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EXHIBIT 10 - iii
CONFIDENTIAL TREATMENT REQUESTED
Technology Cooperation Agreement
THIS TECHNOLOGY COOPERATION AGREEMENT made and entered into as of the 20th
day of December, 1996
BETWEEN
MEMC ELECTRONIC MATERIALS, INC, a corporation organized under the laws of the
State of Delaware, United States of America, having an office at 000 Xxxxx
Xxxxx, Xx. Xxxxxx, Xxxxxxxx, X.X.X.
AND
MEMC KULIM ELECTRONIC MATERIALS SDN BHD, a corporation incorporated in Malaysia
and having its registered office at 000, 0xx Xxxxx, Xxxxxxxx Xxxxxxxxxxxx, Xxxxx
Xxxxxx Xxxxxx, 00000 Xxxxx Xxxxxx, Xxxxxxxx.
WHEREAS:-
I. MEMC has developed and possesses information and processes involving
technology, equipment design, and other intangible assets and property rights of
value, all of which are useful with respect to the manufacture of Wafers (as
hereinafter defined).
II. MEMC is commercially practising in the United States and elsewhere the
foregoing processes embodying the technology, equipment design, assets, and
property rights for the manufacture of the aforesaid Wafers;
III. The JVC is a company established for the joint venture between MEMC
and KHAZANAH NASIONAL BERHAD (formerly called KHAZANAH HOLDINGS BERHAD) pursuant
to a Joint Venture Agreement (as hereinafter defined) for the purpose of
manufacturing Wafers in Malaysia.
IV. MEMC is willing to license the aforesaid technology to the JVC to
assist the JVC to establish a Wafer manufacturing facility in Malaysia so as to
satisfy the growing needs for Wafers of MEMC and other customers.
V. The JVC desires to have MEMC license the aforesaid intangible assets and
property rights to the JVC to the extent provided in this Agreement.
VI. MEMC is willing to license such intangible assets and property rights
to the JVC under the terms and conditions set forth in this Agreement.
VII. Approvals required of the MINISTRY OF INTERNATIONAL TRADE AND
INDUSTRY, MALAYSIA for this Agreement have been duly obtained.
NOW, THEREFORE, for and in consideration of the mutual covenants set forth
herein and other valuable consideration, IT IS AGREED by and between the PARTIES
as follows:-
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ARTICLE 1 DEFINITIONS & INTERPRETATION
1.1 As used in this Agreement, the following terms shall (unless the
context otherwise requires) have the meanings set forth opposite such terms in
this Article 1.1:-
"Affiliate" : the Subsidiaries and Joint Ventures of the referenced
company
"ASEAN Region" : the following countries:-
i) Thailand;
ii) Singapore;
iii) Malaysia;
iv) Indonesia;
v) Philippines; and
vi) Brunei;
vii) and for a period of 7 (Seven) years commencing
from the date of the Joint Venture Agreement,
Vietnam
excluding at all times, any other country
which may be a member of the Association of
South East Asian Nations (ASEAN)
"Claimant": the aggrieved PARTY who seeks arbitration in accordance
with Article 11
"Date of First Commercial Production": the date of Sale by
the JVC of a Qualified Prime Wafer
"Date of First Sale" : the date on which the JVC makes its first
commercial sale of a Wafer
"Date of this Agreement" : the date first set forth above
"Distributorship Agreement" : the Distributorship Agreement dated the
same date as this Agreement between MEMC and JVC
"Effective Date" : the 15th day of October 1996
"Field of this Agreement" : Wafers and processes, apparatus,
equipment, and materials useful in producing Wafers
"Joint Development" : any information or invention, whether or not
patentable, made or developed jointly by MEMC and the JVC, with or without
the assistance of one or more third parties
"Joint Venture" : any company or corporation engaged in the
manufacture of Wafers in which MEMC is a stockholder or shareholder
"Joint Venture Agreement" : the Joint Venture Agreement dated the day
of 199 between MEMC and KHAZANAH NASIONAL BERHAD (formerly called KUMPULAN
KHAZANAH HOLDINGS BERHAD)
"JVC" : MEMC KULIM ELECTRONIC MATERIALS SDN BHD above described
"JVC Equity Share" : an issued equity share in the JVC
"JVC Licensed Programmes" : such computer programmes for the
manufacture of Wafers and Silicon crystal growing:-
i) as are owned by the JVC or to which the JVC is entitled to
grant licences of the scope granted herein without any
obligation to a third party; and
ii) as are commercially in use at the JVC Plant from time to
time
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"JVC Patents" : all patents and patent applications which are
hereafter owned or acquired by the JVC
"JVC Plant" : the factory and necessary ancillary facilities to be
constructed and equipped by the JVC in Malaysia for the manufacture of the
Product
"JVC Technical Information" : any information or invention made or
developed by the JVC within the Field of this Agreement, whether patentable
or non- patentable, including but not limited to data and other information
relative to research and pilot plant projects
"KLRAC" : REGIONAL CENTRE FOR ARBITRATION, KUALA LUMPUR established
under the auspices of the ASIAN- AFRICAN LEGAL CONSULTATIVE COMMITTEE
"Mechanical Completion" : the date on which utilities and machinery
are installed in the JVC Plant and are ready to begin processing raw
materials to produce Wafers
"MEMC" : MEMC ELECTRONIC MATERIALS, INC above described
"MEMC Licensed Programmes" : such computer programmes for the
manufacture of Wafers and Silicon crystal growing:-
i) as are owned by MEMC or to which MEMC is entitled to grant
licences of the scope granted herein without any obligation
to a third party; and
ii) as are commercially in use at the MEMC Plants from time to
time
"MEMC Patents" : the patents and patent applications identified in
"Annexure B" and all patents issued by or patent applications filed in
Malaysia which are hereafter owned or acquired by MEMC
"MEMC's Plants" : MEMC's and its Subsidiaries' plants engaged in the
commercial manufacture of Wafers from polycrystalline Silicon
"MEMC Technical Information" : any and all information, know-how,
apparatus and processes commercially in use at MEMC's Plants for
manufacturing Wafers and Silicon crystal growing on or after the Date of
this Agreement INCLUDING:-
[CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC]
"MEMC Trademarks" : the trade marks, trade names and service marks
described in "Annexure D" of which MEMC is the proprietor
