* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
ADVANCE PRODUCTION PAYMENT AGREEMENT
THIS ADVANCE PAYMENT AGREEMENT ("this Agreement"), is entered into this March
17, 1997, by and among SEIKO EPSON CORPORATION, a Japanese corporation having
its principal place of business at 3-5, Owa 3-chome, Suwa-shi, Nagano-ken 392,
Japan ("Epson"), S MOS Systems Inc., a California corporation, having a place of
business at 150 River Oaks Parkway, San Jose, California 95134-1951, U.S.A.
("SMOS") and Lattice Semiconductor Corporation, a Delaware corporation, having a
place of business at 5555 N.E. Moore Ct., Hillsboro, Oregon 97124-6421, U.S.A.
("Lattice").
1 BACKGROUND
1.1 EPSON
Epson is in the business of designing, manufacturing, testing and
selling semiconductor devices, among other products. Epson
manufactures such semiconductor devices at its plant located at 281
Fujimi, Fujimi-machi, Suwa-gun, Nagano-ken 399-02, Japan (the "Fujimi
Facility") and its plant located at 166-3 Jurizuka, Sakata-shi,
Yamagata-ken 998-01, Japan (the "Sakata Facility").
1.2 SMOS
SMOS is an affiliate of Epson and is Epson's authorized distributor in
the United States for semiconductor devices. SMOS is in the business
of designing, testing and selling semiconductor devices. SMOS conducts
its business at its office located at 150 River Oaks Parkway, San Jose,
CA 95134-1951, U.S.A.
1.3 LATTICE
Lattice is in the business of designing, developing, manufacturing and
marketing and selling both high- and low-density E(2)-CMOS-Registered
Trademark- programmable logic devices and related development system
software.
1
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
1.4 SCOPE OF AGREEMENT
Epson and SMOS have an ongoing business relationship with Lattice
whereby Epson fabricates semiconductor devices for Lattice. The parties
entered into an advance production payment agreement dated July 5, 1994
for development and manufacture of 0.8-0.5 micron, 2-3 metal layer, 6
inch CMOS semiconductor wafers. The parties desire to expand their
relationship. Specifically, Lattice desires to develop and sell high
performance, advanced architecture semiconductor devices, and Epson
desires to construct ( * ) CMOS process line installed in the Site (as
hereafter defined) in order to fabricate such semiconductor wafers and
distribute them to Lattice through SMOS. Accordingly, the parties agree
that Lattice will pay to Epson an advance production payment ("APP")
only to be used as a credit to purchase the Products from Epson through
SMOS over a specified period of time in accordance with this Agreement.
The Products shall be first sold to SMOS from Epson, and then be sold to
Lattice from SMOS under the terms and conditions of the Purchase
Agreement (as hereafter defined). (In the event that SMOS has fallen
into a situation where it is unable to play the role required under this
Agreement for any reason specifically prescribed in this Agreement or
any other reason, Epson and Lattice will mutually consult about the
substitute form of the transaction contemplated herein.)
1.5 POSITION OF SMOS
Notwithstanding any provision herein to the contrary, Lattice, Epson and
SMOS acknowledges that although this Agreement is executed by each of
such three (3) parties, SMOS is a party hereto solely for the purpose to
evidencing its role, as the intermediary through which, under the terms
of the Purchase Agreement, the Products to be sold to Lattice by Epson
will be sold, and to evidence SMOS'S agreement to such an arrangement.
SMOS shall under no circumstances have any rights under this Agreement
(it being understood, however, that this Article 1.5 shall not in any
way affect the rights of SMOS under the Purchase Agreement). In
particular, and without limiting the generality of the foregoing, SMOS
shall have no rights under Article 14 of this Agreement (i.e., any
reference to party or parties to this Agreement shall be deemed to be
only to Epson and Lattice unless
2
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
specifically prescribed therein), and Epson and Lattice may amend this
Agreement in any respect. Epson agrees to cause SMOS to comply with all
of the terms of this Agreement and the Purchase Agreement. Any material
breach of the Purchase Agreement shall constitute a material breach to
this Agreement for the purpose of Article 14.4 of this Agreement.
2 DEFINITIONS
2.1 "APP" will mean the advance production payment of Ten Billion Four
Hundred and Sixty Nine Million and Seven Hundred Thousand Japanese Yen
(JPY10,469,700,000) to be made by Lattice to Epson in the manner
described in Article 4. If the parties agree, in accordance with
Article 4.4, on additional APP, the definition of "APP" hereof shall be
interpreted to include such additional APP.
2.2 "EQUIPMENT" will mean the semiconductor fabrication equipment that
Epson will install in the New Facility for purposes of fabricating New
Facility Wafers.
