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EXHIBIT 10.14
CONFIDENTIAL
***PORTIONS OF THE EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
THE COMPLETE EXHIBIT, INCLUDING THE PORTIONS FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED, HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENT
This Collaborative Research and Development Agreement ("Agreement"),
dated 01 September 1995, is entered into by and between:
E. I. du Pont de Nemours and Company, a corporation organized under the
laws of the State of Delaware (hereinafter "DUPONT"), with principal
offices located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000,
and
Genencor International, Inc., a corporation organized under the laws of
the State of Delaware (hereinafter "GENENCOR"), with principal offices
located at 0 Xxxxxxxxx Xxxxx, 0000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, XX
00000.
WITNESSETH
Whereas, DUPONT and GENENCOR are mutually interested in aspects of
fermentation technology relating to the development of biological sources of,
among other things, useful chemical intermediate compounds;
Whereas, DUPONT is interested in the feasibility of introducing a
biologically-sourced chemical as an intermediate in certain of its polymer,
fiber or other businesses;
Whereas, GENENCOR has expertise in the feasibility and optimization of
fermentative routes for the synthesis of chemical intermediates; and
Whereas, both Parties anticipate that combining the strengths of their
respective organizations in a program of joint research and development will
increase the likelihood of achieving commercialization of a particular
biologically-sourced Compound;
NOW THEREFORE, DUPONT and GENENCOR enter into the "Agreement" and agree
as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the teens set forth hereinafter shall be
defined as follows:
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1.1 "Affiliate" shall mean any person or entity which directly or
indirectly through one or more intermediary controls, is controlled by, or is
under common control with a Party. "Control" shall mean the possession of
greater than fifty percent (50%) of the voting stock or the power to direct or
cause the direction of the management and policies of the controlled entity,
whether through the ownership of voting securities, by contract or otherwise.
For purposes of this Agreement, neither Xxxxxxx Chemical Company (EMN) nor
Cultor, Ltd. (Cultor) shall be treated as an Affiliate of GENENCOR.
1.2 "Agreement" shall mean this Agreement.
1.3 "Bioprocess" shall mean a process developed during the term of the
Agreement for the production of Compound X using living cells.
1.4 "By-Products" shall mean isolatable compounds or substances, other
than Compound X, produced by or during the Bioprocess.
1.5 "Designated Organism(s)" shall mean organisms designated by GENENCOR
under the Termination provisions of Paragraph 10.5.
1.6 "Cash Cost of Manufacturing" ("CCOM") shall mean the *** but
excluding *** associated with the manufacture of *** of Compound X by means of a
Bioprocess. The method of CCOM calculation is set forth in Article 4 herein.
1.7 "Commercial Phase" shall mean the period after the Pre-Commercial
Phase cap of *** has been achieved.
1.8 Commercial Specification for Compound X will be determined by DUPONT
after review and comment by GENENCOR within two years of the Effective Date. The
final Commercial Specification will define monomer that yields a fully
functional commercial grade polymer which is acceptable in a commercial
polymerization process. "Fully functional, commercial grade polymer" will be
characterized by the performance of Bioprocess Compound X in a series of tests.
The series of tests to define this performance standard shall be specified at
the time the Commercial Specification is finalized and shall include ***
comparable to the performance of polymer produced from petrochemical Compound X.
The performance standards for Bioprocess Compound X shall not exceed the
performance standards of petrochemical Compound X. Appendix 1.8 is provided as
an example specification only for Compound X and is not intended to be a
starting specification for Compound X.
1.9 "Compound X" shall mean 1,3-propanediol (also referred to as "PN13")
and any intermediate used in its preparation and any compound or product derived
from 1,3-propanediol.
1.10 "Confidential Information" shall mean all technical information,
know-how, trade secrets and all documents and materials reflecting the same,
including, without limitation patents, patent applications, inventor's
certificates, utility models, copyrights, and other proprietary rights related
thereto, relating to prototypes, materials, compositions, devices, methods, or
procedures in the research and development, manufacture, use or sale of Compound
X, as well as specifi-
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cations for any product, test results and data, notebooks, notes and memorandum,
software, manuals, and drawings relating to the research and development,
manufacture, use or sale of Compound X.
1.11 "DUPONT Field" shall mean the research, preparation, manufacture,
use or sale of Compound X.
1.12 "DUPONT Confidential Information" shall mean any Confidential
Information disclosed by DUPONT, pursuant to this Agreement.
1.13 "Effective Date" of the Agreement shall be 1 September 1995.
1.14 "GENENCOR Confidential Information" shall mean any Confidential
Information disclosed by GENENCOR pursuant to this Agreement.
1.15 "Industrial Enzymes" shall mean proteins and enzymes produced by
living cells which catalyze reactions useful in industrial applications.
1.16 "Inventions" shall mean any invention, patentable or otherwise,
which arises out of the R&D Program, and which is first conceived and/or reduced
to practice during the term of the R&D Program.
1.17 "Party" shall mean DUPONT and Affiliates or GENENCOR and
Affiliates, as the case may be, and "Parties" shall mean DUPONT and GENENCOR and
their respective Affiliates.
1.18 "Patent Rights" shall mean rights arising from any patent
application or patent (foreign or domestic) which cover Inventions, including
any and all divisions, continuing cases, reissues, reexaminations, additions,
substitution cases, renewals, and extensions thereof.
1.19 "Pre-Commercial Phase" shall mean the period starting with the
first Bioprocess production of Compound X meeting the Commercial Specification
up to the cumulative Bioprocess production of *** of Compound X meeting the
Commercial Specification.
1.20 "R&D Program Quarter" shall mean each successive three (3) month
period beginning with the date on which the R&D Program is initiated, 1
September 1995.
1.21 "Royalty Inflation Index" shall mean the Producer Price Index for
Intermediate Material less Food and Feeds as published in the Statistical
Abstract of the US Department of Commerce.
1.22 "Selected Microbial Pathways" shall mean a specific portion of the
*** to 1,3-propanediol pathway, specifically the portion relating to the
conversion of *** to 1,3-propanediol.
1.23 "Third Party(ies)" shall mean any person or persons including any
individual business entity, partnership, corporation, or other entity other than
DUPONT and Affiliates or
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GENENCOR and Affiliates. "Third Party" specifically includes Xxxxxxx Chemical
Company and Cultor, Ltd. which companies each own a 50% interest in GENENCOR.
Nevertheless the Special Confidentiality provision of Paragraph 9.4 shall be
observed with respect to EMN and Cultor.
ARTICLE 2
CQLLABORATIVE RESEARCH AND DEVELOPMENT PROGRAM
2.1 Steering Committee. Each Party will appoint three of its employees
to serve on a Steering Committee. The purpose of the Steering Committee is to
oversee, guide and monitor the conduct of the R&D Program under this Agreement.
Each Party has one (1) vote total on any matter within the scope of the R&D
Program coming before the Steering Committee. To ensure the success of the R&D
Program, the Steering Committee will meet regularly, and at least quarterly, to
review and discuss the progress of the R&D Program. The Steering Committee will:
- function as a communication device to each Party's corporate
management;
- monitor the rights and obligations of the Parties under the
Agreement;
- facilitate the development of the overall relationship between
the Parties;
- review, approve and administer the Program's technical goals,
plans and budget for the R&D Program;
- consider strategic issues such as intellectual property
strategy;
- manage team recognition and team building issues;
- propose to the Parties amendments or modifications to the
Agreement; and the like.
Matters outside the scope of the R&D Program and internal to each Party are not
under the purview of the Steering Committee. Such matters include but are not
limited to determination of internal personnel policies and programs, budgeting,
finance, commercial and marketing strategies, and business decisions. However,
the Parties agree to communicate with each other promptly on those matters
which, while outside the scope of the R&D Program, nevertheless may reasonably
be expected to influence the conduct or term of the R&D Program or the
commercialization of Compound X.
2.2 Research and Development Program. Using the Steering Committee as
the device through which agreement is reached, DUPONT and GENENCOR will jointly
agree on the research and development work to be performed under the Agreement,
including which Party is responsible for such work, whether it is to be
performed jointly by the Parties or solely by one of the Parties, relevant time
lines for progress of such work and such other factors as are deemed necessary
and appropriate to conduct the work. A summary of the work to be performed under
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the Agreement, including the initial R&D Program proposal (the "R&D Program"),
is attached to and incorporated in the Agreement as Appendix 2.2.
2.3 GENENCOR Research and Development Expenses.
(a) R&D Expenses. DUPONT will pay GENENCOR's *** R&D expenses for
work on the R&D Program up to a maximum of One Million, Five Hundred Thousand
dollars US ($1.5MM) per year for five (5) years as
adjusted for inflation according to Paragraph 2.4. This payment is based on the
man-month(s) expended by GENENCOR in support of the R&D Program.
(b) Quarterly R&D Expense Payments. DUPONT agrees to make
quarterly payments to GENENCOR within thirty (30) days of the date DUPONT
receives the last of GENENCOR's monthly reports of man-months expended on behalf
of the R&D Program during the previous R&D Quarter.
(c) Staffing Levels. Staffing levels will be mutually agreed to
by the Parties through the operation of the Steering Committee and based on the
needs of the R&D Program. The overall levels of personnel allocated to the R&D
Program will be reviewed and adjusted quarterly by the Steering Committee to
reflect the needs of the R&D Program. It is expected that GENENCOR will allocate
categories of personnel on an annual basis as follows:
(i) an average of *** Scientific Personnel; the term
"Scientific Personnel" referring to exempt level scientific staff
members and non-exempt technical persons; and
(ii) an allocated equivalent of *** Support Personnel; the
term "Support Personnel" referring to nonexempt or exempt administrative
or technical persons and/or director or higher management level staff
members.
