LCOS SUPPLY AGREEMENT ("Agreement") Dated as of: July 1, 2004 (the "Effective Date")
EXHIBIT
10.3
LCOS
SUPPLY AGREEMENT
("Agreement")
Dated
as
of: July 1, 2004 (the "Effective Date")
THE
SELLER: SPATIALIGHT,
INC.,
a New
York corporation
(hereinafter referred to as "SpatiaLight")
Address: 0 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, XX 00000, X.X.X.
Tel: (000) 000-0000 Fax: (000)
000-0000
THE
PURCHASER:
LG
ELECTRONICS INC.,
an
enterprise of the Republic of Korea
(hereinafter
referred to as "LGE")
Address: 00 Xxxxxx-Xxxx Xxxxxxxxxxxx-Xx, Xxxxx, Xxxxxxxx of Korea
Tel:
00-0-0000-0000 Fax: 00-0-0000-0000
WHEREAS,
SpatiaLight is the creator, developer and manufacturer and the owner of all
right, title and interest in and to SpatiaLight’s active matrix liquid crystal
on silicon (“LCoS”) microdisplay device having an active matrix of 1920 pixels
by 1080 pixels ("LCoS Chip"), and when three (3) LCoS Chips are fitted onto
a
light engine, they may be used in display application products such as high
definition televisions and home screen projection systems.
WHEREAS,
LGE is a leading Korean electronics manufacturer that intends to enter the
global market for LCoS televisions (“LCoS Televisions”) using SpatiaLight LCoS
Sets (as hereinafter defined) fitted onto a light engine of LGE’s design and
manufacture (“LG Light Engine”).
WHEREAS,
SpatiaLight specially developed its LCoS Sets for use in LGE’s LCoS televisions
(16 by 9 aspect ratio) pursuant to a Memorandum of Understanding entered into
on
May 12, 2003, between the parties hereto, providing for the parties to work
jointly in developing the LCoS Sets.
WHEREAS,
LGE and SpatiaLight entered into a mutual Non-Disclosure Agreement dated May
12,
2003 (“Non-Disclosure Agreement”) and the parties agree to continue to be fully
bound by the terms and conditions set forth in that Non-Disclosure
Agreement.
WHEREAS,
LGE desires to purchase LCoS Sets from SpatiaLight pursuant to and subject
to
the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1.
REPRESENTATIONS
Each
of
SpatiaLight and LGE hereby warrants and represents to the other as
follows:
1.1. That
it
is a legal person validly existing in its jurisdiction of establishment;
and
[***] -- Confidential portion omitted and filed separately with SEC.
1.2. That
it
has the full power and authority to enter into this Agreement and perform its
contractual obligations; that its representative who is signing this Agreement
has been duly authorized to do so pursuant to a valid power of attorney, board
of directors' resolution or other valid corporate action effecting the
same.
2.
PRODUCT
PURCHASES
LGE
agrees to purchase from SpatiaLight, in accordance with the prices, quantities,
dates and other terms and conditions set forth herein, sets of three (3)
SpatiaLight LCoS Chips combined with necessary SpatiaLight Analog ASICs and
a
Flex and Mount Set (as hereinafter defined), which form a SpatiaLight LCoS
Set
("LCoS Set").
3.
DELIVERY
DATES OF PRODUCTS
3.1. Initial
Deliveries
SpatiaLight
shall deliver a total of one hundred twenty (120) sets of three (3) trial
production LCoS Chips (which shall not include a SpatiaLight Analog ASIC) (the
“Qualification Sets”) to LGE by September 30, 2004 (the "Qualification Date")
and one hundred (100) sets of three (3) trial production LCoS Chips (which
shall
include a SpatiaLight Analog ASIC) (“Pre-Production Sets”) by November 30, 2004,
according to the following delivery schedule; provided, however, that either
party may, in its sole discretion, elect to change any or all of the delivery
dates set forth in this Section 3.1 by not greater than thirty (30) days sooner
or later than such delivery dates as set forth in this Section 3.1.
|
Month
|
Quantity
|
|
July
2004
|
20
Qualification Sets
|
|
September
2004
|
100
Qualification Sets
|
|
November
2004
|
100
Pre-Production Sets
|
3.2. Subsequent
Deliveries of LCoS Sets
Subsequent
deliveries of SpatiaLight LCoS Sets shall be made in accordance with the rolling
commitment schedule set forth in Section 6 of this Agreement for each month
of
January 2005 through December 2006.
