WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
TECHNOLOGY ALLIANCE AND OPTION AGREEMENT
This Technology Alliance and Option Agreement (the "Agreement") dated as of
November 4, 2004 (the "Effective Date") is by and between ADM Polymer
Corporation, a corporation duly incorporated and validly existing under the laws
of the State of Delaware, with headquarters located at 0000 Xxxxxx Xxxxxxx,
Xxxxxxx, XX 00000 ("ADM Sub"), and Metabolix, Inc., a corporation duly
incorporated and validly existing under the laws of the State of Delaware, with
headquarters located at 00 Xxxx Xxxxxx, Xxxxxxxxx, XX 00000-0000 ("MBX") (MBX
and ADM Sub are collectively the "Parties" and each is a "Party").
RECITALS
WHEREAS, MBX has developed technology relating to the fermentation,
recovery and formulation of PHA Material (as defined below) and possesses
patents, trade secrets and other intellectual property rights in relation
thereto;
WHEREAS, MBX is seeking a collaborator to participate, in the continued
commercialization of the PHA Material;
WHEREAS, ADM Sub has capabilities and resources relating to the
fermentation of PHA Materials and desires to employ the MBX technology in
commercial scale reactors too confirm performance parameters and potential
manufacturing economics;
WHEREAS, ADM Sub is a wholly owned subsidiary of Xxxxxx-Xxxxxxx-Midland
Company ("ADM"); and
WHEREAS, ADM Sub and MBX desire to enter into an agreement under which the
two Parties would cooperate in the preparation of certain hatches of PHA
Material and under which MBX would grant to ADM Sub the option to enter into a
commercial alliance to further commercialize the PHA Material, all on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the recitals and the mutual covenants
and promises contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereto
do hereby agree as follows.
ARTICLE 1
DEFINITIONS
"ADM SUB BACKGROUND TECHNOLOGY" means any Technology used by ADM Sub, or
provided by ADM Sub for use, in the Technology Alliance Program that is
Controlled by ADM Sub: (a) as of the Effective Date, or (b) developed, conceived
or reduced to practice solely by employees of, or consultants to, ADM Sub or its
Affiliates in the conduct of activities outside the Technology Alliance Program,
without the material use of any MBA Technology or Program Technology.
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"ADM SUB CONSTRUCTION MASTER PLAN AND BUDGET" shall have the meaning set
forth in Section 3.1.
"ADM SUB MANUFACTURING FACILITY" means an ADM Sub facility designed to
produce, through microbial fermentation, approximately fifty thousand (50,000)
tons of PHA Material, having an acceptable level of purity, during each twelve
(12) month period, on an ongoing basis through a stable and robust operation,
over a period of years.
"ADM SUB PATENT RIGHTS" means any Patent Rights Controlled by ADM Sub and
claiming or covering the ADM Sub Technology.
"ADM SUB PROGRAM TECHNOLOGY" means any Technology developed, conceived or
reduced to practice solely by employees of, or consultants to, ADM Sub or its
Affiliates (alone or jointly with a third party) during the course of
performance of the Technology Alliance Program, with or without the material use
of any MBX Technology or Program Technology. Nothing in this definition shall be
construed as conveying any rights on ADM Sub to practice any MBX Technology
after the Term.
"ADM SUB PROPRIETARY MATERIALS" means any Proprietary Materials Controlled
by ADM Sub and used by ADM Sub, provided by ADM Sub for use, or necessary or
useful in the Technology Alliance Program.
"ADM SUB TECHNOLOGY" means, collectively, ADM Sub Proprietary Materials,
ADM Sub Background Technology and ADM Sub Program Technology.
"AFFILIATE" of a Person means any other Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with such Person. "Control" and, with correlative meanings, the
terms "controlled by" and "under common control with" shall mean the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract, resolution, regulation
or otherwise. Tepha, Inc. is hereby deemed not to be an Affiliate of MBX.
"COMMERCIAL ALLIANCE" shall have the meaning set forth in the Commercial
Alliance Agreement.
"COMMERCIAL ALLIANCE AGREEMENTS" means the agreements titled "Commercial
Alliance Agreement," "Manufacturing Agreement," "Formulation Agreement,"
"Operating Agreement," "ADM Sub Services Agreement," "MBX Services Agreement,"
and "Loan and Security Agreement" attached hereto as EXHIBIT A to be executed
and delivered by the parties indicated therein upon the exercise of the Option
by ADM Sub in accordance with the terms of this Agreement.
"COMMERCIALLY REASONABLE EFFORTS" shall mean, with respect to the efforts
to be applied by a Party in performing a referenced obligation hereunder, the
amount and quality of effort and resources that would be applied by a reasonable
manager or management team at a corporation having comparable expertise and
assets as such Party, to accomplish a task or to perform an obligation having
comparable relative importance to the success or failure of a commercial
enterprise that is comparable to the Commercial Alliance. For purposes of this
definition, a
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commercial enterprise would be comparable to the Commercial Alliance if it poses
similar anticipated technical and business risks or challenges and similar
anticipated Financial return to the Parties as measured at the time of the
expenditure of the effort. When ADM Sub has an obligation to use "Commercially
Reasonable Efforts" herein, the following shall apply: (i) the term
"Commercially Reasonable Efforts" shall be defined as it is in this definition
but by reference to ADM Sub and ADM as if they were a single entity and (ii) in
determining whether ADM Sub has satisfied its obligation, the efforts applied by
and ADM Sub and ADM shall both be taken fully into account.
"CONFIDENTIAL INFORMATION" means: (a) all tangible embodiments of
Technology produced or discovered by a Party, or jointly by one or more Parties
under the Technology Alliance Program, and all information concerning the terms
of this Agreement, and (b) with respect to a Party (the "Receiving Party"), all
information, Technology and Proprietary Materials which are disclosed by another
Party (the "Disclosing Party") to the Receiving Party hereunder or to any of its
employees, consultants, or Affiliates; except to the extent that the
information, (i) as of the date of disclosure is demonstrably known to the
Receiving Party or its Affiliates, as shown by written documentation, other than
by virtue of a prior confidential disclosure to such Party or its Affiliates;
(ii) as of the date of disclosure is in, or subsequently enters, the public
domain, through no fault or omission of the Receiving Party, or any of its
Affiliates; (iii) is obtained from a third party having a lawful right to make
such disclosure free from any obligation of confidentiality to the Disclosing
Party; or (iv) is independently developed by or for the Receiving Party without
reference to or reliance upon any Confidential Information of the Disclosing
Party as demonstrated by competent written records.
"CONSTRUCTION" AND "CONSTRUCT" shall mean, in respect to a building, the
activities, and their performance, that are usual and appropriate to create a
completed facility that: (i) is in all material respects in compliance with all
material safety, health, zoning, environmental and other regulations and laws
applicable to it whether such applicability is based on its location, physical
dimensions and attributes, its intended uses or otherwise and (ii) is designed
to enable and support state-of-the-art operations pertaining to its intended
purpose. The terms "Construction" and "Construct" shall include the following
activities and their performance with respect to a facility: planning,
designing, engineering, construction, procurement, equipping and acquiring the
necessary permits.
"CONSTRUCTION COSTS" are those costs and expenses that are included in the
ADM Sub Construction Master Plan and Budget as approved by the TAC in accordance
with Section 3.2.5 to the extent actually incurred by ADM Sub in the
Construction of the ADM Sub Manufacturing Facility.
"CONTROL" OR "CONTROLLED" means (a) with respect to Technology (other than
Proprietary Materials) or Patent Rights, the possession by a Party of the
ability to grant a license or sublicense to such Technology or Patent Rights as
provided herein without violating the terms of any agreement or arrangement
between such Party and any third party, and (b) with respect to Proprietary
Materials, the possession by a Party of the ability to supply such Proprietary
Materials to the other Party for use as provided herein without violating the
terms of any agreement or arrangement between the supplying Party and any third
party.
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"EFFECTIVE DATE" means the date first above written.
"FERMENTATION PERFORMANCE PARAMETERS" means the various parameters for
production of PHA Cell Paste through fermentation at the * scale and the * scale
as set forth on EXHIBIT B.
"FIELD" means the research, development, manufacture, use, sale and
importation of PHA Material and PHA Formulations; provided that the Field shall
not include any uses that are within the "Field of Use" as that term is defined
in the License Agreement by and between MBX and Tepha, Inc. dated October 1,
1999.
"GOAL" shall have the meaning set forth in Section 3.1.
"JOINT PROGRAM TECHNOLOGY" means Technology developed, conceived or reduced
to practice jointly by employees of, or consultants to, the Parties (with or
without a third party) during the course of performance of the Technology
Alliance Program. Nothing in this definition shall be construed as conveying any
rights on ADM or ADM Sub to practice any MBX Technology after the Term. Nothing
in this definition shall be construed as conveying any rights on MBX to practice
any ADM Sub Technology after the term.
"JOINT SALES COMPANY" shall have the meaning set forth in the Commercial
Alliance Agreement.
"KNOWLEDGE" means, with respect to MBX, the actual knowledge and awareness,
without the requirement of investigation, of any of the following four (4)
members of MBX management: President and CEO, Chief Scientific Officer, Chief
Financial Officer and Director of Manufacturing and Development, without the
requirement of investigation, and, with respect to ADM Sub, the actual knowledge
and awareness, without the requirement of investigation, of any of the following
nine (9) members of ADM management: Senior Vice President (Corn Processing and
Food Specialties) (Xxxx X. Xxxx), President of Natural Health & Nutrition
Division (Xxxxxx X. Xxxxxxx), Assistant Controller (Xxxx X. Xxxxxx), Corporate
Counsel Intellectual Property (Xxxxx X. Xxxxxx), Senior Attorney (Xxxxxxx X.
Xxxxx), Senior Vice President Venture Research (Xxxx X. Xxxxxxx), Vice President
Technology Assessment (Xxxxx X. Xxxx), President of ADM Research Division
(Xxxxxx X. Xxxxxx), and Vice President of Research, Molecular Biology -
Fermentation (Xxxx X. Xxxxxxx).
"MANUFACTURING COST" shall mean the costs incurred by ADM Sub in
manufacturing and packaging the Marketing Material as specified in EXHIBIT C,
calculated and payable in the manner set forth in this Agreement.
"MARKETING MATERIAL" shall have the meaning set forth in Section 3.3.
"MBX APPLICATIONS PATENT RIGHTS" means any Patent Rights Controlled by MBX
that claim or cover specific uses, within the Field, of PHA Materials or PHA
Formulations.
"MBX BACKGROUND TECHNOLOGY" means any Technology used by MBX, or provided
by MBX for use, in the Technology Alliance Program that is Controlled by MBX:
(a) as of the Effective Date, or (b) developed, conceived or reduced to practice
solely by employees of, or
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consultants to, MBX or its Affiliates in the conduct of activities outside the
Technology Alliance Program, without the material use of any ADM Sub Technology
or Program Technology.
"MBX PATENT RIGHTS" means any Patent Rights Controlled by MBX and claiming
or covering the MBX Technology, including without limitation the MBX
Applications Patent Rights.
