Exhibit 10.22
COMPANY TO PHOTRONICS SUPPLY AGREEMENT
THIS COMPANY TO PHOTRONICS SUPPLY AGREEMENT is made and entered
into as
of May 5, 2006 (the "Effective Date"), by and between MP Mask
Technology Center,
LLC, a Delaware limited liability company (the "Company"), and
Photronics, Inc.,
a Connecticut corporation ("Photronics"). The Company and
Photronics are
hereinafter collectively referred to as the "Parties" and
individually as a
"Party."
RECITALS
WHEREAS, pursuant to the Limited Liability Company Operating
Agreement
of the Company of the same Effective Date herewith (the "Operating
Agreement"),
by and between Micron Technology, Inc. ("Micron") and Photronics,
Micron and
Photronics have formed the Company for the purpose of developing,
producing and
manufacturing photomasks and prototypes for photomasks
("Products");
WHEREAS, Micron and Photronics have entered into a technology
license
agreement of the same Effective Date herewith (the "Technology
License
Agreement"), under which the necessary technology has been licensed
to the
Company in order for it to fulfill its obligations under this
Agreement;
WHEREAS, Micron and Photronics have entered into a separate
supply
agreement of the same Effective Date herewith (the "Photronics to
Micron Supply
Agreement"), which details the terms under which Photronics will
supply to
Micron the products it has purchased from the Company under this
Agreement; and
WHEREAS, Photronics and the Company desire to enter into this
Agreement
so that Photronics may purchase the products manufactured by the
Company;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and other terms and conditions contained
herein, the
Parties hereby agree as follows:
1. DEFINITIONS; INTERPRETATION
For purposes of this Agreement, the definitions set forth in
this
Section 1 shall apply to the respective capitalized terms. All
capitalized terms
not defined herein shall have the meaning set forth in the
Operating Agreement.
1.1 "Company Location" shall mean the Company's photomask
production
facility located at [****].
1.2 "Cost" shall have the meaning set forth in Schedule 5.1
1.3 "Dead-on-Arrival" shall mean any Products that are discovered
to
contain a Material Defect within thirty (30) calendar days after
receipt of
shipment of the Product.
1.4
"Entity" means a corporation, partnership, limited liability
company, unincorporated organization, business association, firm,
joint venture
or other legal entity.
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**** Material omitted pursuant to a request for confidential
treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed separately
with the
Securities and Exchange Commission.
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1.5 "Fiscal Month" shall mean a fiscal month of Micron.
1.6 "Fiscal Quarter" shall mean a fiscal quarter of Micron.
1.7 "Loading Requirement" shall have the meaning defined in the
Photronics to Micron Supply Agreement.
1.8 "Material Defect" shall mean any malfunction, error or other
defect
in a Product that constitutes a material nonconformity with the
Specifications
for such Product under conditions of normal and proper use.
1.9 "Micron Supply Agreement" shall mean the Company to Micron
Supply
Agreement of the same Effective Date herewith, by and between
Micron and the
Company.
1.10 "Micron's Specifications" shall mean the specifications
provided
by Micron for each Product in accordance with Micron's photomask
ordering
procedures and node requirements.
1.11 "Product" or "Products" means photomasks and photomask
prototypes
that are to be manufactured by the Company or Photronics in
accordance with
Micron's Specifications and requirements or in accordance with a
Photronics'
customer's specifications and requirements, as applicable.
1.12
"Purchase Order" shall mean a written purchase order that is
delivered to the Company in accordance with Section 3.2.
1.13 "Qualified" shall have the meaning set forth in the
Technology
License Agreement.
1.14 "Specifications" shall mean the specifications provided by
Photronics to the Company for each Product in accordance with
Photronics'
photomask ordering procedures and node requirements.
1.15 "Technology License Agreement" shall mean the Technology
License
Agreement of the same effective date herewith, by and among Micron,
Photronics
and the Company.
2. PURCHASES; MANUFACTURE AND SUPPLY; FORECASTS
2.1 Photronics Purchases. Photronics shall purchase Products from
the
Company in accordance with the terms and conditions of this
Agreement. Subject
to the terms of this Agreement and the Operating Agreement,
Photronics may
subcontract to the Company the manufacture of Product for which it
has received
purchase orders (x) from Micron pursuant to the Photronics to
Micron Supply
Agreement and (y) from other customers of Photronics, and will
purchase Product
manufactured by the Company at the purchase price set forth in
Section 5.1.
2.2 Company Manufacture and Supply of Product; Micron Purchases.
Except
as set forth in this paragraph, the Photronics to Micron Supply
Agreement and
the Micron Supply Agreement, the Company shall sell Product to
Photronics for
resale to Micron and other customers of Photronics and shall not
sell Products
manufactured by the
2
**** Material omitted pursuant to a request for confidential
treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed separately
with the
Securities and Exchange Commission.
<PAGE>
Company directly to Micron. In addition, in the event Photronics is
(i) in
default of any of its material obligations under any of the
Transaction
Documents, or (ii) unable, unwilling or otherwise fails, for any or
no reason,
to become or remain Qualified with respect to any Product, then
notwithstanding
any other provision herein or in the Photronics to Micron Supply
Agreement,
Micron may purchase Products directly from the Company, at the
Company's actual
documented cost and in accordance with the terms of this Agreement,
until
Photronics (a) cures any default hereunder or (b) demonstrates, to
Micron's
reasonable satisfaction, that it can and does meet Micron's
specified
qualification requirements with respect to Products, as
applicable.
