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EXHIBIT 10.1
Confidential treatment has been requested with respect to
the provisions indicated by (*). The omitted information
has been filed separately with the Securities and
Exchange Commission.
OEM AGREEMENT
THIS OEM AGREEMENT ("Agreement") is made and entered into as of July 24,
1997 (the "Effective Date") by and between Uniphase Corporation, a Delaware
corporation ("Uniphase"), and KLA-Tencor Corporation, a Delaware corporation
("KLA-Tencor").
R E C I T A L
WHEREAS, Uniphase and KLA-Tencor desire to enter into an exclusive OEM
agreement relating to Uniphase's Systems and ADC Software (as defined below);
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties agree as follows:
1. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
1.1. ADC Software. "ADC Software" means (i) Uniphase's proprietary
automatic semiconductor wafer, mask and flat panel display defect review and
classification software identified on Exhibit A hereto, (ii) any other software
for the automatic review and classification of semiconductor wafer, mask and
flat panel display defects commercially released by Uniphase during the term of
this Agreement, and (iii) any upgrades, new versions or improvements to any of
the foregoing commercially released by Uniphase during the term of this
Agreement. ADC Software will be provided by Uniphase to KLA-Tencor in object
code form only and solely as an element of Systems.
1.2. Affiliate. "Affiliate" means an entity controlling, controlled by
or under common control with the named company, where "control" refers to the
ability, direct or indirect, to elect a majority of the Board of Directors or
other governing body of the controlled entity. An entity shall be deemed an
Affiliate of the named company only so long as the foregoing control
relationship exists.
1.3. Change in Control. "Change in Control" shall have the meaning given
in Section 12.4.
1.4. Competitive System. "Competitive System" means any optical defect
review microscope or similar tool for semiconductor wafer, mask or flat panel
display defect review or classification whose architecture is based primarily on
reflected light images and which is capable of operating on a standalone basis
(i.e., does not have to be incorporated into an inspection system).
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1.5. Demonstration System. "Demonstration System" means a Uniphase
Product that is used for demonstration purposes, as designated by KLA-Tencor;
provided, however, that no more than three (3) Uniphase Products may be
designated as Demonstration Systems by KLA-Tencor during any year (commencing
with the year July 1, 1997-June 30, 1998) of this Agreement. Purchases of
Demonstration Systems by KLA-Tencor and its Affiliates shall not be counted in
calculating whether KLA-Tencor has met its minimum purchase obligations
hereunder as described in Section 2.2 or 12.2 below.
1.6. Exclusive Period. "Exclusive Period" means the period during the
term of this Agreement during which the restrictions on Uniphase set forth in
Section 2.7 are in effect, as such term may be extended pursuant to Section 12.
1.7. Gross Margin. "Gross Margin" shall mean, with respect to any sale
or other disposition of ADC Software or Systems (excluding sales of Spare Parts
(as defined below) and non-warranty customer support), the Net Sales Price
thereof minus the sum of (i) the sales price of any KLA-Tencor Options sold or
otherwise disposed of in connection with such sale or other disposition, to the
extent the sales price of such KLA-Tencor Options is included in the Net Sales
Price of such ADC Software or Systems, plus (ii) the Uniphase COGS for such ADC
Software or Systems, as applicable, plus (iii) the KLA-Tencor COGS incurred by
KLA-Tencor in connection with such sale or other disposition. "Spare Parts"
means parts that (i) are acquired by a user of a Uniphase Product, or by
KLA-Tencor on behalf of such a user, to replace the same or substantially the
same parts on such Uniphase Product that are consumed or worn out in the
operation thereof, and (ii) do not provide additional functionality to such
Uniphase Product.
1.8. Initial Term. "Initial Term" means the period commencing on the
Effective Date and ending on June 30, 2000.
1.9. Intellectual Property Rights. "Intellectual Property Rights" means
any and all United States and foreign Patents and published or unpublished
patent applications (including without limitation any and all additions,
divisions, continuations, continuations-in-part, substitutions, extensions,
renewals, utility models and certificates of invention or reissues thereof or
therefor), copyrights, mask work rights, trademarks, trade names, trade secrets
and other forms of legal protection for inventions, works of authorship,
know-how, data, processes and the like.
1.10. KLA-Tencor COGS. "KLA-Tencor COGS" means all of KLA-Tencor's costs
of sales, installation, warranty and applications support (i.e., customer
training and system commissioning, including System integration and testing),
license fees and royalties incurred in connection with sales or other
dispositions of Uniphase Products, measured in each case in accordance with
generally accepted accounting principles consistently applied ("GAAP"), but
excluding any such costs, fees and royalties incurred in connection with sales
or other dispositions of KLA-Tencor Options.
1.11. KLA-Tencor Options. "KLA-Tencor Options" means those KLA-Tencor
products which may be sold or otherwise disposed of in connection with sales or
other disposition of ADC Software or Systems but which are not covered by any
Uniphase Intellectual
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Property Rights or otherwise embody any Uniphase technology. Notwithstanding the
foregoing, it is understood and agreed that (*) described in Section 11.3
below, is a KLA-Tencor Option.
1.12. Net Sales Price. "Net Sales Price" means the total amount invoiced
by KLA-Tencor upon the sale or other disposition of ADC Software or Systems,
less the following deductions: (i) sales, use or similar taxes; (ii) freight,
insurance and other transportation charges; (iii) trade, cash and quantity
discounts; and (iv) amounts repaid or credited by reason of returns or because
of retroactive price reductions, or due to government laws or regulations
requiring rebates; provided that if ADC Software or a System is sold together or
in connection with other products on the same purchase order or under the same
purchase agreement, and the Net Sales Price of the ADC Software or System is
discounted from its published list price, then the discount from published list
price on all of the products so sold on the same purchase order or under the
same purchase agreement, including the System and the ADC Software, shall be
allocated evenly across the Net Sales Price of all of the products so sold on
the same purchase order or under the same purchase agreement, including the
System and the ADC Software, for purposes of calculating Gross Margin.
1.13. Patent. "Patent" shall mean a patent, reissue or reexamination
patent, patent of importation, revalidation patent, utility model, certificate
of invention or registration of patent.
1.14. Specifications. "Specifications" shall have the meaning set forth
in Exhibit C.
1.15. Systems. "Systems" means (i) Uniphase's proprietary laser confocal
microscope semiconductor wafer, mask and flat panel display defect review and
classification systems identified on Exhibit B hereto, (ii) any other laser
confocal microscope systems for the review and classification of semiconductor
wafer, mask and flat panel display defects commercially released by Uniphase
during the term of this Agreement, and (iii) any options, upgrades, new versions
or improvements to any of the foregoing commercially released by Uniphase during
the term of this Agreement.
1.16. System Software. "System Software" means all software provided by
Uniphase to KLA-Tencor with and for the operation of Systems, provided that
System Software does not include ADC Software. System Software will be provided
by Uniphase to KLA-Tencor in object code form only and solely as an element of
Systems; provided, however, that subject to the terms and conditions set forth
herein, Uniphase shall provide KLA-Tencor the source code for such elements of
the System Software as necessary to carry out the research and development
effort contemplated by Section 11.3 below; provided further, however, that the
parties intend that Uniphase shall not provide KLA-Tencor any source code for
System Software licensed by Uniphase from ISOA, Inc.
1.17. Uniphase COGS. "Uniphase COGS" means all of Uniphase's direct and
indirect costs of manufacturing Uniphase Products, including (without
limitation) costs of materials, labor, allocated overhead and services,
including variances, license fees, royalties and similar amounts payable to
third parties, warranty expense, costs of hardware necessary to
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incorporate ADC Software into Systems, costs of testing and integration at
Uniphase's facility and depreciation, measured in each case in accordance with
GAAP.