3.3. Trial
Light Engine Deliveries
LGE
shall
deliver to SpatiaLight twenty-five (25) trial Fitted LGE Light Engines (as
hereinafter defined) in November 2004. The LCoS Sets to be incorporated into
such trial Fitted LGE Light Engines shall be delivered by SpatiaLight to LGE
in
October 2004 and shall be in addition to the Qualification Sets and
Pre-Production Sets. The purchase price for each trial Fitted LGE Light Engine
shall be determined by the parties at a later date; provided, however, that
such
purchase price shall not exceed [***] (not including the cost of the LCoS Sets).
It is hereby agreed that such twenty-five (25) trial Fitted LGE Light Engines
are pre-production products and therefore may not meet the exact technical
specifications that SpatiaLight would require for commercial sale
products.
-2-
[***] -- Confidential portion omitted and filed separately with SEC.
4. TERM
The
term
of this Agreement shall commence on the Effective Date and terminate on December
31, 2006, subject to LGE’s right to cancel set forth in Section 5 hereof and
subject further to early termination by mutual written consent and agreement
as
set forth in Section 11.1 hereof.
5.
QUALIFICATION
AND RIGHT OF CANCELLATION
5.1.
LGE’s
obligations to purchase LCoS Sets under this Agreement shall be expressly
conditioned upon the Qualification Sets meeting LGE’s Final Specifications set
forth in Exhibit 1 hereto. LGE shall have until October 31, 2004 (the
“Determination Date”; and the Effective Date through the Determination Date, the
“Qualification Period”) to perform final qualification tests on the
Qualification Sets. In the event that the Qualification Sets meet the Final
Specifications, LGE shall give written notice thereof to SpatiaLight and LGE
shall be required to purchase from SpatiaLight the LCoS Sets in accordance
with
all of the provisions of this Agreement. In the event that the Qualification
Sets do not meet the agreed upon Final Specifications, LGE may cancel this
Agreement by providing written notice to SpatiaLight not later than October
31,
2004 ("Notice of Cancellation"). If LGE does not provide a Notice of
Cancellation, the Qualification Sets shall be considered to meet the Final
Specifications and LGE shall be required to purchase and SpatiaLight shall
be
required to sell the LCoS Sets in accordance with all of the provisions of
this
Agreement. SpatiaLight and LGE agree to work together to the extent necessary
during the Qualification Period to assure that the Qualification Sets meet
LGE’s
Final Specifications. LGE may elect, in its sole discretion, to change the
Determination Date by not greater than thirty (30) days sooner or later than
the
Determination Date set forth in this Section 5.1.
5.2. LGE
shall
remain fully responsible for all of its obligations to SpatiaLight under this
Agreement through the end of the Qualification Period regardless of whether
it
gives Notice of Cancellation.
6.
CONTRACTUAL
OBLIGATIONS
Following
the Qualification Period and in the event that there is no Notice of
Cancellation, LGE hereby covenants and agrees to purchase SpatiaLight LCoS
Sets
pursuant to this Agreement as follows:
6.1. From
January 2005 through June 2005, LGE shall purchase SpatiaLight LCoS Sets
according to the following schedule (the “Commitment Schedule”), and such
Commitment Schedule shall be updated for each of the months of July 2005 through
December 2006 according to the terms and conditions of Section 6.3 and Section
6.4 (if applicable) below:
|
Month
|
Minimum
Monthly
Commitment
(Quantity
of LCoS Sets)
|
Price
Per LCoS Set
(United
States Dollars)
|
Monthly
Purchase Price Commitment
(United
States Dollars)
|
|
January 2005
|
2,000
|
[***]
|
[***]
|
|
February
2005
|
2,000
|
[***]
|
[***]
|
|
March
2005
|
2,000
|
[***]
|
[***]
|
|
April
2005
|
5,000
|
[***]
|
[***]
|
|
May
2005
|
5,000
|
[***]
|
[***]
|
|
June
2005
|
5,000
|
[***]
|
[***]
|
-3-
[***] -- Confidential portion omitted and filed separately with SEC.