2.3 "EXISTING AGREEMENTS" will mean those contracts for the development,
fabrication, testing and/or sale of semiconductor devices between Epson
and Lattice in effect as of the date of this Agreement.
2.4 "FREE WAFERS" will have the meaning ascribed to it in Article 8.
2.5 "FUJIMI FACILITY" will have the meaning ascribed to it in Article 1.1.
2.6 "NEW FACILITY" will mean the ( * ) CMOS process line constructed at the
Site using the Equipment.
2.7 "NEW FACILITY WAFERS" will mean the semiconductor wafers to be
fabricated by Epson for Lattice at the New Facility.
2.8 "PRICE" will have the meaning ascribed to it in Article 10.1.
3
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
2.9 "PRODUCTS" will mean those specific types of New Facility 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). The Products which the
parties desire to fabricate at the New Facility will be agreed by and
between Epson and Lattice, referring to the Process Road Map for
Lattice 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.
2.10 "PURCHASE AGREEMENT(S)" will mean the agreements by and between SMOS
and Lattice pursuant to which SMOS agrees to sell and Lattice agrees to
purchase the Products. It is the intention of the parties to execute
the Purchase Agreement, the terms of which shall be negotiated and
agreed between SMOS and Lattice, after the execution of this Agreement.
2.11 "PROJECTED COMPLETION SCHEDULE" will have the meaning ascribed to it in
Article 3.1.2.
2.12 "PURCHASE COMMITMENT" will have the meaning ascribed to it in Article
7.1 and Exhibit D attached hereto.
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 "SUPPLY COMMITMENT" will have the meaning ascribed to it in Article 6.1
and Exhibit D.
2.16 ( * ) Process will mean the ( * ), CMOS 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
4
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
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 Lattice 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.
2.17 "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
Lattice, as the case may be, but only so long as such control exists.
3 CONSTRUCTION AND REPRESENTATION
3.1 CONSTRUCTION OF THE NEW FACILITY
3.1.1 LOCATION AND COSTS
Epson hereby agrees, subject to its receipt of the full amount of
the APP 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 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 Lattice
in writing and (a) explain the reason for the delay, (b) describe
the estimated amount of time that construction will be delayed and
(c)
5
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
describe the action that Epson will take to minimize the delay.
3.1.3 BUSINESS INTERRUPTION INSURANCE
Epson will use its best efforts to 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 Lattice, upon
written request, full information concerning the business
interruption insurance coverage.
3.1.4 FIRST SHIPMENT DELAY
In the event that the first mass production of the first Product is
expected to be delayed beyond the process road map described in the
latest version of Exhibit B, firstly, the shipment of such Product
shall be made by utilizing existing facilities in the Sakata
Facility subject to successful completion of the relevant process
at such existing facility. Such alternative shipment shall not be
applied for off-setting the APP. Epson shall provide regular
action plans for the cure of the delay, and make monthly progress
reports to Lattice. If no cure is achievable by the beginning of
( * ), and if the delay is not caused by Lattice, then Epson shall,
in addition to the Free Wafers as prescribed in Article 8 hereof,
provide additional free wafers ( * ).
3.1.5 DESIGN REQUIREMENTS
Epson acknowledges that Lattice may require certain safety and
security requirements for semiconductor fabrication facilities, and
Epson agrees to work with Lattice to incorporate such requirements
into the design of the New Facility to the extent reasonably
requested by Lattice and commercially feasible.
6
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
3.2 REPRESENTATIONS OF EPSON
In order to induce Lattice to enter into this Agreement and to make the
APP hereunder, Epson hereby represents and warrants that:
3.2.1 CORPORATE STATUS
Epson (a) is duly organized, validly existing and 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 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 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.
3.2.4 NO MATERIAL LITIGATION
No litigation, investigation or administrative proceeding is
presently pending, or to the knowledge of Epson, threatened against
Epson which, if adversely determined, would materially affect
Epson's ability to carry out the terms and conditions of this
Agreement. If such material litigation, investigation or
administrative proceeding is commenced against Epson, Epson shall
notify Lattice thereof within
7
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
thirty (30) days of the commencement.
3.3 REPRESENTATION OF SMOS
In order to induce Lattice to enter into this Agreement and to make the
APP hereunder, SMOS hereby represents and warrants that:
3.3.1 CORPORATE STATUS
SMOS (a) is duly organized, validly existing and 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 SMOS
to perform its obligations under this Agreement.
3.3.2 CORPORATE AUTHORITY
(a) SMOS has the corporate power, authority 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 SMOS and (c) there are no
outstanding assignments, grants, licenses, encumbrances, obligations
or agreements, either written, oral or implied, that prohibit
execution of this Agreement.
