agreement. Although not a part of the Research Program, it
is understood and agreed that the amounts paid pursuant to Sections 5.1 and 5.4
shall include the consideration due Symyx from TDCC for evaluations to be
conducted by TDCC for screening [******] under a separate agreement to be
negotiated in good faith; provided, it is further understood and agreed that
Symyx will not be obligated to provide more than [******] of [******] FTE or the
equivalent, [******] under the terms of such separate agreement, and Symyx will
be obligated under such separate agreement only for so long as TDCC is not in
default under any payment due Symyx under this Agreement.
ARTICLE 6
PAYMENTS; BOOKS AND RECORDS
6.1 Royalty Reports and Payments. After the first commercial sale of a
Product on which royalties are payable by TDCC or its Affiliates hereunder, TDCC
shall make quarterly written reports to Symyx within ninety (90) days after the
end of each calendar year quarter, stating in each
-16-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
17
such report, separately for TDCC and each Affiliate, the number, description,
and aggregate Net Sales, of each Product or class of Products sold during the
calendar year quarter upon which a royalty is payable under Section 5.2.
Concurrently with the making of such reports, TDCC shall pay to Symyx all
royalties due in respect of such Net Sales at the rate determined in accordance
with Section 5.2.
6.2 Payment Method. All payments due under this Agreement shall be made
by bank wire transfer in immediately available funds to a bank account
designated by Symyx. All payments hereunder shall be made in U.S. dollars. Any
payments that are not paid on the date such payments are due under this
Agreement or any refunds for overpayments or underpayments of actual royalties
pursuant to Section 5.2.1(i) shall bear interest at the lesser of (i) the prime
rate (as reported by the Bank of America, San Francisco, California, on the date
such payment is due) plus an additional two percent (2%) or (ii) the maximum
rate permitted by law, in each case calculated on the number of days such
payment is delinquent. Nothing in this Section 6.2 shall prejudice any other
rights or remedies available to either party hereunder or at law or equity.
6.3 Place of Royalty Payment and Currency Conversions. Royalties shall
be deemed payable by the entity making the Net Sales of the Product from the
country in which earned in local currency and subject to foreign exchange
regulations then prevailing. Royalty payments to Symyx shall be made in United
States dollars to the extent that free conversion to United States dollars is
permitted. Any such conversion to U.S. dollars from the currency in the country
where such Net Sales occurs shall be made using the exchange rate for conversion
of the foreign currency into U.S. Dollars employed by TDCC in the normal course
of its business for other commercial transactions on the last business day of
the calendar year quarter to which such payment pertains. If, due to
restrictions or prohibitions imposed by national or international authority,
payments cannot be made as aforesaid, the parties shall consult with a view to
finding a prompt and acceptable solution. If such royalties due Symyx in any
country cannot be remitted to Symyx within six (6) months after the end of the
calendar year quarter during which they are earned, then TDCC or its Affiliate
shall upon request of Symyx deposit the full amount of such unpaid royalties in
a bank account in such country in the name of Symyx.
6.4 Records; Inspection. TDCC and its Affiliates shall keep complete,
true and accurate books of account and records for the purpose of determining
the royalty amounts (and revenues received from Sublicensees) which are payable
to Symyx under this Agreement. Such books and records shall be kept at the
principal place of business of such party, as the case may be, for at least
three (3) years following the end of the calendar year quarter to which they
pertain. Such records will be open for inspection during such three (3) year
period by a public accounting firm to whom TDCC has no reasonable objection,
solely for the purpose of verifying royalty reports provided pursuant to Section
6.1. Such inspections may be made no more than once each calendar year, at
reasonable times and on reasonable notice. Inspections conducted under this
Section 6.4 shall be at the expense of Symyx, unless a variation or error
producing an increase in the payment due exceeding the greater of ten thousand
U.S. dollars ($10,000) or ten percent (10%) of the amount stated for any period
covered by the inspection is established in the course of any such inspection,
-17-
18
whereupon all reasonable costs relating to the inspection for such period and
any unpaid amounts that are discovered will be paid promptly by TDCC or the
Affiliate together with interest thereon from the date such payments were due at
the lesser of (i) the prime rate (as reported by the Bank of America, San
Francisco, California), plus an additional two percent (2%) or (ii) the maximum
rate permitted by law. The public accounting firm employees shall sign a
reasonable confidentiality agreement as a condition precedent to their
inspection, and shall report to Symyx only that information which would be
contained in a properly prepared royalty report by TDCC. Symyx agrees to hold in
strict confidence all information received concerning royalty payments and
reports, and all information learned in the course of any audit or inspection,
except to the extent necessary for Symyx to reveal such information in order to
enforce its rights under this Agreement or if disclosure is required by law.
6.5 Tax Matters. All royalty amounts and other payments required to be
paid to a party pursuant to this Agreement may be paid with deduction for
withholding for or on account of any taxes (other than taxes imposed on or
measured by net income) or similar governmental charge imposed by applicable law
("Withholding Taxes"). Any Withholding Taxes will be paid to the proper tax
authorities and receipts for such payment or other proof of payment will be made
available by the paying party to the other party. The parties will exercise
diligent efforts to ensure that any withholding taxes imposed are reduced as far
as possible under provisions of any treaties applicable.
