EXHIBIT 10.5
S017.08.02
AMENDED AND RESTATED
ADVANCE PAYMENT AGREEMENT
AREAS MARKED "***" REPRESENT SECTIONS FOR WHICH CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED. THESE OMITTED SECTIONS HAVE BEEN FILED SEPARATELY WITH THE
COMMISSION.
THIS AMENDED AND RESTATED ADVANCE PAYMENT AGREEMENT (this "Agreement"), is
entered into as of December 12, 1997, by and between SEIKO EPSON CORPORATION,
a Japanese corporation having its principal place of business at 3-5, Owa
3-chome, ▇▇▇▇-▇▇▇, ▇▇▇▇▇▇-▇▇▇ ▇▇▇, ▇▇▇▇▇ ("Epson"), Xilinx, Inc., a Delaware
corporation having its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇. ("Xilinx US"), and Xilinx Ireland, a company formed
under the laws of Ireland, having its principal place of business at Logic
Drive, City West Business Campus, Saggart, Dublin, Ireland ("Xilinx Ireland").
Xilinx US and Xilinx Ireland are collectively referred to herein as "Xilinx".
1 Background
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1.1 Epson. Epson is in the business of designing, manufacturing, testing
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and selling semiconductor devices, among other products. Epson manufactures
such semiconductor devices at its plant located at 281 Fujimi, ▇▇▇▇▇▇-▇▇▇▇▇,
▇▇▇▇-▇▇▇, ▇▇▇▇▇▇-▇▇▇ ▇▇▇-▇▇, ▇▇▇▇▇ (the "Fujimi Facility") and its plant
located at 166-3 Jurizuka, ▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇▇-▇▇▇ ▇▇▇-▇▇, ▇▇▇▇▇ (the "Sakata
Facility").
1.2 Xilinx. Xilinx is in the business of designing, developing and
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marketing CMOS programmable logic devices and related development system
software.
1.3 Prior Agreement. Epson and Xilinx US have an ongoing business
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relationship whereby Epson fabricates semiconductor devices for Xilinx US. The
parties entered into an advance payment agreement dated April 1, 1994 for
development and manufacture of ***. The parties desired to expand their
relationship. Specifically, Xilinx desires to develop and sell high
performance, advanced architecture semiconductor devices and Epson desires to
construct a *** process line in order to fabricate such semiconductor devices
(as hereinafter further defined the "New Facility Wafers"). Accordingly, Epson
and Xilinx US entered into an Advance Payment Agreement dated as of May 17,
1996 (the "Prior Agreement") which provided that, among other things, Xilinx
US would advance money to Epson as an advance payment to be used as a credit
to purchase New Facility Wafers from Epson over a specified period of time.
1.4 Prior Ireland Agreement. Epson and Xilinx Ireland entered into an
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Agreement on Purchase and Sale of *** dated as of May 17, 1996 (the "Prior
Ireland Agreement") which provided that, among other things, Xilinx Ireland
would purchase a specified number of New Facility Wafers from Epson over a
specified period of time.
1.5 Amended Agreement. The parties have agreed to amend certain terms of
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the Prior Agreement pursuant to the terms hereof. This Amended and Restated
Agreement amends the Prior Agreement, and shall be a replacement for, and not
in addition to, the Prior Agreement. Except as may be otherwise noted, all
references to the Prior Agreement shall be deemed to refer to this Agreement.
Effective on the date of this Agreement, the Prior Ireland Agreement shall be
deemed terminated and void for all purposes.
1.6 Purchase Agreement. The ordering, fabrication, testing and delivery
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requirements for the New Facility Wafers covered by this Agreement will be set
forth in a purchase agreement between Xilinx and Epson (as hereafter further
defined the "Purchase Agreement"). The parties acknowledge and agree that even
though their obligations with respect to the quantity of the Products sold and
purchased under this Advance Payment Agreement are stipulated in terms of
"wafers", pricing of all Products will be done on a "good die basis" under the
Purchase Agreement.
1.7 Responsibility for Process. The parties agree that each party will
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contribute to the design and implementation of the process line contemplated
by this Agreement. Epson expects significant contributions from Xilinx in the
construction of the *** process line described above, similar to Xilinx's
contributions to previous process generations, and Xilinx expects to be able
to make significant contributions to the process in order to optimize the
processes for Xilinx products.
2 Definitions
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2.1 "***" will have the meaning ascribed to it in Article 1.3, provided
that the term shall not refer to or include *** products.
2.2 "Advance Payment" will mean the One Hundred Fifty Million U.S. Dollar
(US$150,000,000) payment to be made by Xilinx to Epson in the manner described
in Article 4.1.
2.3 "Equipment" will mean the semiconductor fabrication equipment that
Epson will install in the New Facility for purposes of fabricating New
Facility Wafers.
2.4 "Existing Agreements" will mean those contracts for the development,
fabrication, testing and/or sale of semiconductor devices between Epson and
Xilinx in effect as of the date of this Agreement, but not including the Prior
Agreement.
