entity, shall be deemed to constitute control, unless expressly excluded by mutual agreement of TDCC and Symyx Tech.  Joint ventures in which a party owns no more than a *equity interest shall not be deemed an Affiliate without the consent of the other parties hereto.

 

1.2                                  “ Agreement Compound ” shall mean any Lead Compound or Derivative Compound.

 

1.3                                  “ Alliance Managers ” shall have the meaning set forth in Section 3.1.

 

1.4                                  “ Annual Program Goals ” shall have the meaning set forth in Section 3.5.

 

1.5                                  “ Anticipated Program Goals ” shall mean (1) transfer and implementation of Discovery Tools® Systems to TDCC, including*; (2) deployment, and utilization of Symyx Renaissance® Software across TDCC research and development as a standard automation, data handling, and informatics platform with approximately * TDCC researchers contemplated as users by the end of the Program Term, exclusive of users under Section 7.7; (3) execution of approximately * research programs within the Fields with the goal of (i) discovering commercially viable materials for use in such Fields, and (ii) developing high-throughput workflows, equipment or instruments prior to the purchase and transfer of a related Discovery Tools System (e.g.,*); and (4) provision of know-how transfer, training, and high-throughput intellectual property licenses to enable TDCC to conduct high throughput research and development.

 

1.6                                  “ Combinatorial Chemistry Technology ” shall mean Combinatorial Chemistry Patent Rights and Combinatorial Chemistry Know-How.

 

1.6.1                         “ Combinatorial Chemistry Patent Rights ” shall mean (i) all patent applications (U.S. and other) claiming any inventions or discoveries related to Combinatorial Chemistry, (ii) all divisions, substitutions, continuations, continuation-in-part applications, patents of addition, and reissues, re-examinations and extensions of (i) above, and (iii) patents, utility models or similar grants of rights issuing from any of the preceding of (i) or (ii) above.

 

1.6.2                         “ Combinatorial Chemistry Know-How ” shall mean inventions, information, data, or materials related to Combinatorial Chemistry, excluding any inventions claimed in the Combinatorial Chemistry Patent Rights.

 

1.6.3                         “ Combinatorial Chemistry ” shall mean techniques, methodologies, processes, synthetic routes or instrumentation useful for the simultaneous, parallel or rapid serial: (i) synthesis, (ii) processing, (iii) analysis, or (iv) characterization of more than * compounds, compositions or mixtures in quantities of less than * for purposes of research and development experimentation (i.e., not production processes or the process control, the quality control or the monitoring of such operations.), but shall not refer to particular compositions of matter, materials, compounds or formulations (e.g.*, etc.) or processes to make or use such particular compositions of matter, materials, compounds or formulations.

 

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1.7                                  “ Confidential Information ” shall mean any information disclosed by one party (or by an Affiliate of a party on behalf of that party) to the other party or its representatives in connection with this Agreement which is in written, graphic, machine readable or other tangible form and is marked “Confidential” or “Proprietary” or in some other manner to indicate its confidential nature.  Confidential Information may also include information that is disclosed orally or by observation, provided that such information is designated as confidential at the time of disclosure and confirmed in writing as confidential within thirty (30) days after such disclosure.

 

1.8                                  *

 

1.9                                  “ Designated Compound ” shall have the meaning set forth in Section 4.1.3.

 

1.10                            “ Designated Product ” shall have the meaning set forth in Section 4.1.3.

 

1.11                            “ Derivative Compound ” shall mean any compound or mixture or composition of matter that is derived by or under authority of TDCC or its Affiliates from a Library Compound.  As used in this Agreement, a compound, mixture or composition of matter shall be deemed to have been “derived from” a Library Compound if it*.  Derivative Compound shall also include a compound, mixture or composition of matter that is derived, as described *above, from another Derivative Compound.  Notwithstanding the foregoing, a compound, mixture or composition of matter other than a Library Compound that is first identified * shall not be deemed a Derivative Compound.  It is understood that compounds developed independently by TDCC or its Affiliates without the use of Library Compounds, Confidential Information of Symyx, or Program Technology, shall not be deemed to be a Derivative Compound.

 

1.12                            “ Developer’s Kit Software ” shall mean machine readable, object code versions, provided pursuant to Article 5, of Symyx Developer’s Kit Software, and related documentation.

 

1.13                            “ Direct Modification ” shall have the meaning set forth in Section 4.1.3.

 

1.14                            “ Discovery Tools System ” shall mean a system of hardware and related software for conducting Combinatorial Chemistry, which system has been developed and is ready for commercialization by Symyx in the sense of meeting its specifications, having appropriate documentation and being deliverable to and operable by a Third Party, in each case consistent with Symyx’s usual business practices for commercialization of tools.

 

1.15                            “ Executive Committee ” shall have the meaning set forth in Section 3.4.

 

1.16                            “ Field ” shall have the meaning set forth in Exhibit A.

 

1.17                            “ FTE ” shall mean a full-time employee or independent contractor utilized for the conduct of the Research Program or Software Deployment Plan or, in the case of less than full-time dedication, a full-time equivalent person-year, based on a total of*, of work on or directly related to the Research Program or in implementation of the Software Deployment Plan.

 

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1.18                            “ Independent TDCC Research ” shall have the meaning set forth in Section 2.3.3.

 

1.19                            “ IntelliChem ” shall mean IntelliChem, Inc., an Oregon corporation.

 

1.20                            “ IntelliChem Named User ” means an individual that uses the IntelliChem Products, or any part of such IntelliChem Products, or any software authored by TDCC or its Affiliates incorporating any of such IntelliChem Products, or any part of such IntelliChem Products, including the indirect use of such IntelliChem Products, or any part of such IntelliChem Products.  IntelliChem Named Users may be changed or replaced according to reasonable business practices, program or project changes, and/or changes in job function.

 

1.21                            “ IntelliChem Products ” shall mean the machine readable, object code versions of*, and related documentation, and shall also include updates and upgrades to such products of the same scope as Software Updates and Software Upgrades as defined herein with respect to the Software.

 

1.22                            “ Joint Invention ” shall have the meaning set forth in Section 10.1.

 

1.23                            “ Lead Compound ” shall mean a Library Compound which meets the specific physical, chemical and/or catalytic properties established either in the Research Plan or by the Research Committee for identifying a Lead Compound.  The procedure for identifying a Lead Compound is set forth on Exhibit C hereto. It is understood and agreed that any Library Compound that is transferred from Symyx to TDCC and subsequently commercialized by or under authority of TDCC or its Affiliates shall be deemed a Lead Compound.

 

1.24                            “ Library Compound ” shall mean any compound or mixture or composition of matter screened or prepared by or on behalf of Symyx Tech in the course of the Research Program in order to determine its usefulness in connection with a Research Program in the Field.

 

1.25                            “ Named User ” means an individual that uses the software delivered with a Discovery Tools System, or any part of such software, or any software authored by TDCC or its Affiliates incorporating any of such software, or any part of such software, including the indirect use of such software, or any part of such software.  Named Users may be changed or replaced according to reasonable business practices, program or project changes, and/or changes in job function.

 

1.26                            “ Net Sales ” shall have the meaning set forth in Exhibit J.

 

1.27                            “ Newly Developed Discovery Tools Systems ” shall mean Discovery Tools Systems or modular units of Discovery Tool Systems that are substantially developed in the Research Program, where such development is fully funded by TDCC hereunder.  As set forth in Section 2.1, the Research Committee at the time a Research Plan is established shall determine whether Discovery Tool Systems to be developed pursuant to such Research Plan, if any, in whole or part shall be Newly Developed Discovery Tool Systems.  If there is disagreement on whether or not a Discovery Tools System is in whole or part Newly Developed Discovery Tools System, the issue shall be elevated by the Research or Tools Committee, as applicable, first to the Advisory

 

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Committee, and if still not resolved, then to the Executive Committee.  Newly Developed Discovery Tool Systems do not include “later generation” versions of equipment, instruments or workflows that were developed outside of the Research Program.