1.18. Uniphase Products. "Uniphase Products" means (a) Systems, and (b)
ADC Software.
2. SUPPLY; SPECIFICATIONS; EXCLUSIVITY; COMPETING PRODUCTS.
2.1. Subject to the terms and conditions of this Agreement, Uniphase
hereby appoints KLA-Tencor and its Affiliates as Uniphase's exclusive original
equipment manufacturer for the Uniphase Products. Uniphase shall supply to
KLA-Tencor and its Affiliates all Uniphase Products ordered during the term of
this Agreement. As new Uniphase Products are introduced, Uniphase may wish to
discontinue older Uniphase Products. KLA-Tencor and Uniphase shall negotiate in
good faith a reasonable phase-out for discontinued Uniphase Products that takes
into account both KLA-Tencor's business needs and Uniphase's manufacturing
situation. Uniphase shall also supply to KLA-Tencor and its Affiliates up to
three (3) Demonstration Systems per year, as provided in Section 1.5.
2.2. KLA-Tencor and its Affiliates shall place firm orders with Uniphase
for at least 45 Systems and shall take delivery of at least 45 Systems, in each
case during the period commencing on June 30, 1997 and ending on June 30, 1998,
provided that for purposes of the foregoing minimum purchase commitment: (i)
"Systems" shall mean laser confocal microscope Systems and not merely options or
upgrades thereto; and (ii) the 45 Systems as to which KLA-Tencor and its
Affiliates will place firm orders with Uniphase during the foregoing period need
not be the same 45 Systems as to which KLA-Tencor and its Affiliates will take
delivery from Uniphase during the foregoing period. KLA-Tencor and Uniphase
shall negotiate in good faith minimum purchase quantities for each subsequent
year of the Initial Term (commencing with the year July 1, 1998 - June 30, 1999)
at least thirty (30) days prior to the start of each such year, taking into
account general industry economic forecasts, segment specific growth statistics
and the previous year's actual sales volume, as more fully described in Section
12.2 below.
2.3. The specifications for the Systems listed on Exhibit B hereto and
for Uniphase's Identifier 2.0 product (the "Specifications") are attached to
this Agreement as Exhibit C. Within thirty (30) days after the Effective Date,
Uniphase and KLA-Tencor shall mutually agree upon specifications for the ADC
Software. In the event that a KLA-Tencor customer requests modifications to the
Specifications, including ADC Software specifications, in connection with any
sale or other disposition of a Uniphase Product, such modifications shall not be
binding upon Uniphase unless agreed to by Uniphase. Specifications for new
Uniphase Products to be sold hereunder shall be mutually agreed upon. Subject to
Section 2.4 below, specifications shall not be changed without the parties'
mutual consent.
2.4. Uniphase may implement changes in the design of a Product from time
to time as required to satisfy safety, environmental or governmental standards
as reasonably determined by Uniphase, in consultation with KLA-Tencor and
providing KLA-Tencor with advance notice thereof to the greatest extent
reasonably practical. Uniphase shall use
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commercially reasonable efforts to avoid changing the Specifications for any
Product in connection with its implementation of any of the foregoing changes.
Uniphase shall promptly notify KLA-Tencor when Uniphase becomes aware of the
possible need for any such change, and shall keep KLA-Tencor informed on a
continuing basis as to the implementation of any such change. Uniphase may
further implement changes in the design of a Product that do not result in a
change in the Specifications for such Product with KLA-Tencor's prior written
consent, not to be unreasonably withheld.
2.5. Except as expressly provided in Section 11.3, KLA-Tencor shall not
(i) modify or prepare derivative works of any of the Uniphase Products, (ii)
disassemble, decompile, reverse engineer or otherwise attempt to derive the
source code for the ADC Software or System Software, (iii) incorporate any of
the Uniphase Products in any other products, or (iv) use any of the Uniphase
Products to develop or provide other products or services.
2.6. Notwithstanding any other term of this Agreement, it is understood
and agreed that KLA-Tencor is not acquiring title to the ADC Software or System
Software (or any part thereof). Except as expressly provided in Section 11.3, in
using the ADC Software or System Software internally, KLA-Tencor shall comply
with the terms and conditions of the license agreement attached hereto as
Exhibit D. In connection with KLA-Tencor's sale and distribution of Uniphase
Products to its customers, it is understood and agreed that (i) Uniphase will
include with or in such Uniphase Products a license agreement in the form of
Exhibit D attached hereto covering the ADC Software and System Software included
therein, (ii) KLA-Tencor shall not remove such license agreement from such
Uniphase Products, and (iii) KLA-Tencor shall not grant or purport to grant to
its customers any rights in respect of the ADC Software or System Software that
are broader than the rights granted in such license agreement; provided,
however, that such licenses may be transferable by such customer solely in
connection with the subsequent resale by such customer of the Uniphase Products
as to which such license was originally granted.
2.7. Subject to Section 12, during the Exclusive Period Uniphase agrees
not to sell or license Uniphase Products to any manufacturer of semiconductor
inspection equipment or any other person or entity, other than KLA-Tencor and
its Affiliates. Notwithstanding the foregoing:
(i) Uniphase may continue to sell upgrades and options, either
directly or through its sales channels, to its current customers listed in
Exhibit E attached hereto and continue to provide service and support to such
customers, unless and until such customers elect to receive support from
KLA-Tencor;
(ii) Except as set forth in Section 2.7(i), within ninety (90) days
after the Effective Date, Uniphase shall terminate all rights of Innotech
Corporation to purchase and sell Uniphase Products; and
(iii) Uniphase may contract directly with third parties for the
development and delivery of prototype or beta systems or to conduct funded
research and development, provided that (x) Uniphase notifies KLA-Tencor of any
such contract, (y) except
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for contracts that Uniphase has formally quoted or entered into as of the
Effective Date, all of which are set forth in Exhibit F attached hereto,
Uniphase shall not enter into any such contract with (*) and (z) any resulting
products that are commercially released by Uniphase as a result of such activity
and that fall within the definition of ADC Software or Systems in Section 1
above shall be deemed Uniphase Products hereunder upon such commercial release.
2.8. During the Exclusive Period, neither KLA-Tencor nor any of its
Affiliates, acting by itself or with any other person or entity, will develop,
manufacture, market, sell, distribute, display or otherwise promote any
Competitive System. The foregoing shall not be deemed to prohibit KLA-Tencor or
its Affiliates from selling, distributing or otherwise promoting products other
than Competitive Systems, including without limitation (*). In addition, during
the Exclusive Period, neither KLA-Tencor nor any of its Affiliates, acting by
itself or with any other person or entity, will develop, sell, license,
distribute or otherwise promote any automatic semiconductor wafer, mask or flat
panel display defect review or classification software for use in connection
with any Competitive Systems. Notwithstanding the foregoing, KLA-Tencor or any
of its Affiliates, acting by itself or with any other person or entity, may
develop, manufacture, market, sell, distribute, display or otherwise promote any
optical defect review system for the review and classification of mask (but not
semiconductor wafer or flat panel display) defects. In such event, Uniphase
shall have the option to either (i) convert KLA-Tencor's rights hereunder with
respect to any Uniphase Product(s) that perform the same or substantially the
same functions from exclusive to non-exclusive, or (ii) terminate such rights in
their entirety. In either case as provided in the preceding sentence, the
restrictions set forth in Section 2.7 shall no longer apply with respect to the
Uniphase Product(s) referred to in the preceding sentence.