(d) Confirmation of Monthly Staffing. To assist DUPONT in
accounting for R&D Program costs, GENENCOR will provide to DUPONT a monthly
report confirming the man-months expended during the prior month. Support
Personnel time allocated to the R&D Program will be monitored as shown in
Appendix 2.3 hereof based on a ratio (to be determined) of allocable manpower of
Scientific Personnel who prepared time sheets to allocable Support Personnel.
The equivalent Support Personnel man-month efforts for the succeeding R&D
Program Quarter will be based on the most recent ratio established by the
Steering Committee as part of its quarterly overall review of staffing.
2.4 Inflation Adjustment. R&D costs are to be adjusted annually for
inflation using the Consumer Price Index published by the US Department of
Commerce. The inflation adjustments will be effective on 1 September of each
year beginning in 1996.
2.5 Related DUPONT Research and Development Expenses. DUPONT will pay
all its own R&D and administrative expenses for work on the R&D Program, with no
cost sharing by GENENCOR.
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ARTICLE 3
R&D-BASED MILESTONES
3.1 R&D based Milestones. Upon agreement by the Parties based on the
Steering Committee's review of the scientific data and results of the R&D
Program that a particular R&D based milestone (Generation I, Il or III) was
achieved, DUPONT will make certain non-refundable, lump sum payments to
GENENCOR. The technical success Milestones which trigger such lump sum payments
are provided in Table I. The timelines or other factors affecting payment and
the relevant payment amounts are provided in Table II.
3.2 Generation I and II Milestones. Generation I and II milestones are
reached when all *** technical parameters *** are met or exceeded based on ***
out of ***, provided the average value of the *** meets or exceeds the ***
parameters of Table I. Generation I technical parameters must be met at ***
scale or larger. Generation II technical parameters must be met at *** scale or
larger.
3.3 Generation III Milestones. Generation III milestones are reached
when all *** technical parameters *** for *** processing as set forth in Table
I, are met or exceeded at a scale of *** or larger, or that the equivalent
parameters for a continuous process are met. The method for translating the
batch process parameters to continuous process parameters will be agreed upon by
the Parties through the Steering Committee promptly after the completion of the
Generation III milestone.
3.4 Timing of Payment. Promptly, and no later than sixty (60) days after
the Steering Committee determines that a Milestone has been met, DUPONT shall
pay GENENCOR the applicable Milestone Payment.
Table I
TECHNICAL SUCCESS MILESTONES
R&D Goal ***
--------
GEN I
GEN II
GEN III4
***
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Table II
TIME LINES/PAYMENT AMOUNT
Estimated Completion Date
R&D Goal From Start of R&D Program Payment to GENENCOR
-------- ------------------------- -------------------
GEN I *** ***
GEN II *** ***
*** Payment to GENENCOR
-------------------
GEN III *** ***
1 Based on recovered Compound X, assuming *** recovery.
2 For yield rates of GEN III between the stated ratios of Table II, the
milestone payment will be interpolated.
ARTICLE 4
PRE-COMMERCIAL AND COMMERCIAL E MILESTONES
4.1 Pre-Commercial Milestone. DUPONT will pay GENENCOR a non-refundable,
lump sum payment of *** upon the cumulative Bioprocess production of *** of
Compound X meeting the Commercial Specification during the Pre-Commercial Phase,
regardless of whether the so-produced Compound X are made by DUPONT, or for
DUPONT by a toll manufacturer, or by GENENCOR.
4.2 Commercial Milestones. DUPONT shall pay GENENCOR a non-refundable,
lump sum bonus payment upon the production of Compound X which meets or exceeds
Commercial Specification during a *** period of operating time as described in
Paragraph 4.3 hereof, on a non-campaign, manufacturing basis. The Steering
Committee will determine whether or not a bonus milestone payment under
Paragraph 4.2 is due to GENENCOR and the amount of such payment, if any, such
determination based on its review of the relevant data, Paragraphs 4.3, 4.4, and
the schedule of payments of Table III.
4.3 Operating Time. The *** period of operating time referred to in
Paragraph 4.2 is to be elected prospectively at GENENCOR's discretion from the
first eighteen (18) months of "Actual Operating Time" in a manufacturing plant.
"Actual Operating Time" as used herein means non-campaign, manufacturing
operating time whereby Commercial Specification material is produced and
continuity of operation is achieved in the fermentation process sufficient to
feed the downstream recovery process of Compound X. In the event unexpected or
atypical situations or occurrences arise during the *** period which result in
non-representative average CCOMs, and upon mutual agreement of the Parties that
such results are non-representative, then GENENCOR may elect prospectively a
further *** period of operating time for purposes of achieving production of
Compound X pursuant to this Paragraph. CCOM determination is subject to
reasonable auditing procedures.
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4.4 CCOM Calculation. The amount of the bonus Commercial Milestone
payment and Royalty rate calculations are determined by the CCOM of Compound X
in a commercial scale manufacturing plant according to the schedule of Table III
herein and the following equation for calculating CCOM:
CCOM = ***
Appendix 4.4 shows hypothetical values for applying this formula.
(a) "Cost Element" shall mean individual components of the
Bioprocess including, for example, ***. Each Cost Element contributes positively
or negatively to the CCOM.
(b) "Price95" is the 1995 price per unit of the Cost Element and
will be agreed to by the Parties based on one of the following sources:
(i) ***;
(ii) public source(s) as agreed upon by the Parties;
(iii) if either Party has access to lower priced material,
such price will be used;
(iv) for items not anticipated or not quantifiable as of
the Effective Date, price at commercialization as deflated back to 1995
price levels using the Producer Price Index for Intermediate Material
less Food and Feeds as published in the Statistical Abstract of the U.S.
Department of Commerce.
(c) "Cash Conversion Cost" excluding depreciation is fixed at ***
of Compound X.
(d) Each By-Product has an economic value depending upon whether
it is sold, recycled or disposed of upon removal from Bioprocess. This economic
value will be deflated back to 1995 as described in Paragraph 4.4b (iv). Total
costs and credits for the disposition of By-Products shall be calculated for use
in determining CCOM of Compound X. The particular disposition methods used in
the calculation of CCOM shall be determined as follows:
(i) If such total amount is less than or equal to *** of
the CCOM of Compound X, DuPont solely shall select the particular
methods of By Products disposition on which to base the CCOM
calculation; and
(ii) If such total amount exceeds *** of the CCOM of
Compound X and either Party can verify a lower cost or higher value
disposition method for any By-Product than that used in the initial
calculation of CCOM, then such disposition method will be used in the
calculation of CCOM, provided such method meets or exceeds applicable
governmental regulations as of the date of the CCOM calculation.
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Depreciation expenses shall be excluded from the calculation of net cost
of By-Product disposition.
(e) The CCOM arrived at under the operation of Paragraph 4.4 is
solely for the purpose of determining Commercial Milestone payments and
Commercial Royalties due to GENENCOR. Choice of actual manufacturing processes
and disposition methods of By-Products are solely the responsibility of DuPont.
Table III
CCOM* in Commercial Scale Mfg. Plant Bonus Milestone Payment
------------------------------------ -----------------------
*** ***
* For CCOMs in between the stated rates, the bonus milestone payment to
GENENCOR will be interpolated.
ARTICLE 5
PRODUCT COMMERCIALIZATION
5.1 Plant Capital Costs. All plant capital costs for production of
Compound X will be borne by DUPONT, with no cost sharing by GENENCOR.
5.2 Other Commercialization Costs. All sales and marketing,
manufacturing, R&D and administrative costs for the commercialization of
Compound X will be borne by DUPONT.
5.3 Subsequent Commercialization Agreement. It is anticipated that upon
commercialization of Compound X a further commercialization agreement may be
necessary in order to reflect the specifics of such commercialization. In the
event a commercialization agreement is negotiated by the Parties, it is the
Parties' intention to incorporate the commercial terms set forth herein, taking
into consideration other business and commercial factors as appropriate.
ARTICLE 6
ROYALTY PAYMENTS TO GENENCOR
6.1 Pre-Commercial Royalty. DUPONT will pay GENENCOR a royalty of *** on
*** Compound X made by Bioprocess during the Pre-Commercial Phase, whether or
not such Compound X meets the Commercial Specification (the "Pre-Commercial
Royalty").
6.2 Commercial Royalty. DUPONT will pay GENENCOR a *** royalty (the
"Commercial Royalty") *** of Compound X made by Bioprocess during the Commercial
Phase and released for manufacture or sale. The *** Commercial Royalty is based
on the CCOM of Compound X *** and set forth in Table IV herein. CCOM
determination is to be that of Paragraph 4.2, 4.3 and 4.4 above and subject to
reasonable auditing procedures.
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Table IV
CCOM* Royalty Rate *** of Compound X
---- ------------------------------
***
***
* For CCOM figures falling between the specified rates, the Commercial
Royalty rate will be interpolated.
6.3 Adjustment of Royalty Rates for Inflation. Pre-Commercial and
Commercial Royalty rates have been determined on a 1995 dollars basis; thus the
Royalties will be adjusted annually on a calendar year basis based on the
Royalty Inflation Index.
6.4 Commercial Royalty Schedule. Commercial Royalty rates set forth in
Table IV are applicable to the first *** of Compound X produced annually on a
calendar year basis. The Commercial Royalty rates will be reduced to *** of the
rates specified in Table IV for production of between *** of Compound X within
the calendar year. For a production of Compound X greater than *** within the
calendar year, the Commercial Royalty rate will be reduced to *** of the rates
specified in Table IV herein.