2.5 "***" will have the meaning ascribed to it in Article 6.8.
2.6 "Fujimi Facility" will have the meaning ascribed to it in Article 1.1.
2.7 "New Facility" will mean the *** process line constructed at the Site
using the Equipment.
2.8 "New Facility Wafers" will mean the semiconductor wafers fabricated by
Epson for Xilinx at the New Facility. The parties agree that New Facility
Wafers will consist of high performance, advanced architecture semiconductor
devices. The parties do not intend that the New Facility will be used to
fabricate low performance, less advanced architecture semiconductor devices.
2.9 "Price" will have the meaning ascribed to it in Article 9.1.
2.10 "Products" will mean those specific types of New Facility Wafers and
*** Wafers fabricated using the same masks and the same process flow and
identified by the same series or product name or number. The Products will be
ordered, fabricated, delivered and sold pursuant to the terms and conditions
of Purchase Agreement(s). Those Products which the parties desire to fabricate
at the New Facility will be negotiated and agreed by and between Epson and
Xilinx, referring to the Technology Road Map attached hereto as Exhibit B,
which may be reviewed and amended from time to time by mutual agreement of the
parties. The parties acknowledge, however, that the final determination of
what Products will be fabricated may depend on the results of joint
development and product qualification.
2.11 "Projected Completion Schedule" will have the meaning ascribed to it
in Article 3.1.2.
2.12 "Purchase Agreement(s)" will mean the agreement(s) by and between
Epson and Xilinx pursuant to which Epson agrees to sell and Xilinx agrees to
purchase the Products, and the terms of which shall be negotiated and agreed
by and between the parties after the execution of this Agreement.
2.13 "Sakata Facility" will have the meaning ascribed to it in Article 1.1.
2.14 "Site" will mean that portion of the Sakata Facility where the New
Facility will be constructed.
2.15 "Subsidiary" will mean any corporation, partnership, joint venture or
other legal entity which agrees in writing to be bound by the terms and
conditions of this Agreement and more than fifty percent (50%) of whose
ownership rights are controlled directly or indirectly by Epson or Xilinx, as
the case may be, but only so long as such control exists.
2.16 "***" will mean the *** process owned, licensed or developed by Epson
which will be used at the New Facility. The *** Process will include (a) all
process flow, process steps, process conditions (and modifications thereto)
used to manufacture semiconductor wafers at the New Facility as well as (b)
all methods, formulae, procedures, technology and know-how associated with
such process steps and process conditions. The *** Process will not include
any methods, formulae, procedures, technology or know-how licensed or received
from Xilinx under this Agreement, the Existing Agreements or other agreements
executed between the parties in the future unless otherwise agreed in writing.
If the parties find it necessary or convenient to document process flow for
any Product, such documentation will be signed by the parties and attached to
the appropriate Purchase Agreement as an exhibit.
3 Construction of New Facility
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3.1 Construction and Operation of the New Facility
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3.1.1 Location and Costs. Epson hereby agrees, subject to its receipt of
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the full amount of the Advance Payment as provided in Article 4.1, to
construct the New Facility at the Site and to install the Equipment therein.
3.1.2 Completion Schedule. The projected completion schedule for the
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construction of the New Facility (the "Projected Completion Schedule") is set
forth in Exhibit A attached hereto. In the event Epson has reason to believe
that any item in the Projected Completion Schedule designated as a
Construction Milestone will be delayed by more than thirty (30) calendar days,
Epson will promptly notify Xilinx in writing and (a) explain the reason for
the delay, (b) describe the estimated amount of time that construction will be
delayed and (c) describe the action that Epson will take to minimize the
delay.
3.1.3 Business Interruption Insurance. Epson will use its best efforts to
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obtain business interruption insurance coverage for the New Facility once the
construction of the New Facility is complete. The insurance will cover at
least such risks as are usually insured against by companies engaged in the
manufacture of semiconductor devices in Japan. Epson will maintain such
business interruption insurance coverage during the term of this Agreement.
Epson will furnish to Xilinx, upon written request, full information
concerning the business interruption insurance coverage.
3.1.4 First Shipment Delay. For every month that production shipment of
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New Facility Wafers is delayed beyond *** as specified in Exhibit A, Epson
shall, in addition to the *** as prescribed in Article 6.8 hereof, provide
additional ***.
3.1.5 Design Requirements. Epson acknowledges that Xilinx's insurers have
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set forth certain safety and security requirements for semiconductor
fabrication facilities, and Epson agrees to work with Xilinx to incorporate
such requirements into the design of the New Facility to the extent reasonably
requested by Xilinx and commercially feasible.
3.2 Representations of Epson. In order to induce Xilinx to enter into this
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Agreement and to make the Advance Payment hereunder, Epson hereby represents
and warrants that:
3.2.1 Corporate Status. Epson (a) is duly organized, validly existing and
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in good standing under the laws of the jurisdiction of its incorporation, (b)
has the corporate power to own or lease its assets and to transact the
business in which it is currently engaged and (c) is in compliance with all
requirements of law except to the extent that the failure to comply therewith
will not materially affect the ability of Epson to perform its obligations
under this Agreement.
