EXHIBIT 10.42
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. (S)(S) 200.80(b) (4), 200.83 AND 240.24b-2
COLLABORATIVE DNA SEQUENCING AGREEMENT
BY AND BETWEEN
DIVERSA CORPORATION
AND
PE CORPORATION (NY), THROUGH ITS BUSINESS UNIT CELERA GENOMICS
TABLE OF CONTENTS
RECITALS 3
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1. DEFINITIONS 3
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2. CONTRACT SEQUENCING PROGRAM 7
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3. BIOSPHERE SEQUENCING PROGRAM 7
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4. MATERIALS AND DATA TRANSFER 9
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5. INTELLECTUAL PROPERTY 9
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6. PAYMENTS AND ROYALTIES 11
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7. CONFIDENTIALITY, PUBLICITY AND ANNOUNCEMENTS 13
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8. REPRESENTATIONS AND WARRANTIES 16
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9. DISCLAIMERS AND LIMITATION OF LIABILITY 19
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10. INDEMNITY 20
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11. DISPUTE RESOLUTION 21
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12. TERM AND TERMINATION 22
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13. MISCELLANEOUS 23
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EXHIBIT A - TRANFERS OF MATERIALS 27
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EXHIBIT B - WORK PLAN 28
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EXHIBIT C - MATERIALS TRANSER AGREEMENT 30
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2
COLLABORATIVE DNA SEQUENCING AGREEMENT
This Collaborative DNA Sequencing Agreement (the "Agreement"), effective as
of the 1st day of December, 2000 (the "Effective Date"), is made by and between
Diversa Corporation, a Delaware corporation ("Diversa"), having its principal
place of business at 0000 Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, and PE
Corporation (NY), a New York corporation, through the Celera Genomics Group
("Celera"), having a place of business at 00 Xxxx Xxxx Xxxxx, Xxxxxxxxx, XX
00000. Diversa and Celera are referred to herein individually as "Party" and
collectively as the "Parties."
RECITALS
WHEREAS, Diversa has discovered and developed genes and gene products and
has expertise in, among other things, the extraction and normalization of
deoxyribonucleic acid ("DNA") utilizing its proprietary technologies;
WHEREAS, Celera has developed rapid DNA sequencing techniques and has
expertise in the sequencing and analysis of the genomes of organisms; and
WHEREAS, Celera, subject to the terms and conditions herein, is willing to
sequence certain microbial genes and genomes for Diversa as set forth herein for
Diversa's internal product research and development and commercialization of
products derived from or identified or developed using the genes comprising such
genomes.
NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which the Parties hereby acknowledge, the Parties hereby agree as
follows:
1. DEFINITIONS
For purposes of this Agreement, each capitalized term used shall have the
meaning assigned to it in this Section:
1.1 "Adjustment Factor" shall mean a fraction less than one, with the numerator
equal to (a) [***] and with the denominator equal to (b) [***]. By way of
illustration, [***]. Notwithstanding the foregoing, the Joint Committee
[***].
1.2 "Affiliate" shall mean any corporation, firm, limited liability company,
partnership or other entity that directly or indirectly controls, is
controlled by or is under common control with a Party to this Agreement
(or, for purposes of Sections 1.10 and 1.19 only, a Diversa Partner).
Control for this purpose shall mean ownership, directly or through one or
more affiliated entities, of 50 percent (50%) or more of the shares of
stock entitled to vote for the election of directors in the case of a
corporation, or 50 percent (50%) or more of the equity interests in the
case of any other type of legal entity, or any other arrangement whereby a
Party (or, for purposes of Sections 1.10 and 1.19 only, a Diversa Partner)
controls or has the right to control the board of directors or equivalent
governing body of a corporation or other entity.
1.3 "Annotation Information" shall mean the information derived by analyzing
the Sequence Information to identify features associated with the
sequences, and the functional information resulting from such analysis,
including, but not limited to [***].
1.4 "Biosphere Sequencing Program" shall have the meaning set forth in Section
3.1.
1.5 "Celera Sequence Information" shall mean the respective, consensus, non-
redundant nucleotide sequences from nucleotide templates sequenced through
Celera's sequencing programs or obtained from other sources independently
of the Contract Sequencing Program and Biosphere Sequencing and shall not
include Sequence Information.
1.6 "Confidential Information" shall have the meaning set forth in Section 7.1.
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1.7 "Contract Sequencing Program" shall have the meaning set forth in Section
2.1.
1.8 "Defaulting Party" shall have the meaning set forth in Section 12.2.1.
1.9 "Disclosing Party" shall have the meaning set forth in Section 7.1.
1.10 "Diversa Partner" shall mean [***].
1.11 "Diversa Proprietary Genes" shall mean genes for which the sequences are
contained in Diversa's proprietary databases prior to Celera's delivery of
such associated Sequence Information to Diversa by Celera in accordance
with Section B(2) or B(5)(a), as applicable, of the Work Plan.
1.12 "DNA Evolver" shall have the meaning set forth in Section 3.6.1.
1.13 "Environmental Libraries" shall mean collections of the DNA clones from
the genomes of mixed, enriched or purified organisms obtained from the
environmental samples, which collections Diversa makes available to Celera
pursuant to Section 3.2.
1.14 "Gene Reassembly Process" shall mean [***].
1.15 "Gene Site Saturation Mutagenesis Process" shall mean [***].
1.16 "Improvements" shall have the meaning set forth in Section 4.1.1.
1.17 "Indemnitee" shall have the meaning set forth in Section 10.3.
1.18 "Indemnitor" shall have the meaning set forth in Section 10.3.
1.19 "Internal" and "Internally" shall mean by Diversa itself, by an Affiliate
controlled by Diversa, or by any Diversa Partner.
1.20 "Inventions" shall have the meaning set forth in Section 5.1.
1.21 "Joint Committee" shall have the meaning set forth in Section 3.5.
1.22 "Market Price" shall mean [***], as reasonably determined and agreed upon
by the Parties [***].
1.23 "Materials" shall mean the DNA of genes and/or whole genomes selected by
Diversa for sequencing, including, but not limited to, [***]and provided
to Celera for the Contract Sequencing Program and/or the Biosphere
Sequencing Program.
1.24 "Molecular Biology Enzyme" shall mean an enzyme that is both (a) [***],
and/or a gene encoding such an enzyme.
1.25 "Multiplier" shall mean, [***], a fraction less than one, with the
numerator equal to (a) [***] and the denominator equal to (b) [***]
1.26 "Net Sales" shall mean with respect to each given country, the invoiced
sales of Royalty Bearing Products by or on behalf of Diversa and its
Affiliates or the invoiced services, including, without limitation,
database subscriptions, by or on behalf of Celera and its Affiliates to
any Third Party (whether an end-user, a distributor or otherwise),
exclusive of inter-company transfers or sales to or from Affiliates, less
the following deductions only to the extent reasonable and customary, from
such gross amounts which are actually incurred:
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following deductions only to the extent reasonable and customary, from
such gross amounts which are actually incurred:
(a) credits or allowances actually granted for damaged products, returns
or rejections of product and retroactive price reductions;
(b) freight, postage, shipping, customs, duties and insurance charges;
(c) normal and customary trade, cash and quantity discounts, allowances
and credits;
(d) sales, value added or similar taxes measured by the billing amount,
when included in billing;
(e) charge back payments and rebates granted to managed health care
organizations or to federal, state and local governments, their
agencies, and purchasers and reimbursers or to trade customers;
(f) commissions paid to Third Parties other than sales personnel and
sales representatives or sales agents; and
(g) rebates (or equivalents thereof) granted to or charged by national,
state or local government authorities in countries other than the
United States and actually paid by the Party or its Affiliate in
accordance with the applicable laws, regulations or rules of such
countries.
If a Royalty Bearing Product or a service is sold in the form of a
combination product or service, Net Sales for such combination product
shall be calculated by multiplying actual Net Sales of such combination
product by the fraction A/(A+B) where: A is the invoice price of the
Royalty Bearing Product or the service contained in the combination
product if sold separately by the Party or its Affiliate; and B is the
invoice price of any other active component or components in the
combination product if sold separately by such Party or its Affiliate. If
the Royalty Bearing Product or the service is sold in the form of a
combination product for which the Net Sales cannot reasonably be
calculated using such formula, then the Net Sales for purposes of
determining royalty payments shall be negotiated in good faith and agreed
upon in writing by the Parties based on the relative value contributed by
each component.