"MSIE" : million square inch equivalent being a unit to measure the
surface area of Wafers
"Net Sales Proceeds" : the gross selling price (ie. invoice price) of
Wafers sold by MEMC (pursuant to the Distributorship Agreement) less as may
be separately stated in JVC's or (as applicable) MEMC's invoice to its
customer, any charges for transport, shipping and insurance, sales and
other similar taxes, export duties and sales discounts
"New Products" : [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC]
"PARTIES" : MEMC and the JVC
"PARTY" : either of the PARTIES
"Prime Wafers" : Wafers which meet customer specifications for prime
wafers and are used by a customer as direct substrates of semiconductor
devices
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"Qualification" and "Qualified" : approval by a purchaser of Wafers
for a manufacturer of Wafers to sell from a particular manufacturing
facility or plant to the purchaser, Wafers having certain specifications
"Respondent" : the PARTY against whom a claim is brought pursuant to
Article 11
"Rules" : the Rules of Arbitration of the Regional Centre for
Arbitration, Kuala Lumpur as described in Article 11.2
"Sale" or "Sold" : when Wafers are invoiced to MEMC ( as sold by JVC
pursuant to the Distributorship Agreement)
"Silicon" : a semiconductor grade of elemental silicon of sufficient
purity and crystalline structure essential in the manufacture of
semiconductor devices
"Subsidiary" : a company or corporation, 100% (One Hundred Percent) of
whose entire stock or shares which is eligible to be voted for the election
of directors is owned or controlled, directly or indirectly, through stock
or share ownership by another company or corporation
"Technical Design Package" : the technical design package described in
Article 2.2
"Technical Fees" : the licence initiation fee and the running royalty
described in Articles 5.1 and 5.2 respectively
"Third Party" : any individual, corporation, partnership, trust or
other business organization or entity other than MEMC, the JVC and their
respective Affiliates
"Wafers" : [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC]
1.2 The Annexures hereto shall be taken, read and construed as essential
parts of this Agreement. The headings in this Agreement are inserted for
convenience of reference only and shall not be taken, read and construed as
essential parts of this Agreement. All references to Recitals, Annexures and
Articles shall be references to recitals and annexures to and articles of this
Agreement.
All references to provisions of statutes include such provisions as
modified, re- certified or re-enacted. Words applicable to natural persons
include any body of persons, company, corporation, firm or partnership corporate
or incorporate and vice versa. Words importing the masculine gender shall
include the feminine and neuter genders and vice versa. Words importing the
singular number shall include the plural number and vice versa.
Where two or more persons or parties are included or comprised in any
expression, agreements, covenants, terms, stipulations and undertakings
expressed to be made by or on the part of such persons or parties shall, unless
otherwise provided herein, be deemed to be made by and be binding upon such
persons or parties jointly and severally.
All references to a company includes such company's successors-in-title and
permitted assigns. All references to this Agreement shall include all amendments
and modifications to this Agreement as shall from time to time be in force.
In computing time for the purposes of this Agreement, unless the contrary
intention appears, a period of days from the happening of an event or the doing
of any act or thing shall be deemed to be exclusive of the day on which the
event happens or the act or thing is done and if the last day of the period is a
weekly or public holiday in Malaysia or the United States of America, the period
shall include the next following day which is not a weekly or public holiday in
Malaysia or the United States of America.
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ARTICLE 2 TECHNICAL INFORMATION AND ASSISTANCE
2.1 In consideration of the JVC's performance of its obligations under this
Agreement, MEMC shall provide technical assistance, consultation, advice, and
the like to the JVC to enable the JVC to design, construct, and operate a plant
in Malaysia with an initial nominal production capacity of approximately 100
MSIE of polished Wafers per year utilizing the MEMC Technical Information
provided hereunder, subject to allowance for local labor and manufacturing
conditions, including available raw materials. The JVC Plant shall initially
include process capabilities for 200mm wafers from crystal growing through
polishing.
2.2 The technical assistance referenced in Article 2.1 shall include the
delivery to the JVC of a technical design package written in English in terms of
standard engineering practices and shall include 1 (One) reproducible set of
full-size engineering drawings. All drawings, data sheets, specifications, etc.
provided in the Technical Design Package shall be in units of the International
System of Units and applicable United States standards and codes such as ASME,
TEMA, ANSI, and NEC. Any transformation to standards and codes of Malaysia shall
be the responsibility of the JVC which shall prepare or cause to be prepared,
all the detailed design and construction drawings and specifications for the JVC
Plant based on the Technical Design Package provided by MEMC.
2.3 The JVC acknowledges that so as to enable MEMC to prepare the Technical
Design Package, it was necessary for MEMC to obtain (and incur costs in relation
thereto) the information specific to the site of the JVC Plant and on local
legal requirements set forth in "Annexure A" all of which costs shall be
reimbursed by the JVC to MEMC upon the JVC's receipt of MEMC's invoice therefor.
2.4 MEMC shall arrange for the technical training until the Date of First
Commercial Production of certain technical personnel of the JVC in one or
several of MEMC's Plants. All training will be in English. The time and duration
of such training and the number of the JVC's personnel to be trained shall be
arranged by mutual consent of the PARTIES and the JVC will pay all salaries,
benefits, travelling, living, visa, and other expenses of its own personnel
incurred during the training pursuant to this Article 2.4.