3.2.2 Corporate Authority. (a) Epson has the corporate power, authority
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and legal right to execute, deliver and perform this Agreement and has taken
as of the date hereof all necessary corporate action to execute this
Agreement, (b) the person executing this Agreement has actual authority to do
so on behalf of Epson and (c) there are no outstanding assignments, grants,
licenses, encumbrances, obligations or agreements, either written, oral or
implied, that prohibit execution of this Agreement.
3.2.3 Ownership of the Site. Epson has such right, title and interest in
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and to the Site and the structures located thereon as is required to permit
the operation of the Site as currently conducted and contemplated to be
conducted under this Agreement.
3.3 Representations of Xilinx. In order to induce Epson to enter into this
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Agreement and to make the Supply Commitment, Xilinx hereby represents and
warrants that:
3.3.1 Corporate Status. Xilinx is duly organized, validly existing and in
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good standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate power to own or lease its assets and to transact the business in
which it is currently engaged and (c) is in compliance with all requirements
of law except to the extent that the failure to comply therewith will not
materially affect the ability of Xilinx to perform its obligations under this
Agreement.
3.3.2 Corporate Authority. (a) Xilinx has the corporate power, authority
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and legal right to execute, deliver and perform this Agreement and has taken
as of the date hereof all necessary corporate action to execute this
Agreement, (b) the person executing this Agreement has actual authority to do
so on behalf of Xilinx and (c) there are no outstanding assignments, grants,
licenses, encumbrances, obligations or agreements, either written, oral or
implied, that prohibit execution of this Agreement.
4 Advance Payment
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4.1 Advance Payment. Xilinx shall pay to Epson an amount equal to One
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Hundred Fifty Million U.S. Dollars (US$150,000,000) (the "Advance Payment"),
which Advance Payment will be credited against certain future purchases by
Xilinx of Products as provided in Article 5. The Advance Payment has been and
will be made in the following installments, and the parties agree that all
payments are current:
a) First installment of Thirty Million U.S. Dollars (US$30,000,000) by May
28, 1996 or such later date, which may be designated in writing by Epson.
b) Second installment of Thirty Million U.S. Dollars (US$30,000,000) by
November 1, 1996.
c) Third installment of Thirty Million U.S. Dollars (US$30,000,000) by May
1, 1997. Fourth installment of Thirty Million U.S. Dollars (US$30,000,000) by
November 1, 1997 or installment and acceptance of the first wafer stepper, as
part of Equipment, whichever is later.
d) Fifth installment of Thirty Million U.S. Dollars (US$30,000,000) by
February 1, 1998 or mass production start, whichever is later.
4.2 Payment Method. All payments made by Xilinx to Epson will be in
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immediately available funds and will be made by wire transfer in U.S. Dollars
to a bank account designated by Epson.
4.3 Separate Accounts. Xilinx US will make the first, second and third
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installments, together with Twenty Two Million Five Hundred Thousand U.S.
Dollars (US$22,500,000) of the fourth installment. Xilinx Ireland make the
fifth installment, together with Seven Million Five Hundred Thousand U.S.
Dollars (US$7,500,000) of the fourth installment. Epson will maintain
separate balances for all payments, Wafer orders and *** made by or due to
each of Xilinx US and Xilinx Ireland. Orders made by Xilinx US shall be
offset only against payments made by Xilinx US, and orders made by Xilinx
Ireland shall be offset only against payments made by Xilinx Ireland.
4.4 Non-Refund of Advance Payment. The Advance Payment will not be
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refundable except as provided in Articles 6.7.1 or 14.4.
5 Application of Advance Payment
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5.1 Purchase of Products. The Purchase price of all Products purchased by
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Xilinx as determined in accordance with Article 9.1 will be credited against
the amount of the Advance Payment until the aggregate dollar value of all
Products purchased, calculated pursuant to Article 5.2, equals or exceeds the
amount of the Advance Payment.
5.2 Calculation of Aggregate Value of Wafers Purchased. The Advance
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Payment will be offset and reduced at the end of each calendar month in the
manner set forth in Exhibit D attached hereto.
5.3 Timing. Xilinx shall have the right to credit the Advance Payment
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against all New Facility Wafers purchased under this Agreement, commencing at
such time as Epson is able to deliver such New Facility Wafers to Xilinx.
Notwithstanding anything to the contrary in this Agreement, however, Xilinx
shall not have the right to credit the Advance Payment against purchases of
*** Wafers until shipments of *** Wafers on and after ***.
5.4 Obligations After the Completion of Off-setting the Advance Payment.
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Xilinx will be required to pay for any Products ordered in accordance with the
Purchase Agreement once the Advance Payment has been fully offset and reduced.
Xilinx will make the payments to Epson in U.S. Dollars based on the Price.
