EXHIBIT 10.14
PRODUCT DISTRIBUTION AGREEMENT
This Product Distribution Agreement (this "Agreement") is entered into as of
March 31, 2001, between Millipore Corporation ("Millipore"), a Massachusetts
corporation with its principal place of business at 80 Ashby Road, Bedford, MA
01730, and Mykrolis Corporation ("Mykrolis"), a Delaware corporation with its
principal place of business at Patriots Park, Bedford, MA 01730.
RECITALS
1. Millipore currently owns all of the issued and outstanding common
stock of Mykrolis.
2. Millipore and Mykrolis have entered into a Master Separation and
Distribution Agreement as of March 28, 2001 (the "Master Agreement") under
which, among other things, the business of Millipore's Microelectronics Division
is to be taken over by, and the assets and liabilities associated therewith are
to be transferred to and assumed by, Mykrolis at the Separation Date (as defined
in the Master Agreement).
3. After the Separation Date, in order to enable Millipore and Mykrolis
to carry on their respective businesses as separate companies, Millipore and
Mykrolis desire to provide for a product distribution arrangement relating to
certain products that have been historically manufactured by Millipore and sold
to customers of both Millipore's Microelectronics Division and one or more of
Millipore's other divisions, but which will become the products of either
Millipore or Mykrolis following the Separation Date.
4. The Master Agreement provides for this Agreement to be entered into as
of the Separation Date.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
1. Definitions
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The following terms shall have the meanings assigned to them below
whenever they are used in this Agreement. Capitalized terms used in this
Agreement without definition and which are defined in the Master Agreement shall
have the meanings assigned to them in the Master Agreement. Except where the
context otherwise requires, words imparting the singular shall include the
plural and vice versa, words denoting any gender shall include all genders and
words denoting persons shall include bodies corporate and vice versa.
"Distributed Products" shall mean the Millipore Products when Millipore is
the Manufacturer and Mykrolis is the Distributor, and shall mean the Mykrolis
Products when Mykrolis is the Manufacturer and Millipore is the Distributor.
"Distributor" shall mean a party to this Agreement that orders certain
Products for distribution pursuant to this Agreement and to whom such Products
are sold.
"Field of Use" of a party shall mean (i) for Millipore, the Millipore Core
Business, and (ii) for Mykrolis, the Mykrolis Core Business.
"Manufacturer" shall mean a party to this Agreement that manufactures
certain Products and that sells such Products to the other party for
distribution hereunder.
"Millipore Products" shall mean (i) all products included as of the date
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of this Agreement in the product lines listed in Exhibit A hereto or thereafter
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added to such product lines during the Term of this Agreement, and any improved
or updated versions and/or modifications of any of such products, and (ii) those
products that may become Millipore Products pursuant to Section 17 hereof.
"Mykrolis Products" shall mean all products included as of the date of this
Agreement in the product lines listed in Exhibit B hereto or thereafter added to
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such product lines during the Term of this Agreement, and any improved or
updated versions and/or modifications of any of such products, and (ii) those
products that may become Mykrolis Products pursuant to Section 17 hereof.
"Products" shall mean the Millipore Products and the Mykrolis Products.
"Releases" shall mean any purchase orders or other documents of purchase
that a Distributor may place with a Manufacturer for Distributed Products.
"Term" or "Term of this Agreement" shall mean the effective period of this
Agreement as set forth in Section 12 hereof.
2. Appointment of Distributor. Millipore hereby appoints Mykrolis as the
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exclusive worldwide distributor in the Mykrolis Core Business of the Millipore
Products for the Term of this Agreement. Mykrolis hereby appoints Millipore as
the exclusive worldwide distributor in the Millipore Core Business of the
Mykrolis Products for the Term of this Agreement. Neither Distributor shall
have any rights hereunder to distribute or resell Distributed Products outside
of its Field of Use, and neither Manufacturer shall be restricted in any way
from selling, distributing or marketing its Products in any fields or industries
other than the corresponding Distributor's Field of Use. Neither the
Manufacturer nor its Affiliated Companies will actively market, advertise,
solicit orders or knowingly accept orders of Distributed Products in the
Distributor's Field of Use, during the Term of this Agreement. Furthermore, the
Manufacturer shall use reasonable efforts to refer to the Distributor any
customer inquiries in the Distributor's Field of Use.