 

1.28                            “ Outside Technology ” shall have the meaning set forth in Section 2.3.3.

 

1.29                            “ Product ” shall mean any product that (i) contains an Agreement Compound, (ii) contains a reaction product or other chemical derivative of an Agreement Compound, (iii) utilizes in its manufacture any method or process within the Program Technology developed by Symyx or developed jointly by Symyx and TDCC, or (iv) utilizes an Agreement Compound in its manufacture, e.g., as a catalyst.

 

1.30                            “ Program Technology ” shall mean Program Patents and Program Know-How.

 

1.30.1                   “ Program Know-How ” shall mean inventions, information, data, or materials developed by Symyx or TDCC or jointly by Symyx and TDCC in each case in the course of the Research Program that are useful for the manufacture, use or sale of Agreement Compounds or Products; provided, however, that Program Know-How shall not include any Combinatorial Chemistry Technology, Outside Technology, any invention claimed in the Program Patents or results of Independent TDCC Research.

 

1.30.2                   “ Program Patents ” shall mean (i) all patent applications (U.S. and other), whether filed during the Program Term or after its completion, claiming any inventions or discoveries conceived and reduced to practice in the course of the Research Program by Symyx or TDCC or jointly by Symyx and TDCC, or conceived by Symyx before the Research Program and reduced to practice in the Research Program, which claim an Agreement Compound or a Product, or method or process for the manufacture of an Agreement Compound or Product, or a composition-of-matter containing an Agreement Compound or Product, or a method or process for the use of an Agreement Compound in or for the manufacture of a Product, in each case that are necessary or materially useful for the manufacture, use or sale of Agreement Compounds or Products in the Field, (ii) all divisions, substitutions, continuations, continuation-in-part applications, patents of addition, and reissues, re-examinations and extensions of (i) above, , and (iii) patents, utility models or similar grants of rights issuing on any of the preceding of (i) or(ii) above.  For purposes of this definition, “reduced to practice” shall be construed to include an actual reduction to practice or a constructive reduction to practice where the concept is defined in sufficient detail that it may have been reduced to practice by one skilled in the art without excessive efforts beyond those efforts that one skilled in the art would reasonably employ.  It is understood and agreed that Program Patents shall not include any Combinatorial Chemistry Technology or results of Independent TDCC Research.

 

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1.31                            “ Program Term ” shall mean the meaning set forth in Section 2.2.

 

1.32                            “ Research Committee ” shall have the meaning set forth in Section 3.2.

 

1.33                            “ Research Plan ” shall have the meaning set forth in Section 2.1.

 

1.34                            “ Research Program ” shall mean the program of research conducted by Symyx Tech and/or TDCC on a collaborative basis under this Agreement for the purpose of identifying and optimizing Agreement Compounds in the Field or for making Products for use in the Field.

 

1.35                            “ Secondary Field ” shall have the meaning set forth in Section 2.4 and in Exhibit B.

 

1.36                            “ Software ” shall mean the machine readable, object code versions of Symyx Renaissance® Software Suite provided pursuant to Article 5, consisting of: * and related documentation.

 

1.37                            “ Software Customizations ” shall mean any and all improvements, additions, enhancements, extensions, interfaces, resources, actions, changes, or modifications made by TDCC or its Affiliates to the Software through use of the documented customization capabilities of the Developer’s Kit Software.

 

1.38                            “ Software Deployment Plan ” shall have the meaning set forth in Section 5.1 and in Exhibit G.

 

1.39                            “ Software Updates ” shall mean error corrections, bug fixes, or workarounds to the Software or the Developer’s Kit Software that are developed by or on behalf of Symyx (which typically are indicated by a change in the numeric identifier for the Software in the digit to the right of the decimal) solely to ensure the Software performs according to its specifications and generally released to its customers during the Program Term.

 

1.40                            “ Software Upgrades ” shall mean all revisions to the Software or the Developer’s Kit Software that are developed by or on behalf of Symyx (which typically are indicated by a change in the numeric identifier for the Software in the digit to the left of the decimal) and generally released to its customers during the Program Term, including any Developer’s Kit versions of the Software.  In the event a Developer’s Kit version of the Software is delivered as a Software Upgrade, it shall be treated as Developer’s Kit Software under this Agreement.  *

 

1.41                            “ Sublicensee ” shall mean, with respect to a particular Product, a Third Party to whom TDCC or its Affiliate has granted a license or sublicense to make, use and sell such Product.

 

1.42                            “ Symyx Combinatorial Know-How ” shall mean know-how owned or controlled in the sense of having the right to grant licenses without accounting to others by Symyx with respect to the practice of Combinatorial Chemistry that is disclosed or provided by Symyx to TDCC or its Affiliates in connection with the performance of this Agreement.

 

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1.43                            “ Symyx Combinatorial Patent Rights ” shall mean all patent rights based on claims in patents owned or controlled in the sense of having the right to grant licenses without accounting to a Third Party by Symyx as of the Effective Date or during the Program Term (or during any extension of the license granted in Section 6.1 pursuant to Section 6.5), covering Combinatorial Chemistry. Symyx Combinatorial Patent Rights also shall exclude certain rights that have been exclusively licensed to instrument manufacturers (i.e.,*) as set forth in Exhibit I. Symyx Combinatorial Patent Rights also shall exclude all rights within the field of *

 

1.44                            “ Symyx Inventions ” shall have the meaning set forth in Section 10.1.

 

1.45                            “ Symyx Patents ” shall mean all patent applications (U.S. and other) filed on or before or claiming priority on or before the date * after the end of the Program Term claiming any inventions or discoveries owned or controlled by Symyx (or by any wholly-owned subsidiary of Symyx) which claim an Agreement Compound or a Product, or method or process for the manufacture of an Agreement Compound or Product, or a composition-of-matter containing an Agreement Compound or Product, or a method or process for the use of an Agreement Compound in or for the manufacture of a Product, in each case that are necessary or materially useful for the manufacture, use or sale of Agreement Compounds, or Products in the Field, (ii) all divisions, substitutions, continuations, continuation-in-part applications, patents of addition, and reissues, re-examinations and extensions of (i) above, and (iii) patents, utility models or similar grants of rights issuing on any of the preceding of (i) or (ii) above. Notwithstanding the foregoing, it is understood and agreed that “Symyx Patents” shall not include patent applications or patents claiming inventions made by Symyx or its wholly-owned subsidiary (solely or jointly) in collaboration with, or as part of a research program funded by, a Third Party if such collaboration or research program is not directed to the screening, discovery, or optimization of materials or capabilities (including but not limited to catalysts, catalyst supports, activators and scavenging agents) in the Field for the purpose of making Products or the discovery or development of Products using such materials or capabilities in the Field.

 

1.46                            “ TDCC Improvements ” means enhancements, changes or modifications to a Discovery Tools System delivered to TDCC or its Affiliates under this Agreement, that TDCC or its Affiliates, conceive, reduce to practice or otherwise develop after the delivery of such Discovery Tools System. TDCC Improvements shall not be deemed Program Technology or Combinatorial Chemistry Technology hereunder.

 

1.47                            “ TDCC’s Internal Research and Development Activities ” shall mean only research and/or development by TDCC and/or its Affiliates, including research and development undertaken by TDCC jointly with Third Parties that are involved with TDCC or its Affiliates in developing*, and/or licensees of TDCC’s chemical manufacturing technology, each as consistent with TDCC’s usual and customary business practices.  However, such term shall not include TDCC providing direct access to Discovery Tools Systems or Software or conducting research services or development activities on behalf of Third Parties for a fee other than sharing of expenses incurred in connection with joint activities with Third Parties as described in the prior sentence.

