1
EXHIBIT 10.8
COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (the "Agreement"), effective as of March 1, 1998
(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 Xxxxx XX, a German corporation,
having a principal place of business at X-00000 Xxxxxxxxxx, Xxxxxxx (the
principal contributor and participant within Bayer) and its Affiliates
(collectively, "Bayer").
BACKGROUND
A. Symyx owns and is developing novel, proprietary methods for the
combinatorial preparation and screening of novel materials;
X. Xxxxx is a worldwide-represented German chemical and pharmaceutical
corporation with diversified business units across multiple industry
segments and interests in actively developing and utilizing novel
technologies and materials;
C. Symyx and Bayer desire to collaborate to conduct materials discovery
research and development focused on [******], as well as such additional
materials and activities as may be agreed upon by the parties;
D. Symyx and Bayer have entered into that certain Interim Research Funding
Agreement effective as of September 1, 1997, as amended by that certain
Amendment to Interim Research Funding Agreement effective as of December
1, 1997 (as amended, the "Interim Research Funding Agreement"); and
E. [******]
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
As used herein, the terms in this Agreement shall have the meanings set
forth in Exhibit A.
ARTICLE 2
RESEARCH PROGRAM
2.1 Research Activities. Subject to the terms and conditions set forth
herein, the parties shall conduct collaborative research in connection with the
Research Program. The parties intend to conduct the Research Program on a
collaborative basis, and agree to cooperate in the identification of Lead
Compounds.
-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
2.1.1 Symyx Responsibilities. During the term of the Research
Program, Symyx shall use its reasonable efforts to identify Lead Compounds in
accordance with applicable Project Plans and, in that regard, to prepare and
screen Libraries in the Research Program, one or more of which Libraries may, in
Symyx's discretion, be prepared by Symyx outside the Research Program but used
for screening in the course of performing the Research Program. Symyx shall keep
the RFC responsible for a particular Field fully informed of its activities in
respect of each Project within such Field. 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 Project Plans, or utilize
a total number of Symyx Full-Time Equivalent ("FTE") research positions in
excess of the number of FTE's funded in the Research Expenses and paid for by
Bayer.
2.1.2 Bayer Responsibilities. During the term of the Agreement,
Bayer shall use its reasonable efforts to (i) provide Symyx with background
information and technical information available to Bayer that is necessary to
Symyx in setting up and conducting the Projects within the Research Program, and
(ii) provide other support and assistance necessary for the conduct of the
Research Program as set forth in the Project Plans or as mutually agreed by the
parties, including but not limited to providing chemical reagents,
characterization protocols, and other relevant information for the conduct of
the Research Program. Bayer shall keep Symyx fully informed of Bayer's testing
and development of Agreement Compounds and/or Program Technology, during the
term of the Research Program, Bayer shall keep the RFC responsible for each
Project apprised of the progress and technical issues relating to the
development of Agreement Compounds and commercialization of Products, or
commercial exploitation of Program Technology, resulting from such Project.
2.1.3 Interim Research. It is understood and agreed that
research activities performed under the Interim Agreement shall be considered to
be work performed in the Research Program for all purposes of this Agreement,
including without limitation royalty obligations set forth herein; provided,
however, that payments made from Bayer to Symyx under the Interim Research
Funding Agreement shall not offset or reduce the payments provided under Article
6 of this Agreement.
2.2 Fields and Projects.
2.2.1 Initial Fields. The Research Program shall initially
include the following Fields: [******].
(a) Addition of [******] Field. Upon written agreement
of the parties, including approval [******], on or before May 1, 1998 setting
forth mutually agreeable terms which may include amendments to sections of this
Agreement, the Research Program may be expanded to include the [******] Field,
which shall be defined as [******]. It is understood that upon addition of the
[******] Field to the Research Program, Symyx will dedicate [******] FTEs to
research activities in the [******] Field during the period from May 1, 1998 to
March 1, 1999, and will dedicate [******] FTEs to research activities in the
[******] Field during the period from March 1, 1999 to March 1, 2000.
(b) Bayer Election to Reduce [******] Field. In the
event that the
-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
Research Program has not been expanded to include one or more Projects
concerning [******] (including without limitation the Projects described in
Section 2.3) on or before June 1, 1998, then Bayer may elect to reduce the
number of Symyx FTEs within the [******] Field from [******] FTEs to [******]
FTEs for the period from the effective date of such reduction to March 1, 1999,
and from [******] FTEs to [******] FTEs for the period from March 1, 1999 to
March 1, 2000. In the event that Bayer so elects to reduce the [******] Field,
(i) the funding payments from Bayer to Symyx will be reduced as set forth in
Section 6.2.1(a), and (ii) Symyx shall not be obligated to utilize more than an
average of [******]) FTEs per year in the [******] Field from the effective date
of such election to March 1, 1999 and [******] FTEs per year in the [******]
Field from March 1, 1999 to March 1, 2000.
2.2.2 Addition and Expansion of Fields. Upon mutual written
agreement of the parties, the Initial Fields may be expanded to include
additional Projects or the Research Program may be expanded to include one or
more additional Fields. In conjunction with expansion of the Research Program to
include a new Field, it is understood that the parties will need to reach
agreement regarding the description or definition of the Field, funding for
research in the Field, identification of one or more Projects to be conducted
within the Field, and the term of such Projects, among other things. It is
understood that the parties may agree to reallocate or rebudget resources when
the parties agree to add a new Field or Project to the Research Program, and
that if the parties agree to such reallocation, the addition of a new Field or
Project will not necessarily require an increase in total funding from Bayer.
2.2.3 Projects; Project Plans. A brief description of the
initial Projects in each Field and the Project Plans for each of these initial
Projects have been agreed in writing prior to the Effective Date.
2.2.4 Identification of Lead Compounds. The procedure for the
identification of Lead Compounds by Symyx is set forth on Exhibit B hereto.
2.2.5 Termination of Fields. Fields may be terminated by
unanimous agreement of the Executive Committee. The RFC for a particular Field
may recommend to the Executive Committee that the research activities with
respect to such Field should be terminated. At the request of either party, the
Executive Committee will discuss possible reallocation of resources consistent
with maintained funding by Bayer at the levels set forth in Section 6.2.1;
provided, it is understood that if the Executive Committee does not agree upon
such reallocation and still terminates a Field, the funding payments from Bayer
to Symyx will decrease proportionally to the number of FTE's no longer being
used for such Field. The parties will attempt to implement a smooth transition
in connection with any such termination or reallocation, including provision of
reasonable resources and time frames for wind-down or scale-back of the Project
in such Field.
2.3 [******]
2.4 Research Program Term.
2.4.1 [******]
2.4.2 Extension of Research Program Term. Both parties intend to
identify and
-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
propose additional Projects (including appropriate product driven targets) that
will justify the extension of the Research Program, and agree that not less than
six (6) months before expiration of the Initial Research Term and any Extended
Research Term, the Executive Committee will meet to discuss possible Projects
for extension of the Research Program. Upon written agreement of the parties,
the Research Program Term may be extended up to three (3) years (the "Extended
Research Term"). Except as the parties may otherwise agree, the funding for the
Extended Research Term, if any, shall be not less than [******] from March 1,
2000 to February 28, 2001, not less than [******] from March 1, 2001 to February
28, 2002, and not less [******] from March 1, 2002 to February 28, 2003.
2.5 Field Exclusivity. Subject to Bayer's continuing payment to Symyx of
Research Expenses for a Field, Symyx will not conduct research in such Field for
any third party or on its own behalf, during the Research Program Term, other
than under this Agreement. During the period for which Bayer originally
committed to make Research Funding Payments for a given Field (as set forth in
this Agreement for Initial Fields and as agreed by the parties for any
additional Fields), Symyx will give Bayer thirty (30) days written notice in the
event exclusivity set forth in this Section 2.5 no longer applies for such Field
due to Bayer discontinuing payment, and on request of Bayer, the parties will
discuss what payments, if any, are needed to maintain exclusivity; provided,
however, that Symyx shall not be required to provide such notice to Bayer if the
parties have agreed in writing that the exclusivity set forth in this Section
2.5 no longer applies for such Field.