"MBX PROGRAM TECHNOLOGY" means any Technology developed; conceived or
reduced to practice solely by employees of, or consultants to, MBX or its
Affiliates (alone or jointly with a third party) during the course of
performance of the Technology Alliance Program, with or without the material use
of any ADM Sub Technology or Program Technology.
"MBX PROPRIETARY MATERIALS" means any Proprietary Materials Controlled by
MBX and used by MBX, provided by MBX for use, or necessary or useful in the
Technology Alliance Program. MBX Proprietary Materials shall include, without
limitation, all PHA Material and PHA Formulations supplied as samples to ADM
Sub, all cell lines (including all master stocks and working stock whether
prepared by ADM Sub or MBX) and all fermentation media, supplied by MBX to ADM
Sub, and all progeny, derivatives and mutated forms developed therefrom.
"MBX TECHNOLOGY" means, collectively, MBX Proprietary Materials, MBX
Background Technology and MBX Program Technology.
"OPTION" shall have the meaning set forth in Section 4.3 hereof.
"PATENT RIGHTS" means the rights and interests in and to issued patents and
pending patent applications (which for purposes of this Agreement shall be
deemed to include certificates of inventions and applications for certificates
of invention and priority rights) in any country, including all provisional
applications, substitutions, continuations, continuations-in-part, divisionals,
and renewals, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof Controlled by a Party.
"PERMITTED ACTIVITIES" shall have the meaning set forth in Section 6.1.
"PERSON" means any individual, partnership (whether general or limited),
limited liability company, corporation, trust, estate, association, nominee or
other entity.
"PHA CELL PASTE" means the paste, containing the PHA Material, recovered
from whole fermentation broth and meeting the specifications set forth in
EXHIBIT D.
"PHA FORMULATIONS" means PHA Material that has been processed by blending
different types of PHA Material together with other polymers and/or with other
additives, including nucleants, clarifiers, flow modifiers, plasticizers, flame
retardants and heat stabilizers.
"PHA KNOW-HOW MATERIAL" means PHA Material, the manufacture, use, sale or
importation of which is accomplished or performed with the use of the MBX
Technology or Joint Program Technology.
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"PHA MATERIAL" means the following forms of polyhydroxyalkanoate: *, when
produced by any means other than via Plants, and any other forms of
polyhydroxyalkanoate, produced by any means other than via Plants, that are
substitutable by any customer with one or more of the above substances, are
generally technically and commercially feasible in the marketplace, and have a
potential adverse affect on the sales or profitability of the Joint Sales
Company in a material way. For avoidance of doubt, any PHB copolymers having at
least fifty percent (50%) of the *, when produced by any means other than via
Plants, are hereby deemed to be included in the definition of PHA Material.
"PHA PATENTED MATERIAL" means PHA Material, the manufacture, use, sale or
importation of which within or into the United States by a Person other than
MBX, absent the licenses granted herein, would infringe a Valid Claim of the MBX
Patent Rights or a Valid Claim within Patent Rights claiming or covering any
Technology within the Joint Program Technology.
"PHA RELATED MATERIALS" means any polymer material consisting of one or
more hydroxyacids of the general formula: *
"PHA SUPPLEMENTAL KNOW HOW MATERIAL" means PHA Material, the manufacture,
use, sale or importation of which is accomplished or performed with the use of a
cell Line Controlled by MBX and delivered by MBX to ADM Sub at any time during
the Term.
"PLANTS" shall mean photosynthetic organisms when not raised through
fermentation, but in any case excluding * For avoidance of doubt, * is included
within the definition of Plants.
"PROGRAM TECHNOLOGY" means ADM Sub Program Technology, Joint Program
Technology and MBX Program Technology.
"PROPRIETARY MATERIALS" means any tangible chemical, biological or physical
research materials that are furnished by or on behalf of one Party to the other
Party (the "Receiving Party") in connection with this Agreement, regardless of
whether such materials are specifically designated as proprietary by the
transferring Party, except to the extent that the materials, (i) are already in
the possession of the Receiving Party or its Affiliates, as shown by written
documentation, other than by virtue of a prior delivery of such materials to the
Receiving Party or its Affiliates from the other Party or one of its Affiliates
subject to confidentiality obligations; (ii) as of the date of disclosure is in
the public domain (without restriction on use or availability), or subsequently
enters the public domain (without restriction on use or availability) through no
fault or omission of the Receiving Party or any of its Affiliates; (iii) is
obtained from a third party having a lawful right to provide such material free
from any restriction on use; or (iv) is independently developed by or for the
Receiving Party without reference to or reliance upon any Proprietary Materials
of the Disclosing Party as demonstrated by clear and convincing evidence.
"RECOVERY PERFORMANCE PARAMETERS" shall mean the various parameters for
performance of recovery of PHA Material from PHA Cell Paste as set forth on
EXHIBIT E.
"ROYALTY TERM" means that period commencing upon the * and continuing until
the later of the expiration or termination of * from the Effective Date.
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"SENIOR EXECUTIVES" shall have the meaning set forth in Section 11.3.1.
"SUPPLEMENTAL ROYALTY TERM" means that period commencing upon the delivery
by MBX to ADM or ADM Sub of a cell line Controlled by MBX used in the production
or manufacture of PHA Supplemental Know How Material and ending upon the * to
occur of (i) the *, and (ii) * from the date of such delivery.
"TECHNICAL ASPECTS OF THE GOAL" shall have the meaning set forth in Section
3.1.
"TECHNOLOGY" means and includes all inventions, discoveries, improvements,
trade secrets, know-how and proprietary methods and Proprietary Materials,
whether or not patentable.
"TECHNOLOGY ALLIANCE COMMITTEE" or "TAC" shall have the meaning set forth
in Section 2.1.
"TECHNOLOGY ALLIANCE OUTPUT" shall have the meaning set forth in Section
3.3.
"TECHNOLOGY ALLIANCE PLAN" shall mean the detailed plan for conducting the
Technology Alliance Program attached hereto as EXHIBIT F, subject to such
additions and amendments as the TAC shall determine in accordance with Section
2.1.1.
"TECHNOLOGY ALLIANCE PROGRAM" shall mean the research, development and
evaluative activities to be conducts by the Parties as set forth herein, and in
the Technology Alliance Plan.
"TECHNOLOGY TRANSFER" shall have the meaning set forth in Section 3.2.2.
"THIRD PARTY IP ROYALTY OFFSET" shall have the meaning set forth in Section
8.4.2(b).
"VALID CLAIM" means a claim within a patent application or patent that has
not been abandoned or finally determined to be unenforceable or invalid by a
court or administrative agency with competent jurisdiction where all appeal
rights have been exhausted or expired.
ARTICLE 2
ADMINISTRATION OF THE TECHNOLOGY ALLIANCE
2.1 TECHNOLOGY ALLIANCE COMMITTEE. MBX and ADM Sub shall establish a
Technology Alliance Committee (the "Technology Alliance Committee" or "TAC") to
plan and oversee the execution of the Technology Alliance Program.
2.1.1 RESPONSIBILITIES OF TAC. The TAC shall review and oversee the
progress of the Technology Alliance Program and recommend necessary amendments
to the Technology Alliance Plan prior to its initial implementation and also
during the conduct of the Technology Alliance Program. The TAC shall review and
approve the ADM Sub Construction Master Plan and Budget.
2.1.2 MEMBERSHIP OF TAC. Each Party shall appoint three (3) members to
the TAC one of which shall be designated as its "Co-Chair." Each Party shall
have the right at any
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time to substitute individuals, on a permanent or temporary basis, for any of
its previously designated representatives to the TAC, including its Co-Chair, by
giving written notice thereof to the other Party. Initial designees of ADM Sub
and MBX to the TAC shall be as set forth on Exhibit G.
2.2 MEETINGS.
2.2.1 SCHEDULE OF MEETINGS. The TAC shall establish a schedule of
times for its meetings, taking into account, without limitation, the planning
needs of the Technology Alliance Program. The TAC shall meet monthly unless
otherwise agreed upon by the Parties. Meetings shall also be convened upon the
determination of either or both of the Co-Chairs of the TAC by written notice
(including notice via e-mail) thereof to their respective members that a meeting
is required to discuss or resolve any matter or matters with respect to the
Technology Alliance Program. Meetings shall alternate between the respective
offices of the Parties or another mutually agreed upon location; provided,
however, that the Parties may mutually agree to meet by teleconference or video
conference or may act by a written, memorandum signed by the Co-Chairs of the
TAC.
2.2.2 QUORUM; VOTING; DECISIONS. At each meeting of the TAC, the
participation of at least one member designated by each of the Parties shall
constitute a quorum. Each TAC member shall have one vote on all matters before
the TAC; provided, however, that the member or members of each of the Parties
present at any meeting shall have the authority to cast the votes of any of such
Party's members who are absent from the meeting. All decisions of the TAC shall
be made by majority vote of all of the members, with at least one representative
from each of the Parties voting with the majority. Whenever any action by the
TAC is called for hereunder during a time period in which a meeting is not
scheduled, the Co-Chairs shall cause the TAC to take the action in the requested
time period by calling a special meeting or by action without a formal meeting
by written memorandum signed by both Co-Chairs of the TAC. Representatives of
each Party or of its Affiliates, in addition to the members of the TAC, may
attend meetings as non-voting observers at the invitation of either Party with
prior notice to the other Party. In the event that the TAC is unable to resolve
any matter before it, such matter shall be resolved as set forth in Section 11.3
hereof.
2.2.3 MINUTES. A secretary shall be appointed to keep accurate minutes
of the deliberations of the TAC recording all proposed decisions and all actions
recommended or taken. Drafts of such minutes shall be delivered to the Co-Chairs
of the TAC within a reasonable period of time not to exceed five (5) days after
a TAC meeting. Draft minutes shall be edited by the Parties and shall be issued
in final form within a reasonable time not to exceed ten (10) days after the
meeting only with their approval and agreement as evidenced by their signatures
on the minutes.
2.2.4 EXPENSES. MBX and ADM Sub shall each bear all expenses of their
respective TAC members related to their participation on the TAC and attendance
at TAC meetings.
2.3 DECISION-MAKING RESPONSIBILITIES. The TAC shall be solely responsible
for making all decisions relating to planning and overseeing the execution of
the Technology
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Alliance Program that are not specifically reserved to a Party hereunder. All
such decisions shall be made in good faith with he objective, using Commercially
Reasonable Efforts, of achieving the Goal.
ARTICLE 3
TECHNOLOGY ALLIANCE PROGRAM
3.1 GOAL OF TECHNOLOGY ALLIANCE PROGRAM. The goal of the Technology
Alliance Program is to (i) produce PHA Cell Paste, first in a fermenter having a
capacity of approximately * and then in a fermenter having a capacity of
approximately *, in both cases, in a manner and with results that meet the
applicable Fermentation Performance Parameters; (ii) demonstrate recovery of PHA
Material in a manner and with results that meet the Recovery Performance
Parameters (the items listed in the foregoing "(i)" and "(ii)" collectively are
the "Technical Aspects of the Goal"); and (iii) based upon the results of (i)
and (ii) above, have ADM Sub develop and the TAC agree upon a completed master
plan for Construction of the ADM Sub Manufacturing Facility, including without
limitation, surveys, blueprints, and engineering studies, which master plan
shall be organized into a detailed, multiphase process for undertaking and
completing Construction of the ADM Sub Manufacturing Facility and which shall
have a project budget with projected detailed expenditures provided for each
phase of the Construction process, all of which shall be in form and substance,
suitable for ADM Sub's management and board of directors to make a determination
to approve the expenditures for the ADM Sub Manufacturing Facility as and to the
extent required by ADM Sub's corporate governance polices and procedures (the
"ADM Sub Construction Master Plan and Budget") (collectively the "Goal").