6.2. From
July
2005 through December 2005, LGE forecasts that it will purchase SpatiaLight
LCoS
Sets at the agreed upon purchase price and quantities set forth in the following
schedule (the “Forecast Schedule”). LGE is not bound to purchase and SpatiaLight
is not bound to sell the quantities of LCoS Sets set forth in the Forecast
Schedule:
|
Month
|
Monthly
Forecast
(Quantity
of LCoS Sets)
|
Price
Per LCoS Set
(United
States Dollars)
|
Monthly
Forecast Purchase Price
(United
States Dollars)
|
|
July
2005
|
10,000
|
[***]
|
[***]
|
|
August
2005
|
10,000
|
[***]
|
[***]
|
|
September
2005
|
10,000
|
[***]
|
[***]
|
|
October
2005
|
10,000
|
[***]
|
[***]
|
|
November
2005
|
10,000
|
[***]
|
[***]
|
|
December
2005
|
10,000
|
[***]
|
[***]
|
6.3. Commencing
on January 1, 2005, on the first day of each month of delivery set forth in
this
Section 6, LGE shall be required to update the Commitment Schedule for the
calendar month six months in advance of such month and LGE shall be required
to
update the non-binding Forecast Schedule for the calendar month twelve months
in
advance of such month (i.e., on January 1, 2005, LGE shall provide its monthly
LCoS Set quantity commitment for July 2005 and shall provide its monthly
non-binding demand forecast for January 2006). All such updated commitments
required under this Section 6.3 shall be fully binding upon LGE. All updated
commitments required under this Section 6.3 and Section 6.4 (if applicable)
hereof shall be sent by LGE to SpatiaLight via facsimile or email.
6.4. Commencing
on June 20, 2005, the parties shall use their mutual best efforts and
cooperation to negotiate and agree upon the purchase prices of the LCoS Sets
scheduled for delivery pursuant to this Agreement between January 2006 and
December 2006. In the event that the parties shall not have agreed in writing
with respect to the second delivery year purchase prices for LCoS Sets by
September 20, 2005, by the terms of this Agreement the terms and conditions
of
Section 11 hereof shall then take effect. In such event, commencing on October
1, 2005, on the first day of each month of delivery set forth in this Section
6,
LGE shall continue to be required to update the Commitment Schedule for the
calendar month six (6) months in advance of such month (i.e., on October 1,
2005, LGE shall provide its monthly LCoS Set quantity commitment for April
2006); provided, that LGE’s commitment for each such delivery month shall be in
accordance with the terms and conditions of Section 11 and the other terms
and
conditions of this Agreement. All such updated commitments required under this
Section 6.4 shall be fully binding upon LGE.
-4-
[***] -- Confidential portion omitted and filed separately with SEC.
7.
PRICE
PER SPATIALIGHT LCOS SET
7.1. LGE
agrees to pay SpatiaLight the purchase price of $[***] for
each
Qualification Set and Pre-Production Set sold prior to LGE commencing to
manufacture LCoS Televisions for the quantities as set forth in Section 3.1
hereof.
7.2. Following
the Qualification Period, for the months of January 2005 to June 0000, XXX
agrees to purchase and SpatiaLight agrees to sell LCoS Sets for manufacturing
LCoS Televisions at the purchase prices set forth in Section 6.1
hereof.
7.3. For
the
months of July 2005 to December 0000, XXX agrees to purchase and SpatiaLight
agrees to sell LCoS Sets for manufacturing LCoS Televisions at the purchase
price set forth in Section 6.2 hereof; provided, however, it is expressly agreed
that in the event that LGE purchases a quantity of LCoS Sets that is less than
its monthly forecast for any of such months, then the purchase price of
$[***] per
LCoS
Set shall apply to a monthly order of up to 3,999 LCoS Sets and the purchase
price of $[***] per LCoS Set shall apply to a monthly order of between 4,000
and
9,999 LCoS Sets in such months.