3.3.3 NO MATERIAL LITIGATION
No litigation, investigation or administrative proceeding is
presently pending, or to the knowledge of SMOS, threatened against
SMOS which, if adversely determined, would materially affect SMOS's
ability to carry out the terms and conditions of this Agreement. If
such material litigation, investigation or administrative proceeding
is commenced against SMOS, SMOS shall notify Lattice thereof within
thirty (30) days of the commencement.
3.4 REPRESENTATIONS OF LATTICE
In order to induce Epson to enter into this Agreement and to make the
Supply Commitment, Lattice hereby represents and warrants
8
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
that:
3.4.1 CORPORATE STATUS
Lattice is duly organized, validly existing and 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
Lattice to perform its obligations under this Agreement.
3.4.2 CORPORATE AUTHORITY
(a) Lattice has the corporate power, authority 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 Lattice and (c) there are no
outstanding assignments, grants, licenses, encumbrances, obligations
or agreements, either written, oral or implied, that prohibit
execution of this Agreement.
3.4.3 NO MATERIAL LITIGATION
No litigation, investigation or administrative proceeding is
presently pending, or to the knowledge of Lattice, threatened
against Lattice which, if adversely determined, would materially
affect Lattice's ability to carry out the terms and conditions of
this Agreement. If such material litigation, investigation or
administrative proceeding is commenced against Lattice, Lattice
shall notify Epson thereof within thirty (30) days of the
commencement.
4 APP
4.1 APP
Lattice shall pay to Epson an amount equal to Ten Billion, Four Hundred
sixty nine Million and Seven Hundred Thousand Japanese Yen
(JPY10,469,700,000) ("APP"), which APP will be credited against certain
future purchases by Lattice of New Facility
9
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
Wafers as provided in Article 5. Lattice will pay the whole amount of
APP in accordance with the payment schedule described in Exhibit C
hereof.
4.2 PAYMENT METHOD
All payments made by Lattice to Epson will be in immediately available
funds and will be made by wire transfer in Japanese Yen to the following
bank account of Epson at:
( * )
( * )
For the Account of Seiko Epson Corporation.
4.3 NON-REFUND OF APP
The APP will not be refundable except as provided in Articles 6.4.1 or
14.8.
4.4 ADDITIONAL APP
Epson acknowledges that Lattice may wish to pay to Epson additional APP
of Sixty Million U.S. Dollars (US$60,000,000), to be converted to, and
paid in Japanese Yen using U.S. dollar/Japanese Yen exchange rate
prevailing in Tokyo, as published in Nihon Keizai Shinbun (Nikkei
Newspaper), as at the end of a month immediately preceding the month
during which the parties execute an amendment to this Agreement to
effectuate such additional APP. Lattice will notify Epson by ( * ),
whether or not it wishes to pay such additional APP. If Lattice so
wishes to pay to Epson additional APP, Lattice's additional APP shall be
deemed to be a part of the APP for all purposes hereunder, including but
not limited to the same Price, procedure to offset from the additional
APP, and Free Wafers. The specific terms for such additional APP,
including payment terms, term of this Agreement and the additional
Supply/Purchase Commitment shall be determined and added as an addendum
to this Agreement within ninety (90) days of Lattice's first
notification stated above.
5 CREDIT OF APP
5.1 CREDIT OF APP
The Purchase price of all New Facility Wafers purchased by
10
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
Lattice under the Purchase Agreement will be credited against the amount
of the APP until the aggregate Japanese Yen value of all New Facility
Wafers (excluding the Free Wafers) purchased and received by Lattice,
calculated pursuant to Article 5.2, equals or exceeds the amount of the
APP. The criteria and time required for wafer acceptance by Lattice
will be described in the Purchase Agreement.
5.2 CALCULATION OF AGGREGATE CREDIT VALUE
The amount of APP will be offset and reduced on Japanese Yen to Japanese
Yen basis, at the end of each calendar month of this Agreement, by an
amount equal to the Price for the New Facility Wafers multiplied by the
total number of New Facility Wafers (excluding the Free Wafers) shipped
to Lattice pursuant to the Purchase Agreement during the calendar month,
with adjustment of the increase pursuant to the methods provided in the
Purchase Agreement, however under no circumstances shall the APP balance
be increased, except as provided for in Article 14.8 of this Agreement.
Further, any wafer provided to Lattice under Article 6.4.1 from
alternative facility, besides the New Facility, shall not be used to
offset the APP.
5.3 INVOICES
Epson will cause SMOS to provide Lattice with invoices under the
Purchase Agreement which, for the purpose of APP application, specify
the purchase price of the New Facility Wafers. Also, SMOS shall provide
Lattice and Epson with the monthly report describing, among others, the
outstanding balance of the APP (after the application of all prior
offsets, reductions and credits) as of the commencement of the month
subject to the invoices, the number of New Facility Wafers shipped to
Lattice during that calendar month and the applied Price, and the
outstanding balance of the APP as of the end of such calendar month.