2.5 Following the Date of First Commercial Production and for so long as
MEMC holds a direct and/or indirect interest in [CONFIDENTIAL MATERIAL HAS BEEN
DELETED AND FILED SEPARATELY WITH SEC] or more of the total number of JVC
Equity Shares and maintains control of and over the JVC and this Agreement
continues to have full force and effect, MEMC shall supply, at the JVC's
expense, such qualified technical personnel experienced within the Field
of this Agreement as shall be mutually agreed upon between MEMC and the
JVC and provide assistance to the JVC in operating the JVC Plant in
accordance with this Agreement.
ARTICLE 3 NEW TECHNOLOGY AND OTHER MATTERS RELATED TO LICENSED TECHNOLOGY
3.1 The obligations of the JVC and MEMC set forth in this Article 3 shall
commence on the Date of this Agreement and continue until termination or
expiration of this Agreement.
3.2 MEMC Technical Information and MEMC Licensed Programmes related to the
production of a New Product shall be disclosed by MEMC to the JVC in the manner
described in Article 3.5 only at such time as the JVC commits to producing
commercial quantities of a New Product. A resolution of the JVC's Board of
Directors committing to the installation of equipment to produce a New Product
shall be evidence of the JVC's commitment to produce commercial quantities of a
New Product. The PARTIES shall agree on the procedure for the initial transfer
of Technical Information and MEMC Licensed Programmes related to a New Product
at such time as the JVC commits to producing commercial quantities of a New
Product.
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3.3 In consideration of the performance by the JVC of its obligations under
this Agreement and for no additional payment, MEMC shall disclose to the JVC,
all MEMC Technical Information and MEMC Licensed Programmes developed during the
term of this Agreement. MEMC's obligations under this Article 3.3 shall be
fulfilled in the manner described in Article 3.5.
3.4 In consideration of the performance by MEMC of its obligations under
this Agreement and for no payment, the JVC shall disclose to MEMC, all JVC
Technical Information and JVC Licensed Programmes developed during the term of
this Agreement. The JVC's obligations under this Article 3.4 shall be fulfilled
in the manner described in Article 3.5.
3.5 MEMC shall permit representatives of the JVC and the JVC shall permit
representatives of MEMC to inspect, examine, and study, respectively MEMC's and
the JVC's machinery, equipment, including detailed engineering drawings thereof,
manufacturing processes and documents related thereto, MEMC's Plants or the
JVC's Plant and related control laboratories, wherever located, engaged in the
commercial production of Wafers to the extent that any of the foregoing embody
information required to be disclosed to the other party hereto.
The number of the JVC's or MEMC's representatives and the time and duration
of their visits to MEMC's Plants or the JVC's Plant and laboratories shall be
subject to MEMC's or the JVC's approval, respectively, it being understood that
such inspection, examinations and studies shall not interfere with MEMC's or the
JVC's operation, and such inspections shall not be excessive.
The visit of a representative of either party as provided for in this
section shall not be disapproved or limited without good cause. It is understood
and agreed that the expenses of the visiting party shall be borne by the
visiting party.
3.6 The JVC shall cause each of its employees as a term of his employment,
to enter into a written agreement in the form of "Annexure C" (together with
such modifications thereto as MEMC may require from time to time) which require
such employee to assign to the JVC, all inventions conceived or made during
their employment with the JVC within the Field of the Agreement (whether or not
patentable) and which permit the JVC to disclose, use, patent and license such
inventions to MEMC.
3.7 Notwithstanding anything contained herein to the contrary, the PARTIES
shall be obligated under this Agreement to supply only such information, MEMC
Technical Information and MEMC Licensed Programmes and JVC Technical Information
and JVC Licensed Programmes and licences of third party patents as each has the
legal right to supply and only to the extent and manner set forth in this
Agreement.
If at any time disclosure of any information required under this Agreement
requires any payments to third parties, such disclosure shall be made only after
the party seeking disclosure has agreed to bear the cost of such payments. In
the event such payments are requested by the JVC, the JVC shall obtain
governmental approval, if required, for such payments.
ARTICLE 4 RIGHTS AND LICENCES
4.1 For the term of this Agreement, MEMC grants to the JVC, [CONFIDENTIAL
MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC] licence:-
4.1.1 to use the MEMC Technical Information provided to the JVC
pursuant to Articles 2.1 and 3.3 to manufacture Wafers in Malaysia;
4.1.2 under the MEMC Patents to the extent necessary to manufacture
Wafers in Malaysia using MEMC Technical Information provided to the JVC
pursuant to Articles 2.1 and 3.3;
4.1.3 to sell in the ASEAN Region and for use in the ASEAN Region
Wafers manufactured under the licences granted in Articles 4.1.1 and 4.1.2
; and
4.1.4 to sell to MEMC (upon such terms and conditions as may be agreed
upon between the JVC and MEMC and for resale by MEMC), Wafers manufactured
under the licences granted in Articles 4.1.1 and 4.1.2.
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4.2 The JVC hereby grants to MEMC and its Affiliates, [CONFIDENTIAL
MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC] license to make,
have made, use or sell the inventions claimed in the JVC Patents and
comprising the JVC Technical Information.
The rights and licences granted to MEMC and in this Article 4.2 shall
include an absolute and unfettered right to assign or sublicense such rights to
others.
The JVC shall and shall cause its legal representatives and employees at
MEMC's request made at any time and from time to time after the execution of
this Agreement to take such further action and execute, acknowledge, and deliver
such additional documents and instruments as may be necessary to effectuate this
Article 4.2. If governmental approval is required to effectuate the provisions
of this Article 4.2, the JVC shall use its best efforts to obtain the said
approval.