7.4. The
purchase prices of the LCoS Sets scheduled for delivery pursuant to this
Agreement for the months of January 2006 through December 2006 shall be
determined in accordance with Section 6.4 and Section 11 of this
Agreement.
8.
PURCHASE
ORDERS
8.1. Within
two weeks following the Effective Date, LGE shall issue a purchase order (the
“Qualification Purchase Order”) to SpatiaLight for LGE’s purchase and
SpatiaLight’s sale of the Qualification Sets and Pre-Production
Sets.
8.2. In
the
event that LGE does not provide Notice of Cancellation pursuant to Section
5.1
hereof, LGE shall issue, no later than December 15, 2004, a purchase order
(the
“Rolling Purchase Order”; and together with the Qualification Purchase Order,
the “Purchase Orders”) to SpatiaLight for LGE's purchase and SpatiaLight’s sale
of the entire quantity of LCoS Sets set forth in Section 6.1
hereof.
8.3. Commencing
on January 15, 2005, on the fifteenth (15th)
day of
each month of delivery set forth in this Agreement, LGE shall be required to
reissue the Rolling Purchase Order to reflect LGE’s additional commitment made
pursuant to and in accordance with Section 6.3 and Section 6.4 (if applicable)
hereof.
8.4. The
parties shall use their mutual best efforts to negotiate and agree upon the
terms and conditions of the Purchase Orders. Such terms and conditions shall
include, without limitation, terms and means of payment, packing, shipping
terms, insurance, taxes, destination and inspection.
9.
ADDITIONAL
LIGHT ENGINES
The
parties acknowledge and agree that the right of SpatiaLight to purchase Fitted
LGE Light Engines (as defined below) from LGE set forth in this Section 9
constitutes a consideration for the agreed upon purchase prices set forth in
Section 6 hereof.
-5-
[***] -- Confidential portion omitted and filed separately with SEC.
9.1. The
parties hereby acknowledge and agree that SpatiaLight desires to purchase from
LGE quantities of LGE Light Engines fitted with sets of three (3) SpatiaLight
LCoS Chips (may be LCoS Chips with active matrix of 1920 pixels by 1080 pixels
or 1280 pixels by 720 pixels, at SpatiaLight’s sole discretion) and a UHP lamp
and ballast (“Fitted LGE Light Engines”) for the purpose of sale of such product
to other customers and potential customers of SpatiaLight in only the following
territories: China, Taiwan and Hong Kong. The parties covenant and agree to
provide LGE’s current xxxx of materials cost for producing one (1) Fitted LGE
Light Engine (the “Fitted Engine BOM Cost”) and SpatiaLight’s current xxxx of
materials cost for producing one (1) LCoS Set (the “LCoS Set BOM Cost”) to the
other party on December 1, 2004; provided, however, that the Fitted Engine
BOM
Cost does not include the cost of the LCoS Set incorporated into such Fitted
LGE
Light Engine.
9.2. LGE
hereby covenants and agrees to sell a maximum of 5,000 Fitted LGE Light Engines
to SpatiaLight during each month in 2005 and a minimum of 10,000 Fitted LGE
Light Engines to SpatiaLight during each month in 2006, provided, however,
that
the parties shall not have any rights or obligations under this Section 9 in
the
event that LGE gives Notice of Cancellation. It is expressly agreed and
understood that SpatiaLight is under no immediate obligation and is not
immediately committed in any way to acquire any Fitted LGE Light Engines (other
than the trial Fitted LGE Light Engines) from LGE throughout the term of this
Agreement; provided, however, that SpatiaLight shall be required, no later
than
December 1, 2004, to provide LGE with a six (6) month rolling commitment
schedule and twelve (12) month rolling forecast schedule for Fitted LGE Light
Engines. Such rolling commitment and forecast shall commence in January 2005
and
shall be thereafter updated by SpatiaLight on a monthly basis throughout the
term of this Agreement and shall be fully binding upon the parties
hereto.