Such report shall be signed by the respective responsible person at
Epson, SMOS and Lattice, provided that Lattice shall not be required to
sign any such report unless it is satisfied with the accuracy and
completeness thereof. Lattice may, for its signature, review all
invoices and reports for inaccuracies and if any such inaccuracies are
found and confirmed by Epson and
11
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
SMOS, Lattice may request to make corrections to these invoices and
reports.
5.4 OBLIGATION AFTER COMPLETION OF OFF-SETTING THE APP
Lattice will be required to pay for all New Facility Wafers in
accordance with the Purchase Agreements once the Advance Payment has
been fully offset and reduced. Lattice will make the payments to Epson
in Japanese Yen based on the Price. Further, Epson will be required to
fulfill the Supply Commitment and Lattice will be required to fulfill
the Purchase Commitment until Lattice has purchased ( * ) New Facility
Wafers. After Lattice has purchased this fixed volume of the New
Facility Wafers, during the effective period of this Agreement, Epson
and Lattice will continue to make efforts to supply and purchase at the
rate to be mutually agreed under fair and competitive prices to be
determined between the parties.
6 SUPPLY COMMITMENT
6.1 CONTENTS OF SUPPLY COMMITMENT
It is the intent of Lattice to purchase and Epson to supply New Facility
Wafers until a total ( * ) New Facility Wafers have been supplied to
Lattice by Epson through SMOS and received and accepted by Lattice
("Supply Commitment"). The Supply Commitment and the supply schedule
thereof are set forth in Exhibit D. The Supply Commitment herein shall
remain in effect until Lattice has received and accepted a total of
( * ) New Facility Wafers (exclusive of the Free Wafers) through SMOS
from Epson under this Agreement. Dealing of New Facility Wafers
rejected by Lattice for any reason shall be as described in the Purchase
Agreement. The Supply Commitment for a particular month may be modified
as specifically set forth in this Agreement, but under no circumstances
shall the aggregate Supply Commitment of ( * ) New Facility Wafers be
reduced.
6.2 PURCHASE AGREEMENTS
The Supply Commitment will apply to Products covered by the Purchase
Agreements. The parties anticipate that such Purchase Agreements will
apply to Products distributed by Lattice which require fabrication using
the ( * ) Process.
12
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
6.3 EXCESS CAPACITY
Epson will use its best efforts to provide Lattice, through SMOS, with
excess capacity of the New Facility if Lattice requires so in the manner
specified below. In this case, APP shall be applied to Lattice's orders
of New Facility Wafers in excess of the Supply Commitment of the month.
Also, the Free Wafers prescribed in Article 8 shall be provided for such
excess volume of the New Facility Wafers. First, in the event that
Lattice desires to purchase New Facility Wafers in excess of the
Purchase Commitment, Lattice 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, and notify Epson of it through
SMOS.
Second, Epson will then determine how much capacity is available and
notify Lattice of its determination through SMOS. Epson will give
Lattice 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. Any excess capacity allocated under this Article
6.3 will be applied to the Supply Commitment and to the Purchase
Commitment.
In order to provide Lattice with first priority for unused capacity
using the specific process for Lattice, Epson agrees to give Lattice
monthly written notice of any unused capacity using the specific process
for Lattice for the next ( * ), and to provide Lattice with the first
right to reserve such unused capacity for any New Facility Wafers which
Lattice desires to purchase in excess of the Purchase Commitment.
Lattice will have a reasonable time to elect to reserve such excess
capacity. The parties acknowledge that "specific process for Lattice"
above refers to Lattice's ( * ) process, and that Epson's capacity plan
at the time of executing this Agreement shows that approximately ( * )
of total production capacity of the New Facility will be for ( * )
process, subject to change by then-current production plan of Epson.
Epson will notify Lattice if the capacity set aside for ( * ) process
will change by ( * ) of the total
13
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
capacity.
6.4 FAILURE TO MEET SUPPLY COMMITMENT
6.4.1 FAILURE DUE TO EPSON
In the event that (a) Epson fails to fulfill the Supply Commitment
by the end of any month during the term of this Agreement or (b)
Epson has reason to believe that it will be unable to fabricate the
Supply Commitment by the end of such month, then Epson will take the
following measures:
First, Epson will promptly notify Lattice 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 meet the Supply Commitment (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, the Fujimi Facility or Epson's other qualified
facility to cover the deficiency between the Supply Commitment and
the actual capacity subject to completion of product qualification.
The parties acknowledge, however, that Epson cannot guarantee the
use of such alternative capacity.