ARTICLE 7
INTELLECTUAL PROPERTY
7.1 Ownership. TDCC shall own any inventions or discoveries conceived
and reduced to practice and other intellectual property otherwise developed
solely by personnel of TDCC or TDCC's Affiliates in the course of the Research
Program and shall also own inventions and discoveries fully conceived (with
sufficient specificity that it can be reduced to practice without efforts beyond
those efforts that one skilled on the art would reasonably employ) by personnel
of TDCC or TDCC's Affiliates and reduced to practice in the course of the
Research program by Symyx and TDCC consistent with such conception, which
pertain to [******] (collectively, "TDCC Inventions"). Symyx shall own any
inventions or discoveries conceived and reduced to practice and other
intellectual property otherwise developed solely by Symyx personnel in the
course of the Research Program ("Symyx Inventions"). Except as provided above,
TDCC and Symyx shall jointly own any inventions or discoveries conceived and/or
reduced to practice in the course of the Research Program where personnel of
Symyx and of TDCC have each made inventive contributions to such inventions
which would result in them being determined to be joint inventors in accordance
with United States patent law ("Joint Inventions"). Program Know-How which is
jointly developed but is not deemed to be patentable will be jointly owned.
7.2 Notice of Inventions and Access to Records of the Research Program.
Symyx and TDCC shall report to the Research Committee all inventions relating to
Lead Compounds,
-18-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
19
Derivative Compounds, or Program Technology made in the course of performing the
Research Program. During the Research Program Term and for three (3) years
thereafter, each of TDCC and Symyx shall make available to the other party upon
request research records pertaining to such inventions as may be reasonably
required to exercise any rights of a party arising pursuant to this Agreement.
Such records and the information disclosed therein shall be deemed Confidential
Information of the party providing such records for inspection subject to the
obligations and conditions in Article 9. Upon request and tender of payment for
the actual cost in providing copies, Symyx and/or TDCC, as appropriate, shall
provide to the requesting party legible copies of such records as are reasonably
required.
7.3 Jointly Owned IP. Except as otherwise expressly provided in this
Agreement, both TDCC and Symyx may use, sublicense, commercialize, or otherwise
exploit all jointly-owned Program Technology without the consent of, or
obligation to account to, the other party.
7.4 Patent Prosecution.
7.4.1 Solely-Owned Patents. Each party will be responsible, in
its discretion and at its sole expense, for preparing, filing, prosecuting and
maintaining patent applications and patents relating to the inventions conceived
or reduced to practice in the course of the Research Program that are owned
solely by that party as described in Section 7.1, and conducting any
interferences, re-examinations, reissues, oppositions or requests for patent
term extension or governmental equivalents thereto.
7.4.2 Jointly-Owned Patents.
(a) Combinatorial Chemistry. Symyx shall have the sole right, in
its discretion and at its sole expense, to prepare, file, prosecute and maintain
patent applications and patents relating to Joint Inventions owned by TDCC and
Symyx which claim Combinatorial Chemistry Technology and to conduct any
interferences, re-examinations, reissues, oppositions or requests for patent
term extension or governmental equivalents thereto.
(b) Jointly-Owned Patents Related to Specific Fields. Except as
provided in Section 7.4.2 (a), TDCC shall have the first right, in its
discretion and at its sole expense, to prepare, file, prosecute and maintain, in
consultation with Symyx, patent applications and patents relating to Joint
Inventions within the Program Technology in the first, second and fourth Fields
in Exhibit A which (i) relate to the use of Agreement Compounds to make Products
in one or more of such Fields, or (ii) relate to Products in (or used in) one or
more such Fields or (iii) relate to processes for making Products in one or more
such Fields, in each case that are jointly-owned by TDCC and Symyx, and to
conduct any interferences, re-examinations, reissues, oppositions or requests
for patent term extension or governmental equivalents thereto. In the event that
TDCC does not file, prosecute or maintain, or conduct such other activities
described above, with respect to any such patent or patent application which
claims the composition or method of use of any Agreement Compound in the Field,
Symyx will have the right, in its discretion, to assume such activities at its
own expense. It is understood and agreed that in the event a Joint Invention as
it will be filed in a
-19-
20
patent application or claimed in a patent encompasses Program Technology in one
or more of the third, fifth or sixth fields in Exhibit A in addition to the
first, second or fourth Fields of Exhibit A, then Section 7.4.2(c) shall apply.
(c) Jointly-Owned Patents Outside of the Specified Fields.
Except as provided in Section 7.4.2 (a) and (b), Symyx shall have the first
right, in its discretion and at its sole expense, to prepare, file, prosecute
and maintain, in consultation with TDCC, patent applications and patents
relating to Joint Inventions within the Program Technology that are
jointly-owned by TDCC and Symyx, and to conduct any interferences,
re-examinations, reissues, oppositions or requests for patent term extension or
governmental equivalents thereto. In the event that Symyx does not file,
prosecute or maintain, or conduct such other activities described above, with
respect to any such patent or patent application, TDCC will have the right, in
its discretion, to assume such activities at its own expense.
7.5 Cooperation in Patent Filing. During the Research Program Term and
for three years thereafter, TDCC and Symyx shall use reasonable efforts to keep
each other informed as to the status of patent matters described in this Article
7, including without limitation, by providing the other the opportunity to
review and comment on patent application drafts providing the basis for Program
Patents claiming inventions made in the course of the Research Program a
reasonable time in advance of applicable filing dates, and providing the other
party with copies of any substantive documents that such party receives from
applicable patent offices regarding applications for any Program Patent, and/or
applications claiming any Joint Inventions, promptly after receipt, including
notice of all official actions, interferences, reissues, re-examinations,
oppositions, potential litigation, or requests for patent term extensions. TDCC
and Symyx shall each reasonably cooperate with and assist the other at its own
expense in connection with such activities, at the other party's request. The
Research Committee, either directly or through a patent committee designated by
the Research Committee, will (i) facilitate communication between the parties
regarding patents and patent applications arising from inventions made in the
course of the Research Program, and (ii) discuss and provide advice on patent
strategy related to such patent applications. It is understood and agreed that
provisional patent applications may be filed by a party without review and
comment in order to obtain the earliest possible filing date, but each party
will use commercially reasonable efforts to seek review and comment from the
other party prior to filing such provisional patent applications.
