Exhibit 10.1
CONFIDENTIAL
AMENDED AND RESTATED
DISTRIBUTORSHIP AGREEMENT
THIS AMENDED AND RESTATED DISTRIBUTORSHIP
AGREEMENT (the “Agreement”) is made and entered into as
of the 25th day of May, 2005, to be effective as of the Effective
Date, by and between CREE, INC., a corporation organized and
existing under the laws of the State of North Carolina, U.S.A.,
having its principal place of business at 4600 Silicon Drive,
Durham, North Carolina 27703 (“Manufacturer”), SUMITOMO
CORPORATION, a corporation organized and existing under the laws of
Japan, having its principal place of business at [***], Tokyo
104-8610, Japan (“Distributor”) and Sumitomo
Corporation of America (“SCOA”), a wholly-owned
subsidiary of Sumitomo organized under the laws of State of New
York and having its principal place of business at [***]
Recitals
WHEREAS,
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(A)
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Manufacturer
and Distributor previously entered into an Amended and Restated
Distributorship Agreement dated as of the 14
th
day of May, 2004 (the
“Distributorship Agreement”); and
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(B)
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Manufacturer
and Distributor previously entered into a letter agreement dated as
of the 12th day of July, 2004 (the “First Letter
Agreement”) amending the Distributorship Agreement;
and
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(C)
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Manufacturer,
Distributor and SCOA previously entered into another letter
agreement dated as of the 10th day of September, 2004 (the
“Second Letter Agreement”) further amending the
Distributorship Agreement and the First Letter Agreement (the First
Letter Agreement and Second Letter Agreement being collectively
referred to hereinafter as the “Letter Agreements” and
the Distributorship Agreement and the Letter Agreements being
collectively referred to hereinafter as the “Existing
Agreements”); and
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(D)
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Manufacturer
and Distributor desire to amend and restate the Existing Agreements
to reflect and record certain matters with respect to their
long-standing and strategic relationship; and
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(E)
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SCOA is a party
to this Agreement solely for the purpose of entering into
Individual Contracts for the purchase of LED Products from
Manufacturer pursuant to Sections 7.1 and 7.2 below.
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NOW, THEREFORE, the parties hereto, in
consideration of the premises, covenants and undertakings herein
contained, mutually agree as follows:
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1.1.
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For purposes of
this Agreement, the capitalized terms defined below and elsewhere
in this Agreement have the meanings so defined, and such
definitions apply to both singular and plural forms:
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Affiliate:
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with respect to
a person, any other person that controls, is controlled by, or is
under common control with the named person, whether directly or
through one or more intermediaries, where “control”
means possession of the power to direct the management, operations
or policies of the controlled person through stock ownership,
contract or other arrangements.
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Annual MPC:
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Distributor’s annual minimum purchase
commitment as defined in Section 9.1.
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[***]
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Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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Distributorship
Agreement
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Page 1
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Amended and Restated as of May 25,
2005
CONFIDENTIAL
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ATMI:
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Advanced
Technology Materials, Inc.
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Average Exchange Rate:
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as defined in
Section 8.5 (b).
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Bank:
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as defined in
Section 8.5 (b).
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Base
Rate:
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as defined in
Section 8.5 (b).
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Chip
Schedule:
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as defined in
Section 7.1(a)
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[***]:
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as defined in
Section 8.7(a).
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[***]:
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as defined in
Section 12.2.
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Distributor:
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as defined in
Preamble.
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Distributorship
Agreement:
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as defined in
Recitals.
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Effective
Date:
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the 27
th
day of June,
2005.
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Execution
Date:
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the 25 day of
May, 2005.
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Existing
Agreements:
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as defined in
Recitals.
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Firm Commitment
Portion:
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as defined in
Section 7.3.
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Firmed-Up
Order:
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as defined in
Section 7.1(a).
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First Letter Agreement:
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as defined in
Recitals.
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FY06:
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2006 fiscal
year of Manufacturer.
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FY07:
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2007 fiscal
year of Manufacturer.
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Individual Contract:
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as defined in
Section 7.1.
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Inventory:
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as defined in
Section 7.4.
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Inventory
Cap:
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as defined in
Section 9.3.