Fourth, if Epson's inability to fulfill the Supply Commitment is due
to force majeure prescribed in Article 15.14, Epson will use its
best efforts to make available alternative capacity at the Sakata
Facility and/or Fujimi Facility. The parties acknowledge, however,
that Epson cannot guarantee the use of existing capacity at the
Sakata Facility or Fujimi Facility.
Notwithstanding any provision of this Agreement to the contrary, in
the event that Epson fails to fulfill the Supply Commitment
(including any failure by virture of the
14
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
action or inaction of SMOS or any of the deficiency within the three
(3) month period referenced above), such failure shall constitute a
material breach of this Agreement and Epson, SMOS and Lattice shall
discuss the relief of such breach prior to Lattice's termination of
this Agreement based on the right permitted in Article 14.4 (which
termination may be made without the notice and cure period
contemplated by Article 14.4).
6.4.2 FAILURE DUE TO LATTICE
Notwithstanding anything contained in Article 6.4.1 to the contrary,
in the event that Epson fails to fulfill the Supply Commitment in
any month due to (a) design defects in Products caused by Lattice,
(b) design changes requested by Lattice, (c) process flow changes
requested by Lattice or (d) any other reason caused by Lattice,
Epson will only be required to make reasonable efforts to fulfill
the Supply Commitment in such month. Provisions concerning
Lattice's failure to fulfill its Purchase Commitment are set forth
in Article 7.2.
6.4.3 FAILURE DUE TO BOTH PARTIES
Notwithstanding anything contained in Article 6.4.1, 6.4.2 or 7.1 to
the contrary, in the event that Epson fails to fulfill the Supply
Commitment and Lattice fails to fulfill the Purchase Commitment due
to difficulties caused jointly by Lattice and Epson, the parties
will mutually agree in writing upon a fair and equitable solution.
6.4.4 FAILURE DUE TO CATASTROPHE
In the event that any fire, flood, earthquake, explosion or any
other catastrophe prevents Epson from fabricating New Facility
Wafers for Lattice, (a) Epson will immediately implement the
measures required by Article 6.4.1, (b) Epson
15
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
will permit Lattice to inspect the New Facility, and (c) the parties
will begin good faith negotiations to agree on a corrective action
plan.
7 PURCHASE COMMITMENT
7.1 CONTENT OF PURCHASE COMMITMENT
Lattice intends to purchase each month the number of New Facility Wafers
(the "Purchase Commitment") equal to the Supply Commitment until ( * )
wafers have been purchased. Lattice will not be required to fulfill the
Purchase Commitment in the event that Epson fails to fulfill the Supply
Commitment in the manner specified in Article 6.4.1. Instead, subject
to the terms of the Purchase Agreement, Lattice will be required to
purchase those New Facility Wafers that Epson is able to fabricate up to
the Purchase Commitment for each month. Lattice will not be required to
fulfill the Purchase Commitment in the event of difficulties caused by
both Epson and Lattice. Instead, the parties will mutually agree in
writing upon a fair and equitable solution.
7.2 SALE OF UNUSED CAPACITY
In the event that Lattice is unable to fulfill the Purchase Commitment
in any month for reasons not due to Epson, Epson will use its best
efforts to sell unused capacity to other customers, or to allocate
unused capacity for the fabrication of Epson products during such month.
Further, the Supply Commitment for such month will be reduced to the
same extent that Lattice is unable to fulfill the Purchase Commitment.
When Lattice desires to increase its monthly purchases after Epson has
sold or otherwise allocated unused capacity, then Epson will use its
best efforts to increase capacity for Lattice to the Supply Commitment
in an expeditious manner. The parties will mutually agree upon the
specific rate at which Epson will be required to ramp up capacity to the
Supply Commitment.
16
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
8 FREE WAFERS
As a consideration for Lattice's payment of APP, Epson shall provide Lattice
with ( * ) free wafers of a Product ("Free Wafers") through SMOS pursuant to
the Purchase Agreement for every ( * ) New Facility Wafers ordered by Lattice
after the execution of this Agreement ( * ) until Epson has supplied ( * )
New Facility Wafers (excluding the Free Wafers).
9 FABRICATION, PURCHASE AND SALE
9.1 GENERAL TERMS AND CONDITIONS
The terms and conditions for the 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
have agreed to certain order and forecast systems as described in
Exhibit F, which will be incorporated in the Purchase Agreement. The
parties acknowledge that a best estimation and target of defect
densities as at the date of this Agreement is set forth in Exhibit H
attached hereto, which will be reviewed and amended from time to time by
the parties hereto, and will be incorporated into all Purchase
Agreements.
9.2 START OF PRODUCTION
Qualification testing for the Products will be conducted in the manner
specified in the Purchase Agreement. Once any Product has been
qualified, Epson will begin mass production of such Product in the
manner specified by the Purchase Agreement.