7.6 Enforcement.
7.6.1 Notice. Each party shall promptly notify the other party
in writing if it becomes aware of any actual or threatened commercially material
infringement of the Program Patents by a Third Party.
7.6.2 Inside the Fields. TDCC shall have the initial right, but
not the obligation, to take appropriate legal action to enforce any Program
Patents against any infringement within the Fields by any Third Party, at its
sole cost and expense. If, within six (6) months following receipt of notice
from Symyx of any such infringement of a jointly-owned, issued patent, TDCC does
not take
-20-
21
such action to halt such infringement or notify Symyx of action it proposes to
take to xxxxx patent infringement in a commercially reasonable period, Symyx
shall, in its sole discretion, have the right, but not the obligation to take
such action at its sole expense.
7.6.3 Other Infringement. In the event of an actual or
threatened infringement by a Third Party of a Program Patent that is solely
owned by TDCC, TDCC shall have the sole right, but not the obligation, to take
appropriate legal action to enforce such Program Patent against infringements by
Third Parties, as TDCC determines and at its expense. Except as otherwise
provided in Section 7.6.2, in the event of an actual or threatened infringement
by a Third Party of a Program Patent that is solely owned by Symyx, or jointly
by TDCC and Symyx, Symyx shall have the sole right, but not the obligation, to
take appropriate legal action to enforce such Program Patent against
infringement by Third Parties, as Symyx determines in its discretion and at its
expense. It is understood that Symyx may authorize one or more Third Parties to
enforce patents against infringements outside of the Fields.
7.6.4 Cooperation; Costs and Recoveries; Settlements. Each party
agrees to use commercially reasonable efforts to render such assistance in the
enforcement activities described in Sections 7.6.2 and 7.6.3 as the enforcing
party may reasonably request. Costs of maintaining any such action and damages
recovered therefrom shall be paid by and belong to the party bringing the
action; provided, however, that any recovery by TDCC under Section 7.6.2 in
excess of TDCC's actual cost and expenses shall be divided [******] percent
([******] %) to TDCC and [******] (%) to Symyx. If TDCC consents to a sublicense
to any Third Party, which consent it shall not be required to give, who, but for
the sublicense, would be infringing a claim of an issued patent in the Program
Technology, TDCC shall be entitled to receive all running royalties payable by
such Third Party but such revenue received in excess of TDCC's actual costs and
expenses for enforcement shall be included as a part of revenues received from
Sublicensees as set forth in Section 5.2.1(iv). Neither Symyx nor TDCC shall
settle without the consent of the other party a dispute with a Third Party
regarding infringement of a Program Patent except to the extent that such rights
could have been granted as a permitted license or sublicense without the consent
of the other party.
7.7 Third Party Claims of Infringement. If the manufacture, use or sale
of any Product pursuant to this Agreement because of the practice of the Program
Technology results in any claim, suit or proceeding alleging patent infringement
against Symyx or TDCC (or its Affiliates or Sublicensees), such party shall
promptly notify the other party hereto in writing setting forth the facts of
such claims in reasonable detail. Each party agrees to use commercially
reasonable efforts to render assistance to the other party in defending such
claims of infringement as the defendant may reasonably request. The defendant
shall have the exclusive right and obligation to defend and control the defense
of any such claim, suit or proceeding, at its own expense, using counsel of its
own choice; provided, however, it shall not enter into any settlement which
admits or concedes that any Program Patent is invalid or unenforceable, without
the prior written consent of the other party, which shall not be unreasonably
withheld. The defendant shall keep the other party hereto reasonably informed of
all material developments in connection with any such claim, suit or proceeding.
-21-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
22
ARTICLE 8
COMMERCIALIZATION
8.1 Due Diligence. TDCC shall use commercially reasonable efforts to
develop and commercialize Agreement Compounds and Products which in TDCC's sound
business judgment can be profitably implemented. It is understood and agreed
that such "commercially reasonable efforts" shall mean efforts generally
equivalent to the efforts TDCC uses with regard to its other similar products
(lower case) of comparable value, risk and patent protection to develop and
commercialize Products. Specific diligence parameters will include [******]
8.2 [******]
8.3 Reports. During the term of this Agreement, TDCC shall provide Symyx
with written annual reports within thirty (30) days of the end of each calendar
year providing a summary of the status of the research and development
activities conducted with respect to Products and Agreement Compounds. In
addition, five (5) times during the term of this Agreement, Symyx may request
special reports which provide a summary of the status of the research and
development activities conducted with respect to Products and Agreement
Compounds. TDCC will provide these special reports within thirty (30) days of
notification. The reports as described in this Section 8.3 shall contain
sufficient information to allow Symyx to monitor TDCC's compliance with this
Agreement. All reports and information provided under this Section 8.3 shall be
deemed Confidential Information of TDCC.
ARTICLE 9
CONFIDENTIALITY
9.1 Confidentiality. Except as otherwise expressly provided herein, the
parties agree that, until the later of fifteen (15) years from the Effective
Date of the Agreement and (ii) ten (10) years from the end of the Research
Program, the receiving party shall not, except as expressly provided in this
Article 9, disclose to any Third Party or use for any purpose, any Confidential
Information furnished to it by the disclosing party pursuant to this Agreement,
except in each case to the extent that it can be established by the receiving
party by competent proof that such information:
(a) was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise part
of the public domain after it disclosure and other than through any act or
omission of the receiving party in breach of this agreement;
-22-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
23
(d) was independently developed by the receiving party without
use of, or reference to, the other party's confidential information, as
demonstrated by documented evidence; or
(e) was disclosed to the receiving party, other than under an
obligation of confidentiality, by a Third Party authorized and entitled to
disclose such information to others.