6 Forecasts; Purchase Orders; Supply Commitment
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6.1 Forecasting. On or before the 25th of each month during the term of
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this Agreement, Xilinx shall provide Epson with a six (6) month rolling
forecast which will set forth the estimated quantity of Products to be
fabricated by Epson pursuant to the Purchase Orders from Xilinx. The forecast
shall be provided by Xilinx only for forecasting purposes and shall not bind
either party legally except as may otherwise be expressly set forth in this
Agreement. Each month, Epson shall review any changes in the new 6-month
forecast, and determine in good faith whether such changes are acceptable.
Xilinx agrees to try to minimize fluctuations in its forecast for the first
two months of each forecast.
6.2 Business Meetings; Long-range Forecasts. The parties shall attempt to
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hold business meetings to discuss issues arising under this Agreement
quarterly, but in no event less than three times annually. At each such
meeting, Xilinx shall provide Epson with a two (2) year forecast setting forth
the estimated quantity of Products to be fabricated by Epson, and Epson will
provide Xilinx with a two (2) year forecast of its capacity plan by facility
and by process. In addition, Xilinx will provide Epson with its tape-out plans
for forecasted Products, and Epson will provide Xilinx with its forecasted
process technology road map. All of these forecasts and plans shall be
provided only for forecasting purposes and shall not bind either party
legally.
6.3 Ordering. Xilinx shall place the Purchase Orders for the Products in
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accordance with one of the two procedures mutually agreed upon by the parties
and set forth in Exhibit C. In such Purchase Orders, Xilinx shall, in its
sole discretion, determine which of the two procedures is to be used and shall
provide Epson with reasonable notice should Xilinx decide to use the other
procedure. Xilinx shall specifically set forth the specific type of
Products, the number of the Products to be fabricated by Epson, delivery date
in release form, delivery place, purchase order number, and unit price of the
Products in each Purchase Order.
6.4 Delivery. Epson shall fabricate the Products based on the Purchase
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Agreement(s) and the Purchase Orders, and shall deliver the Products pursuant
to the Purchase Orders.
6.5 Supply Commitment. In the event, and only in the event, Epson and
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Xilinx are unable to agree on the amount of Product to be ordered by Xilinx
and delivered by Epson, Epson commits to supply Xilinx with sufficient foundry
capacity to deliver the amount of Products necessary to amortize the remaining
outstanding Advance Payment over three (3) years from the date of such
disagreement, based on a linear amortization (the "Supply Commitment"), and
Xilinx shall be obligated to purchase Products in at least such capacities
until the Advance Payment has been fully credited to such purchases.
6.6 Excess Capacity. Epson will use its best efforts to provide Xilinx
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with excess capacity in the manner specified below:
First, in the event that Xilinx desires to purchase Products in excess of its
forecast requirements, Xilinx will specify in writing the amount of capacity
required, the Product(s) it desires to purchase and the date from which such
capacity is required.
Second, Epson will then determine how much capacity is available and notify
Xilinx of its determination. Epson will give Xilinx priority over third
parties for excess capacity of the New Facility except to the extent that
Epson is already obligated to provide such third parties with capacity.
Third, the parties will then mutually agree upon a preliminary excess capacity
allocation.
In order to provide Xilinx with first priority for unused capacity, Epson
agrees to give Xilinx monthly written notice of any unused capacity for the
next six (6) months, and to provide Xilinx the first right to reserve such
unused capacity for any New Facility Wafers which Xilinx desires to purchase
in excess of its forecast requirements. Xilinx will have a reasonable time to
elect to reserve such excess capacity.
6.7 Failure to Meet Supply Commitment
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6.7.1 Failure Due to Epson. In the event that (a) Epson fails to fulfill
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the deliver Products specified in Purchase Orders in the manner specified by
this Agreement by the end of any month or (b) Epson has reason to believe that
it will be unable to fabricate such Products by the end of such month, then
Epson will take the following measures:
First, Epson will promptly notify Xilinx in writing and describe the nature of
the difficulty.
Second, Epson will use its best efforts to remedy the difficulty in an
expeditious manner by the end of the second full month following the month in
which Epson is unable to deliver such Products (in other words, the third
month including the month in which the difficulty occurs).
Third, Epson will use its best efforts to make available during the
above-referenced three (3) month period sufficient capacity at the Sakata
Facility and the Fujimi Facility to cover the deficiency between the Products
ordered and the actual capacity subject to completion of product
qualification. The parties acknowledge, however, that Epson cannot guarantee
the use of capacity at the Sakata Facility or the Fujimi Facility.
***
Fifth, in the event that the above measures are insufficient and the parties
are unable to negotiate in good faith a resolution of the difficulty, then
Xilinx, at its option, may elect to be repaid in U.S. Dollars that portion of
the Advance Payment currently outstanding, and Xilinx shall have no further
obligations under this Agreement.
6.7.2 Failure Due to Xilinx. Notwithstanding anything contained in Article
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6.7 to the contrary, in the event that Epson fails to fulfill a Purchase Order
in any month due to (a) design defects in Products caused by Xilinx, (b)
design changes requested by Xilinx, (c) process flow changes requested by
Xilinx or (d) any other reason caused by Xilinx, Epson will only be required
to make reasonable efforts to fulfill the Purchase Order in such month.