Successful completion of the Goal is intended to confirm the potential economics
of producing PHA Material at commercial scale as part of a long-term commercial
alliance.
3.2 CONDUCT OF TECHNOLOGY ALLIANCE PROGRAM. The Parties shall use
Commercially Reasonable Efforts to perform their respective obligations under
the Technology Alliance Program, in accordance with the provisions herein and
the provisions set forth in the Technology Alliance Plan, including without
limitation, the timelines for performance.
3.2.1 CERTAIN MUTUAL REPRESENTATIONS. The Parties hereby represent and
warrant to each other as follows: (i) it shall use Commercially Reasonable
Efforts to perform its obligations under the Technology Alliance Plan in
accordance with high scientific and engineering principles and procedures, and
that it shall perform such obligations in compliance in all material respects
with all requirements of applicable laws, rules, and regulations, (ii) it shall
use Commercially Reasonable Efforts to achieve the objectives of the Technology
Alliance Program efficiently and expeditiously and (iii) it shall proceed
diligently with the Technology Alliance Program using Commercially Reasonable
Efforts, including allocating time, effort, equipment, and skilled personnel to
attempt to complete the Technology Alliance Program and achieve the Goal
successfully and promptly.
3.2.2 TECHNOLOGY TRANSFER. Promptly upon execution of this Agreement,
but in mo event later than three (3) months from the Effective Date, MBX and ADM
Sub shall use Commercially Reasonable Efforts to conduct a transfer of MBX
Technology to ADM Sub: (i) as set forth in the Technology Alliance Plan and (ii)
as and
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to the extent reasonably necessary to enable ADM Sub to produce PHA Cell Paste
(the "Technology Transfer"). MBX and ADM Sub shall each devote Commercially
Reasonable Efforts, including devoting personnel and other resources, to
complete the Technology Transfer in accordance with the requirements, including
without limitation the schedule set forth in the Technology Alliance Plan;
provided, MBX shall have no obligation to transfer any Proprietary Materials or
Technology that MBX does not Control as part of the Technology Transfer. ADM Sub
acknowledges that some of the MBX Technology that will be transferred to ADM Sub
is in the form of trade secrets. In an effort to ensure the maximum continued
protection of MBX's rights in such trade secrets, and in keeping with Article 7
hereof ADM Sub covenants that it will provide access to the MBX Technology only
to employees of ADM and ADM Sub who have a need to have access to such MBX
Technology in order to complete the Technology Transfer and perform ADM Sub's
obligations under the Technology Alliance Plan. MBX acknowledges that some of
the ADM Sub Technology that may be transferred to MBX is in the form of trade
secrets. In an effort to ensure e maximum continued protection of ADM Sub's
rights in such trade secrets, and in keeping with Article 7 hereof, MBX
covenants that it will provide access to the ADM Sub Technology only to
employees of MBX who have a need to have access to such ADM Sub Technology in
order to perform MBX's obligations under the Technology Alliance Plan.
3.2.3 FERMENTATION OPERATION. ADM Sub shall use Commercially
Reasonable Efforts, including making available personnel, plant, equipment and
other resources, to produce the PHA Cell Paste in the quantities, form and
condition set forth in the Technology Alliance Plan. Such resources shall be
made available for the Technology Alliance Program in the manner and to the
extent set forth herein and in the Technology Alliance Plan, with the purpose of
achieving the Goal. MBX shall have reasonable access to that portion, of the
facilities at which such production operations are conducted as is reasonably
necessary to observe and participate in such operations. MBX acknowledges that
the personnel, plant, equipment and other resources utilized in producing the
PHA Cell Paste will not be dedicated to such purpose solely, and ADM Sub will
put such resources to other uses during the Technology Alliance Program, in a
manner consistent with ADM Sub's ability to perform its obligations as described
herein and in the Technology Alliance Plan. At the request of either Party, the
TAC will, within ten (10) days after such request, determine whether the Parties
have, as of that date; successfully produced PHA Cell Paste, in a fomenter
having a capacity of approximately *, in a manner and with results that meet the
applicable Fermentation Performance Parameters.
3.2.4 RECOVERY OPERATION. MBX shall use Commercially Reasonable
Efforts, including making available personnel, plant, equipment and other
resources, to demonstrate recovery of PHA Material as set forth in the
Technology Alliance Plan. Such resources shall be made available for the
Technology Alliance Program in the manner and to the extent set forth herein and
in the Technology Alliance Plan, with the purpose of achieving the Goal. ADM and
ADM Sub shall have reasonable access to that portion of the MBX facilities, or
facilities of third panics, at which such production operations are conducted as
is reasonably necessary to observe and participate in such operations. ADM Sub
acknowledges that the personnel, plant, equipment and other resources utilized
to perform the recovery of PHA Material will not be dedicated to such purpose
solely, and MBX will put such resources to other uses during the Technology
Alliance Program, in a manner consistent with MBX's ability to perform its
obligations as
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described herein and in the Technology Alliance Plan. At the request of either
Party, the TAC will, within ten (10) days after such request, determine whether
the Parties have, as of that date, successfully demonstrated the recovery of PHA
Material in a manner and with results that meet the Recovery Performance
Parameters.
3.2.5 ADM SUB CONSTRUCTION MASTER PLAN AND BUDGET. ADM Sub shall
prepare the ADM Sub Construction Master Plan and Budget, with the assistance of
MBX and in consultation with any Third Party Consultants as shall be approved by
the TAC. After the completion of the ADM Sub Construction Master Plan and
Budget, the TAC will promptly conduct a complete review of such document, and
shall designate and approve those items or categories of costs and expenses
provided in such documents as Construction Costs and shall indicate whether and
why certain items or categories of costs and expenses do not qualify as
Construction Costs, in whole or in part, and whether such costs and expenses
could so qualify under other circumstances, for example, if more information
were provided as the necessity and reasonableness of the particular costs and
expenses or the features or facilities to which such costs and expenses relate.
After such review and approval process is completed by the TAC, in the event ADM
Sub desires to strike the Option, ADM Sub shall seek all approvals and
authorizations required under its corporate governance policies and practices to
authorize the Construction of the ADM Sub Manufacturing Facility including the
authorization to expend the amounts provided for in the ADM Sub Construction
Master Plan and Budget.
3.3 OUTPUT FROM TECHNOLOGY ALLIANCE PROGRAM. ADM Sub will use Commercially
Reasonable Efforts to produce PHA Cell Paste in such amounts as result from the
operations set forth in the Technology Alliance Plan (the "Technology Alliance
Output") and such additional amounts as the Parties may agree to in writing (the
"Marketing Material") for use by MBX in developing the market for PHA Material.
The Technology Alliance Output and the Marketing Material will be made available
by ADM Sub to MBX as set forth in this Section 3.3.
3.3.1 ANALYSIS OF TECHNOLOGY ALLIANCE OUTPUT. MBX will use the
Technology Alliance Output to demonstrate recovery of PHA Material in accordance
with Section 3.2.4 and the Technology Alliance Plan. Further, the Technology
Alliance Output will be used by the Parties to perform such evaluation and
analysis as is necessary or useful in determining whether the Parties have
achieved the Goal. Without limiting the foregoing statement, the Technology
Alliance Output will be evaluated and analyzed by the Parties, in accordance
with the procedures and methods set forth in the Technology Alliance Plan, to
determine whether the Technology Alliance Output meets the Fermentation
Performance Parameters and the Recovery Performance Parameters.
3.3.2 PURCHASE OF TECHNOLOGY ALLIANCE OUTPUT BY MBX. MBX shall have
the right, but not the obligation, to purchase the Technology Alliance Output
from ADM Sub at a price of * of PHA Material contained within the PHA Cell
Paste, on a one hundred percent (100%) purity basis, and the right and
obligation to purchase the Marketing Material manufactured in accordance with
the applicable agreement between the Parties, from ADM Sub, at ADM Sub's
Manufacturing Cost, F.O.B. Decatur, Illinois. MBX may exercise this purchase
option at any time, and from time-to-time, during the Technology Alliance
Program and up to thirty (30) days after the expiration or termination of the
Technology Alliance Program, by written notice to ADM Sub, stating its desire to
purchase, the quantity to be purchased (up to the
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total amount that is then available) and shipping and delivery instructions. ADM
Sub shall invoice MBX for amounts so purchased no sooner than at the time of
delivery and the purchase price for amounts ordered and delivered in accordance
herewith shall be payable by MBX within thirty (30) days of receipt of an
invoice from ADM Sub by wire transfer of immediately available fluids to an
account in the United States designated by ADM Sub. Technology Alliance Output
and Marketing Material purchased hereunder shall be purchased "as is," without
warranty of any kind other than that the Technology Alliance Output and
Marketing Material shall have been stored and handled, from the time of
production until the delivery to MBX, in accordance with the requirements of the
Technology Alliance Plan or as otherwise agreed by the Parties. Technology
Alliance Output and Marketing Material purchased by MBX shall be used by MBX for
performing its obligations pursuant to this Agreement and for market development
activities benefiting the Parties and the potential Commercial Alliance between
them. Technology Alliance Output that is not purchased by MBX shall be used by
ADM Sub solely for internal research and development purposes, or if not soused,
ADM Sub shall either store (for later sale to MBX or the Joint Sales Company or
for later use by ADM Sub solely for internal research purposes) or dispose of
the unused Technology Alliance Output, at ADM Sub's option.
3.4 REPORTING REQUIREMENTS. Within ten (10) days after the end of each
month during the term of the Technology Alliance Program, or as otherwise agreed
to by the Parties, the Parties shall provide each other with a written progress
report which shall describe the activities that have been performed to date in
connection with the Technology Alliance Program, including without limitation,
an evaluation of the work performed in relation to the Goal of the Technology
Alliance Program, and will provide such other information as may be required by
the Technology Alliance Plan or reasonably requested by MBX or ADM Sub.
3.5 RECORDS. ADM Sub and MBX shall maintain records with respect to the
Technology Alliance Program in sufficient detail and in a good scientific manner
appropriate to support patent filings, which shall be complete and accurate and
shall fully and properly reflect all work done and results achieved in the
performance of the Technology Alliance Program. All such records shall be
retained for at least five (5) years after the termination of this Agreement, or
for such longer period as may be required by applicable law. Each of ADM Sub and
MBX shall have the right, during normal business hours and upon reasonable
notice, to inspect and copy any such records that are maintained hereunder.
ARTICLE 4
INTELLECTUAL PROPERTY
4.1 OWNERSHIP.
4.1.1 BACKGROUND TECHNOLOGY, PROPRIETARY MATERIALS. Subject to the
rights and licenses granted herein, ADM Sub shall own all right, title and
interest in and to any: (i) ADM Sub Background Technology, (ii) ADM Sub Program
Technology and (iii) ADM Sub Proprietary Materials. Subject to the rights and
licenses granted herein, MBX shall own all right, title and interest in and to
any: (x) MBX Background Technology, (y) MBX Program Technology and (z) MBX
Proprietary Materials.