1.27 "Non Defaulting Party" shall have the meaning set forth in Section 12.2.1.
1.28 "Notice of Default" shall have the meaning set forth in Section 12.2.1.
1.29 "PE Primary Enzymes" shall mean enzymes within one of the following
classes:
(a) [***]
(b) [***]
(c) [***]
1.30 "PE Secondary Enzymes" shall mean enzymes within one of the following
classes:
(a) [***]
(b) [***]
(c) [***]
(d) [***]
(e) [***]
1.31 "Performance Default" shall have the meaning set forth in Section 12.2.1.
1.32 "Receiving Party" shall have the meaning set forth in Section 7.1.
1.33 "Representation Default" shall have the meaning set forth in Section
12.2.1.
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1.34 "Royalty Base" shall mean, without counting the same amount received by
Diversa under more than one (1) of the sections below, but including all
payments received in any manner or form for a particular Royalty-Bearing
Product, the sum of the following:
1.34.1 Diversa's Net Sales actually received, which amount shall include
for Net Sales attributable to Affiliates only the amount of Net
Sales equal to Diversa's ownership interest in such Affiliates;
1.34.2 with respect to Third Parties to whom Diversa has licensed or
otherwise conveyed rights to sell Royalty-Bearing Products, the
amount, if any, of royalties from sales of Royalty-Bearing
Products to which Diversa is entitled and which Diversa has
actually received; and
1.34.3 the amount of any (a) [***], (b) [***] and (c) [***]; provided,
however, for any such [***], and/or [***] that are based on or
attributable to Royalty Bearing Products and technology or
products other than Royalty Bearing Products, Diversa shall
determine, in its good faith and using commercially reasonable
efforts, the portion of such [***] attributable to items included
in clauses (a), (b) and (c) of this Section 1.34.3.
For purposes of determining the amounts included in the Royalty
Base above, any non-cash consideration shall be assigned a value
by Diversa in good faith, and if external market data for
substantially similar types of consideration are readily
available, the value of such non-cash consideration shall be
determined by reference to such market data, as reasonably
adjusted by Diversa for relevant differences between the types of
consideration.
1.35 "Royalty-Bearing Products" shall mean those articles, substances and
services comprised, in whole or in part, of or derived from any gene
product expressed by Sequence Information or developed using Sequence
Information and Annotation Information generated as part of the Biosphere
Sequencing Program and that may include, without being limited to, [***];
provided, however, that Royalty-Bearing Products shall not include such
articles, substances and services comprised, in whole or in part, of or
derived from (a) [***] or (b) [***]. Notwithstanding the foregoing, the
term "Royalty-Bearing Products" shall not include any product or service
discovered or developed by a Party independently of the Sequence
Information and Annotation Information generated as part of the Biosphere
Sequencing Program, as demonstrated by written documentation reasonably
satisfactory to the other Party; provided, however, that if a gene
sequence corresponding to such Sequence Information is [***] any gene
sequence identified by Diversa as a result shall also not be deemed to be
a "Royalty-Bearing Product."
1.36 "S. diversa" shall mean Streptomyces diversa, the various strains
comprising approximately [***] genomes transferred by Diversa to Celera
under the Contract Sequencing Program.
1.37 "Sequence Information" shall mean the respective consensus, non-redundant
nucleotide sequences from nucleotide templates created from Materials and
sequenced and assembled by Celera pursuant to this Agreement and in
accordance with the Work Plan.
1.38 "Term" shall have the meaning set forth in Section 12.1.
1.39 "Third Party" shall mean any individual, partnership, joint venture,
corporation, trust, estate, unincorporated organization, government or any
department or agency thereof, or any other entity other than Diversa or
Celera or an Affiliate of Diversa or Celera.
1.40 "Third Party Biosphere Sequencing Agreement" shall have the meaning set
forth in Section 3.5.1.
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1.41 "Trimmed Primary Sequence" shall mean Sequence Information from a single
sequencing reaction run on an automated DNA sequencer and [***], unless
and to the extent each member of the Joint Committee agrees in writing to
a [***].
1.42 "Work Plan" shall mean the summary of the activities and schedule for
conducting such activities, as amended from time to time in writing by the
Joint Committee, which summary and all amendments thereto are attached to
this Agreement as Exhibit B.
2. CONTRACT SEQUENCING PROGRAM
2.1 Contract Sequencing Program; Ceiling DNA Amount. Subject to the terms and
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conditions of this Agreement, during the Term, Celera shall sequence and
annotate up to [***] per year of Materials ("Contract Sequencing Program"),
unless otherwise agreed in writing by the Parties. Diversa, in its sole
discretion, in accordance with the Work Plan, shall select the Materials to
be provided to Celera and the number of base pairs of DNA to be sequenced
by Celera; provided, however:
2.1.1 Right of First Refusal. Celera shall have a right of first refusal
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to sequence and annotate up to [***] of DNA from Materials per year
(under the terms and conditions in this Agreement) on any such
project(s) that Diversa chooses not to perform Internally.
Notwithstanding anything to the contrary contained herein, Diversa
shall have an unrestricted right to perform such sequencing and
annotation work Internally; and
2.1.2 Initial S. Diversa Sequencing Project. As soon as practicable after
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the later of the Effective Date or Celera's receipt of S. diversa,
Celera shall sequence and annotate S. diversa in accordance with the
Work Plan.
3. BIOSPHERE SEQUENCING PROGRAM
3.1 Environmental Materials. During the Term, Diversa shall provide to Celera
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for sequencing and annotation at least [***] unique sets of Materials
chosen by the Joint Committee, each from a different environment or
organism ("Biosphere Sequencing Program"). Diversa shall have negotiated
ownership or license rights to all genes, pathways and biomolecules derived
from the environmental samples provided as part of the Biosphere Sequencing
Program sufficient to permit Celera to sequence the DNA from such
Materials.
3.2 Environmental Libraries. Subject to the terms of Section 3.3 below,
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Diversa shall make available to Celera, as determined by the Joint
Committee, Diversa's normalized, diversity-indexed Environmental Libraries
of Materials optimized for biosphere sequencing.
3.3 Estimated Sequencing Efforts. During the [***] after the Effective Date,
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Diversa shall provide Celera, and Celera shall sequence, assemble and
annotate, a minimum of [***] of DNA sequence base pairs in Trimmed Primary
Sequence from the Environmental Libraries and deliver the results in
accordance with the Work Plan(s) associated with the Biosphere Sequencing
Program. During each of the [***] years of the Term, Celera shall
sequence, assemble and annotate an estimated [***] of DNA from the
Environmental Libraries (as further determined by the Joint Committee) and
deliver the results in accordance with the Work Plan(s) associated with the
Biosphere Sequencing Program and the terms herein.
3.4 Product Applications Development. Diversa, either itself or through
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collaborators, shall be responsible for and diligent in providing product
applications development and marketing infrastructure for the sales and
licensing of Royalty-Bearing Products. Diversa shall use sequenced genes
for Diversa's internal research and development or in bona fide
collaborations for the development of Royalty-Bearing Products.
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3.5 Joint Committee. Diversa and Celera hereby agree to establish a joint
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committee (the "Joint Committee") to oversee the Biosphere Sequencing
Program. The Joint Committee shall be responsible for approving and
modifying the Work Plan(s) associated with the Biosphere Sequencing
Program, determining the sequencing and assembly methods to be used as part
of such Work Plan(s), and assessing the sequencing needs, time frame and
work prioritization related to the Biosphere Sequencing Program hereunder.
3.5.1 Membership. Diversa and Celera each shall appoint, in its sole
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discretion, [***] members to the Joint Committee. One of Diversa's
committee members shall be designated as Joint Committee Chairperson
with Celera's approval, such approval not to be unreasonably
withheld. The initial Joint Committee members shall be appointed as
soon as practicable, but no later than thirty (30) days after the
Effective Date. Each Party shall provide the other Party with the
names and contact information for its committee members. All Joint
Committee members shall be full time employees of Diversa or Celera.