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Letter Agreements:
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as defined in
Recitals.
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Liaison Office/
Cree Japan:
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the
representative office maintained by Manufacturer, through an
Affiliate, in the Tokyo, Japan area.
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LED
Products:
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visible or
ultraviolet light emitting diodes (LEDs) in die form that are
fabricated by or for Manufacturer using Group III-nitride materials
on silicon carbide wafers and that Manufacturer makes
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[***]
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Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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Distributorship
Agreement
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Page 2
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Amended and Restated as of May 25,
2005
CONFIDENTIAL
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generally
available to customers for purchase during the term of this
Agreement. As used herein, “generally available”
includes LED Products custom manufactured for customers of
Distributor but excludes LED Products custom manufactured for other
customers.
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LED Product Forecast:
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as defined in
Section 7.3.
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LED Resale
Price:
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as defined in
Section 8.1(a).
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[***]:
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as defined in
Section 8.6(b).
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Manufacturer:
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as defined in
Preamble.
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Master
Agreement:
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as defined in
Section 7.1(c).
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Material
Schedule:
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as defined in
Section 7.1(b)
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New
Products:
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as defined in
Section 9.3.
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[***]
Products
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LED Products
[***] by [***] Manufacturer that have been designated by
Manufacturer to Distributor in writing in accordance with Section
7.1(c).
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[***] Product
Resale Price:
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as defined in
Section 8.2(b).
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[***] Reserve
([***]):
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as defined in
Section 8.6(a).
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[***]:
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as defined in
Section 8.6(a).
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[***] Reserve
([***]):
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as defined in
Section 8.7(a).
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[***]:
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as defined in
Section 8.7(a).
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Products:
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LED Products,
[***] Products and Wafer Products collectively, except where the
term applies in context only to a specific type of
Product.
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Quarterly
MPC:
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Distributor’s quarterly minimum purchase
commitment in each fiscal quarter of Manufacturer as defined in
Section 9.1.
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SCOA:
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as defined in
Preamble.
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Second Letter
Agreement:
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as defined in
Recitals.
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Term:
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the term of
this Agreement as defined in Section 2.2.
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Territory
A:
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the country of
Japan.
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Territory B:
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the countries
of the Republic of China (Taiwan), Singapore and the
Philippines.
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[***]
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Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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Distributorship
Agreement
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Page 3
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Amended and Restated as of May 25,
2005
CONFIDENTIAL
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Territory
C:
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the countries
of [***], the Republic of Korea, the Republic of Indonesia,
Thailand and Malaysia.
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Territory:
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Territory A,
Territory B and Territory C, collectively.
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Wafer Order:
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as defined in
Section 7.1(b)
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Wafer Products:
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collectively
“SiC Wafer Products” and “GaN Wafer
Products.” “SiC Wafer Products” means silicon
carbide wafers, either without epitaxial layers or with only
silicon carbide epitaxial layers deposited thereon, made by or for
Manufacturer and that Manufacturer makes generally available to
customers for purchase during the term of this Agreement.
“GaN Wafer Products” means gallium nitride wafers,
either with or without epitaxial layers deposited thereon, and
hetero substrates, such as silicon carbide, sapphire or silicon,
with one or more AIII nitride epitaxial layers deposited thereon,
made by or for Manufacturer and that Manufacturer makes generally
available to customers for purchase during the term of this
Agreement. As used herein, “generally available”
includes Wafer Products custom manufactured for customers of
Distributor but excludes Wafer Products custom manufactured for
other customers. For avoidance of doubt, Wafer Products do not
include any [***] by [***] Manufacturer.
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Wafer Retail Price:
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as defined in
Section 8.3(b).
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[***]:
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[***] as
defined in Section 7.3.
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1.2.
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For purposes of
this Agreement, “person” shall be construed broadly to
mean any individual, corporation, partnership or other legal
entity, and the terms “fiscal quarter” and
“fiscal year” shall refer to the respective accounting
periods used by Manufacturer.
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2.1.