9.2 Permitted Use and Disclosures. Each party hereto may (i) use
Confidential Information disclosed to it by the other party in conducting the
Research Program and (ii) use or disclose Confidential Information disclosed to
it by the other party to the extent such use and disclosure is reasonably
necessary in (A) exercising the rights and licenses granted hereunder, (B)
prosecuting or defending litigation, (C) complying with applicable laws,
governmental regulations or court orders or submitting mandatory information to
tax or other governmental authorities, (D) filing and prosecuting patent
applications, subject to consultation with the disclosing party as to the
content of such patent applications prior to filing, or (E) making a permitted
sublicense or otherwise exercising license rights expressly granted pursuant to
this Agreement. TDCC and Symyx shall not (and agree that their Affiliates shall
not) disclose Confidential Information received from the other party under this
Agreement as permitted by 9.2(ii)(A) or (E), except pursuant to an agreement of
confidentiality with terms reasonably equivalent to those applicable to the
party to this Agreement that received the information from the other. If a party
to this Agreement is required to make any disclosure pursuant to 9.2(ii)(B), (C)
or (D) of Confidential Information received, it will give reasonable advance
notice to the other party to this Agreement and will use reasonable efforts to
secure confidential treatment of such information (whether through protective
order or otherwise), except to the extent inappropriate in the case of patent
applications.
9.3 Nondisclosure of Terms. Each of the parties hereto agrees not to
disclose the terms of this Agreement to any Third Party without the prior
written consent of the other party hereto, which consent shall not be
unreasonably withheld, except to such party's attorneys, advisors, investors and
others on a need to know basis under circumstances that reasonably ensure the
confidentiality thereof either: (i) in connection with a public offering of
Symyx stock, (ii) in connection with negotiation of a sublicense, manufacture or
sale of a Product or an Agreement Compound, or (iii) to the extent required by
law. Notwithstanding the foregoing, the parties shall agree upon a press release
to announce the execution of this Agreement, and Symyx and TDCC may each
thereafter disclose to Third Parties the information contained in such press
release without the need for further approval by the other. In addition, TDCC
and Symyx may each make public statements regarding the general progress of the
Research Program.
9.4 Publication of Results. Any manuscript or other public disclosure by
Symyx or TDCC describing the scientific results of the Research Program to be
published within the Research Program Term, or within one (1) year after the end
of the Research Program, shall be provided to the other party for review at
least ninety (90) days prior to its submission, except that patent applications
which may be published shall be subject only to the review described in Section
7.5. Further, to avoid the loss of patent rights as a result of premature public
disclosure of patentable information, the reviewing party may, within thirty
(30) days of receiving such a proposed disclosure, notify the
-23-
24
publishing party in writing that the reviewing party desires to file a patent
application on any invention disclosed in such scientific results, in which case
the publishing party shall withhold publication or disclosure of such scientific
results until the earlier of (i) the time the patent application is filed
thereon, (ii) the time the parties both determine, after consultation, that no
patentable invention exists, or (iii) ninety (90) days after the publishing
party received notice of the reviewing party's desire to file such patent
application. Further, if such scientific results contain Confidential
Information of the reviewing party that is subject to the use and nondisclosure
restrictions under this Article 9, the publishing party agrees to remove such
Confidential Information from the proposed publication or disclosure.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 TDCC's Representations. TDCC represents and warrants that: (i) it
has the right and authority to enter into this Agreement and to fully perform
its obligations hereunder; (ii) this Agreement is a legal and valid obligation
binding upon it and enforceable in accordance with its terms, and (iii) it has
not previously granted, and during the term of this Agreement will not knowingly
make any commitment or grant any rights which conflict in any material way with
the rights and obligations set forth herein.
10.2 Symyx's Representations. Symyx represents and warrants that: (i) it
has the right and authority to enter into this Agreement, and to fully perform
its obligations hereunder; (ii) this Agreement is a legal and valid obligation
binding upon it and enforceable in accordance with its terms; (iii) it has not
previously granted, and during the term of this Agreement will not knowingly
make any commitment or grant any rights which conflict in any material way with
the rights and obligations set forth herein; (iv) it has the right to extend the
rights granted by it in this Agreement; and (v) to the best of its knowledge as
of the Effective Date, there are no existing or threatened actions, suits or
claims pending against it with respect to the Confidential Information,
Combinatorial Chemistry Technology or Library Compounds to be used in the
Research Program.