6.5 Royalty Payment. Royalties will be paid monthly within sixty (60)
days after the last day of each month, for a period of thirteen (13) years from
the beginning of the Commercial Phase or eighteen (18) years from Effective Date
of the Agreement, whichever period is shorter.
6.6 Format of Royalty Payments. Each payment to GENENCOR hereunder shall
be made in U.S. Dollars and sent along with a copy of a report on *** of
Compound X produced by Bioprocess during the reporting period to GENENCOR under
separate cover at the address provided in Paragraph 11.6 or as otherwise agreed
to by the Parties.
6.7 Record Retention. Each Party shall keep adequate records in
sufficient detail to enable the royalties due from that Party to be determined
and to confirm the accuracy of calculation of all payments hereunder. Such
records shall be retained for no less than a two (2) year period in which any
such payments are made hereunder.
6.8 Royalty Audit. GENENCOR may, no more than one time per calendar
year, have an independent representative of a certified public accounting firm
inspect and audit the accounts, records, and reports generated by or for DUPONT
relating to the manufacture of Compound X and all other facts or matters
relating to the calculation of royalties due hereunder; provided, however, that
the independent representative identified by GENENCOR seeking such review is
approved by DUPONT, which approval shall not be unreasonably withheld, such
review will be only during normal business hours, and such review will be at the
sole expense of GENENCOR. The independent certified public accountant shall not
disclose to GENENCOR any financial information except as necessary with respect
to the accuracy of reports and payments made under this Agreement. In the event
that such accountant concludes that discrepancies exist between the royalties
paid and the royalties actually due, such discrepancies will be promptly
corrected.
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ARTICLE 7
INTELLECTUAL PROPERTY
7.1 Joint Ownership of Inventions and Patent Rights. Inventions and
Patent Rights, regardless of inventorship, shall be owned jointly by the Parties
subject to contractual rights of each Party relating to the right to use such
Inventions for commercial purposes. The right to use such Inventions for
commercial purposes shall be controlled as follows:
7.2 Compound X Inventions. For Inventions which relate to Compound X
including:
(a) compounds, processes and compositions of matter;
(b) the manufacture, use or sale of Inventions pursuant to this
Paragraph 7.2;
(c) use within the DUPONT Field of enzymes within the Selected
Microbial Pathways leading to Compound X;
(d) the biomaterial processing and use of such biomaterial
processes in the DUPONT Field; and
(e) the manufacture, use and sale of products incorporating or
made using Compound X,
DUPONT shall have an exclusive license pursuant to Paragraph 8.2 (even as to
GENENCOR) to make, have made, use, import, offer for sale, sell and license any
product(s) and/or process(es) embodying the Inventions set forth in this
Paragraph 7.2, pursuant to a reasonable and customary license agreement to be
negotiated by the Parties. Such license agreement shall at a minimum include
provisions relating to (a) a reasonable royalty and/or such other compensation
as is customary for the industry and market in which any product and/or process
embodying the Invention is to be commercialized, (b) the diligent
commercialization of any product(s) and/or process(es) embodying the Inventions
by DUPONT or its licensee such that if DUPONT or its licensee does not
commercialize a product or process embodying the Invention(s) within its
exclusive field within five (5) years from the expiration or termination date of
this Agreement, GENENCOR can request release from the exclusive license granted
to DUPONT pursuant to Paragraph 8.2 relating to the Inventions, and (c) such
other terms as shall be negotiated in good faith by the Parties.
7.3 Industrial Enzyme Inventions. For Inventions which relate to
Industrial Enzymes (including enzymes within the Selected Microbial Pathway)
including:
(a) compounds, processes and compositions of matter;
(b) biomaterial processing for the purification of Industrial
Enzymes; and
(c) the manufacture, use or sale of Industrial Enzyme products
and/or processes embodying such Inventions outside the DUPONT Field,
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GENENCOR shall have an exclusive license pursuant to Paragraph 8.3 (even as to
DUPONT) to make, have made, use, import, sell and license any product(s) and/or
process(es) embodying the Inventions set forth in this Paragraph 7.3, pursuant
to a reasonable and customary license agreement to be negotiated by the Parties.
Such license agreement shall at a minimum include provisions relating to (a) a
reasonable royalty and/or such other compensation as is customary for the
industry and market in which a product or process embodying the Invention is to
be commercialized; (b) the diligent commercialization of products and processes
embodying the Inventions by GENENCOR or its licensee such that if GENENCOR does
not commercialize such Inventions within its exclusive field within five (5)
years from the expiration or termination date of the Agreement, DUPONT can
request release from the exclusive license granted to GENENCOR pursuant to
Paragraph 8.3 relating to the Inventions; and (c) such other terms as shall be
negotiated in good faith by the Parties.
7.4 Other Inventions. For any other Invention not specified in Paragraph
7.2 or 7.3 hereof, including Inventions which relate to microbial expression
systems, carbon flow in a microbial pathway, fermentation systems, gene cloning,
cofactor regeneration, and sustainable biocatalysis, each Party shall be free to
make, have made, import, use, offer for sale, sell, or license products and/or
processes embodying such Inventions subject to the following:
(a) a reasonable royalty or other compensation to the other Party
as is customary for the industry and market in which a product and/or process
embodying the Invention is to be commercialized and as shall be negotiated by
the Parties;
(b) subject to Subparagraph 7.4(c) hereof, GENENCOR shall have
the exclusive rights (even as to DUPONT) to license the Inventions of Paragraph
7.4 to Third Parties;
(c) DUPONT's right to make, have made, use, offer for sale, sell,
import or export products and/or processes embodying the Inventions of Paragraph
7.4 shall be limited to their use in basic research activities and activities to
support its present and future businesses (excluding Industrial Enzyme
business). DUPONT's right to license the Inventions of Paragraph 7.4 shall be
limited to (a) licenses necessitated by the divestiture of a present or future
DUPONT business (which divestiture, for purposes of this Agreement, requires
more than merely a divestiture of R&D efforts in a given technology area) and
only to the extent such license is necessary for the acquiring entity to operate
the DUPONT divested business; and (b) licenses required for DUPONT to "have
made" products and/or processes embodying such Inventions in support of its
present or future businesses (excluding Industrial Enzyme business);
(d) DUPONT's rights under Subparagraph 7.4(c) shall further
exclude the right to make, have made, use, sell, import, export or license
products and/or processes embodying Inventions of Paragraph 7.4 for the
manufacture, use, or sale of indigo, ascorbic acid, aspartic acid or
intermediates or derivatives thereof;
(e) notwithstanding any of the provisions of this Paragraph 7.4,
DUPONT shall have the exclusive right to make, have made, use, offer for sale,
sell, import or export Compound X.
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7.5 Ownership of Background Inventions. Subject to DUPONT's rights with
regard to Compound X as set forth in Paragraph 7.2, to the extent either Party
owns inventions which have been conceived and/or reduced to practice prior to
the Effective Date of the Collaborative R&D Program (hereinafter "Background
Inventions"), such Background Inventions shall remain the sole property of that
Party, provided that to the extent the other Party may require a license under
such Background Inventions in order to commercialize Compound X as contemplated
by the Agreement, such license shall be granted on a royalty free basis.
7.6 Preparation / Prosecution of Patent Applications. All reasonable
costs (excluding internal time and costs) associated with the filing,
prosecution and maintenance of any patent applications or patents covering
Inventions shall be shared by the Parties. The Parties through the Steering
Committee will agree who shall prepare, file and prosecute any given patent
application taking into consideration the nature of the Invention, the rights of
either Party to commercialize products and/or processes embodying the Invention
as set forth in this ARTICLE 7, and the expertise of the Parties relating to the
Invention. The Parties shall cooperate in the preparation and filing of any
patent applications, including sharing copies of such intended filings with
adequate time for review and comment by the other Party.
7.7 Acquisition of Third Party Intellectual Property. The Parties
through the Steering Committee will mutually agree how and whether to license
any intellectual property owned or controlled by Third Parties which may be
necessary to meet the objectives of the R&D Program of this Agreement.
7.8 No Implied License or Right. No license or right is granted by
implication or otherwise with respect to any patent application or patent except
as specifically set forth herein.
7.9 Infringement of Third Party Patents by the Parties. Should either
Party become aware of any patent that would be infringed by the practice of the
Inventions licensed herein, including Background Inventions, or be sued for
infringement thereof, that Party shall notify the other Party promptly in
writing. The Parties shall promptly discuss and decide the best way to defend
such action, proceeding or suit, provided, however, that the Party having the
exclusive commercialization rights in the field for which infringement is
alleged, shall have the primary right and obligation to defend such action,
proceeding or suit.
7.10 Infringement of Patent Rights by Third Parties. Because the Patent
Rights detailed herein are jointly owned, in the event of any infringement of
any such Patent Rights, the Parties will promptly discuss and decide how to
enforce such patent Rights against an alleged Third Party infringer. The Parties
will cooperate in any action taken to enforce the Patent Rights and will reach
agreement on various issues relating to any such enforcement action including,
but not limited to, determining which Party will lead such enforcement action,
and any settlement discussions, cost sharing and award sharing (if any).
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ARTICLE 8
GRANT OF RIGHTS TO INVENTIONS
8.1 Need for Grant of Licenses to Inventions. Each Party recognizes it
may be necessary to grant to the other Party licenses for certain intellectual
property in order to carry out the objectives of this Agreement.
8.2 Grant by Genencor. GENENCOR hereby grants to DUPONT and DUPONT
hereby accepts an exclusive, worldwide license to Patent Rights for Inventions
in the categories set forth in Paragraph 7.2 relating to Compound X. The
specific terms and conditions of such license to DUPONT are to be negotiated by
the Parties in good faith.
