Exhibit 10.20
CONTRACT RESEARCH AGREEMENT
CDT INTERNATIONAL LIMITED (1)
AND
COVION ORGANIC SEMICONDUCTORS GMBH (2)
CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED FROM THIS DOCUMENT. SUCH OMISSIONS ARE NOTED BY " [**]" . AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.
CONTRACT RESEARCH AGREEMENT
THIS AGREEMENT is made the 14 day of December 2001 between:
(1) CDT INTERNATIONAL LIMITED , a company incorporated in Bermuda whose registered office is situated at PO Box HM1556, Corner House Church, Parliament Street, Hamilton HMFX, Bermuda (" CDT" ); and
(2) COVION ORGANIC SEMICONDUCTORS GMBH , a company incorporated in Germany whose principal place of business is situated at Industriepark Hoechst, Gebaude G864, D-65926, Frankfurt am Main, Germany (" Covion" ).
RECITALS:
(A) CDT has, and/or has an Affiliate which has, scientists skilled in the art of the design and development of organic semiconductors and CDT is prepared to carry out, and/or procure that such Affiliate carries out, research and development into this area on behalf of Covion.
(B) Covion has considerable experience and valuable technical and commercial information and know-how in the field of organic semiconductors and wishes CDT to carry out, and/or procure the carrying out by such Affiliate of CDT of, contract research and development on behalf of Covion.
(C) The Parties therefore wish to enter into this Agreement to specify as between CDT and Covion the terms and conditions of the working relationship between CDT and/or CDT' s Affiliate and Covion in relation to the design and development of organic semiconductors.
IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS
1.1 In this Agreement including its Schedules, the headings are included for ease of reference only and shall not affect its interpretation and the following terms shall have the following meanings unless the context otherwise requires:
" Affiliate" means, at the relevant time, any business entity which controls, is controlled by or is under common control with the business entity referred to but in each case only for so long as such control or common control relationship exists; for the purposes of this definition a business entity shall be deemed to " control" another business entity if it owns, directly or indirectly, in excess of 50% of the outstanding voting securities or capital stock of such business entity or any other comparable equity or ownership interest with respect to a business entity other than a corporation.
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" Assigned Patent" means patent application WO 00/55927 (together with the rights to all Patents claiming priority therefrom including associated or national regional patents and continuations thereof).
" Avecia Group Company" means Avecia Limited (a company incorporated in England with company number 3730853) or any Affiliate of Avecia.
" Calendar Quarter" means the period from the Effective Date to 31 st March 2002 and thereafter each successive period of three (3) months ending on, 30th June, 30th September, 31 st December and 31 st March.
" CDT Group Company" means CDT or any Affiliate of CDT.
" CDT Limited" means Cambridge Display Technology Limited (a company incorporated in England with company number 2672530).
" Confidential Information" means all confidential information disclosed by one party or any of its Affiliates (" the Disclosing Party" ) to the other party or any of its Affiliates, (" the Receiving Party" ) pursuant to this Agreement in written verbal or any other form, including, without limitation, data, know-how, formulae, compositions, designs, photographs, drawings, specifications, software program, samples, any product made using the samples and any other material bearing or incorporating any information relating to such information.
" Covion Group Company" means Covion or any Affiliate of Covion.
" Covion Licensee" means any Covion Group Company, any Avecia Group Company, any Relevant Joint Venture of any Covion Group Company and/or any Relevant Joint Venture of any Avecia Group Company;
" Covion OLEM Products" means conjugated Polymeric OLEMs (other than PLEMs) or formulations containing conjugated polymeric OLEMs (other than PLEMs) sold pursuant to a supply agreement for use in the Field.
" Covion OSC Products" means organic semiconductors or formulations containing organic semiconductors sold pursuant to a supply agreement for use outside the Field where the sale or any other aspect of the exploitation of such organic semiconductors or formulations containing organic semiconductors by Covion or any Covion Licensee or by a direct customer of Covion or any Covion Licensee has taken place in a country in which such sale or other aspect of the exploitation falls within any of the then still valid claims licensed to Covion under a patent covering that country in accordance with the Patent and Know-How Licence or falls within any of:
(a) the then still valid claims in a patent covering that country owned by Covion for an invention covered by Clause 7.5 of this Agreement; or
3 (b) the know-how owned by Covion for an invention which is considered to be equivalent to a patent in that country pursuant to clause 7.5 of this Agreement.
" Covion Products" means Covion OLEM Products and/or Covion OSC Products.
" Device Facilities" means CDT Limited' s physics and Device facilities in Cambridge.
" Devices" means devices containing organic semiconductors.
[**]
" Effective Date" means the date of this Agreement.