6.7.3 Failure Due to Both Parties. Notwithstanding anything contained in
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Article 6.7.1, or 6.7.2 to the contrary, in the event that Epson fails to
fulfill a Purchase Order (and Xilinx fails to fulfill the Purchase Commitment)
due to difficulties caused jointly by Xilinx and Epson, the parties will
mutually agree in writing upon a fair and equitable solution.
6.7.4 Failure Due to Catastrophe. In the event that any fire, flood,
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earthquake, explosion or any other catastrophe prevents Epson from fabricating
Products for Xilinx, (a) Epson will immediately implement the measures
required by Article 6.7.1, (b) Epson will permit Xilinx to inspect the New
Facility or such other facilities as may be necessary, and (c) the parties
will begin good faith negotiations to agree on a corrective action plan.
6.8 Coordination. Xilinx US and Xilinx Ireland agree to work with each
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other to make sure that all forecasts and other directions given to Epson are
coordinated with each other and do not create any conflicts. If any such
conflicts occur, all parties will work together to resolve them.
7 ***
8 Fabrication and Purchase and Sale of the Product
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8.1 General Terms and Conditions. The terms and conditions for the
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prototype wafer fabrication, wafer fabrication, order and acceptance,
shipping, insurance and warranty for the Products will be set forth in the
Purchase Agreements. The parties hereby express their good-faith commitment to
sign all Purchase Agreements required to implement the terms and conditions of
this Agreement. Epson agrees to provide all Products covered by this Agreement
in the manner required by the Purchase Agreements. The parties acknowledge
that a best estimation and target of defect densities as at the date of this
Agreement is set forth in Exhibit E attached hereto, which will be reviewed
and amended from time to time by the parties hereto, and will be incorporated
into all Purchase Agreements.
8.2 Start of Production. Qualification testing for the Products will be
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conducted in the manner mutually agreed upon in writing by the parties. Once
any Product has been qualified, Epson will begin mass production of such
Product.
8.3 Turn Around Time. The parties acknowledge that the lead time for
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shipment of Products, defined as the time from Xilinx's process release until
delivery of Products to assembler, known as "turn around time", is of the
essence, and agree that the parties shall set annual target turn around time
and make their joint efforts to achieve such target in accordance with Exhibit
F ("Turn Around Time").
9 Wafer Pricing and Payment
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9.1 Determination of Price. The parties have already expressly agreed to
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(a) certain procedures to annually determine prices of Products (the "Price")
and (b) certain procedures of determining the price of all Products on a per
die basis, as described in Exhibit D. The Price herein shall be applicable
until Xilinx has received a credit against the full Advance Payment for
purchase of Products under the terms of this Agreement.
9.2 Shipping, Insurance, Taxes, Duties and Other Fees. Epson will deliver
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the Products to Xilinx's designated facility in Japan or Xilinx's designated
carrier in Japan on an F.O.B. basis. Epson will be responsible for paying, in
connection with such sale and delivery in Japan (a) all domestic freight,
insurance and other shipping expenses and (b) sales, use, excise, ad valorem,
withholding or other taxes. The risk of loss will pass to Xilinx at F.O.B.
point in Japan. Further, Xilinx will be responsible for paying all freight,
insurance, fees, expenses, taxes, tariffs and duties required in connection
with the export of the Products from F.O.B. point in Japan and the import into
any other country.
9.3 Payment. Other than through offset of the Advance Payment, Xilinx will
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not be required to pay for any Products delivered under this Agreement or any
Purchase Agreement until the Advance Payment has been fully offset and
reduced, including the receipt of any applicable ***. Once the Advance Payment
is fully offset and reduced, Xilinx will be required to pay Epson in the
manner specified in the Purchase Agreements based on the Price for any
additional Products purchased.
9.4 Die Based Transaction. Notwithstanding anything to the contrary
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contained herein, the parties acknowledge and agree that all purchases made
pursuant to Purchase Agreements, starting with the purchase of *** devices,
will be made on a "good die basis" even though the Supply Commitment, the
Purchase Commitment and other obligations of this Agreement are described on a
wafer basis. Such "good die basis" transaction shall be made in reference to
"Die Pricing Mechanism" in Exhibit D and "Defect Density Goal" in Exhibit E.
10 Additional Funding by Xilinx
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Subsequent to the final payment of the Advance Payment pursuant to Article 4.1
above, the parties shall meet to review and discuss the terms and conditions
of future funding by Xilinx and purchases of Products. Neither party has
agreed or committed to any such terms, and neither party shall be bound unless
and until an agreement on such subsequent terms and conditions is reached.
11 Technical Cooperation and Support
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The parties desire to engage in various types of joint development and
technical cooperation activities required to fabricate Products and to
effectuate the terms and conditions of this Agreement. The parties agree to
negotiate in good faith a joint development and technical cooperation
agreement in the future. Also the parties will continue to develop jointly new
state of the art CMOS logic processes under the terms of separate agreements
to be executed between the parties from time to time for specific projects or
product development work.