2.9. KLA-Tencor and its Affiliates shall have the right, subject to
Section 2.6 above, to grant sublicenses to their end-user customers who have
paid the required fees in respect of the ADC Software and the System Software
installed in Systems purchased by KLA-Tencor and its Affiliates hereunder for
the sole purpose of permitting such end-user customers to use the ADC Software
and the System Software for their own internal business purposes in connection
with their use of such Uniphase Products, provided that such sublicenses shall
not grant or purport to grant any rights in respect of the ADC Software or
System Software that are broader than the rights granted in the license
agreement attached hereto as Exhibit D. KLA-Tencor and its Affiliates shall have
the further right to provide to their end-user customers any updates, upgrades
and/or bug fixes to the ADC Software and the System Software provided by
Uniphase to KLA-Tencor hereunder, such updates, upgrades and/or bug fixes to be
used solely in connection with such use of Uniphase Products. KLA-Tencor shall
have the right, subject to Section 2.6 above, to use and make copies of the ADC
Software and System Software, in object code form only, for the sole purpose of,
and only to the extent necessary for, selling, maintaining and supporting the
Uniphase Products purchased by KLA-Tencor and its Affiliates hereunder. No other
rights to grant sublicenses with respect to, provide updates, upgrades and/or
bug fixes for or use or copy the ADC Software or System Software are granted
hereby, except as expressly set forth herein.
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3. PRICES.
3.1. Uniphase will sell and transfer Systems and ADC Software to
KLA-Tencor and its Affiliates hereunder at prices (the "Transfer Prices") to be
negotiated in accordance with Section 3.2. The parties intend that the Transfer
Prices will approximate the sum of (i) the Uniphase COGS with respect to such
Uniphase Products, and (ii) (*) of such Uniphase Products by KLA-Tencor and its
Affiliates. Notwithstanding the foregoing: (i) the amounts that would otherwise
be paid to Uniphase shall be reduced by (*) for each of the first twenty (20)
Systems sold to KLA-Tencor or its Affiliates or to customers of KLA-Tencor or
its Affiliates after June 1, 1998; and (ii) the prices to be paid by KLA-Tencor
and its Affiliates for Spare Parts shall be determined as provided in Section
11.5.
3.2. The initial Transfer Prices for Systems and ADC Software will be
agreed to by Uniphase and KLA-Tencor as soon as possible following the Effective
Date and in any event by August 1, 1997. The Transfer Prices are applicable only
to new Uniphase Products and do not apply to (i) Uniphase Products that Uniphase
has used as demonstration systems, or (ii) Uniphase Products that are designated
by KLA-Tencor as Demonstration Systems (the prices for which are set forth in
Section 7.1 below). The parties shall meet and agree upon any necessary or
appropriate prospective changes to the Transfer Prices prior to October 1, 1997
and January 1, 1998 and on each July 1 thereafter. In the event the parties are
unable to agree upon the initial Transfer Prices or any changes to such prices,
the matter shall be resolved by arbitration as provided in Section 17.1 below.
3.3. The parties currently estimate that:
(i) as of the Effective Date, the Uniphase COGS for its LIS 1010
System is (*) and the Uniphase COGS for its LIS Mask system is (*); and
(ii) the KLA-Tencor COGS for Uniphase Product sales will be (*) of
the sales price to the customer, plus (*) per ADC Software product for
applications support.
3.4. KLA-Tencor and Uniphase will use commercially reasonably efforts to
reduce the KLA-Tencor COGS and Uniphase COGS, respectively. The parties intend
to share equally the benefits of any such cost savings. It is understood and
agreed that failure to achieve such cost savings will not constitute a breach of
the Agreement.
3.5. In order to accelerate the research and development effort to be
undertaken by Uniphase pursuant to Section 11.2 below, on August 1, 1997,
KLA-Tencor will pay Uniphase a non-refundable fee of (*) for non-recurring
engineering costs associated with that effort.
4. NEW RELEASES. Uniphase shall give KLA-Tencor at least six months
prior written notice of new Product releases.
5. ORDER PROCESS. KLA-Tencor will submit orders to Uniphase at least
ninety (90) days prior to shipment. Orders will be submitted on KLA-Tencor's
standard
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purchase order form. Any terms of any order form or order acceptance form which
are inconsistent with or add to the terms of this Agreement shall be of no force
or effect, even if such form is acknowledged by the recipient. The orders shall
contain all relevant information for packing, shipping (forwarding methods) and
other elements to be agreed upon by the parties hereto. Uniphase will use
commercially reasonable efforts to meet the shipment dates requested by
KLA-Tencor. KLA-Tencor shall have the right, at least four (4) weeks prior to
shipment, to delay delivery of Uniphase Products up to four (4) weeks from the
scheduled delivery date. If any Uniphase Products are delivered late to
KLA-Tencor, then during the period of any deficiency Uniphase will devote at
least fifty percent (50%) of its production capacity for Uniphase Products to
the production of Uniphase Products for KLA-Tencor and shall make available at
least fifty percent (50%) of its production output of Uniphase Products to
KLA-Tencor, until such deficiency has been eliminated.
6. DELIVERY; INSPECTION.
6.1. Uniphase Products shall be delivered FOB Uniphase's factory in San
Jose, California.
6.2. All Uniphase Products must meet the Specifications, including the
ADC Software specifications and any modifications to the Specifications
requested by KLA-Tencor or its customers and agreed to by Uniphase, prior to
Source Acceptance (as defined below), if any, shipment and invoicing therefor.
Subject to Uniphase's and KLA-Tencor's development of mutually agreed-to
procedures for this purpose, KLA-Tencor and its Affiliates and the customers of
KLA-Tencor and its Affiliates shall have the right to inspect Uniphase Products
produced for KLA-Tencor and its Affiliates or the customers of KLA-Tencor and
its Affiliates prior to shipment ("Source Acceptance") and shall have the right
to witness all tests of the Uniphase Products produced for KLA-Tencor and its
Affiliates or the customers of KLA-Tencor and its Affiliates which are conducted
by Uniphase.
7. CURRENCY; INVOICING AND PAYMENT TERMS.
7.1. Uniphase shall submit invoices for all Uniphase Products to
KLA-Tencor in U.S. Dollars at the address specified in Section 18.4. Invoices
shall be submitted no earlier than the date of shipment to KLA-Tencor or its
Affiliate or, if Uniphase is requested by KLA-Tencor or its Affiliate to ship
the Uniphase Products directly to the customer of KLA-Tencor or its Affiliate,
the date of shipment to such customer. KLA-Tencor and its Affiliates shall pay
Uniphase eighty percent (80%) of the amount due on each invoice within thirty
(30) days from the date of invoice. KLA-Tencor and its Affiliate shall pay
Uniphase the remaining twenty percent (20%) of the amount due on each invoice
within sixty (60) days from the date of invoice. Notwithstanding the foregoing,
with respect to Uniphase Products that are purchased as Demonstration Systems,
KLA-Tencor shall pay Uniphase the Uniphase COGS with respect to such Uniphase
Products within thirty (30) days from the date of invoice and (*) with respect
to such Uniphase Products within thirty (30) days from KLA-Tencor's receipt of
payment of the sales price therefor from the customer. In all cases KLA-Tencor
or its Affiliate, as applicable,
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shall pay Uniphase the amounts owed hereunder within thirty (30) days of
receiving the associated payment from the end-user customer.
7.2. Any tax, customs duty, or other charges with respect to the sale
hereunder, resale by KLA-Tencor, use or delivery of Uniphase Products shall be
the responsibility of KLA-Tencor. KLA-Tencor shall promptly pay all such amounts
when due. In the event Uniphase is required to pay any amounts for which
KLA-Tencor is responsible pursuant to this Section 7.2, KLA-Tencor shall
promptly reimburse Uniphase upon receipt of an invoice therefor.
