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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 10.5
CONFIDENTIAL TREATMENT
PDF SOLUTIONS, INC. HAS REQUESTED
THAT THE MARKED PORTIONS OF THIS
DOCUMENT BE ACCORDED CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
PROJECT: SONY CORPORATION
***************
YIELD IMPROVEMENT AGREEMENT
This Yield Improvement Agreement is made as of the *** *** ** *******,
****, by and between SONY Corporation, a corporation organized and existing
under and by virtue of the laws of Japan, maintaining its principal office at
7-35, Kitashinagawa 6-chome, Shinagawa-ku, Tokyo, Japan (hereinafter referred to
as "SONY") and PDF Solutions, Inc., a corporation organized and existing under
and by virtue of the laws of the State of California, having its principal place
of business at 333 West San Carlos Street, San Jose, California 95110 U.S.A.
(hereinafter referred to as "PDF").
W I T N E S S E T H:
WHEREAS, SONY is, among other things, engaged in the business of
manufacturing and selling ******************* referred to as the ***** Product
designed by or for SONY (hereinafter referred to as the "PRODUCTS"); and
WHEREAS, PDF has substantial expertise and skill in yield improvement
for semiconductor manufacturing; and
WHEREAS, SONY desires that PDF render certain services for SONY for
purposes of improving the yield of the Products manufactured at SONY's
subsidiary located in ************* (hereinafter referred to as the "SONY
SUBSIDIARY"); and
WHEREAS, PDF is willing to render such services to SONY under the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, it is mutually covenanted and agreed as follows:
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
1. SERVICES
1.1 PDF shall, at its cost and expense, render the following services
(hereinafter referred to as the "SERVICES") for SONY, which are more
fully described in Exhibit A:
1.1.1 To provide SONY with certain characterization vehicles to
assist in enhancing the yield in the fabrication of the
Products manufactured at SONY Subsidiary (the
"CHARACTERIZATION VEHICLES").
1.1.2 To provide certain consulting services in connection with
such yield enhancement activities of SONY ("YIELD RAMP
SERVICES").
1.1.3 To provide certain software to be used at the Sony
Subsidiary (THE "SOFTWARE DELIVERABLE").
1.2 For purposes of rendering the Services, PDF shall assign appropriate
number of its employees and have at least ***** of them devote their
full-time to render the Services. PDF shall ensure that such employees
are fully qualified personnel with enough experience and expertise to
render the Services.
2. SCHEDULES AND DELIVERABLES
2.1 The Services shall be rendered by PDF ******************** and shall
continue to be rendered until
***********************************************************
Characterization Vehicle Deliverables (as defined below) pursuant to
Section 2.5 (THE "SERVICE PERIOD"). Upon five (5) working days prior
written notice by SONY to PDF, SONY may change, if needed, the time
schedule for the provision of the Services so long as the total period
of time for the Services to be rendered after the acceptance by SONY
of the last Characterization Vehicle Deliverables shall not exceed
************** *********************************************. If any
such change significantly affects the costs or efforts required to
render the Services, the parties shall work together to agree upon an
equitable adjustment to the Service Fees.
2.2 PDF shall prepare and deliver to SONY the "Characterization Vehicle
Deliverables", the "Yield Ramp Status Report Deliverables" and the
"Software Deliverables" described under "Deliverables" in Exhibit A
(hereinafter collectively referred to as the "DELIVERABLES").
Characterization Vehicle Deliverables shall be delivered by PDF to
SONY in accordance with the schedule as described in EXHIBIT A. Upon
delivery and acceptance of all Characterization Vehicle Deliverables,
PDF will begin performing Yield Ramp Services for which Yield Ramp
Status Report Deliverables will be generated and submitted to SONY by
the end of each month.