3.5.2 Meetings. The Joint Committee shall meet as needed, but no less
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than once per quarter. Such meetings shall be at reasonable times
and shall alternate between the Parties' facilities. The first such
meeting shall be held within thirty (30) days after the Effective
Date. Any additional meetings, other than quarterly meetings, shall
be held at places and on dates selected by the Joint Committee
Chairperson. Joint Committee members may participate in any such
meeting in person, by telephone or by videoconference. In addition,
the Joint Committee may act without a formal meeting by a written
memorandum signed and agreed to by the majority of the Joint
Committee. Subject to the obligations set forth in Section 7, other
employees and consultants of each Party, in addition to the members
of the Joint Committee, may attend and participate as appropriate in
the Joint Committee meetings as non-voting observers at the
invitation of either Party with the prior approval of the other
Party; provided, however, such employees and consultants shall be
under confidentiality obligations to that Party having terms at
least a strict as those of this Agreement, and such consultants'
work must relate directly to work performed under this Agreement.
3.5.3 Minutes. The Joint Committee shall keep minutes of its meetings
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that record all decisions and all actions recommended or taken. The
Party hosting the meeting shall be responsible for the preparation
of the meeting agenda, and the Joint Committee Chairperson shall be
responsible for arranging the preparation and circulation of the
draft minutes. Draft minutes shall be delivered by mail, electronic
mail or facsimile to each Joint Committee member within thirty (30)
days after each meeting. Draft minutes shall be edited by the Joint
Committee Chairperson and shall be issued in final form only after
approval by the Joint Committee or after obtaining signatures from
the majority of the members of the Joint Committee. A copy of the
approved minutes shall be retained in each Party's files for at
least five (5) years after termination of this Agreement.
3.5.4 Quorum; Voting Decisions. At each Joint Committee meeting, if all
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of the members of the Joint Committee are present, decisions shall
be made by majority vote. In the event that all members are not
present, at least [***] members appointed by each Party shall
constitute a quorum and decisions shall be made by unanimous vote.
If the Joint Committee is unable to reach agreement on any matter,
such dispute shall be settled pursuant to Section 11.
3.5.5 Expenses. Diversa and Celera shall each bear all expenses of its
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respective Joint Committee members related to the members'
participation on the Joint Committee and attendance at Joint
Committee meetings.
3.6 [***] Arrangements.
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3.6.1 During the [***] after the Effective Date, Celera shall not [***].
For each [***] after the [***] anniversary of the Effective Date
through the end of the Term that [***]. In addition, for each [***]
period after the [***] anniversary of the Effective Date through the
end of the Term that [***].
3.6.2 [***]
(a) In the event that [***]. Notwithstanding anything to the
contrary contained herein, Diversa shall have an unrestricted
right to perform DNA sequencing activities Internally,
including, but not limited to, Internal research involving
discovery by DNA sequencing.
(b) In addition, provided that [***]:
i. Diversa shall [***];
ii. [***];
iii. In the event that Diversa [***], Diversa, within
[***], shall [***];
iv. [***];
v. In the event that [***], Diversa [***] shall, during
the [***], consistent with the terms of clause ii.
above;
vi. If [***], has notified Diversa in writing that [***]
under clause ii above, or [***], Diversa [***], then
Diversa shall [***].
Notwithstanding the foregoing or anything contained herein
to the contrary, Diversa shall [***]. In the event that
[***], Diversa shall [***], pursuant to the terms of this
Section 3.6.2(b), [***].
3.6.3 In the event that Diversa [***], and as part of such [***], the
[***], Diversa shall (a) provide Celera with the information
reasonably required to [***] and (b) negotiate with Celera in good
faith [***]. Notwithstanding anything contained herein to the
contrary, in no event shall (i) [***] or (ii) [***], be included in
the Royalty Base or be subject to any payment obligation to Celera
hereunder.
3.6.4 Subject to the terms and conditions contained herein, both Parties
shall be free to enter into collaborations or other agreements with
Third Parties that [***].
3.6.5 Status Meeting. Representatives of Diversa and Celera shall meet on
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or about each anniversary date of the Effective Date to evaluate the
[***] hereunder. Either Party shall have the right to terminate all
(but not fewer than all) [***] of each anniversary date. Such
termination shall be effective upon receipt of written notice by the
other Party.
4. MATERIALS AND DATA TRANSFER
4.1 Transfer of Materials.
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4.1.1 Diversa shall transfer Materials to Celera and, upon receipt, Celera
shall use such Materials, and any and all modifications, derivatives
and progeny thereof ("Improvements") only to meet its obligations
under this Agreement, except as otherwise provided herein or agreed
in writing by the Parties. Any such transfers of Materials shall be
described in writing and attached as an addendum to Exhibit A.
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4.1.2 Celera acknowledges that any transfer of Materials shall be neither
a sale nor an offer to sell such Materials. Other than as permitted
in this Agreement or with Diversa's prior written consent, Celera
shall not distribute the Materials to any Third Party, except
Affiliates and subsidiaries of Celera.
4.1.3 Celera shall restrict access to Materials only to those persons with
a need to know and work with such Materials.
4.3 Celera acknowledges that any data and Materials delivered hereunder by
Diversa are experimental in nature, are for laboratory research use only,
and have not been approved for diagnostic or therapeutic use in humans or
animals. Celera shall not use Materials in in-vivo research in animals or
humans, or in animal or human diagnostic, therapeutic or other direct
clinical applications that would require regulatory approval or clearance.
4.4 All such data and Materials are provided without warranties, and Diversa
shall accept no liability in connection with their use, storage and
disposal by Celera. Notwithstanding the foregoing, Diversa shall make a
reasonable effort to notify Celera immediately of any hazardous
characteristics that are known, or become known to Diversa.
4.5 Return/Destruction of Materials. Upon termination or expiration of this
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Agreement, Celera shall destroy , or, at Diversa's request and expense,
return to Diversa all residual Materials (exclusive of those clones
distributed pursuant to Section 5.2.2). In the event that Diversa requests
Celera to return any and/or all residual Materials, Diversa shall provide
written notice to Celera within sixty (60) days after receiving the
Sequence Information and Annotation Information from the Materials.
5. INTELLECTUAL PROPERTY
5.1 Diversa Rights and Intellectual Property. Diversa shall own all right,
-----------------------------------------
title and interest in and to Sequence Information, all Annotation
Information, all Material, all genes, gene pathways and biomolecules
encoded by or related to such Sequence Information, Annotation Information,
and Material and all applications thereof that are identified or developed
under this Agreement and all inventions conceived of or reduced to practice
by Diversa (collectively, "Inventions"). Except for the rights
specifically granted to or retained by Celera hereunder, Celera irrevocably
assigns to Diversa any rights it may have in the foregoing, and if such
rights cannot be assigned, grants to Diversa an exclusive, irrevocable,
perpetual, worldwide, fully-paid license, with right to sublicense through
multiple tiers of sublicense, to such rights.
5.1.1 Subject to Section 5.5, products identified or developed using any
Sequence Information generated under the Contract Sequencing Program
[***].
5.2 Celera Rights.
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5.2.1 Celera Database. Notwithstanding anything to the contrary contained
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herein, on the earlier of (a) [***] after Celera has delivered to
Diversa under Section B(5)(c) of the Work Plan the Sequence
Information and Annotation Information or (b) the date Diversa
notifies Celera in writing that Diversa does not intend to include
such data and information in a patent application, [***]. However,
[***]. Nothing in this Agreement is intended or shall be interpreted
as granting to Diversa or any Third Party any right or interest in
any of Celera's databases.
5.2.2 [***] Celera shall not be authorized to agree to modifications to
such materials transfer agreement without the prior written consent
of Diversa, which may be given or withheld in Diversa's sole and
absolute discretion.
5.3 License for Environmental Libraries. Diversa, subject to the terms and
------------------------------------
conditions in this Agreement, hereby grants to Celera a nonexclusive,
worldwide, fully paid license to use, access and analyze Diversa's
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Environmental Libraries solely for Celera's use in meeting its obligations
under the Biosphere Sequencing Program.
