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EXHIBIT 10.10
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
The Dow Chemical Company - Symyx Technologies
This COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the "Agreement"),
effective as of January 1, 1999 (the "Effective Date"), is made by and between
Symyx Technologies, a California corporation having a principal place of
business at 0000 Xxxxxxx Xxxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 ("Symyx"),
and The Dow Chemical Company, a Delaware corporation, having a principal place
of business at 0000 Xxxxxxx X. Xxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("TDCC").
BACKGROUND
A. Symyx owns and is developing novel, proprietary methods for the
combinatorial preparation and screening of novel materials and has
conducted certain materials discovery research focused on the discovery
and enhancement of catalysts and other materials; and
B. TDCC owns and is developing proprietary process technology related to
manufacture of various olefin polymers by means of gas phase, slurry,
solution and/or high pressure processes, which technology includes
catalyst systems, process steps, polymer resins and blends and
applications for polymer resins and blends; and
C. Symyx and TDCC desire to collaborate to research, develop and
commercialize certain catalysts useful for synthesis of olefin polymers
and polymers resulting from such synthesis on the terms and conditions
set forth below.
NOW, THEREFORE, for and in consideration of the covenants, conditions
and undertakings set forth herein, it is agreed by and between the parties as
follows:
ARTICLE 1
DEFINITIONS
1.1 "Added Value" shall have the meaning set forth in Section
5.2.1(i).
1.2 "Affiliate" shall mean any entity directly or indirectly
controlling, controlled by or under common control with, a party to this
Agreement. For purposes of this Agreement, the direct or indirect ownership of
fifty percent (50%) or more of the outstanding voting securities of an entity,
or the right to receive fifty percent (50%) or more of the profits or earnings
of an entity shall be deemed to constitute control. In addition, any entity
directly or indirectly owned or controlled by, or owning or controlling, TDCC or
Symyx at the maximum control or ownership right legally permitted in a country
where such entity exists, shall be deemed to constitute control provided that it
in fact results in actual control over the management, business and affairs of
such entity.
1.3 "Agreement Compound" shall mean any Lead Compound or Derivative
Compound.
1.4 "Combinatorial Chemistry Technology" shall mean Combinatorial
Chemistry Patent Rights and Combinatorial Chemistry Know-How.
1.4.1 "Combinatorial Chemistry Patent Rights" shall mean (i)
all U.S. patent applications claiming any inventions or discoveries related to
Combinatorial Chemistry, (ii) all divisions, substitutions, continuations,
continuation-in-part applications, and reissues, re-
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examinations and extensions of (i) above, (iii) foreign counterparts of any of
the preceding of (i) or (ii) above, and (iv) patents, utility models or similar
grants of rights issuing from any of the preceding of (i), (ii) or (iii) above .
1.4.2 "Combinatorial Chemistry Know-How" shall mean
inventions, information, data, or materials related to Combinatorial Chemistry,
excluding any inventions claimed in the Combinatorial Chemistry Patent Rights.
1.4.3 "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 ten (10) compounds, compositions
or mixtures in quantities of less than ten (10) grams.
1.5 "Confidential Information" shall mean any information disclosed
by one party (or by an Affiliate of a party on behalf of that party) to the
other party or its representatives in connection with this Agreement which is in
written, graphic, machine readable or other tangible form and is marked
"Confidential" or "Proprietary" or in some other manner to indicate its
confidential nature. Confidential Information may also include information that
is disclosed orally or by observation, provided that such information is
designated as confidential at the time of disclosure and confirmed in writing as
confidential within thirty (30) days after such disclosure.
1.6 "Coordination Polymerization" shall mean a metal mediated
polymerization that proceeds by a polymerization reaction other than free
radical, controlled free radical, and carbocationic mechanisms. For the Vinyl
Chloride Field and Polar Comonomer within Exhibit A, Coordination Polymerization
mechanisms will be determined by examination of the effect of the metal on the
relative copolymerization rate constants: i.e., monomer selectivities. In
controlled free radical and free radical polymerizations the metal is not
involved in the propagation steps and therefore it does not affect the
microstructure, sequence distributions, or comonomer content in a
copolymerization. The presence and structure of the active metal complex in a
Coordination Polymerization must have a direct and significant effect on the
microstructure and comonomer content of the polymer because the metal is
involved in each propagation step during the polymerization. A test for
Coordination Polymerization would be to run two derivatives of the catalyst
family (e.g. one with bulky ligands, one less bulky) in a copolymerization;
changes in composition of the polymer will be indicative of Coordination
Polymerization. Tests comparing the composition and r1/r2 of polymers obtained
using conventional free radical initiators with those obtained using the
"catalyst" will also be performed.
1.7 "Designated Compound" shall have the meaning set forth in
Section 4.1.3.
1.8 "Designated Polymer" shall have the meaning set forth in Section
4.1.3.
1.9 "Derivative Compound" shall mean any compound or mixture or
composition of matter which 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 (i) results from a chemical synthesis program based on a
Library Compound or (ii) results from the use of Program Technology relating to
one or more Library Compounds, or (iii) is within the scope of patent claims of
any patent or patent application where the inventive feature relates to one or
more Library Compounds or compounds, mixtures or compositions of matter
described in (i) or (ii) above. Derivative Compound shall also include a
compound, mixture or composition of matter that is derived, as described in (i)
through (iii) above, from another Derivative Compound. Notwithstanding the
foregoing, a compound, mixture or composition of matter other than a Library
Compound that is first identified as an Olefin Polymer or as a catalyst useful
in the synthesis of an Olefin Polymer more than five (5) years after the end of
the Research Program shall not be deemed a Derivative Compound. It is understood
that compounds
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developed independently by TDCC without the use of Library Compounds,
Confidential Information of Symyx, or Program Technology, shall not be deemed to
be a Derivative Compound.
1.10 "Direct Modification" shall have the meaning set forth in
Section 4.1.3.
1.11 "Discovery Tools" shall have the meaning set forth in Section
2.8.
1.12 "EPDM" shall have the meaning set forth in Section 2.5.
1.13 "Executive Committee" shall have the meaning set forth in
Section 3.6.
1.14 "Field" means the discovery, development and use of catalysts to
make Olefin Polymers through Coordination Polymerization in a defined reaction
agreed upon by the parties. The Fields are set forth in Exhibit A.
1.15 "FTE" shall mean a full-time employee or independent contractor
utilized for the conduct of the Research Program or, in the case of less than
full-time dedication, a full-time equivalent person-year, based on a total of
forty-six and 1/4 (46.25) weeks or one thousand eight hundred fifty (1,850)
hours per year, of work on or directly related to the Research Program.
1.16 "Independent TDCC Research" shall have the meaning set forth in
Section 2.3.3.
1.17 "Joint Invention" shall have the meaning set forth in Section
7.1.
1.18 "Lead Compound" shall mean a Library Compound which meets the
specific 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 B hereto.
It is understood and agreed that any Library Compound that is transferred from
Symyx to TDCC and subsequently commercialized by or under authority of TDCC or
its Affiliates shall be deemed a Lead Compound.
1.19 "Library Compound" shall mean any compound or mixture or
composition of matter screened or prepared by or on behalf of Symyx in the
course of the Research Program in order to determine its usefulness as an Olefin
Polymer or as a catalyst for making an Olefin Polymer in connection with a
Field. However, any compound, mixture or composition of matter provided to Symyx
by TDCC (or by an Affiliate of TDCC on behalf of TDCC) for screening as a
catalyst, an activator, a scavenging agent or a support provided under another
agreement shall not be deemed to be a Library Compound.
1.20 "Manufacturing Costs" shall mean (i) all direct and indirect
costs related to the manufacture by TDCC or its Affiliates of Products,
including costs for personnel, materials, quality control, regulatory
compliance, administrative expenses, subcontractors, fixed and variable
manufacturing overhead costs and business unit or division costs reasonably
allocable to the manufacture of Products, as determined and allocated in
accordance with generally accepted
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accounting principles, consistently applied, excluding costs for excess
manufacturing capacity not reasonably related to projected demand for Products,
or (ii) with respect to Products purchased from a Third Party vendor, reasonable
amounts actually paid to the vendor for such Products in arm's length
transactions.
1.21 "Net Income" shall mean the pro forma amounts attributable to
royalties, license and other fees projected to be received, and projected Net
Sales with respect to a Product, less the projected: (a) Manufacturing Costs for
such Product; and (b) reasonable expenses incurred by TDCC or its Affiliates in
connection with the marketing, shipping or sale of the Product, and general and
administrative expenses relating thereto, all as determined and allocated in
accordance with generally accepted accounting principles, consistently applied.
1.22 "Net Sales" shall mean the invoice price billed by TDCC or its
Affiliates to Third Parties for the sale of Products, after deduction of (1)
cash, trade and/or quantity discounts actually allowed; (2) amounts repaid or
credited by reason of rejections or returns of goods, recalls, chargebacks,
defects, rebates (including government mandated rebates); (3) freight, postage,
and duties paid for and separately identified on the invoice or other
documentation maintained in the ordinary course of business, and (4) excises,
sales taxes, value added taxes, and duties actually paid and separately
identified on the invoice or other documentation maintained in the ordinary
course of business. Net Sales shall also include the amount of fair market value
of all other consideration received by TDCC or its Affiliates in respect of sale
of Products, whether such consideration is in cash, payment in kind, exchange or
another form. In the case of a transfer of Products between TDCC and one of its
Affiliates or between two Affiliates of TDCC for any purpose other than
research, development or sampling, Net Sales shall where feasible be determined
as provided in Section 5.2.1(vii).
1.23 "Olefin Polymers" shall mean any polymer within the scope of
Exhibit A.
1.24 "Outside Technology" shall have the meaning set forth in Section
2.3.3.
1.25 "Product" shall mean any product that (i) contains an Agreement
Compound, and/or (ii) contains a reaction product or other chemical derivative
of an Agreement Compound, (iii) utilizes in its manufacture any method or
process within the Program Technology developed by Symyx or developed jointly by
Symyx and TDCC, or (iv) utilizes an Agreement Compound in its manufacture, e.g.,
as a catalyst.
1.26 "Program Experiment" shall have the meaning set forth in Section
2.1.1(b).
1.27 "Program Technology" shall mean Program Patents and Program
Know-How.
1.27.1 "Program Know-How" shall mean inventions, information,
data, or materials developed by Symyx or TDCC or jointly by Symyx and TDCC in
each case in the course of the Research Program that are useful for the
manufacture, use or sale of Agreement Compounds or Products; provided, however,
that Program Know-How shall not include any Combinatorial
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Chemistry Technology, Outside Technology, any invention claimed in the Program
Patents or results of Independent TDCC Research.
1.27.2 "Program Patents" shall mean (i) all U.S. patent
applications claiming any inventions or discoveries conceived and reduced to
practice in the course of the Research Program by Symyx or TDCC or jointly by
Symyx and TDCC, or conceived by Symyx before the Research Program and reduced to
practice in the Research Program, which claim an Agreement Compound or a
Product, or method or process for the manufacture of an Agreement Compound or
Product, or a composition-of-matter containing an Agreement Compound or Product,
or a method or process for the use of an Agreement Compound in or for the
manufacture of a Product, in each case that are necessary or materially useful
for the manufacture, use or sale of Agreement Compounds or Products in the
Field, (ii) all divisions, substitutions, continuations, continuation-in-part
applications, and reissues, re-examinations and extensions of (i) above, (iii)
foreign counterparts of any of the preceding of (i) or (ii) above, and (iv)
patents, utility models or similar grants of rights issuing on any of the
preceding of (i), (ii) or (iii) above. It is understood and agreed that Program
Patents shall not include any Combinatorial Chemistry Technology or results of
Independent TDCC Research.
1.28 "Research Committee" shall have the meaning set forth in Section
3.1.
1.29 "Research Plan" shall have the meaning set forth in Section 2.1.
1.30 "Research Program" shall mean the program of research conducted
by Symyx and/or TDCC on a collaborative basis under this Agreement for the
purpose of identifying and optimizing Agreement Compounds for use as catalysts
in the Field. It is understood that the Research Program does not include
screening of compounds, mixtures or compositions of matter provided to Symyx by
TDCC (or by an Affiliate of TDCC on behalf of TDCC) for screening as a catalyst,
an activator, a scavenging agent or a support, which research is to be conducted
under terms of a separate agreement.
1.31 "Research Program Term" shall have the meaning described in
Section 2.2.
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1.32 "Sublicensee" shall mean, with respect to a particular Product,
a Third Party to whom TDCC or its Affiliate has granted a license or sublicense
to make, use and sell such Product.
1.33 "Symyx Patents" shall mean all U.S. patent applications filed on
or before or claiming priority on or before the date five (5) years after the
end of the Research Program claiming any inventions or discoveries owned or
controlled by Symyx (or by any wholly-owned subsidiary of Symyx) which claim an
Agreement Compound or a Product, or method or process for the manufacture of an
Agreement Compound or Product, or a composition-of-matter containing an
Agreement Compound or Product, or a method or process for the use of an
Agreement Compound in or for the manufacture of a Product, in each case that are
necessary or materially useful for the manufacture, use or sale of Agreement
Compounds, or Products in the Field (excluding EPDM), (ii) all divisions,
substitutions, continuations, continuation-in-part applications, and reissues,
re-examinations and extensions of (i) above, (iii) foreign counterparts of any
of the preceding of (i) or (ii) above, and (iv) patents, utility models or
similar grants of rights issuing on any of the preceding of (i), (ii) or (iii)
above. Notwithstanding the foregoing, it is understood and agreed that "Symyx
Patents" shall not include patent applications or patents claiming inventions
made by Symyx or its wholly-owned subsidiary (solely or jointly) in
collaboration with, or as part of a research program funded by, a Third Party if
such collaboration or research program is not directed to the screening,
discovery, or optimization of catalysts and catalyst systems (including but not
limited to catalyst supports, activators and scavenging agents) in the Field for
the purpose of making Olefin Polymers or the discovery or development of Olefin
Polymers using such catalysts and catalyst systems in the Field.