" Existing Patents" means the patents and/or patent applications owned or to be owned by any CDT Group Company or to which any CDT Group Company has/will have relevant rights which enable such CDT Group Company to license/sub-license third parties and which in either case are for inventions, made prior to the Effective Date which were not made or otherwise acquired pursuant to or as part of a pre-existing relevant business by a CDT Group Company at any time before it became an Affiliate of CDT.
" exploitation" means manufacture, import, keeping, use and/or sale (including in relation to any such activity offering to do any of these).
" Field" means the field of displays and lighting.
" Intellectual Property Rights" means patents, designs, design rights, copyright, right in know-how and other intellectual property rights, in each case whether registered or unregistered and including applications for the grant of any of the foregoing and all rights or forms of protection having equivalent or similar effect to any of the foregoing which may subsist anywhere in the world.
" Materials Evaluation Agreement" means the agreement to be entered into between CDT Limited and Covion in the form set out in Schedule 1 to this Agreement contemporaneously with this Agreement.
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" Net Sales Value" means the gross invoice price for sales on an arm' s length basis of Covion Products by Covion or any Covion Licensee to any third party (i.e. an entity other than Covion or a Covion Licensee), less
(i) the cost of packaging (not forming part of the Covion Products), transportation and insurance;
(ii) commissions, early payment discounts (but only where these are in accordance with local business custom and practice), trade discounts or quantity discounts actually granted;
(iii) allowances or credits actually granted to customers on account of settlement of complaints, returns and replacements; and (iv) sales taxes and/or other taxes and/or tariff duties directly imposed on sales of Covion Products.
Where Covion Products are sold other than on an arm' s length basis to a third party (i.e. an entity other than Covion or a Covion Licensee), the Net Sales Value shall be deemed to be the average gross invoice price obtained by Covion or the relevant Covion Licensee (as the case may be) for sales on an arm' s length basis over the six months immediately preceding the transaction in question less those items specified above.
" OLEMs" means organic light-emitting materials.
" Patent and Know-How Licence" means the patent and know-how licence of even date herewith between CDT Limited and Covion.
" PLEMs" means (a) Polyfluorenes; (b) solid compositions containing Polyfluorenes in an amount of at least one percent (1%) by weight; and (c) solutions containing " Polyfluorenes" including formulations for ink jet printing; for the purposes of this definition " Polyfluorenes" means any polymer having substituted or unsubstituted 2,7-linked fluorene mer units but does not include polymer where all the fluorene units are spirofluorenes or indenofluorenes.
" Project" means a research and development programme concerning the use of OLEMs in the Field designated by Covion pursuant to this Agreement.
" Relevant CDT Group Company" means CDT and/or any relevant Affiliate of CDT engaged by CDT pursuant to clause 2.1.
" Relevant Joint Venture" means any joint venture in which the business entity referred to has at least a 50% interest in the outstanding voting securities or capital stock of such joint venture or any other comparable equity or ownership interest with respect to a business entity other than a corporation.
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" Results" means all information, results, inventions, improvements, discoveries, hypotheses, developments, scientific knowledge and know-how conceived as a direct consequence of work conducted pursuant to any Project under this Agreement or using the Confidential Information of Covion provided under this Agreement whether conceived solely by any CDT Group Company personnel or Covion personnel or jointly by any CDT Group Company personnel and Covion.
" Royalty Income" means any income (after deduction of any taxes imposed directly on such income) from sales of organic semiconductors obtained by Covion or any Covion Licensee from the licensing to any third party (i.e. an entity which is not a Covion Licensee) of any patent owned at any time by Covion for an invention covered by Clause 7.5 of this Agreement or any know-how owned at any time by Covion for an invention which is considered to be equivalent to a patent in certain countries pursuant to Clause 7.5 of this Agreement.
" Third Party Patent" means any patent or patent application belonging to a party unconnected with any party to this Agreement with a priority date on or prior to the Effective Date.
1.2 A reference to any party to this Agreement shall include a reference to its legal successors and permitted assignees. 1.3 References to recitals, clauses, paragraphs, and schedules, are to recitals, clauses paragraphs and schedules to this Agreement. 1.4 The Schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of the Agreement and any reference to the Agreement shall include the Schedules.
1.5 References to writing shall include any mode of reproducing words in a legible and non-transitory form.
1.6 References to "a3" and " pounds sterling" are references to the currency of the United Kingdom. 2. SPECIFICATION AND PERFORMANCE OF PROJECTS
2.1 CDT shall provide (or shall procure the provision by a CDT Affiliate of) the full time effort of at least ten graduate scientists skilled in the art of the design and development of organic semiconductors (of whom a minimum of five must be educated to phD level) to carry out Projects pursuant to this Agreement and
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sufficient time of a skilled project manager to oversee this work within the Relevant CDT Group Company (" CDT Project Manager" ). CDT shall ensure that any scientists involved in any Project will not work on projects within any CDT Group Company to develop organic semiconductors for third parties or on any independent projects to develop organic semiconductors within any CDT Group Company.