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3. Prices. Each Manufacturer shall sell the Distributed Products to the
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Distributor at a percentage discount of 35% off its U.S. list price for such
Distributed Products. The initial pricing will be based on the discount from
the U.S. list prices in effect on the Separation Date, and prices shall be
changed annually thereafter, as of the anniversary of the Separation Date, based
on the discount off U.S. list prices in effect on such anniversary date. Prices
shall be F.O.B. point of shipment by the Manufacturer.
4. Responsibilities of the Distributor.
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(a) Each Distributor shall comply with all laws and regulations applicable
to its distribution of the Distributed Products, including without
limitation the U.S. Foreign Corrupt Practices Act of 1977 and all U.S.
export control laws and regulations.
(b) Each Distributor shall use its reasonable best efforts to provide
service to and to perform all necessary repairs on all Distributed
Products sold by the Distributor in a prompt, professional and proper
manner. If the Manufacturer's personnel are needed to provide
installation, maintenance, or repair service for Distributed Products
sold by the Distributor, and the Manufacturer agrees to provide any
such service, the Manufacturer may charge the Distributor a reasonable
mutually agreed upon fee for such service. If any such repair or
replacement is required while the Distributed Products are still under
the applicable Manufacturer warranty, the Manufacturer will reimburse
the Distributor for the cost of replacement parts therefor.
5. Trademarks, Product Labeling and Packaging.
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(a) The trademarks of the Manufacturer and of its Affiliated Companies as
well as all other present or future trademarks of any of them shall be
conspicuously displayed and used by the Distributor in the sale and
promotion of the Distributed Products in a manner identical to or
consistent with the Manufacturer's own practice. All such trademarks
shall be and remain the sole property of the Manufacturer and any use
thereof by the Distributor shall be limited to the Distributed
Products. It is expressly agreed that the Distributor's use of the
Manufacturer's trademarks is with and on the consent of the
Manufacturer and that the Distributor shall acquire no rights in said
trademarks because of its use thereof. The Distributed Products will
bear the labeling and artwork of the Manufacturer, as affixed thereon
by the Manufacturer, and the Distributor will not modify such labeling
or artwork except to add labels stating "Distributed by [fill in name
of Distributor]. For service call ________." or a substantially
equivalent statement, or as may be otherwise expressly authorized in
writing by the Manufacturer in its sole discretion.
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(b) The Manufacturer shall package the Distributed Products in packaging
configurations currently in effect unless otherwise agreed by the
parties. At a Distributor's request, and with such Distributor's
assistance, the Manufacturer agrees to use its reasonable best efforts
to bar code the Distributed Products in a manner reasonably acceptable
to the Distributor. The Distributor agrees to accept the
Manufacturer's methodology for designating and displaying lot numbers
and expiration dates, if any.
6. Supply of Distributed Products
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(a) Each Manufacturer agrees to sell to the corresponding Distributor,
from time to time during the Term, Distributed Products, in the
amounts contained in the Distributor's Releases. Except as set forth
in Section 7(a) hereof, neither Distributor shall have any minimum or
maximum purchase requirements for any or all of such Distributed
Products hereunder, either per order or in the aggregate.
(b) Unless otherwise agreed by both parties in writing, this Agreement
applies to all Releases placed by a Distributor with the corresponding
Manufacturer during the Term. The terms and conditions of this
Agreement shall apply to any Release, whether or not this Agreement or
its terms and conditions are expressly referenced in the Release.
(c) Unless otherwise agreed by both parties in writing for a specific
transaction, no inconsistent or additional term or condition in any
Release, or in any acknowledgment, invoice or other document issued by
a Manufacturer in connection with a particular purchase by a
Distributor, shall be applicable to a transaction within the scope of
this Agreement. Both parties specifically agree that any terms and
conditions in any such documents which are in any way inconsistent
with this Agreement shall be inapplicable, and the terms of this
Agreement shall govern.