 

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1.48                            “ TDCC Joint Venture ” shall mean an entity in which TDCC, directly or indirectly, has an equity ownership interest (or other equivalent interest) of less than * but not less than *, because applicable law or business conditions at the time and place where the Joint Venture was formed made it impractical for TDCC to own an interest of*.

 

1.49                            “ Third Party ” shall mean any party other than Symyx and its Affiliates, TDCC and its Affiliates, and their permitted assignees.

 

1.50                            “ Tools Cost Basis ” shall mean *

 

1.51                            “ Tools Price ” shall have the meaning set forth in Section 7.4.

 

Article 2
RESEARCH PROGRAM

 

2.1                                  Research Program .  Subject to the terms and conditions set forth herein, Symyx Tech and TDCC shall, in a collaborative effort, (i) conduct research activities within the Fields, and (ii) conduct research and development activities with respect to the development and use of high throughput tools and workflows.  Prior to commencing a research project, the parties shall agree upon a written plan describing the research activities to be conducted by each party (the “Research Plan”).  The initial Research Plan for each project will be agreed upon by the parties in writing.  A template for preparing the Research Plan is attached as Schedule 2.1.  Research Plans for projects that are directed to Fields where it is contemplated that a Product may result should include: the Field, criteria for identifying a Lead Compound, key FTEs, initial Annual Program Goals (see Section 3.5), how the Royalty Rate for a Product is to be determined (see Exhibit J) and how the Limited Immunity in Section 4.1.3 may be adapted for this Field, where necessary.  Research Plans for projects in Fields where it is contemplated that a work flow or capabilities will be developed should include: the Field, key FTEs, initial Annual Program Goals (see Section 3.5), and how the Limited Immunity in Section 4.1.3 may be adapted for this Field, where necessary.   Each Research Plan shall also indicate (a) whether it involves the development of a Discovery Tools System, and if so, (b) whether it is intended that such Discovery Tools System be transferred to TDCC after its development and hardening, and (c) the mutual expectation of the parties as to whether such Discovery Tools System or a modular portion of the Discovery Tools System is intended to be a Newly Developed Discovery Tools System.  In the event that during the conduct of a Research Plan, either party believes that the mutual expectation set forth in any Research Plan pursuant to (c) above is no longer correct, such party shall provide written notice to the other party, and the other party shall respond as to whether it agrees that the initially expressed mutual expectation is no longer correct.  In the event the parties do not agree, the matter will be resolved by the Advisory Committee.  If the Advisory Committee is unable to resolve such matter, it will be resolved as set forth in Article 3.

 

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2.1.1                         Responsibility – Symyx Tech .  During the Program Term, Symyx Tech shall use efforts that are reasonable in the circumstances and consistent with professional standards applicable to research in the Field as well as relevant standards applied by Symyx Tech in conducting research outside the Research Program, to conduct research activities in accordance with the Research Plan to identify, discover or synthesize catalysts or Agreement Compounds or Products in the Fields by preparing and screening Library Compounds as set forth in the Research Plan and/or to develop workflows, capabilities or Discovery Tools Systems.

 

(a)                                   Compounds Already Identified.   Symyx Tech shall make available for evaluation in the Research Program any compound, mixture or composition of matter that was screened or prepared by or on behalf of Symyx prior to the Effective Date or during the Program Term and is both (i) owned or controlled by Symyx to the extent that no obligations to any Third Party will be violated by use of the compound, mixture or composition in the Research Program and (ii) believed by Symyx Tech to be potentially useful as a Lead Compound or a precursor of a Lead Compound.

 

(b)                                  FTEs .  Symyx Tech shall utilize a minimum of an average of * FTEs per year to conduct the Research Program in * of the Program Term and an average of * FTEs per year to conduct the Research Program in * of the Program Term. Such number of FTEs may be adjusted by mutual consent.  An average of at least * FTEs per year in * of the Program Term will be devoted to  *. Each FTE utilized by Symyx Tech shall be qualified for the activities assigned to him or her under the Research Program in accordance with work to be done under the Research Plan.  The FTEs may include FTEs with expertise in Chemistry, Engineering, Database and Software services.  The initial FTEs for Chemistry for * will be selected from the list set forth in Exhibit F, and may include fractions of the time of one or more of the listed persons, provided that individuals with special skills or expertise identified as “Key Personnel” in Exhibit F shall be available for minimum fractions of their work time during each calendar year quarter of the Program Term as may be reasonably required consistent with the Research Plan.  Exhibit F shall be supplemented and amended in accordance with Research Plans. Each Research Plan also may designate “Key Personnel” as set forth in Schedule 2.1. It is understood and agreed that in the event one or more “Key Personnel” are not available due to circumstances beyond the reasonable control of Symyx Tech, Symyx Tech shall use commercially reasonable efforts to maintain the overall level of skills and expertise by replacing one or more of the “Key Personnel”.  The Key Personnel may also be amended by mutual agreement of Symyx Tech and TDCC. TDCC shall not unreasonably withhold approval of changes in Key Personnel.  Symyx shall not unreasonably withhold approval of changes to FTEs assigned to Research Plans or other activities under this Agreement requested by TDCC.

 

(c)                                   Other Responsibilities .  Symyx Tech shall use reasonable efforts to ensure that the most efficient and effective Combinatorial Chemistry Technology reasonably

 

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available to Symyx is timely made available for conducting the Research Program.  At TDCC’s request, Symyx Tech will use commercially reasonable efforts to provide samples of up to * of any Lead Compound; however, if such sample cannot be provided at a commercially reasonable cost, Symyx Tech will so notify TDCC and the parties shall meet to discuss how to proceed.  Symyx Tech will also use commercially reasonable efforts to provide workflows and capabilities, but if these cannot be provided at a commercially reasonable cost, Symyx Tech will so notify TDCC and the parties shall meet to discuss how to proceed.  Symyx shall use reasonable commercial efforts to timely deliver to TDCC all Program Know-How and to ensure protection of the Program Know-How against loss or corruption. Notwithstanding any other provision of this Agreement, Symyx shall not, without its consent, be required to perform research activities other than in accordance with the Research Plan, or utilize more FTEs in any given calendar year during the Program Term than set forth in Section 2.1.1(b).

 

2.1.2                         Responsibility – TDCC .  During the Program Term, TDCC shall (i) conduct research activities in accordance with the Research Plan to identify, discover or synthesize * or Agreement Compounds or Products in the Fields and evaluate and develop work flows and capabilities, and (ii) to provide Symyx technical information and technical support reasonably necessary to conduct of the Research Program in accordance with the Research Plan. TDCC’s efforts in conduct of the Research Program shall be reasonable in the circumstances and consistent with professional standards applicable to research in the Field as well as relevant standards applied by TDCC in conducting research outside the Research Program. Notwithstanding any other provision of this Agreement, TDCC shall not, without its consent, be required to disclose proprietary information to Symyx that is not essential to conduct of the Research Program or to provide equipment or materials.

 

2.2                                  Program Term . The Program Term shall commence on the Effective Date and, unless earlier terminated in accordance with Article 15, continue thereafter for a period of*, or such other period as the parties may mutually agree in writing. No later than * prior to the end of the Program Term, the parties will inform one another of their respective interest in a further extension of the Program Term.  In the event both parties are interested in a further extension, the parties will negotiate in good faith the terms of such extension, with the goal of completing such negotiation by * prior to the end of the Program Term. In the event one or both parties are not interested in a further extension, the parties will work together in good faith to provide for a wind-down and completion of activities under this Agreement during*.  Symyx shall use reasonable commercial efforts during any wind-down to complete activities in accordance with Research Plans and deliver Agreement Compounds and all Program Know-How and related information with the objective of enabling TDCC to continue evaluation and development of Agreement Compounds for potential commercialization pursuant to Article 11 and complete transfer of workflows, capabilities and delivery of any Discovery Tool Systems pursuant to Article 7 with the objective of enabling TDCC

 

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to apply Combinatorial Chemistry Technology through the use of such Discovery Tools Systems after the Research Program ends. In the event that either party is no longer interested in a further extension, it will promptly give notice to the other party.