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
2.3 SONY shall prepare and provide PDF with such design data, process data
and other data and information as is reasonably deemed necessary by
SONY or as is reasonably requested by PDF and agreed by SONY for PDF
to render the Services and deliver the Deliverables (hereinafter
referred to as the "TECHNICAL DATA"). In addition, SONY shall at its
cost and expense prepare and make available to the employees of PDF
stationed at SONY Subsidiary, office space, equipment and services as
PDF shall reasonably request including secure office space for use as
a team office, appropriate equipment such as workstations, telephones,
facsimile machines, a photocopier, printers and a removable data
storage device, such as tape drives, and services such as
international access telephone lines, and email access to the
internet; provided that the costs for office supplies and telephone
charges used by employees of PDF shall be borne by PDF, however, such
costs shall constitute additional out-of-pocket expenses to be
reimbursed by SONY to PDF under, and subject to the limitations set
forth in, Section 3.3. The bearing of such costs by PDF and the
reimbursement thereof by SONY shall be accomplished by offsets of one
against the other to the extent reasonably practicable.
2.4 In addition to the provisions of Section 2.1 above, SONY may, if
needed, upon written notice to PDF, make changes to Exhibit A relating
to Deliverables which have not been delivered or actions which have
not been taken as of the time of such change; provided that if any
such change significantly affects the scope or timing of the Services
rendered or any Deliverables to be delivered or changes the costs and
efforts required to render the Services or deliver the Deliverables,
the parties shall work together to agree upon an additional amount to
be paid for such Services, Deliverables, costs or efforts, and upon an
appropriate time schedule.
2.5 Upon receipt of each Deliverable, SONY shall inspect such Deliverable
to determine whether such Deliverable conforms to the description
thereof contained in Exhibit A. Should any Deliverable not reasonably
conform to such description, SONY shall, within ten (10) days after
receipt of such Deliverable, so notify PDF in writing specifying the
variance from the description, and PDF shall promptly correct and
deliver the Deliverable to SONY again. Such Deliverable, as so
corrected, shall be redelivered in accordance with this Section 2.5.
If no notification is made by SONY to PDF within such ten (10) day
period, such Deliverable shall be deemed accepted by SONY.
2.6 For a period of ten (10) days following the end of the Service Period,
PDF shall, upon the request of SONY, assist SONY by answering SONY's
questions through telephone, facsimile or e-mail communications
("VERBAL SUPPORT"); provided that any such Verbal Support shall relate
only to the Services specified to be performed with respect to the
Products under this Agreement and not to other products, projects or
work SONY wishes to have PDF perform.
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
2.7 The Services shall be deemed completed at the time when all the
Deliverables are delivered by PDF to, and accepted by, SONY. PDF
shall, upon the written request of SONY, render for SONY additional
services of providing additional Yield Ramp Status Report Deliverables
following the Service Period defined in Section 2.1 above ("FOLLOW-UP
SERVICES)"; provided that SONY shall pay as consideration the Yield
Ramp Status Report Deliverable Fee specified in Section 3.1 for each
such additional Yield Ramp Status Report Deliverable.
3. CONSIDERATION
3.1 In full and complete consideration for the Services rendered by PDF to
SONY (including the delivery of the Deliverables), SONY shall pay to
PDF an aggregate amount equal to
***************************************** in total (hereinafter
referred to as the "SERVICE FEE"). Such Service Fee shall be payable
by SONY to PDF in ******* installments as follows:
3.1.1 Upon acceptance of each Characterization Vehicle Deliverable,
SONY shall pay the amount of
************************************************
*************** as the "Characterization Vehicle
Deliverables Fee"; and
3.1.2 Upon acceptance of each Yield Ramp Status Report
Deliverable, SONY shall pay the amount of
************************************************
*************** as the "Yield Ramp Status Report
Deliverables Fee".
3.2 Upon SONY's acceptance of each of the Deliverables pursuant to Section
2.5, PDF shall issue to SONY an invoice for the payment in United
States Dollars of the applicable installment of the Service Fee
payable by SONY to PDF under Section 3.1 above. SONY shall make
payment of such installment in United States Dollars by making a
telegraphic transfer remittance to the bank account of PDF within
thirty (30) days following the date of receipt of the invoice by SONY
from PDF.