5.4 Patent Responsibilities. Each Party will be responsible for filing,
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prosecuting, maintaining, defending and enforcing any patent applications,
patents and other intellectual property rights owned by such Party.
Although the Parties do not anticipate that they will jointly discover or
develop an invention other than an Invention, in the event that they do,
Diversa shall file, prosecute and maintain all such patents and patent
applications claiming such inventions and keep Celera fully and timely
informed of such patents and patent applications. The Parties shall share
the costs equally. In the event that either Party desires to abandon or
decline responsibility for any patent application, patent or other
intellectual property right arising out of this Agreement, such Party shall
provide reasonable prior written notice to the other Party of such
intention to abandon or decline responsibility, and the other Party shall
have the right, at its own expense, to file, prosecute, and maintain such
patent application, patent or other intellectual property right.
5.4.1 Diversa shall notify Celera within [***] after filing a patent
application or taking such other actions to protect the Sequence
Information. In the event that, in the [***] following each delivery
of Sequence Information by Celera to Diversa, Diversa decides not to
file, prosecute and/or maintain any patent application, patent or
other intellectual property protection claiming such Sequence
Information or other proprietary result or product arising out of
the results or work from this Agreement, Diversa shall provide
timely written notice, and transfer right, title and interest in and
to such Sequence Information or proprietary result, to Celera
sufficient to enable Celera to file, prosecute, maintain and enforce
such patent application, patent or other intellectual property
right.
5.4.2 At Celera's written request and expense, Diversa shall provide to
Celera a copy of each patent application claiming any Sequence
Information and Annotation Information from the Biosphere Sequencing
Program.
5.5 Prior Patents.
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5.5.1 Notwithstanding anything contained herein to the contrary, in no
event shall Diversa obtain any right, title, or interest in or to
any part of the Sequence Information and Annotation Information
delivered under the Work Plan that is included in a patent issued
to, or patent application filed by, Celera, (a) prior to Diversa's
delivery to Celera of the Materials from which such Sequence
Information was developed or (b) independently of this Agreement.
5.5.2 Notwithstanding anything contained herein to the contrary, in no
event shall Celera obtain any right, title, or interest in or to any
part of the Sequence Information and Annotation Information
delivered under the Work Plan that is included in a patent issued
to, or patent application filed by, Diversa, (a) prior to Celera's
delivery to Diversa of such Sequence Information or (b)
independently of this Agreement.
5.5.3 Nothing in this Agreement is intended or shall be interpreted as
granting to Diversa or any Third Party any right or interest in any
intellectual property (a) invented, discovered, developed, or
otherwise created independent of this Agreement by any business unit
or affiliate of PE Corporation (NY) other than the Celera Genomics
business unit or (b) acquired or licensed by PE Corporation (NY)
independent of this Agreement through or for the benefit of any
business unit or affiliate of PE Corporation (NY) other than solely
for the Celera Genomics business unit.
6. PAYMENTS AND ROYALTIES
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*CONFIDENTIAL TREATMENT REQUESTED
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6.1 Contract Sequencing Program. For the DNA sequencing under the Contract
----------------------------
Sequencing Program as specified in the Work Plan, Diversa shall pay to
Celera (a) [***] and (b) [***].
6.2 Biosphere Sequencing Program.
-----------------------------
6.2.1 Diversa shall pay Celera, (a) [***], subject to Section 6.2.2, or
(b) for any part of the Sequence Information delivered to Diversa
pursuant to the Biosphere Sequencing Program that corresponds to
[***]. If, at the end of [***] following the Effective Date, Diversa
has not provided Celera with [***], Celera shall be entitled to
invoice Diversa for the balance due to Celera [***].
6.2.2 Change in Market Price. In the event that [***] decreases to [***]
-----------------------
or less, then, notwithstanding Section 6.2.1 above, Diversa shall
notify Celera in writing and pay to Celera [***]. The new price
reflecting the decrease in Market Price shall be prospective and
apply to specific organisms, and no refunds or credits with respect
to prior payments or invoices shall be granted.
6.3 Celera Databases. In accordance with Section 6.6, for [***] from the
-----------------
Effective Date, Celera shall pay Diversa (a) [***], and, (b) [***].
6.4 Royalties on the Royalty Base. In accordance with Section 6.6, for [***]
------------------------------
from the Effective Date, Diversa shall pay to Celera:
6.4.1 a royalty of [***] on the first [***];
6.4.2 With respect to the amount of the Royalty Base in excess of [***], a
royalty of [***].
6.4.3 In the event that Diversa is obligated to pay royalties to Third
Parties on amounts included within the Royalty Base, the Parties
agree that the royalty rate used to determine the royalties owed by
Diversa to Celera in Section 6.4.2 above shall be reduced by [***]
of such Third Party royalties (and reduced proportionately for Third
Party royalties of less than [***]) and additionally by [***] of any
Third Party royalties in excess of [***]. Notwithstanding the
foregoing, the minimum royalty paid to Celera by Diversa shall be no
less than [***]. The following table illustrates the intended
application of the foregoing paragraph (assuming that [***], that
[***], and that [***]):
[***]
6.5 Taxes. All amounts payable under this Agreement are exclusive of all
------
sales, use, value-added, withholding, and other taxes and duties. Diversa
shall pay all taxes and duties assessed in connection with this Agreement
and its performance by any authority within or outside of the U.S., except
for taxes payable on Celera's revenue or income.
6.6 Manner of Payment; Statements. Each Party shall make all payments to the
------------------------------
other Party under this Agreement in United States dollars in accordance
with the terms in this Section, which terms may be amended from time to
time by the Parties.
6.6.1 Non-Royalty Payments by Diversa to Celera. Within ten (10) days
--------------------------------------------
following Celera's delivery to Diversa of the data in Section
A(5)(a) or B(5)(a) of the Work Plan and Diversa's receipt of an
invoice from Celera referencing (a) this Agreement, (b) the
program(s) pursuant to which such sequencing was conducted, (c) the
rate per Trimmed Primary Sequence applicable to the DNA sequenced,
and (d) the number of Trimmed Primary Sequences obtained from the
Material (other reasonable information will be supplied separately
as agreed by the Parties), Diversa shall pay Celera at the rate
specified in Section 6.1 or Section 6.2, as applicable. In the
aforementioned invoice or a separate document, Celera shall use
reasonable efforts to notify Diversa of the specific
_________________________
*CONFIDENTIAL TREATMENT REQUESTED
12
Material that is the subject of the invoice. Diversa shall make all
payments to Celera by bank wire transfer in immediately available
funds as follows, or as otherwise specified in writing:
[***]
6.6.2 Royalty Payments. All royalties payable by one Party to the other
-----------------
Party under this Article 6 shall be paid [***] on a country-by-
country basis. Each Party shall submit to the other Party [***] of
this Agreement, a dated statement showing, among other things:
(a) In the case of Diversa, the amount of each of the separate
items included within the definition of the term "Royalty Base"
for the calendar year; and
(b) In the case of Celera, the amounts of [***] for the calendar
year pursuant to Section 6.3 above.
6.7 Exchange Rates. The rate of exchange to be used in calculating the amount
---------------
of currency equivalent in United States Dollars for royalties payable
hereunder shall be the exchange rate on the last business day in the
calendar month, as published in the New York edition of the Wall Street
Journal, preceding the calendar month when the Royalty Base amounts or Net
Sales amounts (as applicable) are generated. In the event that such
publication no longer publishes such rates, another financial publication
agreed on by the Parties shall be substituted or one shall be chosen by an
investment banker/analyst agreed on by the Parties.
6.8 Late Payments. In the event that any payment due hereunder is not made
--------------
when due, the payment shall accrue interest from that date due at the rate
of [***] over the prime rate of interest per month as quoted by Citibank,
N.A., New York, New York; provided however, that in no event shall such
rate exceed the maximum legal annual interest rate. The payment of such
interest shall not limit either Party from exercising any other rights it
may have as a consequence of the lateness of any payment.