7. Orders, Delivery and Payment
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(a) Each Distributor will provide the corresponding Manufacturer with a
rolling one year forecast of its demand for Distributed Products
hereunder (a "One-Year Forecast") which will be updated on a quarterly
basis, at least thirty (30) days prior to the start of each calendar
quarter. Each such One-Year Forecast shall include a sub-forecast for
the first three months within the One-Year Forecast (a "3 Month
Forecast") The Distributor must provide Releases for delivery, during
the three months covered by such 3 Month Forecast, of such Distributed
Products in quantities not more than 25% less or 25% greater than the
quantities set forth in such 3 Month Forecast. Except for such semi-
binding nature of the 3 Month Forecasts, the One-Year Forecasts will
be used for planning purposes only and are not binding. A
Manufacturer will ship
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Distributed Products so as to arrive on the delivery date set forth in
a Release, provided that the delivery date set forth in such Release
is not less than 30 days following the date such Manufacturer receives
such Release and provided that the amounts set forth in such Release
are within the range provided above in accordance with the applicable
3 Month Forecast.
(b) A Distributor shall make payment to the Manufacturer within forty-five
(45) days after the later of (i) receipt of ordered Distributed
Products, and (ii) receipt of such Manufacturer invoice for such
Distributed Products. All payments shall be made in U.S. Dollars.
Late payments shall be subject to interest at a rate of 12% per annum.
(c) All Distributed Products shall be tested, inspected and packaged for
delivery by the Manufacturer in accordance with its standard
procedures.
(d) All Distributed Products shall be delivered to the Distributor or its
designated Affiliated Company in the country of manufacture of such
Distributed Products or, if there is no Affiliated Company of the
Distributor in such country of manufacture, then to a mutually
agreeable Distributor or Affiliated Company location. A Manufacturer
shall not be required to drop-ship any Distributed Products to any
customer or to any other Affiliated Company of the Distributor.
8. Ownership of Goodwill; Waiver of Indemnity. Each Distributor agrees that
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the discounts provided in Section 3 hereof shall constitute full and adequate
compensation for the performance of its obligations hereunder and that any
enhancement of the Manufacturer's goodwill arising out of the sale of the
Distributed Products or the performance by the Distributor of its obligations
hereunder shall be for the sole and exclusive benefit and account of the
Manufacturer. The Distributor agrees and acknowledges that no franchise
relationship is established hereby. All payments to be made to the Manufacturer
hereunder shall be made in connection with bona fide wholesale transactions with
respect to the Distributed Products. The Distributor hereby waives any rights it
may have under law or otherwise to claim or to receive any indemnity or other
compensation upon termination of this Agreement for whatever cause.
9. Distributor Not Agent or Legal Representative of Manufacturer. This
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Agreement does not constitute the Distributor as the agent or legal
representative of the Manufacturer for any purpose whatsoever. The Distributor
is not granted any right or authority to assume, create or incur any debt,
obligation or responsibility, express or implied, on behalf of or in the name of
the Manufacturer or to bind it in any manner whatsoever. Nothing herein shall
be deemed to constitute the Manufacturer and the Distributor as partners, joint
venturers or to be otherwise associated with the business of the other; it is
expressly recognized that no fiduciary relationship exists between the parties.
10. Distributor to Indemnify Manufacturer. Each Distributor agrees to
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indemnify and hold harmless the corresponding Manufacturer and its Affiliated
Companies from all losses
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and damages (including attorney's fees) that it or they may sustain or become
liable for by reason of claims against it or them resulting from unauthorized
acts or statements of the Distributor or its employees, agents or
representatives. The Distributor further agrees to indemnify the Manufacturer
and its Affiliated Companies from any claims asserted by the Distributor's
employees or agents for compensation, severance payments, disability or social
service payments.