3.3 In addition to the Service Fee payable under Section 3.1 above, SONY
shall pay to PDF travel and other reasonable out of pocket expenses
actually incurred by PDF in rendering the Services, including the
economy class air fares, domestic travel expenses in the U.S.A. and
Japan, hotel accommodation expenses and meal expenses for the
employees and consultants of PDF engaged in the Services; provided,
however, that in no event shall the expenses to be paid by SONY to PDF
hereunder exceed *******************
*************************************************. The costs and
expenses reimbursable under this Section 3.3 are referred to as
"EXPENSES."
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
3.4 Within thirty (30) days after close of each calendar month, PDF shall
issue an invoice for the payment in United States Dollars of the
Expenses payable by SONY to PDF under Section 3.3 above together with
a detailed listing of such Expenses. SONY shall make payment of such
Expenses in United States Dollars by making a telegraphic transfer
remittance to the bank account of PDF within thirty (30) days
following the date of receipt of the invoice by SONY from PDF. SONY
shall have the right at SONY's expense to have such Expenses audited
by independent accountants of recognized standing.
3.5 All amounts which SONY does not pay on a timely basis as required by
this Agreement shall be subject to a late charge equal to
***************** (or, if less, the maximum allowed by applicable
law). In the event that any payment due hereunder is overdue, PDF
reserves the right to suspend performance until such delinquency is
corrected.
4. OWNERSHIP AND RIGHTS
4.1 Each party shall solely own any Intellectual Property (as defined
below) developed solely by the employee(s) or agents of such party
irrespective of the Services before or after the term of this
Agreement.
4.2 SONY and PDF agree that the Deliverables shall become the sole and
exclusive property of SONY.
4.3 PDF and SONY agree that the ownership of the inventions and the
intellectual property rights thereon, including, without limitation,
patents and patent applications, copyrights, mask works, trade
secrets, know how, industrial design rights, rights of authorship, and
other intellectual property rights or rights protecting intangible
property or information recognized by the law of any country or
jurisdiction of the world (hereinafter collectively referred to as the
"INTELLECTUAL PROPERTY") generated during the course of the Services,
shall be determined as follows:
4.3.1. ***
4.3.2. ***
4.3.3. ***
4.3.4. ***
4.3.5. ***
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*******************************************************************
*******************************************************************
*******************************************************************
*******************************************************************
4.4 SONY hereby grants to PDF a ************************************
******************************************************* license;
provided that *** shall be bound by the confidentiality obligations
contained in this Agreement.
4.5 PDF hereby grants to SONY a ***********************************
*************************************************************
******************************************************* license;
provided, further, that SONY shall be bound by and shall cause its
sublicensees to be bound by the confidentiality obligations contained
in this Agreement.
4.6 Except as otherwise set forth in this Section 4, neither this
Agreement nor the performance of the Services shall give either PDF or
SONY any ownership, interest in or rights to the Intellectual Property
owned by the other party.
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
5. DURATION AND TERMINATION OF AGREEMENT
5.1 This Agreement shall become effective as of the date first above
written and shall continue in full force and effect until the payment
of the Service Fees shall have been completed in accordance with the
terms and conditions of this Agreement.
5.2 Either party shall have the right to terminate this Agreement at any
time if:
5.2.1 the other party is in breach of any term, condition or
covenant of this Agreement and fails to cure that breach
within thirty (30) days after receiving written notice of
that breach, which notice must state that failure to cure
such breach will result in termination of this Agreement.
5.2.2 the other party (i) becomes insolvent, (ii) admits in
writing its insolvency or inability to pay its debts or
perform its obligations as they mature, or (iii) becomes the
subject to any voluntary or involuntary proceeding in
bankruptcy, liquidation, dissolution, receivership,
attachment or composition or general assignment for the
benefit of creditors.