2.3 Forecasts. [****].
2.4 Capacity Commitment. [****].
3. PURCHASE ORDERS
3.1 Purchase Orders. Photronics shall purchase Products from
the
Company by issuing a Purchase Order or a release to a blanket
Purchase Order
that references this Agreement. Photronics and the Company agree
that a Purchase
Order sent to the Company by confirmed facsimile or electronic
transmission
shall constitute a writing for all legal purposes. All Purchase
Orders submitted
to the Company shall be governed by the terms of this Agreement.
Nothing
contained in any Purchase Order or the Parties' other documents of
purchase or
sale shall in any way modify the terms of purchase or add any
additional terms
or conditions except as specifically agreed in writing by the
parties.
3.2 Acknowledgment of Purchase Orders. The Company shall notify
Photronics of the receipt and acceptance of a Purchase Order and of
the accepted
delivery date for accepted orders within two (2) business days
after receipt of
the Purchase Order and any Purchase Order not specifically rejected
in writing
by the Company during such period shall be deemed accepted
hereunder. The
Company may not reject a Purchase Order or release issued in
compliance with
this Agreement and seeking delivery of Products within Forecasted
amounts and
established lead times.
3.3 Revision of Purchase Orders. Photronics shall have the
right,
without charge, to issue change orders to Purchase Orders by
providing written
notice to the Company prior to the beginning of the production of
the Product
impacted by such change order. The Company shall use all
commercially reasonable
efforts to accommodate Photronics' revised Purchase Order in
accordance with the
Company's lead times in effect at the time the Purchase Order
change is
requested.
3.4 Cancellations. [****].
3.5 Reschedules. Photronics may reschedule the delivery of any
Purchase
Order or portion thereof for Products, without charge upon notice
to the
Company.
4. SHIPPING; DELIVERY; ACCEPTANCE
4.1 Packaging Requirements. All shipments shall be in packaging
that
complies with the Specifications and, if applicable, Micron's
packaging
requirements. In addition, all
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**** Material omitted pursuant to a request for confidential
treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed separately
with the
Securities and Exchange Commission.
<PAGE>
shipments shall be accompanied by a detailed packing list which
will reference
the Products, Purchase Order number, and the quantity in each
shipment covered
by the packing list.
4.2 Shipping. The Company shall ensure that Product orders are
delivered on the applicable delivery date(s). Orders will be
shipped to the
delivery address set forth in the applicable Purchase Order.
4.3 Delivery. The Company's liability for delivery shall cease
and
title and all risk of loss or damage shall transfer to Photronics
when the
Product is delivered to Photronics' or its customer's designated
receiving
facility, as specified in the Purchase Order. Photronics or its
customer shall
be the importer of record and pay all related duties, fees and
charges. The
Company shall immediately notify Photronics in writing of any
anticipated delay
in meeting the delivery schedule, stating the reasons for the
delay. No shipment
will be deemed complete until all ordered units have been
delivered.
4.4 Dead on Arrival. In the event that any Product is found by
Photronics or Micron to be Dead-on-Arrival, the Company shall use
reasonable
efforts consistent with the Company's practices to ship, at the
Company's sole
expense, a replacement Product to the site designated by Photronics
or Micron
within fourteen (14) business days of receipt of notice from
Photronics or
Micron and Photronics or Micron shall return the Dead-on-Arrival
Product in
accordance with the Product return procedures described under
Section 6.2.
5. PRICE; PAYMENTS; TAXES; AUDIT
5.1 Purchase Price for Products. The purchase price for each
Product
purchased by Photronics from the Company shall be the Company's
cost of the
Product as set forth in Schedule 5.1.
5.2 Payments Terms. The Company shall provide an invoice to
Photronics
with an estimated price upon the shipment of Product hereunder.
Each such
invoice shall specify the Purchase Order for each Product and the
estimated
price per photomask. After each Fiscal Month end, the Company shall
provide
Photronics with a final invoice and Photronics' payment obligation
shall be
calculated from the date of Photronics' receipt of such invoice.
Unless
otherwise agreed by the Parties, payments for Product delivered in
accordance
with Section 4, and any other payments required hereunder, shall be
made within
thirty (30) days after the receipt of the final invoice. Payment
does not
constitute acceptance. In no event shall the Company deliver an
invoice before
shipping the Products to which such invoice relates. All amounts
payable by
Photronics to the Company shall be paid in U.S. Dollars.
5.3 Taxes. All amounts payable for Product sold by the Company
to
Photronics hereunder are exclusive of any taxes. Photronics shall
be responsible
for and shall pay any applicable sales, use, excise or similar
taxes, including
value added taxes and customs duties due on the importation of
Products and
arising from purchases made by Photronics under this Agreement,
excluding any
taxes based on the Company's income. All such taxes shall be
determined based
upon the final shipment designation of the items identified on the
invoice.
5.4 Audit of Books and Records. Upon Photronics' request from time
to
time (not to exceed two (2) times per year), Photronics shall have
the right to
perform an audit of
4
**** Material omitted pursuant to a request for confidential
treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed separately
with the
Securities and Exchange Commission.
<PAGE>
the Company's books and records to verify its compliance with the
terms and
conditions of this Agreement. In the event an audit reveals