12 Intellectual Property Rights
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Epson warrants that it has all necessary rights to develop, manufacture and
sell to Xilinx the Products. Epson will indemnify and hold harmless Xilinx
from any loss, damage or expense (including attorney's fees) arising from
claims that the sale or use of the Products infringes on the intellectual
property rights of third parties except where such infringement is caused by
Xilinx's instruction or specifications thereto.
13 Confidential Information
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13.1 Definitions. Confidential Information' means technical information,
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specifications, data, drawings, designs or know-how disclosed between Epson
and Xilinx in connection with this Agreement. Confidential Information does
not include information or material that is expressly covered by
confidentiality provisions of Existing Agreements, it being understood that
such provisions will apply.
13.2 Marking. If Confidential Information is provided in a tangible form,
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it will be marked as confidential or proprietary. If Confidential Information
is provided orally, it will be treated as confidential and proprietary if it
is treated as confidential or proprietary at the time of disclosure by the
disclosing party and described as such in a writing provided to the other
party within thirty (30) days of the oral disclosure, which writing will be
marked as confidential or proprietary. Material that is not marked as required
by this Article 13.2 will not be deemed Confidential Information.
13.3 Restrictions on Use. During the term of this Agreement and for a
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period of five (5) years following disclosure of any Confidential Information,
the receiving party will: (a) hold the Confidential Information in confidence
using the same degree of care that it normally exercises to protect its own
proprietary information but no less than a reasonable degree of care, (b)
restrict disclosure and use of Confidential Information solely to those
employees (including any contract employees or consultants) of such party on a
need-to-know basis, and not disclose it to other employees or parties, and (c)
restrict the number of copies of Confidential Information to the number
required to carry out its obligations under this Agreement.
13.4 Exceptions to Confidentiality Obligations. Neither party will use or
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disclose the other party's Confidential Information except as permitted by
this Agreement. The receiving party, however, will have no obligations
concerning the disclosing party's Confidentiality Information if the
disclosing party's Confidential Information:
a) is made public before the disclosing party discloses it to the receiving
party;
b) is made public after the disclosing party discloses it to the receiving
party (unless its publication is a breach of this Agreement or any other
agreement between Epson and Xilinx);
c) is rightfully in the possession of the receiving party before the
disclosing party discloses it to the receiving party;
d) is independently developed by the receiving party without the use of the
Confidential Information, if such independent development is supported by
documentary evidence; or
e) is rightfully obtained by the receiving party from a third party who is
lawfully in possession of the information and not in violation of any
contractual, legal or fiduciary obligation to the disclosing party with
respect to the information.
13.5 Return of Confidential Information. Upon termination of this
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Agreement, a party who has received Confidential Information from the other
party pursuant to this Agreement will return, within fourteen (14) days of the
disclosing party's request for return, all Confidential Information that was
obtained or learned by the receiving party from the disposing party, together
with all copies, excerpts and translations thereof.
14 Term and Termination of Agreement
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14.1 Term. The term of this Agreement will extend from the date first
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written above until all of the Advance Payment has been credited against Wafer
purchases hereunder and all *** due in connection therewith have been
provided, unless terminated earlier pursuant to Article 14.2 or 14.3. After
the expiration of this Agreement, Epson and Xilinx shall continue to make
efforts to supply and purchase a certain volume of wafers per month under fair
and competitive prices to be determined between the parties.
14.2 Termination. Either party may terminate or suspend this Agreement
-----------
immediately and without liability upon written notice to the other party if
any one of the following events occurs:
a) the other party files a voluntary petition in bankruptcy or otherwise
seeks protection under any law for the protection of debtors;
b) a proceeding is instituted against the other party under any provision of
any bankruptcy laws which is not dismissed within ninety (90) days;
c) the other party is adjudged bankrupt;
d) a court assumes jurisdiction of all or a substantial portion of the assets
of the other party under a reorganization law;
e) a trustee or receiver is appointed by a court for all or a substantial
portion of the assets of the other party;
f) the other party becomes insolvent, ceases or suspends all or substantially
all of its business;
g) the other party makes an assignment of the majority of its assets for the
benefit of creditors; or
h) a direct competitor of one party acquires, through merger, consolidation,
acquisition or otherwise, an interest in excess of fifty percent (50%) of the
voting securities or assets of the other party.
14.3 Termination for Cause. If either party fails to perform or violates
---------------------
any material obligation of this Agreement, then, sixty (60) days after
providing written notice to the breaching party specifying the default (the
"Default Notice"), the non-breaching party may terminate this Agreement,
without liability, unless:
a) the breach specified in the Default Notice has been cured within the sixty
(60) day period; or
b) the default reasonably required more than sixty (60) days to correct, and
the defaulting party has begun substantial corrective action to remedy the
default within such sixty (60) day period and diligently pursues such action,
in which event, the non-breaching party may not terminate or suspend this
Agreement unless one hundred twenty (120) days has expired from the date of
the Default Notice without such corrective action being completed and the
default remedied.