5.2.3 More than ten percent (10%) of the other party's outstanding
stock or equity interests is acquired by, or the other party
is merged with, any competitor of such terminating party.
5.3 In addition to the provisions of Section 5.2, SONY may
terminate this Agreement at any time prior to the completion
of the Services by giving a written notice to PDF. In such
case, SONY shall pay to PDF ***********************
***********************************************************
**********.
5.4 The provisions of Sections 2.6, 2.7, 3 (to the extent Service Fees,
Expenses or any portion thereof are payable), 4, 6, 7 and 8 of this
Agreement shall survive the expiration and termination of this
Agreement.
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
6. CONFIDENTIALITY
6.1 Each party (the "RECEIVING PARTY") hereto agrees to maintain as
confidential and to use only for the purposes permitted under this
Agreement, during the term of this Agreement and for ***************
thereafter, all confidential and proprietary information and materials
received from the other party (the "DISCLOSING PARTY") under this
Agreement ("CONFIDENTIAL INFORMATION"); provided that to be protected
as Confidential Information, information and materials shall be (a)
physically marked as confidential or proprietary, or (b) if disclosed
orally or visually, identified as confidential at the time of
disclosure and be reduced to writing with confidential or proprietary
marking, which shall be delivered to the Receiving Party within thirty
(30) days after the oral or visual disclosure. Notwithstanding the
immediate foregoing, (i) the Deliverables, (ii) the Technical Data and
(iii) any and all the information and materials provided to or
acquired by the employees of PDF at SONY Subsidiary shall be deemed
Confidential Information of SONY even without marking or designation
of confidentiality.
6.2 Notwithstanding the provisions of Section 6.1 above, a Receiving Party
shall have no obligation to maintain the confidentiality of any
information or material that:
6.2.1 was in the Receiving Party's lawful possession prior to the
disclosure as supported by satisfactory evidence of such
possession;
6.2.2 becomes publicly known through no wrongful act or omission
of the Receiving Party;
6.2.3 is lawfully received by the Receiving Party from a third
party without breach of any confidentiality obligation or
other restriction on disclosure;
6.2.4 is independently ascertainable or developed by the Receiving
Party or its employees who have not had access to the
Confidential Information.
6.2.5 is required to be disclosed to a court or government agency,
provided that prompt prior written notice of such intended
disclosure is given to the Disclosing Party sufficient to
enable it to acquire a protective order.
6.3 Confidential Information of each party shall be and remain the
property of such party. Upon request by the Disclosing Party or upon
expiration or termination of this Agreement, whichever is earlier, the
Receiving Party shall return all Confidential Information received
from the Disclosing Party together with all copies thereof or destroy
them, if so requested by the Disclosing Party.
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7. WARRANTIES AND INDEMNIFICATION
7.1 PDF warrants that the Services shall be rendered in a professional
manner consistent with the quality of PDF's performance of services
for other similarly situated clients. PDF also warrants that the
Services shall be rendered in compliance with all relevant Japanese
and United States (federal and state) laws, ordinances, rules and
regulations and shall not constitute any breach of contractual
obligations of PDF with third parties. PDF further warrants that the
Deliverables are free from infringement of any patent, copyright,
trade secret right or, to PDF's actual knowledge, other Intellectual
Property of any third party; provided that such warranty shall not
extend (a) to any infringement that are caused by or results from (i)
any modifications recommended to be made to SONY's designs or
products, or (ii) other suggestions, recommendations or other matters
made or provided by PDF contained in such Deliverables or the
application or implementation of any of the foregoing unless such
recommendations, suggestions, Deliverables, applications, and
implementations considered alone (and not in conjunction with
Technical Data, Intellectual Property or other reports or information
provided by SONY or any third party other than consultants or
subcontractors of PDF) would constitute such an infringement; or (b)
to the extent any infringement results from any infringement contained
in any Technical Data, Intellectual Property or other reports or
information provided by SONY or any third party other than consultants
or subcontractors of PDF.
