JOINT VENTURE AGREEMENT Of TCZ GMBH, dated as of July 15, 2005 among TCZ GMBH, CYMER, INC., CARL ZEISS SMT AGJoint Venture JV Agreement |
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Exhibit 10.1
*** Text Omitted and Filed Separately Pursuant to a Confidential Treatment Request Under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)
EXECUTION COPY
JOINT VENTURE AGREEMENT
Of
TCZ GMBH,
dated as of July 15, 2005
among
TCZ GMBH,
CYMER, INC.,
CARL ZEISS SMT AG
and
CARL ZEISS LASER OPTICS BETEILIGUNGSGESELLSCHAFT MBH
TABLE OF CONTENTS
ii
* CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)
iii
JOINT VENTURE AGREEMENT
OF
TCZ GMBH
JOINT VENTURE AGREEMENT of TCZ GmbH, a limited liability company organized under the laws of Switzerland (the “ Company ”), dated as of July 15, 2005 among, initially, Carl Zeiss SMT AG, a stock corporation organized under the laws of Germany (“ Zeiss SMT ”), Carl Zeiss Laser Optics Beteiligungsgesellschaft mbH, a limited liability company organized under the laws of Germany and an indirect wholly-owned subsidiary of SMT (“ Zeiss LOB ”), and Cymer, Inc., a Nevada corporation (“ Cymer ”) and, following its registration in the commercial register, the Company. Capitalized terms used herein but not defined when used have the meanings assigned to such terms in Article 1.
RECITALS
1. Cymer and Zeiss LOB intend to form the Company as a joint venture to develop, integrate, market, sell and support tools employing a beam generated by an excimer laser to induce crystallization for Low Temperature Poly-Silicon (LTPS) processing (the “ Products ”) for the manufacture of flat panel displays, including LCDs, LCD SOGs and OLEDs, to engage in related application development and to search for other business opportunities for process tools for the manufacture of flat panel displays.
2. It is intended that the Company and the Members or their Affiliates will enter into an Intellectual Property Agreement substantially in the form attached hereto as Exhibit A (the “ Intellectual Property Agreement ”) and each of the other Joint Venture Documents (as defined below).
3. Cymer and Zeiss LOB wish to enter into this Joint Venture Agreement to govern the affairs of the Company and set forth their respective rights, obligations and understandings with respect to the Company.
4. Zeiss SMT wishes to [. . . *** . . .] of Zeiss LOB under this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
* CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)
Section 1.01 . Definitions. (a) As used herein, the following terms have the following meanings:
“ Administrative Services Agreements ” means (i) the Administrative Services Agreement to be entered into between Cymer and the Company, in a form to be mutually agreed by Cymer and Zeiss LOB not later than the Closing, as amended, supplemented or otherwise modified from time to time, and (ii) the Administrative Services Agreement to be entered into between Zeiss LOB or its Affiliate and the Company, in a form to be mutually agreed by Cymer and Zeiss LOB not later than the Closing, as amended, supplemented or otherwise modified from time to time.
“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. As used herein, “ control ” (and the derivative terms “ controlling ” and “ controlled ”) means the direct or indirect ownership of more than fifty percent (50%) of the equity securities or other ownership interests and voting rights of, and the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise. No party or its Affiliates shall by reason of this Agreement be deemed to be an affiliate of the other party or its Affiliates. The term “ affiliated ” shall have a corresponding meaning. Notwithstanding the foregoing definition, when used with respect to Zeiss SMT or Zeiss LOB, the term “ Affiliate ” shall exclusively mean (a) Zeiss SMT and any Person under the control of Zeiss SMT and (b) IMT and any Person under the control of IMT. Notwithstanding the foregoing definition, for purposes of this Agreement, the Company and its subsidiaries shall not be considered an Affiliate of either Member.
“ Agreement ” means this Joint Venture Agreement, as amended, supplemented or otherwise modified from time to time.
“ Area of Responsibility ” means each area of the R&D Effort in which one Member or the Company has primary responsibility for directing and carrying out research, as specified from time to time in the then current Business Plan.
“ Budget Year ” means the period commencing on the date of this Agreement and ending on December 31, 2005 and each successive one-year period thereafter.
“ Capital Call Notice ” means a written request delivered by the Company to each Member from time to time requesting that each Member provide funds to the Company. Such notice shall specify in reasonable detail (i) the amount being
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requested, (ii) the Company’s anticipated use of funds and the timing of such use, and (iii) wire transfer instructions.
“ Confidentiality Agreement ” means the Confidentiality Agreement to be entered into among Cymer, Zeiss SMT, IMT and the Company at the Closing, substantially in the form attached hereto as Exhibit D, as amended, supplemented or otherwise modified from time to time. It is intended that the Company will become a party to the Confidentiality Agreement following its formation.
“ Contribution Agreement ” means the Contribution Agreement to be entered into between Cymer and the Company at the Closing substantially in the form attached hereto as Exhibit B, as amended, supplemented or otherwise modified from time to time.
“ Cymer Supply Agreement ” means the Supply Agreement to be entered into between Cymer and the Company at the Closing, substantially in the form attached hereto as Exhibit C, as amended, supplemented or otherwise modified from time to time.
“ Deliverable ” means work product or deliverables of any type to be developed or delivered by a Member during the course of a Project.
“ Facilities Agreements ” means (i) the Facilities License Agreement to be entered into between the Company and Cymer relating to use by the Company of certain facilities in the United States, in a form to be mutually agreed by Cymer and Zeiss LOB not later than the Closing, as amended, supplemented or otherwise modified from time to time, and (ii) the Facilities License Agreement to be entered into between the Company or its Affiliate and an Affiliate of Cymer relating to use by the Company or its Affiliates of certain facilities in Korea and Taiwan, in a form to be mutually agreed by Cymer and Zeiss LOB not later than the Closing, as amended, supplemented or otherwise modified from time to time.
“ GAAP ” means United States generally accepted accounting principles, consistently applied.
“ IMT ” means Carl Zeiss Industrielle Messtechnik GmbH.
“ IMT IP Side Letter ” means the side letter to the Intellectual Property Agreement executed by IMT by or at the Closing, substantially in the form attached hereto as Exhibit I.
“ Intellectual Property ” means any or all of the following: (i) works of authorship, including, without limitation, computer programs, algorithms, routines, source code and executable code, whether embodied in software, firmware or otherwise, documentation, designs, files, records and data, (ii) inventions (whether or not patentable), improvements, and technology, (iii) proprietary and confidential information, including, without limitation, technical
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data and customer and supplier lists, trade secrets, know-how and techniques, (iv) databases, data compilations and collections and technical data, (v) logos, trade names, trade dress, trademarks and service marks, (vi) domain names, web addresses and sites, (vii) tools, methods, processes, devices, prototypes, schematics and test methodologies, and (viii) any and all instantiations of the foregoing in any form and embodied in any media.
“ Intellectual Property Rights ” means any or all of the following and all rights in, arising out of, or associated therewith, whether arising from statute or common law: (i) all United States and foreign patents and utility models and applications therefor and all reissues, divisions, re-examinations, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and equivalent or similar rights anywhere in the world in inventions and discoveries, including, without limitation, invention disclosures, (ii) all trade secrets and other rights in know-how and confidential or proprietary information, (iii) all copyrights, copyright registrations and applications therefor and all other rights corresponding thereto throughout the world, (iv) all industrial designs and any registrations and applications therefor throughout the world, (v) all rights in World Wide Web addresses and domain names and applications and registrations therefor, all trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor and all goodwill associated therewith throughout the world, and (vi) any similar, corresponding or equivalent rights to any of the foregoing throughout the world.
“ Interest ” means, with respect to any Member, the aggregate shares ( Gesellschaftsanteile ) in the Company held by such Member.
“ Joint Venture Documents ” means, collectively, this Agreement, the Contribution Agreement, the Intellectual Property Agreement, the Trademark License Agreement, the Supply Agreements, the R&D Services Agreements, the Administrative Services Agreements, the Facilities Agreements and the Confidentiality Agreement.
“ Member ” means Cymer, Zeiss LOB or any other Person who, at such time, is admitted to the Company as a Member in accordance with the terms of this Agreement, each in its capacity as a shareholder of the Company.
“ Member Parent ” means, with respect to any Member, (i) in the case of Cymer or any Member that is an Affiliate of Cymer, Cymer, Inc., (ii) in the case of Zeiss LOB or any Member that is an Affiliate of Zeiss SMT, Carl Zeiss SMT AG and (iii) in the case of any Member that is not an Affiliate of either Cymer or Zeiss SMT, the ultimate parent company of such Member.
“ Net Income ” shall mean, for any period, the Company’s net income as determined under GAAP.
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“ Percentage Interest ” means, with respect to any Member, such Member’s Percentage Interest as set forth in Section 4.01.
“ Person ” means an individual, corporation, partnership, association, trust, limited liability company or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“ R&D Effort ” means research and development undertaken by either Member reasonably related to the Business.
“ R&D Services Agreements ” means (i) any R&D Services Agreement to be entered into between Cymer and the Company (or their respective Affiliates), substantially in a form to be mutually agreed by Cymer and Zeiss LOB not later than the Closing, as amended, supplemented, or otherwise modified from time to time, and (ii) any R&D Services Agreement to be entered into between Zeiss LOB and the Company (or their respective Affiliates), substantially in a form to be mutually agreed by Cymer and Zeiss LOB not later than the Closing, as amended, supplemented, or otherwise modified from time to time.
“ Supplier ” means, with respect to any Supply Agreement, the Person identified as the Supplier in such Supply Agreement, including any transferee of all or substantially all of the assets of a Supplier that has assumed such Supply Agreement in accordance therewith.
“ Supply Agreements ” means the Cymer Supply Agreement and the Zeiss Supply Agreement.
“ Trademark License Agreement ” means the License Agreement to be entered into between the Company and Carl Zeiss AG, substantially in a form to be mutually agreed by Cymer and Zeiss LOB at the Closing, as amended, supplemented or otherwise modified from time to time.
“ THL ” means the Swiss Federal Tax Harmonized Law, as amended from time to time.
“ Transfer ” means any direct or indirect sale, assignment, disposition, exchange, mortgage, pledge or grant of a security interest in, foreclosure or any other transfer of any portion of, or economic or voting interest in, an Interest, but shall not include any sale, assignment, disposition, exchange, mortgage, pledge or grant of a security interest in, foreclosure or any other transfer of any capital stock of a Member Parent. A “Transfer” shall also include any sale, assignment or other transfer by a Member Parent of any direct or indirect interest in the Member that is its Affiliate. When used as a verb, the term “Transfer” refers to entering into any transaction or series of transactions that results in a “Transfer.”
“ Work Plan ” means a mutually agreed written schedule setting forth a description of a Project to be performed under this Agreement.
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“ Zeiss Supply Agreement ” means the Supply Agreement to be entered into between Zeiss LOB (or its Affiliate) and the Company at the Closing, substantially in the form attached hereto as Exhibit C, as amended, supplemented or otherwise modified from time to time.
