Document:

Exhibit 10.3

 

[Redacted Copy]

 

“***” indicates portions of the agreement that have been omitted pursuant to a confidential treatment request and have been filed with the Securities and Exchange Commission separately.

 

	
Frame   Manufacturing and Supply Agreement
    	
 
    	
Novaled confidentiality
    

 

Manufacturing and Supply Agreement

 

Novaled AG, Tatzberg 49, D-01307 Dresden, a company duly organised and existing under the laws of Germany registered at the local court of Dresden, represented by Gildas SORIN, acting in his capacity of Managing Executive Director,

 

- Hereinafter called “Novaled” -

 

and

 

Ciba Specialty Chemicals Inc., Klybeckstrasse 141, CH-4057 Basel, Switzerland, represented by ***, Head of BL Electronic Materials and ***, Senior Legal Counsel

 

- Hereinafter called “Manufacturer” -,

 

Hereinafter also called collectively the “Parties” and individually a “Party”

 

Preamble

 

Novaled has developed specific patented and patentable know-how and certain confidential, substantial and identified technical and commercial information concerning materials and substances for specific applications in the field of organic light emitting devices (hereinafter referred to as “OLEDs”). Manufacturer is a company, which is in the business of chemical production and has developed specific patented and patentable know-how and certain confidential, substantial and identified technical and commercial information concerning the manufacturing processes for the organic materials as defined in Annex I.

 

Novaled proposes to obtain specific manufacturing services as regards organic materials as defined in Annex I (referred to as “Authorized Purpose”) exclusively from Manufacturer subject to the terms and the conditions set forth in this Agreement and specific orders that have to be agreed between the Parties on a case-by-case basis. Annex I shall be amended by both parties in writing by mutual agreement from time to time. Manufacturer ensures by confirming Novaled’s requests case-by-case to have the capacity for the requested production and services and to carry out these orders solely for Novaled subject to the terms and the conditions set forth in this Agreement and the subsequent orders under this Agreement.

 

 

NOW , THEREFORE, it is agreed as follows:

 

1.              Placement of orders and production

 

1.1 Subject to the terms and conditions set forth in this Agreement and the subsequent orders under this Agreement, Manufacturer shall carry out manufacturing and supply services as regards the Authorized Purpose for Novaled and Novaled shall purchase the agreed quantities of products, substances and/or services as may be ordered by Novaled from time to time exclusively from Manufacturer. The terms and conditions of the subsequent orders shall be agreed separately in a fair and equitable way between the Parties using Annex II or a similar form and shall include:

 

·                  Specification of manufacturing products, substances and/or services according to the mutually approved production process for raw materials (referred to as “Products”)

·                  Product characterisation

·                  Quantity

·                  Price

·                  Payment conditions

·                  Delivery time

·                  Product purity (tolerances)

·                  Rolling forecasts

·                  Stock inventories

·                  Packaging

 

The terms and the conditions set forth in this Agreement also apply to all subsequent orders between the Parties. In case of contradictions between the Agreement and individual terms and conditions of a subsequent order the terms and conditions of the subsequent order shall prevail.

 

1.2 Any divergent conditions stipulated by either Party are not agreed to by the other Party unless such Party expressly sets out its acceptance of such conditions in writing.

 

1.3 In order to keep the information given by Novaled confidential the Manufacturer is not authorised to sub-contract the subsequent order, parts of it or any of the manufacturing works and services concerning these orders outside its legal body, except as agreed with Novaled. For the avoidance of doubt, Manufacturer may assign the contract in whole or in part to its Affiliates, “Affiliates” meaning those corporations, companies and business entities which are, directly or indirectly, controlled by, controlling or under common control with the parties, control meaning ownership of more than 50% of the shares or entitled to appoint the Board of Directors.

 

1.4 Novaled warrants that Manufacturer receives access to any and all information, data, technology, know-how etc. required for the successful implementation of the Authorised Purpose, including but not limited to, environmental, health and safety data.

 

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1.5 Manufacturer warrants that Novaled receives access to any and all information, data, technology, know-how etc. required and needed for Novaled’s envisaged use of Products.

 

2.              Delivery of Products

 

Agreed delivery dates are binding and any late delivery shall result in a liability of the party in delay. Whether or not the delivery date or the delivery period has been complied with shall be determined by the date on which the Products are received at the point of receipt or application as agreed by both Parties in writing.