14.4 Effect of Termination. In the event of any termination of this
---------------------
Agreement, Epson shall pay to Xilinx within thirty (30) days after such
termination an amount of money in U.S. Dollars equal to the unused balance of
the Advance Payment (including the dollar amount equivalent to the outstanding
balance of ***, if any, resulting from delays in wafer shipment as prescribed
in Articles 3.1.4 and 6.7.1, based on the pricing mechanism set forth in
Exhibit D).
14.5 Survival of Obligations. The following Articles will survive any
-----------------------
expiration, termination or cancellation of this Agreement and the parties will
continue to be bound by the terms and conditions thereof:12, 13, 14.2, 14.3
and 14.4.
15 Miscellaneous
-------------
15.1 Order of Precedence. In the event of any conflicts between this
-------------------
Agreement and any Purchase Agreement, any purchase orders, acceptances,
correspondence, memoranda, listing sheets or other documents forming part of
an order for the Products placed by Xilinx and accepted by Epson, priority
will be given first to this Agreement, second to the Purchase Agreements,
third to Epson's acceptance, fourth to Xilinx's order and then to any other
documents. In no event, however, will either party's standard terms and
conditions be applicable to the transactions between the parties, unless
expressly accepted in writing by the other party.
15.2 Dispute Resolution
------------------
15.2.1 Meeting of Executives. In the event that any dispute or
---------------------
disagreement between the parties as to any provision of this Agreement arises,
prior to taking any other action, the matter will be referred to responsible
executives of the parties for consideration and resolution. Any party may
commence such proceedings by delivering a written request to the other party
for a meeting of such responsible executives. The other party will be required
to set a date for the meeting to be held within thirty (30) days after receipt
of such request and the parties agree to exercise their best efforts to settle
the matter amicably.
15.2.2 Location of Meeting. In the event that Epson initiates the
-------------------
proceedings described in Article 15.2.1, the first meeting will be held in San
Jose, California and all subsequent meetings will alternate between Tokyo,
Japan, and San Jose, California. In the event that Xilinx initiates the
proceedings described in Article 15.2.1, the first meeting will be held in
Tokyo, Japan and all subsequent meetings will alternate between San Jose,
California and Tokyo, Japan.
15.2.3 Demand for Arbitration. Any dispute relating to and/or arising out
----------------------
of this Agreement will be decided exclusively by binding arbitration under
procedures which ensure efficient and speedy resolution. Such an arbitration
may be commenced by either party involved in the dispute (i) after the
expiration of a sixty (60) day period following the written request to resolve
the dispute, and/or (ii) at such earlier time as any party involved repudiates
and/or refuses to continue with its obligations to negotiate in good faith.
The arbitration hearing will be conducted in the State of Hawaii, and will be
in the English language (with translations and interpretations as reasonable
for the presentation of evidence and/or conduct of the arbitration).
Notwithstanding anything to the contrary, any party may apply to any court of
competent jurisdiction for interim injunctive relief as may be allowed under
applicable law with respect to irreparable harm which cannot be avoided and/or
compensated by such arbitration proceedings, without breach of this Article
15.2.3 and without any abridgment of the powers of the arbitrators.
The arbitration will be conducted under the Rules of the Asia Pacific
Arbitration Center. Notwithstanding anything to the contrary, (i) the
arbitrators will have the power to order discovery to the extent they find
such discovery necessary to achieve a fair and equitable result and (ii) the
arbitrators shall require pre-hearing exchange of documentary evidence to be
relied upon by each of the respective parties in their respective cases in
chief, and pre-hearing exchange of briefs, witness lists, and summaries of
expected testimony.
The arbitrators will make their decision in writing.
15.2.4 Arbitrators. The arbitration will be conducted by three (3)
-----------
arbitrators. No person with a beneficial interest in the dispute under
arbitration may be an arbitrator. The parties will make reasonable efforts to
select arbitrators with experience in the field of computers and law.
15.2.5 Binding Effect. The decision or award rendered or made in
--------------
connection with such arbitration will be binding upon the parties and judgment
thereon may be entered in any court having jurisdiction and/or application may
be made to such court for enforcement of such decision or award. However, the
arbitrators will not have the authority to create any licenses. They will only
be permitted to enforce licenses which the parties have otherwise agreed to in
the Agreement or the Existing Agreements.
15.2.6 Expenses. The expenses of the arbitrators will be shared equally by
--------
the parties; each party will otherwise be responsible for the costs and
attorney's fees incurred by it.
15.3 Consequential Damages.
---------------------
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,
SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES (INCLUDING LOST PROFITS) WHETHER
BASED ON WARRANTY, CONTRACT, TORT OR ANY OTHER LEGAL THEORY REGARDLESS OF
WHETHER SUCH PARTY HAD ACTUAL OR CONSTRUCTIVE NOTICE OF SUCH DAMAGES.