7.2 THE WARRANTY IN THIS SECTION 7 IS EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT, WHICH ARE EXPRESSLY DISCLAIMED. NOTHING UNDER THIS
AGREEMENT, OR THE STATEMENT OF WORK OR PROJECT SHALL BE DEEMED TO BE A
WARRANTY AS TO THE OUTCOME OF ANY PROJECT OR THE EFFICACY OF ANY
RECOMMENDATIONS MADE BY PDF. EXCEPT AS EXPRESSLY PROVIDED IN SECTION
7.1 ABOVE, NOTHING UNDER THIS AGREEMENT OR THE STATEMENT OF WORK SHALL
BE DEEMED TO CREATE ANY LIABILITY ON THE PART OF PDF WITH RESPECT TO
THE RESULTS OF ANY ACTIONS TAKEN BY SONY AS A CONSEQUENCE OF PDF'S
RECOMMENDATIONS OR THE OUTCOME ON A PRODUCT FROM FOLLOWING ANY
SUGGESTIONS OR RECOMMENDATIONS CONTAINED IN THE DELIVERABLES.
7.3 EXCEPT AS SPECIFICALLY PROVIDED FOR IN SECTION 7.4, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER FOR SPECIAL, CONSEQUENTIAL,
INCIDENTAL, INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES, HOWEVER CAUSED,
WHETHER FOR BREACH OF WARRANTY, CONTRACT, TORT NEGLIGENCE, STRICT
LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
7.4 PDF hereby agrees to indemnify and hold SONY, its affiliates, and
their respective officers, directors, employees, and agents ("SONY
INDEMNITEES") harmless from and against any and all liabilities,
losses, damages, costs, and expenses ("LOSSES"), and any attorney's
fees and expenses relating to its defense, resulting directly from any
claim or action brought against the SONY Indemnitees resulting from
any breach by PDF of the foregoing warranties (a "CLAIM") and defend
the SONY Indemnitees against such Claims, provided that the SONY
Indemnitees shall follow the indemnification procedure as set forth in
this Agreement. *** The indemnification contained in this Section 7.4
shall be the sole and exclusive remedy for any breach of warranty
contained in this Agreement.
7.5 If any Claim is commenced against a party entitled to indemnification
under this Section 7 , such party shall give written notice to the
other party within ten (10) days of notice of such Claim. If such
party receiving notice is obligated under this Section 7 to defend the
party against such Claim, then the indemnifying party shall take
control of the defense and investigation of the Claim, using such
attorneys and other assistance as it selects in its discretion. The
indemnified party shall cooperate in all reasonable respects in such
investigation and defense, including trial and any appeals, provided
that such party may also participate, at its own expense, in such
defense. No settlement of a Claim that involves a remedy other than
payment of money by indemnifying party shall be agreed to and entered
without the consent of the indemnified party, which consent shall not
be unreasonably withheld.
7.6 No action, regardless of form, arising from this Agreement may be
brought by either party more than one (1) year after the cause of
action actually is discovered by that party (but in no event later
than as otherwise provided by law), except that an action for
non-payment may be brought within one (1) year after the later of the
date of last payment or the date such unpaid amount should have been
paid.
8. APPLICABLE LAW; JURISDICTION
8.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of California without reference to choice or
conflicts of laws. This Agreement is prepared and executed and shall
be interpreted in the English language only, and no translation of the
Agreement into another language shall have any effect. The parties
agree that the United Nations Convention on Contracts for the
International Sale of Goods (1980) is specifically excluded from and
shall not apply to this Agreement.
8.2 Any controversies and disputes arising out of or relating to this
Agreement shall be submitted to: (i) the Tokyo District Court in Japan
in case the action is instituted by PDF; and (ii) the United States
District Court for the Northern District of California in case the
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action is instituted by SONY; as the Court of first instance. The
parties hereto agree that the judgment, degree, or order rendered by a
Court of last resort or a Court of lower jurisdiction from which no
appeal has been taken in Japan or the United States shall be final and
binding upon both parties.