(b) Each of the following additional terms is defined in the Section set forth opposite such term:
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ARTICLE 2
Section 2.01 . Formation of the Company. (a) As soon as reasonably practicable following the execution of this Agreement, Cymer and Zeiss LOB will contribute the initial capitalization of the Company of CHF 20,000.00 as set forth in Section 4.02(a) and take such other steps to form the Company as a Swiss limited liability company ( Gesellschaft mit beschränkter Haftung ) in accordance with the Swiss corporate legal implementation timetable attached as Exhibit F. At the closing, which shall take place on a date to be mutually agreed between Cymer and Zeiss LOB consistent, to the extent reasonably practicable, with said timetable (the “ Closing ”), the following cash and property contributions (the “ Capital Contributions ”) will be made:
(i) Each Member shall make the required funding contributions set forth in Section 4.02(a)(i).
(ii) Cymer shall contribute, assign, transfer, convey and deliver to the Company all of Cymer’s right, title and interest in and to the Contributed Intellectual Property (as defined in the Contribution Agreement) on the terms and subject to the conditions set forth therein.
(b) As soon as reasonably practicable after Closing, the Company shall use $[. . . *** . . .] of the required funding contribution to finance the purchase by the Company or its subsidiary of a demonstration Product, of which $[. . . *** . . .] will be payable to Cymer and $[. . . *** . . .] will be payable to Zeiss LOB.
(c) The Company shall have Articles of Association ( Statuten ) substantially in the form attached hereto as Exhibit G, subject to such modifications as may be required by the commercial register of the Canton of Zug as part of the registration process.
(d) Cymer’s obligations at Closing hereunder shall be subject to the condition that the IMT IP Side Letter shall have been executed and delivered by IMT at or prior to the Closing.
Section 2.02 . Execution of Agreements by Company. At the Closing, promptly following the Company’s registration in the commercial register of the Canton of Zug, the Members (i) will cause the Company to become a party to this Agreement by executing and delivering counterparts hereof and (ii) shall execute and deliver, in the case of Cymer to the extent it is a party thereto, and shall cause the Company to execute and deliver, (A) counterparts of the Intellectual Property
* CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)
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Agreement and Trademark License Agreement, (B) counterparts of each Supply Agreement and (C) each other Joint Venture Document that the Members shall mutually agree shall be executed at the Closing.
Section 2.03 . Execution of Agreements by Zeiss SMT. At the Closing, promptly following the Company’s registration in the commercial register, Zeiss SMT (i) shall execute and deliver counterparts of (A) the Intellectual Property Agreement and (B) the Confidentiality Agreement and the IMT IP Side Letter, each as executed by IMT, (ii) shall cause Carl Zeiss Laser Optics GmbH to execute and deliver counterparts of the Zeiss Supply Agreement and (iii) shall cause any other Joint Venture Document which the parties have agreed shall be executed and delivered at Closing to be executed and delivered by any of its Affiliates that is a party thereto.
Section 2.04 . Representations And Warranties. (a) Cymer hereby represents and warrants that as of the date hereof (i) it is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, (ii) it has the requisite power and authority to execute and deliver this Agreement and the other Joint Venture Documents and to fully perform its obligations hereunder and thereunder, (iii) the execution, delivery and performance of this Agreement and the other Joint Venture Documents have been duly authorized on the part of Cymer, (iv) it is not party to or affected by contractual or other legal obligations that would in any material respect interfere with its full performance of this Agreement or the other Joint Venture Documents, (v) Cymer owns the Contributed Intellectual Property (as defined in the Contribution Agreement) free and clear of any encumbrances (including any license other than any Existing Cross-Licenses), to the Company, as set forth in the Contribution Agreement, and (vi) the individuals executing this Agreement on behalf of Cymer have the authority to do so.
(b) Zeiss LOB hereby represents and warrants that (i) it is a limited liability company duly organized, validly existing and in good standing under the laws of Germany, (ii) it has the requisite power and authority to execute and deliver this Agreement and the other Joint Venture Documents and to fully perform its obligations hereunder and thereunder, (iii) the execution, delivery and performance of this Agreement and the other Joint Venture Documents have been duly authorized on the part of Zeiss LOB, (iv) it is not party to or affected by contractual or other legal obligations that would in any material respect interfere with its full performance of this Agreement or the other Joint Venture Documents, and (v) the individuals executing this Agreement on behalf of Zeiss LOB have the authority to do so.
(c) Zeiss SMT hereby represents and warrants that (i) it is a stock corporation duly organized, validly existing and in good standing under the laws of Germany, (ii) it has the requisite power and authority to execute and deliver this Agreement and the other Joint Venture Documents to which it is a party and
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to fully perform its obligations hereunder and thereunder, (iii) the execution, delivery and performance of this Agreement and the other Joint Venture Documents to which it is a party have been duly authorized on the part of Zeiss SMT, (iv) it is not party to or affected by contractual or other legal obligations that would in any material respect interfere with its full performance of this Agreement or the other Joint Venture Documents to which it is a party, (v) the individuals executing this Agreement on behalf of Zeiss SMT have the authority to do so, and (vi) all right, title and interest in and to Foreground Technology (as defined in the Intellectual Property Agreement) conceived or reduced to practice by IMT or any Person under the control of IMT will be owned by SMT and that, upon execution and delivery of the IMT IP Side Letter by IMT, SMT will obtain all rights from IMT to fully perform its obligations under the Intellectual Property Agreement.
(d) Notwithstanding any other provision contained in this Agreement, the Company shall be authorized to execute, deliver and perform this Agreement and the other Joint Venture Documents to which it is a party and all documents, agreements, certificates, or statements contemplated thereby or related thereto, each in the form attached hereto, or in the case of the Administrative Services Agreements, the Facilities License Agreements and the R&D Services Agreements, in the form mutually agreed by Cymer and Zeiss LOB at or before Closing, exclusive of any future amendments, without any further act, vote or approval of any Member or any other Person.
ARTICLE 3
Section 3.01 . Name. The name of the Company shall be “TCZ GmbH”. The business of the Company shall be conducted under such name or names as the Members Meeting may from time to time determine in accordance with the provisions hereof based upon decisions taken by the Committee of Representatives.
Section 3.02 . Purpose. The purpose of the Company is to develop, market, sell, integrate and service the Products and to engage in related application development based on the Products (the “ Business ”), and to search for other business opportunities for process tools for the manufacture of flat panel displays, and to take actions reasonably related thereto, in each case as set forth in greater detail in the Business Plan as in effect from time to time. If the Company identifies business opportunities for process tools for the manufacture of flat panel displays other than the Products and applications based on the Products (“ Other FPD Business Opportunities ”), the Company shall bring such Other FPD Business Opportunities to the attention of the Members, and the Members will discuss in good faith whether or not to expand the scope of the Business of the Company to pursue such Other FPD Business Opportunities. For the avoidance of the doubt, the “Business” shall not include the development, marketing, selling,
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integration or services of tools other than the Products, unless the Members so agree and amend this Agreement to expand the definition of the Business accordingly.
Section 3.03 . Place of Business of the Company. The principal place of business of the Company shall be located at such address as may be designated by the Members Meeting from time to time based upon decisions taken by the Committee of Representatives.
Section 3.04 . Registered Office; Registered Agent. The address of the registered office of the Company in Switzerland shall be as determined by the Members and set forth in the Commercial Register.
Section 3.05 . Duration of the Company. The Company shall continue until its termination in accordance with the provisions of Article 11.
Section 3.06 . Title to Company Property. All property of the Company, whether real or personal, tangible or intangible, shall be deemed to be owned by the Company as an entity, and no Member, in its capacity as such, shall have any direct ownership interest in such property, except upon termination of the Company as set forth in Article 11.
Section 3.07 . Limited Liability. Except as required by mandatory Swiss law, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Member shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member.
ARTICLE 4
Section 4.01 . Percentage Interests; Capital Contributions. (a) The names and Percentage Interests of the Members shall be as follows:
(b) The Percentage Interests shall not be subject to adjustment unless agreed by the Members, except as otherwise provided in Sections 6.03(c)(iii) or 11.03.
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(c) Other than the Members’ initial capital contributions, their Required Funding Contributions, and Zeiss LOB’s obligations pursuant to Section 12.03 below, no additional funding or capital contribution of the Members shall be required, except as the Members may unanimously agree.
Section 4.02 . Funding Commitments. (a) As soon as reasonably practicable after execution of this Agreement, each of the Members shall contribute their proportionate share of the Company’s nominal capital of CHF 20,000.00 based on their Percentage Interest for purposes of the formation of the Company in accordance with Exhibit F. The Members from time to time shall be obligated to provide funds to the Company, as provided in this Section 4.02, up to the amount specified in Section 4.02(a)(iii), which each such Member shall make by way of a contribution of capital, in all cases, by wire transfer of immediately available funds.
(i) At the Closing, Cymer shall contribute $14,170,000.00 in cash and Zeiss LOB shall contribute $[. . . *** . . .] in cash in respect of their required funding contributions for 2005, and Cymer shall contribute any property to be contributed pursuant to the Contribution Agreement.
(ii) The amount and timing of subsequent required funding contributions under this Section 4.02 (“ Required Funding Contributions ”) shall be determined by the Chief Executive Officer consistent with the then current Business Plan as in effect from time to time, subject to the provisions of Section 4.02(a)(iii). Each Member shall make each such funding contribution within ten business days of receipt of a Capital Call Notice from the Company.
(iii) No Member shall be required to contribute to the Company an amount for any Budget Year that exceeds its proportionate share (determined on the basis of its Percentage Interest) of the annual maximum required funding contribution amount (the “ Annual Maximum Required Funding Contribution ”) for such Budget Year (which shall cover the Company’s expected funding requirements for the period ending 15 months after the beginning of such Budget Year), set forth for such Budget Year in the then current Business Plan as may be in effect from time to time, or, absent an updated Business Plan containing an Annual Maximum Required Funding Contribution for such Budget Year, the amount determined as provided in Section 6.03(c).
(b) If a Member fails to contribute its required portion of any Required Funding Contribution as and when required by this Agreement, the Company shall then notify the Members in writing of such default, specifying the default in reasonable detail, and if the defaulting Member shall not have cured such default within ten business days after receipt of such default notice, such failure shall be deemed a material breach of this Agreement and in addition to, and without
* CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)
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prejudice to, any and all other remedies, the non-defaulting Member may treat such default as a “Triggering Event” pursuant to Section 11.02(a), except that the non-defaulting Member shall be treated as the Non-Triggering Party and the defaulting Member shall be treated as the Triggering Party thereunder. The foregoing shall be exercisable by written notice from non-defaulting Member to the defaulting Member, given within 30 days after receipt of the default notice.
Section 4.03 . Other Matters. (a) Except as otherwise provided in this Agreement, no Member shall demand or receive a return of its capital contributions or resign from the Company without the consent of the other Member. Under circumstances requiring a return of any capital contributions, no Member shall have the right to receive property other than cash, except as may be specifically provided herein.
(b) No Member shall receive any interest, salary or drawing with respect to its capital contributions or for services rendered on behalf of the Company or otherwise in its capacity as a Member, except as otherwise contemplated by this Agreement.