1.34 "Third Party" shall mean any party other than Symyx and its
Affiliates, TDCC and its Affiliates, and their permitted assignees.
ARTICLE 2
RESEARCH PROGRAM
2.1 Research Program. Subject to the terms and conditions set forth
herein, Symyx and TDCC shall conduct the research activities in the Fields in a
collaborative effort in accordance with an agreed upon written plan describing
the research activities to be conducted by each party (the "Research Plan"). The
initial Research Plan has been agreed upon by the parties in writing prior to
the Effective Date.
2.1.1 Responsibility - Symyx. During the term of the Research
Program, Symyx shall use efforts that are reasonable in the circumstances and
consistent with professional standards applicable to research in the Field as
well as relevant standards applied by Symyx in conducting research outside the
Research Program, to conduct research activities in accordance with the Research
Plan to identify, discover or synthesize catalysts for making Olefin Polymers in
the Fields by preparing and screening Library Compounds as set forth in the
Research Plan.
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(a) Compounds Already Identified. Symyx shall make available
for evaluation in the Research Program any compound, mixture or composition of
matter which was screened or prepared by or on behalf of Symyx prior to the
Effective Date or during the Research Program Term and is both (i) owned or
controlled by Symyx to the extent that no obligations to any Third Party will be
violated by use of the compound, mixture or composition in the Research Program
and (ii) believed by Symyx to be potentially useful as a Lead Compound or a
precursor of a Lead Compound.
(b) FTEs and Experiments. During each calendar year quarter
of the Research Program Term, Symyx shall, in its discretion taking into
consideration what is required to achieve the objectives of the Research Plan,
either (i) utilize nine (9) FTEs to conduct the Research Program or (ii) conduct
at least seven thousand five hundred (7,500) separate Program Experiments in the
Research Program. Each FTE utilized by Symyx shall be qualified for the
activities assigned to him or her under the Research Program. The FTEs will
include FTEs for Chemistry, Engineering, Database and Software. The initial FTEs
for Chemistry will be selected from the list set forth in Exhibit E, 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 E shall be available for minimum fractions of their work time during
each calendar year quarter of the Research Program Term as may be reasonably
required consistent with the Research Plan. 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, Symyx shall use commercially reasonable
efforts to maintain the overall level of skills and expertise by replacing one
or more of the "Key Personnel" listed on Exhibit E. The Key Personnel identified
in Exhibit E may also be amended by mutual agreement of Symyx and TDCC and TDCC
shall not unreasonably withhold approval of changes in Key Personnel in Exhibit
E. As used herein, a "Program Experiment" shall include (A) an attempt to
synthesize a compound, mixture or composition of matter for use as a potential
catalyst, and (B) an attempt to carryout a polymerization reaction related to
the Field using such compound, mixture or composition of matter, and (C)
measurement of a property of either the potential catalyst or resulting polymer,
if any (e.g., activity of potential catalyst or physical/chemical properties of
polymer). It is understood and agreed that if different potential catalysts are
used in different experiments, or if two or more experiments are run using the
same potential catalyst in an attempted polymerization reaction that is run with
different monomers or different reaction parameters, or if measurement is made
of different properties, then such experiments shall be deemed to be separate
Program Experiments. The Program Experiments conducted by Symyx during the
Research Program will be selected consistent with the objectives set forth in
the Research Plan. Duplication of Program Experiments during the Research
Program will be avoided unless required as a control or for other valid research
purposes consistent with the objectives set forth in the Research Plan.
(c) Other Responsibilities. Symyx shall use reasonable
efforts to ensure that the most efficient and effective Combinatorial Chemistry
Technology reasonably available to Symyx are made available for conducting the
Research Program. At TDCC's request, Symyx will use commercially reasonable
efforts to provide samples of up to ten (10) grams of any Lead Compound;
however, if such sample cannot be provided at a commercially reasonable cost,
Symyx will so notify
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TDCC and the parties shall meet to discuss how to proceed. Notwithstanding any
other provision of this Agreement, Symyx shall not, without its consent, be
required to perform research activities other than in accordance with the
Research Plan, or utilize more than nine (9) FTEs (or, if applicable, perform
more than 7,500 Program Experiments) in any given calendar year quarter during
the Research Program Term.
2.1.2 Responsibility - TDCC. During the Research Program Term,
TDCC shall (i) conduct research activities in accordance with the Research Plan
to identify, discover or synthesize catalysts for making Olefin Polymers in the
Fields, and (ii) to provide Symyx technical information and technical support
reasonably necessary to conduct of the Research Program in accordance with the
Research Plan. TDCC's efforts in conduct of the Research Program shall be
reasonable in the circumstances and consistent with professional standards
applicable to research in the Field as well as relevant standards applied by
TDCC in conducting research outside the Research Program. Notwithstanding any
other provision of this Agreement, TDCC shall not, without its consent, be
required to disclose proprietary information to Symyx which is not essential to
conduct of the Research Program or to provide equipment or materials.
2.2 Research Program Term. The Research Program Term shall commence
on the Effective Date and, unless earlier terminated, continue thereafter for a
period of three (3) years, or such other period as the parties may mutually
agree in writing.
2.3 Exclusivity and Independent Research.
2.3.1 In the Field. During the Research Program Term, Symyx
shall not conduct any research activities outside the Research Program, on its
own behalf or on behalf of any Third Party, directed to the screening,
discovery, and optimization of catalysts and catalyst systems, including but not
limited to catalyst supports, activators and scavenging agents, for the purpose
of making Olefin Polymers within the scope of the Field. In addition, during the
Research Program Term, Symyx shall not knowingly provide Library Compounds to a
Third Party for use in screening, discovery, and optimization of catalysts and
catalyst systems (including but not limited to catalyst supports, activators and
scavenging agents) for the purpose of making Olefin Polymers.
2.3.2 Other Polyolefin Research by Symyx. It is understood
that Symyx will conduct research activities outside the Research Program ("Other
Polyolefin Research") during the Research Program Term for itself and/or Third
Parties for the purpose of identifying catalysts for making polyolefins other
than in the Field. In the event some Symyx employees work on both the Research
Program and the Other Polyolefin Research, Symyx shall use good faith
commercially reasonable efforts to avoid potential conflicts or overlaps between
the Research Program and Other Polyolefin 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 Polyolefin Research, except to the extent that Symyx has granted to
TDCC exclusive rights to screen and optimize the Library Compounds in the Field
as set forth in Section 2.3.1. In the event that Symyx becomes aware of
information, data, materials or inventions which Symyx believes may
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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 Research Program Term for itself and/or with Third Parties for the purpose
of identifying catalysts for making polymers including but not limited to Olefin
Polymers, developing new polymers including but not limited to Olefin Polymers
and developing, evaluating or utilizing Combinatorial Chemistry Technology. In
the event some TDCC employees work on both the Research Program and the
Independent TDCC Research, TDCC shall use good faith commercially reasonable
efforts to avoid potential conflicts or overlaps between the Research Program
and Independent TDCC Research and misappropriation of any Confidential
Information of Symyx. In the event that TDCC in the course of conducting
research outside of and independent from the Research Program discovers
information, data, materials or inventions ("Outside Technology") which TDCC
believes may advance the Research Program, TDCC may make such Outside Technology
available for use in the Research Program the extent it is free to do so without
violating obligations to any Third Party, and it is understood that such Outside
Technology shall not be deemed to be Program Technology; provided, however, that
information, data, materials or inventions made in the Research Program shall be
deemed to be Program Technology whether or not such information, data, materials
or inventions were made using Outside Technology.
2.4 Changes to Fields. The initial Fields activated in the Research
Plan shall be two or more Fields designated in the Research Plan. During the
Research Program Term, TDCC and Symyx may agree to conduct research in one or
more additional Fields, or to amend Exhibit A to create a new Field. In the
event that TDCC and Symyx agree to a new Field, this will be documented by
appropriate written modifications to the Research Plan, including criteria for
identifying a Lead Compound in such Field, and appropriate modifications in
writing to the staffing plan of the Research Program activities in connection
with such Field. TDCC and Symyx may also agree to discontinue activity in one or
more Fields by written modifications to the Research Plan. Appropriate
modifications or adjustments to staffing of the Research Program will be agreed
to reflect any changes in activity of the Fields. The Research Committee
described in Section 3.1 shall in general provide direction for any changes in
Fields and make formal recommendations to the Executive Committee. Symyx shall
not unreasonably refuse to agree to changes proposed by TDCC to change activity
in the Fields. TDCC shall not unreasonably refuse to agree to adjustments in
staffing of the Research Program proposed by Symyx as a consequence of any
changes in the activity of the Fields.
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2.5 EPDM. For a period of two (2) years commencing on the Effective
Date, Symyx will not conduct research on its own behalf or on behalf of any
Third Party for the purpose of discovering or developing catalysts to make
ethylene propylene diene monomer polymers ("EPDM"), except as provided in this
Section 2.5. If Symyx wishes to work on catalysts for the purpose of making
EPDM, either on its own behalf or on behalf of a Third Party, Symyx will notify
TDCC in writing. If TDCC wishes to either fully fund the work by Symyx in this
EPDM program, if there is no Third Party, or share the cost of the program, if
there is a Third Party, TDCC may so notify Symyx in writing and the parties will
negotiate terms for such EPDM program. If TDCC does not wish to participate in
the EPDM program, and TDCC does not give Symyx written consent to conduct such
program on its own behalf or on behalf of a Third Party, then Symyx shall not
conduct or initiate the EPDM program prior to two years after the Effective
Date. TDCC understands that Symyx may have similar obligations to a Third Party
in connection with the Other Polyolefin Research as described in Section 2.3.2
with respect to EPDM. Notwithstanding the foregoing, in the event that a Third
Party provides to Symyx compounds and/or potential catalysts for making EPDM,
Symyx may work with such Third Party at any time to conduct research activities
directed solely towards the optimization of such compounds and/or potential
catalysts for making EPDM.
2.6 Research Records. Symyx and TDCC shall maintain records of the
Research Program (or cause such records to be maintained) in sufficient detail
and in good scientific manner as will properly reflect the work done and results
achieved in the performance of the Research Program (including information
sufficient to establish dates of conception and reduction to practice of
inventions). Access to such records shall be granted as provided in Sections
5.1.3 and 7.2.
2.7 Development and Commercialization of Agreement Compounds and
Products. TDCC and its Affiliates shall be responsible for all expenses incurred
for the development and commercialization of Agreement Compounds and Products by
TDCC and its Affiliates under the terms of this Agreement.
2.8 Discovery Tools. It is understood that Symyx has been at its own
expense developing and intends to continue to develop a 48-channel parallel
polymerization reactor and related analysis tools (including ambient and high
temperature molecular weight determination modules, a high throughput thermal
analysis module, library synthesis tools and certain related software) for uses
including but not limited to synthesizing, screening or identifying Coordination
Polymerization catalysts and/or supported Coordination Polymerization catalysts
utilizing Combinatorial Chemistry (collectively, the "Discovery Tools"), and
that Symyx intends to offer some or all of these Discovery Tools to TDCC and/or
TDCC Affiliates and possibly to Third Parties, either through sale of equipment
and supplies and/or licenses to intellectual property or some other means
selected at Symyx's discretion. Symyx agrees to provide TDCC a proposal (the
"Tools Proposal") setting forth a summary of terms which in Symyx's opinion are
essential and on which Symyx is willing to license and/or sell such Discovery
Tools to TDCC on or before April 1, 1999, and Symyx and TDCC agree to negotiate
in good faith to enter into a written agreement for such license and/or sale of
Discovery Tools for a period of sixty (60) days following delivery of the Tools
Proposal, it being understood that such written agreement shall set forth
mutually agreed terms and conditions on which Symyx will license and/or sell
Discovery Tools on a non-exclusive basis as reasonably required for internal
research use by TDCC and/or TDCC's Affiliates. In order to provide TDCC an
opportunity to be one of Symyx's first customers to exploit the Discovery Tools
for Coordination Polymerization applications, Symyx will not ship or deliver the
Discovery Tools to any of the companies listed in Exhibit C earlier than one
year after the date Symyx notifies TDCC
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such Discovery Tools are available for shipment to TDCC, provided that TDCC or
TDCC's Affiliates enter into a written agreement with Symyx to purchase and/or
license Discovery Tools on or before sixty (60) days after Symyx has delivered
the Tools Proposal to TDCC, and such agreement is not breached by TDCC. Symyx
shall also not knowingly deliver Discovery Tools to a Third Party which Symyx
has reason to know at the time of contracting to deliver same would be used for
the benefit of any of the companies on Exhibit C during the period, if any, that
Symyx is obligated not to license or sell Discovery Tools to such companies. It
is understood and agreed that the terms for sale of Discovery Tools by Symyx to
TDCC are to be mutually agreed in writing and this Agreement does not itself
obligate Symyx to sell or TDCC to purchase such Discovery Tools, or obligate
either Symyx or TDCC to accept or agree to terms and conditions of any such sale
and/or license. In the event that Symyx and TDCC do not conclude a written
agreement regarding purchase or license of Discovery Tools within sixty (60)
days of delivery of the Tools Proposal, TDCC and Symyx may mutually agree to
terms of such an agreement at a later date but Symyx shall be free to ship or
deliver Discovery Tools to any party.