4.3 MEMC hereby grants to the JVC:-
4.3.1 [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY
WITH SEC] licence to install, use, and execute the MEMC Licensed
Programmes on computers at the JVC Plant in support of the internal
business activities of the JVC; and
4.3.2 [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY
WITH SEC] licence to make and use only at the JVC Plant any modifications
or derivative works thereof created by the JVC or its employees, servants
and agents.
The JVC acknowledges that the MEMC Licensed Programmes are confidential to
MEMC and the JVC's duties of confidentiality with respect to the MEMC Licensed
Programmes shall be the same as those set forth in Article 7 with respect to
MEMC Technical Information.
4.4 The JVC hereby grants to MEMC and its Affiliates, [CONFIDENTIAL
MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC] license to install,
use, and execute the JVC Licensed Programmes and to make and use any
modifications or derivative works thereof. The rights granted to MEMC and
its Affiliates in this Article 4.4 shall include the right to sub-license
such rights to others.
MEMC understands that the JVC Licensed Programmes may embody valuable
confidential information of the JVC and MEMC's duties of confidentiality with
respect to the JVC Licensed Programmes shall be the same as those set forth in
Article 7 with respect to the JVC Technical Information.
ARTICLE 5 PAYMENTS
5.1 As consideration for the rights, licences and assistance provided under
this Agreement, the JVC shall pay to MEMC a licence initiation fee of
[CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC]. This
licence initiation fee shall be non-refundable and not creditable against
any royalties, fees or other payments due to MEMC pursuant to this
Agreement and shall be paid by four instalments based upon the following
milestones:
[CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC]
5.2 As further consideration for the rights, licences and assistance
provided under this Agreement, the JVC shall pay to MEMC a running royalty of
[CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC] per
annum of Net Sales Proceeds commencing from the Date of First Sale.
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The PARTIES shall meet at least 6 (Six) months prior to the expiration of
the period of [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH
SEC] years commencing from the Date of First Sale to try and reach an agreement
on the applicable rate of running royalty for a further period of
[CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC] years
commencing immediately after the expiration of [CONFIDENTIAL MATERIAL HAS
BEEN DELETED AND FILED SEPARATELY WITH SEC] years from the Date of First Sale.
If the PARTIES fail to arrive at an agreement on the applicable rate for
the revised running royalty, this difference shall be referred to arbitration in
accordance with Article 11 (save that the single arbitrator selected by (as
applicable) the PARTIES or KLRAC, shall be a person with knowledge and/or
experience in the commercial aspects of the Silicon Wafer industry and who is
not a citizen of the United States of America or Malaysia). The arbitrator shall
be instructed to select the revised running royalty proposed by either MEMC or
by the JVC as the running royalty applicable for the renewed period of this
Agreement and to issue the arbitral award as soon as may be possible prior to
the commencement of such renewal period.
5.3 The running royalty referred to in Article 5.2 shall be computed
semi-annually and shall be paid by the JVC to MEMC within 60 (Sixty) days of the
last day of June and December of each calendar year, each such payment to be
accompanied by a written report setting forth the quantities and descriptions of
all Wafers Sold by the JVC during the period in respect of which payment is
made.
5.4 The JVC shall reimburse MEMC within 30 (Thirty) days from the JVC's
receipt of MEMC's invoice therefor and MEMC shall separately invoice the JVC for
(and furnish to the JVC upon the JVC's request, reasonable evidence to
substantiate the amounts invoiced):-
5.4.1 the expenses which MEMC incurs in providing to the JVC, the
assistance and training described in Article 2; and
5.4.2 all expenses paid by MEMC (in accordance with MEMC's travel
policy, for travel expenses to and from their place of employment, local
travel expenses, and local living expenses) to such of its personnel as
provide to the JVC the assistance or training described in Article 2 of
this Agreement.
5.5 All payments hereunder by the JVC to MEMC shall be made in US Dollars
to such account in Xxx Xxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx of America as MEMC
shall specify. If payment as aforesaid shall be prohibited by exchange
regulation or other governmental restraint in United States of America or
Malaysia, then the JVC shall make payments hereunder (as applicable) in such
currency and/or to such account as shall be permitted by law and selected by
MEMC.
5.6 The JVC shall:-
5.6.1 make due payments of such withholding tax (calculated as at the
date hereof, at 10% (Ten Percent) of the amounts of the Technical Fees) as
may be properly chargeable under applicable laws and treaties on the
Technical Fees and deduct the withholding tax so payable from the Technical
Fees; and
5.6.2 promptly furnish to MEMC, a copy of:-
i) the JVC's letter accompanying each payment of withholding tax
deducted as aforesaid; and
ii) the receipt issued to the JVC for the withholding tax so paid.
5.7 Save as provided in Article 5.6, all sums payable by the JVC to MEMC
shall be paid without any set-off, counter-claim, qualification or condition
whatsoever.
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5.8 The JVC shall keep such detailed records as may be necessary to
determine the payments due under this Agreement. At the request of MEMC, the JVC
shall permit an independent public accountant selected by MEMC or an MEMC
internal auditor to have access during ordinary business hours to such records
as may be necessary to determine in respect to any semi-annual period, the
correctness of any report and/or payment under this Agreement or information as
to any sum payable for such period.
5.9 If the JVC fails to pay on due date, any sums payable hereunder by the
JVC to MEMC, the JVC shall pay to MEMC (in addition and without prejudice to
MEMC's other rights and remedies in respect of the JVC's failure) interest on
the aforesaid sums calculated at a rate equivalent to 2% (Two Percent) per annum
above the then prevailing Base Lending Rate of MALAYAN BANKING BERHAD from the
date on which the said sums are due and until the date of actual payment
thereof.