Section 5.01 . Distributions. After the date of Closing, when, if and as determined by the Members Meeting or required by a Member pursuant to Section 5.02, the Company shall make available the Net Income of the Company for distribution to the Members (or to any Affiliate of a Member designated by such Member) in proportion to their Percentage Interests, and each Member agrees to vote its shares in favor of such a distribution; provided that Intellectual Property Rights owned or licensed by the Company shall be distributed only in accordance with the Intellectual Property Agreement or otherwise upon termination and dissolution of the Company in accordance with Article 11. With respect to the amount to which each Member is entitled pursuant to the preceding sentence, such Member may elect, at its sole option, to (i) receive such amount in cash or, if so determined by the Members Meeting, property or (ii) treat such amount as part of such Member’s funding contribution for purposes of satisfying its Required Funding Contribution.
Section 5.02 . Member’s Right to Require Distribution. Either Member shall have the right to require the Members Meeting to make a distribution of the Net Income of the Company to the Members under Section 5.01, provided that the Company will have sufficient available funds on hand after the distribution to meet 110% of its reasonably foreseeable working capital requirements during the 18 months following the date of such distribution based on the more conservative of the (a) the financial projections in the then current Business Plan or (b) the most recent financial projections approved by the Members Meeting.
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Section 5.03 . Amounts Withheld. The Company is authorized to withhold from distributions to the Members and to pay over to any federal, cantonal, communal or foreign government any amounts which it reasonably determines may be required to be so withheld pursuant to the THL or any provisions of any other federal, cantonal, communal or foreign law. All amounts withheld pursuant to the THL or any provision of any federal, cantonal, communal or foreign tax law with respect to any distribution to any Member shall be treated as amounts distributed to such Member pursuant to this Article for all purposes under this Agreement.
Section 5.04 . Dissolution. Upon dissolution and winding up of the Company, the Company shall make distributions in accordance with Article 11.
Section 5.05 . No Distributions in Violation of Law. Notwithstanding any other provision contained in this Agreement, the Company shall not be required to make a distribution to any Member to the extent that such distribution would violate mandatory Swiss law.
ARTICLE 6
Section 6.01 . Members Meeting and Committee of Representatives. (a) Except as otherwise provided in this Agreement, the business and affairs of the Company shall be managed by the Chief Executive Officer (the “ Chief Executive Officer ”) under the supervision of the meeting of all the Members of the Company (the “ Members Meeting ”), as specified in this Agreement. The actions set forth in Section 6.01(c) below may not be taken by the Company without the approval of a group of individuals acting as representatives of the Members (the “ Committee of Representatives ”). On the basis of such approval, any action so approved shall be presented by the Committee of Representatives to the Members Meeting.
(b) Except as otherwise provided in Section 10.02(b), Section 11.03 and Section 11.04, the Committee of Representatives shall consist of four individuals (each a “ Representative ”). Two of such Representatives shall be designated by Cymer and two such Representatives shall be designated by Zeiss LOB. Each Representative (i) shall hold office until a successor shall have been duly designated or if earlier, such Representative’s death, resignation or removal and (ii) except as otherwise provided in Section 11.03, may be removed only by the Member having designated such Representative.
(c) In addition to the actions requiring consent of the Members pursuant to Section 6.04 below, the following actions may not be taken by the Company or by the Chief Executive Officer acting on behalf of the Company without
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obtaining the approval of the Members Meeting acting on the recommendation of the Committee of Representatives as set forth herein:
(i) adoption or amendment of a Business Plan and the product development process as described in Section 6.03(a)(iii);
(ii) entering into or making any loans or advances to, guarantees for the benefit of, or investments by the Company, in excess of $100,000, other than trade credit in the ordinary course of business and investments in cash or cash equivalents in accordance with an investment policy adopted by the Members Meeting;
(iii) entering into any agreement or commitment (or series of related agreements or commitments) outside the ordinary course of business involving an aggregate value of more than $100,000 per year;
(iv) entering into any transaction with any Member or Affiliate of any Member other than the transactions contemplated hereby and by the other Joint Venture Documents for which a final form has been agreed;
(v) any acquisition or disposition (in a single transaction or a series of related transactions) of any assets, business or operations outside the ordinary course of business in an aggregate value of more than $100,000;
(vi) subject to the terms of the Intellectual Property Agreement, licensing the Company’s Intellectual Property outside the ordinary course of business or commencing or settling any litigation or claim involving the Company’s Intellectual Property; or
(vii) commencing or settling any material litigation or claim.
Section 6.02 . Officers. (a) The Company will be managed by the Chief Executive Officer, who will act as “ Geschäftsführer ” under applicable Swiss law, in accordance with the Company’s then current Business Plan as in effect from time to time. Without limiting the generality of the foregoing, the Chief Executive Officer will be responsible for managing the following activities of the Company, in accordance with the Company’s then current Business Plan as in effect from time to time: (i) sales and marketing, (ii) application development, (iii) supply management, (iv) service and support to the Company’s customers, (v) systems integration, (vi) business development and (vii) accounting, finance, and general and administrative functions. The Chief Executive Officer may delegate any of such authority to the other officers of the Company. The other officers of the Company may include one or more vice presidents or other officers as the Chief Executive Officer may in his or her discretion determine. One person may hold the offices and perform the duties of any two or more of said offices.
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All of the officers of the Company shall report to the Chief Executive Officer of the Company.
(b) The Member with the greater Percentage Interest shall have the right to appoint the Chief Executive Officer of the Company, provided that such appointment shall be subject to the approval of the other Member, which approval shall not be unreasonably withheld or delayed. The Chief Executive Officer may be removed at any time by the Members Meeting.
(c) The officers of the Company (other than the Chief Executive Officer) shall be appointed by the Chief Executive Officer to hold office for such term as the Chief Executive Officer may determine; provided that such appointment shall be subject to the approval of the Members Meeting, which approval shall not be unreasonably withheld or delayed. Each such officer shall hold office until his or her successor is appointed, or until the earlier of his or her death, resignation or removal, and may be removed with or without cause at any time by the Chief Executive Officer. The remuneration of each such officer shall be approved by the Members Meeting. Each Member may suggest one or more candidates for such other officers, which suggestions the Chief Executive Officer shall consider in good faith, and, if the Chief Executive Officer rejects such suggestions, the Chief Executive Officer shall, if so requested, explain his or her reasons for the rejection. Each Member shall, if so requested by the Chief Executive Officer, reasonably assist the Chief Executive Officer in locating candidates for positions with the Company within the ranks of the Member’s employees and in recruiting such candidates to join the Company.
(d) Unless mutually agreed by the Members, commencing no later than ninety (90) days after the Closing, each officer of the Company (including the Chief Executive Officer), and each other employee of the Company that has been transferred to the Company from either Cymer or Zeiss SMT or their respective Affiliates, shall be a full-time employee of the Company and devote 100% of such person’s full professional and business-related time to the Company. Unless mutually agreed by the Members, no officer of the Company shall be permitted to participate in any compensation program of either Member, provided that nothing in this provision shall prohibit any officer from retaining and exercising any stock options granted to such officer prior to becoming an officer of the Company or participating in any health and welfare benefits plans of a Member provided to the officer pursuant to an Administrative Services Agreement.
Section 6.03 . Business Plan. (a) The Company will be subject to and managed in accordance with a Business Plan (the “ Business Plan ”) which will cover a rolling period of [. . . *** . . .] Budget Years and will be revised annually. The Company’s initial Business Plan for the partial year [. . . *** . . .] and years [. . . *** . . .] is identified in Schedule A hereto. Such initial Business Plan will remain in effect until modified or superseded by the Members Meeting in accordance with the terms hereof. The Business Plan will include, without limitation:
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(i) the long-term objectives of the Company in light of its then current strategic, competitive and technology position, the Product roadmap and the broad Areas of Responsibility of each Member;
(ii) a schedule or timetable with a description of all milestones (including technical milestones, business milestones and financial milestones) and/or Deliverable due dates;
(iii) a schedule of “ Gate Reviews ” to be held by the Members Meeting in accordance with a product development process, which shall be prepared by the Chief Executive Officer of the Company and approved by the Members Meeting, during which Gate Reviews the Members Meeting will determine whether milestones and/or Deliverable due dates have been met or achieved;
(iv) a Work Plan for the Members, the Suppliers and the Company with respect to each distinct area of inquiry (each such area, a “ Project ”) containing with respect to such Project (1) the identity of the project managers for the Project and/or the manner in which they will be selected; (2) a description of any performance, status and operational reports to be generated during the Project; (3) quality criteria for assessing the performance of the Suppliers and the Company, as the case may be, during such Project including, but not limited to, performance criteria for milestones, classifications of the severity of errors or failures, and response processes for the correction of any such errors or failures; and (4) any other terms and conditions agreed upon by the Members with respect to a Project;
(v) a Work Plan for the Company with respect to its Area of Responsibility with respect to each Project;
(vi) financial projections (including projected balance sheet, income statement and cash flow, as well as projected Annual Maximum Required Funding Contributions) for each of the [. . . *** . . .] Budget Years covered by the Business Plan;
(vii) the Annual Maximum Required Funding Contribution for the next Budget Year, which shall cover the Company’s expected funding requirements for the period ending [. . . *** . . .] months after the beginning of such Budget Year); and
(viii) performance metrics for the Company for the next Budget Year for use in assessing the performance of the Chief Executive Officer.
(b) With respect to each Budget Year after [. . . *** . . .] the Chief Executive Officer will develop and present to the Members no later than [. . . *** . . .] of
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each year a proposed revised and updated Business Plan that has been rolled forward for another year. For the avoidance of doubt, unless a new Business Plan is approved by the Members Meeting, the Company will be subject to and managed in accordance with the then current Business Plan as in effect from time to time.
(c) During any Budget Year for which the Members Meeting has not approved a revised Business Plan by [. . . *** . . .], the Annual Maximum Required Funding Contribution for such Budget Year shall be established as follows:
(i) Each Member shall not later than [. . . *** . . .] notify the Chief Executive Officer and the other Member in writing of its proposal for the Annual Maximum Required Funding Contribution for such Budget Year; provided that neither Member’s proposal may be [. . . *** . . .] than [. . . *** . . .]% or [. . . *** . . .] than [. . . *** . . .]% of the [. . . *** . . .] of (A) the [. . . *** . . .] for such [. . . *** . . .] as specified in the [. . . *** . . .] by the [. . . *** . . .], or (B) the [. . . *** . . .] as specified in the [. . . *** . . .] proposed by the [. . . *** . . .].
(ii) The issue shall be immediately escalated for expedited resolution by the Chairman of the Board (or equivalent officer) of each Member as provided in Section 12.10(a).
(iii) If the matter is not resolved by [. . . *** . . .] of any year, then the Member proposing the [. . . *** . . .] Annual Maximum Required Funding Contribution for such Budget Year shall have the option, at its election, by notice given no later than [. . . *** . . .] of the following year either (A) to establish the [. . . *** . . .] amount as the Annual Maximum Required Funding Contribution for such Budget Year and to agree to pay, as an additional capital contribution to the Company, the difference between the amounts last proposed by each Member, and upon such payment the paying Member’s Percentage Interest shall be increased to a percentage equal to the [. . . *** . . .] of (x) the [. . . *** . . .] of the [. . . *** . . .] by the [. . . *** . . .] since [. . . *** . . .] the Company (including pursuant to [. . . *** . . .]), [. . . *** . . .] by (y) the [. . . *** . . .] of the [. . . *** . . .] by [. . . *** . . .] (including pursuant to [. . . *** . . .]) since [. . . *** . . .] the Company, and the [. . . *** . . .] Percentage Interest shall be [. . . *** . . .] accordingly), or (B) to establish the Annual Maximum Required Funding Contribution for such Budget Year as an amount equal to [. . . *** . . .] of the amounts proposed by each Member.