9.3 TURN AROUND TIME
The parties acknowledge that the lead time for shipment of New Facility
Wafers, defined as the time from Lattice's purchase order release until
delivery of New Facility Wafers, 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 I.
10 WAFER PRICING AND PAYMENT
17
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
10.1 DETERMINATION OF PRICE
The general method for determining the price of Products ("Price") shall
be as set forth in Exhibit E. Epson agrees that at any time the Prices
to Lattice ( * ). The Price herein shall be applicable until Lattice
has completed the purchase of ( * ) New Facility Wafers under the terms
of this Agreement.
10.2 SHIPPING, INSURANCE, TAXES, DUTIES AND OTHER FEES
Epson will deliver the Products on a C.I.F., San Jose basis, and SMOS
will deliver such Products to Lattice on an F.O.B., San Jose basis.
Bearing of sales, use, excise, ad valorem, withholding or other taxes or
duties that may be applicable to purchase of the Products by Lattice
shall be prescribed in the Purchase Agreement.
10.3 PAYMENT
Other than through offset of the APP, Lattice will not be required to
pay for any New Facility Wafers delivered under this Agreement or any
Purchase Agreement until the APP has been fully offset and reduced.
Once the APP is fully offset and reduced, Lattice will be required to
pay Epson in the manner specified in the Purchase Agreement based on the
Price until Lattice has completed the purchase of ( * ) New Facility
Wafers under the terms of this Agreement.
11 TECHNICAL COOPERATION AND SUPPORT
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,
including SMOS, will discuss such joint development possibilities, and will
conclude appropriate agreement(s).
12 INTELLECTUAL PROPERTY RIGHTS
All intellectual property rights clauses relating to ( * ) Process and the
Products will be set forth in the Purchase Agreement. Lattice agrees that
any indemnity or warranty that Lattice expressly provides to Epson or SMOS
under the Purchase Agreement will be fully
18
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
enforceable by Epson even though Epson has not executed the Purchase
Agreement. Furthermore, Epson agrees that any indemnity or warranty that
Epson or SMOS purports to provide to Lattice under the Purchase Agreement
will be fully enforceable by Lattice even though Epson has not executed the
Purchase Agreement. In the event that any claims for intellectual property
rights infringements described in the Purchase Agreement prevent the parties
from fulfilling the Supply Commitment and the Purchase Commitment, the
parties will mutually agree on a fair and equitable solution without
affecting in any way the right of either party to terminate this Agreement
for cause pursuant to Article 14.4 as a consequence of failure of the other
party to fulfill this Agreement and the Purchase Agreement as the case may
be. The parties acknowledge that the covenants contained in this Article 12
are an essential part of this Agreement.
13 CONFIDENTIAL INFORMATION
13.1 DEFINITIONS
"Confidential Information" means technical information, specifications,
data, drawings, designs or know-how, prices, order volumes, forecasts,
financial information, strategic plans, and other important business
information disclosed between Epson and Lattice, or SMOS and Lattice in
connection with this Agreement. Confidential Information includes
information or material that is expressly covered by confidentiality
provisions of Existing Agreements or the Purchase Agreement, it being
understood that such provisions will apply.
13.2 MARKING
If Confidential Information is provided in a tangible form, 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.
19
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
13.3 RESTRICTIONS ON USE
During the term of this Agreement and for a period of ( * ) 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 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
Confidential 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 Lattice);
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.
20
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
Each party may disclose any Confidential Information to the
extent that such party has been advised by counsel that such
disclosure is necessary to comply with laws or regulations
provided that such party shall give the other party reasonable
advance notice of such proposed disclosure, shall use its best
efforts to secure confidential treatment of such Confidential
Information, and shall advise the other party in writing of
the manner of the disclosure.
13.5 RETURN OF CONFIDENTIAL INFORMATION
Upon termination of this 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 disclosing party, or delivered to the
receiving party, together with all copies, excerpts and translations
thereof.
14 TERM AND TERMINATION OF AGREEMENT
14.1 TERM
The term of this Agreement will extend from the date first written above
until the latest of (a) Epson's completion of the supply of, and receipt
and acceptance by Lattice of, ( * ) New Facility Wafers in total ( * ),
(b) the completion of off-setting APP, or (c) ( * ), unless terminated
earlier pursuant to Article 14.2, 14.3 or 14.4. After the expiration of
this Agreement, Epson and Lattice 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 (except for the terms provided in Articles 14.5 and
14.6) 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
21
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
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) the other party fails to pay all or a substantial portion of
its debts as they become due or admits in writing its
inability to pay all or a substantial portion of its debts as
they become due; or
i) force majeure, as prescribed in Article 15.14, becomes in
effect and performance of the obligations under this Agreement
will not be restored within six (6) months after such force
majeure's occurrence.