11. Subagents.
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Each Distributor may use any of its Affiliated Companies or third parties
as subdistributors, agents or commissionaires in the distribution of Distributed
Products hereunder, provided that the Distributor requires any such
subdistributor, agent or commissionaire to be bound by the restrictions
hereunder as to Field of Use, and provided further that the Distributor shall
promptly notify the Manufacturer as to the identity and sales territory of any
such third party distributor, agent or commissionaire.
12. Term and Termination
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(a) The effective period of this Agreement (the "Term") shall begin on the
Separation Date and continue thereafter for a period of five (5) years
or until earlier termination in accordance with clause (b) of this
Section 12. Any Release issued by Distributor before the effective
date of termination and in accordance with Sections 6 and 7 hereof
shall be fulfilled by the Manufacturer.
(b) Either party may (i) terminate this Agreement, or (ii) terminate its
obligations as Manufacturer and the other party's rights as
Distributor of such Manufacturer terminating party's Products
hereunder, prior to the date five (5) years following the Separation
Date without prejudice to any rights or liabilities accruing up to the
date of termination:
(i) in the event of a material breach by the other party of any of
the terms and conditions of this Agreement, by giving the other
party notice of such breach, and provided that such breach shall
not have been cured within sixty (60) days following such notice;
and
(ii) immediately, by written notice thereof, if any of the following
events or an event analogous thereto occurs:
a. an adjudication has been made that the other party is
bankrupt or insolvent;
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b. the other party has filed bankruptcy proceedings or has had
such proceedings filed against it, except as part of a bona
fide scheme for reorganization;
c. a receiver has been appointed for all or substantially all
of the property of the other party;
d. the other party has assigned or attempted to assign this
Agreement for the benefit of its creditors; or
e. the other party has begun any proceeding for the liquidation
or winding up of its business affairs.
(c) A Distributor may terminate its rights and the corresponding
Manufacturer's obligations under this Agreement with respect to the
Distributed Products that such Distributor has distributed, effective
at any time, provided it has given the Manufacturer at least sixty
(60) days prior written notice thereof. Any such termination under
this clause (c) shall not relieve such Distributor of its supply
obligations or deprive the other party of its distribution rights
hereunder.
(d) Termination under this Section 12 shall be in addition to and not a
substitute for other rights or causes of action of the terminating
party.
(e) Termination of this Agreement or of a Distributor's rights and the
corresponding Manufacturer's obligations hereunder shall not in any
way operate so as to impair or destroy any of the rights or remedies
of either party, either at law or in equity, nor shall it relieve the
parties of their obligations pursuant to Sections 4 (a), 5, 8, 9, 10,
11, 13, 14, 15, 19 and 20 hereof.
(f) Each party acknowledges, both in its capacity as a Distributor and as
a Manufacturer, that it has no right to renew or extend this
Agreement, or either distribution relationship hereunder, following
the end of the Term of this Agreement. This Agreement may be renewed
or extended only upon and in accordance with the terms of a written
agreement by the parties to that effect, which the parties are under
no obligation to negotiate or enter into.
13. Right to Repurchase of Inventory. If this Agreement is terminated by
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either party for any reason, or if a Distributor's rights and the corresponding
Manufacturer's obligations hereunder are terminated, the Manufacturer may, at
its option, repurchase from the Distributor any or all of the Distributed
Products in the possession of Distributor; provided, that the Manufacturer shall
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be under no obligation to exercise this repurchase option. The repurchase price
for any such inventory which the Manufacturer elects to repurchase shall be the
price paid therefor by the Distributor (including transport and insurance
costs). The Manufacturer, however, reserves the right to reject any Distributed
Product tendered by the Distributor which
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is not in first class condition, which is obsolete or which is otherwise not fit
for resale. Any Distributed Product sold by the Distributor prior to such
termination but not yet installed (assuming installation is necessary) shall be
installed by the Manufacturer and all mutually agreed upon expenses shall be
charged to the Distributor's account and deducted at time of final statement. If
the Manufacturer does not exercise its repurchase option as described above, the
Distributor shall be free to continue to distribute any Distributed Products in
its inventory for a reasonable period of time following such termination, but
not to exceed 18 months, any such distribution to be subject to the applicable
terms hereof.