10.3 Disclaimer. TDCC and Symyx specifically disclaim any
representation, warranty or guarantee that the Research Program will be
successful, in whole or in part. It is understood that the failure of the
parties to successfully synthesize, discover, identify or optimize Agreement
Compounds in the course of the Research Program shall not constitute a breach of
any representation or warranty or other obligation under this Agreement;
provided, however, it is understood and agreed that the foregoing shall not be
construed so as to relieve either party from its obligation under this Agreement
to perform research activities in the Research Program. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, SYMYX AND TDCC MAKE NO REPRESENTATIONS
AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED,
WITH RESPECT TO THE PROGRAM TECHNOLOGY, INFORMATION DISCLOSED HEREUNDER, LIBRARY
COMPOUNDS, AGREEMENT COMPOUNDS, OR PRODUCTS, AND HEREBY EXPRESSLY DISCLAIM ANY
-24-
25
WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, OR VALIDITY
OF ANY PROGRAM TECHNOLOGY, PATENTED OR UNPATENTED, OR NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
ARTICLE 11
INDEMNIFICATION
11.1 TDCC. TDCC agrees to indemnify, defend and hold harmless Symyx and
its Affiliates and their respective directors, officers, employees, agents and
their respective successors, heirs and assigns (the "Symyx Indemnitees") from
and against any losses, costs, reasonable expense from lost time of Symyx
employees, claims, damages, liabilities or expense (including reasonable
attorneys' and professional fees and other expenses of litigation)
(collectively, "Liabilities") arising, directly or indirectly out of or in
connection with Third Party claims, suits, actions, demands or judgments,
including without limitation, personal injury, product liability, patent
infringement and trade secret misappropriation matters, suits, actions or
demands relating to (i) any Agreement Compounds or Products which are developed,
manufactured, used, sold or otherwise distributed by or on behalf of TDCC, its
Affiliates, Sublicensees or other designees (other than Symyx, its Affiliates
and licensees), (ii) TDCC's activities in performing the Research Program, (iii)
Symyx's research activities in performing the Research Program arising in
circumstances where TDCC has directed these activities pursuant to Section 3.6,
and (iv) any breach by TDCC of the representations and warranties made in this
Agreement, except, in each case, to the extent such Liabilities result from the
negligence or intentional misconduct of the Symyx Indemnitees. Except as
expressly set forth herein regarding reasonable expenses from lost time of Symyx
employees, indemnification hereunder does not include any consequential damages
or lost profits which may be suffered by the Symyx Indemnitees.
11.2 Symyx. Symyx agrees to indemnify, defend and hold harmless TDCC,
its Affiliates and Sublicensees and their respective directors, officers,
employees, agents and their respective heirs and assigns (the "TDCC
Indemnitees") from and against any losses, costs, claims, damages, liabilities
or expense (including reasonable attorneys' and professional fees and other
expenses of litigation) (collectively, "Liabilities") arising, directly or
indirectly out of or in connection with Third Party claims, suits, actions,
demands or judgments, including without limitation, personal injury, product
liability, patent infringement and trade secret misappropriation matters, suits,
actions, or demands relating to (i) any Library Compound or product (lower case)
developed, manufactured, used, sold or otherwise distributed by or on behalf of
Symyx, its Affiliates, licensees or other designees (other than TDCC, its
Affiliates and Sublicensees), (ii) any breach by Symyx of its representations
and warranties made in this Agreement, and (iii) Symyx's activities in
performing the Research Program other than those where TDCC directed such
activities pursuant to Section 3.6 (except with respect to claims of
infringement of the intellectual property rights of Third Parties, in which
event Symyx shall not be obligated to indemnify TDCC); and except, in each case,
to the extent such Liabilities result from the negligence or intentional
misconduct of the TDCC
-25-
26
Indemnitees. Indemnification hereunder does not include any consequential
damages or lost profits which may be suffered by the TDCC Indemnitees.
11.3 Procedure. In the event that any "Indemnitee" (either a TDCC
Indemnitee as described in Section 11.2 or a Symyx Indemnitee as described in
Section 11.1) intends to claim indemnification under this Article 11 it shall
promptly notify the other party in writing of such alleged Liability. The
indemnifying party shall have the right to control the defense thereof with
counsel of its choice that is reasonably acceptable to Indemnitee; provided,
however, that any Indemnitee shall have the right to retain its own counsel at
its own expense for any reason. The affected Indemnitee shall give reasonable
cooperation to the indemnifying party and its legal representatives in the
investigation of any action, claim or liability covered by this Article 11. The
indemnification under this Article 11 shall not apply to amounts paid by an
Indemnitee in settlement of any Liabilities if such settlement is effected
without the consent of the indemnifying party, which consent shall not be
withheld unreasonably. The failure of the Indemnitee to deliver notice to the
indemnifying party within a reasonable time after commencement of a claim or
action, if prejudicial to the ability to defend such claim or action, shall
relieve the indemnifying party of any liability under this Article 11 to the
extent of such prejudice. The indemnifying party will not be liable to pay legal
costs and attorney's fees incurred by the Indemnitee in establishing its claim
for indemnification.
ARTICLE 12
TERM AND TERMINATION
12.1 Term of Agreement. The term of this Agreement shall commence on the
Effective Date, and shall continue in full force and effect on a
country-by-country, Agreement Compound-by-Agreement Compound and Product by
Product basis, until TDCC and its Affiliates have no remaining royalty payment
obligations for such Agreement Compound or Product in such country, unless
terminated earlier as provided in this Article 12. Following the expiration of
this Agreement pursuant to this Section 12.1, but not the earlier termination of
this Agreement pursuant to Section 12.2 or 12.3, with respect to an Agreement
Compound or Product in a country, TDCC shall have a nonexclusive license under
Symyx's interest in the Program Technology to make, have made, use, sell, offer
to sell and import such Agreement Compound or Product in such country.
12.2 Breach.
12.2.1 Termination of Agreement. Either party to this Agreement
may terminate this Agreement in the event the other party shall have materially
breached or defaulted in the performance of any of its material obligations
hereunder, and such default shall have continued for thirty (30) days after
written notice thereof was provided to the breaching party by the non-breaching
party. Any termination shall become effective at the end of such thirty (30) day
period unless the breaching party (or any other party on its behalf) has cured
any such material breach or default prior to the expiration of the thirty (30)
day period. In the event that TDCC has materially breached this Agreement solely
with respect to an Agreement Compound or Product within a specific Field, then
-26-
27
Symyx shall only be entitled to terminate this Agreement with respect to such
Field as a result of such breach. Any dispute as to whether or not a material
breach or default has occurred or has been timely cured shall be subject to
dispute resolution in accordance with Section 13.16.