2.9 Third Party Claims. In the event that TDCC or Symyx receives a
written notice from any Third Party alleging patent infringement,
misappropriation of trade secrets, or other violation of intellectual property
rights, based on research activities in the Research Program (i) such party
shall promptly notify the other, and (ii) Symyx shall have the right, in its
discretion, to cease to conduct any research activities that are the subject of
such claim without liability to TDCC; provided, however, that if TDCC acquires a
license to permit the conduct of such activities by Symyx in the Research
Program, and/or if TDCC and Symyx mutually agree in writing upon terms of
indemnification by TDCC for Symyx's conduct of such activities, then Symyx will
resume or continue, as appropriate, such activities in accordance with the
Research Plan and the terms and conditions of this Agreement. In the event Symyx
decides to cease to conduct any research activities pursuant to this Section
2.9, Symyx and TDCC shall endeavor to change or modify the Fields as provided in
Section 2.4 in a manner which maintains the value of the Research Program to
TDCC; provided, however, that if such cessation of research activities by Symyx
will have a material adverse impact on the Research Program which in the
reasonable opinion of TDCC will not be adequately remedied by a change or
modification of Fields, then TDCC shall have the right to terminate the Research
Program on thirty (30) days written notice to Symyx specifying termination
pursuant to this Section 2.9 and identifying the ceased research activities
giving rise to the termination.
ARTICLE 3
MANAGEMENT
3.1 Establishment of Research Committee. Symyx and TDCC shall
establish a committee (the "Research Committee") to (i) monitor technical
progress in the Research Program and report progress to the Executive Committee,
(ii) modify the Research Plan as needed within the scope of the Fields, (iii)
establish criteria to define Lead Compounds within each Field, and (iv)
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recommend to the Executive Committee changes in the Fields in accordance with
Section 2.4, and (v) ensure open communications between the parties.
3.2 Membership of Research Committee. The Research Committee shall
be comprised of three (3) representatives designated by each of Symyx and TDCC,
or such other equal number of representatives as the parties may from time to
time agree in writing, with each party's representatives selected by that party.
Either party may replace one or more of their respective Research Committee
members at any time, upon written notice to the other party. The chairperson of
the Research Committee shall be selected by TDCC. The secretary of the Research
Committee shall be selected by Symyx.
3.3 Technical Team and Program Coordinator. Symyx and TDCC shall
each designate two or more representatives to serve on a Technical Team which
will: (i) provide day to day oversight and coordination of activities under the
Research Program, and (ii) initiate and respond to communications between the
parties related to conduct of the Research Program. Each party shall designate a
single program coordinator to lead its representatives on the Technical Team and
to resolve or facilitate resolution of issues arising under the provisions of
this Agreement. The Technical Team shall report progress and refer unresolved
disputes to the Research Committee. Each party may change its designated program
coordinator or representatives on the Technical Team at any time upon written
notice to the other.
3.4 Meetings. During the Research Program Term, the Research
Committee shall meet at regular intervals at least four times per year at
locations and times agreed by the parties. Special meetings of the Research
Committee may be called by either party on ten (10) days written notice to the
other party. All meetings shall alternate between offices of TDCC and Symyx
unless members of the Research Committee otherwise agree. Upon consent of the
parties, other representatives of Symyx or TDCC may attend Research Committee
meetings as nonvoting observers. Research Committee members may participate in
any such meeting in person, by telephone, or by televideo conference. Symyx
shall prepare minutes of each Research Committee meeting, which minutes shall be
subject to review and approval by TDCC. The reviewed and approved minutes shall
be signed by Research Committee representatives of each party.
3.5 Decision Making. A quorum of the Research Committee shall be
present at any meeting where at least one member of each party participates in
all decisions. Decisions of the Research Committee shall be made by unanimous
approval. In the event the Research Committee is unable to decide an issue, it
may be referred by either party to the Executive Committee for resolution.
3.6 Executive Committee. Symyx and TDCC shall establish a committee
comprised of one representative each from Symyx and TDCC (the "Executive
Committee"). Each party's representative on the Executive Committee shall be
selected by that party, and either party may replace its Executive Committee
representative at any time, upon written notice to the other party. The initial
members of the Executive Committee shall be Xx Xxxxxxxx for TDCC and Xxxxx
Xxxxxx for
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Symyx. The Executive Committee shall meet at least twice per year at locations
and times agreed by the parties, and members of the Executive Committee may
participate in any such meeting in person, by telephone, or by televideo
conference. Special meetings of the Executive Committee may be called by either
party on fifteen (15) days written notice to the other party. Upon consent of
the parties, other representatives of Symyx or TDCC may attend Executive
Committee meetings as nonvoting observers. Symyx shall prepare minutes of each
Executive Committee meeting, which minutes shall be subject to approval by TDCC
and after approval will be signed by Executive Committee representatives of each
party. The Executive Committee shall (i) oversee the direction of the overall
relationship between TDCC and Symyx, (ii) resolve any disputes not resolved by
the Research Committee, (iii) set the direction of the Research Program within
the bounds set forth in this Agreement and the Research Plan, and (iv) decide
upon changes in Fields. In the event that the Executive Committee cannot reach
unanimous agreement on matters related to the conduct of the Research Program
other than: (a) the interpretation of obligations of confidentiality under this
Agreement, (b) the amount of any payments due hereunder, (c) intellectual
property ownership, (d) additions to or changes in the scope of the Fields, (e)
staffing of research projects, (f) expenditures by Symyx in conducting the
Research Program, and (g) rights granted under Article 4, TDCC shall have the
right to cast the deciding vote. Unresolved disputes related to (a), (b), (c),
(d), (e), (f), or (g) shall be subject to binding arbitration by either party as
set forth in Section 13.16, in the absence of a unanimous decision by the two
members of the Executive Committee.
ARTICLE 4
LICENSES
4.1 License to TDCC.
4.1.1 License in the Fields. Subject to the terms and
conditions of this Agreement, Symyx agrees to grant, and hereby grants, to TDCC,
and TDCC hereby accepts an exclusive (even as to Symyx), worldwide,
royalty-bearing license under Symyx's interest in the Program Technology to
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 Research 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 Fields.
However, it is understood and agreed that no license is granted to TDCC under
Symyx Patents or other patents owned or controlled by Symyx which are not
Program Patents, except as provided in Section 4.1.3.
4.1.2 EPDM. Within six months after the end of the Research
Program Term, TDCC may identify and notify Symyx of up to five Lead Compounds
which TDCC may use in a chemical synthesis program or modify using Program
Technology to produce Agreement
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Compounds for EPDM. For so long as TDCC retains a license under Section 4.1.1 to
use any Lead Compound to manufacture, use and sell Products within any Fields,
and on the terms and conditions set forth in this Agreement, Symyx agrees that
TDCC shall also have a non-exclusive, worldwide, royalty-bearing, license under
Symyx's interest in the Program Technology to use any Lead Compound or
Derivative Compounds based on the up to five Lead Compounds notified to develop,
make, have made, use, sell, offer for sale, and import EPDM as a Product under
this Agreement. TDCC understands and acknowledges that Symyx may grant similar
rights regarding EPDM to a Third Party in connection with the Other Polyolefin
Research described in Section 2.3.2, and that one or more Lead Compounds or
Derivative Compounds to which TDCC obtains a license in the Field may be
licensed to the Third Party for use outside of the Field, and that both TDCC and
such Third Party may acquire licenses from Symyx to use one or more of the same
Lead Compound(s) or Derivative Compound(s) to make EPDM.
4.1.3 Limited Immunity with Respect to Symyx Patents. Within
three (3) months after the end of the Research Program Term, TDCC may identify
and notify Symyx of (a) up to ten (10) discrete chemical entities that were
identified as Lead Compounds in the Research Program or result from a chemical
synthesis program based on a Library Compound or from use of Program technology
relating to a Library Compound (each such compound being a "Designated
Compound"), and (b) one Olefin Polymer, which may comprise either any one of the
first five Fields in Exhibit A or a specific copolymer of ethylene and/or
a-olefin with a single specified comonomer selected by TDCC from the sixth Field
("Polar Comonomer Fields") in Exhibit A, such Olefin Polymer being (the
"Designated Polymer"). It is understood and agreed that no more than three of
the ten Designated Compounds are to be selected for use in the Polar Comonomer
Fields. In furtherance of the license granted to TDCC in Section 4.1.1, Symyx
agrees that, to the extent necessary for TDCC to practice the license granted in
Section 4.1.1 and for so long as TDCC is not in default of any payment due to
Symyx hereunder, Symyx shall not bring any claim or action against TDCC or its
Affiliates or Sublicensees or purchasers or users of Products from TDCC or its
Affiliates or Sublicensees, based on or asserting that:
(i) the manufacture, use, sale, offer for sale or import of
the Designated Polymer that is made using an Agreement Compound and for which
TDCC, its Affiliates or Sublicensee pays a royalty to Symyx hereunder violates
or infringes any Symyx Patent, or
(ii) the manufacture, use, sale, offer for sale or import of
a Product (other than the Designated Polymer covered in (i) above) that contains
or is made using a Designated Compound (or a "Direct Modification" thereof, as
defined in Exhibit D) and for which TDCC, its Affiliates or Sublicensee pays a
royalty to Symyx hereunder violates or infringes any Symyx Patent based on or
claiming priority from a U.S. patent application filed on or before or claiming
priority on or before the date two (2) years after the end of the Research
Program (or a division, substitution continuation, continuation in part,
reissue, re-examination, or extension thereof, or a foreign counterpart of any
of the preceding, or any patents, utility models, or similar grant of rights
issuing on any of the preceding).
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It is understood and agreed that the limited immunity granted under this Section
4.1.3 shall not extend to any unit of Product, unless Symyx has actually
received payment of royalty for such unit of Product so manufactured, used, sold
or imported in a territory where one or more Symyx Patent(s) are in force.
4.2 Sublicenses. Subject to the terms and conditions of this
Agreement, TDCC shall have the right to grant sublicenses under the rights
granted in Section 4.1 above to Affiliates of TDCC; provided that the terms of
each such sublicense shall be consistent with the terms of this Agreement. It is
understood that any such sublicense shall be subject and subordinate to the
terms and conditions of this Agreement, and that TDCC shall remain responsible
for all applicable financial and other obligations under this Agreement for each
such Affiliate sublicensed, including without limitation milestone and royalty
payments due to Symyx hereunder with respect to development and sales of
Products. Subject to the terms and conditions of this Agreement, TDCC or an
Affiliate of TDCC shall also have the right to grant sublicenses under the
rights granted in Sections 4.1.1, 4.1.2 and 4.1.3 above to one or more Third
Parties; provided that any revenue received from such a Sublicensee for such
grant shall be shared in accordance with Section 5.2(iv). TDCC shall provide to
Symyx at least the following information with respect to each Sublicensee or
Affiliate sublicensed: (i) the identity of each Sublicensee or Affiliate
sublicensed, (ii) a summary of the rights granted as to both subject matter and
territory; and (iii) a summary of the Confidential Information of Symyx and
Program Technology furnished to each Sublicensee or Affiliate. No sublicense
granted by TDCC or an Affiliate to a Third Party may be further assigned or
further transferred by any Sublicensee without the prior written consent of
Symyx, which consent shall not be unreasonably withheld; provided, any such a
sublicense may be further assigned by a Sublicensee without the consent of Symyx
in connection with a transfer of substantially all the business of such
Sublicensee to which such sublicense relates.
4.3 Third Party Rights. It is understood that Symyx is in the
business of conducting materials discovery, research and development with Third
Parties, and that Symyx will continue to grant Third Parties rights to acquire
licenses related to compounds and materials derived from such research. It is
possible that a Third Party may acquire rights from Symyx with respect to one or
more compounds or materials that are solely owned by Symyx or jointly owned by
Symyx and a Third Party and which were made and designed independently of
Symyx's activities in the Research Program. Accordingly, Symyx's grant of rights
to TDCC under Section 4.1 does not include (i) rights that are covered by a
patent application with respect to such a compound or material that was made and
designed independently of activities in the Research Program and is solely owned
by Symyx or a Third Party or jointly owned by Symyx and a Third Party, where
such patent application was filed by a Third Party (either alone or jointly with
Symyx) prior to the filing by TDCC (either alone or jointly with Symyx) of a
patent application with respect to such a compound or material, or (ii) rights
which are subject to a license, option, or other rights that Symyx has granted
to a Third Party prior to the Effective Date. It is understood and agreed that,
even if Symyx complies with its obligations under this Agreement, research for
Third Parties in the course of Symyx's other business 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
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TDCC, or jointly owned by TDCC and Symyx, under this Agreement. Symyx shall use
its good faith commercially reasonable efforts to avoid such conflicts. In the
event that conflicts arise between rights granted to TDCC in the Field and
rights granted by Symyx outside the Field, Symyx agrees to use commercially
reasonable efforts to promote a resolution of the conflict between TDCC and the
Third Party via a cross-license or other arrangement acceptable to the parties
involved. It is understood that, except to the extent that TDCC is damaged as a
proximate result of a material breach by Symyx of Sections 2.3, 4.1.1, or 10.2
of this Agreement, then Symyx shall have no liability under this Agreement with
respect to any such conflict.
4.4 Joint Inventions Outside of the Fields. TDCC, TDCC's Affiliates,
Symyx, and Symyx's Affiliates shall each have the right to use Joint Inventions
for internal research purposes outside of the scope of the Fields; provided,
however, that Symyx shall have the sole right to grant and authorize licenses
and sublicenses under such Joint Inventions to Third Parties outside of the
scope of the Fields. It is further understood and agreed that Symyx shall have
the right to grant Third Parties licenses under Joint Inventions outside of the
scope of the Field that are exclusive even as to TDCC and Symyx; provided, that
if Symyx grants such a license that is exclusive even as to TDCC and Symyx,
Symyx shall promptly notify TDCC in writing and shall pay to TDCC thirty-three
percent (33%) of up-front license fees and royalties payments received by Symyx
from such Third Party in respect of such exclusive license under such Joint
Inventions. Notwithstanding the foregoing, it is understood and agreed that
Symyx may grant exclusive licenses under such Joint Inventions outside of the
Fields to certain Third Parties in connection with the Other Polyolefin Research
described in Section 2.3.2, and that Symyx shall not be required to pay any
amounts to TDCC hereunder in connection with such licenses. It is understood and
agreed that Confidential Information received by Symyx from TDCC shall be
subject to all applicable provisions of Article 9 of this Agreement.