8.3 Grant by DuPont. DUPONT hereby grants to GENENCOR and GENENCOR
hereby accepts an exclusive, worldwide license to Patent Rights for Inventions
in the categories set forth in Paragraph 7.3 relating to Industrial Enzymes. The
specific terms and conditions of such license to GENENCOR are to be negotiated
by the Parties in good faith.
8.4 Other Licenses to Inventions. Upon notice by either Party to the
other Party that a license is needed to the Inventions referred to in Paragraph
7.4 which relate to microbial expression systems, carbon flow in a microbial
pathway, fermentation systems, gene cloning, co-factor regeneration, and
sustainable biocatalysis, the Parties shall promptly undertake to negotiate and
grant such license. The specific terms and conditions of any such license under
this Paragraph 8.4 shall reflect the principles set forth in Subparagraphs
7.4(a)-(e).
ARTICLE 9
CONFIDENTIALITY
9.1 Confidentiality. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the Parties, each of the Parties
agrees that for five (5) years from the date of termination of this Agreement it
shall keep confidential and shall not publish or otherwise disclose and shall
not use for any purpose, other than as provided for in this Agreement, any
Confidential Information furnished to it by the other Party or for which it has
otherwise agreed to maintain in confidence pursuant to this Agreement, except to
the extent that it can be established by competent proof by it that such
Confidential Information:
(a) was already known to it, other than under an obligation of
confidentiality, at the time of disclosure by the other Party as shown by prior
written records;
(b) was generally available to the public or otherwise part of
the public domain at the time of disclosure to it;
(c) became generally available to the public or otherwise part of
the public domain after disclosure and other than through any act or omission of
it in breach of this Agreement;
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(d) was disclosed, on a non-confidential basis, to it by a Third
Party who had no obligation to the other Party not to disclose such information
to others; or
(e) is developed independently by the receiving Party.
9.2 Material Transfers. The Parties agree that transfers of biological
material during the term of this Agreement are controlled by the Master Material
Transfer Agreement, attached as Appendix 9.2 and incorporated into this
Agreement. Further, the Parties shall maintain a log of such transferred
materials.
9.3 This Agreement. The Parties agree that the existence, material
terms, and the subject matter of this Agreement shall be considered Confidential
Information of both Parties. The Parties will consult with one another and agree
on the provisions of this Agreement to be redacted in any filings made by the
Parties with the Securities and Exchange Commission or other government agency
or as otherwise required by law or regulation. Notwithstanding the foregoing,
each Party shall have the right to disclose in confidence the material terms of
this Agreement to Third Parties retained by such Party to perform legal,
accounting or similar services and who have a need to know such terms in order
to provide such services.
9.4 Special Confidentiality. The Parties further specifically
acknowledge that, as of the Effective Date of this Agreement, Xxxxxxx Chemical
Company ("EMN") and Cultor, Ltd. ("Cultor") each own fifty per cent (50%)
interest in GENENCOR and that EMN & Cultor operate businesses with potentially
competing interests as against DUPONT. Therefore, to ensure the confidentiality
of DUPONT Information, GENENCOR specifically agrees not to disclose DUPONT
Information or Confidential Information to EMN or to Cultor.
9.5 Authorized Disclosure to Party Employees. Each Party may disclose
Confidential Information belonging to the other Party to its own employees to
the extent such disclosure is reasonably necessary for the following:
(a) research and development within the Collaborative Research
and Development Program;
(b) filing or prosecuting patents within Licensed Patent Rights;
(c) prosecuting or defending litigation;
(d) complying with applicable governmental regulations; and
(e) evaluating toll manufacturing opportunities or developing
cost estimates for same.
9.6 Authorized Disclosure to Certain Third Parties. Either Party may
disclose the other Party's Confidential Information to Third Parties retained by
the disclosing Party to the extent that such disclosure is reasonably necessary
for the provision by the Third Party of Third Party's engineering, design,
construction or toll manufacturing services pursuant to the
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commercialization of Compound X, provided that any such Third Party signs a
Confidentiality Agreement consistent with the provisions of Paragraphs 9.1, 9.2
and 9.3 herein.
9.7 Notice of Disclosure. In the event a Party wishes to make a
disclosure of the other Party's Confidential Information to Third Parties with
regard to activities pursuant to Paragraphs 9.3 and 9.6, it will, except where
impracticable, give reasonable advance notice to the other Party of such
disclosure. In any event, each Party agrees to take all reasonable action to
avoid disclosure of the other Party's Confidential Information hereunder.
ARTICLE 10
TERM & TERMINATION
10.1 Term of the Agreement. This Agreement, unless terminated sooner as
provided elsewhere herein, shall expire five (5) years from the Effective Date
of the Agreement, which term can be extended by mutual agreement of the Parties.
10.2 Material Breach. In the event that any material provision of this
Agreement is breached by either Party, the non-breaching Party upon sixty (60)
days' written notice to the breaching Party may terminate this Agreement.
However, if such breach is corrected within the sixty (60) day period and there
are no unreimbursed damages resulting from the breach, the Agreement shall
continue in force.
10.3 Termination. DUPONT may terminate the Agreement for any reason by
giving GENENCOR written Notice of Termination. During a three-month period
following such Notice of Termination (the "Termination Period"), DUPONT shall
pay the fully allocated R&D costs of GENENCOR as specified above in ARTICLE 2,
provided that GENENCOR will use its best efforts during such initial three month
period to end work on the R&D Program, such efforts to include the transfer of
all relevant technology to DUPONT, including the designation and transfer of
Designated Organisms as more fully detailed below in Paragraph 10.5. DUPONT has
the option to permit up to an additional three month termination period ("the
Additional Termination Period") during which time GENENCOR will end all work on
the R&D Program and will transfer all relevant technology to DUPONT. During the
Additional Termination Period, if any, DUPONT will pay only those costs incurred
by GENENCOR relating to ending the R&D Program and transfer of technology. In
any case, the R&D Program shall end no later than six (6) months after the
Notice of Termination of this paragraph. The Parties will agree on the work and
resources, including personnel, necessary to end the R&D Program during the
Termination period and/or the Additional Termination Period, if any, and the
process to transfer the relevant technology (collectively, "the Activities") as
provided under this Agreement.
10.4 Continuing Rights and Obligations. Temnination of the Agreement for
any reason shall not relieve either Party of its rights or obligations including
rights and obligations relating to:
- the keeping of records and the provision of reports (Article 6);
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- any liability hereunder for damages to either Party resulting
from the unauthorized disclosure or use of any Confidential
Information by the other Party (Article 9);
- any Inventions made during the R&D Program and any intellectual
property rights arising therefrom including obligations to
diligently file, prosecute and maintain such and to license such
intellectual property (Articles 7 and 8);
- non-use and non-disclosure obligations (Article 9); and
- payment of expenses, milestones, royalties or other amounts
accrued as of the time of such termination or payment of such
milestones, royalties or other amounts as may later arise
(Articles 3-8 and 10).
Promptly upon termination, if not before, the Parties shall negotiate in good
faith the applicable terms and conditions of any license contemplated by this
Agreement.
10.5 Designated Organisms. Within forty-five (45) days of the Notice of
Termination to GENENCOR, GENENCOR shall designate in writing:
(1) three organisms, provided that all three (3) organisms
are not from the same genus and species ("Designated Organism(s)"); and
(2) pertinent growth conditions for each Designated
Organism(s). Testing of the Designated Organism(s) will be conducted as
described in Paragraph 3.2 hereinof for the R&D-Based Milestones.
10.6 R&D Milestone Payments.
(a) R& DMilestones Payments. Following termination of this
Agreement, the basis for determining whether or not a particular R&D Milestone
payment is due and the amount of such payment shall be the results of testing of
Designated Organisms designated by GENENCOR as in Paragraph 10.5 above. To
qualify for a given R&D-based Milestone payment, a Designated Organism must meet
the performance standards for *** set out in Article 3 herein.
(b) Interpolation Between R&D Milestone Payments. Following
termination of this Agreement for reasons other than breach by GENENCOR and if
performance of at least *** of the difference between the previously met R&D
Milestone target and the next unmet R&D Milestone target is achieved, DUPONT
will pay GENENCOR at least *** of the next applicable R&D Milestone target for
the next six (6) month period relative to the current applicable milestone. For
such performance between *** of the performance standard, DUPONT will pay
GENENCOR a linear interpolation between the previously described target and the
current R&D Milestone target. [For purposes of illustrating the intent of this
provision, an example is provided as Appendix 10.6 hereto.]
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10.7 Commercialization Following Termination. If after the Termination
of the Agreement for reasons other than breach by GENENCOR, DUPONT
commercializes Compound X, the following payments will be made to GENENCOR:
(i) If DUPONT directly or indirectly commercializes
Compound X made by Bioprocess within a two (2)-year period from
Termination of the Agreement, DUPONT will pay GENENCOR the applicable
R&D and/or Commercialization Milestone payment pursuant to ARTICLES 3
and 4 hereof and the applicable royalty as defined in ARTICLE 6 hereof,
in full, as though the Agreement had not been terminated.
(ii) If DUPONT directly or indirectly commercializes
Compound X made by Bioprocess more than two (2) years after the
termination of the Agreement, DUPONT will pay GENENCOR any applicable
Commercialization Milestone pursuant to ARTICLE 4 hereof the performance
of which would have been provided by the Designated Organisms of
Paragraph 10.5.
(iii) If the R&D Program is terminated for reasons other
than breach before "Actual Operating Time" sufficient to calculate CCOM
is attained per Paragraph 4.3 herein, then the Parties will negotiate in
good faith the applicable milestones and/or royalties according to the
general principles of this Agreement.