9. WORKING INDEPENDENTLY OR WITH OTHERS.
9.1 Subject to SONY's compliance with the confidentiality and other
provisions stated herein and in any existing agreement between the
parties, nothing in this Agreement shall be construed to preclude SONY
from independently performing or acquiring from other parties the same
or similar services as the Services provided by PDF hereunder.
9.2 SONY acknowledges that PDF has extensive expertise, experience, and
proprietary products and tools in the area of electronic design and
yield improvement and that PDF intends to utilize such expertise,
experience, products and tools in providing consulting services and
other services to other clients. Subject to PDF's compliance with the
confidentiality and other provisions stated herein and in any existing
agreement between the parties, nothing in this Agreement shall
restrict or limit PDF from performing such design consulting or other
services to any other entity in any industry, including the
semiconductor and electronics industries. SONY agrees that, except as
otherwise agreed in this Agreement, PDF and its employees may provide
design consulting services similar in nature to the Services for any
third parties both during and after the term of this Agreement.
Subject to the limitations placed on PDF by the confidentiality and
other provisions of this Agreement or by any existing agreement
between PDF and SONY, PDF may in its sole discretion develop, use,
market, license, offer for sale, or sell any software, application or
product that is similar or related to that which was developed by PDF
for SONY hereunder.
10. GENERAL
10.1 PDF shall not disclose or publicize the existence and terms of this
Agreement to any third party without the prior written consent of
SONY. In particular, no press releases shall be made by PDF without
prior written consent of SONY.
10.2 The relationship of PDF and SONY established by this Agreement is that
of independent contractors, and nothing contained in this Agreement
shall be construed to (i) give either party the power to direct or
control the day-to-day activities of the other, (ii) constitute the
parties as agents, partners, joint venturers, co-owners or otherwise
as participants in a joint or common undertaking, or (iii) allow
either party to create or assume any obligation on behalf of the other
or bind the other for any purpose whatsoever nor shall either party
represent to anyone that it has such power or authority.
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
10.3 Neither party may assign or transfer any of the rights and
responsibilities under this Agreement without written consent of the
other party and any purported attempt to do so shall be deemed void.
10.4 This Agreement expresses the entire understanding and agreement
between SONY and PDF with regard to the subject matter hereof and,
except for any confidentiality or nondisclosure agreements between the
parties, supersedes any and all agreements previously entered into
between the parties hereto with regard to the subject matter hereof.
10.5 For purposes of this Agreement, "Subsidiary" shall mean any
corporation or other entity, in which more than fifty percent (50%) of
the stocks or other equity interest entitled to vote for the election
of directors of such entity shall be owned or controlled by PDF or
SONY directly or indirectly; provided that such corporation or entity
shall be deemed to be a "Subsidiary" only so long as such ownership or
control exists.
10.6 This Agreement shall not be subject to change or modification except
by the execution of an instrument in writing subscribed by the parties
hereto.
10.7 If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such
provision, then (i) such provision shall be excluded from this
Agreement, (ii) the balance of this Agreement shall be interpreted as
if such provision were so excluded and (iii) the balance of this
Agreement shall be enforceable in accordance with its other terms.
10.8 This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together will constitute one and
the same instrument.
10.9 Either PDF or SONY shall not be liable for any loss, damage, or
penalty arising from delay due to causes beyond its reasonable
control.
10.10 Neither party shall, directly or indirectly export or re-export any
technical data or information or data received from the other party
hereunder or the direct products thereof to any destination prohibited
or restricted by export control regulations of Japan and the United
States, including U.S. Export Administration Regulations, without
proper authorization from the appropriate governmental authorities. In
addition, the parties agree that no technology furnished to the other
will be used for any purpose to develop and/or manufacture nuclear,
chemical or biological weapons and/or missiles.