7.3. Each party shall have the right, at its own expense, during normal
working hours and not more than once per year, to have its independent auditors
review the other party's books and records to confirm the Uniphase COGS,
KLA-Tencor COGS and Gross Margin incurred and/or achieved by KLA-Tencor or
Uniphase, as applicable. Such auditor shall only disclose to the auditing party
such information as is necessary for such confirmation.
8. FORECASTS. On or before the 15th day of each calendar quarter,
KLA-Tencor shall provide Uniphase with a six-month rolling forecast, of which
the first three months shall be firm orders.
9. TITLE; RISK OF LOSS. Good and marketable title and risk of loss shall
pass to KLA-Tencor or its Affiliate after Source Acceptance, if any, and when
Uniphase Products are delivered to the carrier, FOB Uniphase's factory in San
Jose, California.
10. KLA-TENCOR OBLIGATIONS; TRAINING; EXHIBITIONS.
10.1. KLA-Tencor shall be responsible for promoting, selling,
installing, supporting and servicing the Uniphase Products purchased under this
Agreement.
10.2. Uniphase will provide telephone support to KLA-Tencor regarding
the Uniphase Products during Uniphase's normal business hours (Monday through
Friday, 9:00 AM to 5:00 PM) free of charge to KLA-Tencor. If KLA-Tencor's
customers who have purchased Uniphase Products contact Uniphase with support
questions, Uniphase will refer such customers to KLA-Tencor. KLA-Tencor shall
assume as much of the telephone support burden as its expertise permits.
10.3. Uniphase will train up to five (5) KLA-Tencor engineers, who shall
act as trainers for the KLA-Tencor sales and support organizations. Training
will be conducted in English. Travel, meals and lodging expenses of KLA-Tencor's
and Uniphase's engineers will be borne by KLA-Tencor.
10.4. Uniphase will provide mutually agreed upon customer support in
case of a problem that cannot be solved by KLA-Tencor for the first twenty (20)
Uniphase Products sold by KLA-Tencor to KLA-Tencor's customers, for a period not
to exceed six (6) months following acceptance, free of charge. KLA-Tencor will
bear the reasonable travel, meals and lodging expenses of Uniphase's service
personnel. Thereafter, Uniphase will provide service to
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KLA-Tencor's customers at Uniphase's local service charge rate, with travel,
meals and lodging expenses of service personnel borne by KLA-Tencor.
10.5. In the event that KLA-Tencor shall experience within a single
thirty (30) day period, failure of at least six (6) of the same Uniphase
Products while under warranty to meet the same element of the mutually agreed
Uniphase specifications (a "Continuing Fault"), KLA-Tencor's purchase
commitments under Section 2 for the annual period(s) during which such
Continuing Fault has occurred shall be suspended during such period of
Continuing Fault and shall be reduced in proportion to the portion of the period
covered by such purchase commitment during which the Continuing Fault remains
unresolved. In such event, Uniphase and KLA-Tencor shall work together to
resolve such problem as quickly as possible. Field support for Uniphase Products
with Continuing Faults shall be provided by Uniphase at Uniphase's expense.
10.6. During the term of this Agreement, KLA-Tencor agrees to market and
promote sales of the Uniphase Products, other than Uniphase Products for the
review and classification of mask (but not semiconductor wafer or flat panel
display) defects, with the same level of effort as KLA-Tencor uses to market and
promote sales of KLA-Tencor's wafer inspection and yield management products.
10.7. During the term of this Agreement, KLA-Tencor agrees to exhibit
prominently the Uniphase Products at industry-wide trade shows where KLA-Tencor
has an exhibit in a manner that KLA-Tencor deems appropriate. This will include
all major industry shows in the second half of calendar 1997 and beyond during
the term of this Agreement.
11. UNIPHASE OBLIGATIONS.
11.1. Uniphase shall manufacture Uniphase Products in accordance with
the Specifications, including any modifications to such Specifications agreed to
by Uniphase. Uniphase shall comply with any reasonable request of KLA-Tencor as
to Specifications regarding color, label, logo, brand name, and model number. In
the event that KLA-Tencor determines to have Uniphase manufacture Uniphase
Products exhibiting any of Uniphase's trademarks, trade names, logos or similar
subject matter, any use of the foregoing by KLA-Tencor in marketing,
distributing or otherwise promoting the Uniphase Products shall be subject to
Uniphase's prior written approval, not to be unreasonably withheld or delayed.
KLA-Tencor agrees to reproduce the Uniphase copyright notices that appear on the
originals.
11.2. Uniphase will use commercially reasonable efforts to develop (*).
The resulting product will be deemed a Uniphase Product hereunder. KLA-Tencor
and Uniphase shall jointly develop the product development schedule for this
project.
11.3. Uniphase will assist KLA-Tencor in implementing (*):
11.3.1. KLA-Tencor and Uniphase shall jointly develop the product
specifications and development schedule for this project. In the event that
(*) is not available for shipment by the thirtieth (30th) day following the
availability date set forth on such
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schedule, then notwithstanding Section 3 above, Uniphase shall only be entitled
to (*) on sales and other dispositions of (*) during the sixty (60) day period
following such thirtieth (30th) day. In the event that (*) is not available for
shipment by the ninetieth (90th) day following the availability date set forth
on such schedule, then notwithstanding Section 3 above, Uniphase shall not be
entitled to any portion of the Gross Margin on sales and other dispositions of
(*) during the ninety (90) day period following such ninetieth (90th) day. In
the event that (*) is not available for shipment by the 180th day following
the availability date set forth on such schedule, then notwithstanding Section 3
above, Uniphase shall only be entitled to (*) on sales and other dispositions
of (*); provided, however, that (x) such period of reduced Gross Margin sharing
shall not exceed 180 days following such 180th day, (y) following such period of
reduced Gross Margin sharing, the provisions of Section 3 above shall govern the
sharing of Gross Margin on sales of (*) hereunder, and (z) Uniphase shall not be
required to supply (*) to KLA-Tencor after the completion of the 180 day
period following such 180th day.
11.3.2. Subject to the terms and conditions of this Agreement, Uniphase
hereby grants to KLA-Tencor, under Uniphase's applicable Intellectual Property
Rights, a world-wide, non-transferable, non-sublicensable (except as expressly
provided below) license to use, modify and duplicate the source code for the
System Software provided to KLA-Tencor by Uniphase hereunder for the sole
purpose of, and only to the extent necessary for, enabling (*) to operate on
and in conjunction with Systems, including for the support and maintenance of
(*). Subject to the terms and conditions of this Agreement, Uniphase hereby
further grants to KLA-Tencor, under Uniphase's applicable Intellectual Property
Rights, a world-wide, non-transferable, non-sublicensable license to compile
the foregoing modified source code for the System Software into object code and
(i) incorporate such object code into such (*) for the sole purpose of, and
only to the extent necessary for, enabling such (*) to operate on and in
conjunction with Systems, and (ii) make copies of and, subject to Section 2.6
above, grant sublicenses to end-user customers of KLA-Tencor and its Affiliates
in respect of such object code for the sole purpose of permitting such end-user
customers to use such object code for their own internal business purposes in
connection with their use of (*). No other rights or licenses in respect of
the source code for the System Software are granted hereby, by implication,
estoppel or otherwise. Any copies of the source code or object code for the
System Software made by or for KLA-Tencor shall bear the same copyright and
other proprietary notices and legends as appear on the original.
Notwithstanding the foregoing, if Uniphase reasonably believes that it cannot
provide a portion of the source code for the System Software to KLA-Tencor
without thereby providing source code licensed by Uniphase from ISOA, Inc.,
then (x) Uniphase shall not be obligated to provide such portion of the source
code for the System Software to KLA Tencor, and (y) no licenses shall be
granted hereunder with respect to such portion.