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12
4.1.2 JOINT OWNERSHIP. MBX and ADM Sub shall jointly own all Joint
Program Technology. ADM Sub hereby grants to MBX a perpetual, *, exclusive,
fully-sublicenseable license to ADM Sub's rights in Joint Program Technology for
the research, development, manufacture, use, sale and importation of PHA Related
Material produced via Plants. MBX hereby grants to ADM Sub a perpetual, *,
exclusive, fully-sublicenseable license to MBX's rights in Joint Program
Technology for use in all fields that are part of ADM's and its Affiliates'
commercial activities at any time during the tern of this Technology Alliance
Agreement, but excluding: (i) uses that are within the Field, (ii) uses that are
within the term "Field of Use" as that term is defined in the License Agreement
by and between MBX and Tepha, Inc. dated October 1, 1999 and (iii) any and all
uses of PHA Related Material produced via Plants. Subject to the rights,
licenses and obligations set forth herein, MBX and ADM Sub hereby agree that
they shall each have the right to assign, sell, license or otherwise convey
their rights in the Joint Program Technology without notice to or consent of the
other Party and without any obligation to share the proceeds of such activity
with the other Party, or otherwise to account to the other Party in connection
with such activities. In all other respects, the rights of the Parties as joint
owners shall be determined by the laws of the United States of America and the
State of Delaware.
4.1.3 DISCLOSURE. MBX and ADM Sub shall each promptly disclose to the
other, in writing, the making, conception or reduction to practice of any
Program Technology.
4.2 LICENSE GRANTS.
4.2.1 LICENSE GRANTS BY MBX. Subject to the terms and conditions act
forth herein, MBX hereby grants to ADM Sub a *, non-exclusive license, without
the right to assign or sublicense, under MBX's right, title and interest in and
to the MBX Technology and the MBX Patent Rights, solely to perform its
obligations under the Technology Alliance Plan during the term of this
Agreement. ADM Sub acknowledges that certain of the MBX Patent Rights and MSX
Technology are Controlled by MBX pursuant and subject to that certain License
Agreement dated July 15, 1993 by and between MBX and Massachusetts Institute of
Technology as amended, the MIT License"). The license granted herein to ADM Sub
is subject to certain rights retained by MIT in the MIT License and ADM Sub
further agrees that the obligations to MIT set forth in Articles 2, 5, 7, 8, 9,
10, 12, 13 and 15 (copies of said articles am attached hereto as Exhibit H) are
binding upon ADM Sub as if it were a Party to the MIT License.
4.2.2 GRANTS BY ADM SUB. Subject to the terms and conditions set forth
herein, ADM Sub hereby grants to MBX a *, non-exclusive license, without the
right to assign or sublicense, under ADM Sub's right, title and interest in and
to the ADM Sub Technology and the ADM Sub Patent Rights, solely to perform its
obligations under the Technology Alliance Plan during the term of this
Agreement.
4.3 GRANT OF OPTION. MBX hereby grants to ADM Sub the might and option to
enter into a commercial alliance for the further research, development,
manufacture, use, sale and importation of the PHA Material and PHA Formulations
on the terms and conditions set forth in the Commercial Alliance Agreements (the
"Option"). The Option shall be exercisable by ADM Sub as follows: (i) at any
time after the Technical Aspects of the Goal have been achieved and until thirty
(30) days after the expiration of the term of this Agreement, by written notice
to
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13
MBX or (ii) at any time after the Fermentation Performance Parameters applicable
to fermentation in a * fermenter have been met and until thirty (30) days after
the expiration of the term of this Agreement, by written notice to MBX;
provided, however, that, in either case, the Option shall not be exercisable if
and for so long as ADM Sub is in breach of this Agreement. Following the
exercise of the Option, the Parties shall promptly execute and deliver the
Commercial Alliance Agreements in accordance with this Agreement.
4.4 NO IMPLIED RIGHTS. The Parties hereby agree and acknowledge that no
rights or licenses under their respective intellectual property rights are
granted hereunder, by implication, estoppel or otherwise, by either of them,
except as expressly set forth in Section 4.1, Section 4.2 and Section 4.3.
4.5 REPRESENTATIONS AND WARRANTIES.
4.5.1 MBX REPRESENTATIONS. Except as otherwise disclosed on Schedule
4.5.1 attached hereto and incorporated herein by reference, MBX represents and
warrants, as of the Effective Date, that: (a) MBX possesses the full legal
right; authority and power to enter into this Agreement and to grant the license
to ADM Sub as set forth herein, and that no consent or approval is required in
connection therewith; (b) to MBX's Knowledge, the MBX Patent Rights are valid
and enforceable within the Field, and MBX has no Knowledge of any current or
threatened claim by a third party that any of the MBX Patent Rights are invalid
or unenforceable within the Field or that practicing any of the MBX Patent
Rights or MBX Technology within the Field would infringe a third party's Patent
Rights; (c) there is no existing or, to MBX's Knowledge, threatened litigation
concerning the ownership or use within the Field of the MBX Technology or MBX
Patent Rights; (d) all MBX Patent Rights that have been prosecuted by MBX
(directly or through legal counsel) have been prosecuted in good faith; (e) to
the Knowledge of MBX, all MBX Patent Rights that have been prosecuted by a third
party (directly or through legal counsel) have been prosecuted in good faith;
(f) MBX has not sold, transferred, granted any licenses, or otherwise conveyed
any rights in or to the MBX Technology or MBX Patent Rights that would prevent
MBX from granting the rights and licenses granted herein; (g) MBX shall not
Knowingly provide any false or misleading information to ADM Sub in connection
with the Technology Transfer or the performance of the Technical Alliance
Program; (h) MBX has disclosed to ADM Sub any information, which, to MBX's
Knowledge, identifies significant health or safety risks associated with the
production or recovery of PHA Material or PHA Formulations; (i) to its
Knowledge, MBX can fulfill its obligations hereunder without violating,
infringing or misappropriating any rights, including any contract, statutory or
intellectual property rights or any confidentiality rights of any third party;
(j) MBX has no Knowledge of any existing or threatened acts by any third party
that would infringe the MBX Technology or the MBX Patent Rights; (k) MBX has no
Knowledge of any prior art that would render the MBX Patent Rights unpatentable;
(l) the MBX Patent Rights include all of the patents and patent applications
which MBX Controls which would be infringed by the research, development,
manufacture, use, sale or importation of PHA Material and PHA Formulations;
provided, that if any such patents or patent applications are not encompassed
within the definition of the term "MBX Patent Rights", such definition shall be
construed as if such patents or patent applications were so included; (m) MBX
has provided ADM Sub with true copies of the agreements listed on Schedule 4.5.1
and that these agreements are all the agreements that are currently effective,
or entered into but effective after the Effective Date, that MBX or its
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14
Affiliates has entered into with third parties pursuant to which: (1) MBX or its
Affiliates has granted to a third party the right to practice the MBX Patent
Rights in the Field, (2) a Third Party granted to MBX or its Affiliates the
right to practice such third party's intellectual property rights within the
Field, (3) MBX or its Affiliates and a third party have or shall conduct
activities relating to the production or sale of PHA Material or PHA
Formulations, (4) MBX or its Affiliates shall have transferred or conveyed a
cell line intended to produce PHA Material to a third party, or (5) either party
shall manufacture, distribute or sell polyhydroxyalkanoates or concerning the
license of Technology or Patent Rights concerning the manufacture, distribution
or sale of polyhydroxyalkanoates, (n) Schedule 4.5.1 contains a complete list,
as of the Effective Date, of any written opinions of counsel MBX has received
concerning the patentability or enforceability of any MBX Patent Rights or
Patent Rights Controlled by any Third Party; (o) Schedule 4.5.1 contains a
complete list of all written notices MBX has received from any third parties
alleging that MBX is or maybe infringing a third party's patent or other
intellectual property right; and (p) Schedule 4.5.1 contains a complete list of
all written notices MBX has provided to any Third Party alleging that such Third
Party is or may be infringing MBX Technology or MBX Patent Rights. Anything
herein to the contrary notwithstanding, MBX shall only be required to provide
copies to ADM Sub of those material transfer agreements entered into with Third
Parties pursuant to which MBX or its Affiliates shall have transferred or
conveyed a cell line intended to produce PHA Material or that does not conform
in all material respects with the form of material transfer agreement attached
hereto to Schedule 4.5.1. Anything herein to the contrary notwithstanding, the
Parties hereby agree and acknowledge as follows: (i) with respect to such of the
Technology and Patent Rights that are Controlled by MBX and that include or
claim processes or methods ("Methods IP") of manufacturing, processing or using
compositions of matter, it is acknowledged that MBX may not have, or be able to
license to ADM Sub or the Joint Sales Company hereunder, the freedom to practice
such Methods IP with respect to compositions that are owned or controlled by
Third Parties and that MBX makes no representation or warranty as to such
freedom to operate; (ii) with respect to such of the Technology and Patent
Rights that are Controlled by MBX and that include or claim compositions of
matter of PHA Formulations ("Formulations IP"), it is acknowledged that MBX may
not have, or be able to license to AIM Sub or the Joint Sales Company hereunder,
the fight to make, use or sell PHA Formulations that are claimed by such
Formulations IP to the extent that a Third Party owns or controls the right to
manufacture, use or sell a component, ingredient or combination that is included
within a particular PHA Formulation and that MBX makes no representation or
warranty as to such freedom to operate; provided, however, that except to the
extent recently allowed US Patent Application US 2003/0236358 (published
December 25, 2003) is valid, enforceable and applicable, this exception shall
not apply to the formulations listed on Schedule 4.5.1 as "Core Formulations";
(iii) with respect to such of the Technology and Patent Rights that are
Controlled by MBX and that include or claim a method producing PHA Material
through the use of engineered microbial cell lines, MBX believes that *, (iv)
with respect to such of the Technology and Patent Rights that are Controlled by
MBX and that include or claim the manufacture, use or sale of *; and (v) with
respect to patent applications that are included within the MBX Patent Rights,
MBX only makes the representations and warranties set forth in items 4.5.1(a),
(c), (d), (e), (f), (g), (j), (k), (I), (m) and (n). MBX DOES NOT MAKE ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER CONCERNING THE MBX PATENT RIGHTS, THE MBX
TECHNOLOGY OR ITS RIGHTS THEREIN. MBX HEREBY SPECIFICALLY DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR
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15
IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
4.5.2 ADM SUB REPRESENTATIONS. Except as otherwise disclosed on
Schedule 4.5.2 attached hereto and incorporated herein by reference, ADM Sub
represents and warrants, as of the Effective Date, that: (a) ADM Sub possesses
the full legal right, authority and power to enter into this Agreement and to
grant the license to MBX as set forth herein, and that no consent or approval is
required in connection therewith; (b) to ADM Sub's Knowledge, the ADM Sub Patent
Rights that, to ADM Sub's Knowledge, have specific application within the Field,
are valid and enforceable within the Field, and ADM Sub has no Knowledge of any
current or threatened claim by a third party that any of the ADM Sub Patent
Rights that, to ADM Sub's Knowledge, have specific application within the Field,
are invalid or unenforceable within the Field or would infringe a third party's
Patent Rights if practiced in the Field; (c) there is no existing or, to ADM
Sub's Knowledge, threatened litigation concerning the ownership or use within
the Field of the ADM Sub Technology or ADM Sub Patent Rights than to ADM Sub's