2.6 [******]
2.7 Records. Symyx and Bayer 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 all 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).
2.8 Activities Following Research Program. Except as expressly provided
otherwise under the terms of this Agreement, Bayer shall, at Bayer's or its
Sublicensees' expense, be responsible for conducting all development of
Agreement Compounds and Products within the Field following the completion of
the Research Program and all commercialization of Products in the Field to which
Bayer retains rights under this Agreement, and, subject to and in accordance
with the licenses, rights and obligations set forth in this Agreement, Bayer
shall have the right in its exclusive discretion to conduct such development and
commercialization.
-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
ARTICLE 3
MANAGEMENT AND INFORMATION
3.1 Executive Committee.
3.1.1 Responsibility. Symyx and Bayer shall establish a
committee (the "Executive Committee") to (i) oversee and to direct the overall
relationship between Symyx and Bayer, (ii) add, modify and terminate Fields and
Projects within such Fields, (iii) approve budgets for conduct of the Research
Program, (iv) identify and recommend additional fields for potential expansion
or extension of the Research Program, and (v) resolve any issues which a
Research Field Committee is unable or not authorized to resolve, and (vi) review
and modify as necessary the Lead Compound identification and approval process.
3.1.2 Membership. The Executive Committee shall be comprised of
three (3) representatives from each party, with each party's representatives
selected by the party. Either party may replace their respective Executive
Committee members at any time, upon written notice to the other party. It is
understood that Bayer's representatives on the Executive Committee may include
one representative from Central Research and each business group and Affiliate
of Bayer participating in a Project, up to a total of three (3) persons.
3.1.3 Meetings. The Executive Committee shall meet at least
twice per year at locations agreed by the parties, or more frequently as decided
by the Executive Committee. With the consent of the parties, other
representatives of Symyx or Bayer may attend Executive Committee meetings as
nonvoting observers. Each party shall be responsible for all of its own expenses
associated with attendance of such meetings. Executive Committee members may
participate in any such meeting in person, by telephone, or by televideo
conference. Symyx shall prepare minutes of each Executive Committee meeting,
which minutes shall be approved and signed by Executive Committee
representatives of each party.
3.1.4 Decision Making. Decisions of the Executive Committee
shall be made by unanimous approval. In the event the Executive Committee is
unable to resolve an issue, it will be referred to the responsible
representative of the Board of Directors of Bayer and the Chairman of the Board
of Symyx for resolution, and such persons shall discuss such matter within
thirty (30) days.
3.1.5 Additional Fields and Projects. The Executive Committee
shall consider and evaluate proposed additional fields and projects for the
potential expansion or extension of the Research Program proposed by
representatives of either party. If the Executive Committee determines that the
addition of a given field or Project or extension of an existing Field is
appropriate and desirable, the Executive Committee will recommend such
additional field or project, or such extension of a Field, to the parties and
the parties will negotiate in good faith the terms and conditions upon which
such additional field or Project may be added or extended; however, it is
understood that neither party shall be obligated to agree to or accept such
terms and conditions. It is understood that Symyx shall not be obligated to
perform any additional research activities without its prior consent.
3.2 Research Field Committees.
-5-
6
3.2.1 Responsibilities. Bayer and Symyx will establish a
committee for each Field to oversee and review the technical direction of
research activities within a Field (the "Research Field Committee," or "RFC").
The responsibilities of each Research Field Committee shall include: (i)
establishing and modifying the Lead Criteria for each Project in the applicable
Field, (ii) determining whether a particular compound identified in a Project in
that Field meets the Lead Criteria, in accordance with the procedure set forth
in Exhibit B to this Agreement, (iii) defining the activities and milestones for
each Project in the Field, (iv) monitoring and reporting research progress for
the Field for which it is responsible, and ensuring open exchange between both
parties, (v) preparing and prioritizing lists of potential additional Projects
for the Field, (vi) evaluating results of Projects in the Field and potential
modifications to Project Plans, (vii) making recommendations regarding the
approval of budgets for Projects in the Field, and (viii) coordinating all
patent activities arising from Projects in the Field. From time to time, a RFC
may invite additional non-voting experts and establish subcommittees, such as a
patent committee, to oversee particular tasks or activities. The RFC may, by
unanimous agreement, amend the Project Plans of Projects within the applicable
Field, provided, however, that the RFC shall not alter the funding for any
Project without the prior agreement of the Executive Committee.
3.2.2 Membership. Each RFC shall include an equal number of
representatives from Bayer and Symyx, up to three (3) persons from each, each
party's representatives selected by that party. The parties will each designate
one of their own representatives as the leader of their representatives on the
RFC to help coordinate activities of the RFC. Symyx and Bayer may each replace
its RFC representatives and leaders at any time, upon written notice to the
other party. Each RFC shall be chaired as agreed by the parties.
3.2.3 Meetings. During the term of the applicable Project, each
RFC shall meet quarterly at regular intervals, or more frequently as agreed by
the RFC, at such locations as the parties agree. With the consent of the
parties, other representatives of Symyx or Bayer may attend RFC meetings as
nonvoting observers. Each party shall be responsible for all of its own expenses
associated with attendance of such meetings. RFC members may participate in any
such meeting in person, by telephone, or by televideo conference. Symyx shall
prepare minutes of each RFC meeting, which minutes shall be approved and signed
by RFC representatives of each party, and will prepare a list of action items
determined by the RFC in each formal meeting for submission to the Executive
Committee.
3.2.4 Decision Making. Decisions of each RFC shall be made by
unanimous approval. In the event that unanimous agreement on any matter is not
achieved within the RFC, the matter will be referred to the Executive Committee
for resolution.
ARTICLE 4
INTELLECTUAL PROPERTY
4.1 Program Technology. Subject to 4.3, title to all inventions and
other intellectual property made by employees or agents of Bayer and Symyx in
the course of and in connection with the Research Program shall be deemed owned
jointly by Symyx and Bayer, excluding
-6-
7
Combinatorial Chemistry Technology. It is understood that, except as otherwise
expressly provided in this Agreement, both Bayer and Symyx may use, sublicense,
commercialize, or otherwise exploit all such jointly-owned technology without
the consent of, or obligation to account to, the other party.
4.2 Law. Inventorship of inventions and other intellectual property
rights conceived and/or reduced to practice pursuant to this Agreement shall be
determined in accordance with applicable law in the country where the invention
is made, subject to the express provisions of this Agreement regarding rights of
ownership and grant of licenses.
4.3 Combinatorial Chemistry Technology. Symyx shall retain sole
ownership of, and all rights to, Combinatorial Chemistry Technology, and any
inventions or discoveries conceived or reduced to practice or otherwise
developed by Symyx and/or Bayer relating to Combinatorial Chemistry Technology,
developed in connection with the conduct of the Research Program.
4.4 Reserved Rights. Symyx shall not have any right to combinatorial
technologies developed by Bayer outside the Research Program, and Bayer shall
not have any obligation to disclose the same to Symyx. Bayer shall not have any
right in or to any Combinatorial Chemistry Technology or to Symyx Technology or
any intellectual property developed by Symyx outside the Research Program,
except as expressly set forth in this Agreement, and Symyx shall not have any
obligation to disclose the same to Bayer.
4.5 Notice of Inventions. Symyx and Bayer shall promptly report to the
RFC of each Field any inventions relating to Lead Compounds or Program
Technology or Combinatorial Chemistry Technology made in the course of
performing the Research Program.
4.6 Cooperation. Each of Bayer and Symyx shall keep the other informed
as to the status of patent and patent prosecution matters defined in this
Article 4, including without limitation, by providing the other the opportunity
to fully review and comment on any documents as far in advance as possible of
filing dates and prosecution deadlines, and providing the other copies of any
substantive documents that such party receives from such patent offices promptly
after receipt, including notice of all official actions, interferences,
reissues, re-examinations, oppositions, potential litigation, or requests for
patent term extensions. Bayer 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.