(iv) Furthermore, DUPONT will pay GENENCOR a proportionate
royalty, taking into consideration the royalty schedule of Table IV, as
a function of the actual years of the R&D Program completed prior to
termination and the level of technical success achieved with the
GENENCOR Designated Organism(s) versus the Commercialization Milestones.
At a minimum, the royalty shall be *** of Compound X. This royalty will
be adjusted annually based on the Royalty Inflation Index. [For purposes
of illustrating the intent of this provision, an example is provided as
Appendix 10.7 hereto].
(v) If DUPONT directly or indirectly commercializes a
product or process other than Compound X incorporating an Invention,
DUPONT shall pay to GENENCOR a royalty or such other compensation as
provided for in Paragraph 7.2 and 7.4 hereof.
10.8 Insolvency or Bankruptcy. Either Party may, in addition to any
other remedies available to it by law or in equity, terminate this Agreement by
written notice to the other Party (the "Insolvent Party") in the event the
Insolvent Party shall have become insolvent or bankrupt, or shall have made an
assignment for the benefit of its creditors, or there shall have been appointed
a trustee or receiver of the Insolvent Party or for all or a substantial part of
its property, or any case or proceeding shall have been commenced or other
action taken by or against the Insolvent Party 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 any substantial part of the property of the
Insolvent Party, and any such event
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shall have continued for sixty (60) days undismissed, unbonded and undischarged.
Upon the termination of this Agreement by either Party pursuant to this Section
10.8, all rights and licenses granted to the other Party by the terminating
Party under this Agreement shall revert to or be retained by the granting Party.
10.9 Damages. In no event shall either Party be responsible for any
consequential damages incurred by the other Party in connection with this
Agreement, including, without limitation, lost profits or opportunities or
injury to Person or property resulting from the termination of this Agreement.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 Assignment. Neither this Agreement nor any interest hereunder shall
be assignable by either Party without the prior written consent of the other
Party, provided, however, that either Party may assign this Agreement to any
successor by merger or sale of substantially all of its business unit to which
this Agreement relates in a manner such that the assigning Party shall remain
liable and responsible for the performance and observance of all its duties and
obligations hereunder. Grant of a license or sublicense or transfer of
technology only shall not constitute "substantially all" of a Party's business.
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 assignment not in accordance with
this Section shall be void.
11.2 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of the
Agreement.
11.3 Force Majeure. Neither Party shall be liable to the other for loss
or damages or shall have any right to terminate this Agreement for any default
or delay attributable to any Force Majeure, if the Party affected shall give
prompt notice of any such cause to the other Party. The Party giving such notice
shall thereupon be excused from such of its obligations hereunder as it is
thereby disabled from performing for so long as it is so disabled and for thirty
(30) days thereafter, provided, however, that such affected Party commences and
continues to take reasonable and diligent actions to cure such disablement.
11.4 No Trademark Rights. Except as otherwise provided herein, no right,
express or implied, is granted by this Agreement to use in any manner the name
"GENENCOR" or "DUPONT" or any other Trademark, service xxxx or trade name of the
other Party in connection with the performance of this Agreement.
11.5 Public Announcements. If either Party desires to, or is required by
law to, make a public announcement concerning this Agreement or the subject
matter hereof, such Party shall give reasonable prior advance notice of the
proposed text of such announcement to the other Party for its prior review and
prior written approval.
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11.6 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by facsimile
transmission (receipt verified), telexed, mailed by registered or certified mail
(return receipt requested), postage prepaid, or sent by express courier service,
to the Parties at the following addresses (or at such other address for a Party
as shall be specified by like notice, provided, however, that notices of a
change of address shall be effective only upon receipt thereof):
If to GENENCOR, addressed to:
GENENCOR INTERNATIONAL, INC.
0 Xxxxxxxxx Xxxxx,
0000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxxx, XX 00000
Attention: Sr. V.P. of Commercial and Legal Affairs
With copy to: V.P. of Research
If to DUPONT, addressed to:
Director, Biotechnology Development
E. I. du Pont de Nemours and Company
Experimental Station
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000-0000
11.7 Amendment. No amendment, modification or supplement of any
provision of this Agreement shall be valid or effective unless made in writing
and signed by a duly authorized officer of each Party.
11.8 Waiver. No provision of the Agreement shall be waived by any act,
omission or knowledge of any Party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by a duly
authorized officer of the waiving Party.
11.9 Dispute Resolution. The Parties agree that in the event of a
dispute between them arising from, concerning or in any way relating to this
Agreement, the Parties shall undertake good faith efforts to resolve any such
dispute in good faith. In the event the Parties shall be unable to resolve any
such dispute, the Parties will use an appropriate arbitration proceeding such as
the American Arbitration Association proceeding. Such proceeding shall take
place in New York City with one arbiter to be appointed by each Party and a
third arbiter to be appointed by the two designated arbiters.
11.10 Independent Contractors. The relationship between GENENCOR and
DUPONT created by this Agreement is one of independent contract and neither
Party shall have the power or authority to bind or obligate the other except as
expressly set forth in this Agreement. Except for injury or damage caused solely
by the gross negligence of a Party, that Party shall not be liable under any
circumstances for any injury or damage done to or suffered by an employee's
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person or property while on that Party's premises and the other Party shall
assume all risk of such injury or damage while that employee is on the Party's
premises.
11.11 Disclaimer of Warranties. EXCEPT AS OTHERWISE MAY EXPRESSLY BE
PROVIDED HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ALL WARRANTIES TO THE OTHER,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
11.12 Indemnification. For claims arising from activities occurring
during the research and development of Compound X made by Bioprocess each Party
shall be responsible for its own actions and shall not indemnify the other
Party. Upon commercialization of Compound X, DUPONT shall indemnify GENENCOR for
claims arising from or related to the manufacture, use or sale of Compound X
under the direct or indirect control of DUPONT. DuPont's idemnity shall not
apply where the sole cause of the claim is the willful misconduct or gross
negligence of GENENCOR.
11.13 Descriptive Headings. The descriptive headings of this Agreement
are for convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.
11.14 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the substantive laws of the State of Delaware, U.S.A.,
provided that all questions concerning the construction or effect of patent
applications and patents shall be decided in accordance with the laws of the
country in which the particular patent application or patent concerned has been
filed or granted, as the case may be.
11.15 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
11.16 Entire Agreement of the Parties. This Agreement will constitute
and contain the complete, final and exclusive understanding and agreement of the
Parties and cancels and supersedes any and all prior negotiations,
correspondence, understandings and agreements, whether oral or written, between
the Parties respecting the subject matter of this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective 1 September 1995.
GENENCOR INTERNATIONAL, INC. E.I. DU PONT DE NEMOURS AND COMPANY
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXX
--------------------------------- --------------------------------
Title: Sr. V.P. of Commercial and Title: Sr. V.P., Research
Legal Affairs and Development
--------------------------
DuPont, Genencor
Collaborative R&D Agreement
Date: 10/19/95 Date: 10/24/95
---------------------------- ----------------------------
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Appendix 1.8
Chemical Composition of Example of Compound X
Min Max
--- ---
1,3 propanediol *** ***
***
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Appendix 2.2
Proposed Research for the Production of 1,3 Propanediol Through ***
The overall goal of the project is to achieve the benchmarks enumerated
in the contract document, and in so doing achieve a CCOM of ***. Both Parties
anticipate that achievement of such a CCOM will require the engineering pathways
for *** to 1,3-propanediol, the source and pathways for reducing equivalents,
and the energy for cell maintenance. In each phase of the program, the tasks
will be planned and executed jointly as agreed upon the Steering Committee, with
the actual work taking place at the location most appropriate to the task.
The work will consist of 4 major parts:
1. Development of confirmation examples
2. Development of first generation strain
3. Development of second generation strain
4. Development of final, third generation strain and process
A. Development of Confirmation Examples:
From initiation through May 10, 1996, the group will demonstrate the ***
to 1,3 propanediol process in a variety of organisms. In addition to the known
*** and *** will be tested. This will necessitate the sequencing and subcloning
of the *** and ***, work that is currently in progress, and the construction of
vector/promoter systems appropriate to the target organisms. Information
obtained will also be used to guide the overall host selection process.
B. Development of the First Generation Strain:
This work will have as its goal the attainment of the first benchmark by
the l8th month. Initially the groups will focus on creating the basecase, the
toolbox upon which to build the initial production organism. Targets include
defining and *** specific *** for the ***, characterizing the ***, and examining
and determining the possibility of using the alternate *** to *** pathway. The
team will put in place the necessary ***, synthesize the appropriate *** for
expression of the target genes and devise and implement all necessary assays and
analytical methods for the evaluation of *** intermediates. Concurrently, an
engineering model will be constructed to assess *** and *** of candidate host
strains. From the first day, *** experiments will be initiated to understand the
two halves of the process, *** to 1,3-propanediol, in the current *** models
***. The materials generated in these studies will be used to initiate studies
in separations methodology.
After the first two quarters of research, we hope to have in place all
the tools and potential host constructions to enable the development of the
initial model production organisms. After the second two quarters of work, we
believe that the organism will enter a period of aggressive *** optimization,
culminating with hitting the generation I benchmark before the 18th-month
target.
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C. Development of Second and Third Generation Strains and Processes:
The first generation strategy for the production of 1,3 propanediol
involves the use of *** production organism. In parallel, while constructing the
confirmation examples, we will be evaluating several other potential hosts
including *** and ***. If any of these alternatives prove more effective, we
will change the main thrust of the program to focus on this opportunity. In any
case, the low-cost production of the target compound will involve *** in a way
that applies to the chosen host organism. For example, ***. These strategies
will be employed during the development of the second generation production
organism. During this phase, co-development of more than one potential final
host may be required.
In parallel, as a candidate host and early process are defined, we will
initiate process recovery of the ***. This will be required to merge the *** and
recovery processes to achieve the second and third generation goals.