 

3.              Forwarding I Packaging

 

The agreed prices are fixed prices and include the costs for packaging and transportation to the specified destination and exclude supplementary claims of all kinds unless otherwise stated in the subsequent orders. In cases where prices are quoted “ex works”, Novaled is required to ensure that the most reasonable and suitable method of transportation is chosen, unless Novaled itself collects the Products or arranges for the Products to be collected by a carrier. The Parties shall discuss and agree on the allocation of any additional costs that have not been agreed and could not have been reasonably foreseen. A detailed delivery note with information relating to the order must be enclosed with the delivery.

 

4.              Warranty, Product Liability

 

4.1 The Manufacturer agrees to manufacture the Products according to the specifications provided by Novaled and agreed by both Parties. Novaled shall examine the Products immediately on receipt and notify the Manufacturer of any apparent defects without delay, and within ten working days at the latest. Novaled is required to notify the Manufacturer of any hidden defects immediately on the discovery of the said defects. Failure to make such notification within such period shall constitute acceptance of the delivery and agreement that such delivery fully complies with applicable terms and conditions.

 

4.2 Novaled shall carry out technical tests of the delivered Products as agreed upon in the product characterization at its costs. If in such tests technical errors are found which exceed the tolerances agreed upon and such is due to default of Manufacturer, Manufacturer shall have to bear the costs of such investigation.

 

4.3 Manufacturer makes no warranty of any kind, either express or implied, by fact or law, other than Manufacturer’s obligation to deliver Products complying with the agreed specifications and Manufacturer makes no warranty of fitness for a particular purpose, or warranty of merchantability other than stated herein.

 

4.4 Manufacturer’s total liability and Novaled’s exclusive remedy for any cause of action associated with the Agreement, whether based in tort, contract, strict liability or any other legal theory is expressly limited to payment in an amount not to exceed twice the value of the order from which such liability arose. In no event shall Manufacturer be liable for any other damages including, without limitation, incidental, consequential or other damages.

 

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4.5 Since Manufacturer has no control over Novaled’s (or others’) use, disposition, subsequent processing, admixing or reaction of any Product with other products, chemicals or materials, Novaled assumes the entire liability and responsibility therefore, except when and to the extent that such liability is caused by Manufacturer’s negligence.

 

4.6 In any case, Novaled’s right to claim compensation shall expire two years after delivery of the Products. The period of limitation for parts newly delivered or rectified by the Manufacturer within the scope of subsequent delivery shall start from the beginning on the date that such parts are subsequently delivered or rectified.

 

5.              Licensing

 

5.1 Manufacturer shall get a free and non transferable license on all patents and patent applications necessary for the manufacturing of Product within the Authorized Purpose.

 

5.2 Novaled shall get a free and non transferable license on all patents and patent applications needed and necessary to promote, market, commercialize and distribute Products.

 

6.              Sale to Third Parties

 

6.1 Manufacturer shall not have the right to develop, promote, market, commercialize, distribute, issue orders and/or use for the production of and/or sell the Products. In the event that any new application of the Products shall arise, then the parties shall enter into good faith negotiations for its commercialization.

 

6.2 Manufacturer shall not have the right to use confidential information transferred to it under this Agreement for the production or the marketing of a competing product.

 

7.              Confidentiality obligation /  documents

 

7.1 Either Party agrees to keep strictly confidential all Confidential Information as defined below given by the other party and to provide the necessary means to prevent un-authorised disclosure of the Confidential Information and not to provide it to third parties any of it during this Agreement and for a period of five (5) years after its expiration. For the purpose of this Agreement, Manufacturer’s Affiliates shall not be regarded as third parties, provided that they are bound by obligations of secrecy no less strict than those set out herein.

 

7.2 Both Parties shall limit access to Confidential Information to those employees who are required to be aware of it for the purpose of this Agreement and who agree to be bound by the terms of this Agreement.

 

7.3 Subject to the confidentiality obligation are all substances, materials, drawings, data, instructions, articles, processes, know-how etc., which either Party has provided to the other hereunder (“Confidential Information”). Written documents shall be marked as confidential.

 

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7.4 The above obligations shall not apply or shall cease to apply to information which either Party can tangibly show is information which:

 

a)                                      was known by receiving party prior to disclosure;

 

b)                                     has become part of the public domain through no fault, act or omission of receiving party;

 

c)                                      was provided to receiving party by a third party having no duty of confidentiality to either Party;

 

d)                                     was developed by either Party independently without the use of or reliance on any Confidential Information.