4.7 Patent Prosecution.
4.7.1 Patent Committee. The Executive Committee may establish a
committee (the "Patent Committee") to facilitate the filing, prosecution, and
maintenance of patent applications and patents within the Program Technology.
The Patent Committee shall be comprised of an equal number of representatives
from each party, and each party shall designate one person to serve as the
Patent Committee Leader for that party. The Patent Committee shall be
responsible to discuss issues of patent strategy, including without limitation,
issues of where to file patent applications, whether to abandon patent
applications, and how the costs of such prosecution and maintenance will be
funded. The Patent Committee shall also endeavor to open and facilitate
appropriate lines of communication between the parties, the Executive Committee,
-7-
8
and the RFC's regarding the filing, prosecution, and maintenance of patent
applications and patents within the Program Technology. Decisions of the Patent
Committee shall be made by unanimous approval. In the event the Patent Committee
cannot resolve an issue by unanimous agreement, the matter will be referred to
the Executive Committee for resolution.
4.7.2 Responsibilities.
(a) Inventions by Symyx. Except as provided in Section 4.7.3,
Symyx shall, in its discretion, be responsible for preparing, filing,
prosecuting and maintaining patent applications and patents relating to
inventions within the Program Technology made by employees or agents of Symyx,
but not Bayer, in the course of performing the Research Program, and conducting
any interferences, re-examinations, reissues and oppositions relating to such
patent applications and patents, as it deems appropriate, at Symyx's expense.
(b) Inventions Made Jointly.
(i) The parties will cooperate to file, prosecute and
maintain patent applications covering inventions with the Program Technology
made jointly by employees or agents of Bayer and employees or agents of Symyx in
countries agreed by the parties. The parties shall agree which parties shall be
responsible for conducting such activities with respect each such invention.
Except as otherwise expressly provided in this Agreement, the parties will share
equally all expenses and fees associated with the filing, prosecution, issuance
and maintenance of any patent application and resulting patent for each such
invention in the agreed countries.
(ii) In the event that either party wishes to seek
patent protection with respect to any inventions with the Program Technology
made jointly by employees or agents of Bayer and employees or agents of Symyx in
a country the other is not interested in pursuing patent protection, it shall
notify the other party hereto. If the other party wishes to seek patent
protection with respect to such a jointly-made invention in such country or
countries, it may file, prosecute and maintain patent applications and patents
with respect thereto, at its own expense.
(c) Inventions by Bayer. Bayer shall, in its discretion, be
responsible for preparing, filing, prosecuting and maintaining worldwide in such
countries it deems appropriate, patent applications and patents relating to all
inventions within the Program Technology made by employees or agents of Bayer,
but not Symyx, in the course of performing the Research Program, and conducting
any interferences, re-examinations, reissues and oppositions relating thereto as
it deems appropriate, at Bayer's expense.
4.7.3 Symyx Election Not to Prosecute; Bayer Right to Prosecute.
(a) Symyx Election. In the event that Symyx desires to
discontinue prosecution of a patent application filed by Symyx (or filed jointly
by Symyx and Bayer) pursuant to Section 4.7.2(a) or 4.7.2(b), or desires not to
file or conduct any further activities with respect to a patent application or
patent subject to such sections, Symyx shall notify the Patent Committee or
Executive Committee, and the parties will discuss the appropriate means to
proceed with respect to such patent or patent application. In the event the
Patent Committee, the
-8-
9
Executive Committee, and the management of the parties cannot within sixty (60)
days determine an appropriate means to proceed with respect to such patent or
patent application, that is mutually agreeable to the parties, then Symyx may
elect upon sixty (60) days prior notice to discontinue prosecution of any patent
applications filed by Symyx pursuant to Section 4.7.2(a) above and/or not to
file or conduct any further activities with respect to the patent applications
or patents subject to such Section.
(b) Bayer Prosecution. In the event Symyx declines to
file or, or having filed, fails to further prosecute or maintain any patent
applications or patents as described in Section 4.7.3(a), or declines or fails
to conduct any proceedings including, but not limited to, interferences,
re-examinations, reissues, oppositions relating thereto, then, subject to
Symyx's agreements with third parties, Bayer shall have the right to prepare,
file, prosecute and maintain such patent applications and patents in such
countries worldwide it deems appropriate, and conduct such proceedings at its
sole expense, and shall consult with Symyx in connection with all such
activities. In such case, Symyx shall immediately execute all necessary
documents that may be required in order to enable Bayer to file, prosecute and
maintain such patent application and to conduct any such proceedings. If such
patent or patent application is filed, prosecuted or maintained by Bayer and if
Bayer sells Products the manufacture, use, or sale of which is covered by such
patent and no other patent within the Program Technology in the country where
such Products are made or sold, then Bayer may credit its costs and expenses in
filing, prosecuting, or maintaining such patent or patent application
("Expenses") against royalties owed to Symyx for such Product under this
Agreement as follows: for patents and patent applications under Section 4.7.2(a)
[******] percent ([******] %) of such Expenses, and for patents and patent
applications under Section 4.7.2(b) [******] percent ([******] %) of such
Expenses; provided, however, that the royalties paid to Bayer shall not be so
reduced any given quarter to less than [******] percent ([******] %) of the
amount that would otherwise be due to Symyx. Nothing in this Section 4.7.3 shall
affect the ownership rights set forth in this Article 4 or the licenses granted
by the parties in Article 5 of this Agreement.
4.8 Copies. Bayer shall promptly provide to Symyx and the Patent
Committee a copy of any patent applications filed by Bayer and its Affiliates
which are Sublicensees after the publication thereof during the term of this
Agreement with respect to any Program Technology, including without limitation,
Agreement Compounds. Symyx shall promptly provide to Bayer and the Patent
Committee a copy of any patent applications filed by Symyx after the publication
thereof during the term of this Agreement relating to any Program Technology,
including without limitation, Agreement Compounds.
4.9 Enforcement and Defense.
4.9.1 Enforcement. Each party shall promptly notify the other of
its knowledge of any potential infringement of the Program Technology by a third
party.
(a) If such infringement relates to a Product subject to this
Agreement, the parties shall be entitled to jointly bring legal action necessary
to enforce patents claiming inventions within the Program Technology for use in
the Field. The EC will discuss whether to jointly bring action to xxxxx such
infringement. If the parties agree to jointly bring action to xxxxx such
infringement, the parties shall share the expenses (including without limitation
attorneys'
-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
and expert fees) incurred in connection with such action, with Symyx paying
[******] of such expenses and Bayer paying [******] of such expenses. Any
recovery by the parties in any such action shall be shared as follows: first,
each party shall recover its expenses incurred in such action, and then the
remainder shall be shared by the parties with Bayer receiving [******] of such
amount and Symyx receiving [******] of such amount.
(b) If either party notifies the other that it does not wish to
take legal action against an infringement described in Section 4.9.1(a), or if
the parties do not within six (6) months of the date they both have knowledge of
the potential infringement agree to jointly take legal action, then either party
shall have the right, but not the obligation, to independently take such action
to xxxxx such infringement at its own expense. If Symyx independently brings
such action, Symyx shall control and be responsible for all expenses incurred in
connection with such action and may retain all recoveries related to such
action. If Bayer independently takes such action and Symyx does not take such
action, then Bayer will have the right to choose to: (i) not offset any
reasonable expenses incurred in connection with such action against royalties
due Symyx with respect to a Product which utilizes the infringed patent in the
affected country, or (ii) offset [******] of the reasonable expenses incurred in
connection with such action against royalties due Symyx with respect to a
Product which utilizes the infringed patent in the affected country, up to
[******] of such royalties due in any year. In the event Bayer elects not to
offset expenses as described in this Section 4.9.1(b)(i) above, Bayer will
retain all recoveries related to such action. In the event Bayer elects to
offset expenses as described in this Section 4.9.1(b)(ii), any recovery by Bayer
in such action shall be divided as follows: first, Bayer shall recover its
reasonable expenses incurred in such an action, second, Bayer shall reimburse
Symyx for any royalties for which Bayer took an offset, and third, Bayer may
retain [******] of any remainder and shall pay to Symyx [******] of such
remainder.