Section 6.04 . Company Actions Requiring Consent of Members. In addition to the actions requiring consent of the Members acting on the recommendation of the Committee of Representatives pursuant to Section 6.01(c),
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the following actions may not be taken by the Company or by the Chief Executive Officer unless approved by all Members pursuant to a decision or resolution of the Members Meeting:
(a) any amendment of this Agreement, any other Joint Venture Document or the Company’s Articles of Association;
(b) issuance of any new shares or admission of any new Members (and each Member agrees to grant such consent for admission of a Permitted Transferee);
(c) redemption or repurchase of any shares;
(d) authorizing or committing the Company to a change in the scope of the Business;
(e) taking any actions in respect of the dissolution or liquidation or winding-up of the Company (except as permitted pursuant to Section 11.05(c)) or the filing or acquiescing to the filing of a petition in respect of the Company under bankruptcy or insolvency laws, or the making of any assignment for the benefit of creditors;
(f) any merger, consolidation, reorganization (including conversion) or other business combination involving the Company or any of its Affiliates (other than of a wholly owned Affiliate with or into another wholly owned Affiliate) or any acquisition of the Company or any of its Affiliates by another entity by means of any transaction or series of related transactions or the sale of all or substantially all of the assets of the Company;
(g) appointment and removal of the Chief Executive Officer and of the Swiss Trustees;
(h) approval of the Company’s annual financial statements and any corporate resolutions regarding the use of net profit for distributions;
(i) any discharge of the Chief Executive Officer and/or of the Swiss Trustees from liability pursuant to applicable Swiss corporate law;
(j) division of any shares of the Company; or
(k) commencing any litigation or filing any claims in Swiss court against the Chief Executive Officer or any of the Swiss Trustees or a Member for damages resulting from the Company’s formation or management.
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Section 6.05 . Meetings of Committee of Representatives. (a) Regular Meetings . The Committee of Representatives shall hold regular meetings at least quarterly, rotating between a location in the United States determined by Cymer and a location in Germany determined by Zeiss LOB, or such other location as determined by the Committee of Representatives. Written notice of each meeting shall state the place, date and hour of such meetings, and include an agenda of matters to be considered at the meeting. Notice shall be given in the manner prescribed herein not fewer than seven days nor more than 60 days before the date thereof.
(b) Special Meetings . In addition, any Representative may, on at least five business days prior written notice to the other Representatives, call a special meeting of the Committee of Representatives, specifying in reasonable detail in such notice the purpose of such meeting.
(c) Quorum . The presence of three Representatives shall constitute a quorum for the transaction of business at a duly noticed meeting of the Committee of Representatives. If a quorum shall fail to be present for such a meeting, then any Representative may provide a supplemental notice to the other Representatives rescheduling such meeting at least 48 hours after such supplemental notice. For the avoidance of doubt, a quorum shall be required at such rescheduled meeting.
(d) Objections . Attendance of a Representative at a meeting shall constitute a waiver of notice of such meeting, except if such Representative attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of business at such meeting because the meeting has not been validly called, noticed or convened.
(e) Chair of Meeting . Prior to each meeting, one of the Representatives shall be designated as lead Representative to serve as chair of the meeting. The lead Representative shall rotate from meeting to meeting between a Representative designated by Zeiss LOB and a Representative designated by Cymer.
(f) Taking Decisions . Except where this Agreement specifically provides otherwise, any decision taken at a meeting of the Committee of Representatives must be approved as follows: (i) if the Committee of Representatives consists of four Representatives and Cymer and Zeiss LOB are each entitled to designate two Representatives, the decision shall require the consent of [. . . *** . . .] Representatives; (ii) if the Committee of Representatives is increased to five Representatives pursuant to Section 10.02 of this Agreement, the decisions shall require only the consent of the Representatives of the Member having a [. . . *** . . .] of the Percentage Interests; and (iii) if one Member is entitled to designate all the Representatives pursuant to Section 11.03, the decisions shall require [. . . *** . . .] the consent of the Representatives of that Member.
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(g) Expenses . Each Member shall pay all reasonable travel and other expenses of the Representatives designated by such Member in connection with participating in meetings of the Committee of Representatives.
Section 6.06 . Decision by Consent. Any decision required or permitted to be taken by the Committee of Representatives or Members Meeting, either at a meeting or otherwise, may be taken without a meeting if all Representatives or Members consent thereto in writing. Any such decision of the Committee of Representatives, taken without a meeting, must be confirmed in writing by all Representatives. Any such decision of the Members Meeting, taken without a meeting, shall be confirmed in writing by all the Members.
Section 6.07 . Telephonic Meetings. Representatives may participate in a meeting of the Committee of Representatives by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
Section 6.08. Swiss Legal Implementation. (a) The Members undertake to participate in Members Meetings and to exercise their voting rights with regard to and in strict compliance with the provisions of this Agreement. With respect to any action reserved for and approved by the Committee of Representatives pursuant to Section 6.01(c), the Members undertake to and shall use their voting rights in Members Meetings in such way as to ensure that the decisions taken by the Committee of Representatives are approved.
(b) For the purposes of implementing the corporate governance structure set forth in the other provisions of this Article 6 in a manner consistent with applicable Swiss corporate law, the Company shall have in addition to the Chief Executive Officer, two additional “ Geschäftsführer ”, each one designated by each of the Members and each being a Swiss resident (each a “ Swiss Trustee ”)
(c) The Swiss Trustees shall exercise their powers as Geschäftsführer each in accordance with a trust agreement (the “ Swiss Trust Agreement ”), substantially in the form attached hereto as Exhibit H, to be entered into among the Swiss Trustees and the Members, which agreements shall provide, among other things, that the Swiss Trustees shall only act on joint instructions from both Members. The Swiss Trustees shall be granted power to sign for the Company only jointly by two and not individually, such power to be exercised solely in accordance with the Swiss Trust Agreement, which power shall be entered into the commercial register.
(d) The Chief Executive Officer shall exercise his powers as Geschäftsführer so as to vote for, ratify, give full effect to and facilitate, and not to hinder or contravene, any decision or action taken by the Members Meeting in
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accordance with the other provisions of this Agreement. The Chief Executive Officer shall be granted power to sign for the Company individually, such power to be exercised solely in accordance with this Section 6.08(d) and the other provisions of this Agreement, which power shall be entered into the commercial register. This Section 6.08(d) shall not confer on the Chief Executive Officer any power or authority not otherwise conferred on such officer in accordance with the other provisions of this Agreement.
(e) It is understood and agreed that this Section 6.08 is intended to implement the corporate governance structure set forth in the other provisions of this Article 6 in a manner consistent with applicable Swiss corporate law. Accordingly, this Section 6.08 shall not require, authorize or permit the Chief Executive Officer, or the Swiss Trustees to take any decision or action not otherwise authorized, permitted or required under the other provisions of this Article 6. To the extent any decision or action to be taken in accordance with the other provisions of this Article 6 cannot be implemented effectively pursuant to this Section 6.08 in a manner consistent with applicable Swiss corporate law, the Members hereby agree to amend this Section 6.08 as may be reasonably necessary for such implementation.
Section 6.09 . Nature of Obligations among Members. Except as otherwise provided in this Agreement or by written agreement among the Members, no Representative shall have any authority to act for or assume any obligation or responsibility on behalf of any Member or the Company, and no Member shall have any authority to act for or assume any obligation or responsibility on behalf of any other Member or the Company.
ARTICLE 7
Section 7.01 . Fiscal Year/Independent Auditors. The fiscal year of the Company (the “ Fiscal Year ”) shall end on December 31st of each year. The Members Meeting shall select the Company’s independent auditors, which shall be a recognized international accounting firm based upon decisions taken by the Committee of Representatives.
Section 7.02 . Books and Records. (a) The Company shall keep, including through bookkeeping services rendered pursuant to the Administrative Services Agreement, adequate books and records at its principal office. Such books and records shall include a current list of the full name and last known business, residence or mailing address of each Member, originals of this Agreement, and any amendments thereto (and any signed powers of attorney pursuant to which any such document was executed), a copy of the Company’s federal, cantonal, communal and other tax returns and reports, if any, and annual financial statements of the Company, for the [. . . *** . . .] ([. . . *** . . .]) most recent [. . . *** . . .], and minutes of
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proceedings of the Members Meeting. The Company’s books of account and business records shall be filed and preserved for a period of at least [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] or such longer period as required by law.
(b) The Company shall permit each Member and its officers, agents and representatives, upon reasonable advance notice and during normal business hours and such other times as any such Member may reasonably request, to: (i) visit and inspect any of the properties of the Company; (ii) examine the corporate and financial records of the Company and make copies thereof or extracts therefrom, and (iii) discuss the affairs, finances, and accounts of the Company with the Representatives, officers, employees, and independent accountants of the Company. In addition, the Company shall require its independent accountants to make available to the Members copies of all reports, investigations and work papers prepared by such accountants during the course of any audit of the Company or otherwise, provided that the Members may be required to enter into the standard form of agreement customarily required by such independent accountants as a condition to access to such material. Any Member may, at its own expense, request and obtain a separate audit of the Company’s books by its own accountant, provided that such separate audit is not made more frequently than [. . . *** . . .] in each Fiscal Year and that at least [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] prior written notice of such request is given to the Chief Executive Officer. The Chief Executive Officer shall cause the Company’s officers and employees to cooperate with such Member’s accountant in the execution and preparation of such audit, including providing customary certifications to such Member’s accountant.
Section 7.03 . Financial Reports. (a) The Company, at its expense, shall provide or cause to be provided to each Member, no later than thirty days after the close of each of the first three quarters of the Company’s Fiscal Year, and no later than ninety days after the end of each such Fiscal Year, a financial report of the business and operations of the Company prepared in accordance with GAAP consistently applied, relating to such period, which report shall include (i) a balance sheet as at the end of such period, (ii) a statement of income (loss) containing actual operating performance vs. budgeted operating performance for the current period and the year-to-date, and (iii) a cash flows statement (including sources and uses of funds) for the current period and the year-to-date, and in each case a comparison of the period then ended with the corresponding period in the Fiscal Year immediately preceding such periods, which, in the case of the report furnished after the close of the Fiscal Year, shall be audited by the Company’s independent certified public accountants, and which, in the case of the reports furnished after each of the first three quarters of the Company’s Fiscal Year, shall be unaudited and shall not include any notes thereto. In addition, the quarterly financial statements shall be accompanied by (x) a statement of changes in Members’ equity containing a detail of Capital Contributions, distributions and income/loss allocations for each of the Members and in total, for the current period and the year-to-date, and (y) an analysis, in reasonable detail, of the variance between the Company’s operating results and the corresponding amounts
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in the then current annual Budget. The quarterly financial reports may in each case be subject to normal year-end adjustments. In addition, the Members shall be entitled to any other financial information, including monthly management reports in the form produced by the Company, that the Members may reasonably request.