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Except as
expressly provided herein, the amended and restated terms and
conditions in this Agreement shall not become effective until the
Effective Date. After the Execution Date but prior to the Effective
Date, certain terms and conditions expressly identified herein
shall become effective with respect to Products to be shipped after
the Effective Date in order to facilitate the transition between
the provisions of this Agreement and the Existing Agreements. This
Agreement will be legally binding on the parties when executed on
behalf of both parties notwithstanding the later Effective Date.
Upon the Effective Date, this Agreement shall supersede and replace
the Existing Agreements with respect to Products to be shipped
after the Effective Date, but the Existing Agreements shall
continue to apply with respect to Products shipped prior to the
Effective Date.
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2.2.
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Subject to the
provisions of Sections 8.7(a) and 9.2, the term of this Agreement
(the “Term”) shall extend for a period of five (5)
fiscal years commencing June 23, 2002 and ending June 24, 2007,
unless sooner terminated in accordance with the provisions of this
Agreement.
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2.3.
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The parties
acknowledge and agree that neither is obligated to continue its
business relationship with the other after the effective date of
any termination of this Agreement or the expiration date if this
Agreement is not renewed.
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[***]
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Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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Distributorship
Agreement
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Page 4
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Amended and Restated as of May 25,
2005
CONFIDENTIAL
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3.1.
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Distributor
will serve as the strategic partner and exclusive distributor of
Manufacturer for distribution of Products in Territory A during the
Term of this Agreement. Section 4.1 below defines the exclusive
nature of Distributor’s appointment in Territory
A.
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3.2.
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Subject to the
provisions in Section 4.2 below, Distributor will serve as a
non-exclusive distributor for distribution of Products in Territory
B and Territory C during the Term of this Agreement.
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3.3.
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Notwithstanding
any language herein to the contrary, unless extended by written
agreement of the parties, Distributor’s appointment as a
distributor of GaN Wafer Products in the Territory is [***]. In
connection with the determination of the [***] for [***] (as
provided in Section [***] below), the parties in good faith will
discuss [***] and shall mutually agree upon the terms for
[***].
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4.
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EXCLUSIVITY;
NON-EXCLUSIVE TERRITORIES
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4.1
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During the Term
of this Agreement and subject to Distributor’s compliance
with its obligations in Section 5 below, except as otherwise
provided in Sections 8.3(d) and 9.4 below, Manufacturer will not,
without Distributor’s written consent, directly or through
any Affiliate sell Products to any person other than Distributor
for shipment by Manufacturer or its Affiliates into Territory A.
This Section 4.1 shall not be construed to restrict Manufacturer or
its Affiliates from selling or authorizing the sale of Products to
persons outside Territory A.
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4.2
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Distributor’s appointment in Territory B
and Territory C is non-exclusive. Distributor shall not advise any
customer or potential customer in such territories that it may only
purchase Products from Distributor. Customers in such territories
shall be free to choose to purchase Products directly from
Manufacturer or from another distributor, as applicable. With
respect to marketing, sales and deliveries by Distributor in
Territory C, Distributor may [***]. Subject to any applicable
export restrictions, Distributor may request that Manufacturer
[***]. If the customer prefers to purchase Products directly from
Manufacturer, the provisions of Section 10 will apply if
Manufacturer requests Distributor’s assistance in connection
with such transaction.
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5.1
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Distributor
agrees to perform and comply with the following during the Term of
this Agreement:
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(a)
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It will use its
best efforts, to the fullest extent commercially reasonable, to
promote the sale of [***] Products within the Territory through its
sales and merchandising programs in order to obtain and sustain the
maximum sales of [***] Products in the Territory and will solicit
orders for and sell [***] Products within the Territory.