(c) If there is an infringement which does not relate to a
Product of a patent covering a joint invention within the Program Technology,
the parties shall discuss whether to jointly bring an action to xxxxx such
infringement. In the event that the parties do not wish to jointly bring such an
action either party may seek to xxxxx such infringement; provided, in such
event, should the alleged third party infringer assert that one or more of the
parties to this Agreement are necessary or indispensable to such proceedings,
the other party hereto agrees to join in and participate in such proceedings, at
the expense of and to the extent requested by the party initially participating
in such suit.
4.9.2 Infringement Claims. If the manufacture, sale or use of
any Product pursuant to this Agreement because of the practice of the Program
Technology or the Bayer Technology results in any claim, suit or proceeding
alleging patent infringement against Symyx or Bayer (or its Sublicensees), such
party shall promptly notify the other party hereto in writing setting forth the
facts of such claims in reasonable detail. The Patent Committee or EC will
discuss whether the parties should work together in responding to such action.
Except as the parties may otherwise agree, 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 aspect of the Bayer Technology (in the case of Symyx) and the
Program Technology (in the case of Bayer) is invalid or unenforceable, without
the prior written consent of such other party. The defendant shall keep the
other party hereto reasonably informed of all
-10-
* 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.
11
material developments in connection with any such claim, suit or proceeding.
Each party agrees that it will provide reasonable assistance and cooperation if
the other party is a defendant in such an action, including reasonable access to
documents, records, and witnesses at the defendant's expense. In the event Bayer
disagrees Bayer Technology (in the case of Symyx) or Symyx disagrees the Program
Technology (in the case of Bayer) is invalid or unenforceable, the parties shall
meet to discuss and reach agreement. In the event agreement on this matter is
not achieved within fifteen (15) days, the matter will be referred to the Chief
Executive Officer of Symyx and the head of the corresponding Bayer business unit
for resolution.
ARTICLE 5
LICENSES
5.1 Program Technology.
5.1.1 Bayer Field License. Subject to the terms and conditions
of this Agreement, Symyx agrees to grant and hereby grants to Bayer an
exclusive, worldwide, royalty-bearing license, with the right to sublicense,
under Symyx's interest in the Program Technology solely to develop, make, have
made, import, use, offer for sale, and sell Products for use in the applicable
Field.
5.1.2 Bayer Out of Field License. Symyx agrees to grant and
hereby grants to Bayer an exclusive, worldwide, royalty-free license, with the
right to sublicense, under Symyx's interest in Program Technology which was
invented solely by Bayer employees and agents, to use such Program Technology
outside of the Field and to develop, make, have made, import, use, offer for
sale, and sell products other than for use in the applicable Field.
5.1.3 Symyx Out of Field License. Bayer agrees to grant and
hereby grants to Symyx an exclusive, worldwide, royalty-free license, with the
right to sublicense, under Bayer's interest in Program Technology which was
invented solely or jointly by Symyx employees and agents, to use such Program
Technology outside of the Field and to develop, make, have made, import, use,
offer for sale, and sell products other than for use in the applicable Field.
5.2 Bayer Right of First Negotiation. Subject to Symyx's obligations to
third parties, Bayer will have on a right of first negotiation to negotiate with
Symyx to acquire an exclusive, worldwide, royalty-bearing license under Symyx's
interest in Program Technology, with the right to sublicense, to develop, make,
have made, import, use, offer for sale and sell products other than Products, as
follows: (i) Symyx will provide notice if it wishes to pursue a particular
product using Program Technology solely or jointly invented by Symyx employees,
and in such event within sixty (60) days the parties shall commence
negotiations; (ii) such negotiations shall continue for six (6) months from the
date of such notice, or such longer period as the parties may agree; (iii) if
Symyx and Bayer do not reach agreement within such six (6) months period, or
such longer period as the parties may agree, Symyx may develop or commercialize
such products (other than Products) with a third party or pursue such product
itself without obligation to Bayer.
5.3 Sublicenses. Subject to the terms and conditions of this Agreement
Bayer shall have the right to sublicense the rights granted in Sections 5.1.1.,
5.1.2 and 5.4 to third parties,
-11-
12
including Affiliates of Bayer; provided that the terms of each such sublicense
are 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 Bayer shall remain responsible for all applicable financial
and other obligations under this Agreement for each such Sublicensee, including
without limitation royalty payments due to Symyx hereunder with respect to sales
of Products by any such Sublicensee. Bayer shall provide to Symyx at least the
following information with respect to each of Bayer's sublicensees: (i) the
identity of each sublicensee, and (ii) a description of the rights granted
including scope as to both subject matter and territory.
5.4 Symyx Technology. In the event that any patent rights within Symyx
Technology are necessary for the development and manufacture or
commercialization of a Product to which Bayer has a license pursuant to Section
5.1, Symyx will grant to Bayer a non-exclusive, worldwide royalty-free license,
with the right to sublicense, under patent rights within Symyx Technology as of
the Effective Date, solely to make, have made, import, use, offer for sale and
sell such Product, in each case solely to the extent that Symyx has the right to
grant such rights and solely to the extent that such license is necessary to
enable Bayer or its sublicensee to exercise the rights granted in the licenses
described in Section 5.1.
5.5 Bayer Technology. Bayer agrees to grant, and hereby grants, to Symyx
a nonexclusive, royalty-free license under the Bayer Technology to conduct the
research activities in the Research Program. Notwithstanding Section 5.1 above,
Symyx shall retain the right under the Program Technology to make, have made and
use Agreement Compounds for its own research purposes (i.e., to develop, improve
and validate its technology and intellectual property).
5.6 Access to Combinatorial Chemistry. It is understood that Bayer and
Symyx may, in the future, be interested in entering into an agreement on
mutually agreeable terms and conditions whereby Bayer may obtain access to part
of Symyx's Combinatorial Chemistry Technology. If Bayer desires to acquire
access to part of the Combinatorial Chemistry Technology, Bayer may give Symyx
written notice thereof. If Symyx is willing to grant, and has the right to
grant, Bayer access to such technology, both parties will negotiate in good
faith to try to determine mutually agreeable terms of an agreement whereby Bayer
may obtain a non-exclusive royalty-bearing license to such part of the
Combinatorial Chemistry Technology; however, it is understood that nothing
herein shall obligate either party to negotiate, or enter into, such an
agreement. It is understood that unless and until Symyx and Bayer enter into a
written agreement granting such rights to Bayer, Symyx shall have the right, at
any time and in its sole discretion, to develop, commercialize, sublicense to
third parties (on an exclusive or nonexclusive basis), assign to third parties,
or otherwise exploit Combinatorial Chemistry Technology without obligation to
Bayer.
5.7 Permitted Uses. Except as otherwise agreed in writing, neither Bayer
nor its Affiliates nor Sublicensees shall develop or commercialize any Agreement
Compound or Product except pursuant to the licenses set forth in Section 5.1.1
and 5.1.2 of this Agreement.
5.8 No Conflict. During the term of this Agreement, Symyx shall not
grant any license which Symyx, at the time, knows conflicts with the rights
granted to Bayer in Sections 5.1.1, 5.1.2, 5.2 and 5.4.
-12-
13
5.9 Third Party Rights. It is understood that Symyx is in the business
of conducting research and development with third parties, and that Symyx will
grant such third parties rights after the Effective Date to acquire licenses for
compounds derived from libraries similar to Bayer's rights under this Article 5.