14. Warranties, Indemnification and Insurance
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(a) Each Manufacturer warrants to the corresponding Distributor that:
(i) All Distributed Products supplied to the Distributor hereunder
shall conform to the specifications referred to for such
Distributed Products in the Manufacturer's published
literature;
(ii) All Distributed Products shall be free of defects in materials
and workmanship;
(iii) It will abide by all applicable laws and regulations in
manufacturing the Distributed Products; and
(iv) All Distributed Products supplied hereunder will be
manufactured in strict conformity with ISO 9002 and cGMP
standards.
(b) In the event of a breach of the foregoing warranties, the
Manufacturer's sole obligation to the Distributor or any end user
shall be to repair, replace, or refund, at the Manufacturer's option,
any non-conforming Distributed Product.
(c) THE MANUFACTURER MAKES NO OTHER WARRANTY, EXPRESSED OR IMPLIED,
INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR USE. FURTHERMORE, THE MANUFACTURER SHALL NOT
BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR ANY OTHER INDIRECT
DAMAGES RESULTING FROM ECONOMIC LOSS OR PROPERTY DAMAGE SUSTAINED BY
THE DISTRIBUTOR FROM THE USE OF THE SUPPLIED MEMBRANES.
(d) Each Manufacturer agrees to indemnify and hold the corresponding
Distributor harmless from and against any claim or legal action by a
third party against such Distributor (including reasonable attorneys'
fees associated therewith) based on damages incurred as a result of
property damages, personal injury or death, to the proportionate
extent arising from a breach of any of the above
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warranties of the Manufacturer or from the Manufacturer's negligent
action or omission.
(e) Without limiting any other rights or remedies that a Distributor may
have, if such Distributor determines that delivered Distributed
Products do not conform to the agreed specifications for such
Distributed Products, then such Distributor may reject or withdraw its
acceptance thereof and shall notify Manufacturer in writing of such
nonconformity or error within thirty (30) days from receipt of such
Distributed Products by the Distributor. The Manufacturer shall have
fifteen (15) days after receipt of written notice of nonconformity or
error to replace nonconforming Distributed Products at the expense of
the Manufacturer. If so directed by the Manufacturer, the Distributor
shall return nonconforming Distributed Products to the Manufacturer's
manufacturing facility, at the Manufacturer's expense and using such
carrier and such delivery dates and terms as the Manufacturer shall
reasonably specify.
(f) In the event of a Distributed Product failure confirmed by the
Manufacturer, or a recall required by a government agency or requested
by the Manufacturer, the Manufacturer agrees to pay the costs of any
recall mailing it makes as well as return freight costs. The
Manufacturer will also bear the costs of supplying replacement
products. All other costs will be for the account of the Distributor.
In addition, the Manufacturer shall notify the Distributor immediately
in writing should the Manufacturer become aware of any defect or
condition which may render any of the Distributed Products in
violation of any statute or regulation, or which in any way alters the
specifications or quality of the Distributed Products.
(g) Each Manufacturer agrees to procure and maintain, at all times during
the Term, product liability insurance with respect to the Distributed
Products supplied by it (Broad Form Vendor's Endorsement) and
contractual liability coverage, with the minimum limits of $5,000,000
(Five Million Dollars). Each Manufacturer shall, upon request by the
Distributor, furnish to the Distributor a certificate of insurance
evidencing the foregoing coverage and limits. The insurance provider
shall not be changed without providing the Distributor with ten (10)
days' prior written notice.