Project Management and Reporting:
Over the term of the joint program, the project will be led by a team of
two project leaders, one from each Party. In addition, the programs will be
divided into a series of subterms as follows, with representation from each
company:
1. Biochemistry
2. Microbiology / Molecular Biology
3. *** / Separation / Modelling
Each subteam will have a site leader responsible for managing workflow
in the team.
The team will communicate primarily via Lotus Notes. Each team member
will prepare a short monthly report to be summarized by the subteam leaders (one
report/subteam). The joint project leaders will abstract an overall monthly
report for communication to the Steering Committee and publication to
management. Finally, project status will be reported formally to the Steering
Committee in the form of a Quarterly Report to be prepared prior to the joint
team Quarterly Meetings.
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Appendix 2.3
GENENCOR INTERNATIONAL, INC.
SSF TECHNOLOGY CENTER
Allocable Manpower
------------------
Professional Scientific Staff Who Prepare Time Sheet by Project ***
--------------------------------------------------------------- -------
Support Personnel for *** Scientific Staff as SSF:
-------------------------------------------------
Media Prep. ***
Glass Washer ***
Culture Collection and Prep. ***
Research Facility Support ***
Site Safety ***
R&D Human Resources Support ***
Library Support ***
Local Computer Support ***
Accts. Payable/Local Acctg. Reports ***
VP Research & Development ***
Secretarial Support ***
Process Techs. in Rochester Running *** ***
***
Total Support Personnel for the Work of 96 Scientific Staff ***
----------------------------------------------------------- -------------
% Support Personnel/SSF Scientific Staff ***
---------------------------------------- -------------
Resources Applied, but not Included in Support % Ratio:
------------------------------------------------------
Contracted Screening ***
Metabolic Pathway Part-Timers/Consultants ***
Xxxx Xxxxxxx, Xxx Xxxx and Xxx Xxxxxxx'x Direct Time on Tiger ***
Project
Total for Tiger Project ***
----------------------- -------------
Scientific Staff on Time Sheet ***
Support Personnel at *** Rate ***
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Appendix 4.4
Compound X
Cash Cost of Manufacture Example
Item $ /***
---- ------
*** ***
Media ***
Other Material ***
By-products / Waste ***
Utilities ***
***
===
Cash Conversion Cost* ***
===
***
* By agreement in Paragraph 4.4(c)., this value is ***
*** Units Unit / lb $ / unit $ /***
--- ----- --------- -------- ------
*** *** *** ***
Unit / lb = Conversion X Selectivity X Recovery
2.0 = (1/0.999) X 1.88 X (1/0.95)
OTHER MATERIAL
***
UTILITIES
Item Units Unit /*** $ / unit $ /lb
---- ----- --------- -------- -----
Inert Gas M scf *** *** ***
Cooling water M gal *** *** ***
Steam M lbs *** *** ***
Electricity Kwh *** *** ***
Process Water M gal *** *** ***
===
***
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Appendix 9.2
MASTER MATERIAL TRANSFER AGREEMENT
BIOLOGICAL MATERIALS
As indicated in previous communications, E. I. du Pont de Nemours and
Company ("DuPont") and Genencor International, Inc. ("Genencor") have entered
into a Collaborative Research and Development Agreement, effective 1 September
1995, to investigate a commercially viable, biological route to Compound X. In
support of such research, the transfer of certain biological material (as herein
defined) between DuPont to Genencor is desirable. This biological material has
been developed by DuPont or Genencor and is extremely valuable in terms of
previously invested R&D resources and potential commercial applications. The
terms under which DuPont and Genencor are willing to provide samples of
biological material are as follows:
1. Definitions:
A. "Original Material" means [to be identified in a "log" of all
material transferred by either Party to the other Party].
B. "Material" means Original Material plus Progeny and Unmodified
Derivatives thereof and any DNA, RNA, vehicles, constructs,
vectors, plasmids, cosmids, protein, and/or cells incorporating
Original Material or a component or sequence thereof.
C. "Progeny" means unmodified descendent from the Original
Material, such as virus from virus, cell from cell, or organism
from organism.
D. "Unmodified Derivatives" means substances created by Genencor or
DuPont that constitute an unmodified functional sub-unit or an
expression product of the Original Material. Some examples
include: subclones of unmodified cell lines, purified or
fractionated sub-sets of the Original Material, proteins
expressed by DNA/RNA supplied by Genencor or DuPont, monoclonal
antibodies secreted by a hybridoma cell line, and sub-sets of
the Original Material such as novel plasmids or vestors.
E. "Modifications" mean substances created by Genencor or DuPont
that contain or incorporate the Material (Original Material,
Progeny, or Unmodified Derivatives).
F. "Provider" means the entity transferring the Material.
G. "Recipient" means the entity receiving the Material.
2. The Material is the property of the Providor and the Recipient shall use
Material solely for research purposes of the R&D Program as contemplated in the
Collaborative Research R&D Agreement. GENENCOR's use of the Material will take
place in the laboratories of Genencor
28
29
DuPont, Genencor
Collaborative R&D Agreement
located at 000 Xxxxxxx Xxx, Xx. Xxx Xxxxxxxxx, XX 00000, or such other place as
agreed to by the Parties. DuPont's use of the Material shall take place in the
laboratories of DuPont located in Wilmington, DE, or such other place as agreed
to by the parties.
3. Neither Party shall use Material transferred to it in research that is
subject to consulting or licensing obligations to any third Party. Neither Party
shall transfer any Material transferred to it to any third Party without the
prior written approval of the Provider. Each Party reserves the right to
distribute its own Original Material to others and to use it for its own
purposes.
4. In the event the research described above in Paragraph 2 is completed or five
(5) years has elapsed from 1 September 1995, the Effective Date of the
Collaborative Research & Development Agreement, whichever occurs first, the
Original Material will be destroyed by the Recipient, returned to the Provider
or otherwise disposed of, or the arrangement continued as mutually agreed to in
writing by DuPont and Genencor.
5. It is the intent of the parties to this Agreement that inventions arising
from use of the Material identified in Paragraph 1 above, regardless of
inventorship, shall be owned jointly by the Parties subject to contractual
rights of each Party relating to the right to use such Inventions for commercial
purposes as set forth in the Collaborative Research and Development Agreement.
6. Each Party will use the Material in compliance with all laws and regulations,
including current EPA, FDA, USDA and NIH Guidelines for work with recombinant
DNA, and for transport of materials and protection of the environment.
7. The Material is understood to be experimental in nature, is not for human use
or for use in animals intended for food, and IT IS PROVIDED BY BOTH PARTIES
WITHOUT WARRANTY OF ANY SORT, EXPRESS OR IMPLIED. Provider makes no
representation that the use of the Material will not infringe any patent or
other proprietary right, and no grant, right or license under any of Provider's
patents or patent applications is granted by implication. Recipient shall hold
Provider harmless from any loss, claim, damage, illness, or injury to persons or
property whatever the cause may be arising out of or pertaining to Recipient's
use of the Material.
8. Any ambiguity or conflict regarding the interpretation, rights or obligations
of the Parties pursuant to this Material Transfer Agreement as it relates to the
research, development or commercialization of Compound X , shall be controlled
by the terms of the Collaborative Research and Development Agreement.
Additionally, to the extent any terms (such as "Compound X") used in this
Agreement are defined in the Collaborative Research and Development Agreement,
such definitions shall apply to this Agreement as if expressly stated herein.
29
30
DuPont, Genencor
Collaborative R&D Agreement
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective 1 September 1995.
GENENCOR INTERNATIONAL, INC. E.I. DU PONT DE NEMOURS AND COMPANY
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXX
--------------------------------- --------------------------------
Title:Sr. V.P. of Commercial and Title:Sr. V.P., Research and
Legal Affairs Development
Date: 10/19/95 Date: 10/24/95
--------------------------------- ------------------------------
30
31
DuPont, Genencor
Collaborative R&D Agreement
Appendix 10.6
1) GEN I MILESTONE HAS BEEN MET AND PAID EARLIER SO THE TARGET IS MILESTONE
OF GEN II.
2) DUPONT CANCELS IN MONTH 36 (THERE BEING NO BREACH BY GENENCOR AS CAUSE).
3) TESTING OF THE DESIGNATED ORGANISM TAKES PLACE.
4) WITH RESULTS OF TEST WE CALCULATE X FOR THE TECHNICAL METRICS. LETS USE
TITER AS THE EXAMPLE.
***
5) ***
31
32
DuPont, Genencor
Collaborative R&D Agreement
Appendix 10.6 continued
***
32
33
DuPont, Genencor
Collaborative R&D Agreement
Appendix 10.6 continued
MILSTONE PAYMENT
***
33
34
DuPont, Genencor
Collaborative R&D Agreement
APPENDIX 10.7
This Example illustrates proportionate royalties.
ASSUME:
1) DuPont terminatates the Agreement (for other than breach by Genencor)
after 4 years.
2) The best Designated Organism designated by Genencor achieved an
average CCOM target of ***, then the applicabale royalty calculation would be:
***
Hypothetical:
***
34
35
[LETTERHEAD]
23 July 1997
Xxx Xxxxxxx
Director, Business Development
Genencor International, Inc.
0 Xxxxxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Ray:
In accordance with the Resolution approved on 10 July 1997 by the
Steering Committee of the Joint DuPont/Genencor Development Team, we hereby
propose that effective as of the date of the acceptance below, the Collaborative
Research and Development Agreement between our respective companies dated 01
September 1995, shall be amended to read as indicated below. Accordingly, the
original text of the sections of the Collaborative Research and Development
Agreement indicated below shall be canceled and the following text substituted
respectively therefor. No other terms have been amended and the remainder of the
Agreement remains in force.