Knowledge, have specific application within the Field; (d) all ADM Sub Patent
Rights that have been prosecuted by ADM or its Affiliates (directly or through
legal counsel) have been prosecuted in good faith; (e) to the Knowledge of ADM
Sub, all ADM Sub Patent Rights that have been prosecuted by a third party
(directly or through legal counsel) have been prosecuted in good faith; (f)
neither ADM Sub nor any of its Affiliates have sold, transferred, granted any
licenses, or otherwise conveyed any rights in or to the ADM Sub Technology or
ADM Sub Patent Rights that, to ADM Sub's Knowledge, have specific application
within the Field, which sale, transfer, license or conveyance would prevent ADM
Sub from granting the rights and licenses granted herein; (g) ADM Sub shall not
Knowingly provide any false or misleading information to MBX in connection with
the Technology Transfer or the performance of the Technical Alliance Program;
(h) ADM Sub has disclosed to MBX any information, which, to ADM Sub's Knowledge,
identifies significant health or safety risks associated with the production or
recovery of PHA Material or PHA Formulations; (i) to its Knowledge, ADM Sub can
fulfill its obligations hereunder without violating, infringing or
misappropriating any rights, including any contract, statutory or intellectual
property rights or any confidentiality rights of any third party; (j) ADM Sub
has no Knowledge of any existing or threatened acts by any third party that
would infringe the ADM Sub Technology or the ADM Sub Patent Rights that, to ADM
Sub's Knowledge, have specific application within the Field; (k) ADM Sub has no
Knowledge of any prior art that would render unpatentable those ADM Sub Patent
Rights that, to ADM Sub's Knowledge, have specific application within the Field,
(l) the ADM Sub Patent Rights include all of the patents and patent applications
which ADM Sub Controls which would be infringed by the research, development,
manufacture, use, sale or importation of PHA Material and PHA Formulations;
provided, that if any such patents or patent applications are not encompassed
within the definition of the term "ADM Sub Patent Rights", such definition shall
be construed as if such patents or patent applications were so included, (m) ADM
Sub has provided MBX with true copies of the agreements listed on Schedule 4.5.2
and that these agreements are all the agreements that are currently effective,
or entered into bat effective after the Effective Date, that ADM Sub or its
Affiliates has entered into with third parties pursuant to which: (1) ADM Sub or
its Affiliates has granted to a third party the right to practice within the
Field the ADM Sub Patent Rights that, to ADM Sub's Knowledge have specific
application within the Field, (2) a Third Party granted to ADM Sub or its
Affiliates the right to practice such third party's intellectual property rights
specifically within the Field, (3) ADM Sub or its
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Affiliates and a third party have or shall conduct activities relating to the
production or sale of PHA Material or PHA Formulations, (4) ADM Sub or its
Affiliates shall have transferred or conveyed a cell line intended to produce
PHA Material to a third party, or (5) either party shall manufacture, distribute
or sell polyhydroxyalkanoates or concerning the license of Technology or Patent
Rights concerning the manufacture, distribution or sale of
polyhydroxyalkanoates, (n) Schedule 4.5.2 contains a complete list, as of the
Effective Date, of any written opinions of counsel ADM Sub or its Affiliates
have received concerning the patentability or enforceability of any ADM Sub
Patent Rights or Patent Rights Controlled by any Third Party that, to ADM Sub's
Knowledge, have specific application within the Field; (o) Schedule 4.5.2
contains a complete list of all written notices ADM Sub has received from any
third parties alleging that ADM Sub or its Affiliates is or may be infringing a
third party's patent or other intellectual property right within the Field; and
(p) Schedule 4.5.2 contains a complete list of all written notices ADM Sub or
its Affiliates has provided to any Third Party alleging that such Third Party is
or may be infringing ADM Sub Technology or XXXX Sub Patent Rights within the
Field. Anything herein to the contrary notwithstanding, ADM Sub shall only be
required to provide copies to MBX of those material transfer agreements entered
into with Third Parties pursuant to which ADM Sub or its Affiliates shall have
transfer red or conveyed a cell line intended to produce PHA Material or that do
not provide that ADM Sub will own, or have an option to take an exclusive
license to inventions that relate to the manufacture, use or sale of PHA
Material that are made in connection with the work done pursuant to the material
transfer agreement. Anything herein to the contrary notwithstanding, the Parties
hereby agree and acknowledge as follows: with respect to patent applications
that are included within the ADM Sub Patent Rights, ADM only makes the
representations and warranties set forth in items 4.5.2(a), (c), (d), (e), (f),
(g), (j), (k), (1), (m) and (n). ADM SUB DOES NOT MAKE ANY OTHER REPRESENTATION
OR WARRANTY WHATSOEVER CONCERNING THE ADM SUB PATENT RIGHTS, THE ADM SUB
TECHNOLOGY OR ITS RIGHTS THEREIN. ADM SUB HEREBY SPECIFICALLY DISCLAIMS ALL
OTHER WARRANTIES, EXPRESS OR BELIED, INCLUDING BUT NOT LIMITED TO, IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 5
PAYMENTS
5.1 PAYMENTS. Within ten (10) days after the Effective Date, ADM Sub shall
pay to MBX the amount of three million dollars ($3,000,000) as a non-refundable;
non-creditable upfront payment. Within ten (10) days following the TAC's
determination that (i) the production of PHA Cell Paste in a fermenter having a
capacity of approximately * was in a manner and with results that met the
applicable Fermentation Performance Parameters, and (ii) the recovery of PHA
Material was in a manner and with results that met the Recovery Performance
Parameters, ADM Sub shall pay to MBX the amount of one million dollars
($1,000,000) as a non refundable, non-creditable milestone payment. Within ten
(10) days following the first to occur of: (i) the achievement of the Goal and
(ii) the exercise of the Option by ADM Sub, ADM Sub shall pay to MBX the amount
of one million dollars ($1,000,000) as a non refundable, non-creditable
milestone payment. Anything herein to the contrary notwithstanding, in the event
that ADM Sub desires to exercise the Option in accordance with Section 4.3, the
above-described upfront payment and the two (2) milestone payments, to the
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17
extent not already paid, shall be due and payable in full as a pre-condition to
the exercise of the Option. Amounts due under this Section 5.1 shall be payable
by wire transfer of immediately available funds to an MBX bank account in
accordance with instructions to be provided to ADM Sub by MBX.
5.2 OTHER EXPENSES. Except as provided in Section 5.1, each Party shall
bear its own costs and expenses incurred in performing under this Agreement.
ARTICLE 6
EXCLUSIVITY
6.1 EXCLUSIVITY. During the term of this Agreement, and for a period of
thirty (30) days thereafter, ADM Sub and MBX shall not, directly or through one
or more Affiliates or agents, discuss, negotiate or establish, business
operations, agreements or transactions with any third party concerning or
relating to *, including without limitation any business operation, agreement or
transaction that would have as a purpose, the manufacture, use, sale or
importation of *. Notwithstanding the foregoing, MBX shall at all times be
permitted to engage in the following activities: (i) communicate with and supply
PHA Material and PHA Formulations to potential and actual customers or marketing
partners from the PHA Material to be produced by ADM Sub and MBX hereunder, (ii)
establish fermentation, recovery and formulation capacity, directly or through
third party service providers, to produce, sell and convey pilot scale
quantities of PHA Material for market development purposes, to supply MBX
customers or to satisfy certain obligations of MBX hereunder, (iii) discuss,
negotiate or establish strategic marketing alliances, (iv) in-license or
otherwise acquire rights to Technology that may be useful in connection with the
activities of the Parties hereunder, or under the Commercial Alliance
Agreements, provided that such Technology is made available for use in
connection with such activities (the activities listed in the foregoing clauses
(i) through (iv) inclusive are the "Permitted Activities") and provided further
that, for avoidance of doubt, MBX shall not grant any right or license to any
MBX Technology for use within the Field to any Person other than to carry out
any of the Permitted Activities. MBX shall provide written notice to ADM Sub
describing any Permitted Activities that it plans to undertake and shall provide
ADM Sub with a reasonable opportunity to provide continents thereon to MSX.
Promptly upon ADM Sub exercising the Option hereunder, MBX shall assign to the
Joint Sales Company (and the Joint Sales Company shall assume) any and all
agreements entered into within the Permitted Activities concerning the supply of
PHA Material and PHA Formulations, any strategic marketing alliances and any
licenses to MBX Technology. Any amounts received by MBX in connection with any
strategic marketing alliance or in connection with any license to MBX Technology
in the Field permitted within the Permitted Activities shall be used solely to
further develop the MBX Technology within the Field.
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ARTICLE 7
TREATMENT OF CONFIDENTIAL INFORMATION;
PUBLICITY; NON-SOLICITATION
7.1 CONFIDENTIALITY OBLIGATIONS. MBX and ADM Sub each recognize that the
other Parties' Confidential Information and Proprietary Materials constitute
highly valuable and proprietary confidential information. Each of MBX and ADM
Sub agrees that it will keep confidential, and will cause its employees,
consultants, and Affiliates to keep confidential, all Confidential Information
and Proprietary Materials of the other Parties. The Party and their respective
employees, consultants or Affiliates, shall not use any Confidential Information
or Proprietary Materials of any other Party for any purpose whatsoever except as
expressly permitted in this Agreement. MBX acknowledges that the corn costs that
constitute a portion of the Manufacturing Cost shall constitute ADM Sub
Confidential Information.
7.2 LIMITED DISCLOSURE. MBX and ADM Sub each agree that any disclosure of
any other Party's Confidential Information or any transfer of any other Party's
Proprietary Materials to any officer or employee of any other Party or any of
its Affiliates shall be made only if and to the extent necessary to carry out
its rights and responsibilities under this Agreement and shall be limited to the
maximum extent possible consistent with such rights and responsibilities. MBX
and ADM Sub each further agree that any disclosure of another Party's
Confidential Information or any transfer of another Party's Proprietary
Materials as permitted by the preceding sentence shall only be made to such of
the recipient Party's officers, employees aid Affiliates who are bound by
written confidentiality obligations to maintain the confidentiality thereof and
not to use such Confidential Information or Proprietary Materials except as
expressly permitted by this Agreement. MBX and ADM Sub each further agree not to
disclose or transfer any other Party's Confidential information or Proprietary
Materials to any third parties under any circumstance without the prior written
approval from the relevant other Party (such approval not to be unreasonably
withheld), except as otherwise required by law, or except as otherwise expressly
permitted by this Agreement. Each Party shall take such action, and shall cause
its Affiliates to take such action, to preserve the confidentiality of the other
Parties' Confidential Information and Proprietary Materials as it would
customarily take to preserve the confidentiality of its own Confidential
Information and Proprietary Materials, and in no event, less than reasonable
care. Each Party, upon the request of any other Party, will return all the
Proprietary Information and Confidential Materials disclosed or transferred to
it by such other Party pursuant to this Agreement which does not constitute
Joint Program Technology, including all copies and extracts of documents and all
manifestations in whatever form, within two (2) months of the request or, within
two (2) weeks of the termination or expiration of this Agreement; provided,
however, that a Party may retain Confidential Information, and Proprietary
Materials of another Party relating to any license which survives such
termination and one copy of all other Confidential Information may be retained
in its legal files solely for the purpose of monitoring compliance with this
Article 7.