12.2.2 Termination of Research Program for Breach. In the event
that Symyx shall have materially breached or defaulted in the performance of any
of its material obligations hereunder during the Research Program Term, and such
default shall have continued for thirty (30) days after written notice thereof
was provided to Symyx by TDCC, TDCC may elect to terminate the Research Program
and not the Agreement, upon written notice to Symyx clearly stating TDCC's
election. Any termination of the Research Program and not the Agreement shall
become effective at the end of such thirty (30) day period unless Symyx (or any
other party on its behalf) has cured any such breach or default prior to the
expiration of the thirty (30) day period or TDCC elects not to terminate the
Research Program. In the event that TDCC properly terminates the Research
Program and not the Agreement, TDCC shall have no further obligation to make the
payments otherwise due Symyx under Section 5.1 after the effective date of such
termination of the Research Program. In the event that Symyx has materially
breached or defaulted during the Research Program Term and TDCC has provided to
Symyx notice of such material breach or default, and of TDCC's intent to
terminate the Research Program if such material breach or default is not cured
within the applicable 30-day cure period, TDCC may, upon prior notice to Symyx,
suspend payments that would otherwise be due to Symyx under Section 5.1 during
such 30-day cure period; provided, however, that (i) TDCC shall only be entitled
to suspend payments as described herein one (1) time during the Research Program
Term; (ii) in the event the Research Program is terminated, TDCC shall have no
rights or license in or to Program Technology developed by Symyx during the
period for which such payments were suspended; and (iii) in the event that Symyx
cures such breach or default (or TDCC waives such breach or default) and the
Research Program is not terminated, TDCC shall pay to Symyx the full amount that
would have been due under Section 5.1 plus interest to be calculated as provided
in Section 6.2 within fifteen (15) business days of the earlier of (i) the date
such cure is notified to TDCC, (ii) the date of a waiver by TDCC, or (iii) the
end of the thirty (30) day cure period.
12.2.3 Other Remedies for Breach. It is understood that in the
event that a party has breached or defaulted in performance of any of its
obligations hereunder and such breach or default shall have continued for thirty
(30) days after written notice thereof was provided to the breaching party by
the non-breaching party, the non-breaching party may elect to seek such specific
performance and/or monetary damages or rescission as the non-breaching party may
be entitled at law or equity, if any, pursuant to Section 13.16.
12.3 Termination for Insolvency. If voluntary or involuntary proceedings
by or against a party are instituted in bankruptcy under any insolvency law, or
a receiver or custodian is appointed for such party, or proceedings are
instituted by or against such party for corporate reorganization, dissolution,
liquidation or winding-up of such party, which proceedings, if involuntary,
shall not have been dismissed within sixty (60) days after the date of filing,
or if such party makes an assignment for the benefit of creditors, or
substantially all of the assets of such party are seized or attached and not
released within sixty (60) days thereafter, the other party may immediately
-27-
28
terminate this Agreement effective upon notice of such termination or in the
event Symyx is involved in insolvency proceedings during the Research Program
Term, TDCC may elect to terminate the Research Program and not the Agreement
upon notice to Symyx.
12.4 [******]
12.5 Effect of Termination.
12.5.1 Accrued Rights and Obligations. Termination of this
Agreement for any reason shall not release either party hereto from any
liability or obligation which, at the time of such termination, has already
accrued to the other party or which is attributable to a period prior to such
termination nor preclude either party from pursuing any rights and remedies it
may have hereunder or at law or in equity with respect to any breach of this
Agreement.
12.5.2 Return of Confidential Information. Upon any termination
of this Agreement prior to fifteen (15) years from the Effective Date or
rescission of the Agreement pursuant to Section 12.2.4, TDCC and Symyx shall
promptly return to the other all Confidential Information received from the
other party (except one copy of which may be retained for archival purposes and
ensuring compliance with the provisions of Article 9).
12.5.3 Termination of the Research Program. In the event the
Research Program (and not the Agreement) is properly terminated by TDCC as
provided in Sections 2.9, 12.2.2, 12.3 or 12.4, earlier than three (3) years
after the Effective Date, TDCC shall have no further obligation to make the
payments otherwise due to Symyx under Section 5.1 following the effective date
of such termination. On request from TDCC, Symyx shall engage in an orderly
transfer to TDCC of information and data from the Program Technology developed
before the effective date of such termination. It is understood and agreed that
Symyx shall have the right, in its discretion, to continue research activities
in the Field, either on its own or with a Third Party, following any such
termination.
12.5.4 [******]
12.5.5 Licenses.
(i) Termination of Agreement by TDCC. In the event of
any termination of the Agreement by TDCC pursuant to Section 12.2.1 or 12.3, the
licenses granted by Symyx in Section 4.1 shall terminate. It is understood that
if Symyx has granted any permitted sublicense or license to a Third Party under
Section 4.4 prior to the effective date of such termination, then such
sublicense or license shall not be effected and shall continue in accordance
with its terms with revenues to be shared as if this Agreement remained in
effect.
(ii) Termination of Research Program But Not Agreement.
In the event TDCC terminates the Research Program and not the Agreement as set
forth in Section 2.9, 12.2.2, 12.3 or 12.4, then the licenses in Section 4.1,
sublicenses in Section 4.2 and rights in Joint Inventions under
-28-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
29
Section 4.4 shall remain in effect with respect to all Program Technology made,
or conceived and reduced to practice before the effective date of such
termination; provided, however, that (i) such licenses and rights shall not
include any interest or right in or to Program Technology (or other intellectual
property made, or conceived or reduced to practice by Symyx) after the effective
date of such termination, and (ii) Section 4.1.3 shall terminate on the
effective date of such termination.