11.3.3. Subject to Section 16, Uniphase will provide to KLA-Tencor,
Uniphase's standard reliability test specifications and protocols for the
Systems to which KLA-Tencor intends to port (*). Modifications of such Systems
by KLA-Tencor shall not void the warranty provided in Section 14, provided that
(i) KLA-Tencor has notified Uniphase of such modifications at least thirty (30)
days in advance, (ii) KLA-Tencor provides Uniphase with access to reliability
test data which meets Uniphase's standard reliability specifications in
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accordance with Uniphase's standard reliability test protocols for relevant
subsystems; and (iii) Uniphase has reasonably agreed that such modifications
will not void the warranty. If KLA-Tencor cannot provide reliability test data
which meets Uniphase's standard reliability specifications in accordance with
Uniphase's standard reliability test protocols for relevant subsystems,
KLA-Tencor may elect that (a) Uniphase will not cover the warranty for the
modified subsystem; or (b) KLA-Tencor will provide Uniphase access to the
modified subsystems, in which case Uniphase will have its reliability engineers
inspect the equipment to determine whether the warranty should apply. If
KLA-Tencor provides such access, KLA-Tencor will bear the costs of travel,
meals, lodging and engineering time of Uniphase's reliability engineers. The
warranty provided in Section 14 shall not apply to modules of the Uniphase
Products which have been modified by KLA-Tencor if (x) KLA-Tencor has not
notified Uniphase of such modification at least thirty (30) days in advance, or
(y) Uniphase, in its reasonable discretion, has not approved of the modification
(provided that in such case, Uniphase shall provide KLA-Tencor with a reasonable
explanation of why the modification was not approved), and the deviation of any
such modules from the Specifications therefor shall not be deemed a Continuing
Fault. All modules of the Uniphase Product which are not modified by KLA-Tencor
or defects not caused by KLA-Tencor's modifications shall remain covered by the
warranty in Section 14. In the event that (I) Uniphase approves of a
modification as provided above, and (II) based on field experience with such
modified System, it appears that such modification is resulting in more frequent
or more serious System defects or failures, then Uniphase shall not be required
to honor the warranty provided in Section 14 for such modified Systems. No other
rights to modify Uniphase Products are granted hereby, by implication, estoppel
or otherwise.
11.4. During the Exclusive Period, but in no event for a period
exceeding the Initial Term, Uniphase agrees to invest annually at least (*) of
the amounts received by Uniphase for sales of Uniphase Products hereunder
(excluding the amounts received pursuant to Section 3.5 above) in each twelve
month period following the Effective Date (commencing with the period July 1,
1997-June 30, 1998) in research and development activities relating to further
development of Uniphase Products. Characterization of activities as involving
research and development efforts shall be in accordance with GAAP. After the
Initial Term, so long as the Exclusive Period is in effect, the parties shall
negotiate the level of Uniphase's investment in research and development for
subsequent terms of the Agreement.
11.5. It is understood and agreed that most parts for the Uniphase
Products are obtained by Uniphase from third-party vendors. During the term and
following termination of this Agreement, Uniphase will assist KLA-Tencor, at
KLA-Tencor's expense, in procuring Spare Parts from such vendors. With respect
to Uniphase Products Spare Parts manufactured by Uniphase, Uniphase shall make
such parts available to KLA-Tencor for a period of five (5) years following
manufacture of the applicable Uniphase Products. The prices to be paid by
KLA-Tencor for such Spare Parts shall be the greater of (i) Uniphase COGS plus
twenty percent (20%) and (ii) fifty percent (50%) of KLA-Tencor's then-current
published U.S. list price.
11.6. Uniphase shall provide KLA-Tencor with copies of and hereby grants
KLA-Tencor the right to use, reproduce and reformat (to the extent required to
conform to other
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KLA-Tencor documentation) all necessary Uniphase technical and other
documentation such as operation and maintenance manuals and system descriptions,
including the right to receive and reproduce electronic versions of these
documents and their regular updates. All written materials shall be provided in
English. All electronic versions shall be provided on a diskette in Windows
format. KLA-Tencor may make modifications to the foregoing materials; provided
that KLA-Tencor shall reproduce on any copies thereof all Uniphase copyright and
other proprietary notices and legends as appear on the versions thereof provided
to KLA-Tencor by Uniphase. KLA-Tencor shall only use, reproduce and distribute
the foregoing Uniphase materials in connection with KLA-Tencor's sale and
promotion of the Uniphase Products.
12. TERM AND TERMINATION,
12.1. The initial term of this Agreement shall be the Initial Term.
Following the Initial Term, KLA-Tencor may extend the term of this Agreement for
up to three (3) additional one-year periods by giving written notice to Uniphase
at least two (2) months before the end of the then-current term; provided,
however, that no such extension shall be effective unless it is determined,
within thirty (30) days after the end of the then-current term, that KLA-Tencor
met the minimum purchase obligation provided for in Section 2.2 above or Section
12.2 below, as applicable, for the year immediately preceding the proposed
extension year. In the event that it is determined that KLA-Tencor has not met
the foregoing minimum purchase obligation, then Uniphase shall provide written
notice to that effect to KLA-Tencor and this Agreement shall terminate thirty
(30) days after such notice is given. Upon termination of this Agreement under
any subsection of this Section 12, (a) the rights and license granted to
KLA-Tencor pursuant to this Agreement shall automatically terminate except as
necessary to continue support and maintenance of the Uniphase Products for
KLA-Tencor's customers and to sell any Uniphase Products in KLA-Tencor's
inventory or covered by firm purchase orders placed by KLA-Tencor prior to such
termination or within thirty (30) days thereafter and calling for delivery
within six (6) months thereafter, (b) Uniphase and KLA-Tencor will each, upon
the other party's request, ship to such other party all tangible items in the
shipping party's possession which are proprietary to such other party, and (c)
KLA-Tencor will have no obligation to purchase any Uniphase Products after the
date of termination, whether or not such products have been forecasted for
purchase, unless such Uniphase Products are covered by a KLA-Tencor purchase
order.
12.2. For each year of this Agreement following the initial year
(commencing with the year July 1, 1998-June 30, 1999), the parties shall
negotiate in good faith to reach agreement on the minimum number of Systems to
be purchased hereunder by KLA-Tencor during such year, including any extension
year pursuant to Section 12.1 above, at least thirty (30) days prior to the
start of such year. In addition to the factors referenced in Section 2.2 above,
the parties shall use VLSI Research Inc.'s sales growth projections for optical
review tools, if available, or if not available for process diagnostics
equipment as a guideline for their negotiations. In the event that the parties,
after making such good faith efforts, do not reach agreement on a minimum number
of Systems for such year, then such minimum number shall be determined by
arbitration as provided in Section 17.1 below. The Exclusive Period shall
continue during the period of any such negotiation and/or arbitration.
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12.3. In the event of a material breach or default under this Agreement,
this Agreement may be terminated by the non-breaching party upon ninety (90)
days written notice unless such breach or default is cured to the reasonable
satisfaction of the non-breaching party during said 90-day period.