15. Notices
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Any notice or other communication required or permitted to be given by either
party pursuant to the terms of this Agreement shall be in writing and shall be
deemed given if and when delivered by hand or sent by certified mail, return
receipt requested, overnight courier, confirmed telecopy, or confirmed
electronic mail transmission, addressed as follows:
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If to Millipore: Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Attn: Vice President, Manufacturing
Fax: (781) 533-3120
with a copy to: Millipore Corporation
80 Ashby Road
Bedford, MA 01730
Attn: General Counsel
Fax: (781) 533-3125
If to Mykrolis: Mykrolis Corporation
Patriots Park
Bedford, MA 01730
Vice President, Manufacturing
Fax: (781) 533-3117
with a copy to: Mykrolis Corporation
Patriots Park
Bedford, MA 01730
Attn: General Counsel
Fax: (781) 533-3125
or to such electronic mail address as may be specified by an addressee party to
the other party by one of the other means provided above, or to such other
address, telecopy number or electronic mail address as may be specified by an
addressee party to the other by one of the means provided above.
16. Force Majeure
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The obligations of a party under this Agreement will be suspended to the extent
that it is wholly or partially precluded from complying with its obligations
under this Agreement by force majeure. Force majeure includes, but is not
restricted to, fire, storm, flood, earthquake, explosion, accident, act of the
public enemy, war, rebellion, insurrection, sabotage, epidemic, quarantine
restriction, labor dispute, labor shortage, transportation embargo or failure or
delay in transportation, act of God, act (including laws, regulations,
disapprovals or failure to approve) of any government agency, whether national,
municipal, or otherwise. During the existence of any such force majeure
condition,the affected party shall nevertheless use its best efforts to remove
the cause thereof.
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17. Additional Products
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It is the intention that all products of either Manufacturer that have been sold
into the Distributor's Field of Use during the two (2) year period immediately
preceding the date of this Agreement will be included as Distributed Products of
the Manufacturer hereunder. If either party discovers any such product that is
not included on Exhibit A or B hereto, as the case may be, such product shall be
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deemed added to such Exhibit, and considered a Distributed Product of the
Manufacturer, at the request of the Distributor of such product.
18. Conflicts with Other Agreements
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In the event that there are any conflicts between the terms of this Agreement
and any distribution agreements of either party or their Affiliated Companies in
effect as of the date hereof, the parties will cooperate with one another in
good faith to attempt to eliminate such conflicts.
19. Incorporation of Provisions from Master Agreement
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The following provisions of the Master Agreement, mutatis mutandis, are hereby
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incorporated by reference into this Agreement for all purposes:
Article VI (Confidentiality);
Article IX (Dispute Resolution);
Section 10.3 (Governing Law);
Section 10.6 (Counterparts);
Section 10.7 (Binding Effect; Assignment);
Section 10.8 (Severability);
Section 10.9 (Failure or Indulgence Not Waiver;
Remedies Cumulative);
Section 10.10 (Amendment);
Section 10.11 (Authority);
Section 10.12 (Interpretation).
In the event of any conflict between any of the foregoing incorporated
provisions of the Master Agreement and any other provision of this Agreement,
such other provisions shall prevail.
20. Entire Agreement
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This Agreement, including Exhibits A and B attached hereto, is the entire
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agreement between the parties with respect to the subject matter hereof, and
supersedes any prior negotiations and agreements or understandings and any
contemporaneous oral agreements or understandings with respect to the subject
matter hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives effective as of the date first
set forth above.
MILLIPORE CORPORATION MYKROLIS CORPORATION
By: /s/ Francis J. Lunger By: /s/ Jean Marc Pandraud
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Name: Francis J. Lunger Name: Jean Marc Pandraud
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Title: Executive Vice President Title: President
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EXHIBIT A
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Millipore Products
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G1 Process Discs
H1 Pre/Depth Filter Cartridges
H2 Cartridge Products
H3 Clarification Cartridges
I1 Stacked Disk Products
J1 Durapore Cartridges
J2 PTFE Cartridges
J5 MiE Durapore Filters
J6 PES Cartridges
M5 Ultra Stak
N1 4 Inch Capsule
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EXHIBIT B
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Mykrolis Products
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H4 MiE Chemical Filter Products
H5 MiE Photoresist Filters
I2 MiE Gas Filter Products
M6 Fine Process Products
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