2.2 Covion shall also appoint a skilled project manager to work with the CDT Project Manager in directing the Projects (" Covion Project Manager" ). The Covion Project shall designate the scope, the targets and the associated work programmes for each Project in consultation with the CDT Project Manager. The CDT Project Manager will provide a written monthly report to the Covion Project Manager on the progress and direction of each Project and they will otherwise meet as necessary in order to assess the Progress and direction of each Project.
2.3 The actual work under each Project may be carried out solely by the Relevant CDT Group Company or by the Relevant CDT Group Company in collaboration with personnel of Covion. The CDT Project Manager shall oversee any work done on a Project by Covion personnel at the Relevant CDT Group Company' s premises unless otherwise agreed with the Covion Project Manager. 2.4 CDT:
(a) warrants that the Relevant CDT Group Company has the expertise and resources to perform research and development in the area of organic semiconductors; and
(b) shall, or shall procure that the Relevant CDT Company shall, carry out the research and development under each Project with the care and skill reasonably to be expected of chemists skilled in the art of the design and development of organic semiconductors but Covion acknowledges that no CDT Group Company gives any representation or warranty that any such work as is carried out pursuant to a Project will be successful in achieving the objective of such Project.
2.5 All costs incurred by Covion pursuant to any project shall be borne by Covion. All costs incurred by the Relevant CDT Group Company pursuant to any Project shall (as between CDT and Covion) be borne by CDT. Covion and the Relevant CDT Group Company shall each provide all necessary infrastructure and support to its staff up working on any Project (including in the case of Covion travel, lodging, meals and other living and incidental expenses for such Covion personnel involved on any Project and the Covion Project Manager). The Relevant CDT Company shall make available such equipment and Support capacities as would reasonably be required to support a synthetic chemistry
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activity involving ten scientists and of a quality consistent with a state of the art industrial chemical research organisation. Covion and the relevant CDT Group Company shall each fund its own efforts for carrying out each Project including, without limitation, funding manpower and capital resources. However no CDT Group Company can be required to commit to external purchases of specialized monomers at a level that would be equivalent to commercial manufacturing scale (which for these purposes shall mean manufacture of one half of one kilogramme or more of an organic semiconductor).
2.6 The research and development on each Project shall be carried out at CDT Limited' s Cambridge research and development facilities at the relevant time. The laboratories in which the Projects will be carried out will comply with all UK COSHH requirements. The personnel of Covion involved in any Project and the Covion Project Manager shall be allowed access to such laboratories (subject to any normal security requirements) and (subject to CDT Limited' s requirements and commitments in respect thereof) to use any relevant equipment during normal business hours in the same way as the Relevant CDT Group Company' s personnel working on such Project.
2.7 CDT shall ensure that the Relevant CDT Group Company' s personnel and any Covion staff working on any Project shall, on reasonable notice and subject to CDT Limited' s requirements and commitments in respect thereof, have such access free of charge as may be necessary in connection with any such Project to the Device Facilities solely for the purposes of research, development and testing in relation to OLEMs in the Field. Covion staff shall also be entitled to make use of the Device Facilities free of charge solely for research and development in relation to organic semiconductors being carried out by Covion other than pursuant to or in connection with ally projects during normal business hours on reasonable notice subject to CDT Limited' s requirements and commitments in respect thereof.
2.8 Any Project may be varied by the Covion Project Manager from time to time in consultation with the Relevant CDT Group Company so as to give the best opportunity to deliver the objectives of such project. Each project shall be conducted by the Relevant CDT Group Company within overall parameters as agreed with Covion.
2.9 After completion of each stage of any Project, Covion and the Relevant CDT Group Company shall each in a timely manner communicate to the other in writing the Results.
2.10 Representatives from Covion and the Relevant CDT Group Company involved in each Project shall meet at such times and in such places as the respective project managers shall agree in order to discuss the progress of the Project, any issues arising and agree any modifications to the objective of the Project.
8 2.11 For the avoidance of doubt, any time periods specified for the carrying out of any Project shall be indicative only. 2.12 For the avoidance of doubt, it shall not be considered a breach of this Agreement by either Party (or any other Relevant CDT Group Company) if the objectives of any Project are not achieved so long as Covion and the Relevant CDT Group Company each uses reasonable technical endeavours in the performance of its obligations.
2.13 Each party (and any other Relevant CDT Group Company) will at all times act in the utmost good faith towards the other party in connection with this Agreement and the research to be carried out under it pursuant to any Project. Each party (and any other Relevant CDT Grou ...
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