It is understood and agreed that, even if Symyx complies with its obligations
under this Agreement, compounds provided to third parties in the course of
Symyx's other business activities may result in third party patent applications
and patents, including patent applications and patents owned by such third
parties, or owned jointly by Symyx and such third parties, which could conflict
with patent applications and patents owned by Bayer, or jointly owned by Bayer
and Symyx hereunder. In such event, Symyx agrees on request of Bayer to talk to
such third party and discuss with such third party and Bayer the possibility of
obtaining rights or licenses for Bayer with respect to such conflicting patents
or patent applications.
ARTICLE 6
PAYMENTS
6.1 "Research Expenses" shall be equal to the total number of Symyx
Full-Time Equivalent ("FTE") research positions on all Projects in the Research
Program multiplied by Symyx's FTE rate [******] per FTE per year as of the
Effective Date, which rate will be increased annually to reflect changes in the
Consumers Price Index, All Consumers, as published by the U.S. Bureau of Labor
Statistics using 1998 as the base year).
6.2 Research Program Payments.
6.2.1 [******]
6.2.2 Quarterly Payments. The amounts to be paid in connection
with the Research Program with respect to each twelve (12) month period shall be
paid quarterly in advance. The initial payment shall be made no later than five
(5) business days after March 1, 1998. Subsequent payments shall be made on or
before the applicable quarterly anniversaries of March 1, 1998. All such
payments are non-refundable and noncreditable.
6.2.3 Modifications. Research Program Payments may only be
changed with unanimous approval of the Executive Committee.
6.3 Royalties.
6.3.1 [******]
6.3.2 [******]
6.3.3 [******]
(i) [******]
(ii) [******]
-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
(iii) [******]
(iv) [******]
(v) [******]
(vi) Impracticality. In the event that Bayer believes in
good faith that the agreed split of value added Net Income will make it
commercially impracticable to sell Products for use in manufacturing it may
notify Symyx. In such a case, Symyx will be open to discussing this issue on a
case-by-case basis.
6.3.4 [******]
6.3.5 Single Royalty; Non-royalty Sales. No royalty shall be
payable under this Section 6.3 with respect to sales of Products among Bayer and
its Affiliates for resale; and in no event shall more than one royalty be due
hereunder with respect to any Product unit even if covered by more than one
patent included in the Program Technology.
6.4 [******]
6.5 [******]
(A) [******]
(B) [******]
(C) [******]
6.6 [******]
6.6.1[******]
6.6.2 [******]
6.7 [******]
6.7.1 [******]
6.7.2 [******]
6.8 Royalties for New Projects. The parties will agree on the method of
compensation for Products stemming from projects pursued under an expansion of
this Agreement, prior to the addition of such Project in the corresponding
Field.
6.9 Royalty Term. Bayer's obligation to pay royalties to Symyx shall
continue for each Product, on a country-by-country basis, until the later of (i)
ten (10) years after the first commercial sale of such Product, or (ii) the
expiration of the last to expire issued patent covering such Product on a
country-by-country basis.
-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
6.10 Sublicenses. In the event that Bayer or its Affiliate grants a
Sublicense under the Program Technology or Symyx Technology to a third party
(other than an Affiliate of Bayer), Bayer shall pay to Symyx [******] per cent
([******] %) of all license fees, royalties, and other consideration (including
the fair market value of any noncash consideration) received by Bayer and its
Affiliates from each Sublicensee in respect of each such license or sublicense
under the Program Technology or Symyx Technology, in addition to any royalties
due to Symyx under Section 6.3, 6.4, 6.5, 6.6 or 6.7. Such fees, royalties, and
consideration shall in all cases be negotiated at arms-length.
6.11 Third Party Royalties. Bayer is responsible for all payments due to
third parties for the manufacture, sale, or use of Products by Bayer, its
Affiliates or Sublicensees.
6.12 Trade Secret Royalties. The parties acknowledge and agree that the
principal value contributed by Symyx is accelerated time to market, enhanced
probability of success and the potential for multiple Agreement Compounds and
that Symyx and/or Bayer may not own or control patents that cover the
manufacture, use or sale of a particular Product. Bayer acknowledges and agrees
that the value Bayer receives hereunder is in the conduct of research by Symyx
and access to the Agreement Compounds, and accordingly Bayer shall pay the
royalties at the rates specified in Section 6.3 (or an alternative amount agreed
by the parties under Section 6.4, 6.5, 6.6, 6.7,or 6.8) , regardless of whether
the applicable Agreement Compound or Product is covered by a patent application
or patent within the Program Technology or Bayer Technology; provided, however,
that if the applicable Agreement Compound or Product is not covered by a patent
application or patent within the Program Technology or Bayer Technology, then
the minimum royalties set forth in 6.3.3(iv) shall not apply.
6.13 Products Without Patent Protection. If no patent or pending patent
application within the Program Technology claims the method of making, use or
sale of a Product or an Agreement Compound used in making a Product, Symyx and
Bayer will use reasonable and appropriate efforts to maintain applicable trade
secret protection, if any, of such Product or its manufacture.
ARTICLE 7
EQUITY
7.1 Stock Purchase. On or before March 31, 1998, Bayer will have the
option of purchasing up to US$ [******] of Symyx Series D Preferred Stock;
provided, Bayer and Symyx enter into a Preferred Stock Purchase Agreement of
substantially the form set forth in Exhibit D.
ARTICLE 8
PAYMENTS; BOOKS AND RECORDS
8.1 Royalty Reports and Payments. After the first commercial sale of a
Product on which royalties are payable by Bayer or its Sublicensees hereunder,
Bayer shall make quarterly written reports to Symyx within ninety (90) days
after the end of each calendar quarter, stating in each such report, separately
for Bayer and each Sublicensee, the number, description, and
-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
aggregate Net Sales, by country, of each Product sold during the calendar
quarter upon which a royalty, or royalty alternative payment, is payable under
Section 6.3, 6.4, 6.5, 6.6, or 6.7 above. Concurrently with the making of such
reports, Bayer shall pay to Symyx all royalties or royalty alternative payments
due at the rates specified in such Sections.
8.2 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. In
the event that the due date of any payment subject to Article 6 hereof is a
Saturday, Sunday or national holiday, such payment may be paid on the following
business day. Any payments that are not paid within ten (10) days of the date
such payments are due under this Agreement shall bear interest at 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%), calculated on the number of
days such payment is delinquent; provided, however, that if the interest rate
specified herein exceeds the maximum rate permitted by law, then Bayer shall
only be obligated to pay interest at the maximum rate permitted by law. Nothing
in this Section 8.2 shall prejudice any other rights or remedies available to
Symyx hereunder or at law or equity.
8.3 Currency Conversions. If any currency conversion shall be required
in connection with the calculation of royalties hereunder, such conversion shall
be made using the selling exchange rate for conversion of the foreign currency
into U.S. Dollars, quoted for current transactions reported in The Wall Street
Journal for the last business day of the calendar quarter to which such payment
pertains.
8.4 Records; Inspection. Bayer and its Sublicensees shall keep complete,
true and accurate books of account and records for the purpose of determining
the royalty amounts payable 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 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 Bayer has no reasonable
objection, solely for the purpose of verifying royalty statements hereunder.
Such inspections may be made no more than once each calendar year, at reasonable
times and on reasonable notice. Inspections conducted under this Section 8.4
shall be at the expense of Symyx, unless a variation or error producing an
increase exceeding five percent (5%) of the amount stated for any period covered
by the inspection is established in the course of any such inspection, whereupon
all reasonable costs relating to the inspection for such period and any unpaid
amounts that are discovered will be paid promptly by Bayer together with
interest thereon from the date such payments were due at the prime rate (as
reported by the Bank of America, San Francisco, California), plus an additional
two percent (2%). Symyx agrees to hold in strict confidence all information
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. The public accounting firm employees shall
sign a customary 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 Bayer.