 

2.3                                  Exclusivity and Independent Research .

 

2.3.1                         In the Field .  During the Program Term, Symyx shall not conduct any research activities outside the Research Program, on its own behalf or on behalf of any Third Party, directed to*, for the purpose of making Products within the scope of the Field applicable at that time, provided that Symyx shall not be precluded from conducting any research activities outside the Research Program, on its own behalf or on behalf of any Third Party, directed to*.  In addition, during the Program Term, Symyx shall not knowingly provide Library Compounds for screening in a particular Field to a Third Party for use in * for the purpose of making Products within the scope of such particular Field. Symyx shall be permitted to engage in optimization projects on its own behalf or on behalf of a Third Party, within the Field applicable at that time, provided that work for or on behalf of the Third Party shall be limited to*.

 

2.3.2                         Other Research by Symyx .  It is understood that Symyx will conduct research activities outside the Research Program (“Other Research”) during the Program Term for itself and/or Third Parties for the purpose of * other than in the Field. In the event some Symyx employees work on both the Research Program and the Other Research, Symyx shall use good faith commercially reasonable efforts to avoid potential conflicts or overlaps between the Research Program and Other Research and misappropriation of any Confidential Information. It is understood that the Library Compounds are regularly used by Symyx and that Symyx can use and screen the Library Compounds for any use on its own behalf or for Third Parties, including without limitation for Other Research.  In the event that Symyx becomes aware of information, data, materials or inventions that Symyx believes may advance the Research Program, in the course of conducting research outside of the Research Program at its own expense or in collaboration with a Third Party, Symyx will make available these information, data, materials and inventions for use in the Research Program to the extent it is free to do so without violating obligations to any Third Party; provided, however, it is understood that this provision shall not impose, or be construed to impose, any obligation on Symyx to identify or make itself aware of any such information, data, materials and inventions.

 

2.3.3                         Independent TDCC Research . It is understood that this Agreement shall not prohibit TDCC from conducting research activities outside of and independent from the Research Program (“Independent TDCC Research”) during the Program Term for itself and/or with Third Parties for the purpose of*.  In the event some TDCC employees work on both the Research Program and the Independent TDCC

 

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Research, TDCC shall use good faith commercially reasonable efforts to avoid potential conflicts or overlaps between the Research Program and Independent TDCC Research and misappropriation of any Confidential Information of Symyx.  In the event that TDCC in the course of conducting research outside of and independent from the Research Program discovers information, data, materials or inventions (“Outside Technology”) that TDCC believes may advance the Research Program, TDCC may make such Outside Technology available for use in the Research Program to the extent it is free to do so without violating obligations to any Third Party, and it is understood that such Outside Technology shall not be deemed to be Program Technology; provided, however, that information, data, materials or inventions made in the Research Program shall be deemed to be Program Technology whether or not such information, data, materials or inventions were made using Outside Technology.   Notwithstanding the above, TDCC will not knowingly in collaboration with any Third Party conduct research activities using Combinatorial Chemistry methods with respect to the active projects being conducted with Symyx in the Field applicable at that time, provided, however, that TDCC shall not be precluded from engaging in optimization projects in collaboration with any Third Party, and provided that this sentence shall not restrict the use by TDCC of Discovery Tools Systems purchased and licensed hereunder or previously purchased and licensed from Symyx.  Notwithstanding anything herein to the contrary, a TDCC Affiliate shall not be limited in its research activities, unless TDCC directs the research or owns the research results.

 

2.3.4                         *

 

2.3.5                         *

 

2.4                                  Changes to Fields .  The initial Fields activated in the Research Plan shall be those identified in Exhibit A.  During the Program Term, TDCC and Symyx Tech may agree to conduct research in one or more additional Fields (including one or more of the Secondary Field), or to amend Exhibit A to create a new Field or to delete Fields that are not contemplated to be activated. Those Fields that are not currently active but which may be included in a Research Plan upon request of TDCC are Secondary Fields as set forth in Exhibit B.  In the event that TDCC and Symyx Tech agree to a new Field, or a new project within the Fields, this will be documented by appropriate written modifications to the Research Plan, including the criteria in Schedule 2.1, and appropriate modifications in writing to the staffing plan of the Research Program activities in connection with such Field.  TDCC and Symyx Tech may also agree to discontinue activity in one or more Fields by written modifications to the Research Plan.  In the event the parties determine to discontinue research activities in any particular Field in which research was active during the Program Term, such Field shall no longer be within the Field in Exhibit A as of the date research activities are discontinued, but may revert to a Secondary Field only if the parties mutually agree in writing that this Field may be reactivated at a future date.*  Appropriate modifications or adjustments to staffing of the Research Program will be agreed to reflect any changes in activity of the Fields.  The Advisory

 

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Committee described in Section 3.3 shall in general provide direction for any changes in Fields and make formal recommendations to the Executive Committee.  Symyx Tech shall not unreasonably refuse to agree to changes proposed by TDCC to change activity in the Fields.  TDCC shall not unreasonably refuse to agree to adjustments in staffing of the Research Program proposed by Symyx Tech as a consequence of any changes in the activity of the Fields.  TDCC may add to the Fields in connection with projects to be activated, with the consent of Symyx Tech, such consent not to be unreasonably withheld.  Symyx Tech may delete from the Fields in connection with projects not planned to be activated, with the consent of TDCC, such consent not to be unreasonably withheld.

 

2.5                                  Secondary Fields .  Symyx may engage in discussions with Third Parties regarding possible collaboration in any Secondary Field.  Prior to making a formal proposal to a Third Party to collaborate in an Secondary Field, Symyx will notify TDCC and TDCC shall give written notice to Symyx within * informing Symyx whether TDCC is interested in negotiating with Symyx to activate a project in such Secondary Field.  In the event TDCC notifies Symyx that it is interested, good faith negotiations shall commence promptly and continue for a period not to exceed * from the giving of such notice by TDCC to activate a collaboration in such Secondary Field.  If TDCC and Symyx agree to establish such a collaboration, then such Secondary Field shall become part of the Fields (and shall no longer be a Secondary Field).  If the parties have not agreed to establish such a collaboration within such * period, Symyx shall be free to engage in a collaboration in such Secondary Field with a Third Party, and in such event, such Secondary Field shall thereafter be excluded from both the Secondary Fields and the Fields.  Notwithstanding the above, in the event that TDCC, during the Program Term, knowingly in collaboration with any Third Party conduct research activities using Combinatorial Chemistry methods with respect to any of the Secondary Fields, TDCC shall promptly notify Symyx in writing and such Secondary Field shall thereafter be excluded from both the Secondary Fields and the Fields, provided that this sentence shall not apply to the use by TDCC of Discovery Tools Systems purchased and licensed hereunder or previously purchased and licensed from Symyx.

 

2.6                                  Research Records .  Symyx Tech and TDCC shall maintain records of the Research Program (or cause such records to be maintained) in sufficient detail and in good scientific manner as will properly reflect the work done and results achieved in the performance of the Research Program (including information sufficient to establish dates of conception and reduction to practice of inventions).  Access to such records shall be granted as provided in Sections 8.9 and 10.2.

 

2.7                                  Development and Commercialization of Agreement Compounds and Products .  TDCC and its Affiliates shall be responsible for all expenses incurred for the development and commercialization of Agreement Compounds and Products by TDCC and its Affiliates under the terms of this Agreement.