12.4. This Agreement may be terminated by a party in the event that the
other party undergoes a Change in Control, such termination to be effective upon
thirty (30) days written notice. Alternatively, in the event of a Change in
Control of a party, the other party may elect to continue this Agreement on a
nonexclusive basis, meaning that KLA-Tencor shall be released from its
obligations under Section 2.8, and Uniphase shall be released from its
obligations under Section 2.7, for the remainder of the year of this Agreement
in which the Change in Control occurs and, at such electing party's option, for
one additional extension year. For these purposes "Change in Control" shall mean
the occurrence of any one of the following:
(a) any direct competitor of a party is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (the
"Exchange Act") or any successor rule), directly or indirectly, of securities of
the other party representing 10% or more of the combined voting power of the
other party's then outstanding securities; or
(b) the solicitation of proxies (within the meaning of Rule 14a-1(k)
under the Exchange Act or any successor rule) by a direct competitor of a party
with respect to the election of any director of the other party where such
solicitation is for any candidate who is not a candidate proposed by a majority
of the Board in office prior to the time of such election, and the election of
such candidate.
12.5. KLA-Tencor may elect to terminate the Exclusive Period for
convenience upon ninety (90) days prior written notice to Uniphase. In the event
of such termination, this Agreement shall continue on a nonexclusive basis, as
described in Section 12.4, for a period of one (1) year thereafter, after which
this Agreement shall terminate.
12.6. Uniphase may elect to terminate the Exclusive Period in the event
that KLA-Tencor fails to meet the minimum purchase obligation provided for in
Section 2.2 or 12.2 above, as applicable, such termination to be effective as of
the end of the year in question, which shall be Uniphase's sole remedy in
connection therewith. In the event of such termination, this Agreement shall
continue on a nonexclusive basis, as described in Section 12.4, for a period of
one (1) year thereafter, after which this Agreement shall terminate.
12.7. Termination of this Agreement shall not relieve either party from
obligations, including payment obligations, to the other party incurred prior to
termination.
12.8. Sections 14, 15, 16 and 18 hereof shall survive any termination of
this Agreement.
13. FORCE MAJEURE. Neither party shall be liable for any delay or
failure in performance to the extent such delay or failure is caused by fire,
flood, earthquake, other natural disaster, explosion, war, strike, labor
stoppage, embargo, government requirement, civil or
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military authority, act of God, inability to secure raw material or
transportation facilities, or for any act or omission of carriers or suppliers
or any other causes beyond its reasonable control, whether or not similar to the
foregoing, but any such delay or failure shall be remedied as soon as possible.
The provisions of this Section 13 shall not excuse the failure to pay monies due
hereunder.
14. WARRANTIES; CONTINUING FAULTS.
14.1. Uniphase warrants that, to the best of its knowledge, it is the
owner or licensee of all Intellectual Property Rights covering or embodied in
the Uniphase Products and has all rights necessary to enter into this Agreement.
Uniphase further warrants that, at the time of shipment, the Uniphase Products
will comply with all applicable industry and environmental regulations.
14.2. Uniphase warrants that (a) good and marketable title to the
Uniphase Products purchased hereunder, free and clear of liens and adverse
claims, will be transferred to KLA-Tencor and its Affiliates, and (b) the
Uniphase Products purchased hereunder will meet the Specifications, including
the ADC Software specifications, and will be free from faulty workmanship and
use of defective materials for a period of 12 months from the date of acceptance
of the Uniphase Products by a KLA-Tencor customer or 18 months from the date of
shipment to KLA-Tencor, whichever first occurs. Spare Parts are warranted for a
period of 90 days from the date of installation or 18 months from the date of
shipment, whichever first occurs, provided that the foregoing 18 month period
shall be reduced (x) for the Spare Parts listed on Exhibit G attached hereto, to
the period set forth thereon, and (y) with respect to Spare Parts acquired by
Uniphase from third parties, to the maximum period for which such Spare Parts
are warranted by such third parties. Notwithstanding the foregoing, if
KLA-Tencor is required to offer a longer warranty period to its customers,
including for Spare Parts, Uniphase will honor such longer warranty period with
mutually acceptable pricing. In the event of a breach of the warranty set forth
in clause (b), Uniphase's sole liability and KLA-Tencor's sole remedy shall be
for Uniphase, at its option and expense, to repair or replace the defective
Uniphase Product or component; provided that if such defective Uniphase Product
or component cannot be repaired or replaced, then Uniphase shall refund the
purchase price. The warranty set forth in clause (b) shall not apply in the
event that the Uniphase Products are subjected to abuse, misuse or operation
outside proper environmental parameters (as indicated in the manuals for such
Uniphase Products) or are modified other than by Uniphase or are repaired other
than by Uniphase or its authorized agents or by KLA-Tencor. Uniphase does not
represent that the ADC Software will be error-free, but will maintain an active
"bug fix" program and will provide new releases containing bug fixes to
KLA-Tencor and its customers without charge.
14.3. EXCEPT AS SET FORTH IN SECTIONS 14.1 AND 14.2 HEREOF, UNIPHASE
DISCLAIMS ALL WARRANTIES AND REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, WITH
RESPECT TO THE UNIPHASE PRODUCTS, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WARRANTIES ARISING FROM
A COURSE OF
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DEALING, USAGE OR TRADE PRACTICE, OR WARRANTIES CONCERNING THE NONINFRINGEMENT
OF THIRD PARTY RIGHTS.
14.4. THE REMEDY OF REPAIR, REPLACEMENT OR REFUND SET FORTH IN SECTION
14.2 SHALL BE KLA-TENCOR'S SOLE REMEDY AND UNIPHASE'S SOLE LIABILITY IN THE
EVENT OF BREACH OF THE WARRANTY PROVIDED IN SECTION 14.2(b).
15. INTELLECTUAL PROPERTY; PROHIBITED TRANSACTIONS; INDEMNITY;
TRADEMARKS.
15.1. Uniphase shall retain ownership of all of the Intellectual
Property Rights relating to the Uniphase Products. Subject to the preceding
sentence, KLA-Tencor shall retain ownership of all Intellectual Property Rights
in and to KLA-Tencor Options. Uniphase and KLA-Tencor shall each own all
Intellectual Property Rights developed solely by such party without reference to
any Intellectual Property Rights owned by the other party. Uniphase and
KLA-Tencor shall jointly own all Intellectual Property Rights developed jointly
by the parties hereunder, except that in the event that Uniphase and KLA-Tencor
jointly develop any Intellectual Property Rights pursuant to the development
project contemplated by Section 11.3 above and such Intellectual Property Rights
are embodied in KLA-Tencor's Impact product, then KLA-Tencor shall own all such
Intellectual Property Rights and Uniphase agrees to assign to KLA-Tencor all of
Uniphase's right, title and interest in and to such Intellectual Property
Rights. Uniphase is not hereby receiving any license, implied or express, to any
KLA-Tencor Intellectual Property Rights in or to KLA-Tencor Options, and during
the term of this Agreement Uniphase will not reverse engineer any KLA-Tencor
Options. The foregoing shall not be deemed to prevent Uniphase from fulfilling
its research and development obligations pursuant to Section 11.3 above.
15.2. Uniphase agrees not to sell or otherwise transfer its Uniphase
Product business or all or substantially all of the Intellectual Property Rights
that cover the Uniphase Products (other than as part of a sale of Uniphase or
its entire business) (*). The foregoing restriction shall terminate on the
earliest to occur of (i) five (5) years following the Effective Date, (ii) two
(2) years following the termination of the Exclusive Period, (iii) immediately
upon KLA-Tencor's giving notice of termination of the Exclusive Period pursuant
to Section 12.5, or (iv) immediately upon KLA-Tencor's failing to meet the
minimum purchase obligation set forth in Section 2.2 above for the initial year
of this Agreement (the period from June 30, 1997 throught and including June 30,
1998).