4.5 Retained Rights.
4.5.1 Sole Inventions Outside the Fields. Subject to the
license to Combinatorial Chemistry Technology in Section 4.6, TDCC and Symyx
shall each retain all rights outside the scope of the Fields in and to
inventions and discoveries invented or made solely by such party in the course
of the Research Program.
4.5.2 Symyx Research. Notwithstanding the licenses and rights
granted by Symyx in this Article 4, Symyx shall retain the right to make, have
made, and use any Library Compounds or Agreement Compounds, and use or practice
any processes or methods developed by or on behalf of Symyx in the course of
performing the Research Program, for its own internal research to develop,
improve and validate its tools and Combinatorial Chemistry Technology.
4.6 Combinatorial Chemistry. TDCC agrees to grant, and hereby
grants, to Symyx an irrevocable, royalty-free non-exclusive license, with the
right to grant and authorize sublicenses, 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
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Chemistry Technology made or invented jointly by TDCC and Symyx in the course of
the Research Program for internal research purposes; provided, however, that
Symyx shall have the sole right to grant and authorize licenses and sublicenses
to Third Parties under such Combinatorial Chemistry Technology. It is understood
that this Section 4.6 shall not apply to any inventions conceived and reduced to
practice by TDCC independent of the Research Program and without use of, or
reference to, Combinatorial Chemistry Technology owned by Symyx, other than the
use of and reference to the Discovery Tools, if any, licensed or sold to TDCC as
set forth in Section 2.8. Nothing herein shall be construed to obligate TDCC to
grant to Symyx the right to use or sublicense background rights in technology of
TDCC which existed prior to the Effective Date or results of Independent TDCC
Research.
4.7 Limited Use Outside of Field. Except as the parties may
otherwise expressly agree in writing, TDCC shall not use or sell, or authorize
the use or sale of, Program Technology developed solely or jointly by Symyx, or
any Agreement Compound or Library Compound, except (i) in relation to the
manufacture, use or sale of Products within the corresponding Field or Fields in
accordance with the license granted by Symyx in Sections 4.1.1 or (ii) in
relation to the manufacture, use or sale of EPDM 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.
ARTICLE 5
PAYMENTS
5.1 Research Funding.
5.1.1 Amounts. TDCC shall pay Symyx the following amounts as a
part of the consideration for conducting the research activities in the Research
Program: (i) four million five hundred thousand dollars ($4,500,000) for the
first full year of the Research Program, (ii) four million nine hundred fifty
thousand dollars ($4,950,000) in the second full year of the Research Program,
and (iii) five million four hundred thousand dollars ($5,400,000) in the third
full year of the Research Program.
5.1.2 Quarterly Payments. The amounts set forth in Section
5.1.1 shall be paid in advance in four equal installments during each year of
the Research Program. The initial payment shall be made on or before the 1st day
of the month following the Effective Date. Subsequent payments shall be made at
three month intervals thereafter on or before the first day of the applicable
month for the duration of the Research Program term. It is understood and agreed
that all such payments are nonrefundable and noncreditable, except as provided
in Article 12.
5.1.3 Research Program Records. Symyx shall keep complete,
true and accurate books of account and records sufficient to determine the
number of Symyx FTE's utilized, the number of experiments performed by Symyx in
each quarter during the Research Program Term in connection with the performance
of the Research. Such books and records shall be kept at the
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principal place of business of Symyx for at least three (3) years following the
end of the calendar year quarter to which they pertain. Such records will be
open for inspection during normal business hours upon ten (10) days prior notice
during such three (3) year period, by an independent auditor of TDCC, for the
purpose of verifying the number of Symyx FTE's used in the Research Program
during the Research Program Term, and the number of Program Experiments. Such
inspections may be made no more than once each calendar year, at reasonable
times mutually agreed by Symyx and TDCC. It is understood and agreed that TDCC's
auditor will be obliged to execute a reasonable confidentiality agreement prior
to commencing any such inspection.
5.2 Royalties.
5.2.1 General Principles. TDCC shall pay to Symyx (i) a
royalty on Net Sales of Products by TDCC and its Affiliates at a royalty rate
determined in accordance with this Section 5.2.1, and (ii) a share of any
payments from Sublicensees as set forth in Section 5.2.1(iv). Illustrative
calculations for determining a royalty rate pursuant to Section 5.2.1(i) and
sharing of revenue from Sublicensees pursuant to Section 5.2(iv) shall be
mutually agreed by Symyx and TDCC by July 1, 1999.
(i) Determining Royalty Rate for Net Sales of
Product. A royalty rate shall be determined for each class of Products. Where
two or more Products to be sold commercially by TDCC are similar in terms of
type and markets, for example different grades of polyethylene resins for films,
all such Products shall be included in a class of Products and a single royalty
rate determined for same. At least three (3) months prior to the first
commercial sale of the first Product in a class, Symyx and TDCC shall meet to
determine a fixed royalty rate that will be payable to Symyx with respect to Net
Sales of the applicable class of Products. TDCC and Symyx shall each use
commercially reasonable efforts to determine the applicable royalty rate for
each class of Products prior to the initial sale of significant commercial
quantities of such Products. In the event that the applicable royalty rate of a
Product has not been determined at the time the initial payments of royalties
are due, a provisional royalty rate of two and one-half percent (2.5%) will be
used as the basis for royalty payments for such Product until the applicable
royalty rate is determined. When the applicable royalty rate is determined, TDCC
shall within thirty (30) days remit to Symyx any amounts underpaid because the
provisional royalty rate was lower than the determined royalty rate, plus
interest to be calculated as provided in Section 6.2 from the time the royalty
payments would have been due to the time the payment is made, and TDCC shall be
entitled to take as a credit against future royalty payments to Symyx for such
Products any amounts overpaid because the provisional royalty rate was higher
than the determined royalty rate, plus interest to be calculated as provided in
Section 6.2 from the time such provisional payments were made until the time
such credit is taken. The royalty rate for each class of Products shall be
determined by TDCC and Symyx as set forth in this Section 5.2.1 with the goal of
providing Symyx twenty-five percent (25%) of the Added Value realized by TDCC
and its Affiliates from commercialization of: Agreement Compounds and Products
attributable to Program Technology licensed by Symyx to TDCC and the use of
Combinatorial Chemistry Technology of Symyx. In the case of manufacture or sale
of Products by TDCC or TDCC Affiliates, "Added Value" shall mean the difference
for a business unit between: (i) Net Income derived from
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the use or sale of a Product to the extent it is attributable to use of
Agreement Compounds or Program Technology, and (ii) the Net Income without the
use or sale of Product but including other goods which it is expected would have
been sold by the business unit if the Product were not available, in each case
determined in accordance with Generally Accepted Accounting Principles (GAAP),
on a consistent basis. By way of example and without limitation, in determining
the overall Added Value received by TDCC, where a Product is a substitute for an
existing product sold by TDCC, the parties shall consider changes in sales
volume resulting from Product, Product pricing and Product development,
production and commercial costs (e.g., due to changes in raw materials costs,
capital costs, processing costs, yield, market development costs, research
costs, royalties payable to Third Parties and claims of third parties), in each
case, attributable to the use or sale of the Products or their manufacture. In
addition, it is understood that if a Product uses technology developed by TDCC
or its Affiliates outside of the Research Program or acquired from a Third
Party, e.g., a second catalyst in a dual catalyst system to manufacture a
Product where the first catalyst is an Agreement Compound, Added Value shall,
where appropriate, take into account the contributions of the Agreement
Compounds and Program Technology relative to the other technology in determining
the Net Income derived from use or sale of the Product as a result of the
Agreement Compounds and Program Technology. Once the projected Added Value
related to the particular Product has been determined, the parties will then
decide on the royalty rate to be paid by TDCC on Net Sales of such Product so as
to provide Symyx twenty-five percent (25%) of the Added Value projected to be
realized by TDCC or its Affiliates over the period during which royalty payments
are to be paid. However, in no event shall the royalty rate so determined by the
parties be less than one-half of one percent (0.5%) or greater than five percent
(5%) of the Net Sales of a Product.
(ii) TDCC Internal Documentation. The royalty rate
used to calculate the royalty payments due Symyx with respect to a particular
Product or class of Products shall be agreed by the parties at the time TDCC
decides to build or modify its commercial production facilities to utilize the
Program Technology or to use any Agreement Compound for production of such
Products in its production facilities, and in no event later than six months
after the date of commercialization of such Product. It is understood and agreed
that limited sales for purposes of market development do not constitute
commercialization of a Product. The royalty rate will be determined based on the
expectation of the Added Value to be realized by TDCC and TDCC Affiliates from
such Products, as demonstrated in TDCC's internal forecasts for ten (10) years
or longer of Product sales, pricing, cost and profitability used by TDCC at the
time of determining whether or not to build or modify production facilities to
utilize the Program Technology, or whether or not to utilize Agreement
Compounds, or other relevant sources of information if such forecasts do not
exist. Such forecasts shall start with the first year of commercial sales of the
class of Products, and prior to their consideration, such forecasts and other
relevant information shall have been approved by the chief executive officer of
TDCC or the leader of the business unit of TDCC or a TDCC Affiliate involved. It
is understood and agreed that if TDCC notifies Symyx that TDCC desires enhanced
secrecy with respect to certain specified internal forecasts of TDCC or TDCC's
Affiliates for Product sales, pricing, cost or profitability to be provided to
Symyx hereunder, Symyx shall designate one (1) executive of Symyx, approved by
TDCC (which approval shall not be unreasonably withheld), to review such
information, which executive shall agree not to disclose the actual data or
forecast to
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other employees of Symyx, and TDCC shall also disclose such data or forecasts to
an independent consultant selected by Symyx and approved by TDCC (which approval
shall not be unreasonably withheld) for verification on Symyx's behalf of the
royalty determination for the applicable Products. The designated Symyx
executive and independent consultant shall each be required to agree to and
abide by reasonable and appropriate obligations of confidentiality with respect
to any Confidential Information received, and internal forecasts of TDCC for
Product sales, pricing, cost and profitability will be subject to reasonable and
appropriate protections to prevent disclosure of same to other persons at Symyx
and to Third Parties.
(iii) Arbitration. In the event the parties do not
reach agreement on the royalty rate to be paid by TDCC to Symyx with respect to
any particular class of Products within ninety (90) days from the parties' first
meeting regarding such Product pursuant to Section 5.2.1(i), above, the
determination of a royalty rate may be submitted to binding arbitration by
either party pursuant to Section 13.16, except that the arbitration will be
conducted by one neutral arbitrator with expertise in the chemical industry
which both TDCC and Symyx approve. The arbitrator in an arbitration pursuant to
this Section 5.2.1(iii) shall be instructed that the sharing of Added Value as
set forth in this Section 5.2.1 shall be the basis of the arbitrator's decision,
which decision regarding the royalty shall be limited to setting an appropriate
royalty rate for the Product. The arbitrator must agree to abide by appropriate
obligations of confidentiality with respect to any Confidential Information
received and internal forecasts of TDCC for Product sales, pricing, cost and
profitability will be subject to protections to prevent disclosure of same to
Symyx.
(iv) Sharing of Sublicense Revenues. In addition to
the royalty paid to Symyx on Net Sales of Products by TDCC and its Affiliates,
TDCC shall share payments received from Sublicensees with Symyx as follows: TDCC
shall pay to Symyx twenty five percent (25%) of any royalties and license fees
received from a Sublicensee net of costs (including costs for negotiation and
administration of the license) with respect to the grant of a license to make,
have made, use, sell, offer for sale, and import Products or EPDM using
Agreement Compounds or Program Technology licensed to TDCC by Symyx. The payment
received by TDCC for grant of such a sublicense is to be negotiated at
arm's-length. In the event that the license to the Third Party pertaining to
Products is granted as part of a license of other rights, for example a license
to use TDCC solution polymerization technology, or in exchange for non-monetary
consideration, such as a cross-license, the fair market value of the technology
sublicensed related to the Agreement Compounds and Program Technology licensed
to TDCC from Symyx shall be determined and used as the basis for calculating the
twenty five percent (25%) of such revenue due Symyx.
(v) Development Activity Expenses. It is further
understood and agreed that when determining Added Value, development expenses
with respect to a particular Product will be depreciated on a straight-line
basis over the same period of time as the forecasts in Section 5.2.1(ii) to
determine Added Value, and will be limited to the amount of development expenses
expected to be incurred by TDCC and its Affiliates.
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(vi) Unexpected Results. In the event that after a
royalty rate is set for a class of Products, subsequent developments, such as
failure to obtain patent protection, much lower or higher market prices for a
Product than projected, much lower or higher volumes of sales of Products than
forecast, third party patent infringement claims or royalties payable to a Third
Party on a Product, result in a material impact of greater than twenty percent
(20%) on the projected Added Value on which the royalty rate was based, the
Parties shall in good faith negotiate an adjustment to the royalty rate, within
the range specified in the last sentence of Section 5.2.1(i), for such class of
Products upon request of either party.