8.5 Tax Matters. All royalty amounts and other payments required to be
paid to
-16-
17
Symyx pursuant to this Agreement shall 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 a jurisdiction other than the
United States (,,Withholding Taxes") to the extent Symyx and/or its Affiliates
or their successors has the lawful rights to utilize the Withholding Taxes paid
by Bayer as a credit against Symyx's and/or its Affiliates regular U.S. tax
liability. Bayer shall provide Symyx a certificate evidencing payment of any
Withholding Taxes hereunder.
ARTICLE 9
DUE DILIGENCE
9.1 Due Diligence. Bayer shall use reasonable and diligent efforts to
develop Agreement Compounds and commercialize Products in the relevant markets
of the world. The parties may mutually agree on reasonable specific criteria to
establish due diligence for each Project.
9.2 [******]
(i) [******]
(ii) [******]
(iii) [******]
9.3 Lack of Diligence.
9.3.1 [******]
9.3.2 [******]
9.3.3 [******]
9.4 Reports. During the term of this Agreement, Bayer shall provide
Symyx with written quarterly reports within thirty (30) days of the end of each
six (6) month period providing at least the following information, (i)
description of the status of the research and development activities conducted
with respect to each Agreement Compound while in development; and (ii) the
status of all patent applications claiming such Agreement Compounds. The reports
as described in this Section shall contain sufficient information to allow Symyx
to monitor Bayer's compliance with this Agreement. Until first commercial
introduction of each royalty-bearing Product, Bayer shall keep Symyx apprised of
the status of the commercial development of all such Products by semi-annually
providing Symyx with a written report detailing such activities with respect to
each such Product during the term of this Agreement. All reports and information
provided under this Section 9.4 shall be deemed Confidential Information of
Bayer.
ARTICLE 10
CONFIDENTIALITY
-17-
* 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.
18
10.1 Confidential Information. Except as otherwise expressly provided
herein, the parties agree that, until the later of (i) ten (10) years after the
Effective Date or (ii) five (5) years after termination of this Agreement, the
receiving party shall not, except as expressly provided in this Article 10,
disclose to any third party or use for any purpose any Confidential Information
furnished to it by the disclosing party hereto pursuant to this Agreement,
except to the extent that it can be established by the receiving party by
competent proof that such information:
(i) was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure;
(ii) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(iii) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement;
(iv) was independently developed by the receiving party as
demonstrated by documented evidence prepared contemporaneously with such
independent development; or
(v) was disclosed to the receiving party, other than under an
obligation of confidentiality, by a third party who had no obligation to the
disclosing party not disclose such information to others.
10.2 Permitted Use and Disclosures. Each party hereto may (i) use
Confidential Information disclosed to it by the other in conducting the Research
Program and (ii) use or disclose Confidential Information disclosed to it by the
other party, to the extent such information is within the Program Technology and
such use or disclosure is reasonably necessary and permitted in (A) the exercise
of such rights granted hereunder, (B) filing or prosecuting patent applications,
(C) prosecuting or defending litigation, (D) complying with applicable
governmental regulations or court order or otherwise submitting information to
tax or other governmental authorities, or (E) making a permitted sublicense or
otherwise exercising license rights expressly granted by the other party
pursuant to the terms of this Agreement; provided that if a party is required to
make any such disclosure, other than pursuant to a confidentiality agreement, it
will give reasonable advance notice to the other party of such disclosure and,
save to the extent inappropriate in the case of patent applications, will use
its reasonable best efforts to secure confidential treatment of such information
in consultation with the other party prior to its disclosure (whether through
protective orders or otherwise) and disclose only the minimum necessary to
comply with such requirements.
10.3 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, or as customary in connection with a public offering of
Symyx stock, or to the extent required by law. Notwithstanding the foregoing,
the parties shall agree
-18-
19
upon a press release and timing to announce the execution of this Agreement, and
thereafter, Symyx and Bayer may each disclose to third parties the information
contained in such press release without the need for further approval by the
other. In addition, Bayer and Symyx may make public statements regarding the
progress of the Research Program and the achievement of milestones with respect
thereto, following consultation and mutual agreement, the consent of neither
party not to be unreasonably withheld.
10.4 Publication. Any manuscript by Symyx or Bayer describing the
scientific results of the Research Program to be published during the term of
the Research Program or within three (3) year after the end of the Research
Program shall be subject to the prior review of the parties at least ninety (90)
days prior to submission. Further, to avoid loss of patent rights as a result of
premature public disclosure of patentable information, the receiving party shall
notify the disclosing party in writing within thirty (30) days after receipt of
any disclosure whether the receiving party desires to file a patent application
on any invention disclosed in such scientific results. In the event that the
receiving party desires to file such a patent application, the disclosing party
shall withhold publication or disclosure of such scientific results until the
earlier of (i) the time a patent application is filed thereon, or (ii) the time
the parties determine, after consultation, that no patentable invention exists,
or (iii) ninety (90) days after receipt by the disclosing party of the receiving
party's written notice of the receiving party's desire to file such patent
application, or such other period as is reasonable for seeking patent
protection. Further, if such scientific results contain the information of the
receiving party that is subject to use and nondisclosure restrictions under this
Article 10, the disclosing party agrees to remove such information from the
proposed publication or disclosure.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 Bayer. Bayer represents and warrants that: (i) it has the authority
and right to enter into this Agreement and to perform all of its obligations
hereunder; and (ii) this Agreement is a legal and valid obligation binding upon
it and enforceable in accordance with its terms.
11.2 Symyx. Symyx represents and warrants that: (i) it has the authority
and right to extend the rights granted in this Agreement, (ii) this Agreement is
a legal and valid obligation binding upon it an enforceable in accordance with
its terms; (iii) it has the full right to enter into this Agreement, and to
fully perform its obligations hereunder; (iv) it has not previously granted, and
during the term of this Agreement will not knowingly or intentionally make any
commitment or grant any rights which are inconsistent in any material way with
the rights and licenses granted herein; 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 Symyx Technology.
11.3 Disclaimer. Bayer 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 identify Agreement Compounds in the course of the
Research Program will not, alone, constitute a breach of any representation or
warranty or other obligation under this Agreement. EXCEPT AS OTHERWISE EXPRESSLY
SET FORTH IN THIS AGREEMENT, SYMYX AND BAYER AND THEIR RESPECTIVE AFFILIATES
-19-
20
MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY KIND,
EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE PROGRAM TECHNOLOGY, SYMYX
TECHNOLOGY, BAYER TECHNOLOGY, LIBRARIES, AGREEMENT COMPOUNDS, INFORMATION
DISCLOSED HEREUNDER OR AGREEMENT PRODUCTS INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF ANY
PROGRAM TECHNOLOGY, SYMYX TECHNOLOGY OR BAYER TECHNOLOGY, PATENTED OR
UNPATENTED, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES.
ARTICLE 12
INDEMNIFICATION
12.1 Bayer. Bayer agrees to indemnify, defend and hold Symyx and its
Affiliates and their directors, officers, employees, agents and their respective
successors, heirs and assigns (the "Symyx Indemnitees") harmless 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 (other than claims of infringement of Symyx patents licensed to
Bayer under this Agreement) and trade secret misappropriation matters, suits,
actions or demands relating to (i) any Agreement Compounds or Products
developed, manufactured, used, sold or otherwise distributed by or on behalf of
Bayer, its Sublicensees or other designees (including, without limitation,
product liability claims and patent infringement claims ) other than claims of
infringement of Symyx patents licensed to Bayer under this Agreement), (ii)
Bayer's performance of the Research Program, and (iii) any breach by Bayer of
the representations and warranties made in this Agreement, except, in each case,
to the extent such Liabilities result from the gross negligence or intentional
misconduct of Symyx.