ARTICLE 6 JOINT DEVELOPMENTS
6.1 The JVC and MEMC shall jointly own all Joint Developments and all
applications for patent which claim a Joint Development as an invention shall be
filed in the names of and jointly owned by the JVC and MEMC.
6.2 The JVC hereby grants MEMC, the right to prepare, file, prosecute,
maintain, license and enforce on the JVC's behalf, all patents and patent
applications which are jointly owned by the JVC and MEMC, for the full term of
such patents and patent applications. The JVC shall and shall cause its legal
representatives and employees at any time to take such further action and
execute, acknowledge, and deliver such additional documents and instruments as
are reasonably requested by MEMC to effectuate Article 6.1 and this Article 6.2.
ARTICLE 7 CONFIDENTIAL INFORMATION
7.1 As from the Date of this Agreement and for 10 (Ten) years following the
termination for any reason whatsoever of this Agreement, the JVC shall (subject
to the provisions of Article 7.2) keep confidential all MEMC Technical
Information and other secret or confidential information received by the JVC
from MEMC pursuant to this Agreement and restrict access to the same to such
directors, officers, employees, and representatives of the JVC as have a
reasonable need for such information in carrying out their respective duties on
behalf of the JVC.
Prior to its permitting such directors, officers, employees and
representatives as aforesaid, access to any MEMC Technical Information and other
secret or confidential information received by the JVC from MEMC pursuant to
this Agreement, the JVC shall require such persons to execute (unless they shall
have previously executed the same pursuant to Article 3.6) a written agreement
in such form as may be acceptable to MEMC.
7.2 The JVC's duty of confidentiality pursuant to Article 7.1 shall not be
applicable to information which:-
7.2.1 was in the public domain at the time of disclosure or comes into
the public domain;
7.2.2 the JVC can show by written or other tangible evidence was in
its possession at the time of the disclosure hereunder, and which the JVC
without breach of any obligation is free to disclose to others;
7.2.3 was received by the JVC from a Third Party or from JVC's
Affiliate who did not acquire it, directly or indirectly, from MEMC under
an obligation of confidentiality and which the Third Party and JVC's
Affiliate without breach of any obligation is free to disclose to others;
or
7.2.4 is required to be disclosed by laws, regulations, or court
orders provided that all reasonably necessary steps are taken by the JVC to
the extent permitted by law, government regulations, and court orders to
maintain the information as confidential, and provided further that MEMC is
given advance notice that such a disclosure is being required.
7.3 The JVC shall require all engineering contractors and other contractors
and vendors in the design, engineering, equipment manufacture, and erection of
the JVC Plant, prior to their having access to the MEMC Technical Information or
any confidential information within the Field of this Agreement received from
MEMC, to sign and shall require the aforesaid contractors and vendors also to
obtain from their employees, secrecy agreements in terms acceptable to MEMC
wherein such contractors and vendors and their respective employees agree for
the benefit of the JVC and MEMC, to keep confidential and to use only on behalf
of the JVC, any confidential information within the Field of this Agreement
received, directly or indirectly, from MEMC.
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7.4 Subject to the provisions of Articles 3 and 4, as from the Date of this
Agreement and for 10 (Ten) years following the termination for any reason
whatsoever of this Agreement, MEMC shall keep confidential, using the same
degree of care as MEMC uses with MEMC Technical Information of a like character,
all JVC Technical Information and other secret or confidential information
received from the JVC. MEMC's duty of confidentiality pursuant to this Article
7.4 shall not be applicable to information which:-
7.4.1 was in the public domain at the time of disclosure or comes into
the public domain;
7.4.2 MEMC can show by written or other tangible evidence was in its
possession at the time of the disclosure hereunder, and which MEMC without
breach of any obligation is free to disclose to others;
7.4.3 was received by MEMC from a Third Party or from MEMC's Affiliate
who did not acquire it, directly or indirectly, from JVC under an
obligation of confidentiality and which the Third Party and MEMC's
Affiliate without breach of any obligation is free to disclose to others;
or
7.4.4 is required to be disclosed by laws, regulations, or court
orders provided that all reasonably necessary steps are taken by MEMC to
the extent permitted by law, government regulations, and court orders to
maintain the information as confidential, and provided further that the JVC
is given advance notice that such a disclosure is being required.
ARTICLE 8 ASSIGNABILITY
Except as expressly provided in this Agreement, neither this Agreement nor
any of the rights and obligations arising hereunder may be assigned or
transferred by either party and any such purported assignment shall be null and
void, except that MEMC may assign and transfer this Agreement and the rights and
obligations arising hereunder to a company acquiring substantially all of the
business and assets of MEMC dealing with the Field of this Agreement and the JVC
shall consent to such assignment and transfer of MEMC's rights and obligations
and release MEMC from all liability hereunder upon the assumption by the
aforesaid company (in place of MEMC) of such liability.
ARTICLE 9 FORCE MAJEURE
9.1 Neither of the PARTIES shall be in default hereunder by reason of its
delay in the performance of or failure to perform any of its obligations
hereunder if such delay or failure is caused by any contingency beyond its
reasonable control, including, without limitation, war, restraints affecting
shipping, strikes, lockouts, fires, accidents, floods, droughts, natural
calamities, demand or requirements of a government or of any governmental
subdivisions thereof, restraining orders or decrees of any court or judge having
jurisdiction. If the event of a force majeure continues for a period of more
than 30 (Thirty) days, the PARTIES shall discuss efforts that each can
reasonably take to avoid or minimize the effect of said force majeure. If due to
an event of force majeure, for a period of 180 (One Hundred And Eighty) days,
either the JVC is unable to make payments to MEMC hereunder or either party is
deprived of a substantial benefit it reasonably anticipated under this Agreement
the party so detrimentally impacted may terminate this Agreement by written
notice to the other party.
