Exhibit 10.21
PHOTRONICS TO MICRON SUPPLY AGREEMENT
THIS PHOTRONICS TO MICRON SUPPLY AGREEMENT (together with the
Schedules
attached hereto, collectively this "Agreement") is made and entered
into as of
May 5, 2006 (the "Effective Date"), by and between MICRON
TECHNOLOGY, INC., a
Delaware corporation and its Affiliates (collectively "Micron"),
and PHOTRONICS,
INC., a Connecticut corporation ("Photronics"). Micron 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 MP Mask Technology Center, LLC, of the same Effective Date
herewith, by and
between Micron and Photronics (the "Operating Agreement"), the
Parties have
formed MP Mask Technology Center, LLC (the "Company") for the
purpose of
developing, producing and manufacturing photomasks and prototypes
for
photomasks;
WHEREAS, the Parties have entered into a Technology License
Agreement
of the same Effective Date herewith, under which the necessary
technology has
been licensed to the Company and Photronics (as defined below) in
order for such
Parties to fulfill their obligations under this Agreement;
WHEREAS, the Company and Photronics have entered into a separate
supply
agreement of even Effective Date herewith, which details the terms
under which
Photronics will purchase Products manufactured by the Company;
and
WHEREAS, the Parties desire to enter into this Agreement to
establish
the terms under which Micron shall purchase Products from
Photronics;
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 "Capacity" shall have the meaning set forth in Section 2.7.
1.2 "Capacity Commitment" shall have the meaning set forth in
Section
2.7.
1.3 "Copy Critical" shall have the meaning set forth in the
Technology
License Agreement.
1.4 "Copy Exact" shall have the meaning set forth in the
Technology
License Agreement.
1.5 "Copy Exact Photronics Facility" shall have the meaning for
a
Photronics Facility that is Copy Exact, each as defined in the
Technology
License Agreement.
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1.6 "Cost" shall have the meaning set forth in Schedule 5.1.
1.7 "Dead-on-Arrival" shall mean any Product that is discovered
to
contain a Material Defect within thirty (30) calendar days after
receipt of
shipment of the Product.
1.8 "Entity" means a corporation, partnership, limited
liability
company, unincorporated organization, business association, firm,
joint venture
or other legal entity.
1.9 "Fiscal Month" shall mean a fiscal month of Micron.
1.10 "Fiscal Quarter" shall mean a fiscal quarter of Micron.
1.11 "Fiscal Year" shall mean a fiscal year of Micron.
1.12 "Forecast" shall have the meaning set forth in Section
2.5.
1.13 "Intellectual Property Right" shall have the meaning set forth
in
the Technology License Agreement.
1.14 "Licensed Technology" shall have the meaning set forth in
the
Technology License Agreement.
1.15 "Loading Failure Margin" shall have the meaning set forth
in
Section 2.4.
1.16 "Loading Percentage" shall mean [****].
1.17 "Loading Requirement" shall mean [****].
1.18 "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.
1.19 "Maximum Capacity Commitment" shall have the meaning set forth
in
Section 2.7.
1.20 "Micron Supply Agreement" shall mean the Micron Direct
Supply
Agreement of the same Effective Date herewith, by and between
Micron and the
Company.
1.21 "New Photronics Facility" shall have the meaning set forth in
the
Technology License Agreement.
1.22 "New Photronics Facility Lease" shall mean the Build to Suit
Lease
of the same Effective Date herewith by and between Micron and
Photronics
relating to the New Photronics Facility.
1.23 "Next Quarter Forecast" shall have the meaning set forth
in
Section 2.5.
1.24 "Photronics Facility" shall mean (i) a facility that directly,
or
indirectly through one or more intermediaries, is at least ninety
percent (90%)
owned by Photronics unless otherwise agreed upon by Micron in
writing on a
case-by-case basis or (ii) [Photronics Semiconductor Mask
Corporation (Taiwan)
("PSMC"), provided that Photronics' direct or
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>
indirect ownership of PSMC at all times is greater than 50% and no
company that
makes or sells Competing Products owns any ownership interest in
PSMC.
1.25 "Photronics Supply Agreement" shall mean the Supply Agreement
of
the same effective date herewith, by and among Photronics and the
Company.
1.26 "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.
1.27 "Process Node" shall have the meaning set forth in the
Technology
License Agreement.
1.28 "Purchase Order" shall mean a written purchase order or
blanket
purchase order that is delivered to Photronics in accordance with
Section 3.2.
1.29 "Qualified" shall have the meaning set forth in the
Technology
License Agreement.
1.30 "Qualified Product(s)" shall have the meaning set forth in
Section
2.7.
1.31 "Specifications" shall mean the specifications provided by
Micron
to Photronics for each Product in accordance with Micron's
photomask ordering
procedures and node requirements.
1.32 "Technology License Agreement" shall mean the Technology
License
Agreement of the same effective date herewith, by and among Micron,
Photronics
and the Company.
1.33 "Warranty Period" shall have the meaning set forth in Section
6.1.
2. PURCHASES; MANUFACTURE AND SUPPLY; PRODUCT TRANSITION;
FORECASTS
2.1 Micron Purchases. Micron shall purchase Products from
Photronics in
accordance with the terms and conditions of this Agreement.