9.3. LGE
agrees to sell all of such Fitted LGE Light Engines to SpatiaLight at a purchase
price not greater than the same percentage in excess of the Fitted Engine BOM
Cost as the percentage in excess of the LCoS Set BOM Cost that SpatiaLight
sells
LCoS Sets to LGE under this Agreement. The parties acknowledge and agree that
the xxxx of materials cost may change over time, and therefore agree to review
and reset the xxxx of materials costs of the Fitted LGE Light Engines and the
LCoS Sets in light of then prevailing market conditions on each six (6) month
anniversary date of the Effective Date throughout the term of this
Agreement.
10.
EXCLUSIVITY
10.1. The
parties covenant and agree that LGE shall have the exclusive right in the
Republic of Korea to purchase SpatiaLight LCoS Sets (applies only to SpatiaLight
LCoS Chips with active matrix of 1920 pixels by 1080 pixels) commencing on
the
Effective Date and terminating on June 30, 2005 (“LGE’s Right of Exclusivity”),
unless extended pursuant to the provisions of Section 10.2 hereof.
10.2. In
the
event that LGE fulfills its commitment to purchase an aggregate of 21,000 LCoS
Sets during the first six months of delivery as set forth in Section 6 hereof,
then LGE’s Right of Exclusivity shall be extended through December 31, 2005. In
the event that LGE’s aggregate commitment to purchase LCoS Sets for the months
of July 2005 to December 2005 is equal to or greater than its aggregate monthly
forecast for such months (60,000 LCoS Sets) and in the further event that LGE
fulfills its commitment for such months, then LGE’s Right of Exclusivity shall
be extended through June 30, 2006. In the event that LGE’s aggregate commitment
to purchase LCoS Sets for the months of January 2006 to June 2006 is equal
to or
greater than its aggregate monthly forecast for such months, as will be provided
pursuant to Section 6.3 hereof, and in the further event that LGE fulfills
its
commitment for such months, then LGE’s Right of Exclusivity shall be extended
through December 31, 2006.
-6-
[***] -- Confidential portion omitted and filed separately with SEC.
10.3. The
parties covenant and agree that SpatiaLight shall be the exclusive provider
of
LCoS products, limited to a three (3) panel type, to LGE throughout the entire
term of this Agreement (“SpatiaLight Exclusivity”); provided, however, that in
the event that LGE’s Right of Exclusivity shall terminate during the term of
this Agreement, the terms of Section 10.4 shall then take effect; provided,
further, however, that in the event that the parties shall not have agreed
in
writing with respect to the second delivery year purchase prices for LCoS Sets
by September 20, 2005 pursuant to the terms and conditions of Section 6.4
hereof, then the terms and conditions of Section 11 shall supercede the terms
and conditions of this Section 10 only with respect to the delivery months
of
January 2006 through December 2006.
10.4. In
the
event that LGE’s Right of Exclusivity shall terminate during the term of this
Agreement pursuant to the terms of this Section 10, SpatiaLight shall then
have
the right, in its sole discretion, to elect to continue SpatiaLight Exclusivity
throughout the remaining term of this Agreement by notifying LGE in writing
within fifteen (15) days following such termination.
(a) In
the
event that SpatiaLight so elects to extend SpatiaLight Exclusivity, LGE shall
then have the first priority right to purchase from SpatiaLight: (i) all of
the
quantities of LCoS Sets that LGE has committed to purchase from SpatiaLight
as
of the date that LGE’s Right of Exclusivity was terminated, and (ii) fifty
percent (50%) of the quantities of LCoS Sets that LGE has forecast to purchase
from SpatiaLight as of such termination date.
(b) In
the
event that SpatiaLight does not so elect to extend SpatiaLight Exclusivity,
then
SpatiaLight Exclusivity shall terminate as of the date that LGE’s Right of
Exclusivity terminated and LGE shall not have any priority rights with respect
to purchasing LCoS Sets.
10.5. The
parties covenant and agree that SpatiaLight shall not contract to sell LCoS
Sets
to Samsung Electronics Co., Ltd. and/or any or all of its domestic or foreign
subsidiaries or affiliates at any time during which LGE’s Right of Exclusivity
is in effect pursuant to this Agreement.
11.