6.9 Examination of Records. Each Party shall keep for a period covering at
----------------------
least the preceding [***] records pertaining to the development and sale or
other disposition of products and services pursuant to this Agreement
sufficient for the other Party to confirm the accuracy of all payments due
hereunder. Each Party shall have the right to appoint an independent,
certified public accountant reasonably acceptable to the other Party (such
acceptance, not to be unreasonably withheld) examine such records for the
purpose of verifying any amounts payable, or information provided, under
this Agreement, provided that such accountant has entered into a
confidentiality agreement with the Party that contains confidentiality
provisions substantially similarly restrictive on such agent as the terms
of this Agreement and also limiting the use and disclosure of such
information to purposes germane hereto. Such audits may be exercised
during normal business hours upon reasonable prior written notice to the
Party being examined and the accountant shall provide only the results of
such audit and shall not disclose to any of the other Party's Confidential
Information provided to it or to which it may have had access during the
conduct of the audit. Prompt adjustments shall be made by the Parties to
reflect the results of such examination. The Party requesting such
examination shall bear the full cost of such examination, unless such
examination discloses a variance of more than [***] from the amounts
actually due, in which case the Party being examined shall bear the full
cost of such examination.
7. CONFIDENTIALITY, PUBLICITY AND ANNOUNCEMENTS
7.1 Definition of Confidential Information. "Confidential Information" shall
---------------------------------------
mean all non-public technical and business information, whether
electronically, orally or in writing, furnished by either Party (the
"Disclosing Party") to the other Party (the "Receiving Party") in
connection with this Agreement. Such Confidential Information shall
include, without limitation, the existence and terms of this Agreement, the
identity of a microbial species whose genome has been sequenced or is being
sequenced, any gene or gene sequence
_______________________
*CONFIDENTIAL TREATMENT REQUESTED
13
encoding an enzyme or other gene product, any such enzyme or other gene
product, the use of any such enzyme or other gene product, trade secrets,
know-how, inventions, technical data or specifications, testing methods,
business or financial information, research and development activities,
product and marketing plans, and customer and supplier information,
invention disclosures, patent disclosures, patent applications, structures,
models, techniques, processes, compositions, compounds, biological samples,
and the like, and 7.2 bioinformatics methods, hardware configurations and
software in various stages of development or any software product (source
code, object code or otherwise), including its audiovisual components
(menus, screens, structure and organization) and any human or machine
readable form of the program, and any writing or medium in which the
program or information therein is stored, written or described, including,
without limitation, diagrams, flow charts, designs, drawings,
specifications, models, data, bug reports, and such items that become known
to a Party during visits to the facilities of the other Party.
7.2 Obligations. The Parties agree that they shall take all reasonable measures
------------
to protect the secrecy of and avoid disclosure and unauthorized use of the
Confidential Information. Without limiting the foregoing, the Parties
shall take at least those measures that each takes to protect its own
confidential information of a similar nature, but in no event less than a
reasonable degree of care. Both Parties shall immediately notify the other
in the event either Party has knowledge of any unauthorized use or
disclosure of the Confidential Information. Except as otherwise authorized
in this Agreement, the Parties further agree that the Receiving Party shall
keep confidential and shall not publish or otherwise disclose, and shall
not use for any purpose, any Confidential Information furnished to it by
the Disclosing Party pursuant to this Agreement, regardless of the medium
on which it is provided, including know-how.
7.3 Exceptions. The obligations of the Receiving Party under Section 7.2 shall
-----------
not apply to any specific Confidential Information to the extent that the
Receiving Party can demonstrate by competent proof that such Confidential
Information:
(a) Was generally known to the public or otherwise part of the public
domain prior to the time of its disclosure under this Agreement;
(b) Entered the public domain after the time of its disclosure under this
Agreement through means other than an unauthorized disclosure
resulting from an act or omission by the Receiving Party or its
directors, officers, employees, consultants, advisors or agents;
(c) Was or is independently developed or discovered by the Receiving Party
without use of the Confidential Information, and which can be
demonstrated by written record created at the time of such independent
discovery or development;
(d) Was already known to the Receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the
Disclosing Party; or
(e) Is or was disclosed to the Receiving Party at any time, whether prior
to or after the time of its disclosure under this Agreement, by a
Third Party having no fiduciary relationship with the Disclosing Party
and having no obligation of confidentiality to the Disclosing Party
with respect to such Confidential Information.
7.4 Permitted Disclosure.
---------------------
7.4.1 Subject to Section 7.2, the Receiving Party may disclose the
Disclosing Party's Confidential Information only to the extent such
disclosure is required for (a) filing or prosecuting patent
applications and maintaining patents and (b) filing or maintaining
regulatory applications or approvals.
7.4.2 Notwithstanding the obligations in Section 7.2, the Receiving Party
may disclose the Disclosing Party's Confidential Information in (a)
establishing rights or enforcing obligations under this Agreement;
or (b) complying with applicable laws, regulations, and/or court or
administrative
14
orders (such as disclosure to the SEC, the EPA, the FDA, or the
United States Patent and Trademark Office or to their foreign
equivalents); provided however, that in each case described herein
if a Receiving Party shall be required to make any disclosure of the
Disclosing Party's Confidential Information under this Section
7.4.2, it will (i) give twenty-four (24) hours advance notice to the
Disclosing Party of such disclosure requirement; (ii) provide a copy
of the proposed disclosure; and (iii) use commercially reasonable
efforts in assisting the Disclosing Party to secure confidential
treatment of such Confidential Information required to be disclosed,
including cooperating with the other to obtain a protective order
for the Disclosing Party's Confidential Information.
7.4.3 The Receiving Party further may disclose the Disclosing Party's
Confidential Information only to the Receiving Party's employees,
contractors, consultants, licensees or collaborators who (i) have a
need-to-know and (ii) are under contract not to disclose or use
Confidential Information and such disclosure is only in the context
of the Receiving Party's own scientific results.
7.5 Copies. A Receiving Party shall not make any copies of the Disclosing
-------
Party's Confidential Information without the prior written approval of the
Disclosing Party except as is reasonably necessary for the Receiving
Party's internal research and development. Notwithstanding the foregoing,
the Receiving Party may retain one (1) copy of the Disclosing Party's
Confidential Information for legal archival purposes.
7.6 Publication & Database Rights.
------------------------------
7.6.1 Publication of DNA Sequence Information. Notwithstanding Section
----------------------------------------
7.2, Celera and Diversa shall have the right to jointly publish any
and all Sequence Information generated under the Biosphere
Sequencing Program immediately following one Party's filing of, or
both Parties' decision not to file, a patent application covering
all such Sequence Information to be published. Any such publications
shall indicate Celera and Diversa as co-authors or give appropriate
scientific attribution to each Party, as appropriate and as
determined by the Joint Committee. Celera further shall have the
right to publish Sequence Information provided that it gives Diversa
reasonable notice prior to publication that enables Diversa to
pursue protection of its Confidential Information and provided the
Joint Committee has determined the appropriate authorship and/or
scientific attribution to be given to Diversa. The Parties agree
that the addition of the Sequence Information to a Celera database
shall not constitute a publication.
7.6.2 Disclosure for Scientific Publication/Presentation. Notwithstanding
---------------------------------------------------
Section 7.2, either Party may publish scientific results of its work
pursuant to this Agreement; provided, however, that:
(a) at least thirty (30) days prior to submission for any
publication of any document, slides, lecture, and/or any other
method of publishing that will disclose the other Party's
Confidential Information not disclosable under this Section 7,
the Party shall provide a copy of such publication to the other
Party for the other Party's prior review, comment and written
consent, such consent not to be unreasonably withheld. The
other Party, at its discretion, may remove its Confidential
Information or consent to such disclosure of Confidential
Information; provided, however, that in no event shall the
other Party delay any such planned disclosure beyond the thirty
(30) day period. If the other Party has not removed the
Confidential Information and/or responded to the Party's
request for written consent within thirty (30) days of the
other Party's receipt of the copy, such planned disclosure
shall be deemed approved by the other Party. Each Party agrees
that the other Party may keep a copy of such disclosure for its
records. Each Party further agrees that within forty-eight (48)
hours of receiving notice from the publisher of publisher's
intent to release the publication, such Party will advise the
other Party of such publication, the planned publication date,
and furnish a final copy of the publication; and
15
(b) each Party further agrees to include in any publication or
presentation resulting from its work or the information
developed under this Agreement appropriate scientific
attribution to the other Party.