Section 7.04 . Tax Matters. The Company and its Affiliates shall abide by the tax law and regulations in each jurisdiction in which it operates and shall cooperate with the Members to provide documents and information that either Member may need to file its own tax returns in any jurisdiction.
Section 8.01 . Press Release. Upon the Closing or such other time as may be mutually agreed, Cymer and Zeiss SMT shall issue a mutually agreed joint press release, announcing the formation of the Company and their collaboration under this Agreement.
Section 8.02. Non-Competition. In order to ensure the requisite level of dedication to enable the Company to offer the most competitive products in the marketplace, until such time as a Member ceases to be, directly or through an Affiliate, a Member of the Company (at which time such Member and its Affiliates may become subject to the non-compete covenant set forth in Section 11.02(b)) or the Company is dissolved, neither such Member nor any of its Affiliates shall engage, either directly or indirectly, as a principal for its own account or solely or jointly with others, or as a stockholder in any corporation or joint stock association, in any business engaged in the Business (other than the Company or as contemplated by the Joint Venture Documents). For the avoidance of doubt, without limiting the generality of the foregoing covenant, it is acknowledged and agreed that until such time as a Member ceases to be, directly or through an Affiliate, a Member of the Company (at which time such Member and its Affiliates may become subject to the non-compete covenant set forth in Section 11.02(b)) or the Company is dissolved, neither such Member nor any of its Affiliates shall knowingly supply services, products or components for use in products or services competitive with the Business or the Products of the Company; provided , however, that if neither IMT nor any Person under its control continues to act as supplier of Stages (as defined in the Supply Agreement) or other products to the Supplier or an Affiliate of the Supplier under the Zeiss Supply Agreement, IMT and any Person under its control shall cease to be subject to the foregoing covenant [. . . *** . . .] after the date IMT and any person under its control ceased to act as a supplier.
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ARTICLE 9
Section 9.01 . Exculpation and Indemnification. Each Member agrees that it shall vote its shares in the Company and take all other necessary action in its capacity as a shareholder of the Company (including, to the extent permissible pursuant to applicable law, causing the Company to call a special meeting of Members) to provide for (a) the elimination of the liability of each Representative on the Committee of Representatives to the maximum extent permitted by applicable law (and each Member hereby irrevocably waives any right to pursue and agrees to vote its shares and take all other necessary action in its capacity as a shareholder of the Company not to pursue any such eliminated liability) and (b) indemnification of each Representative on the Committee of Representatives for acts on behalf of the Company, if any, to the maximum extent permitted by applicable law.
ARTICLE 10
Section 10.01 . General. (a) No Member may Transfer all or any part of its Interest, and no Member Parent may Transfer its direct or indirect interest in a Member that is its Affiliate (each a “Transfer of an Interest”), without the consent of the other Member, except that no consent shall be required for (and the non-Transferring Member shall give any consent that may be required under mandatory Swiss company law to effect) the direct or indirect Transfer by the Member of the entirety of a Member’s Interest or by a Member Parent of the entirety of its interest in a Member that is its Affiliate to
(i) any Affiliate of such Member; or
(ii) with respect to any Transfer [. . . *** . . .], any other Person if (x) such other Person is not a competitor of the other Member or Member Parent and (y) the aggregate purchases by the Company and its Affiliates of Products containing Core Components (as such terms are defined in the Supply Agreement between the relevant Member or its Affiliate and the Company) from the relevant Member or its Affiliate under the Supply Agreement during the last four fiscal quarters of the Company for which financial statements are available accounted for not more than [. . . *** . . .]% of the Company’s aggregate cost of (A) the bill of materials for goods sold and (B) system integration during the same period (each of the transferees referred to in clauses (i) and (ii) above a “ Permitted Transferee ”); and no Permitted Transferee may Transfer any or all of its Interest, except the entirety of its Interest to another Permitted Transferee. In the event a Member transfers its Interest to an Affiliate, such Affiliate shall, unless otherwise agreed by the other Member, assume
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all of the transferring Member’s obligations under this Agreement and such Member hereby agrees to irrevocably and unconditionally guarantee to the Company and the other Member the timely payment and performance by such Affiliate of such Member’s obligations thereunder for so long as such transferee remains an Affiliate of the transferring Member.
(b) Any Transfer of an Interest that is not made in compliance with the provisions of this Agreement shall be void, and the Company shall not recognize any such Transfer. Any purported or attempted transfer of any Interest that is not made in compliance with the provisions of this Agreement shall constitute a material breach of this Agreement. Notwithstanding anything else contained herein, no Transfer shall be made except in compliance with applicable law.
(c) For the avoidance of doubt, the provisions of this Article 10 shall not apply to any Transfer of any direct or indirect interest in a Member that could be deemed to occur as a result of a change of control involving the relevant Member Parent.
Section 10.02 . Non-affiliate Transfers. (a) Prior to any Transfer of an Interest permitted under Section 10.01(a)(ii) above, the Member or Member Parent, as the case may be, who proposes to Transfer its Interest (the “ Transferring Member ”) (such transferee, the “ Proposed Transferee ” and such transfer, a “ Non-Affiliate Transfer ”) shall give the other Member (the “ Non-Transferring Member ”) written notice of its intention, describing the Proposed Transferee, the price and the terms and conditions of the proposed Transfer. The Non-Transferring Member shall have a right [. . . *** . . .] to purchase the Transferring Member’s Interest at [. . . *** . . .] and upon [. . . *** . . .] by the Proposed Transferee. The Non-Transferring Member shall have thirty (30) days from the receipt of such notice to agree to purchase the Transferring Member’s Interest by giving written notice to the Transferring Member. If the Non-Transferring Member fails to exercise its right [. . . *** . . .] under this Section 10.02(a), the Transferring Member shall have thirty (30) days thereafter to sell its Interest to the Proposed Transferee at a price and upon terms and conditions [. . . *** . . .] to the Proposed Transferee than specified in the Transferring Member’s notice to the Non-Transferring Member of the proposed Transfer. If the Transferring Member does not sell its Interest to the Proposed Transferee during such thirty (30) day period, the Transferring Member shall not thereafter Transfer its Interest, without first offering such Interest to the Non-Transferring Member in the manner provided above.
(b) Following the consummation of a Transfer of an Interest either (x) to a Proposed Transferee pursuant to a Non-Affiliate Transfer or (y) to the Non-Transferring Member upon the exercise of such Member’s right [. . . *** . . .] pursuant to Section 10.02(a) above:
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(i) the Transferring Member and its Affiliates shall be subject to the non-compete covenant set forth in Section 11.02(b) as if the Transferring Member were the Triggering Party; provided that the Non-Compete Period shall begin on the date of the [. . . *** . . .] of the Transfer and end on the [. . . *** . . .] of the [. . . *** . . .] of such [. . . *** . . .] or the [. . . *** . . .] of the [. . . *** . . .]; and
(ii) (A) the Representatives of the Transferring Member shall be automatically removed from the Committee of Representatives and (B) if the Transferring Member is [. . . *** . . .] or its Affiliate, (1) the size of the Committee of Representatives shall be increased to five Representatives, (2) each Member shall be entitled to designate a number of Representatives that is in proportion to its Percentage Interest (three Representatives for a 60% Percentage Interest, two Representatives for a 40% Percentage Interest) and (3) actions by or decisions of the Committee of Representatives shall no longer require [. . . *** . . .] pursuant to Section 6.05(f), but only approval by [. . . *** . . .] of the Representatives participating at a duly convened meeting at which a quorum is present (in person or by proxy).
Section 10.03 . Recognition of Transfers. (a) Prior to any Transfer of its Interest as permitted by this Article 10, the Member transferring such Interest shall give written notice of such Transfer to the other Member and to the Company. Upon receipt of such written notice, the Company shall notify the transferee of the transfer restrictions contained in this Agreement.
(b) No transferee shall be admitted to the Company as a Member unless the Transfer was permitted hereby. Subject to the foregoing, each such transferee, as a condition to its admission as a Member, shall execute and deliver to the Company such instruments, in form and substance satisfactory to the Members, as the Members shall reasonably deem necessary or desirable to confirm the agreement of such transferee to be bound by all the terms and provisions of this Agreement (as it may be amended in connection with the admission of such transferee as a Member). The Members agree to amend this Agreement to the extent necessary to reflect the transfer and admission of the new Member and to continue the Company without dissolution. Upon execution of such instruments, the transferee shall be admitted to the Company as a Member. Immediately following the admission of the transferee to the Company as a Member, the Member who has thereby transferred all of its Interest shall cease to be a Member of the Company. The transferee, as a Member of the Company, and the other Member are hereby authorized to, and shall, continue the business of the Company without dissolution.
(c) Any transferee who is admitted to the Company as a Member shall succeed to the rights and powers (including distribution preferences), and be
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subject to the restrictions and liabilities, of the transferor Member to the extent of the Interest transferred.
ARTICLE 11
Section 11.01 . Term. The term of the Company shall continue until the Company is dissolved pursuant to this Article.
Section 11.02 . Triggering Events. (a) Within the first 15 days of each [. . . *** . . .] (beginning in [. . . *** . . .]) either Member (such Member, the “ Triggering Party ”) may, for convenience, notify the other Member (the “ Non-Triggering Party ”) in writing of its election to treat such notice as a “ Triggering Event .”
Upon notice of a Triggering Event, the Non-Triggering Party will notify the Triggering Party in writing within 15 days of the Non-Triggering Party’s exercise of one of the following options:
(i) purchase the Triggering Party’s Interest at a [. . . *** . . .] ([. . . *** . . .]); provided that the Triggering Party shall remain liable for any Required Funding Contributions for the Fiscal Year in which the Triggering Event occurs, pro-rated for the period from the beginning of such Fiscal Year to the Triggering Event, and provided further that the Triggering Party shall be entitled to receive, in addition to the cash purchase price, any royalties if and as payable to it pursuant to the Intellectual Property Agreement; or
(ii) dissolve and commence winding up of the Company pursuant to Section 11.05(c).
Upon receipt by the Triggering Party, such notice shall be final and irrevocable, unless otherwise agreed by the Triggering Party.
(b) If the Non-Triggering Party has exercised its option (i) pursuant to Section 11.02(a), then effective from the consummation of the purchase of the Triggering Party’s Interest by the Non-Triggering Party, the Triggering Party and its Affiliates shall not for a period beginning on the date of such [. . . *** . . .] and ending on the [. . . *** . . .] of the [. . . *** . . .] of such [. . . *** . . .] or the [. . . *** . . .] of the [. . . *** . . .] (the “ Non-Compete Period ”) engage, either directly or indirectly, as a principal for its own account or solely or jointly with others, or as a stockholder in any corporation or joint stock association, in any business engaged in the Business (other than the Company). For the avoidance of doubt, without limiting the foregoing covenant, it is acknowledged and agreed that
* CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)
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neither the Triggering Party nor any of its Affiliates shall knowingly supply services, products or components for use in products or services competitive with the Business or the Products of the Company during the Non-Compete Period (other than to the Company and its Affiliates and the Non-Triggering Party).
(c) If the Non-Triggering Party exercises its option (ii) pursuant to Section 11.02(a), (A) the Intellectual Property Rights of the Company shall be distributed to the Members as joint owners of an equal undivided interest therein with no duty to account to the other party and (B) each Member shall be entitled to receive, as soon as possible and in any event within 30 days after the exercise of such option by the Non-Triggering Party, copies of source code, documentation and other materials as may be necessary to continue to develop the Products.