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[***]
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Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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Distributorship
Agreement
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Page 5
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Amended and Restated as of May 25,
2005
CONFIDENTIAL
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(b)
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Distributor
will furnish Manufacturer with reports on the following matters in
writing not less frequently than the period shown, and promptly
upon request at such other times as Manufacturer may request in
writing, with the report to be delivered to Manufacturer and/or the
Liaison Office as indicated below unless otherwise requested by
Manufacturer:
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Report
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Frequency
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Delivered To
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General market situation for Products in the
Territory
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[***]
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Cree Japan
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[***]-month forecast of anticipated sales of
Products
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[***]
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Cree Japan
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Inventory on hand, including volume
by Product type and assigned
value
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[***]
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Cree Japan
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Summary of meetings with customers
and prospective customers,
including current and anticipated
Product applications by customer
and quantity requirements
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[***]
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Cree Japan
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Summary of significant customer
inquiries
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[***]
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Cree Japan
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Information, to the extent known,
regarding the activities of competitors
with respect to Products in the
Territory
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[***]
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Cree Japan
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(c)
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In addition, in
its role as the strategic partner of Manufacturer for distribution
of Products in Territory A, Distributor will cooperate with
Manufacturer and the Liaison Office to establish, to the fullest
practicable extent, a “transparent interface” between
Manufacturer and customers for Products such that the Liaison
Office is kept fully informed of all developments relating to
customers for Products and that the Product sales and marketing
efforts of Distributor are coordinated with the efforts of the
Liaison Office. Without limiting the foregoing, upon request
Distributor will make available to the Liaison Office copies of all
quotes, invoices, customer correspondence and other records
relating to the sale and marketing of Products in Territory A and
in Territory C.
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(d)
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Distributor
will at all times conduct its affairs under this Agreement in
accordance with the highest standards of business ethics and
propriety. It will comply with all applicable laws and regulations
in performing its obligations under this Agreement and will apply
for and obtain (at its own expense) all licenses and approvals
necessary to perform its obligations hereunder except as provided
in Section 12.2.
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(e)
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Without
Manufacturer’s prior written consent, neither Distributor nor
its directors, officers, agents or employees shall at any time
during the Term of this Agreement, directly or indirectly, (i)
establish any Product distribution branch or maintain any Product
distribution depot outside the Territory, or (ii) manufacture,
distribute, represent, sell or otherwise handle any products that,
in the reasonable opinion of Manufacturer, [***], including without
limitation [***]; provided that the foregoing limitations as
provided in this Section 5.1(e) will only apply to
[***].
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(f)
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Distributor will not market, sell
or otherwise distribute Products purchased under this Agreement
outside the Territory or market, sell or otherwise distribute [***]
Products to [***] for such [***] Products, except as may be
authorized by Manufacturer in writing from time to time in
Manufacturer’s sole discretion. Distributor will not, without
Manufacturer’s prior written consent, which consent will not
be unreasonably withheld, sell or otherwise distribute Products
purchased under this Agreement to a person other than an end user
customer. Notwithstanding any language herein to the contrary, the
parties hereto confirm that [***].
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[***]
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Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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Distributorship
Agreement
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Page 6
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Amended and Restated as of May 25,
2005
CONFIDENTIAL
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(g)
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Distributor
will appoint at least one employee within its organization to
coordinate the performance of its responsibilities under this
Agreement.
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(h)
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Distributor
shall be responsible for obtaining any required licenses, permits
and other governmental approvals necessary for the export of
Products from the United States or such other country from where
Products are shipped and their import into the Territory, except as
provided in Section 12.2, and will otherwise comply with all export
and import laws and regulations applicable to its activities under
this Agreement.
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6.
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DUTIES OF
MANUFACTURER
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6.1
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Subject to
Section 7 below, Manufacturer agrees to use its best efforts, to
the fullest extent commercially reasonable, to meet the
requirements of Distributor for Products during the Term of this
Agreement and to perform and comply with the following during the
Term of this Agreement:
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(a)
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Manufacturer
shall [***] unless Distributor’s exclusivity with respect to
such Product(s) or territory is no longer in effect as otherwise
provided in this Agreement.
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(b)
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Manufacturer
shall maintain the Liaison Office, either directly or through an
Affiliate, and shall staff such office with one or more full-time
personnel, to provide support for sales of Products in Territory
A.
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(c)
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Manufacturer
shall furnish to Distributor, at no cost, such catalogues,
specifications and technical data literature as Manufacturer makes
available to its customers generally and shall provide the
materials in such quantities as Distributor may reasonably request
to support its sales of Products in the Territory.
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(d)
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Manufacturer
will invite Distributor to participate in any discussions between
the Liaison Office or Manufacturer and Distributor’s
customers concerning Products to be purchased in connection with
this Agreement provided that Distributor agrees to be bound by the
same restrictions on information disclosed in such discussions as
the customer and in any event, such discussions will be subject to
the provisions in Section 14 below.