ALTERNATIVE
RIGHTS AND OBLIGATIONS IN THE SECOND DELIVERY
YEAR
Solely
in
the event that the parties shall not have agreed in writing with respect to
the
second delivery year purchase prices for LCoS Sets by September 20, 2005
pursuant to the terms and conditions of Section 6.4 hereof, then,
notwithstanding the provisions of Section 10 hereof, for the delivery months
January 2006 through December 2006, the parties covenant and agree
that:
11.1. The
matter of the pricing of LCoS Sets to be sold and purchased under and in
accordance with this Section 11 and the other provisions of this Agreement
shall
immediately be submitted to binding arbitration, in accordance with Section
21
hereof; provided, however, that the parties shall have the right to mutually
agree in writing to terminate this Agreement with respect to all of the rights
and obligations of the parties hereunder scheduled to occur after December
31,
2005. Such termination shall only be effective in the event that LGE and
SpatiaLight mutually agree to it in writing between the dates of June 20, 2005
and September 19, 2005.
-7-
[***] -- Confidential portion omitted and filed separately with SEC.
11.2. LGE’s
Right of Exclusivity and SpatiaLight Exclusivity shall terminate on December
31,
2005 (provided that such rights of exclusivity had not previously terminated
pursuant to the terms and conditions of Section 10 hereof).
11.3. LGE
shall
be obligated to purchase from SpatiaLight a minimum of fifty percent (50%)
of
the LCoS products, limited to a three (3) panel type, that LGE may purchase
from
any LCoS supplier in each such delivery month and SpatiaLight commits to sell
such LCoS Sets to LGE in each such delivery month in accordance with the terms
and conditions of this Agreement and at such prices as shall be determined
by
arbitration in accordance with Section 11.1 and Section 21 hereof. LGE shall
have the right to fill the remaining fifty percent (50%) of its demand for
LCoS
products from any second sources that it so elects.
11.4. SpatiaLight
shall be obligated to grant LGE the first priority right, with respect to
SpatiaLight’s LCoS production output, to purchase from SpatiaLight all of the
quantities of LCoS Sets that LGE commits to purchase from SpatiaLight in
accordance with Section 6.4 hereof.
11.5. The
parties shall have the right, in their respective discretion, to agree to sell
and purchase to and from each other any additional LCoS Sets and Fitted LGE
Light Engines that the parties are not obligated to sell and purchase to and
from each other according to the terms and conditions of this Section 11 and
Section 9 hereof.
12.
[Intentionally
Omitted]
13.
DIGITAL
ASICS
SpatiaLight
covenants and agrees to provide LGE with the codes for the required Digital
ASICs and Digital FPGA and updates to such codes, as they become available,
throughout the term of this Agreement. It is expressly agreed that SpatiaLight’s
agreement to provide such codes to LGE constitutes a consideration for the
agreed upon purchase prices set forth in Section 6 hereof.
14.
LCOS
SET COMPONENT COSTS
The
parties covenant and agree to use their mutual best efforts throughout the
term
of this Agreement, following the Qualification Period, to assist SpatiaLight
to
obtain and procure LCoS Set components to be used by SpatiaLight in connection
with this Agreement at lower costs than SpatiaLight currently incurs and to
obtain other favorable procurement terms and conditions for SpatiaLight. Such
best efforts assistance shall include, without limitation, leveraging of LGE’s
purchasing power for SpatiaLight’s and LGE’s benefit. The parties covenant and
agree to form a joint task force with representatives from both of the parties
hereto for the purpose of furthering the objectives set forth in this Section
14.
15.
PATENT
INDEMNIFICATION
SpatiaLight
shall defend and fully indemnify LGE from any suit, cause of action, judgment,
demand, liability, loss, damage, cost, expense (including reasonable attorneys'
fees and court costs) or other actual or alleged claim of any kind, whether
direct or indirect, that arises out of a claim by a third party against LGE
alleging that the LCoS Sets delivered to LGE under this Agreement infringes
any
United States of America, European Union, China and/or Republic of Korea patent
of a third party. The indemnity applies whether or not legal proceedings are
instituted, irrespective of the means, manner or nature of any settlement,
compromise or determination. This indemnity obligation does not apply to any
claims based on the use of the LCoS Sets in violation of this Agreement, or
in
combination with any software, hardware, network or system not recommended
for
use by SpatiaLight with the LCoS Sets, or in connection with SpatiaLight’s
compliance with LGE’s instructions, designs or specifications.