Section 11.03 . Breach under this Agreement or Event of Default under Supply Agreements. If a material breach of this Agreement, including without limitation any failure by a Member to pay its Required Funding Contributions when due, or an Event of Default (as defined in the Supply Agreements) on the part of the Supplier that is an Affiliate of such Member occurs and remains unremedied for a period of 30 days following notice thereof from the non-defaulting Member and is continuing, in addition to, and without prejudice to, any and all other remedies, the non-defaulting Member may, at its option, either (A) treat such default as a “Triggering Event” pursuant to Section 11.02(a) except that the non-defaulting Member shall be treated as the Non-Triggering Party and the defaulting Member shall be treated as the Triggering Party thereunder or (B) remove the two Representatives on the Committee of Representatives designated by the defaulting Member and designate two Representatives selected by the non-defaulting Member in its sole discretion to replace such removed Representatives to serve until such time as the material breach or Event of Default has been remedied by the defaulting Member. In addition to replacement of such removed Representatives, if the breach is non-payment of a Required Funding Contribution, then without limiting the non-defaulting Member’s other rights under this Agreement, (A) the non-defaulting Member shall have the right, in its sole discretion, to pay the defaulting Member’s Required Funding Contribution and (B) the non-defaulting Member’s Percentage Interest shall be increased to a percentage equal to the quotient of (x) the sum of the cumulative contributions paid by the non-defaulting Member since inception of the Company (including pursuant to this Section 11.03), divided by (y) the sum of the cumulative contributions paid by both Members (including pursuant to this Section 11.03) since inception of the Company, and the other Member’s Percentage Interest shall be reduced accordingly; provided that if the material breach by the defaulting Member is willful, occurs at any time [. . . *** . . .] and remains unremedied for a period of 30 days following notice thereof from the non-defaulting Member and is continuing, in addition to, and without prejudice to, any and all other remedies (including pursuant to the first part of this Section 11.03), the non- defaulting Member may treat such breach as a “Triggering Event” pursuant to Section 11.02(a) except that the willfully defaulting Member shall be
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treated as the Triggering Party thereunder and provided that the purchase price for the willfully defaulting Member’s Interest shall be $[. . . *** . . .], and provided further that the willfully defaulting Member shall remain liable for its share of all Required Funding Contributions for the Fiscal Year in which the breach occurs.
Section 11.04 . Change of Control. (a) Change of Control at Parent Level. If, through a transaction or series of transactions, a Member Parent of a Member is acquired by, or comes otherwise under the control of, a competitor or Major Customer of the other Member Parent, the other Member may treat such event as a “Triggering Event” pursuant to Section 11.02(a), except that such other Member shall be treated as the Non-Triggering Party and the Member whose Member Parent is affected by such event shall be treated as the Triggering Party thereunder. As used in this Section 11.04, “ Major Customer ” means, with respect to any Member Parent from time to time, a customer that (i) accounts for in excess of [. . . *** . . .]% of the consolidated revenues of such Member Parent during the preceding twelve (12) months for which financial statements are available or (ii) is of material strategic significance to the future development of the consolidated business of such Member Parent due to an expected share of such Member Parent’s consolidated revenues in excess of [. . . *** . . .]% during any twelve (12) month period within the next [. . . *** . . .] based upon the projected revenues in such Member Parent’s then current business plan, in each case as shall have been certified to the other Member Parent by the chief executive officer of such Member Parent prior to any relevant transaction.
(b) Supplier and Company Interest No Longer Affiliates. If, as a result of a transaction or series of transactions other than a Transfer of an Interest to a Permitted Transferee pursuant to Section 10.01(a), a Supplier ceases to be an Affiliate of a Member without becoming an Affiliate of a Person that, as a result of such transaction or series of transactions, Article 10, becomes a Member or an Affiliate of a Member, then the Member that was not an Affiliate of such Supplier immediately prior to such transaction or series of transactions may treat such event (a “ Triggering Separation ”) as a “Triggering Event” pursuant to Section 11.02(a), except that such Member shall be treated as the Non-Triggering Party and the other Member shall be treated as the Triggering Party thereunder.
(c) Joint Transfer of Supplier and Company Interest . Notwithstanding any other provision of this Article 11 or Article 10, any Transfer of an Interest by a Member or Member Parent, in a transaction or series of transactions, that does not result in a Triggering Separation shall be permitted at all times, whether or not to a Permitted Transferee, as long as the transferee is not a competitor or Major Customer of the Member Parent of the other Member, subject to compliance with this Section 11.04(c). In connection with any Transfer permitted under this Section 11.04(c), (x) the other Member shall have a [. . . *** . . .] with respect to the Interest and interest in or assets of the Supplier to be Transferred, and any other assets to be transferred as part of such transaction or series of transactions, such right to be exercised in the manner set forth in Section 10.02(a),
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(y) the transferring Member or Member Parent, as the case may be, and its Affiliates shall be subject to the non-compete covenant set forth in Section 11.02(b) as if the transferring Member were the Triggering Party; provided that the Non-Compete Period shall begin on the date of the [. . . *** . . .] of the Transfer and end on the [. . . *** . . .] of the [. . . *** . . .] of such [. . . *** . . .] or the [. . . *** . . .] of the [. . . *** . . .], and (z) if as a result of such Transfer Member and the Supplier are no longer Affiliates of [. . . *** . . .], the composition of the Committee of Representatives shall be modified as set forth in Section 10.02(b)(ii). The provisions of this Section 11.04(c) shall not apply to any Transfer of any direct or indirect interest in a Member that could be deemed to occur as a result of a change of control involving the relevant Member Parent.
Section 11.05 . Liquidating Events. The Company shall dissolve (and each Member agrees to vote its shares in favor such dissolution) and commence winding up upon the first to occur of any of the following events (each a “ Liquidating Event ”):
(a) upon the unanimous written agreement of the Members to dissolve and wind up the Company;
(b) any time there are no Members of the Company unless the Company is continued in accordance with applicable law;
(c) upon the exercise of the Non-Triggering Party of its option (ii) upon notice of a Triggering Event in accordance with Section 11.02(a); or
(d) the entry of a decree of judicial dissolution pursuant to applicable law.
Section 11.06 . Winding Up. Upon the occurrence of a Liquidating Event, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, distributing its Intellectual Property Rights, liquidating its assets, and satisfying the claims of its creditors and Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company’s business and affairs; provided that all covenants contained in this Agreement and obligations provided for in this Agreement shall continue to be fully binding upon the Members until such time as the assets or property or the proceeds from the sale thereof has been distributed pursuant to this Article and the Company has terminated. The Member with the greater Percentage Interest, or in the case of a Liquidating Event pursuant to Section 11.05(c), the Non-Triggering Party, shall be responsible for overseeing the winding up of the Company. Such party (the “ Liquidator ”) shall take full account of the Company’s assets and liabilities, and except as otherwise required by law, the Company’s affairs shall be wound up in an orderly manner in accordance with the following procedures:
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(a) (A) the Intellectual Property Rights of the Company shall be distributed to the Members as joint owners of an equal undivided interest therein with no duty to account to the other party and (B) each Member shall be entitled to receive, as soon as possible and in any event within 30 days after the Liquidating Event, copies of source code, documentation and other materials as may be necessary to continue to develop the Products.
(b) To the extent that the Liquidator determines that any or all of the assets of the Company (other than the Intellectual Property Rights provided for in Section 11.06(a) above) shall be sold, such assets shall be sold as promptly as possible, but in a business-like manner so as not to involve undue sacrifice, and the proceeds thereof shall be used first to satisfy any liabilities of the Company and then shall be distributed to the Members in accordance with their Percentage Interests.
Section 11.07 . Rights of Members; Resignation. (a) Except as otherwise provided in this Agreement, each Member shall look solely to the assets of the Company for the return of its capital contributions and shall have no right or power to demand or receive property other than cash from the Company.
(b) No Member shall resign from the Company prior to the dissolution and winding up of the Company in accordance with this Agreement.
Section 11.08 . Waiver of Partition. Each Member hereby irrevocably waives any and all rights that it may have pursuant to Swiss law to maintain an action for partition of any of the Company’s property, or to compel a sale thereof.
Section 12.01 . Notices. All notices, requests and other communications to any party or to the Company shall be in writing (including facsimile or similar writing) and shall be given:
if to the Company, to such address as the Company shall notify the other parties hereto as soon as possible after its formation;
if to Cymer, to:
Cymer, Inc. 17075 Thornmint Court San Diego, CA 92127-1712 USA
Attn: Chief Financial
Officer
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with a copy to:
Cooley Godward LLP Five Palo Alto Square
3000 El Camino Real
Attn: Gary H. Moore
if to Zeiss LOB, to:
Carl Zeiss Laser Optics Beteiligungsgesellschaft mbH Carl-Zeiss-Strasse 22 73447 Oberkochen, Germany Attention: Axel Jaeger Facsimile No: [. . . *** . . .] Telephone No.: [. . . *** . . .]
if to Zeiss SMT, to:
Carl Zeiss SMT AG Carl-Zeiss-Strasse 22 73447 Oberkochen, Germany Attention: Dr. Hermann Gerlinger Facsimile No: 011-49-7364-208100 Telephone No.: [. . . *** . . .]
with a copy to:
Davis Polk & Wardwell 99 Gresham Street London EC2V 7NG Attention: John W. Banes
Facsimile No:
011-44-20-7418-1055
or to such other address or facsimile number as any such party may hereafter specify for the purpose by notice to the other parties. Each such notice, request or other communication shall be effective when received at the address specified in this Section, or such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such
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notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.
Section 12.02 . Amendments; No Waivers. (a) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by each Member, or in the case of a waiver, by the Member against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 12.03 . Expenses. All costs and expenses incurred by the parties hereto in connection with this Agreement shall be paid by the party incurring such cost or expense, except that any incremental legal or administrative costs or expenses incurred by Cymer or the Company resulting from legal organization of the Company in Switzerland and described in more detail in Exhibit E shall be paid by Zeiss LOB.
Section 12.04 . Zeiss SMT [. . . *** . . .] . For so long as Zeiss LOB is controlled by Zeiss SMT, Zeiss SMT [. . . *** . . .] by Zeiss LOB of Zeiss LOB’s obligations under this Agreement.
Section 12.05 . Successors and Assigns. This Agreement is personal to the Members and may not be assigned or otherwise transferred by a Member except to a transferee of such Member’s Interest in connection with a transfer permitted by and made in accordance with the terms hereof. Any purported assignment or other transfer in violation of this Agreement shall be null and void. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. This Agreement is for the sole benefit of the parties hereto and, except as otherwise contemplated herein, nothing herein expressed or implied shall give or be construed to give any Person, other than the parties hereto, any legal or equitable rights hereunder.
Section 12.06 . Headings. Headings are for ease of reference only and shall not form a part of this Agreement.
Section 12.07 . Entire Agreement. This Agreement together, with the Exhibits hereto, and any documents referred to herein or therein, constitutes the entire agreement of the Members with respect to the subject matter hereof. Any references in this Agreement to provisions in the Exhibits to this Agreement are intended for clarification only, and in the event of any inconsistency, the provisions of the Exhibits shall govern.