15.4 Assignment. Neither party will assign, transfer or otherwise dispose
----------
of this Agreement in whole or in part without the prior consent of the other
party in writing, and such consent will not be unreasonably withheld. Except
as the case set forth in Article 14.2(h) above, this Agreement may be assigned
in whole or in part to any Subsidiary or to a successor who has acquired a
majority of its business or assets of the assigning party.
15.5 Public Announcements. Neither party will publicly announce the
--------------------
execution or existence of this Agreement or disclose the terms and conditions
of this Agreement without first submitting the text of such announcement to
the other party and receiving the approval of the other party of such text,
which approval, unless public disclosure is required by a court or a
government agency, may be withheld for any reason. However, Xilinx may
disclose the existence and the terms of this Agreement in a registration
statement filed with the Securities and Exchange Commission or in accordance
with generally accepted accounting procedures under the rules of the
Securities and Exchange Commission or National Association of Securities
Dealers Automated Quotations.
15.6 Notice and Communications. Any notices required or permitted to be
-------------------------
given hereunder will be in English and be sent by (i) registered airmail or
(ii) cable, facsimile or telex to be confirmed by registered airmail,
addressed to:
To Epson:
Fujimi, ▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇-▇▇▇
▇▇▇▇▇▇-▇▇▇ ▇▇▇-▇▇, ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Director and Corporate General Manager
Semiconductor Operations Division
Tel: ▇▇-▇▇▇-▇▇-▇▇▇▇
Fax: ▇▇-▇▇▇-▇▇-▇▇▇▇
To Xilinx:
▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇.
Attn.: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer, Xilinx, Inc.
Tel: ▇-▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
Any such notice will be deemed given at the time of its receipt by the
addressee.
15.7 Relationship of the Parties. Epson and Xilinx are independent
---------------------------
contractors and neither of them will be nor represent themselves to be the
legal agent, partner or employee of the other party for any purpose. Neither
party will have the authority to make any warranty or representation on behalf
of the other party nor to execute any contract or otherwise assume any
obligation or responsibility in the name of or on behalf of the other party.
In addition, neither party will be bound by, nor liable to, any third person
for any act or any obligations or debt incurred by the other party, except to
the extent specifically agreed to in writing by the parties.
15.8 Waiver and Amendment. Failure by either party, at any time, to
--------------------
require performance by the other party or to claim a breach of any provision
of this Agreement will not be construed as a waiver of any right accruing
under this Agreement, nor will it affect any subsequent breach or the
effectiveness of this Agreement or any part hereof, or prejudice either party
with respect to any subsequent action. A waiver of any right accruing to
either party pursuant to this Agreement will not be effective unless given in
writing.
15.9 Severability. In the event that any provision of this Agreement will
------------
be unlawful or otherwise unenforceable, such provision will be severed, and
the entire agreement will not fail on account thereof, the balance continuing
in full force and effect, and the parties will endeavor to replace the severed
provision with a similar provision that is not unlawful or otherwise
unenforceable.
15.10 Rights and Remedies Cumulative. The rights and remedies provided
------------------------------
herein will be cumulative and not exclusive of any other rights or remedies
provided by law or otherwise.
15.11 Headings. The Article headings in this Agreement are for convenience
--------
only and will not be considered a part of, or affect the interpretation of,
any provision of this Agreement.
15.12 Governing Language. This Agreement and all communications pursuant
------------------
to it will be in the English language. If there is any conflict between the
English version and any translated version of this Agreement, the English
version will govern.
15.13 Force Majeure. Except as otherwise expressly provided for herein, no
-------------
party will be liable in any manner for failure or delay in fulfillment of all
or part of this Agreement directly or indirectly owing to any causes or
circumstances beyond its control, including, but not limited to, acts of God,
governmental order or restrictions, war, war-like conditions, hostilities,
sanctions, revolutions, riot, looting, strike, lockout, plague or other
epidemics, fire and flood.
15.14 Counterparts. This Agreement may be executed in any number of
------------
counterparts, and all such counterparts will together constitute but one
Agreement.
15.15 Integration. This Agreement sets forth the entire agreement and
-----------
understanding between the parties as to its subject matter and supersedes all
prior agreements, understandings and memoranda between the parties, except for
the Existing Agreements. No amendments or supplements to this Agreement will
be effective for any purpose except by a written agreement signed by the
parties.
15.16 Government Approvals; Export Control Laws. Epson will file all
-----------------------------------------
reports and notifications that may be required to be filed with any agency of
the Government of Japan in order to allow the performance of this agreement
according to its terms. Xilinx will be responsible for obtaining all licenses
and permits required to export the Products from Japan. Neither party will
transmit indirectly or directly any Products or technical information
contained in the Confidential Information except in accordance with applicable
Japanese and United States export control laws, regulations and procedures.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first above written.
SEIKO EPSON CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director and Corporate General Manager
Semiconductor Operations Division
XILINX, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
XILINX IRELAND
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
AREAS MARKED "***" REPRESENT SECTIONS FOR WHICH CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED. THESE OMITTED SECTIONS HAVE BEEN FILED SEPARATELY WITH THE
COMMISSION.