(iii) Termination by Symyx. In the event of termination
by Symyx under Sections 12.2 or 12.3, the license set forth in Section 4.1 shall
terminate; provided, however, that if the breach relates solely to an Agreement
Compound or Product in a specific Field, then Symyx shall only terminate the
licenses to TDCC with respect to the Agreement Compounds and Products in such
Field, and the remaining licenses granted to TDCC and to Symyx hereunder shall
remain in effect, subject to all the terms and conditions of this Agreement. If
a party to this Agreement has granted any permitted sublicense or license to a
Third Party prior to the effective date of such termination, then such
sublicense or license shall not be effected and shall continue in accordance
with its terms with revenues to be shared as if this Agreement remained in
effect.
12.6 Survival. Sections 2.7, 4.3, 4.4, 4.5, 4.6, 5.5, 7.1, 12.5, 12.6,
13.1, 13.2, 13.5, 13.6, 13.10, 13.11, 13.16, and 13.17, and Articles 9 and 11 of
this Agreement shall survive the expiration or termination of this Agreement for
any reason. [******]
ARTICLE 13
MISCELLANEOUS
13.1 Governing Laws. This Agreement and any dispute arising from the
construction, performance or breach hereof shall be governed by and construed
and enforced in accordance with, the laws of the state of Delaware, without
reference to conflicts of laws principles.
13.2 No Implied Licenses. Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force or effect. No other
license rights shall be created by implication, estoppel or otherwise.
13.3 Waiver. It is agreed that no waiver by either party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
13.4 Assignment. This Agreement shall not be assignable by either party
to any Third Party without the written consent of the other party hereto, except
either party may assign this Agreement, without such consent, to an Affiliate or
to an entity that acquires all or substantially all of the business or assets of
the assigning party relating to the subject matter of this Agreement, whether by
merger, reorganization, acquisition, sale, or otherwise, subject to Section
12.4. This Agreement shall be binding upon and accrue to the benefit any
permitted assignee, and any such assignee shall agree to perform the obligation
of the assignor.
-29-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
30
13.5 Independent contractors. The relationship of the parties hereto is
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint ventures of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
13.6 Representation by Legal Counsel. Each party hereto represents that
it has been represented by legal counsel in connection with this Agreement and
acknowledges that it has participated in the drafting hereof. In interpreting
and applying the terms and provisions of this Agreement, the parties agree that
no presumption shall exist or be implied against the party which initially
drafted such terms and provisions.
13.7 Solicitation of Employees. TDCC and Symyx both agree that they will
not, during the Research Program Term, actively recruit or solicit employment of
any scientific or technical personnel of the other party involved in the
Research Program [******] . It is understood that the foregoing restriction
shall not apply to, or be breached by: (i) advertising open positions,
participating in job fairs, and conducting comparable activities to recruit
skilled or unskilled help from the general public, or responding to individuals
contacted through such methods, (ii) responding to unsolicited inquiries about
employment opportunities or possibilities from job placement agencies or other
agents acting for unidentified principals, or (iii) responding to unsolicited
inquiries about employment opportunities from any individual.
13.8 TDCC Affiliates. It is understood and agreed that TDCC may at its
sole discretion fulfill some or all of its obligations by or through its
Affiliates, and that TDCC may grant sublicenses under the Program Technology to
its Affiliates subject to the terms and conditions of this Agreement. TDCC
hereby warrants and guarantees the performance by its Affiliates of, and shall
remain jointly and severally liable for, all applicable obligations of its
Affiliates under this Agreement, including without limitation, the payment of
applicable royalties.
13.9 Compliance with Laws. In exercising their rights under this
license, the parties shall fully comply in all material respects with the
requirements of any and all applicable laws, regulations, rules and orders of
any governmental body having jurisdiction over the exercise of rights under this
license including, without limitation, those applicable to the discovery,
development, manufacture, distribution, import, use, export and sale of Products
or Agreement Compounds pursuant to this Agreement.
13.10 Export Control Regulations. The rights and obligations of the
parties under this Agreement, shall be subject in all respects to United States
laws and regulations as shall from time to time govern the license and delivery
of technology and products abroad, including the United States Foreign Assets
Control Regulations, Transaction Control Regulations and Export Control
Regulations, as amended, and any successor legislation issued by the Department
of Commerce, International Trade Administration, or Office of Export Licensing.
Without in any way limiting the provisions of this Agreement, each party hereto
agrees that, unless prior authorization is obtained from the Office of Export
Licensing, it shall not export, reexport, or transship, directly or indirectly,
to any country, any of the technical data disclosed to it by the other party if
such export would
-30-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
31
violate the laws of the United States or the regulations of any department or
agency of the United States Government. This provision shall survive termination
of this Agreement.
13.11 Headings. The captions to the several Sections hereof are not part
of this Agreement, but are included merely for convenience of reference and
shall not affect its meaning or interpretation.
13.12 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be hand delivered, or sent by express delivery
service with confirmation of receipt, or sent by registered or certified mail,
return receipt requested, postage prepaid, or by facsimile transmission (with
written confirmation copy by registered first-class mail), in each case to the
respective address or facsimile number indicated below.
Symyx: Symyx Technologies
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Attn: President & COO
Fax: (000) 000-0000
TDCC: The Dow Chemical Company
Xxxxxx Xxxxxxxxxx, 0000 Xxxxxxxx
Xxxxxxx, XX 00000
Attn: General Patent Counsel
Fax: (000) 000-0000
Any such notice shall be deemed to have been given when received. Either party
may change its address or facsimile number by giving the other party written
notice, delivered in accordance with this Section.