-8-
[***] -- Confidential portion omitted and filed separately with SEC.
16.
SHARING
OF INFORMATION
The
parties agree that they will continue to work jointly throughout the term of
this Agreement to achieve its business objectives. The parties agree to remain
in regular contact with the other and to meet and share information as
appropriate. Such sharing of information shall include, without limitation,
information that SpatiaLight has concerning the digital ASIC which LGE intends
to incorporate into its LCoS high definition television sets.
17.
WARRANTIES
17.1. SpatiaLight
shall warrant that LCoS Sets will be: (i) in accordance with the Final
Specifications; (ii) free from any material defect or failure of a material
kind
or nature in design, materials and workmanship; and (iii) merchantable, fit
and
sufficient for the purpose intended.
17.2. The
warranties made by SpatiaLight with respect to the LCoS Sets set forth in this
Section 17 shall commence on the date of the consumer sale by LGE of the LCoS
Televisions containing such LCoS Sets and shall remain in effect for the shorter
of (i) the same period of time that LGE warrants such LCoS Televisions to the
consumer; or (ii) a period of two years following the consumer sale by LGE
of
LCoS Televisions containing such LCoS Sets.
17.3. In
case
that any of the LCoS Sets delivered under this Agreement are not in material
compliance with the above warranties, SpatiaLight shall either, at LGE's option,
(i) repair or replace such LCoS Set; or (ii) refund to LGE the amount paid
for
such LCoS Set by LGE.
17.4. Except
as
set forth in this Section 17, SpatiaLight makes no other warranties to LGE,
express or implied.
18.
FORCE
MAJEURE
18.1. Neither
Party shall be liable to the other for any delay or non-performance of its
obligations hereunder in the event and to the extent that such delay or
non-performance is due to an event of Force Majeure ("Force Majeure
Events").
18.2. Force
Majeure Events are events beyond the control of the party which occur after
the
date of signing of this Agreement and which were not reasonably foreseeable
at
the time of signing of this Agreement and whose effects are not capable of
being
overcome without unreasonable expense and/or loss of time to the party
concerned. Force Majeure Events shall include (without being limited to) war,
civil unrest, acts of government, natural disasters, exceptional weather
conditions, breakdown or general unavailability of transport facilities,
accidents, fire, explosions, terrorist acts, political risks and general
shortages of energy.
-9-
[***] -- Confidential portion omitted and filed separately with SEC.
19.
CONFIDENTIALITY
Either
party (“Recipient”) acknowledges that it has had and may continue to have access
to certain Confidential Information of the other party (“Discloser”). For
purposes of this Agreement, "Confidential Information" shall include, but not
be
limited to, information concerning Discloser 's business, plans, designs,
customers, potential customers, sales, marketing, the terms of this Agreement
including, but not limited to pricing, quantities and dates, and other related
information. Recipient shall not use or appropriate in any way, for its own
account or the account of any third party, nor disclose to any third party,
any
of the Confidential Information and shall take all necessary precautions to
protect the confidentiality of such Confidential Information. Recipient hereby
acknowledges that misappropriation or disclosure to any third party of any
Confidential Information would cause irreparable harm to Discloser.
Notwithstanding the provisions of this Section 18, the parties shall, if
required by applicable securities laws and Nasdaq rules and regulations,
publicly disclose such information as shall be in compliance with such laws
and
regulations.
20.
GOVERNING
LAW
This
Agreement shall be governed by the laws of the State of New York in the United
States, as if the Agreement were wholly executed and performed in the State
of
New York, without giving effect to the conflicts of law statutes and conflicts
of law doctrines of New York (except for Section 5-1401 of the New York General
Obligations Law, which shall be applicable and binding on the parties) or of
any
other jurisdiction.
21.