(vii) Single Royalty Due. Where a Product is sold by
TDCC or its Affiliates to Third Parties and the Product is also converted by
TDCC or its Affiliates into another Product by processing, blending or
fabricating and the resulting converted Product sold, Net Sales shall be
determined on the Product initially made and only a royalty payment for such
initial Product shall be due. In the case of a transfer of Products between TDCC
and one of its Affiliates or between two Affiliates of TDCC for any purpose
other than research, development or sampling, Net Sales shall where feasible be
determined based on the invoiced sales price for substantially identical
Products upon sale to a Third Party customer in the territory or geographic
region where the Product is delivered, less the deductions allowed for such
sales. In the event that Products are transferred between an Affiliate of TDCC
and either TDCC or another Affiliate of TDCC and there have been no comparable
sales of such Products to a Third Party on which to determine a basis of
determining the value of such sale, the invoice price received from invoicing,
shipment or transfer of title in the Product to a person or entity other than
TDCC or its Affiliate, less allowed deductions, shall be used in determining Net
Sales. In the event a Product is sold by TDCC or an Affiliate in combination
with other goods and services, Net Sales of the Product shall also be determined
by reference to the average selling price of the Product without other goods and
services sold to Third Parties during the same time period.
(viii) Patents. Whether or not patent protection will
be obtained for Products or a process for making or using Products will have a
significant impact on the Added Value realized by TDCC. In addition, failure to
xxxxx infringement of a Program Patent and/or obligations to pay a Third Party a
royalty for rights to practice under its patents or to settle patent
infringement disputes may have an impact on Added Value. Accordingly, the extent
of patent protection for Products and risks and costs of infringement of Third
Party patents will be taken into consideration in determining the Value Added.
5.2.2 Royalty Term. TDCC's obligation to pay royalties to
Symyx shall continue for each class of Products until the later of (i) twelve
(12) years after the first commercial sale of any Product in such class of
Products on which royalties are payable by TDCC to Symyx, or (ii) the expiration
of the last to expire issued patent covering such Product based on the Program
Technology which is owned and/or controlled by TDCC or Symyx. Notwithstanding
any other provision of this Agreement, all royalty obligations of TDCC or its
sublicensee for all Products shall cease twenty (20) years from the date of the
first commercial sale of the first Product on which royalties are payable by
TDCC to Symyx.
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5.3 Payments in Lieu of Royalties. Royalties due on Net Sales of
Products or classes of Products may be burdensome to calculate and report. TDCC
and Symyx in such cases will seek to negotiate an alternative basis for
calculation of consideration payable in lieu of running royalties on such
classes of Products, which both parties deem will result in a payment to Symyx
of an amount commensurate with the royalties otherwise payable under Section
5.2.
5.4 Technology Access Fee. In addition to the other payments to
Symyx provided herein, TDCC shall pay to Symyx a one-time Technology Access Fee
of [******] by February 12, 1999. It is understood and agreed that the
Technology Access Fee is noncreditable and shall be non-refundable, except as
provided in Article 12.
5.5 Third Party Royalties. Symyx shall not be responsible for
payments due to Third Parties for the manufacture, sale, or use of Products by
TDCC or its Affiliates or Sublicensees.
5.6 Convenience of the Parties. The parties acknowledge that Symyx
may not own or control patent applications or patents covering the manufacture,
sale or use of a particular Product; however, that parties agree that
substantial value is expected to be contributed by Symyx in accelerated
identification, time to market, enhanced probability of success, and the
potential for multiple leads and, for the convenience of the parties, TDCC
agrees to pay royalties as specified herein during the applicable royalty
period, regardless of whether a Product is covered by a patent application or
patent owned or controlled by Symyx.
5.7 Separate Agreement. Although not a part of the Research Program,
it is understood and agreed that the amounts paid pursuant to Sections 5.1 and
5.4 shall include the consideration due Symyx from TDCC for evaluations to be
conducted by TDCC for screening as a catalyst, an activator, a scavenging agent
or a support under a separate agreement to be negotiated in good faith;
provided, it is further understood and agreed that Symyx will not be obligated
to provide more than six (6) months time of one (1) FTE or the equivalent, for
example, (3) FTEs for two (2) months, under the terms of such separate
agreement, and Symyx will be obligated under such separate agreement only for so
long as TDCC is not in default under any payment due Symyx under this Agreement.
ARTICLE 6
PAYMENTS; BOOKS AND RECORDS
6.1 Royalty Reports and Payments. After the first commercial sale of
a Product on which royalties are payable by TDCC or its Affiliates hereunder,
TDCC shall make quarterly written reports to Symyx within ninety (90) days after
the end of each calendar year quarter, stating in each such report, separately
for TDCC and each Affiliate, the number, description, and aggregate Net Sales,
of each Product or class of Products sold during the calendar year quarter upon
which a royalty is payable under Section 5.2. Concurrently with the making of
such reports, TDCC shall pay to Symyx all royalties due in respect of such Net
Sales at the rate determined in accordance with Section 5.2.
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6.2 Payment Method. All payments due under this Agreement shall be
made by bank wire transfer in immediately available funds to a bank account
designated by Symyx. All payments hereunder shall be made in U.S. dollars. Any
payments that are not paid on the date such payments are due under this
Agreement or any refunds for overpayments or underpayments of actual royalties
pursuant to Section 5.2.1(i) shall bear interest at the lesser of (i) the prime
rate (as reported by the Bank of America, San Francisco, California, on the date
such payment is due) plus an additional two percent (2%) or (ii) the maximum
rate permitted by law, in each case calculated on the number of days such
payment is delinquent. Nothing in this Section 6.2 shall prejudice any other
rights or remedies available to either party hereunder or at law or equity.
6.3 Place of Royalty Payment and Currency Conversions. Royalties
shall be deemed payable by the entity making the Net Sales of the Product from
the country in which earned in local currency and subject to foreign exchange
regulations then prevailing. Royalty payments to Symyx shall be made in United
States dollars to the extent that free conversion to United States dollars is
permitted. Any such conversion to U.S. dollars from the currency in the country
where such Net Sales occurs shall be made using the exchange rate for conversion
of the foreign currency into U.S. Dollars employed by TDCC in the normal course
of its business for other commercial transactions on the last business day of
the calendar year quarter to which such payment pertains. If, due to
restrictions or prohibitions imposed by national or international authority,
payments cannot be made as aforesaid, the parties shall consult with a view to
finding a prompt and acceptable solution. If such royalties due Symyx in any
country cannot be remitted to Symyx within six (6) months after the end of the
calendar year quarter during which they are earned, then TDCC or its Affiliate
shall upon request of Symyx deposit the full amount of such unpaid royalties in
a bank account in such country in the name of Symyx.
6.4 Records; Inspection. TDCC and its Affiliates shall keep
complete, true and accurate books of account and records for the purpose of
determining the royalty amounts (and revenues received from Sublicensees) which
are payable to Symyx under this Agreement. Such books and records shall be kept
at the principal place of business of such party, as the case may be, for at
least three (3) years following the end of the calendar year quarter to which
they pertain. Such records will be open for inspection during such three (3)
year period by a public accounting firm to whom TDCC has no reasonable
objection, solely for the purpose of verifying royalty reports provided pursuant
to Section 6.1. Such inspections may be made no more than once each calendar
year, at reasonable times and on reasonable notice. Inspections conducted under
this Section 6.4 shall be at the expense of Symyx, unless a variation or error
producing an increase in the payment due exceeding the greater of ten thousand
U.S. dollars ($10,000) or ten percent (10%) of the amount stated for any period
covered by the inspection is established in the course of any such inspection,
whereupon all reasonable costs relating to the inspection for such period and
any unpaid amounts that are discovered will be paid promptly by TDCC or the
Affiliate together with interest thereon from the date such payments were due at
the lesser of (i) the prime rate (as reported by the Bank of America, San
Francisco, California), plus an additional two percent (2%) or (ii) the maximum
rate permitted by law. The public accounting firm employees shall sign a
reasonable confidentiality agreement as a condition precedent to their
inspection, and shall report to Symyx only that
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information which would be contained in a properly prepared royalty report by
TDCC. Symyx agrees to hold in strict confidence all information received
concerning royalty payments and reports, and all information learned in the
course of any audit or inspection, except to the extent necessary for Symyx to
reveal such information in order to enforce its rights under this Agreement or
if disclosure is required by law.
6.5 Tax Matters. All royalty amounts and other payments required to
be paid to a party pursuant to this Agreement may be paid with deduction for
withholding for or on account of any taxes (other than taxes imposed on or
measured by net income) or similar governmental charge imposed by applicable law
("Withholding Taxes"). Any Withholding Taxes will be paid to the proper tax
authorities and receipts for such payment or other proof of payment will be made
available by the paying party to the other party. The parties will exercise
diligent efforts to ensure that any withholding taxes imposed are reduced as far
as possible under provisions of any treaties applicable.
ARTICLE 7
INTELLECTUAL PROPERTY
7.1 Ownership. TDCC shall own any inventions or discoveries
conceived and reduced to practice and other intellectual property otherwise
developed solely by personnel of TDCC or TDCC's Affiliates in the course of the
Research Program and shall also own inventions and discoveries fully conceived
(with sufficient specificity that it can be reduced to practice without efforts
beyond those efforts that one skilled on the art would reasonably employ) by
personnel of TDCC or TDCC's Affiliates and reduced to practice in the course of
the Research program by Symyx and TDCC consistent with such conception, which
pertain to Olefin Polymers, compositions containing Olefin Polymers or uses for
Olefin Polymers (collectively, "TDCC Inventions"). Symyx shall own any
inventions or discoveries conceived and reduced to practice and other
intellectual property otherwise developed solely by Symyx personnel in the
course of the Research Program ("Symyx Inventions"). Except as provided above,
TDCC and Symyx shall jointly own any inventions or discoveries conceived and/or
reduced to practice in the course of the Research Program where personnel of
Symyx and of TDCC have each made inventive contributions to such inventions
which would result in them being determined to be joint inventors in accordance
with United States patent law ("Joint Inventions"). Program Know-How which is
jointly developed but is not deemed to be patentable will be jointly owned.
7.2 Notice of Inventions and Access to Records of the Research
Program. Symyx and TDCC shall report to the Research Committee all inventions
relating to Lead Compounds, Derivative Compounds, or Program Technology made in
the course of performing the Research Program. During the Research Program Term
and for three (3) years thereafter, each of TDCC and Symyx shall make available
to the other party upon request research records pertaining to such inventions
as may be reasonably required to exercise any rights of a party arising pursuant
to this Agreement. Such records and the information disclosed therein shall be
deemed Confidential Information of the party providing such records for
inspection subject to the obligations and
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conditions in Article 9. Upon request and tender of payment for the actual cost
in providing copies, Symyx and/or TDCC, as appropriate, shall provide to the
requesting party legible copies of such records as are reasonably required.
7.3 Jointly Owned IP. Except as otherwise expressly provided in this
Agreement, both TDCC and Symyx may use, sublicense, commercialize, or otherwise
exploit all jointly-owned Program Technology without the consent of, or
obligation to account to, the other party.
7.4 Patent Prosecution.
7.4.1 Solely-Owned Patents. Each party will be responsible, in
its discretion and at its sole expense, for preparing, filing, prosecuting and
maintaining patent applications and patents relating to the inventions conceived
or reduced to practice in the course of the Research Program that are owned
solely by that party as described in Section 7.1, and conducting any
interferences, re-examinations, reissues, oppositions or requests for patent
term extension or governmental equivalents thereto.
7.4.2 Jointly-Owned Patents.
(a) Combinatorial Chemistry. Symyx shall have the sole
right, in its discretion and at its sole expense, to prepare, file, prosecute
and maintain patent applications and patents relating to Joint Inventions owned
by TDCC and Symyx which claim Combinatorial Chemistry Technology and to conduct
any interferences, re-examinations, reissues, oppositions or requests for patent
term extension or governmental equivalents thereto.
(b) Jointly-Owned Patents Related to Specific Fields. Except
as provided in Section 7.4.2 (a), TDCC shall have the first right, in its
discretion and at its sole expense, to prepare, file, prosecute and maintain, in
consultation with Symyx, patent applications and patents relating to Joint
Inventions within the Program Technology in the first, second and fourth Fields
in Exhibit A which (i) relate to the use of Agreement Compounds to make Products
in one or more of such Fields, or (ii) relate to Products in (or used in) one or
more such Fields or (iii) relate to processes for making Products in one or more
such Fields, in each case that are jointly-owned by TDCC and Symyx, and to
conduct any interferences, re-examinations, reissues, oppositions or requests
for patent term extension or governmental equivalents thereto. In the event that
TDCC does not file, prosecute or maintain, or conduct such other activities
described above, with respect to any such patent or patent application which
claims the composition or method of use of any Agreement Compound in the Field,
Symyx will have the right, in its discretion, to assume such activities at its
own expense. It is understood and agreed that in the event a Joint Invention as
it will be filed in a patent application or claimed in a patent encompasses
Program Technology in one or more of the third, fifth or sixth fields in Exhibit
A in addition to the first, second or fourth Fields of Exhibit A, then Section
7.4.2(c) shall apply.
(c) Jointly-Owned Patents Outside of the Specified Fields.
Except as provided in Section 7.4.2 (a) and (b), Symyx shall have the first
right, in its discretion and at its sole expense,
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to prepare, file, prosecute and maintain, in consultation with TDCC, patent
applications and patents relating to Joint Inventions within the Program
Technology that are jointly-owned by TDCC and Symyx, and to conduct any
interferences, re-examinations, reissues, oppositions or requests for patent
term extension or governmental equivalents thereto. In the event that Symyx does
not file, prosecute or maintain, or conduct such other activities described
above, with respect to any such patent or patent application, TDCC will have the
right, in its discretion, to assume such activities at its own expense.