 

7.5 After the expiration or termination of the Agreement all written documents are to be returned to the disclosing Party within 10 days or as otherwise agreed between the Parties. Either Party shall not have the right to use the Confidential Information given to it for any other purposes than the Authorized Purpose of this Agreement. Particularly for a period of five years after the expiration or termination of this Agreement, neither Party shall have the right to use Confidential Information submitted to it directly or indirectly from the other Party for itself or for third parties.

 

7.6 The term Confidential Information shall apply to any and all information exchanged since November 1, 2005 between the Parties.

 

8.              Intellectual Property Rights and Use Limitation

 

8.1 This Agreement does not prejudice the right of either Party to file patent applications or to file applications for any other intellectual property rights referring to know-how, developments, improvements etc. (referred to as “Improvements”) generated by either Party based on its own and on the other Party’s Confidential Information if, (i) in the case of Manufacturer, such Improvement refers to the technical and commercial information concerning the manufacturing process and if, (ii) in the case of Novaled, such Improvement refer to the technical and commercial information concerning materials and substances as regards Annex 1.

 

8.2 Improvements generated by either Party based on the other Party’s Confidential Information which can not specifically be related and attributed to either the Product and its applications or the manufacturing process specified in article 8.1 above, shall be jointly and equally owned by both Parties, unless otherwise agreed.

 

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9.              Term and Termination

 

9.1 The Agreement shall be valid for a period of two years (referred to as “Initial Period”) beginning from date of signing of this Frame Agreement (referred as “Effective Date”). Thereafter is shall be extended for one additional year, unless written cancellation is given by either Party nine (9) months before the end of the Initial Period. The Parties shall enter into good faith negotiations for any follow-up agreements.

 

9.2 Either Party may terminate this Agreement effective immediately upon written notice in the event of any material breach of this Agreement by the other Party which remains uncured after 30 (thirty) day’s written notice thereof from the non-breaching Party.

 

10.       Assignability

 

This Agreement shall not be assigned by either party to a third party without the prior written consent of the other party, except that either Party may assign this Agreement to a successor of business and assigns in respect of the business to which this Agreement relates.

 

Either Party shall have the right to extraordinarily terminate this agreement in the event that the other Party is being taken over by a competitor of the remaining party.

 

11.       Miscellaneous

 

11.1 Unless otherwise agreed the place of the performance under this Agreement shall be in Dresden, Germany at Novaled’s premises.

 

11.2 This Agreement and matters connected with the performance hereof shall be construed and governed in accordance with the substantial laws of Federal Republic of Germany with no reference to the rules on conflict law.

 

11.3 Any changes, amendments or modifications of this Agreement have to be made in writing.

 

11.4 If any term or provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or provisions of this Agreement, but such provision or provisions shall be ineffective only to the extent of such invalidity, illegality or unenforceability, without invalidating the remainder of such provision or provisions or the remaining provisions of this Agreement. In such case, this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions had never been contained herein, unless the deletion of such provision or provisions would result in such a material change as to cause performance by a Party to be unreasonable.

 

	
Ciba   Specialty Chemicals Inc.
    	
 
    	
 
    	
 
    	
Novaled   GmbH
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
/s/   Rolf Drewes
    	
 
    	
/s/   Luca Mighali
    	
 
    	
/s/   Gildas Sorin
    
	
Rolf   Drewes
    	
 
    	
Luca   Mighali
    	
 
    	
Mr.   Gildas Sorin
    
	
Head   of
    	
 
    	
Senior   Legal Counsel
    	
 
    	
Managing   Executive Director
    
	
BL   Electronic Materials
    	
 
    	
 
    	
 
    	
Dresden,   Germany, date 10 April 2006
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Basel, date 10 April 2006
    	
 
    	
 
    	
 
    	
 
    

 

6

 

ANNEX I

 

Organic materials shall be:

 

***, 
 ***
 ***

 

7

 

Annex II

 

Order form for subsequent orders under the 
 Frame Manufacturing and Supply  Agreement 
 dated                

 

From: Novaled

 

To: Manufacturer

 

Date:

 

According to the terms and conditions of the Frame Manufacturing and Supply Agreement, dated           that apply complementary to the terms and conditions stated herein, Novaled places the following order:

 

Specification of manufacturing products, substances and/or services:

 

Manufacturing /  synthesis procedure conditions: 

 

Product characterisation: 

 

Quantity:

 

Raw materials provided by Novaled:

 

Price:

 

Payment condition

 

Delivery time:

 

Product purity (tolerances):

 

Further conditions for manufacturing and delivery:

 

	
Dresden,   the
    	
 
    	
 
    	
 
    	
Signed   on behalf of Novaled GmbH
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Accepted   by Manufacturer:
    	
 
    	
 
    	
 
    	
 
    
	
, the
    	
 
    	
 
    	
 
    	
signed   on behalf of 
    

 

8Exhibit 10.4

 

[Redacted Copy]

 

“***” indicates portions of the agreement that have been omitted pursuant to a confidential treatment request and have been filed with the Securities and Exchange Commission separately.