12.2 Symyx. Symyx agrees to indemnify, defend and hold Bayer, its
Affiliates and Sublicensees and their respective directors, officers, employees,
agents and their respective heirs and assigns (the "Bayer Indemnitees") harmless
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 and product liability matters,
suits, actions, demands relating to (i) any product developed, manufactured,
used, sold or otherwise distributed by or on behalf of Symyx, its Affiliates,
licensees or other designees (other than Bayer, its Affiliates and Sublicensees)
pursuant to Section 5.1.3 herein (including, without limitation, product
liability and patent infringement claims), and (ii) any breach by Symyx of its
representations and warranties made in this Agreement, except, in each case, to
the extent such Liabilities result from the gross negligence or intentional
misconduct of Bayer.
12.3 Procedure. In the event that any Indemnitee (either a Bayer
Indemnitee or a Symyx Indemnitee) intends to claim indemnification under this
Article 12 it shall promptly notify the other party in writing of such alleged
Liability. The indemnifying party shall have the
-20-
21
right to control the defense thereof with counsel of its choice as long as such
counsel 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, including if representation of any Indemnitee by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnitee and any other party
reasonably represented by such counsel in such proceeding. The affected
Indemnitee shall cooperate with the indemnifying party and its legal
representatives in the investigation of any action, claim or liability covered
by this Article 12. The Indemnitee shall not, except at its own cost,
voluntarily make any payment to incur any expense with respect to any claim or
suit without the prior written consent of the indemnifying party, which such
party shall not be required to give.
ARTICLE 13
TERMINATION
13.1 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 and Product-by-Product basis until Bayer and its Affiliates
and Sublicensees have no remaining royalty payment obligations in a country,
unless terminated earlier as provided in this Article 13.
13.2 Breach.
13.2.1 Termination of Agreement. Either party to this Agreement
may terminate this Agreement as to any other party hereto in the event such
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 sixty (60) 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 sixty (60) day period unless the breaching party (or any other party
on its behalf) has cured any such breach or default prior to the expiration of
the sixty (60) day period; provided, however, in the case of a failure to pay
any amount due hereunder, such default may be the basis of termination fifteen
(15) business days following the date that notice of such default was provided
to the breaching party.
13.2.2 Termination of Research Program. If, during the Research
Program Term, Symyx shall have materially breached or defaulted in the
performance of any of its material obligations hereunder, and such breach or
default shall have continued for sixty (60) days after written notice thereof
was provided to Symyx, Bayer may, in its discretion, choose to either (i)
terminate the Agreement or (ii) upon written notice to Symyx, terminate the
Research Program without terminating the Agreement. Any such termination of the
Agreement or the Research Program shall become effective at the end of such
sixty (60) day period unless Symyx (or any other party on its behalf) has cured
any such breach or default prior to the expiration of the sixty (60) day period.
In the event Bayer terminates the Research Program and not the Agreement, as set
forth in this section 13.2.2, Bayer shall not be obligated to pay the Research
Expenses as set forth in Sections 6.1 and 6.2 for research conducted after such
termination. It is understood that among other things, termination of the
Research Program without termination of the Agreement, as set forth in this
Section 13.2.2 shall not constitute termination of the licenses set forth in
-21-
22
Article 5 or the payment obligations set forth in Article 6 (other than Research
Expenses); provided, however, "Program Technology" shall not include any Patent
Rights or Know-How or other inventions, discoveries, data, or information, or
intellectual property rights in and to such inventions, discoveries, data, or
information made, conceived, reduced to practice, or otherwise developed solely
or jointly by Symyx, after termination of the Research Program.
13.3 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
terminate this Agreement effective upon notice of such termination.
13.4 Effect of Expiration or Termination.
13.4.1 Accrued Rights and Obligations. Expiration or 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 these
Agreement.
13.4.2 Stock on Hand. In the event of the cancellation or
termination of any license rights with respect to a Product prior to the
expiration of this Agreement, inventory of the Product on hand at the time of
such cancellation or termination may be sold for up to six (6) months after date
of such cancellation or termination, subject to Articles 6 and 8 and the other
applicable terms of this Agreement.
13.4.3 Licenses.
(i) In the event of a termination by Symyx pursuant to
Section 13.2 or 13.3, the licenses and rights granted Bayer herein, other than
the license set forth in Section 5.1.2, shall terminate.
(ii) If Bayer's rights terminate with respect to a
particular Agreement Compound and/or Product for failure to meet the diligence
requirements of Section 9.1, and more than one Product is being commercially
developed or exploited by Bayer or its Sublicensees hereunder, then Symyx shall
be entitled to terminate this Agreement only with respect to the applicable
Agreement Compounds and Products.
13.5 Survival. Sections 2.6, 2.7, 2.8, 5.1.2, 5.1.3, 5.7, 5.9, 6.3, 6.4,
6.5, 6.6, 6.7, 6.9, 6.10, 11.3, 13.4, 13.5 and Articles 4, 8, 10, 12, 14 of this
Agreement shall survive the expiration or termination of this Agreement for any
reason.
-22-
23
ARTICLE 14
MISCELLANEOUS
14.1 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 California, without
reference to conflicts of laws principles.
14.2 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.
14.3 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.
14.4 Assignment. This Agreement shall not be assignable by either party
to any third party hereto without the written consent of the other party hereto,
except either party may assign this Agreement, without such consent, to an
entity that acquires all or substantially all of the business or assets of such
party to which this Agreement pertains, whether by merger, reorganization,
acquisition, sale, or otherwise. 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.
14.5 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.
14.6 Performance Warranty. Bayer hereby warrants and guarantees the
performance of any and all rights and obligations of this Agreement by its
Affiliates and Sublicensees.
14.7 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 and export and sale of Products
pursuant to this Agreement.
14.8 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, Bayer 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 Bayer by Symyx if such
-23-
24
export would violate the laws of the United States or the regulations of any
department or agency of the United States Government.
14.9 Patent Marking. Bayer agrees to xxxx and have its Sublicensees xxxx
all Products sold pursuant to this Agreement in accordance with the applicable
statute or regulations relating to patent marking in the country or countries of
manufacture and sale thereof.
14.10 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or by registered or
certified mail, return receipt requested, postage prepaid, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other parties hereto and shall be deemed to have been given upon
receipt.
Symyx: Symyx Technologies
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000 XXX
Attn: Chief Financial Officer
Bayer: Xxxxx XX
X-00000 Xxxxxxxxxx
Germany
Attn: Head of Central Research
Copy: Patents & Licensing Department
14.11 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.
14.12 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.
14.13 Complete Agreement. This Agreement with its Exhibits, and Stock
Purchase Agreement executed by the parties of even date herewith 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. The Interim Research Funding
Agreement is hereby terminated and superseded by this Agreement; provided,
however that all information and materials subject to the confidentiality
provisions of the Interim Research Funding Agreement shall be treated as
Confidential Information subject to this Agreement. No
-24-
25
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 Bayer.
14.14 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 San Francisco, California,
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 14.14 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.
14.14.1 [******]
14.15 Remedies. It is understood that the remedies provided in Section
9.3 shall not prejudice any other rights or remedies available to Symyx
hereunder or at law or equity, and shall not preclude Symyx from pursuing any
rights and remedies available to Symyx with respect to any breach of this
Agreement.
14.16 Headings. The captions to the several Section hereof are not part
of this Agreement, but are included merely for convenience of reference and
shall not affect its meaning or interpretation.
14.17 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.
-25-
* 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.
26
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.
SYMYX TECHNOLOGIES XXXXX XX
By: /s/ XXX XXXXXXXXXX By: /s/ X.X. XXXXXXXXXX
------------------------- -----------------------------
Title: President Title: Head of Central Research
---------------------- --------------------------
Date: 2/27/98 Date: 3/3/1998
----------------------- ---------------------------
By: /s/ X. XXX XXXXXXXXX
--------------------------
Title: Lic. Manager
--------------------------
Date: 03/03/1998
---------------------------
Exhibit A - Definitions
Exhibit B - Procedure for Lead Compound Identification
Exhibit C - Description of Initial Fields and Projects
Exhibit D - Stock Purchase Agreement
-26-
27
EXHIBIT A
DEFINITIONS
1.1 "Agreement Compound" shall mean any Lead Compound [******].