 

2.8                                  Third Party Claims .  In the event that TDCC or Symyx receives a written notice from any Third Party alleging patent infringement, misappropriation of trade secrets, or other violation of intellectual property rights, based on research activities in the Research Program or potential commercialization of results of the Research Program, such party shall promptly notify the other.  Symyx and TDCC shall use commercially reasonable efforts to determine how the objectives of any

 

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Research Program involved may be achieved without excessive risks or costs, including potential settlement with the Third Party.  Symyx and TDCC, upon advice of counsel, shall each have the right, in its discretion, to cease to conduct any research activities that are the subject of such claim without liability to the other party; provided, however, that if TDCC or Symyx acquires a license to permit the conduct of such activities, and/or if TDCC and Symyx mutually agree in writing upon terms of indemnification for conduct of such activities, then the parties will resume or continue, as appropriate, such activities in accordance with the Research Plan and the terms and conditions of this Agreement.  In the event a party decides to cease to conduct any research activities pursuant to this Section 2.8, Symyx and TDCC shall endeavor to change or modify the Fields as provided in Section 2.4 in a manner that maintains the value of the Research Program to TDCC. In the event Symyx or TDCC decides to cease to conduct any research activities pursuant to this Section 2.8, such cessation is a material portion of the Research Program (at least*) and the parties are unable to agree upon changes or modifications of the Fields as provided in Section 2.4 in a manner that maintains the value of the Research Program to TDCC, TDCC may elect by written notice to Symyx to limit the number of FTEs in the Research Program (and its corresponding payment obligation pursuant to Section 8.1) to those FTEs whose work was not subject to the cessation.

 

Article 3
MANAGEMENT

 

3.1                                  Alliance Managers .  Symyx and TDCC each shall designate an alliance manager on or before the Effective Date (“Alliance Managers”) who will be responsible for the day to day coordination of all activities under this Agreement, will act as a single point of contact for all matters, and will be responsible for organizing and presenting matters to the advisory and executive committees for review and approval. Either party may replace their designated alliance manager at any time, upon written notice to the other party, but each party shall use reasonable efforts to maintain continuity.  The responsibilities of the Alliance Managers may include, but are not limited to, communication plans and notifications pursuant to this Agreement, handling of invoices and payment issues and contacts for initial efforts to resolve any disputes.

 

3.2                                  Research Committees .

 

3.2.1                         Establishment .  Symyx Tech and TDCC shall establish a committee  for each active project (the “Research Committee”), for each Discovery Tools System deliverable hereunder as set forth in Section 7.16 (a “Tools Committee”) and for the Software Deployment Plan to (i) monitor technical progress and report progress to the Advisory Committee, (ii) establish and modify the Research Plan for such project as needed, (iii) recommend modifications to the Advisory Committee of the criteria to define Lead Compounds for research projects within each Field, (iv) recommend to the Advisory Committee changes in the Fields in accordance with Section 2.4, (v) recommend to the Advisory Committee metrics for each project to be used to assess progress against the Annual Program Goals, and (v) ensure open communications between the parties.

 

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3.2.2                         Membership .  The Research Committee shall be comprised of * representatives designated by each of Symyx Tech and TDCC, or such other equal number of representatives as the parties may from time to time agree in writing, with each party’s representatives selected by that party.  Either party may replace one or more of their respective Research Committee members at any time, upon written notice to the other party.  The chairperson of the Research Committee shall be selected by TDCC.  The secretary of the Research Committee shall be selected by Symyx Tech.

 

3.2.3                         Meetings .  During the Program Term, each Research Committee shall meet at regular intervals at least four times per year (unless otherwise agreed) at locations and times agreed by the parties.  Special meetings of the Research Committee may be called by either party on ten (10) days written notice to the other party.  All meetings shall alternate between offices of TDCC and Symyx unless members of the Research Committee otherwise agree.  Upon consent of the parties, other representatives of Symyx or TDCC may attend Research Committee meetings as nonvoting observers.  Research Committee members may participate in any such meeting in person, by telephone, or by video conference.  Symyx Tech shall prepare minutes of each Research Committee meeting, which minutes shall be subject to review and approval by TDCC.  The reviewed and approved minutes shall be signed by Research Committee representatives of each party.

 

3.2.4                         Decision Making .  A quorum of the Research Committee shall be present at any meeting where at least one member of each party participates in all decisions.  Decisions of the Research Committee shall be made by unanimous approval.  In the event the Research Committee is unable to decide an issue, it may be referred by either party to the Advisory Committee for resolution.

 

3.3                                  Advisory Committee .

 

3.3.1                         Establishment . Symyx and TDCC shall establish an advisory committee to (i) oversee the direction of the overall relationship between TDCC and Symyx and the progress toward achieving the Annual Program Goals and Key Program Goals, (ii) approve or establish metrics used to assess progress against the Annual Program Goals, (iii) organize quarterly progress and status reports to the Executive Committee, (iv) resolve any issues referred to it by the Research Committees or the Alliance Managers, (v) set the direction of the Research Program, Software Deployment Plan and Discovery Tools System within the bounds set forth in this Agreement, and resolve disputes or negotiate changes concerning same, and (vi) decide upon any other changes in projects or Research Plans recommended by the appropriate Research Committee.

 

3.3.2                         Membership .  The Advisory Committee shall be comprised of * representatives designated by each of Symyx and TDCC (“Advisory Committee”) with each

 

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party’s representatives selected by that party, and with representatives having expertise in tools, informatics and research areas.  The initial representatives to serve on the Advisory Committee shall be selected and communicated by each party to the other on or before the Effective Date.  Either party may replace one or more of their respective Advisory Committee members at any time, upon written notice to the other party.  The chairperson of the Advisory Committee shall be selected by TDCC.  The secretary of the Advisory Committee shall be selected by Symyx.

 

3.3.3                         Meetings .  During the Program Term, the Advisory Committee shall meet at regular intervals at least four times per year (unless otherwise agreed) at locations and times agreed by the parties.  Special meetings of the Advisory Committee may be called by either party on ten (10) days written notice to the other party.  All meetings shall alternate between offices of TDCC and Symyx unless members of the Advisory Committee otherwise agree.  Upon consent of the parties, other representatives of Symyx or TDCC may attend Advisory Committee meetings as nonvoting observers.  Advisory Committee members may participate in any such meeting in person, by telephone, or by video conference.  Symyx shall prepare minutes of each Advisory Committee meeting, which minutes shall be subject to review and approval by TDCC.  The reviewed and approved minutes shall be signed by Advisory Committee representatives of each party.

 

3.3.4                         Decision Making .  A quorum of the Advisory Committee shall be present at any meeting where at least one member of each party participates in all decisions.  Decisions of the Advisory Committee shall be made by unanimous approval.  In the event the Advisory Committee is unable to decide an issue, it may be referred by either party to the Executive Committee for resolution.

 

3.4                                  Executive Committee . Symyx and TDCC shall establish a committee comprised of * representative each from Symyx and TDCC (the “Executive Committee”).  Each party’s representative on the Executive Committee shall be selected by that party, and either party may replace its Executive Committee representative at any time, upon written notice to the other party.  The initial members of the Executive Committee shall be selected and communicated by each party to the other on or before the Effective Date.  The Executive Committee shall meet at least twice per year (unless otherwise agreed) at locations and times agreed by the parties, and members of the Executive Committee may participate in any such meeting in person, by telephone, or by video conference.  Special meetings of the Executive Committee may be called by either party on fifteen (15) days written notice to the other party.  Upon consent of the parties, other representatives of Symyx or TDCC may attend Executive Committee meetings as nonvoting observers.  Symyx shall prepare minutes of each Executive Committee meeting, which minutes shall be subject to approval by TDCC and after approval will be signed by Executive Committee representatives of each party.  The Executive Committee shall be ultimately responsible for (i) overseeing the successful execution of this Agreement, (ii) resolving any disputes not resolved by the Advisory Committee, and (iii)

 

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approving the Annual Program Goals.  The Executive Committee also shall monitor progress against the Annual Program Goals and document such monitoring and its results in the minutes of the Executive Committee.