7.3 EMPLOYEES AND CONSULTANTS. MBX and ADM Sub each hereby represent that
all of its employees, and any consultants to such Party or its Affiliates,
participating in the activities of the Technology Alliance Program who shall
have access to the Confidential Information or Proprietary Materials of the
other Party are bound by written obligations to maintain such information in
confidence and not to use such information except as expressly permitted herein
* CONFIDENTIAL TREATMENT REQUESTED
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mid to assign any inventions or discoveries made in connection with such
activities to MBX or ADM Sub as applicable. Each Party agrees to be held
responsible for the confidentiality obligations to which its employees and
consultants (and those of its Affiliates) are obligated.
7.4 PUBLICITY. Neither Party may publicly disclose the existence or terms
of this Agreement without the prior written consent of the other Party;
provided, however, that either Party may make such a disclosure: (a) to the
extent required by law (including the fling of a redacted copy of the Agreement
as an exhibit to a legally required filing) or by the requirements of any
nationally recognized securities exchange, quotation system or over-the-counter
market on which such Party has its securities listed or traded, and (b) to any
investors (including without limitation, entities interested in acquiring the
stock or assets of such Party or merging with or into such Party), prospective
investors, lenders, other potential financing sources, prospective customers and
prospective strategic marketing partners who are obligated to keep such
information confidential. In the event that such disclosure is required as
aforesaid, the disclosing Party shall make Commercially Reasonable Efforts to
provide the other Party with reasonable notice prior to such disclosure and to
coordinate with the other Party with respect to the wording and timing of any
such disclosure. The Parties, prior to the execution of this Agreement, will
mutually agree on the wording of a press release publicizing the Technology
Alliance which shall be attached hereto as Exhibit I. Once such press release or
any other written statement is approved for disclosure by both Parties, either
Party may make subsequent public disclosure of the contents of such statement,
but no more than the contents of such statement, without the further approval of
the other Party.
7.5 PROHIBITION ON SOLICITATION. Neither Party nor its Affiliates shall,
during the period commencing on the Effective Date and continuing until the
expiration or termination of this Agreement and two (2) years thereafter,
specifically solicit any person who is employed by the other Party or its
Affiliates and who was involved in the Technology Alliance Program during the
term of this Agreement, whether such person is solicited to be hired as an
employee or consultant, unless authorized in writing by the other Party. The
Parties acknowledge that generally listing a position for hire in a newspaper,
trade journal or similar publication shall not constitute a specific
solicitation in violation of the terms of this provision. The Parties also
acknowledge that specifically soliciting any person who was formerly employed by
the other Party or its Affiliates is not in violation of the terms of this
provision. The Parties further acknowledge for the avoidance of doubt that this
Section only applies to those persons that remain employees of a Party and not
to former employees of a Party.
7.6 TERM. The obligations and restrictions set forth in this Article 7
shall survive the termination or expiration of this Agreement for a period of
twenty (20) years.
ARTICLE 8
TERM AND TERMINATION
8.1 TERM. This Agreement shall commence as of the Effective Date and shall
expire upon the first to occur of (i) fifteen (15) months following the
completion of the initial fermentation run by ADM Sub in a fermenter having a
capacity of approximately *, (ii) eighteen (18) months following the completion
of MBX's obligations in connection with the Technology
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Transfer as specified under the Technology Alliance Plan, (iii) the second
anniversary of the Effective Date, unless terminated in accordance with this
Article 8 prior to such date, and (iv) the execution of the Commercial Alliance
Agreement.
8.2 TERMINATION BY EITHER PARTY. This Agreement may be terminated at any
time by either Party in the event that the other Party materially defaults on
any material obligation hereunder or materially breaches any material term of
this Agreement to be performed or observed: (a) by giving one (1) month prior
written notice to the defaulting Party in the case of a breach of any payment
term of this Agreement, and (b) by giving two (2) months prior written notice to
the defaulting Party in the case of any other breach; provided, however, that in
the case of a default or breach capable of being cured, if said defaulting Party
shall cure the said default or breach within such notice period after said
notice shall have been given, then said notice shall not be effective and this
Agreement shall continue in full force and effect.
8.3 AT WILL TERMINATION BY ADM SUB. ADM Sub shall have the right to
terminate this Agreement at any time upon not less than one (1) month prior
written notice to MBX.
8.4 CONSEQUENCES OF TERMINATION OR EXPIRATION; GRANT OF LICENSES. Upon the
termination or expiration of the Agreement, the following shall occur:
8.4.1 CONSEQUENCES OF TERMINATION OR EXPIRATION.
(a) MBX shall immediately cease using, and shall promptly return
to ADM Sub, all ADM Sub Technology, except to the extent MBX
has a license to practice such Technology under Section 8.4;
(b) ADM Sub shall immediately cease using, and shall promptly
return to MBX all MBX Technology, except to the extent ADM
Sub has a license to practice such Technology under Section
8.4;
(c) the license granted to ADM Sub pursuant to Section 4.2.1
shall immediately terminate;
(d) the license granted to MBX pursuant to Section 4.2.2 shall
immediately terminate;
(e) each Party shall promptly pay to the other any amounts due
and payable hereunder as of the effective date of
termination or expiration; and
(f) subject to those rights and obligations of the Parties that
survive termination or expiration by their terms or pursuant
to Section 8.5, this Agreement shall terminate and be of no
further force or effect.
8.4.2 RIGHTS UPON ADM SUB TERMINATION.
(a) In the event ADM Sub terminates this Agreement pursuant to
Section 8.3, or ADM Sub does not Exercise the Option after
the
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Technical Aspects of the Goal have been achieved, then ADM
Sub shall and hereby does grant to MINX a
fully-sublicenseable, *, perpetual, irrevocable,
non-exclusive license under all intellectual property rights
Controlled by ADM Sub and claiming or covering Program
Technology, to research, develop, manufacture, use, sell and
import PHA-Related Material, produced using any means or
methods, for any rand all uses.
(b) In the event ADM Sub terminates this Agreement pursuant to
Section 8.2, then MBX shall and hereby does grant to ADM Sub
a fully-sublicenseable, *, perpetual, irrevocable (unless
the terms of the license are breached), non-exclusive
license under all intellectual property rights Controlled by
MBX and claiming or covering Program Technology and MBX
Background Technology to research, develop, manufacture,
use, sell and import PHA Material and PHA Formulations for
use in the Field. The foregoing license shall be limited
such that ADM Sub shall be permitted to make a maximum of *
of PHA Materials during each consecutive period of twelve
(12) months during the term of the license on a * basis and
ADM Sub shall have the right to make up to an additional *
of PHA Material during each consecutive period of twelve
(12) months during the term of the license subject to
payment to MBX of a royalty (i) during the Royalty Term
equal to: (y) * on all sales or other conveyances of PHA
Patented Material (including, without limitation, PHA
Material that is contained within PHA Formulations), on a
one hundred percent (100%) purity basis; and (z) * on all
sales or other conveyances of PHA Know How Material
(including, without limitation, PHA Material that is
contained within PHA Formulations), on a one hundred percent
(100%) purity basis; and (ii) during the Supplemental
Royalty Term equal to * on all sales or other conveyances of
PHA Supplemental Know How Material (including, without
limitation, PHA Material that is contained within PHA
Formulations), on a one hundred percent (100%) purity basis.
Provided, however, that any such royalty shall be reduced by
the amount of royalties payable to any Third Party under a
license required to obtain freedom to practice the MBX
Technology and/or MBX Patent Rights for the manufacture, use
or sale of PHA Material within the Field provided that MBX
breached an obligation under Section 4.5.1 to disclose: (i)
the existence of such Third Party's intellectual property
rights in such Technology, or (ii) claims by such Third
Party that any of the MBX Patent Rights are invalid or
unenforceable, or that the practice of any of the MBX Patent
Rights would constitute an infringement or misappropriation
of such Third Party's intellectual property rights (such
royalty reduction right is "Third Party IP Royalty Offset").
Such royalty shall be payable within thirty (30) days
following the end of each
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calendar quarter for sales or conveyances that occur during
such calendar quarter. Amounts due under this Section
8.4.2(b) shall be payable by wire transfer of immediately
available funds to an MBX bank account in accordance with
instructions to be provided to ADM Sub by MBX. Any amounts
that are not paid when due hereunder shall accrue interest
at the rate of four percent (4%) per annum in excess of the
one year London Interbank Offered Rate (LIBOR) then most
recently published in THE WALL STREET JOURNAL. The right to
demand and receive the interest provided hereunder shall be
in addition to any other rights available to MBX hereunder
or at law. ADM Sub shall maintain records with respect to
the sale or conveyance of PHA Material under this license in
sufficient detail to enable MBX to verify the accuracy of
the royalty payments made hereunder by ADM Sub. Such records
shall be retained for at least five (5) years after the
relevant (late of sale or conveyance. MBX shall have the
right, during normal business hours and upon reasonable
notice, to have an independent third party accounting firm
(subject to a mutually agreeable confidentiality agreement)
inspect and copy any such records that are maintained in
accordance with this Section 8.4.2(b). ADM Sub may terminate
this license at any time without any further obligation by
providing MBX with written notice thereof. In addition, in
the event ADM Sub terminates this Agreement pursuant to
Section 8.2, MBX shall promptly destroy any derivatives and
mutated forms constituting MBX Proprietary Materials
invented by ADM Sub, and provide ADM Sub with a
certification signed by an officer of MBX that MBX has
complied with this provision.
8.4.3 RIGHTS UPON MBX TERMINATION. In the event MBX terminates this
Agreement pursuant to Section 8.2, then ADM Sub shall and hereby does grant to
MBX: (i) a fully-sublicenseable, *, perpetual, irrevocable, exclusive license
under all intellectual property rights Controlled by ADM Sub and claiming or
covering Program Technology, to research, develop, manufacture, use, sell and
import PHA Related Material, produced using any means or methods, for any and
all uses, and (ii) a fully-sublicenseable, *, perpetual, irrevocable,
non-exclusive license under all ADM Sub Background Technology, to research,
develop, manufacture, use, sell and import PHA-Related Material, produced using
any means or methods, for any and all uses.
8.4.4 RIGHTS UPON BANKRUPTCY.
(a) In the event ADM Sub files for protection under Chapter 11
of the U.S. Bankruptcy Code, and ADM Sub, directly or
indirectly in connection with such proceedings, rejects this
Agreement as an executory contract (or on similar grounds),
then ADM Sub shall and hereby does grant to MBX: (i) a
fully-sublicenseable, *, perpetual, irrevocable, exclusive
license under all intellectual
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property rights Controlled by ADM Sub and claiming or
covering Program Technology, to research, develop,
manufacture, use, sell and import PHA-Related Material,
produced using any means or methods, for any and all uses,
and (ii) a fully-sublicenseable, *, perpetual, irrevocable,
non exclusive license under all ADM Sub Background
Technology, to research, develop, manufacture, use, sell and
import PHA-Related Material, produced using any means or
methods, for any and all uses.