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(e)
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Subject to
availability, Manufacturer shall supply Distributor Products in
accordance with this Agreement in quantities adequate to the
Distributor’s reasonable requirements for sales in the
Territory. In the event orders for Products exceed
Manufacturer’s ability to manufacture and deliver them,
Manufacturer will allocate to Distributor [***], which allocation
Manufacturer shall determine in its sole discretion exercised in
good faith; provided, however, that in no event shall Manufacturer
treat Distributor less favorably than it will any of
Manufacturer’s other customers for Products in allocating
such supply.
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(f)
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Manufacturer
shall provide training services to sales and service personnel of
Distributor at the Liaison Office or at Manufacturer’s
principal offices to such scope and extent as reasonably necessary
for Distributor to promote sales and service of Products in the
Territory. Nothing in this clause or elsewhere in this Agreement
shall be construed to require Manufacturer to disclose proprietary
and confidential information.
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[***]
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Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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Distributorship
Agreement
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Page 7
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Amended and Restated as of May 25,
2005
CONFIDENTIAL
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(g)
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Manufacturer
shall be responsible for furnishing to Distributor, [***], such
packing material as may be reasonably required for re-packing
Products purchased from Manufacturer for shipment to
Distributor’s customers.
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7.1
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All sales of
Products from Manufacturer to Distributor shall be made by
execution of an individual sales contract stated in US Dollars (an
“Individual Contract”) in the following
manner:
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(a)
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In the case of
LED Products, in connection with Distributor’s [***]
transmittal of its revised LED Product Forecast by [***] (as
provided in Section 7.3 below), Distributor will include a purchase
order for LED Products to be purchased in [***] (the
“Firmed-Up Order”). The quantity of LED Products
included in the Firmed-Up Order will (i) except as provided in
Section 7.4 below, [***] as provided in Section 7.3 below, and (ii)
not exceed [***] without Manufacturer’s approval of such
[***] unless such [***] is required by Section 7.3 below.
Manufacturer will respond to Distributor by [***] by [***]
enclosing an order acknowledgement (the “Chip
Schedule”) confirming Product prices and [***]. Each
Firmed-Up Order for LED Products placed by Distributor and
acknowledged by Manufacturer in a Chip Schedule as provided above
shall constitute an Individual Contract for the sale of LED
Products. Individual Contracts for LED Products shall be firm and
may not be modified by Distributor; [***].
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(b)
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In the case of
Wafer Products, [***] during the term of this Agreement Distributor
will [***] to Manufacturer a purchase order for Wafer Products (a
“Wafer Order”). Manufacturer will respond to
Distributor by [***], but in no event more than [***] after receipt
of the Wafer Order if the Wafer Product is a standard product of
Manufacturer, enclosing an order acknowledgement (the
“Material Schedule”) confirming Product prices and
[***]. Each Wafer Order placed by Distributor and acknowledged by
Manufacturer in a Material Schedule as provided above shall
constitute an Individual Contract for the sale of Wafer
Products.
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(c)
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In the case of
[***] Products, Manufacturer will [***] designate in writing to
Distributor a [***] Product that is available for purchase by
Distributor under this Agreement, including any terms that are
specific to such [***] Product. Distributor [***] Manufacturer.
Designation of a [***] Product is subject to Manufacturer and
Distributor entering into (or amending, as applicable) an
appropriate written master agreement (the “Master
Agreement”) to mutually establish the terms and conditions
for the sale and purchase of such [***] Product. [***] thereafter,
Manufacturer and Distributor will enter into separate individual
contracts pursuant to and in accordance with such Master Agreement.
Each individual contract entered into between Manufacturer and
Distributor pursuant to the written Master Agreement shall
constitute an Individual Contract for the sale of [***]
Products.
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(d)
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Notwithstanding
any language herein to the contrary, shipments dates confirmed by
Manufacturer in the Chip Schedule or the Material Schedule, as the
case may be, do not represent guaranteed shipment dates.
[***].