ARBITRATION
OF ALL CLAIMS AND DISPUTES AS SOLE REMEDY
The
sole
remedy for disposing of any claim, dispute or controversy arising out of or
in
connection with this Agreement, if not resolved by the parties within thirty
(30) days of written notice of such claim or dispute, including any question
regarding the existence, validity or termination of this Agreement, shall be
referred to and finally resolved by arbitration under the applicable rules
of
the International Chamber of Commerce, which rules are deemed to be incorporated
by reference into this clause. There shall be a total of three arbitrators
and
the place where the arbitration shall take place shall be New York City, in
the
United States. The language to be used in the arbitral proceedings shall be
the
English language.
22.
CURRENCY
Purchase
price and all monies paid to SpatiaLight shall be paid in United States Dollars
without regard to any currency fluctuation.
23.
PRESS
RELEASE
23.1. The
parties agree that SpatiaLight shall, on July 1, 2004, or within thirty (30)
days thereafter, issue a press release with respect to this Agreement, which
press release SpatiaLight has undertaken to draft and LGE has reviewed and
LGE
hereby consents to the contents thereto. LGE agrees to participate in such
press
release, without limitation, by making members of LGE’s senior management
available to make statements with respect to this Agreement that may be used
as
quotations in such press release. During the term of this Agreement, the parties
shall, if required by applicable securities laws and Nasdaq rules and
regulations, file such reports at such dates and containing such information
as
shall be in compliance with such laws and regulations.
-10-
[***] -- Confidential portion omitted and filed separately with SEC.
23.2. The
parties covenant and agree that the parties shall issue a joint press release
and shall hold a joint press conference with respect to this Agreement by not
later than the scheduled date of commencement of the Consumer Electronics Show
in Las Vegas, Nevada in January 2005, and SpatiaLight shall undertake to draft
such press release and shall submit such draft to LGE for review and approval
before its public release.
24.
INTEGRATION
OF ACTIONS
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and supersedes any and all prior oral or written
agreements and negotiations between them. Notwithstanding the foregoing, the
Non-Disclosure Agreement by and between SpatiaLight and LGE shall remain in
full
force and effect and the parties shall be fully bound thereby for the term
set
forth therein.
25.
AMENDMENTS
AND MODIFICATIONS
No
amendment or modification of this Agreement shall be valid unless set forth
in
writing and signed by both of the parties hereto.
26.
NOTICES
All
notices required or permitted under this Agreement shall be in writing and
personally delivered or mailed, by certified mail, return receipt requested,
and
addressed as follows:
| (a) If to LGE: |
Young
Xxxx Xxx
Digital Display Research Lab, LG Electronics
Inc.
00
Xxxxxxxx-xxxx Xxxxxx-xx, Xxxxx 000-000, Xxxxxxxx of
Korea
Tel:
00-0-000-0000
Fax: 00-0-000-0000
|
| (b) If to SpatiaLight: |
Xxxxxx X. Xxxxx
0
Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx,
XX 00000, X.X.X.
Tel:
(000) 000-0000 Fax: (000)
000-0000
|
27. NON-ASSIGNABILITY;
BINDING EFFECT
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement, nor any of the rights or obligations of the parties hereto shall
be
assignable by either party hereto without the prior written consent of the
other
party.
28. SEVERABILITY
In
case
any provision of this Agreement shall be invalid, illegal or unenforceable,
it
shall, to the extent practicable, be modified in such manner as to be valid,
legal and enforceable, subject to the condition that, as so modified, there
shall be no material alteration in or to this Agreement with respect to the
business terms or objectives of the parties hereto.
[Remainder
of page intentionally left blank]
-11-
[***] -- Confidential portion omitted and filed separately with SEC.
IN
WITNESS WHEREOF, the undersigned, intending to be bound hereby, have caused
this
LCoS Supply Agreement to be duly executed by their officers thereunto duly
authorized, on the date first above written.
| LG ELECTRONICS INC. | ||
| |
|
|
| By: | /s/ Xxxxx Xxx | |
|
|
Name: Xxxxx Xxx
Title:
Director Digital Display Research Laboratory
|
|
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxx | |
|
|
Name: Xxxxxx X. Xxxxx
Title:
Chief Executive Officer
|
|
-12-
[***] -- Confidential portion omitted and filed separately with SEC.