(b) In the event MBX files for protection under Chapter 11 of
the U.S. Bankruptcy Code, and MBX, directly or indirectly in
connection with such proceedings, rejects this Agreement as
an executory contract (or on similar grounds), then MBX
shall and hereby does grant to ADM Sub a
fully-sublicenseable, *, perpetual, irrevocable (unless the
terms of the license are breached), nonexclusive license
under all intellectual property rights Controlled by MBX and
claiming or covering Program Technology and MBX Background
Technology to research, develop, manufacture, use, sell and
import PHA Material and PHA Formulations for use in the
Field. The foregoing license shall be limited such that ADM
Sub shall be permitted to make a maximum of * of PHA
Materials during each consecutive period of twelve (12)
months during the term of the license on a * basis and ADM
Sub shall have the right to make up to an additional * of
PHA Material during each consecutive period of twelve (12)
months during the term of the license subject to payment to
MBX of a royalty (i) during the Royalty Term equal to: (y) *
on all sales or other conveyances of PHA Patented Material
(including, without limitation, PHA Material that is
contained within PHA Formulations), on a one hundred percent
(1.00%) purity basis; and (z) * on all sale or other
conveyances of PDA Know-How Material (including, without
limitation, PHA Material that is contained within PHA
Formulations), on a one hundred percent (100%) purity basis;
and (ii) during the Supplemental Royalty Term equal to * on
all sales or other conveyances of PHA Supplemental Know-How
Material (including, without limitation, PHA Material that
is contained within PHA Formulations), on a one hundred
percent (100%) purity basis. Provided, however, that any
such royalty shall be subject to Third Party IP Royalty
Offset. Such royalty shall be payable within thirty (30)
days following the end of each calendar quarter for sales or
conveyances that occur during such calendar quarter. Amounts
due under this Section 8.4.4(b) shall be payable by wire
transfer of immediately available funds to an MBX bank
account in accordance with instructions to be provided to
ADM Sub by MBX. Any amounts that are not paid when due
hereunder shall accrue interest at the rate of four percent
(4%) per annum in excess of the one year London Interbank
Offered Rate (LIBOR) then most recently
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published in THE WALL STREET JOURNAL. The right to demand
and receive the interest provided hereunder shall be in
addition to any other rights available to MBX hereunder or
at law. ADM Sub shall maintain records with respect to the
sale or conveyance of PHA Material under this license in
sufficient detail to enable MBX to verify the accuracy of
the royalty payments made hereunder by ADM Sub. Such records
shall be retained for at least five (5) years after the
relevant date of sale or conveyance. MBX shall have the
right, during normal business hours and upon reasonable
notice, to have an independent third party accounting firm
(subject to a mutually agreeable confidentiality agreement)
inspect and copy any such records that are maintained in
accordance with this Section 8.4.4(b). ADM Sub may terminate
this license at any time without any further obligation by
providing MBX with written notice thereof.
8.5 SURVIVING PROVISIONS; RESERVATION OF RIGHTS. Termination or expiration
of this Agreement for any reason shall be without prejudice to any rights and
obligations of the Parties that have accrued as of the Effective Date of
termination and:
(a) the rights and obligations of the Parties provided hi Section 8.4,
and Articles 1, 4, 6, 7, 9, 10 and 11 and any other provision which would
reasonably be expected to survive termination in accordance with the terms of
this Agreement, all of which shall survive such termination for the period of
time set forth in each such provision, or indefinitely if no such time is
specified; and
(b) any other rights or remedies provided at law or equity which
either Party may otherwise have against the other.
ARTICLE 9
PATENT MATTERS
9.1 PATENT FILING, PROSECUTION AND MAINTENANCE.
9.1.1 ADM SUB PATENT RIGHTS. ADM Sub shall have the sole right and
authority to file, prosecute and maintain the ADM Sub Patent Rights during the
term of this Agreement at its own expense and using patent counsel of its own
choosing. ADM Sub represents that it will continue to file, prosecute and
maintain the ADM-Sub Patent Rights in accordance with reasonable commercial
practices during the term of this Agreement.
9.1.2 MBX PATENT RIGHTS. MBX shall have the sole right and authority
to file, prosecute and maintain the MBX Patent Rights during the term at its own
expense and using patent counsel of its own choosing. MBX represents that it
will continue to file, prosecute and maintain the MBX Patent Rights in
accordance with reasonable commercial practices during the term of this
Agreement.
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9.1.3 ABANDONMENT. If either Party decides to withdraw from the
continued prosecution of any Patent Rights on Technology that is at that time
subject to a license hereunder, such Party shall so inform the other Party at
least thirty (30) days prior to the effective date of such decision and the
other Party shall have the right, through patent attorneys or agents of its
choice, to assume responsibility for the continued prosecution of such Patent
Rights. Promptly after the effective date of the decision to withdraw, the
withdrawing Party shall assign its right, title and interest in and to such
Patent Rights to the other Party. Notwithstanding such assignment, such Patent
Rights will continue to be subject to any licenses granted herein to the extent
necessary in carrying out the Commercial Alliance.
9.1.4 JOINT PROGRAM TECHNOLOGY. The Parties will file, prosecute and
maintain Patent Rights claiming Joint Program Technology in accordance with this
Section 9.1.4 with the primary goal of maximizing the commercial potential of
the PHA Material in a commercially reasonable manner. The Parties, sharing
expenses equally and acting through patent attorneys or agents agreed upon by
the Parties, shall prepare, file, prosecute and maintain all Patent Rights
relating to Joint Program Technology. If either Party decides to withdraw from
the continued prosecution of any Patent Rights on Joint Program Technology, such
Party shall so inform the other Party at least thirty (30) days prior to the
effective date of such decision and the other Party shall have the right,
through patent attorneys or agents of its choice, to assume responsibility for
the continued prosecution of such Patent Rights. Promptly after the effective
date of the decision to withdraw, the withdrawing Party shall assign its right,
title and interest in and to such Patent Rights to the other Party.
Notwithstanding such assignment, such Patent Rights will continue to be subject
to the licenses granted herein to the extent applicable.
9.2 INFRINGEMENT AND DEFENSE.
9.2.1 ACTUAL OR THREATENED INFRINGEMENT. In the event either Party
becomes aware of any possible infringement or unauthorized possession, knowledge
or use of any Technology, which is the subject matter of this Agreement, in the
Field (collectively, an "Infringement"), that Party shall promptly notify the
other Party and provide it with available details. ADM Sub hereby reserves the
exclusive right (but not obligation) to take whatever action it deems
appropriate to prevent or terminate any third party infringement of ADM Sub
Patent Rights claiming the ADM Sub Technology, at ADM Sub's cost. MBX hereby
reserves the exclusive right (but not obligation) to take whatever action it
deems appropriate to prevent or terminate any third party infringement of MBX
Patent Rights claiming the MBX Technology, at MBX's cost. Notwithstanding the
foregoing, during the term, if either Party (the "Defending Party") decides to
take any action to prevent or terminate any third party infringement of its
Patent Rights within the Field, it shall first give notice to the other Party
(the "Neutral Party") and, if the Neutral Party can produce a written legal
opinion of an independent patent attorney concluding that there is a reasonable
likelihood that such third party could, in good faith, in connection with such
action, allege that a claim or claims within Patent Rights Controlled by the
Neutral Party are invalid or unenforceable, then the Defending Party shall not
take such action against such third party without the prior, written consent of
the Neutral Party. The Parties, sharing expenses equally and acting through
patent attorneys or agents agreed upon by the Parties, shall take whatever
action they shall agree upon to prevent or terminate any third party
infringement of Patent Rights relating to Joint Program Technology, provided,
however, that if the Parties cannot agree, MBX shall have the right to make the
final determination with respect
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to third party infringement within the Field. In all cases, all decisions by a
Party pursuant to this Section 9.2 shall be made in good faith and in the best
interest of the Technology Alliance Program.
9.2.2 DEFENSE OF CLAIMS. In the event that any action, suit or
proceeding is brought against either Party based on its actions in performance
of the Technology Alliance Program and alleging the infringement of the
Technology or intellectual property rights of a third party, the Parties shall
cooperate with each other in the defense of any such suit, action or proceeding.
The Parties will give each other prompt written notice of the commencement of
any such suit, action or proceeding or claim of infringement and will furnish
each other with a copy of each communication relating to the alleged
infringement. Each Party shall cooperate in the defense of such actions. If as a
consequence of such action, suit or proceeding by a third party, a prohibition,
restriction or other condition is imposed upon one or both of the Parties, the
Parties shall examine and discuss in good faith the consequences of such
prohibition or restriction or other conditions on this Agreement and on possible
modifications hereto.
ARTICLE 10
INDEMNIFICATION
10.1 INDEMNIFICATION BY MBX. During the course of, and upon and after
termination of this Agreement for any reason whatsoever, MBX and its Affiliates
shall indemnify, defend and hold ADM Sub, its Affiliates and their respective
directors, officers and employees (collectively, "ADM Sub Indemnitees") harmless
against any claims (including without limitation claims for product liability,
personal injury or death, or property damage), liability, damage, loss, cost or
expense (including reasonable attorneys' fees) incurred by any of them, to the
extent resulting from: (i) the * of MBX, or any of its Affiliates, or their
respective employees, representatives or agents; or (ii) MBX's *.
Notwithstanding anything to the contrary, this provision shall not apply to any
claims or suits to the extent attributable to the negligence or willful
misconduct of air ADM Sub Indemnitee or a breach of this Agreement by ADM Sub.
10.2 INDEMNIFICATION BY ADM SUB. During the course of, and upon and after
termination of this Agreement for any reason whatsoever, ADM Sub and its
Affiliates shall indemnify, defend and hold MBX, its Affiliates and their
respective directors, officers and employees (collectively, "MBX Indemnitees")
harmless against any claims (including without limitation claims for product
liability, personal injury or death, or property damage), liability, damage,
loss, cost or expense (including reasonable attorneys' fees) incurred by any of
them, to the extent resulting from: (i) the * of ADM Sub, or any of its
Affiliates, or their respective employees, representatives or agents; or (ii)
ADM Sub's *. Notwithstanding anything to the contrary, this provision shall not
apply to any claims or suits to the extent attributable to the negligence or
willful misconduct of an MBX Indemnitee or a breach of this Agreement by MBX.