7.7 Joint Press Release. Notwithstanding Section 7.2, Diversa and Celera
--------------------
shall issue a joint press release announcing the execution of this
Agreement and completion of research under this Agreement, with the text of
such press release(s) mutually agreed to in writing in advance of issuance.
8. REPRESENTATIONS AND WARRANTIES
8.1 Organization; Good Standing. Each Party hereby represents to the
----------------------------
other Party on the Effective Date and thereafter throughout the Term that,
to the best of its knowledge, it (a) is a corporation duly organized,
validly existing, (b) is in good standing under the laws of the
jurisdiction of its incorporation, (c) is qualified to do business and in
good standing in each jurisdiction in which the performance of its
obligations hereunder requires such qualification and (d) has all requisite
power and authority, corporate or otherwise, and the legal right to conduct
its business as now being conducted, to own, lease and operate its
properties and to execute, deliver and perform under this Agreement.
8.2 Binding Obligation; Due Authorization; No Conflict. Each Party hereby
---------------------------------------------------
represents to the other Party on the Effective Date and thereafter
throughout the Term that, to the best of its knowledge, this Agreement is a
legal and valid obligation binding upon its execution and enforceable in
accordance with its terms and conditions. The execution, delivery and
performance of this Agreement by such Party have been duly authorized by
all necessary corporate action and the person executing this Agreement on
behalf of such Party has been duly authorized to do so by all requisite
corporate actions and do not and will not (a) require any consent or
approval of its stockholders or any Third Party and (b) conflict with, or
constitute a breach or violation of, any agreement, instrument,
understanding, oral or written, to which it is a party or by which it may
be bound, and any judgement of any court or governmental body applicable to
such a Party and (c) violate any law, decree, order, rule or regulation of
any court, governmental body or administrative or other agency having
authority over it.
8.3 Each Party hereby represents to the other Party on the Effective Date and
thereafter throughout the Term, that it is aware of no action, suit or
inquiry or investigation contemplated or instituted by any Third Party that
questions or threatens the validity of this Agreement.
9. DISCLAIMERS AND LIMITATION OF LIABILITY
9.1 NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR
WARRANTY GIVEN BY EITHER PARTY OR THEIR SUPPLIERS THAT THE USE OF ANY
INFORMATION, DATA, SOFTWARE OR OTHER MATERIALS PROVIDED HEREUNDER WILL NOT
INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OF ANY THIRD
PARTY. THE INFORMATION, DATA, SOFTWARE OR OTHER MATERIALS PROVIDED BY
EITHER PARTY HEREUNDER ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND
WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. CELERA MAKES NO
WARRANTY THAT THE SEQUENCE INFORMATION AND OTHER RESULTS PROVIDED TO
DIVERSA HEREUNDER DO NOT [***].
9.2 IN NO EVENT SHALL EITHER PARTY OR CELERA'S SUPPLIERS BE LIABLE FOR LOST
PROFITS, LOSS OF USE, LOSS OF BUSINESS, BUSINESS INTERRUPTION, LOSS OF
DATA, COST OF COVER OR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR INCIDENTAL
DAMAGES OF ANY NATURE WHATSOEVER, HOWEVER CAUSED AND UNDER ANY THEORY OF
LIABILITY WHETHER BASED IN CONTRACT, WARRANTY, TORT (INCLUDING WITHOUT
LIMITATION, NEGLIGENCE), STRICT LIABILITY, STATUTORY OR OTHERWISE, ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
----------------
* Confidential Treatment Requested
16
9.3 THE LIABILITY OF EITHER PARTY, ITS AGENTS, EMPLOYEES, SUBCONTRACTORS AND
SUPPLIERS WITH RESPECT TO ANY AND ALL SUITS, ACTIONS, LEGAL PROCEEDINGS,
CLAIMS, DEMANDS, DAMAGES, COSTS AND EXPENSES ARISING OUT OF THE PERFORMANCE
OR NONPERFORMANCE OF ANY OBLIGATIONS UNDER THIS AGREEMENT, WHETHER BASED ON
CONTRACT, WARRANTY, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE),
STRICT LIABILITY, STATUTORY OR OTHERWISE, SHALL BE LIMITED TO DIRECT,
ACTUAL DAMAGES INCURRED AS A RESULT OF SUCH PARTY'S FAILURE TO PERFORM ITS
OBLIGATIONS AS REQUIRED BY THIS AGREEMENT. NEITHER PARTY'S LIABILITY,
FURTHER, SHALL EXCEED IN THE AGGREGATE, A SUM EQUAL TO [***].
9.4 THE LIMITATION SET FORTH IN SECTION 9.3 ABOVE SHALL NOT APPLY TO DAMAGES
OCCASIONED BY A BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET FORTH IN THIS
AGREEMENT OR THE FAILURE OF EITHER PARTY TO COMPLY WITH ITS PAYMENT
OBLIGATIONS HEREUNDER.
10 INDEMNITY
10.1 Diversa Indemnity. Diversa shall indemnify, defend and hold Celera
-----------------
(including its officers, directors, employees and agents) harmless from and
against all personal or property losses, liabilities, damages and expenses
(including attorney's fees and costs) arising (a) out of any false
representation or warranty or out of the breach or non-fulfillment of any
material covenant or agreement of Diversa contained herein or contemplated
hereby; (b) out of the gross negligence or intentional misconduct of
Diversa in connection with the performance of Diversa of its obligations
under this Agreement; (c) out of Diversa's use of the Sequence Information,
Annotation Information or other technology developed or discovered pursuant
to this Agreement; and/or (d) from products developed by Diversa under this
Agreement, except in any case described above to the extent any such loss,
liability, damage or expense arises from the action or inaction of Celera.
10.2 Celera Indemnity: Celera shall indemnify, defend and hold Diversa
----------------
(including its officers, directors, employees and agents) harmless from and
against all personal or property losses, liabilities, damages and expenses
(including attorneys' fees and costs) arising (a) out of any false
representation or warranty or out of the breach or non-fulfillment of any
material covenant or agreement of Celera contained herein or contemplated
hereby; (b) out of the gross negligence or intentional misconduct of Celera
in connection with the performance of its obligations under this Agreement;
and/or (c) out of Celera's use of Environmental Libraries, Sequencing
Information, and Annotation Information relating to Celera's sequencing,
annotation, and database activities related to this Agreement, except in
any case described above to the extent any such loss, liability, damage or
expense arises from the action or inaction of Diversa.
10.3 Procedure: A party (the "Indemnitee") that intends to claim indemnification
---------
under this Section 10 shall promptly notify the other party (the
"Indemnitor") of any loss, liability, damage, expense, claim, demand,
action or other proceeding in respect of which the Indemnitee intends to
claim such indemnification, and the Indemnitor shall have the right to
participate in, and, to the extent the Indemnitor so desires, jointly with
any other Indemnitor similarly noticed, to assume the defense thereof with
counsel selected by the Indemnitor and reasonably satisfactory to the
Indemnitee; provided, however, that an Indemnitee shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
Indemnitee, if representation of such Indemnitee by the counsel retained by
the Indemnitor would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other party represented by such
counsel in such proceedings. The indemnity agreement in this Section 10
shall not apply to amounts paid in settlement of any loss, liability,
damage, expense, claim, demand, action or other proceeding if such
settlement shall be effected without the consent of the Indemnitor, which
consent shall not be withheld unreasonably. The failure to deliver notice
to the Indemnitor within a reasonable time after the commencement of any
such action, if prejudicial to its ability to defend such action, shall
relieve such Indemnitor of any liability to the Indemnitee under this
Section 10 to the extent Indemnitor is prejudiced by Indemnitee's delay,
but the omission so to deliver notice to the Indemnitor will not relieve it
of any liability
---------------------
* Confidential Treatment Requested
17
that it may have to the Indemnitee otherwise than under this Section 10.
The Indemnitor may not settle the action or otherwise consent to an adverse
judgment in such action or other proceeding that affects the rights or
interests of the Indemnitee without the express written consent of the
Indemnitee. The Indemnitee under this Section 10, and its employees and
agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any action, claim or liability
covered by this indemnification.