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Section 12.08 . Governing Law. This Agreement shall be governed by, and construed under, the laws of [. . . *** . . .] (without regard to conflicts of laws principles).
Section 12.09 . Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 12.10 . Dispute Resolution; Arbitration. (a) Any dispute, controversy or claim arising out of or in connection with this Agreement, or any of the Joint Venture Documents, or the alleged breach, termination or invalidity thereof, may be escalated, at the request of either Member, to the Chairman of the Board (or equivalent officer) of each Member for resolution. In the event of such a request, the Chairmen shall meet, either in person or by telephone, within thirty (30) days after the date of such request in order to discuss and attempt to resolve such dispute, controversy or claim by mutual agreement.
(b) Any dispute, controversy or claim arising out of or in connection with this Agreement or the alleged breach, termination or invalidity thereof that is not settled by the dispute resolution process set forth in Section 12.10(a) or otherwise by the joint agreement of the Parties shall be finally settled under Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said Rules. Unless otherwise agreed by the Parties, such arbitration shall take place in [. . . *** . . .]. Any award rendered by the arbitrators will be final and binding on the parties, and judgment upon the award may be entered in the [. . . *** . . .], or any other court having jurisdiction over the award or having jurisdiction over the parties or their assets. The arbitration agreement contained in this Section 12.10 will not be construed to deprive any court of its jurisdiction to grant provisional relief (including by injunction or order of attachment) in aid of arbitration proceedings or enforcement of an award.
Section 12.11 . Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be deemed an original. This Agreement shall become effective only after and subject to each party having received a counterpart hereof signed by each of the other parties.
Section 12.12 . Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties
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shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
Section 12.13 . Further Assurances; Swiss Corporate Documents. The Members will execute and deliver such further instruments and do such further acts and things as may be required to carry out the intent and purpose of this Agreement. In particular, and without limiting the generality of the foregoing, each Member agrees (i) that the Company’s Articles of Association ( Statuten ) and other Swiss corporate legal documents (collectively, the “ Swiss Corporate Documents ”) shall at all times contain provisions as may be necessary or appropriate to give effect and facilitate the provisions of this Agreement, (ii) that in the event of any inconsistency between the Swiss Corporate Documents and this Agreement, this Agreement shall prevail and (iii) to take such actions with respect to its shares or in its capacity as a shareholder of the Company, including voting its shares at a shareholders meeting and adopting any changes to the Swiss Corporate Documents, all to be consistent with and in accordance with the terms of this Agreement.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the date set forth above.
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Form of Intellectual Property Agreement
Intellectual Property Agreement
dated as of
, 2005
among
Cymer, Inc.
Carl Zeiss SMT AG
and
TCZ GMBH
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TABLE OF CONTENTS
i
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ii
A-3
Intellectual Property Agreement
This Intellectual Property Agreement (this “ Agreement ”) dated as of , 2005 (the “ Effective Date ”) by and among Cymer, Inc., a Nevada corporation (“ Cymer ”) having its principal offices located at 17075 Thornmint Court, San Diego, California USA 92127, Carl Zeiss SMT AG a stock corporation organized under the laws of Germany (“ SMT ”) having its principal offices located at 73446 Oberkochen, Germany, and TCZ GmbH, a limited liability company organized under the laws of Switzerland (“ JV ”) having its principal offices located at . Cymer, SMT and JV are each a “ Party ” and together constitute the “ Parties ” to this Agreement.
RECITALS:
1. The Parties desire to collaborate to develop, integrate, market, sell and support tools employing a beam generated by an excimer laser to induce crystallization for Low Temperature of Poly-Silicon (LTPS) processing for the manufacture of flat panel displays, including LCDs, LCD-SOGs and OLEDs, to engage in related application development and any products, if any, within the scope of a Business Plan approved by JV (the “ Collaboration ”).
2. Cymer and SMT have formed JV in furtherance of the Collaboration, pursuant to an agreement dated July 15, 2005 (the “ JV Agreement ”).
3. The Parties are entering into this Agreement in order to set forth the intellectual property rights in the intellectual property created during the term of the JV and rights that will apply following the termination of the JV.
NOW, THEREFORE, in consideration of the promises and the respective representations, warranties, covenants, and agreements set forth herein, the Parties agree as follows:
Section 1.01 . Definitions. (a) The following terms shall be used in this Agreement with the following meanings. Capitalized terms not otherwise defined in this Agreement shall have the meaning set forth in the JV Agreement.
“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. As used herein, “ control ” (and the derivative terms “ controlling ” and “ controlled ”) means the direct or indirect ownership of more than fifty percent (50%) of the equity securities or other ownership interests and voting rights of,
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A-4
and the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise. No party or its Affiliates shall by reason of this Agreement be deemed to be an affiliate of the other party or its Affiliates. The term “ affiliated ” shall have a corresponding meaning. Notwithstanding the foregoing definition, when used with respect to SMT, the term “ Affiliate ” shall exclusively mean (a) SMT and any Person under the control of SMT and (b) IMT and any Person under the control of IMT. Notwithstanding the foregoing definition, for purposes of this Agreement, JV shall not be considered an Affiliate of either Cymer or SMT.
“ Background Technology ” means (i) Patents and Know-How existing prior to the commencement of the Collaboration on August 1, 2004 that are owned, licensed or otherwise controlled by a Party or its Affiliates and (ii) Patents and Know-How that are conceived, developed, licensed or otherwise brought under the control of, a Party or its Affiliates outside the Collaboration.
“ Competency(ies) ” means: with respect to Cymer and SMT, the fields specified in Exhibit A as Cymer Competencies and Zeiss Competencies, respectively; and with respect to JV, application development and systems integration with respect to the Products.
“ Continuation Event ” means (a) the exercise by the Non-Triggering Party of its option to purchase the Triggering Party’s interest in JV following a Triggering Event in accordance with the JV Agreement, (b) the exercise by a Member of its rights [. . . *** . . .] to purchase the other Member’s Interest in the JV under the JV Agreement, or (c) the Transfer by a Member of its interest in the JV to a Permitted Transferee which is not an Affiliate of such Member.
“ Continuing Party ” shall mean (a) the Non-Triggering Party as defined in the JV Agreement, (b) the Member that exercises its right [. . . *** . . .] to purchase the Interest in the JV of the other Member of the JV, or (c) the Member that retains its Interest in the JV upon the Transfer by the other Member of the JV of its Interest in the JV to a Permitted Transferee which is not an Affiliate of such Member.
“ Cymer Contributed [. . . *** . . .] ” means the [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] Cymer contributed to JV pursuant to the Contribution Agreement dated as of the date hereof as identified in Exhibit A hereto.
“ Cymer Exclusive Fields ” means those Competencies specified in Exhibit A as Cymer Competencies that are not specified in Exhibit A as Zeiss Competencies and are not specified as a JV Competency.
“ Disclosed Know-How ” means Know-How of one Party or its Affiliates that is disclosed to another Party or its Affiliates in the course of performance of the Collaboration.
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“ Exclusive Field ” means the Cymer Exclusive Field, Zeiss Exclusive Field or JV Exclusive Field, as applicable.
“ Existing Cross License Agreements ” means (i) [. . . *** . . .] and (ii) any cross-license agreement in effect as of the Effective Date between a Party or its Affiliates, on the one hand, and a third party, on the other hand.
“ Foreground Technology ” means Patents and Know-How relating to Products that are made, conceived or reduced to practice in the course of performance of the Collaboration by a Party or any of its Affiliates. Foreground Technology does not include Background Technology.
“ IMT ” means Carl Zeiss Industrielle Messtechnik GmbH, a limited liability company organized under the laws of Germany.
“ Interest ” shall have the meaning set forth in the JV Agreement.
“ JV Exclusive Field ” means those Competencies specified as JV Competencies that are not specified in Exhibit A as Zeiss Competencies or Cymer Competencies.
“ Know-How ” means information or inventions not generally known or available.
“ Member ” shall mean Cymer or SMT, or any Affiliate of Cymer or SMT who is a Member (as defined in the JV Agreement) of JV.
“ Net Sales ” means, with respect to any Party, the amount of gross sales invoiced by such party or its Affiliates to third parties (excluding any party hereto or its Affiliates) for Products, less deductions for the following items which are included in the invoiced amounts and do not exceed reasonable and customary amounts in the country in which such sale occurred: (a) returns (including withdrawals and recalls), (b) rebates, (c) volume discounts granted at the time of invoicing, (d) sales taxes, value-added taxes and other taxes directly linked and included in the gross sales amount. “ Net Sales ” shall also include the amount or fair market value of all other consideration received by a Party or its Affiliates (other than JV) with respect to Products, whether such consideration is in cash, payment in kind, exchange or another form.
“ Non-Compete Period ” shall have the meaning set forth in the JV Agreement.
“ Patents ” mean all foreign and domestic patents, utility models and patent applications (including all provisional, divisional, substitution, continuation and continuation in-part applications, and all foreign counterparts thereof).
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“ Person ” means an individual, corporation, partnership, association, trust, limited liability company or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“ Products ” means low temperature polysilicon tools for laser induced crystallization for manufacturing flat panel displays, including without limitation LCDs, SOGs and OLEDs, and any additional products listed in Exhibit B as amended from time to time by mutual agreement of the Parties.
“ Selling Party ” shall mean (a) the Triggering Party as defined in the meaning set forth in the JV Agreement, (b) the Member that sells its Interest in the JV to the other Member of the JV upon the other Member’s exercise of its right [. . . *** . . .] under the JV Agreement, or (c) the Member that Transfers its Interest in the JV to a Permitted Transferee which is not an Affiliate of such Member. If the Triggering Party under (a) or the selling or transferring Member under (b) or (c) above is [. . . *** . . .] or an Affiliate of [. . . *** . . .], then the “Selling Party” shall, for purposes of this definition, include [. . . *** . . .] and [. . . *** . . .] and their respective Affiliates.
“ Supply Agreement ” means the Supply Agreement between JV and Cymer or the Supply Agreement between JV and SMT or an Affiliate of SMT, each of even date with this Agreement.
“ Triggering Event ” shall have the meaning set forth in the JV Agreement.
“ Zeiss Exclusive Fields ” means those Competencies specified in Exhibit A as Zeiss Competencies that are not specified in Exhibit A as Cymer Competencies and are not specified as JV Competencies.
(b) Each of the following terms is defined in the Section set forth opposite such term:
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ARTICLE 2
Section 2.01 Ownership of Foreground Technology.
(a) Solely Owned Foreground Technology. Foreground Technology that is solely made, conceived and reduced to practice by the employees or contractors of one Party, or any of its respective Affiliates, and all intellectual property rights therein, shall represent “ Solely Owned Foreground Technology ” of such Party and shall be solely owned by such Party.
(b) Shared Foreground Technology . Foreground Technology that is made, conceived or reduced to practice by at least one employee or contractor of one Party or its Affiliates, on the one hand, and at least one employee or contractor of another Party or its Affiliates, on the other hand, and all intellectual property rights therein, shall represent “ Shared Foreground Technology ” and shall be owned equally by such Parties. Except for Patents contained in Shared Foreground Technology that are exclusively licensed under the provisions of Article 4 and then only to the extent limited by such exclusive license, each jointly owning Party may use Shared Foreground Technology and grant any licenses to the Shared Foreground Technology to third parties without the consent of the other Party and without any obligation to account to or share any royalties or other proceeds resulting from licenses with the other jointly owning Party.