 

3.5                                  Annual Program Goals .  The Advisory Committee, in consultation with the Research Committees and Tools Committees (as described in 7.16) and subject to the final approval of the Executive Committee, shall set annual goals (“Annual Program Goals”) for each twelve (12) month period commencing on January 1st of each year during the Program Term.  Such Annual Program Goals shall specify the activities to be carried out under this Agreement during such twelve-month period including, without limitation (i) the Software Deployment Plan and implementation activities to be carried out during such twelve-month period, (ii) the Discovery Tools Systems to be fabricated and transferred to TDCC during such twelve-month period, (iii) the research projects and Research Plans that will be active during such twelve-month period, including anticipated completion dates for active projects and proposed start dates for new projects, and (iv) any other activities to be carried out during such twelve-month period in support of achieving the Annual Program Goals and wind-down of activities at the end of the Program Term.

 

3.6                                  Annual Reviews .  Beginning on or about *, and each year thereafter during the Program Term, a joint TDCC-Symyx team shall present to the Advisory Committee and the Executive Committee an evaluation of progress made against the Annual Program Goals during the previous calendar year.

 

Article 4
LICENSES

 

4.1                                  License to TDCC .

 

4.1.1                         License in the Fields .  Subject to the terms and conditions of this Agreement, Symyx agrees to grant, and hereby grants, to TDCC, and TDCC hereby accepts an exclusive (even as to Symyx), worldwide, royalty-bearing license under Symyx’s interest in the Program Technology to make, have made, import and use Agreement Compounds to develop, make, have made, use, sell, offer for sale, and import Products within the scope of the corresponding Fields.  For purposes of clarification, it is understood that for so long as TDCC retains this license, TDCC shall have the non-exclusive right to use Library Compounds and Confidential Information received from Symyx in the course of the Research Program, as well as Program Technology, to develop Agreement Compounds both during and after the Program Term and to make, have made, import and use such Agreement Compounds to develop, make, have made, use, sell, offer for sale, and import Products within the scope of the corresponding Fields.  It is further understood and agreed that the licenses set forth in this Section 4.1.1 shall apply only to the Fields as such Fields exist at the time any particular Program Know How is developed or any particular Program Patent is conceived and reduced to practice (as defined in Section 1.30.2). A license arising with respect to particular Program Technology as

 

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applicable to the then-existing Field shall continue to apply to such Field even if the scope of the Field is subsequently amended such that it no longer includes the Field that was in place at the time the license initially arose. It is understood and agreed that no license is granted to TDCC under Symyx Patents or other patents owned or controlled by Symyx that are not Program Patents, except as provided in Section 4.1.2 or 4.1.3.

 

4.1.2                         *

 

4.1.3                         Limited Immunity with Respect to Symyx Patents .

 

*

 

4.2                                  Sublicenses .  Subject to the terms and conditions of this Agreement, TDCC shall have the right to grant sublicenses under the rights granted in Section 4.1 above to Affiliates of TDCC and TDCC Joint Ventures; provided that the terms of each such sublicense shall be consistent with the terms of this Agreement. It is understood that any such sublicense shall be subject and subordinate to the terms and conditions of this Agreement, and that TDCC shall remain responsible for all applicable financial and other obligations under this Agreement for each such Affiliate sublicensed, including without limitation milestone and royalty payments due to Symyx hereunder with respect to development and sales of Products. Subject to the terms and conditions of this Agreement, TDCC or an Affiliate of TDCC shall also have the right to grant sublicenses under the rights granted in Sections 4.1.1 and 4.1.2 above to one or more Third Parties (other than TDCC Joint Ventures); provided that any revenue received from such a Sublicensee for such grant shall be shared in accordance with Section J2.1(iv) or J3.1 of Exhibit J, as applicable.   TDCC shall provide to Symyx Tech at least the following information with respect to each Sublicensee or Affiliate or TDCC Joint Venture sublicensed: (i) the identity of each Sublicensee or Affiliate or TDCC Joint Venture sublicensed, (ii) a summary of the rights granted as to both subject matter and territory; and (iii) a summary of the Confidential Information of Symyx and Program Technology furnished to each Sublicensee or Affiliate or TDCC Joint Venture. No sublicense granted by TDCC or an Affiliate to a Third Party may be further assigned or further transferred by any Sublicensee without the prior written consent of Symyx Tech, which consent shall not be unreasonably withheld; provided, any such a sublicense may be further assigned by a Sublicensee without the consent of Symyx Tech in connection with a transfer of substantially all the business of such Sublicensee to which such sublicense relates.

 

4.3                                  Third Party Rights .  It is understood that Symyx is in the business of conducting materials discovery, research and development with Third Parties, and that Symyx will continue to grant Third Parties rights to acquire licenses related to compounds and materials derived from such research.  It is possible that a Third Party may acquire rights from Symyx with respect to one or more compounds or materials that are solely owned by Symyx or jointly owned by Symyx and a Third Party and which were made and designed independently of Symyx’s activities in the Research Program.  Accordingly, Symyx’s grant of rights to TDCC under Section 4.1 does not include (i) rights that are covered by a patent application with respect to such a compound or material that was made and designed independently of activities in the Research Program and is solely owned by Symyx or a Third Party

 

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or jointly owned by Symyx and a Third Party, where such patent application was filed by a Third Party (either alone or jointly with Symyx) prior to the filing by TDCC (either alone or jointly with Symyx) of a patent application with respect to such a compound or material, or (ii) rights which are subject to a license, option, or other rights that Symyx has granted to a Third Party prior to the Effective Date.  It is understood and agreed that, even if Symyx complies with its obligations under this Agreement, research for Third Parties in the course of Symyx’s other business activities may result in patent applications and patents owned by Third Parties, or owned jointly by Symyx and such Third Parties, which could conflict with patent applications and patents owned by TDCC, or jointly owned by TDCC and Symyx, under this Agreement.  Symyx shall use its good faith commercially reasonable efforts to avoid such conflicts.  In the event that conflicts arise between rights granted to TDCC in the Field and rights granted by Symyx outside the Field, Symyx agrees to use commercially reasonable efforts to promote a resolution of the conflict between TDCC and the Third Party via a cross-license or other arrangement acceptable to the parties involved.  It is understood that, except to the extent that TDCC is damaged as a proximate result of a material breach by Symyx of Sections 2.3, 4.1.1, 4.1.2 or 13.2 of this Agreement, then Symyx shall have no liability under this Agreement with respect to any such conflict.

 

4.4                                  Joint Inventions* . TDCC, TDCC’s Affiliates, Symyx, and Symyx’s Affiliates shall each have the right to use Joint Inventions for internal research purposes *; provided, however, that, subject to Section 4.1.2 and prior obligations arising under the CRLA, Symyx shall have the sole right to commercially exploit such Joint Inventions *.  It is further understood and agreed that Symyx shall have the right to grant Third Parties licenses under Joint Inventions * that are exclusive even as to TDCC and Symyx.  If Symyx grants such a license that is exclusive even as to TDCC and Symyx, Symyx shall promptly notify TDCC in writing.  Symyx and TDCC shall negotiate in good faith to determine the added value attributable to TDCC and the Research Program.  *  It is understood and agreed that Confidential Information received by Symyx from TDCC or developed by Symyx for TDCC shall be subject to all applicable provisions of Article 12 of this Agreement.

 

4.5                                  Retained Rights .

 

4.5.1                         Sole Inventions Outside the Fields .  Subject to the license to Combinatorial Chemistry Technology in Section 4.6, rights under Section 4.1.2 and any prior obligations under the CRLA, TDCC and Symyx shall each retain all rights * in and to inventions and discoveries invented or made solely by such party in the course of the Research Program, provided that nothing contained herein shall limit TDCC’s use of Discovery Tools Systems purchased and licensed hereunder or previously purchased and licensed from Symyx.