2.3 GENENCOR Research and Development Expenses
(a) R&D Expenses, DUPONT will pay GENENCOR's fully allocated R&D
expenses for work on the R&D Program up to a maximum of One
Million, Five Hundred Thousand dollars US ($1.5MM) per year for
five (5) years and six (6) months as adjusted for inflation
according to Paragraph 2.4. This payment is based on the
man-month(s) expended by GENENCOR in support of the R&D Program.
1
36
TABLE II
Time Lines/Payment Amount
Estimated Completion Date
R&D Goal From Start of R&D Program Payment to GENENCOR
-------- ------------------------- -------------------
GEN I *** ***
GEN II *** ***
*** Payment to GENENCOR
-------------------
GEN III ***
1 Based on recovered Compound X, assuming *** recovery.
2 For yield rates of GEN III between the stated ratios of Table II, the
milestone payment will be interpolated.
6.5 Royalty Payment. Royalties will be paid monthly within sixty (60) days
after the last day of each month, for a period of thirteen (13) years
from the beginning of the Commercial Phase or eighteen (18) years and
six (6) months from Effective Date of the Agreement whichever period is
shorter.
10.1 Term of the Agreement. This Agreement, unless terminated sooner as
provided elsewhere herein, shall expire five (5) years and six (6)
months from the Effective Date of the Agreement, which term can be
extended by mutual agreement of the Parties.
Appendix 9.2 Master Material Transfer Agreement for Biological Materials
4. In the event the research described above in Paragraph 2 is completed
or five(5) years and six (6) months has elapsed from 1 September 1995, the
Effective Date of the Collaborative Research & Development Agreement, whichever
occurs first, the OriginalMaterial will be destroyed by the Recipient, returned
to the Provider or otherwise disposed of, or the arrangement continued as
mutually agreed to in writing by DuPont and Genencor.
In keeping with subparagraph 11.7 of the Collaborative Research and
Development Agreement, please indicate acceptance of the foregoing proposal by
obtaining the signature of an authorized officer of Genencor and returning to me
the enclosed duplicate of this letter.
2
37
We look forward to the continued success of this joint work.
Very truly yours,
E.I. DU PONT DE NEMOURS AND COMPANY
By: /s/ XXXXXX X. XXXXXX
--------------------------
Xxxxxx X. Xxxxxx, Ph.D
Director, Biotechnology
Development Corporate New
Business Development
ACCEPTED the 19 day of August, 1997 ACCEPTED the __ day of______, 1997
GENECOR INTERNATIONAL, INC. E. I. DU PONT DE NEMOURS AND COMPANY
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXX
---------------------------------- ---------------------------------
Title: Senior Vice President of Commercial Xxxxxx X. Xxxxxx, Ph.D.
& Legal Affairs Senior Vice President
Research and Development
3
38
[LETTERHEAD]
March 31, 1998
Xxx Xxxxxxx
Director, Business Development
Genencor International, Inc.
0 Xxxxxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Ray:
Re: Second Letter Amendment to the 1 September 1995 Collaborative
Research and Development Agreement
DuPont and GCI have learned much in the 2.5 years since embarking on
this Collaborative Research and Development Agreement (Agreement). One important
understanding is that the technical milestones of *** are related and are not
independent factors in producing 1,3-propanediol from *** with a biocatalyst.
In light of this understanding, the parties wish to amend the Agreement
to better recognize the attainment of milestones in the development of this
technology. Accordingly, the text of the paragraphs of the Agreement indicated
below shall be deleted and the following text inserted respectively therefor as
indicated. No other terms have been amended and the remainder of the Agreement
as effective 1 September 1995 and as first amended on 23 July 1997 remains in
force.
Paragraph 3.1 shall upon amendment read in its entirety as follows:
3.1 R&D based Milestones. Upon agreement by the Parties based on the Steering
Committee's review of the scientific data and results of the R&D Program that a
particular R&D Milestone (Generation I, II, or III) was achieved, DuPont will
make certain non-refundable, lump sum payments to GENENCOR. The Parties agree
that the concept of "Contract Pennies" (CP), an economic equivalent of the
combined, weighted effect of the parameters of ***, will be used to determine
when an R&D Milestone is attained.
***
***
The technical parameters used to calculate CP to trigger Milestone lump
sum payments are set out in Table I. The timelines or other factors affecting
payment and the relevant payment amounts are set out in Table II.
Paragraph 3.2 shall upon amendment read in its entirety as follows:
1
39
3.2 Generation I and II Milestones.
(a) The Generation II Milestone is reached when the "CP" is equal to
or better than ***. The values for *** must individually be
equal to or better than *** of the respective GENII technical
parameter in Table I. The Generation II Milestone must be met at
the *** scale or larger.
(b) Alternatively, in the event that DuPont or DuPont's designee
starts physical construction of a market development facility
for the production of Compound X or begins production in an
analogous facility before the Generation II Milestone is met
under the terms of Paragraph 3.2(a), DuPont will recognize that
the Generation II Milestone has been achieved and will pay
GENENCOR the Generation II Milestone payment. The amount of the
Generation II Milestone payment due to GENENCOR under this
paragraph will be determined by reference to Table II. For the
purposes of this Paragraph 3.2(b) only, the "Estimated
Completion Date" of Table II is the date that physical
construction of the market development facility is begun.
(c) To recognize the substantial progress of the Parties and
although the explicit original GenI Technical Milestones as set
out in the 1 September 1995 Agreement have not been met to date,
DuPont shall make a progress payment to GENENCOR of ***.
GENENCOR agrees that no other payment for the attainment of GenI
Technical Milestones is due.
Paragraph 3.3 shall upon amendment read in its entirety as follows:
3.3 Generation III Milestone. The Generation III Milestone payment is
triggered when CP is equal to or better than *** processing at a scale
of *** or larger, or when the equivalent CP for an alternative process
is met. The parameters of *** must individually be equal to or better
than 0.70 of the GENIII target in Table I to trigger the Generation III
Milestone. The method for translating the batch process parameters to
alternative process parameters will be agreed upon by the Parties
through the Steering Committee promptly after the attainment of the
Generation II Milestone under Paragraph 3.2(a) or 3.2(b). Additionally,
the GENIII Milestone requires that a) the GENIII strain be sufficiently
genetically stable and biologically robust to operate on a commercial
scale; b) strain design is consistent with regulatory requirements; and
c) *** media requirements are consistent with ultimate commercialization
at a CCOM of ***. The items a), b), and c) parameters will be agreed
upon by the Parties through the Steering Committee promptly after the
attainment of the Generation II Milestone under Paragraph 3.2(a) or
3.2(b).
Table I upon amendment shall read in its entirety as follows:
2
40
Table I
TECHNICAL PARAMETERS
R&D Goal *** *** ***
--------
GEN I *** *** ***
GEN II *** *** ***
GEN III *** *** ***
***
3
41
Table II upon amendment shall read in its entirety as follows:
TABLE II
TIME LINES/PAYMENT AMOUNT
Estimated Completion Date
R&D Goal From Start of R&D Program Payment to GENENCOR
-------- ------------------------- -------------------
GEN I *** ***
GEN II *** ***
*** Payment to GENENCOR
-------------------
GEN III *** ***
1 For yield of GEN III between the stated ratios of Table II, the milestone
payment will be interpolated.
Paragraph 10.6 (a) upon amendment shall read in its entirety as follows:
10. R&D Milestone Payments.
(a) R&D Milestones Payments. Following termination of this
Agreement, the basis for determining whether or not a particular
R&D Milestone payment is due and the amount of such payment
shall be the results of testing of Designated Organisms
designated by GENENCOR as in Paragraph 10.5 above. To qualify
for a given R&D-based Milestone payment, a Designated Organism
must meet the performance standards for CP set out in Article 3
herein, provided that the parameters of *** must individually
equal or better *** of the GENX technical parameters of Article
3, Table I.
In keeping with subparagraph 11.7 of the Collaborative Research and
Development Agreement, please indicate acceptance of the foregoing amendments
and terms by obtaining the signature of an authorized officer of Genencor.
Please return one fully executed copy of the document to me.
4
42
We look forward to the continued success of this collaborative effort.
Very truly yours,
E.I. DU PONT DE NEMOURS AND COMPANY
By: /s/ XXXXXX X. XXXXXX
--------------------------
Xxxxxx X. Xxxxxx, Ph.D
Director, Biotechnology
Development Corporate New
Business Development
ACCEPTED the 7th day of May, 1998 ACCEPTED the 25 day of April, 1998
GENECOR INTERNATIONAL, INC. E. I. DU PONT DE NEMOURS AND COMPANY
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXX
---------------------------------- ---------------------------------
Title: Senior Vice President Xxxxxx X. Xxxxxx, Ph.D.
------------------------------- Senior Vice President
and General Manager Central
Research and Development
5
43
19 February 1999
W. Xxxxxx Xxxxxxxx
President and Chief Executive Officer
Genencor International, Inc.
0 Xxxxxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Xxx:
RE: THIRD LETTER AMENDMENT TO THE COLLABORATIVE RESEARCH &
DEVELOPMENT AGREEMENT OF 1 SEPTEMBER 1995
On 25 January 1999, you, as President and CEO of Genencor International,
Inc. ("Genencor") having authority to act on Genencor's behalf, and I, with
authority to act on behalf of E. I. du Pont de Nemours and Company ("DuPont"),
met to discuss the relationship of the two organizations and our mutual interest
in the success of this important R&D Program. This letter memorializes those
constructive discussions and specifically amends the Collaborative Research and
Development Agreement as set out below.