14.3 TERMINATION DUE TO ACQUISITION OR SALE OF ASSETS
In the event that a direct competitor or 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, or such other party transfers all or substantially all of its
business to which this Agreement relates to a direct competitor of such
party, the non-aquiring or non-transferring party will be permitted,
upon written notice to the other party, to require that the
22
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
transactions contemplated by this Agreement and the Purchase Agreements
be phased out and terminated at a rate not to exceed, ( * ) of the
business existing at the time of the acquistion or transfer according to
the following schedule:
A B
- -
( * ) ( * )
( * ) ( * )
( * ) ( * )
( * ) ( * )
A- Time elapsed since acquisition or transfer of assets
B- Level to which business may be phased out measured as a percentage
of business existing at the time of the acquisition or transfer of
assets
Alternatively, the business may be phased out and terminated under this
Article 14.3 in a manner otherwise agreed upon in writing by the
parties.
14.4 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
23
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
completed and the default remedied.
14.5 TERMINATION BY EPSON
In the event that Epson terminates this Agreement pursuant to this
Article 14, then, unless otherwise agreed upon in writing, Epson may
offset and reduce the APP to cover all direct material and labor costs
for work in process rendered unusable by termination and will ship such
work in process to Lattice, at Lattice's expense, if requested to do so.
Upon such termination, Epson shall refund the remaining portion of APP
(reduced by the amount of any such offset and reduction to cover direct
material and labor costs for work in process rendered unusable by the
termination) no later than thirty (30) business days after the date of
termination.
14.6 TERMINATION BY LATTICE
In the event that Lattice terminates this Agreement pursuant to this
Article 14, then, unless otherwise agreed in writing, Lattice may either
(a) request that Epson refund the remaining portion of APP (from which
Epson may offset and reduce to cover all direct material and labor costs
for work in process rendered unusable by the termination) and then Epson
will refund the remaining portion of APP (as so offset and reduced) or
(b) request Epson to complete all work in process and ship them under
normal terms and conditions, and then Epson will refund the remaining
portion of APP (excluding, without limitation, the costs and expenses
which have arisen in connection with completing all work in process and
shipping thereof), with in either such case such refund to be paid upon
the earlier of:
(a) receipt of sufficient funding from a financial institition or other
source for purposes of paying the refund, or
(b) thirty (30) days from the date of termination.
24
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
14.7 RETENTION OF RIGHTS AFTER TERMINATION
Notwithstanding anything contained in this Article 14 to the contrary,
in the event that either party is entitled to terminate this Agreement
pursuant to Articles 14.2 (f), (g) or (h) or either party is subject to
a bankruptcy, reorganization or liquidation proceeding, the other party
may elect to (a) retain its rights in this Agreement existing
immediately prior to termination pursuant to Article 14.2 (f), (g) or
(h) or the initiation of such proceeding or (b) treat any such
proceeding or attempted rejection of this Agreement by a bankruptcy
trustee as an event of termination. Unless otherwise provided, in the
event of such termination, Epson shall refund the remaining portion of
the APP in accordance with article 14.5 or 14.6 as applicable.
14.8 RECONCILIATION
In the event of termination that results in a refund of the APP balance
pursuant to Article 14 (or would result in such a refund if the APP
balance were increased by the net return material account balances, if
any, under the Purchase Agreement), Epson shall cause SMOS to bring
current the APP, Free Wafers and return material account balances as
provided for in the Purchase Agreement in order to reconcile the account
with Lattice, and to refund the mutually agreed net amount.
14.9 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, and 15.
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 Lattice and accepted by SMOS (or Epson), priority
will be given first to this Agreement, second to the Purchase
Agreements, third to SMOS's or
25
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
Epson's acceptance, fourth to Lattice'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 Lattice and
SMOS (or Epson), unless expressly accepted in writing by the other
party.
15.2 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of California, U.S.A. without reference to conflict of law
principles.
15.3 DISPUTE RESOLUTION
15.3.1 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.
15.3.2 LOCATION OF MEETING
In the event that Epson initiates the proceedings described in
Article 15.3.1, the first meeting will be held Hillsboro, Oregon and
all subsequent meetings will alternate between Tokyo, Japan, and
Hillsboro, Oregon. In the event that Lattice initiates the
proceedings described in Article 15.3.1, the first meeting will be
held in Tokyo, Japan and all subsequent meetings will alternate
between Hillsboro, Oregon and Tokyo, Japan.
15.3.3 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.
26
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
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 translators 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 15.3.3 and
without any abridgement 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.
15.3.4 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.
15.3.5 BINDING EFFECT
The decision or award rendered or made in connection with
27
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
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.