[****].
2.2 Photronics Manufacture and Supply of Product. Photronics
shall
accept Purchase Orders from Micron for Product and shall either
manufacture
Product at a Micron Qualified Photronics Facility or subcontract
the manufacture
of such Product to the Company pursuant to the terms of the
Photronics Supply
Agreement. [****].
2.3 Photronics Manufacturing Approach. [****].
2.4 Loading Requirement. Photronics shall maintain the Loading
Requirement at all times during the Term, as measured on the basis
of orders or
releases thereto, as applicable, placed each Fiscal Month, so as to
ensure the
most efficient and cost effective utilization of the Company.
2.5 Forecasts. [****].
2.6 Micron Purchase Commitment. [****].
3
**** 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>
2.7 [****].
3. PURCHASE ORDERS
3.1 Purchase Orders. Micron shall purchase Products from Photronics
by
issuing a Purchase Order or a release to a blanket Purchase Order
that
references this Agreement. Micron and Photronics agree that a
Purchase Order
sent to Photronics by confirmed facsimile or electronic
transmission shall
constitute a writing for all legal purposes. All Purchase Orders
submitted to
Photronics 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. For Micron's orders from
Photronics Facilities, Photronics shall notify Micron of the
receipt and
acceptance of a Purchase Order or releases thereto 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
Photronics during such period shall be deemed accepted hereunder.
Photronics may
not reject a Purchase Order or release issued in compliance with
this Agreement
and seeking delivery of Products within established lead times and
the
Forecasted amounts (subject to the Maximum Capacity Commitment, if
applicable).
3.3 Revision of Purchase Orders. Micron shall have the right,
without
charge, to issue change orders to Purchase Orders by providing
written notice to
Photronics prior to the beginning of the production of the Product
impacted by
such change order. Photronics shall use all commercially reasonable
efforts to
accommodate Micron's revised Purchase Order in accordance with the
lead times in
effect at the time the Purchase Order change is requested.
3.4 Cancellations. Micron may cancel all or any part of a
Purchase
Order, without charge, by providing written notice to Photronics
prior to the
beginning of the production of the Product impacted by such
cancellation.
[****].
3.5 Reschedules. Micron may reschedule the delivery of any
Purchase
Order or portion thereof for Products, without charge, upon notice
to
Photronics.
4. SHIPPING; DELIVERY; ACCEPTANCE
4.1 Packaging Requirements. All shipments shall be in packaging
that
complies with Micron's packaging requirements provided to
Photronics and the
Specifications. In addition, all 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. Photronics 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. Photronics' liability for delivery shall cease and
title
and all risk of loss or damage shall transfer to Micron when
Product is
delivered to Micron's designated receiving facility as specified in
the Purchase
Order. Micron shall be the importer of record
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>
and pay all related duties, fees and charges. Photronics shall
immediately
notify Micron 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
Micron
to be Dead-on-Arrival, Photronics shall use reasonable efforts
consistent with
the Company's practices to ship, at Photronics' sole expense, a
replacement
Product to the site designated by Micron within fourteen (14)
business days of
receipt of notice from Micron, and 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 Micron from Photronics shall be as set forth in
Schedule 5.1.
5.2 Payments Terms. Photronics shall issue and deliver an invoice
to
Micron for any amounts payable to Photronics pursuant to this
Agreement. [****].
Unless otherwise agreed by the Parties, payments for Products
delivered in
accordance with Section 4, and any other payments required
hereunder, shall be
made within thirty (30) days after the receipt of final invoice.
Payment does
not constitute acceptance. In no event shall Photronics deliver an
invoice
before shipping the Products to which such invoice relates.
Photronics may
suspend performance hereunder if Micron fails to make any material
overdue and
undisputed payments hereunder within thirty (30) days after receipt
of written
notice from Photronics that such payment is overdue.
5.3 Taxes. All amounts payable for Product sold by Photronics to
Micron
hereunder are exclusive of any taxes. Micron 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 Micron under this Agreement, excluding any taxes
based on
Photronics' 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 Micron's request from time to
time
(not to exceed two (2) times per year), Micron shall, upon
reasonable advance
notice to Photronics, have the right to have an independent auditor
reasonably
acceptable to Photronics perform an audit of Photronics' books and
records to
verify Photronics' compliance with the terms and conditions of this
Agreement,
[****]. In the event an audit reveals an overpayment by Micron,
Photronics shall
immediately issue a refund to Micron for any such overpayment. Any
audit
performed hereunder shall be performed in a manner that does not
unreasonably
interfere with Photronics' business and ensures compliance with all
Applicable
Laws and confidentiality requirements.
5.5 Inspection and Audit of Photronics Facilities. Upon
Micron's
reasonable advance request from time to time, Micron shall have the
right to
perform a reasonable inspection and audit of Photronics' facilities
used to
manufacture Product hereunder, as necessary to verify that the
manufacturing
facilities are Qualified in respect of any part type family or
Process Node. In
the event an inspection of a Photronics' Facility reveals any
deficiency in
meeting Micron's Specifications and requirements or any other
failure to be
Qualified, Photronics shall promptly take action to remedy such
deficiency.
5
**** 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>
6. WARRANTIES
6.1 Product Warra