7.5 Cooperation in Patent Filing. During the Research Program Term
and for three years thereafter, TDCC and Symyx shall use reasonable efforts to
keep each other informed as to the status of patent matters described in this
Article 7, including without limitation, by providing the other the opportunity
to review and comment on patent application drafts providing the basis for
Program Patents claiming inventions made in the course of the Research Program a
reasonable time in advance of applicable filing dates, and providing the other
party with copies of any substantive documents that such party receives from
applicable patent offices regarding applications for any Program Patent, and/or
applications claiming any Joint Inventions, promptly after receipt, including
notice of all official actions, interferences, reissues, re-examinations,
oppositions, potential litigation, or requests for patent term extensions. TDCC
and Symyx shall each reasonably cooperate with and assist the other at its own
expense in connection with such activities, at the other party's request. The
Research Committee, either directly or through a patent committee designated by
the Research Committee, will (i) facilitate communication between the parties
regarding patents and patent applications arising from inventions made in the
course of the Research Program, and (ii) discuss and provide advice on patent
strategy related to such patent applications. It is understood and agreed that
provisional patent applications may be filed by a party without review and
comment in order to obtain the earliest possible filing date, but each party
will use commercially reasonable efforts to seek review and comment from the
other party prior to filing such provisional patent applications. 7.6
Enforcement.
7.6.1 Notice. Each party shall promptly notify the other party
in writing if it becomes aware of any actual or threatened commercially material
infringement of the Program Patents by a Third Party.
7.6.2 Inside the Fields. TDCC shall have the initial right,
but not the obligation, to take appropriate legal action to enforce any Program
Patents against any infringement within the Fields by any Third Party, at its
sole cost and expense. If, within six (6) months following receipt of notice
from Symyx of any such infringement of a jointly-owned, issued patent, TDCC does
not take such action to halt such infringement or notify Symyx of action it
proposes to take to xxxxx patent infringement in a commercially reasonable
period, Symyx shall, in its sole discretion, have the right, but not the
obligation to take such action at its sole expense.
7.6.3 Other Infringement. In the event of an actual or
threatened infringement by a Third Party of a Program Patent that is solely
owned by TDCC, TDCC shall have the sole right, but
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not the obligation, to take appropriate legal action to enforce such Program
Patent against infringements by Third Parties, as TDCC determines and at its
expense. Except as otherwise provided in Section 7.6.2, in the event of an
actual or threatened infringement by a Third Party of a Program Patent that is
solely owned by Symyx, or jointly by TDCC and Symyx, Symyx shall have the sole
right, but not the obligation, to take appropriate legal action to enforce such
Program Patent against infringement by Third Parties, as Symyx determines in its
discretion and at its expense. It is understood that Symyx may authorize one or
more Third Parties to enforce patents against infringements outside of the
Fields.
7.6.4 Cooperation; Costs and Recoveries; Settlements. Each
party agrees to use commercially reasonable efforts to render such assistance in
the enforcement activities described in Sections 7.6.2 and 7.6.3 as the
enforcing party may reasonably request. Costs of maintaining any such action and
damages recovered therefrom shall be paid by and belong to the party bringing
the action; provided, however, that any recovery by TDCC under Section 7.6.2 in
excess of TDCC's actual cost and expenses shall be divided seventy-five percent
(75%) to TDCC and twenty-five (25%) to Symyx. If TDCC consents to a sublicense
to any Third Party, which consent it shall not be required to give, who, but for
the sublicense, would be infringing a claim of an issued patent in the Program
Technology, TDCC shall be entitled to receive all running royalties payable by
such Third Party but such revenue received in excess of TDCC's actual costs and
expenses for enforcement shall be included as a part of revenues received from
Sublicensees as set forth in Section 5.2.1(iv). Neither Symyx nor TDCC shall
settle without the consent of the other party a dispute with a Third Party
regarding infringement of a Program Patent except to the extent that such rights
could have been granted as a permitted license or sublicense without the consent
of the other party.
7.7 Third Party Claims of Infringement. If the manufacture, use or
sale of any Product pursuant to this Agreement because of the practice of the
Program Technology results in any claim, suit or proceeding alleging patent
infringement against Symyx or TDCC (or its Affiliates or Sublicensees), such
party shall promptly notify the other party hereto in writing setting forth the
facts of such claims in reasonable detail. Each party agrees to use commercially
reasonable efforts to render assistance to the other party in defending such
claims of infringement as the defendant may reasonably request. The defendant
shall have the exclusive right and obligation to defend and control the defense
of any such claim, suit or proceeding, at its own expense, using counsel of its
own choice; provided, however, it shall not enter into any settlement which
admits or concedes that any Program Patent is invalid or unenforceable, without
the prior written consent of the other party, which shall not be unreasonably
withheld. The defendant shall keep the other party hereto reasonably informed of
all material developments in connection with any such claim, suit or proceeding.
ARTICLE 8
COMMERCIALIZATION
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8.1 Due Diligence. TDCC shall use commercially reasonable efforts to
develop and commercialize Agreement Compounds and Products which in TDCC's sound
business judgment can be profitably implemented. It is understood and agreed
that such "commercially reasonable efforts" shall mean efforts generally
equivalent to the efforts TDCC uses with regard to its other similar products
(lower case) of comparable value, risk and patent protection to develop and
commercialize Products. Specific diligence parameters will include TDCC
utilizing its knowledge of chemical and polymer markets to identify suitable
concepts for Products and market opportunities.
8.2 Acquisition of Rights by Symyx. In the event that TDCC
determines it will not commercialize on its own or by license to Third Parties
or Affiliates of TDCC one or more discrete, specified chemical entities that
were identified as Lead Compounds to manufacture one or more specified Olefin
Polymers with respect to one or more Fields, TDCC shall notify Symyx. Symyx
shall for a period of three (3) months from the date of such notification have
the option, on written notice to TDCC, to obtain an exclusive, worldwide right
under TDCC's interest in Program Technology and at TDCC's discretion,
improvements or modifications made by TDCC to such Program Technology for such
Lead Compounds to be used to manufacture, use and sell the specified Olefin
Polymers, on reasonable terms to be agreed by the parties, with consideration to
be paid TDCC which is commensurate with fair market value of these rights taking
into account the investment made by TDCC in the development of the Lead
Compounds and the use of the same for the manufacture of Olefin Polymers. In the
event that Symyx exercises its option, and TDCC and Symyx do not reach agreement
on fair market value for such rights, Symyx shall have the right to have the
fair market value of such rights determined by arbitration pursuant to Section
13.16 upon notice given to TDCC within ninety (90) days after the date the three
(3) month option period expires.
8.3 Reports. During the term of this Agreement, TDCC shall provide
Symyx with written annual reports within thirty (30) days of the end of each
calendar year providing a summary of the status of the research and development
activities conducted with respect to Products and Agreement Compounds. In
addition, five (5) times during the term of this Agreement, Symyx may request
special reports which provide a summary of the status of the research and
development activities conducted with respect to Products and Agreement
Compounds. TDCC will provide these special reports within thirty (30) days of
notification. The reports as described in this Section 8.3 shall contain
sufficient information to allow Symyx to monitor TDCC's compliance with this
Agreement. All reports and information provided under this Section 8.3 shall be
deemed Confidential Information of TDCC.
ARTICLE 9
CONFIDENTIALITY
9.1 Confidentiality. Except as otherwise expressly provided herein,
the parties agree that, until the later of fifteen (15) years from the Effective
Date of the Agreement and (ii) ten (10) years from the end of the Research
Program, the receiving party shall not, except as expressly provided in this
Article 9, disclose to any Third Party or use for any purpose, any Confidential
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Information furnished to it by the disclosing party pursuant to this Agreement,
except in each case to the extent that it can be established by the receiving
party by competent proof that such information:
(a) was already known to the receiving party, other than
under an obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part
of the public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise
part of the public domain after it disclosure and other than through any act or
omission of the receiving party in breach of this agreement;
(d) was independently developed by the receiving party
without use of, or reference to, the other party's confidential information, as
demonstrated by documented evidence; or
(e) was disclosed to the receiving party, other than under
an obligation of confidentiality, by a Third Party authorized and entitled to
disclose such information to others.
9.2 Permitted Use and Disclosures. Each party hereto may (i) use
Confidential Information disclosed to it by the other party in conducting the
Research Program and (ii) use or disclose Confidential Information disclosed to
it by the other party to the extent such use and disclosure is reasonably
necessary in (A) exercising the rights and licenses granted hereunder, (B)
prosecuting or defending litigation, (C) complying with applicable laws,
governmental regulations or court orders or submitting mandatory information to
tax or other governmental authorities, (D) filing and prosecuting patent
applications, subject to consultation with the disclosing party as to the
content of such patent applications prior to filing, or (E) making a permitted
sublicense or otherwise exercising license rights expressly granted pursuant to
this Agreement. TDCC and Symyx shall not (and agree that their Affiliates shall
not) disclose Confidential Information received from the other party under this
Agreement as permitted by 9.2(ii)(A) or (E), except pursuant to an agreement of
confidentiality with terms reasonably equivalent to those applicable to the
party to this Agreement that received the information from the other. If a party
to this Agreement is required to make any disclosure pursuant to 9.2(ii)(B), (C)
or (D) of Confidential Information received, it will give reasonable advance
notice to the other party to this Agreement and will use reasonable efforts to
secure confidential treatment of such information (whether through protective
order or otherwise), except to the extent inappropriate in the case of patent
applications.
9.3 Nondisclosure of Terms. Each of the parties hereto agrees not to
disclose the terms of this Agreement to any Third Party without the prior
written consent of the other party hereto, which consent shall not be
unreasonably withheld, except to such party's attorneys, advisors, investors and
others on a need to know basis under circumstances that reasonably ensure the
confidentiality thereof either: (i) in connection with a public offering of
Symyx stock, (ii) in connection with negotiation of a sublicense, manufacture or
sale of a Product or an Agreement Compound, or (iii) to the extent required by
law. Notwithstanding the foregoing, the parties shall agree upon a press release
to
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announce the execution of this Agreement, and Symyx and TDCC may each thereafter
disclose to Third Parties the information contained in such press release
without the need for further approval by the other. In addition, TDCC and Symyx
may each make public statements regarding the general progress of the Research
Program.
9.4 Publication of Results. Any manuscript or other public
disclosure by Symyx or TDCC describing the scientific results of the Research
Program to be published within the Research Program Term, or within one (1) year
after the end of the Research Program, shall be provided to the other party for
review at least ninety (90) days prior to its submission, except that patent
applications which may be published shall be subject only to the review
described in Section 7.5. Further, to avoid the loss of patent rights as a
result of premature public disclosure of patentable information, the reviewing
party may, within thirty (30) days of receiving such a proposed disclosure,
notify the publishing party in writing that the reviewing party desires to file
a patent application on any invention disclosed in such scientific results, in
which case the publishing party shall withhold publication or disclosure of such
scientific results until the earlier of (i) the time the patent application is
filed thereon, (ii) the time the parties both determine, after consultation,
that no patentable invention exists, or (iii) ninety (90) days after the
publishing party received notice of the reviewing party's desire to file such
patent application. Further, if such scientific results contain Confidential
Information of the reviewing party that is subject to the use and nondisclosure
restrictions under this Article 9, the publishing party agrees to remove such
Confidential Information from the proposed publication or disclosure.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 TDCC's Representations. TDCC represents and warrants that: (i)
it has the right and authority to enter into this Agreement and to fully perform
its obligations hereunder; (ii) this Agreement is a legal and valid obligation
binding upon it and enforceable in accordance with its terms, and (iii) it has
not previously granted, and during the term of this Agreement will not knowingly
make any commitment or grant any rights which conflict in any material way with
the rights and obligations set forth herein.
10.2 Symyx's Representations. Symyx represents and warrants that: (i)
it has the right and authority to enter into this Agreement, and to fully
perform its obligations hereunder; (ii) this Agreement is a legal and valid
obligation binding upon it and enforceable in accordance with its terms; (iii)
it has not previously granted, and during the term of this Agreement will not
knowingly make any commitment or grant any rights which conflict in any material
way with the rights and obligations set forth herein; (iv) it has the right to
extend the rights granted by it in this Agreement; and (v) to the best of its
knowledge as of the Effective Date, there are no existing or threatened actions,
suits or claims pending against it with respect to the Confidential Information,
Combinatorial Chemistry Technology or Library Compounds to be used in the
Research Program.
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10.3 Disclaimer. TDCC and Symyx specifically disclaim any
representation, warranty or guarantee that the Research Program will be
successful, in whole or in part. It is understood that the failure of the
parties to successfully synthesize, discover, identify or optimize Agreement
Compounds in the course of the Research Program shall not constitute a breach of
any representation or warranty or other obligation under this Agreement;
provided, however, it is understood and agreed that the foregoing shall not be
construed so as to relieve either party from its obligation under this Agreement
to perform research activities in the Research Program. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, SYMYX AND TDCC MAKE NO REPRESENTATIONS
AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED,
WITH RESPECT TO THE PROGRAM TECHNOLOGY, INFORMATION DISCLOSED HEREUNDER, LIBRARY
COMPOUNDS, AGREEMENT COMPOUNDS, OR PRODUCTS, AND HEREBY EXPRESSLY DISCLAIM ANY
WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, OR VALIDITY
OF ANY PROGRAM TECHNOLOGY, PATENTED OR UNPATENTED, OR NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
ARTICLE 11
INDEMNIFICATION
11.1 TDCC. TDCC agrees to indemnify, defend and hold harmless Symyx
and its Affiliates and their respective directors, officers, employees, agents
and their respective successors, heirs and assigns (the "Symyx Indemnitees")
from and against any losses, costs, reasonable expense from lost time of Symyx
employees, claims, damages, liabilities or expense (including reasonable
attorneys' and professional fees and other expenses of litigation)
(collectively, "Liabilities") arising, directly or indirectly out of or in
connection with Third Party claims, suits, actions, demands or judgments,
including without limitation, personal injury, product liability, patent
infringement and trade secret misappropriation matters, suits, actions or
demands relating to (i) any Agreement Compounds or Products which are developed,
manufactured, used, sold or otherwise distributed by or on behalf of TDCC, its
Affiliates, Sublicensees or other designees (other than Symyx, its Affiliates
and licensees), (ii) TDCC's activities in performing the Research Program, (iii)
Symyx's research activities in performing the Research Program arising in
circumstances where TDCC has directed these activities pursuant to Section 3.6,
and (iv) any breach by TDCC of the representations and warranties made in this
Agreement, except, in each case, to the extent such Liabilities result from the
negligence or intentional misconduct of the Symyx Indemnitees. Except as
expressly set forth herein regarding reasonable expenses from lost time of Symyx
employees, indemnification hereunder does not include any consequential damages
or lost profits which may be suffered by the Symyx Indemnitees.