 

4.5.2                         Symyx Research .  Notwithstanding the licenses and rights granted by Symyx in this Article 4, Symyx shall retain the right to make, have made, and use any Library Compounds or Agreement Compounds, and use or practice any processes or methods developed by or on behalf of Symyx in the course of performing the Research Program, for its own internal research to develop, improve and validate its tools and Combinatorial Chemistry Technology.

 

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4.6                                  Combinatorial Chemistry .  TDCC agrees to grant, and hereby grants, to Symyx an irrevocable, royalty-free non-exclusive license, with the right to grant and authorize sublicenses, under TDCC’s interest in Combinatorial Chemistry Technology made or invented solely by TDCC in the course of the Research Program, to conduct activities using Combinatorial Chemistry.  TDCC, TDCC’s Affiliates, Symyx and Symyx’s Affiliates shall each have the right to use Combinatorial Chemistry Technology made or invented jointly by TDCC and Symyx in the course of the Research Program for internal research purposes; provided, however, that Symyx shall have the sole right to grant and authorize licenses and sublicenses to Third Parties under such Combinatorial Chemistry Technology.  It is understood that this Section 4.6 shall not apply to any inventions conceived and reduced to practice by TDCC independent of the Research Program and without use of, or reference to, Combinatorial Chemistry Technology owned by Symyx, other than the use of and reference to the Discovery Tools Systems, if any, licensed or sold to TDCC as set forth in Article 7 or under prior agreements.  Nothing herein shall be construed to obligate TDCC to grant to Symyx the right to use or sublicense background rights in technology of TDCC that existed prior to the Effective Date or results of Independent TDCC Research.

 

4.7                                  Limited Use Outside of Field .  Except as the parties may otherwise expressly agree in writing, TDCC shall not use or sell, or authorize the use or sale of, Program Technology developed solely or jointly by Symyx, or any Agreement Compound or Library Compound, except (i) in relation to the manufacture, use or sale of Products within the corresponding Field or Fields in accordance with the license granted by Symyx in Sections 4.1.1, or (ii) in accordance with Section 4.1.2.  It is understood that this Section 4.7 does not preclude TDCC from the use or sale or authorizing the use or sale of compounds developed independently by TDCC without the use of Library Compounds, Confidential Information of Symyx, or Program Technology, or limit TDCC’s use of Discovery Tools Systems purchased and licensed hereunder or previously purchased and licensed from Symyx or limit the use of workflows, instruments and equipment developed in the normal course of business of TDCC and its Affiliates and TDCC Joint Ventures (provided that the use of such workflows, instruments and equipment shall be licensed by Symyx only as expressly set forth in this Agreement).

 

4.8                                  *

 

4.9                                  *

 

4.10                            General Provisions with respect to Rights and Fields .  For the avoidance of doubt, it is understood that as a general proposition, all licenses and rights that arise under this Agreement, including without limitation, Sections 4.1, 4.2, and 4.4, with respect to Program Technology with respect to any particular Field continue even though the scope of the Field as subsequently amended does not include such particular Field or includes other Fields. It is the intent of the parties that this Agreement be construed such that the rights and licenses hereunder are consistent with the scope of the Fields at the time any particular Program Know How is developed, any particular Lead Compound is identified, or any particular Program Patent is conceived and reduced to practice (as defined in Section 1.30.2).  By way of illustration, the above principles shall apply such that TDCC’s rights with respect to a particular Agreement Compound, applicable to a particular Field as of the

 

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time such Agreement Compound arose, apply equally to any modifications TDCC might make to such Agreement Compound, even if such modifications are made after the Field definition has been changed.

 

Article 5
SOFTWARE

 

5.1                                  Deployment .  Symyx DTools shall provide a minimum of * and up to * FTE years of personnel to deploy the Software during the Program Term within TDCC and its Affiliates in accordance with a Software Deployment Plan attached hereto as Exhibit G (“Software Deployment Plan”), as follows:  *.  TDCC shall provide Symyx with at least twelve (12) months notice a forecast of the staffing levels for the Software Deployment Plan (other than staffing for 2005 and 2006, which shall be as set forth above)(e.g., if there are expected to be less than * as of January 1, 2007, TDCC shall so notify Symyx no later than January 1, 2006) and at least six (6) months notice with respect to actual staffing levels for the Software Deployment Plan.   Notwithstanding any other provision of this Agreement, Symyx shall not, without its consent, be required to perform activities other than in accordance with the Software Deployment Plan or utilize a number of FTEs in excess of the number of FTEs specified above. Symyx DTools shall use efforts that are reasonable in the circumstances and consistent with professional standards applicable to the research and development software business to conduct activities in accordance with the Software Deployment Plan.  TDCC contemplates that it will provide an average of * FTEs per year during the Program Term in support of the Software Deployment Plan, but such number may be adjusted by mutual consent, such consent not to be unreasonably withheld.  Annual Program Goals for each twelve (12) month period commencing on January 1 ^st of the Program Term for the Software Deployment Plan will be established pursuant to Section 3.5.  Symyx shall for the duration of the Program Term and any extension thereof use commercially reasonable efforts to provide such support services for the Software as it generally provides to its customers, as further described in Exhibit G.  Such support services shall be without additional charge to TDCC (other than the payments set forth in Sections 8.2 and 8.4 hereunder).  Symyx will take reasonable steps to facilitate the organization and operation of user groups (Renaissance user groups for all interested Symyx customers consistent with Symyx’s practices as of the Effective Date) for Software during the Program Term, if TDCC requests.

 

5.2                                  Software License .  Symyx Dtools shall provide the Software to TDCC (and to Affiliates designated by TDCC) on or before the beginning of the Program Term and shall provide documentation for same in accordance with the Software Deployment Plan and Annual Program Goals.   Symyx Dtools hereby grants to TDCC a worldwide, nonexclusive, nontransferable, nonsublicensable (except as provided in Section 5.10) right to install and use * copies of the Software, in object code format, during the Program Term, solely for TDCC’s Internal Research and Development Activities. Symyx does not provide, and TDCC and its Affiliates shall be responsible to secure or use their own Oracle database[s] and operating system[s] and appropriate licenses thereto, as well as licenses for any Third Party software TDCC wishes to use (e.g., Spotfire).  TDCC will report to Symyx the number of users of the Software, within * at the request of Symyx, but not more frequently than *.

 

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5.3                                  Developer’s Kit Software License .  Symyx Dtools shall provide the Developer’s Kit Software to TDCC (and to Affiliates designated by TDCC) on or before the beginning of the Program Term and shall provide documentation for same in accordance with the Software Deployment Plan and Annual Program Goals, and Symyx hereby grants to TDCC a worldwide, nonexclusive, nontransferable, nonsublicensable (except as provided in Section 5.10) right to install and use * copies of the Developer’s Kit Software, in object code format, during the Program Term, to create Software Customizations solely for TDCC’s Internal Research and Development Activities.  Symyx and TDCC agree that TDCC will retain ownership of the Software Customizations (and the intellectual property rights therein) it creates using the Developers Kit Software hereunder.  With respect to any such Software Customizations, TDCC will either (i) rely solely on trade secret protection, or (ii) agrees to grant and hereby grants to Symyx a nonexclusive, worldwide, perpetual, irrevocable, paid-up, transferable, sublicenseable right to make, have made, modify, copy, create derivative works based on, use, offer to sell, sell, export and import any Software Customizations to the extent these are claimed in any patent application filed by TDCC to the extent TDCC may grant rights to Symyx. In the event TDCC elects (ii) above with respect to any Software Customization, TDCC will provide Symyx the opportunity to review and comment on associated patent application drafts at least * days prior to filing or prosecuting any application for a patent with respect to any Software Customization, and shall promptly notify Symyx in the event any patent publishes or is issued with claims covering any Software Customization.  Notwithstanding the preceding, it is understood and agreed that U.S. provisional patent applications (filed under 35 U.S.C.§111(b)) may be filed by TDCC without review and comment in order to obtain the earliest possible filing date, but TDCC will use commercially reasonable efforts to seek review and comment from the other party prior to filing such provisional patent applications.  Furthermore, for clarification, it is understood that the license to Symyx under this Section shall not apply to any inventions conceived and reduced to practice by TDCC independent of the Developer’s Kit Software and without use of confidential information owned by Symyx.  In addition, nothing herein shall be construed to obligate TDCC to grant to Symyx the right to use or sublicense background rights in technology of TDCC that existed prior to the Effective Date.  TDCC also is not obligated to disclose to Symyx Software Customizations kept as a trade secret. TDCC will report to Symyx the number of users of the Developer’s Kit Software, within * at the request of Symyx, but not more frequently than *.