10.11 In rendering the Services hereunder, PDF may use consultants and other
subcontractors upon obtaining prior consent of SONY, which consent
shall not be unreasonably
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withheld. PDF shall cause such consultants and subcontractors to be
subject to and bound by the confidentiality obligations set forth in
Section 6 of the Agreement and agree to SONY's and PDF's ownership of
the Intellectual Property as described in Section 4 of the Agreement.
Failure by such consultants and subcontractors to observe any
provisions of this Agreement shall constitute a breach of this
Agreement by PDF.
10.12 All notices required or permitted to be given under this Agreement
must be in writing and will be effective when delivered personally or
sent by registered mail, postage prepaid, and addressed to the parties
at their respective address set forth below or new address or
addresses subsequently designated in writing by either party to the
other:
SONY PDF
Legal & Intellectual Property Dept. Chief Financial Officer
Core Technology & Network Company
Sony Corporation PDF Solutions, Inc.
1-11-1, Osaki, Shinagawa-ku, Tokyo 333 West San Carlos Street,
141-0032, Japan Suite 625
San Jose, California 95110 USA
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SONY CORPORATION PDF SOLUTIONS, INC.
By: /s/ Norikazu Ouchi By /s/ John K. Kibarian
Norikazu Ouchi John K. Kibarian
General Manager President
Device Development Dept.-1
LSI Development Div.
LSI Business & Technology
Development Group
Core Technology &
Network Company
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
EXHIBIT A
STATEMENT OF WORK
SONY CORPORATION
**************
This Statement of Work is made between PDF Solutions, Inc. ("PDF") and
SONY Corporation ("SONY") pursuant to and attached as an exhibit to that certain
Yield Improvement Agreement dated as of January 1, 2000 (the "AGREEMENT")
between PDF and SONY. All terms and conditions contained in the Statement of
Work are subject to the terms and conditions set forth in the Agreement.
SERVICES
PDF will provide SONY with characterization vehicles and other
Deliverables resulting from consulting services relating to assisting SONY in
***************** of the ********************************************** Product
designed by or for SONY ************* (the "PRODUCTS").
COMMENCEMENT
The engagement will commence with a kick-off meeting on or before
********** (the "KICK-OFF MEETING"). At this meeting PDF and SONY
representatives will meet to commence the project. Prior to the kickoff meeting,
PDF managers and engineers will have met with SONY managers and engineers to
assess availability of data and design a specific work plan for delivery of the
Deliverables based upon available data and resources. This assessment will be
presented at the kickoff meeting along with the first Characterization Vehicle.
DELIVERABLES
The objective of the Project and the result of the above activities will
be to deliver the following Deliverables (which shall be the "DELIVERABLES" as
defined in the Agreement):
(1) CHARACTERIZATION VEHICLE DELIVERABLES. The following four items shall
collectively be referred to as the ************************
************** The following ************************ will be delivered
by **********:
(a) ********** data and documentation
(b) ********** data and documentation
(c) ********** data and documentation
(d) ********** data and documentation
ExA-1
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NOTE: Mask data is defined to be an electronic GDS-II file and will be
delivered either on 8mm tape or through network TCP/IP FTP.
*********************** DOCUMENTATION:
As part of the ************************ portion of the project, the
following documentation will be provided:
(A) Summary. *****************************************************.
(B) ***********************************************************.
(C) *********************************************
***************************************************************
******************************************* will be provided to
SONY by **********.
(D) **********************************************************
**************************************************************
*****************************. One or more status report(s) will
be generated for *********** ************************ data
containing the following information and these reports will be
provided to SONY by **********:
(i) ****************************************
********************
(ii) **************************************
**************************************
(iii) *******************************************
******
(E) *************************Report.