15.3. Subject to the paragraphs below, Uniphase (the "Indemnifying
Party") shall indemnify, defend and otherwise hold KLA-Tencor and its Affiliates
and any of their officers, directors, shareholders, employees, agents or
customers (the "Indemnified Parties") harmless from any claims, demand, loss,
damage, settlement, judgment, costs, fees, expense or liability that any of them
may incur (including reasonable attorneys' fees) as a result of any claim or
allegation that the Uniphase Products infringe, misuse or misappropriate any
patent, copyright, trade secret or other Intellectual Property Right of any
other person or entity. Uniphase shall not have any obligation to indemnify the
Indemnified Parties pursuant to this Section 15.3 to the
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extent that the infringement, misuse or misappropriation results from (i)
combination of the Uniphase Products with any products not supplied by Uniphase,
where such infringement, misuse or misappropriation would not arise based on the
use of the Uniphase Products alone, or (ii) modification of the Uniphase
Products other than by Uniphase or its authorized agents, or (iii) use of the
Uniphase Products for any purpose for which they were not intended.
15.4. In the event of any claim or allegation (including any cease and
desist or similar letter), suit or legal action brought against any of the
Indemnified Parties alleging such infringement, misuse or misappropriation, the
Indemnifying Party shall pay all costs and expenses incurred and satisfy all
settlements, judgments and decrees against the Indemnified Parties, provided
that (i) the Indemnified Parties promptly notify the Indemnifying Party when
such claim, suit or action becomes known to the Indemnified Parties, (ii) the
Indemnified Parties grant the Indemnifying Party sole control over the defense
of the claim, suit or action, and (iii) the Indemnified Parties provide such
assistance and cooperation as the Indemnifying Party shall reasonably request,
at the Indemnifying Party's expense. The Indemnifying Party shall not be liable
for any settlement agreed to without its prior written consent. The Indemnifying
Party shall not agree to any settlement without the prior written consent of the
Indemnified Parties, such consent not to be unreasonably withheld, unless such
settlement involves solely the payment of money by the Indemnifying Party.
Failure to provide the notice required by this Section shall not relieve an
Indemnified Party from any obligation hereunder except to the extent actually
prejudiced by such failure.
15.5. In the event that KLA-Tencor or any of its Affiliates or any of
their customers are enjoined from the use of the Uniphase Products due to a
proceeding based upon the infringement, misuse or misappropriation of any
Intellectual Property Rights as to which Uniphase is obligated to indemnify the
Indemnified Parties pursuant to Section 15.3, Uniphase at its option shall
either:
(a) promptly render the Uniphase Products non-infringing and
complying with the Specifications; or
(b) procure for KLA-Tencor and its Affiliates and their customers the
right to continue using the Uniphase Products; or
(c) replace the Uniphase Products with non-infringing equipment
complying with the Specifications; or
(d) repurchase the Uniphase Products at their original purchase price
(but if the Product was purchased by a KLA-Tencor customer more than one-year
prior to the date of such injunction, less depreciation calculated on a
straight-line basis assuming a five-year useful life from the date of purchase
by such customer), in case any of the options in paragraphs (a), (b) or (c) are
not reasonably available.
15.6. THIS SECTION 15 STATES THE ENTIRE LIABILITY AND SOLE REMEDY OF
KLA-TENCOR AND UNIPHASE FOR THIRD PARTY CLAIMS RELATING TO INTELLECTUAL PROPERTY
RIGHTS.
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15.7. KLA-Tencor acknowledges that the symbols, trademarks and service
marks adopted by Uniphase or its suppliers to identify the Uniphase Products, as
set forth in Exhibit H attached to this Agreement (the "Trademarks"), belong to
Uniphase and that KLA-Tencor shall have no rights in such Trademarks, or any
similar marks or marks which comprise the elements of such marks, except as
expressly set forth herein. Subject to Uniphase's prior written approval and
such written guidelines as Uniphase shall issue from time to time, KLA-Tencor
may, at its discretion, use the Trademark solely in connection with the
marketing and sale of the Uniphase Products. Further, KLA-Tencor may also use
its own marks in connection with the marketing and sale of the Uniphase Products
in conjunction with the Trademarks, upon Uniphase's reasonable approval.
16. INFORMATION EXCHANGE.
16.1. Uniphase and KLA-Tencor have exchanged prior to the date of this
Agreement and intend to continue to exchange various types of information (i.e.,
technical and non-technical information, patents, trade and industrial secrets,
manufacturing processes, and other confidential and proprietary information) in
order to accomplish the work to be performed under this Agreement. Information
shall be considered confidential if it is disclosed in writing and marked
"confidential," "proprietary," or words of similar import, or disclosed orally
and delivered to the other party in such written and marked form within one
month of its disclosure. Nothwithstanding the foregoing, all source code of
either party hereto shall be considered confidential. The parties shall treat
all such information as strictly confidential, unless the information is:
(a) available to the public at the time of disclosure to the
receiving party, or thereafter becomes available to the public through no fault
of the receiving party, but in such event only as of such later date;
(b) independently made available to the receiving party by a third
party without restrictions on disclosure; or
(c) known to the receiving party before disclosure to the receiving
party by the disclosing party or developed by the receiving party without
reference to any confidential information of the disclosing party.
In addition, the parties shall treat as confidential information the
terms and provisions of this Agreement and any information exchanged pursuant to
the License Agreement and the OEM Agreement, each dated as of November 20, 1995,
by and between Uniphase and Tencor Instruments.
16.2. The receiving party shall use the information solely for its own
internal use consistent with this Agreement, not disclose the information to any
person or persons outside its organization, and disclose the information to any
person or persons within its organization only on a "need to know" basis.
Notwithstanding the foregoing, the-receiving party shall not be liable for:
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(a) inadvertent disclosure or use of confidential information
provided that:
(i) it uses the same degree of care in safeguarding the
information as it uses for its own confidential information of like importance,
but in no event less than reasonable care; and
(ii) upon the disclosure of any inadvertent disclosure or misuse
of any information, it shall endeavor to prevent any further inadvertent
disclosure or misuse; or
(b) unauthorized disclosure or use of confidential information by
persons who are or have been in its employ, unless the receiving party fails to
protect the information with the same degree of care as it uses for its own
information or similar importance, but in no event less than reasonable care; or
(c) disclosure of confidential information where such information is
disclosed with the prior written approval of the other party; or
(d) disclosure of confidential information where such information has
been received by the disclosing party, without restriction on disclosure, from a
source other than the other party without breach of this Agreement and otherwise
not in violation of the other party's rights.
16.3. If either party is compelled to make a disclosure of any
confidential information of the other party by law or government rule or
regulation:
(a) such disclosure shall be limited to the extent required;
(b) the other party shall have an opportunity to review the
information (and any request for confidential treatment) at least thirty (30)
days (or such shorter period as is required by the rule or regulation) before
disclosure; and
(c) the disclosing party shall promptly apply for applicable
protective orders.
Notwithstanding the foregoing, such review shall not make the
reviewing party responsible for the content of the disclosure.
16.4. Each party agrees that injunctive relief shall be appropriate
in the event of any breach or threatened breach of this Section 16, due to the
irreparable harm (for which monetary damages would not be an adequate remedy)
that would be suffered by the party whose confidential information is disclosed.
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17. ARBITRATION.
17.1. Any dispute over either (i) the initial Transfer Prices for
Uniphase Products or changes thereto pursuant to Section 3.2 above, or (ii) the
minimum number of Systems to be purchased hereunder by KLA-Tencor during any
year of this Agreement following the initial such year, as provided in Section
12.2 above, shall be settled by final and binding arbitration in Santa Xxxxx
County, California before a single neutral arbitrator, chosen by the parties
within two weeks of the making of a written arbitration demand by either party.