9.2 In the event of such force majeure event, the party prevented from
performing its obligations under this section shall promptly give written notice
to the other party together with full details.
11
ARTICLE 10 NOTICES
10.1 All notices hereunder shall be in writing signed by the PARTY by whom
it is served or by its solicitors and shall be sufficiently served on the PARTY
to whom it is addressed if it is delivered by hand or courier at or sent by
pre-paid registered or certified post, telex or telefax (and confirmed
forthwith, in the case of a notice sent by telex or telefax, by the delivery by
hand or courier or by registered post of a copy of the notice) to the address
set forth below of the PARTY to whom it is sent or to such address as one PARTY
may from time to time notify to the other PARTY:-
If to MEMC : MEMC ELECTRONIC MATERIALS, INC
000 Xxxxx Xxxxx (City of X'Xxxxxx)
Xx. Xxxxxx, Xxxxxxxx
Xxxxxx Xxxxxx xx Xxxxxxx
Attention: President
Facsimile: (314) 279- 5158
If to the JVC : MEMC KULIM ELECTRONIC MATERIALS SDN BHD
c/o Khaw & Xxxxxxx
6th Floor, Menara Boustead
00, Xxxxx Xxxx Xxxxxx
00000 Xxxxx Xxxxxx
Xxxxxxxx
Attention: President
Facsimile: (000) 000 0000 / 000 0000
10.2 A notice sent:-
10.2.1 by telex or telefax (and confirmed by the delivery of a copy
thereof by hand or by registered post) shall be deemed to have been served
at the time (in the place of the receipt thereof) when the transmission by
telex or telefax is completed provided in the case of a notice sent by
telex, the sender receives at the end of the transmission, the answer back
code and telex number of the addressee of such notice; or
10.2.2 by registered post shall be deemed to have been served on the
7th (Seventh) day occurring after the date on which it is posted; or
10.2.3 by hand to any address shall be deemed to have been served at
the time it is left at such address; or
10.2.4 by courier shall be deemed to have been served on the 7th
(Seventh) day occurring after the date on which it is given to the courier
company.
Notwithstanding the foregoing provisions, if the time or day hereinbefore
referred to shall not be a business day (when banks are open for business) in
the place of the receipt of the notice given, such notice shall be deemed to be
received on the next immediately following business day.
12
ARTICLE 11 ARBITRATION
11.1 If any dispute or controversy arises at any time out of or in relation
to this Agreement, the PARTIES shall seek to resolve the matter amicably through
discussions between the PARTIES. If the PARTIES fail to resolve such dispute or
controversy within 30 (Thirty) days by amicable arrangement and compromise or
when arbitration is otherwise provided for in this Agreement, the Claimant may
seek arbitration as set forth in this Article 11.
11.2 Any dispute or controversy arising out of or in relation to or in
connection with this Agreement which cannot be amicably resolved as provided in
Article 11.1 may be referred by the Claimant to arbitration by a single
arbitrator pursuant to the Rules of Arbitration of the KLRAC then in force in
accordance with the provisions of this Article 11. Arbitration under this
Article 11 shall be the exclusive means for a PARTY to seek resolution of any
dispute or controversy arising out of, in relation to, or in connection with
this Agreement except that any PARTY in dispute may bring an action before a
court of competent jurisdiction for the adoption of provisional or protective
measures pending the final decision or award of the arbitration.
The single arbitrator shall be selected by agreement between the PARTIES
within 60 (Sixty) days from the date on which the Claimant's request for
arbitration is filed with the KLRAC pursuant to Article 11.3 or, failing
agreement between the PARTIES, the KLRAC shall be the appointing authority. The
single arbitrator shall be a jurist (with qualifications and experience in a
common law jurisdiction) who is not a citizen of the United States of America or
Malaysia.
The arbitration shall be conducted in Kuala Lumpur.
The arbitrator shall make every effort to find a solution to the dispute in
the provisions of this Agreement, giving full effect to all parts thereof.
However, if a solution cannot be found in the provisions of this Agreement, the
arbitrator shall apply the substantive law of the State of Missouri, United
States of America without regard to its choice of law provisions. If there is
any conflict between the Rules and this Article 11, the provisions of this
Article 11 shall govern.
11.3 The Claimant shall file a request for arbitration with the KLRAC and
notify the Respondent in writing of the nature of the claim(s). After a request
for arbitration of any dispute subject to arbitration under this Agreement has
been filed, the PARTIES shall, upon request, make discovery and disclosure of
all materials relevant to the subject of the dispute. The arbitrator shall make
the final determination as to any discovery disputes between the PARTIES.
Examination of witnesses by the PARTIES and by the arbitrator shall be
permitted.
Following the selection of the arbitrator as set forth above, the
arbitration shall be conducted promptly and expeditiously so as to enable the
arbitrator (to the extent reasonably possible) to render a decision within 120
(One Hundred And Twenty) days after the arbitrator has been appointed.
Unless otherwise agreed by the PARTIES in dispute, the arbitration
proceedings shall be conducted in English.
11.4 The award of the arbitrator shall be final and binding on the PARTIES
in dispute. Judgment on the arbitral award rendered may be entered in any court
of competent jurisdiction or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as the case may
be.
In rendering the award, the arbitrator shall apply the terms and conditions
of this Agreement in accordance with the laws governing this Agreement. The
arbitrator shall state the reasons upon which the award is based and shall
determine how the reasonable expenses of the arbitration are to be borne by the
PARTIES in dispute.