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[***]
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Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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Distributorship
Agreement
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Page 8
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Amended and Restated as of May 25,
2005
CONFIDENTIAL
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7.2
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Each Individual
Contract shall be subject to the following terms, except as may be
otherwise mutually agreed in writing by the parties:
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(a)
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[***] Products
shall be delivered F.O.B. Manufacturer’s manufacturing
facilities or inventory hub (including [***]) by delivery to a
transportation company designated or approved by Distributor. Title
and risk of loss of [***] Products shall pass to Distributor upon
delivery to the transportation company. All transportation charges
and expenses, including the cost of insurance against loss or
damage in transit, shall be Distributor’s
responsibility.
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(b)
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Except for any
warranty claim covered by Section 7.2(d) below, in the event any
Product does not conform to the terms of the Individual Contract,
the non-conformity will be reported in writing to Manufacturer as
soon as possible. In the case of shipping damage or other
non-conformity discoverable upon reasonable inspection (such as, by
way of illustration, shipment shortages, incorrect Products, broken
wafers and torn tape), the non-conformity shall in any event be
reported in writing no later than [***] after the date Products are
shipped by Manufacturer to Distributor or such claim shall be
deemed waived; provided that Distributor [***]. In all other cases,
the non-conformity shall be reported as a warranty claim under
Section 7.2(d) below in writing within [***] after shipment of
Product by Manufacturer if the claim relates to an LED Product,
within [***] after shipment of Product by Manufacturer if the claim
relates to a Wafer Product, and within [***] if the claim relates
to a [***] Product. Any non-conformity not reported within the
applicable warranty period shall be deemed waived.
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(c)
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Manufacturer’s sole obligation with
respect to Products reported to be non-conforming no later than
[***] after the date Products are shipped by Manufacturer to
Distributor shall be to issue a [***] credit memorandum to
Distributor for the quantity and price invoiced for any such
Products determined by Manufacturer to be non-conforming, which
credit memorandum may be used [***]. Manufacturer is not required
to refund money pursuant to such credit memoranda. All
non-conforming Products must be returned to Manufacturer for
verification of the non-conformity, and Distributor must obtain a
return authorization from Manufacturer prior to shipment of the
non-conforming Products, which authorization shall not be
unreasonably withheld. Provided that it is able to verify [***] the
non-conformity, Manufacturer will use commercially reasonable
efforts to [***] to Distributor within [***] after
Manufacturer’s receipt of the report of non-conformity as
provided in Section 7.2(b). [***] provisions for non-conforming
[***] Products will be as provided in the master agreement or
applicable Individual Contract. Upon receipt of the non-conforming
Products, Manufacturer will [***] the [***] credit memorandum
[***]. Upon [***], Manufacturer will issue a new invoice [***],
which invoice shall be the controlling document related to such
purchase for purposes of determining the parties’ rights and
obligations under this Agreement, including, without limitation,
the Product warranty, [***] Reserve and [***] Reserve provisions
(as otherwise provided herein, if applicable); provided that, for
the purpose of determining (i) whether the Quarterly MPC has been
met, and (ii) whether the value of Distributor’s inventory
meets or exceeds the Inventory Cap, such Products shall be deemed
purchased [***]. This Section 7.2(c) states the exclusive remedy of
Distributor with respect to non-conforming Products, except as to
any warranty claim covered by Section 7.2(d) below.
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(d)
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Manufacturer
warrants to Distributor that Products shipped hereunder will meet
such specifications as have been expressly agreed to in writing by
the parties hereto, provided such Products are used in accordance
with the applicable specifications. This warranty is extended only
to Distributor and does not constitute a warranty to either
Distributor’s customers or other end-users or to any
sub-distributor, [***]. All claims under this warranty must be
reported in writing to Manufacturer (with such report accompanied
by Products claimed to be defective, in die or packaged form if
such Products cannot readily be removed therefrom) as soon as
possible, but in any
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[***]
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Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
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Distributorship
Agreement
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Page 9
|
Amended and Restated as of May 25,
2005
CONFIDENTIAL
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event no later
than [***] after shipment of such Products by Manufacturer if the
claim relates to an LED Product, within [***] after shipment of
such Products by Manufacturer if the claim relates to a Wafer
Product, and within [***] if the claim relates to a [***] Product,
and if not so reported, such claims shall be deemed waived.