15.3.6 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; provided, however, if the
arbitrators appointed in Article 15.3.4 find that the position of
the non-prevailing party or parties in such arbitration was without
substantial justification or was frivolous, the arbitrators may
assess all of the costs and expenses together with reasonable
attorney's fees against the non-prevailing party or parties.
15.4 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; PROVIDED, HOWEVER, THIS LIMITATION WILL NOT
APPLY IF THE DAMAGES OCCUR AS A RESULT OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF EITHER PARTY IN THE PERFORMANCE OF THEIR RESPONSIBILITIES
UNDER THIS AGREEMENT.
15.5 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 in the case set forth in Article 14.3, above, this Agreement may
be assigned to any Subsidiary or to a successor who has acquired a
majority of the business or assets of the assigning party.
28
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
15.6 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, Lattice may disclose the
existence and the terms of this Agreement in any document legitimately
required to be filed with the Securities and Exchange Commission (and
may file a copy of this Agreement required legitimately with such
filing) or in accordance with generally accepted accounting procedures
under the rules of the Securities and Exchange Commission or the
National Association of Securities Dealers Automated Quotations stock
market.
15.7 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:
281 Fujimi, Fujimi-machi, Suwa-gun
Nagano-ken 399-02, Japan
Attn: Nobuo Hashizume,
Director and Corporate General Manager
Semiconductor Operations Division
Tel: 81-266-61-1211
Fax: 81-266-61-1270
To SMOS:
150 River Oaks Parkway, San Jose, CA 95134-1951
U.S.A.
Attn: Tadakatsu Hayashi, President and CEO
Tel: 1-408-922-0200
Fax: 1-408-922-0238
To Lattice:
5555 N.E. Moore Ct., Hillsboro, Oregon,
29
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
97124-6421, U.S.A.
Attn: Cyrus Tsui
Chairman, President and Chief Executive Officer
Tel: 1-503-681-0118
Fax: 1-503-681-3077
Any such notice will be deemed given at the time of its receipt by the
addressee.
15.8 RELATIONSHIP OF THE PARTIES
Epson and Lattice 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.
15.9 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.
15.10 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.
30
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
15.11 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.
15.12 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.
15.13 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.
15.14 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.
15.15 COUNTERPARTS
This Agreement may be executed in any number of counterparts, and all
such counterparts will together constitute but one Agreement.
15.16 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.
15.7 GOVERNMENT APPROVALS; EXPORT CONTROL LAWS
Epson will file all reports and notifications that may be
31
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
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.
Lattice will file all reports and notifications that may be required to
be filed with any agency of the Government of U.S.A. in order to allow
the performance of this Agreement according to its terms. 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.
32
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first above written.
LATTICE SEMICONDUCTOR CORPORATION
By: /s/ CYRUS TSUI
--------------------------------------------------
Name: Cyrus Tsui
Title: Chairman, President and Chief Executive Officer
SEIKO EPSON CORPORATION
By: /s/ NOBUO HASHIZUME
--------------------------------------------------
Name: Nobuo Hashizume
Title: Director and Corporate General Manager
Semiconductor Operations Division
S MOS Systems, Inc.
By: /s/ TADAKATSU HAYASHI
--------------------------------------------------
Name: Tadakatsu Hayashi
Title: President and CEO
33
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT A
"Projected Completion Schedule"
EXHIBIT B
"Process Road Map for Lattice"
EXHIBIT C
"Payment Schedule"
EXHIBIT D
"New Facility Production Capacity and
Supply/Purchase Commitment"
EXHIBIT E
Price Determination Procedure"
"APP Offset Procedure"
"( * )"
EXHIBIT F
"Forecast System"
EXHIBIT G
"Epson's ( * ) Technology Road Map and ( * ) Process"
EXHIBIT H
"Defect Density Goal"
EXHIBIT I
"Turn Around Time"
34
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT A
PROJECTED COMPLETION SCHEDULE
( * )
35
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT B
PROCESS ROAD MAP FOR LATTICE
( * )
36
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT C
PAYMENT SCHEDULE
( * )
37
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT D
NEW FACILITY PRODUCTION CAPACITY PLAN
AND SUPPLY/PURCHASE COMMITMENT
( * )
38
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT E
PRICE DETERMINATION PROCEDURE
( * )
APP OFFSET PROCEDURE
( * )
( * )
( * )
39
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT F
FORECAST SYSTEM
( * )
40
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT G
EPSON'S ( * ) TECHNOLOGY ROAD MAP AND ( * ) PROCESS
( * )
41
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT H
DEFECT DENSITY GOAL
( * )
42
* Omitted and filed separately with the SEC pursuant to a confidential
treatment request.
EXHIBIT I
TURN AROUND TIME
( * )
43