Each PARTY hereby agrees that any judgment upon an award rendered by the
arbitration may be executed against the assets of each PARTY in any
jurisdiction.
13
ARTICLE 12 GOVERNING LAW AND JURISDICTION
This Agreement shall be construed, interpreted and governed in accordance
with the laws of the State of Missouri, United States of America. Subject to the
provisions of Article 11, the PARTIES hereby submit unconditionally to the
non-exclusive jurisdiction of the courts of the State of Missouri.
ARTICLE 13 TERM, TERMINATION AND DEFAULT
13.1 The term shall commence on the Effective Date and shall continue for
[CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH SEC] years
following the Date of First Sale unless terminated earlier as herein provided.
Upon the expiration of such [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC] year period, this Agreement shall be renewed (subject to
the prior written approval of the Ministry of International Trade and Industry,
Malaysia and the grant of all other requisite approvals if applicable, for
such renewal including the revised running royalty payable during the
period of renewal) for a second period of [CONFIDENTIAL MATERIAL HAS BEEN
DELETED AND FILED SEPARATELY WITH SEC] years.
The PARTIES shall meet at least 6 (Six) months prior to the expiration of
the further period of [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC] years aforesaid to determine whether this Agreement
shall be further renewed and if so, the terms applicable to such further
renewal period.
13.2 In the event that either PARTY is in default under this Agreement, the
other may give written notice to the defaulting PARTY, calling attention
thereto. A failure by the JVC to make a payment required under Article 5 or any
other material breach by a PARTY which is not corrected within 60 (Sixty) days
after the date of receipt of such notice shall entitle the non-defaulting PARTY
at any time thereafter to terminate this Agreement by giving written notice to
that effect. A PARTY's right to terminate pursuant to this Article 13.2 shall be
at its option and shall not constitute a waiver of its other rights or remedies
with respect to said default, and the failure to exercise any such right in the
event of any occurrence giving rise thereto, shall not constitute a waiver of
the right in the event of any subsequent occurrence.
13.3 Notwithstanding any other provision to the contrary in this Agreement,
MEMC may terminate this Agreement upon giving 90 (ninety) days' written notice
to JVC in the event that:-
13.3.1 MEMC's holding of a direct and/or indirect interest in JVC
Equity Shares falls below [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND
FILED SEPARATELY WITH SEC] of the total number of JVC Equity Shares
without MEMC being in breach of Clause 4.2 of the Joint Venture
Agreement;
13.3.2 MEMC is no longer a party to the Joint Venture Agreement;
13.3.3 MEMC or MEMC's representative is prohibited from voting as a
shareholder or director of the JVC or prohibited from participating in the
management of the JVC due to a Malaysian statutory or regulatory
restriction which would result in a situation where in the reasonable
opinion of MEMC, its right and interest in the JVC or under the Joint
Venture Agreement or this Agreement will be impaired; or
13.3.4 the Joint Venture Agreement is terminated for any reason.
13.4 Termination or expiration of this Agreement shall not terminate the
following:-
13.4.1 the licences granted to MEMC pursuant to Articles 4.2 and 4.4;
13.4.2 the respective obligations of the PARTIES to observe:-
i) their confidentiality obligations herein;
ii) their obligations under Articles 6.1 and 6.2;
iii) their obligations under the first two sentences of Article
14.1 and the first sentence of Article 14.2; and
iv) any of the obligations of the PARTIES which arise prior to a
termination or expiration and the remedies of either PARTY
provided in this Agreement with respect thereto; and
13.4.3 the payment obligations of the JVC pursuant to Article 5.
14
13.5 Upon the expiration or termination of this Agreement for any reason,
the JVC shall discontinue using the MEMC Technical Information and the JVC shall
return to MEMC originals and copies of all portions of any notes, reports,
photographs, manuals, memoranda, plans, drawings, flow sheets, records or other
documents containing any MEMC Technical Information provided, directly or
indirectly to and in the JVC's possession and further agrees to destroy all
portions of any copies of any materials prepared by the JVC, its employees or
representatives which contain MEMC Technical Information.
ARTICLE 14 EXPORT OF TECHNICAL INFORMATION
14.1 Notwithstanding other provisions of this Agreement, the JVC agrees to
make no disclosure of or use any MEMC Technical Information furnished or made
known to the JVC pursuant to this Agreement, except in compliance with the laws
and regulations of the United States of America, and in particular, the JVC
agrees not to export, directly or indirectly, either the MEMC Technical
Information or the "direct product" thereof to any country or countries for
which a validated license is required pursuant to the Export Regulations
pertaining to the exportation of technical data and the "direct product"
thereof, promulgated by the Bureau of Export Administration of the United States
Department of Commerce.
The term "direct product" as used above is defined to mean the immediate
product (including processes and services) produced directly by the use of the
technical data. MEMC agrees to notify the JVC from time to time what legal
restrictions under the laws of the U.S. are applicable to disclosure or use of
MEMC Technical Information.
14.2 Notwithstanding other provisions of this Agreement, MEMC agrees to
make no disclosure of or use JVC Technical Information except in compliance with
the export laws and regulations of Malaysia. The JVC agrees to notify MEMC from
time to time what legal restrictions under the export laws of Malaysia are
applicable to disclosure or use of JVC Technical Information.
ARTICLE 15 TRADEMARKS
15.1 MEMC hereby grants to the JVC, the non-exclusive right to use the MEMC
Trademarks identified in "Annexure D" to identify Wafers made by the JVC for
such period commencing from the Date of this Agreement and expiring (unless MEMC
elects otherwise, at its absolute discretion) on the date on which MEMC ceases
to maintain control of the JVC or to hold a direct and/or indirect interest in
51% (Fifty One Percent) or more of the total number of JVC Equity Shares from
time to time and this Agreement continues in full force and effect.