11.2 Symyx. Symyx agrees to indemnify, defend and hold harmless TDCC,
its Affiliates and Sublicensees and their respective directors, officers,
employees, agents and their respective heirs and assigns (the "TDCC
Indemnitees") from and against any losses, costs, claims, damages, liabilities
or expense (including reasonable attorneys' and professional fees and other
expenses of
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litigation) (collectively, "Liabilities") arising, directly or indirectly out of
or in connection with Third Party claims, suits, actions, demands or judgments,
including without limitation, personal injury, product liability, patent
infringement and trade secret misappropriation matters, suits, actions, or
demands relating to (i) any Library Compound or product (lower case) developed,
manufactured, used, sold or otherwise distributed by or on behalf of Symyx, its
Affiliates, licensees or other designees (other than TDCC, its Affiliates and
Sublicensees), (ii) any breach by Symyx of its representations and warranties
made in this Agreement, and (iii) Symyx's activities in performing the Research
Program other than those where TDCC directed such activities pursuant to Section
3.6 (except with respect to claims of infringement of the intellectual property
rights of Third Parties, in which event Symyx shall not be obligated to
indemnify TDCC); and except, in each case, to the extent such Liabilities result
from the negligence or intentional misconduct of the TDCC Indemnitees.
Indemnification hereunder does not include any consequential damages or lost
profits which may be suffered by the TDCC Indemnitees.
11.3 Procedure. In the event that any "Indemnitee" (either a TDCC
Indemnitee as described in Section 11.2 or a Symyx Indemnitee as described in
Section 11.1) intends to claim indemnification under this Article 11 it shall
promptly notify the other party in writing of such alleged Liability. The
indemnifying party shall have the right to control the defense thereof with
counsel of its choice that is reasonably acceptable to Indemnitee; provided,
however, that any Indemnitee shall have the right to retain its own counsel at
its own expense for any reason. The affected Indemnitee shall give reasonable
cooperation to the indemnifying party and its legal representatives in the
investigation of any action, claim or liability covered by this Article 11. The
indemnification under this Article 11 shall not apply to amounts paid by an
Indemnitee in settlement of any Liabilities if such settlement is effected
without the consent of the indemnifying party, which consent shall not be
withheld unreasonably. The failure of the Indemnitee to deliver notice to the
indemnifying party within a reasonable time after commencement of a claim or
action, if prejudicial to the ability to defend such claim or action, shall
relieve the indemnifying party of any liability under this Article 11 to the
extent of such prejudice. The indemnifying party will not be liable to pay legal
costs and attorney's fees incurred by the Indemnitee in establishing its claim
for indemnification.
ARTICLE 12
TERM AND TERMINATION
12.1 Term of Agreement. The term of this Agreement shall commence on
the Effective Date, and shall continue in full force and effect on a
country-by-country, Agreement Compound-by-Agreement Compound and Product by
Product basis, until TDCC and its Affiliates have no remaining royalty payment
obligations for such Agreement Compound or Product in such country, unless
terminated earlier as provided in this Article 12. Following the expiration of
this Agreement pursuant to this Section 12.1, but not the earlier termination of
this Agreement pursuant to Section 12.2 or 12.3, with respect to an Agreement
Compound or Product in a country, TDCC shall have a
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nonexclusive license under Symyx's interest in the Program Technology to make,
have made, use, sell, offer to sell and import such Agreement Compound or
Product in such country.
12.2 Breach.
12.2.1 Termination of Agreement. Either party to this Agreement
may terminate this Agreement in the event the other party shall have materially
breached or defaulted in the performance of any of its material obligations
hereunder, and such default shall have continued for thirty (30) days after
written notice thereof was provided to the breaching party by the non-breaching
party. Any termination shall become effective at the end of such thirty (30) day
period unless the breaching party (or any other party on its behalf) has cured
any such material breach or default prior to the expiration of the thirty (30)
day period. In the event that TDCC has materially breached this Agreement solely
with respect to an Agreement Compound or Product within a specific Field, then
Symyx shall only be entitled to terminate this Agreement with respect to such
Field as a result of such breach. Any dispute as to whether or not a material
breach or default has occurred or has been timely cured shall be subject to
dispute resolution in accordance with Section 13.16.
12.2.2 Termination of Research Program for Breach. In the event
that Symyx shall have materially breached or defaulted in the performance of any
of its material obligations hereunder during the Research Program Term, and such
default shall have continued for thirty (30) days after written notice thereof
was provided to Symyx by TDCC, TDCC may elect to terminate the Research Program
and not the Agreement, upon written notice to Symyx clearly stating TDCC's
election. Any termination of the Research Program and not the Agreement shall
become effective at the end of such thirty (30) day period unless Symyx (or any
other party on its behalf) has cured any such breach or default prior to the
expiration of the thirty (30) day period or TDCC elects not to terminate the
Research Program. In the event that TDCC properly terminates the Research
Program and not the Agreement, TDCC shall have no further obligation to make the
payments otherwise due Symyx under Section 5.1 after the effective date of such
termination of the Research Program. In the event that Symyx has materially
breached or defaulted during the Research Program Term and TDCC has provided to
Symyx notice of such material breach or default, and of TDCC's intent to
terminate the Research Program if such material breach or default is not cured
within the applicable 30-day cure period, TDCC may, upon prior notice to Symyx,
suspend payments that would otherwise be due to Symyx under Section 5.1 during
such 30-day cure period; provided, however, that (i) TDCC shall only be entitled
to suspend payments as described herein one (1) time during the Research Program
Term; (ii) in the event the Research Program is terminated, TDCC shall have no
rights or license in or to Program Technology developed by Symyx during the
period for which such payments were suspended; and (iii) in the event that Symyx
cures such breach or default (or TDCC waives such breach or default) and the
Research Program is not terminated, TDCC shall pay to Symyx the full amount that
would have been due under Section 5.1 plus interest to be calculated as provided
in Section 6.2 within fifteen (15) business days of the earlier of (i) the date
such cure is notified to TDCC, (ii) the date of a waiver by TDCC, or (iii) the
end of the thirty (30) day cure period.
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12.2.3 Other Remedies for Breach. It is understood that in the event that a
party has breached or defaulted in performance of any of its obligations
hereunder and such breach or default shall have continued for thirty (30) days
after written notice thereof was provided to the breaching party by the
non-breaching party, the non-breaching party may elect to seek such specific
performance and/or monetary damages or rescission as the non-breaching party may
be entitled at law or equity, if any, pursuant to Section 13.16.
12.3 Termination for Insolvency. If voluntary or involuntary
proceedings by or against a party are instituted in bankruptcy under any
insolvency law, or a receiver or custodian is appointed for such party, or
proceedings are instituted by or against such party for corporate
reorganization, dissolution, liquidation or winding-up of such party, which
proceedings, if involuntary, shall not have been dismissed within sixty (60)
days after the date of filing, or if such party makes an assignment for the
benefit of creditors, or substantially all of the assets of such party are
seized or attached and not released within sixty (60) days thereafter, the other
party may immediately terminate this Agreement effective upon notice of such
termination or in the event Symyx is involved in insolvency proceedings during
the Research Program Term, TDCC may elect to terminate the Research Program and
not the Agreement upon notice to Symyx.
12.4 Symyx Change of Control. In the event that greater than fifty
percent (50%) of the outstanding shares of Symyx's voting stock is acquired,
directly or through its subsidiaries, by a company listed in Exhibit C during
the Research Program Term, TDCC shall have the right to terminate the Research
Program and not the Agreement immediately upon written notice to Symyx.
12.5 Effect of Termination.
12.5.1 Accrued Rights and Obligations. Termination of this
Agreement for any reason shall not release either party hereto from any
liability or obligation which, at the time of such termination, has already
accrued to the other party or which is attributable to a period prior to such
termination nor preclude either party from pursuing any rights and remedies it
may have hereunder or at law or in equity with respect to any breach of this
Agreement.
12.5.2 Return of Confidential Information. Upon any termination
of this Agreement prior to fifteen (15) years from the Effective Date or
rescission of the Agreement pursuant to Section 12.2.4, TDCC and Symyx shall
promptly return to the other all Confidential Information received from the
other party (except one copy of which may be retained for archival purposes and
ensuring compliance with the provisions of Article 9).
12.5.3 Termination of the Research Program. In the event the
Research Program (and not the Agreement) is properly terminated by TDCC as
provided in Sections 2.9, 12.2.2, 12.3 or 12.4, earlier than three (3) years
after the Effective Date, TDCC shall have no further obligation to make the
payments otherwise due to Symyx under Section 5.1 following the effective date
of such termination. On request from TDCC, Symyx shall engage in an orderly
transfer to TDCC of information and data from the Program Technology developed
before the effective date of such termination. It is understood and agreed that
Symyx shall have the right, in its discretion, to
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continue research activities in the Field, either on its own or with a Third
Party, following any such termination.
12.5.4 Refund of Certain Payments. In the event that the
Research Program is properly terminated pursuant to Section 2.9, 12.2.2, 12.3 or
12.4, Symyx will refund to TDCC: (i) one thirty-sixth (1/36) of the Technology
Access Fee for each full month between the effective date of such termination
and the third anniversary of the Effective Date, and (ii) a pro rata amount of
Research Funding paid in advance by TDCC pursuant to Section 5.1 for periods
after the effective date of termination of the Research Program. In the event
that this Agreement is properly terminated by TDCC pursuant to Section 12.2.1 or
12.3, Symyx will refund to TDCC: (i) one thirty-sixth (1/36) of the Technology
Access Fee for each full month between the date thirty (30) days before the
effective date of such termination and the third anniversary of the Effective
Date, and (ii) a pro rata amount of Research Funding paid in advance by TDCC
pursuant to Section 5.1 for periods after the date thirty (30) days before the
effective date of such termination of the Agreement.
12.5.5 Licenses.
(i) Termination of Agreement by TDCC. In the event of any
termination of the Agreement by TDCC pursuant to Section 12.2.1 or 12.3, the
licenses granted by Symyx in Section 4.1 shall terminate. It is understood that
if Symyx has granted any permitted sublicense or license to a Third Party under
Section 4.4 prior to the effective date of such termination, then such
sublicense or license shall not be effected and shall continue in accordance
with its terms with revenues to be shared as if this Agreement remained in
effect.
(ii) Termination of Research Program But Not Agreement. In
the event TDCC terminates the Research Program and not the Agreement as set
forth in Section 2.9, 12.2.2, 12.3 or 12.4, then the licenses in Section 4.1,
sublicenses in Section 4.2 and rights in Joint Inventions under Section 4.4
shall remain in effect with respect to all Program Technology made, or conceived
and reduced to practice before the effective date of such termination; provided,
however, that (i) such licenses and rights shall not include any interest or
right in or to Program Technology (or other intellectual property made, or
conceived or reduced to practice by Symyx) after the effective date of such
termination, and (ii) Section 4.1.3 shall terminate on the effective date of
such termination.
(iii) Termination by Symyx. In the event of termination by
Symyx under Sections 12.2 or 12.3, the license set forth in Section 4.1 shall
terminate; provided, however, that if the breach relates solely to an Agreement
Compound or Product in a specific Field, then Symyx shall only terminate the
licenses to TDCC with respect to the Agreement Compounds and Products in such
Field, and the remaining licenses granted to TDCC and to Symyx hereunder shall
remain in effect, subject to all the terms and conditions of this Agreement. If
a party to this Agreement has granted any permitted sublicense or license to a
Third Party prior to the effective date of such termination, then such
sublicense or license shall not be effected and shall continue in accordance
with its terms with revenues to be shared as if this Agreement remained in
effect.
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12.6 Survival. Sections 2.7, 4.3, 4.4, 4.5, 4.6, 5.5, 7.1, 12.5,
12.6, 13.1, 13.2, 13.5, 13.6, 13.10, 13.11, 13.16, and 13.17, and Articles 9 and
11 of this Agreement shall survive the expiration or termination of this
Agreement for any reason. Section 7.3 shall also survive the expiration or
termination of this Agreement, except if this Agreement is properly terminated
by TDCC pursuant to Section 2.9, 12.2.1 or 12.3, then any rights of TDCC and
Symyx to use sublicense, commercialize, or otherwise exploit jointly-owned
Program Technology must be agreed by the parties in writing. Section 4.7 shall
survive any termination or expiration of this Agreement, but if this Agreement
is properly terminated by TDCC pursuant to Section 2.9, 12.2.1, or 12.3, TDCC
for a period of three (3) months from the date of termination have an option
upon written notice to Symyx to obtain a non-exclusive, royalty-bearing license
to use Program Technology in the Field on reasonable terms to be agreed by the
parties with consideration to be paid to Symyx which is commensurate with the
fair market value of these rights taking into account the investment made by
TDCC in the Research Program and the Technology Access Fee retained by Symyx. In
the event TDCC exercises such option and TDCC and Symyx do not reach agreement
on fair market value, TDCC shall have the right to have fair market value of
such rights determined by arbitration pursuant to Section 13.16 upon notice
given to Symyx within ninety (90) days of the end of the option period.
ARTICLE 13
MISCELLANEOUS
13.1 Governing Laws. This Agreement and any dispute arising from the
construction, performance or breach hereof shall be governed by and construed
and enforced in accordance with, the laws of the state of Delaware, without
reference to conflicts of laws principles.