The parties reached several understandings. The parties recognize that
the reimbursement rate of R&D expenses that was mutually satisfactory as of the
date of original 1995 Agreement, now no longer adequately reimburses Genencor
for the current cost of its Scientific Personnel working on the R&D Program. The
parties recognize Genencor's need to maintain its leadership position with
respect to its "Directed Evolution Technology" as well as the usefulness of that
technology to accelerating the technical success of the R&D Program. The parties
anticipate that the Generation II Milestone will be reached in mid-1999 and then
successfully demonstrated at the *** scale or larger, accomplishments leading to
a determination by the Steering Committee that the Generation II Milestone was
met and triggering the applicable Milestone Payment. The parties further
recognize Genencor can make valuable technical contributions to DuPont's
decision-making process with respect to scale-up and manufacture, particularly
as it relates to the timely selection of a ***, and so influence DuPont's
decision whether to commercialize the technology. The parties further recognize
that DuPont is assessing the business opportunity for 3GT fiber made with
1,3-propanediol and that DuPont expects to reach a decision point on the
commercialization of 3GT products within 12 months of the date of this letter
amendment, at which time a negative decision on commercialization will trigger
timely re-negotiation or termination of the R&D Program Collaborative Research
and Development Agreement. The parties further appreciate that the effect of a
decision by DuPont to not commercialize fiber made with 1,3-propanediol would
cause Genencor to lose an opportunity to realize revenue from its contributions
to the R&D Program.
44
In recognition of these considerations, the parties agree to the
following:
1. DuPont accepts Genencor's offer for Xxxxxxx X. Xxxxxxx, Vice
President Development, to participate in setting the criteria
for selection of a *** and to consult in DuPont's manufacturing
efforts in order to enhance the successful commercialization of
Bioprocess 1,3-propanediol; and
2. Effective 1 January 1999, the parties hereby amend the
Collaborative Research and Development Agreement dated 01
September 1995 and subsequently amended 19 August 1997, and 31
March (hereinafter collectively "the Agreement as amended"), for
a third time to read as indicated below. No other paragraphs
have been amended or added than those set out below in full and
the remainder of the Agreement as previously amended remains in
force.
ARTICLE I
DEFINITIONS
1.9 "Compound X" shall mean *** and 1,3-propanediol and derivatives of
1,3-propanediol. For purposes of calculating the R&D-Based Milestones
under ARTICLE 3, the Royalty Payments To GENENCOR under ARTICLE 6, and
for calculations under Paragraphs 10.6-10.7 of ARTICLE 10, "Compound X"
shall mean 1,3-propanediol.
1.24 "Directed Evolution Technology" shall mean equipment, techniques,
materials (such as DNA, RNA, vehicles, constructs, vectors, plasmids,
cosmids, proteins, and cells) or methods useful for high frequency
nucleic acid mutagenesis, genetic recombination and for the enrichment
of strains or genes with improved traits from a population by selection
or screening. Directed Evolution Technology can be applied toward
desired phenotypic characteristics of strains or toward altered enzymes
in microbial pathway engineering.
ARTICLE 2
COLLABORATIVE RESEARCH AND DEVELOPMENT PROGRAM
2.2 Research and Development Program
(a) GENENCOR agrees to apply its Directed Evolution Technology to
the R&D Program and to provide DuPont with results obtained from
such application showing an improvement over the starting
material(s) based on the stated intent of the experiment, such
results to include Materials as defined in the Master Biological
Material Transfer Agreement, Appendix 9.2 ("Results"). GENENCOR
will disclose to DUPONT sufficient information for DUPONT to
make use of the Results in the DuPont Field, except that
GENENCOR shall have no obligation to disclose to DUPONT
information on the underlying experimentation, techniques or
analyses leading to the Results to the extent said information
would provide DUPONT enabling disclosure of the Directed
Evolution Technology.
2
45
2.3 GENENCOR Research and Development Expenses
(a) R&D expenses. DUPONT and GENENCOR agree that as of 1 January
1999 and for the remaining term of the Agreement as amended,
DUPONT shall pay GENENCOR for R&D expenses for work on the R&D
Program at the rate of *** per each of the full time equivalent
Scientific Personnel assigned to the R&D Program. The rate set
for Scientific Personnel includes the cost of Support Personnel
and overhead.
(d) Promptly upon the acceptance hereof by XXXXXX, XXXX NCOR will
invoice DUPONT, at the rate effective prior to January 1, 1999,
for GENENCOR'S fully allocated R&D expenses in the amount of ***
for GENENCOR's man-months expended on the R&D Program utilizing
Directed Evolution Technology prior to December 31, 1998, but
not reimbursed by DUPONT. Any man-months expended by GENENCOR
personnel on or after January 1, 1999 applying Directed
Evolution Technology on the R&D Program will be reimbursed
consistent with Paragraph 2.3(a) as amended.
ARTICLE 3
R&D-BASED MILESTONES
3.4 Timing of Payment. Promptly, and no later than sixty (60) days after the
Steering Committee determines that a Milestone has been met, DUPONT
shall pay GENENCOR the applicable Milestone Payment, with the further
special condition that, upon the Steering Committee's determination that
the Generation II Milestone was met and is due and payable, DUPONT may
make the applicable Milestone Payment as late as 31 January 2000.
ARTICLE 5
PRODUCT COMMERCIALIZATION
5.4 DUPONT Non-Commercialization of the R&D Bioprocess. In the event DUPONT
elects to commercialize 3G in an amount of at least *** per year by
means of a manufacturing route other than that of the Bioprocess, this
decision made by DUPONT under conditions where the Generation III
performance targets were reached or at the time the decision is made the
projected full costs and investment of a Bioprocess route to
1,3-propanediol is at least twenty (20) percent less than the equivalent
projected full costs and investment of a chemical route to
1,3-propanediol, then GENENCOR shall upon written notice to DUPONT be
released from the exclusive license it granted to DUPONT to Patent
Rights under Article 7.2 for Compound X Inventions as they relate or
lead to the bioproduction of ***, thereby granting GENENCOR the
royalty-free right and license, including the right to sublicense, to
make use, have made, sell or import *** other than as a precursor to
1,3-propanediol using Compound X Inventions and Patent Rights. DUPONT
agrees to disclose to GENENCOR the set of methodologies and metrics used
to calculate the projected full costs and investment of the Bioprocess
and chemical routes to 1,3-propanediol. DuPont shall have no obligation
to disclose to GENENCOR any
3
46
information on the underlying process design technology of the chemical
route to 1,3-propanediol used in this calculation.
ARTICLE 7
INTELLECTUAL PROPERTY
7.10 Notwithstanding Section 7.1 of the 1995 Agreement the Parties hereby
agree that any Inventions and Patent Rights regardless of inventorship
arising from the application of Directed Evolution Technology to the R&D
Program shall be solely owned by GENENCOR and GENENCOR grants no right,
title, interest or license, express or implied, in Directed Evolution
Technology or the Results and DUPONT acquires no right, title, interest
or license in Directed Evolution Technology or the Results except that
GENENCOR grants DUPONT an exclusive license, including the right to
sublicense to its Affiliates, to use the Results solely for the
manufacture or toll manufacture, use, sale, import and export of
Compound X in any country.
7.11 GENENCOR represents and warrants that it has good title (either as owner
or as a licensee) to Directed Evolution Technology. As of the date of
this Third Letter Amendment GENENCOR, to the best of its knowledge, is
not aware of any third party patents which are infringed by performing
the methodologies of GENENCOR's Directed Evolution Technology. Nothing
contained herein shall be interpreted as a warranty, express or implied
as to the patentability, enforceability or validity of the licensed
Directed Evolution Technology.
ARTICLE 9
CONFIDENTIALITY
9.2(a) The Parties agree that any Materials transferred to DUPONT as part of
the Results arising from application of GENENCOR's Directed Evolution
Technology hereunder shall be controlled by the Master Material Transfer
Agreement (except for Paragraph 5 thereof).
9.8 DUPONT acknowledges that the Directed Evolution Technology is the
proprietary property of GENENCOR and that all or part of the Directed
Evolution Technology constitutes a trade secret of GENENCOR.
Accordingly, DUPONT agrees that to the extent any information on the
underlying experimentation, techniques or analyses relating to the
application of Directed Evolution Technology (as opposed to the Results)
is disclosed to DUPONT, DUPONT shall, subject to the exception set forth
in Section 9.1(a)-(e), keep confidential and shall not publish or
otherwise disclose and shall not use for any purpose other than as
provided in this Agreement.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.17 Any ambiguity or conflict regarding the interpretation, rights or
obligation of the Parties pursuant to this Third Letter Amendment to the
Collaborative Research and Development
4
47
Agreement of 1 September 1995 shall be controlled by this Third Letter
Amendment to the Collaborative Research and Development Agreement of 1
September 1995.
In keeping with subparagraph 11.7 of the Collaborative Research and
Development Agreement, please indicate acceptance of the foregoing amendments by
obtaining the signature of a duly authorized officer of Genencor and returning
to me the enclosed duplicate of this letter.
We look forward to the continued success of this work.
Very truly yours,
/s/ XXXXX X. XXXXXXXXXX
Xxxxx X. Xxxxxxxxxx
ACCEPTED, ACCEPTED,
the 23rd day of February, 1999 the 22nd day of February, 1999
GENECOR INTERNATIONAL, INC. E. I. DU PONT DE NEMOURS AND COMPANY
By: /s/ W. XXXXXX XXXXXXXX By: /s/ XXXXXX X. XxxXXXXXXX
--------------------------- ------------------------------
W. Xxxxxx Xxxxxxxx Xxxxxx X. XxxXxxxxxx
Title: President and Title: Group Vice President for
Chief Executive Officer Polyester
5