Distributor must obtain a return authorization from Manufacturer
prior to shipment of the defective Products, which authorization
shall [***]. Manufacturer’s sole obligation with respect to
Products determined not to meet the terms of this warranty shall
be, at its option , to issue a [***] credit memorandum for
the quantity and price invoiced for such defective Products, which
credit memorandum may be used [***]. Provided that it is able to
verify [***] the defect, Manufacturer will use commercially
reasonable efforts to [***] to Distributor within [***] after
Manufacturer’s receipt of the report of claims under the
warranty as provided in this Section 7.2(d). [***] provisions for
defective [***] Products will be as provided in the master
agreement or applicable Individual Contract. Upon [***], unless
previously paid, Distributor shall promptly pay the invoice [***],
which invoice shall be the controlling document related to such
purchase for purposes of determining the parties’ rights and
obligations under this Agreement, including, without limitation,
Annual MPC, Inventory Cap, [***] Reserve and [***] Reserve
provisions (as otherwise provided herein if applicable), provided
that the warranty [***] shall commence [***]. Manufacturer may
issue an invoice [***] solely for administrative purposes, but no
amount shall be due under such invoice after applying the
applicable credit memorandum, and such invoice will not be used in
determining the parties’ rights and obligations under this
Agreement[***]. This Section 7.2(d) states the exclusive remedy
against Manufacturer with respect to breach of the warranty given
herein or other alleged defects in Products. This Section 7.2(d)
(as limited by Section 7.2(e) and other applicable terms and
conditions of this Agreement) shall survive with full force and
effect after the termination or expiration of this Agreement with
respect to Products purchased prior to such termination or
expiration.
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(e)
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In connection
with the determination of the [***] for [***] as provided in
Section [***] below, the parties in good faith will review the
[***] warranty period provided for in this Agreement to determine
whether it should apply to Products to be purchased in [***] based
on the industry standards and customer expectations in Territory A
at such time. The warranty period may be [***] prior to [***] if
and when Manufacturer and Distributor are able to agree that they
have obtained sufficient customer acceptance of such change in
Territory A.
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(f)
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UNLESS
OTHERWISE AGREED IN WRITING BY AN AUTHORIZED REPRESENTATIVE OF
MANUFACTURER, THE WARRANTY IN SECTION 7.2(d) IS IN LIEU OF ALL
OTHER WARRANTIES RELATING TO PRODUCTS, WHETHER ORAL OR WRITTEN,
EXPRESS OR IMPLIED, OR IMPOSED BY STATUTE OR OTHERWISE. ALL IMPLIED
WARRANTIES, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF
FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY, ARE EXPRESSLY
DISCLAIMED BY MANUFACTURER. Distributor shall make no
representations or warranties on behalf of Manufacturer with
respect to Products or otherwise.
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7.3
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During the Term
of this Agreement, each week Distributor will issue to Manufacturer
a [***] forecast of its LED Product requirements (the “LED
Product Forecast”). The quantities indicated in each LED
Product Forecast represent the number of units of each LED Product
that Distributor requests to be shipped by [***] of the stated
week. Distributor will update the LED Product Forecast on [***].
Subject to Sections 7.7, 9.3 and 9.4 of this Agreement, the
quantities and types of LED Products forecasted to be delivered
within [***] (the “Firm Commitment Portion”) shall be
firm and may not be
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[***]
|
Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
|
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|
|
|
Distributorship
Agreement
|
|
Page 10
|
Amended and Restated as of May 25,
2005
CONFIDENTIAL
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modified by
Distributor. At Distributor’s option, [***]. The aggregate
purchase price of LED Products requested for any fiscal quarter may
not exceed [***] without Manufacturer’s prior written
approval of such increase. In order to avoid any future
misunderstanding, the parties confirm [***] the LED Product
Forecast that, at all times, the [***] the [***] Products [***]
Products that have been [***] Products that are [***] the [***] the
[***], and [***] Products that are [***]) and the [***] Products
forecasted [***] shall be [***] the [***]. In addition, the minimum
aggregate purchase amount of LED Products forecasted by Distributor
for shipment [***]) will be determined as follows:
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[***] = [***]
Provided that, if [***] yields a
[***], then Distributor, at its option, may [***] the [***], and if
[***] yields a [***], then Distributor shall [***].