10.3 CONDITIONS TO INDEMNIFICATION. A Party seeking indemnification under
this Article 10 (the "Indemnified Party') shall give prompt notice of the claim
to the other Party (the "Indemnifying Party) and, provided that the Indemnifying
Party is not contesting the indemnity obligation, shall permit the Indemnifying
Party to control any litigation relating to such claim and disposition of any
such claim, provided that the Indemnifying Party shall act reasonably and
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in good faith with respect to all matters relating to the settlement or
disposition of any claim as the settlement or disposition relates to Parties
being indemnified under this Article 10 and provided, further, that the
Indemnifying Party shall not settle or otherwise resolve any claim without prior
notice to the Indemnified Party and the consent of the Indemnified Party (which
consent shall not be unreasonably withheld, conditioned or delayed) if such
settlement involves anything other than the payment of money by the Indemnifying
Party. The Indemnified Party shall cooperate with the Indemnifying Party in its
defense of any claim for which indemnification is sought under this Article 10
and shall have the right to be present hi person or through counsel at all legal
proceedings giving rise to the right of indemnification.
ARTICLE 11
MISCELLANEOUS
11.1 NO ASSIGNMENT. No Party shall sell, transfer or permit any transfer
of, in whole or in part, this Agreement without prior written consent of the
other Parties, which consent may be withheld for any reason. The merger or
acquisition of MBX by, with or into a third party shall not be deemed to effect
an assignment of this Agreement by MBX and this Agreement shall be binding upon
and inure to the benefit of such third party, or new entity, in the case of a
merger or similar transaction in which MBX does not continue as the same
corporate entity and shall continue to bind and inure to the benefit of MBX in
the case of an acquisition or similar transaction in which MBX survives as the
same corporate entity. ADM Sub shall not enter into any merger, acquisition or
similar transaction without the prior, written consent of MBX. Nothing herein
shall restrict ADM from entering into a merger or acquisition of ADM by, with or
into a third party and no such transaction shall he deemed to effect an
assignment of this Agreement by ADM Sub and this Agreement shall be binding upon
and inure to the benefit of such third party, or new entity, in the case of a
merger or similar transaction in which ADM does not continue as the same
corporate entity and shall continue to bind and inure to the benefit of ADM Sub
in the case of an acquisition or similar transaction in which ADM survives as a
the same corporate entity. Any purported assignment or transfer in violation of
this provision shall be null and void. In the event that, at anytime *, MBX
receives a bona fide offer from a third party to acquire all, or a majority, of
the outstanding shares of voting equity of MBX (such an acquisition is
hereinafter an "Acquisition Transaction"), MBX shall provide notice to ADM Sub
of the proposed Acquisition Transaction at least * from ADM Sub to enter into an
Acquisition Transaction with ADM Sub (such an agreement is a "No-Shop
Agreement"). Such notice will set forth the *. ADM Sub shall not, directly or
indirectly, contact such proposing party without MBX's prior written consent,
provided however, that if such proposing party contacts ADM Sub without direct
or indirect prompting or solicitation by ADM Sub, then nothing in this Section
11.1 shall restrict ADM Sub's ability to communicate with such proposing party.
In the event that the * period, or thereafter at anytime before MBX has entered
into a No-Shop Agreement *, MBX will provide notice to ADM Sub of the terms of
such modified bona fide offer, including the same level of detail and
information as is required to be included in the original notice, at least forty
eight (48) hours (which forty eight (48) hour period must include at least one
(1) full business day) prior to entering into a No-Shop Agreement. For avoidance
of doubt, provided that MBX has complied with the foregoing notice requirements,
MBX shall have no obligation to provide any additional notice to ADM Sub of
changes to the tens of an offer after MBX has entered into a No-Shop Agreement
with respect to such transaction.
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Notwithstanding the foregoing, if MBX *, the foregoing notice requirements shall
not apply, and *.
11.2 SUCCESSORS. In the event of a permitted assignment, this Agreement
shall be binding upon, and inure to the benefit of, all the Parties and their
respective successors and legal assigns.
11.3 DISPUTE RESOLUTION. Any dispute or claim arising out of or relating to
this Agreement, or breach thereof shall be resolved in accordance with this
Section 11.3. During the course of resolving any such dispute, the Parties shall
continue to perform their obligations hereunder (including by making payment of
the undisputed portion of any payment obligation that is the subject of a
dispute hereunder or thereunder). Notwithstanding the foregoing, the obligation
of the Parties to continue to perform hereunder during the resolution of
disputes shall not require a Party to perform obligations (other than any
undisputed portion of any payment obligations) where such performance is
rendered impossible, or would otherwise not maintain or increase the likelihood
that the Parties will achieve the purpose and Goal of the Technology Alliance,
because of circumstances created by or directly related to the dispute itself.
11.3.1 GOOD FAITH CONSULTATION. In the event of a dispute between the
Parties, the Parties shall attempt in good faith to settle such dispute through
mutual consultation. If, after such consultation, the dispute cannot be
resolved, the Parties shall wait for not less than sixty (60) days after the
dispute arises and at the end of such period meet for a second consultation. If
the dispute is not resolved after the second consultation, the matter shall be
referred to the Senior Vice President (Corn Processing and Food Specialties) of
ADM Sub and the Chief Executive Officer of MBX (together, the "Senior
Executives") for resolution in accordance with Section 11.3.2.
11.3.2 SENIOR EXECUTIVES. The Senior Executives shall diligently
attempt to resolve the dispute, including, if they deem it necessary, meeting
directly in order to provide full consideration of the dispute. If the Senior
Executives are unable to resolve the dispute within sixty (60) additional days
after the second consultation then the dispute shall be referred to arbitration.
11.3.3 ARBITRATION. Any arbitration to be conducted hereunder shall be
brought and conducted in accordance with the following provisions:
(1) The arbitration shall be held in Chicago, Illinois if
initiated by MBX and in Boston, Massachusetts if initiated
by ADM Sub.
(2) The arbitration shall be conducted by three (3) arbitrators
in accordance with the commercial arbitration rules of the
American Arbitration Association. Each Party, upon notice to
the other Party, shall appoint one arbitrator. The two
arbitrators appointed by the Parties shall appoint a third
arbitrator. The arbitrators shall be lawyers who will have
substantial patent law or patent litigation experience and
substantial commercial law or commercial litigation
experience. The arbitrators shall be instructed to follow
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federal precedents, laws and evidentiary rules that would be
applicable to litigation in the Federal Court of the
jurisdiction in which the arbitration is held, except for
those issues which involve patent issues, in which case the
arbitrators shall be instructed to follow federal
precedents, laws and evidentiary rules that would be
applicable to litigation in the Federal Circuit Court of
Appeals.
(3) The arbitration shall be conducted in English, and all
written submissions shall be in English.
(4) The Parties agree that the decision of the arbitrators shall
be final and binding on the Parties. The decision of the
arbitrators shall be carried out voluntarily and without
delay.
(5) The fees and expenses of the arbitrators shall be shared
equally by the Parties. Each Party will bear its own costs
and expenses, including without limitation, its own legal
fees and expert witness fees. Notwithstanding the foregoing,
the Parties agree to be bound by and obey any order of the
arbitrators relating to one Party being liable for any such
costs, including without limitation, the legal fees of the
other Party.
11.3.4 EQUITABLE RELIEF. Nothing in this Agreement shall prevent or
limit a Party's right to file and prosecute an action to seek injunctive relief
to prevent or stay a breach of this Agreement or any action necessary to enforce
the award of the arbitrators.
11.4 GOVERNING LAW. Except as specifically otherwise provided herein, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware.
11.5 FORCE MAJEURE. In the event of the intervention of a force majeure,
which term shall include, without limitation, acts of God, strikes, labor
disturbances, lockouts, riots, epidemics, quarantines, wars or conditions of
war, actions, inactions or regulations of any government, fires, acts of
terrorists, insurrections, embargoes or trade restrictions, or any other reasons
beyond a Party's reasonable control, the Party affected by the force majeure
shall use Commercially Reasonable Efforts to comply with the Agreement. In the
case that such Commercially Reasonable Efforts fail or are futile, such Party
shall not be responsible for delays or a failure to perform under this Agreement
caused by a force majeure. Provided, however, that any payment obligations of a
Party shall not be affected or excused by such force majeure. If a Party's delay
or failure to perform continues for more than one hundred twenty (120) days, the
other Party may terminate this Agreement. In the event that either Party shall
incur a delay in delivery or performance for a reason permitted by this Article,
that Party shall notify the other Party within five (5) days from the date of
the actual occurrence of the cause for such delay.
11.6 NOTICES. All notices, requests and other communication hereunder shall
be in writing and sent by facsimile with confirmation sent by courier requiring
acknowledgment of receipt by the respective Parties as follows:
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To MBX: Metabolix Corporation
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: President and CEO
With copy to: Xxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx PC
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxx, Esq.
To ADM Sub: ADM Polymer Corporation
0000 Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: President
With copy to: Xxxxx-Xxxxxxx-Midland Company
0000 Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
Either Party may change the registered address to which such notice should be
sent by giving written notice to the other Party.
11.7 INTEGRATION; ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the Parties with regard to the subject matter contained herein and
supersedes all prior written and oral agreements, understandings and
negotiations, with regard to such subject matter.
11.8 AMENDMENTS. This Agreement, including this provision, may not be
amended without a written instrument signed by duly authorized representatives
of both Parties.
11.9 SEVERABILITY. In the event that any part of this Agreement is
adjudicated to be invalid or unenforceable because it contravenes any applicable
law or regulation, the Parties shall perform this Agreement in accordance with
their original intentions as set forth herein, corresponding as closely as
possible to the invalid or unenforceable part insofar as it is still valid under
such law or regulation and reflects the original intention of the Parties. The
validity of the remaining permissible portions of this Agreement shall remain
unaffected thereby.
11.10 WAIVER/CUMULATIVE RIGHTS. No failure by any Party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition. All rights and remedies which a Party may have hereunder or by
operation of law are cumulative, and the pursuit of one right or remedy shall
not be deemed an election to waive or renounce any other right or remedy.
11.11 NO JOINT VENTURE OR PARTNERSHIP RELATIONSHIP. Nothing contained in or
relating to this Agreement is or shall be deemed to constitute a joint venture,
partnership or agency relationship between any of the Parties hereto and no
Party shall have any authority to act for or to assume any obligation or
responsibility on behalf of the other Party.
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11.12 FURTHER ASSURANCES. Each Party shall duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things, including without limitation the
filing of such assignments, agreements, documents and instruments, as may be
necessary or as the other Party may reasonably request in connection with this
Agreement or to carry out more effectively the provisions and purposes hereof,
or to better assure and confirm unto such other Party its rights and remedies
under thus Agreement.
11.13 CONSTRUCTION. Except where the context otherwise requires, wherever
used the singular shall include the plural, the plural the singular, the use of
any gender shall be applicable to all genders, the word "or" is used in the
inclusive sense and the word "any" shall mean any one item, or all items, in a
referenced category. The captions of this Agreement are for convenience of
reference only and in no way define, describe, extend, or limit the scope or
intent of this Agreement or the intent of any provision contained in this
Agreement. The language of this Agreement shall be deemed to be the language
mutually chosen by the Parties and no rule of strict construction shall be
applied against either Party hereto.
11.14 ACKNOWLEDGMENT. The Parties hereby acknowledge that all licenses
granted herein are, for the purposes of Section 365(n) of Title 11 of the U.S.
Code, licenses of rights to intellectual property as defined in said Title 11.
11.15 COUNTERPARTS. This Agreement may he executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which,
taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year above
written.
ADM POLYMER CORPORATION
By: /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: President
METABOLIX, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
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