 

AMENDMENT

 

to the

 

Frame Manufacturing and Supply Agreement
  dated April 11th, 2006 (Ciba agreement no. 2007-00892-01, “Agreement”)

 

by and between

 

Novaled AG, Tatzberg 49, D-01307 Dresden (“Novaled’)

 

And

 

Ciba Inc., Klybeckstrasse 141, CH-4057 Basel (“Ciba or Manufacturer”)

 

The Agreement shall be modified as follows:

 

1.                                      Term and Termination

 

a.                                       The Agreement shall be extended until April 30th, 2011 and thereafter be automatically extended for an indefinite period by an additional year each time unless either party terminates the Agreement upon 6 months prior written notice, for the first time effective as of October 30th, 2010.

 

b.                                      In case of termination of the Agreement, Novaled shall provide Ciba within two weeks after the date of notification of termination with a forecast of organic materials (the “Products”) quantities needed until the termination (the “Forecasted Quantities”). Until expiry of the Agreement in case of termination for whatever reason Ciba shall be obliged to deliver the Forecasted Quantities and Novaled shall be obliged to purchase either the Forecasted Quantities or Ciba’s then current inventory of the Products which shall not exceed 1/3 of the purchases of the 12 months prior to the date of the notification of termination.

 

c.                                       Novaled shall purchase all Products as listed in Annex 1a exclusively from Ciba provided that Ciba is able to supply and terms and conditions for the manufacture and supply of such materials acceptable to both parties have been agreed upon by Novaled and Ciba.

 

d.                                      ***

 

2.                                      Order and Purchase Obligation

 

The ordering and purchase obligation from Novaled to Ciba as defined under Article 1 of the Agreement is valid as long as Ciba is able to supply Products in quantities and in a time frame as agreed between Novaled en Ciba.

 

 

3.                                      Products and Products Specification

 

a.                                       Annex 1 which lists the Products manufactured by Ciba under the Agreement shall be replaced by a new Annex 1a as follows:

 

***

 

b.                                      Referring to Article 1 of the Agreement, which stipulates the ordering and specification principle, an Annex 1b (in Annex to this Amendment) shall be added which contains preliminary specifications and may be extended or revised, upon mutual agreement between the parties at any time, if the technical knowledge development regarding a material and its intended use gives a cause for such a change. Any such change in specifications will be addressed by Novaled in written form prior to placing orders which are affected by such changes.

 

***, Ciba will independently present an assessment of potential impurity artefacts caused by the production process. This has to take place upon each change in the production process or batch size and will include an assessment of potential impurities and suggestions for their analytical determination in terms of product quality specification. Ciba shall inform Novaled in due time about any change in the production process or batch size and Novaled has to agree on it before Ciba implement these change.

 

4.                                      Warranty, Product Liability

 

The examination period for Novaled to examine the Products on receipt and notify the Manufacturer of any deviations from the product specifications shall be extended to *** at the latest.

 

5.                                      Miscellaneous

 

This Amendment shall become effective as of April 11, 2009. Otherwise, except as stated herein, the Agreement shall remain unchanged.

 

	
Dresden
    	
 
    	
March 24th,   2009
    	
 
    	
Novaled   AG
    	
 
    	
/s/   Gildas Sorin
    
	
Place
    	
 
    	
Date
    	
 
    	
 
    	
 
    	
G. Sorin CEO
    
	
Basel
    	
 
    	
30/3/2009
    	
 
    	
Ciba   Inc.
    	
 
    	
/s/   N. Ergenc
    
	
Place
    	
 
    	
Date
    	
 
    	
 
    	
 
    	
N. Ergenc
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
/s/   J.L. Pretre
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
J.L. Pretre
    

 

 

ANNEX 1A:                  MATERIALS LIST

 

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Material Specification Sheet

 

 

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Material Specification Sheet

 

 

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Material Specification Sheet

 

 

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Material Specification Sheet

 

 

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Material Specification Sheet

 

 

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Material Specification Sheet

 

 

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Material Specification Sheet

 

 

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