Where: A = [***];
B = [***];
B = [***];
B = [***];
C = [***];
and
D = [***].
For avoidance of doubt, the
references to [***] in the foregoing formula refer to [***] in
[***] and not [***] in the [***].
If Distributor fails to timely
update the LED Product Forecast, the quantities of LED Products for
the new week of the rolling LED Product Forecast will be determined
by Manufacturer [***], and Manufacturer may determine the product
mix in any commercially reasonable and appropriate manner. Although
non-binding, Distributor will use commercially reasonable efforts
to provide accurate forecasts for the quantities and types of LED
Products required in the remaining weeks of the LED Product
Forecast, with particular attention to the accuracy of product mix
for the [***].
Notwithstanding the foregoing, LED
Product prices for such Firm Commitment Portion [***]. Manufacturer
is authorized to accept orders for and ship LED Products against
the Firm Commitment Portion of the Product Forecast unless
Distributor has notified Manufacturer that the Inventory Cap has
been reached pursuant to Section 9.3 of this Agreement.
Manufacturer will target to ship in accordance with
Distributor’s requested delivery dates all quantities and
types of LED Products that have been a firm commitment for at least
[***]. Shorter lead times may be available from time to time upon
request. If Manufacturer is unable to ship LED Products in
accordance with Distributor’s requested delivery date,
Manufacturer will [***] in accordance with Section 7.1
above.
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7.5
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Notwithstanding
the foregoing, Distributor’s purchase commitment in Section
9.1 below is not conditioned upon its issuance of Firmed-Up Orders
or LED Product Forecasts. Even if Distributor does not issue such
documents, its purchase commitment in Section 9.1 below is valid
except as otherwise expressly provided in this
Agreement.
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7.6
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For the
avoidance of doubt, orders of Wafer Products and [***] Products are
not subject to the provisions in Sections 7.3 through 7.5 above.
Lead-times for Wafer Products and [***] Products will vary based on
the specifications of the Wafer Products and [***] Products,
respectively, and Manufacturer will provide an estimate of the
applicable lead-time upon request. Distributor and Manufacturer
will determine ordering and forecasting provisions for [***]
Products [***].
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[***]
|
Confidential
treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the
Commission.
|
|
|
|
|
|
Distributorship
Agreement
|
|
Page 11
|
Amended and Restated as of May 25,
2005
CONFIDENTIAL
|
|
7.7
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Even after an
Individual Contract has been executed, Distributor may request
[***]. In such case, Manufacturer will consider the request and
determine in its sole discretion whether to [***]. If Manufacturer
agrees to [***], the parties will execute an amended Individual
Contract.
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7.8
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Notwithstanding
any language in this Agreement or the Existing Agreements to the
contrary, the provisions set forth in this Section 7 shall apply
with respect to LED Product Forecasts and purchase orders issued by
Distributor in Manufacturer’s fiscal year 2005 for Products
to be shipped in FY06. Further, upon the Execution Date, the
quantities and types of LED Products forecasted to be shipped
within [***] from such date shall be considered the Firm Commitment
Portion.
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8.
|
PRICES AND
PAYMENT TERMS
|
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8.1
|
Pricing for LED
Products purchased under this Agreement will be determined as
follows:
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(a)
|
For LED
Products ordered by Distributor in accordance with Sections 7.1
through 7.4 above that are confirmed by Manufacturer for shipment
during FY06, the unit price payable by Distributor for such LED
Products will be [***]. For LED Products ordered by Distributor in
accordance with Sections 7.1 through 7.4 above that are confirmed
by Manufacturer for shipment during FY07, the unit price payable by
Distributor for such LED Products will be [***].
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(b)
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The “LED
Resale Price” shall be [***]. If the LED Resale Price is
stated in Japanese yen it will be converted to U.S. dollars as
provided in Section 8.5 below. Manufacturer may, after consultation
with Distributor, reduce its suggested LED Resale Price effective
upon wri
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