1.2 "Bayer Technology" shall mean all patents, copyrights, trade secrets,
know-how, data, and other intellectual property of any kind owned, in whole or
part, or controlled by Bayer during the term of this Agreement which relates to
an invention conceived and reduced to practice outside the Research Program by
Bayer. For purposes of clarification, Bayer Technology includes process
development performed by or under authority of Bayer or its Affiliates outside
of the Research Program. Bayer Technology excludes Combinatorial Chemistry
Technology developed in connection with the conduct of the Research Program.
1.3 [******]
1.4 [******]
1.5 "Confidential Information" shall mean (i) any proprietary or confidential
information or material in tangible form disclosed hereunder that is marked as
,,Confidential" at the time it is delivered to the receiving party, (ii)
proprietary or confidential information disclosed orally hereunder which is
identified as confidential or proprietary when disclosed and such disclosure of
confidential information is confirmed in writing within thirty (30) days by the
disclosing party (iii) written information that is marked as "Confidential" that
contains financial projections, business plans, marketing plans, cost
projections, or manufacturing plans or other confidential business information
related to commercialization or development of Products or Agreement Compounds.
Data generated in the course of the Research Program concerning the activity of
Agreement Compounds within the applicable Field shall be treated as Confidential
Information with respect to provisions regarding disclosure of Confidential
Information.
1.6 [******]
(i) [******]
(ii) [******]
(iii) [******]
1.7 "Executive Committee" or "EC" shall have the meaning set forth in Section
3.1.
1.8 "Field" shall mean a defined, mutually agreed, area of research within the
Research Program focused on the development of Agreement Compounds for the
production of one or more Products. The initial Fields for this Agreement are
described in Section 2.2.1. Each Field may include one or more Projects.
1.9 "Lead Compound" shall mean a compound contained in a library prepared by or
on behalf of Symyx under the Research Program, or screened by Symyx under the
Research Program, that meets the specific physical and/or chemical properties
established as Lead Criteria by the
-27-
* 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.
28
Research Committee. Any compound that (i) is identified in a Project as having
activity within the applicable Field and (ii) thereafter enters development, or
is sold or otherwise commercialized, by Bayer or its Affiliates or Sublicensees
shall also be deemed a Lead Compound for all purposes of this Agreement.
1.10 "Lead Criteria" shall mean the specific physical and chemical properties
established by the RFC in the applicable Project Plan for identifying a Lead
Compound.
1.11 "Manufacturing Costs" shall mean (i) all direct and indirect costs related
to the manufacture by Bayer 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.
1.12 "Net Income" shall mean the Net Sales with respect to a Product, less: (a)
Manufacturing Costs for such Product; and (b) reasonable expenses incurred by
Bayer 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.
1.13 "Net Sales" shall mean the invoice price of any Product sold by Bayer or
its Affiliates to bona fide independent third parties, less, to the extent
included in such invoice price the total of: (1) ordinary and customary trade
discounts actually allowed; (2) credits, rebates and returns; (3) freight and
duties paid for and separately identified on the invoice or other documentation
maintained in the ordinary course of business, and (4) excise taxes, other
consumption taxes, customs duties and other compulsory payments to governmental
authorities actually paid and separately identified on the invoice or of the
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 Bayer or its Affiliates in respect of Products, whether such consideration is
in cash, payment in kind, exchange or another form.
1.14 "Product" shall mean any product within the scope of a Field which
incorporates an Agreement Compound or utilizes an Agreement Compound in its
manufacture or is made utilizing a method or process within the Program
Technology. (cf. 6.11 and 6.12)
1.15 "Program Technology" shall mean any Patent Right and Know-How conceived,
reduced to practice, or otherwise developed by the parties in connection with
the conduct of the Research Program. For purposes of clarification, Program
Technology includes process development performed by or under authority of Symyx
or Bayer, or jointly by Symyx and Bayer, in the course of performing the
Research Program. Program Technology shall not include any Symyx Technology,
Bayer Technology or Combinatorial Chemistry Technology.
1.15.1 "Know-How" shall mean all data, instructions, processes, formulas
and
-28-
29
information, including, without limitation, chemical, physical and analytical,
safety, manufacturing and quality control data and information which is
necessary for the development, manufacture or use of Agreement Compounds or
Products. Know-How does not include any inventions included in the Patent
Rights.
1.15.2 "Patent Rights" shall mean (i) any patent or patent
application claiming an invention conceived and reduced to practice by Symyx or
Bayer, or jointly by the parties, in the course of performing the Research
Program which claims an Agreement Compound or a Product, or method or process
for the synthesis 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, and (ii) any divisions, continuations, continuations-in-part, reissues,
reexaminations, extensions or other governmental actions which extend any of the
subject matter of the patent applications or patents in (i) above, and any
substitutions, confirmations, registrations or revalidations of any of the
foregoing.
1.16 "Project" shall mean a research effort within a Field focused on the
identification and development of Lead Compounds with mutually agreed upon
characteristics, or uses, for the manufacture of Product(s). Projects shall
include the initial Projects referenced in Section 2.2.3, and any additional
Projects that become part of the Research Program in accordance with Section
3.1.1.
1.17 "Project Plan" shall mean the written overall plan to be prepared annually
by the applicable RFC for the research to be conducted with respect to a
particular Project in a given year, which shall include a budget, time lines,
staffing requirements and research objectives, as may be amended by the RFC from
time to time.
1.18 "Research Expenses" shall have the meaning set forth in Section 6.1.
1.19 "Research Field Committee" or "RFC" shall have the meaning set forth in
Section 3.2.1.
1.20 "Research Program" shall mean all research activities conducted by Symyx
and Bayer on a collaborative basis under this Agreement, with the goal of
discovering Agreement Compounds within the Fields, in accordance with the
Project Plans.
1.21 "Research Program Term" shall have the meaning described in Section 2.4.1.
1.22 "Sublicensee" shall mean, with respect to a particular Product, a third
party to whom Bayer (or its Affiliate) has granted a license or sublicense to
develop, make, import, use, offer for sale or sell such Product (each such
license or sublicense referred to in this Agreement as a "Sublicense"). As used
in this Agreement, ,,Sublicensee" shall also include a third party to whom Bayer
has granted the right to distribute such Product, provided that such third party
has the primary responsibility for marketing and promotion at its expense of
such Product within the field or territory for which such distribution rights
are granted.
1.23 "Specialty Product" shall mean chemicals and materials which are not
Commodity Products.
-29-
30
1.24 "Symyx Technology" shall mean all patents, copyrights, trade secrets,
know-how, data, and other intellectual property of any kind owned or controlled
by Symyx during the term of this Agreement which relates to an invention
conceived and reduced to practice outside the Research Program by Symyx. Symyx
Technology excludes Combinatorial Chemistry Technology.
1.25 [******]
-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
EXHIBIT B
PROCEDURE FOR LEAD COMPOUND IDENTIFICATION
1. At such time as Symyx has identified a compound which it believes may meet
the Lead Criteria for a particular project, it shall provide the data and
results supporting such conclusion to the applicable RFC.
2. Symyx will, on request of Bayer, use reasonable efforts to provide reasonable
quantities of such compound for Bayer to confirm whether it meets the applicable
Lead Criteria.
3. The RFC shall review the results provided by Symyx and Bayer with respect to
a particular Lead Compound, and if such results indicate that the applicable
Lead Criteria have been satisfied, the RFC shall deem such compound to be a Lead
Compound for all purposes of this Agreement.
4. In the event that the RFC requests further information or the conduct of
further studies to confirm whether a particular Lead Compound meets the
applicable Lead Criteria, Symyx and Bayer shall use reasonable efforts to
prepare any such information and conduct any such studies.
-31-
32
EXHIBIT C
INITIAL FIELDS
[******]
-32-
* 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.
33
EXHIBIT D
[PREFERRED STOCK PURCHASE AGREEMENT]
-33-