13.13 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect to
the fullest extent permitted by law without said provision, and the parties
shall amend the Agreement to the extent feasible to lawfully include the
substance of the excluded term to as fully as possible realize the intent of the
parties and their commercial bargain.
13.14 Force Majeure. Neither party shall lose any rights hereunder or be
liable to the other party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting party if the failure is
occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers, or
any other reason where failure to perform is beyond the reasonable control and
not caused by the negligence, intentional conduct or misconduct of the
non-performing party and such party has exerted all reasonable efforts to avoid
or remedy such force majeure; provided, however, that in no event shall a party
be required to settle any labor dispute or disturbance.
-31-
32
13.15 Complete Agreement. This Agreement with its Exhibits, constitutes
the entire agreement, both written and oral, between the parties with respect to
the subject matter hereof, and all prior agreements respecting the subject
matter hereof, either written or oral, express or implied, shall be abrogated,
canceled, and are null and void and of no effect, except that the Research Plan
shall have effect and information exchanged by the parties pursuant to the
Secrecy Agreement between the parties dated September 22, 1998 shall be deemed
to be Confidential Information under this Agreement. No amendment or change
hereof or addition hereto shall be effective or binding on either of the parties
hereto unless reduced to writing and executed by the respective duly authorized
representatives of Symyx and TDCC.
13.16 Dispute Resolution. Any dispute under this Agreement which is not
settled by mutual consent shall be finally settled by binding arbitration,
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association by three (3) neutral arbitrators appointed in accordance
with said rules, unless the parties agree to conduct such arbitration with a
single arbitrator. The arbitration shall be held in Wilmington, Delaware, and
the arbitrators shall be independent experts with a background suitable for the
matters in dispute. The arbitrators shall determine what discovery will be
permitted, consistent with the goal of limiting the cost and time which the
parties must expend for discovery; provided the arbitrators shall permit such
discovery as they deem necessary to permit an equitable resolution of the
dispute. Any written evidence originally in a language other than English shall
be submitted in English translation accompanied by the original and a true copy
thereof. The costs of arbitration, including administrative and arbitrators'
fees, shall be shared equally by the parties. Each party shall bear its own
costs and attorneys' and witness' fees. A disputed performance or suspended
performances pending the resolution of the arbitration must be completed within
thirty (30) days following the final decision of the arbitrators or such other
reasonable period as the arbitrators determine in a written opinion. Any
arbitration subject to this Section 13.16 shall be completed within one (1) year
from the filing of notice of a request for such arbitration. The award shall be
final and binding upon the parties hereto. Judgment upon any decision rendered
by the arbitrators may be entered by any court having jurisdiction.
13.17 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one and the same agreement.
-32-
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their authorized representatives and delivered in duplicate
originals as of the Effective Date.
THE DOW CHEMICAL COMPANY SYMYX TECHNOLOGIES
By: /s/ X. X. XXXXXXX By: /s/ XXX XXXXXXXXXX
------------------------------- ---------------------------------
X. X. Xxxxxxx
Title: Executive Vice President Title: President and COO
---------------------------- ------------------------------
Date: 2 February 1999 Date: 5 February 1999
----------------------------- -------------------------------
-33-
34
LIST OF EXHIBITS
Exhibit A: Scope of Field
Exhibit B: Procedure for Lead Compound Identification
Exhibit C: Company List
Exhibit D: Direct Chemical Modification
Exhibit E: List for Initial Chemistry FTEs
-34-
35
EXHIBIT A
SCOPE OF FIELD
THE FIELDS SHALL BE DEFINED AS (HEADINGS ARE FOR CONVENIENCE IN REFERENCE AND
ARE NOT INTENDED TO LIMIT THE DESCRIPTION):
[******]
-35-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
36
EXHIBIT B
PROCEDURE FOR LEAD COMPOUND IDENTIFICATION
1. At such time as Symyx has identified a Library Compound which it
believes may meet the established criteria for a Lead Compound in a particular
activated Field it shall provide the data and results supporting such conclusion
to the Research Committee. Examples of target criteria for Lead Compounds are
set forth in the Lead Compound Criteria Section of the Research Plan.
2. Following the identification of any potential Lead Compound, at
TDCC's request, Symyx shall prepare and deliver to TDCC reasonable gram
quantities of such potential Lead Compound, which TDCC shall use in confirming
whether such potential Lead Compound meets the applicable lead criteria. Symyx
will use commercially reasonable efforts to provide quantities in such amounts
as the Research Committee may determine is reasonably required by TDCC for
testing, and will notify TDCC if it is not commercially reasonable to provide
such quantities to TDCC, in which case the parties agree to meet and discuss how
to proceed with respect to such Lead Compound.
3. The Research Committee shall review the results provided by TDCC with
respect to a potential Lead Compound, and if the Research Committee determines
that such results indicate that the applicable lead criteria have been
satisfied, then such Library Compound shall be deemed to be a Lead Compound for
all purposes of this Agreement.
4. In the event that the Research Committee requests further information
or the conduct of further studies to confirm whether a potential Lead Compound
meets the applicable lead criteria, Symyx and TDCC shall use commercially
reasonable efforts to prepare any such information and conduct such studies.
-36-
37
EXHIBIT C
COMPANY LIST
[******]
-37-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
38
EXHIBIT D
DIRECT CHEMICAL MODIFICATION
[******]
-38-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
39
EXHIBIT E
LIST FOR INITIAL CHEMISTRY FTES
[******]
-39-
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