10.4 Insurance: Each Party shall maintain, through self-insurance or
---------
commercially placed insurance, adequate coverage for the indemnification
obligations set forth herein and shall provide competent proof of such
insurance within forty-eight (48) hours after receipt of a written request
from the other Party.
11. DISPUTE RESOLUTION
11.1 Informal Dispute Resolution. In the event that a dispute arises under this
----------------------------
Agreement between the Parties , either Party may, by written notice to the
other Party, have such dispute referred to the Chief Executive Officer of
Diversa and the Senior Vice President and General Manager, Discovery
Services of Celera, or their successors or counterparts, for resolution by
good faith negotiations at a mutually convenient location and time within
sixty (60) days after such notice is received. If the Parties are unable to
reach agreement with respect to a dispute between the Parties pursuant to
this Section 11.1, then such dispute shall be resolved as described in
Section 11.2.
11.2 Mediation. If the dispute is not resolved within thirty (30) days after
----------
referral under Section 11.1, or such other time as mutually agreed upon in
writing by the Parties, the Parties shall submit the matter to non-binding
mediation to be administered by the American Arbitration Association (the
"AAA") under its Commercial Mediation Rules in effect at such time (the
"Mediation Rules"). The Party desiring such mediation shall initiate it in
accordance with the Mediation Rules of the AAA. Upon delivery of the
mediation request, the Parties shall endeavor in good faith to select a
neutral mediator who is acceptable to each Party. If the Parties have not
selected a mutually acceptable neutral mediator within five (5) business
days after delivery of the mediation request, they shall notify the AAA and
request the AAA to appoint a mediator in accordance with the Mediation
Rules. Unless otherwise agreed upon by the Parties, all mediation sessions
shall be held at the AAA regional office closest to Celera's primary place
of business. The Parties shall endeavor in good faith to resolve the
dispute through the mediation process contemplated by this Section and
neither Party shall be entitled unilaterally to terminate the mediation
prior to thirty (30) days after the appointment of a mediator. Upon any
termination or appeal of mediation proceeding, the Parties shall submit the
dispute to binding arbitration pursuant to Section 11.3.
11.3 Binding Arbitration.
--------------------
11.3.1 Any dispute under this Agreement that is not settled pursuant to
Sections 11.1 or 11.2 shall be finally settled by binding
arbitration, conducted in accordance with the Commercial
Arbitration Rules of the AAA by one mutually agreed upon
independent, neutral arbitrator having at least five (5) years of
experience directly or indirectly related to the disputed issue(s).
If the Parties do not mutually agree on an arbitrator within forty-
five (45) days after initiating arbitration, the Parties shall
request the AAA to appoint an arbitrator. The procedures or rules
for the arbitration may be modified by mutual written consent of
the Parties, including having mediation rather than an arbitration
conducted. Any arbitration shall be in English held in San Diego,
California if the dispute resolution is initiated by Celera and in
Rockville, Maryland if the dispute resolution is initiated by
Diversa. The arbitrator shall determine what discovery shall be
permitted, consistent with the goal of limiting the cost and time
that the Parties must expend for discovery; provided, however, that
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 or a
true copy thereof. Except as otherwise expressly provided in this
Agreement, the costs of the arbitration, including administrative
and arbitrator fees, shall be shared equally by the Parties and
each Party shall bear its own costs and attorneys' and witness'
fees incurred in connection with the arbitration.
18
11.3.2 A disputed performance or suspended performance(s) pending the
resolution of the arbitration must be completed within a reasonable
time period following the final decision of the arbitrators.
11.3.3 Any arbitration subject to this Section 11.2 shall be completed
within one (1) year from the filing of the notice of a request for
such arbitration and a written decision with reasons therefore
provided to the Parties.
11.3.4 Any decision which requires a monetary payment shall require such
payment to be payable in United States dollars, free of any tax or
other deduction.
11.3.5 The Parties agree that the decision shall be the sole, exclusive
and binding remedy between them regarding any and all disputes,
controversies, claims and counterclaims presented to the
arbitrators. If a Party fails to comply with a decision, then the
other Party may seek judicial recognition and enforcement of the
award or decision in a court of competent jurisdiction.
11.3.6 Nothing herein shall be construed as depriving either Party, at any
time prior to the empanelment of the arbitral tribunal, of the
right to obtain provisional measures, including, injunctions,
orders for posting security, attachment of funds or property, or
any other preliminary relief, in any court of competent
jurisdiction within the United States. The arbitral tribunal, by
its own motion or motion of the Parties, is authorized to award any
form of provisional measures it deems appropriate and the Parties
may enforce such award in any such court of competent jurisdiction.
11.4 Confidentiality. The Parties hereby mutually agree that the
----------------
existence, terms, content and decision of any dispute resolution pursuant
to this Agreement, as well as all information or documents relating
thereto, shall be maintained in confidence and not be given, shown,
disclosed to or discussed with any Third Party, except (a) by prior written
agreement of both Parties; (b) during any legal proceeding to protect or
secure a Party's rights under such dispute resolution; (c) to counsel and
accountants who shall agree to maintain its confidentiality; (d) to the
extent required by applicable reporting requirements; and (e) upon
compulsory legal process.
12. TERM AND TERMINATION
12.1 Term. This Agreement shall commence on the Effective Date and
-----
continue in full force and effect, unless terminated as otherwise provided
herein, for a period of [***] ("Term").
12.2 Default:
-------
12.2.1 Notice of Default: In the event any material representation or
-----------------
warranty made hereunder by either Party shall have been untrue
("Representation Default") or upon any breach or default of a
material obligation of this Agreement by a Party ("Performance
Default"), the Party not in Default ("Non-Defaulting Party") must
first give the other Party ("Defaulting Party") written notice
thereof ("Notice of Default"), which notice must state the nature
of the untruthfulness, breach or default in reasonable detail and
request the Defaulting Party cure such Default within [***] days.
_______________________
*CONFIDENTIAL TREATMENT REQUESTED
19
12.2.2 Termination for Default: The Non-Defaulting Party may, in addition
-----------------------
to any other remedies which may be available to such Non-Defaulting
Party at law or equity, terminate this Agreement in the event of
(a) a Representation Default by the Defaulting Party or (b) a
Performance Default by the Defaulting Party; that has not been
cured within [***] days after receipt of a Notice of Default; or,
if such Performance Default cannot be cured within such [***] day
period, and the Defaulting Party shall have failed to commence
substantial remedial actions within such [***] day period and to
diligently pursue the same. Notwithstanding the foregoing, if a
Representation or Performance Default is not curable by its nature,
the Non-Defaulting Party may immediately terminate this Agreement
with a Notice of Default to the Defaulting Party.
12.3 Bankruptcy:
----------
12.3.1 A Party may terminate this Agreement if, during the Term, the other
Party shall file in court or agency pursuant to any statute or
regulation of any state or country, a petition in bankruptcy or
insolvency or for reorganization or for an arrangement or for the
appointment of a receiver or trustee of the Party or of its assets,
or if the other Party proposes a written agreement of composition
or extension of its debts, or if the other Party shall be served
with an involuntary petition in bankruptcy or seeking
reorganization, liquidation, dissolution, winding-up arrangement,
composition or readjustment of its debts or any other relief under
any bankruptcy, insolvency, reorganization or other similar act or
law of any jurisdiction now or hereafter in effect, or there shall
have been issued a warrant of attachment, execution, distraint or
similar process against it, filed in any insolvency proceeding, and
such petition shall not be dismissed within ninety (90) days after
the filing thereof, or if the other Party shall propose or be a
Party to any dissolution or liquidation, or if the other Party
shall make an assignment for the benefit of creditors.
12.3.2 All rights and licenses granted under or pursuant to this Agreement
are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the U.S. Bankruptcy Code, licenses of rights to
"intellectual property" as defined under Section 101 of the U.S.
Bankruptcy Code. The Parties agree that each Party that is a
licensee of such rights under this Agreement shall retain and may
fully exercise all of its rights and elections under the U.S.