 

5.4                                  Sample Code .  TDCC may use and modify the source code version of those portions of the Software and the Developer’s Kit Software that are identified in the documentation as sample code (“Sample Code”).  TDCC may not distribute the Sample Code, or any modified version of the Sample Code, in source code form, except as provided in Section 5.10, but may provide it on a confidential basis to third parties providing services to TDCC for the sole purpose of exercising rights as set forth in this Article 5.

 

5.5                                  Software Upgrades and Software Updates .  Subject to payment by TDCC of the applicable payments pursuant to Article 8, TDCC and its Affiliates to which rights have been extended pursuant to Section 5.10 will have the right to install and use all Software Upgrades and Software Updates during the Program Term.  Software Upgrades and Software Updates shall be provided promptly after release.

 

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5.6                                  Limited License .  By virtue of this Article, TDCC acquires only the nonexclusive rights to operate the Software and Developer’s Kit Software, and ownership of Software Customizations as specified in this Article 5 and to make copies of the Software and the Developer’s Kit Software as necessary in connection with TDCC’s and its Affiliates’ use thereof.  All other rights in the Software and the Developer’s Kit Software, and all title and interest in the Software and the Developer’s Kit Software, or rights in patents, copyrights, and trade secrets in the Software and the Developer’s Kit Software, including the copies of the Software and the Developer’s Kit Software delivered to TDCC and Affiliates, shall at all times remain the property of Symyx.  In particular, TDCC shall not acquire by virtue of this Article 5 any rights in or license to, express or implied, patents or intellectual property owned or controlled by Symyx with respect to methods of conducting combinatorial or high throughput research other than as expressly described in the first sentence of this Section 5.6 and as expressly set forth in Articles 6 and 7. TDCC acknowledges and agrees that the features of the graphical user interface of the Software (the “User Interface”), including, without limitation, icons, menu and screen designs, screen layouts, and command and screen sequence, are proprietary to Symyx and are only disclosed to TDCC under a condition of confidentiality, provided that TDCC shall not be required to take actions outside its normal business practices with respect to the visibility of screens in its facilities or restrictions on access that are more stringent than TDCC takes with regard to similar licensed software. TDCC agrees that it will not create software programs incorporating the User Interface or any part thereof, except in accordance with Sections 5.2, 5.3 or 5.4.  TDCC further acknowledges that the User Interface is a copyrighted work of Symyx.

 

5.7                                  Disclaimer . The Software and the Developer’s Kit Software (including the Sample Code) are provided “AS IS” and without warranty of any kind, except that the Software and the Developer’s Kit Software shall be suitable for use as set forth in Exhibit G.  If any Software or the Developer’s Kit Software is not suitable for such use, Symyx shall, at its option, repair or replace at no cost to TDCC any defective or nonconforming Software (or component thereof). The foregoing warranties and remedies will be void as to any Software damaged or rendered unserviceable by: (a) the acts or omissions of personnel other than Symyx employees and Symyx contractors; (b) misuse, abuse, neglect, theft, vandalism, fire, water, or other peril; (c) modification of, alteration of, or additions to any Software performed by non-Symyx personnel; or (d) non-conformities arising from use of the Software with any other hardware, software, firmware, devices, or other products, including Software Customizations.  Symyx does not warrant that the Software or the Developer’s Kit Software (including the Sample Code) will meet TDCC’s or its Affiliates’ requirements or that the operation of the Software or the Developer’s Kit Software (including the Sample Code) will be uninterrupted or error free or that the Software or the Developer’s Kit Software (including the Sample Code) will be compatible with other hardware or software that TDCC or its Affiliates may elect to operate. SYMYX MAKES AND TDCC RECEIVES NO OTHER WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE IN ANY PROVISION OF THIS AGREEMENT OR OTHER COMMUNICATION WITH TDCC, AND SYMYX SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, AND FITNESS FOR A PARTICULAR PURPOSE.

 

Confidential

 

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5.8                                  Source Code .  The parties on or before the Effective Date shall enter into a source code escrow agreement that will provide that, in the event Symyx is liquidated, dissolved or ceases to carry on its business, or otherwise becomes unwilling or unable to support TDCC’s use of the Software or the Developer’s Kit Software, on commercially reasonable terms, where TDCC can demonstrate that access to the source code is reasonably necessary for TDCC’s continued use of the Software and/or the Developer’s Kit Software as provided in the Software Deployment Plan, and provided that TDCC is not in default under this Agreement, a copy of the Software source code shall be provided to TDCC solely for the purpose of the Software Development Plan.  Such agreement shall contain provisions for periodic verification that the escrowed source code corresponds to Symyx’s then-current version.  Such source code escrow agreement shall be in substantially the form entered into between TDCC and Symyx Tech in connection with the Sale and License Agreement entered into between TDCC and Symyx Tech as of October 22, 1999, and may be an amendment of such agreement.

 

5.9                                  Restrictions .  TDCC will not itself, nor through any parent, Affiliate, agent or other Third Party, except for purposes of exercising licensed rights set forth in this Article 5: (a) reproduce, distribute, copy, sell, lease, license or sublicense the Software, Developer’s Kit Software, or any Software Customization; (b) use the Software, Developer’s Kit Software, or any Software Customization; (c) attempt to, or permit any party to, through any means, reverse engineer, disassemble, decompile, or otherwise attempt to derive source code from the Software or the Developer’s Kit Software; (d) modify, translate, enhance, or create derivative works based on the Software or the Developer’s Kit Software (except as permitted in Sections 5.3 and 5.4); or (e) remove any copyright, trademark or patent notices that appear on the Software or the Developer’s Kit Software as delivered to TDCC. TDCC shall take reasonable steps to limit access to the Software, Developer’s Kit Software, or any Software Customization to employees of TDCC and Affiliates to which rights have been extended pursuant to Section 5.10 and independent contractors notified to Symyx in writing to whom Symyx has no reasonable objection.

 

5.10                            Right to Extend Licenses to Affiliates .  TDCC shall have the right to extend the licenses and other rights granted to TDCC in this Article 5 to any of its Affiliates (but such Affiliates shall have no right to grant any further extensions), provided that TDCC shall not then be in default with respect to any of its obligations to Symyx under this Article 5 or related payment obligations under Sections 8.2 or 8.4.  Any such extension shall be in writing and shall be accepted in writing by such Affiliate.  A copy of such writing shall be provided to Symyx upon request.  All of the obligations and restrictions imposed on TDCC in this Agreement with respect to the Software and the Developer’s Kit Software shall apply to such Affiliate to the same extent as they apply to TDCC and the operations of such Affiliate shall be deemed to be the operations of TDCC for purposes of these obligations.  TDCC shall account therefore and be primarily responsible for the performance by such Affiliate of all of its obligations hereunder, if the Affiliate fails to comply.  A license extended under this Section shall terminate for a given entity at the time such entity ceases to be an Affiliate if not expiring or terminated sooner under the terms of this Agreement, but TDCC shall have the right to end such use over a reasonable time period after the entity ceases to be an Affiliate, not to exceed *, in order to transition the former Affiliate to other software.

 

Confidential

 

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