*****************************************************************
*********** **************************will be generated for the
************* ********This report will contain the following
information and will be provided to SONY by **********:
(i) **********************************************
***************************************
ExA-2
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
(ii) *********************************
(iii) ********************************************************
*********************
(2) **********************************************************************
(A) ***************************************************************
(B) ***************************************************************
(C) ***************************************************************
ExA-3
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
(i) ***
(ii) ********** of yield with ********** data;
(iii) ********** assessment; and
(iv) ********** results necessary to **********.
(D) Quantification of **********
(3) SOFTWARE DELIVERABLE. PDF will grant SONY a ********** **********
software license for use solely in the SONY Subsidiary. PDF will, upon
SONY's timely execution of PDF's applicable license agreement, deliver
and install such software by **********.
TEAM STRUCTURE
Sony will establish a Steering Committee (the "STEERING COMMITTEE")
which will consist of (a) **********, and (b) **********. ********** will make
all such personnel available for performance under the Agreement and this
Statement of Work. The Steering Committee will be limited to ********** in order
to allow decisions to be reached in a timely fashion. The Steering Committee is
responsible for giving the team its charter, deciding which yield improvement
actions to take and who in the Sony organization will be responsible for
carrying out the improvement. At the quarterly Steering Committee Review
Meetings, PDF will provide a summary of the monthly engineering meetings
********** to assist the Steering Committee in its charter.
The day-to-day analyses will be conducted by a ********** of engineers
from SONY and PDF. A PDF Engagement Manager will manage the activities of
**********. The PDF Engagement Manager will be responsible for directing all
team members in their analyses as well as aggregating and synthesizing the
results of all the analyses conducted by the entire team. The PDF Engagement
Manager will be available for all communications at reasonable times with the
********** members and the Steering Committee. In addition, the PDF Engagement
Manager will be the principal point of contact for any questions that Sony
personnel not on the ********** or Steering Committee may have during the course
of the engagement.
ExA-4
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
In addition to the PDF Engagement Manager, PDF will make a total of **
engineers and managers available to this engagement. PDF may staff additional
engineers during critical points during the term of this Agreement.
TOOLS
SONY will provide PDF with office space in *********** and other typical
business resources reasonably requested from time to time by PDF. In
particular, SONY will provide PDF with secure office space large enough to
accommodate up to ****** PDF personnel in addition to the SONY engineers
assigned to work on the ********. SONY will provide PDF with office equipment
reasonably requested by PDF from time to time including ******* international
access telephones (including such analog lines as PDF shall request), an
international access Facsimile machine and line, and a photocopier. SONY will
provide PDF with 24-hour access to the team office so work can continue at
night and on weekends.
SONY will provide PDF with computing resources that PDF reasonably deems
necessary to conduct data analysis and simulations. The details of such request
will be sent in a separate document to the SONY project leader but in general,
SONY will provide ****** engineering workstations connected to **************
the Internet. SONY will also provide such other accessories as PDF shall
reasonably request including a removable data storage device, such as a tape
drive, and a printer.
LOCATION
The Project will be conducted by SONY's and PDF's personnel at SONY's
Subsidiary , and by PDF's personnel at PDF's facilities. In certain cases, PDF
may require SONY engineers to work at the PDF facility in San Jose, California.
PDF engineers may also work in SONY's Subsidiary when the engagement manager
believes this is necessary to achieve progress. If SONY shall provide PDF
employees with an English version of the employee rules and regulations in force
at the SONY facilities, then PDF employees shall comply with such rules and
regulations in all material respects in an equivalent manner as other SONY
employees generally. PDF shall take all reasonable steps necessary to ensure
that all employees resident at or visiting a SONY facility shall treat as
confidential in accordance with Section 6 all material information of a
proprietary nature observed by or disclosed to such employee, and shall comply
in all material respects with all export control obligations contained in
Section 8.
DURATION
The Project will proceed for a period of *********** following the acceptance of
the last Characterization Vehicle Deliverables unless earlier terminated
pursuant to the Agreement.
ExA-5
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Appendix A
**********
APP-1