Bankruptcy Code. The Parties further agree that, in the event of
the commencement of a bankruptcy proceeding by or against either
Party under the U.S. Bankruptcy Code, the Party hereto which is not
a Party to such proceeding shall be entitled to a complete
duplicate of (or complete access to, as appropriate) any such
intellectual property and all embodiments of such intellectual
property, and same, if not already in their possession, shall be,
within ten (10) days of the commencement of such proceeding,
delivered to them (i) upon any such commencement of a bankruptcy
proceeding upon their written request therefore, unless the Party
subject to such proceeding (or a trustee on behalf of the subject
Party) elects to continue to perform all of their obligations under
this Agreement or (ii) if not delivered under (i) above, upon the
rejection of this Agreement by or on behalf of the Party subject to
such proceeding upon written request therefore by the non-subject
Party.
12.4 Consequences of Termination: The following provisions, and any rights and
---------------------------
obligations pursuant thereto, shall survive termination or expiration of
this Agreement: Sections 5 (other than 5.3), 6.3, 6.4, 6.6, 6.7, 6.8, 6.9
and 7 through 13. In addition, expiration or termination of this Agreement
will not relieve the Parties of any obligation accruing prior to such
expiration or termination.
13. MISCELLANEOUS
13.1 Force Majeure. Neither Party shall be held liable or responsible to the
--------------
other Party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes
beyond the reasonable control of the affected Party, including but not
limited to fire, floods, embargoes, war, acts of war (whether war is
declared or not), insurrections, riots, civil commotions, strikes, lockouts
or other labor disturbances, acts of God or acts, omissions or delays in
acting by any governmental authority or the other Party; provided,
20
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* Confidential Treatment Requested
however, that the Party so affected shall use reasonable commercial efforts
to avoid or remove such causes of nonperformance, and shall continue
performance hereunder with reasonable dispatch whenever such causes are
removed. Either Party shall provide the other Party with prompt written
notice of any delay or failure to perform that occurs by reason of force
majeure. When such circumstances arise, the Parties shall mutually seek a
resolution of the delay or the failure to perform and discuss what, if any,
modification of the terms of this Agreement may be required in order to
arrive at an equitable solution.
13.2 Assignment. Neither Party shall assign any of its rights or obligations
-----------
hereunder in whole or in part without the written consent of the other
Party, except: (a) as incident to the merger, consolidation, reorganization
or acquisition of stock or assets or a similar transaction affecting all or
substantially all of the assets or voting control of the assigning Party;
(b) to any directly or indirectly wholly-owned subsidiary if the assigning
Party remains liable and responsible for the performance and observance of
all of the subsidiary's duties and obligations hereunder; or (c) with the
consent of the other Party, such consent not to be unreasonably withheld.
This Agreement shall be binding upon the successors and permitted assigns
of the Parties, and the name of a Party appearing herein shall be deemed to
include the names of such Party's successors and permitted assigns to the
extent necessary to carry out the intent of this Agreement. Any purported
assignment in violation of the preceding sentence shall be void.
13.3 Entire Agreement. This Agreement and the exhibits hereto constitute the
-----------------
entire agreement between the Parties with respect to the subject matter
hereof and supersede all prior and contemporaneous agreements,
representations, and understandings of the Parties. No Party hereto shall
be liable or bound to the other in any manner by any warranties,
representations or covenants with respect to the subject matter hereof
except as specifically set forth herein.
13.4 Exhibits. All Exhibits referenced in and attached hereto are incorporated
---------
herein by reference. In case of any discrepancies between terms
incorporated from the Exhibits and the terms of the Sections herein, the
terms of the Sections shall prevail. Any amendment to an Exhibit shall be
approved in writing by a duly authorized representative of each Party.
13.5 Amendment and Waiver. This Agreement may be amended, supplemented, or
---------------------
otherwise modified only by means of a written instrument signed by both
Parties. Any waiver of any rights or failure to act in a specific instance
shall relate only to such instance and shall not be construed as an
agreement to waive any rights or fail to act in any other instance, whether
or not similar.
13.6 Severability. In the event that any provision of this Agreement shall, for
-------------
any reason, be held to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect any other provision hereof,
and the Parties shall negotiate in good faith to modify the Agreement to
preserve (to the extent possible) their original intent; elsewhere, this
Agreement shall not be affected so long as the Parties are still able to
realize the principal benefits bargained for in this Agreement.
13.7 Third Parties. Nothing in this Agreement, express or implied, is intended
--------------
to confer upon any party, other than the Parties hereto, except as
expressly provided in Section 3.5.2(b), and their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
13.8 Withholding. To the extent any Party is required by law to withhold or to
------------
make tax payments on behalf of or with respect to the other Party, the
first Party may withhold such amounts and make such tax payments as so
required. For purposes of this Agreement, any such payments or
withholdings shall be treated as a payment to Party on behalf of whom the
withholding or payment was made.
13.9 Relationship of Parties. It is expressly agreed that Diversa and Celera
------------------------
shall be independent contractors and that nothing in this Agreement is
intended or shall be deemed to constitute a partnership, agency,
distributorship, employer-employee or joint venture relationship between
the Parties. No Party shall incur any debts or make any commitments for the
other, except to the extent, if at all, specifically provided herein.
21
13.10 No Trademark Rights. Except as otherwise provided herein or agreed to in
--------------------
advance in writing, no right, express or implied, is granted by this
Agreement to use in any manner the names "Celera," "Celera Genomics," "PE
Corporation," or "Diversa Corporation," or any other trade name or
trademark of a Party or the names of any employees thereof, for any
purpose other than for the Parties' own internal purposes.
13.11 Exports. The Parties acknowledge that the export of technical data,
--------
materials or products is subject to the exporting party receiving any
necessary export licenses and that the Parties cannot be responsible for
any delays attributable to export controls which are beyond the
reasonable control of either Party. Diversa and Celera agree not to
export or re-export, directly or indirectly, any information, technical
data, the direct product of such data, samples or equipment received or
generated under this Agreement in violation of any applicable export
control laws or governmental regulations. Diversa and Celera agree to
obtain similar covenants from their licensees, sublicensees and
contractors with respect to the subject matter of this paragraph.
13.12 Notices. Any consent, notice or report required or permitted to be given
--------
or made under this Agreement by one of the Parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by telephone, personal delivery or courier) or courier, postage
prepaid (where applicable), addressed to such other Party at its address
indicated below, or to such other address as the addressee shall have
last furnished in writing to the addressor and shall be effective upon
receipt by the addressee.
If to Diversa: Diversa Corporation
00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xx. Xxx Xxxxx, Ph.D.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Celera: Celera Genomics
00 Xxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
cc: Legal Department
13.13 Governing Law. This Agreement shall be governed by and construed under
--------------
the substantive laws of the State of Delaware.
13.14 Counterparts. This Agreement may be executed via facsimile and in two or
-------------
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, and shall
become effective when there exist copies hereof which, when taken
together, bear the authorized signatures of each of the Parties hereto.
Only one such counterpart signed by the Party against whom enforceability
is sought needs to be produced to evidence the existence of this
Agreement.
13.15 Titles and Subtitles; Form of Pronouns; Construction and Definitions.
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The titles of the sections and paragraphs of this Agreement are for
convenience only and are not to be considered in construing this
Agreement. All pronouns used in this Agreement shall be deemed to include
masculine, feminine and neuter forms, the singular number includes the
plural and the plural number includes the singular. Unless the context
otherwise requires, the term "including" shall mean "including, without
limitation."
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement effective as of the date first above written.
Diversa Corporation
By /s/ Xxx X. Short
__________________________________
Name: Xxx X. Short, Ph.D.
Title: President and Chief Executive Officer
PE Corporation (NY)
By /s/ Xxxxx Xxxxxxx
__________________________________
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and General
Manager, Discovery Services
23
EXHIBIT A
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TRANSFERS OF MATERIALS
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[***]
_______________________
*CONFIDENTIAL TREATMENT REQUESTED
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EXHIBIT B
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WORK PLAN
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[***]
_______________________
*CONFIDENTIAL TREATMENT REQUESTED
25
EXHIBIT C
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Materials Transfer Agreement
[***]
_______________________
*CONFIDENTIAL TREATMENT REQUESTED
26