13.2 No Implied Licenses. Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force or effect. No other
license rights shall be created by implication, estoppel or otherwise.
13.3 Waiver. It is agreed that no waiver by either party hereto of
any breach or default of any of the covenants or agreements herein set forth
shall be deemed a waiver as to any subsequent and/or similar breach or default.
13.4 Assignment. This Agreement shall not be assignable by either
party to any Third Party without the written consent of the other party hereto,
except either party may assign this Agreement, without such consent, to an
Affiliate or to an entity that acquires all or substantially all of the business
or assets of the assigning party relating to the subject matter of this
Agreement, whether by merger, reorganization, acquisition, sale, or otherwise,
subject to Section 12.4. This Agreement shall be binding upon and accrue to the
benefit any permitted assignee, and any such assignee shall agree to perform the
obligation of the assignor. C:\NRPORTBL\PALib2\pgc\1293081.2
13.5 Independent contractors. The relationship of the parties hereto
is that of independent contractors. The parties hereto are not deemed to be
agents, partners or joint ventures of the others for any purpose as a result of
this Agreement or the transactions contemplated thereby.
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13.6 Representation by Legal Counsel. Each party hereto represents
that it has been represented by legal counsel in connection with this Agreement
and acknowledges that it has participated in the drafting hereof. In
interpreting and applying the terms and provisions of this Agreement, the
parties agree that no presumption shall exist or be implied against the party
which initially drafted such terms and provisions.
13.7 Solicitation of Employees. TDCC and Symyx both agree that they
will not, during the Research Program Term, actively recruit or solicit
employment of any scientific or technical personnel of the other party involved
in the Research Program or development of catalysts for synthesis of
polyolefins. It is understood that the foregoing restriction shall not apply to,
or be breached by: (i) advertising open positions, participating in job fairs,
and conducting comparable activities to recruit skilled or unskilled help from
the general public, or responding to individuals contacted through such methods,
(ii) responding to unsolicited inquiries about employment opportunities or
possibilities from job placement agencies or other agents acting for
unidentified principals, or (iii) responding to unsolicited inquiries about
employment opportunities from any individual.
13.8 TDCC Affiliates. It is understood and agreed that TDCC may at
its sole discretion fulfill some or all of its obligations by or through its
Affiliates, and that TDCC may grant sublicenses under the Program Technology to
its Affiliates subject to the terms and conditions of this Agreement. TDCC
hereby warrants and guarantees the performance by its Affiliates of, and shall
remain jointly and severally liable for, all applicable obligations of its
Affiliates under this Agreement, including without limitation, the payment of
applicable royalties.
13.9 Compliance with Laws. In exercising their rights under this
license, the parties shall fully comply in all material respects with the
requirements of any and all applicable laws, regulations, rules and orders of
any governmental body having jurisdiction over the exercise of rights under this
license including, without limitation, those applicable to the discovery,
development, manufacture, distribution, import, use, export and sale of Products
or Agreement Compounds pursuant to this Agreement.
13.10 Export Control Regulations. The rights and obligations of the
parties under this Agreement, shall be subject in all respects to United States
laws and regulations as shall from time to time govern the license and delivery
of technology and products abroad, including the United States Foreign Assets
Control Regulations, Transaction Control Regulations and Export Control
Regulations, as amended, and any successor legislation issued by the Department
of Commerce, International Trade Administration, or Office of Export Licensing.
Without in any way limiting the provisions of this Agreement, each party hereto
agrees that, unless prior authorization is obtained from the Office of Export
Licensing, it shall not export, reexport, or transship, directly or indirectly,
to any country, any of the technical data disclosed to it by the other party if
such export would violate the laws of the United States or the regulations of
any department or agency of the United States Government. This provision shall
survive termination of this Agreement.
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13.11 Headings. The captions to the several Sections hereof are not
part of this Agreement, but are included merely for convenience of reference and
shall not affect its meaning or interpretation.
13.12 Notices. All notices, requests and other communications
hereunder shall be in writing and shall be hand delivered, or sent by express
delivery service with confirmation of receipt, or sent by registered or
certified mail, return receipt requested, postage prepaid, or by facsimile
transmission (with written confirmation copy by registered first-class mail), in
each case to the respective address or facsimile number indicated below.
Symyx: Symyx Technologies
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Attn: President & COO
Fax: (000) 000-0000
TDCC: The Dow Chemical Company
Xxxxxx Xxxxxxxxxx, 0000 Xxxxxxxx
Xxxxxxx, XX 00000
Attn: General Patent Counsel
Fax: (000) 000-0000
Any such notice shall be deemed to have been given when received. Either party
may change its address or facsimile number by giving the other party written
notice, delivered in accordance with this Section.
13.13 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect to
the fullest extent permitted by law without said provision, and the parties
shall amend the Agreement to the extent feasible to lawfully include the
substance of the excluded term to as fully as possible realize the intent of the
parties and their commercial bargain.
13.14 Force Majeure. Neither party shall lose any rights hereunder or
be liable to the other party for damages or losses (except for payment
obligations) on account of failure of performance by the defaulting party if the
failure is occasioned by war, strike, fire, Act of God, earthquake, flood,
lockout, embargo, governmental acts or orders or restrictions, failure of
suppliers, or any other reason where failure to perform is beyond the reasonable
control and not caused by the negligence, intentional conduct or misconduct of
the non-performing party and such party has exerted all reasonable efforts to
avoid or remedy such force majeure; provided, however, that in no event shall a
party be required to settle any labor dispute or disturbance.
13.15 Complete Agreement. This Agreement with its Exhibits,
constitutes the entire agreement, both written and oral, between the parties
with respect to the subject matter hereof, and
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all prior agreements respecting the subject matter hereof, either written or
oral, express or implied, shall be abrogated, canceled, and are null and void
and of no effect, except that the Research Plan shall have effect and
information exchanged by the parties pursuant to the Secrecy Agreement between
the parties dated September 22, 1998 shall be deemed to be Confidential
Information under this Agreement. No amendment or change hereof or addition
hereto shall be effective or binding on either of the parties hereto unless
reduced to writing and executed by the respective duly authorized
representatives of Symyx and TDCC.
13.16 Dispute Resolution. Any dispute under this Agreement which is
not settled by mutual consent shall be finally settled by binding arbitration,
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association by three (3) neutral arbitrators appointed in accordance
with said rules, unless the parties agree to conduct such arbitration with a
single arbitrator. The arbitration shall be held in Wilmington, Delaware, and
the arbitrators shall be independent experts with a background suitable for the
matters in dispute. The arbitrators shall determine what discovery will be
permitted, consistent with the goal of limiting the cost and time which the
parties must expend for discovery; provided the arbitrators shall permit such
discovery as they deem necessary to permit an equitable resolution of the
dispute. Any written evidence originally in a language other than English shall
be submitted in English translation accompanied by the original and a true copy
thereof. The costs of arbitration, including administrative and arbitrators'
fees, shall be shared equally by the parties. Each party shall bear its own
costs and attorneys' and witness' fees. A disputed performance or suspended
performances pending the resolution of the arbitration must be completed within
thirty (30) days following the final decision of the arbitrators or such other
reasonable period as the arbitrators determine in a written opinion. Any
arbitration subject to this Section 13.16 shall be completed within one (1) year
from the filing of notice of a request for such arbitration. The award shall be
final and binding upon the parties hereto. Judgment upon any decision rendered
by the arbitrators may be entered by any court having jurisdiction.
13.17 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their authorized representatives and delivered in duplicate
originals as of the Effective Date.
THE DOW CHEMICAL COMPANY SYMYX TECHNOLOGIES
By: /s/ X. X. XXXXXXX By: /s/ XXX XXXXXXXXXX
------------------------------- ---------------------------------
X. X. Xxxxxxx
Title: Executive Vice President Title: President and COO
---------------------------- ------------------------------
Date: 2 February 1999 Date: 5 February 1999
----------------------------- -------------------------------
41
LIST OF EXHIBITS
Exhibit A: Scope of Field
Exhibit B: Procedure for Lead Compound Identification
Exhibit C: Company List
Exhibit D: Direct Chemical Modification
Exhibit E: List for Initial Chemistry FTEs
42
EXHIBIT A
SCOPE OF FIELD
THE FIELDS SHALL BE DEFINED AS (HEADINGS ARE FOR CONVENIENCE IN REFERENCE AND
ARE NOT INTENDED TO LIMIT THE DESCRIPTION):
(1) Polyethylene 1 Field - The discovery, development and use of catalysts for
the Coordination Polymerization of ethylene and/or a-olefins to make
homopolymers or copolymers (density <0.915 according to ASTM D792);
(2) Polyethylene 2 Field - The discovery, development and use of catalysts for
the Coordination Polymerization of ethylene and/or a-olefins to
homopolymers or copolymers (density >=0.915 according to ASTM D792);
(3) Ethylene/Styrene Field - The discovery, development and use of catalysts
for the Coordination Polymerization of ethylene and/or a-olefins with
styrene or substituted vinyl aromatic analogs;
(4) Polypropylene Field - The discovery, development and use of catalysts for
the Coordination Polymerization of propylene to make polypropylene;
(5) Vinyl Chloride Field - The discovery, development and use of catalysts for
the Coordination Polymerization of vinyl chloride to form homopolymers or
copolymers with ethylene and/or a-olefins; and
(6) Polar Comonomer Fields - The discovery, development and use of catalysts
for the Coordination Polymerization of ethylene and/or a-olefins with the
following comonomers: a) vinyl acetate, b) any acrylate, any c)
methacrylate, d) acrylic acid, e) methacrylic acid, f) maleic anhydride,
or g) acrylamide, in each case to form copolymers comprised of either less
than 10 mole % of the comonomer or greater than 90 mole % of the comonomer
with number average molecular weight > 5,000;
1) For clarity, the monomers mentioned in the above Fields have the following
chemical structures:
[DIAGRAM] [DIAGRAM] [DIAGRAM] [DIAGRAM]
a-Olefins Acrylamide Acrylates Acrylic Acid
[DIAGRAM] [DIAGRAM] [DIAGRAM] [DIAGRAM]
Maleic Anhydride Methacrylates Methacryllic Acid Substituted Vinyl
Aromatic Analogs
[DIAGRAM] [DIAGRAM]
Vinyl Acetate Vinyl Chloride
R(1) = linear, branched, or cyclic saturated hydrocarbon moiety. For substituted
vinyl aromatic analogs, R(1) may also be a hydrogen moiety; and Ar =
unsubstituted aromatic hydrocarbyl moiety or an aromatic moiety substituted
with hydrocarbyl or halogen substituents.
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EXHIBIT B
PROCEDURE FOR LEAD COMPOUND IDENTIFICATION
1. At such time as Symyx has identified a Library Compound which it
believes may meet the established criteria for a Lead Compound in a particular
activated Field it shall provide the data and results supporting such conclusion
to the Research Committee. Examples of target criteria for Lead Compounds are
set forth in the Lead Compound Criteria Section of the Research Plan.
2. Following the identification of any potential Lead Compound, at
TDCC's request, Symyx shall prepare and deliver to TDCC reasonable gram
quantities of such potential Lead Compound, which TDCC shall use in confirming
whether such potential Lead Compound meets the applicable lead criteria. Symyx
will use commercially reasonable efforts to provide quantities in such amounts
as the Research Committee may determine is reasonably required by TDCC for
testing, and will notify TDCC if it is not commercially reasonable to provide
such quantities to TDCC, in which case the parties agree to meet and discuss how
to proceed with respect to such Lead Compound.
3. The Research Committee shall review the results provided by TDCC with
respect to a potential Lead Compound, and if the Research Committee determines
that such results indicate that the applicable lead criteria have been
satisfied, then such Library Compound shall be deemed to be a Lead Compound for
all purposes of this Agreement.
4. In the event that the Research Committee requests further information
or the conduct of further studies to confirm whether a potential Lead Compound
meets the applicable lead criteria, Symyx and TDCC shall use commercially
reasonable efforts to prepare any such information and conduct such studies.
44
EXHIBIT C
COMPANY LIST
Borealis Group
BP/Amoco p.l.c.
BP Chemicals Limited
Dex-Plastomers V.O.F.
DSM
DuPont Dow Elastomers L.L.C.
Elenac GmbH
Equistar Chemicals L.P.
Exxon Chemical
Mitsui Petrochemicals
Montell Polyolefins
Nova Corporation
Royal Dutch/Shell
Philips Petroleum Company
Union Carbide Corporation
Univation Technologies
45
EXHIBIT D
DIRECT CHEMICAL MODIFICATION
A discrete chemical entity means a specific organometallic compound where the
metal as well as all substituents and functional groups of the coordinating
ligands are specified. As an example, the following compound would exemplify a
discrete chemical entity TDCC could select as a Designated Compound as used
under Section 4.1.3. This particular palladium (II) compound is supported by the
neutral ancillary ligand as shown:
[COMPOUND FORMULA]
Where Ph = phenyl group; Me = methyl group; Cy = cyclohexyl group.
If this compound were to be selected by TDCC as a Designated Compound, then a
Direct Modification of this compound would be represented by the following
general formula:
[COMPOUND FORMULA]
Where X and X' represent monoanionic ligands
Within this general formula R(1)-R(6), X and X' represent the groups that may
be modified. R(1)-R(6) may be modified with any group provided that said group
does not bind to the metal to change the ligand class from a (2,0) ligand as
defined in the Research Plan.
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46
EXHIBIT E
LIST FOR INITIAL CHEMISTRY FTES
Xxxxxx Xxxxxx*
Xxxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxxxxx Xxxxx
Xxxx XxXxxxxx*
Xxxxx Xxxxxx*
Xxxx Xxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxx*
Xxx Xxxxxxx*
Xxxxx Xxxx*
"Key Personnel" are marked with "*"
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