15.2 At all times, MEMC shall have the right to inspect at reasonable
times, the operations and products of the JVC which bear or are identified by
any MEMC Trademark for the purpose of assuring that MEMC standards of quality
and performance are maintained by the JVC. The JVC's right to use the MEMC
Trademarks shall be terminated at any time if MEMC, in its sole discretion,
determines that the MEMC's standards of quality and performance are not being
maintained by the JVC or if there are any restrictions whatsoever placed on the
right of MEMC to inspect the operations and products of the JVC which bear any
MEMC Trademark.
15.3 Ownership of the MEMC Trademarks including the goodwill of the
business symbolized thereby shall be vested at all times in MEMC and the JVC
shall not claim any title, right or interest (other than as provided in this
Agreement) in any of the MEMC Trademarks.
15.4 Upon the registration of MEMC as the proprietor of any of the MEMC
Trademarks in any of the countries comprised in the Region, MEMC will join the
JVC in making an application to the Registrar of Trade Marks in the country
concerned for the purpose of securing the registration of the JVC as a
registered user of the MEMC Trademarks concerned.
15.5 The JVC hereby covenants with MEMC that the JVC will:-
15.5.1 not during the continuance of this Agreement or at any time
after the termination or expiry of this Agreement or of the licence granted
under Article 15.1, manufacture or sell Wafers on behalf of or for others
which use the same or similar marks to the MEMC Trademarks or simulate in
any way, the get-up or design of Wafers upon which the MEMC Trademarks
shall be used and/or which is sold under any of the MEMC Trademarks;
15.5.2 make such use of the MEMC Trademarks as will be necessary to
maintain the validity of the MEMC Trademarks in the Region;
15.5.3 notify MEMC of any conflicting use of the MEMC Trademarks or of
any acts of infringement or unfair competition involving the MEMC
Trademarks forthwith upon the same being brought to the JVC's attention or
knowledge;
15.5.4 assist MEMC (at MEMC's cost) in instituting proceedings against
third parties to prevent any infringement or any acts of unfair competition
involving the MEMC Trademarks;
15.5.5 save with MEMC's prior written consent, not settle in any
circumstances, any claim or action against third parties for any
infringement or acts of unfair competition involving the MEMC Trademarks;
15.5.6 not use the MEMC Trademarks in a manner likely to
prejudice the protection afforded to it by law and/or their validity; and
15.5.7 not at any time, do or suffer to be done, any act or thing
which may in any way impair the rights of MEMC in and to the MEMC
Trademarks or represent that the JVC has any title, right or interest
(other than pursuant to this Agreement) in the MEMC Trademarks.
15
ARTICLE 16 MISCELLANEOUS
16.1 This Agreement constitutes the full understanding of the PARTIES with
respect to the subject matter contained herein and supersedes all prior
agreements or understandings, whether oral or written, with respect to such
matter. There are no representations or warranties made by any of the PARTIES
with respect to the subject hereof, including, but not limited to, patent
infringement or third party proprietary rights, failure of performance, or
accuracy and completeness save as specifically set forth in this Agreement or in
a document signed by a party hereto, in which document it is expressly stated
that the statements therein are representations, conditions, or undertakings for
the purpose of this Agreement. No terms, conditions, understandings, or
agreements purporting to modify or vary the terms of this Agreement shall be
binding unless hereafter made in writing and signed by a duly authorized
representative of the party to be bound.
16.2 Failure of a party to insist upon strict and punctual performance of
any provision hereof shall not constitute a waiver of, or estoppel against,
asserting the right to require such performance, nor shall any one waiver or
estoppel constitute a waiver or estoppel with respect to a later breach whether
of similar nature or otherwise.
16.3 If any one or more of the provisions of this Agreement should be ruled
wholly or partly invalid or unenforceable by a court or other government body of
competent jurisdiction, then:-
16.3.1 the validity and enforceability of all provisions of this
Agreement not ruled to be invalid or unenforceable will be unaffected;
16.3.2 the effect of the ruling will be limited to the jurisdiction of
the court or other governmental body making the ruling;
16.3.3 the provision(s) held wholly or partly invalid or unenforceable
will be deemed amended, and the court or other government body or an
arbitrator appointed as permitted pursuant to the Agreement is authorized
to reform the provision(s), to the minimum extent necessary to render them
valid and enforceable in conformity with the PARTIES' intent as manifested
herein.
16.3.4 if the ruling, and/or the controlling principle of law or
equity leading to the ruling, is subsequently overruled, modified, or
amended by legislative, judicial, or administrative action, then the
provision(s) in question as originally set forth in this Agreement will be
deemed valid and enforceable to the maximum extent permitted by the new
controlling principle of law or equity.
16.4 This Agreement shall be executed in English. The terms and provisions
hereof are to be interpreted in accordance with their plain English meaning.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be the original. The English text of this Agreement shall prevail
over any translation.
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IN WITNESS WHEREOF the PARTIES hereto have caused this Agreement to be
executed in duplicate by their duly authorized representatives MEMC executing
this Agreement within 60 (Sixty) days from the execution hereof by the JVC.
SIGNED by ) /s/ Xxxxxx X. Xxxxxxxx
) President and Chief Operating
for and on behalf of ) Officer
MEMC ELECTRONIC MATERIALS, )
INC, MEMC aforesaid in the presence of:- )
/s/ Xxxxxx X. Xxxxxxxx
Corporate Vice President,
General Counsel & Secretary
SIGNED by ) /s/ Xxxxxx Xxxxxxxx
)
for and on behalf of )
MEMC KULIM ELECTRONIC )
MATERIALS SDN BHD )
the JVC aforesaid in the presence of:- )
/s/ Xxxxxxxxxxxxx