Except as varied by the provisions of this Section 17, the American Arbitration
Association's then-prevailing Commercial Arbitration Rules shall apply to the
arbitration. The parties shall exercise their best efforts to commence the
arbitration hearing not later than 30 days after the selection of the
arbitrator. The arbitration shall be completed within 20 days of its initiation,
and the arbitrator shall render the decision within 10 days of the completion of
the arbitration hearing. Unless the parties otherwise agree, no pre-arbitration
discovery shall be allowed; the California Evidence Code shall apply to the
taking of evidence at the arbitration; and the arbitration proceedings and
evidence shall be confidential. The arbitrator shall have no authority to award
any remedy or relief except as explicitly provided in the last sentence of this
Section 17, and shall limit the arbitration decision to (depending on which of
the two arbitrable issues is submitted) specifying the initial Transfer Prices
or changes thereto pursuant to Section 3.2 above, or specifying the minimum
number of Systems to be purchased pursuant to Section 12.2 above. In determining
any dispute regarding the minimum number of Systems to be purchased, the
arbitrator shall explicitly address in the grounds for the decision the factors
set forth in Sections 2.2 and 12.2 above. The arbitrator's decision shall be
based on substantial evidence in the record as a whole, and shall be accompanied
by a written statement of the facts found and the rules of law applied in
reaching the decision. Judgment on an arbitration decision may be entered and
enforced only in the Superior Court of the State of California, and the court
shall not enforce any decision that is erroneous in its application of
substantive law. The arbitrator shall impose sanctions for the abuse or
frustration by any party of the arbitration process, and shall award the
prevailing party, if any, reimbursement from the other party for its costs and
expenses, including reasonable attorneys' fees, and such other party shall also
pay the costs of the arbitration.
18. GENERAL.
18.1. This Agreement shall be governed by, and construed in
accordance with, the laws of the state of California, excluding any laws which
direct the application of another jurisdiction's laws.
18.2. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but which together shall constitute one and the
same instrument.
18.3. The headings of the Sections of this Agreement are for
convenience and shall not be used to interpret this Agreement.
18.4. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given seven
(7) days after mailing if
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delivered or mailed by certified or registered mail with return receipt
requested, or upon the date of hand delivery, or upon the date of facsimile
transmission if receipt is confirmed:
To KLA-Tencor:
000 Xxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
Fax: (000) 000-0000
ATTN: Xxx Xxxxx
with a copy to:
Xxxx Xxxxx, Esq.
KLA-Tencor Corporation
000 Xxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
Fax: (000) 000-0000
To Uniphase:
000 Xxxxxxxxx Xxxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
(000) 000-0000
Fax: (000) 000-0000
ATTN: President
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
(000) 000-0000
Fax: (000) 000-0000
Addresses may be changed by a notice given in accordance with this Section.
18.5. Any provision of this Agreement may be amended only by a written
instrument signed by the parties.
18.6. This Agreement constitutes the entire agreement between the
parties regarding the subject matter hereof and supersedes any and all prior
negotiations, correspondence, understandings and agreements regarding such
subject matter.
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18.7. This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns; provided that
neither party shall assign any of its rights or obligations hereunder, whether
by operation of law or otherwise, without the prior written consent of the other
party.
18.8. If any provision of this Agreement is held to be unenforceable for
any reason, it shall be adjusted rather than voided, if possible, in order to
achieve the intent of the parties to the extent possible. In any event, all
other provisions of this Agreement shall be deemed valid and enforceable to the
full extent.
18.9. Remedies provided herein are not exclusive unless otherwise
expressly provided herein. Delay in enforcing any right or remedy as a result of
any breach hereof shall not be deemed a waiver of that or any subsequent breach,
except to the extent that a party is prejudiced by such delay.
18.10. Each party warrants to the other party that:
(a) it has taken all necessary corporate and other internal actions
necessary to enter into this Agreement and the persons signing this Agreement
have been authorized to do so; and
(b) it has not entered into and will not enter into any other
agreements that in any way conflict with this Agreement.
18.11. Each party shall be responsible for obtaining all such approvals,
permits, consents, waivers and governmental clearances to the extent that they
affect its obligations under this Agreement.
18.12. The Uniphase Products to be furnished under this Agreement may be
or may become subject to the export control laws and regulations of the United
States and other national governments and international authorities. KLA-Tencor
agrees that it shall be responsible for complying with all such laws and
regulations in respect of Uniphase Products purchased hereunder, including
responsibility for paying any and all export fees, duties and the like. In
addition, a party receiving technical data or materials from the other party
shall not export, either directly or indirectly, any commodities, software or
technology provided to it by the other party, nor the direct products of any
such commodities, software or technology, to any proscribed country or to the
nationals thereof as stated in any such applicable export control laws and
regulations.
18.13. EXCEPT FOR BREACHES OF SECTION 16, IN NO EVENT SHALL EITHER PARTY
BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY
KIND OR NATURE WHATSOEVER, INCLUDING (WITHOUT LIMITATION) LOST PROFITS, LOST
DATA, BUSINESS INTERRUPTIONS, OR LOSS OF BUSINESS OPPORTUNITY, OR OTHER ECONOMIC
LOSS, ARISING IN ANY WAY OUT OF THE AGREEMENT OR THE PERFORMANCE
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HEREOF, HOWEVER CAUSED AND ON THEORY OF LIABILITY, EVEN IF SUCH PARTY HAD BEEN
ADVISED OF POSSIBILITY OF SUCH DAMAGES.
18.14. The prevailing party in any action to enforce the terms of this
Agreement shall be entitled to reimbursement from the non-prevailing party for
its costs and expenses (including reasonable attorneys' fees) incurred in
connection therewith, in addition to any other relief to which the prevailing
party shall be entitled
18.15. By its execution of this Agreement, Tencor Instruments agrees
with Uniphase that the License Agreement and the OEM Agreement, each dated as of
November 20, 1995, between Uniphase and Tencor Instruments shall terminate as of
the Effective Date. It is understood and agreed that no further license
payments, following the payment made on or about April 20, 1997, are due from
Tencor to Uniphase under the foregoing License Agreement.
18.16. By its execution of this Agreement, Ultrapointe Corporation
agrees to be bound by all terms and conditions hereof that are binding upon
Uniphase.
18.17. Unless otherwise required by law (including, without limitation,
as deemed advisable by a party hereto for purposes of compliance with applicable
securities laws), in which case there will be prior disclosure to the other
party, no disclosure (whether or not in response to an inquiry) of the subject
matter of this Agreement shall be made by any party hereto unless approved by
KLA-Tencor and Uniphase prior to release, provided that such approval shall not
be unreasonably withheld.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
UNIPHASE CORPORATION KLA-TENCOR CORPORATION
By:/s/ Xxx X. Xxxxxx By:/s/ Xxx X. Xxxxxxxx
---------------------------- --------------------------------
Name: Xxx X. Xxxxxx Name: Xxx X. Xxxxxxxx
-------------------------- ------------------------------
Title: Chief Financial Officer Title: Chief Executive Oficer
------------------------- -----------------------------
ULTRAPOINTE CORPORATION TENCOR INSTRUMENTS
By:/s Xxxx X. Xxxxx By:/s/ Xxxx X. Xxxxx
---------------------------- --------------------------------
Name: Xxxx X. Xxxxx Name: Xxxx X. Xxxxx
-------------------------- ------------------------------
Title: President Title: Secretary
------------------------- -----------------------------
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The following exhibits to this Agreement have been
omitted. Copies of these exhibits will be submitted
the the Securities and Exchange Commission upon
request.
A. ADC Software
B. Systems
C. Specifications
D. Uniphase Software License
E. Uniphase Customers(*)
F. Uniphase Quotations
G. Uniphase Spare Parts
H. Uniphase Trademarks
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