Section 2.02. Ownership of Background Technology . Each Party and its Affiliates shall retain sole right, title and interest to its Background Technology and this Agreement shall not confer to a Party any intellectual property rights in the Background Technology of any other Party or its Affiliates. Other than as expressly provided with respect to Disclosed Know-How, no license to Background Technology is granted hereunder. Cymer and SMT each represent and warrant that, to the best of its knowledge, it and its Affiliates [. . . *** . . .] as of the Effective Date [. . . *** . . .] with claims that would be directly infringed by a tool employing a beam generated by an excimer laser to induce crystallization for Low Temperature Poly-Silicon processing for the manufacture of flat panel displays (“ Subject Tool ”) (excluding the [. . . *** . . .] to be contributed by Cymer to JV pursuant to a Contribution Agreement of even date with this Agreement) but not by a component, subassembly, or materials contained therein within the Competency of Cymer or SMT, respectively. Cymer and SMT each agree and covenant that should any Patent issue in the future on any currently pending patent applications owned or controlled by such Party or any of its Affiliates, or any continuation or divisional of any such pending patent application, that would be directly infringed by a Subject Tool made or sold by JV but not by a component, subassemply or materials contained therein within the Competency of Cymer or SMT,
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respectively, such Party will, for itself and on behalf of its Affiliates, grant to JV a world-wide, non-transferable, non-sublicensable, non-exclusive, royalty-free, perpetual, irrevocable license under such Patent to make, have made, use, import, sell and offer for sale, lease and otherwise transfer Subject Tools that would directly infringe such Patent. For the avoidance of doubt, Subject Tool does not include, and neither Party shall have any obligation to grant any license under any claim in any Patent that would be infringed by, any component, subassembly or materials used in a Subject Tool even if such component, subassembly or materials have no substantial non-infringing use other than use in a Subject Tool or would be deemed to contributorily infringe or induce infringement of a Patent covering a Subject Tool.
Section 2.03 Employees and Contractors . Each Party and its Affiliates shall have a written agreement with each employee or contractor engaged in any development activities related to and conducted as part of the Collaboration, or shall take such other or additional steps as may be necessary under applicable law, to secure ownership by such Party or its Affiliates of all Foreground Technology made, conceived or reduced to practice by its employees or contractors in the course of performance of the Collaboration. Without limiting the generality of the foregoing, any Party or its Affiliates with employees in Germany will take at its expense all steps necessary to claim full, unrestricted ownership of Foreground Technology made by its employees that may be patentable and may result in a Patent under which another Party has been granted an exclusive license under the provisions of Section 4.02, provided that such other Party undertakes to file a patent application therefor in Germany under the provisions of Section 3.01(b) or Section 3.02. Each Party or its Affiliates shall be solely responsible for payment of any remuneration payable to its employees or contractors in respect to Foreground Technology.
ARTICLE 3
Section 3.01. Prosecution of Inventions in Solely Owned Foreground Technology.
(a) The Party owning Solely Owned Foreground Technology shall be entitled, but have no obligation to file, prosecute and maintain the Patents claiming such inventions, except as otherwise provided in Section 3.01(b).
(b) With respect to any invention contained in Solely Owned Foreground Technology that may be patentable and may result in a Patent under which another Party has been granted an exclusive license under the provisions of Section 4.02 (the “ Exclusively Licensed Party ”), such Exclusively Licensed Party shall have the first right, but not the obligation, of filing, prosecuting and maintaining the Patent claiming such invention. At least forty-five (45) days prior to filing an application disclosing or claiming Solely Owned Foreground
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Technology that may be patentable and may result in a Patent exclusively licensed to another Party under Section 4.02, the owning Party will by notice request the Exclusively Licensed Party to elect whether or not it will undertake the filing, prosecuting and maintaining of such Patent.
(i) If the Exclusively Licensed Party notifies the owning Party within forty-five (45) days after such request that it elects to undertake the filing, prosecution and maintenance of such Patent, the Exclusively Licensed Party (x) shall take all commercially reasonable efforts to prepare, file, prosecute and maintain such Patent on behalf of the owning Party, and (y) shall be responsible for the expenses and attorneys fees in connection therewith, reasonably consult with the owning Party regarding such filing and prosecution efforts, keep the owning Party reasonably informed of the prosecution (including by providing copies of all patent applications, amendments and correspondence from U.S. and foreign patent offices) so as to allow the owning Party a reasonable amount of time to review such information, seek the comments of the owning Party on proposed applications, amendments, and responses to office actions and make commercially reasonable efforts to accommodate such comments of the owning Party. The owning Party shall provide the Exclusively Licensed Party with reasonable access to the inventors to assist the Exclusively Licensed Party in preparing and prosecuting such Patent.
(ii) If the Exclusively Licensed Party notifies the owning Party in writing within such forty-five (45) day period that it elects not to file such Patent or fails to respond within such forty-five (45) day period, the owning Party shall have the right, but no obligation, to proceed with the filing, prosecution and maintenance of the patent application for such invention at its own expense. If the owning Party undertakes such filing, any license to such Patent granted under Section 4.02 shall become non-exclusive.
(c) If the Exclusively Licensed Party has undertaken the filing, prosecution and maintenance of a Patent pursuant subsection (b) above, then within six (6) months from the filing of the first application for such Patent it shall notify the owning Party in writing in which additional jurisdictions the Exclusively Licensed Party intends to file, prosecute and maintain such Patent. With respect to the jurisdictions so notified to the owning Party, the Exclusively Licensed Party and the owning Party shall have the same obligations as with respect to the initial Patent filing pursuant to subsection (b)(i) above. In addition, the owning Party then shall have the right, but no obligation, to file, prosecute and maintain such Patent in any jurisdictions not so notified to it by the Exclusively Licensed Party and any license to such Patent under Section 4.02 shall become non-exclusive in such jurisdictions.
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(d) If the Exclusively Licensed Party has undertaken the filing, prosecution and maintenance of a Patent pursuant to subsection (b) or (c) above subsequently decides not to prosecute or maintain such Patent in any jurisdiction, it shall notify the owning Party of that decision in writing at least one hundred twenty (120) days before the Patent would lapse if not duly prosecuted or maintained in such jurisdiction. The owning Party then shall have the right, but no obligation, to assume such filing, prosecution or maintenance of the Patent in any such jurisdiction from the Exclusively Licensed Party at its own expense, and any license to such Patent under Section 4.02 shall become non-exclusive in any such jurisdiction in which the owning Party assumes such Patent.
Section 3.02. Prosecution of Inventions in Shared Foreground Technology.
(a) (i) With respect to each invention within Shared Foreground Technology that may be patentable, such invention shall be considered by a joint committee to be established by the Parties consisting of one representative from each Party owning such Shared Foreground Technology, which shall determine in good faith which of the owning Parties (the “ Responsible Party ”) should prosecute the Patents claiming such invention. The Responsible Party shall have the first right, but not the obligation, of filing, prosecuting and maintaining the Patents claiming such invention on behalf of the owning Parties, with expenses and attorney fees to be shared equally. At least forty-five (45) days prior to filing a patent application disclosing or claiming Shared Foreground Technology, the Responsible Party will provide the other owning Party with written notice of its intent.
(ii) If the other owning Party consents to such filing or fails to respond within such forty-five (45) day period, the Responsible Party shall reasonably consult with the other owning Party regarding such filing and prosecution efforts, keep the other owning Party reasonably informed of the prosecution (including by providing copies of all patent applications, amendments and correspondence from U.S. and foreign patent offices) so as to allow the other owning Party a reasonable amount of time to review such information, seek the comments of the other owning Party on proposed applications, amendments, and responses to office actions and make commercially reasonable efforts to accommodate such comments of the other owning Party.
(iii) If the other owning Party notifies the Responsible Party in writing within such forty-five (45) day period that it does not consent to such filing, the Responsible Party shall have the right to proceed with the filing and prosecution of one or more patent applications for such invention at its own expense and for its own benefit. If the Responsible Party undertakes such filing and prosecution, the non-consenting owning Party shall promptly assign all of its right, title and interest in and to such invention and any intellectual property rights arising therefrom to the
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Responsible Party; provided that, in such case the license granted under Section 4.02 to the non-consenting owning Party shall not apply and the Responsible Party will grant to the non-consenting owning Party and its Affiliates a worldwide, fully paid up, [. . . *** . . .], non-transferable, non-sublicensable, non-exclusive, perpetual, irrevocable license to make, have made, use, import, sell and offer for sale, lease and otherwise transfer products using such invention and using any intellectual property rights arising therefrom outside the Exclusive Field of any Party other than the non-consenting owning Party. To the extent such Patent is covered by one or more of the Existing Cross License Agreements the Responsible Party agrees to be bound by all applicable licenses, immunities, covenants and restrictions set forth in such Existing Cross License Agreements.
(b) (i) The other owning Party may request that the Responsible Party take all necessary actions to file and prosecute a patent application on any particular invention within the Shared Foreground Technology on behalf of each owning Party, or their respective Affiliates, and shall provide sixty (60) days notice prior to any critical date if possible. Upon such request, the Responsible Party shall have thirty (30) days to inform the other owning Party whether the Responsible Party will proceed with the requested filing or prosecution, or if the Responsible Party will forego the same.
(ii) If the Responsible Party elects to proceed, it shall take all commercially reasonable efforts to accomplish such filing and prosecution and proceed as set forth in Section 3.02(a). Within six (6) months of the filing of the first application for such Patent it shall notify the other owning Party in writing in which additional jurisdictions the Responsible Party intends to file, prosecute and maintain such Patent. With respect to the jurisdictions so notified by the Responsible Party, the Responsible Party and the other owning Party shall have the same obligations as with respect to the initial Patent filing.
(iii) If the Responsible Party elects not to proceed within such thirty (30) day period (or with respect to any additional jurisdictions in which the Responsible Party does not notify its intention to file, prosecute and maintain), the other owning Party shall have the right to proceed with the filing and prosecution of one or more patent applications for such invention at its own expense and for its own benefit. If the other owning Party undertakes such filing and prosecution, the Responsible Party shall promptly assign all of its right, title and interest in and to such invention and any intellectual property rights arising therefrom to the other owning Party (as a whole if the Responsible Party elects not to proceed with an initial filing or with respect to the non-notified additional jurisdictions in the case that the Responsible Party elects to proceed with an initial filing); provided that, in such case the license granted under Section 4.02 to the Responsible Party shall not apply (in all jurisdictions if the Responsible Party elects not to proceed with an initial filing or in the non-notified
* CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)
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additional jurisdictions in the case that the Responsible Party elects to proceed with an initial filing) and the other owning Party will grant to the Responsible Party and its Affiliates a worldwide, [. . . *** . . .], [. . . *** . . .], non-transferable, non-sublicensable, non-exclusive, perpetual, irrevocable license to make, have made, use, import, sell and offer for sale, lease and otherwise transfer products using such invention and using any intellectual property rights arising therefr | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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